ML19347D264

Annual Financial Rept 1980.Info Re Regulatory Environ,Unit Prices,Rate Development & Cost of Money & Required Return Encl

ML19347D264
Person / Time
Site:	San Onofre
Issue date:	03/10/1981
From:	SAN DIEGO GAS & ELECTRIC CO.
To:
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ML13302A498	List: ML13302A497 ML19347D254 ML19347D261 ML19347D264 ML19347D268 ML19347D271 ML19347D274 ML19347D275 ML19347D276 ML19347D279 ML19347D281 ML19347D282 ML19347D287 ML19347D289 ML19347D290 ML19347D293 ML19347D294 ML19347D295 ML19347D297 ML19347D299 ML19347D300
References
NUDOCS 8103110690
Download: ML19347D264 (76)

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1979?

Financial 1and Statistical Report

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7 to lialan e Sheets 11 Statenients of ( hanges m I inancial Pouhon 9

e 12 Statements of 1:arn:ngs Remsested m the lluuness and

.\\dditional P.ud in Capital 10 13 Ss stem Rate liase 10 14 Ntatements of I one-I crm 1)ebt 11 15 l)eratl o! l tiht s Plant l!

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('aritalization and Plant Ratio 1:

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()perarme Stanstws 13 I9 l'\\lNtInc (icneration ('.ipaest) NesoureCs

}4 20 Pro;ested (sencranne Resource Additions 14 21 Reculation 15 22 Proje<tions Cet sumpnon.1)emand. Capital Requirements and

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Foreword March 3,198 Southern California Edison Company provides electric service in n 50,000 square-mile area of Central and Southern Cali-fornia. This area includes some 600 cities and cotamunities with a population of more than eight million people.

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Edison's gross investmen"

• utility plant totals nearly $7.6 billion. The installed Company-owned generating capacity at the end of 1979 was 13.263 megawatts of which 79% is com-

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prised of oil and gas-fired generating units. SCE's interest in

___s coal. fired generating units accounts for another 12%, and 6%

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b il hydroelectric plants. The Company's interest in a nuclear plant accounts for the remaining 3%. In addition, Edison had p,-

1,670 megawatts of capacity under contract from other utility

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sources at year end.

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RECENT RATE SIATTERS

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t GENERAL RATE INCREASE FILED ENERGY COST ADJUSTMENT CLAUSE PROCEDURE CHANGES The Company filed with the California Public Utilities Com-mission (CPUC) on December 26,1979, a general rate appli-On January 29, 1980, the CPUC authorized the acceleratec cat:on designed to increase annual revenues by approximately recovery of the Company's undercollected Energy Cost Adjust

$340 million, based on a 1981 test year. The application ment Clause (ECAC) revenues in the amount of $81 millior requests rate relief as a result of a general increase in openting during the period between February 3 and April 30,1980. &

expenses and financing costs. In addition, the application the same time, the CPUC approved, on an interim basis.

requests an average annual rate of return on common equity the use of a floating interest rate on the ECAC balancing of 15% and 10.7E% on rate base for the period 1981-82.

account which more nearly matches current short. term borrow-Because of the two-year cycle adopted by the CPUC in granting ing or investment rates. Also revised are the ECAC filinq general rate increases, the Company has also requested an procedures which should permit the Company's billing rates q attrition allowance of 0.40% return on rate base to reflect more accurately reflect the cost of fuel incurred during the increasing costs in the year following the test year.

ECAC adjustment period.

1 Highlights 5-Year 10-rear I979

.974 Compound g9s9 Compour i Annua:

Annual Growth Rate Growth Rate Earnings Per Share.

4.56 3

2.80 10.2 %

5 2.35 6.9 %

Common Dividends Paid Per Share (a) 2.54 1.65 9.0 1.40 a1 Operating Revenues (000)

$ 2,563,974

$ 1,360.959 13.5

$ 642,124 14.8 Operating Expense (000)

$ 2,178,978

$ 1,198,249 14.5

$ 482,663 16.3 Energy Costs-net (000)(b)

$ - 1.344,023

$ 541,890 19.9 126.216 26.7 Taxes on income (000)(b)

$ 100.292 5

70,618 7.3 36,480 10.6 Net income (000)

$ 346,219 160,344 16.6

$ 107,869 12.4 Earnings Available for Common and Original Preferred Stock (000)

$ 292,481

$ 124,656 18.6 95,152 11.9 Payroll (000)

$ 325,815

$ 208,892 9.3 133,146 9.4 Employees 12,917 12,970 (0.1) 11,693 1.0 Population of Service Area 8,310,000 7,580,000 1.9 7,137,000 1.5

. Total Customers.

