ML19305E883
| ML19305E883 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 02/21/1980 |
| From: | SOUTHERN CALIFORNIA EDISON CO. |
| To: | |
| Shared Package | |
| ML17296A708 | List: |
| References | |
| NUDOCS 8005200616 | |
| Download: ML19305E883 (35) | |
Text
._ _ _ _ _ _ _ - - . - - __ . _ _ _ _ _ . __ . - - - _
f 1979 Annual Report O l
To l Five-Year l
'i Compound Highlights 1979 1978 Change Growth l Earnings Per Share $ 456 $ 3 52 29 5 1o.2 Common Dividends Paid Per Share (a) $ :.54 $ 2.24 13 4 9.o l
- Return on Common Equity 13 6"c t o.5's 29 5 74 1
l l,
Operating Revenues (ooo) $2,563,974 $2,328,798 10.1 13 5 Operating Expenses (ooo) $2.178 978 $2,o04,297 87 14 5 Energy Costs (ooo) (b) $ 1,344,o:3 $1,24o,o29 84 19 9 i
l Construction Expenditures (ooo) $674,000 $ 568,000 28 7 :6.o I
i Employees 12,917 22,845 o.6 (o.2) i Customers Served 3,oS2,38 : 2,986,545 32 27 Kilowatt-hour Consumption (ooo) 59 517,561 57,o27,o35 44 31 1 (a) On September ao,1979, the Company's Board of Directors authorized an increase in the common stock quarterly dividend to so.68 from
] So 62 per share, effective with the October 31, 979 payment, which is equivalent to $a.72 per share on an annual basis.
(b) included in Operating Expenses.
Earnings and Dividends Paid Per Share Return on Common Equity 5 00 15.0 '
E Earn ngs Z3 Dividenes Paio I
4 00 ' ,
12.0 < >
3 00 " 9.0
i 2 00 o 6.0 < i a si.or 3n 51.47, $1.5g $1.36 St.M.
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- I T Q . M $ c d' i g , h f;fsf,1j S 0o -
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1970 1971 1972 1973 1974 1975 1976 19r7 1978 1979 1970 1971 1972 1973 1974 1975 1976 1977 1976 1979 Recent increases in the common stock dividend under. One of the key contributing factors to the improve-score the Company's commitment to provide ment in earnings and rate of return is the more adequate returns to its common stock shareholders. positive raremaking climate in which the Company operates.
1
, Poof E066/6
TO Our MOre Than 180,000 Shareholders ^ .
Your Company's 1979 operations show improved financial Edison has implemented more than yo energy conservation results, progress in developing new sources of energy, and a and load management programs in its service territory. Our continued commitment to conservation and load management. 1979 programs, coupled with the impact of the rising cost of in addition, the Company intensified its efforts to control electricity, resulted in an estimated reduction in energy costs and improve productivity and management effectiveness. consumption for the year of nearly three billion KWH, saving Edison's earnings per share in 1979 amounted to $4 56, up approximately $100 million in imported, high-cost fuel oil.
from the $ 3.52 recorded in 1978. The improved earnings In addition, the Company's projected peak demand is expected are attributable to increased operating revenues resulting from to be reduced by 7oo megawatts (htW) by 1985, a capacity the December 1978general rate increase, higher non-cash equivalent to an amount which could serve more than 45o,om allowances for funds used during construction and increased residential customers. Such a reduction would mean lower kilowatt-hour (KWil) consumption, due largely to a sub- capital expenditure requirements for new generating plants and stantial number of new customers. a correspondingly reduced need for external financing.
Despite the camings improvement, Edison began to face Because of soaring OPEC oil prices, however, it is projected serious cash flow problems late in the year because of rapidly that customers' electric bills could increase by Sos by the increasing prices paid for foreign oil which then had not been end of 198o. The Company has embarked upon a conservation reflected m the Energy Cost Adjustment Clause. In recognition communications program to inform customers of the of this,in January 198o, the California Public Utilities anticipated increase and to urge them to continue to use Commission (CPUC) issued decisions to modify the energy electricity as wisely and efficiently as possible.
clause procedure which should help alleviate future cash flow problems associated with any additional increases in foreign Nuclear Power oil prices. The CPUC also has an accelerated general rate case The accident at Three hfile Island (ThtI) in Afarch 1979has procedure which is producing decisions in a timely manner, impacted public attitudes about nuclear powerand significantly and recent CPUC decision: have recognized increasing costs of affected the future of nuclear energy as a resource option labor, operations and maintenance as well as allowing for for the United States.
more realistic rates of return. Although the San Onofre Nuclear Generating Station Unit Nevertheless, continued increases in operating costs and No. I has significant safety and design differences from the inflation caused the Company to file for a $3 4o million rate ThiI plant, Edison responded promptly to Nuclear Regulatory increase. This rate filing includes a requested rate of return on Commission (NRC) requests and recommendations involving rate base of to.7 8 "c, and a return on common equity of the lessons learned from the Thfl accident.
15.o"c, currently authorized at 9 6o% and 13 499, respec- The Company has begun to imp!ement a number of NRC-tively. The Company requested the new rates to become required modifications to Unit No.1. Reviews and evaluations effective January 2,19 8 1. of the operating procedures at San Onofre are being conducted on a continuing basis. In addition, during the course of con-Common Stock Dividend Increased struction of San Onofre Units Nos 2 and3, more than 4o On September :o,1979, the Board of Directors declared a improvements have been scheduled and will be made before 9 7"c increase in the common sto:k quarterly dividend by these units are placed into operation. Because of slowed raising the rate, on an annual basis, to $2 72 per share. At administrative procedures in processing licenses by the NRC year-end, the dividend was providing a yield on common staff following the Tht! accident, Edison has rescheduled stock market value of it.19. construction work tc complete San Onofre Unit No. : in April The Board's action represents the fourth dividend increase 1981 rather than November 19 8o as previously scheduled.
in the past three years and emphasizes Edison's efforts to Unit No. 3, previously scheduled for completion November provide returns to its common stock shareholders which should 1982, will be rescheduled to mid-1982, tend to support a market price of common stock at least equal During 1979, San Onofre Unit No. t cstablished a new to its book value. The Company has paid quarterly cash production record, generating more than 3 3 billion KWH of dividends on its common stock each year since 192o. electricity. The unit, which has an outstanding 12-year record of operation, achieved excellent results in 1979, operating Conservation at 3 79"o of its capacity, and replacing the need to burn more The current energy climate continues to underscore the need than five million barrels of expensive foreign oil, saving about for our customers to conserve electric energy, both to reduce $95 million in replacement fuel costs.
the use of low-sulfur, high-cost oil which the Company is In recognition of the increased attention being given to required to burn to meet air quality standards, and to defer the nuclear energy, the Company combined its nuclear functions need for increasingly expensive future plant facilities. under a new Nuclear Engineering and Operations Department.
This reorganization centralized all nuclear projects under one department and is designed to more effectively manage and
coordinate Edison's nuclear operations, including the construc- There is some confusion about the role of solar power.
tion supervision of San Onofre Units Nos 2 and3. Solar-supplemented water and space heating are tech-We are encouraged by the growing recognition of the nologically feasible now and are economicaHy attractive in necessity of nuclear energy to lessen our nation's reliance on certain applications, and Edison is encouraging installation foreign-controlled oil. President Carter recently said that of such systems.in its service territory. Central station solar nuclear energy must play "an important role in the United power plants to serve the overall electric needs of consumers, States to ensure our energy future." Also, Congress rejected however, remain in the developmental stage and are not efforts to impose a statutory moratorium on nuclear pimt expected to make significant contributions to our nation's licensing. Another exampleis a four-year National Academy of energy mix until at least the turn of the century.
Sciences study which concluded thit more nuclear power pimts are a necessity to meet our nation's electricity require- Emphasis on Productivity Intensifies ments for the nexe 3o years. To control costs, the Company intensified its productivity Nuclear power must remain a viable option if we are to improvement programs during the year, placing emphash on continue to meet our customers' electricity needs reliably and increasing the effective management of all resources, including c( c.tomically withou t increasing our dependence on potentially fuel, finances, labor, materials and the efficiency of system interruptible, uncor trollable-sive foreign oil. operations.
In 1979, SCE added nearly 96,oco new customers to its Future Growth Projections system, the largest yearly increase in customers since 196 3, Edison's long-range average annual peak demand and KWH and the second highest in the Company's history. During consumption forecasts are slightly below previous forecasts, the last six years, about 455,ooo new customers have been but remain in the 3'*e to 3H'.' growth range. Although added to the system, yet the Company has been able to serve these growth projections are higher than those forecast by the f them with 474 ewer employees than at year-end 1973, a California Energy Commission, which has authority for the clear measure of our emphasis on improving productivity.
siting of new power plants in the state, Edison is proceeding with generation resource plans to provide sufficient capacity Change in Board of Directors reserves to meet projected customer demand for reliable On August 26, Roy A. Anderson, chairman of the board and
- electric service through the 1980s. chief executive officer of Lockheed Corporation, was elected a l Even with conservation and the impact of higher prices for director of the Company.
- electricity, the Company is projecting a need for more than Mrs. Joan C. Hanley, speech pathologist, educator and 6,ooo additional MW of generating capacity to serve present businesswoman, was elected a director effective January 2, 4
customers and about 7w,ow new customers during the 198o, replacing Dr. Dorothy W. Nelson, who resigned after l
next decade. her nomina
- ion by President Carter to serve as judge of the The new capacity requirement is expected to be met mostly United States Court of Appeals for the Ninth Circuit.
by nuclear power plants now under construction, the development of coal projects, combustion turbines, increased A Decade of Challenges hydroelectric capacity, purchased power and cogeneration, The 1980s will be a decade of critical energy decisions for the supplemented by a relatively small amount of alternative world, our nation and our Company. The energy challenges energy including solar, wind and geothermal. which lie ahead are formidable and will require the continued Edison continues to emphasize the development of new diligence, ingenuity and hard work of all employees and the energy resources as alternatives to expensive, imported fuel support of shareholders. In this regard, Edison was named o 1. The Company's energy research and development expendi- recently by a major credit rating agency, Standard and Poor's ture last year totaled more than sa8 million, one of the highest Corporation, as one of five electric utilities which are well-among investor-owned electric utilities in the country. For positioned to meet the challenges of the 198os. The Company 198o, Edison plans an expenditure of nearly $4o million for pledges its best efforts to achieve practicable and cost-energy research. effective energy solutions that will contribute to a productive Currently, the Company has under construction a to-MW economy and the betterment of society.
central station solar plant, two small wind turbines with a combined output of 3% MW, and a 9-MW geothermal electric JZ 9 Q l u 4-o %
power plant. Edison also is involved in a 92-MW coal-gasification/ combined cycle project. These demonstration William R. Could Jack K. Horton projects, however, could account for only about t 25 M W of President Chairman of the Board the more than 6,ooo MW needed during the next to years.
February at,198o 1 3 l
l
l .
i r
Year in Review -
Electric Consumption and Customers increase Kilowatt-Hour Consumption Consumption of electricity by Edison's 31 million customers so ,
se s 3, ., 3, .o totaled 59 5 billion KWH in 1979, an increase of 4 4% as 34 ,
58 '
compared with 1978, primarily the result of adding 95,837 52 ' 5' '
.a e su new customers to the system. This was the largest yearly 5*
4s s I - -
increase of new customers since 1963, and the second highest in the Company's history. i lo Residential consumption was up 5 3"e', as compared with l the previous year, while industrial usage gained 4 2% and commercial usage rose 3 71 Consumption by other cu<tomer j
2 'o "
classification > increased 4 .t"c. The average annual growth 3 in KWH consumption over the last five years has been 31%. ) ,, ,
a Record Peak Set During Heat Wave Despite continuing conservation efforts by customers, a record 'o '
net peak demand ofIa,4 46 MW was set on September it during a prolonged heat wave and accompanying heavy use of ,u j air conditioning. The new net peak represents a 3 9% increase -
"# "" " ' ' " ' ' " "'5 " " "'8 ""
over the i1,997 MW peak recorded in September 1978 . The average annual growth in peak demand over the last five years, Kilawatt-hour consumption increased 4 ..(~e during including the 1979 peak, was 41%. the year primarily as a result o.f.zdding nearly 96,000 I
new customers. This was the largest yearly customer
- Edison Develops Capacity Shortage Plan increase since 1963 and the second largest in the An assessment of the state's generating capacity levels in Company's history.
l 1979 resulted in Edison and other major electric utilities in i
California developing a capacity shortage contingency plan to
. help avert a possible shortage of electric generation. How-l ever, because of the inaeased level of reserve sha-ing and the Average Annual Red - ' Bill availability of electrical resources from out-of-state utilities ars --
during periods of peak customer demands, implementation -unii.a simes ueras.
of the statewide plan was not required. ~8#*'"**"""""
l' soo , ,
Conservation Efforts Expand l SCE continued its development and expansion of conservation programs designed to encourage more efficient use of electric 225 i energy by all customer groups and to moderate the growth of system peak demand.
During 1979, these programs included the installation of l
more than 60,000 electric water heater insulation jackets and the distnbution of about 55,000 shower flow-control devices.
iso [_i I
i In July, Edison intensified its street lighting convershn program by expanding its five-year project to inclade concer- 7s!
l sion of ali Edison-owned streetlights to energyefficient high-pressure sodium vapor lamps. so Edison participated with two other electric utilities in the '87o is7: is72 1973 is74 is7s isrs is77 is7e is73 l state to develop a conservation!!oad management education The average annual bill for the Company's package ior students from elementary through secondary residential customers compares favarably to Ihe grades. In 198o, more than 15,o00 sets of conservation United States average.
l materials are expected to be distnbuted to schools in Edison's service territory alone.
4
In 1979, Edison's conservation display center recorded its Average Annual Use Per Residential Customer !
