Bailout Watch #45 – May 23, 2001

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BAILOUT WATCH: Keeping an eye on the energy industry and the politicians

Bailout Watch #45 – May 23, 2001

Click here to read the Los Angeles Business Advisors letter

Click here to see the List of Los Angeles Business Advisors signatories

The Bailout Is Coming
Citizens, it’s time to contact your elected reps again OR FACE ANOTHER 40% RATE INCREASE. Key Assembly Democrats are working on a $3 to $5 billion Edison bailout plan, as are some Senate Dems. Now, a number of Republicans in the Assembly — who had been holding firm against a bailout — are negotiating terms with the Democrats. One option they are pondering would be to require that ratepayers get an ownership interest (i.e. stock) in plants that the utilities will be required to build. Of course, since ratepayers will be asked to pay for the plant construction, plus a profit for the utilities, the danger is that the value of the equity interest will be offset by inflated construction prices passed through to ratepayers. In other words, we will be forced to pay even higher electricity prices, negating the value of our "involuntary" investment.

Upside Down, You’re Turning Me… Back in the old days the Democrats were supposed to fight for the government-run projects and the Republicans could be counted on to deride them as a pre-cursor to socialism. But then came the California energy crisis. On Monday, the "Am I hearing you correctly" file got a little bit bigger, when Republican Assembly Members (and two San Diego Democratic Senators) lost a vote that would have made it easier for San Diego County to form a public power system of their own. Acknowledging that the free market failed San Diego last summer, local leaders from the county called for legislative assistance to escape the idiotic energy system controlled by SDG&E and the private energy companies. Public ownership of electricity: must be a Democratic proposal, with Republicans as the loyal opposition, right? Not in this world. Instead the Dems stood with the panicky utility, and the Republicans cast ideology aside and stood with San Diegans.

Public to Lawmakers: Just Say No to Deregulation 2. Citizen volunteers gathered thousands of postcards from voters throughout the state to oppose the "direct access" bills that are under consideration by state legislators. SBX2 27 (Bowen) and ABX2 42 (Kelley) would restore the foolish deregulation system, despite the fact that the system has been used to gouge California residents and businesses and bring the state’s economy to its knees. Electricity deregulation has failed California’s residential, commercial, industrial and agricultural ratepayers. "Direct Access," which allows big business to cut special deals with energy companies while the average consumer faces escalating rates, was a chief provision of deregulation and also failed California. FTCR is urging all Californians to call on their Senators and Assembly Members to stop these bills.

Businesses for the Bailout. We know why the state Chamber of Commerce and the Business Roundtable types are letting Edison use them in its campaign to push the Edison bailout through Sacramento. These lobbying groups represent big business, and are happy to abandon small business along with residential ratepayers (See BW#35). But check out the list of businesses that, under the rubric "Los Angeles Business Advisors," are lobbying lawmakers for the Edison bailout deal. Why is the President of AAA, the Auto Club of S. California, pushing it? Or the president of the University of S. California? Read the letter and signatories at We’ve inserted their phone numbers and addresses so you can call or write these folks and tell them you don’t appreciate their support for a massive rate increase. Maybe they think they can afford it, but the rest of us can’t.

Judgment Day
531 Days Until November 5, 2002

Los Angeles Business Advisors
(Members Endorsing Letter)

Mr. Stephen Bollenbach President & CEO Hilton Hotels Corporation 9336 Civic Center Drive Beverly Hills, CA 90210 Phone: (310) 278-4321

Mr. Stephen Baum Chairman & CEO Sempra Energy Executive Offices 555 West Fifth Street Los Angeles, CA 90013-1011 Phone: (213) 244-1200

Mr. Les Biller Vice Chairman & COO Wells Fargo Bank 420 Montgomery Street, San Francisco, CA 94163 Phone: (800) 411-4932

Mr. Eli Broad Chairman SunAmerica Inc. 1 SunAmerica Center Los Angeles, CA 90067-6022 Phone: (310) 772-6000

Mr. John E. Bryson Chairman & CEO Edison International 2244 Walnut Grove Avenue, P.O. Box 800 Rosemead, CA 91770 Phone: (626) 302-2222

Mr. John Cardis Vice Chair/National Managing Partner Deloitte & Touche LLP 350 S. Grand Ave., Suite 200 Los Angeles, CA 90071-3469 Phone: (213) 688-0800

Mr. Warren Christopher Senior Partner O’Melveny & Meyers 400 S Hope St # 1060 Los Angeles, CA 90071-2899 Phone: (213) 430-6000

Mr. Robert Day Chairman & CEO Trust Corporation of the West 11100 Santa Monica Blvd # 2000 Los Angeles, CA 90025-3335 Phone: (310) 235-5900

Mr. Richard M. Ferry Chairman Korn / Ferry International 1800 Century Park East, Suite 900 Los Angeles, CA 90067-1512 Phone: (310) 552-1834

Dr. Ray Irani Chairman & CEO Occidental Petroleum Corporation 10889 Wilshire Blvd. Los Angeles, CA 90024-4201 Phone: (310) 208-8800

Mr. Bruce Karatz Chairman & CEO KB Home 10990 Wilshire Blvd., 7th Floor Los Angeles, California 90024 Phone: (310) 231-4000

Mr. Robert F. Maguire III Managing Partner Maguire Partners 355 S Grand Ave., Suite 4500 Los Angeles, CA 90071-3107 Phone: 213-626-3300

Mr. Tom McKernan President & CEO Automobile Club Of Southern California 5550 Wilshire Blvd., Suite 101 Los Angeles, CA 90036-3886 Phone: (323) 525-0018

Mr. Peter W. Mullin Chairman & CEO Mullin Consultants Inc. 644 S Figueroa St. Los Angeles, CA 90017-3411 Phone: (213) 488-8500

Mr. Barry Munitz Chairman & CEO The J. Paul Getty Trust 1200 Getty Center Dr., Suite 400 Los Angeles, CA 90049-1681 Phone: (310) 440-7340

Mr. Phil Neal Chairman & CEO Avery Dennison Corporation Mr. Charles D. Miller Chairman (Retired) 150 N Orange Grove Blvd. Pasadena, CA 91103-3534 Phone: (626) 304-2000

Mr. Ron Olson Partner Munger, Tolles & Olson 355 S Grand Ave., Suite 4295 Los Angeles, CA 90071-3104 Phone: (213) 620-1544

Ms. Joan Payden President & CEO Payden & Rygel 333 S Grand Ave. Los Angeles, CA 90071-1504 Phone: (213) 625-1900

Mr. David Pyott Chairman & CEO Allergan 2525 Dupont Drive Irvine, CA 92612 Phone: (714) 246-4500

Mr. Nelson Rising Chairman & CEO Catellus Development Corporation 800 N Alameda St., Suite 100 Los Angeles, CA 90012-2902 Phone: (213) 625-5865

Mr. Ed Roski President & CEO Majestic Realty Corporation 13191 Crossroads Pkwy North, 6th Floor Bassett, CA 91746-3421 Phone: (562) 692-9581

Mr. Steven B. Sample President University of Southern California 3535 S Figueroa St Los Angeles, CA 90089-0102 Phone: (213) 740-2311

Mr. Michael T. Smith Chairman & CEO Hughes Electronics Corporation 2060 East Imperial Hwy. Los Angeles, CA 90059-2257 Phone: (310) 616-8797

Mr. Sam P. Bell President Los Angeles Business Advisors 333 S. Hope St., Suite 1859 Los Angeles, CA 90071 Phone: (213) 486-3607

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