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BALANCE OF POWER:
Happy humpday to you. It's all downhill from here...for good and bad. Cray-cray morning of writing and listening to committees and floor sessions. Here is this morning's picture of the 2017-18 Legislature with Governor Jerry Brown (click to enlarge):
THE DEADLINE: From lobbyist Chris Micheli:
"By my count, there are 18 bills that were amended yesterday, the final day for amendments under Prop. 54 to be considered by this Friday’s midnight adjournment date (with exceptions for urgency clauses, tax levies, etc.). Of the 18 total measures, there are 7 SBs and 11 ABs for consideration. On the attached chart, the bills are listed along with the time the amendments went into print and can therefore be considered after that time on the other house’s floor. I also put them in time order."
SB 901 (Dodd): The two-house conference committee on wildfire prevention and response came to a conclusion last night with a signed conference report that readies the proposal for a floor vote this Friday. However, as critics of the final language start lobbying members against the final bill, passage is not certain, even if the bill only requires a simple majority.
In testimony on the final package, ratepayers, particularly those of big industries such as agriculture, manufacturers, and oil production and refining, opposed the "solution" in the bill that would allow utilities--primarily PG&E--to borrow money on the private market that is "securitized" by PUC-approved rate "surcharges." That long-term borrowing with a dedicated revenue stream lowers the borrowing cost for PG&E on what could be several billion dollars. Some opponents call it a "bailout"--a "third rail" word.
A representative from The Utility Reform Network (TURN) joined the opposition on behalf of individual ratepayers, which was echoed by a press release by the organization today with the subject line "Bailout Worth Billions Approved for PG&E." TURN reported 83.4% of its $6,328,354 revenues in 2017 from reimbursement of attorneys fees. The organization does good work, but is essentially a nonprofit public interest law firm focused on regulated utilities. That isn't a negative as similar groups are responsible to a lot of the civil rights work over the years.
For KQED, Guy Marzorati and Marisa Lagos report:
[The compromise is] aimed at both protecting utility ratepayers from footing the bill for billions of dollars in damage caused by electrical equipment -- and ensuring that PG&E and other utilities don't go bankrupt.
It would do that by letting PG&E issue bonds to pay for damage caused by last year's North Bay wildfires while creating a commission to weigh utility liability in fires that started this year.
Southern California Edison, San Diego Gas & Electric (both owned by Sempra Energy) and many publicly owned utilities also don't like the final language. Many feel like they invested more on the front end for fire prevention while PG&E was paying out dividends to shareholders. Now, they believe, PG&E is going to recoup costs of not preparing, while they can't recoup their prevention investment.
Victims and insurance companies like the final package, as it provides hope for cost recovery even while liability for last October's Tubbs Fire is still being determined. That fire in Lake, Napa, and Sonoma counties destroyed 5,636 structures, with the largest destruction in Santa Rosa.
The testimony was in quite contrast to Monday night's, when there was a parade of PG&E supporters weighing in on behalf of the language at the time. These were mostly specialty chambers of commerce that generally represent small businesses, and which are also generously supported by PG&E.
PG&E has strategically taken a restrained approach in public testimony, spending time on private lobbying and television and radio commercials. Instead, the face of PG&E is its workers, many represented by the International Brotherhood of Electrical Workers. Both PG&E and IBEW know that the overwhelmingly Democratic Legislature will be far more influenced by union workers than shareholders. About 84% of PCG (PG&E) stock is held by institutional shareholders, most of which are mutual funds. Most of you reading this likely are shareholders whether you know it or not, and many of you are ratepayers as well.
There is no simple winners and losers chart.
As supporters and opponents don their walking shoes for two days of heavy lobbying ahead of Friday's vote, it is anybody's guess. Lawmakers in PG&E territory don't want to be seen as pushing the utility into bankruptcy. However, they are wary of consumer outrage when the surcharge is added after an unspecified amound of bonds at an uncertain interest rates are sold. If the utilities dividend returns any time during the period of the surcharge, the politics could be ugly. That said, investor-owned utilities are equity stocks and dividends are their lifeblood of maintaining a stock price.
PG&E will have its lobbying force out in full and will be talking the other third-rail B word--"bankruptcy." That's a big threat to employees and shareholders, as well as to the commitments PG&E has made to carbon reduction in electricity generation as part of the state's overall climate plan. That will be particularly persuasive to nothern California legislators.
Meanwhile, Southern California legislators don't see much in the package, except for the funding and more generous tree and shrub clearance regulations and funding, which includes $1 billion over five years from the state's cap-and-trade fund. Some, however, don't believe it is enough and any time you say "cap-and-trade," opposition ears perken. There are also concerns about language about the diameter of trees that can be removed in forest clearance.
The biggest end-of-session fight has literally come down to a game of inches.
There's a lot more in the nearly 100-page bill. Few people have read the whole package. Advocates look for their section and parse every word. Few legislators have staff with knowledge on all of the issues involved. Because it is a conference report, there is no committee analysis, which is often used to build the floor analysis. The floor write-up likely won't be available until Friday, which will already be a hectic day as the clock ticks toward midnight.
