CONTACT: Kyle DeVine September 3, 1997 CPUC - 553
213-897-4225 (A96-11-046)

CPUC Gives Edison Go Ahead To Commence Plant Sale

The California Public Utilities Commission (CPUC) today gave Southern California Edison Company (Edison) the go ahead to commence the auction of all 12 of its gas-fired electric generation plants which have a total of 9,500 megawatts. Edison may not accept final bids until the Commission completes a review of environmental impacts under the California Environmental Quality Act. In addition, for six of the plants, the Commission will not approve the sale until the Federal Energy Regulatory Commission (FERC) approves the form of an agreement that will govern their future operation at the direction of the Independent System Operator.

Edison's proposal is in response to Commission decisions requiring it to divest itself of at least 50 percent of its fossil generating assets. The Commission's goal in ordering this is to promote increased competition in the energy market.

Safety and reliability will not be jeopardized by the sale. The power plants will retain their existing staff for operations and maintenance and six of the plants have been specified as "must-run" - they must run to assure reliability.

The six plants that must remain in operation are: Alamitos, El Segundo, Eitwanda, Huntington Beach, Mandalay and Redondo. The Commission will not approve their sale unless their operators agree with the Independent System Operator's requirements which are awaiting FERC approval, which may occur later this year.

Six plants are not required to remain in operation to maintain system reliability. They are: Coolwater, Ellwood, Highgrove, Long Beach, Ormond Beach and San Bernardino.

Edison proposes to include in the sale the real property or property leases where the plants are located, operating equipment, inventory - except for backup oil supplies, and Edison's interest in the air quality tradable emissions credits for each plant's nitrogen oxides and some of the sulfur dioxide credits.

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CPUC Gives Edison Go Ahead to start Auction, page 2

All of the plants are currently being used in the performance of Edison's duty as a public utility; therefore, according to state law, their sale must be approved by the CPUC.

Edison may not accept final bids until the Commission reviews and adopts a mitigated negative declaration, under the California Environmental Quality Act . Copies of a proposed mitigated negative declaration have been made available and interested parties have been invited to comment by September 25.

Net proceeds of the sale would be used to reduce stranded costs which may lower rates consumers pay.