Business

Wednesday, Oct 10 2012 02:09 PM

Partner's financial trouble could affect Chevron's, Aera's local cogen plants

BY JOHN COX Californian staff writer jcox@bakersfield.com

Five cogeneration plants that provide electricity and steam directly to Kern County oil fields could become caught up in financial trouble at Edison Mission Group.

Edison Mission, part of Rosemead-based Edison International and sister company to electric utility Southern California Edison, co-owns four of the local plants with Chevron Corp. It co-owns another with Bakersfield's Aera Energy LLC.

On July 31, Edison International reported a $110 million second-quarter loss at Edison Mission, up from a $30 million loss a year before. The company blamed low power prices.

Edison International also raised the possibility of a Chapter 11 bankruptcy reorganization at Edison Mission to address $500 million in unsecured debt payment coming due in June 2013.

Edison Mission spokesman Doug McFarlan said earlier this month that the company does not expect its debt talks -- or even a bankruptcy filing, were that to happen -- to have any impact on the plants' operations. But, he warned, there is "no absolute guarantee" of that.

The four Chevron-affiliated plants, located in Oildale and Fellows, together employ 66 Edison workers and generate a total of 1,210 megawatts of power for oil field operations and electricity for sale to the grid. The steam it also makes is key to the production of heavy oil nearby.

The plant co-owned by Aera in Fellows provides work for 26 Edison workers and two Aera employees; it generates steam and 225 megawatts of power.

A spokeswoman at Aera wrote in an email last week that the company is monitoring Edison Mission's situation but that it "does not expect any impact on cogen operations."

Chevron declined to comment.

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