How would you know?
Posted on 07/20/2002 12:16:35 PM PDT by Jean S
SACRAMENTO, Calif., July 20 (UPI) -- A long-awaited record $11.1 billion bond offering by the state of California soon will be ready for Wall Street's perusal, it was reported Saturday.
The Los Angeles Times said the issuance, which would be the largest ever by a U.S. government agency, would be used to pay the tab for electricity the state purchased in early 2001 when power costs soared and left the state's utilities reeling.
"This is a very unique situation," Dan Aschenbach, senior vice president for Moody's Investors Service, told the Times. "I don't think there is any other type of bond issue that's had to be put in place to resolve an issue as significant as a $6 billion (budget) deficit to the state."
The bonds are needed to both replace the $6.5 billion the state had to divert from the treasury to stave off rolling blackouts, but also a $4.3 billion loan used to buy power in the brutally bullish spot market.
California's deregulation plan implemented in the mid-1990s left the state's major utilities without enough generating capacity to handle growing demand and restricted them from passing on the full cost of buying additional electricity from private energy producers.
When utilities, including Pacific Gas & Electric and southern California Edison, found themselves deeply in debt with their creditworthiness scuttled, the state began buying power on their behalf through the Department of Water Resources.
State Treasurer Phil Angelides proposed the bond sale more than a year ago, however the Times noted bureaucratic delays and differences of opinion between Gov. Gray Davis and the Public Utilities Commission worked in California's favor as interest rates fell.
The supply situation has been largely corrected through temporary wholesale price caps, more long-term supply contracts and new power plants slowly coming on line. The calmer atmosphere should make the bond sale more attractive to financial analysts, the Times concluded.
"They are not buying everything off the spot market any longer," said Aschenbach. "There has been a fair amount of new generation built, which has helped the supply demand balance and helped keep prices moderate.
"It takes the pressure off having to ask for additional revenue," he added. "Those types of factors argue for a more stable rating."
The sale should be ready for vetting by Moody's and the other major Wall Street ratings agencies within a few weeks, the Times said. Once blessed, the next step would be actually pitching the bonds to investors.
The roughly 27 million customers of Edison, PG&E and San Diego Gas & Electric Co. will pay off the bonds over the next 20 years. Electric bills are not expected to be raised to cover the payments.
True. I wore my Simon shirt to the gym today and got two thumbs up.
Well, no one hopes you are right more than me. The thing I was thinking of, is this tax thing the Demon Cats keep bringing up about Simon. I hope it dies out, but who knows? BTW, do you experience this at the K Street Mall, Arden Way or what?
You are wrong. AB1890(Assembly Bill 1890) was authored by (R) Jim Brulte who was also Assembly Speaker when the Republicans controlled the State Assembly in 1996....AB1890 (deregulation) was signed by (R) Republican Governor Pete Wilson Sept. 1996 to be implemented Jan. 1998 (after Wilson's term).....The rest, as they say, is history.
BTW, this didn't happen overnight. California had (2) Republican governors for 16 cosecutive years prior to Davis.
That's just it. It won't work without price controls...And isn't "price controls" a "regulation"?
(California went 20+ years without any new power plants)
California had republican governors for 16 consecutive yrs before Davis. Wilson, the 2 term (8yrs) Republican Governor who signed the "deregulation" bill didn't see any need in building any either I guess.
You are wrong too. Jim Brulte was never Assembly Speaker. Curt Pringle was the Republican Assembly Speaker in 1996 (and I never worked for a finer man).
How would you know?
I sent him a few articles I'd gathered from Free Republic, and much to his credit, he admitted I was right.
If that doesn't show Davis can be beaten in November, I don't know what would.
Obviously I need a shirt. How do I get one?
D
I disagree with this statement....there's nothing savant-like about him. He's just a garden variety idiot.
We REALLY have to get this guy (Davis) UTTA here!
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