2co,oocth visitor. Conservation consultants at the center, io.oco
- va.i.a sw .. u.r...
located in a major shopping mall, have been providing infor.
marion about energy-saving techniques for the home since it opened in July 1978 Edison presented more than 9o Energy Nianagement Awards in 1979 to commercial and industrial customers which a coo made significant conservation and load management con- e tributions. The combined efforts of these customers are f _
expected to save approximately to million KWH annually and i i achieve a demand reduction of3 .x N!W. $
The Company also is working with more than 56 industrial uoo y firms to develop methods of capturing waste heat to produce or cogenerate electricity with in-plant generators to conserve energy resources.
In 1979, Edison signed five cogeneration contracts totaling 4o N!W, bringmg to 56 MW the amount of cogeneration now (coo under contract. The Company has identified about 450 MW nn un nr2 on un an on an an an of cogeneration potential and is vigorously pursuing this Since the oil embargo of 2973, the average annual resource. kilowatt-hour consumption by the Company's Other Edison conservation projects include experimental residential customers has increased moderately.
programs in appliance efficiency testing, agricultural energy saving tethniques, conservation workshops, residential lighting projects and energy audits for all customer groups.
Annual Fuel and Purchased Power Expenses Load Nianagement Activities increase t3o, ,
Load management, the process of reducing peak demand by shifting some electric use away from peak periods to improve t2so o system efficiency, continues to be an integral element in future resource plans.
In May, the California Energy Commission adopted stand- ,, ,
ards to establish several cost-effective load management ;
programs in such areas as residential appliance cycling, the j 3.no operation of swimming pool filter pumps and non-residential energy audits. Many of Edison's current programs comply j with the new rules, and additional projects are being accel- E ,, ~
u erated to further comply with the new standards on a timely l and cost-conscious basis.
The Company expanded its residential automatic powr- .250 >
shift programs, previously involving 12,oco customers, by '
i including an .dditional 2,200 volunteer residential customers " '
from throughout the Edison system. The programs are "" "" "'" "" "" "" "" "" "" ""
designed to test the effectiveness of automatically cycling off and on air conditioners and electric water heaters during Over the past decade, annual fuel and purchased hot days when electric demand on the Company's system is power expenses for the Company increased more than highest. Preliminary results from these tests are expected one billion dollars.
in 198o.
5
During 1979, experiments were conducted to evaluate at night when demand for electricity is less than durirg ehe conservation and load management alternatives involving day. The ice is used throughout the day to chill water for air time-of-use (TOU) rates for residential, commercial and conditioning systems in place of energy-consuming industrial users. TOU rates are designed to provide economic refrigeration compressors.
incentives to encourage customers to shift electric usage to Two experimental projects scheduled for implementation in non-peak periods on a voluntary basis. Alllarge non- 1980 involve the use of visual display devices installed in residential customers, 2,ooo-kilowatt (KW) demand or the homes of nearly 4o0 volunteer participants. These devices greater, on the Edison system are on TOU rates. are designed to display continuously changing information Through 1979, the Company completed the adjustment such as energy costs, monthly billing calculations and and/or installation of trippers on swimming pool time clocks projections of the next month's electricity bill.
for about 22,000 customers to shut off filter pumps during The Company is developing another new experimental load peak demand periods. Since this program began in 1977, more management concept called " Demand Subscription Service."
than 42,000 customers have participated. This program will provide economic incentives to certain Edison also is involved in residential and non-residential customers who will select a maximum demand limit. Should a eff-peak cooling systems for air conditioning using ice storage customer's demand exceed the pre-selected limit, electric systems. These systems displace energy usage by making ice service could be interrupted automatically by Edison if needed Planned Capacity Additions Percent Total Capacity Scheduled No. Complete (Megawatts-SCE Operating Under Construction Units (as of1a.33 79) Fuel Type Share Only) Date Big Creek 3 #3 1 87 Hydro 32 198o Geothermal-Brawley 60 Deo ranon 1 Geothermal p, c 2 8o Wind Dmonnration 2 8 Wind Proiests 298o San Onofre 2 & 3 2 76 Nuclear 2,706 1981,83 Solar One 2 Solar 1 82 3 Deonp tlal!on Palo Verde 1,2 & 3 3 30 Nuclear 298 3,84,86 579 Cholla 4' 2 65 Coal Purchase 347 1984 Planned Cogeneration -
Customer Generation 6o 1981 - 1989 California Geothermai 2 Geothermal 54 2982 Californa Department of Water Resou. . ep -
Hydro Exchange Sto" 1983 Mexico Geothermal * -
Geothermal Purchase 33o 1984 - 1986 Coal Gasification i Coal Dmonllal p ion 1984 Combustion Turbine 2o Oil Up to 1,29o :.985 -19 87 Allen-Warner Valley E .ergy System 6 Coal 1.o45 1985 - 1989 Balsam Meadow 1 Hydro 2oo 1986 Dinkey Creek' -
Hydro Purchase 12o 1986 California Coal 1,2 3 3 Coal 1988,89,go l 750
- Purchase or exchange power. No capital required by Edison.
" Replaces existing contract for 34o MW which termmates in 198 3 6
at a time of system peak load. Service could be readily restored Peak Demand Forecast Comparison once the customer's demand has been reduced to the pre- so ,
selected level, or when the system's peak has passed. Edison '
expects to test this service on 2. coo new residential customers see a72 l \,,
during 19 8o and 19 8 2. i
,e s l Progress continued on other load management programs,
/ see an\
including the promotion of solar energy for supplemental i 2a /
water and space heating. i 3 a'
/
Generation Resources Under Construction }",
[ j The Company projects a need for more than 6,000 $1W of ] l a. core.a s ,
i new generating capacity for the next decade to meet the electric j io '
- [ " " ' * " * "
l needs of its customers. This generation requirement is equal ! ce ie7 ss to about 45% of Edison's current Company-owned capacity. l see is72: s.rs 8
Last year, SCE spent approximately $674 million on its construction program and currently projects an expenditure of about $7 :S million for 1980. a The two So4 Edison-owned 1,too-htW units now under ises 7o 7s so es so es roco construction at the San onofre Nuclear Generating Station site Projections for both kilowatt-hour con:umption and are approximately 76% complete. The scheduled operating peak demand itare been reduced by nearly one-half dates are December 19 8 1 for Unit No. 2 and February 19 8f 3 or from the pre-od embargo growth rates projected in Unit No. 3. These dates reflect a delay in the units caused 1973, resulting in a reduced need for new electric by the slowed administrative procedures in processing licenses generating capacity.
by the NRC staff following the Tht! accident.
The delay will result in an increase in total project costs for Units Nos : and 3of $t4o million. More than three-quarters of this increase results from the cost of carrying the money Funds Required fcr Construction invested in the project for the longer period. '" "
Edison has a 15 8% interest (579 MW) in three 1,:22-N1W units being constructed at the Palo Verde Nuclear Generating $[7",,',","'
3 73 , , , "32 g Station near Phoenix, Arizona. Construction is approximately i.000 " so4 ion h no n 304 complete. The units are scheduled for firm operation 847 ER in the 1983-86 period. ,, m es2h,_
r.
M In July, Arizona Public Service Company, Palo Verde ; ns b t
project manager, canceled proposed Units 4 and 5 ,in which j u 3l o E_
Edison would have had a 3:.3% interest. 3 sa " s2s [N Construction of a 3 t-MW hydroelectric unit at Big Creek j % 1$}'* jl is approximately 8 7% complete. The scheduled firm operating i
,, u d'2 ggp date is March 1980. g yf 4 Generation Resources Planned eco o h #
In August, the California Energy Commission approved Edison's Notice of Intent for the siting of a 1,290-MW
..N@$Wg@i^-
OGYM combustion-turbine "peaker park" to be built in California's a74 a7s a7e an are an uso int as2 was as4 1.ucerne Valley. This facility, which can be put into operation or shut down rapidly, is scheduled for completion in the A comparison of the pre-oil embargo 1973 to-year mid-19 80s, subject to obtaining timely regulatory approvals. construction expenditure forecast with the Company's in December, Edison filed a Notice of Intent with the recorded expenditures and current forecast reflects California Energy Commission to build a three-unit,15co-MW substantially lower n,nstruction expenditures coal-fired generating station (the California Coal Project) at as a result of the reduction of growth rate projections.
one of five proposed sites in the Company's service territory. Construction expenditures for the fire-year period Edison would be a 50% owner and would serve as manager 2 #o-84 currently are projected at approximately and operator. $3 6 billion.
7
t Preliminary engineering is in pmgress for a new moo-MW In September, preliminary excavation for a to-MW solar hydroelectric unit, to be located near Big Creek between plant commenced on the nation's first electric generating Huntington and Shaver Lakes, with a new diversion tunnel station powered directly by solar energy and connected to a and dam at Balsam Meadow. operation of this facility is utility grid. In late 2979, contracts were awarded for scheduled for the mid-198os. approximately 2,8o0 heliostats (mirrors) and the construction The Company is participating in the planning for two of a visitor's information center.The solar facility, located at out-of-state coal. fired generating stations. The proposed SCE's Cool Water Generating 5 ation site in the Califomia Allen-Warner Valley Energy System consists of a 2,ooo-MW desert,is scheduled for completion in 19 2. 8 The project is plant to be built near Las Vegas, Nevada, and a Soo-MW a cooperative effort by Edison, which will serve as project plant to be located near St. George, Utah. one of the manager of the non-solar portion of the plant, the U.S.
participants, the Nevada Power Company, will be project Department of Energy, the Los Angeles Department of Water manager. Edison's initial share of the two-plant project, and Power, and the California Energy Commission.
scheduled for completion in the mid-to-late 19 80s, would be The Company's geothermal energy program expanded in
! approximately 1,o45 MW. 2979 with the start of construction of a 9-MW power plant at Edison is actively pursuing the acquisition of non-capital Brawley, one of three geothermal sites in the Imperial Valley generation resources to reduce the !arge amount of capital of California being developed by the Company. Scheduled I
required by the Company for its annual construction program, for operation in early 1980, this electric generating facility will l and to further reduce dependence on fuel oil. In some be the first utility-owned plant in the United States operating instances, Edison can purchase, with minimal or no expendi. on a hot water (in contrast to steam) resource.
ture of capital funds, portions of generating resources con- SCE's geothermal activities also include the development
- structed and owned by other utilities. In 1979, the Company of two other Imperial Valley power plants, a 9-MW unit near acquired the rights to purchase approximately 6 3 o MW of Salton Sea, and a 45-MW facility at Heber, both with generating capacity for the 298 3-200o period, and is presently operating dates in 1982.
pursuing similar power purchases in the western United in July, the Company and Texaco inc. signed an agreement States, Canada and Mexico.
to build a 92-MW coal-gasifier / combined cycle test facility at the Cool Water site designed to demonstrate the feasibility of Edison Pursues New Energy Resources producing and using a clean-burning gas from coal in actual
- Edison continued its efforts to lessen dependence on power plant operation. The test unit is scheduled for oil and natural gas through the development of alternative preliminary operation in 1983 energy resources.
l Operating Revenues and Kilowatt-Hour Consumption Class of Service Operating Revenues (ooo) Kilowatt-Hour Consumption (ooo)
I
%of % %of %
1979 total 1979 2978 change 1979 total 1979 1978 change Residential . . . . . . . . . . 29 8 $ 764,595 $ 7o4,658 85 27 2 26,192491 15,369,284 Agricultural . . . . . . . 53 2.8 47,246 4o,449 26.6 1.6 975,321 852417 14 6 Commercial . . . . . . . . . . . 25 9 6637,6 8 61o,735 87 24,454,329 23,937poo Industrial . . . .
24 3 37
...... 26 7 683 ,ot3 593,58 o 25 2 29 2 27,352,728 26,652,243 42 Public Authorities ....
87 222,223 202,573 97 79 4,7o1,252 4,66,895 2.o 5
Interdepartmental ..... -
39 jo 3o.o -
2,234 1,o15 11 7 R esale . . . . . . . . . . . . . . . 58 249,266 234,o38 22 4 74 4,426,206 4,27o,o27 6.1 Subtotal . . . . . . ...... 98 7 2,529,96o 2,286,o63 to.7 58,2ot,o4o 55,637,382 Resale-Special Contracts
- 97 6 44 o.8 2o,o38 4,225 o.9 558,385 233,2oti 139 5 Public Authorities-Special . . ........ o.1 3,228 4,265 (26 7) 25 858,436 2,256 ,548 (25 8)
Total Sales of Electric Energy . ... ...... 99 6 2,553,t 26 2,294,543 59,517,861 12 3 too.o 57,o27435 44 Other Electric Revenues . . o.4 to,84 8 34,255 (68 3) - - - -
Total . . . . . . . . . . . . zoo.o $2,56 3,974 $ 2,328,798 t o.1 too.o 59,527,861 57427,o35 44
' Indicates over soo%.
8
, , r I
r e
I l
l Edison is constructing two wind turbine generators approximately 70% of the Company's total 2979 operating (WTG) near its Devers Substation near Palm Springs. One is expenses. Fuel and pur:hased power costs for 198 o are ,
a horizontal axis unit expected to produce 3 MW of electricity expected to reach $2.2 billion, an increase of47% over in a 4o mph wind, making it the highest output WTG being 1979 costs.
tested in the nation. The second unit is a vertical axis design Fuel oil requirements for 1979 totaled4 8 million barrels, and will produce H MW of electricity in a 35 mph wind. nearly three million barrels more than the previous year. The Testing of both units will begin in 198o. Company expects fuel oil use to decline to approximately The Company is actively studying the feasibility of 42 million barrels in 19 o, 8 primarily because of a projected magnetohydrodynamics (MHD) systems to test the possibility increase in natural gas availability.
of converting power plants from oil to coal-burning. MHD i converts the thermal energy of a fuel such as coal directly to Federal Fuel Regulations l electricity without moving parts, and offers the possibility The Powerplant and Industrial Fuel Use Act of 1978 (PIFUA) of higher system efficiency. prohibits the use of natural gas as a primary energy source in Edison also is participating in a multi utility program to existing power plants after 199o. However, prior to 199o, develop fuel cell generating units. Fuel cells generate energy by natural gas may be used in proportions generally not greater
! converting the chemical energy in liquid and gaseous fuels, than the average use during 1974-1976, which, on a i including synthetic fuels, directly into electricity. systemwide basis for Edison,is about 24% of combined i oil and gas requirements. However, temporary exemptions Energy Costs Continue to Rise have been issued to use gas in excess of the presenbed limits.
