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To: GREENLAW4-7 who wrote (87149)	2/14/2001 7:17:55 AM
From: Second_Titan	Respond to of 95453

Calif Gov: Util Parent Cos Must Cover Some Past Pwr Costs Dow Jones Newswires LOS ANGELES -- Any solution that helps California's two largest utilities recover nearly $13 billion in uncollected wholesale power costs must involve a contribution from their parent companies, Gov. Gray Davis said Tuesday. "There should be some contribution from shareholders, since $3 billion to $4 billion in profits each went to the utilities' holding companies," Davis said at a news conference in Los Angeles. Recent audits of PG&E Corp. (PCG) unit Pacific Gas & Electric Co. and Edison International (EIX) unit Southern California Edison showed the utilities have paid billions of dollars to their parent companies in recent years. Financial analysts say this was normal practice or even necessary under the state's deregulation scheme, which would see the utilities' role shrink. Consumer activists say the funds should be factored into a final settlement. State regulators are expected this week to open an investigation into whether the utilities properly disclosed payments to their parent companies. Davis reiterated that he hopes by Friday to have a rough plan to allow the utilities to recover their power costs, which have dragged them to the brink of bankruptcy. The governor said he hopes to have a detailed plan in place two weeks from Friday. The solution, Davis said, would be "a buyout, not a bailout," with the utilities turning over assets in exchange for an injection of state or state-backed funds. The state was still considering plans to buy the utilities' transmission or hydroelectric assets or to take options on the utilities' stock, Davis said. Davis also said a federal judge's decision Monday not to allow Southern California Edison to immediately pass its wholesale power costs on to customers in the form of higher rates was helpful to negotiations. "We're gratified the judge made a thoughtful decision to give us time for an appropriate solution," Davis said. Davis also said the utilities shouldn't be allowed to go bankrupt.