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AroundTheCapitol.com Headlines | California Legislative Directory | Nooner Premium Subscribers

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LEGISLATIVE DIRECTORY:

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What a Monday! If you run in to me at an afternoon/evening event and ask "What's in tomorrow's Nooner" and I say "I'll know when I wake up," I'm not lying. Today is definitely one of those days!

It's a pretty crappy news day, so before we get to that, let's have a positive. Tonight, the Golden 1 Center is launching a "Meatless Monday" program that will feature special chef-created options at the arena's Flavor Lab outside Section 109. This is in addition to the meatless options at The Burger Patch cart outside section 123. Congratulations to Jennifer Fearing and others who have pushing for this. Sounds great to me, particularly to see Portland face the Kings. For the newcomers, I was born in Portland, like both teams, but only root for the Kings under Slamson's roof. My only challenge tonight will be reconciling Meatless Monday with Whole30, but I'll take on the challenge. Tickets are still available for the 7pm tipoff.

I hope you enjoyed your weekend. If you took a couple of days off of The Nooner, here's what was covered:

  • Saturday, January 12: Davis police officer shooting, CADem and CARep chair races; Gavin and water; LA teacher strike; 2020 Watch
  • Sunday, January 13: Davis police officer shooting; FBI investigation in Los Angeles expands; impact on council, mayoral races, Garcetti 2020

DAVIS POLICE OFFICER MEMORIAL: The service for fallen 22-year-old rookie Davis Police Department Natalie Corona will be held this Friday, January 18 at 11 a.m. at the UC Davis Activities and Recreation Center (ARC). It will be open to the public. 

PACIFIC GAS & ELECTRIC: Yesterday, Geisha Williams stepped down as CEO of Pacific Gas & Electric, which has been beleaguered by liability arising out of the 2010 San Bruno gas line explosion and wildfires in 2017 and 2018 widely believed to be attributed to electrical lines. Williams was the first and only Latina CEO of a Fortune 500 company.

This morning, the company announced plans to file voluntary Chapter 11 bankruptcy on or about January 29.

When SB 901 was being sold to legislators, t the pass-along costs to each ratepayer of debt service were identified at around $5/year per $1 billion financed. At the time, the liability number floated from the 2017 wildfires was $3 billion, so that would be $1.25 more per month for each ratepayer. It wasn't easy to stomach, but the political backlash wasn't seen to be overwhelming. Several legislators exhaled over the vote on Election Day November 6 when California voters rejected a repeal of the gas tax for road repair that, at 12 cents/gallon, was far greater and discernible than the PG&E securitization. 

That number--just for 2017 may now be $9 billion. That brings that per-month cost of securitization to $3.75 per ratepayer. These numbers were not discussed in the SB 901 analysis although many observers at the time thought the $3 billion was lowballed.

Securitization is like financing a car, although the lien is not on a physical entity (car) but rather on government-approved rates. Instead of paying everything at once that would be impossible, utility companies would sell bonds on Wall Street "securitized" by surcharges approved by the state's Public Utility Commission and paid by ratepayers. Because the bonds are paid by government approved rates, they would be theoretically be issued at lower rates than typical operational bonds of a public company. Think of it as dad co-signing for your car loan. 

But, of course, we are not done. That $3 billion/$1.25 per month to $9 billion/$3.75 per month be may now convert to $30 billion in liability when the 2018 Camp Fire is factored in. That works out to $12.50 per month per ratepayer, using the numbers shared with legislators when they grudgingly approved SB 901 on August 31. Of course, those calculations based on $5 per ratepayer per $1 billion borrowed were using PG&E's bond credit ratings at the time and before the 2018 wildfires. The cost of borrowing, even as politically secured debt, has likely gone up.

Dad is no longer co-signing for a Honda Accord, but rather a Tesla with the possibility of a Y2020 political bug. Like the markets, both he (the PUC/Legislature) and the "bank" (bond-buyers) are having second thoughts.

Nobody knows how the market would receive liability securitization bonds from PG&E at this point. S&P lowered the company's bond rating to junk status earlier this month and the liability has increased tenfold since the Legislature acted on August 31 and the market situation for PG&E has only gotten worse. 

And, there is no political willingness to see a potential $2.50/month ratepayer obligation soar to $25/month. The former was hard enough.

