- Forces virtually all businesses, including small businesses & family farms (approximately 180,000 Southern California businesses), to pay a $4.1 billion bailout tax ($2.9 billion for bailout, $1.2 billion in bond interest). These costs will be passed on to consumers. Many businesses have already added “energy surcharges.”
- Allows Southern California Edison to reap an extra benefit worth more than $1 billion (See attached estimate from PUC‘s Office of Ratepayer Advocate)
- Gives ratepayers nothing in exchange for bailout (In Sen. Pres. John Burton’s terminology, we give $ but get no “Hot Dog.”) The bailout bill removes the exchange of transmission lines from Edison for bailout money. Instead, ratepayers get the “option to buy” the lines at $2.4 billion (twice the book value) which can only be exercised by a future vote of the legislature. (In effect, submitting the issue to Edison‘s lobbyists at a future date). In the unlikely event that such a purchase happens, any profit from it will not be used to reduce debt or repay the ratepayers.
- Allows big businesses to escape the long-term DWR contracts through a Direct Access program that would leave residential and small business consumers with the burden of the long and vastly over-priced DWR contracts negotiated by the Governor.
- Locks the state of California into a high-priced 10-year contract for electricity with Edison‘s subsidiary (the Sunrise plant).
- Guarantees Edison a higher-than-appropriate rate of return (11.6% profit) that cannot be lowered by the PUC for 5 years. Office of Ratepayer Advocate (ORA) conservatively estimates this will provide at least $300 million in excess profits to SoCal Edison (see attachment).
- Says that if FERC orders refunds, Edison receives up to $500 million that should be designated to ratepayers. (ORA estimates $225 million will go to Edison as a result of limited FERC refunds.) In effect, if such refunds are made, Edison will come out of the bailout with extra profits beyond the payback of its stated debts.
- The ORA says the bailout further subsidizes Edison‘s nuclear plants through accelerated depreciation of San Onofre & Palo Verde plants (see attachment).
CONTACT: Doug Heller/Carmen Balber 310-403-0284