CCC   PPPPP   U    U    CCC       N    N  EEEEE  W  W  W   SSS
 C   C  P    p  U    U   C   C      NN   N  E      W  W  W  S   S
C       P    P  U    U  C           N N  N  E      W  W  W  S
C       PPPPP   U    U  C           N N  N  EEE    W W W W   SSS
C       P       U    U  C           N  N N  E      WW   WW      S
 C   C  P       U    U   C   C      N   NN  E      W     W  S   S
  CCC   P        UUUU     CCC       N    N  EEEEE  W     W   SSS


CONTACT: Kyle DeVine            September 20, 1996  CPUC - 536
         213-897-4225                             (A.93-12-029)

        CPUC APPROVES NEW RATE-SETTING PLAN FOR EDISON

    The California Public Utilities Commission (CPUC) today
approved a new way to set Southern California Edison's (Edison)
revenue requirement. It's called Performance-Based Ratemaking
(PBR) and will replace use of a general rate case to set
revenue requirement for transmission and distribution, or non-
generation, costs beginning January 1997.
    PBR will give Edison incentive to increase efficiency and
lower costs because the resulting savings will be shared by
Edison shareholders and customers.  To ensure costs are not
reduced at the expense of service or safety, PBR includes
service and safety standards Edison must meet.
    Edison's total revenue requirement is $7.3 billion and $4
billion of that covers operating expenses and return on rate
base.  Until now, non-generation costs were included in the
operating expenses.  Now, Edison must separate operating
expenses into generation and non-generation costs before PBR
can be used to set the non-generation revenue requirement.
    The Commission also adopted rules for distribution-only PBR
to be used when the transition is made from non-generation PBR
to distribution-only PBR.  That will occur when the Federal
Energy Regulatory Commission (FERC) and the CPUC require
utilities to separate non-generation investment and operating
revenue requirements into transmission or distribution costs.
For example, the FERC may declare that facilities that carry
voltages of 230kV may be classified as transmission facilities
and facilities carrying smaller voltages may be classified as
distribution.  Distribution-only PBR is expected to begin in
1998 and used until December 2001 when it may be replaced or
modified depending on experience or changes from electric
restructuring.
                             more


    PBR adjusts the revenue requirement based on inflation and
productivity. Edison requested a PBR that would include
customer growth based on forecasts, but the Commission declined
to include this factor because forecasting would require more
regulatory intervention.  The Commission goal in using PBR is
to minimize the need for regulatory intervention.

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