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Enron Mail |
Doesn't this constitute a change in Edison's position, i.e., I thought they'd indicated that everyone would be paid by end of Q1'03. Now it appears they're saying that suppliers will get paid by year-end '03. Am I missing something? Thanks for the info.
Best, Jeff -----Original Message----- From: Tribolet, Michael Sent: Monday, October 15, 2001 11:27 AM To: Schneider, Chip; Mellencamp, Lisa; Curry, Wanda; Dasovich, Jeff; Bradford, William S. Subject: FW: ML Power Group-EIX-Update Following Meeting With Management -----Original Message----- From: Hunter Horgan [mailto:HHorgan@Amaranthllc.com] Sent: Monday, October 15, 2001 11:25 AM To: Tribolet, Michael Subject: FW: ML Power Group-EIX-Update Following Meeting With Management -----Original Message----- From: ML Power Group [mailto:Maria_Melone@ml.com] Sent: Monday, October 15, 2001 12:24 PM To: hhorgan@paloma.com Subject: ML Power Group-EIX-Update Following Meeting With Management * We met with Edison management on Friday (10/12) to discuss the recently announced settlement agreement between the company and the CPUC. The agreement, which was approved by Judge Lew on 10/5, provides a framework for Edison to repay creditors on a Q1 2002 time frame and, ultimately, to resume power procurement responsibilities. * Edison?s current estimate is that past power procurement debts will be recovered by year-end 2003. Discussions are ongoing with banks regarding a bridge loan, which is key in terms of getting creditors paid on time. * Negotiations with the renewable QF generators continue with both sides apparently seeking a fixed-price contract. The main issue is likely to be timing of the switch to a new pricing formula, particularly as there will likely be a substantial increase over current payments indexed to gas prices. * Regarding other generator creditors, Edison will be pursuing a negotiated settlement. One key date in this process is March 31, 2002, after which Edison is committed to join the state and the CPUC in pursuing legal action to recover alleged generator overcharges. * One option is a so-called ?grand agreement? under which Edison would agree on the starting amount owed to each generator. This would potentially release Edison to negotiate with the individual generators directly, as opposed to through the PX/ISO. * Edison expects to provide more detail of its earnings outlook within a few weeks ? but probably not in time for the Q3 results release though. * Several key accounting issues need to be resolved first, notably whether or not the PROACT (Procurement Related Obligations Account) will be set up as a regulatory asset. Another key issue outstanding is the utility retained generation (URG) rate proceeding currently under way at the CPUC. * Given the above uncertainties, it is still difficult to be precise about the earnings impact of the Edison settlement. For the time being we are sticking with our 2002E of $1.60, comprising $1.40 from the utility and $0.20 for the non-regulated businesses and parent. There is potential upside to our numbers, particularly if previous tax sharing arrangements are restored under the terms of the settlement agreement. * Edison is trading at 9.6x our 2002E, only modestly below the group average multiple. We see only modest upside from here at this stage, although clarity on the non-regulated outlook is a potential positive catalyst.
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