Edison Asks for Patience From State, Generators

The parent of Southern California Edison said Friday that the utility is making progress in its bid to stay out of bankruptcy, yet still requires help from state legislators and patience from unpaid power generators.

“It’s been a frustrating time, I know,” said Stephen Pickett, general counsel of Rosemead-based Edison International, in a conference call with holders of defaulted SCE debt. “We’re starting to see the fruits of all that labor.”

On Thursday, the California Public Utilities Commission approved parts of a controversial rescue agreement by SCE and Gov. Gray Davis under which California would buy the utility’s portion of the statewide power grid for $2.76 billion. Legislators have until mid-August to approve the plan.

A day earlier, the PUC ordered SCE to pay 15% of its past-due bills to small power generators that can demonstrate hardship. Edison has said its utility unit owes about $1.3 billion to these generators, and at least 30 have sued SCE. On Tuesday, SCE said it reached agreement with some regarding payment, power pricing and future litigation.

California’s power crisis resulted from its big utilities buying power at higher prices than they could charge customers under the state’s failed utility deregulation plan, and going billions into debt.

Pacific Gas & Electric Co., a unit of San Francisco-based PG&E; Corp., filed for bankruptcy protection April 6, and SCE continues to work to avoid a similar fate.

A few bondholders on Friday’s conference call expressed concern about how much SCE will pay to power generators, whose claims, like theirs, are unsecured. It would take three unsecured creditors of any kind to throw the utility into involuntary bankruptcy.

SCE has offered to pay generators, even those not suffering hardship, 10% of what it owes them.

Meanwhile, the utilities commission, despite its actions Thursday, has yet to take up key parts of SCE’s so-called memorandum of understanding with Davis. Pickett said Edison should know early next week whether the commission will put its remaining memorandum items on its next agenda.

Edison International shares gained 4 cents to close at $11.19 on the New York Stock Exchange. The stock has fallen 28% this year.