california power 1 19 00 executive summary sb 7 x gives dept water resources given legislative authority undertake short term power purchases price cap feb 2 nd new legislation ab 1 x sb 6 x would seek 1 long term contracts 5 5 cent cap 2 creation california power conservation financing authority long term contracts proposed ab 1 x likely subject significant amendment renegotiation prior feb 2 nd expiration sb 7 x authority proposed sb 6 x would bond issuance powers finance new generation capacity conservation measures negotiations way using bond authority utility bailout utilities state government split debt obligations utility parents state borrowing plans power purchases create credit risks state treasury socal edison misses payments bush administration opposes price caps supporting state efforts split pg believe could willing guarantee issue bonds deal rest one senior california political leader explained getting utility holding companies eat substantial part debt owe key solving back debt problem without provoking widespread public outrage bailout private price gouging companies taxpayer money since 75 californians currently blame utilities puc crisis 10 blame davis crucial political stance governor course absorbing anything like 6 billion debt would quite shock seemingly healthy holding company power generating branches two utilities began spreading word quite willing accept bankruptcy thus mid week sides pushed toward resolution federal bankruptcy court would worst case solution sides country economy would suffer resulting credit shock governor political future would suffer electricity rate increases almost certain mandated bankruptcy judge private sector legal authorities believe utilities corporate holding structure would ultimately breached bankruptcy procedures would end absorb significant amount debt end addition would likely face state government determined use state powers condemnation enter power business major way senator burton sb 6 x legislation strengthen powers dramatically make point quite explicit would set california power conservation financing authority power issue bonds invoke eminent domain would finance new power plants consider feasibility public interest state acquiring operating maintaining transmission facilities currently owned investor owned municipal utilities write sides trying construct path back bankruptcy ledge safe ground question tone shifted last 24 hours macho confrontation maybe run thing far noted chance miscalculation still quite high solution agreed time stand much debt state government absorb versus utilities holding company continuing technical fact default still makes possible bank trigger bankruptcy demanding immediate accelerated payment 5 default update thursday socal edison 215 million default california power exchange edison failed make 215 electricity payment yesterday california power authority began seizing long term contacts reselling recoup money owed generators pg e said expects trading privileges cal power authority suspended today leaving generation nuclear hydroelectric sources ongoing wave defaults severely restricted pg e socal ability buy power department water resources able pick slack least short term state may getting risky credit territory proposed california public power authority would borrow neighborhood 1 3 billion state general fund advance year expected fiscal surplus loan repaid authority expected future revenues near bankrupt utilities freeze rate hikes unclear revenues would come amount borrowed terms repayment doubt examined carefully bond rating agencies 5 bush policies reported wednesday bush administration continues demonstrate little interest getting involved california crisis president elect bush surprised state leaders yesterday comments essentially said excessive environmental regulation root current supply shortage bush top officials appear unanimously opposed long term price caps however one issue considerable importance administration according source close top bush economic advisor significant concern pg e credit problems could cause gas suppliers stop shipments gas pg e pipeline risk would pipeline could go dry causing significant possibly dangerous disruptions california residences businesses prevent problem bush working davis proposal split pg e separate gas electric companies gas company would solvent electric company would go immediately ch 11 following significant defaults