IEP Files FERC Protest Against ''Sweetheart'' Edison Deal

Business Wire, Jan 12, 2004

Business Editors/Energy Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--Jan. 12, 2004

California's Independent Energy Producers (IEP) has filed a protest with the Federal Energy Regulatory Commission contesting a proposal by Southern California Edison to enter into a long-term contract for power without the competitive bidding required by California law.

"Edison is proposing to re-monopolize California's electricity market," said IEP Executive Director Jan Smutny-Jones. "Edison claims this is a one-time deal, but it has huge, far-reaching implications -- not just for California and the western region, but for the entire nation. We take this very seriously."

Known as the "Mountain View" project, Edison wants to enter into a 30-year contract for 1000-plus megawatts of power with a company it will soon acquire as a subsidiary. By acquiring the company as a subsidiary, Edison could circumvent state and federal regulatory oversight.

"This is a single-source sweetheart deal that puts ratepayers at risk and saddles them with millions of dollars in new stranded cost," said Smutny-Jones. "It's also unfair to Edison's competitors, who could build clean and efficient power plants for California at less cost.

"I want to make it very clear that IEP does not object to utility companies like Edison constructing new generating facilities," said Smutny-Jones. "But it must be a transparent process with competitive bidding and open books -- otherwise, ratepayers are hurt and competitors are unfairly forced out of the market, stifling competition and driving electricity prices higher."

"We're asking FERC to reject Edison's proposal because it violates the provisions of the Federal Power Act," said Smutny-Jones. "It's not in the best interests of California consumers or the nation. It sets a terrible precedent."