Fuel costs continue to represent the Company's largest expense. PIFUA also prohibits use of natural gas or oilin any new Feel and purchased power costs amounted to $15 billion in power plant except as permitted by specific exemption.
1979, compared with $1.2 billion in 1978, representing Although regulations implementing PIFUA are not final, they Source of Income: 1979 Distribution of Income: 1979 r 2To Agricultural r 4% Earnings reinvested in the business F '
6% Other ,
5% Taxes a
i ". 6"e Resale F 6Te Maintenance
" s 85 Public authorities "
7% Depreciation s s 8% Interest 25% Commercial "
8% Dividends 12% Other operation expenses (principallylabor)
I "
25% Industrial
! , SoTe Ener6y costs 28" Residential 9
S
- are being challenged in the courts. Consequently, the full higher rates became effective, subject to refund, August 16, impact of PIFUA on Company operations cannot yet be 1979, and are designed to increase annual revenues by determined. approximately $5 5 million.
Edison has for many years been studying various synthetic In August 1979, Edison received decisions, subject to furtfier fuels, such as oil shale and fuel gas made from coal and other review, from the FERC on resale rate cases filed January 2, domestic sources. These studies have identified certain 1974, and October 31,1975. These rate case decisions will alternative fuels which may serve to reduce the use of oil, the produce annualincreases in resale revenues of approximately objective of PIFUA and the President's proposed oil displace- $12 million and $13 4 million, respectively.
ment program announced in July 1979 The President's program proposed that utilities reduce oil Costly Air Quality Rule consumption, saving one million barrels of oil a day on a The California Air Resources Control Board adopted a rule national basis by 199o. This is to be achieved by converting requiring a go"e reduction of oxides of nitrogen from power coal-capable oil-fired generation to coal buming and by use of plants by 2990. In its current form, this reguhtion could alternative fuels. Physical conversion to coal burning to meet cost the Company's ratepayers as much as $15 billion. Edison this requirement is not feasible on the Edison system, and is working with local and state agencies to achiev t reasonable equivalent use of alternate fuels may not be possible for a emissions reductions more compatible with state aad federal number of reasons, including permit precess constraints related objectives at a significantly lower cost to the Company.
i to synthetic fuel production, delivery and utilization.
The Company supports legislation which would expedite the SOHIO Project Canceled permit process for construction and operation of synthetic On May 25,1979, Standard Oil of Ohio (SOHIO) announced fuel production plants. its decision to cancel a project which would have included the corstruction and operation of air quality equipment at one of Edison Files for Rate Increase the Company's steam generation plants. Costs incurred by On December 26, Edison filed for a $34o million rate Edison for this project have been reimbursed by SOHIO in increase based on a 198 1 test year. This rate filing includes a accordance with the project agreement.
requested rate of return on rate base of 1o.78%, and a return on common equity of 25.o"c, currently authorized at 9 6o% and Afanagement Succession Plans Continue 13 49"c, respectively. Edison continues to plan for effective management at all levels through formal programs of executive and management Resale Rates development and replaceability. During the year, a number of On January 25,1979, the Company filed an application with changes occurred at the officer level.
the Federal Energy Regulatory Commission (FERC) for higher Jack B. Moore, vice president of advanced engineering, rates and an optional TOU rate for resale customers. These retired August 31, and on December 31, James H. Drake, vice Percentage of Afale, female and hiinority Asian American Total l Emplovces at Male remale Black American Indian Hispanic Minorities Year-E'nd "' "
7' ~ l Year-End Year End Year-End Year-End Year-End Year-End Year-End '
lo74 and 1979 1974 1979 1974 1979 1974 1979 1974 1979 1974 1979 1974 1979 1974 1979 NianagementN 94 2 89.6 59 20 4 2.8 25 35 4.8 o.4 o.5 39 56 96 23 3 Non-hfanagementW 80 5 77 1 19 5 22 9 6.4 7.'9 23 24 o.6 o.9 t o.5 15 2 28.8 26 4 Total Companym 84.6 81.2 25 4 28 9 5.o 6.2 2.o 32 o.6 o.8 85 22.x 26.2 22.2 tai Management employers include the "oficiale and Stanstr*s" and "Profensnonals" Afirmative Action Categories.
[21 Non-Management employees include the " Technicians." "ofice and C!erical." **Crs.'tsmen." " operators."
"laberrrs" and "$r*stce Workers" A*irmstrue Action Categories.
OJ Inc!uden allclasses of employers.
to
1 -
I, l
l l
I pre sident of engineenng and construction, and C. E. Wilcox, Area Installed Capacity and Area Peak Demand vi e president of personnel, both retired. Each of these officers ro. coo m pr avided 3o years of distinguished service to the Company.
Glenn J. Bjorklund, previously a customer service vice {
, president, was elected corporate vice president in charge of i. coo m l l system development, effective August 1. '
l r, p=ij,,y,- 1
^* 76 Th : Board of Directors elected three other officers, effective Onh2'N_y;au.a[a;u' l
January 1,19 8o: Robert Dietch, previously Southeastern is. coo o ca usw
.4 l
Division manager, was elected a vice president in charge of i
. eN l Edison's newly-created nuclear engineering and operations E, department; C. E. Hathaway, previously a customer service I ..ooo m vice president, was elected corporate vice president of personnel; and Dr. Lawrence T. Papay, previously a general superintendent, was elected vice president for advanced noo m enginrenng.
On September 20, Afrs. Honor AhT-r was elected corporate secre ary, eFective November 2, succeeding Joseph C. Bobek, om
, who retired after servmg the Company with merit for 33 years. ,,,, ,,7, ,,y , ,7, ,,7, On N! arch 2, Robert L Boynton was appointed a customer service vice president. In 1979, a September heat wave and heavy use of air conditioning pushed the demand for electricity to SCE Chairman Honored a record area peak demand of 12,662 megawatts, a in 1979, Edison Cl airman of the Board Jack K. Horton was 4.z", increase over the 1973peak. The net main sys-elected chairman or the Edison Electric Institute (EEI), the tem peak reached 12,464 megawatts on the same day.
, association of America's investo:-owned electr.. utility com-
) panies. N!r. Horton assumed leadership of the EEI at a i significant time for the industry. During his term, the con-l sohdation of the Institute and the National Association of Total Capitalization I Electric Companies was completed, and the resulting organiza- a>
l rion, the EEI, moved from New York City to Washington, '* "S #'"" D' *'
g D.C. In 1979, the institute also developed far-reaching a nuclear programs designed to respond to the TNil incident.
((*[*"'M"[**" '" I l I
' 4a.2%
Affirmative Action Program Continues 4m I 47.as
- Efforts to increase the representation of minorities and females j '
48 5 %
4 in the work force continued during 1979 through the 4 Company's Affirmative Action Program. 32 "
~
During 1979, minority representation increased from 20 7%
at the beginning of the year to m:.29 at year-end. Female l
14.rs-is.3[ ]
ts.as ;
2 m _ _, ;,, ,.
representation increased from 18.o'~c to 18 9"o during the ~tus A 8 same period.
l Dunng the five-year period year-end 1974 through year- ' '
end 1979, minority representation in the work force increased from :6.t"e to 22.:"c, and females have increased from 15 4"o , ,
to 18#c. ,,,, ,,7, ,,,, ,,7, ,,7, At year-end 1979, the Company's capital structure was 43.fc long-term debt 13.S"o preferred and preference stock, and33.o"e common equity.
Financial Review .
The Company experienced an improvement in its financial Stock Price Information position during the year principally as a result of the iso December 1978 general rate merease which became fully - see
^,,,,,,,,pDj
- ""*
- 7^*'"'
effective on January x,2979 10 ,,,a,"",,, , ,,",',,,,,"g,,,q, A more detailed review of the factors affecting Edison's operations is contained in the Commentary on the Summary no as om,y
,,,,, ,,,,,,,,, 3 c,.... y [f ios oiwo.no w-urens of Operations of this report on Page 29. Financial highlights for the year include the following:
"' \f % p n ,,
- Revenues surpassed the two and one-half billion dollar
/incru,. i \/
level during 1979, totaling $2 56 billion for the year, an increase of $235 million or 1o.1% over the prior year.
_I j /\
/A\ /
/
.]
\ A [""'k f.\
This increase is primarily attributable to: (t) the general , i }\ y/ f d T /y rate increase which became effective at the beginning of ,b\ V the year; (2) increased energy costs for generation and pur-chased power, and.(3) kilowatt-hour usage by new so V // V i
e.g Customers. sce s,s.so
- Earnings per share for 1979 were $4 56 per share, 7o om: N reflecting a 3o%. increase over the $3 52 per share recorded in 197 8. Earnings per share over the past five years have eo
"" " 75 "" " 77 "" ""
grown at an average annual race of 1o.2%.
- The Company's return on average common equity The Company's common stock price has increased increased from 10 54% for1978to 13 64% for1979 primarily as a result of an aggressive dividend policy
- Pre-tax interest coverage increased from 2.66 times in 2978 initially announced in 1976 to 3.oS times in 1979 Recognizing these improved results and Edison's continuing intent to provide more competitive returns to its common shareholders, the Board of Directors declared a 97% increase in the common stock quarterly dividend on accelerate the recovery of undercollections already incurred.
September 2o,1979, by raising the rate from 62 to 68 cents On January 29,19 80, the CPUC granted the Company's per share. On an annual basis, the increased dividend is request and authorized an ECAC increase to recover equivalent to $2 72 per share. $81 million during the period between February 3 to April 3 0, This action, combined with three other dividend increases 198o, instead of later in the year.
declared since early in 2977, has contributed to a growth In addition, the CPUC instituted a number of interim in the Company's dividend rate over the past five years changes which are 5 tended to improve the cash recovery of 9% annually. aspect of the ECAC procedure. First, the CPUC increased the frequency for filing ECAC adjustments from two to three Energy Cost Recovery times per year and adopted the use of more current energy Although earnings per share increased substantially in 1979, prices and balancing account amounts as well as estimates of cash flow was adversely affected during the year by rising energy mix, rather than the historical data previously used, energy costs for generation which, at the time, were not fully for determining energy cost billing factor adjustments.
reflected in the Company's rates through the Energy Cost Secondly, more flexibility has been provided for determining Adjustment Clause (ECAC). Under the ECAC procedure, the period during which undercollec+ed energy costs are energy costs above or below those used in establishing rates to be recovered.
are accumulated in a balancing account, and the accumulated In another decision, the CPUC revised the rate for accruing amount is reflected in succeeding rate adjustments. In 1979 interest on under or overcollected amounts in the balancing the CPUC authorized two energy cost adjustment increases account from a fixed rate of 7% to a floating rate which more totaling approximately $500 million annually. At year- nearly matches current short-term borrowing or investment end 1979, accumulated net undercollections and accrued rates. Currently that rate is approximately 23%
interest in the balancing account amounted to approximately
$3o4 million.
To improve cash flow, Edison petitioned the CPUC on December 21,1979, to modify an earlier ECAC decision to 12 l
Financing Pror; ram Continues Dividend Reinvestment and Stock Purchase Plan A return to double-digit inflation, the Federal Reserve 2o " pere.ni or tor : sner.noso.r. so " p rc.n of Toi.: sner..
i Board's tightening c,f monetary policy, and uncertain l domestic and world affairs all contributed to a dramatic rise in interest rates du.ing 1979. Despite the difficult capital market conditions created by these events, the Company was is " is "
.ble to raise $433 million in new capital at comparatively attractive rates through two private and two public securities issues. This capital, combined with an additional $47 million raised through the sale of common stock under Edison's 'O' 'O "
Dividend Reinvestment and Stock Purchase Plan, and Eraployee Stock Purchase Plan, was used to help finance the Company's continuing construction program. Details of 5" *"
these issues are provided in the accompanying table.
Prior to the rapid acceleration of interest rates in October.
Edison undertook several financings in the private and public markets which, in retrospect, were at relatively favorable ,u ,,
rates. In April and June, the Company privately placed
$53 million in preferred stock and $1o5 million in mortgage bonds, respectively. The Company then moved to the public Since the 5% discount feature was adde <l to the market in September and negotiated the sale of $75 million in Dividend Reinvestment and Stock Purchase Plan in preferred stock. early 1977, participation has increased signi cantly.
During the year, Edison again looked to foreign sources In 2979, more than 26,000 participating share-for new capital and entered into a 7H-year financing agree- holders purchased 2.2 million shares with nearly $28 ment, utilizing mortgage bonds, with a syndicate of million of dividends and optionalcash payments.
foreign banks. The agreement, signed on September 28, per-mits the Company to borrow up to $50 million at any time during the first year at a floating interest rate. At the end of the first year the full s'to million will be borrowed and the 1979 Financings intere:,t rate will convert from a floating rate to a fixed rate of 9H9 for the remaining 6% years.
Month issue and cost to comrany [t n$)
On October 6, the Federal Reserve Board implemented April Cumulative Preferred Stock, Series A strong measures to curb monetary expansion and slow the growth m inflation. As a result, interest r:tes began to rise Dividend Rate - S.7o% $ 53 dramatically. With a $200 million public offering of mort- June 25-year First & Refunding age Bonds gage bonds already on the calendar for competitive bidding g on October 11, Edison faced its first issue of deot at a -
Septem r C " Prefer d Stock coupon rate in excess of 20%. However, because of the D dnR prospect of continuing high long-term bond rates and pos-October 25-year First & Refunding sible disruptions in the short and long-term capital markets, the Company went forward with tb financing. 88 fouonbte m% zoo Reflecting the $48o million in total new capital raised in 1979, Edison's capital structure at year-end was 48 2% debt, Periodically Dividend Reinvestment and b se Plan and 13 8% preferred and preference stock, and 3 8.o" common E S ock equity.
