SAN FRANCISCO -- A consumer group asked the California Supreme Court on
Thursday to declare that state regulators violated the law when they entered
into a settlement with Southern California Edison and proposed a reorganization
plan for Pacific Gas & Electric Co.
The Foundation for Taxpayer and Consumer Rights of Santa Monica alleged
that the Public Utilities Commission is a "renegade state agency"
that is illegally committing ratepayers of the two financially troubled
utilities to pay at least $10 billion--or about $1,150 each--in violation
of the 1996 deregulation law that froze retail electricity rates.
"The PUC is out of control ... wheeling and dealing in secret,"
Harvey Rosenfield, president of the group, said at a news conference here.
"It has been behaving like Enron."
After secret negotiations, the commission in October settled a federal
lawsuit filed by Edison that would permit the utility to collect more
than $3 billion from its customers for power purchases during the energy crisis.
The commission now is working on its own plan for the reorganization of
PG&E, which filed for Chapter 11 bankruptcy protection from creditors
a year ago.
Like the Edison settlement, the PUC plan would cost ratepayers billions
of dollars by artificially extending record rate increases approved by
the commission last year.
PUC General Counsel Gary Cohen said the commission's actions not only
were legal under laws passed during the energy crisis, but also share
the pain of the "deregulation fiasco" among utility shareholders
The foundation's lawsuit asks the Supreme Court to declare the PUC's
actions illegal and to force the agency to heed a state constitutional
provision that requires state agencies to obey state laws.
The lawsuit does not specifically attempt to prevent the commission from
filing its PG&E reorganization plan as scheduled by Monday. But it
asks the high court to declare the PUC's plan unlawful, and that could
effectively block the agency from sponsoring a reorganization plan, said
attorney Michael Strumwasser, who filed the suit. He said the high court
could hear the suit, reject it or send it to a state appellate court.