January 8, 2001

Southern California Edison Company (SCE) today released the following statement in response to today's expedited decision by the U.S. District Court upholding the utility's right to recover the costs of purchasing power for its customers.

ROSEMEAD, Calif., Jan. 8, 2001-SCE applauded today's decision by U.S. District Court Judge Ronald S.W. Lew upholding the central claim of our lawsuit against the California Public Utilities Commission (CPUC)-our right to recover the reasonable costs of purchasing power for our customers.  This ruling is an important step toward rebuilding the financial stability of California's electric power system.

The court found that a trial is needed on the question of whether SCE's purchases were prudent.  We believe we will prevail on that issue too because the CPUC has repeatedly held that purchases made through California's Power Exchange and Independent System Operator are, by definition, reasonable.  We will work with the CPUC to implement a schedule for the reasonable recovery of our costs.

We filed the lawsuit on Nov. 15 asking the federal court to overturn rulings by the CPUC that illegally prevent it from the reasonable recovery of operating costs for purchasing power it has been forced to incur on behalf of our customers.  We believe that the five members of the commission violated federal law when, after requiring us to procure wholesale power for its customers from the state's newly deregulated wholesale market, and to sell it without markup, the commission blocked us from recovering the full cost of doing so.

Our lawsuit was made necessary by the commission's refusal over the past eight months to heed warnings that its policies breach federal law and unfairly place the company and our customers in jeopardy.

In the lawsuit, we noted that we incurred "undercollections" (the difference between out-of-control wholesale power costs and frozen retail rates) approaching $5 billion that have seriously weakened our financial integrity and service reliability. 

This suit is one of many steps we are taking to attempt to remedy serious market problems that threaten the ability of the state's major utilities to continue serving their customers.  We are pursuing every possible means of protecting our customers and shareholders from California's dysfunctional electricity market.

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An Edison International company, Southern California Edison is one of the nation's largest electric utilities, serving a population of more than 11 million via 4.3 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.