<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1994
---------------------------------------
OR
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
---------------- -----------------
Commission File Number 1-9936
SCEcorp
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4137452
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2244 Walnut Grove Avenue
(P.O. Box 999)
Rosemead, California
(Address of principal 91770
executive offices) (Zip Code)
818-302-2222
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Class Outstanding at August 5, 1994
- - - -------------------------- -----------------------------
Common Stock, no par value 447,798,240
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SCEcorp
INDEX
<TABLE>
<CAPTION>
Page
No.
----
Part I. Financial Information:
Item 1. Consolidated Financial Statements:
Consolidated Statements of Income--Three and Six
<S> <C>
Months Ended June 30, 1994, and 1993 2
Consolidated Balance Sheets--June 30, 1994, and
December 31, 1993 3
Consolidated Statements of Cash Flows--Six Months
Ended June 30, 1994, and 1993 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 12
Part II. Other Information:
Item 1. Legal Proceedings 18
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
</TABLE>
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SCEcorp
PART I--FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF INCOME
In thousands, except per-share amounts
<TABLE>
<CAPTION>
3 Months Ended 6 Months Ended
June 30, June 30,
-------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C>
Electric utility revenue $1,746,438 $1,689,576 $3,423,117 $3,390,547
Diversified operations 112,083 78,161 164,150 162,151
---------- ---------- ---------- ----------
Total operating revenue 1,858,521 1,767,737 3,587,267 3,552,698
---------- ---------- ---------- ----------
Fuel 198,679 165,994 391,030 380,797
Purchased power 537,346 508,739 1,026,861 969,587
Provisions for regulatory adjustment
clauses -- net (30,532) (16,166) (39,439) 6,072
Other operating expenses 379,723 334,874 701,640 675,176
Maintenance 88,309 87,212 172,481 177,813
Depreciation and decommissioning 234,904 228,080 470,826 455,341
Income taxes 109,177 112,551 200,007 187,766
Property and other taxes 52,802 53,508 107,359 114,696
---------- ---------- ---------- ----------
Total operating expenses 1,570,408 1,474,792 3,030,765 2,967,248
---------- ---------- ---------- ----------
Operating income 288,113 292,945 556,502 585,450
---------- ---------- ---------- ----------
Provision for rate phase-in plan (31,580) (31,580) (64,226) (64,930)
Allowance for equity funds used
during construction 3,565 5,075 7,489 10,090
Other nonoperating income -- net 25,859 11,060 57,647 35,260
---------- ---------- ---------- ----------
Total other income (deductions) -- net (2,156) (15,445) 910 (19,580)
---------- ---------- ---------- ----------
Income before interest and other expenses 285,957 277,500 557,412 565,870
---------- ---------- ---------- ----------
Interest on long-term debt 127,656 140,170 252,735 272,826
Other interest expense 22,276 19,334 40,670 27,230
Allowance for borrowed funds used
during construction (3,715) (4,049) (7,804) (8,052)
Capitalized interest (12,083) (29,315) (22,392) (36,839)
Dividends on subsidiary preferred stock 10,020 10,212 20,040 20,682
---------- ---------- ---------- ----------
Total interest and other expenses -- net 144,154 136,352 283,249 275,847
---------- ---------- ---------- ----------
Net income $ 141,803 $ 141,148 $ 274,163 $ 290,023
========== ========== ========== ==========
Weighted-average shares of common stock
outstanding 447,799 447,739 447,799 447,738
Earnings per share $ .32 $ .32 $ .61 $ .65
Dividends declared per common share .25 .355 .605 .705
</TABLE>
The accompanying notes are an integral part of these financial statements.
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SCEcorp
CONSOLIDATED BALANCE SHEETS
In thousands
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Utility plant, at original cost $18,738,591 $18,436,134
Less -- accumulated provision for
depreciation and decommissioning 7,463,420 7,138,289
----------- -----------
11,275,171 11,297,845
Construction work in progress 938,367 857,225
Nuclear fuel, at amortized cost 118,963 148,012
----------- -----------
Total utility plant 12,332,501 12,303,082
----------- -----------
Nonutility property -- less
accumulated provision for
depreciation of $83,243 and $73,169
at respective dates 1,330,176 1,276,471
Nuclear decommissioning trusts 869,954 788,575
Investments in partnerships and
unconsolidated subsidiaries 1,254,753 1,162,452
Investments in leveraged leases 502,331 497,469
Other investments 41,803 20,577
----------- -----------
Total other property and investments 3,999,017 3,745,544
----------- -----------
Cash and equivalents 540,811 420,510
Receivables, including unbilled
revenue, less allowances of
$18,162 and $18,669 for uncollectible
accounts at respective dates 947,964 880,758
Fuel inventory 136,216 120,859
Materials and supplies, at average cost 118,237 104,092
Accumulated deferred income taxes -- net 197,283 204,119
Regulatory balancing accounts -- net 10,426 --
Prepayments and other current assets 18,984 117,758
----------- -----------
Total current assets 1,969,921 1,848,096
----------- -----------
Unamortized debt issuance and
reacquisition expense 370,728 381,781
Rate phase-in plan 306,218 364,209
Unamortized nuclear plant -- net 222,521 273,837
Income tax-related deferred charges 1,836,360 2,016,194
Other deferred charges 472,320 445,799
----------- -----------
Total deferred charges 3,208,147 3,481,820
----------- -----------
Total assets $21,509,586 $21,378,542
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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SCEcorp
CONSOLIDATED BALANCE SHEETS
In thousands
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
----------- ------------
(Unaudited)
CAPITALIZATION AND LIABILITIES
Common shareholders' equity:
Common stock (447,799 shares
<S> <C> <C>
outstanding at each date) $ 2,691,605 $ 2,691,605
Retained earnings 3,269,218 3,265,976
----------- -----------
5,960,823 5,957,581
Preferred stock:
Not subject to mandatory redemption 358,755 358,755
Subject to mandatory redemption 275,000 275,000
Long-term debt 6,309,462 6,459,195
----------- -----------
Total capitalization 12,904,040 13,050,531
----------- -----------
Other long-term liabilities 302,573 266,595
----------- -----------
Current portion of long-term debt 323,766 348,896
Short-term debt 1,030,471 655,344
Accounts payable 359,461 373,092
Accrued taxes 516,159 410,612
Accrued interest 102,939 101,360
Dividends payable 115,803 162,818
Regulatory balancing accounts -- net -- 57,932
Deferred unbilled revenue and other
current liabilities 812,373 741,334
----------- -----------
