SoCal Edison to Ask State to Lower Rates by This Summer

AP Business Writer

LOS ANGELES (AP) – Southern California Edison, the state’s second-largest utility, will ask for an average rate decrease of 13.4 percent to take effect later this year after the utility finishes paying its power-crisis debt, the company said Thursday.

The utility said it plans to file the plan with the California Public Utilities Commission on Friday. It said the decrease would probably take effect by this summer.

The application must still be reviewed and approved by the PUC.

It would mainly affect businesses and large residential customers, Edison said.

Edison was granted a rate increase last year as part of a settlement of its federal lawsuit against the PUC. The deal, which is being challenged in state court by a consumer group, was designed to help the utility repay $3.6 billion in debt it accumulated during the state’s power crisis of 2000.

The utility incurred the debt when wholesale power costs skyrocketed and Edison could not pass the higher costs along to ratepayers.

Most residential customers would not see lower rates if Edison’s plan is approved. The company said about two-thirds of its residential customers did not pay the crisis surcharge because they either were eligible for discounts or kept their consumption below certain benchmarks.

Edison said Thursday it will propose that rates for large business customers drop 26 percent. Rates for small and medium business customers would drop 19 percent.

Rates for residential customers who are big users would drop 8 percent.

“The higher electricity rates were borne by our business customers as well as those residential customers who have high consumption requirements,” SoCal Edison chief executive Alan Fohrer said in a statement. “Thus, we are asking the commission to reduce rates in the same pattern originally used to allocate those crisis rates among customer groups.”

Earlier this year, Edison asked the PUC for a 3 percent rate hike to take effect in 2004. The commission has yet to act on that request.

Edison estimated the rate decrease would reduce its annual revenue by $1.3 billion to $1.4 billion. The 3 percent rate hike, if approved, would boost revenues by $286 million annually.

Edison said that even with its rate decrease, rates would still be higher than they were before the power crisis because of higher costs from long-term power contracts made by the state.