PUC Sets 3% Hike in Edison Customer Rates

State regulators Thursday approved an estimated 3% increase in rates for Southern California Edison customers, a long-awaited decision that disappointed both consumer advocates and the state’s second-largest utility.

The Public Utilities Commission voted 4 to 1 on an increase that calls for the utility to collect $2.81 billion a year from ratepayers -- an increase of about $73 million, or 3%, over current revenue -- to cover higher expenses and costs to overhaul and expand the company’s electricity grid, PUC Commissioner Carl W. Wood said.

On average, ratepayers will see an increase of about 1% on their bills, because about two-thirds of the charges that they now pay are related to the state’s energy crisis and are not affected by the rate increase, Wood said.

Edison, a subsidiary of Rosemead-based Edison International, said the increase was retroactive to May 2003 and would begin showing up on customer bills in mid-August.

“It’s a bad-news, good-news outcome,” said Bob Finkelstein, executive director of the Utility Reform Network, a San Francisco consumer group that had pressed for a rate cut. “The bad news is that Edison’s rates are high enough as it is, and the last thing the commission needed to do is to give them more. It’s good news to the extent that the commission didn’t give Edison everything that it wanted.”

Edison, which serves a 50,000-square-mile region in coastal, Central and Southern California, submitted a rate request in May 2002 that sought an increase of $251 million a year. Proposals that were turned down Thursday included rate increases ranging from $53 million to $129 million.

Thursday’s PUC decision determines the size of Edison’s rate increase; a subsequent proceeding will set how the increase is divided among the company’s 4.6 million commercial and residential customers. Edison will alter customer bills to reflect any changes called for when the final allocation is settled, the company said.

Jim Scilacci, the utility’s chief financial officer, called the PUC’s move “a mixed decision,” adding that the new rates don’t cover certain depreciation costs that will ultimately “be shifted to future utility customers.”

Scilacci said Edison had not seen the final rate document or decided whether to appeal the action.

The PUC said it could revise the rate increase if its investigation into fraudulent customer satisfaction surveys conducted for Edison turns up evidence of additional wrongdoing. Positive survey results can help Edison qualify for cash incentives paid for through higher rates. Edison’s own investigation showed that survey results had been doctored to hide declining customer satisfaction scores.

Edison has offered to refund or forgo $14.4 million of the $48 million in survey-based bonuses it received or expected to receive for its performance from 1997 through 2003.