A Los Angeles federal judge refused Friday to block Southern California Edison's $3.3-billion settlement with the California Public Utilities Commission, a deal that both sides say will help restore the utility to fiscal soundness.

U.S. District Judge Ronald S. W. Lew's action was largely procedural, paving the way for the Utility Reform Network to seek a stay from the U.S. 9th Circuit Court of Appeals in San Francisco.

The consumer group, which has condemned the settlement as a bad deal that is unfair to the utility's customers, will file its request with the appellate court sometime next week, said attorney Michael Strumwasser.

On Oct. 5, Lew approved the settlement, which allows Edison to use ratepayer and shareholder funds to repay $3.3 billion in debts owed to electric power suppliers.

The deal, structured as a settlement of a federal lawsuit filed by Edison against the PUC, would keep customer rates at their current levels for at least two years. Edison would not pay dividends to shareholders for the same period.

The consumer group contends that the settlement violates terms of the 1996 law deregulating the sale of electricity in California.

The group appealed Lew's approval of the settlement to the 9th Circuit, which is expected to hear the case early next year.

Stephen E. Pickett, Edison's vice president and general counsel, said of the judge's latest ruling: "We're pleased. It's an important step in the process."