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Gold/Mining/Energy : Mirant Corporation (MIR) -- Ignore unavailable to you. Want to Upgrade?

To: Softechie who wrote (271)	2/25/2002 8:47:49 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 903

I liked this part: At the time the contracts were signed, critics said the state was signing too many and for time periods that were too long. In effect, they said it was creating a long-term fix for the short term problem of skyrocketing energy prices brought on by inadequate supply coupled with surging demand in the then-vibrant economy. Brushing aside such criticism, the governor's office said the prices were reasonable and he praised sellers like Calpine for coming to the table. In its filing this week, the state walks a rocky path. It is arguing at FERC that the contracts are neither "just" nor "reasonable" as required by the Federal Power Act. Yet within the state, it is arguing for rate-making purposes that the costs of those contracts are in fact "just and reasonable" and that retail consumers must pay to uphold them.

To: Softechie who wrote (271)	2/25/2002 9:11:51 AM
From: Oeconomicus	Respond to of 903

Davis lashing out, trying to cover his own stupidity. Here's how the long-term contracts came about, as described in a footnote to MIR's 9/30/01 10Q: DWR Power Purchases: On January 17, 2001, the Governor of California issued an emergency proclamation giving the DWR authority to enter into arrangements to purchase power in order to mitigate the effects of electrical shortages in the state. The DWR began purchasing power under that authority the next day. On February 1, 2001, the Governor of California signed Assembly Bill No. 1X authorizing the DWR to purchase power in the wholesale markets to supply retail consumers in California on a long-term basis. The Bill became effective immediately upon its execution by the Governor... The note does imply, however, that what I suggested about a "funding out" clause is the case: ...The ability of the DWR to make future payments is subject to the DWR having a continued source of funding, whether from legislative or other emergency appropriations, from a bond issuance or from amounts collected from SCE and Pacific Gas and Electric for deliveries to their customers. BTW, the 10Q also notes that MIR entered into a 19-month agreement with the DWR on 5/24/01 (covering 6/1/01-12/31/02) to supply approx. 500MW of electricity. Anyone know what the value of that contract would be at current rates and at the rates CA was buying at the time? Bob