CPUC Approves Edison's Near-10% Revenue Increase

In an approval eagerly awaited by Southern California Edison n an approval eagerly awaited by Southern California Edison management, the California Public Utilities Commission allowed the utility to increase its revenues from ratepayers by 9.75 percent, retroactive to January. Regulators also allowed the utility to augment its ratepayer income stream the next two years - by 3.82 percent in 2007, followed by another 4.95 percent in 2008. Edison's 2006 revenues are set at $3.75 billion. The commission places "great faith" in the utility's plans to "modernize a fraying infrastructure," said commissioner Geoffrey Brown. The investor-owned utilities' "new excuse" for getting more revenue "is the aging infrastructure," responded Marcel Hawiger, The Utility Reform Network attorney. "It's a whole new paradigm. Commissioners are giving utilities excessive rates of return and they've got cash to burn." Hawiger said that while there is some validity to the claims of infrastructure problems, they come from long-term neglect, not the lack of approved rates. Earlier in the week, Edison International chief executive officer John Bryson said that "The largest single part of the strategic plan is strengthening the power grid." He noted that regulatory plan is strengthening the power grid." He noted that regulatory approval for new revenues will double spending for distribution and transmission. The utility did not respond to a request for comment about the CPUC decision. The new decision doubled the amount of money offered in the original proposed decision for customer service incentives, including surveys. That increase amounts to $88 million. Edison's service incentive program was marred two years ago when it was revealed that the utility's employees falsified performance surveys (Circuit, July 2, 2004). Edison volunteered to repay $14.4 million of $48 million it earned. That behavior is still being studied at the CPUC. being studied at the CPUC. In total, the final rate decision was about $51 million higher than the original proposal by administrative law judge David Fukutome. In addition to increased funds for customer service incentives, there is a $2.5 million augmentation for San Onofre Nuclear Generating Station operation and maintenance, and a $3.5 million raise for transmission upgrades from the original proposed decision. While the decision adopts TURN's and the Division of Ratepayer Advocates' accounting methods in some areas, it rejected a proposal by San Diego Gas & Electric for a cost-control incentive mechanism for San Onofre. SDG&E owns 20 percent of that plant. It has criticized Edison's costs of running the facility. Until recently, SDG&E planned to extricate itself from nuclear ownership (Circuit, April 21, 2006). The order passed 4-0 with commissioner John Bohn absent.

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CPUC Approves Edison’s Near-10% Revenue Increase

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