Sacramento Bee

As a hotly contested $2.9 billion rescue plan for Southern California Edison inched toward a vote in a key Assembly committee late Monday, consumer leaders gathered to lead a voters' revolt against the proposal.

Sacramento Bee

As a hotly contested $2.9 billion rescue plan for Southern California Edison inched toward a vote in a key Assembly committee late Monday, consumer leaders gathered to lead a voters' revolt against the proposal.

Sparking the controversy was a plan to allow Edison to sell $2.9 billion in bonds, backed by business ratepayers, in an effort to avoid bankruptcy and allow the state's second-largest utility to resume buying electricity for its 4.2 million customers.

The Assembly's energy committee planned to meet late into the night, if necessary, to finish hearing public testimony, then cast votes on the plan.

Gov. Gray Davis and Assembly Democratic leaders support the proposal.

If approved by the committee, the pact would be sent to the full Assembly and then to the Senate for concurrence in amendments.
Legislators remain deeply split over the proposal.

Supporters say that permitting Edison to join Pacific Gas & Electric Co. in bankruptcy proceedings could raise new questions about California's energy future, send the wrong signal to businesses, and make it harder for the state to extract itself from the energy-buying business.

But Harvey Rosenfield, leader of the Foundation for Taxpayer and Consumer Rights, said Monday that if the Legislature passes a rescue plan – regardless of its final form – "we will reverse that at the ballot box."

Members of Rosenfield's group have created a "war room" in the new Sheraton Grand Hotel to fight SB 78xx during the final three weeks of the legislative session.

Utilities helped create the current crisis by lobbying hard for deregulation and for the cap on electric rates that ultimately prevented them from recouping the full cost of electricity, Rosenfield said Monday.

"They are pigs that want to feed at the public trough," he said. "If anybody's going to bail out Southern California Edison, it ought to be its own parent company."

Legislators have been arguing for months about whether to help Edison regain financial solvency and, if so, what should be given and what demanded in return.

Under the current plan, Edison's $2.9 billion bond sale would eliminate most of its $3.9 billion debt.

The remaining $1 billion owed to electricity generators would be Edison's responsibility, but the utility is expected to reduce that figure by using a $425 million tax refund from its parent company and any refunds it receives by contesting energy-supplier overcharges.

One issue that state and Edison officials were trying to resolve Monday involved an option to purchase the utility's transmission grid. The state wants the five-year option to be based on net book value, about $1.2 billion, while Edison is fighting for fair market value, an unspecified but much higher price.

Legislators also were trying to extract assurances Monday that approval of the plan would keep Edison from bankruptcy and avoid any additional risk to the state.

Another disputed provision involves more than 21,000 acres of watershed lands owned by Edison. The pact would require the utility to transfer title to much of the acreage to a trust and to provide conservation easements for the remainder.

The rescue plan would provide the state with discount power from Edison's Sunrise plant for 10 years, would require Edison to gradually increase its supply of renewable energy, and would allow businesses to contract directly with generators for electricity – provided the firms reimburse the state for debts incurred on their behalf and meet other specified conditions.