McClintock speaks to utility’s workers, decries Gov. Davis’ push for bill.
Ventura County Star
State Sen. Tom McClintocktold 50 Southern California Edison employees outside his Thousand Oaks office Friday morning that he opposes a bill that allows the utility to sell bonds to erase a $2.9 billion debt.
McClintock, a Republican, called the bill a bailout paid for by consumers. Edison serves 4.3 million customers, including Ventura County, the southern portion of Santa Barbara County and the city of Santa Barbara.
“That (the bill)is retroactively raising the price of electricity for customers,”McClintock said. “It’s an outrage.”
The state Senate will debate the proposal in an Oct. 9 special session called by Gov. Gray Davis, who endorses the bill. The Assembly has approved the measure.
This would be the third special session devoted to energy issues. The previous two were during the legislative session.
Edison fell into debt by paying record prices for wholesale electricity late last year and early this year, prices caused in part by deregulation of the power industry. The utility could not pass along the rate increase to its customers.
McClintock also compared the company to “robber barons.” McClintock said the utility should file for bankruptcy in court and produce a plan to pay off its debts, he said.
Edison disagreed. It said the bonds would be financed without an increase in residential rates, according to Rudy Gonzales, an Edison spokesman.
“We think we handle this better than a judge,”he said.
McClintock also pointed out that Pacific Gas & Electric, which also faces large debts, had filed for bankruptcy and recently presented a preliminary plan to erase the debt.
Consumer advocates strongly oppose the bill and say the company got into debt because of a deregulation law it endorsed. If the Edison bill is passed, an initiative will be put on the ballot to rescind it, advocates have said.
“There’s no good reason to pay for Edison‘s mistakes,”said Douglas Heller of the Foundation for Taxpayer and Consumer Rights.
An August SEC filing shows that Edison was $3.3 billion in debt but also had $1.7 billion in cash, Heller said.
Brian Bennett, chief spokesman for Edison, said Heller’s figures were inaccurate and would provide a more detailed account of the company’s finances. As of late Friday afternoon, however, Bennett had not provided any figures.
Davis has no right to demand a bailout that the public does not want, Heller said. Davis is not worried about the bill becoming an issue in the next election because he already has collected $30 million in campaign support, he said.
“He forgets that he’s the governor, not the king,”Heller said.