Free Republic

In yet another expensive example of the California electricity crisis, Wall Street firms are pressuring the state into borrowing far more in an upcoming bond sale than it needs to cover past or future power costs. The additional borrowing - nearly $2 billion of the $12 billion offering - will be diverted to so-called reserve funds, which rating agencies and energy suppliers demand if payments for interest and for long-term electricity contracts are to be guaranteed. The reserve funds from the bonds will be bolstered by payments from state electricity customers until the reserves total at least $3.4 billion. In...

SAN FRANCISCO, May 29 (Reuters) - Pacific Gas & Electric Co. (NYSE:PCG - News) has challenged an order by state regulators needed for California to launch an $11.1 billion bond issue to help recoup the cost of the state's emergency power purchases last year. The challenge, made late on Tuesday by the PG&E Corp. subsidiary, California's biggest utility, could delay the bond issue, one of the largest municipal bond sales ever, credit analysts said. While state Treasurer Phil Angelides has not set a schedule for any bond deal, he recently told investors he would likely issue a timetable sometime...