Senate approves Edison rescue deal, Assembly measure stalled
By Jennifer Coleman
Associated Press Writer
SACRAMENTO (AP) -- The state Senate approved a bill that significantly alters
the plan negotiated by Gov. Gray Davis to help the struggling utility
Southern California Edison.
The bill approved Friday, authored by Democratic Sens. Richard Polanco and
Byron Sher, lets Edison issue $2.5 billion in revenue bonds to pay debts
amassed when prices for wholesale electricity reached record-high levels in
the last year.
"I believe it's a measure that gets us to the goal of getting the state out
of the business of buying electricity ... and to bring this entity to
creditworthiness," said Polanco, D-Los Angeles.
Approved 22-17, the bill now goes to the Assembly. The Assembly adjourned
Friday night without voting on a similar measure.
The Polanco-Sher plan shifts the burden of repaying the bonds to commercial
and industrial power users and has been opposed by business interests and by
Edison, which says it won't help the company escape bankruptcy.
Davis' plan, announced in April, offers Edison $2.76 billion for its
transmission system and lets it sell revenue bonds to repay the rest of its
estimated $3.5 billion worth of debt generated when it had to pay
skyrocketing wholesale power prices.
Under the plan by Polanco, and Sher, of Stanford, the state has a five-year
option to buy Edison's grid.
That, said Republican Sen. Ross Johnson of Irvine, gives Edison a bailout it
"neither needs nor deserves.
"I am tired of this projection of Edison as a victim. They have their legion
of lobbyists here telling us ad nauseam that they didn't support
deregulation," Johnson said during floor debate. "The idea of Edison as the
victim goes down in the annals of real whoppers. Edison paid their lobbyists
bonuses for the successful passage of deregulation."
During the 1995-1996 deliberations that led to deregulation, Edison officials
helped create the current system in meetings with business interests and
then-Gov. Pete Wilson, a Republican.
Lawmakers are set to go on summer break Friday night until Aug. 20, a
schedule that conflicts with the deadline in the Memorandum of Understanding
between Davis and Edison. That says the Legislature must approve the deal by
Aug. 15.
"It's a firm deadline, which means this issue has to be fully resolved prior
to the end of the legislative recess," Davis said Friday.
For that to happen, either the Senate bill or a proposal by Assembly Speaker
Robert Hertzberg, D-Van Nuys, and Assemblyman Fred Keeley, D-Boulder Creek,
has to reach Davis.
"I have problems with both bills," Davis said. "I am heartened by the fact
that there's a bill moving in each house."
The Keeley-Hertzberg plan trims at least $300 million from the governor's
offer. It also allows Edison to issue the bonds, which would be repaid by
Edison ratepayers over 10 years.
The plan also attempts to increase the state's use of "green" energy
resources and allow Edison customers to opt for cheaper direct-access energy
service.
The Assembly didn't vote on the Keeley bill Friday, because Hertzberg is
considering forming a working group with the Senate and the administration to
"iron out the bills' differences," said Hertzberg's spokesman Paul Hefner.
Davis said he wanted any working group to continue working over the summer
break to devise a compromise by the Aug. 15 deadline.
"I don't want people to go out fishing for 30 days and come back and worry
about it on Aug. 20 because I know we're going to have reapportionment and
other major issues to deal with in that last month," the governor said.

On the Net:
Read the bills, AB82xx by Keeley and SB78xx by Polanco, at
http://www.leginfo.ca.gov
Read the governor's Memorandum of Understanding at