-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bv7iNZxDyFk7D2UFi6S9fYQxvwU8V5uYPSThfOSI02eZEmEJjG1u3nXn/dySbAPE 1JO2Dv1B+j+/DOCFWJ1fTQ== 0000827052-96-000045.txt : 19961206 0000827052-96-000045.hdr.sgml : 19961206 ACCESSION NUMBER: 0000827052-96-000045 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961205 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961205 SROS: AMEX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EDISON INTERNATIONAL CENTRAL INDEX KEY: 0000827052 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 954137452 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09936 FILM NUMBER: 96676204 BUSINESS ADDRESS: STREET 1: 2244 WALNUT GROVE AVE STREET 2: P O BOX 800 CITY: ROSEMEAD STATE: CA ZIP: 91770 BUSINESS PHONE: 8183022222 FORMER COMPANY: FORMER CONFORMED NAME: SCECORP DATE OF NAME CHANGE: 19920703 8-K 1 EIX 8-K DATED 12/5/96 PAGE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: December 5, 1996 Date of earliest event reported: November 21, 1996 EDISON INTERNATIONAL (Exact name of registrant as specified in its charter) CALIFORNIA 1-9936 95-4137452 (State or other jurisdiction of (Commission (I.R.S. employer incorporation or organization) file number) identification no.) 2244 Walnut Grove Avenue (P.O. Box 800) Rosemead, California 91770 (Address of principal executive offices, including zip code) 818-302-2222 (Registrant's telephone number, including area code) PAGE Item 5. Other Events On November 21, 1996, the Board of Directors of Southern California Edison Company (Edison), Edison International's electric utility subsidiary, approved a plan to sell all 12 of its natural gas and oil- fueled power plants. The plants, all located within Edison's service territory, have a combined book value of approximately $700 million. A copy of Edison's press release on the matter is attached as Exhibit 20.1 and incorporated herein by this reference. A copy of a press release from Edison International (EIX) concerning this matter, the Palo Verde Nuclear Generating Station (PVNGS) cost recovery matter discussed below, and other information not part of this filing, is attached in relevant part as Exhibit 20.2 and also incorporated herein by this reference. On November 27, 1996, Edison filed its divestiture application with the California Public Utilities Commission (CPUC). Under the application, Edison proposes to auction the affected plants by grouping them into 4 "bundles," with no bidder being allowed to purchase more than 2 of the 4 "bundles." The auctions are to be held in two phases: the first three bundles in the summer of 1997, followed by auction of the fourth bundle in the fall of that same year. A copy of EIX's press release on the matter, which press release also includes information on the PVNGS matter discussed below (and other information not part of this filing), is attached in relevant part as Exhibit 20.3 and incorporated herein by this reference. In addition, on November 15, 1996, Edison, The Utility Reform Network (TURN) and the Office of Ratepayer Advocates of the CPUC (all of the active parties in the PVNGS cost recovery proceeding), filed a settlement agreement with the CPUC. The settlement is substantially the same as the Memorandum of Understanding signed by the same parties on November 1, 1996. On November 26, 1996, the assigned Administrative Law Judge to the Palo Verde proceeding issued a proposed decision adopting the settlement agreement upon which the CPUC may act as soon as December 20, 1996. Copies of EIX's press releases on the matter are included as portions of attached Exhibits 20.2 and 20.3. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits Exhibit Number Description - ------- ----------- 20.1 News Release -- Edison Plans to Divest 12 Power Plants in California 20.2 Investor Relations News dated November 21, 1996 20.3 Investor Relations News dated December 4, 1996 PAGE SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EDISON INTERNATIONAL KENNETH S. STEWART ---------------------------------- KENNETH S. STEWART ASSISTANT GENERAL COUNSEL December 5, 1996 EX-20.1 2 PRESS RELEASE ON DIVESTITURE PAGE EXHIBIT 20.1 Southern California Edison An EDISON INTERNATIONAL Company FOR IMMEDIATE RELEASE Contact: Tom Higgins (818) 302-2255 World Wide Web Address: http://www.edisonx.com Edison Plans to Divest 12 Power Plants in California ROSEMEAD, Calif., Nov. 21, 1996-The Board of Directors