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Edison to Oppose Corona's Takeover

November 01, 2002|Karen Robinson-Jacobs | Times Staff Writer

Southern California Edison Co. vowed Thursday to go to court to block plans by Corona to seize the utility's power lines and transmission facilities and said the city can expect to rack up tens of millions of dollars in legal bills if it pursues the takeover.

Corona officials formally announced plans Thursday to consider taking over the poles, wires and two substations Edison now uses to deliver energy to its 37,000 customers in the Riverside County city of 130,000. Initial studies value the property at $70 million to $130 million, Corona Mayor Darrell Talbert said.

Talbert said the announcement was the first step in a process to create a municipal utility. He said the city would release a detailed feasibility study Tuesday and could present an offer to Edison as early as December.

Promising savings and a more stable energy environment, Talbert said initial studies show that "the day we take over ... we can deliver power to our residents and businesses at least a 15% savings over the current Edison rates." The savings, he said, would come largely from the city's lower overhead and tax-exempt status.

But Charley Wilson, a spokesman for SoCal Edison, questioned whether the city could provide power more cheaply, noting that Edison -- the state's second-largest utility -- has more pricing power in purchasing electricity.

"Historically, over the past 50 years, these have not been good ideas, once all the analysis is out on the table," Wilson said. "Most of the time these things don't pencil out."

Wilson also said the company would force the matter into court rather than sell.

"We're not looking to entertain offers for sale," he said. "So they should build into their economic model the time and expense of going through an eminent-domain proceeding," which he said would cost "in the tens of millions of dollars."

Craig Moyer, an attorney with Manatt, Phelps & Phillips, which is advising the city, said Corona has the right to seize Edison's facilities under the city's power of eminent domain if it can convince a judge that the takeover is in the public interest.

City officials say a municipal utility can better serve the needs of businesses such as Golden Cheese Co., which has been in a protracted fight with Edison to get more energy for its 34-acre factory.

"This plant has been operating for two years, during peak periods, using diesel generators," said Shawn Kaddoura, vice president of the company, one of the largest employers in Corona. "They will be able to get us the deficiency of power that we need."

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