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THE CALIFORNIA ENERGY CRISIS

Judge Favors Small Producer in Bout With Edison

April 17, 2001|TONY PERRY | TIMES STAFF WRITER

EL CENTRO — An Imperial County judge said Monday he is leaning toward a decision ordering Southern California Edison to pay $33 million to a geothermal power producer, but will allow Edison lawyers a final opportunity to talk him out of it.

CalEnergy asserts it is owed the money for electricity it sold Edison from eight geothermal plants near the Salton Sea.

Cash-strapped Edison last year stopped payment to a variety of small producers, who now say they are owed $1.8 billion by Edison and Pacific Gas & Electric.

If Superior Court Judge Donal Donnelly is unconvinced by Edison's arguments at a June hearing and follows through with an order favoring CalEnergy, it will represent the first victory for a small producer against the giant utility.

CalEnergy alleges that it is owed more than $120 million for energy it provided from November, when Edison stopped making monthly payments, until late March, when Donnelly allowed CalEnergy to sever its contract with Edison and sell energy to the highest bidder.

The $33 million represents payments for November and December. The remainder of the $120 million involves months earlier this year for which Edison plans to dispute the billing rate.

CalEnergy and other small producers have complained that the tentative deal struck between Edison and Gov. Gray Davis does not address the back payments owed them by Edison.

Edison on Monday failed to persuade Donnelly to order CalEnergy to resume selling power to Edison now that Edison is willing to pay for new energy received.

CalEnergy said it does not want to resume selling to Edison until the utility pays for energy already received. CalEnergy has instead been selling to its business partner, El Paso Merchant Energy Co.

Edison lawyers said El Paso Merchant has manipulated the market to drive up natural gas prices. For that reason, they said, Edison should be allowed to argue that CalEnergy has acted improperly and should not be able to collect the $33 million.

Donnelly, who had been on the verge of a tentative ruling for CalEnergy, agreed that Edison should be able to make such an argument, setting a hearing for June.

It remains to be seen whether the final arbiter will be Donnelly, the Public Utilities Commission or a Los Angeles judge selected to deal with a dozen similar suits against Edison. The PUC is set to discuss the issue of small producers this week.

"Things keep happening," said James Polish, lawyer for Edison. "Things could dramatically change this week or the following week."

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