Total current liabilities 3,260,972 2,851,388
----------- -----------
Accumulated deferred income
taxes -- net 3,978,239 4,168,719
Accumulated deferred investment
tax credits 441,973 455,574
Customer advances and other
deferred credits 621,789 585,735
----------- -----------
Total deferred credits 5,042,001 5,210,028
----------- -----------
Commitments and contingencies
(Notes 1, 2 and 3)
Total capitalization and liabilities $21,509,586 $21,378,542
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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SCEcorp
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
<TABLE>
<CAPTION>
6 Months Ended
June 30,
----------------------------
1994 1993
--------- -----------
(Unaudited)
Cash flows from operating activities:
<S> <C> <C>
Net income $ 274,163 $ 290,023
Adjustments for noncash items:
Depreciation and decommissioning 470,826 455,341
Amortization 77,542 57,870
Rate phase-in plan 57,991 57,459
Deferred income taxes and investment tax
credits (18,680) (24,674)
Equity in income from partnerships and
unconsolidated subsidiaries (41,505) (41,811)
Other long-term liabilities 35,978 (102,296)
Other -- net (47,255) 21,236
Changes in working capital components:
Receivables (47,802) (27,311)
Regulatory balancing accounts (68,358) 268,989
Fuel inventory, materials and supplies (29,502) (15,450)
Prepayments and other current assets 101,782 145,314
Accrued interest and taxes 102,680 73,891
Accounts payable and other current
liabilities 29,220 (37,240)
Distributions from partnerships and
unconsolidated subsidiaries 35,158 53,364
--------- -----------
Net cash provided by operating activities 932,238 1,174,705
--------- -----------
Cash flows from financing activities:
Issuances of long-term debt 97,379 1,468,064
Issuances of preferred stock -- 74,626
Repayment of long-term debt (230,040) (1,265,021)
Redemption of preferred stock -- (86,392)
Nuclear fuel financing -- net (13,816) (12,246)
Proceeds from sales of common stock -- 141
Short-term debt financings -- net 319,321 (40,243)
Dividends paid (317,937) (313,416)
--------- -----------
Net cash used by financing activities (145,093) (174,487)
--------- -----------
Cash flows from investing activities:
Additions to property and plant (540,730) (585,483)
Nuclear decommissioning trusts (81,379) (71,309)
Investments in partnerships and
unconsolidated subsidiaries (112,683) (150,636)
Other -- net 67,948 (31,848)
--------- -----------
Net cash used by investing activities (666,844) (839,276)
--------- -----------
Net increase in cash and equivalents 120,301 160,942
Cash and equivalents, beginning of period 420,510 496,338
--------- -----------
Cash and equivalents, end of period $ 540,811 $ 657,280
========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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SCEcorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Management's Statement
In the opinion of management, all adjustments necessary to present a fair
statement of the financial position and results of operations for the
periods covered by this report, including recurring accruals, have been
made.
SCEcorp's significant accounting policies were described in Note 1 of
"Notes to Consolidated Financial Statements" included in its 1993 Annual
Report on Form 10-K filed with the Securities and Exchange Commission.
SCEcorp follows the same accounting policies for interim reporting
purposes. In January 1994, SCEcorp adopted a new accounting standard
which requires that certain debt and equity instruments be reported at
fair value. Adoption of this standard did not have a material effect on
results of operations or financial position. This quarterly report should
be read in conjunction with SCEcorp's 1993 Annual Report.
Certain prior-period amounts have been reclassified to conform to the June
30, 1994, financial statement presentation.
Note 1. Regulatory Matters
California Public Utilities Commission (CPUC) Electric Utility Industry
Restructuring Proposal
On April 20, 1994, the CPUC issued a proposal for restructuring
California's electric utility industry. Under the proposal, large
electric customers would have the option to choose a range of generation
providers, including utilities, (direct access) beginning in 1996. As
proposed, eligibility would expand gradually, until all customers,
including residential, have the option for direct access to this
competitive generation market beginning in 2002. Edison would continue
to provide transmission and distribution services to all customers in its
service territory. Performance-based regulation would replace traditional
cost-of-service regulation for all transmission and distribution services.
The proposal also stated that utilities should be entitled to recover all
of their investments in generation developed under traditional cost-of-
service regulation even if a portion is uneconomic under current
conditions. On June 8, 1994, Edison filed its response to the CPUC's
proposal recommending the creation of an independent regional power pool
company that would act as an intermediary between all power consumers and
suppliers. Additionally, Edison has recommended that the CPUC reaffirm
in a definitive way that prudent investments made under existing
regulation will be protected in the transition to direct access, and in
anticipation of a delay in implementing the CPUC's proposal due to several
regulatory, legislative and jurisdictional issues, Edison proposed the
adoption of performance-based ratemaking for its generation operations
until direct access phase-in begins. The CPUC has held three full-panel
hearings to address comments on its proposal. A fourth full-panel hearing
is scheduled for September 1994. A CPUC final policy statement is
expected in early 1995.
Edison currently applies accounting standards that recognize the economic
effects of rate regulation and, accordingly, has recorded regulatory
assets related to its generation, transmission and distribution
operations. If rate recovery of generation-related costs becomes unlikely
or uncertain, whether due to competition or regulatory action, these
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SCEcorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
accounting standards may no longer apply to Edison's generation
operations. This change could result in either full recovery of
generation-related regulatory assets or a non-cash write-off of up to
approximately $1 billion, depending on whether the CPUC adopts a
transition mechanism for the recovery of all or a portion of these
regulatory assets before rate recovery becomes unlikely or uncertain.
Until the CPUC establishes more definitive valuation and pricing criteria
for its restructuring proposal, Edison cannot predict the effect of the
proposal on its results of operations or financial position.
