Foes Unite to Battle Power Exchange

A crisis certainly makes for strange bedfellows--or fellow litigants.

California’s electricity meltdown brought lawyers for the state Public Utilities Commission and the state attorney general’s office shoulder to shoulder with lawyers for Southern California Edison in Los Angeles Superior Court on Wednesday as the utility won an injunction temporarily protecting some long-term electricity contracts from seizure.

Some of these same folks have been bitter adversaries in recent court and regulatory proceedings.

In fact, Edison complained in a motion filed Monday as part of a federal lawsuit against the PUC that the utility has worked for months to “achieve a fair and stable resolution to the electricity crisis” and yet “has been met with resistance, denial and finger-pointing by the defendants. No meaningful action has been taken.”

In that lawsuit, Edison is seeking permission to pass along nearly $5 billion in electricity costs to customers. On Jan. 8, U.S. District Judge Ronald S.W. Lew ruled that Edison has the right to pass on to consumers “reasonable” costs incurred in buying power on the wholesale market. Edison still must show that it acted prudently when it bought electricity, beginning in late May, when wholesale prices were skyrocketing but customer rates were frozen at a tiny fraction of the price of power.

But on Wednesday, the parties were all lined up together against the California Power Exchange and some electricity generators, which want to resell Edison’s long-term power contracts to satisfy a $215-million electricity bill that Edison has not paid to the exchange.

Los Angeles Superior Court Judge David P. Yaffe granted an injunction until Feb. 2 to prevent the exchange from taking the contracts, in part because the lawyers from the attorney general’s office said Gov. Gray Davis is considering using his emergency powers to commandeer the contracts for the state so that it would have access to this relatively cheap power.

Michael Diamond, a lawyer for the Power Exchange, said requests by the state agencies to join Edison in its suit were an attempt to further politicize an already controversial issue.

The state attorney general’s office was allowed to intervene in the lawsuit, but the PUC was not, on grounds that it hadn’t filed its legal request in time.

If nothing else, the electricity crisis will ensure full employment for the legal profession for several years.

“Over the span of time,” said one party, who wished to remain anonymous, “you end up on all kinds of sides.”