Edison International Says Rescue Plan OK With SCE

A senior Edison International executive said Tuesday that the company’s insolvent Southern California Edison utility can work around limits in a rescue plan now being debated in the state Legislature.

The rescue bill, under consideration in the state Assembly, would let SCE issue as much as $2.9 billion in ratepayer-supported bonds to pay off debts that built up when wholesale energy prices spiked last year and earlier this year.

But lawmakers have barred SCE from using the money to pay off about $1 billion it owes big power generators, which include companies the state has accused of price gouging. The utility, based in Rosemead, says it has about $3.9 billion in total debt resulting from the state’s energy crisis.

“We have to be able to sit down with the generators and work something out that is agreeable to both sides,” Ted Craver, chief financial officer of Edison International, told creditors in a conference call Tuesday.

The question of how SCE might deal with the generators has become increasingly important as lawmakers work against a deadline of Sept. 14--when they are scheduled to adjourn until next year--to agree on a rescue plan.

One risk, analysts said, is that lawmakers could pass a plan only to see the utility dragged into U.S. Bankruptcy Court anyway by generators that worry about how they will be paid.

Craver said SCE has several options, though most would require cooperation from the generators.

For one thing, he said, the utility could use its cash on hand, which in a recent federal filing it listed at $1.7 billion. Additionally, it could negotiate to delay payments or get the generators to forgive some portion of what it owes, Craver said.

SCE already has such a deal with a group of smaller generators, known in the industry as “qualifying facilities,” under which the utility has paid about 10% of the amount owed. The utility has agreed to pay another 10% once a legislative rescue is signed by Gov. Gray Davis and the remainder from proceeds of the bond offering.

The holders of $931 million of defaulted notes and bonds also would get paid with funds from the bond offering.

Craver said Edison remains committed to repairing its credit, which he defined as being able to pay its bills and defaults.

“Even then, it will be a slow road back,” he said.

In response to a creditor’s question, Craver said the company still maintains its policy of not voluntarily filing for federal Bankruptcy Court protection from its creditors.

Shares of Edison International fell 11 cents to close at $13.50 on the New York Stock Exchange on Tuesday.