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Enron Mail |
----- Forwarded by Jeff Dasovich/NA/Enron on 04/04/2001 11:52 AM -----
"Ronald Carroll" <rcarroll@bracepatt.com< 04/04/2001 11:41 AM To: <mmilner@coral-energy.com<, <rreilley@coral-energy.com<, <ray.alvarez@ei.enron.com<, <acomnes@enron.com<, <dfulton@enron.com<, <jdasovic@enron.com<, <jhartso@enron.com<, <smara@enron.com<, <snovose@enron.com< cc: Subject: Fwd: Edison gets more time; Calif. may sell $14 bln bonds ----- Message from "Tracey Bradley" <tbradley@bracepatt.com< on Wed, 04 Apr 2001 08:34:07 -0500 ----- To: "Justin Long" <jlong@bracepatt.com<, "Paul Fox" <pfox@bracepatt.com< cc: "Jeffrey Watkiss" <dwatkiss@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com< Subject: Edison gets more time; Calif. may sell $14 bln bonds Tuesday April 3, 6:15 pm Eastern Time Edison gets more time; Calif. may sell $14 bln bonds (UPDATE: Recasts, adds details throughout, byline) By Jonathan Stempel NEW YORK, April 3 (Reuters) - Edison International (NYSE:EIX - news), parent of troubled utility Southern California Edison, said on Tuesday bankers are giving it and the utility more time to cure their defaults on three credit lines. The announcement came after the California Public Utilities Commission (PUC), which sets rates, also on Tuesday voted to authorize the state's Department of Water Resources to sell between $12 billion and $14 billion of bonds to finance power purchases, and examine the financial links between the utilities and their parents. The 30-day extension from Edison's banks means the banks will ``forbear,'' or not act upon, the credit line defaults. ``That will take us out to basically around April 14,'' said Ted Craver, chief financial officer of Edison International, during an investor conference call. The prior forbearance, the banks' second, had expired March 13. The California power crisis has led to periodic blackouts and left SoCal Edison, which owes more than $5.4 billion for post power costs, and the state's largest utility Pacific Gas & Electric Co., which owes about $8.9 billion, on the brink of bankruptcy. A rate freeze imposed under the state's 1996 utility deregulation law has prevented them from passing on their soaring wholesale power costs to consumers. Though the PUC awarded the utilities a roughly 40 percent rate hike last week, allowing them to collect $4.8 billion more each year, analysts and the utilities said the hike effectively does nothing to let the utilities to recoup their prior costs. ``At best the utility is standing still (in that) it hasn't improved its cash flow or its cash position,'' said Craver. ``At worst, it is going backwards. That's our basic conclusion on the numbers and the mechanisms as we understand them.'' San Francisco-based PG&E Corp. (NYSE:PCG - news), parent of Pacific G&E, has said it expects to take a $4.1 billion charge for unrecouped electricity costs, while Rosemead, Calif.-based Edison has said it may take a ``substantial'' charge that may total as much as $2.7 billion. The California Independent System Operator, which runs most of the state's power grid, early on Tuesday called another Stage Two emergency alert because of supply problems. Such alerts are declared when power reserves fall to within 5 percent of peak demand. The alert was later lifted. Edison shares closed Tuesday on the New York Stock Exchange at $12.82, up 27 cents, or 2.2 percent. PG&E shares closed on the Big Board at $11.53, down 22 cents, or 1.9 percent. Craver also said in the conference call that SoCal Edison has rolled over 364-day and 5-year Libor-based credit facilities that recently matured for a respective 30 and 90 days, and that Edison rolled over one of its own facilities for 45 days. He concluded the call by expressing relief that creditors have not yet thrown the utility into bankruptcy, which analysts have said could already have happened by now had the PUC not granted the rate hike. ``I'm somewhat amazed about how disciplined everybody has been,'' he said. ``We're seeking protection from misguided regulatory decisions, and the solution is really in that same venue, in the regulatory and political and legislative context.''
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