California appeals court panel grants temporary stay in SCE case
By the OGJ Online Staff
HOUSTON, Oct. 30 -- A California federal appeals court panel Tuesday granted a consumer group's request for temporary stay of a settlement between Southern California Edison Co. and the Public Utilities Commission.
The two-judge motions panel of the US 9th Circuit Court of Appeals remanded to US District Court Judge Ronald S.W. Lew the Utility Reform Network's (TURN) motion for a stay of Lew's judgment approving the lawsuit settlement reached earlier this month between Southern California Edison (SCE) and the California PUC.
TURN's request for a stay will be reviewed by Lew within the next 14 days to determine whether to order a stay pending appeal of the decision. SCE Chairman Stephen E. Frank said TURN's motion for a stay has no merit, and "we will continue to vigorously oppose it." He noted the circuit court panel did not decide on the merits of the stay or the settlement.
The Oct. 5 settlement came in response to a lawsuit Edison International filed nearly a year ago alleging state regulators were preventing its utility unit Southern California Edison from collecting sufficient retail rates to pay for the actual cost of power it was purchasing last year on behalf of its customers.
The utility accumulated $3.9 billion in debt buying power on the wholesale market, which it couldn't pass through to customers because of a retail rate freeze. SCE, which said the agreement will permit it to avoid filing for bankruptcy protection, charged the rate freeze violated federal law and was an unconstitutional taking of property.
Under the agreement, the utility will use cash on hand plus future revenue to cover back debt, much of it owed to generators. The utility can recover certain back debts as of Aug. 31, less cash on hand on that date, with an additional $300 million deducted from the total.
Frank said SCE continues to believe the settlement is sound and is in the "best interests of the state, ratepayers, taxpayers, and the economy overall. We're confident it will be upheld."
The agreement was reached after lawmakers failed to approve a deal between California Gov. Gray and the utility that also would have permitted it to avoid bankruptcy. The state would have purchased various assets of the utility. Critics called it a bail out.
