The following are?summaries of today's appearance by  Sen. John Burton to the 
Sacramento Press Club and of his news conference this  afternoon announcing a 
lawsuit against FERC.
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John Burton held what amounted mostly to a Q&A session at  a?lunch with the 
Sacramento Press Club today. He started by talking about  the Edison MOU, 
which he said will be assigned to the Senate Utility Committee  for review, 
the Judiciary Committee will look at the legal elements, and the  Natural 
Resources Committee will look at issues surrounding easements.?  (One 
columnist commented that Burton would "love it to death," meaning it would  
get so much attention it will be hard for it to advance.)
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The MOU, he said, includes language that eliminates oversight  by the PUC.? 
He said that will not be the case when it leaves the  Senate.
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Burton is obviously troubled by?the MOU; he said "some  people" say it 
doesn't just make Edison creditworthy, it makes them whole.?  He said the 
following would have to take place for the MOU to be  acceptable:
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Back debt must be verified;
All creditors must take a 30% "haircut";
The transmission lines would need to be purchased for an  amount close to 
what the governor has mentioned;
$400 million (or more) must come from Edison's parent to pay  back debt.

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When asked whether $400 million was enough, he said "no" and  that he feels 
the parent should pay "a ton."? That led to a discussion of  the dedicated 
rate component, which he doesn't like.?He used  the example that if 
electricity costs $20 and the dedicated rate component is  $5, if prices drop 
to $10 people will unnecessarily pay higher rates.? A  larger infusion of 
cash from Edison's parent could eliminate the need for the  dedicated rate 
component. 
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Burton called?the dedicated rate component a "big  problem" and said it could 
be the strongest argument for use in an initiative  campaign.
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He said he planned to tell the governor this afternoon that  the state should 
set an acceptable purchase price for power and not pay anything  more (note:? 
this is a populist approach that is getting a lot of support  from radio talk 
shows and other media).? He later threw out the number  $200.? The state is 
going to have blackouts whether or not it pays top  dollar, he said, so this 
is one way he sees to fight back.? It's tough  medicine, but as he put it, 
"You've got to take castor oil and it tastes crappy,  but two days later 
you're over it and your stomach's OK."
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Burton also used a quote from his late brother, Phil, on how  he believe the 
situation should be handled:? "The only way to deal with  exploiters is to 
terrorize the bastards."
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Asked how long the committee process would take re: the MOU,  Burton said the 
MOU sets August 15 as a deadline but that if there is ongoing  progress there 
are allowances that would let the process go as long as into  December.
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LAWSUIT PRESS CONFERENCE
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Shortly after the lunch, Burton held a press conference to  announce a 
lawsuit against FERC was filed today in the U.S. Court of Appeals for  the 
Ninth Circuit.? A copy of the brief and press release was faxed earlier  this 
afternoon to Jim Steffes and should be available in his office.? If  
additional copies are needed, please contact me or Scott Govenar.
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The plaintiffs are Burton, individually and on behalf of the  Senate; Bob 
Hertzberg, individually and on behalf of the Assembly; and the City  of 
Oakland.? At the event were Burton, Hertzberg, Oakland Mayor Jerry  Brown, 
atty. Joe Cotchett of Cotchett, Pitre & Simon (in Burlingame); atty.  Clark 
Kelso, a constitutional scholar from McGeorge School of Law; Sen. Liz  
Figueroa; and Joan Breuner, vice mayor of Oakland.? 
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The suit asks for FERC to respond within 7 days and a ruling  within 21 days.
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Burton opened by explaining that they were suing FERC for not  fulfilling its 
statutory authority to maintain fair and justifiable rates.?  Hertzberg added 
that FERC had ignored the law and that they  were compelled to file suit for 
Californians' relief.
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Joe Cotchett said the suit is "very basic" and is based on the  Federal Power 
Act, which he says limits power costs to "fair and justifiable"  rates.??A 
primary?strategy in this suit is to present it as a  "health and welfare" and 
public safety suit; he noted that there are 3 million  disabled children and 
12,000 convalescent homes in CA who can be adversely  affected by blackouts.? 
He said it is "not an economic lawsuit -- it's  about senior citizens, 
disabled kids and convalescent facilities."? Today  also happened to be the 
legislative day for the California Association of Health  Facilities (the 
nursing home trade assn.), and several nursing home workers were  apparently 
asked to sit at the back of the room for effect.
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Cotchett said FERC has been told for 3 years that there were  opportunities 
to exert market power.? He also claimed that a Redondo Beach  facility 
(obviously AES) was fined $8 million by FERC for taking its plant  off-line 
and substituting higher rates.? He said, however, that this order  had been 
sealed.
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He cited an industry report that predicts 260 hours of  blackouts this 
summer, which could mean four hours a day.? That could be,  he said, 
"potentially the ruination of a lot of medicine in  refrigeration."? Cotchett 
noted that only hospitals with more than 100 beds  are exempt from blackouts, 
which does not protect surgical centers or many  health facilities.
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Jerry Brown added that "prices are unjust and people are  suffering."? 
Continued high prices could mean "potential civic disruption,"  and that 
there will be "more actions to mobilize" Western mayors.
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Liz Figueroa spoke briefly to reiterate the health aspects of  the lawsuit.
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Burton had mentioned Clark Kelso, who regularly appears on TV  here as a 
legal expert and I believe was a colleague of Justice Anthony Kennedy,  in 
his Press Club appearance.? He said Kelso had appeared regularly in the  
media early on to say that the state had no standing to file the  
suit.?Burton's lawyer's sent him the brief, and Kelso thought enough of it  
to?join the legal team.
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Kelso reiterated that FERC has been aware of potential market  power for 
three years, and that the commission has delayed  action?unreasonably.? It 
has failed to define "fair and justifiable";  that failure, he said, violates 
the Equal Protection and Due Process clauses of  the Constitution.
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Kelso said this is not a partisan issue, and called upon  "fellow 
Republicans" to support the effort.
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Joan Breuner (sp?), Oakland's vice mayor, said only that she  believed that 
if the energy situation were happening in Texas rather than  California, the 
president and FERC would have acted long ago.
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During the Q&A session, Cotchett said the urgency filing  is necessary 
because "5 generators supply 90%" of the electricity in CA and all  five have 
rate renewals before FERC.? He also said one of the cases that is  relevant 
is Bush v. Gore, in which the Supreme Court found that failure to set  
standards (regarding elections, obviously, in that case) violates the Equal  
Protection clause.? He also said six states have expressed interest in the  
case and have requested briefs:? Oregon, Nevada, Arizona, Washington,  
Minnesota and one other he didn't name.? None of these states has yet  
committed to joining the suit.