8-KOther Events

EDISON INTERNATIONAL 8-K Report (Jul 14, 2004)

Filed July 14, 2004For Securities:EIX

Summary

On July 8, 2004, Edison International's primary subsidiary, Southern California Edison Company, received a final decision from the California Public Utilities Commission (CPUC) regarding its 2003 general rate case. The decision authorized an annual increase in base rates of approximately $73 million, which is significantly lower than the $250 million requested by the company. The authorized increase is retroactive to May 22, 2003, with the accumulated balance to be recovered over the next 12 months. Despite the lower-than-requested amount, the decision supports Southern California Edison's multi-billion dollar infrastructure investment program through 2005, crucial for maintaining electric grid reliability. However, the CPUC rejected a requested increase in depreciation to cover disposal costs of retired equipment, shifting $114 million annually to future years, and also disallowed $28 million in supplemental costs identified by the company.

Key Highlights

  • 1CPU Decision on 2003 General Rate Case issued July 8, 2004.
  • 2Authorized annual base rate increase of approximately $73 million, substantially below the $250 million requested.
  • 3Decision is retroactive to May 22, 2003, with recovery of the authorized increase over the next 12 months.
  • 4Approves continuation of multi-billion dollar infrastructure investment program through 2005 to ensure grid reliability.
  • 5Rejects requested increase in depreciation for retired equipment, shifting $114 million annually to future recovery.
  • 6Does not recognize $28 million in supplemental costs identified by Southern California Edison for transmission and distribution operations.
  • 7Southern California Edison plans to file for its 2006 general rate case, aiming to renew requests for appropriate operating and depreciation expenses.

Frequently Asked Questions

The California Public Utilities Commission authorized an annual increase of approximately $73 million in base rates, which was significantly less than the $250 million requested by Southern California Edison. The decision also approved the continuation of its infrastructure investment program but rejected certain cost recovery requests.

Southern California Edison estimates that the consolidated rate decision, including this general rate case outcome, will result in a decrease of 0.34% in average rates for bundled service customers due to rate stabilization efforts.

The company will recover a smaller-than-expected increase in base rates, with a significant portion of requested depreciation expense for retired equipment ($114 million annually) and identified supplemental costs ($28 million) not recognized in this decision. This will necessitate aligning costs with authorized revenues and potentially renewing these requests in future filings.

Southern California Edison is planning to submit a notice of intent for its 2006 general rate case this summer and file a formal application in the fall. This upcoming application will aim to re-establish appropriate levels for operating and depreciation expenses.