October 1, 2000
Davis calls for immediate collective action to fix "broken" market; says robust economy is linked to "financially healthy utilities"
ROSEMEAD, Calif., Oct. 1, 2000-Edison International (NYSE: EIX) today applauded California Governor Gray Davis for his commitment in calling for immediate, collective action by all parties involved to resolve the serious problems with the state's wholesale electricity marketplace, where the cost of power skyrocketed this summer.
"We are pleased that Governor Davis has pledged to bring about effective solutions to California's badly flawed wholesale electricity market," said Edison International Chairman, President & CEO John E. Bryson. "We join him in this urgent call to action and will continue working with both state and federal authorities to develop workable solutions that will result in price stabilization, affordable customer rates and reliable electric service."
Calling the wholesale market "clearly broken," the Governor's Sept. 29 statement sends a clear signal that immediate and long-term solutions to the state's market problems are underway. The first action outlined in the statement was a call for FERC to reduce price and bid caps on wholesale power sold in California.
He also underscored the importance of protecting ratepayers and the state's utilities that serve them and sustain the local economy.
"The current path of unconscionable wholesale energy prices is unacceptable for ratepayers and California utilities," the Governor stated. "California consumers have a legitimate need for California's utilities to remain solvent, and the state must be committed toward that end.
"Without financially healthy utilities, no California-based entity will exist that will be sufficiently solvent to invest in the new electrical generation and transmission facilities necessary to solve our energy problems. California needs the [Federal Regulatory Commission] to act this fall for California to have the time necessary to develop new market mitigation measures and more permanent market reforms.
"This will help stem the flood of red ink that threatens to drown California consumers, while we work to find more permanent solutions," he continued, noting that this action would affect electricity bid and sold through auction procedures for delivery to consumers by utilities and marketers. "There is no justification for delay when the wholesale markets under FERC regulation-not state regulation-are so clearly broken."
The overnor acknowledged that the challenges presented by wholesale market deregulation are significant, "but can be met over time if all parties act responsibly. This will require cooperation and responsible action by consumers, the utilities, the state, FERC, and most of all, the merchant generators and energy traders who are unconscionably profiteering in the deregulated marketplace."
Stephen E. Frank, president, chairman and CEO of Edison International's utility subsidiary, Southern California Edison, underscored the importance of fair market rules, sufficient power supplies, and price stabilization as key goals in making the wholesale market more workably competitive.
"We will not rest until these goals are achieved," Frank said. "In our pursuit of both immediate and long-term remedies, SCE is fully committed to ensuring that customer rates are stable and affordable. We are determined to prevent our customers from experiencing the rate shock we saw this summer in San Diego, where utility bills doubled and tripled."
# # #
Based in Rosemead, Calif., Edison International is a premier international electric power generator, distributor and structured finance provider. With assets of $36 billion and a portfolio of approximately 28,000 MW, Edison International is an industry leader in privatized, deregulated and incentive-regulated markets and power generation. It is the parent company of Southern California Edison, Edison Mission Energy, Edison Capital, Edison Enterprises and Edison O&M Services.