3,082,382 2,691,691 2.7 2,383,251 2.6 Kilowatt-Hour Consumption (000) 59.517,861 51,089,981 3.1 42,601,606 3.4 Net Utility Plant (000)

$ 3,826,836

$ 3,269,553 3.2

$ 2,400,982 4.8 Main System Peak (kw)(c) 12,464,000 9.997,000 4.5 7,804,000 4.8 Operating Capacity (kw) 14,932,223_-

13,494,849 2.0 10.238,627 3.8 l':) On Septemb.cr 20,1979, the Company's Board of Directors authori:ed an increase in the Common Stock quarterly disidend to 50.68 from 30.62 per share, efectis sw(th the October 31,1979 payment, which is equis-alent to $2.72 per share on an annual basis, fb) included in Operating Espenses.

fen Ifigh 5 year growth rate because of depressed 1974 peak demand resulting from mild climate conditions and customer conservation in response to the 1973 oil embargo.

1 L

SECURITIES AND EXCHANGE COMMISSION

[f.dL.

WASHINGTON, D.C.

20549 8

FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1979 Commission File Number 1-3779 SAN DIEGO GAS & ELFCTRIC COMPANY (Exact name of registrant as specified in its charter)

CALIFORNIA 95-1184800 (State or other jurisdiction of (I.R.S. Employer incorporation or organization)

Identification No.)

101 Ash Street, San Diego, California 92101 (Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code:

(714) 232-4252 SECURITIES REGISTERED PUPSUANT TO SECTION 12(b) OF THE ACT Title of each class Name of each exchange so registered on which registered Preference Stock (Cumulative) Without Par Value (except $7.325, S8.25 &

S9.125 Series)

American and Facific Cumulative Preferred Stock - S20 Par Value (except 4.60% Series)

American and Pacific Common Stock - SS Par Value New York and Pacific First Mortgage Bonds, Series O-R New York SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT None (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 oc 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.

X Yes No' Common stock, SS Par Value, number of shares outstanding

-31,188,237 as of December 31, 1979 Page 1 of 44 3

PART I e

Item 1.

BUSINESS DFSCRIPTION OF BUSINFSS Ceneral Development and Description of Business San Diego Cas & Electric Company ("SDG&E" or "the Company") is an operating public utility corporation organized and existing under and by virtue of the laws of the State of California.

The Company was incorporated in California in 1905 and is engaged principally in the business of generating, purchasing, transmitting and distributing electric energy to approximately 751,000 customers in San Diego County and in portions of Orance and Imperial Counties, California and pur-chasing, transmitting and distributing natural gas service to approx-imately 493,000 customers in San Diego County and generating and distributing steam service to approximately 64 customers in downtown San Diego.

SDG&E's principal place of business is located in the Electric Buildinq, 101 Ash Street, San Diego, California 92101 and its telephone is (714) 232-4252.

Electricity is generated and rarchased and is distributed to customers by means of the Company owned overhead and underground transmission and distribution systems.

Natural gas is purchased and distributed to customers by means of Company-owned transmission and distribution systems and steam is generated and distributed to customers through Company-owned underground facilities.

The Company has been experiencing problems common to the utility _ industry in general, including (1) increasing costs of fuel, wages and materials, (2) large capital outlays, longer con-struction periods and protracted regulatory proceedings for larner and more complex new genc. rating units needed to meet current and future service requirements of customers, (3) reliance on capital markets with high costs of both equity and borrowed capital, (4) compliance with environmental requirements and (5) regulatory lag

'in the graating of needed rate increases.

The Company is expanding its utility plant in an ongoing effort to meet the increasing demands on its system.

Capital expenditures for these purposes and.for the replacement of existing

-facilities amounted to approximately S205 million in 1979.

The Company's current estimate of such expenditures during 1980 is approx-imately S174 million.

This includes S154 million for the electric department, S14 million for the gas department and $6 million for common plant.

The capital expenditures for 1979 and 1980 do not include non-cash items such as allowance for funds used during con-struction. J

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Itcm 1.

BUSINESS Cont'd The Company c idects a continuing review of its construction program.

This pro am and the above estimate are subject to re-vision based upon ianges in assumptions as to system load crowth, rates of inflation, receipt of adequate and timely rate relief, the availability and timino of regulatory approvals and the avail-ability and costs of outside sources of capital.

The cash requirements for the construction program are ex-pected to be obtained from (1) internal sources, which the Company estimates will provide fron 10% to 20% of its capital needs, (2) bank loans and the sale of cormercial paper, (3) the sale of addi-tional debt and equity securities and (4) other outside financinc.

After the sales of the new First Mortgage Ponds and the new Common Stock (see Note 7 of the Supplementary Notes to Financial State-ments in this Form 10-K), the Company expects that approximately S80 million of additional external financing will be reouired during the balance of 1980, including the possible sales of addi-tional Common Stock and First Mortgage Bonds.

