By the OGJ Online Staff
HOUSTON, Sept. 17, 2001 — California Gov. Gray Davis called for a third special session, after the California lawmakers adjourned without passing a bill to rescue Southern California Edison Co. from bankruptcy.
The California legislature adjourned late Friday without approving a bill the state Senate and the Assembly could agree on. The two houses had passed separate versions. Davis and SCE endorsed the more generous Assembly version, but some lawmakers and consumer groups complained the package favored by the governor and SCE was too expensive.
“I am proud of the work by the Assembly. Unfortunately, the Senate has not gotten the job done,” Davis said.
The utility has $2 billion in unpaid debts and obligations and is still hoping California legislators will cobble together a package that will make the company creditworthy. If satisfactory legislation is adopted, the utility could then finance power purchases to serve its entire electric load, instead of counting on the state to buy power on its behalf.
The utility unit of Edison International, Rosemead, Calif., has escaped bankruptcy court because banks agreed to “forbear” on loans due. Other creditors have also agreed to hold off forcing the utility into involuntary bankruptcy by waiting for the legislature to approve a bailout. The state of California has been buying power for the utility’s customers until the company is creditworthy and able to purchase power itself.
Edison officials said they can continue to avoid bankruptcy and wait for the legislature to pass a bill.
“Edison will work closely with its creditors and ask for their continued support and forbearance as we move closer to a negotiated settlement,” the company said. “We continue to strongly believe that such a settlement is far preferable to bankruptcy for our customers, our company, and our state.”
Renewable energy producers in California are particularly interested in keeping the utility out of bankruptcy court. They have already agreed with Southern California Edison on a plan for payment of past bills and long-term contracts for energy going forward. Those agreements would be scrapped if the utility ended up in bankruptcy court.
“Had the Senate approved this bill, we would have assurance of receiving back payments totaling more than $400 million and a commitment that the state was ready to increase its renewable energy portfolio over the next 10 years,” said a spokesman for the Renewable Energy Creditors Committee.
Renewable power producers generate about 3,000 Mw of energy in California.
Pacific Gas & Electric Co., faced with similar problems as Southern California Edison, filed for protection under federal bankruptcy laws Apr. 6, 2001.