Mohave Outage Review
In 1986, the CPUC began investigating a 1985 steam-pipe rupture at the
Mohave Generating Station. Edison, plant operator and 56% owner, incurred
costs of approximately $90 million, after insurance recoveries, to repair
damage and provide replacement power during the six-month outage. In 1991,
the CPUC's Division of Ratepayer Advocates (DRA) alleged that Edison
contributed to the piping failure by imprudently operating the plant and
recommended the disallowance of all accident-related expenditures. Edison
believes the accident was caused by a manufacturing defect in a seam weld
and filed testimony contesting the allegations. A CPUC decision issued
in March 1994 agreed with the DRA's allegations and ordered a second phase
of this proceeding to quantify the disallowance. The probable effect on
net income cannot be determined at this time, but SCEcorp believes it will
not materially affect its results of operations or financial position.
Palo Verde Nuclear Generating Station Outage Review
In March 1989, Arizona Public Service Company (APS), operating agent for
Palo Verde, removed Units 1 and 3 from service for modifications required
by regulatory agencies. As required by state law, the CPUC conducted an
investigation, and ordered the authorized revenue collected during the
outages be subject to refund. The units resumed operation in December 1989
and July 1990.
During 1992, the CPUC consolidated its reasonableness review of
replacement power costs from several Unit 2 outages in 1989 and 1990 with
the investigation of Units 1 and 3. The DRA initially recommended a
disallowance valued at $169 million, including: $63 million of revenue
collected during the outages (including interest); $5 million for capital
projects deemed unnecessary; $50 million in replacement power costs; and
$51 million in penalties for environmental effects of replacement power
and the outages' effect on the regional energy market. Edison filed
testimony that its costs were reasonably incurred.
In September 1993, Edison and the DRA agreed to settle these disputes for
$38 million (including $29 million for replacement power costs, $2 million
for capital projects and $7 million for interest), subject to CPUC
approval. The effect of the settlement has been fully reflected in the
financial statements. A CPUC decision is expected in 1995.
Research, Development and Demonstration (RD&D) Cost Review
In Edison's 1992 general rate case, the CPUC deferred a decision (pending
additional information from Edison) on the recovery of $56 million in
capitalized RD&D costs. Edison refiled, requesting that $35 million be
included in rate base and $17 million be classified as RD&D expense.
Subsequently, additional adjustments of $11 million were recorded. In
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SCEcorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 1993, the DRA recommended further disallowances of about $15
million on Edison's RD&D capital refiling. In June 1994, a CPUC
administrative law judge issued a proposed decision recommending
disallowances of $6 million. The probable effect of this matter has been
fully reflected in the financial statements. A CPUC decision is expected
in September 1994.
Note 2. Nuclear Decommissioning
Decommissioning of Edison's nuclear generating facilities is expected to
cost an estimated $1.1 billion in current-year dollars (based on site-
specific studies performed in 1990 for San Onofre Nuclear Generating
Station and 1989 for Palo Verde). Edison expects to decommission its
nuclear facilities by prompt removal or decontamination at the end of
their useful lives. Decommissioning is scheduled to begin in 2013 at San
Onofre and 2024 at Palo Verde. San Onofre Unit 1, which shut down in
1992, will be stored until decommissioning begins at the other San Onofre
units.
Decommissioning costs are recovered in customer rates through charges to
depreciation expense. Decommissioning expense was $33 million and $68
million for the three and six months ended June 30, 1994, respectively,
and $35 million and $71 million for the three and six months ended June
30, 1993, respectively. The accumulated provision for decommissioning at
June 30, 1994, and December 31, 1993, was $865 million and $797 million,
respectively. The estimated costs to decommission San Onofre Unit 1 have
been recorded as a liability.
Decommissioning costs recovered in rates are placed in external trusts,
which, together with accumulated earnings, will be utilized solely for
decommissioning. These amounts are invested in high-grade securities
(classified as available-for-sale) and reported at market value in
accordance with a new accounting standard for debt and equity securities
implemented in January 1994. Unrealized gains are recorded in the
accumulated provision for decommissioning.
Trust investments include:
<TABLE>
<CAPTION>
Maturity June 30, December 31,
Dates 1994 1993
-------- -------- ------------
(In millions)
<S> <C> <C> <C>
Municipal bonds 1996-2021 $592 $680
Stocks 53 51
U.S. government and agency issues 1998-2023 129 36
Short-term investments and other 1994 91 22
---- ----
Trust fund balance $865 $789
==== ====
Market value (based on quoted market prices) $870 $853
</TABLE>
Trust fund earnings (based on specific identification) increase the trust
fund balance and the accumulated provision for decommissioning. Net
earnings were $9 million and $20 million for the three and six months
ended June 30, 1994, respectively, and $11 million and $23 million for the
same periods in 1993. Proceeds from sales of securities (which are
reinvested) were $358 million and $403 million for the three and six
months ended June 30, 1994, respectively, and $91 million and $48 million
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SCEcorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
for the same periods in 1993. Approximately 87% of the trust fund
contributions were tax-deductible.
In its 1995 general rate case filing, Edison requested to revise its
authorized decommissioning costs based on updated site-specific studies
(1993 for San Onofre and 1992 for Palo Verde), and adjustments to its
authorized escalation rates and after-tax rate of return on the trust
funds. If approved by the CPUC, current fund contribution levels would
be virtually unchanged. A CPUC decision is expected in late 1994. Edison
believes the amounts collected in rates are adequate to meet estimated
decommissioning costs.
Note 3. Contingencies
Conservation Expenditures Tax Issue
The Internal Revenue Service (IRS) has completed its examination of tax
years 1983-1988. In connection with this examination, the IRS has
challenged certain tax positions, including how Edison deducts energy
conservation expenditures. The deduction of energy conservation
expenditures is consistent with positions taken by other members of the
industry. According to the IRS, certain demand-side management (DSM)
expenditures should not be treated as a current income tax deduction. The
IRS claims that DSM programs create a future benefit by delaying the cost
of building additional power plants. The utility industry believes that
energy conservation expenditures constitute ordinary and necessary
business expenses, which, under current provisions of the Internal Revenue
Code, are deductible in the year incurred or accrued. SCEcorp believes
the IRS' position is in conflict with existing tax laws and contrary to
the nation's energy and environmental policy goals. SCEcorp will continue
to vigorously defend its position.
