Ann de Rouffignac
HOUSTON, Mar. 5, 2001Only a fraction of December's $1.43 billion in power bills owed by the California utilities to the California Independent System Operator (ISO) was paid Friday.
The California ISO sent out invoices for December's bills but came up mostly empty handed. Market participantsmostly Pacific Gas & Electric Co., a unit of PG&E Corp., and Southern California Edison Co., a unit of Edison Internationaldidn't pay up. California's two biggest utilities are teetering on the edge of bankruptcy and have missed several key payments on debt obligations and purchased power.
Pacific Gas & Electric Co. was billed $1.111 billion and only paid $177 million, said Ron Low, spokesman for the utility.
Southern California Edison Co. was billed $311 million and paid nothing. And $9 million was billed to all others, who are expected to pay, said Patrick Dorinson, spokesman for the ISO.
The new set of debt is piled on top of November's bills for power which are still outstanding. There is a lag of 3 months between the month power is bought and delivered and the billing cycle from the ISO. Bills of $519 million from November are still unpaid, said Dorinson.
That brings the total unpaid power purchases for November and December to $1.76 billion.
Independent power generators have been selling power to the California Power Exchange (PX) and the ISO which buys power on behalf of the utilities. The generators have not been paid for power sold into the market since the utilities failed to pay their November invoice due Feb. 2.
Subsequently, they have been under federal court order to sell power to the ISO with little hope of compensation. Utilities, the ultimate purchaser of the power, are not creditworthy and unlikely to pay. The court order is set to expire next week, but the judge could enter a permanent injunction forcing the generators to continue to provide power.
Generators have reacted to the unpaid bills for spot power by seeking to arrange long-term contracts with the state that will guarantee payment. But the long-term contracts do nothing to cure November, December and upcoming January and February bills, said one source close to a generator.
Many are getting nervous about the possibility those bills will not be paid in full given California Gov. Gray Davis's remarks at a recent analysts' meeting in New York. He suggested that generators would not get paid in full for the money owed them by utilities through the ISO.
Mirant Corp., formerly Southern Energy, did not mince its words in a statement Friday.
"We want quick payment for past due amounts. Any talk of additional delay or of partial payment is counterproductive to finding a solution," said Randy Harrison, chief executive officer of Mirant's western operations. Likewise, Reliant Energy Inc. and Dynegy Inc. have both said they intend to pursue recovery in full of California's unpaid bills.