Posted on 04/11/2002 11:37:52 PM PDT by Ernest_at_the_Beach
Edited on 09/03/2002 4:50:16 AM PDT by Jim Robinson. [history]
In a hearing closely watched by California politicians, federal energy regulators on Wednesday warned Nevada utilities seeking to force renegotiations of deals struck during the energy crisis that they "bear a heavy burden."
Meeting in Washington, the Federal Energy Regulatory Commission refused to accept, at least for now, the argument of Nevada utilities that their long-term power contracts should be overhauled because they were signed at a time when Western power markets were dysfunctional and manipulated by power sellers. California has made similar arguments in support of renegotiating deals struck here at the height of last year's electricity crisis.
(Excerpt) Read more at latimes.com ...
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Article 1
Section. 10.
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
OTOH, Davis has "emergency powers", so he can impair the obligagtions of contracts all he wants without the inconvenience of the legislature passing any silly little laws.
New word here, most apropriate!!
There is a fine line between imparing contracts under legitimate emergency powers and in illegaly conspiring to manipulate Interstate Commerce and violate anti-trust laws. It will be interesting to see how Davis walks this fine line. Also, this post is interesting in how FERC seems to be sending a signal that it does not want to bust high priced power contracts signed by willing buyers and willing sellers.
Perhaps the most interesting thing is that it is now Mid April and no public announcements have been made about when the California power bonds are to be sold. Time is running out if bonds are to be sold. Davis must be planning something else.
From Last December: This governor confronts state cash-flow squeeze and a RAW deal
Even if the Legislature approves Davis' proposed spending reductions, the state is looking at a cash-flow deficit by June of as much as $2 billion -- unless the power bonds are floated, according to projections made by legislative number-crunchers. And if it becomes reality, it creates a dicey political scenario involving Davis and his archenemy, state Controller Kathleen Connell.Short-term cash squeezes may be covered by borrowings through "revenue anticipation notes" (RANs) issued by the administration and state Treasurer Phil Angelides. But longer-term loans to cover cash-flow deficits, particularly those that run over more than one fiscal year, involve "revenue anticipation warrants" (RAWs), and only Controller Connell can initiate and approve those.
Sacramento, CA, January 22, 2002 - State Controller Kathleen Connell today released the State's cash flow analysis resulting from the Governor's proposed Budget for Fiscal Year 2002-03.
"It appears the Governor's Budget is based on overly-optimistic revenue projections and receipt of Federal funds," stated Connell. "If the Legislature adopts the Governor's Budget, it is highly likely we will be in a situation to have to issue a Revenue Anticipation Note of up to $5 billion."
Controller Connell released cash flow information that reveals there is not enough money to cover the State's expenses for Fiscal Year 2002-03 and that serious steps need to be taken to fix the situation.
Controller Connell's analysis differs from the Governor's proposed Budget and the Legislative Analyst's Report in that her analysis is based on the State's cash flow, using projections of revenue and expenditures and factoring in all the expenses the Governor has in his proposed Budget.
The Controller noted that the Governor's budget called for an increase in major tax receipts of 9.93%, growth rate that is unlikely to occur in a recessionary period. The Controller also said the Governor's estimates for the receipt of Federal funds is too high, and his expenditures for Prop 98 expenditures is too low. After making these adjustments and working them into the State's cash flow projections, Connell said there will not be enough money to pay for the Governor's budget proposal.
My mother lives in California. I just finished doing her state taxes. Last year she paid about $1000. This year it was only half of that, due to the poor stock market.
This is a very interesting new development. It is interesting because it is laying out the obvious truth. It is also interesting because the rating agencies have probably run similar numbers and are waiting for the state to correct thing. Wall Street will not lend money or will not maintain outstanding debt credit ratings if California's cash flow threatens their ability to repay principal and interest. California political leaders are going to have to come up with a financial plan for their state that "works" or Wall Street will react negatively.
Earth to Gov. Davis, get your act together. Stop prancing about in you re-election mode and do the business you were elected to or you might get the ultimate political death sentence, getting elected to a financial crisis of your own making. Wait a minute, that is exactly what has happened and it will likely cause you to loose to Simon. Oh how justice has irony.
I had no idea. No State-licensed Esquires!!! Yay!
Off topic, but I wish the state would get out of the licensing business altogether: Contractors, doctors, foresters, whatever.
It just legitimizes quacks in all disciplines, and relieves the public of having to investigate who is competent (or not) in their profession. It drives up the cost of just about everything involved. It's just another tax-gathering scheme by the state.
Let professional societies take care of their own standards and of cleaning their own houses. And let talented people who don't have two years to study for some phony examination get back to work.
Is Davis promoing himself from Head Fascist in Charge of Kaliland to KING FASCIST?
SIMON, THE SANE ONE!
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