It would be easy for John Bryson, chairman and chief executive of Edison International Inc., to gripe about the effects on the company's Southern California Edison unit during the height of California's fictional energy crisis when bankruptcy was narrowly averted. He also has a good case against regulators who were oblivious to Enron Corp. traders manipulating the newly-deregulated power system.

But all that is ancient history for Bryson, who has emerged as the long-shot victor on Wall Street.

"We learned that we can work through tough times, surmount obstacles and move ahead," said Bryson. "We didn't have a plan that was sexy and new or different. It's really been done one building block at a time."

Edison stock, which has jumped 63 percent, to $38 a share over the past year, got its first big lift in October when the company announced a five-year strategic plan that convinced institutional investors.

The biggest turnaround has been with Edison Mission Energy Group, which owns a fleet of mostly coal-fired power plants in Illinois, Pennsylvania and the Midwest and has been helped by higher natural gas prices. The unit posted a $25 million first-quarter profit, reversing a $39 million loss a year ago.

Paul Fremont, an analyst at Jefferies & Co., said one critical decision Bryson made during the rolling blackouts of 2000-2001 was divesting the company's foreign power plants to pay down debt.

"Bryson has obviously steered the company through a very difficult time in California on the regulated side," said Fremont, who has a "buy" rating on the stock with a 12-month price target of $46. "He also managed to hold on to a considerable amount of non-regulated assets at a time when many other utilities were forced out of that business."

Early evidence of Edison's recovery came last year when the company boosted its quarterly dividend to 25 cents from 20 cents even though the increase only brought the payout back to 1997 levels. Utilities have always relied on dividends to attract fixed-income investors, and the increase served as an elixir in the recovery.

There also was a resolution over recovery of the costs of purchasing electricity at sky-high rates during the power crisis even though customer rates were blocked at lower prices. The disparity had propelled public utilities into debt.

The state Public Utilities Commission had rejected the argument that Edison and San Francisco-based Pacific Gas & Electric Corp. were entitled to such reimbursement. PG & E; was forced to file for bankruptcy protection, but Edison held on. Eventually both utilities were allowed to recover costs from ratepayers.


For reprint and licensing requests for this article, CLICK HERE.