California's Davis calls third special session Oct. 9

California Gov. Gray Davis called a third special session of the legislature for Oct. 9 to take up his plan to rescue Southern California Edison Co. from bankruptcy. Lawmakers may also look into the impact of Pacific Gas & Electric Co.'s bankruptcy reorganization proposal.

Sept. 28, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Sept. 28 -- California Gov. Gray Davis called a third special session of the legislature for Oct. 9 to take up his plan to rescue Southern California Edison Co. from bankruptcy.

He previously indicated he would call lawmakers back Oct. 2. The utility unit of Edison International, Rosemead, Calif., has been fighting to avoid filing for bankruptcy protecton for months after running up $3.9 billion in debt for wholesale power.

"This is a time of great economic uncertainty," Davis said in a statement. "Another utility bankruptcy is not in anyone's interest. It is my belief that the legislature and I can work responsibly to avoid rate hikes or additional layoffs."

Davis has pushed to keep SCE out of bankruptcy court, but a bill based on an agreement between the governor and the utility stalled in the state Senate, when it adjourned for the year Sept. 15. The most recent version of the SCE rescue bill would have allowed the utility to recover $2.9 billion through a mandatory charge on some business customers' bills.

Consumer groups criticized the bill and Senate Pres. John Burton (D-San Francisco) declined to call it for a vote because he said it had the support of only seven senators. He also indicated he wouldn't return for another special session without an agreement in hand.

The governor's declaration called on the legislature to "consider and act upon legislation affecting the operation, maintenance, finances, and financial viability of investor-owned utilities that provide electricity or natural gas to California residences and businesses."

Sources suggested by including "investor-owned utilities" lawmakers could also consider the impact of the bankruptcy reorganization plan filed last week by Pacific Gas & Electric Co. The plan would essentially exempt the utility from state regulation, and some lawmakers have expressed concern about the proposal.

Southern California Edison said it supported the governor, especially in a "time of great economic uncertainty." Unconfirmed reports circulated earlier that some generators were considering filing an involuntary bankruptcy petition. The utility said a negotiated solution is preferable to bankruptcy.