Mirant Settles With California Parties

January 14, 2005

January 14, 2005

ROSEMEAD, Calif., Jan. 14, 2005 – Southern California Edison (SCE) and other California Parties today announced they have reached a settlement with Mirant Corporation and a number of its affiliates providing for refunds against Mirant’s charges dating back to California’s energy crisis of 2000 and 2001. 

The settlement resolves specified claims against Mirant made by SCE, Pacific Gas and Electric (PG&E), San Diego Gas & Electric, the California Public Utilities Commission (CPUC), the California Electricity Oversight Board, the California Department of Water Resources Electric Power Fund, and the California attorney general. 

“We commend all parties for settling these important issues in a manner that provides significant value to Californians,” said SCE Chairman John Bryson.  “This is the fifth settlement to recover for consumers a portion of the overcharges during the state’s power crisis.  We will continue to work with the CPUC, state officials, and others to gain the maximum total recovery possible for our customers.”

The settlement calls for Mirant to assign to the settling parties approximately $320 million in receivables claimed by Mirant to be due it 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 2000, until its collapse in January 2001.  In addition, Mirant will allow in favor of the California Parties an unsecured claim of $175 million in the bankruptcy of one of its affiliates.  Mirant will also assign to the California Parties any interest due on the approximately $320 million. 

SCE estimates that its share of the settlement will be approximately $68 million in cash and over $33 million of the unsecured claim.  The value actually realized from the unsecured claim will depend on a number of factors pertinent to the bankruptcy estate.  The exact manner in which the proceeds ultimately received are refunded to SCE customers will be determined by the CPUC.

The settlement has been approved by the CPUC and is subject to the approval of the Federal Energy Regulatory Commission, and the Mirant and PG&E bankruptcy courts.  Once fully approved, it will resolve, among other things, Mirant’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.