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BEFORE THE
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of )
SOUTHERN CALIFORNIA EDISON COMPANY )
(U 338-E) for (i) authority to include )
Palo Verde Nuclear Generating Station )
Unit No. 2 as a Specified Major Addition)
under the Major Additions Adjustment )
Clause, (ii) authority to revise rate )
levels established thereunder to )
recover the costs of owning. operating, )
and maintaining Palo Verde Nuclear )
Generating Station Unit No.2, and )
(iii) related substantive and )
procedural relief. )
)
Application No. 86-02-034
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NOTICE OF FILING APPLICATION FOR RATE INCREASE
IMPORTANT INFORMATION
ABOUT CURRENT AND FUTURE ELECTRIC RATES
To keep you informed about the cost of your electric
service, the following information describes Application
No. 86-02-034, which Southern California Edison Company
("Edison") filed with the Cal Hornia Publ ic Util ities Commiss ion
on February 21, 1986.
BACKGROUND INFORMATION
Palo Verde Nuclear Generating Station ("Palo Verde") is
a three-unit nuclear power plant located approximately 50 miles
west of Phoenix, Arizona. The Arizona Public Service Company is
the operator of Palo Verde. and Edison owns a 15.8~ share of the
plant. Other owners include Arizona Public Service Company,
Public Service Company of New Mexico, and El Paso Electric
Company.
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Palo Verde Unit No. 1 was completed and began commercial
operation on February I, 1986. Edison filed Application
No. 85-05-144 with the Commission on May 31, 1985 to request
authorization to change the Company's rates to recover Edison's
share of the costs of owning, operating, and maintaining Palo
Verde Unit No. 1 when the unit achieved commercial operation.
Proceedings concerning that Application are currently pending
before the Commission.
Palo Verde Unit No. 2 is nearing completion, and Edison
will soon begin receiving electricity from Unit 2. During the
construction of the plant, Edison's customers have not paid any
of the costs of Palo Verde. Under California law, the costs of
bUilding a new plant are not included in customers' rates until
the plant is completed and producing electricity.
EDISON'S APPLICATION TO THE PUBLIC UTILITIES COMMISSION
Edison's Application requests authorization to make
changes to Edison's rates to recover its share of the costs of
owning, operating, and maintaining Palo Verde Unit No. 2 when it
begins commercial operation. It is expected that Palo Verde
Unit No.2 will begin commercial operation in September 1986.
Edison's Application includes a range of data to provide for any
commercial operating date through January 1. 1987 and requests
that the Commission authorize rate levels that correspond to the
actual date Palo Verde Unit No. 2 begins commercial operation.
As a part of Edison's Application, it is anticipated that the
Commission will also review the reasonableness of the investment
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in the Palo Verde project in conjunction with the utility
regulatory commissions of Arizona. New Mexico. and Texas.
IMPACT OF EDISON'S REQUEST ON CUSTOMERS' RATES
The following table lists revenue changes and the
percentage change in total rate levels requested in this
Application. assuming a Palo Verde Unit No. 2 commercial
operating date of January 1. 1987:
Revenue Impact of the Proposed Chan~es
In Rate Levels For Palo Verde Unit No.2
(Commercial Operatin~ Date -- January 1. 1987)
Estimated
Proposed Revenue
Revenue Decrease
Increase Above Resulting From Net Revenue
Present Level Energy Savings Increase
( In Millions) (In Millions) (In Millions)
Customer Group ill ill ill ill ill ill
Domestic (Residential) 36.6 2.5 (10.6) (0.7) 26.0 1.8
Lighting - Sm & Med Pwr 39.0 . 2.2 ( 7.5) (0.4) 31. 5 1.8
Large Power 40.2 2.5 (11. 8) (0.7) 28.4 1.8
Agricultural & Pumping 3.7 2.4 ( 1. 0) (0.7) 2.7 1.8
Street & Area Lighting 0.9 1.3 ( 0.3) (0.4) 0.6 0.9
TOTAL 5 Customer Groups $120.4 2.4" ($31. 2) (0.6") $89.2 1. 8'7.
Although Edison is requesting a net increase in rates.
the commercial operation of Palo Verde Unit No. 2 is expected to
result in a reduction in fuel- and energy-related rates of
approximately $31.2 million annually because the nuclear fuel
costs for Palo Verde Unit No. 2 are lower than costs for other
sources of energy. The estimated reduction in fuel- and
energy-related rates has been requested in another Edison
application and is shown in the table above.
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The requested rate increase will be smaller if Palo
Verde Unit No.2 begins commercial operation before January 1,
1987. Based on Edison's estimated commercial operating date for
Palo Verde Unit No.2 of September 1. 1986. the revenue increase
(not including energy savings) would be approximately
$116.7 million. and the net revenue increase (which includes
energy savings) would be approximately $81.5 million. or a 1.6~
rate increase.
The rates requested by Edison will increase the average
rate per kilowatthour by 20/l00ths of a cent (0.20t). However,
the rate levels proposed on certain rate schedules may cause
individual customers to receive smaller or larger increases.
depending on their use of electricity.
REVIEW OF EDISON'S APPLICATION
A copy of Edison's Application may be reviewed at either
of the Commission's offices or at the Edison offices listed below:
Offices of the California Public Utilities Commission
State Building
107 South Broadway
Los Angeles. CA 90012
State Building
350 McAllister Street
San Francisco. CA 94102
Offices of Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead. CA 91770
100 Long Beach Boulevard
Long Beach, CA 90802
1241 South Grand Avenue
Santa Ana. CA 92705
10060 Telegraph Road
Ventura. CA 93003
152 South Grand Avenue
Covina. CA 91723
1700 East Tahquitz-McCallum Way
Palm Springs, CA 92262
300 N. Pepper Avenue
Rialto. CA 92376
321 West Main Street
Visalia. CA 93261
Pebbly Beach Generating Station
Avalon. CA 90704
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A copy of Edison's Application will be sent upon written
request, directed to:
Mark A. Frazee, Attorney
Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770
Questions concerning Edison's Application, including
customer requests to receive notice of the date, time. and place
of any hearing on the Application, should be directed in writing
to the Public Advisor. California Public Utilities Commission,
350 McAllister Street. San Francisco, California 94102.
SOUTHERN CALIFORNIA EDISON COMPANY
By
Isl MICHAEL R. PEEVEY
Michael R. Peevey
Executive Vice President
Dated: February 25, 1986.
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