Displaying an unusual amount of public candor last week, the parent company CEO of near-bankrupt Southern California Edison Co., Rosemead, CA, bared his corporate soul to a Los Angeles business leaders’ forum, admitting bankruptcy for the utility is a very real possibility unless there is an eleventh-hour reprieve granted by the state legislature.

John Bryson, who has been subject to increasing criticism for his handling of Edison’s part in the state electricity crisis, said lawmakers and state regulators have to act soon if Edison International’s utility is to avoid the same fate that Pacific Gas and Electric Co. endured April 6 when it voluntarily went into Chapter 11 reorganization in a federal court in San Francisco.

California’s crisis, Bryson said, has been “long on criticism and finger pointing and short on action,” but he noted that the federal regulatory action last Monday on western region-wide wholesale price mitigation might be a sign of a turnaround as was the governor’s announcement the same day of a deal between the state and Sempra Energy’s San Diego Gas and Electric Co.

While under the state’s maligned restructuring plan, the Edison utility was forced to quickly sell its in-state fossil fuel generation plants, neither the utility nor the holding company, Edison International, have made any money off the deals, he argued. Now it is time to just as swiftly get the state out of the power-buying business, Bryson said.

In politics where perceptions often prevail over reality, Bryson outlined a number of “myths” that are hurting Edison’s chances of gaining the support it needs from state elected officials and the California Public Utilities Commission. The biggest misperception is that the Edison utility is somehow “seeking a bailout from taxpayers,” Bryson told a June 19 meeting of Los Angeles Town Hall.

“Only the reverse is true,” Bryson said “In fact, for nearly a year, Edison bailed out California consumers and taxpayers by selling electricity at retail at billions of dollars less than we were forced to pay at wholesale.”

Three other popular “myths,” he noted, are: 1) the Edison utility actually profited from deregulation; 2) Edison International somehow “benefited improperly” from its relationship with its utility subsidiary and deregulation; and 3) the deal negotiated between the governor and the Edison utility “somehow is too good a deal” for Edison.

“Our dividends have been eliminated altogether,” said Bryson, predicting that whether the state legislature supports the transmission sale agreement with the state will depend on whether lawmakers determine a healthy Edison utility serves the public interest better than one in bankruptcy court. “Our stock price is trading at an all-time low price in recent decades. Under the negotiated agreement, in addition to committing all our power supply at low cost, providing billions of dollars in value, we will contribute $1.6 billion earned by our generating plants to pay down our outstanding debt.

“California will be badly hurt if Southern California Edison is forced in bankruptcy. At this most challenging time, the state needs healthy, stable utilities, not more uncertainty.”

Bryson said Edison was not looking for sympathy or a handout, but understanding and bipartisan support. Unless the state lawmakers act soon, he predicted the state’s energy future is going to be determined by “lawsuits and court proceedings.”

And what will follow is a “dysfunctional business climate” in the state. “It would indelibly stamp California as a state that is unable to overcome partisan and personal differences to work for the common good, even at a time of crisis,” Bryson said.

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