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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: January 11, 1996
Date of earliest event reported: January 10, 1996
SOUTHERN CALIFORNIA EDISON COMPANY
(Exact name of registrant as specified in its charter)
CALIFORNIA 1-2313 95-1240335
(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)
818-302-1212
(Registrant's telephone number, including area code)
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Item 5. Other Events
On January 10, 1996, the California Public Utilities
Commission (CPUC) issued its decision in Edison's 1995 General
Rate Case. Copies of press releases issued by the CPUC and by
Edison are attached hereto as exhibits 20.1 and 20.2,
respectively.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibits
Exhibit
Number Description
- ------- -----------
20.1 News Release -- CPUC Sets Edison Revenue
Requirement; Proposes Policy Guidelines For
SONGS Cost Recovery
20.2 Edison Reacts to CPUC's Decision Regarding Its
1995 General Rate Case
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.
SOUTHERN CALIFORNIA EDISON COMPANY
KENNETH S. STEWART
----------------------------------
KENNETH S. STEWART
ASSISTANT GENERAL COUNSEL
AND ASSISTANT SECRETARY
January 11, 1996
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EXHIBIT 20.1
News Release
California Public Utilities Commission
107 S. Broadway, Rm 5109,
Los Angeles, California 90012-4402
CONTACT: Kyle DeVine January 10, 1996 CPUC - 503
213-897-4225 (A.93-12-025)
CPUC SETS EDISON REVENUE REQUIREMENT;
PROPOSES POLICY GUIDELINES FOR SONGS COST RECOVERY
The California Public Utilities Commission (CPUC) today set the
Southern California Edison Company (Edison) base revenue requirement for
the General Rate Case (GRC) at $3.839 billion, bringing its total base
revenue requirement (total ALBRR) to $4.017 billion. Broadly speaking,
this total revenue requirement covers the fixed costs which Edison faces.
This decision determines allowed costs and subsequent proceedings will
flow those cost changes through to rates.
This $4.017 billion represents a decrease from $4.115 billion as of
January 1, 1995, primarily due to reductions in the cost of capital ($53.1
million), SONGS 1 ($11.7 million), nuclear refueling costs ($24.1 million)
and other costs reviewed in the GRC itself ($9.1 million).
Edison, San Diego Gas and Electric (SDG&E) and the Division of
Ratepayer Advocates (DRA) reached a Settlement on these issues, called
Phase 1 issues. The Commission also received substantial testimony on
these issues. Today's order does not accept this proposed Settlement on
Phase l, but develops its order from the testimony. Today's order reduces
operating revenue by $9.1 million from the proposed Settlement. However,
almost none of this reduction affects the direct labor cost for Edison
employees who work in maintenance and operation functions. The order does
align Edison's employee health care costs with the recent costs of other
California utilities.
Today's order also addresses the issues, called Phase 3 issues, of
cost recovery for the San Onofre Nuclear Generating stations, Units
Numbers 2 and 3 (SONGS 2&3). The order recognizes the joint proposal of
Edison and SDG&E for recovery of SONGS 2&3 costs over the period from 1996
through 2003. This joint proposal developed a basic trade-off between
accelerating the depreciation and lowering the allowed rate of return for
the equity financed portion of the SONGS investment. This proposal also
included a mechanism, called the ICIP (Incremental Cost Incentive
Pricing), designed to have SONGS operating costs not exceed the
alternative costs of power. Today's order proposes policy guidelines which
differ in three important respects.
First, for the equity financed portion of the SONGS investment, the
guidelines allow a rate equal to 90 percent of the utilities' embedded
cost of debt, which is consistent with the policy guideline in the
Commission's recent Electric Restructuring Decision (D.95-12-063). As in
the utilities' joint proposal, the order allows both utilities to recover
the entire undepreciated value of the plant from 1996 through 2003.
Second, the guidelines allow ratepayers and shareholders to share equally
in benefits from the operation of the units after 2003. Third, the order
requires the utilities to submit a reasonableness review showing if either
unit remains shut down for an extended period. Edison and SDG&E jointly
own the SONGS facility and these policy guidelines affect both utilities.
