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		 Subject: Fwd: DJ Calif Asked For Revisions To Util Audit Language -Source


----- Message from "Tracey Bradley" <tbradley@bracepatt.com> on Wed, 31 Jan 
2001 08:56:51 -0600 -----
To:	"Andrea Settanni" <asettanni@bracepatt.com>, "Jeffrey Watkiss" 
<dwatkiss@bracepatt.com>, "Paul Fox" <pfox@bracepatt.com>, "Ronald Carroll" 
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Subject:	DJ Calif Asked For Revisions To Util Audit Language -Source
FYI

DJ Calif Asked For Revisions To Util Audit Language -Source 
Copyright , 2001 Dow Jones & Company, Inc. 



LOS ANGELES (Dow Jones)--California utility regulators sent a draft audit of 
Edison International (EIX) unit Southern California Edison's financial 
condition back to accounting firm KPMG LLP to have "conclusionary statements 
and value judgments" removed, a person working closely with the state on the 
issue said Tuesday. 

     "They made some value judgments, but their job was simply to provide an 
audit," the person said. As a result, the California Public Utilities 
Commission told the auditors "to go back and take out the value judgments and 
make their findings neutral," the person said. 

     The final audit, released late Monday, is decidedly different from an 
executive summary of a draft lawmakers held last week, according to several 
Democratic lawmakers who said they had seen a copy. 

     For one, last week's executive summary clearly stated that the utilities 
can recoup billions of dollars from consumers retroactive to August 2000, one 
Democratic senator said. 

     KPMG and the California Public Utilities Commission declined to comment. 

     The Public Utilities Commission requested independent audits of Southern 
California Edison and PG&E Corp. (PCG) unit Pacific Gas & Electric Co. in 
late December to determine the validity of their claims that soaring 
wholesale power costs would force them into bankruptcy unless their rates 
were allowed to rise. 

     The audit of Pacific Gas & Electric, being prepared by Barrington 
Wellesley Group, had yet to be released late Tuesday. 

     KPMG's final audit shed some light on the severity of Southern 
California Edison's liquidity crisis and outlined payments the utility has 
made to its parent company. But it made no recommendations on whether the 
Public Utilities Commission should grant the utility's request for a rate 
hike or declare at an end the rate freeze that has kept it from passing its 
power costs on to customers. 

     The audit says Southern California Edison has paid $4.5 billion more for 
electricity than it was allowed to charge consumers. It also says the utility 
has paid $4.8 billion to its parent company since deregulation, with the bulk 
of that sum being paid out to shareholders via dividends or share buybacks. 

     One adviser to a Democratic assemblyman said it was proper for the 
Public Utilities Commission to send the audit back to KPMG. 

     "I would have done the same thing," the adviser said. "This is a very 
charged issue." 

     -By Jason Leopold; Dow Jones Newswires; 323-658-3874; 
mailto:jason.leopold@dowjones.com 

     (END) Dow Jones Newswires 31-01-01 

     0226GMT