Short-term cash requirements increased in 2979 as a result $48o of rising energy costs not being fully reflected in the Company's rates. Edison has been financing the temporary shortfall primarily through the issuance of commercial paper, j the lowest cost form of short-term financing available to the
- Company. Edison maintains tooG back-up lines of credit
! to support the issuance of commercial paper.
l l
Looking to 19 8o, the Company's capital expenditures are tion, are expected to average less than zo'~o annuahy during expected to amount to approximately $728 million for the this period which is within the Company's objective to construction of new facilities and $8 5 million to refund maintain a stable and financially manageable growth in maturing debt obligations. To help finance these capital plant additions needs, Edison currently expects to raise approximately $7oo million in new capital through the issuance of common Dividend Stock Plan Continues to Grow and preferred stock, and mortgage bonds. At the end of 1979, more than 16,ooo shareholders, or about The first issue of the new year, seven million shares of 12'5 of the holders of Edison's common stock, were common stock, was completed on February 23,198 o, at a participating in the Dividend Reinvestment and Stock market price of $a3125 per share, raising approximately Purchase Plan (DRP). This represented approximately 2x
$157 million in net proceeds. In addition, a public oifering of million shares, or 27 5c' of the Company's total common stock
$200 million of mortgage bonds is scheduled for April 2. outstanding on December 31,1979 Over the five-year period 198 o to 1984, construction During the year, participants purchased 1.2 million expenditures are projected to amount to approximately $3 6 shares with nearly $28 million of dividends and optional billion, an average of more than $7oo million per year. cash payments. Since the DRP was started in 1976 , nearly Construction expenditures, as a percent of total capitaliza- $53 million has been invested in new shares.
Southern California Edison Company Capital Stock-Dividend and Price Information Quarterly liigh and Low Sales Prices l$)
Div dends Calendar Quarter - 1978 Calendar Quarter - 1979 Class and Per i a 3 4 i a 3 4 Series of Stock Share (a) High Low Hish Low Hish Low Hiah Low High Low High Low High Low High Low Original Preferred .62 27M 25M 27 24H 27 % 25 27 % 24H 27M 25 M 27H 24M 29 25Js 27H 25M Cumulative Preferred:
4.os % .25 M 22M stM tzM toH x2H isH 22M tom tsH tom stH 2o% stH to tom 8H 4 24% .26M 13H ttM 23 % 1251 13M tM 12!1 tom 22M toH 12 toH 12 % to st% 8M 4 32 % .27 13H ttM 13M ttH 12 % stM 22 % toH 12 tom 13 toH 12 to tom 8M 4 73 % .29% 14M 13M 14M 12H 14 22H 13 M stH 13H stM 13 H 12 % 13 M stM 22M to 5.So% 36!1 18 16M 18 15 % tyM 15 M 17M 25 % 26 % 14H 16 % 14M 36H 14 % ISM 22 885% 553125 27H 24H 25M 23M 26M 23M 26 22M 24M 22M 24 22M 24M 22% 22 % 18M i 92o% 57M 27M 25H 27 24M 27M 24 % 27 23M 25 % 23 M 25M 22H 25 M 23M 23 M 19 j 5too Cumulative Preferred: l 7 325% (b) s.83% - - - - - - - - - - - - - - - -
7 58 % 1.89M 9o 86M 88M 8t% 9o 79!1 86 % 82 82 M 77 M 8M 4 78 % 35H 77 77H 63 7 8o% (b) 1 95 .
8 54% 2 362(c) - - - - - - - - - - - - - -
93 8M5 l 870% 2.17M to4 too to3 94M to3 93 tot 91 95 % 89 96 6 90 98 H 87M 87 72 )
8 7o4Alb i t.59M(d) - - - - - - - - - - - - - - - -
896% 2.24 to64 tooM 104 97H to6is 95M to4 94 % 98 % 94 too 91 99M 90 92 74 Preference:
5 20 % 32M 18M 17M 18 % 16 19 % 17H 19H 16M 19% 28M 19H 17H 19M 18 % 19 27 % ;
Convertible 7 373% tb) 46 o938 - - - - - - - - - - - - - - - - l Common .62 26 % 25 26M 22H 27 25 % 26H 23M 27H 25M 27M 24M 26H 25 % 26M 23 H l l
(a) Quarterly dividends were paid at the rates indicated in each quarter of 2979 except the fourth quarter dividend on Original Preferred Stock and j Common Stock. tchich was at the rate of So.68 per share.
(b) There are no prices as these issues are private placements and shares are not traded.
(c) Initial pro rata dividend paid December 31,1979. Subsequent quarterly dividends ta be paid at $2.135 per share or 38 34 annually.
(d) Initialpro rat.: dividend paid June 3o,2979. Subsequent quarterly dividends paid at $2.373 per share or $8 70 annually.
1 14
Report of Management r
The accompanying financial statements have been prepared with the exercise of independent judgment as Audit by Company personnel in conformity with generally Committee members. The Audit Committee meets period-accepted accounting principles appropriate in the circum- ically with management, the independent public accountants stances applied on a consistent basis. The integrity and and the internal auditors to make inquiries as to the objectivity of the data in these financial statements are the manner in which the responsibilities of each are being responsibility of management. In order to assure this discharged and reports thereon to the Board of Directors.
integrity and objectivity, the Company maintains a highly In addition, the Audit Committee recommends to the Board developed system cf internal controls. This system includes of Directors the annual appointment of the independent communication by written policies and procedures, public accountants with whom the Audit Committee reviews organization structures that provide for appropriate divi- the scope of the audit and non-audit assignments, the sion af responsibility, and the selection and training of accounting principles being applied by the Company in qualified personnel and is augmented by programs of financial reporting and the adequacy ofinternal accounting internal audits. controls and internal audit procedures.
An independent examination of these financial statements To further assure independence in performing and has been conducted by Arthur Andersen & Co., independent reporting the results of audits, representatives of the inde-public accountants, in accordance with generally accepted pendent public accountants and the Company's staff of auditing standards. The accompanying Report of the internal auditors have full and free access to meet with the
, Independent Public Accountants expresses an informed Audit Committee, without members of Company manage-opinion as to whether the financial statements, considered ment being present, to discuss any accounting, auditing, or in their entirety, present fairly the Company's financial financial reporting matter.
position, results of opn ations and changes in financial position, in conformity with generally accepted accounting principles applied on a consistent basis.
(42,'r_ Q uw g The Audit Committee of the Board of Directors is entirely H. Fred Christie Jack K. Horton composed of Directors who are free from any relationships Senior Vice President Chairman of the Board that, in the opinion of the Board of Directors, would interfere and Chief FinancialOgicer and Chief Executive Ogicer Report of Independent PubliC Accountants To the Shareholders and the Board of Directors, Southern California Edison Company:
We have examined the balance sheets and statements of In our opini- n, the financial statements referred to above capital stock and long-term debt of Southern California present fairly the financial position of the Company as of Edison Company (a California corporation, hereinafter December 31,1979 and 1978, and the results of its
- referred to as the " Company"), as of December 31,1979 and operations and the changes in its financial position for the 1978, and the related statements of income, earnings re- years then ended and further, in our opinion, the quarterly invested in the business, additional paid-in capital and financial data set forth in Note
- of " Notes to Financial changes in financial position for the years then ended. our Statements" summarize fairly the results of operations examinations were made in accordance with generally for each quarter within such years, all in conformity with accepted auditing standards and, accordingly, included such generally accepted accounting principles applied on a tests of the accounting records and such other auditing consistent basis.
procedures as we considered necessarv in the circumstances, and also included similar examinatio[u of the financial & yC statements for each quarter within each of the years.
Los Angeles, California ARTHtJR ANDERsEN Ar CO.
l February 8,198 o
! 15
Southern California Edison Company .
Statements Of Income ""d<d o"* 1 - -
1979 1978 Thousands of Dollars Operating Revenues: Sales (Notes I and3 ) . ... ... .. 52 553,1:6 $2,294,543 Other . . . . . . . .. . ... ... . . 10,84S 34,255 Total operating revenues (Note :) . . . . . . . . 2,5ei3 ,974 2,328,798 Operating Expenses: Fuel (Note 3) . .... ... .... .. 2,433,65S t,o86,o31 Purchased power .. . . .. . .. . 99,245 128,698 Provision for energy cost adjustments (Notes 2,3 and5 ) .. . . (188,88o) 35,28o Subtotal- energy costs . . ... . .
2 344.o:3 2,240,o29 Other operation expenses (Notes y,6 and7 ) . . 28 3,6:2 3:219 t Maintenance (Note 2) .. . .. .. .. 177,4o7 164,111 Provision for depreciation (Note 2) . ... 178,637 257,2o3 Taxes on income - current and deferred (Notes I and 5 ).... . . Ico,:9: 72,8o3 Property and other taxes . . 56,428 86,429 Total operating expenses . . .. .. .. 2.178,978 2,oo4,197 Operating Income (Note 2). . ... . ... ... . .. . . . 384,996 324,601 Other Income and Income Deductions: Allowance for equity funds used during construction (Note 2) . . . . . 92,o19 5 8,471 Other - net (Note 31 and5 ) . .. . . 47,739 31,319 Total other income and income deductions . .. 239,758 89,79o Total Income before Interest Charges. . . . .. . ... . ... .. .. . 524,754 414,391 Interest Charges: Interest on long-term debt . . .. . 179,626 154,3o1 Other interest and amortization (Note 1) . . 25,456 28,357 Total interest charges . . .. . 2o5,08: 182,658 Allowance for debt funds used during construction (Note 2) . (:6,547) (19,95o)
Net interest charges . . . . . .. 173,535 162,708 Net income (Note 2). ..... . .. . . . . .... . . 34 6,219 :51,683 Dividends on Cumulative Preferred and Preference Stock . . . .. .. .. 53,738 49,457 Earnings Available for Common and Original Preferred Stock. . . .. . . . .. $ 29:,481 $ 202,226 Weighted Average Shares of Common and Original Preferred Stock Outstanding i and Common Stock Equivalents (ooo). . . . . . .. . . .... . 64.202 37,477 Earnings Per Share (Notes 2 and 2): Primary . ....... . ... .
$4 56 $3.52 Fully diluted . . . .. . .... 5439 $3.38 )
Dividends Declared Per Common Share . . . . . . . . .. . . . .. . ........ 5:.6o $2 3o 1 1
16 The accompanying notes are an integral part of these statements.
l j
Southern California Edison Company Statements of Changes in Financial Position Y<ar rad <d o<"d<o t-1979 1973 Thousand, of Dollars Funds Provided By:
Operations - Net income (Note m) . . . . .. . .. .. .... S 34 6,229 $151,683 Non-fund items -
Depreciation (Note 2) ... . . . 178,637 157,:o3 Equity in earnings of unconsolidated subsidiaries (Note 2) . . . . . . .. (3,133) (6o8)
Allowance for debt and equity funds used during construction (Note 2) . (128,566) (78,422)
Investment tax credit deferred - net (Notes 1 and 5 ). .
45 533 31,568 Other - net . . .. ..... . .
9.:69 4788 Earnings distributed from unconsolidated subsidiaries . . . ... . ... .. .. . I. coo 1,000 Total from operations . .. .. .. 45 S,959 368,223 Long-term financing - Preferred stock . . . . . . . . .... . 127,500 -
- Preference stock . . . I13,828) (14,522)
' Common stock . . . . . . . . . 62,00: 2o3,34 6 Long. term debt . . .. . . . . . . 355,000 200,o00 Total from long-term financing . . . . . 53o,674 388,84:
Other sources - Constraction advances and other . .. . Iz.6:S 9,158 Decrease in working capital . .... . . . .. 3,928 13,o67 Total from other sources . ... . . 15,546 ::,325 Total funds provided ... .. . . .. $1,005,179 $779,38o Funds Applied To: Construction expenditures - net . . .. S 792,713 $646,252 Less - allowance for debt and equity funds
- used during construction (Note z) . . . . 118,566 7 8,4
- 1 Funds used for construction expenditures 674,147 567832 Advances to unconsolidated subsidiaries . . 57 69 3,63 o Dividends . . . . . . .. .. . .. ..... :22,400 182,738 Repayment of long-term debt . .. 33,736 35,500 Customer refunds - net . . . ... . .. 49,3:2 (36,918)
Other - net . .. . .. .. .. . 20,806 26 599 Total funds applied . . . . . .. . $t,005,279 $779,38o Working Capital Changes: Receivables and temporary cash investments . . 5 (79 4:9) $ 79,155 Fuel stock, materials and supplies (Notes 3 and4 ) . 13:.731 (21.< .12 8)
Deferred energy costs - net (Notes z,3 and5 ) . . 167,2o5 (24,286)
Notes and accounts payable . . . .
(27o.346) 68,8o3 Taxes, interest accrued and other . . . .. .. .. 4 6,o:1 (32.622)
- Increase (Decrease) in working capital . . . . . S (3,913) $(13,o67)
- These amounts include conversions of Preference Stock,5 2o4 Convertible Series, to Common Stock.
"Other th an current maturities of long-term debt.
The accompanying notes are an integral part of these statements.
,7
Southern California Edison Company ,
Balance Sheets oue+ n. .
1979 1978 ASSETS Thousands of Dollars i
Utility Plant: Utility plant, at original cost (Notes 2 and 3 ).... $5,5o2,984 $5,3o3,746 Less - Accumulated provision for deprecia tion (Note 2) . . . . . . . . . . . . . . . . . . . 2,676,14S 1,519,274 Net utility plant . .. .... .............. .. 3,826,S3 6 3,78 4,572
- Construction work in progress (Note 6) . .. . 2,o3S,958 2,493,573 Nuclear fuel, at amortized cost . . .... ... 15,728 13,572 Total utility plant . ...... .. . . ... . 5,901,522 5,291,717 I
Other Property and Investments: Real estate and other, at cost -less accumulated prevision for depreciation . . . . . . t 1,t t o 7,68 5
Subsidiary companies (Note r) . . . . . . . . . . . . . 93,725 85,818 Total other property and investments . .. .... 104.835 93,476 Current Assets: Cash (Note 4) . . . . . . . . . . ... . . 4,705 7,45S Temporary cash investments . . .. .. .. .
