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             December 20, 1996   CPUC - 569
         213-897-4225                             (A.96-02-056)

     CPUC PERMITS EDISON TO RECOVER PALO VERDE INVESTMENT

    The California Public Utilities Commission (CPUC) today
approved a settlement submitted by Southern California Edison
Company (Edison), the CPUC Office of Ratepayer Advocates, and
The Utility Reform Network (TURN) which allows Edison to
recover its remaining investment of $1.2 billion in the Palo
Verde Nuclear Generating Station.
    Recovery of the investment will be spread out from January
1997 through December 2001, which complies with state law
specifying that the costs shall be recovered by December 31,
2001.  During the recovery time, the return on the Palo Verde
sunk costs will be reduced from 9.55 percent to 7.35 percent
after-tax return on rate base.
    The amount to be recovered next year to amortize Palo Verde
sunk costs and recover operating expenses is estimated at $375
million; however, in compliance with state law, rates will not
be increased for the next five years.  The costs will be
recovered from rates which the Commission previously
authorized.
    Edison will recover its share of incremental operating
costs including its share of nuclear fuel costs, property
taxes, incremental capital, operations, maintenance,
administrative and general expenses, and related income taxes.
    If the total costs of incremental capital, operations,
maintenance, administrative and general expenses exceeds the
levels forecast by Edison by more than 25 percent, Edison must
demonstrate that the extra costs are reasonable before they can
be recovered.


                            -more-
    The Nuclear Unit Incentive Procedure will continue through
December 31, 2001, but only for calculating rewards for any
units performing above 80 percent capacity.
    If the site's gross capacity is less than 55 percent in a
calendar year, Edison must prove that the diminished operation
was reasonable or Edison's costs for the power purchased to
replace the lost power may be disallowed.
    After December 31, 2001, Edison may sell power generated by
Palo Verde to any customer at market prices.
    Net benefits obtained due to operation after December 31,
2001, will be split 50/50 between Edison and its customers.

Background

    Edison owns a 15.8 percent share of Palo Verde which began
operating in 1986.  It has three nuclear generating units and
is located near Phoenix, Arizona.  It is operated by Arizona
Public Service.


                             -###-