Chris! I told you not to do that. That is going to complicate
everything."
?????But he hadn't listened.
?????He didn't seem to be able to listen to anyone.
?????And he didn't have to this time.
?????Nassar didn't pay him. He barely even spoke to him.
?????Nassar still controls the company through a couple of his friends,
including an accountant, Fong Man Lo. They were at a lunch to celebrate the
bond sale in September when Mike, sitting next to Lo, asked for some of Lo's
money. The accountant said he'd give him some, but he was under no illusion
that his money was as safe as the money being piled up in this restaurant.
?????He got an apartment. And a BMW.
?????"I still say he's crazy," says Lo. "The guy hasn't learned anything at
all."
?????There's no doubt that the world has grown more dangerous for the
frequent gambler. But Mike is still gambling, with an air of detachment that
hasn't changed since we first met him. He knows that if he's going to lose,
he's going to lose. So he's not going to try to beat the house. But he is
still trying to beat the other guys.
?????And maybe he can.
?????The bond salesman is, after all, selling something people need. He says
he figures his rate of return at around 15%. But his overhead is minimal
compared with those of many of his competitors.
?????The way he sees it, if he undercharges, he can always make up the
difference on volume. He and his partners will continue to sell $50 million
worth of debt a week.
?????Says Mike: "It is possible for an independent broker to make a lot of
money in Asia."
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Davis May Shift Stance on Power Plant
PG&E, Edison and San Diego officials--already on the defensive--now fear
Davis will use executive orders to seize plants. Talks were also scheduled
with plant owner--Enron--for Saturday.
By DAN MORAIN, Times Staff Writer
?????SACRAMENTO--There was a time when state leaders felt so confident of
success in persuading corporate behemoths to build plants in California that
they played what amounted to a prank on the California Energy Commission,
sending fake letters purporting to come from the chief executive officers of
the state's three largest utilities.
?????The letter that Gov. Gray Davis is said to have received on Friday is
not a joke. With its bold assertions, it appears to be the opening gambit in
an attempt by California's energy insiders to force state power regulators
and plant builders to accept a fait accompli: massive, long-term power
contracts at rates that could exceed the real cost of electricity by 10%.
?????That is the concern of a number of insiders and outside analysts, who
note that the governor's staff could use the executive orders to seize two
gas-fired power plants that are near completion in Pittsburg, a small town
about 100 miles northeast of San Francisco.
?????Officials of Pacific Gas & Electric Co., which is on the verge of
bankruptcy, and Southern California Edison Co. learned Friday that Davis had
signed executive orders that they said essentially took two of the plants
that they own off their hands.
?????The Davis administration plans to sign agreements with the builders of
the Pittsburg and Morro Bay power plants that are virtually the same as the
miraculous deals the governor cut with private companies that build power
plants near Yuba and Sutter county lakes earlier this year. In exchange, he
got a pledge from the private companies that they would operate the plants
for 10 to 20 years.
?????The executive orders that Davis is expected to sign within the next
three days would name the chief executives of PG&E, Edison and San Diego Gas
& Electric Co. as the directors of a new state power authority that would
issue bonds to finance the purchase of power plants.
?????The two power plant developers are to be brought into the state
Conservation Financing Authority. With their plants off the California
market, they could be forced to sell to the state agency at a fraction of
what it would cost them to operate.
?????Such a tactic appears to be the first phase of an intricate plan that
would put California into the power business in a big way and lead to the
state eventually owning and operating most of the state's power plants.
?????"This is our first glimpse of the true plan," said Bill Ahern, senior
vice president of the California League of Food Processors.
?????The governor's plan calls for the immediate seizure of the two power
plants under construction in Pittsburg.
?????"The governor says he has no interest in building power plants out of
state. His actions are contrary to that," said Richard Ferreira, director of
procurement for the Alameda County Local Agency Formation Commission.
?????Ferreira, one of the state's most ardent utility regulators, said he
won't let the Davis administration by-pass a 1962 state law that requires
local governments to approve the siting of power plants and transmission
lines.
?????"I'm very upset and angry. These people are wrecking the state," said
Ferreira, who blames the corporate interests that control the major
utilities.
?????The governor's executive orders are needed because FERC last month put
the 1,500-megawatt Pittsburg plant on an "in-service" list, meaning that if
the developer, Delta Power, hadn't reached an agreement with state
officials, the agency would have begun the process of forcing its sale to a
willing party.
?????The $250-million plant, which was to be completed in June, is a key
piece of the state's five-year, $23-billion conservation program that is
supposed to provide 20,000 megawatts for Californians.
?????If the plant sale isn't stopped, it could ignite a legal battle over the
$1.3-billion plant that the Davis administration negotiated with Delta, said
Joe Bob Perkins, president of Reliant Energy in charge of the plant.
?????He believes the orders will be challenged in court.
?????"You can't just take something like this and make it disappear because
it doesn't fit into some state plan that was dreamed up in an afternoon,"
Perkins said.
?????In February, Davis traveled to Washington and announced a deal in which
the state would pay just $1.6-billion for the 1,300-MW Mohave plant near
Laughlin, Nev., and the transmission lines that would run from the plant to
the California border.
?????But PG&E refused to sign off on the plan unless it could charge higher
prices for electricity in the future, and the price was the sticking point.
?????The state's purchase of the plants is crucial because the state will be
paying the bill for the long-term contracts the Department of Water
Resources has signed on behalf of the state's three cash-strapped
investor-owned utilities: PG&E, Southern California Edison and San Diego Gas
& Electric.
?????The $43-billion state deal signed in February is widely credited for
having prevented the utilities' financial collapse just three weeks ago. The
state is spending another $4.1-billion to buy transmission lines from the
utilities, which are on the verge of bankruptcy because of soaring wholesale
power prices.
?????The Delta plant, on the other hand, was developed in a different time
when electricity was cheaper, and its main selling point is that it can
provide enough electricity to light two million homes.
?????"I see this as an abomination, to be honest," said Gino DiCaro, owner of
a Pittsburg-based marketing company, Advanced Placement Inc. "I see this as a
$2-billion robbery of ratepayers."
?????The state argues that even as the utilities are spending huge amounts to
buy power at the last minute, the Department of Water Resources is acquiring
far more electricity under long-term contracts, driving down the average
price per kilowatt by 26%.
?????The deal is not, as critics suggest, an attempt by the state to grab for
itself power plants that should be built by private investors.
?????"This is just the opposite," said John Stevens, assistant general
manager for Delta Power, which estimates that the state's contracts could
save ratepayers as much as $30 million a year once the whole deal is
completed.
?????But one source with ties to one of the utilities said that Davis is
keeping the developer
