NEW YORK, Dec. 3, 2001 — Fitch has published a special research report on the California Department of Water Resources (DWR) that is the first update to the `Frequently Asked Questions' report published Aug. 22, 2001.
The report, which is the second in a series covering DWR, focuses on the status of California Public Utility Commission (CPUC) orders and proposed alternative bond structures.
It also addresses the Pacific Gas & Electric bankruptcy plan and the CPUC settlement with Southern California Edison, as well as the impact of the delay in the DWR bond issuance on the California Consumer Power and Conservation Financing Authority (the power authority) and the state budget.
Since Feb. 1, 2001, when California Governor Gray Davis signed into law Assembly Bill No. 1 (AB 1X), DWR's Power Fund has become the dominant purchaser of electricity in California. Consequently, its counterparty credit quality is of vital importance to virtually all energy suppliers doing business in the Western U.S.
The credit of DWR's contractual counterparties (i.e. generators, energy marketers, and gas suppliers) will in turn be affected by the counterparty credit of DWR. The ability of DWR to issue up to $13.4 billion in long-term bonds is also important to the credit and liquidity of the State of California's general fund. Recent events have caused this bond issuance to be delayed until at least 2002 and possibly indefinitely.
The 5-page report, `California Department of Water Resources (Quarterly Update)', dated Nov. 30, 2001 is available on Fitch's web site at `www.fitchratings.com' or by contacting Market Services at 1-800-853-4824. Fitch plans to publish updates to reflect major developments on a quarterly basis.
