Duke Settles With California Parties

July 13, 2004

July 13, 2004

ROSEMEAD, Calif., July 13, 2004 – Southern California Edison (SCE) and other California parties today announced they have reached a settlement with Duke Energy Corp. and a number of its affiliates that provide for refunds against Duke’s energy charges dating back to California’s energy crisis of 2000 and 2001. 

The settlement resolves specified claims against Duke made by SCE, Pacific Gas and Electric, San Diego Gas & Electric, the California Electricity Oversight Board, the California Department of Water Resources Electric Power Fund, and the California attorney general.  The attorneys general of Oregon and Washington are also participating in the settlement, along with the San Diego District Attorney and the market oversight division of the Federal Energy Regulatory Commission (FERC).

“We commend all the parties for settling these important issues in a manner that provides significant value to California consumers,” said SCE Chief Executive Officer Al Fohrer.  “We hope others will follow this example.” 

The settlement calls for Duke to assign to the settling parties about $140 million in receivables that would otherwise be due Duke from the California Independent System Operator, manager of most of California’s electricity grid, and the now-defunct California Power Exchange, an auction house that set the hourly wholesale price of electricity from January 1, 2000, until its collapse in January 2001.  Duke will also contribute approximately $60 million in cash, for a total settlement value in excess of $200 million.  The additional cash payment includes $2.5 million that Duke had previously paid in an earlier settlement negotiated between Duke and FERC’s market oversight division.

SCE estimates that its share of the settlement proceeds will be in excess of $40 million.  The exact manner in which these proceeds are refunded to SCE customers will be determined by the California Public Utilities Commission (CPUC).

The settlement is subject to the approval of the CPUC and FERC.  The CPUC may provide its approval by electing to become a party to the settlement.  If approved, the settlement would resolve, among other things, Duke’s portion of claims by the California parties in the current FERC refund case, any additional refund obligations it might have incurred at FERC for sales into California energy markets during the summer of 2000, and certain potential civil claims. 

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An Edison International (NYSE:EIX) company, Southern California Edison is one of the nation’s largest electric utilities, serving a population of more than 12 million via 4.6 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.