Endevco’s Power Woes: First SDG & E;, Now Enron
By CHRIS CZIBORR
Enron Corp.’s woes are fueling uncertainty at San Juan Capistrano-based Endevco Corp., a maker of vibration measurement gear that has gotten low-cost electricity from the collapsed Houston company for most of this year.
For now, Endevco manufacturing manager Mike Will said the company still is getting power from Enron. But Endevco, part of the Britain’s Meggitt PLC, is waiting for the other shoe to drop, he said.
“We know about as much as we’re reading in the newspapers at this point,” Will said. “If Enron goes under, then we could revert back to San Diego Gas & Electric. Although I understand Enron is trying to operate in Chapter 11.”
A local utility official who asked not to be named said Enron could assign the Endevco contract,an asset on its balance sheet,to another alternative energy provider, barring intervention from the state Public Utilities Commission.
“So it should be a seamless transfer,” the official said.
With lower natural gas prices, Enron’s contracts could be moneymakers for other electricity suppliers the utility official said. Cheaper gas boosts profits on electricity sales generated from natural gas, which is used to produce more than a third of California’s electricity demand.
Enron saw its revenue surge after power prices spiked in California in the past year or so. The company has been vilified by some state officials for its role in the state’s power crisis.
By getting power directly from Enron, Endevco has been insulated from rising rates in California. The company earlier this year switched to Enron from San Diego Gas & Electric, a move Endevco’s Will said the company made after SDG & E; customers saw wild energy price swings last year.
Endevco pays $45,000 per month for its electricity from Enron vs. a high of $100,000 paid to SDG & E; last December, he said.
Another unsettled question for Endevco and other South County business is whether they still could be on the hook for debt SDG & E; incurred selling power for less than what it paid for it since the summer of 2000.
“So, I wouldn’t say Endevco is completely in the clear,” the utility official said. “But it could be too problematic to figure all of that out. San Diego could let it go at that.”
Will said that SDG & E;’s billing for the debt created confusion, a concern echoed by other South County customers of the utility.
“I honestly didn’t understand SDG & E;’s accounting for charges,” Will said. “They had numbers that changed from month to month, even though our consumption levels didn’t fluctuate.”
“No one really has any idea how to figure out what SDG & E; is owed and by whom,” the utility official said.
