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CalEnergy officials optimistic deal with Edison can be reached to sell power to other utilities

March 01, 2001|By DARREN SIMON, Staff Writer

CalEnergy officials said this morning they think it will be possible to reach an agreement with Southern California Edison that would allow CalEnergy to sell its geothermal power to other utilities in the state.

Vince Signorotti, CalEnergy land manager, said this morning attorneys are working toward reaching such an agreement by Monday and having it signed Tuesday.

If that agreement is reached it would mean a hearing set for Wednesday on the issue of CalEnergy selling its power to other agencies would be canceled.

"We are assuming we will reach an agreement with Edison and the hearing will not be necessary," Signorotti said. "We are cautiously optimistic."

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If such an agreement is reached it would not represent a break in the contract. It would simply allow CalEnergy to sell its power elsewhere until Edison becomes solvent enough to pay for the energy.

Signorotti's comments this morning came a day after it was announced CalEnergy and Edison had reached an agreement to give Edison more time to respond to CalEnergy's lawsuit.

A hearing set for this week has been delayed until April 2. In that hearing CalEnergy will present a motion for summary judgment in which a judge rather than a jury would rule on the merits of the case.

Despite talks both of reaching an agreement on CalEnergy selling its power elsewhere and the agreements on the hearing schedule, CalEnergy officials said the basic lawsuit is still ongoing.

Signorotti said as of today, Edison owes CalEnergy $75 million for November, December and January.

CalEnergy is asking the court to force Edison to pay $45 million, the amount owed to CalEnergy for November and December.

Attorneys for Edison have declined to speak on the merits of CalEnergy's lawsuit or on the financial conditions that have led Edison to not make payments.

CalEnergy operates 10 geothermal plants in the Imperial Valley, eight of which provide energy to Edison.

CalEnergy officials said they cannot continue operations indefinitely without receiving payment from Edison, so the company is looking to sell its power elsewhere in the state.

In addition, CalEnergy is looking to legislation drafted by state Sen. Jim Battin that would allow companies that produce renewable energy, such as CalEnergy, to receive payment from the state.

That bill has yet to be assigned to a legislative committee and there was no information this morning on how quickly it will make its way through the Legislature.

County officials said this morning they are watching the CalEnergy issue closely. They said each year the county receives millions of dollars in property taxes from the geothermal company. The next tax payment is due in April.

CalEnergy officials said they will owe in excess of $4 million in April in property taxes. They said their intent is to meet that payment.

CalEnergy officials also have been unable to pay hundreds of thousands of dollars in royalties owed to the landowners upon whose land the company's geothermal plants operates.

Staff Writer Darren Simon can be reached at 337-4082.

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