PUC to Weigh Compromise on Deregulation : Energy: Edison offers alternative to plans now on table. Consumer groups oppose it.

California Public Utilities Commission officials said Monday that they will give strong consideration to a compromise proposal by Southern California Edison Co. and a group of large energy customers that would remake the state’s electric utility industry.

The Edison-led coalition is working out final details of the compromise, which is supported by Gov. Pete Wilson but opposed by consumer and environmental groups. The compromise, which must win PUC approval, would stake out a middle position between two competing proposals now under the commission’s consideration.

Those proposals were discussed Monday at a meeting in Pasadena of the PUC, which is seeking to deregulate the industry, whose power rates are among the nation’s highest.

One proposal already has the backing of three of the PUC’s four commissioners and would create a wholesale pool into which power generators would sell electricity, which would then be sold at a uniform rate to customers.

A second proposal, by Commissioner Jessie K. Knight Jr., would move the industry even further into deregulation, allowing customers to work out their own deals for power with any of the state’s generators, much as long-distance telephone customers now have their choice of carriers.

The compromise--reached after private negotiations among Edison, the California Manufacturers Assn., the Independent Energy Producers and the California Large Energy Consumers Assn., and announced by Wilson earlier this month--would contain elements of both proposals.

The compromise would create a wholesale pool but would allow certain customers to deal directly with the utilities for their own contracts.

Until the compromise, the utility industry had gone on record favoring the wholesale pool approach. A broad coalition of others, including environmentalists, consumer activists, industrial customers and business interests, had opposed it.

Few interested parties took part in the negotiations that resulted in a memorandum of understanding containing the compromise.

On Monday, a formal compromise proposal was still being drafted for submission to the PUC. Commission President Daniel Fessler, the principal author of the original pool proposal, expressed interest in seeing the new plan.

“I am ecstatic that people are talking to, rather than at, one another. Now it remains to be seen,” Fessler said.

Knight also left open the possibility of considering the new compromise favorably.

For its part, Edison said it would put the plan before the commission by Sept. 8, when the next hearing into the matter is scheduled. “The differences between the majority and minority proposals were never as great as their similarities, and this is a balance between the two,” Edison spokesman Thomas Higgins said.

On Monday, Edison’s maneuvering raised the ire of the consumer and environmental groups.

“This is really a back-room deal among just a couple of very large interests, and there was no public representation at all in these discussions. And the results show it: It’s got a lot in it for Edison, a little for the big customers and virtually nothing in it for small customers at all,” said Mike Florio, acting executive director of the San Francisco-based consumer group Toward Utility Rate Normalization.

Among other things, Florio said his group continues to oppose any effort that leaves consumers holding the bag for the costs of building nuclear power plants--costs, he argues, consumers are already paying in the form of higher-than-average rates.

Meanwhile, representatives of several Southern California cities that have banded together to buy power threatened Monday to make use of the state’s public initiative process to circumvent the PUC’s rule-making process altogether if it does not like the way electric restructuring is headed.

“The CPUC can save Californians billions of dollars per year by facilitating the rapid introduction of open and fair competition in our electric services industry,” said James D. Boulgarides, vice mayor of Culver City and chairman of the Southern California Cities Joint Powers Consortium, which represents nine area municipalities.