SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 6, 1999
EDISON INTERNATIONAL
(Exact name of registrant as specified in its charter)
CALIFORNIA 001-9936 95-4137452
(State of principal jurisdiction of (Commission file (I.R.S. employer
incorporation of organization) number) identification no.)
2244 Walnut Grove Avenue
(P.O. Box 800)
Rosemead, California 91770
(Address of principal executive offices, including zip code)
626-302-2222
(Registrant's telephone number, including area code)
<PAGE>
Items 1 through 4, 6, 8 and 9 are not included because they are inapplicable.
Item 5. Other Events
MOHAVE GENERATING STATION ENVIRONMENTAL LITIGATION
On October 6, 1999, Southern California Edison, the Los Angeles Department of
Water & Power, Nevada Power, and the Salt River Project, co-owners of the Mohave
Generating Station (the "Owners"), along with three environmental groups,
announced a settlement to a federal lawsuit that the groups had filed against
the Owners in February 1998, alleging power plant violations of federal and
state air quality regulations. The settlement, which is subject to final
approval by the U.S. District Court in Las Vegas, will accelerate the planned
installation of additional air emission controls on the power plant. A copy of
the press release issued by the Owners on October 6 pertaining to the above
announcement is attached hereto as Exhibit 99.1 and incorporated herein by
reference.
PAITON GENERATING STATION LITIGATION
On October 7, 1999, Indonesia's state-owned electricity company, PT Perusahaan
Listrik Negara (PLN) announced that it had filed a lawsuit in the State Court of
Central Jakarta against PT Paiton Energy Company ("PEC") seeking to annul PLN's
contract to purchase power from PEC's coal-fired 1,230 megawatt generating
station located in East Java, Indonesia. PEC is 40 percent-owned by Edison
Mission Energy, a wholly-owned subsidiary of Edison International. As of October
19, 1999, PEC has not been served with PLN's complaint. According to PLN's press
releases and public statements, PLN has alleged that the contract was the result
of corruption and is one-sided and against the public interest. Pursuant to
PEC's rights under the power purchase agreement, PEC sent a notice of
arbitration to PLN under the power purchase agreement to preserve the sanctity
of the agreement and to protect the interests of its shareholders, lenders and
other credit support providers. PEC also stated its continued willingness to
negotiate with PLN and the Government of Indonesia to resolve issues relating to
the power purchase agreement. Copies of press releases issued by PEC on October
7 and 11, 1999 are attached hereto as Exhibits 99.2 and 99.3.
On October 15, 1999, an interim arrangement was entered into among the
shareholders, sponsors and commercial lenders of PEC. The interim arrangement
provides for the waiver of certain events of default, including a principal
payment default on loans made by the commercial lenders, and for the amendment
of agreements relating to the contribution and application of equity by the
sponsors and shareholders. The interim arrangement was necessary because
conditions were not met for the United States Export-Import Bank to take out
$540 million in loans made by the commercial lenders as originally scheduled.
Discussions are ongoing with the United States Export-Import Bank to extend the
deadline for the take-out and identify appropriate conditions therefor in light
of current conditions in Indonesia.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits
Exhibit
Number Description
99.1 Press Release of Mohave Generating Station dated October 6, 1999 entitled
"Mohave Plant Owners, Environmentalists Reach Agreement on Pollution
Controls"
99.2 Press Release of PT Paiton Energy Company dated October 7, 1999 entitled
"PT Paiton Energy Responds to PLN Lawsuit"
99.3 Press Release of PT Paiton Energy Company dated October 11, 1999 entitled
"PT Paiton Energy Reaffirms Willingness to Negotiate, Reiterates Interim
Offer of 3.3 U.S. Cents per kWh"
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EDISON INTERNATIONAL
(Registrant)
KENNETH S. STEWART
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KENNETH S. STEWART
Assistant General Counsel and Assistant Secretary
October 19, 1999
News Release from . . .
Mohave Generating Station
SOUTHERN CALIFORNIA EDISON * LOS ANGELES DEPARTMENT OF WATER & POWER
NEVADA POWER * SALT RIVER PROJECT
FOR IMMEDIATE RELEASE
Edison Contacts: Clarence Brown/Steve Hansen, (626) 302-2255
LADWP Contact: Eric Tharp, (213) 367-0387
Nevada Power Contact: Faye Andersen, (775) 834-4822
SRP Contact: Scott Harelson, (602) 236-3021
NOTE TO EDITORS--This press release as well as a series of fact sheets and
downloadable photos of the Mohave plant and the proposed emission control
facilities are available on Edison's media website: www.edisonnews.com.