In addition to SDG&E's utility operations, it has four subsidiaries which are involved in the following non-utility operations:

1.

To design, build, own, operate and r.aintain central enercy plants to supply energy to reet individual customer thermal energy requirements.

2.

To conduct exploration and development activities or support those being conducted by others, primarily for the development of natural resources.

3.

To engaae in the acquisition, ownership, development, maintenance, operation and sale of real property and associated personal property.

4.

To facilitate financing transactions on behalf of the parent.

Sales are to various types of customer classes.

Followinc is a tabulation for the last five calendar years of the amount of revenue contributed by classes:

Revenue by Class of Service 1979 1978 1977 1976 1975 (Millions of S)

Electric Residential S212.4

$183.4 S153.0 S145.0 S117.7 Come.ercial &

Industrial 326.3 281.7 216.9 210.8 156.9 Other 53.8 3.3 52.2 2.3 10.1 Subtotal 592.5 468.4 422.1 358.i 284.7 _

Item 1.

BttSINESS Cont'd 1979 1978 1977 1976 1975 Gas Residential S 73.2 S 56.5 S 51.9 S 52.2 S 55.8 Other 78.5 87.7 65.9 41.6 33.1 Subtotal 151.7 144.2 117.8 93.8 88.9 Steam 1.0 1.0 0.9 0.8 0.7 Total S745.2 S613.6 S540.8 S452.7 S374.3 See " Revenues" in Note 1 of Notes to Financial Statements in the 1979 Annual Report to Shareholders, herein incorporated by reference, for explanation of reclassification of 1976-1978 revenue.

LINES OF BUSINESS / INDUSTRY SEGMENTS The approximate percentages of operating revenues and operating income (exclusive of taxes on income, other income credits and interest charges) attributable to each principal line of business were as follows:

Operatino Revenues Operatino Income Electric Gas Electric Gas 1975 76.1%

23.7%

74.0%

26.0%

1976 79.1 20.7 85.3 14.7 1977 78.1 21.8 74.1 25.9 1978 76.3 23.5 72.2 27.8 1979 79.5 20.4 88.6 11.4 See also Schedules of Financial Information by Segments of Business on page 19 of the Company's Annual Report to Shareholders.

Operating income for segment information is not comparable to operating income for lines of business information because segment information includes income taxes in operating income while lines of business excludes income taxes.

SOURCES /AVAILABLITY OF RAW MATERIALS Electric Fuel Supply The Company has experienced and will continue to experience some curtailment of gas available for electric generation.

However, current estimates indicate that gas-will be available for electric generation in 1980 under most weather conditions.

Gas for electric

. generation may also be available in subsequent years depending on weather conditions and the success of various gas supply projects affecting the Company's gas supplier (see " Gas Supply" below).

Item 1.

BUSINESS Cont'd The Company's fuel oil use in 1979 was 10.9 million barrels and it is estimated that up to 11.6, 12.9 and 14.2 million barrels will be required in 1480, 1981 and 1982, respectively.

The Company has adequate inventory and contracts to cover substantially all of these requirements.

The Company expects to be able to cover the balance through additional purchases or through the increased availability of natural gas during this period.

In addition, the Company has contracted for additional quantities of fuel oil to cover a portion of its anti-cipated requirements into 1984 at prices to be negotiated in the future (see Mote 6 of Notes to Financial Statements in the 1979 Annual Report to Shareholders).

The Company's principal suppliers of fuel oil are Hawaiian Independent Pefinery, Inc. and Tesoro Alaska Petroleum Company.

The nuclear fuel cycle for the Company's nuclear generating facilities is comprised of the following:

(1) the mining and milling of ore to produce uranium concentrate, (2) the conversion of uranium concentrate to uranium hexafluoride, (3) the enrichment of the uranium hexafluoride, (4) the fabrication of fuel assemblies and (5) the storace of spent fuel and, if permitted by Federal energy policy, its reprocessing.

The Company and Southern California Edison Company (" Edison")

have contracts for nuclear fuel cycle services for the San Onofre Nuclear Generatino Station which fulfill requirements through and including the years indicated as follows:

Unit 1 Units 2 and 3 Mining and milling (l) 1986 1984(2)

Conversion 1990 1990 Enrichment 2005 2008 Fabrication 1992 1984 Storage and reprocessing (3)

(3)

(1)

The Company's suppliers of uranium concentrate are Homestake Mining Company, Pathfinder Mines Corporation and a joint venture between Rocky Mountain Energy Company and Mono Power Company, a subsidiary of Edison.

(2)

During the period from 1985 through 1988, part of the uranium recuirements are under contract.