In March 1994, the CPUC approved Edison's request to establish a
memorandum account to track the prospective income tax effect if a change
in the method of deducting these expenditures were imposed. Such amounts
would be recovered through customer rates, subject to reasonableness
reviews. The probable effect on net income of the outcome of this matter
cannot be determined at this time, but SCEcorp believes it will not
materially affect its results of operations or financial position.
Environmental Protection
SCEcorp is subject to numerous legislative and regulatory environmental-
protection requirements. To meet these requirements, SCEcorp will
continue to incur substantial costs to operate existing facilities,
construct and operate new facilities, and mitigate or remove the effect
of past operations on the environment.
SCEcorp has identified 59 sites for which it is, or may be, responsible
for remediation under environmental laws. In 1994, Edison developed an
above-ground storage tank inspection program to determine the future use
of its existing fuel-oil pipeline and station tanks. As a result of this
program, several above-ground storage tanks may require surrounding soil
remediation and were added to Edison's total number of identified sites.
Edison is participating in investigations and cleanups at a number of
these identified sites and has estimated its minimum liability at $74
million. This estimate may change as progress is made in determining the
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SCEcorp
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
magnitude of required remedial actions, as Edison's share of these costs
in proportion to other responsible parties is determined, and as
additional investigations and cleanups are performed.
On May 4, 1994, the CPUC approved an incentive mechanism for rate recovery
of environmental-cleanup costs at 23 of Edison's identified sites (Edison
may request to include additional sites). This mechanism allows Edison
to recover 90% of cleanup costs through customer rates. Shareholders fund
the remaining 10%, with the opportunity to recover these costs through
insurance. Environmental-cleanup costs not included in the incentive
mechanism are expected to be recovered through customer rates. As a
result, Edison's regulatory asset of $68 million reflects the estimated
future environmental-cleanup costs expected to be recovered in customer
rates.
The probable effect of the outcome of these environmental matters cannot
be determined at this time, but SCEcorp believes they will not materially
affect its financial position.
Nuclear Insurance
Federal law limits public liability claims from a nuclear incident to $9.2
billion. Edison and other owners of San Onofre and Palo Verde have
purchased the maximum private primary insurance available ($200 million).
The balance is covered by the industry's retrospective rating plan that
uses deferred premium charges. Federal regulations require this secondary
level of financial protection. The Nuclear Regulatory Commission
exempted San Onofre Unit 1 from this secondary level, effective June 3,
1994. The maximum deferred premium for each nuclear incident is $79
million per reactor, but not more than $10 million per reactor may be
charged in any one year for each incident. Based on its ownership
interests, Edison could be required to pay a maximum of $158 million per
nuclear incident. However, it would have to pay no more than $20 million
per incident in any one year. Such amounts include a 5% surcharge if
additional funds are needed to satisfy public liability claims and are
subject to adjustment for inflation.
Property damage insurance covers losses up to $500 million, including
decontamination costs, at San Onofre and Palo Verde. Decontamination
liability and property damage coverage exceeding the primary $500 million
also has been purchased in amounts greater than federal requirements.
Additional insurance covers part of replacement power expenses during an
accident-related nuclear unit outage. These policies are issued primarily
by mutual insurance companies owned by utilities with nuclear facilities.
If losses at any nuclear facility covered by the arrangement were to
exceed the accumulated funds for these insurance programs, Edison could
be assessed retrospective premium adjustments of up to $34 million per
year. Insurance premiums are charged to operating expense.
Palo Verde Steam Generators
In March 1993, a steam generator tube ruptured at Palo Verde Unit 2. A
subsequent investigation of the unit revealed cracking in additional steam
generator tubes. APS, operator of Palo Verde, reduced power at all three
units to 85% in late 1993 to mitigate further tube degradation until
investigations were completed. In April 1994, investigations revealed
some minor cracking at Unit 3. APS implemented several remedial actions,
and returned two units to full power in July 1994. APS expects Unit 2
(currently operated at 88% power) to be returned to full power by year-
end 1994, following additional inspections.
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SCEcorp
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
RESULTS OF OPERATIONS
Earnings
SCEcorp's earnings per share for the three- and six-month periods ended
June 30, 1994, were 32 cents and 61 cents, respectively, compared with
32 cents and 65 cents for the year-earlier periods. Southern California
Edison Company's earnings were down 5 cents and 6 cents, respectively, for
both periods ended June 30, 1994, primarily due to a lower authorized
return on common equity and a 1993 benefit from refinancing long-term
debt. The Mission companies' earnings for both the second quarter and
year-to-date periods in 1993 reflect a 3-cent charge by Mission Power
Engineering Company for the settlement of litigation for its Coso
geothermal project and a 1-cent charge for additional reserves at Mission
Land Company to recognize reduced real estate values. Excluding these
charges, the Mission companies' earnings for the second quarter and year-
to-date period ended June 30, 1994, compared to the year-earlier periods,
increased 1 cent and decreased 2 cents, respectively. The quarterly
increase is attributed to Mission Land's operating loss in 1993. The
year-to-date decrease reflects Mission Energy Company's 1993 decision to
forgo recording earnings from five geothermal projects, due to the reduced
value of its investments. This decision will continue to significantly
impact 1994 earnings and possibly beyond.
Operating Revenue
Electric utility revenue increased, almost entirely due to an increase in
Edison's average rates. Almost 98% of electric utility revenue is from
retail sales. Retail rates are regulated by the California Public
Utilities Commission (CPUC) and wholesale rates are regulated by the
Federal Energy Regulatory Commission. Revenue from diversified operations
increased 43% for the quarter ended June 30, 1994, compared to the year-
earlier period, primarily due to an increase in Mission Land's real estate
rent and sales revenue resulting from an apartment complex sale, an
increase in Mission Energy's electric revenue derived from its Loy Yang
B project, and Mission Land's second quarter 1993 loss in partnership
income from reduced real estate values.
