October 2, 2001
Today, the California Public Utilities Commission (PUC) and Southern California Edison (Edison) reached a settlement agreement regarding Edison's federal lawsuit against the PUC. This settlement will allow Edison to become credit-worthy again to buy power for its customers instead of relying on the state. This agreement represents the best outcome for ratepayers and for the economy of the State of California. The agreement:
· Implements recovery without a rate increase, and allows for a rate reduction under certain circumstances.
· Retains PUC and state regulatory authority over Edison.
· Allows Edison to become solvent so it can buy power to serve its customers.
· Requires Edison shareholders to contribute at least $1.2 billion in dividends to the recovery plan, as well as an initial $300 million adjustment to the beginning balance.
· Requires that any settlements obtained from refund proceedings or court actions against power generators and marketers be used 100% to pay down back debt, and 90% to ratepayers after back debt has been fully recovered.
· Provides necessary funds for Edison to execute needed maintenance and improvements on its physical system within the current rate structure.
· Does not affect ratepayer protections currently in place, including:
o All residential customers using less than 130% of baseline are protected from the original rate increases
o Adjusting baseline amounts to protect consumers
o Ensuring that low-income customers are protected from any of the original rate increases.