california 02 16 01 pt 2 source reports following regarding today developments sum due governor sudden panic resultant willingness negotiate parties wait see mode makes unclear whether involuntary bankruptcy filing early next week consensus view bankruptcy still likely outcome timing subject ups downs negotiations weekend creditors especially small ipps close end forbearance highly frustrated erratic nature negotiations events given report chronological original plan proposed governor davis utilities morning contained following points parent companies utilities would return subsidiaries 1 5 billion money originally tranferred parent companies ostensibly parents could use pay taxes however revealed audit money excess needed taxes reality state would purchase transmission assets 3 5 billion proposed utilities would issue bonds pay utilities undercollection bonds would secured distribution charge added power bills money would collected dwr transferred utilities thereby involving state less full faith credit commitment contradiction preliminary reports appeared press plan rejected utilities one reason rejection low price transmission assets bondholders pressed negotiations point order see deal could reached bondholders less impaired generators generators however demanded paid money owed threatened move quickly toward involuntary bankrtupcy filing local sources report governor davis panicked point offered purchase transmission assets 6 billion almost twice earlier offer pay generators undercollection amounts 9 12 billion reportedly suggested term bonds would used pay bail 15 years would nearly double actual cost bail plan would put forward emergency legislative bill point consumer advocate harvey rosenfield entered negotiations state treasurer office rosenfield threatened governor managed pass plan would start referendum counter rosenfield would 90 days emergency bill passed put referendum place knowledgeable sources advise would difficult bonds plan issued less 90 days therefore rosenfield poses credible threat subsequent negotiations governor davis offered purchase transmission assets price least 6 billion possibly high 12 billion senator president pro tem john burton upset governor giving negotiations easily mike florio another consumer advocate contacted gov davis said idea negotiating bail appeared davis intended ridiculous florio consumer advocates threatened ally rosenfield support referendum davis pursued course action consumer advocates strongly feel generators take hair cut part solution well governor announce later afternoon framework solution identical reported previously state purchase transmission assets issuance bonds utilities state support dwr however state government yet reach consensus numbers framework remains unclear whether framework acceptable parties announcement bondholders may refrain involuntary filing order see terms final agreement generators inclined file may feel put enough pressure governor may worthwhile wait see well interested terms agreement particularly amount paid undercollect also terms long term power contracts state must negotiate example state willing purchase power high prices order placate generators would likely go along plan