Southern California Edison

20 Cal. 3d 813 (1978), 576 P.2d 94515 Cal. 3d 680 (1975), 542 P. 2d 1371

The Court affirmed a Commission decision directing Edison to refund, over a 36-month period, certain over collections generated by operation of Edison’s fuel cost adjustment clause.  The Court concluded that because the application of fuel cost adjustment clauses was not “true ratemaking” but, rather, a mechanical application of an adjustment clause, the rule against retroactive ratemaking (Section 728) did not proscribe the prospective refund of past over collections.  Many regarded this decision as a judicial signal that the rule against retroactive ratemaking had lost its vitality.  It seems to have enjoyed a rebirth under Ponderosa Telephone (Para. 16).  Notwithstanding Ponderosa, however, Edison remains ripe for further elucidation.  What is the “bright line” between (1) “true ratemaking” and (2) everything else?

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