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Feb 15, 2002
CONTACT: Doug Heller - 310-392-0522 x309
Edison Profits Rise Due to Illegal Bailout, Says FTCR
$3.6 Billion From Ratepayers Allows Edison to Profit from Deregulation CrisisSanta Monica, CA -- Consumer advocates challenge the profit statements from Edison International, which were announced today. According to the Foundation for Taxpayer and Consumer Rights (FTCR), $2.1 billion (which represents the after-tax earnings on the $3.6 billion bailout to be paid by consumers) of Edison's announced profit is attributable to an illegal settlement the California Public Utilities Commission signed with Edison in October. That settlement has been appealed to the 9th Circuit Court of Appeals.
"Edison's profit is based on more than three billion dollars that was stolen from the ratepayers as part of a deal between Edison and Governor Davis's Public Utility Commissioners. This money must be refunded to consumers, rather than listed as profit on Edison's books," said Doug Heller of FTCR. "When the Legislature allowed the PUC to collect more money from consumer last year, the rate increase was meant cover future electricity costs and repay the Treasury not to bail Edison out of its deregulation disaster."
In March 2001, the PUC imposed the largest rate increase in California history, with the intention of using those high rates to pay off the high priced power that the state was buying during the height of the electricity crisis. When the prices fell, the excess should have been returned to consumers. Instead, the PUC and Edison secretly brokered a deal that allows Edison to keep that consumer money, thus providing the company with a sudden and massive profit.
Wednesday, the PUC proposed a similar bailout of Pacific Gas & Electric as part of the federal bankruptcy proceedings for PG&E.
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