So,532 Receivables,less reserves of $8,496,ooo and
$5,6o8,000 for uncollectible r: counts at l
respective dates (Notes I and 8) . . . . . . . 222,72S. 212,625 Fuel stock, at cost (frst-in, frst.out) (Notesy and4) 284.8:7 163,o11 Materials and supplies, et average cost . . . .. 39,388 28,463 Deferred energy costs (Notes z, y and 5 )... .. 3o3,6:: 1o2,396 Prepayments and other (taxes, insurance, etc.) . . So,:66 42,o22 Total current assets . . .. . . . . 9:5,536 635,490 l
Deferred Charges: Unamortized debt expense (Note 2) , . .. . 26,589 24,7o9 Other deferred charges . .. .. . . 23,755 22,3o5 Total deferred charges . . . . .. . ..... ..... 45,344 37,oz4
$6,977,:37 $6,oS7,697.
18 The accompanying notes are an integral part of these balance sheets.
December p.
3979 1978 CAPITALIZATION AND LIABILITIES Thousands of Dollars Capitalization: Preferred Stock - subject to mandatory redemption requirements:
Cumulative Preferred Stock . . . . . . . . . . . S 262,50o $ 235,ooo Preference Stock . . . . . . . . . . . ... .. 62,oco 62,ooo Preferred Stock - other:
Original Preferred Stock . . . . . . . . .. 4,o m 4,ooo Cumulative Preferred Stock . . . . ... . 458,755 45 8,755 Preference Stock . . . . . . . . . . ... . 27,o67 4o,895 Common stock, including additional stated capital ... . .. .... . 577,259 547,266 Other Shareholders' Equity:
Additional paid-in capital . . ..... ... 601,578 569,673 Earnings reinvested in the business . . . . . .... 2,o54,296 931,217 Long-term debt (Notes 1,4 and 8) . . . . .. 2,746,207 2,477,474 Total capitalization . . ........... . .. 5,793,662 5,226,18o Current Liabilities: Accounts payable . . . .. . ... .. 288,897 154,495 Commercial paper payable (Note 4) . ......... 234,34o -
Notes payable to banks (Note 4) ... . . . . 19,84o 29,986 Current maturities of long-term debt . . . . . .... 84,544 33,737 Customer refunds - current . ....... .. .. 5 8,139 52,724 Taxes accrued (Note 5) . . . .. .. .... 73,311 92,550 Interest accrued . ...... .. .... .... .. 55,619 52,o69 ;
Customer deposits ... .... ... . .. 14,58 3 25,6o1 l 1
Dividends declared . . . ..... .. .. 8 8 4,31 43,205 Accumulated deferred income taxes -
net (Notes 1 and5 ) . . . . . .. 88,o76 53,928 Other . . . ... .. . . .... .. 19,947 23,612 Total current liabilities . . . .. .. ....... 88 57,6 8 54o,9o7 Commitments and Contingencies (Note 3) l Reserves and Deferred Credits: Customer advances and other deferred credits . . . . 51,598 4 6,125 Customer refunds . . . ......... . .. 5 8,454 107,774 !
! Accumulated deferredincome taxes and I investment tax credits (Notes z and5 ) . . .. 255,297 220,o96 l Reserves for pensions, insurance, etc. (Note 7) . . . 32 548 26,625 l
Total reserves and deferred credits . .. . .. 297,S97 290,6to S6,977,237 $6,057,697 The accompanying notes are an integralpart of these balance sheets. 19 l
~
Southern California Edison Company -
Statements of Earnings Reinvested in the Business v<ar t ded o<<<-6 r s=. -
1979 3978 Thousands of Dollars B lance at January 1 . . . . . . . S 932,217 $ 862,956 Add: Net income . . .. .. . .. . 34 6,229 251,683 Transfer of amortization reserve - Federal (a) . -
3,801 1,277,436 1,118,44o Deduct: Dividends declared on capital stock -
Original preferred . .. ... . ... I,219 1,o75 Cumulative preferred . .. . 47,574 42,532 Preference . . . . . 6,164 6,926 Common - $2.6o per share for 1979 and 52 3o per share for 1978 166,443 132,2o5 Capital stock expense . . 1,740 4,48 5 223,14o 187,223 Balance at December 31 (b). . .
$1,o34,2p $ 931,217 (a) Pursuant to a regulatory order, an operating reserve relating to certain federally-licensed hydroelectric projects was transferred to Earnings Reinvested in the Business and became an appropriation thereof.
t b) Includes undistributed earnings of unconsolidated subsidiaries of $3o,753,000 at December 31.1979 Statements of Additional Paid-in Capital v<ar E=d<d o<ce=6<r > 2.
1979 1978 Thousands of Dollars Balance at January 1 . . . . $369,673 $443,109 Premium received on sale of common stock . . 31,908 226,572 Payments made in lieu of issuing ;
fractional shares of common stock . .
(3) (8) i Balance at December 31 . . S601,578 $ 6 ,659 73 l
l l
I l
l l
4 30 The accompanying notes are an integral part of these statements.
. Southern California Edison Comp 1ny o,camy,,,,,,,7,
- Statements of Capital Stock aaewtun Demmser 32, Shares Price 1979 1978 Outstanding Per Share Thousands of Dollars Preferred Stock - Subject to Mandatory Redemption Requirements (a) (b):
$too Cumulative Preferred (d): 7 325% Series . .. .. .. 75o om $1to.m 5 75m $ 75m 600,000 t to.co (c.nm 6o,ooo 7 8c% Series . . ...
8 54% Series . . . .. . 750,o00 to8 54 : 5.om 8 7o% Series A . . .. 5254m 2to m ' 2. iN 5:e 2.m $13tooo Preference - 7 375% Series . . . ... . 2,4 So, coo 26.25 5 e 2.nm $ 62ooo Preferred Stock - Other (a) (b):
Original Preferred - 5%, prior, cumulative, participating, not redeemable . 48oooo S 4mn $ 4ooo Cumulative Preferred: 4o8% Series . ... ... . . 1,o00.000 $ 25 5o $ 25em $ 25.mo 4 24% Series . . .. 1,200,000 25 8o 30 con 30,000
, 4 32% Series . . .. 1,653,429 28 75 4t336 41 336
, 4 78% Series . . . . 1,296,769 25.So y 2 419 32,419 5 8o% Series . . . .. . 2,2o0,000 25 65 e t.m 554m 8.85% Series . . 2.o0o.000 26 50 mm 50,000 9 2o% Series . .. . . . 2,ooo. coo 27 25 Sm Soom
$100 Cumulative Preferred: 7 58% Series . . . .
- 7. o.om t oS.m ry e 75400 8 7o% Series . . .
Sm.om 11 t.m Scwm Soow 8 96% Series . . .
5004N 2 LN 50 mo 50.om
$4t3 7 $458,755 Preference (c) (d) - 5 2o% Convertible Series. . 2,o82,68o 25.oo $ 2 .067 $ 4o.89c
$too Preference Common Stock - including additional stated capital (a) (c) (d). . 64,S94 936 $57 .2 9 $547.166 (s) The Company's Articles of Incorporation redemption of a specified percentage of the of Common Stock reserved for the conversion authorize the issuance of: shares originally outstanding (2 5% in 1983 and of the Preference Stock,5 2o% Convertible Shares Par Value increasing to 5 5% by 2003) at $too per share Series, amounted to 796,o88 shares at the Class of Stock Authorized Per Share plus accumulated unpaid dividends. Commencing adjusted conversion price of $34 0o per share. In .
September 2,1984, and contmuing until all shares addition,2,o24,38o shares of Common Stock (ooo)
Onginal Preferred 8 $ SM are repurchased, the Company has a contractual were reserved for the conversion of3 %% Con.
4o obligation to offer to repurchase a minimum of vertible Debentures, Due 198o, at the adjusted Cumulative Preferred 24.oco 25 496,oco shares annually of its Preference Stock, conversion price of $37.m per share.
$tm Cumulative Preferred 6,ooo too 7 375% Series, at $25 per share plus accumulated unpaid dividends. Commencing June 3o,1985, (d) Transactions in the capital stock accounts Preference 2o,o00 25
$too Preference 2,o00 too and continuing until all shares are redeemed, the during 1978 and 1979 reflect the following:
8M $10o Cumulative Preferred Stock,8 7o% Series On October 25,1978,6eoo ooo shares of Com-Common 90.o0o A, has a cumulative sinking fund provision mon Stock were issued at an initial public (b) Cumulative Preferred and Preference Stock requiring the annual redemption of a specified offering price of $25 375 per share and5 25400 Redemptien Provisions - All series of $too percentage of shares originally cutstanding shares of Stoo Cumulative Preferred Stock.
Cumulative Preferred Stock. Cumulative Pre. (25 % in 19 85 and increasing to 9 5% by 2om) 8.yo%, Series A, and 750.000 shares of $too ferred Sexk and Preference Stock are redeemable at $too per share plus accumulated unpaid divi- Cumulative Preferred Stock,8 54% Series, at the option of the Company. The various dends. Commencing June 3o,1986, and contin- were issued during 1979. Additional shares of senes of $too Cumulative Preferred Stock, the uing until all shares are redeemed, the $too Common Stock were issued as follows:
Cumulative Preferred Stock,8.85% Series and Cumulative Preferred Stock,8 54% Series, has a
, Shares Issued 9 20% Series, and the Preference Stock,7 375% mandatory sinking fund provision requinng Series, are subject to certain restrictions on the annual redemption of 22 5o0 shares at $too 1979 1978 redemption for refunding purposes. The $too per share plus accumulated ur paid dividends. Dividend Reinvestment and Cumulative Preferred Stock,7 325% Series, has a For each of the five years subsequent to 1979, the Stock Purchase Plan - 2.265,o73 637,ot4 cumulative sinking fund provision requiring aggregate mandatory :'edemption requirements Employee Stock Purchase the redemption of 3o,000 shares annually at w 11 be: none for 19 9 o through 19 8 2, $4,5ooom Plan 756,427 631 522
$100 per share plus accumulated unpaid divi. for 1983, and $t6,9oo,ooo for 198 4 Employee Stock dends, commencing July 31,1983, and continu- Ownership Plan 30,282 203 879 ing until all shares are redeemed. Commencing (c) Under a prescnbed formula, the conversion Conversion of $53,14o November 3o,198 3, and contmuing until all prices of convertible securities are adjusted when and 58o,854 shares in shares are redeemed. the $too Cumulative Pre. additional shares of Common Stock are sold by respective years of firred Stock. 7 8c,% Series, has a cumulative the Company. On December 3t 2979, the shares Preference Stock,5 2o%
sinking fand provision requiring the annual Convertible Series 406 573 417,7to The accompanying notes are an integral part of these statements. n
Southern California Edison Company Stahments oE Long-term Debt Year Ended December $2, 2979 1978 Thousands of Dollars First and Refunding Mortgage Bonds (a): Series F, Due 1979 h%) . . . .. . $ - $ yoom Series G, Due 198 1 (3%%) . .... . 4o,om 4oom Series H, Due 1982 (4M%) . . . . . 37,500 37,5 m Series I, Due 198 2 (4%%) . .. . . .
4a m 4o,om Series J, Due198 2 (4%%) . . . . .. . . 40,0oo 4o,ooo Series K. Due 1983 (4% %) . . .. .. ... .. Sonoo So,om Series I., Due 19 8 5 (5%) . . .. ... . . .. yo.om 3cooo Series M, Due198 5 (4%%) . .. . .. 60,o00 6o, coo Series N, Due 198 6 (4M%) . . .. .. .. 30 ooo 3o,om Series O, Due 1987 (4M%) . ... . . .. 4o.om 4o,mo Series P, Due 1987 (4M%) . . .. .
So mo So,mo Series Q, Due 1988 (4%%) . . . . 6oooo 6o,ooo Series R, Due 19 8 9 (4%%) . . . . . 60,000 6o.ooo Series S. Due 1990 (4M%) .. .. . . 6oooo 6oooo Series T, Due 1991 (5 M%) . .. 75400 75,000 Series U, Due 1991 (6%%) . . . So,om So,ooo Series V, Due 1992 (5%%) . So m 8om Series W, Due 1993 (6%%) .. . t oo coo too,ooo Series X, Due 1994 (7%%) . . . .. . .. 75m 754m Series Y, Due 1994 (8%%) 200,0o0 1o0,000 Series Z. Due 1995 (7%%) . . .. . .. too oco too,ooo Series AA, Due 1996 (8%) . . . . tcnoco 100.000 Series BB, Due 1997 (7%%) .. . . .. .
125 m tasom Series CC, Due 1999 (8M%) , twm im e Series DDP, Due 1999 (7%) . .
1543o 1543o Series EE, Due 198 1 (9%) . .. . . . .. twom twm Series FF, Due zooo (8%%) . . . . .
15o ooo 15o400 Series GG, Due zoot (87,F.) 125,o00
, .. . 125 000 Series HH, Due 2o02 (8M%) , . . . .. 12 y. coo 125,000 Series II, Due 198 4 (7M%) 75,mo
.. . . .. 75ooo Series JJ, Due 2o03 (9%%) . .. . . 2 mow 2 mom Series KK. Due 2004 (9 95%) ,
tos. coo -
Series LL. Due1987 (9%%)(c) . . - -
Series MM, Due 2004 (st%%) . . . . zoo.ono -
2,617,53o 2,352,530 First Mortgage Bonds (Calectric) (a) 664oo Due 198 o-1991 (2%%-5%%) . 66. coo Convertible Debentures (b) Due 198 0 (3%%) . . . . .. 74 902 74 902 Promissory Notes (Note 8) Due 198o-1983 ($M%) . . 27,953 14 217 Short. term debe expected to be refinanced - Commercial paper (c) . . . . .. . . . .
Soom -
Principal amounts outstanding . . . . . . . . . . . . . . .. . ... 2,832.649 2,522,385 Current maturities of long-term debt (d) . . ... . . . ... .. .
