Judge rules geothermal companies to get part of Edison assets

May 17, 2001|By KELLY GRANT, Staff Writer

Two local geothermal companies will recoup some of the money owed by Southern California Edison in the form of a portion of that company's assets, a judge ruled.

Imperial County Superior Court Judge Jeffery Jones ruled in the favor of Heber Geothermal Co. and Second Imperial Geothermal Co., providing the companies a writ of attachment to $28 million of Edison's assets, said Danielle Tinman, spokeswoman for the geothermals' parent company, Covanta Energy of Fairfield, N.J.

The writ of attachment means, "If they do not pay us, we would own some of their assets in that amount," Tinman said.

The two Heber-area companies generate energy for Edison as part of a long-term contract.

Between November 2000 and March 2001, the geothermals generated power but received no payment from Edison.

In mid-April the two geothermals filed a lawsuit against Edison asking for back payments from November to March totaling over $35 million, Tinman said.


"This (lawsuit), frankly, is our only recourse," Tinman said.

The geothermals did not stop providing energy to Edison from November to March despite not being paid. The geothermals currently generate energy for Edison, which resumed making payments in April.

Tinman said the lack of payment imposed "incredible stress" on the companies. Though Edison has begun paying again, the geothermals can't forget the five months of expenses incurred without revenues to offset the non-payment, Tinman said.

A judge has yet to rule on the back payments and a third request that the geothermals be allowed to sell energy to a third party. Tinman did not know when to expect those rulings.

After the filing of the suit last month, SCE had 30 days to respond. Tinman said the company has yet to reply.

The next step for the geothermals is to issue a bond for $28 million for potential liability associated to the attachments, Tinman said.

"We believe we have a very strong case," Tinman said.

"We have every reason to believe he'll rule in our favor," she added.

Second Imperial Geothermal Co. operates on Dogwood Road and generates 40 megawatts of energy. Edison owes it $16.3 million.

Heber Geothermal produces 52 megawatts from its location on Pitzer Road. Edison owes it $19.3 million.

Edison, one of California's two largest utilities, has not filed for bankruptcy but is in severe financial crisis. The two local geothermals are not the only power generators to go without payment by Edison. CalEnergy, a Calipatria-based geothermal company with contracts with Edison, has been in court with SCE for months over lack of payment.

Staff Writer Kelly Grant can be reached at 337-3441.

Imperial Valley Press Online Articles