Edison Inquiry Disputes Charges

Edison International said a company investigation found no improper payments were made to Indonesian government officials to win a sales contract for a $2.5-billion power plant project.

The Rosemead-based company, California’s second-largest utility, hired a law firm to interview employees of Edison Mission Energy, its power plant development unit, to investigate charges of corruption and excessive electricity prices in the Paiton project, the Wall Street Journal reported, citing people familiar with the inquiry.

Edison Mission signed a contract in 1994 to sell power from the plant, which is still under construction, to Indonesia’s government-owned utility at rates now under scrutiny.

“A review of these allegations has found no improper payments made to any official of the Indonesian government in connection with the Paiton project by either Edison Mission Energy or by any other owner-developer of the project,” Edison International said.

Former President Suharto resigned last May, after 32 years of ruling Indonesia, amid charges of corruption. Less than a month later, state-run utility PT Perusahaan Listrik Umum Negara said the contract to buy power from Edison Mission set prices too high and was signed under pressure from Suharto.

Edison Mission owns 40% of the project and has spent $300 million on construction. Indonesia’s PT Batu owns 15%, General Electric unit owns 12.5% and Japan’s Mitsui owns 32.5%. Edison International’s shares fell 13 cents to close at $25.63 on the New York Stock Exchange.