There is no way out. Governor Brown wanted to the Legislature to change the law of "inverse condemnation" that makes PG&E strictly liable for property damage caused by its equipment without requiring proof of negligence or intent. That didn't fly with the Legislature over Fourth Amendment constitutional issues and deciding whether it was retroactive to 2017 or would only apply going forward. I wrote more on inverse condemnation and how we got to today's bankruptcy announcement on January 5. On January 6, I wrote about Southern California Edison, which is in much better financial condition but needs SB 901 to be extended to cover 2018 to securitize the liability of the Woolsey Fire.

I don't think changing inverse condemnation will be back on the table this year, but I also don't know of anyone who thinks they have a solution at this point. Sure, lots of people will emerge from the shadows to offer a solution that they will make money on, but their suggestions will be about as believable as the guy selling a Rolex from his trenchcoat in an alley outside of Hamilton on Broadway.

I obviously don't know what PG&E can and will try to do under Chapter 11. Like most of you, I just have their balance sheets and publicly disclosed assets and liabilities. PG&E already has $18 billion in outstanding bonds, according to TheStreet.com.

A challenge for the bankruptcy court will be that the wildfire liability for 2017 and 2018 is not a known number. Officially, the cause of the Tubbs Fire in Lake, Napa, and Sonoma counties in 20 2007 that destroyed 5,636 structures is not known, although is widely believed to have been caused by power lines in a windstorm, like the Camp Fire in 2018 that was the most destructive and deadliest in California history, destroying 18,804 structures and taking 86 lives.

Nobody wins in bankruptcy. Shareholders, creditors including operational and bondholders, employees, and ratepayers are all likely to take a hit. The gaming of the California electricity market led to rolling blackouts, unidentifiable economic impact, and largely, the recall of Governor Gray Davis. However, it was nothing to the "retail" impact the bankruptcy of PG&E will likely be, as Enron had relatively few operations in California but was really a market player.

PG&E's press release from the company states that it expects to continue service and employee compensation as usual. 

That's different from what it and its largest union, the International Brotherhood of Electrical Employees, told law makers leading up to the vote on SB 901 on the last night of session. The ultimate scare tactics were put on the table before lawmakers of the ultimate doom and gloom. The true impact is likely between PG&E's press release and the nightmare scenario given in August. Remember, the November fires had not yet happened. 

The parties before the bankruptcy court are numerous. In addition to those I listed above, there are insurance companies who have already paid out to policyholders and want to recoup, trial lawyers looking at recovery of wrongful death claims, local governments, and many more. I lied when I said nobody wins in bankruptcy. Lawyers win and lobbyists on all sides will win as issues concomitant with the bankruptcy move through the Legislature. 

There are no legislative hearings scheduled yet and the two-house committee that tackled the issue last year would have to be reconstructed this year since we're in a new session. All eyes are on Governor Gavin Newsom, Senate President Pro Tem Toni Atkins, and Assembly Speaker Anthony Rendon.

Meanwhile, Consumer Watchdog took on legislators with a letter to legislative leaders and a presser in "to expose" the "Wailea 12"--legislators it claims were "partying in Hawaii with utility executives as Malibu and Paradise burned." 

The advocacy group points to a January 5 article by Ivan Penn in the New York Times. Penn writes:

"As California’s deadliest wildfire was consuming the town of Paradise in November, some of the state’s top power company officials and a dozen legislators were at an annual retreat at the Fairmont Kea Lani resort on Maui. In the course of four days, they discussed wildfires — and how much responsibility the utilities deserve for the devastation, if any.

. . .

Events like the Maui conference have provided fodder for the industry’s critics.

The annual event is organized by the California Independent Voter Project, a nonprofit in San Diego that was co-founded by a former state senator and says it informs the public about policy issues. The event brings together legislators and executives from several industries, who pay $8,000 a head to attend. Legislators sometimes pay their own way or receive compensation if they speak.

PG&E canceled its presence at the event as fires began raging in Northern California but did not seek a refund of its sponsorship, which the company said covered the entry fees for its officials. Executives of the two other investor-owned utilities, Southern California Edison and San Diego Gas & Electric, still attended.

Also at the event were 10 members of the State Assembly and two state senators who sit on committees dealing with the state budget, appropriations, energy, public safety and insurance. The dozen lawmakers are among the biggest beneficiaries of campaign contributions from the three utilities, receiving more than $600,000 since 2011, according to Consumer Watchdog."

AT MY BELL: At 11:25am as I put this baby to bed, PCG, the parent of PG&E is trading at 9.06 USD −8.52 (48.48%).

LA-LA LAND: As expected, United Teachers Los Angeles went on strike this morning and, as of this writing, are in the streets with their umbrellas. The team at the LA Times write

"Schools will be open but it’s unknown how many students will head to classes in the nation’s second-largest school system. Some will be joining their teachers on the picket line.