of Edison International and its electric utility subsidiary, Southern California Edison, today approved a plan to sell by auction 12 power plants in SCE's service territory. This represents 100% of the utility's natural gas and oil-fueled generation assets. Edison International and its subsidiaries will not bid for these assets in the auctions scheduled to begin in summer 1997. The 12 power plants, all located within SCE's California service territory, have a total rated operating capacity of about 10,000 megawatts and have a combined book value of about $700 million. Although SCE believes the transaction would be the largest asset sale of generation capacity in the electric industry's history, the plants to be sold currently produce slightly less than 20% of the power delivered to Edison customers and represent less than 10% of Edison's total current investment in its California utility system. The 12 plants are: Alamitos Generating Station, Long Beach Cool Water Generating Station, Daggett Ellwood Generating Station, Santa Barbara El Segundo Generating Station, El Segundo Etiwanda Generating Station, San Bernardino Highgrove Generating Station, San Bernardino Huntington Beach Generating Station, Huntington Beach Long Beach Generating Station, Long Beach Mandalay Generating Station, Ventura Ormond Beach Generating Station, Oxnard Redondo Generating Station, Redondo Beach San Bernardino Generating Station, San Bernardino "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. "In the future, the generation of power will be largely unregulated. Although we are selling these regulated plants, Edison International-- through its competitive power generation company, Edison Mission Energy, as well as through SCE--will continue to be a major participant in generation markets throughout California, the nation, and the world. We know this business and remain committed to it," Bryson said. Edison Mission Energy is one of the largest independent power producers in the world. 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 PAGE plant in Arizona. San Onofre and Palo Verde will make the transition to competition under separate plans previously approved by the California Legislature and the California Public Utilities Commission (CPUC). In addition, Edison International has ownership interests in 14 power projects in California through its Edison Mission Energy subsidiary, which also develops and operates power plants worldwide. The company had announced last March that it intended to voluntarily divest 50% of its oil and gas-fueled plant assets, in accordance with the CPUC's restructuring decision. That decision also required California utilities to value their fossil 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, according to Bryson. SCE's ownership share in its coal-fueled Mohave and Four Corners ower 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. "This will ensure that nearly all the employees operating these plants today will continue to have the opportunity to further their careers in the generation business," said Stephen Frank, president and chief operating officer of SCE. "In addition, we will offer workforce transition programs to those Edison employees who may be impacted by divestiture-related job reductions," he said. SCE will file a detailed plan for the sale of the 12 power plants with the California Public Utilities Commission before the end of November. New Harbor Inc. is advising the company on the transactions. Parties interested in bidding on the power plants should contact John G. Paton, managing director of New Harbor Inc., at (212) 486-3668 or Ted Craver, Edison International vice president and treasurer, at (818) 302-1089. # # # Southern California Edison is one of six Edison International companies. It is the nation's second largest electric utility, serving more than 11 million people in a 50,000-square-mile area within central, coastal and southern California. The other related companies are Edison Mission Energy, Edison Capital, Edison Source, Edison EV (Electric Vehicles),and Edison Select. EX-20.2 3 INVESTOR RELATIONS NEWS 11/21/96 PAGE 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 PAGE 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. EX-20.3 4 INVESTOR RELATIONS NEWS 12/4/96 EXHIBIT 20.3 EDISON INTERNATIONAL INVESTOR RELATIONS NEWS December 4, 1996 ALJ Proposed Decision Adopts Palo Verde Settlement