Calif. legislature fails to OK Edison rescue plan

- The California state legislature adjourned for the year on Saturday without approving a last-minute bailout for Southern California Edison, prompting the governor to vow to call lawmakers back in two weeks for a special session to keep the utility out of bankruptcy.

The state Assembly had approved a $2.9 billion rescue plan last week to help the utility recoup some of the costs it ran up in California's energy crisis, but the bill stalled in the Senate over concern it was too sweet a deal for the utility. "Unfortunately, the Senate has not gotten the job done," Gov. Gray Davis said after the legislature adjourned. "I will call a third special session, which will begin in approximately two weeks, so Edison can avoid bankruptcy."

The legislature was racing to craft a plan to pay off some of SoCal Edison's estimated $3.9 billion in debt by issuing bonds to be paid back in a portion of the rates paid by the utility's business customers.

SoCal Edison, a unit of Edison International , based in Rosemead, California, racked up its debt buying electricity for its customers as wholesale market prices skyrocketed during California's 2000-01 power crisis.

Saddled with similar debts, the state's largest utility, PG&E Corp. unit Pacific Gas & Electric, filed for bankruptcy protection in April.

Assemblyman Fred Keeley, the architect of the $2.9 billion Assembly plan already approved in the lower chamber and backed by Davis, said on Friday he had expected the Senate to return a measure that would vastly shrink the pool of ratepayers shouldering the bond to about 1,000 business customers from 181,000 business customers.

The Senate was also considering breaking up the original bill into three separate bills on the theory that at least some component of the deal would get to the governor's desk by the deadline, legislative staffers said.

But Senate President John Burton, who has long opposed the Assembly version of the bill, said even a scaled-back version did not have the required votes for passage in the Senate.

"We should have killed this baby once and for all," Burton told a packed chamber after learning the governor planned to call the legislature back to the capitol.