Edison International executives Friday called the California Assembly’s approval of a bill that would rescue its financially troubled utility unit from bankruptcy “another step” in the process.
The Assembly and state Senate bills are “thematically similar,” said Ted Craver, chief financial officer of the Edison International, parent of Southern California Edison Co., but “we still have a long way to go.” The bill passed Thursday by the Assembly originated in the state Senate but was amended extensively by assembly committees.
The Assembly version is friendlier to Southern California Edison. Senate leaders have indicated the revisions face an uphill battle when the bill returns for reconciliation. It would allow the utility to recover $2.9 billion through a bond issue that would be repaid by mandatory charges on business customers. The company would have to find another way to retire the remaining $1 billion in debt.
Gov. Gray Davis wants to make the utility creditworthy again so it can resume buying power on behalf its customers. The state took over buying power for customers of the utilities in January, after plunging credit ratings made it impossible for them to buy power in the wholesale market.
The utilities piled up bad debts after wholesale electric power prices skyrocketed. Under a state imposed rate freeze, they couldn’t recover their costs. Consumer groups have criticized the proposal as a bailout for Southern California Edison.
Edison executives Friday also said they were reviewing the California Public Utilities Commission’s draft order that lays out how much revenue each utility will hand over to the Department of Water Resources to help offset the cost of the DWR’s wholesale electricity purchases.
They noted the PUC estimate for Southern California Edison of $4 billion over the 2-year period is about $500 million less than the DWR’s estimate based on a rate of 10.03�/kw-hr rather than 10.28�/kw-hr.
The changes were based on a PUC decision to use a cost-of-service approach to allocate the costs rather than the “postage stamp” approach proposed by the DWR, the executives said. But they said they were unable to determine how the PUC arrived at its numbers and would be filing comments with the state regulators.
Earlier, the PUC said it determined the cost of serving northern California residents was higher than serving Californians in Southern California Edison’s territory. Pacific Gas & Electric Co., operating under bankruptcy protection, has threatened to sue to halt what it calls cost-shifting to its customers from Southern California Edison.