california update 6 11 01 executive summary california claims victory easing power prices california budget look good vote friday power prices sources report generator acknowledge drop power prices california last week due least part threat price controls generators traders reportedly increasingly unwilling line power inventory next months sources believe likely lead increased volatility governor davis issued statements attributing easing power prices negotiating long term contracts made note increased hydrogenation northwest lighter demand cool weather california california budget friday deadline sources indicate california legislature missing june 15 th budget deadline appears likely may affect california ability secure future financing coupled poor macroeconomic indicators increasing unemployment outlook state look good sources report budget would go print today order printed vote friday going print today mean vote friday sources pessimistic legislature agree budget friday republicans reportedly concerned 12 5 b revenue bonds sell issued republicans asking 3 5 b budget reserve insurance possibility want achieve cutting increases programs education increased mandated law leaving base program amounts alone however date failure reach agreement among members programs cut