Shifting of funds to parent firms is area of dispute California utilities are squaring off against state regulators in two arenas in the next few days, in a tug of war over how much money the utilities can charge customers. Today, the California Public Utilities Commission will consider launching an investigation into how San Diego Gas and Electric, Southern California Edison and Pacific Gas and Electric shifted billions of dollars from their utility operations to their parent companies. Agreements that allowed utilities to become part of larger, diversified corporations specified that the parent companies had to give top priority to the capital needs of the utilities. In a federal lawsuit scheduled to begin in Los Angeles on Monday, Edison is pushing to raise its rates 10 percent, just a month after the PUC granted increases of 7 percent to 15 percent. Federal law should supersede the state's deregulation laws, they say.
Some federal officials agree.
But consumer activists complain that it is unfair for the utilities to have enjoyed the profits of deregulation while passing the costs on to consumers. Now that they're losing money, they're saying the rate freeze is void. Edison makes light of such arguments. Michael Shames, head of the Utilities Consumers' Action Network in San Diego, concedes that Edison may win its case. But he added that if the judge orders the PUC to allow the utilities to raise their rates, the PUC may examine the utilities' past actions to determine how much money they are entitled to recover.