Lawmakers Have No Reason to Settle Lawsuit Through a Legislative Bailout

Los Angeles — A U.S. District Court in Los Angeles has denied Edison‘s request to immediately pass on rate hikes to consumers as a result of the high, wholesale energy costs associated with deregulation. The ruling means that the lawsuit, So. Ca. Edison v. Loretta Lynch (President of the California Public Utilities Commission), et al, which has received much attention among officials in Sacramento, will go to a full trial.

Edison and PG&E (which has filed a similar suit) have used the impending suits as political leverage in their lobbying effort to win a legislative bailout of their beleaguered utility subsidiaries. Last week, Governor Davis suggested that the state needed to craft bailout legislation before today’s hearing, apparently convinced that the court would rule in the utilities’ favor.

“This is a victory for California consumers,” said consumer advocate Harvey Rosenfield with the Foundation for Taxpayer and Consumer Rights (FTCR). “Edison has been holding this lawsuit over the heads of legislators, threatening that the hammer would fall on February 12. But the hammer did not fall, and another utility bluff has been called.”

Consumer advocates have asked legislators and Governor Davis to solve the energy crisis without forcing the public to bail out Edison and PG&E. FTCR points out that after the cases are finally heard, any decision in this case will be appealed, a process that will reach far beyond the resolution of the energy crisis. For that reason, it makes no sense to tie legislation to a settlement of these cases.

“The public interest should not be compromised in fear of the results of a legal battle that has just begun. The inescapable conclusion to be drawn from the facts of this energy crisis is that the utilities do not deserve a bailout and consumers should be protected from unwarranted rate increases,” said Harvey Rosenfield.

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