SACRAMENTO, Calif. -- Southern California Edison Co. is planning 1,450 layoffs in coming months as the result of a power crisis that has pushed the utility to the brink of bankruptcy and prompted President Clinton to a call a White House meeting on the issue.
The layoff announcement on Friday came as Energy Secretary Bill Richardson granted a reprieve to SoCal Edison and Pacific Gas and Electric Co. by extending an order requiring suppliers to sell California electricity to avoid blackouts.
Treasury Secretary Lawrence Summers, National Economic Council director Gene Sperling and Richardson were among those expected to attend the White House meeting on Tuesday. It was unclear if Gov. Gray Davis, expected to discuss the issue in his State of the State address on Monday, would attend, said spokesman Steve Maviglio.
"The idea there is to try to create some sort of framework that could help to alleviate the supply crunch that California is experiencing now in energy," said White House spokesman Jake Siewert.
Richardson's order was scheduled to expire Friday, but the extension takes it through next Thursday. To keep it in place past Tuesday, the state must implement measures to reduce peak demand 5 percent by Jan. 15.
Also on Friday, the U.S. Court of Appeals in Washington rejected a bid by SoCal Edison to order the Federal Energy Regulatory Commission to cap wholesale electricity prices. FERC had argued that a cap would not solve the crisis.
The three-judge panel said SoCal Edison had not proven that its right to relief was "clear and indisputable."
Shortly thereafter, SoCal Edison announced the layoffs. The company eliminated 400 jobs last month. The 1,850 layoffs amount to 13.6 percent of its work force.
SoCal Edison and Pacific Gas and Electric Co. were dealt a surprise blow a day earlier when state regulators approved price hikes of 7 percent to 15 percent, or about half of what the utilities had requested.
The rate hike, effective immediately, would raise the average monthly residential bill of $54 by about $5.
Wall Street did not expect such a modest rate hike to salvage the faltering utilities and responded by downgrading their parent companies' credit ratings. Then, stock prices plummeted.
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