>> the ferc project? >> yes. >> i would look to don on that. >> the don pedro is currently in stages -- two irrigation districts will file draft license applications and the final license application is filed in april. at that point, ferc will start to consider the kind of full requirements that might be required, but at this point it's really ditch to difficulty to say what is the potential hit on san francisco. >> is that owned by east bay mud? >> no don pedro is owned by turlock. the flood control obligation is transferred to the districts and also the city has the ability to pre-pay their water rights in advance and divert upstream. so it kind of acts as virtual storage for us. it's not storage we can divert out of reservoir, but allows us to operate the hetch hetchy project to increase your yield. >> the storage there is just for irrigation? >> that is correct. any water in don pedro is completely under control of the districts and pursuant to their water rights and not ours. >> commissioner moran? a

the pedro process is going through the ferc process and that is expected to come to completion in 2016 and obligations on the tulle river from san francisco. we have to deal with that issue in the future and we don't know what the answer to that is yet, but it's a risk out there. the state board water quality control plan for the bay delta, specifically on the san joaquin river is out in draft and 35% of unimpaired flow during january to june and that could impose a large obligation on san francisco. the way its written it's unclear, but it's a hit to the water supply that we would have to deal with and there is also the flow criteria for the delta ecosystem that the state board adopted as the result of the reform act of 2009 that calls for higher levels of unimpaired flows going down the riff. all of these regulatory items represent risk to us and that is something that we have to deal with and at some point some decisions may get made that will result in an impact to us. there is demand uncertainty. we're starting to see rebounding demand with the improving economy and the san franci

>> yes, manipulation of the energy market, that's what ferc should be doing. time, that doesn't really have expertise in commodities. one question why they let the bank to get into this business to begin with. these banks were manipulating this market. so they need to be held accountable. >> do you know ron benz? >> no i do not. >> a ferc chairman has brought power much like ceos even if other commissioners dissent and the chairman not suppose to carry m r. obama's banner is what the "washington journal" these say about that possible nomination to head up ferc. rob from georgia, republican caller. caller: i remember at the end of 2008 there was a huge financial crisis that appeared to bring about a depression even worldwide. we bailed out a bunch of these financial institutions and ultimately general motors. i'm curious how much of that money came back into the treasury, one, i guess we made some profit on some of it. two, i'm curious about where did it go? did it go to pay back the debt that the country owes or did it go into the general fund and we spend it?

were seeing in the 2000s, and obviously that would be a welcome change n.2005 congress authorized fercs enforcement staff and try to go offer manipulation on a more vigorous basis, and in the last couple of years they brought more than a dozen case is, this being the latest. for jpmorgan, this is the latest in a string of ill-fated moves. they took on this energy business through the acquisition of bear stearns in 2008 and added to it in 2010 but acquiring rbs sempra for $1.7 billion but commodities have been highly volatile, tyler in, recent years and something they have sort of struggled, and now it looks like they will divest themselves with all of the part of the commodities business. >> kate, thanks very much. >>> moving along, it's must-watch cnbc tonight. the premiere of "the profit" tonight at 10:00 eastern time. you do not want to miss it. there is its start, marcus lamonis who will do whatever it takes to fix a failing business. he can smile. he will smile, i promise you. he will. he'll also get his take on the health of the american economy in business right now. "power" wil

chairman ofthe next ferc.- "the wallu think of street journal" taking on this role for ferc?st: one would have thought have betterd oversight and how they were conducting this, but they do not have expertise on commodities. if these banks were mitigating those markets, a to be held to account andferc needs to do that. >> do you know -- host: do you know ron binz? guest: no, i do not. int: back to the phones, rob makem, georgia. in 2008 therember was a huge financial crisis and we bailed out a bunch of these financial institutions and ultimately general motors. ofm curious as to how much of that money came back into the treasury, and i guess we made some profit on some of the. i'm curious about where did it go -- did it go to pay back the debt or did he go into the general fund and we spent it? guest: on a cash flow basis, the government did make money. part of that was treasury investments, part of it was the fdic lending facilities. for those programs, they went into the budget of the fed and the fdic. for the taxpayer investment, those funds went into general revenues. you

