When the state discusses its $50 billion debt, it is not including about $10 billion more in debt created to address the 2000-01 energy crisis. The $11 billion bond the state floated in 2002 is not a part of the debt under the general fund, and thus is excluded in the state’s announced debt, according to the Department of Finance. “Repayment of the bonds is guaranteed through the Department of Water Resources bond charge,” by ratepayers and all debt service is paid by ratepayers, according to a Finance spokesperson. The department added that about $10 billion of the debt from the 2000-01 energy crisis remains outstanding. The state’s debt and energy bond funding mechanisms are separate. According to Kevin Civale, DWR bond counsel, they are “apples and oranges.” In other words, in the eyes of the state, one is general fund/taxpayer debt, the other is ratepayer debt. According to Russell Mills, financial reporting contractor for DWR, the energy bonds are being paid off at a rate of $500 million to $600 million a year. (Editor’s note, Mills’ title was misrepresented in some of last week’s issues. He works for DWR, not Finance. Circuit regrets the error.) Meanwhile on the budget front, neither the California Energy Commission nor the California Public Utilities Commission has clarified whether the agencies will be targeted under the 10 percent budget cut proposed by Governor Arnold Schwarzenegger last week, according to spokespersons.
