The bill won’t require the utility to transfer Sierra land to a state trust.
A $2.9 billion rescue plan to save Southern California Edison from bankruptcy narrowly passed the Assembly energy committee Wednesday after the last tangible asset for taxpayers — thousands of acres of Sierra land — was stripped from the deal.
After days of arm-twisting by Democratic leaders, the lawmakers’ 11-7 vote was largely along party lines. But the fate of the bill ultimately rested with a lone Republican, Bill Leonard of San Bernardino, who voted “yes” but doesn’t like the plan.
“To say it’s a work in progress is probably too flattering,” Leonard said of SB 78xx. “But in the final analysis, we need a vehicle for making Edison creditworthy and helping stabilize rates … The thought that it could die in committee outweighed my policy objections.”
The full Assembly is expected to consider the measure by Friday.
The plan, labeled a bailout by angry consumer groups, would allow California’s second-largest utility to sell $2.9 billion in bonds, backed by business ratepayers, to eliminate much of its $3.9 billion debt from the energy crisis.
Edison would be responsible for the remaining $1 billion but could offset much of it through a $425 million tax refund from its parent company, any future monies it receives by contesting supplier overcharges, and various subsidies built into the rescue plan.
As part of the proposal, for example, the state would provide tax and other benefits for Edison‘s San Onofre nuclear plant and would guarantee a five-year, 11.6 percent rate of return on the utility’s capital investments.
The complicated, 53-page deal also would ensure that the state receives electricity at discount rates from Edison‘s Sunrise plant for 10 years and a five-year option to purchase the utility’s 12,580 miles of transmission lines for about $2.4 billion — double their book value.
In a major turnabout Wednesday, lawmakers decided not to require Edison to transfer thousands of acres of sensitive Sierra watershed lands to a trust created by the state.
Initially, the deal had called for Edison to provide title or easements to more than 21,000 acres of land, much of it in Fresno County, sparking stiff opposition from local residents who felt state ownership would restrict current or future uses.
By a narrow 10-8 margin, the Assembly energy committee voted Wednesday to require only development rights, not title, to the sensitive acreage.
The amendment, by Democratic Assemblyman Joe Canciamilla of Pittsburg, was designed to retain the status quo — ensuring public access under Edison ownership.
But the last-minute amendment angered environmentalists and prompted Assemblywoman Hannah-Beth Jackson, D-Santa Barbara, to withhold her vote on the overall rescue plan.
“Once they took out the conservation easements, I couldn’t see any good reason to ask ratepayers to bail out Edison,” Jackson said later.
Only one Democrat, Dean Florez of Shafter, voted against SB 78xx.
When negotiations for an Edison rescue plan began months ago, the concept was “a dollar for a hot dog,” in other words, the state would provide money and receive an asset.
The final bill, however, eliminated both tangible assets that once were under consideration — purchase of the transmission lines, which now is only an option, and title to the Sierra lands.
Supporters of the plan say the state would benefit in numerous other ways, however.
Edison would abandon all litigation against the state and, once solvent, would resume purchasing electricity for its 4.2 million customers, a role the state has assumed on an emergency basis since January.
The Foundation for Taxpayer and Consumer Rights has vowed to overturn SB 78xx with a ballot initiative if the measure is signed into law.
“The public was betrayed tonight,” spokesman Doug Heller said. “And every politician who supported this extreme bailout should be held accountable.”