- the power companies, local governments, state government regulators, the federal government, and ferclly in charge. number 2, we have been through this period of deregulating things to drive down prices as these prices go lower through competition, there's no way to capture from customers the amount of money you need to make investments to strengthen and modernize the grid. so who comes up with the money and how do you come up with the money in this new deregulated system? >> bill: anybody working on this? >> well, anybody and everybody but nobody has a solution. >> bill: right. so -- so it's -- it's -- i guess it's not considered today a national priority, is it? >> i don't think it is. some will say they are working hard. it's a big national priority. but the point in fact is you know, the last two wars we have fought in afghanistan and iraq the enemies didn't wear uniforms. well that was different because you couldn't quite determine who the enemy is. the next war might be a war without explosions. it shuts down essential systems and that will kill people as well. >> bill: it's the

you usually see a big improvement from ferc to second quarter on ebita margins.line from first quarter to second quarter. >> verizon said it's increasing its capex guidance for 2013. now they're looking at 16.4 to 16.6 billion. what does that tell you? >> it's a pretty small number in the big picture. it's a little spending they node to do to keep up with the demand for wireless data growth. >> i also know we always tend to look closely at the fios numbers. for the fios internet they had 160,000 new net customers for the tr fios internet servers. how does that match up with what you have been expecting? >> both were better than i expected. excuse me. the tv customers, you know, we were locking for more like 125. they hadded 140. it's a good growth number. the broad band numbers were also good, even i was looking a little further beyond the fios. the old dsl lines. those were better tan we expected. >> so what do you think of the stock? >> i have a whole grading on it t. valuation is not that compeling to me. you know, it's trading at i7 7.1 times. 4.1% dividend y

we saw that mortgage banking revenue really didn't change at all from the ferc.matically. >> you said it was a great quarter. if you take a look at the free park, there was no reaction whatsoever. it feels as long as the market is concerned, it was wasn't a great quarter. it was a blah quarter. >> i don't think anybody who looks at the numbers would actually agree with that. again the market i think over the last few days has been anticipating a good quarter from wells and a number of the other banks and, you know, the whisper number such as it is might have been closer to the 98 cents they reported. but 98 cents vs. the consensus of 93 is a good result. >> net income higher than expected. non-interest expense better than expected. here's the number that stand out to me. tell me if you agree spectacular. there is no other way to describe it. the prediction for credit losses was $652 million t. prediction or the consensus was 1.2, so their writeoffs for future losses were half of what wall street was expecting. >> yes, as i said, the credit quality improved dramat

what we're seeing here is ferc ramping up our enforcement ability.nsparent for consumers. >> did it take a while to ramp up? it has been since 2005 it's been eight years and we've seen a rash of cases in the last two, but perhaps a little bit of a quieter period in the interim. why was that? >> it was because of the ramp up. number one, we had to get the personnel on board and number two, we had to start doing the analysis and this analysis would have to go in depth in what's happening in the markets to determine the manipulation screams. now we're fully functional. we have a full complement and a full team, and we're ready to ensure these markets can be fair and open and transparent for consumers. >> okay. final question, mr. chairman. the federal reserve must soon decide whether or not to keep banks -- to allow them to keep their physical commodities assets. john mo jpmorgan is selling off theirs but others are holding on to them. when the fed asks you for your input, what will you advise? >> we welcome anybody in the markets that want to play fair

behind barcla barclays, but i don't know if you want to be in the electricity business in that the ferc wants you to store it for a day and are you supposed to lose money on the electricity and ed edison suddenly back, and where was edison from? that is a question for you. edison, new jersey. >> very good. i'm focused on tesla. >> tesla! >> on tesla, and it is more interesting. >> why don't you get one. >> no sh, i won't get one. i will read the book about the guy. >> well, i have the tell you that i'm thinking that the bank stocks were supposed to be the worst group. no, they are great. unh, and the health maintenance and think about the circle that we are -- by the way, i never should have left off citigroup, because that is better than expected and that group which is already up 20% going into the quarter has surprise, surprise, surprise and bank of america, we have to go back over it, because it is a beautiful quarter. >> above 14 for first time in a long time. >> and the stock should be at 18. >> and buzz about what jim chanos, and nelson peltz said yesterday at delivering alpha, a

attacks by the m23 and infighting with the ferc our ongoing, and just last week attacks by the allied democratic forces forced more than 65,000 refugees to flee into uganda. we note ugandan foreign minister had warnings this morning about the idea. mr. president, the immediate priority must be to ensure that all signatorisignatori es take practical steps to implement their commitments under the framework, and where they fail to live up to these commitments, they must be held to account by their own citizens and civil society, by the regional neighbors, and by the broader international community, including this council. .. affairs of neighboring countries and to neither tolerate nor provide assistance or support of any kind to armed groups. any collaboration between the fardc and the fdlr must cease as must any support to the m 23. there can be no peace as long as such support continues. turning briefly to some key practical challenges and priorities ahead, consistent reports of grave human rights abuses and widespread sexual violence by armed groups and the fardc obviously undermined