pge/sce numbers

Utility shares climb on plan progress
Tentative deal to buy transmission system for $2.7 billion

By Myra P. Saefong, CBS.MarketWatch.com
Last Update: 11:56 AM ET Feb 26, 2001
SACRAMENTO, Calif. (CBS.MW) - Shares of PG&E and Edison were lifted slightly
Monday by indications that efforts to end California's energy crisis are
moving forward.
On Friday, California Gov. Gray Davis said the state had reached an
"agreement in principle" to buy Southern California Edison's power lines in a
move to keep the cash-strapped utility solvent.
"This is a significant step forward for Edison and the resolution of the
California power credit crisis," Steven Fleishman, an analyst at Merrill
Lynch, said in a research note Monday.

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Under terms of the deal, Southern California Edison will sell its electricity
transmission lines to the state for $2.76 billion, or 2.3 times their
estimated book value. See full story.
A formal agreement may be completed in working sessions this week, according
to Bob Foster, Edison's EIX: news, msgs, alerts) senior vice president of
public affairs. There is desire from both parties to "conclude this as
rapidly as possible," he said during a conference call to note holders on
Friday.
The sale of the transmission lines would help Edison's SoCal Edison unit pay
off $4.1 billion in debts accrued from having to buy power on the wholesale
power market at prices high above what it's able to charge its customers
under state-capped retail rates, Fleishman said.
However, discussions with the state's other near-bankrupt utility, Pacific
Gas & Electric "were flailing last week," he said, in part because the
utility's undercollected costs of more than $5 billion at the end of 2000 are
much bigger than SoCal Edison's. However, PG&E is likely willing to work out
a deal within the proposal's framework, Fleishman said.
"It may be that the only way the numbers can work is with a rate increase,"
he added.
Shares of Edison climbed by 33 cents to $15.02, and PG&E shares gained 55
cents to $14.25 Monday.
In another positive development, Edison International said its bank creditors
will refrain from collecting interest on what they're owed through March 14.
Additionally, power generators have agreed to sell their excess energy into
the state for another two weeks following a federal court order to extend the
sales until the next court hearing on March 16.