California Supreme Court Takes Utility Bailout Case

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Group Sees Billions in Refunds to Ratepayers

The California Supreme Court today announced it will decide whether the California Public Utilities Commission has the authority to order California ratepayers to pay off the $3 billion in deregulation debts Southern California Edison owes to vendors including wholesale energy suppliers.

On September 23, the U.S. 9th Circuit Court of Appeals sided with consumer advocates and said that the California Constitution and the state deregulation law, sponsored by Edison in 1996, “appeared” to prohibit ratepayers from being forced to pay off the utility’s deregulation debts. It further agreed that the PUC deal violated state public open government laws. However, following federal procedures, the 9th Circuit asked the California Supreme Court to take the case and decide the state law issues.

FTCR, which successfully defeated Edison‘s 2001 campaign for a legislative ballot, sued the PUC in the California Supreme Court on April 11, raising the same issues addressed in the federal case. However, on August 15, the California Supreme Court declined without comment to hear the case at the time.

FTCR recently urged the California Supreme Court to hear the case and lauded today’s announcement: “According to Edison and the five unelected renegade public officials on the PUC, deregulation was a ‘heads the utilities win, tails consumers lose’ proposition. But the deregulation law says otherwise. Now the California Supreme Court will enforce the law and make sure residential ratepayers don’t get stuck with the tab for Edison‘s greed and mismanagement,” said Harvey Rosenfield of FTCR.

FTCR said if the state Supreme Court agrees with the Ninth Circuit’s ruling, Edison would be required to cut its current rates and to refund excess charges it has collected under the bailout deal. It would also mean that the PUC has no authority to propose a similar ratepayer bailout for bankrupt PG&E.

“The Ninth Circuit’s analysis confirms that that state PUC has no authority to rewrite state law and make Edison and PG&E ratepayers pay off more than $10 billion in alleged losses of the greedy companies that got us into this debacle,” said Rosenfield. “We are confident the California Supreme Court will read California law as the Ninth Circuit has, and come to the same conclusion. The utilities, their parent companies, their stockholders and their vendors reaped the rewards of deregulation, and they must bear the losses.”

A copy of the FTCR letter to the California Supreme Court may be found at

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Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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