As of this writing, PG&E's stock is up 1%, modestly above the Dow Jones Industrial average's gains, but not showing any significant response to last night's developments on SB 901.
[Disclaimer: I have accepted ads from both sides of this issue. As with my policy, I accept ads as they don't encourage illegal behavior.]
SB 100 (de León): It was a tense vote count that wasn't closed for hours, but the bill to accellerate California's 100% zero emissions standard eventualy passed the Assembly 44-33 yesterday, with three not voting. The bill is now back on the Senate Floor for concurrence, where it will certainly pass. Governor Brown looks forward to the bill landing on his desk and signing it into his legacy.
While utilities were divided on SB 901 package, SB 100 passage was opposed by each of the investor-owned utilities, as well as many business groups, particularly agriculture.
Senator de León passed on file on the bill this morning, so it's unclear if it will be brought up today or if he just didn't have paper on it yet.
SB 10 (Hertzberg): The governor signed the bill to replace money bail in California with pre-trial risk assessment was signed by Governor Jerry Brown just after The Nooner went out. He was surrounded by the bill's author, Bob Hertzberg (D-Van Nuys), lead Assembly proponent Rob Bonta (D-Alameda), legislative leaders Toni Atkins (D-San Diego) and Anthony Rendon (D-Lakewood), as well as Chief Justice Tani Cantil-Sakauye of the California Supreme Court.
Cantil-Sakauye was at UC Davis Law during Jerry Brown's second term as governor. Gotta love a community college-UCD-King Hall alum who becomes chief justice and was the second woman and first person of color to assume the post. Good pick, Arnold Schwarzenegger.
Friend of The Nooner Capitol Public Radio's Ben Adler gets some Morning Edition time to talk about the bill.
Opponents from the bail bond industry promised to fight the bill's implementation. David Quintana, a lobbyist for the bail industry, told the Sacramento Bee “You don’t eliminate an industry and expect those people to go down quietly,” he said. “Every single weapon in our arsenal will be fired.”
The fight is clearly not over. Meanwhile, if the legal attack is over the 72-hour requirement for amendments for a final vote, it would just be a three-month stay of execution for the bail bond industry. There will be simple majorities in both houses again next session. A bill that eliminates cash bail effective January 1, 2020 instead of October 1, 2019 would pass and be signed by gubernatorial favorite Gavin Newsom. so it's likely a legal debate over three months.
Of course, we have Duncan Hunter after the jump...
CA50 (East San Diego County): Yesterday, Congressman Duncan Hunter told San Diego's ABC 10News “Leave my wife out of it, leave my family out of it. It’s me they’re after anyway. They’re not after my wife; they want to take me down, that’s what they’re up to. So let’s get this in the arena and have this settled,” said Hunter. [h/t LAT's Sarah D. Wire]
He made the comments before speaking at the luncheon for the "Women Volunteers in Politics," a conservative group.
Apparently, a lot has changed since his interview with Fox News after pleading "not guilty" last Thursday, during which he drove the bus right over his wife. Fox reports, you decide:
"He also said that his wife handled most of the family expenses when he was first deployed to Iraq in 2003 and that she continued to manage them when he joined Congress.
“When I went away to Iraq in 2003, the first time, I gave her power of attorney. She handled my finances throughout my entire military career and that continued on when I got into Congress... She was also the campaign manager so whatever she did, that’ll be looked at too, I’m sure, but I didn’t do it.”
Okay, so that's two very different stories. He's truly trying to make this about a witch hunt by the Republican U.S. Attorney and not what's in the indictment or his own campaign reports. Yes, the investigation started under a Democratic U.S. Attorney, but that followed an FEC investigation and media coverage, and the Hunters have essentially already expressed guilt of charges through previous repayments to the campaign committee.
Meanwhile, SurveyUSA has released a poll commissioned by ABC 10 and the San Diego Union-Tribune. If you're a regular Nooner reader, you know how I feel about SurveyUSA. The firm uses responses from robocalls and text messages. It's an affordable way for local television stations and newspapers to get a snapshot on the relative cheap.
From the basic cost side, statewide polls on candidates and issues can lead to five days of stories, whereas a single legislative poll is one story. Thus, the only in-depth polls we get on legislative districts are generally by interested parties--the candidates or committees shaping a message to promote a candidate.
So, we take what we can get:
69% of self-identified "conservative" voters believe the charges are politically motivated. They account for 38% of the district's voters. A sightly smaller share (64%) of registered Republicans believe they are politically motivated. They are 43% of the sample.
11% of likely voters say that the charges against Hunter make them "more likely" to vote for him in November.
The polling began before the court appearance of the Hunters, pleas of "not guilty," and Hunter's FOX News interview.
Take the above numbers for what you will at this point in the game. If Democrats decide to make Hunter a priority, there is plenty ready to hit the press to provide salacious details from the indictment to independents and Republican women. Legitimate polling doesn't start for a couple of weeks for congressional races, particularly for a dynamic situation like we find in CA50.
#CAKEDAY: Happy birthday to Michael Anadon, Shirley Kim, Jorge Morales, and Afrack Vargas!
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