Mohave Plant Owners, Environmentalists
Reach Agreement on Pollution Controls
Under settlement terms, Mohave Generating Station will install
equipment by Jan. 1, 2006 to reduce emissions by at least 85%.
LAUGHLIN, Nev., Oct. 6, 1999--The owners of the Mohave Generating Station and
three environmental groups announced today a settlement to a federal lawsuit
that would accelerate by three years the planned installation of additional air
emission controls on the 1,580-MW, coal-fired power plant located here.
The signed agreement is subject to final approval by the U.S. District Court in
Las Vegas. Under the terms of the agreement, the plant owners will install a
sulfur-dioxide scrubber and a fabric filter "baghouse" by Jan. 1, 2006 as
opposed to Dec. 31, 2008, as initially proposed by the owners.
The scrubber must remove at least 85% of the sulfur dioxide from the plant's air
emissions, while the filtering system is expected to eliminate 99% of the
visible particles from the plant's airborne releases. Capital costs are
estimated at $300 million.
"The agreement creates a win-win solution for all sides," said Bob Wyman,
attorney for the owners. "All of the major stakeholders associated with these
negotiations will benefit from additional measures to protect air quality in the
desert areas of Arizona, Nevada and California, all the way to the Grand
Canyon."
-MORE-
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MOHAVE SETTLEMENT ANNOUNCEMENT
Page 2 of 2
While the long-term future of the plant will depend on the emerging deregulated
electricity markets and other plant costs, the settlement was structured to
provide the greatest chance for the plant to remain economically viable. This
was an important concern to the parties, who recognize the economic needs of the
local communities and the Hopi Tribe and Navajo Nation, for whom hundreds of
jobs and millions of dollars in taxes, royalties and other contributions are at
stake.
The coal that fuels the Mohave plant comes from a mine on land jointly owned and
controlled by these tribes. In addition to the nearly 280 jobs generated by the
mine, the millions of dollars paid in royalties to the tribes help fund a number
of local health, education and welfare programs.
The environmental lawsuit was filed in early 1998 by the Grand Canyon Trust, the
Sierra Club and the National Parks and Conservation Association. It alleged that
plant operations were in violation of federal and state air quality regulations.
As part of the settlement, the defendants do not admit to these violations.
Last December, the plant owners committed to place additional emission control
devices on the plant to augment and enhance existing devices and to further
reduce any limited contribution the plant may be making to visibility impairment
in the Grand Canyon. The major parties involved in today's settlement have been
able to strengthen this original commitment and address the concerns of the
environmental lawsuit.
"We're very pleased to be able to settle this issue through negotiations, rather
than costly, extended litigation," Wyman said. "The key settlement terms are
aligned with the owners' ongoing commitment to enhance Mohave's environmental
performance and build on its solid regulatory compliance record."
The plant's owners are Southern California Edison (56% majority owner and
operator); Los Angeles Department of Water & Power (20%); Nevada Power (14%);
and the Salt River Project (10%).
# # #
News Release from . . .
PT PAITON ENERGY COMPANY
FOR IMMEDIATE RELEASE
Contact:
Ong Hock Chuan: 62 21 526 6261 or
62 816 882 773
Randall Oliver: (949) 798-7840
PT Paiton Energy Responds to PLN Lawsuit
JAKARTA, Indonesia, Oct. 7, 1999--PT Paiton Energy, the owner/operator of the
Paiton Swasta I electric generating plant in Indonesia, made the following
statement in response to PLN's press statements regarding their decision to
abandon negotiations and file a lawsuit seeking to cancel the 1994 Power
Purchase Agreement:
"PT Paiton Energy is deeply disappointed that PLN would file a lawsuit at a time
when we were meeting almost daily and making significant progress towards an
agreement. PT Paiton Energy firmly believes PLN's decision is contrary to the
interests of the Government and people of Indonesia.
"While PLN has abandoned negotiations, PT Paiton Energy remains committed to
working with the Government of Indonesia to reach an agreement that addresses
the country's current economic woes and provides significant benefits to the
Indonesian people.
-MORE-
<PAGE>
PE RESPONSE TO PLN LAWSUIT
Page 2 of 2
"PT Paiton Energy has offered significant concessions during negotiations with
PLN on an interim agreement. We have agreed to lower the cost of coal to match
PLN's price. We have agreed to accept payments from PLN for outstanding invoices
at a rate of 2450 Rupiah to the U.S. dollar for operating costs and interest
payments to lenders until a long-term approach can be developed. Together, these
provisions mean that we have agreed to an interim price of 3.3 U.S. cents per
kilowatt-hour. This is a good offer, and it is regrettable that PLN decided not
to respond.
