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Energy suit details emerge

December 13, 2001|By DARREN SIMON, Staff Writer

More details of the latest legal wrangling between local geothermal company CalEnergy and Southern California Edison came to light Wednesday as the sides squared off for what could be a prolonged fight.

The controversy involves capacity bonus payments Edison offers its renewable energy providers if such companies provide power above the minimum contractual level. That minimum level is 80 percent of a company's capacity to generate power.

Edison's contracts with renewable power providers state if the geothermals provide 85 percent of their power generating capacity to Edison through June, July, August and September — energy peak months — Edison will provide bonus payments for each of those months.

The contracts also state if such companies provide 85 percent of capacity through all four months they qualify for bonus payments in the winter.


The latest lawsuit erupted because Edison officials said CalEnergy does not qualify for the winter bonus payments. CalEnergy officials have claimed the company qualifies and Edison has breached the contract.

The new lawsuit came a week after CalEnergy dropped a suit it filed in November against Edison. In that case, CalEnergy sought $100 million the company stated Edison owed in back payments.

A new payment schedule set by Edison, in which the utility promised to make back payments by March, led to a settlement.

In the new lawsuit, CalEnergy is seeking $400,000, the amount it would have received in October in bonus payments.

Vince Signorotti, land manager for CalEnergy, said over the course of a year Edison would owe $6 million in bonus payments.

Edison officials have said CalEnergy does not qualify for the winter bonus because in June it did not meet the 85-percent-of-capacity contractual requirement.

For most of June, CalEnergy sold power on the open market based on a court judgment in CalEnergy's first lawsuit against Edison in November 2000.

In that case, CalEnergy sued Edison for failing to pay for several months of power. An Imperial County Superior Court judge ruled CalEnergy could sell its power on the open market until Edison resumed its payments.

Toward the end of June, Edison and CalEnergy settled that case and on June 22 CalEnergy started again to provide energy to Edison.

Signorotti said starting June 22, CalEnergy provided 100 percent of its capacity to Edison.

He also claimed that based on the June settlement CalEnergy should receive the winter bonus.

Edison officials said CalEnergy did not meet the minimum requirements to earn the bonus during the winter, and Edison officials further said CalEnergy's claims against the utility are baseless.

They also said there is nothing in the June settlement that deals with the issue of bonus payments.

In a press release, Edison officials state they categorically reject CalEnergy's allegations. They further state CalEnergy has known it was not going to receive the bonus payment since July and only now has filed a lawsuit.

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

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