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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 21, 1995
Date of earliest event reported: December 20, 1995
SCEcorp
(Exact name of registrant as specified in its charter)
CALIFORNIA 1-9936 95-4137452
(State or other jurisdiction of(Commission (I.R.S. employer
incorporation or organization) file number) identification no.)
2244 Walnut Grove Avenue
(P.O. Box 800)
Rosemead, California 91770
(Address of principal executive offices, including zip code)
818-302-2222
(Registrant's telephone number, including area code)
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Item 5. Other Events
On December 20, 1995, the California Public Utilities
Commission (CPUC) issued its decision on the restructuring of
California's electric utility industry. The CPUC voted 3-2 in
favor of a plan to deregulate the power-generation part of the
industry starting in January 1998 through the creation of a
wholesale pool known as a power exchange. The CPUC and
Southern California Edison press releases describing the
decision are attached hereto as Exhibits 20.1 and 20.2,
respectively.
Also on December 20, 1995, the CPUC put off until
January 10, 1996 a decision on Southern California Edison
Company's general rate case, including recovery of Edison's
investment in the San Onofre Nuclear Generating Station.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibits
Exhibit
Number Description
- - - - ------- -----------
20.1 News Release -- CPUC Proposes New Electric
Industry Market Structure in California to
Proovide Competition and Consumer Choice
20.2 New Release -- Edison Reacts to CPUC's Decision
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
KENNETH S. STEWART
----------------------------------
KENNETH S. STEWART
ASSISTANT GENERAL COUNSEL
AND CORPORATE SECRETARY
December 21, 1995
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EXHIBIT 20.1
From: General Information
Subject: CPUC Proposed Restructure Decision
The following release was issued by the California Public Utilities
Commission this afternoon.
CPUC Proposes New Electric Industry Market Structure In California To
Provide Competition And Consumer Choice
The California Public Utilities Commission (CPUC) today proposed
transition to a competitive electric market beginning January 1, 1998,
with all consumers participating by 2003. Consumers seeking lower rates
will be able to choose among electricity generators including Pacific Gas
& Electric (PG&E), Southern California Edison (SCE) and San Diego Gas &
Electric (SDG&E) and their competitors, and the Commission will use
performance-based regulation to encourage efficient utility operation.
The Commission was divided about how restructuring should proceed,
with Commissioners Daniel Wm. Fessler, P. Gregory Conlon, and Henry M.
Duque adopting a majority policy decision and Commissioners Jessie J.
Knight, Jr. and Josiah L. Neeper proposing a minority view.
As competition in the electric services industry evolves, the
Commission will ensure it is fair, expand the current CPUC role of
providing protection and information for consumers so they can make
informed choices, and provide a forum to resolve customer complaints about
electric service. Attention will be given to ensuring that consumers,
particularly those with limited English-speaking ability or other
disadvantages, receive accurate, reliable and easily understood
information.
The Commission also will continue to assure safe, reliable, and
environmentally sensitive service, and that utilities have an opportunity
to earn a fair return on investment. Diversity of energy resources and
public purpose programs will continue.
Creating a California Consensus
Because restructuring of California's electric services industry has
widespread impact and the market structure requires the participation and
oversight of the Federal Energy Regulatory Commission (FERC), the CPUC
will work over the next 100 days to build a California Consensus involving
the Legislature, the Governor, public and municipal utilities, and
customers. This Consensus would then be placed before the FERC so that in
a spirit of "cooperative federalism" the CPUC and FERC could together
implement the new market structure by January 1, 1998.
During this time, the Commission also will lay out a "roadmap" of
steps to implement its restructuring policy.
Consumer Choice
By January 1, 1998, a representative number of customers from all
customer groups (residential, industrial, commercial, and agricultural)
will be able singly or in an aggregate to participate in the first phase
of direct access which will last for one year. Consumers will be able to
negotiate and contract directly with generation providers (direct access).
Their utility will continue to deliver power. Or they may seek a marketer
or broker to negotiate power purchase on their behalf. After the first
year, there will be no limit on participation in direct access service
except for technical constraints.
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Page 2
Consumers also may choose to continue to have their utility purchase
and deliver electricity to them just as it does now.
The Commission will regulate the rates, terms, and conditions of
utility services not subject to competition using performance- based
regulation (PBR) instead of cost-of-service regulation. Under PBR,
utilities will have greater flexibility in running their operations and
their shareholders will profit from efficiencies or pay for poor
performance. PBR should improve service quality and encourage innovation.
New Electric Industry Market Structure
An Independent System Operator (ISO) will enable competing power
producers to have equal opportunity to deliver their supplies. Utilities
must transfer operational control of their transmission facilities to the
ISO.
