Secret Bailout Deal Orders Ratepayers to Pay $3 Billion to Edison
The Gov. Gray Davis-controlled California Public Utilities Commission today announced it had secretly negotiated a deal that will force consumers to pay $3 billion in debts accrued by SoCal Edison in 2000 and 2001 — at least $750 for every ratepayer.
In a secretive move, the California Public Utilities Commission filed a last minute legal agreement with Southern California Edison in Federal District Court in Los Angeles today. The deal strikes a major blow to consumers who were previously protected from a bailout by the State Senate, which refused to approve a bailout proposal developed by Governor Davis and Edison.
Statement of Harvey Rosenfield and Douglas Heller
Consumer Advocates with The Foundation for Taxpayer and Consumer Rights:
“Today, five unelected officials ordered ratepayers to pay S. California Edison $3 billion to cover the losses it incurred under the deregulation law Edison lobbyists wrote, sponsored and shoved through the Legislature. The cost to ratepayers of this bailout: an additional $750 each, and possibly more, because the deal says the PUC will make sure Edison gets paid off, no matter what it costs the ratepayers. That’s on top of the $5 billion per year in rate increases, averaging 45%, that the PUC ordered this year as the result of the deregulation fiasco, and the $9 billion hole in the state budget caused when Edison stopped purchasing electricity, forcing the state to do so.
“In approving this deal, the Governor’s unelected appointees did what our elected state lawmakers have refused to do for the last ten months. Stick the residential and small business ratepayers of California with the cost of keeping afloat a greedy utility company and its executives — starting with John Bryson, who received an $8 million compensation package last year. Having reaped the rewards of deregulation — $10 billion in surcharges on ratepayers since 1996 — Edison now gets to dump its losses on ratepayers. A recent poll showed that the People of California overwhelmingly opposed the bailout of the utilities. But Governor Davis and his PUC don’t care.
“This is an outrageous betrayal of the People of California. The public officials who did this must be removed from office. The question now is will Attorney General Bill Lockyer intervene to challenge this dirty deal? Will the Legislature order the PUC to reverse its position? Or will the People have to try to reverse this at the ballot box? ”
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