(845441 G3 737)
Unamortized premium or (discount)-net . .. . . .. . . . . . .. .. . f t.8981 (174)
Total long-term debt . . . . ... . .. $2,746.2o7 $2 477,474 (a) All mortgage bonds are secured by utility Common Stock for each $37.m and $37.So, re- There were no outstanding borrowings under the plant, substantially all of which is subjett to a spectively, of the principal amount of such agreement at December 31.1979 Because the lien under the Company's trust indentures. Addi. debentures. Any such debentures which are con- Company expects to refinance5 $ o omm tional First and Refunding Mortgage Bonds,in. verted may not be reissued. of short-term obligations through the operation cludmg additional bonds equalin principal of the agreement. such amount has been classi-amount to bonds retired, may be issued subject to (c) In September 1979, the Company entered fied as long-term debt in the balance sheet at the provisions of the applicable trust indentures. into a financing agreement with certain foreign December 31,1979 Each of the bond indentures requires special banks that permits the Company to borrow, deposits with the trustees, which are based at sny time through September 17,198o, up to (d) Current maturities of long-term debe at primarily upon the amount of bonds o itstanding. $5ooooooo at a floating interest rate based December 31,1979, included3 %% Convertible These deposit requirements of $77,78o, coo in on the London Interbank Offered Rate. On Debentures, Due August 15,198o,in the 1979 were satisfied by property additions and September 28,198o, as required by the agree- amount of $74 9o2.oco: First Mortgage Bonds replacements. The Company expects to satisfy ment, the Company will borrow any additional (Calectric), Series of 2%%, Due June 2,198o,in these requirements in the same manner in 198o. amount necessary to bring the total the amount of $6ooo ooo, SM% Promissory The First and Refunding Mortga6e Bonds, borrowings to $5o.ooo.ooo. Commencing on that Notes, Due February 28,198 o,in the amount of Series DDP and KK, are subject to mandatory date, the principal outstanding will bear interest $t,832,ooo and Due August 31,198 o,in the sinking fund requirements commencing on at the fixed rate of9%% per annum. The bor. amount of $t,8tomoo. The amounts of July 2,199o and June 15,1985, respectively. rowings will be secured by the concurrent maturing long-term debt willbe $143,548 4o0 issuance of an equal principal amount of the in 198t $t21,o25,ooo in 1982: $53,5ot ooo (b) At December 31,1979 and 1978, the 3H% Company's First and Refunding Mortgage Bonds, in 1983: and $83oo0,o00 in 198 4 Convertible Debentures, Due 198o, were con. Series LL, due March 28,198 7. The financing vertible at the adjusted rate of one share of agreement contains no restrictive covenants.
- The accompanying notes are an integral part of these statements.
Southern California Edison Company
- Notes to Financial Statements Note 1 - Summary of Significant Accounting Policies Deferred Energy Costs -
Deferred energy costs result from the Company's Energy General -
Cost Adjustment Clause (ECAC), which requires monthly i The Company is a public utility primarily engaged in the entries t adjust the rcSultS f Perations and the mam-business of supplying electric energy in portions of central tenance f a balancing account for overcollections or under-and southern California, excluding the City of Los Angeles c llecti ns. Variati ns between ECAC revenues and the and certain other cities. The accounting records of the related energy costs mcluded m rates are deferred until such Company are maintained in accordance with the Uniform System of Accounts as prescribed by the Federal Energy
"I*'I "' f""d'd * ' ' "d f' "'"'Ih'Y cust es through CPUC authonzed rate adjustments.
Regulxory Commission (FERC) and adopted by the ECAC related energy costs include incurred transportation California Public Utilities Commission (CPUC). and storage costs related to spent nuclear fuel. The income tax Utility Plant -
effects f ECAC also are deferred. For income tax purposes,
~
billed revenues and incurred energy costs are utilized in Additions to unlity plant and replacements of retirement ,
ene determinati n f taxable income.
units of property are capitalized at original cost, which includes labor, material, indirect charges for engineering, supervision, transportation, etc., and an allowance for debt Subsidiaries -
and equity funds used during construction. Nfaintenance Investments in unconsolidated subsidiary companies, all of
)
is charged with the cost of repairs and minor renewals; plant which are wholly owned, are accounted for by the eqmty accounts with the replacement of property units; and the method. None of the Company's five wholly owned subsid-depreciation reserve with the cost, less net salvage, of prop- iaries is considered significant for financial reporting erty units retired. The Company also owns undivided purposes. NIono Power Company ( Afono), a non-public interests in jointly-owned facilities and the balance sheet at utility, is engaged primarily in the acquisition and develop-December 31,1979 includes utility plant, accumulated ment of mineral properties and interests therein. h!ono provision for depreciation, and construction work in progress has entered into agreements to conduct uranium, oil, coal, gas of $5c8,6ao,oco, $t28,445,00o, and $1,827,327,000, and geothermal exploration and development, substantially respectively, pertaining to such facilities. all of the costs and benefits of which are being reflected in the Company's energy costs.
Depreciation ~
Depreciation of utility plant is computed on a straight-line Allowance for Funds Used During Construction (AGC) -
remaining life basis for financial statement purposes, and ADC is the generally accepted utility accounting procedure approximated 3 .5'e and 3.a4 of average depreciable plant for designed to capitalize the cost of both debt and equity funds the years 1979 and 1978 , respectiv b. Although the even- used to finance plant additions during construction periods tul mst of retiring a nuclear ge caring unit cannot be and to restore net income to the level which would have
, y edicted with certainty, the Company has estimated that been experienced without the construction program through decommissioning costs will approximate $36 ,000,000 for a transfer of such costs from the income statement to the nuclear generation facilities in service.The Company's rates balance sheet as utility plant construction work in progress.
are designed to recover such costs through depreciation Such costs are recovered from customers as a cost of service expense over the estimated remaining usefullives of such through provisions for depreciation in future periods.
facilities. Although ADC increases net income,it does not represent i current cash earnings. The effective annual ADC rate was Income Taxes - 776% for 1979 and 6 9 6% for 197 8, based upon a formula Accounting policies with respect to income taxes, including prescribed by the FERC which provides for the separate investment tax credits applicable thereto, are set forth in computation of ADC applicable to debt funds and to equity Note 5, together with supplementary income tax information. funds and permits semi-annual compounding.
Debt Premium and Discount - Earnings Per Share -
- Debt premium or discount and related expenses are Primary earnings per share are based on the weighted amortized to income over the lives of the issues to which average shares of Common and Onginal Preferred Stock they pertain. outstanding, giving effect to the participating provisions of the Original Preferred Stock, and Common Stock Equivalents Revenues - for funds held by the Employee Stock Purchase Plan Trustee Customers are billed monthly, except for most residential in each period, and after providing for cumulative customers who are billed bi-monthly. Revenues are recorded Preferred and preference dividend requirements. Fully diluted when customers are billed. earnings per share also give effect to the dilution which I
would result from the conversion of the Preference Stock, 5 2o% Convertible Series, and the 3M Convertible Debentures, due 138o- 23
Southern California Edison Company - Notes to Financial Statements (continued)
Note 2 - Quarterly Financial Data The August 2,2979 FERC decision wh ch affirmed the ne....a. or ooii.r. N"s'!".*,', August 4,1974 rate increase with respect to cost of service, onr.uns opmuns we rony Provided, however, that the rate increase remain subject to m , w w.toa,a wme, into , inco , en.m oaced refund pending resolution of the " price squeeze" issue December 31,1979 . $7o9,252 $100,352 $92 538 $1.19 $1.2 5 raised by the intervenors.
September 3o, 2979 684,334 to6 738 98,822 1 32 1.27 June 3o,1979 . . 566,656 81,748 o.88 The August 22,1979 FERC decision on the February 1, 71.183 o.91 March 31,1979 6o3,733 9 6,259 8 ,63 77 1.13 2.o9 1976 rate increase, required the Company to file a revised December 31,1978 60o,902 99,162 85,455 1.19 2.15 cost of service which reduced the annual revenues by Septembu 30,1978 , 634 334 9o,778 68,84 6 t.oo o.96 approximately $ 3,600,o00. Revenues billed in excess of this fUc$1,297 8 547 h h $fo revised cost of service had previously been deferred and the related interest accrued. Both the Company and certain Note 3 - Commitments and Contingencies intervenors have petitioned for rehearing. The decision also provided that to determine the extent of a " price Construction program and fuel supply -
,, if any, with respect to the filed revised rates, the The Company has significant purchase commitments in case would be :emanded to an Administrative Law Judge connection with its continuing construction program. As of for hearings on that issue. If a " price squeeze"is determined, December :o,1979 (the date of the Company's latest a further rate reduction may be imposed which could result approved budget), funds required for construction expends.-
in additional refunds, but the Company believes that they tures are estimated at $767,8 3 1,o00 for 19 8o, $753,808, would not have a material financial effect.
for 1981 and $6a7,864,ooo for 1982. Minimum long-term commitments of apprnximately $8 4 billion existed on Energy cost adjustment clause -
December 31,1979 under the Company s fuel supply and On October 23,2979, the CPUC granted approximately transportation arrangements.
$432,600,000 of the Company's requested $46 6,600,000 Government licenses - increase pursuant t ECAC. Such increase became effective n November 1, 2979. The requested amount was The terms and provisions of licenses granted by the United States covering the Company's major and certain minor reduced by approximately $3 5,mo,ooo as a result of the hydroelectric plants, together with certain storage and reg- CPUC s determination to defer consideration of the reason-uiating reservoirs and related transmission facilities, expire ableness of operating capacity factors at the Company's at various times between 198o and 20o9. They contain C al-fired Power plai is until results of a consultant's report numerous restrictions and obligations on the part of the n such plants can be evaluated. The Company believes that
! perating practices at its coal-fired power plants have been Company, including the right of the United States to acquire Company properties or the FERC to issue a license to a new Prudent and reasonable.
licensee under certain conditions upon the payment of ,
specified compensation. Legal matters - antitrust and employment practtces Resale revenues - Antitrun - In March 197 , five8 resale customers filed a Pursuant to FERC procedures, on August 4,1974, February 2, suit agamst the Company in Federal Court alleging violation 1976, and August 16,1979, increases in the Company's of certain antitrust laws. The complaint seeks damages m resale rates became effective, subject to refund with interest aces f $23, m, , c nsequential damages and a trebling to the extent that any of the increases are subsequently f such damages and certam mjunctive relief, and alleges that determined to be inappropriate. Effective May 2,1974, a the Company (i) is engaging in anti-competitive behavior Fuel Clause Adjustme..t (FCA) was added to the Company's by charging more for wholesale electrwity sol to the resale j resale rates and was modified effective February 2,1976 cust mers than the Company charges certain .iasses ofits l As of December 31,1979, approximately $377,8oo,oo0 has retail cust mers, and (ii) has taken actions alone and m !
been collected subject to refund. Of this amount, approx- c neert with other utilities to prevent orlimit such resale cus-imately $4 6,600,o00 is no longer subject to refund by virtue t mers fmm braining bulk power supplies from other of appeals relative to the May :,1974 FCA becoming final 5 urc" t reduce r replace the resale customers' wholesale since December 31,1979 The Company believes that any purchases from the Company. In May 1979, the Federal other amounts which the FERC may require the Company Court continued a stay of the proceedings pending resolution to refund as a result of the proceedings relative to these f the Company's FERC resale rate filing which became increases should not have a material financial effect on effective n February 2,197 ,6and of the FERC proceedings the Company. inv Iving bulk power contracts and substantially the same
~ antitrust issues. The resale customers have asked the FERC 24
4 to modify these contracts and to order the Company to presently maintains deposits aggregating approximately provide additional transmission services to them. On $12,000,000 which are not legally restricted as to with-
, February 25,19 8o, the Court lifted the stay on discovery and drawal. None of such lines of credit was used during 1979 set February to,19 18 for the next status conference. The and 1978
< foregoing proceedings involve comp. e issues of law The Company has an additional $150,000,000 line of ,
and fact, and, although the Company a cable to predict credit which may be utilized only for the purchase of fuel oil their final outcome, it has categorically denied the allegations through the use of bankers' acceptances. Notes issued under
- of these resale customers.The August 22,1979 FERC this agreement are secured by a pledge of the Company's j decision discussed above under " Resale revenues" could affect fuel oil inventory. There were no bankers' acceptances the pending antitrust litigation. outstanding during 1979. The maximum amount of bankers' acceptances outstanding during 1978 was $68,545,000 with Employment Practices - In 1972, a charge was filed with average daily borrowings of $24,259,0o0 and a weighted the Federat Equal Employment Opportunity Commission average annual interest rate (total interest divided by aver-(EEOC) and a class action lawsuit was filed in Federal Court age daily borrowings) of77 .8 "c.
in 1974, both of which alleged that the Company had The maximum amount of commercial paper outstanding engaged in unlawful, discriminatory employment practices, for 1979 and 1978 , was $184 340,000 and $165 ,273,mo.
Although denying that it has engaged in any unlawful respectively. The average daily borrowings for these same employment practices, the Company has entered into a periods were $65,o57,000 and $123,414,ooo, respectively, Conditional Settlement with the EEOC and the representa- with weighted average annual interest rates of it.o8% and rives of most of the class action plaintiffs which, on 7 23%, respectively. Of the amo mt outstanding at Decem-November 7,1977, was submitted to the Federal Court for ber 31,1979, $50,000,o00 is expected to be refinanced and
, approval as a consent decree. The estimated cost of this has been classified in the balance sheet as long-term debt.
settlement is initi.tlly $700,000 with the possibility of an The maximum amount of notes payable outstanding during additional estimated $3 00,0o0 in payment on individual 1979 and 1978was Sao,o7 8,ooo and $8 7,97o,o00, respec-awards after hearings. tively. The average daily borrowings for these same periods
- On December 31,1979, the court filed a memorandum were $ao,oS2,ooo and $41,4024oo, respectively, with ,
4 indicating it would approve the Agreement. It is not known weighted average a mualinterest rates of 2t.ot'~e and 8.23 %,
at this time whether an appeal will be taken from a ~ respectively. These notes are unrelated to the lines of ,
,- judgment. If the decision were to be reversed on appeal and credit referred to above.
the cases tried, it is the opinion of Company counsel that the l Company has a number of defenses which should be sus- Note 5 - Taxes on Income tained by a court and which, among other things, have the As required by the CPUC, no provisions are made for effect of limiting monetary damages. The Company believes, income tax reductions (net) which result from reporting j based on a current analysis of the applicable law and facts, certain transactions for income tax purposes in a period i that the amount of any recovery for monetary damages, different from that in which they are reported in the financial
! including back pay, should not have a material financial effect statements, except for certain investment tax credits (ITC) on the Company. discussed below, the tax effects of the ECAC balancing account provisions and certain resale revenues.