The ISO will control and operate the state's transmission system,
schedule delivery of electric power supplies to ensure sufficient power to
meet demand, and make sure all standards for transmission service are
satisfied. It will also communicate any problems in delivering power
supply.
An independent Power Exchange (Exchange) will operate as a voluntary
wholesale power pool allowing power producers to compete on common grounds
using transparent rules for bidding into the Exchange. The Exchange
matches the bids with bids submitted by utilities, power marketers,
brokers or others on behalf of end-user customers, ranking the least-cost
bids according to yet-to-be-delivered protocols, and then submits its
delivery schedule to the ISO for integration with other schedules
submitted under different arrangements.
Purchasing from and selling to the Exchange is not voluntary for
California utilities under CPUC jurisdiction except for divested
generation plants. The utilities must bid all their generation output into
the Exchange, and purchase their energy from the Exchange. The Commission
anticipates that the state's municipal utilities, independent power
producers and out-of-state producers will see economic benefits of selling
into the Exchange and that municipal utilities, retail aggregators and
individual purchasers will see benefit in purchasing from the Exchange.
The ISO and Power Exchange would be separate, independent entities
under FERC jurisdiction.
Utilities will continue to have direct control and operation of
their distribution system, power production and procurement of generation
services for their customers. They would also continue to own, but not
operate, their transmission facilities.
The Commission concludes that market power problems will require
existing investor-owned utilities to divest themselves of a substantial
portion of their generating assets, and provides an incentive to encourage
voluntary utility divestiture of 50 percent of their fossil fuel
generating assets. Existing utility generation assets would undergo a
Commission-reviewed market valuation process within the first five years
of implementation of the new market structure.
Utilities will be obligated to provide distribution service to all
customers, and least cost-generation service to those customers who do not
choose or are not eligible for direct access.
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Page 3
Rates for customers taking both generation and distribution utility
service will be capped at levels established by CPUC- approved January 1,
1996 revenue requirements. However, a portion of the rate will be
recoverable through a non-bypassable charge called the competition
transition charge. All customers who take retail service as of the date of
this decision or who begin utility service after this decision will pay
this charge whether they choose to receive bundled utility service
(generation and distribution) or purchase electricity from a provider
other than the utility.
Public Purpose Program Funding
The Commission suggests the Legislature adopt a non- bypassable
"public goods charge" on retail sales to fund research, development, and
demonstration and energy efficiency programs. Funding should focus on
activities not provided by the competitive market that are in the broader
public interest. The Commission also will support legislation authorizing
a non- bypassable surcharge, separate from the public goods charge, to
fund low-income rate assistance and energy efficiency programs. Funding
would be based on need, and funding for low-income energy efficiency
services based on detailed analysis of the need for those services.
Environmental Impact Report
Because the Commission's policy may potentially impact the
environment, such as reducing opportunities for energy efficiency
incentives and shifting energy production, the Commission will prepare an
environmental impact report pursuant to the California Environmental
Quality Act. This report will analyze environmental impacts of the policy
adopted today, compare environmental effects of alternative policies, and,
if necessary, identify mitigation measures for any potentially significant
impacts.
Resource Diversity
To promote resource diversity, the Commission recommends a minimum
renewables purchase requirement with credits for meeting the requirement
tradeable and a penalty for noncompliance.
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EXHIBIT 20.2
Edison Reacts To CPUC's Electric Industry
Restructuring Decision
ROSEMEAD, CA -- Southern California Edison today reacted with
caution to the plan for restructuring the state's electric utility
industry announced yesterday by the California Public Utilities
Commission.
The CPUC has decided on a market structure for the electric utility
industry in the state that, in most respects, seeks to follow a compromise
proposal filed with the Commission last Sept. 11 by Edison and a coalition
of electricity customers and independent power producers, according to
John Bryson, Edison chairman and chief executive officer.
The compromise proposal -- or Memorandum of Understanding (MOU) --
addressed major stakeholder concerns and recommended a power pool-based
market with simultaneous initiation of direct access -- ensuring
competitive prices for all customers. It also recommended fair treatment
of utility shareholders.
"We have not yet had the opportunity to thoroughly study the
decision, and measure it against the MOU agreement," Bryson said.
"However, it appears that both the Commission decision and the dissenting
Commissioners' plan offer substantial support for the MOU principles.
This growing consensus is the best basis to move the restructuring process
forward.
"We will need to discuss the decision with our MOU partners before
putting together a detailed response and planning our next steps," Bryson
said. Edison will file its response with the CPUC within the 100-day
comment period established by the Commission.
- SCE -
