california update 8 20 01 executive summary legislators prepare address socal bailout options 5 7 b revenue notes request state treasurer hands bonds bankruptcy edison mou expected major issue political agenda week legislative leadership wants pass bail measure friday 8 24 analysts confident mou passed many skeptical current proposals able cobble together 41 votes assembly davis administration said proceeds november bond sale used repay 6 2 b borrowed general fund purchase energy however repeated delays bond sale caused concern pg e upset money first used pay state without offsetting funds state owes pg e assembly republican leader dave cox said members vote plan clean bailout e without additional provisions related environmental mitigation thus essentially saying members vote assembly member rod wright proposal current plan wright proposal much support democrats sources report least one prominent legislator senator mike machado apparently remarked certain need pass mou others may muttering similar things mou still likely strangely though discussions held staff level week mou legislation key driver mou debate much haircut sce required take hit parent company sources report sce accept haircut 500 however haircut placed range 1 b told sce bryson informed team would take sce bankruptcy voluntarily represents significant turnaround sce previous optimism attributable legislative indifference sce bankruptcy threat well growing tension bryson governor davis middle range 500 1 b difficult ascertain high sce go pulling bankruptcy trigger short term anticipatory notes state controller kathleen connell asked emergency sale 5 7 b short term note possibly form revenue anticipation note ran cover california electricity costs november 12 4 b state bonds expected issue legislature state controller request made legal obligation issue demand treasurer time determines general fund insufficient funds payment appropriations legislature connell claims ran could offered early september necessary state general fund running dry recent power purchases state treasurer angelides studying plan yet publicly comment according sources also yet comment legislators new york last week meeting people wall street bond issuance mandated state statute angelides issue notes unilaterally need approval legislature anyone else total discretion issuance timing amount however state general fund would depleted november 15 th even without ran revenue rans unusual rans previously issued fy 95 96 fy 99 00 largest 5 b ran fy 92 93 california recent economic growth rans necessary last year expected unnecessary year concerns surrounding pg e suit filed earlier last week pg e seeks priority 12 b revenue bond allocations somewhat eased well placed utility source report suit little impact revenue bond anticipatory notes issuance however suspicion among administration increasingly concerned investor confidence weakening bond issuance might deemed failure thus promoting idea pg e actions responsible rather investor uncertainty revenue stream allocation dwr contracts event revenue bonds issuance delayed past october 31 st bridge loan maturity interest rate charged state would reportedly jump four percent seven percent