In the absence of any definitive regulatory or legislative moves as yet to implement a three-week-old memorandum of understanding (MOU) with the governor, Southern California Edison officials Tuesday acknowledged that creditors and other parts of the financial community are afraid the utility will join the state’s other major investor-owned utility, Pacific Gas and Electric, in bankruptcy court.

Edison will be making additional filings to the California Public Utilities Commission later this week, and the CPUC is expected to take some actions at its Thursday meeting regarding the state’s financially ailing utilities. Lawmakers were busy proposing both natural gas bills and additional electricity measures, but no omnibus proposal on the MOU has emerged.

“We clearly have a significant amount of action and reaction by the QFs (small generator qualifying facilities), creditors and others concerning our situation, and whether we would be facing an involuntary bankruptcy proceeding, and I would say that that risk remains significant,” said Ted Craver, Edison senior vice president and CFO. “If enough people who we owe money to don’t see any constructive resolution coming from a negotiated approach, the risk is there that they would attempt to put us into an involuntary bankruptcy proceeding. That part, unfortunately, we don’t fully control.”

During a regularly scheduled conference call with bondholders, Craver agreed with one creditor’s assessment that negotiations between Edison and the state seemed to be “a little bit at an ebb” this week. State lawmakers are attempting this week “to get an understanding of what exactly is in the MOU,” said Craver, adding that it is a “fairly dense document.

“I think a lot of folks are focused on what alternatives there are if the MOU doesn’t work out. We have PG&E in a bankruptcy situation, so people are trying to understand the implications of both approaches, so these people are into a period of research, education and understanding. The CPUC (state regulators) has been a little quiet, too, but that is actually going to pick up.”

Edison’s stock closed down more than 5% Tuesday at $9.31.

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