The California Public Utilities Commission's (CPUC) Administrative Law Judge (ALJ) assigned to the Palo Verde Nuclear Generating Station (PVNGS) cost recovery proceeding issued a proposed decision on November 26. The proposed decision recommends that the CPUC adopt the Palo Verde All-Party Settlement. (Details of the Settlement are outlined in EIX's November 1 and 21 Investor Relations (I/R) Newsletters and the ALJ proposed decision.) The proposed decision provides for the accelerated recovery of SCE's remaining investment in Palo Verde and pass-through balancing account treatment for its portion of incremental operating costs over a five-year recovery period. The ALJ has also proposed an abridged procedural schedule that would permit the issuance of a final CPUC decision as early as December 20, 1996. Comments on the proposed decision are due December 9, with reply comments due December 13. The ALJ proposed decision is eight pages in length and is available upon request. SCE Files Divestiture Application with CPUC On November 27, Southern California Edison (SCE) filed an application with the CPUC to voluntarily divest, by auction, 100% of its gas and oil-fueled generation assets. (Details on the 12 plants to be divested and SCE's plans for divestiture were published in EIX's November 21 I/R Newsletter.) The application proposes that the plants be sold in four bundles (or groupings), with no bidder, or consortium of bidders, being allowed to purchase more than two of the four bundles. SCE proposes that the first three bundles be auctioned simultaneously during the summer of 1997. The fourth bundle would contain those plants which must be run at times for system reliability reasons (e.g. for voltage support). SCE has concluded that after transmission upgrades costing approximately $125 million, only two gas-fired stations would remain "must-run": the Alamitos and Huntington Beach generating stations. (SCE has filed a separate application with the CPUC regarding rate treatment of the proposed transmission upgrades.) SCE proposes that the fourth bundle be auctioned in the fall of 1997. SCE envisions a three-stage divestiture process: 1) CPUC review and decision on SCE's 11/27/96 proposal, including the auction protocols and procedures; 2) Auctions conducted and winning bidders selected in accordance with approved procedures; 3) CPUC approval of the final sales. - more - PAGE The following table shows the four bundles, and their respective megawatts (MW), net book value, and original cost:
Station Net Book Value Original Capacity MW (as of 12/31/95)(a) Cost (Summer) (thousands $) (thousands $) ----------- ------------------- ------------- "Ventura Bundle" ELLWOOD 48 2,128 7,843 MANDALAY 570 15,616 124,314 ORMOND BEACH 1500 164,180 306,537 ---- ------- ------- Bundle Total 2118 181,924 438,694 "Eastern Bundle" COOL WATER 628 94,919 224,612 ETIWANDA 1030 37,534 175,152 HIGHGROVE 154 (2,505) 25,815 SAN BERNARDINO 126 (1,771) 22,688 ---- ------- ------- Bundle Total 1938 128,177 448,267 "South Bay Bundle" REDONDO 1310 98,416 292,532 EL SEGUNDO 1020 74,514 187,499 LONG BEACH 530 94,886 180,607 ---- ------- ------- Bundle Total 2860 267,816 660,638 "Local Reliability Bundle" ALAMITOS 2083 153,112 379,613 HUNTINGTON BEACH 563 2,563 184,103 ---- ------- ------- Bundle Total 2646 155,675 563,716 TOTAL 9562 733,592 2,111,315 ==== ======= ========
(a) These figures represent SCE's best current estimate. Because the property included in the sales may differ somewhat from what is assumed here, the final figures included in SCE's Affidavit of Compliance may not be identical. Highlights of Divestiture Schedule Proposed by SCE in its 11/27 Application
Calif. Environmental Quality Assessment (CEQA) determination 01/23/97 Intervenor/Staff testimony 01/30/97 SCE rebuttal testimony 02/11/97 Hearings 02/18-28/97 ALJ proposed decision 04/28/97 CPUC approval of auction process 06/11/97 Initial bids due on Bundles 1 - 3 06/30/97 Final bids due on Bundles 1 - 3 08/14/97 Winner Selection and contract execution for Bundles 1 - 3 08/21/97 Compliance filing on Bundles 1 - 3 08/27/97 Initial bids due on Bundle 4 09/09/97 Final bids due on Bundle 4 10/13/97 Winner selection and contract execution on Bundle 4 10/17/97 Compliance filing on Bundle 4 10/21/97 Final CPUC decision on Bundles 1 - 3 10/22/97 Final CPUC decision on Bundle 4 12/16/97
-----END PRIVACY-ENHANCED MESSAGE-----