"PT Paiton Energy would also like to correct several factual inaccuracies in
PLN's recent public statements. First, the tariff for Paiton Swasta I is
comparable to other contracts in Southeast Asia and around the world. The
current tariff price is projected to be 5.5 U.S. cents per kWh over the term of
our contract with PLN, excluding the cost for additional infrastructure required
by PLN that will be shared with other units not owned by PT Paiton Energy at
PLN's Paiton power complex. This infrastructure, which includes roads, sea water
intakes and a switchyard, adds approximately .75 U.S. cents per kWh to the
price.
"Additionally, our Power Purchase Agreement with PLN places significant risks
upon PT Paiton Energy. Paiton Energy bears responsibility for any cost overruns;
furthermore, if the plant is not available for operation for any reason, PT
Paiton Energy does not get paid.
"Finally, contrary to the unsupported allegations of PLN's lawyers, PT Paiton
Energy is not aware of any evidence of improper actions by any of its members to
influence the award of the Paiton Swasta I project or the terms of our agreement
with the Government of Indonesia."
# # #
News Release from . . .
PT PAITON ENERGY COMPANY
FOR IMMEDIATE RELEASE
Contact:
Ong Hock Chuan: 62 21 526 6261 or
62 816 882 773
Randall Oliver: (949) 798-7840
PT Paiton Energy Reaffirms Willingness to Negotiate,
Reiterates Interim Offer of 3.3 U.S. Cents per kWh
JAKARTA, Indonesia, Oct. 11, 1999--PT Paiton Energy, the owner/operator of the
Paiton Swasta I electric generating plant in Indonesia, made the following
statement in response to PLN's press statements regarding negotiations on Paiton
Swasta I:
"PT Paiton Energy reiterates that it has offered significant concessions to PLN
in an effort to reach a temporary arrangement while we negotiate a long-term
restructuring of the contract. We hope that PLN will withdraw its lawsuit, then
we can withdraw our notice of arbitration, and the parties can engage in
constructive negotiations," said Ronald Landry, CEO and President Director of PT
Paiton Energy.
"Before PLN abandoned negotiations and decided to pursue litigation, we had
offered significant concessions towards achieving an interim agreement. PT
Paiton Energy agreed to lower the cost of coal to match PLN's price, which they
have stated is Rp 173,800 per ton. We agreed to accept payments from PLN for
outstanding invoices at a rate of 2450 Rupiah to the U.S. dollar for operating
costs and interest payments to lenders until a long-term approach could be
developed. Together, these provisions mean that we agreed to an interim price of
3.3 U.S. cents per kilowatt-hour," Landry said.
-MORE-
PE Response
Page 2 of 2
To go into some detail, on numerous occasions, including letters dated September
3, 8, 17 and 21 of this year, PT Paiton Energy indicated its willingness to
accept payment at a rate of Rp 2450 to the U.S. dollar, even though the official
exchange rate is nearly Rp 8,000 to the dollar.
In addition, on the issue of the coal price, PT Paiton Energy sent a letter to
PLN dated September 29, 1999 offering to obtain coal at a price "which will
reasonably be within PLN's merit order for generator dispatch." In subsequent
meetings with PLN, PT Paiton Energy promised to match PLN's own price for coal
at the Paiton site. PLN told PT Paiton Energy during those meetings that it pays
Rp 173,800 per ton.
The reduced coal cost, combined with payments pegged at Rp 2450 to the US
dollar, equal 3.3 U.S. cents per kilowatt-hour.
"We offered to discuss restructuring with PLN without a confidentiality
agreement, because we think negotiations need to be as transparent as possible.
The Indonesian people have a right to know what a state enterprise is doing. The
confidentiality agreement proposed by PLN is unworkable because it would deprive
our lenders, including agencies of the Governments of Japan and the U.S., of the
information they need," Landry said.
Landry added, "We continue to think our offer is a good one, and so we are
providing information to the public. But if PLN still doesn't think this is a
good deal, we urge PLN, instead of trying to keep negotiations secret, to start
serious discussions immediately.
"When PLN last week sued PT Paiton Energy, we were left with no other choice
than to send a notice of arbitration to PLN. PT Paiton Energy took this action
to preserve the sanctity of its Power Purchase Agreement, and to protect the
interests of its shareholders, lenders and other credit support providers.
Notwithstanding the notice of arbitration, PT Paiton Energy stands ready to
renew negotiations with PLN and the Government of Indonesia toward an amicable
resolution of these issues in the near future," Landry said.
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