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CalEnergy to hand over $4.8 million tax payment

April 09, 2001|By DARREN SIMON, Staff Writer

CalEnergy officials announced this morning they will go before the county Board of Supervisors Tuesday and hand over a check of $4.8 million.

That is what the local geothermal company owes this month in property tax.

Earlier, CalEnergy officials had said they would not be able to make the full payment as a result of the ongoing dispute with Southern California Edison. That prompted concern among county officials, who said the county could ill afford to lose such property tax revenue.

This morning CalEnergy officials said thanks to a ruling by local Superior Court Judge Donal Donnelly that the geothermal company could suspend its contract with Edison, CalEnergy has been able to sell its power on the open market.

As a result, company officials said, they can make the property tax payment.

The check is expected to be presented to the board between 9:30 and 10 a.m. Tuesday by Vince Signorotti, CalEnergy land manager.

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As CalEnergy prepares to make the payment, the legal dispute between the company and Edison continues.

On April 16 the two will be in the County Courthouse in El Centro for a hearing in which Donnelly could rule whether Edison must pay money owed to CalEnergy for a five-month period. CalEnergy claims Edison owes it more than $140 million in back payments.

Donnelly last month ruled CalEnergy could suspend its contract with Edison and sell power on the open market. That suspended contract calls for eight of CalEnergy's 10 plants in the Imperial Valley to provide energy to Edison.

While the contract has been suspended, it can be reimplemented at any time.

In the wake of Donnelly's ruling, CalEnergy has sold its power to El Paso Merchant Energy, which has sold the power to other customers.

"With that court ruling we were given a temporary revenue lifeline that, in turn, has allowed us to make our tax payment. We did not want to miss the payment in the first place because of the impact on local services, but the failure of Edison to make payments to us left us no choice at the time," Signorotti said in a prepared statement.

CalEnergy has started to make partial royalty payments to landowners upon whose land the geothermal plants are located. Signorotti said the company will be unable to make full payments until Edison pays what is owed to CalEnergy.

Edison officials have said they are prepared to start paying CalEnergy and all other renewable energy providers it has contracts with on a "going-forward" basis starting this month.

That does not mean the company will make back payments for the five months it did not pay.

Edison officials said the renewable energy providers hiked prices this year to levels Edison could not afford and the state Public Utilities Commission has recently taken action that effectively reduces those prices.

Edison officials have said they are acting on the rationale that the contract suspension with CalEnergy is over and the geothermal is obligated to again start providing energy to Edison.

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

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