. Leases and Rentals - Effective January 1,197 6, pursuant to FERC procedure,
! The Company has entered into various arrangements to lease the Company began providing deferred income taxes for automotive equipment, computer equipment, nuclear fuel, certain timing differences allocable to resale rates. The rev-l office space and other incidental equipment and property enues related to such deferred income taxes are being ,
! which are accounted for as operating leases in accordance collected subject to refund, as discussed in Note 3, pending
[ with raremaking practices. Neither the annual gross lease action by the FERC.
expense nor the present value of the minimum commitments ITC not deferred have been applied as a current reduction
- of capitalleases are material. of income tax expense. Ad&ional ITC, made available to i the Company under the provisions of the Tax Reduction Act Note 4 - Compensating Balances and Short-Term Debt of 1975 and the Tax Reform Act of 197 6, have been deferred i In order to continue lines of credit with various banks, which and are being amortized . income tax expense ratably over amounted to approximately $198,o0o,o0o on December 31, the service lives of the pmerties generating such credits.
, 1979 and $170,o00,000 on December 32,1973 , the Company The Company has reduced its deferred income tax pro-vision and the balance of accumulated deferred income taxes
- net, in the amount of $68,128,00o, representing ITC in t.
Southern California Edison Company - Notes to Financial Statements (continued) ,
excess of those utilized to date or to be utilized on the Note 7- Retirement Plans 1979 federal income tax return, pending their utilizatic,n in The Company's current pension program is based on a future income tax returns. Such ITC were generated in trusteed non-contributory pension plan. Company contribu-1979 and,if not utilized, would expire in 1986. tions are determined on the basis of a level premium funding Supplementary information regarding taxes on income is method and prior service costs are funded. Pension costs set forth in the following table: are funded or reserved for on an actuarial basis and amounted Thousands of Dollar, t $37,456,000 and $32,236 ,o00 for 1979 and 1978 ,
respectively. Accumulated pension funds and reserves Year Ended December 3 ,
1978 exceed vested beneht, under the program.
1979 Under the Employee Stock Purchase Plan adopted to sup-current:
Federal . . . . $ 6 737 $ (49,219) plement employees' income after retirement, emplo,ees may State . 4.ot9 3567 elect to contribute specified percentages of their compensa-to.736 (45652) tion to a trustee for the >urchase of Company Common Deferred - Federal and State: Stock and the Compan3 contributes to the plan an amount
" "# ' ' equal to one-half of the aggregate contributions of Deferr d ene yc is h.ks
~ (s )
customer refunds .
7s. sot employees, less forfeitures. The Company's contribution Other . (t3 644) 2.208 amounted to $3,263 ,000 cnd $2,785 ,0o0 for 1979 and 1978 ,
66.017 97.673 respectively. In addition, employees may contribute up to Total taxes on income . . $ 76773 $ 52.o22 5% of their regular monthly base pay through suppfemental Taxes on income included in operating contributions without regard to years of service. These exrenses . . ....... .... $10o.292 $ 72.8o3 supplemental contributions are not matched by the Company.
Tues on income included in other income . f23519) (2o.782)
The Tax Reduction Act of 1975 introduced a provision for Total taxes on income . . $ 76.773 $ 52.o2s an additional 1% ITC if the funds generated therefrom Difference between the federal statutory tax are invested in the purchese of employer securities for the a e r conc eUa7f I ."
benefit of employees and transferred into an Employee Stock Federal statutory rate . . . 4 6 .o'~e 48.o% Ownership Plan (ESOP). Eligible securities include Common Excess of tax over book depreciation . -
(3 4) Stock or securities convertible into Common Stock. The s d durfng c*cns ct70n Company has established an ESOP and has elected the addi-(t2 9) (12 4)
Percentage repair allowance . .. (3 3) (4 7) tional 1% ITC for the years 1976 ,1977 and 1978. As of Administrative and general expenses December 31,1979,336,4a3 shares of Common Stock capitalized .... . (2.2) (2 7) .
applicable to the plan have been issued in trust.
Investment tax credits - net . (8.1) (8.4)
Federal deduction for state taxes on The ' fax Reform Act of 1976provided for a'n additional income ............. . . (2.2) (2 7) %% ITC for the purchase of employer securities, similar to A I or cr d$ff en es . the provision for the additional 2% ITC discussed above,
. (3 7) ([.3)
State tax provision . . 47 47 for eligible employees who provide matching contributions.
Effective tax rate . . 18.1 % 171% An election to obtain such additional H% ITC was made with respect to 1978 . The availability of the additional %% ITC Note 6 - Research and Development is contingent upon a favorable determination by the Internal Revenue Service that the ESOP as amended to incorporate Research and Development (R&D) expenditures are expensed currently if they are of a general nature. Plant the HG ITC continues to qualify under the Internal Revenue related R&D expenditures are accumulated in construction Code.
work in progress (CWIP) until a determination is made The Company has recorded as a liability to ESOP approxi-whether or not such projects will result in construction of mately $13,681,000 for the 1% ITC for the years 1978 electric plant. If no construction of electric plant ultimately and 1979 in excess of those utilized or to be utilized on the federalincome tax returns for those years. An additional results, the expenditures are charged to operating expense.
HG ITC of approximately $3,o88,ooo was elected for The balance of R&D expenditures included in CWIP at December 31,1979 and 1978 was $a9,438,ooo and 1978, and it is expected approximately $3,972,0oo will be elected for 1979, both amounts are in excess of those utilized
$17,178,000, respectively.
Thousands of Dollars - or to be utilized on the federal income tax returns for those Year Ended December 31, years. Such 1% and %% ITC were generated in 1978 1979 1978 and 1979 and, if not utilized, would expire in 1985 and R&D expensed .. . .. . .. $33 778 $ r 4,442 1900' re5PectiveIY-R&D charged to CWIP - net . 12.26o 3.847 Total R&D expenditures . . . .. $28.o18 $18.289 a6
Note 8 - Long-Term Debt Payable in Foreign Currency accounts receivable. On June 28,1976, the Company entered The Company has entered into a financing agreement, as into forward exchange contracts with a United States amended, with certain English banks pursuant to which bank to purchase, at various times from February 1979 to it issued promissory notes payable in pounds sterling. These August 19 83, pounds sterling to repay substantially all notes are secured by a pledge of the Company's customer of the promissory notes.
Supplementary Information to Dis-!ose the Effects of information presented below is intended to provide certain Changing Prices (Unaudited) information about the effects of both generalinflation and changes in specific prices. It should be viewed as an In accordance with the requirements and guidelines of the estimate of the approximate effect ofinflation, rather than as Financial Accounting Standards Board, the supplementary a precise measure.
(Thous.nds of Do!!.rs)
Statement of Earnings Available for Common and ^*gr"d ,
Original Preferred Stock Adjusted for Changing Prices enm.rv 3,,,,,, m con.rs for the Year Ended Dece'mber 31,1979 sI.",'"n','n'!, con.c.nr con.r corrent co.
Total Operating Revenues $2,563,974 $2,563,974 $2,563,974 ,
1 Operating Expenses:
Energy costs . . . . . .. . . . . . 1,344,o23 1,344,023 1,344,023 Provision for depreciation ... . .. 178,637 35o,mo 415,om Taxes on income . . .. . 200,292 200,292 1 *,292 Other operating expenses . . . ... . . .. 356,o26 556,o26 556,026 Other income and deductions . . . . . (139,758) (139,758) (139,758)
Net interest charges . ... . . . . .. 17 8,535 17 8,535 17 8,535 Dividends on cumulative preferred and preference stock . . . 53,738 53,738 53,738 2,271,493 2442,856 2,5o7,86 5 Earnings available for common and original preferred stock (excluding reduction of utility plant to net recoverable cost) . . $ 292,481 $ 122,218 $ 56,118 Excess of increase in general price level of $1,468,o00,0o0 over increase in specific prices of $1,417,000,000 of utility plant held during the year (a) .. . . . . . .. . . ...
$ (52.mo)
Reduction of utility plant to net recoverable cost . . . . . $ (5 61,000) $(445,000)
Gain from decline in purchasing power of net monetary liabilities . . $ 452,o00 $ 452,o00 (a) At December 31,1979, current cost of utility plant, net of accumulated depreciation, was $t2,t33,ooo.ooo while related historical cost and net recovmble cost was $5 90a. coo,ooo. The difference of $6,231.0o0.000, which includes $t.417,ooo.ooo for the current year, represents the changes in specifte prices (current cost) of utriity plant from the date the plant was originally acquired.
27
Southern California Edison Company - Supplementary information (continued)
Five Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices (In Thousands of Dollars, Except Per Share Data) 1975 2976 1977 1978 1979 Average 1979 Dollars Total Operating Revenues .. ............ $2,223,o00 $2,357,om $2,476,000 $2,593,ow $2,563,974 Historical Cost Information Adjusted for General Inflation (Constant Dollar):
Earnings available for common and original preferred stock' . . . . .... ... .. . .
$122,n 8 Earnings per share on common and original preferred stock * . . . . . . ........ .. $1.89 Net assets at year-end at net recoverable cast . $2,101,000 Current Cost Information:
Earnings available for common and original preferred stock' . . . . . ... . ..... *5 6,118 Earnings per share on common and original J preferred stock .. .... .. ... ... $.87 Excess of increase in general pnce level over i increase in specific prices of utility plant after reduction to net recoverable cost . . . . . . . .. $ 49 6,000 Net assets at year-end at net recoverable cost . $2,1o1,000 General Information:
Gain from decline in purchasing power of net monetary liallities . . . . . . . . . . . . . . $ 452,000 Cash dividends declared per common share 5 2.26 $ 2.14 $ 2 45 $ 2 53 $ 2 57 Market price per common share at year-end . . . . $25 68 $2856 $30.84 $27 62 $23.o5 Average consumer price index . . . . . .. 161.2 270 5 181 5 195 4 227 6 "
- Excludes reduction of unlity plant to net recoverable cost.
- Estirnated.
Constant dollar amounts represent historical costs of Under ratemaking procedures prescribed by the regulatory utility plant restated in terms of dollars of equal purchasing commissions exercising rate jurisdiction over the Company, power, as measured by the Consumer Price Index for all only the historical cost of utility plant is recoverable Urban Consumers. Current cost amounts reflect through future depreciation charges. Theref:re, the cost the changes in specific prices of utility plant from the date the of utility plant, stated in terms of constant dollars or current plant was acquired to the present. and differs froi.: constant cost, exceeding the ',iistorical cost of utility plant is not dollar amounts to the extent that prices in general have presently recoverable through depreciation charges, and, increased more or less rapidly than specific prices. The current accordingly, the excess is reflected as a reduction of utility cost of utility plant was determined by restating its historical plant to net recoverable cost. While the ratemaking process cost using Company projections of year-end indices to be gives no iecognition to the current cost of replacing utility reported in the Handy-Whitman Index of Public Utility plant, based on past ratemaking practices the Company Construction Costs. believes it will be allowed to recover and earn a return on The provision for depreciation on constant dollar and the increased cost of its investment when replacements current cost bases was determined by applying primary of utility plant occur.
financial statement depreciation rates to restated utility During a period of inflation, holders of monetary assets plant accounts. suffer a loss of general purchasing power while holders Since only historical costs are deductible for income tax of monetary liabilities experience a gain. The gain from the purposes, the income tax expense in the primary financial decline in purchasing power of net monetary liabilities is statements was not adjusted. primarily attributable to the substantial amount of debt which Fuelinventories and the cost of fuel used in the generation has been used to finance utility plant. However, to properly of electricity have not been restated from their historical reflect the economics of rate regulation, the gain from cost since rate regulation limits the recovery of fuel and pur- the decline in purchasing power of net monetary liabilities, chased power costs to recorded costs. As such, fuelinventories including Cumulative Preferred and Preference Stock, offsets are effectively monetary assets and have been included in the the reduction to net recoverable cost of utility plant. The computation of purchasing power gain orloss. Company, therefore, does not have the opportunity to realize
,such h lding gain n net m netaryliabilities.
28
Commentary on Summary of Operations This commentary discusses variations between the years - The increase in mamtenance expenses of 8.1% resulted 2979 and 1978 and should be read in conjunction with the primarily from the impact of inflation. This increase, Summary of Operations on Page 3o. however, is considerably less than the 23 2To increase Operating revenues increased by to.1% over 197 8 which experienced in 1978, which was largely due to storm damage was primarily due to the combined effect of a 7"o increase in experienced during the first quarter of 1978 the average revenue per KWH from 4.o2C to 4 31C and an - Depreciation expense increased by $22,434,000, or 23 6Te, increase in KV 1 mnsumption of .4%. 4 The higher average reflecting, in part, additional plant but primarily the imple-revenue largely :eflected a rate increase which became mentation, effective September 1,1978, of higher deprecia-effective January 2,2979. Approximately 32T of theincrease tion rates authorized by the CPUC.
m revenues, however, was attributable to the Company's - The increase in taxes on income of $27,4 89,o00 reflected Energy Cost Adjustment Clause (ECAC) revenues which do the net effect of higher pre-tax net income, which was due not affect earnings but do represent cash flow. primarily to the rate increase which became effective The increase in KWH consumption resulted primarily from January 2,1979, partially offset by the reduction from 48%
an increase of nearly 96,000 in the total number of cus- to 46% in the federal statutory tax rate and an increase in romers. This was the largest yearly customer increase since the net investment tax credits.
