[Robert357]

It is possible for the next week to go to the S&P website and click on events and hear the replay of today's conference call on the California DWR Power Bonds. An interesting discussion, if you want to get all the details. I had thought that there were be a few controversial questions, but the financial community and the State of California restrained themselves. I listened to the replay of the S&P conference call. It was interesting.

S&P really spelled out the risks of the bond issue. S&P categorically disagreed with DWR and the Bond Issue official statement over the assumption that DWR will transfer the need to buy spot power for the investor owned utilities (IOUs) by January 1, 2003. S&P states that it will take probably a year or two more for the transfer to happen. S&P feels that the current speculative grade of PG&E and SCE will slow down their ability to purchase large amounts of power from others. DWR had to step in to buy for these IOUs because no one would sell to such un-credit worthy utilities and the utilities are still not credit-worthy and are not likely to have good credit ratings by January of 2003. One investor asked if such a difference doesn't call to question the validity of the fundamental plan outlined in the Official Statement. It was acknowledged as a good question.

A question that stopped the discussion was what would happen if San Francisco took over a significant part of PG&E's service territory. The gist of the question was that if a municipal utility would be formed, it would not be subject to CPUC oversight and the customers of the municipal utility would not need to be charged in the payback for past purchases as administered by the CPUC. The S&P folks immediately saw where this was going and indicated that this was another risk and they would research it and get back to folks.

There were a lot of polite, but negative baggage, left on the door of the State and Gov Davis. They did praise Davis (with a left handed complement) for recently signing Assembly Bill 57, which was passed in July of this past year. They pointed to this and other things, as a lack of Political will on the part of California to do what is required to pay the bondholders.

[snopercod]

Thanks for the recap of the conference call.

...if a municipal utility would be formed, it would not be subject to CPUC oversight and the customers of the municipal utility would not need to be charged in the payback for past purchases as administered by the CPUC.

I love the hypocricy of these people. They want to retroactively charge businesses and government agencies like the university system - who had the good sense to choose direct access - for "opting out" of their little socialist nirvana. But if Willie Brown wants to do it...No problemo!

What is to keep the CPUC from charging San Francisco the same "severance fees" as they intend to charge the University of California?