March 26, 2001

Edison Nears Agreement to Sell Assets, Calif. Negotiator Says

(Sacramento, California) Edison International, owner of California’s No. 2 electric utility, is near a final agreement to sell its power-transmission lines to the state, Governor Gray Davis’s chief negotiator said.

Negotiations are continuing with PG&E Corp., owner of California’s largest utility, and No. 3 utility owner Sempra Energy, said Joseph Fichera, chief executive of Saber Partners LLC. A final agreement with Edison’s utility, Southern California Edison, will likely be reached first, he said.

“We are meeting very intensely with Southern California Edison,” Fichera said. “They are first in the queue. We met three times last week and we have a meeting scheduled tomorrow.”

Edison and PG&E have more than $13 billion in debt because they aren’t able to pass on power-buying costs to customers. Under California’s deregulation laws, wholesale power prices were allowed to float while customer rates remained frozen. The state wants to buy some of the utilities’ assets to help them pay debts and to address an energy shortage that has caused blackouts.

Fichera wouldn’t say when he expects an agreement with Edison to be reached. “This is a critical week,” he said.

–Daniel Taub in (Sacramento, California) (310) 770-1292 or dtaub@bloomberg.net, through the San Francisco newsroom (415) 912-2980/dfr