Edison To Repay Creditors 'Immediately,' But No Date Yet
LOS ANGELES -(Dow Jones)- Embattled utility Southern California Edison expects to pay all creditors "immediately," but the Edison International (EIX) unit does not have a specific date of when its debt payments will begin, said John Bryson, chairman and chief executive of Edison International. 
"We intend to pay all of our creditors," Bryson said Wednesday in a call with reporters. "But we do not have a specific date." 
Southern California Edison and the California Public Utilities Commission struck a deal Tuesday that will allow the utility to pay off $3.3 billion of its $3.9 billion debt through existing retail electricity rates. 
Both parties settled a year-old lawsuit Southern California Edison filed against the PUC--otherwise known as a filed rate doctrine--that could have ended a retail rate freeze and allowed the utility to recover more than $5 billion in wholesale power costs from ratepayers. 
The settlement must still be approved by a federal court judge. A ruling is expected by Thursday. 
Bryson indicated that the utility may try to negotiate with some large generators, owed nearly $1 billion, to accept less than 100 cents on the dollar for money the companies are owed. 
"There is no deal between us and the generators at this point," Bryson said. "We will engage promptly" in settlement discussions. "We are eager to work it out in a tough minded and fair way." 
Ted Craver, Edison's chief financial officer, said the utility has between $2.4 and $2.5 billion cash-on-hand and about $3.9 billion in debt. 
Bryson said the utility does not expect its credit ratings to be restored to investment grade "immediately." 
"We've had some discussions with the credit rating agencies," Bryson said. "But no one expects it to be restored immediately. It's going to take some time." 
Bryson added that the utility will seek new lending opportunites, but he did not elaborate. 
     
Stephen Frank, president of Southern California Edison, said the utility would sit down with all of its creditors and work out a payment plan. 
Bryson said the utility believes that all of its debt can be paid off by the end of 2003. He did not say how much money from retail rates would be carved out for paying off Southern California Edison's debt. 
The utility's debt rose to $6.35 billion, according to a recent Securities and Exchange filing. 
"In the month of October we generated about $300 million" from retail rates. But Bryson said he could not estimate how much of that will be set aside to pay creditors. 
The utility and the PUC both said rates will not have to increase beyond the record rate hikes state regulators ordered earlier this year. 
Bryson said the utility has no intention of taking over the state's long-term power supply contracts as a result of the deal with the PUC. 
     
Fearing the state legislature wouldn't support a bill to rescue Southern Califoria Edison after six months of wrangling, advisers to Gov. Gray Davis and Edison executives began negotiating with the state's Public Utilities Commission on a settlement of a year-old lawsuit the utility filed to force the commission to raise rates enough to cover its power costs. 
The negotiations with the PUC were kept secret from state lawmakers in case a settlement couldn't be reached, Davis aides and Edison executives said. 
The end result, Edison and the commission said, is a deal that will allow the utility to work out a plan to pay off its creditors and keep Southern California Edison from following PG&E Corp. (PCG) unit Pacific Gas & Electric into bankruptcy.