Operating Expenses
Fuel expense increased 20% for the three months ended June 30, 1994,
compared to the year-earlier period, primarily due to an increase in
Edison's power generation. The increased power generation resulted from
decreased hydro generation.
Purchased-power expense increased, due to greater volume and higher-
priced federally required purchases by Edison from nonutility generators.
These purchases were made under contracts with CPUC-mandated pricing,
which is generally higher than those for other sources.
The provisions for regulatory adjustment clauses minimize rate
fluctuations by adjusting for differences between estimated and actual
kilowatt-hour sales or energy costs. These differences are accumulated
in balancing accounts for subsequent rate adjustment. Prior-period rate
adjustments are also reflected in these provisions. The quarterly and
year-to-date decreases reflect authorized estimates exceeding actual
kilowatt-hour sales, partially offset by CPUC-authorized estimates
exceeding energy costs.
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Other operating expenses increased, mainly due to the CPUC authorizing
accelerated recovery of costs related to an Edison demand-side management
(DSM) program.
Other Income and Deductions
The provision for rate phase-in plan reflects a CPUC-authorized, 10-year
rate phase-in plan for the three Palo Verde Nuclear Generating Station
units. Phase-in plans minimize the effect on customer rates of newly
constructed plant by implementing rate increases gradually. Palo Verde's
plan deferred $200 million of revenue for each unit during the first four
years of operation. The deferred revenue, including interest, is being
collected evenly over six years ending in 1996 for Units 1 and 2, and in
1998 for Unit 3. The provision is a non-cash offset to the collection of
deferred revenue.
Other nonoperating income increased for both periods ended June 30, 1994,
compared to the same periods in 1993, primarily due to Mission Power
Engineering's second quarter 1993 charge for the settlement of litigation
on its Coso geothermal project.
Interest Expense
Interest on long-term debt decreased, primarily due to refinancing debt
at lower interest rates. Other interest expense increased 15% and 49% for
the three and six months ended June 30, 1994, respectively, compared to
the year-earlier periods, mainly due to Edison's increased short-term
borrowings.
Capitalized interest decreased, primarily due to decreased construction
activity at Mission Energy.
FINANCIAL CONDITION
SCEcorp's liquidity is primarily affected by debt maturities, dividend
payments and capital expenditures. Capital resources include cash from
operations and external financings.
Although SCEcorp is committed to a strong dividend, in light of declining
authorized rates of return for Edison, Edison's ongoing cash needs, the
changing nature of the electric utility industry and recently proposed
changes in California utility regulation, in the second quarter of 1994
SCEcorp lowered its quarterly common stock dividend by about 30%.
Cash Flows from Operating Activities
Net cash provided by operating activities totaled $932 million for the
six-month period ended June 30, 1994, compared to $1.2 billion for the
same period in 1993. SCEcorp continues to meet most of its capital
requirements with cash from operations.
Cash Flows from Financing Activities
Edison's short-term debt is used to finance fuel inventories, balancing
account undercollections and general cash requirements. The Mission
companies' short-term debt is used mainly for construction projects until
long-term construction or project loans are secured. Long-term debt is
used mainly to finance capital expenditures. Edison's external financings
are influenced by market conditions and other factors, including
limitations imposed by its articles of incorporation and trust indenture.
<PAGE>
<PAGE>
As of June 30, 1994, Edison could issue approximately $5.7
additional first and refunding mortgage bonds and $3.5 billion of
preferred stock at current interest and dividend rates.
SCEcorp and its subsidiaries have lines of credit totaling $2.0 billion.
Edison has lines of credit of $800 million for short-term debt and the
Mission Companies have lines of credit of $600 million to finance general
cash requirements. Edison also has lines of credit of $500 million for
the long-term refinancing of its variable-rate pollution control bonds.
California law prohibits Edison from incurring or guaranteeing debt for
its nonutility affiliates. Additionally, the CPUC regulates Edison's
capital structure, limiting the dividends Edison may pay SCEcorp. These
restrictions are not expected to affect SCEcorp's ability to meet its cash
obligations.
Cash Flows from Investing Activities
The primary uses of cash for investing activities are additions to
property and plant, the Mission companies' investments, and contributions
to nuclear decommissioning trusts. Decommissioning costs are accrued and
recovered in rates over the useful life of each nuclear generating
facility through charges to depreciation expense. Edison expects to
spend approximately $7.9 billion to decommission its nuclear facilities,
primarily between 2013-2035. This estimate is based on Edison's current-
dollar decommissioning costs ($1.1 billion), escalated using a 7.7% rate
and an earnings assumption on trust funds ranging from 5.25% to 6.0%.
These amounts are expected to be funded from independent decommissioning
trusts (see Notes to Consolidated Financial Statements). Edison
contributes approximately $96 million per year to decommissioning trusts.
Trust contributions will continue until decommissioning begins. Cash used
for the Mission companies' investing activities was $118 million for the
first six months of 1994.
Capital Requirements
SCEcorp's projected capital requirements for the years 1994 through 1998
are:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
------ ------ ------ ------ ------
(In millions)
<S> <C> <C> <C> <C> <C>
Construction expenditures $1,248 $1,244 $1,074 $1,064 $1,309
Maturities of long-term debt 72 296 290 567 522
------ ------ ------ ------ ------
Total $1,320 $1,540 $1,364 $1,631 $1,831
====== ====== ====== ====== ======
</TABLE>
REGULATORY MATTERS
The CPUC increased Edison's 1994 authorized revenue by $232 million, or
3.2%. The increase includes a $275 million increase for fuel and related
costs and an $82 million increase for higher operating costs, partially
offset by a $108 million decrease for the lower costs of debt and equity.
In its 1994 cost-of-capital decision, the CPUC approved Edison's request
to increase its equity ratio from 46% to 47.25%. The increase reflects
the CPUC's recognition of Edison's need to reduce debt to levels more in
line with other utilities and the competitive environment. The CPUC also
authorized Edison an 11.0% return on common equity for 1994. Authorized
return on common equity was 11.8% for 1993. This decision is expected to
reduce 1994 earnings by approximately 6 cents per share.
