Bringing to a close a 16-year dispute over wholesale electricity costs, the city's Public Utilities Department will receive $11 million from Southern California Edison over the next three years.
The refund, stemming from various overcharges Anaheim and four other cities accused the electric company of making on several occasions since 1976, will consist of $8.5 million in cash and a $2.5-million reduction in the rate Edison will charge Anaheim for electricity. Utility department officials said the money will be used to avoid increases in the city's electric rate.
"It will not lower rates, but the settlement will put downward pressure on our rates and help keep them at current levels," department Assistant General Manager Brian Brady said Tuesday.
Edison spokesman Steve Hansen said the electric company has admitted no wrongdoing, but "the reason we agreed to this settlement is that we wanted to avoid further litigation."
The cities of Anaheim, Riverside, Azusa, Banning and Colton accused the power company of charging a rate that was higher than the rate it charges its best industrial customers, which is a violation of federal regulations.
The cities--and not Edison--supply their residents and businesses with electric power. In addition to generating their own electricity, the cities buy for resale electricity from a variety of sources, including Edison.
The cities said that by overcharging the cities, Edison had an unfair advantage over them when it recruited new industrial companies to its service areas. The other cities received a combined $12 million in rebates and rate reductions.