Edison Bailout Bills Remain Stalled

Leading lawmakers conceded they would probably leave on their summer break without passing legislation aimed at rescuing Southern California Edison from its financial straits as competing bailouts stalled in the Legislature Thursday.

The Assembly is expected to consider one of two rival measures to save Edison today, and the Senate is expected to take up an Edison rescue deal of its own.

But all three pending measures face long odds and none have sufficient support to clear both houses, legislative leaders said.

With the Legislature set to quit for the summer as early as today, the leaders predicted they would be forced to continue negotiations during the monthlong recess in hopes of brokering a deal.

“I can’t imagine that in the next 24 hours” lawmakers will reach consensus on an Edison rescue, said Assemblyman Fred Keeley (D-Boulder Creek), who coauthored one of the lower house’s rescue bills with Assembly Speaker Bob Hertzberg (D-Sherman Oaks).

One indication of the lack of enthusiasm for the legislation is that Keeley himself does not support the measure that bears his name. “I don’t believe that this bill in its current form should become law,” he said. “This bill is not ready.”

The maneuvering in both houses Thursday capped a day of frenetic activity in the state Capitol, which has become flooded with cell phone-carrying lobbyists seeking to influence the Edison deal for seemingly every special interest in the state.

Yet amid the flurry of action, there seemed little chance of actually making law. Many of the participants said the legislative debate appeared to be less an attempt to pass a bill than a war of one-upsmanship between the houses to see who could “lob a grenade” into the rival house and go home until August. That way, if Edison soon winds up in Bankruptcy Court, leaders of each house could argue they were not to blame.

Hoping to head off a growing sentiment among lawmakers that bankruptcy may not be such a bad alternative, Gov. Gray Davis spent the day working the phones in hopes of persuading legislators that a government rescue of Edison would be good for the state.

To avoid mass blackouts, California has been purchasing billions of dollars worth of electricity since the beginning of this year because the state’s two largest private utilities, Edison and Pacific Gas & Electric, are no longer credit-worthy enough to buy power on behalf of their customers.

The utilities lost that status and ran up billions in debt the last two years because they were paying high prices for power on the wholesale market and could not recover those costs from customers because of a state-imposed rate freeze.

As a result, the state government is stuck in the power-buying business until the utilities regain their financial footing--an expensive predicament that threatens the state’s financial health.

Davis attempted to head off the crisis by negotiating rescues of the two utilities, but PG&E; lost faith in the talks and opted to take itself into Bankruptcy Court in April, embarrassing the Democratic governor.

Days later, Davis reached a tentative rescue deal with Southern California Edison. But the plan hit the Legislature with a thud amid concerns it was overly generous to Edison, and it has languished for months.

Last week, lawmakers finally picked up the pace and began moving forward with a series of competing proposals to alter the governor’s deal with Edison. But it was clear from the outset that no consensus had emerged, and many lawmakers are becoming convinced that legislative inaction--even if it means bankruptcy--may be the best way to resolve Edison’s financial predicament.

“We’re bailing out people who don’t need to be bailed out,” said Sen. Ross Johnson (R-Irvine).

Legislative leaders hoped to pass something before today when the Assembly and Senate are scheduled to break for their traditional summer recess. The date is considered important because Edison and Davis had set an Aug. 15 deadline for lawmakers to take action on the rescue deal. If no bill is passed by then--as seems likely--the utility has the right to walk away from negotiations.

However, it became evident Thursday that the dueling measures making their way through both houses lacked strong support.

In the Assembly, the Hertzberg-Keeley bill, a modification of Davis’ original plan, was competing against a rival bill by Assemblyman Rod Wright (D-Los Angeles), who had teamed with Republicans to push what he bluntly called a “straight bailout” of Edison.

In the Senate, Davis’ original plan was amended by Sen. Byron Sher (D-Stanford) and turned into a trimmed-down rescue plan that was opposed by Edison.

Sher’s bill was voted down twice in policy committees Wednesday and Thursday, but it was resuscitated both times, and is now on the Senate floor.