SOUTHERN CALIFORNIA EDISON AND REGULATORY GROUP AGREE TO SETTLE ON EDISON'S POWER PURCHASES FROM AFFILIATES
SOUTHERN CALIFORNIA EDISON AND REGULATORY GROUP AGREE
TO SETTLE ON EDISON'S POWER PURCHASES FROM AFFILIATES
SAN FRANCISCO, Nov. 1 /PRNewswire/ -- Southern California Edison and the California Public Utilities Commission Division of Ratepayer Advocates (DRA) jointly announced that they have reached an agreement in principle to settle disputes about Edison's purchases of power from non-utility projects that are partly owned by an Edison affiliate, Mission Energy Co.
The DRA had alleged that Edison favored its affiliated projects over non-affiliated power producing projects. However, Edison has maintained that the 13 affiliated projects have proven to be a highly reliable source of power with price provisions favorable to Edison's customers.
In announcing the agreement, Edmund Texeira, executive director of DRA, said, "This is a good deal for ratepayers. It provides a direct credit of $120 million and it compensates ratepayers in the future by discounting the prices paid over the remaining life of the 13 affiliate contracts. We urge the Commission to approve this agreement."
John E. Bryson, Edison's chairman and chief executive officer, said, "It is beneficial to all concerned that a settlement of these issues has been reached. The alternative to this settlement was years of litigation focussing on events of the past rather than opportunities of the future. We believe this is a reasonable settlement."
The agreement in principle provides a one-time benefit to customers of $120 million effective Jan. 1, 1992, as well as a reduction in the amount Edison customers will be charged for power produced by Edison-affiliated projects in the future. "Altogether, this results in savings to Edison customers worth about $250 million on a present value basis," Texeira said. Edison also has agreed not to enter into new power purchase contracts with Qualifying Facility projects partly owned by an Edison affiliate.
DRA and Edison have agreed that a related issue concerning Edison's authorized Rate of Return will be decided in Edison's General Rate Case proceeding currently being considered by the CPUC. Related to the affiliate transaction issues, DRA has recommended a lower authorized rate of return that, if adopted, would result in a one-time annual reduction of up to $35 million in Edison's rates. Edison opposes this recommendation.
With the exception of the rate of return issue, the settlement covers all affiliate transaction issues between Edison and DRA related to both contract formation and contract administration on all contracts between Edison and affiliated Qualifying Facilities power producers through Dec. 31, 1991, Edison and DRA said.
The terms of the agreement in principle have been approved by the board of directors of Southern California Edison. Edison and DRA are working to complete a definitive agreement regarding the settlement.
After the definitive agreement has been completed, DRA and Edison will hold a settlement conference to explain the terms of the settlement to parties in the proceedings. Edison and DRA will then seek CPUC approval of the settlement. A decision by the CPUC is expected on the settlement in 1992.
"Without this settlement, resolution of issues concerning the formation and administration of these 13 affiliated contracts would have taken years," said DRA's Texeira.
/CONTACT: Edmund Texeira of DRA, 415-703-2429 or Lewis M. Phelps of Southern California Edison, 818-302-7933/ CO: Southern California Edison; California Public Utilities
Commission Division of Ratepayer Advocates ST: California IN: UTI SU: AL -- LA022 -- 0438 11/01/91 17:33 EST