1963 and the second largest in the Company's history. The The Company's Allowance for Debt and Equity Funds Used residential sales growth rate equalled that of 1972, only the During Construction (ADC) increased 52 2Te in 1979, second time it has been equalled or exceeded in the past due to more construction work in progress, approximately seven years. two-thirds of which was related to the San Onofre Nuclear Operating expenses, which include eneigy costs as well as Generating Station. In addition, there was an increase in other operation, maintenance, depreciation, and tax expenses, the ADC rate from 6 9 6Te to 7 7 6 "e effective January 1,2979 increased by 8 7% in 1979. This increase is the net result The 12 3% increase in interest charges reflected the com-of the following: bined effects of higher short-term interest rates and additional
- Energy costs consisting primarily of fuel and purchased long-term debt outstanding during 1979. Preferred dividend power expenses, increased by 8 4Te in 1979. However, it is requirements increased 8 7 % , reflecting additional preferred intended that through the operation of the Company's ECAC, stock outstanding during 1979 including the balancing account feature, changes in ECAC- Primary earnings per share were $4 0 for 1979 as related fuel and purchased power expenses will not affect compared with $3 52 for 197 8. The i . crease of $1.o4 earnings. While the ECAC has not adequately provided the or 29 5"e, reflected the $90,255,cm. c. 44 6"c, net increase in cash recovery needed during times of rapid increase-in earnings, which was partially offset by the dilutive effect energy costs such as .he recent price increases in foreign oil, of the issuance of new shares of Common Stock.
recent actions of the CPUC to revise the ECAC procedures should accelerate the cash recovery of increases in energy Costs.
- Operation expenses other than energy cost, increased 13 6". in 1979 as compared with 17 2To in 1978.The increase was primarily due to the impact of inflation on the costs of labor, material and services and additional operation costs associated with system growth. The lower : ate of increase, i
as compared with the prior year, reflects the increased emphasis by the Company on productivity improvement.
1 I
N 29 j
o Southern California Edison Company .
Summary Of Operations and Comparative e Statistics Of Progress 1969-1979 1979 1978 Summary of Operations Operating Revenues . . .... . ..... . . $2,563,974 $2,328,798 in thousands Operating Expenses . . .... .... .... 2,278,978 2,oo4,197 Energy Costs (a) . . . .... .. . . . 1,344 023 2,24o,o29 Taxes on Income - Current and Deferred (a) . . . 100,292 72,8o3 Allowance for Debt and Equity Funds Used During Construction . . . ... ... . 118,566 7 8,421 Interest Charges . . . ....... . . .. . . 2o5,o82 182,658 Net Income . . . .. .. . .. . . . . 34 6,219 252,683 Eamings Available for Common and Original Preferred Stock . . .. ..... $ 292,481 $ 2o2,226 Weighted Average Shares of Common and Original Preferred Stock Outstanding and Common Stock Equivalents . .. 64,202 57,477 Per Share Data:
Primary Earnings . .. .. .. .... .
$4.56 $3 52 Fully Diluted Earnings . .. ... . .. . $4 39 $3 38 Dividends Declared on Common Stock . $2.6o $2 30 Dividend payout ratio (paid) . . 55 7 Pe 6.6%
3 Balance Sheet Data Gross Utility Plant . .... . ... . $7,577,67o $6,81o,891 in thousands Accumulated Provision for Depreciation . . . 1,676,148 2,519,174 Percent of Gross Utility Plant . . .. .. 22.1 22 3 Long-Term Debt (includes current maturities) (b):
Bonds . . ... . . . .... .. 2,691,577 2,418,222
, Debentures .. .... . ... .. .. 74,957 75,o46 Other . . .. . .. . .. 64,227 17,953 Preferred & Preference Stock . . . . .. 814,32 7oo,65 o Common Stock, including Additional Stated Capital . . . . . . . . .. ... . 577,259 547,166 Additional Paid-in Capital . .. 6o1,578 59,673 6
Earnings Reinvested in the Business . . $1,o54,296 $ 932,217 Capital Structure (percent):
Long-Term Debt:
Bonds . . . .. . . . 45 8 46.o Debentures .. . . . . .
23 24 Other . . . .. . . . ...... 2.2 o.4 Preferred & Preference Stock . . . 23 8 13 3 Common Equity . .. . ......... 38; 398 Book Value Per Common Share . ... . .
$34 22 $32 57 Operating and Operating Capacity (kw) (c) . . 14,932,223 14 b 5,:23 Consumption Data Total Energy Requirement (kwh) (ooo) . . 66,216,91o o3, 77,116 Percent Output:
Thermal ... . . .. . . 82.2 73 9 Hydro-Company Plants . . .. .
76 92 Purchased Power k Other Sources . . . . . to.3 16 9 Kilowatt. Hour Consumption (ooo) . .. . 59,517,861 57,o27,o35 Number of Customers .. ... . .. . 3,o82,382 2,986,545 Average Annual kwh Consumption Per Residential Customer . . . .. ... .. 6,oto 5,883 Numberof Employees ... . . .. .. 22,917 12,845 Main System Peak (kw) (ooo) .. . .. 12,46 4 11 997
- (a) Included in Operating Expenses.
30
p 1977 1976 3975 1974 1973 197a 1971 197o 1969
$2,o64,924 $1,84 6,54o $1,647,134 $1,36o,959 $1,o75,949 $ 927,674 $ 8o2,434 $ 72o,661 $ 6 42, 24 2,734,292 2,539,4co 1,38o,528 2,1v3,249 843,53o 7o9,724 612,732 535,846 482,663 2,o40,o91 916,131 824,826 541,890 344,990 24o,135 192,98 2 143,475 226 216 68,792 59,5o6 46,623 70,618 46,496 44,542 3 8,54: 38,635 3 68
,4 o 6o,238 47,61o 26,773 16,163 20,19o 7,25: 15,859 27,oo7 27,471 161,o78 244,368 126,185 222,959 97,728 91,752 82,308 77,633 68,246 252,979 226,798 27 68
,7 1 16o,344 14 6,12o 135,648 227,297 127,495 2o7,869
$ 2o6,33o $ 185 ,o47 $ 137,177 $ 124,65 6 $ 117,268 $ 110,46 9 $ 105,752 $ 110,497 $ 95,152 54 347 4,68 87 47,96 5 44,58 o 43,965 43,96 5 43,o41 4 0,963 40,501
$3 8o $3 8o $2.86 L.8o $2.67 $2 51 52 46 $2 7o $2 35
$3 63 $3 61 $2 75 $2.68 $2 57 $2 43 $2 37 $2 59 $2.27
$2.o6 $1.68 $1.68 $1.68 $156 $156 $152H $15o $14o 505% 44 2To 58 7 To 59%
8 58 4% 62.2 % 61.o'~o 54 6To 59 6 %
$6,291,733 $5,658,433 $5,147,333 $4,766,275 $4,458,631 $4,233,o67 $3,99 8,o45 $3,737,837 $3,461,836 1,383,oo9 2,258 ,327 I,149,3 2 t 2,oS 2,o24 95 8,22o 851,91o 779,409 7o7,928 649,7o2 22 3 22.2 22 3 22.2 21 5 2 o.1 19 5 28 9 28.8 2,255,216 2,o55,966 2,ot 2,597 1,863,951 t,6 4o,349 1,7o5,139 2,54,8o 8 1,484,84o 1,384,84 o 4
75,235 75,224 75,323 75,402 75,49o 75,579 74,902 74,98 7 74,98 7 20,o23 2o,617 25,968 24,327 6,871 7,991 7,991 438 -
715,272 612,753 612,753 5 62,753 512,753 437,753 3 62,753 3 62,753 262,753 470,374 442,741 395,709 395,7o9 3(2,376 362,376 362,376 337,36 o 337,36 o 443,109 427,422 350,5o3 35o,5o3 316,63 6 3 1 6,63 6 326,63 6 243,437 243,437
$ 862,956 $ 7 69,425 $ 671,548 $ 616,56 2 $ 569,938 $ 512,264 $ 47o,754 $ 43o,477 $ 3 81,o4o 46 6 6 47 46 8 48.1 47.x 49 9 49 9 So.6 51.6 1.6 17 2.8 19 2.2 2.2 2.6 23 2.8 o.4 o.5 o.6 o.4 o.: o.3 -
o.3 -
14 7 23 9 24 8 14 5 14 7 12.S 11 4 22 4 98 376 37 2 34.: 35 2 35 8 34.8 3 6 .I 34 4 35 8
$3:.3o $30.67 $29 64 $28 50 $28 46 $27 24 $26.2o $24 72 $23 53 14,44o,123 14,169,323 13,76 o,713 13,494,849 13,447,o95 12,615,665 12,458,165 10,904,845 20,238,627 63,344,706 59,427,973 5 6,279,232 55,2o5,988 57,73o,121 55,686,776 52,67 2,o84 49,674,757 46,344,845 S7.5 75.: 726 75 2 89 4 86.6 So.o 8 2., ,92 24 43 84 to.o 9.o 6.4 84 92 22 7 10.2 20 5 15 4 6.1 24 8 7.o it.6 83 8.2 57,7:6,273 53,685,378 51,327,5o8 52,o89,981 54,o92,934 52,309,906 48,856,493 45,881,o76 42,6o1,6o6 2,9oo,S$ 6 2,824,403 2,749,68o :,692,6 9x 2,626,492 2,566,341 2,497,34: 2,4388 ,5 4 2,383,251 5,60 3 5,605 5,596 5,541 5,885 5,777 5,64 : 5,24o 5,031 2 2,671 22,52o 12,377 12,97o 23,391 12,9o7 x 2,o48 12,534 22.693 I
12,247 21,o81 20,293 20,253 9,815 9,35o 8,274 9,997 7,8o4 lb) The years subsequent to t972 include unamortized premium or discount related to each category of long. term debt.
(c) Includes 1,66 9,5o3 and 2,65o,5o3 w k available from others in 1979 and 1978. 32
Board of Directors i
Jack N. Horton Chairman of the Board and Chief Executive Oficer Roy A. Anderson Chairman of the Board and Chief Executive Oficer, Lockheed Corporation, Burbank, California Norman Bs ker,lt. Chairman of the Board and Chief Executive Oficer, United California Bank, Los Angeles, California Edward W. Carter Chairman of the Board. Carter Hateley Hale Stores, Inc., Los Angeles, California William B. Coberly,lt. President, California Cotton Oil Corporation, (Investments and Real Estate Holdings),
Los Angeles, California Terrell C. Drinkwater Retired Airline Executive, Los Angeles, California Walter B. Gerken Chairman of the Board and Chief Executive Oficer, Pacific Atutual Life 'nsurance Company, Ne:cport Beach, California William R. Gould President loan C. Hanley General Partner and hianager, hiiramonte Vineyards, Rancho California, California
. Frederick G. Larkin, lt. Chairman of the Executive Committee Security Pacific National Bank, Los Angeles. California T. 51. NicDaniel,Ir. Corporate Director and Consultant (Retired President, Southern California Edim Company),
San A1arino, California John V. Newman President, CBS-Sony California, Inc. (Citrus Production), Oxnard, California Gerald H. Phipps President. Gerald H. Phipps, Inc. General Contractors (Building Construction), Denver, Colorado Henry T. Segerstrom h1anaging General Partner, C. J. Segerstrom & Sons (Real Estate Development), Costa hiesa, California E.L.Shannon,lt. Chairman of the Board and Chief Secutive Oficer, Santa FeInternationalCorporation (Oil Service, Petroleum Exploration and Production), Orange, California H. Russell Smith Chairman of tiv Board, AveryInternational (hianufacturer of Self-Adhestve Products), San biarino, California Richard R. Von Hagen President, Lloyd Corporation, Ltd.
(Real Estate Development and Production of Oil and Gas), Beverly Hills, California Executive Officers lack K. Horton Chairman of the Board and Chief Executive Oficer Willlam R. Gould President Howard P. Allen Executive Vice President
~
j H. Fred Christie Senior Vice President and Chief Financial Oficer
- David 1. Fogarty Senior Vice President
. A. Arenal Vice President (Engineering and Construction)
G. I. Bjorklund Vice President (System Development)
Robert Dietch Vice President (Nuclear Engineering and Operations) l C. E. Hathaway Vice President (Personnel)
\ loe T. Head,lt. Vice President (Poteer Supply) 1 P. L. h1artin Vice President (Customer Service)
A. L. hiaxwell Vice President and Comptroller Edward A. hiyers,lr. Vice President (Conservation. Communications and Revenue Services)
L.T.Papay Vice President (Advanced Engineering)
William H. Seaman Vice President (Fuel Supply)
Robert E. Umbaugh Vice President (Administration)
{ lohn R. Bury General Counsel hiichaelL Noel Treasurer
( Honor hiuller Secretary l I
t 3
l l
c .
9 Ic80 Annual Shareholders' Meeting Stock Transfer Agent The annual meeting of shareholders of Southern Southern California Edison Company California Edison Company will be held at to a.m., Rosemead, California Thursday, April 17,19 o, 8 at the Company's Corporate Headquarters, 2244 Walnut Grove Avenue, Rosemead, Registrar of Stock California 9177o. Telephone (213) 572-z:22. Security Pacific National Bank Los Angeles, California Statistical Supplement A comprehensive financial and statistical supplement to Stock Exchange Listings this report is available in limited quantity. A copy may be Common Stock:
requested by writing to the Treasurer, Southern California New York Stock Exchange
{
Edison Company, P.O. Box 800, Rosemead, Pacific Stock Exchange California 91770.
Preferred and Preference Stocks:
American Stock Exchange Pacific Stock Exchange Ticker Symbol SCE (Common Stock)
Media Listing:
Scaled Tl sis Annual Report and the statements and statistics contained herein have been assembled for general e informative purposes and are not intended to induce, or for use in connection teith, any sale or purchase of securities. Under no circumstances is this report or any part of its contents to be considered a prospectus, or as an offer to sell, or the solicitation of an offer to buy, any securities.
For Investor Relations Information, contact the Treasurer, Southern California Edison Company.
Telephone (213) 572-2o86 e _n
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