SCE Responds to Court Decision on QF Contract

March 22, 2001

March 22, 2001

Imperial County Superior Court Judge Donal Donnelly today granted a motion for summary adjudication brought by CalEnergy regarding its request for a temporary contract suspension so that it may sell power from its "qualifying facility" (QF) projects to parties other than Southern California Edison. Following is SCE's response to that ruling.

ROSEMEAD, Calif., March 22, 2001-SCE opposed the contract suspension requested by CalEnergy because we believe Governor Davis, state regulators and involved parties are close to resolving very legitimate financial concerns of CalEnergy and other QF suppliers.

Moreover, we have been concerned that CalEnergy's request would lead to an escalation of in-state generators shipping electricity out of state at a time when California faces a supply crisis.  CalEnergy has expressed an interest in selling power to its partner in the QF projects, El Paso Energy.

Our QF creditors have been informed that we are working diligently to resolve this crisis without unfairly advantaging one class of creditors over another.  To date, most of our creditors have been willing to work with us as we try to bring about a solution in Sacramento.  However, we recognize that those QFs that continue to supply electricity have experienced the same financial distress we have faced for months. 

For several months, SCE has been trying to reduce the high prices for its QF contracts.  Most recently, we have been working with Governor Davis' office to find a reasonable way to make payments on a going-forward basis to those QFs that continue to supply electricity to SCE to help stabilize electricity supplies for our customers.

We are studying Judge Donnelly's order to determine our next course of action.

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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.