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California Power Rates May Rise

The Associated Press Monday, April 2, 2001; 7:09 AM

LOS ANGELES Negotiations between the state and ailing Southern California Edison included a draft proposal that could mean another rate increase for its customers, a newspaper reported.

The Los Angeles Times' reported Monday it obtained a 40-page draft memorandum of understanding, dated last week, that among other things could obligate Edison customers to help pay the utility's multibillion debt through a "dedicated rate component" potentially a rate increase even if no power line deal was reached.

The component, which wasn't specified, wouldn't show up in bills for two years, according to the draft.

A spokesman for Gov. Gray Davis called the draft "ancient history" and said it has been updated and changed significantly in the past week, but did not offer other details.

An Edison spokesman could not immediately be reached for comment by the Times.

The document was dated Tuesday the same day that the state Public Utilities Commission approved record rate increases of up to 42 percent for Edison and 46 percent for Pacific Gas & Electric, the state's two biggest utilities.

The commission was meeting Monday to determine how best to hear from as many different groups as possible before implementing the increase, the biggest electric-rate increase in California's history.

Edison officials described as "very active" talks with the governor's office over the sale of its transmission lines to give the struggling utility a cash infusion. But SoCal Edison chief financial officer Ted Craver said a deal was not imminent.

Davis also wants to buy electrical lines from PG&E and San Diego Gas & Electric Co. for a combined total of about $7 billion.

Talks between the state and PG&E are awaiting the outcome of the Edison deal, PG&E spokesman John Nelson said Sunday.

In a conference call with creditors Friday, PG&E Chief Financial Officer Peter Darbee said he was "discouraged" by the week's events and that his company was making daily assessments about a bankruptcy-law filing.

"Major progress" is needed on resolving the financial mess caused by the state's electricity crisis, Darbee told The Wall Street Journal, but "time is running short."

-- Martin Thompson (, April 02, 2001

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