<PAGE>
<PAGE>
The CPUC is reviewing Edison's costs (approximately $90 million) related
to a 1985 steam-pipe rupture at the Mohave Generating Station. A March
1994 CPUC decision stated that Edison had contributed to the piping
failure by imprudently operating the plant and recommended the
disallowance of all accident-related expenditures. The CPUC also ordered
a second phase of this proceeding to quantify the disallowance. The
probable effect on net income cannot be determined at this time, but
SCEcorp believes it will not materially affect its results of operations
or financial position.
The CPUC is also reviewing extended outages at Palo Verde. The CPUC's
Division of Ratepayer Advocates (DRA) initially recommended disallowances
valued at $169 million. In September 1993, Edison and the DRA agreed to
settle these disputes for $38 million, subject to CPUC approval. The
effect of the settlement has been fully reflected in the financial
statements. A CPUC decision is expected in 1995.
In its 1995 general rate case filing, Edison requested a $117 million
revenue increase to recover the higher costs of operations (excluding
fuel) resulting from inflation and new capital investments. Adjusted for
inflation, this increase represents a 7.2% reduction from Edison's 1992
authorized revenue. In addition, Edison filed a proposal for a
performance-based rate-making mechanism that would determine most of
Edison's revenue (excluding fuel) from 1996-2000 (see Competitive
Environment). In March 1994, as part of its response to the general rate
case filing, the DRA recommended that Edison be denied funds to continue
operating San Onofre Nuclear Generating Station Units 2 and 3 after 1998,
or that an alternative pricing mechanism (a fixed price per kilowatt-hour
generated) be implemented. Edison believes the continued operation of the
nuclear units would benefit its customers by providing reliable and non-
polluting energy. A CPUC decision is expected on the general rate case
in late 1994. Hearings on performance-based ratemaking are currently
being conducted with a CPUC decision expected in 1995.
On May 25, 1994, the CPUC approved Edison's request to accelerate recovery
of its investments in San Onofre and Palo Verde by $75 million, or 40%,
annually through 2011. This decision also adopted Edison's request to
offset the rate impact of the accelerated cost recovery with a
corresponding deceleration of rate recovery associated with its
transmission and distribution assets.
COMPETITIVE ENVIRONMENT
Electric utilities operate in a highly regulated environment in which they
have an obligation to provide electric service to their customers in
return for an exclusive franchise within their service territory. This
regulatory environment is changing. The generation sector has experienced
competition from nonutility power producers and Edison expects even
greater competition in the generation sector over the next decade.
Due to this changing environment, Edison requested a performance-based
rate-making mechanism in its 1995 general rate case filing. The filing
asks for a revenue-indexing formula that combines operating expenses and
capital-related costs into a single index. This is a departure from the
traditional utility model that links potential earnings levels with
capital investment. It would provide stronger incentives for efficient
utility operations and investment and allow for a better alignment of
customer and shareholder interests. On July 12, 1994, the CPUC ordered
Edison to divide its performance-based rate-making application into two
phases--transmission and distribution, and power generation. Hearings are
scheduled to begin in October 1994 for the transmission and distribution
phase and in 1995 for the power generation phase.
<PAGE>
<PAGE>
On April 20, 1994, the CPUC issued a proposal for restructuring
California's electric utility industry. Under the proposal, large
electric customers would have the option to choose a range of generation
providers, including utilities, (direct access) beginning in 1996. As
proposed, eligibility would expand gradually, until all customers,
including residential, have the option for direct access to this
competitive generation market beginning in 2002. Edison would continue
to provide transmission and distribution services to all customers in its
service territory. Performance-based regulation would replace traditional
cost-of-service regulation for all transmission and distribution services.
The proposal also stated that utilities should be entitled to recover all
of their investments in generation developed under traditional cost-of-
service regulation even if a portion is uneconomic under current
conditions. On June 8, 1994, Edison filed its response to the CPUC's
proposal recommending the creation of an independent regional power pool
company that would act as an intermediary between all power consumers and
suppliers. Additionally, Edison has recommended that the CPUC reaffirm
in a definitive way that prudent investments made under existing
regulation will be protected in the transition to direct access, and in
anticipation of a delay in implementing the CPUC's proposal due to several
regulatory, legislative and jurisdictional issues, Edison proposed the
adoption of performance-based ratemaking for its generation operations
until direct access phase-in begins. The CPUC has held three full-panel
hearings to address comments on its proposal. A fourth full-panel hearing
is scheduled for September 1994. A CPUC final policy statement is
expected in early 1995.
Edison currently applies accounting standards that recognize the economic
effects of rate regulation and, accordingly, has recorded regulatory
assets related to its generation, transmission and distribution
operations. If rate recovery of generation-related costs becomes unlikely
or uncertain, whether due to competition or regulatory action, these
accounting standards may no longer apply to Edison's generation
operations. This change could result in either full recovery of
generation-related regulatory assets or a non-cash write-off of up to
approximately $1 billion, depending on whether the CPUC adopts a
transition mechanism for the recovery of all or a portion of these
regulatory assets before rate recovery becomes unlikely or uncertain.
Until the CPUC establishes more detailed valuation and pricing criteria
for its restructuring proposal, Edison cannot predict the effect of the
proposal on its results of operations or financial position.
Mission Energy, one of the nation's largest independent power producers,
is well positioned to participate in the changing regulatory environment
for electric power. Further, international markets present an even
greater opportunity for growth and earnings. Mission Energy currently
owns 2,055 megawatts of generating capacity, enough power to serve a
population of over one million.
MISSION ENERGY PROJECT UPDATE
In February 1994, Mission Energy signed a 30-year power purchase agreement
for the 1,230-MW, coal-fired Paiton power project in Indonesia, which will
be one of the largest privately owned power projects in the world. The
plant, which is 32.5% owned by Mission Energy, is scheduled to begin
operating in 1998 and is expected to contribute significantly to Mission
Energy's earnings beginning in 1999.
Mission Energy and ISAB, the petroleum subsidiary of one of the largest
industrial groups in Italy, have formed ISAB Energy to build a 500-MW
combined-cycle power plant in Italy. The plant will use oil gasification
technology and is expected to begin commercial operation in 1998. On June
1, 1994, the 240-MW, gas-fired Gordonsville plant in Virginia went into
<PAGE>
commercial operation. The 150-MW, gas-fired Auburndale plant in Florida
commenced commercial operation on July 1, 1994.
