Executive Summary California Treasurer Angelides Sets Dates for Bridge Loans & Bonds California's Supreme Court May See Challenge to "Plan B"  Angelides on Bridge Loans and Bonds CA Treasurer Angelides has said that beginning 15 August, the state will se= t up a bridge loan.
The revenue bonds will not be issued until September o= r October.
Angelides is not concerned about a cash crisis in July or Augus= t.  However, he is quite worried about problems with cash flow in October a= nd November.
This is based on calculations he has done with numbers from t= he DWR and from other parts of the government, not on payment terms for pow= er.
He fears there will be a cash management problem.
California Supreme Court to Challenge "Plan B" California Attorney Michael Sturmwasser is expected to challenge "Plan B" b= efore the California Supreme Court on the basis that it results in a retroa= ctive rate increase and that it removes the PUC's authority to review power=  purchases.
This is because "Plan B" enables SoCal to collect a dedicated = rate component to pay both its undercollect and its expenses going forward.=   SoCal (and PG&E) would have to be guaranteed this dedicated rate componen= t to be able to operate going forward and remain credit-worthy.
This takes=  the burden of financing the energy crisis away from the state and off the = state's balance sheet, a key goal of lawmakers.
However, at the same time,=  it also abrogates the PUC from its responsibility to review power purchase= s.  The state cannot give the utilities a blank check (in the form of a ded= icated rate component) to operate without taking authority away from the PU= C.  According to the California constitution, the legislature can add to th= e responsibilities of the PUC, but it cannot take away powers from the PUC.=   At the same time, ratepayers will be paying an additional surcharge for p= ower that they have already used.
Sources describe Sturmwasser's case as "= arguable"; in other words, it has a fair chance of succeeding.
However, re= gardless of whether the challenge succeeds or fails, it is very likely to c= loud the issue of the bail-out and significantly deflate the prospects of t= he Plan B.
If FERC were to impose cost-based controls on power prices, sources believe=  it might "go a long way toward avoiding these problems."
Were this to hap= pen, the PUC could declare FERC's rates "just and reasonable," which would = likely greatly lessen the crisis and keep SoCal liquid.
However, such meas= ures by FERC require significant lead time.
Sources state that "the state = needs to tease the feds into doing this."
This can be done by conducting s= tudies to obtain current cost data and update the data FERC would use for d= etermining the cost controls.
Sources report that this process of "teasing= " FERC has not yet started.
This is chiefly because California politicians=  are focused on flat price caps, which FERC is very unlikely to impose.
It=  appears the state is asking FERC for the wrong measures, which is delaying=  the process.
The only way for the state to avoid these constitutional iss= ues would be for the state to purchase the utilities, as municipal entities=  would not be subject to PUC regulation.
However, there remains very signi= ficant opposition to this idea, especially on the Republican side.
A state=  purchase of the utilities would likely only gain momentum once Plan B bega= n to fail for the reasons cited above.
Additionally, a state purchase of t= he utilities would be less expensive were both utilities in bankruptcy.
Sturmwasser is a partner at Sturmwasser & Woocher, a Santa Monica law firm.=   (His offices are on the top floor of the tallest building in Santa Monica= , overlooking the beach.)
He has been a utilities lawyer for over 30 years= .
His clients include the consumer advocacy group TURN (Toward Utilities R= ate Normalcy), among others.
Sturmwasser will reportedly look for funding = to support the legal challenge, but if he cannot find money elsewhere, he w= ill likely be able to support it out of his own pocket.

California Update 5/29/01
Executive Summary California Treasurer Angelides Sets Dates for Bridge Loans & Bonds California's Supreme Court May See Challenge to "Plan B" Angelides on Bridge Loans and Bonds CA Treasurer Angelides has said that beginning <NUMBER> August, the state will se= t up a bridge loan.
The revenue bonds will not be issued until September o= r October.
Angelides is not concerned about a cash crisis in July or Augus= t. However, he is quite worried about problems with cash flow in October a= nd November.
This is based on calculations he has done with numbers from t= he DWR and from other parts of the government, not on payment terms for pow= er.
He fears there will be a cash management problem.
California Supreme Court to Challenge "Plan B" California Attorney Michael Sturmwasser is expected to challenge "Plan B" b= efore the California Supreme Court on the basis that it results in a retroa= ctive rate increase and that it removes the PUC's authority to review power= purchases.
This is because "Plan B" enables SoCal to collect a dedicated = rate component to pay both its undercollect and its expenses going forward.= SoCal (and PG&E) would have to be guaranteed this dedicated rate componen= t to be able to operate going forward and remain credit-worthy.
This takes= the burden of financing the energy crisis away from the state and off the = state's balance sheet, a key goal of lawmakers.
However, at the same time,= it also abrogates the PUC from its responsibility to review power purchase= s. The state cannot give the utilities a blank check (in the form of a ded= icated rate component) to operate without taking authority away from the PU= C. According to the California constitution, the legislature can add to th= e responsibilities of the PUC, but it cannot take away powers from the PUC.= At the same time, ratepayers will be paying an additional surcharge for p= ower that they have already used.
Sources describe Sturmwasser's case as "= arguable"; in other words, it has a fair chance of succeeding.
However, re= gardless of whether the challenge succeeds or fails, it is very likely to c= loud the issue of the bail-out and significantly deflate the prospects of t= he Plan B.
If FERC were to impose cost-based controls on power prices, sources believe= it might "go a long way toward avoiding these problems."
Were this to hap= pen, the PUC could declare FERC's rates "just and reasonable," which would = likely greatly lessen the crisis and keep SoCal liquid.
However, such meas= ures by FERC require significant lead time.
Sources state that "the state = needs to tease the feds into doing this."
This can be done by conducting s= tudies to obtain current cost data and update the data FERC would use for d= etermining the cost controls.
Sources report that this process of "teasing= " FERC has not yet started.
This is chiefly because California politicians= are focused on flat price caps, which FERC is very unlikely to impose.
It= appears the state is asking FERC for the wrong measures, which is delaying= the process.
The only way for the state to avoid these constitutional iss= ues would be for the state to purchase the utilities, as municipal entities= would not be subject to PUC regulation.
However, there remains very signi= ficant opposition to this idea, especially on the Republican side.
A state= purchase of the utilities would likely only gain momentum once Plan B bega= n to fail for the reasons cited above.
Additionally, a state purchase of t= he utilities would be less expensive were both utilities in bankruptcy.
Sturmwasser is a partner at Sturmwasser & Woocher, a Santa Monica law firm.= (His offices are on the top floor of the tallest building in Santa Monica= , overlooking the beach.)
He has been a utilities lawyer for over <NUMBER> years= .
His clients include the consumer advocacy group TURN (Toward Utilities R= ate Normalcy), among others.
Sturmwasser will reportedly look for funding = to support the legal challenge, but if he cannot find money elsewhere, he w= ill likely be able to support it out of his own pocket.
pu according california fail reasons cited time abrogates angelides bridge loans offices floor tallest flat augus quite worried gain momentum plan utilities blank cash flow october