The order allows Edison and SDG&E 25 days to respond to these guidelines.
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CPUC SETS EDISON REVENUE REQUIREMENT-2-2-2
Additional Phase 1 Revenue Requirement Issues
The commission did not approve the full amount of the customer charge
increases, which Edison had requested. The Commission approved lower
customer charges because depressed economic conditions in Southern
California have increased unemployment and increases in service charges
would disapportionately impact low income customers. The commission has
approved the following:
o Service establishment charge for same day service will increase
$7.50 from the current $10 to $17.50. Edison had requested a $15
increase to $25. Next day service will increase $5 from the
current $5 to $10. Edison had requested a $10 increase to $15.
Because the next day charge is fairly low, there will be no
special low-income (LIRA) rate.
o Reconnection charge for next day service is increased $2.50 from
the current $10 to $12.50; Edison had requested a $5 increase to
$15. Same day service is increased $5 from the current $15 to
$20; Edison had requested a $10 increase to $25. After business
hours or on weekends, the rate will increase $5 from the current
$20 to $25; Edison has requested a $10 increase.
o Field collection charge will be renamed field assignment charge
and will include services provided at the home such as
collecting money and disconnecting service. It will increase $5
from $5 to $10. Edison requested a $10 increase to $15.
o The return check charge will increase $4 from the current $5 to
$9. Edison had requested it be increased to $10.
o The Commission will not allow a late payment charge to
residential customers because Edison does not credit payments
the day received.
Today's order sets Research, Development and Demonstration (RD&D)
funding at $29.7 million, $2.0 million more than the Settlement requested.
it is $26.5 million less than Edison originally requested because
increased competition in the electric industry will impact utilities
involvement with RD&D. Demand-side management (DSM) funding was set at
$69.3 million, $18.3 million more than the Settlement requested, for
energy conservation measures that encourage efficient use of electricity.
The Commission denied Edison's requested increases of $92.1 million
for 1996 and $96.8 million for 1997 for anticipated increased investment
costs, referred to as attrition increases. However, Edison may request the
increases again if extraordinary economic conditions arise before
performance-based ratemaking (PBR) is implemented for Edison. The
Commission is considering PBR to replace the current complex and costly
method of determining rates. PBR sets rates by using a formula that
reflects inflation, utility efficiency in producing and providing
electricity, and other utility costs.
In its review of the request, the Commission wanted to hear concerns
from the utility, other parties, consumers and Edison employees.
Therefore, the Commission held 2 months of evidentary hearings, public
participation hearings in 11 Southern California communities and a public
hearing that focused on Edison employee concerns. The Commission also held
a full panel hearing where all five commissioners listened to
presentations by Edison, unions, consumer groups and the public.
- ### -
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EXHIBIT 20.2
Edison Reacts to CPUC'S Decision
Regarding Its 1995 General Rate Case
ROSEMEAD, Calif., Jan. 10, 1995 -- Southern California Edison today
expressed disappointment with the California Public Utilities Commission's
(CPUC) decision regarding operating revenues in the company's 1995 General
Rate Case, but pledged to work diligently to provide customers with high-
quality electric service despite the decision.
The Commission's decision reduces Edison's operating revenues by
approximately $100 million, in inflation-adjusted dollars, from the amount
the Commission found reasonable and necessary in the company's last
General Rate Case. The decision falls substantially short of the General
Rate Case settlement the company negotiated with the Division of Ratepayer
Advocates (DRA) of the CPUC more than a year ago. The changes from the DRA
settlement with respect to operating revenues were in every respect
adverse to the company.
Edison said the impact of the decision would fall primarily on
workforce levels, but that the company would work diligently to avoid
measures that would impact service to customers.
Edison said it would consult with its partners in the Memorandum of
Understanding (MOU) to assess the portion of the GRC decision dealing with
its San Onofre Nuclear Generating Station (SONGS), which appears to be
consistent with the restructuring decision reached by the CPUC on Dec. 20.
Under the procedure adopted by the Commission, Edison will evaluate
the CPUC's GRC decision before deciding whether to accept the terms of the
decision or to seek further review by the Commission.
- SCE -
