Edison’s Credit Rating Lowered From AA to A+ : Regulation: The change comes in the wake of the PUC’s decision to reduce allowable return on equity for six major utilities.

For the first time in more than 40 years, Southern California Edison Co.’s credit rating has dropped below AA.

On Tuesday, Fitch Investors Service and Duff & Phelps Credit Rating Co. dropped by two levels--from AA to A+--their ratings for about $4.6 billion of Southern California Edison Co. mortgage bonds and preferred stock. Ratings committees at Moody’s Investor Service and Standard & Poor’s met Tuesday afternoon to consider Edison’s situation. Standard & Poor’s is expected to take some action today.

The ratings cut came in response to a decision Monday by the California Public Utilities Commission to lower 1993 rates of return on equity for the six largest California utilities. The PUC action essentially reduces how much the utilities can earn next year and will result in consumer rate decreases--at least in the short term.

While the San Francisco-based consumer group TURN, or Toward Utility Rate Normalization, did not believe that the PUC decision went far enough, the utilities and the financial community were disappointed and, in some cases, surprised by the decision.

“As a ratepayer I’d be a little bit angry,” said Edward J. Tirello Jr., an analyst with Smith Barney, Harris Upham Inc. “The PUC has caused Edison to have a lower rating and that will increase the cost to the consumer. That did not have to be. . . . It’s foolish.”

Return on equity is one factor in determining consumer rates, which will be set in December for 1993. The short-term effect could be rate decreases next year totaling as much as $108 million in Edison’s service territory, $15 million to $20 million for Southern California Gas Co., $32 million for San Diego Gas & Electric Co. and about $100 million for Pacific Gas & Electric Co.

The L.A. Department of Water & Power was not affected by the PUC decision.

But the utilities expressed concern about the longer-term effect on ratepayers, as well as on the utilities’ attractiveness to investors.

“The new competitive climate in the gas industry,” a SoCal Gas spokesman said Tuesday, “demands some recognition that investors should be compensated for a more risky business situation.”

For Edison, the financial risk is more immediate. Other California utilities are already rated below AA. The lower ratings for Edison mean that the utility will have to pay higher interest rates to acquire capital.

“And these costs will be passed through” to ratepayers, said Al Fohrer, Edison vice president and chief financial officer.

Fohrer also sees at least two big effects on investors. One is a defection to utilities in other states. He also predicted a possible drop in dividends, which could push stock value down.

On the New York Stock Exchange on Tuesday, Edison stock lost 62.5 cents to $43.375; San Diego Gas shares dropped 87.5 cents to $23.375; PG&E; shares eased 37.5 cents to $31.75.