As midnight was closing in Thursday, the lower house Assembly in California’s legislature passed on a 41-32 vote a revised rescue package to restore Southern California Edison Co.’s financial viability and to inject a healthy dose of re-regulation into the market for small residential and commercial electricity consumers. The measure goes back to the state senate where it faces an uncertain fate.
Proponents assured their fellow lawmakers there would be no rate increases as a result of the legislation and it would further protect against utility assets going to more “out-of-state interests” as could happen among creditors in a bankruptcy proceeding.
Assembly Speaker Robert Hertzberg, who worked with Gov. Gray Davis and Democratic leaders in the legislature to eke out a piece of legislation that had considerable opposition — even among his own party’s majority members — said “it is what it is.” Hertzberg advised that while the bill was imperfect, it was better than the alternative of Edison sliding in bankruptcy. “At the end of the day, it is a good deal.”
The bill provides for $2.9 billion in securitized bond proceeds that the utility can use to pay off its debts to everyone except the merchant generator/marketers (roughly $1 billion); the potential for the state to buy Edison’s transmission system for up to twice its book value; deeding of environmentally sensitive watershed from the utility to the state; restrictions on dividend payments from the utility to its parent company, Edison International, for the next five years; and provisions for suspending direct access retail customer choice for as long as the state remains in the wholesale electricity buying business.
“We get to re-regulate residential and small business owners to get out of the morass of deregulation that screwed us up so badly,” Hertzberg told his fellow lawmakers at shortly after 11 p.m. in urging their support. (Republican leader David Cox urged a No vote.) “If we don’t [pass this measure] we may be subject to an $8 to $10 billion liability lawsuit.”
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