Edison to Auction Off 12 of Its Power Plants
Southern California Edison, under a mandate to let competitors into its market, said Thursday that it will auction off all of its fossil fuel-burning power plants in the state next summer in what it described as the largest asset sale ever by a utility. Edison valued the plants at $700 million.
The sale of the 12 power plants, which produced about 20% of all the energy Edison delivered last year, is in response to a state Public Utilities Commission directive last December that Edison and the state’s other dominant power company, Pacific Gas & Electric, sell at least half of their fossil fuel facilities within their service territories.
The PUC order was designed to entice outside power generators to buy the plants and thus enter the California market, breaking up the utilities’ historical monopolies. In the soon-to-be-deregulated energy market, California power customers will choose where to buy their power starting in January 1998.
The board of Edison International, Southern California Edison’s parent, said it decided to sell all--not just the half required--of its fossil fuel plants to avoid time-consuming and contentious disputes among outside interests over which plants ought to be sold and for how much.
“This removes a hurdle to the realization of a competitive market and makes us feel a little more optimistic about getting there,” said V. John White, executive director for the Center for Energy Efficiency and Renewable Technologies, a Sacramento research and advocacy group for environmental and alternative energy.
Utility president Stephen Frank declined to estimate what the plants might fetch at auction. Although the plants have a capacity of about 10,000 megawatts, enough to light 10 million homes, they ran at only 20% capacity last year. The plants are all at least 20 years old.
Edison gets most of its power from its San Onofre and Palo Verde, Ariz., nuclear stations and from hydroelectric and alternative-energy sources.
Unions representing some of the 561 employees of the plants said the sale will put workers at risk.
“Our members are anxious, and we are concerned about that a whole lot,” said Scott Hanlon, business representative of International Brotherhood of Electrical Workers Local 47 in Diamond Bar, which represents about 60 power plant employees.
However, provisions of the state power deregulation law enacted in September stipulate that utilities maintain operation of the plants at current manpower levels for two years after their sale. The law also sets aside $100 million from the rate base for benefits and retraining to laid-off workers.
