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CONTACT: Kyle DeVine             September 4, 1996   CPUC - 539
         213-897-4225                             (A.89-03-026)

                      KRAMER-VICTOR PROJECT

    The California Public Utilities Commission (CPUC) today
approved a Southern California Edison Company (Edison) request to
charge its customers $5.8 million for its share of construction
costs for transmission facilities near Victorville.
    In 1990, the Commission approved a $50 million project to
construct a transmission line and upgrade the Victor and Kramer
substations.  The facilities would be used to transmit power
generated by Luz International Limited and CalEnergy.  Luz would
pay 44 percent of the construction costs, CalEnergy 21 percent,
and Edison ratepayers 34 percent.
    Shortly thereafter, Edison began the project but stopped in
July 1991 when it learned Luz had filed bankruptcy.  Up to that
point Edison had spent $17.1 million on the project.  Edison
indicated to the Commission that because Edison may use the
improvements in the future, it wanted to recover the full $17.1
million from its customers; not from Luz or CalEnergy.
    The Commission authorized Edison to charge customers Edison's
$5.8 million share of the costs because the utility began the
construction in good faith and kept costs to a minimum by swiftly
stopping construction when it learned Luz was bankrupt.
    The Commission agrees that CalEnergy should not be charged
for facilities it does not need, but costs should be charged to
Luz since its actions halted the construction.  Edison will
pursue reimbursement of the $11.4 million - Luz and CalEnergy's
share - through the bankruptcy courts.  If Edison is unsuccessful
in recovering any of this amount despite reasonable attempts, it
may ask the Commission for approval to collect the balance from
Edison ratepayers.                     -###-