CalEnergy unsure if Davis' proposal will prove beneficial, still looking for court action Thursday

March 21, 2001|By DARREN SIMON, Staff Writer

Gov. Gray Davis' announcement Tuesday of his intention to order the state's two largest power utilities to pay bills owed to renewable energy providers could prove positive for local geothermal producers, according to CalEnergy's top official.

However, it is too soon to say what the benefit will be or if legislators will act quickly on the governor's intention, said David Sokol, chief executive officer of MidAmerican Energy Holdings Co. of Omaha, Neb., parent company of CalEnergy.

Sokol was in the Imperial Valley this morning to express his thanks to the county Board of Supervisors for the support it has given CalEnergy, which operates 10 geothermal plants in the Valley.

Sokol said CalEnergy will do everything it can to meet its more than $4 million property tax bill owed to the county April 10.


"Every effort will be made to make that payment," Sokol told the board, adding if CalEnergy has to use its own reserves to pay the property tax it will consider it.

Sokol will remain in the area through Thursday to attend a hearing in the County Courthouse in El Centro, where a Superior Court judge will decide whether CalEnergy will be allowed to break from its contract with Southern California Edison and sell power to another utility.

CalEnergy has a contract in which eight of its local plants provide energy to Edison.

Sokol told the board Edison has failed to pay CalEnergy for five months.

He said as of Friday, Edison owed CalEnergy $140 million, adding $120 million of that is delinquent.

CalEnergy has filed a lawsuit against Edison seeking two actions: that the court allow CalEnergy to sell its energy to another utility and that the court force Edison to pay CalEnergy $45 million — the amount owed when CalEnergy filed its lawsuit.

When asked this morning how Davis' advocating the ordering of Edison and Pacific Gas & Electric to pay their bills will affect CalEnergy, Sokol said, "I think it is an interesting step, but there are no details. We really do not know what it means."

Sokol added, "We need timely action because it has been five months."

He said before the state can force Edison and PG&E to pay bills owed to renewable energy providers, the state Legislature and Public Utilities Commission must give their support.

He said it could be weeks before there is any movement, although he is hopeful there might be some action sooner than that.

Sokol told the board 3,000 megawatts of renewable energy has been lost because some providers have had to close their operations because they have not been paid by Edison.

Vince Signorotti, CalEnergy land manager, said a loss of 3,000 megawatts is enough to affect 3 million households in the state.

When asked how long CalEnergy can continue operations without payment, Sokol said only, "We don't want to close these plants. We don't want to lay people off."

Sokol did say the hearing set for 8:30 a.m. Thursday is "extremely important."

In response to Sokol's report to the supervisors, the board directed staff to draft a letter to be sent to Davis, the Legislature and the PUC. The board will ask the state to take swift action on Davis' proposal.

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

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