💸 More budget cuts in CA

More budget cuts in California, PG&E and KKR $3.5B deal gets blocked, and American companies spending in Europe

Author

chrisnolansf
May 14, 2024

Today’s newsletter is 470 words - a 2.5-minute read (4-minute if you’re…🐌)

Welcome back everyone,

Glad to have you join us: We’re Chris & Nolan (@chrisnolansf), and this is SF Whisper - covering the coolest, most interesting business and local news in San Francisco.

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Anyways. Let’s get started.

💸 More budget cuts in California

Tightening the Belt: With an increasing $45 billion budget deficit, Gavin Newsom announced sweeping cuts across several state programs.

Education and Health on the Chopping Block: Despite maintaining free kindergarten and health insurance for low-income adults, Newsom suggested severe cutbacks, including halting construction funds for new kindergartens and scaling back in-home care for disabled immigrants. 

Backlash: Following a pandemic-driven financial windfall, California’s revenue forecasts have sharply declined, prompting Newsom to call for $32.8 billion in cuts over the next two years. The proposed cuts have sparked widespread criticism for potentially increasing hardship among vulnerable groups.

⚡ A Hard No to PG&E's $3.5 Billion Deal

Deal Denied: California's utility regulators have thrown cold water on PG&E's plans to offload a hefty slice of its power generation assets to PE firm KKR. Despite PG&E's hopes to rejuvenate its finances with a $3.5 billion deal involving hydropower, gas, solar, and battery storage assets, the California Public Utilities Commission (CPUC) wasn't sold, citing a lack of thorough analysis to justify the move.

Regulatory Roadblocks: The decision follows concerns about potential operational upheavals and impacts on regional water management. KKR, a giant in infrastructure investment, had expressed confidence in enhancing the utility’s operations while maintaining regulatory compliance, but the CPUC’s Thursday vote put those plans on hold.

What’s Next: With over $59 billion in infrastructure assets, KKR had hoped to reinforce its California ties. However, for now, PG&E must chart a different course to navigate its complex recovery and investment challenges, as the CPUC calls for more convincing strategies.

🎇 US Tech Invests in Europe

Microsoft's Mega Move: Microsoft is setting up to spend $4.3 billion to enhance its cloud and AI capabilities across France.

Amazon Joins: Amazon is injecting 1.2 billion euros into its French operations. This funding is earmarked for creating over 3,000 new jobs and expanding its logistical footprint.

Intel in Ireland: Intel is dialing up its global manufacturing capabilities, entering advanced negotiations with Apollo to fund an $11 billion facility in Ireland.

Catch up on the latest:

  • Instagram creator marketplace opens up in 10 more countries (Link)

  • Stonestown Galleria redevelopment in SF (Link)

  • RSA conference wrapped and 40k+ showed up (Link)

  • Open AI’s Omni model (Link)

Today’s whisper:

A few Studio Ghibli showings coming up in the AMC this month. Enjoy these timeless classics in the theater! (Nausicaa, Castle in the Sky)