Contact out of the firing line

By ELLE READ

Electricity generator Contact Energy is unlikely to get caught up in the financial troubles of its key shareholder's sister company Southern California Edison, says ratings agency Standard and Poor's.

Southern California Edison has said it won't pay $US596 million ($1.34 billion) in bills due shortly as rising wholesale electricity costs have left it short of cash and may force it into bankruptcy.

Southern California Edison and Edison Mission Energy, which has a 40 per cent stake in Contact, are both owned by parent company Edison International.

There has been speculation Edison would be forced to sell its Contact holding to help pay the debts, although analysts say this is unlikely.

S&P has reaffirmed its long-term BBB+ and short -term A-2 ratings on Contact saying that without a controlling shareholding, Edison Mission's ability to extract cash from Contact to support the ailing parent business is limited.