CPUC-MANDATED POWER CONTRACTS
On June 22, 1994, the CPUC ordered the California utilities to proceed
with the signing of new contracts with independent power producers. This
decision will force Edison to purchase 686 MW of new power at fixed prices
starting in 1997. This will cost Edison customers $14 billion over the
life of the contracts. On July 25, 1994, Edison filed a petition with the
CPUC asking it to reconsider its decision. Edison has consistently
opposed this proposal because it has no need for additional generating
capacity until at least 2005 and because the contracts will increase
customer rates. Also, Edison believes the decision is inconsistent with
the CPUC's restructuring proposal goal to ultimately lower rates. For the
twelve months ended June 30, 1994, Edison paid about $800 million more
than the cost of power available from other sources for federally required
purchases from independent power producers under CPUC-mandated pricing.
ENVIRONMENTAL PROTECTION
Costs to protect the environment continue to grow due to increasingly
stringent laws and regulations.
SCEcorp has identified 59 sites for which it is, or may be, responsible
for remediation under environmental laws. Earlier this year, Edison
developed an above-ground storage tank inspection program to determine
future use of its existing fuel-oil pipeline and station tanks. As a
result of this program, several above-ground storage tanks may require
surrounding soil remediation and were added to Edison's total number of
identified sites. SCEcorp is participating in investigations and cleanups
at a number of these identified sites and has recorded its minimum
liability at $74 million. This estimate may change as progress is made
in determining the magnitude of required remedial actions, as SCEcorp's
share of these costs in proportion to other responsible parties is
determined, and as additional investigations and cleanups are performed.
On May 4, 1994, the CPUC approved an incentive mechanism for rate recovery
of environmental-cleanup costs at 23 of Edison's identified sites (Edison
may request to include additional sites). This mechanism allows Edison
to recover 90% of cleanup costs through customer rates. Shareholders will
fund the remaining 10%, with the opportunity to recover these costs
through insurance. Environmental-cleanup costs not included in the
incentive mechanism are expected to be recovered through customer rates.
As a result, Edison's regulatory asset of $68 million reflects the
estimated future environmental-cleanup costs expected to be recovered in
customer rates.
The 1990 federal Clean Air Act requires power producers to have emissions
allowances to emit sulfur dioxide. Power companies receive emissions
allowances from the federal government and may bank or sell excess
allowances. Edison expects to have excess allowances under Phase II of
the Clean Air Act (2000 and later). The act also calls for a five-year
study of regional haze in the southwestern U.S. In addition, the U.S.
Environmental Protection Agency is conducting a study of the effect of air
contaminant emissions on visibility in Grand Canyon National Park. The
potential effect of these studies on sulfur dioxide emissions regulations
for the Mohave Coal Generating Station is unknown.
SCEcorp's projected capital expenditures to protect the environment are
$1.4 billion for the 1994-2001 period, mainly for placing overhead
distribution lines underground and reducing nitrogen-oxides emissions
<PAGE>
<PAGE>
from gas-fired electric generators. Edison's projected capital
expenditures (up to $290 million by 2001) to reduce nitrogen-oxides
emissions may be lowered by local regulations.
The possibility that exposure to electric and magnetic fields (EMF)
emanating from power lines, household appliances and other electric
sources may result in adverse health effects has received increased
attention. The scientific community has not yet reached a consensus on
the nature of any health effects of EMF. However, an administrative law
judge's proposed decision provides for a rate-recoverable research and
public education program conducted by California electric utilities, and
authorizes these utilities to take no-cost or low-cost steps to reduce EMF
in new electric facilities. Edison is unable to predict when or if the
scientific community will be able to reach a consensus on any health
effects of EMF, or the effect that such a consensus, if reached, could
have on future electric operations.
The probable effect on net income of these environmental matters cannot
be determined at this time, but SCEcorp believes they will not materially
affect its financial position.
NEW ACCOUNTING STANDARDS
In January 1994, SCEcorp adopted a new accounting standard which requires
the accrual of certain postemployment, but prior to retirement, benefits
provided to former or inactive employees. Edison has recorded balance
sheet adjustments of $10 million representing the additional liability for
these postemployment benefits, and expects to recover these costs in
rates. In January 1994, SCEcorp also adopted a new accounting standard
which requires certain debt and equity investments be reported at fair
value. Accordingly, nuclear decommissioning trusts and other equity
investments are now reported at market value. Adoption of these new
standards did not have a material effect on results of operations or
financial position.
OTHER CONTINGENCIES
The Internal Revenue Service (IRS) has completed its examination of tax
years 1983-1988. In connection with this examination, the IRS has
challenged certain tax positions, including how Edison deducts energy
conservation expenditures. The deduction of energy conservation
expenditures is consistent with positions taken by other members of the
industry. According to the IRS, certain demand-side management (DSM)
expenditures should not be treated as a current income tax deduction. The
IRS claims that DSM programs create a future benefit by delaying the cost
of building additional power plants. The utility industry believes that
energy conservation expenditures constitute ordinary and necessary
business expenses, which, under current provisions of the Internal Revenue
Code, are deductible in the year incurred or accrued. SCEcorp believes
the IRS' position is in conflict with existing tax laws and contrary to
the nation's energy and environmental policy goals. SCEcorp will continue
to vigorously defend its position.
In March 1993, a steam generator tube ruptured at Palo Verde Unit 2. A
subsequent investigation of the unit revealed cracking in additional steam
generator tubes. APS, operator of Palo Verde, reduced power at all three
units to 85% in late 1993 to mitigate further tube degradation until
investigations were completed. In April 1994, investigations revealed
some minor cracking at Unit 3. APS implemented several remedial actions,
and returned two units to full power in July 1994. APS expects Unit 2
(currently operated at 88% power) to be returned to full power by year-
end 1994, following additional inspections.
