text_combined: california update 3 15 01 executive summary davis might concede rate hikes future power consumption past utility debt davis pg e negotiations standstill sticking point net short pg e summer days go word secured deal involuntary bankruptcy chances increase significantly among small generators qfs ferc would probably approve transmission deal several conditions california california public utility commission rate increases today may turning point ca puc reviews size department water resources dwr rate increase passed along consumers electricity bills davis considered rate hikes political suicide may relief consumer groups sources indicate one california main consumer advocate leaders may tolerate rate increases future power consumption remains adamant raising rates cover past utility debt dwr currently buying power behalf state needs income securitize planned 10 b bond issue key part davis plan sign long term power contracts dwr continues spend 40 60 every day power purchases well placed source informed us dwr essentially bankrupt currently money normal activities ordering supplies purchasing new equipment etc department finance forwarding dwr money ever parks programs purchase power dwr hands tied revenue bonds issued california state treasurer phil angelides submitting recommendation rate increases order secure revenue cover 10 billion worth state bonds davis pg e odds sources report davis pg e negotiations facing two difficult challenges 1 pg e wants 2 9 times book far consumer groups recommend sale transmission lines sce accepted 2 3 2 pg e needs relief davis pg es legal responsibility ultimate power purchaser state point davis wants limit state energy power purchases especially summer utilities refuse sign deal leave billions dollars red 3 4 b pg measure accomplished would provide davis even less negotiating power activity davis starting lose support state legislature sources report increasing tension governor state senate president pro tem john burton burton announced special senate committee investigate generators evidence price manipulation state auditor also planning investigation davis increasingly realizes protect deal signs picked apart legislature consumer groups later qf likely source involuntary bankruptcy sacramento insiders fear group small generators lose patience force bankruptcy utilities sb 47 x may california qualified facilities last hope avoiding involuntary bankruptcy filing pg e socal ed sdg e bill designed cut qf costs provide better rate structure held state senate sources indicate filing could come anytime investigations underway ferret likely candidates hebert wood bush administration favors replacing hebert jr texas puc head pat wood intense battle behind scenes senate republican leader trent lott favors hebert president bush wants wood administration would prefer wood want ferc pick fight davis means bush might ultimately lose western states 2004 effort tone recent press reports hebert made several token concessions california including 69 million worth power refunds streamlining federal permitting process pipeline power plant installation expected ferc would likely approve transmission deal davis could complete list conditions conditions might include bring lines formally regional grid system well elements pave way dramatic administrative actions west next year bush administration opposed price caps believes free market solutions administration also considering whether might good idea privatize federally owned assets bpa