This excerpt taken from the AWR 10-K filed Mar 15, 2006.
The ability of GSWC to deliver purchased power to customers in its Bear Valley Electric area is limited by the ability of the transmission facilities owned by Edison to transmit this power. On December 27, 2000, GSWC filed a lawsuit against Edison for breach of contract as a result of delays in upgrading these transmission facilities as well as for violations of good faith and fair dealing, negligent misrepresentation, intentional misrepresentation and unjust enrichment.
In March 2004, GSWC and Edison agreed to settle this suit. Under the terms of the settlement, GSWC agreed to pay a $5 million project abandonment fee to Edison. Edison filed an application to the FERC for approval to treat the entire $5 million settlement payment as an abandoned project cost to be included in Edisons wholesale rate charged to GSWC. In addition, Edison has agreed to sell the Goldhill substation and associated transmission line to GSWC at its book value. GSWC made an initial lump sum payment of $1.4 million to Edison during the first quarter of 2004 and agreed to pay Edison the remaining $3.6 million over a 15 year term through 180 equal monthly payments of $38,137. In August 2004, the FERC approved Edisons application and GSWC recorded the $1.4 million payment in the supply cost balancing account. This amount was previously recorded as a regulatory asset pending FERC approval of Edisons application. In addition, monthly payments made to Edison totaling $457,644 and $228,822 made to Edison for the years ended December 31, 2005 and 2004, respectively, are also included in the electric supply cost balancing account.