<PAGE>
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings
Antitrust Matters
Transphase Systems, Inc. filed a lawsuit on May 3, 1993, in the United
States District Court for the Central District of California against
Edison and San Diego Gas & Electric Company ("SDG&E"). The complaint
alleged that Transphase was competitively disadvantaged because it could
not directly access the demand-side management funds Edison collects from
its ratepayers to fund demand-side management activities, and that the
utilities willfully acquired and maintain monopoly power in the energy
conservation industry. The complaint sought $50 million in damages before
trebling. On October 7, 1993, the District Court dismissed the case and
denied the plaintiffs the opportunity to replead. Transphase appealed to
the Ninth Circuit Court of Appeals; the appeal was denied on May 6, 1994.
Transphase has requested a hearing en banc on the denial of the appeal.
This matter was previously reported in the Annual Report on Form 10-K for
the year ended December 31, 1993, under the heading "Antitrust Matters"
in Part I, Item 3 and in the Quarterly Report on Form 10-Q for the quarter
ending March 31, 1994, under the heading "Legal Proceedings" in Part II,
Item 1.
Qualified Facilities ("QF") Litigation
On May 20, 1993, four geothermal QFs filed a lawsuit against Edison in Los
Angeles County Superior Court, claiming that Edison has underpaid the
plaintiffs, and continues to underpay the plaintiffs, for energy. The
action was brought on behalf of Vulcan/BN Geothermal Power Company, Elmore
L.P., Del Ranch L.P., and Leathers L.P., each of which is partially owned
by a subsidiary of Mission Energy Company (a subsidiary of SCEcorp). The
plaintiffs allege that the underpayments totaled at least $10 million as
of the filing of the complaint. In subsequent court filings, plaintiffs
contend that contract payments due through the end of the contract term
could total approximately $50 million. They also seek unspecified
punitive damages. The matter is in the discovery stage. The materiality
of a judgment in favor of the plaintiffs would be largely dependent on the
extent to which additional payments resulting from such a judgment are
recoverable through Edison's Energy Cost Adjustment Clause ("ECAC").
Edison believes the claims are without merit and is vigorously defending
itself against the claims in the lawsuit.
Between January 1994 and July 1994, Edison was named as a defendant in a
series of seven lawsuits brought by independent power producers of wind
generation. Six of the lawsuits were filed in Los Angeles County Superior
Court and one was filed in Kern County Superior Court. The lawsuits
allege Edison incorrectly interpreted contracts with the plaintiffs by
limiting fixed energy payments to a single 10-year period rather than
beginning a new 10-year period of fixed energy payments for each stage of
development. In each of the lawsuits, the plaintiffs seek declaratory
relief regarding the proper interpretation of the contracts. Plaintiffs
allege a combined total of approximately $173 million in damages, which
includes consequential damages claimed in six of the seven lawsuits. The
lawsuits are in various stages of pleading and discovery. The materiality
of judgments in favor of the plaintiffs would be largely dependent on the
extent to which any damages or additional payments which might result from
such judgments would be recoverable through Edison's ECAC. Edison
believes the claims are without merit and is vigorously defending against
these claims.
<PAGE>
<PAGE>
Electric and Magnetic Fields ("EMF") Litigation
Edison has been served with two lawsuits, both of which allege, among
other things, that certain plaintiffs developed cancer and sustained other
injuries as a result of EMF emitted from Edison facilities. The first
lawsuit, filed in Orange County Superior Court and served on Edison in
June 1994, requests compensatory and punitive damages. Although no
specific damage amounts are alleged in the complaint, in subsequent court
filings, plaintiffs estimated general damages at $8 million. On August 8,
1994, one of the co-defendants filed a cross-complaint against the other
co-defendants, including Edison, requesting indemnification and declaratory
relief concerning the rights and responsibilities of the parties. The second
lawsuit was filed in Los Angeles County Superior Court and served on
Edison in July 1994. This complaint requests an unspecified amount of
compensatory damages. In subsequent court filings, however, plaintiffs
claimed approximately $3 million in damages. Edison believes that the
allegations in all of these actions are without merit and intends to
vigorously defend against these allegations.
The Orange County Superior Court case was previously reported in the
Quarterly Report on Form 10-Q for the quarter ending March 31, 1994, under
the heading "Environmental Litigation", in Part II, Item 1.
San Onofre Personal Injury Litigation
A former engineer for two contractors providing services for San Onofre
has been diagnosed with leukemia. On July 12, 1994, the engineer and his
wife sued Edison and SDG&E, as well as a manufacturer of fuel rods for the
plant, in the United States District Court for the Southern District of
California. The plaintiffs allege that the engineer's illness resulted
from contact with radioactive fuel particles released from failed fuel
rods. Plant records show that the engineer's exposure to radiation was
well below Nuclear Regulatory Commission safety levels. In the complaint,
plaintiffs seek unspecified compensatory and punitive damages. Edison
believes the allegations are without merit and intends to vigorously
contest the allegations.
Item 5. Other Information
Construction Program and Capital Expenditures
Construction expenditures for the 1994-1998 period are estimated (as of
July 14, 1994, the date of SCEcorp's latest approved budget) as follows:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 Total
---- ---- ---- ---- ---- -----
(In millions)
<S> <C> <C> <C> <C> <C> <C>
Electric generating plant $ 338 $ 336 $ 274 $ 274 $ 500 $1,722
Electric transmission lines and substations 174 116 156 167 213 826
Electric distribution lines and substations 449 495 522 552 547 2,565
Other expenditures 256 267 131 113 91 858
Non-utility expenditures 61 74 34 1 1 171
------ ------ ------ ------ ------ ------
Total 1,278 1,288 1,117 1,107 1,352 6,142
Less--Allowance for funds used during construction 30 44 43 43 43 203
------ ------ ------ ------ ------ ------
Funds required for construction expenditures $1,248 $1,244 $1,074 $1,064 $1,309 $5,939
====== ====== ====== ====== ====== ======
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K:
June 16, 1994
Item No. 5 -- Other Events -- SCEcorp Common Stock Dividend
Deduction
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCEcorp
(Registrant)
By R. K. BUSHEY
---------------------------------
R. K. BUSHEY
Vice President and Controller
By W. J. SCILACCI
---------------------------------
W. J. SCILACCI
Assistant Treasurer
August 10, 1994
