CEO Says Moves to Deregulate Are Risky

Edison International Chief Executive John Bryson said Thursday that “further experiments” with deregulating California’s electricity markets could be disastrous for the state.

“That would be like playing Russian roulette with the state’s electricity system,” said Bryson, speaking at the company’s annual shareholder meeting in Long Beach.

California deregulated its power markets in 1996 under a flawed scheme that ultimately contributed to rolling blackouts in parts of the state and the bankruptcy filing by the state’s largest utility, PG&E; Corp.’s Pacific Gas & Electric.

That scheme allowed residential and business customers some choice over which company supplied their electricity.

There have been calls for some large business customers to have increased options for buying their power to help keep costs to a minimum.

Bryson said the Rosemead-based company’s utility, Southern California Edison, was ready to invest $9 billion to $10 billion over the next five years to improve its electric system under the right regulatory conditions.

He also said substantial investment was needed, as SCE’s service area included four of the 10 fastest-growing counties in the U.S. and that a significant part of the electric system was more than 50 years old.

Such investments, however, require a “predictable customer base,” he noted.

“Customers must not be able to escape those costs by turning to power providers who do not bear the same costs and responsibilities,” Bryson said.

California Gov. Arnold Schwarzenegger last month expressed his qualified support for allowing large business customers to contract directly for their power needs.

However, he said that it was important to ensure that utilities’ remaining customers not bear “an additional burden as a result of the departing business customers,” and that there had been discussions about how utilities could recover investment costs under such circumstances.

At the shareholder meeting, the slate of 10 Edison directors up for election were all approved despite objections raised by the California Public Employees’ Retirement System. The pension fund withheld its votes for the directors, citing a shareholder-approved “poison pill” resolution that it said the company failed to implement.

Last year, shareholders passed a nonbinding resolution urging that the board terminate its shareholder-rights plan, otherwise known as the poison pill provision, which is designed to discourage hostile takeovers.

Edison shares rose 20 cents to $22.81 on the New York Stock Exchange.