california update 9 20 2001 executive summary cpuc terminates direct access pg e socal bankruptcy developments direct access despite information cpuc representative responded favorably vote delay request sent state major business interests pressure delay vote governor davis cpuc effectively terminated direct access 3 2 vote estimates regarding votes commissioners brown wood lynch play well cpuc failure pursue retroactivity da agreements cpuc move carry forward da vote complete surprise president lynch historically presided independently pressure governor davis dismayed california legislature unable offer resolution lynch commissioners felt obligated provide direction move state forward securing state economic base note da agreements signed within last three months may still held review cpuc though official word yet issued cpuc also passed two measures preventing progress california 12 5 b bond sale still clear date bonds issued socal pg e bankruptcies mirant reliant mirant leading push reported approached several entities potential third parties creditors committee take sce involuntary bankruptcy city long beach approached believe long beach use leverage potential third party creditor negotiate independent deal socal payment debt orange county coram san gorgonio farms also suspected asked sign petition contrary rumor confirmed dynegy considering joining mirant reliant however move dynegy would logical note dynegy funded mirant reliant recent polling research examining public opinion effects move dynegy reportedly discussing possibility attempting determine socal response pg e filing mirant reliant effort try pulse likelihood timing voluntary bankruptcy petition per earlier media reports pg e announced filing three months early reorganization plan court believe utility motivated part desire scuttle chance state mou socal third special session legislature reactions key lawmakers burton bowen hertzberg keeley course governor important watch key elements pg e plan include assumes responsibility debt state aid requested utility split two distribution company remaining cpuc regulatory authority native generation spun new company free cpuc oversight regulated ferc pg e commits provide 100 native generation state california 10 years cost cost power includes cost generation currently 3 5 cents per kw h cost financing estimated sources 1 5 cents per kw h debt paid 90 qf debt paid immediately remainder longer term large generators substantially paid immediately asked carry remaining debt longer term