April 9, 2001
ROSEMEAD, Calif., April 9, 2001-- At a joint press conference today with Governor Gray Davis, Edison International Chairman, President and CEO John E. Bryson announced agreement on a plan to restore Southern California Edison to financial health.
"This negotiated resolution with the Governor is far preferable for our company and our employees and for our customers than is going into bankruptcy," said Bryson.
"Through difficult negotiations over many weeks," Bryson noted, "we believe we have achieved a practical approach. Our customers and the state's economic vitality will benefit greatly from a financially healthy utility which can retain experienced and skilled employees and can invest the billions of dollars needed to maintain a sound electric infrastructure system.
"The blunt reality remains that we in California face a large challenge in restoring overall stability to the California electric system," Bryson said. "Our employees at Edison can make a large difference in helping to meet that challenge. Vital work remains to be done with the Governor, the Legislature, the California Public Utilities Commission, and other policymakers, but this agreement is a large first step toward restoring stability for much of Southern California."
Today's more detailed agreement follows the framework announced in a February 23 preliminary agreement with the Governor. It was approved by the Edison International and SCE boards of directors this morning. Implementation will require further action by the California Legislature and the state Public Utilities Commission. Both Governor Davis and Bryson have urged swift action by both bodies.
Major terms of the agreement include:
- The state will receive a primary utility asset--SCE's 12,000-mile transmission system. SCE employees will operate and maintain the system through a contractual arrangement with the state.
- Edison International and SCE commit to no less than $3 billion of capital investment in utility infrastructure over the next five years.
- For the next 10 years, SCE will sell the output from its power plants under cost-based, rather than market-based, pricing.
- For the next 10 years, Edison Mission Energy's unregulated Sunrise power plant will sell its output exclusively to California under cost-based pricing.
- SCE agrees to forego development of 20,000 acres of its Big Creek and Eastern Sierra hydroelectric properties and grants conservation easements in perpetuity to the state for land and habitat preservation on these properties.
- SCE will gain a means of repaying the debt it incurred buying power for its customers during the current rate freeze.
- Upon implementation of this agreement by the Legislature and CPUC, SCE will drop its lawsuit against state regulators.
A copy of the Memorandum of Understanding will be available later today on Edison's investor Web site: www.edisoninvestor.com.
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Based in Rosemead, Calif., Edison International is the parent company of Southern California Edison, Edison Mission Energy, Edison Capital, Edison O&M Services, and Edison Enterprises.