Court upholds Edison bailout

[jamesinca]

Court upholds Edison bailout
PUC can charge customers for utilities' energy-related losses

Bob Egelko, Chronicle Staff Writer Friday, August 22, 2003

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The state Supreme Court upheld a $3.3 billion ratepayer bailout of Southern California Edison Co. on Thursday and said state regulators can charge customers for the huge power bills utilities incurred during the energy crisis.

The court unanimously affirmed the state Public Utilities Commission's authority to require ratepayers to cover utilities' losses from the 2000-01 spike in power prices. The justices rejected a consumer group's argument that a 1996 rate-freeze law required utilities, not ratepayers, to bear any losses from energy costs through March 2002.

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The ruling removes a potential legal obstacle to the PUC's pending settlement with Pacific Gas and Electric Co., which would require customers to pay most of PG&E's debt to power suppliers to lift the company out of bankruptcy. Consumer advocates said the ruling also highlighted the need for action by Gov. Gray Davis, who appointed the PUC members.

"The governor still has an opportunity to demonstrate his sincerity in protecting ratepayers by not allowing PG&E to recover an even richer deal than this one," said Nettie Hoge, executive director of The Utility Reform Network, which challenged the Edison settlement. Otherwise, she said, the ruling would "ensure that customers pay for every penny of deregulation's failure."


But Davis supported the settlement in court and told reporters Thursday that the agreement had made it possible for the PUC to reduce Edison's rates, effective Aug. 1, by $1.25 billion, or 13.8 percent. That reduction came after customers had finished paying their $3.3 billion share of the settlement.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/08/22/BU68299.DTL