SCE to Eliminate 1,450 Jobs, Limit Service, Maintenance
Cash-starved Southern California Edison said Friday that it will trim 1,450 jobs and reduce service and equipment maintenance to keep free of Bankruptcy Court.
The troubled utility said it aims to save $365 million through the latest cost cutting, on top of $100 million in reduced spending and the elimination of 400 contractor jobs announced last month.
Union official Patrick Lavin said the workers are suffering because of a 4-year-old state deregulation scheme they never wanted.
“Anybody losing their jobs because of the state Legislature’s inability to grasp what it did in 1996--and the governor and everybody else--is a travesty,” said Lavin, business manager of the International Brotherhood of Electrical Workers Local 47, which represents about 4,100 SCE employees.
In explaining the moves, John E. Bryson, chairman and chief executive of Edison International, parent company of Southern California Edison, said: “We’re going to do everything we can do in a real tough-minded way to avoid getting into bankruptcy. . . . We’re going to do everything we can to preserve cash. We’re going to focus all our resources on doing everything we can to keep the most essential functions going.”
The Rosemead utility is in a cash bind because it is paying much more for electricity than it can charge customers under currently frozen rates. SCE has not been able to persuade banks to lend it more money to buy electricity, and the utility has warned that it will run out of cash in a few weeks.
SCE had asked the state Public Utilities Commission for a 30% rate hike but got only a 90-day increase of 7% to 15% depending on customer class. The two biggest Wall Street bond-rating agencies--Standard & Poor’s and Moody’s Investors Service--downgraded the debt ratings for SCE and PG&E; Corp.’s Pacific Gas & Electric to a notch above junk status. A third, Fitch Inc., went one step further, rating the debt as “deeply speculative.”
Stephen E. Frank, SCE’s chief executive, said 600 of the jobs lost would be from the ranks of the utility’s 13,540 employees, and 850 additional cuts would be contractor and temporary jobs. Some of the cuts will come through attrition and some from layoffs at all levels in the next three or four months, he said.
SCE also announced several reductions in service. For example, the electric meters of residential and small-business customers will be read bimonthly with estimates in between so that monthly bills can be sent. Response time for power outages could be longer, and new service connections will be limited to normal business hours.
