The San Francisco Chronicle
The Assembly narrowly approved a rescue plan for Southern California Edison yesterday, but the controversial legislation still faces an uphill battle before becoming law.
Gov. Gray Davis has made the plan his top legislative agenda, and his aides spent the day yesterday cajoling votes from lawmakers reluctant to be perceived as voting for a bailout.
The bare majority, 41-to-32 vote came late last night after several hours of debate. No Republicans supported the bill, SB 78xx.
“If we are going to do a deal, we ought to do it right and not look like fools,” said Assemblyman Keith Richman, R-Northridge.
Republican Assemblyman Rod Pacheco of Riverside said the bill was just another in a long line of serious mistakes made in the energy market — starting with the deregulation bill in 1996 that led to this year’s crisis.
“When is this insanity going to end?” he asked. “This solution will ultimately destroy the state of California — this is the legacy you will leave the children of this state.”
But Democrats who support the plan said it is the only way for the state to continue to have a more stable market.
“The cost of not taking action is the future of our state,” said Assemblyman Dario Frommer, D-Los Angeles.
Assemblyman Fred Keeley, D-Boulder Creek, who has led the legislative process, said letting Edison go into bankruptcy would send a disastrous signal to energy markets that have finally stabilized.
The Assembly heavily amended the Senate version of the bill, threatening its chances for passage when the bill returns to that chamber for a final vote.
Senate President Pro Tem John Burton, D-San Francisco, has said that the Senate will not support the Assembly’s changes. Lawmakers adjourn for the year Sept. 14, and any deal will have to be reached before then.
The plan would have the state guarantee $2.9 billion of Edison‘s $3.9 billion debt. The state would back bonds that Edison would issue and consumers would pay off over time.
While no rate increases are expected to be needed, consumer groups argue that businesses will pass on costs to everyone. And the GOP questioned whether a rate increase would come in time.
“We ought to issue every ratepayer a big bucket, because they are going to have to get ready for a big bailout,” said Assemblyman Jay La Suer, R-La Mesa.
The plan calls for setting aside 20,000 acres of watershed land for conservation. This piece has been extremely controversial because of lands near Shaver Lake in Fresno County. County supervisors have threatened to sue the state if the plan moves forward.
Republicans called it a blatant “land grab” last night.
The bill also provides for a resumption of direct access, which would allow companies and residents to contract directly for their own power instead of going through the utility. This would start Jan. 1, 2003.
The plan also includes a five-year option for the state to buy the utility’s transmission grid for twice its book value — about $2.4 billion. Davis’ original agreement called for the state to pay $2.76 billion for the lines, but the Senate version had the state paying only about $1 billion.
Consumer groups fault the measure for giving too many benefits to Edison and not enough to consumers.
The Foundation for Taxpayer and Consumer Rights plans to craft a referendum to reverse any plan the Legislature approves. Edison supports the measure, but has said it cannot guarantee that it will be able to avoid bankruptcy.
“There isn’t a company that has worked harder to stay out of bankruptcy,” said Bob Foster, an Edison lobbyist.
Among the Democrats who voted against the bill was Assemblyman Joe Canciamilla, D-Pittsburg.