Edison Mission Energy, an unregulated power-generating unit of Edison International, said Monday that it had filed for bankruptcy protection and had agreed on a reorganization plan with its parent company and holders of its $3.7 billion in debt.
Edison International of Rosemead also is the parent company of Southern California Edison, one of the nation's largest electric utilities. Edison Mission Energy spokesman Douglas McFarlan said that SCE and its customers weren't affected by the filing.
As part of the reorganization plan, Edison Mission Energy will separate from Edison International and be considered by the parent company to be a discontinued operation. Edison International's stake in the generating unit will be transferred to unsecured creditors.
"We are pleased to have reached this agreement, which we believe reflects the long-term value potential of our organization," Pedro Pizarro, president of Edison Mission Energy, said in a statement. "This is an important first step in the process to reduce our debt, enhance our liquidity profile and position EME for continued operation and future success."
Edison Mission Energy of Santa Ana said it had slightly more than $5.1 billion in assets and just under that amount in liabilities in Chapter 11 documents filed Monday in U.S. Bankruptcy Court in the Northern District of Illinois.
Edison Mission Energy has been struggling on several fronts: depressed energy prices because of the nation's boom in natural gas production; higher fuel costs affecting its older coal-fired facilities and pending debt maturities.
The company also said that it faced the "need to retrofit its coal-fired facilities to comply with environmental regulations."
Despite the challenges, Pizarro sought to strike a positive tone on Edison Mission Energy's future.
"We believe this financial restructuring — coupled with the existing strength of our employees and assets — will position us to take advantage of new opportunities while preserving our focus on safe, reliable operations," Pizarro said.
Edison Mission Energy companies own, operate and lease a portfolio of more than 40 electricity generating sites around the U.S. that are powered by wind, natural gas, biomass and coal, as well as an energy marketing and trading operation based in Boston.
Edison International said it expected to take a tax charge of about $1.5 billion during the fourth quarter because of the bankruptcy.
Edison International shares rose 18 cents to $44.99.