Edison Sees Possible Generation Unit Bankruptcy, Nuclear Probes

Edison International (EIX) (EIX), owner of California’s second-largest electric utility, said its money- losing, unregulated generation unit may be put into bankruptcy and disclosed more inquiries into its nuclear plant shutdown. 

The net loss at its Edison Mission Group widened to $110 million from $30 million a year ago on lower power prices and higher fuel costs, the Rosemead, California-based company said yesterday when reporting a 46 percent fall in second-quarter profit. The unit may have to file for Chapter 11 bankruptcy protection, the company said in a filing with the U.S. Securities and Exchange Commission.

The company is working to restructure about $3.7 billion in debt (0223076D) at Edison Mission, which has been hurt by a slump in power prices and rising environmental-compliance costs for its coal- fired power plants, Chief Executive Officer Ted Craver said on a conference call with investors. It’s in talks with bondholders to restructure debt and may have to reorganize its generation unit under new ownership if talks are unsuccessful, he said.

“I don’t think it’s all that surprising that the company is exploring various forms of reorganizing its generating unit, given its financial condition and the overall wholesale power market it is operating in,” Paul Patterson, a New York-based utility analyst for Glenrock Associates LLC, said yesterday in a telephone interview.
The earnings were issued after the close of regular trading in New York. Edison’s shares fell 24 cents, or 0.5 percent, in after-hours trading.

San Onofre Plant

Net income fell to $103 million, or 23 cents a share, from $191 million, or 54 cents, a year earlier. Excluding results from a coal plant that the company intends to transfer to General Electric Co. (GE) (GE), per-share profit was 32 cents, more than the 28-cent average of nine analysts’ estimates compiled by Bloomberg.

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