For those who go to school, the day is unlikely to follow routines as volunteers, an estimated 400 substitutes and 2,000 staffers from central and regional offices fill in for 31,000 teachers, nurses, librarians and counselors. At 10 schools, nonteaching employees will take part in a sympathy strike, which will create additional headaches as administrators struggle to manage such tasks as preparing and serving meals."

Beyond the question of how many students will show up and how many substitutes are available and willing to cross the picket line, it is also unknown what "open" means. Meals are important with a very large number of students on free or reduced-price meals. Does warehousing the students in school gyms count for the district's average daily attendance?

UTLA does not plan to return to the bargaining table today and the strike is expected to last at least a few days and likely longer.

In April-May 1970, there was a 23-day strike and in May-June 1989, there was a 9-day strike. Both of these were before the Proposition 98 minimum funding guarantee and toward the end of the budget negotiations of the repective years. Now there is a guarantee and the rough numbers for the 2019-2020 budget are known with Gavin Newsom's budget proposal last Thursday. The big items in the K-12 budget are basically known with only details to be worked out by the legislative budget process. 

MEDIAWORLD AND #CAKEDAY after the jump...

Classifieds below: all job listings are in Sacramento unless noted (submit at $40/week)

  • Job: Aaron Reed and Associates: Administrative Assistant
  • Job: Asian Pacific American Leadership Foundation: full-time program manager (Los Angeles)
  • Job: County Welfare Directors Association of California: senior-level Executive Assistant
  • Job: Health Plan of San Joaquin: Government Affairs Representative (French Camp, CA)
  • Job: NorCal Cannabis: Legislative and Regulatory Strategist to Public Policy Strategist
  • Job: Pruitt Consulting LLC: fundraising associate
  • Job: TrattenPrice Consulting: Office Manager/Admin Assistant
  • Office Space: Class A Office Space Available on L Street, across from Capitol
  • Residential: A quiet, vacant duplex unit, half a mile south of Land Park/ Sacramento Zoo.
  • Training: Lobbying Seminars with veteran Ray LeBov: Next dates: February 7-8, April 4-5, June 6-7
  • Training: PDI (Political Data Inc.): weekly online trainings of various skill levels 

MEDIAWORLD: The East Bay Express laid off most editorial employees on Friday as it continues to face declining ad revenues and a lawsuit outcome over the payment of overtime to an employee, which may be up to $750,000. Publisher Robert Gammon  writes:

"The Express, however, intends to continue publishing weekly under a different editorial model and is committed to continuing its long tradition of investigative journalism; political and environmental news; and music, arts and culture, and food coverage.

. . .

Under the reorganization, I will be returning to my role as editor of the Express, and Buel will return on Monday as publisher (his old position). I had been serving as both editor and publisher in recent months.

The Express will also be moving to a freelance model for nearly all of its ongoing coverage. Throughout its 40 years, the paper has relied heavily on freelance journalists in its pages. Before the recent layoffs, more than half the content in the paper each week was produced by freelance writers. In addition, several of the people laid off have agreed to freelance for the paper."

As a one-person operation covering the tech and content sides, I don't envy those trying to keep the East Bay Express alive. I'm also on the board of Open California, the non-profit that operates Capitol Weekly. It's no secret that the editorial content and great things like the podcast, Politics on Tap, and the Oral Histories Project are only possible through organizational and philanthropic support and the policy-oriented events it holds. 

Meanwhile, Gannett appears to be next on the dinner plate for Digital First media. In California, Digital First operates the Media News Group, which includes the East Bay Times (including the former Oakland Tribune), Los Angeles Daily News, Orange County Register, Riverside Press-Enterprise, San Bernardino San Diego Mercury News, and many more. 

Gannett owns many properties including the nation's "most widely circulated" newspaper--USA Today. Of course, much of that distribution is through hotels, where it is an opt-out feature on your bill. It's particularly popular for its sports coverage during morning business before the shower if you get my drift.

I like to kid USA Today about its business model and as someone who used to travel way too much, but the paper has some great journalists. Further, the paper's founder, Al Neuharth, created the Gannett Foundation, which created the Freedom Forum, and the Newseum. If you haven't been to the Newseum on Penn Avenue in DC, it's a must-visit and, well, it's open during shutdowns. During law school, I participated in the National First Amendment Moot Court Competition sponsored by the Freedom Forum, which was in Nashville and had Supreme Court Justice Sandra Day O'Connor as a keynote.

