Add renewables, not cost: Edison International CEO

NEW YORK/LOS ANGELES (Reuters) - Edison International (EIX.N) will reduce greenhouse gas emissions, boost renewable power supplies and increase energy efficiency without subjecting customers to hefty price spikes, said CEO Ted Craver.

Craver, speaking at the Reuters Global Energy Summit in New York and later by phone from corporate offices in Rosemead, California, said customers are prepared to pay to reduce carbon emissions and increase renewable power sources and energy efficiency.

But, he warned, "Customers cannot handle huge price spikes. We need to give the industry enough time to phase in any changes needed to reduce carbon dioxide emissions."

As have most chiefs of U.S. utilities, Craver said that his company expects national carbon regulation including a cap-and-trade system.

For such emissions-curbing rules to work, he said, Edison International's two main units, the regulated Southern California Edison (SCE) and unregulated Edison Mission Group, must have "certainty" and "a reasonable transition period."

SCE, which serves more than 4.9 million customers in Southern California, is already the biggest buyer of renewable power and the most energy efficient utility in the nation.

SCE conducts annual requests for proposals (RFP) to buy more renewable power. The 2009 solicitation will take place in the coming weeks.

WORLD'S LARGEST SOLAR ROOFTOPS

The California Public Utilities Commission (CPUC) is expected on June 18 to expand SCE's effort to create the world's largest rooftop solar project.

SCE expects to install 250 MW of solar photovoltaic panels on 150 large commercial roofs in its service territory within five years in an $875 million project.

CPUC Commissioner John Bohn has proposed that SCE expand the project to a total of 500 MW of rooftop solar. The new 250-MW project would seek independent solar installers to place the panels and sell the power to SCE.

The 500-MW project would dwarf the biggest current rooftops project, which is in Europe, said SCE.

SCE gets about 16 percent of its power from renewable sources like wind, solar and geothermal, and expects to have contracts in place to get 20 percent from renewables by 2010, which would meet California's mandates.

By purchasing the renewable power under long-term contracts, SCE is able to offset the highly variable cost of natural gas, which still generates most of the power in California. Natural gas, which currently trades at about $3.75 per million British thermal units on the NYMEX, has peaked over $13 last summer before falling below $4 this spring.

SCE also plans to spend more than $1.6 billion to install more than 5 million smart meters that will help customers reduce and more closely manage power use.

EDISON MISSION

On the unregulated side is Edison International's Edison Mission Group subsidiary, which generates and markets about 10,000 MW of electricity. It generates most of its power by burning coal -- mainly in Illinois and Pennsylvania -- and is investing in wind farms and carbon capture and storage technologies.

At its coal-fired power plants, Craver said Edison Mission is looking to burn biofuels and/or biomass. In Illinois and Pennsylvania, the company is studying carbon capture and storage technologies at its Powerton and Homer City plants.

Utilities will have to adapt or die when it comes to carbon emission constraints, Craver said.

"If you can't find a way to capture carbon dioxide at the coal plants, they will ultimately go out of business in a carbon constrained world," Craver said.

(Reporting by Scott DiSavino in New York and Bernie Woodall in Los Angeles)