CalEnergy waging battle to sell power elsewhere

March 22, 2001|By DARREN SIMON, Staff Writer

Proceedings for CalEnergy's lawsuit against Southern California Edison started this morning, with officials from the geothermal company stating they must be allowed to sell their power to other utilities.

There was no decision by press time in the case, which was heard by Superior Court Judge Donal Donnelly in the County Courthouse in El Centro.

CalEnergy filed its lawsuit against Edison seeking two actions: to force Edison to pay money owed it and to allow CalEnergy to break its contract with Edison.

For five months Edison has failed to pay CalEnergy for the power it receives. CalEnergy officials say Edison owes $140 million on its contract.


Eight of CalEnergy's 10 plants in the Imperial Valley provide power to Edison.

While CalEnergy officials have declined to say how long the company can operate without payment from Edison, they have said the hearing today is critical.

"This is extremely important," said David Sokol, chief executive officer for MidAmerican Energy Holdings Co., parent company of CalEnergy.

He said if Donnelly allows CalEnergy to sell its power to other utilities, it could get a cash flow going again immediately. He said it is critical that the judge make a decision today.

If Donnelly does not make a decision or rules in Edison's favor, Sokol said, his company would have to look at taking action that could put Edison into bankruptcy.

CalEnergy officials have said the company will not be able to pay about $3.9 million of the property tax it owes to Imperial County on April 10 because of Edison not paying its bills.

CalEnergy has failed to pay more than $1 million to the Imperial Irrigation District for power and water service, according to IID officials.

Sokol went before the county Board of Supervisors on Wednesday and said the company would do everything it could to make its property tax payments.

County officials have said if CalEnergy does not make that payment it could have serious implications for the county, which would have to make up the difference.

The Calipatria Unified School District stands to be hurt by CalEnergy missing its property tax payment. School district officials there said a loss of that revenue could hurt the district's ability to seek bonds for building projects.

CalEnergy is one of several renewable energy providers that have not been paid by Edison and another investor-owned utility in the state, Pacific Gas & Electric.

Some renewable energy providers have closed operations and there has been a loss of 3,000 megawatts of energy as a result. That equates to a loss of power to 3 million households.

Sokol said his company does not want to shut down and will do everything possible to continue operations.

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

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