No. 33

Edison Sells Power Plants

As part of its preparations to enter the deregulated electric power market this year, Southern California Edison announced in November the sale of 10 gas-fired generating plants for $1.12 billion, nearly three times their book value of $421 million.

Four buyers snapped up the plants, most of which are based in Southern California: AES Corp., Houston Industries, Thermo Ecotek and a consortium of NRG Energy and Destec Energy.

The deals were supposed to have closed on Jan. 1, the original start date for deregulation. But because computer problems have forced a three-month delay in the deregulation commencement, the deals have been placed on hold. They are expected to gain the necessary approvals from the state Public Utilities Commission and be finalized in the early part of this year.

As part of the deregulation process, the state’s three investor-owned utilities SCE, San Diego Gas & Electric and Pacific Gas & Electric have sold or are in the process of selling off most of their power-generating assets, leaving the utilities primarily in the business of transmitting and distributing electricity.

The sale leaves Edison with its stake in the San Onofre Nuclear Generating Station, various hydropower and solar plants in California and generation facilities in other states.