$269.1-Million Rate Cut by Edison Co. Suggested
The public staff of the California Public Utilities Commission recommended Monday that Southern California Edison Co. cut its rates by $269.1 million next year rather than raise them by $301.5 million, as the utility wants.
Edison officials dismissed the recommendation as “standard procedure” by the arm of the PUC that speaks for consumers. The utility said it is “confident” that the PUC will grant it a rate increase.
Edison asked the PUC last month for permission to raise its rates by about 5.7% in 1988. Public hearings on the request are to begin March 23, with a final decision by the five-member PUC expected late this year.
Edison’s proposal would increase the revenues it gets from customers to about $5.6 billion next year from a current $5.3 billion. The PUC staff recommendation would lower rates by about 5%.
The nearly $600-million discrepancy between Edison’s request and the public staff’s recommendation stems from disagreements on what rate of return Edison should receive, what it will cost Edison to borrow money and what its operating expenses will be.
About $200 million of the discrepancy stems from the PUC staff’s recommendation that Edison shareholders’ rate of return on common equity be reduced to 12% versus Edison’s request that it be raised to 14.75%. Its current authorized rate of return is 13.9%.
Edison also projects higher borrowing costs than appears likely in “today’s climate of lower inflation,” the PUC staff said.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
