Judge Approves Edison Deal

(KFWB) 10.05.01, 9:50a --

Calling it "fair, adequate and reasonable," a federal judge has approved the agreement between the California Public Utilities Commission and Southern California Edison. The deal settles a lawsuit brought by Edison and is intended to keep the utility from going into bankruptcy.

The agreement was filed with U.S. District Judge Ronald S.W. Lew on Thursday. It allows Edison to pay off about half of its $6 billion debt through rate hikes imposed last May. The hikes will raise an estimated $3.3 billion for Edison in the next two years. They could be extended after that.

Under the deal, Edison's shareholders will not receive dividends for three years -- about $1.2 billion worth.

The agreement was negotiated in secret and made public Tuesday. It took negotiators 10 days to reach the deal.

SoCal Edison had sued the PUC last November. The utility wanted the PUC to raise rates to pay for higher wholesale power costs. Edison has incurred debt by purchasing power at a higher cost than it is allowed to charge consumers.

Edison suspended its lawsuit after reaching a tentative agreement with Governor Gray Davis. However, that deal, called a "memorandum of understanding," was not approved by the Legislature.

The agreement between the PUC and Edison was struck after the failure of the "memorandum."

-- PHO (owennos@bigfoot.com), October 05, 2001