[GRAPHIC OMITTED] Media Statement
EDISON INTERNATIONAL
FOR IMMEDIATE RELEASE
Contact Corporate Communications: (626) 302-2255
Edison Calls for Dramatic Reform of
California Electricity Market Structure
The following statement was released today by Edison International
Chairman, President & CEO John E. Bryson:
ROSEMEAD, Calif., Dec. 13, 2000--For over 100 years, the people of Southern
California Edison have been proud to provide the people of this state with
reliable and affordable electricity. We have fulfilled our historic obligation
to serve and have contributed to the vital growth of this dynamic economy.
Unfortunately, the ability to fulfill the electricity needs of California has
never been more threatened. Let me explain:
Three years ago, state lawmakers and the California Public Utilities
Commission (CPUC) "deregulated" the generation of electricity. Edison was
ordered to sell the generating plants that we owned in the Los Angeles basin.
Today, those generating plants are owned by independent power companies who are
selling power for prices that are indefensible. Southern California Edison had
sold power from the plants it previously owned at an average of $31/MWh during
previous Decembers. Yesterday's price was over $1,000/MWh--far more than can be
defended on the basis of increased costs of production.
Simultaneously with "deregulation" came a new form of regulation, a
multi-year freeze on rates that Edison was allowed to charge users of
electricity. However, since this summer, the prices charged by generators and
other sellers have skyrocketed. As a result, since May 2000, Edison has paid
more than $3.5 billion above what current CPUC-established rates provide us to
buy power for our customers.
To fund the $3.5-billion deficit and to finance the additional procurement
of electricity, Edison has had to borrow huge sums of money in the commercial
markets. This situation is not sustainable. The new market structure is broken
and must be discarded.
In the current crisis, we will soon be compelled to take drastic measures
to preserve our ability to serve customers--actions that could include rationing
electricity. Moreover, vital investments in the state's electrical
infrastructure would be curtailed, damaging service reliability. None of this
needs to happen.
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EDISON STATEMENT RE. ENERGY CRISIS
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It is time to break decisively from this failed policy. We need swift
action from state officials to bring about immediate and longer-term fixes to a
broken system. On behalf of the Edison Company, I call on policy makers to act
with the urgency this situation demands. We need to reform and, where necessary,
re-regulate California's electric system.
We believe three important principles should guide this reform:
1. There must be a reliable supply of electricity--Utilities should once
again be charged with responsibility to plan for, acquire and assure sufficient
power to meet the state's needs without the threat of interruption. We need the
right tools to assure reliability, and regulatory reform to streamline
decision-making and clarify accountability.
2. Electricity must be affordable--Our economic future cannot continue to
be held hostage to market manipulation. We need a system of cost-based wholesale
pricing where the majority of power is either generated by Edison for Edison
customers, as it was before 1996, or is arranged and delivered under long-term
contracts to Edison at stabilized costs.
3. Both the price and supply of electricity must be determined under a
stable framework--Customers have to be protected from price volatility.
Utilities have to be strong enough to afford that protection, to borrow
sufficient funds for operations, and to make vital investments in service
reliability. No matter who supplies the electricity, everyone must pay his or
her fair share for its delivery.
There are many causes to our current crisis. But it is time to move beyond
assigning blame. Delay is the enemy. We are prepared to do our part in
contributing to a comprehensive solution. However, any comprehensive solution
requires urgent action on the sensible, and moderate first steps that we have
put forward to the CPUC, including a stable system of rates that allows us to
collect for electricity we have procured for our customers at no profit for our
company. This will allow us to continue providing this vital service in the
future, and avert damage to the reliability of California's electric system.
Every day that passes significantly weakens our ability to protect our
customers and uphold a tradition of high quality service that has been our
privilege to provide.
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Based in Rosemead, Calif., Edison International is a premier international
electric power generator, distributor and structured finance provider. Southern
California Edison is a wholly owned subsidiary of Edison International and is
one of the nation's largest electric utilities, serving a population of 12
million people in parts of central, coastal and southern California.
