Standard & Poor's (S&P) plans to maintain negative outlooks on the three largest California electric utilities (em Southern California Edison (SCE), San Diego Gas & Electric (SDG&E), and Pacific Gas & Electric (PG&E). Although it considers the California Public Utilities Commission's (CPUC's) December 20 electric restructuring order "reasonably favorable," S&P will not reexamine the ratings until it is sure the plan will be finalized as proposed. S&P's concern is that some members of the California State Senate believe small customer interests would not be adequately protected. Further, State Sen. Steve Peace is leading a charge to reform the CPUC.
S&P notes that SDG&E would be least impacted by restructuring, because its generating assets constitute a significantly smaller portion of total assets. SCE must file a recovery plan for the Palo Verde nuclear plant, which S&P expects will be fashioned after the plan filed for the San Onofre nuclear plant (SONGS) (em and, therefore, not controversial. PG&E, however, will find it a challenge to file a "SONGS-like" plan for Diablo Canyon. S&P points out that PG&E already has entered into a settlement that makes significant concessions on the price per kilowatt-hour.
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