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Edison unit unable to recover costs
By Matt Andrejczak, CBS.MarketWatch.com Last Update: 12:48 PM ET Sep 26, 2000 NewsWatch Latest headlines
WASHINGTON (CBS. MW) -- Due to high energy costs, Edison International reported Tuesday in a regulatory filing that its Southern California-based public utility unit continues to be unable to generate sufficient revenue to cover its costs.
Rosemead, Calif.-based Edison (EIX: news, msgs) said the problem began in May and is "expected to continue through September." As of Aug. 31, Edison said the unit had racked up $1.97 billion in unpaid revenue services costs, the SEC filing noted.
Edison is hamstrung in its ability to raise rates because California is deregulating its electricity industry and has a statutory rate freeze in effect till March 31, 2002.
In the regulatory filing, the company said the problem will likely be decided in the California courts where it believes it has "solid grounds" for recovering the unpaid costs.
But so far, the California Public Utilities Commission has denied Edison's requests, and those of other public utility companies, to recover their costs after the rate freeze expires.
If it is unable to recover its costs, Edison said its Southern California unit would be required to take a one-time charge against its earnings.
Edison said the unit is currently seeking to arrange short-term financing to meet its liquidity needs.
Shares of Edison were up 19 cents to $23.13 in recent trading.
-- Martin Thompson (firstname.lastname@example.org), September 26, 2000
It looks like California is going to be the forecaster of dire things to come with utilities and power companies around the country -- as the energy plot thickens.
-- RogerT (rogerT@c-zone.net), September 26, 2000.