BAILOUT WATCH: Keeping an eye on the energy industry and the politicians
Bailout Watch #83 – Oct 05, 2001
Federal Court Approves Bailout With No Hearing. At 9:30 this morning, U.S. District Court Judge Lew approved Tuesday’s secretly negotiated Edison-PUC deal without even hearing arguments against the deal, which violates numerous state laws. This decision will be appealed.
Davis PUC either lying about deal or got snookered by Edison lawyers. Two groups that are miles apart on the issues came to a similar conclusion yesterday after reviewing the Secret Bailout Deal between SoCal Edison (SCE) and the Cal. PUC. Governor Davis’s appointees at the PUC have not been straight with us in describing the terms and true cost of the proposed Edison Bailout. The Utility Reform Network claims that the "CPUC either lied about or lost $1.2 billion," because the PUC had said that the total bailout of $3.3 billion would be reduced by $1.2 billion through Edison’s promise not to pay stock dividends for a few years. But the written agreement clearly forces consumers to pay all of the $3.3 billion. The power companies, which filed documents asking the federal judge to hold off on any ruling, pointed out that a PUC press statement "appears to contradict the plain language of the Agreement, and there is consequently a serious uncertainty as to how SCE’s retail rates would be set under the Agreement." Edison’s own legal briefs argue that the PUC signed away the full $3.3 billion. There are only two ways to interpret this fiasco: either state officials are blatantly lying to the public — or they got snookered by Edison’s lawyers. Either way, it’s the same old story: the ratepayers get screwed.
Forget the PUC. In the Bailout world, you’ll be calling Judge Ronald Lew if Edison turns your lights off. One of the absurdities of the Secret Bailout Deal is that it takes away the power of the state — including state courts — to address regulatory problems the public may face with Edison. Under this "settlement," anytime consumers or businesses want to challenge a rate hike or take issue with a variety of Edison actions that are tied in, even remotely, to this bailout, Edison will point to the deal and kick the complaint right on up to Judge Lew in Federal District Court. Judge Lew becomes the regulator-in-chief of SoCal Edison for the next four years, at least. Certainly there are more important things for a federal judge to do than read thousands of pages of testimony on rate allocation or assess raw data detailing the effects of energy load curtailment programs…
The role of the Present is to mock the Past. The Public Utilities Commission is an outgrowth of the early 20th century Railroad Commission, created by housecleaning Governor Hiram Johnson, when the railroads ran the Legislature. 90 years after this Commission was put in place to protect the People from a corrupt Legislature and an out-of-control monopoly, it’s the Senate that protected the people from the out-of-control corporation and the Commission that needs a housecleaning. State Senator Tom McClintock notes the ironic circularity in this recent secret deal between the PUC and Edison: "What has befallen consumers is the same sort of influence peddling and special interest domination of government that California suffered a century ago."
Judgment Day
395 Days until November 5, 2002
