With lack of progress in the FERC settlement talks, state legislative negotiations and among state regulators, all holding the hope for some financial relief, Southern California Edison Co. officials indicated Tuesday that they will continue to resist bankruptcy if state and federally-generated relief falls short, but they will be in a “very difficult” predicament unless some solution comes out of the state legislature by mid-August.

“Quite clearly the CPUC has missed a number of important dates called for in the MOU (memorandum of understanding with the governor),” said Ted Craver, Edison International CFO.Without significant action by both the regulators and lawmakers by Aug. 15, it is a matter of significant concern from our standpoint,” he said, noting the utility still doesn’t view bankruptcy as an alternative it would voluntarily take.

In response to a specific question, Craver said the FERC settlement talks have not directly impacted the state legislative discussions, but they are obviously related because refunds could alter the degree of financial distress the legislative solutions would have to address. “A refund settlement, however, was never specifically contemplated in the MOU with the governor,” he said.

The Edison utility’s parent, Edison International, was expected to file (an 8K) with the federal Securities and Exchange Commission late Tuesday or early today, detailing the refinancing it closed July 2 to pay off $1.2 billion in the holding company’s debt. Included in those details is disclosure that a combination of $59 million in dividends from merchant power plant developer Edison Mission Energy and sale of various nonutility assets totaling $210 million were added to the parent company’s refinancing, according to Craver.

Regarding the completion of the settlement with various qualifying facility (QF) generators, the California Public Utilities Commission is expected at its business meeting this Thursday to eliminate any confusion between settlements worked out between Edison and the QFs and the regulators’ initial order prompting the settlements. Edison has about $1.3 billion it owes the QFs, Craver said.

Regarding the refund settlement talks, Edison feels “a little constrained” by the confidentiality agreements related to the talks, but as far as refunds that would substantially cut into the debts the Edison utility owes the power suppliers, there is little hope for anything soon, according to the Edison officials. Similarly, they said nothing specifically is on the horizon in the state legislature, and it is facing a July 20 date to recess for its traditional summer hiatus.

“Frankly, we continue to look at all of these things as both good and bad news,” Craver said during a creditors’ conference call. “The good news is lawmakers are beginning to coalesce around a couple of core principles (of the MOU), including the need to restore the utilities to creditworthiness. But the process we go through is a political process and there is no coalescence around one plan.”

If nothing breaks in the legislature before the summer recess and action is put off until lawmakers return in mid-August, then “we will definitely be running short of days to get anything accomplished,” Craver said.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.