Statement by U.S. Senator Dianne Feinstein
on the agreement between California and Southern California Edison
April 26, 2001

“California stands on brink of a major disaster. There will be a shortfall of between 2,000 and 10,000 megawatts of electricity this summer, and the State has already spent $5.2 billion buying energy. Unless the major utilities are up and running and the Governor’s financing plan is put in place, the State, itself, will be forced to continue burning taxpayer dollars to purchase energy at exorbitant wholesale prices.

This means no additional State dollars for schools; no dollars for the environment; no dollars for public safety; and no dollars for a wide range of other critically important programs.

In order to avoid what could be a catastrophe, the State must move aggressively to get out of the power-buying business. It appears that the only way to do this is to ensure that the utilities return to solvency and are doing what they are trained to do – purchase power.

I believe that to have Southern California Edison join Pacific Gas & Electric in bankruptcy would push us from crisis into disaster. Therefore, it is crucial that Southern California Edison become credit-worthy once again.

We are in the process of reviewing the Memorandum of Understanding between the State and Southern California Edison. On balance, based on the financial analysis of The Blackstone Group and Saber Partners, it appears fair, and I support the framework of the Memorandum of Understanding.

I strongly urge the State Legislature to immediately begin their consideration of this agreement and the Governor’s financing plan. To delay presents a real hazard. I strongly believe that definitive action must be taken quickly before the State’s electricity and financial situation deteriorates further.”