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California has new plan for utilities - WSJ

Wednesday February 7, 2:48 AM EST NEW YORK, Feb 7 (Reuters) - In a plan to make California's utilities "viable" the state is mulling injecting enough cash into the utilities to restore them to the lower end of investment grade debt, the Wall Street Journal reported in its online edition Wednesday.

If the utilities, Edison International's (EIX) Southern California Edison and PG&E Corp.'s (PCG) Pacific Gas & Electric Co., get restored to a triple-B credit rating, they could issue bonds, the paper said.

The new bonds would let the companies amortize much of their past power-procurement costs over the next 10 to 15 years, the paper said.

The plan is being considered by lawyer Michael Kahn, of San Francisco's Folger, Levin & Kahn LLP, Calif. Gov. Gray Davis' point man in the energy talks, the paper said.

The goal is to make the two troubled utilities, which are nearly bankrupt after spending billions to buy energy, "viable" and not to bring them "back to full strength," Kahn was reported as saying.

The companies have racked up $12 billion in debt buying power at sky-high prices that, under the state's terms of deregulation, they can't pass along to consumers.

The plan being proposed would help out the utilities but not to the extent where it could be considered a government bailout, the Journal said people familiar involved in the energy talks told it.

-- Martin Thompson (, February 07, 2001

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