California Power Woes Deepen

Jan. 6 -- Southern California Edison, one the state’s two major utility companies struggling to avoid bankruptcy and keep the lights on across the state, has announced 1,450 layoffs, prompting President Clinton to call a high-level White House meeting on the issue next week.

Company officials estimate the move will save an estimated $465 million, money the company desperately needs, according to its Vice President Tom Higgins.

“We have very big bills that are coming due this month,” said Higgins, “and you know we need to be able to satisfy those obligations or we’re going to have to see a situation where California will basically be experiencing these blackouts.”

However, a union spokesman for the International Brotherhood of Electrical Workers said the layoffs only prove energy deregulation isn’t working and could have been avoided if people had “done their homework.”

Losing Money Daily

Both Edison and Pacific Gas and Electric Company, the state’s two largest utility companies, have pleaded for relief, having lost more than $9 billion since June to soaring wholesale prices and a state-imposed rate freeze that prevented them from passing costs on to consumers. The deficit, in turn, has affected the companies’ ability to buy power on credit and avert blackouts.

“We’re basically borrowing, depending on the day, anywhere from 24 to 30 million dollars or going into debt in order to procure electricity,” said Higgins. “We can’t keep doing that clearly.”

Southern California Edison, a unit of Edison International has around 11 million customers while Pacific Gas and Electric, a subsidiary of PG&E Corp, has 13 million.

Thursday, the state’s Public Utilities Commission dealt a blow to the companies by voting to raise electric rates between seven and 15 percent—half of what the companies requested. The rate hike, effective immediately, would raise the average monthly residential bill of $54 by about $5.