Power Regulators Reject Plan to Issue Billions in Bonds (KFWB) 10.02.01, 2:05p --

State power regulators have rejected a plan to issue $12.5 billion in bonds to cover the nearly $9 billion paid out of the general fund for emergency supplies of electricity. The Department of Water Resources stepped in earlier this year to purchase power for cash-strapped utilities to avoid blackouts.

The vote was 4-1 against the DWR proposal. Opposing commissioners say a pending Senate bill would pay back the state general fund much more quickly. However, Governor Davis and state Treasurer Phil Angelides are opposed to the bill. Angelides has warned the state could suffer a $9.3 billion dollar budget deficit if there are continued delays in approving the bonds.

Attempts at issuing the billions in bonds have already been delayed until at least next year by disputes between the governor, state legislators, regulators, utilities, consumer advocates and business groups. Issues involving Public Utility Commission powers, long-term power contracts, and how bond buyers will be paid, still must be resolved before bonds are issued.

-- PHO (owennos@bigfoot.com), October 02, 2001

Answers

I'm sorry, who is going to buy the bonds? Investors you say? We're swiftly headed into recession, state governments across the nation are going to have to cut back and CA is getting ready to float BILLIONS in bonds? Hasn't Standard & Poor already downgraded there credit status? CA is going to be VERY hard pressed to pay anything back. By the way, unemployment isn't done rising.

-- Guy Daley (guydaley1@netzero.net), October 02, 2001.

This is a a real kick in the groin. As a Californian I can only say we need that bond revenue badly, and we need it yesterday. If this thing is stalled into next year, into the teeth of a recession, these bonds will be about as popular a product as selling refrigerators to Eskimos.

-- Art Esman (esman@wetwo.net), October 02, 2001.