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EXHIBIT 20.2
EDISON INTERNATIONAL
INVESTOR RELATIONS NEWS
November 21, 1996
SCE Plans to Divest 100% of Gas and Oil Power Plants in California
The Board of Directors of Edison International and its electric
utility subsidiary, Southern California Edison (SCE), today approved a
plan to sell, by auction, 12 power plants in SCE's service territory.
These plants represent 100% of the utility's natural gas and oil-fueled
generation assets. Edison International and its subsidiaries will not
bid for these assets in auctions scheduled to begin in the summer of
1997.
The 12 power plants have a total rated operating capacity of
9,562 megawatts (MW) and have a combined book value of about $700
million. The plants to be sold currently produce slightly less than 20%
of the power delivered to SCE customers and represents less than 10% of
SCE's total current investment in its California utility system.
Power Plants Locations Capacity Employees
- ------------ --------- -------- ---------
Alamitos Generating Station Long Beach 2,083 MW 100
Cool Water Generating Station Daggett 628 MW 60
Ellwood Energy Support Facility Santa Barbara 48 MW 0
El Segundo Generating Station El Segundo 1,020 MW 66
Etiwanda Generating Station San Bernardino 1,030 MW 58
Highgrove Generating Station San Bernardino 154 MW 3
Huntington Beach Gen. Station Huntington Beach 563 MW 42
Long Beach Generating Station Long Beach 530 MW 39
Mandalay Generating Station Ventura 570 MW 43
Ormond Beach Gen. Station Oxnard 1,500 MW 62
Redondo Generating Station Redondo Beach 1,310 MW 72
San Bernardino Gen. Station San Bernardino 126 MW 16
"We believe this plan is the best way to facilitate a smooth,
timely transition to a competitive electricity market and maximize value
for our shareholders and customers," said John Bryson, chairman and
chief executive officer of Edison International and SCE.
Through SCE and its competitive power generation company,
Edison Mission Energy, Edison International will continue to be a major
participant in generation markets throughout California, the nation, and
the world. "We know this business and remain strongly committed to it,"
Bryson said.
He said the utility will continue to own and operate its
hydroelectric power facilities in California and the San Onofre nuclear
power plant near San Clemente, and will continue to own a portion of the
Palo Verde nuclear plant in Arizona. San Onofre and Palo Verde will
make the transition to competition under separate ratemaking plans. In
addition, Edison International has ownership interests in 14 operating
projects in California (28 in the U.S. and 51 worldwide) through its
Edison Mission Energy subsidiary.
The company had announced last March that it intended to divest
50% of its oil and gas-fueled plant assets, in accordance with the
California Public Utilities Commission's (CPUC) restructuring decision.
That decision also required California utilities to value their fossil
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power plants by the end of 2003. AB1890, California's new electric
industry restructuring legislation, requires that valuation to be
completed by the end of 2001. The divestiture plan announced today is
contingent on the overall electric industry restructuring implementation
process continuing on a satisfactory path.
SCE's ownership share in its coal-fueled Mohave and Four
Corners power plants in Nevada and New Mexico, respectively, also will
be valued in accordance with the requirements of AB1890. Final
determination about the ownership of those plants will be made after
additional analysis is completed.
SCE will operate and maintain the 12 divested power plants for
at least two years following their sale, as mandated by California's
restructuring legislation. In addition, the company will offer
workforce transition programs to those SCE employees who may be impacted
by divestiture-related job reductions.
The gas and oil generation units would have received a return
on equity of approximately 7% under the December 20, 1995 CPUC
restructuring decision. Contribution to earnings from the gas and oil
portfolio under the restructuring decision would have been approximately
$25 million annually. The earnings per share impact, if any, will
depend on the sale price of the units sold and the competition
transition charge (CTC) recovery mechanism. SCE will file a detailed
plan for the sale of the 12 power plants with the CPUC on November 27.
Palo Verde All-Party Settlement Filed with CPUC
On November 15, all the active parties in the Palo Verde
Nuclear Generating Station (PVNGS) cost recovery proceeding, Southern
California Edison (SCE), the Office of Ratepayer Advocates (ORA), and
The Utility Reform Network (TURN), filed a Settlement Agreement with the
California Public Utilities Commission (CPUC). The Settlement was
substantially the same as the memorandum of understanding (MOU) signed
November 1.
The terms of the Settlement would achieve accelerated full
recovery of SCE's remaining investment in PVNGS (forecast to be $1.2
billion as of December 31, 1996) beginning in 1997 and extending through
2001 at a reduced rate of return (approximately 7.35% return on
ratebase). SCE will receive pass-through balancing account treatment
for it's portion of incremental costs for PVNGS over the five-year
"recovery period", January 1, 1997 through December 31, 2001, so long as
costs do not exceed a baseline forecast by 30% and/or the site gross
capacity factor does not fall below 55%. Additionally, PVNGS will
continue to operate under a Nuclear Unit Incentive Pricing Procedure for
purposes of calculating a reward only for capacity factor performance in
excess of 80%. SCE owns a 15.8% interest in PVNGS, which is operated by
Arizona Public Service (APS). The impact of the Settlement on SCE's
1997 net income is projected to be a decline of approximately $21
million. An Administrative Law Judge Proposed Decision (ALJ PD) and a
final CPUC decision are expected in the near future.