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Date: Thu, 22 Mar 2001 18:03:03 -0600 From: "Tracey Bradley" <tbradley@bracepatt.com< To: "Justin Long" <jlong@bracepatt.com<, "Paul Fox" <pfox@bracepatt.com< Cc: "Aryeh Fishman" <afishman@bracepatt.com<, "Andrea Settanni" <asettanni@bracepatt.com<, "Jeffrey Watkiss" <dwatkiss@bracepatt.com<, "Kimberly Curry" <kcurry@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com< Subject: CalEnergy to sell on open market Mime-Version: 1.0 Content-Type: text/plain; charset="us-ascii" Content-Disposition: inline FYI - an interesting development. CalEnergy to sell on open market By Myra P. Saefong, CBS.MarketWatch.com Last Update: 6:17 PM ET Mar 22, 2001 EL CENTRO, Calif. (CBS.MW) -- An independent power producer won the right Thursday to sell its electricity on the open market, despite contracts obliging it to sell the energy to Edison International's cash-strapped utility unit. A judge in an Imperial County Superior Court Thursday ruled that CalEnergy, a subsidiary of privately held MidAmerican Energy, should be allowed to sell its electricity on the open market, Vince Signorotti, a spokesman for the company, said Thursday afternoon. As a result of the ruling, CalEnergy stopped supplying power to Southern California Edison at 1 p.m. Pacific time Thursday and has been selling it to entities that will pay for it since then, David Sokol, CEO of CalEnergy said during a conference call. "We're very pleased with his ruling," Signorotti said, emphasizing that the ruling is a "short-term solution" but means that CalEnergy will be able to keep its plants operating, pay its taxes, vendors, employees and landowners. Even more importantly, Signorotti said, the move keeps the "environmentally renewable resource flowing into the California market." "It is absolutely our intention that the power stay in the state," Sokol said. However, he recognized that the power buyers are not obliged to keep it within the state. The sale to third parties could mean that California and its near-bankrupt utilities will pay even higher prices for electricity. Southern California Edison (EIX: news, msgs, alerts) owes the generator $140 million from Nov. 1 of last year to date, Signorotti said. The current ruling doesn't address the issue of past payments. The court case on other issues continues on, Sokol said. The utility is unable to make certain payments to creditors because, along with Pacific Gas & Electric (PCG: news, msgs, alerts) , it has run up billions of dollars in undercollected costs -- the difference between what they paid on the wholesale spot market for electricity and what they received from customers under state-capped retail rates. "We think the ruling probably has significant implications for the entire QF (small independent generator) community," Sokol said. "There's a lot of other QFs that have not taken this action to date," he said. "Now I think there is an argument that they can obviously mitigate (damages caused by non-payment) based upon this ruling given the statement of basically common law in California." Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco.
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