SACRAMENTO — Gov. Gray Davis will call state lawmakers back to Sacramento next week in an attempt to keep Southern California Edison from declaring bankruptcy, an aide to the governor said Tuesday.
Davis will bring the Legislature back by calling his third extraordinary session to address energy. The governor will issue a proclamation by Wednesday, and the session will likely start Tuesday, said Davis’ spokesman Steve Maviglio.
Edison, the state’s second largest utility, amassed $3.9 billion in debts from high wholesale electricity costs last year that they could not pass on to customers. The state’s largest utility, Pacific Gas and Electric Co., also ran up billions in debts and filed for Chapter 11 bankruptcy protection in April.
That month, Davis said he and Edison had agreed on a rescue plan, and the Senate and Assembly each passed their versions of the plan this summer. But the two houses couldn’t reconcile their plans before the regular session adjourned Sept. 15.
Davis’ original plan called for the state to buy the utility’s high-voltage transmission grid for $2.76 billion and allow Edison to sell revenue bonds for the remaining debt.
Both houses passed plans that gave the state a five-year option to buy the Edison lines. The Senate limited the price to the lines’ book value, about $1.2 billion, and the Assembly offered twice that.
The two plans diverged on how much in bonds Edison could sell. The company backed an Assembly plan that offered $2.9 billion, while the Senate plan limited the bonds to $2.5 billion.
Edison said the Senate’s plan wouldn’t keep it from following PG&E into bankruptcy.
PG&E filed its reorganization plan Thursday, proposing to put its power plants, electrical transmission lines and natural gas pipelines into three new companies. Those companies would be under the umbrella of the utility’s unregulated parent company, PG&E Corp.
Assemblyman Fred Keeley, D-Boulder Creek, last week called the PG&E reorganization plan “the worst of what many of us predicted would happen if you let these companies go bankrupt.”
PG&E’s plan would shift its prime assets from state regulation to that of the Federal Energy Regulatory Commission, which has not supported California leaders during the energy crisis, Keeley said.
Such a flawed plan would motivate lawmakers to help Edison, he said.
But Assemblyman Dean Florez, D-Shafter, said the PG&E plan helps consumers because it doesn’t involve a rate increase. That’s why the Legislature should let Edison file for bankruptcy, too.
“The PG&E plan, from a ratepayer’s point of view, seems to be a better deal,” said Florez. “In this deal, all creditors get paid, either in cash or with bonds, but they get paid 100 percent.”
Florez, a member of the Assembly Energy Committee, said he hasn’t seen any new plans from Davis or other lawmakers and he doesn’t “see any sense in going back unless there’s a new deal on the table.”
A Field Poll released Tuesday found that a majority of California voters didn’t support a rescue plan either. The statewide poll found 68 percent of those polled opposed Davis’ plan to allow the utility to issue bonds that would be paid by ratepayers.
The statewide poll questioned 1,003 California adults by telephone on Sept. 7-10. The poll has a margin of error of plus or minus 3.2 percentage points.