It appears Digital First's hostile effort is just for the Gannett newspapers. The television stations, including Sacramento's ABC10 (KXTV) are not on the dinner menu. Gannett split its newspaper and electronic media priorities in to separate companies in 2015. KXTV is now owned by Tegna, Inc.

Probolsky Research

 

#CAKEDAY: Happy birthday to Emily Cohen, Jeremy Empol, Assemblymember Reggie Jones-Sawyer, and Esthela Pacheco!

#CAKEYEAR: Happy 25th to the Public Policy Institute of California! Read more about what PPIC is working on.

CLASSIFIEDS

Add your classified of up to 100 words by emailing scottlay@gmail.com for $40/week.

  • LOBBYING SUCCESS BEGINS HERE. And what an "interesting time" to be a lobbyist, with a whole new set of players in Sacramento. So, send us your new lobbyists, support staff, and anyone else who manages or collaborates in the process of advocacy, and they'll come back with invaluable information and inside insights they can put to immediate use. Capitol Seminars is already the No.1 training resource for numerous nonprofits, private sector organizations, lobbying and public affairs firms, trade associations and state and local government entities. Conducted by 45-year Capitol veteran Ray LeBov, our seminars cover the processes, points of influence and best practices for success across these key areas of advocacy -- Legislative, Budget, Regulatory, Lobbying the Administration, and Media Strategies. Next dates: February 7-8, April 4-5, June 6-7. Curriculum information and registration: www.capitolseminars.net or 916-442-5009.

  • Health Plan of San Joaquin is recruiting a Government Affairs Representative in French Camp, CA. This position is responsible for identifying, researching and evaluating public policy, including state and federal legislation, assisting with proactive and responsive public policy communications to internal and external stakeholders, and representing HPSJ’s interests in various industry associations and public forums. Bachelor’s Degree in Business, Healthcare Administration, Political Science, Communications or similar is required along with at least four years’ experience in healthcare advocacy, public affairs or government relations. Apply with confidence at:  www.jobs.net/jobs/hpsj/en-us/job/United-States/Government-Affairs-Representative/J3V2YV5XCBH77HWW9Q3/
  • FOR RENT: A quiet, vacant duplex unit, half a mile south of Land Park/ Sacramento Zoo.  2 bedrooms/1.5 baths.  New paint and carpet. 2-year lease.  For additional information email elisha@growproperties.com.
  • County Welfare Directors Association of California seeks senior-level Executive Assistant to support CWDA Executive Director and his team. Duties include scheduling, meeting/event planning and logistics, conference planning, member support, contract management. Our office is fast-paced, busy and fun. Competitive salary DOE; excellent benefits. More information here.
  • TrattenPrice Consulting – Office Manager/Admin Assistant
    Government affairs firm seeks an office manager/assistant for two lobbyists. Candidate must have experience working in a lobbying office including scheduling, bill tracking, and administrative support. Candidate will have a min 2-3 years direct experience, be well-organized, a self-starter and flexible. Salary BOE. Submit resumes to Lea-Ann ltratten@trattenprice.com.​

  • Cal State Student Association seeks Legislative Policy Analyst
    The position is responsible for researching and analyzing legislative policy issues. Additionally, the position will be responsible for externally representing the organization in legislative meetings and committees. Lastly, the position will be responsible for advising our board of directors and legislative affairs committee. For more information and to apply, visit apptrkr.com/1364276.

  • Aaron Reed and Associates: Administrative Assistant
    Experience working in governmental affairs office, working knowledge of the legislative process, calendaring, arranging travel, proficient in Microsoft Outlook, Excel and Word, outstanding communication skills. Salary BOE. Please send your resume to Joelle jmccoy@aaronread.com. (1/15)

  • The University of California Office of the President is looking for an Associate Director of Strategy, Planning & Operations in its Sacramento Office. The position serves as a key member of the office’s management team, facilitates issue management across legislative, budgetary and advocacy portfolios, produces briefings, memos, reports and presentations on a variety of matters affecting the University, and directs special projects. Job requires strong knowledge of UC, the executive and legislative branches of California government and higher education policy. Bachelor’s or advanced degree in public policy-related fields and 7 years of related experience is preferred. Salary commensurate with experience.
    To apply, visit: apptrkr.com/1331140 
  • For 30 Years PDI has been California’s premier data vendor. Now, you can get live online trainings on the newest PDI software every week:

Tuesday 4PM Intro Training 
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