Dianne Feinstein: “Based upon the foregoing, it should be clear that if Southern California Edison was involved in a bankruptcy proceeding…”

“Based upon the foregoing, it should be clear that if Southern California Edison was involved in a bankruptcy proceeding, the proposed legislation would have significant impact upon Southern California Edison and its other creditors. Mr. President, this is the bankruptcy counsel. So we know two things: One, from bankruptcy counsel, that this amendment--the Wyden amendment and the Smith amendment--do in fact create two classes of creditors. And they do, in fact, give premier standing to one class of creditors, the Federal subsidized entities. Those entities are given preference in a bankruptcy. Secondly, we know in fact that the amount involved is a good deal more than the amount represented in this Chamber. We also know that virtually every other power producer and supplier--every single one--believes that if this amendment were to pass, they would have to exercise their rights, which would be to push Southern California Edison and Pacific Gas and Electric into an involuntary bankruptcy and most probably in chapter 7, which would mean a dissolution of the companies involved. This would be tragic because the State has negotiated an agreement with two utilities to buy their transmission lines and to put $7 billion into the purchase of those transmission lines. The result would then be a securitization of that back debt and enable these utilities to pay their debtors and creditors without going into bankruptcy.”