CCC   PPPPP   U    U    CCC       N    N  EEEEE  W  W  W   SSS
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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
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  CCC   P        UUUU     CCC       N    N  EEEEE  W     W   SSS

CONTACT: Kyle DeVine            November 26, 1996   CPUC - 558
         213-897-4225                             (A.96-05-022)

       CPUC SETS 1997 RATES OF RETURN FOR ENERGY UTILITIES

    The California Public Utilities Commission (CPUC) approved an
all-party settlement which keeps the return on common equity for
1997 at 1996 levels and lowers the return on rate base for three
of the four energy utilities in the state.  The changes result in
decreases or no changes in authorized revenues.
    The return on common equity remains at 11.60 percent for
Pacific Gas and Electric (PG&E), San Diego Gas and Electric
Company (SDG&E), Southern California Edison Company (Edison), and
Southern California Gas Company (SoCal Gas).  The following table
shows the return on common equity, 1997 and 1996 returns on rate
base and revenue changes:

Utility   Return on   Return on Rate base  Estimated Revenue
          Equity         1997    1996      Change (in millions)
ΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡΡ
PG&E      11.60%         9.45%   9.49%     Electric $5.3 decrease
                                           Gas      $1.6 decrease

Edison    11.60          9.49    9.55               $5.4 decrease

SoCalGas  11.60          9.49    9.42                   no change

SDG&E     11.60          9.35    9.37                   no change

     The Commission adopts a rate of return on common equity
which caps the return which common stockholders can receive on
their investment in the absence of any additional earnings from
Commission approved incentive programs.  The adopted rate of
return on common equity, which when used with setting rates,
provides utilities an opportunity to earn a fair rate of return.
     The return on rate base caps how much the utility can earn
on its total rate base which includes the interest costs for long
term debt and the return on preferred stock as well as the return
  on common equity.  Generally a lower return on rate base by
                             -more-

itself will lower customer rates. This will apply for gas rates.
However, there is a rate freeze mandated by the California
Legislature in AB1890 for electric rates; the Commission will
determine the rate impact with implementation of the cost
recovery plans filed by the utilties and now under consideration
by the Commission.
     PG&E pipeline expansion returns are separated from other
PG&E returns and the pipeline return on common equity is
decreased from 12.10 percent to 11.60 percent.  Its long term
debt decreases from 67 percent to 64 percent.
     The traditional PG&E utility operations' capital structure
will see a 30 basis point increase in preferred stock and
corresponding decrease in long term debt.
     SoCalGas equity will increase 60 basis points; long term
debt increases 270 basis points.  Its preferred stock will
decrease 330 basis points, due largely to a redemption of
preferred shares.
     Edison and SDG&E capital structures remain unchanged.
     The four energy utilities and other parties, including the
CPUC Office of Ratepayer Advocates (ORA), submitted a joint
agreement to the Commission.  The Commission adopted the proposal
because it is in the public interest and meets CPUC settlement
policies.

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