Socal

While other aspects of California’s year-old energy woes have settled into well-defined trench warfare that centers on supply, demand and price issues in Sacramento and Washington, D.C., the state’s two largest investor-owned utilities limp along, pulled by the ebb and flow of politics and the courts with no clear path for restoring their financial independence, although Gov. Gray Davis wants the state to exit its current electricity buying role by the end of next year.

Banks providing credit lines to Southern California Edison and its parent, Edison International, have extended their forbearance in recognition that they expect the utilities deal (MOU) with California’s governor will eventually be implemented to help restore credit-worthiness, Edison officials said last Tuesday as part of a conference call with the financial community dealing with the company’s first-quarter earnings report.

The Rockies and California border-SoCalGas were the odd markets out Tuesday as the budding rejuvenation of prices in general picked up steam. Most points registered gains between 15 cents and a quarter, with larger advances posted at Pacific Northwest and PG&E-related points.

Banks providing credit lines to Southern California Edison and its parent, Edison International, have extended their forbearance in recognition that they expect the utilities deal (MOU) with California’s governor will eventually be implemented to help restore credit-worthiness, Edison officials said Tuesday as part of a conference call with the financial community dealing with the company’s first quarter earnings report.

Prices emerged from the weekend to resume the slide that dominated much of last week’s market. Only the California border-SoCalGas managed to show a gain for the day as a terribly weak screen, continued lack of fundamental support and expectations of another big storage injection report this week combined to push nearly all points down between 10 and 20 cents Monday.

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.

A proposed new law to implement sections of the governor’s agreement (MOU) with Southern California Edison Co. will be offered later this week in the ongoing special session of the state legislature, Edison senior vice president Bob Foster said Tuesday in a regular conference call with utility bondholders. Foster characterized the state lawmakers’ attitude as “cautious,” but noted there is “no outright rejection” of the Edison MOU, which requires a state law to authorize California to buy the utility’s transmission assets and assign a portion of its rates to pay for state-backed bonds.

Prices leveled off Tuesday in the East with few points varyingby more than a couple of cents in either direction from flat.Western markets generally were softer except for flat numbers inthe Pacific Northwest and a gain of more than a dollar at theSouthern California border. The Golden State’s power situationremained dire enough that a second straight day of rollingblackouts was ordered (see related story).

Sen. Pete Domenici (R-NM) yesterday called on FERC to conduct astudy into why there is such a huge differential between prices fornatural gas in the supply basin and prices for the gas delivered tothe Southern California border.