california update 4 20 01 executive summary davis struggles find senate support socal transmission deal chance deal going one time quick vote deal go hearings probably die transmission deal legislators seize assets seek price caps asset seizure would target power contracts power plants result endless court battles ensue gives davis opportunity continue blame generators marketers bankruptcy socal still likely scenario qfs socal likely file transmission deal dies gets amended congressional democrats rally around davis seize opportunity blame administration transmission deal democratic support governor gray davis scrambles build support socal ed transmission proposal one thing evident longer deal exposed public debate less likely pass fact politicians leery deal davis unable locate even one sponsor introduce bill senate eyes many democratic legislators republicans forcing socal edison bankruptcy looking like better option buying transmission lines governor senior strategists quietly trying schedule quick vote transmission line purchase early next week bill currently scheduled voted effort avoid debate however opening within next two weeks davis feels enough support pushed socal deal needs every piece place negotiated davis team team wants amendments allowed assembly floor quick vote unlikely fast track strategy fails davis prospects transmission lines purchase deteriorate steadily keep mind even resubmitted assembly vetted socal edison attorneys according sources legislature going try modify memorandum understanding gov davis sce however senate leadership believe sufficient support pass even modified mou burton reportedly believes least 6 democrats vote along republicans bill gets picked apart public uglier looks democrats realize alone supporting another problem faced legislatures deal favor socal state among things state overpaying 1 5 billion transmission lines additionally mou davis socal ed nearly matches point point deal davis condemned pg e asset seizures since pg e bankruptcy filing maintained asset seizures eminent domain would become major pursuit increasingly frustrated democrats davis legal office thoroughly scrubbed law eminent domain seizures everything power generating assets across california existing power contracts negotiated davis calls profiteering power brokers course everyone governor office understands seizing would immediately end state federal courts would legal nightmare minor constitutional legal interstate commerce problems main thing seizing would continue davis main approach problem management press conference would put governor democrats right side issue punishing capitalist leeches according one senior democratic legislator movement within democratic members state assembly demand davis agree seize power contracts return vote favor power transmission purchase course taking contracts would setting precedent taking power plants appeal seizing contracts would allegedly put california state officials charge power sold reduce mark ups substantially used contract power authority provide spot market power purchases peak emergency conditions drive price roof price caps one strong indication whether summer price caps occur depends powerfully decisions made three republican governors colorado alaska wyoming three key players portland western governor conference last january according senior white house officials took personal prolonged intervention president bush peel three away otherwise unanimous call price caps governors signed price cap appeal administration source said would already price caps start make clear something changed listen sources indicate republican leaders begin rethink opposition price caps bush administration forced reconsider price caps remedy west cost plus caps think republican price caps first duty make sure private companies make money incentives provide power affected grid give idea magnitudes cost plus deal current discussions would put cap power costs something like 250 per kilowatt hour long way august futures contract pricing 750 per kilowatt hour long way last august 150 kwhr price particularly long way cost generating power something like 25 30 kwh market price exceptions option allows bush administration political credit imposing price caps write ferc currently process considering permit renewals five companies generating power california duke dynegy aes reliant williams permit grants three year waiver allows sell power california existing whatever price market bear words ferc could simply grant companies right sell energy market price perhaps changing definition controlling market share power control prices would revert back ferc technically granting extension permits ferc establish formal finding five power companies wield market power means affect price energy withholding power crucial times course ferc found three different rulings last four months companies wield exactly kind ability market prices ordered minor rebates adjust subsequent price spikes would mean ferc would want wield effective power price capping california shown desire front escape clause ferc simply renew waivers routinely renewed unless company applying waivers controls 20 electricity market none companies come close words waivers option lets ferc escape bush administration ferc commissioners really want escape decision may hands three republican governors anywhere else country certain past days administration officials become fully aware potential political liabilities nothing except advocating nuclear coal power plants democrats seize opportunity blame bush senior political leaders think total energy bill year could come high 60 billion would destroy state finances decade add constant drumbeat numbers voters hear everyday direct pocket electricity costs paid 7 billion electricity 1999 27 billion 2000 expected pay 70 billion year ten times rate two years ago course open bills massive rate increases bring incredible numbers home direct way well blame democrats saying simple solution white house allow national level democrats realize california power crisis prime opportunity chastise bush administration free market advocate ferc chairman hebert resistance summer price caps california leaders calculate year taxpayer energy bill potentially 60 billion rogue gallery democratic congressional leaders currently meeting governor davis coordinating efforts fan across eight western states power grid singular message solution western voters electricity problems lies right washington dc ferc headquarters controlled bush administration appointees political dialogue takes aggressive national tone possible impact control us congress comes focus solutions articulated california democrats sense republicans run west become less less free market focused two strains democratic solution becoming unavoidable part energy picture asset seizures price caps