Edison subsidiary is becoming global force in providing power.

Five years ago, Edison Mission Energy, the independent power development arm of Rosemead-based Edison International, was a mid-sized power producer that saw its U.S. market drying up during the recession.

So the company began a major overseas push in search of new markets.

Now Mission once again is refocusing its attention on the domestic market. This time, though, Mission is one of the world's largest independent power producers with massive power projects spanning the globe - from Britain and Spain to Australia and Indonesia.

For the first nine months of this year, Irvine-based Mission reported $586 million in revenue, up from $346 million for the like period in 1995 and surpassing the $467 million posted for all of last year.

Those figures understate Mission's total global activity by almost half, because they do not include the company's prorated share of ventures in which it holds a minority stake.

Taking that into account, Mission is close to being a billion-dollar company, with 1995 revenues of $865 million.

Still, Mission until now has not been as profitable as parent Edison overall, either on a net-margin basis or on its return on equity, which Edison computes to be about 10 percent, a couple of points under the company as a whole.

But Mission has been catching up. Its net income in 1995 was $64 million, up from $55 million in 1994.

The spur prompting Mission to cast its gaze back home: deregulation, led by California's landmark move this summer to deregulate its three monopoly electric utilities, including parent Edison.

Until now, nonregulated independent power producers like Mission have been prohibited from owning or operating portions of the main power grid; they largely were relegated to the fringes of the U.S. power market, building and operating cogeneration and alternative fuel plants.

For example, until earlier this year Mission operated six geothermal plants in California; it has sold four of them, but still operates the other two.

With deregulation, independent power producers will be able to compete with regulated utilities to own and operate power plants actually on the main power grid.

"Deregulation in California ushers in a new era of opportunities for Mission across the U.S., which has been a quiet market until now," said Mission President and Chief Executive Ed Muller.

Mission has acquired plenty of know-how in dealing with recently deregulated markets. After stumbling early on with an investment in a Mexican power project near the Texas border that ran into stiff environmental opposition, Mission has racked up a string of more than two dozen acquisitions and project developments.

"The biggest challenge in a competitive market is maintaining discipline. You don't just chase projects because others are doing it," Muller said.

Picking projects carefully so far has paid off for Mission, said Laura Kuffler, an analyst with Standard & Poor's Corp., which rated Mission's debt this summer as BBB+ with a "stable" outlook.

"They have relatively economical projects now and will have very substantial projects coming online over the next few years," Kuffler said.

The downside, Kuffler said in the rating statement, was the increasing debt load due to the billions that Mission has invested in power operations and projects around the globe.

Indeed, with the move toward privatization around the globe, governments are contributing less of the funding; it's increasingly up to private investors like Mission to come up with the financing.

The huge sums involved limit the competition to those with deep pockets or creative use of debt. In fact, Muller said the company might not have gotten a project in Wales if it had not been for an innovative financing proposal.

"We were able to come up with Eurobonds for our $1 billion bid; no one had ever financed a power plant like this before," he said. Eurobonds are sold to investors outside the country of the issuer; in this case, the bonds were sold primarily to European investors.

The expertise that Mission has gained dealing with deregulation and privatization on the international scene not only will serve it well as it goes back into the U.S. market; it also will aid parent Edison International as it prepares for deregulation, according to Edison spokesman Tom Gibbons.

"The experience they've achieved will provide valuable lessons for us," Gibbons said.

In the meantime, Mission has become an increasingly valuable asset in Edison's portfolio.

With deregulation approaching, Edison is focused on making its operations more efficient in the face of increased competition, which likely will translate into several more rounds of layoffs.

"Mission is one of the high-growth areas for Edison that will make a real contribution to shareholder value," Gibbons said. "We fully expect their percentage of Edison's overall profits will increase, especially as deregulation kicks in."

Gibbons had no comment on whether Edison eventually would sell or spin off Mission. But one Wall Street analyst thinks those possibilities are unlikely.

"Because Mission is an area that has provided Edison International with growth - and shareholders with steady returns - I don't expect Edison to sell or spin off Mission," said Standard & Poor's Kuffler. "With the uncertainty that will come with deregulation, an asset that generates consistent growth will be even more important for shareholders."