Agency rejects Southern California Edison’s plan to sell stake in electric plant

Brian Melley

Friday, Jan. 19, 2001 | 11:26 a.m.

SAN FRANCISCO -- California's energy regulatory body voted Thursday to block debt-ridden Southern California Edison from selling its stake in a Nevada power generating plant and said it would likely block future proposed divestitures.

The state Public Utilities Commission scuttled plans by SoCal Edison to raise cash by selling its stake in the 1,580-megawatt Mohave Generating Station in Laughlin, Nev., to Virginia-based AES Corp. Edison operates the coal-fired plant along the Colorado River and owns a 56 percent share in the operation.

After ordering half the lights turned out in the auditorium to spare precious energy, Commission President Loretta Lynch said she didn't want to place more generating assets in the hands of out-of-state power producers who can turn around and charge utilities higher rates.

"Today is just another demonstration that we can't let that happen," Lynch said. "This commission cannot and will not allow that much power or additional megawatts to be placed in the hands of merchant generators."

But SoCal Edison said the decision further hampers its efforts to save itself from bankruptcy. While it can't sell its power plant, it is forced to sell its electricity at regulated prices that don't reflect its costs.

"Their decision to shut down deregulation by denying our ability to sell assets does signal an end to deregulation," said Bruce Foster, a vice president for SoCal Edison. "It must be balanced by an opportunity for the company to recover its costs associated with the wholesale market."

Standard & Poor has downgraded SoCal Edison's credit ratings and an electricity supplier threatened to force it into bankruptcy if it failed to pay its bills.

Michael Shames, executive director of the Utility Consumers' Action Network, applauded the decision to reject the Mohave sale.

"Selling that asset would have exposed California to even higher prices," Shames said. "What we've seen is that when these assets are sold to the private market these assets are used against the consumer in the form of higher prices."