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Deal: CalEnergy again selling Edison power

June 26, 2001|By KELLY GRANT, Staff Writer

CalEnergy has entered into an agreement with Southern California Edison to recoup money owed it by Edison and resume generating power for Edison.

At midnight Friday, CalEnergy, which operates 10 geothermal plants in the Salton Sea area, resumed selling Edison power under the terms of existing contracts after three months of selling power to companies other than Edison.

The agreement stipulated that Edison pay Calipatria-based CalEnergy 10 percent of the about $120 million it owes plus interest within two days of Edison signing the agreement. That payment was made last week, said Vince Signorotti, CalEnergy land manager.

It also sets up a payment schedule for Edison to completely reimburse CalEnergy for the five-month period last winter that it failed to pay for power.

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"This is an important achievement and we're hopeful it will work effectively for all parties," Signorotti said.

Signorotti said the agreement is full of contingencies. The linchpin is passing through the Legislature a memorandum of understanding that would have the state of California purchase Edison's transmission assets for $2.76 billion, Signorotti said.

Edison will use the money from the sale to repay qualifying facilities, which are small electricity generators throughout the state such as CalEnergy.

Once Edison totally reimburses CalEnergy, CalEnergy will continue to furnish power to Edison at a fixed price for five years, Signorotti said.

Signorotti said the agreement offers something for everyone. Edison and ratepayers will receive affordable electricity and CalEnergy will get a leveled price, he said.

Though under contract, Edison stopped paying CalEnergy for power it received from November 2000 to March. In March an Imperial County judge allowed CalEnergy to suspend deliveries to Edison and sell its power on the spot market.

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

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