State Power Regulators Announce Edison Settlement, Rescue Plan

(AP) 10.02.01, 2:55p --

California power regulators announced an agreement Tuesday with Southern California Edison Co. that the state says will allow the utility to pay some $3 billion in debt and help it avoid following Pacific Gas and Electric Co. into bankruptcy.

The settlement was reached by the Public Utilities Commission over a suit Edison filed in federal court against the PUC in November 2000, in which Edison said the commission's refusal to raise electric rates violated federal law and was an unconstitutional taking of its property. Under the settlement, Edison will release the PUC from all claims.

The plan intends to "restore Edison to creditworthiness so that it is able to resume procuring the electricity needed by its customers," said a release issued by the PUC.

Since January, the state has spent nearly $9 billion buying electricity for the customers of Edison, PG&E and San Diego Gas and Electric after their credit ratings sank and they were prevented from buying their own power.

Soaring power costs triggered a financial crunch at all three utilities, which could not collect the full price of power from their customers because of an electric rate freeze.

PG&E filed for federal bankruptcy protection April 6, and Edison has warned for months that it is not far behind. Five major creditors threatened to push it into involuntary bankruptcy over the weekend if the utility did not work out a payment agreement.

Tuesday's settlement requires: -- Edison to use its available cash and incoming revenue to pay its back debt, which the PUC estimates to be $3 billion.

-- Edison not to pay any dividends on its common stock through 2003, or earlier if it pays its debts in full. The PUC can determine whether to prevent it from paying its 2004 dividend. Edison can resume paying dividends in 2005. Edison shareholders will forego at least $1.2 billion in dividends, the PUC estimates.

-- Edison to spend 100 percent of any refunds issued by the Federal Energy Regulatory Commission or other suits against power sellers on paying its debts.

-- PHO (owennos@bigfoot.com), October 02, 2001