March 26, 2001
During a news conference today, California Public Utilities Commission (CPUC) President Loretta Lynch announced several major proposed decisions related to the state's energy crisis. Following is SCE's initial response:
ROSEMEAD, Calif., March 26, 2001--In response to President Lynch's proposed decisions today, SCE said that its highest goal remains the restoration of creditworthiness so that it can provide safe and reliable electricity service to its customers.
The proposed decisions President Lynch announced recognize the absolute necessity of addressing the disparity between very high wholesale power costs and frozen retail rates. However, a cursory review of the multiple complex proposals suggests that substantial improvements will be needed if they are to fully align costs with rates and restore the creditworthiness of the state's utilities in the eyes of the financial community.
Several elements of Lynch's plan are not conducive to meeting these objectives. For example, collection of the increased revenues must be structured in such a way as to assure that costs incurred will be fully recovered through a mechanism which allows for flexibility to meet unknown future shifts in the costs of generation.
Moreover, the proposed retroactive change in the accounting rules which date back over three years and govern the current market transition would only serve to add complexity and uncertainty at a time when the opposite is required to restore the confidence of the financial community.
While we agree with President Lynch that it is time to pay the state's power bills, the commission must take measures that clearly give utilities the tools to do so and fulfill our core mission.
An Edison International company, Southern California Edison is one of the nation's largest electric utilities, serving a population of more than 11 million via 4.3 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.