(3)

Spent fuel from Unit 1 is presently being stored at the plant site and at General Electric's Midwest Storage Facility at Morris, Illinois.

Such storage capacity is adequate at least through 1986 for Unit 1 and is expected to be adequate for Units 2 and 3 at least through 1990.

The Company has no contractual commitment for the reprocessing of spent fuel from Units 1, 2 or 3.

The cost and availability of reprocessing servi-ces are present-ly uncertain in view of the Federal policy to defer indefinitely Iter 1.

BUSINFSS Cont'd the concercial development of reprocessing facilities in the United States.

Should reprocessing be unavailable to the Company when existing storage limits are reached, additional arrangements for such storage would be required, although their cost or avail-ability cannot presently be determined.

The availability and cost of the various components of the nuclear fuel cycle for the company's nuclear facilities, to the extent not currently provided by contract, cannot accurately be predicted at this t ime.

The Company has contracted for firm purchases of capacity and energy as more fully explained in Note 5 of Supplementary Notes to Financial Statements in this Form 10-K.

Gas Supply The Company currently purchases all of its gas from Southern California Gas Company ("SoCal").

The gas is delivered through three transmission pipelines with a combined capacity of 424,000 Mcf per day.

The Company's contract with SoCal presently provides for delivery of up to 221,000 Mcf per day on a contract demand basis.

It also has provisions for delivery of additional peaking gas to meet the Company's high priority gas requirements during winter months.

For the 1979-1980 winter period, additional peaking gas deliveries of up to 102,000 Mcf per day were allowed up to an aggregate of 5,868,000 Mcf for the entire period.

The contract is an automatic annually renewable 5-year agreement subject to termination by either party on 4-years notice.

The' Company is negotiating with SoCal to modify its contract in ac-cordance with the California Public Utilities Commission ("CPUC")

decisions ordering parity of service for the Company's customers and those of SoCal and establishing the end use priority system for natural gas.

El Paso Natural Gas Company ("El Paso") and Transwestern Pipeline Company ("Transwestern") represent the major portion of SoCal's current supplies.

Both El Paso and Transwestern have established curtailment plans approved by the Federal Energy Regulatory Commission

("FERC") and deliveries are being made pursuant to these plans rather than under the specific volumetric provisions in their contracts.

As a result, SoCal has experienced some curtailment of its natural gas deliveries and anticipates that such curtailments will continue.

This has caused some curtailment of deliveries to the Company's own electric generation plants and to other of the company's lower priority customers (primarily large commercial and industrial users).

Current estimates indicate further curtailment of gas for electric generation in 1980 and 1981, but little curtailment of other low priority cus-tomers-under average weather conditions.

No curtailme.nt of gas service to any of the Company's higher priority customers (primarily resi-dential and small commercial users) has occurred and the Company estimates that ge.s supplies are sufficient under average weather con-.

Iten 1.

BUSINESS Cont'd ditions to fully serve higher priority customers and to provide sub-stantial deliveries to lower priority customers through 1985.

There are currently no restrictions on the Company's accepting new gas customers except that prior CPUC approval is required with respect to new customers with a maximum peak day demand of 300 Mcf or more.

Previously, this requirement had extended to customers with peak demands of 50 Mcf or more.

In view of the current estimates of gas availability, the Company does not anticipate that any additional restrictions on new customers will be imposed in the foreseeable future.

To supplement existing gas supplies, SoCal, its af filiates and its suppliers are currently participating in a wide range of long-term gas acquisition projects.

If these projects are successful, the cost of such gas is expetted to be substantially higher than the cost of gas from present sources.

The price and very likely the availability of natural gas to the Company will also be increased as the result of the National Energy Act which will deregulate the price of new supplies of domestic natural gas in various stages through the mid-1980's.

The Company cannot currently predict the extent and timing of its effect upon the Company.

However, the Company anticipates that any increase in its cost of gas will be recovered through the Purchased Gas Adjustment clause.

The Company's two liquefied natural gas

(" LNG") plants provide substantial seasonal load equating capability.

The plants produce LNG from pipeline gas delivered during periods of low demand.

The LNG is stored and vaporized for use during winter periods of high demand.

These plants have a combined storage capacity of 1,820,000 Mef and a combined delivery capacity of 240,000 Mcf per day.

FRANCHISES AND REGULATIONS The Company's franchises are in general deemed adequate to pe rmit it to engage in the businesses it now conducts.

The Company has separate franchises with the sixteen cities and three counties in its service territory.

One franchise has a 25 year term, 3 franchises have a 50 year term and 2 franchises have an indeterminate term for electric service but a 50 year term for gas service.

The remaining franchises have an indeterminate term for both electric and gas service.

The Company is subject to regulation by the CPUC, which has the authority, among other things, to establish rates and conditions of service, to regulate the sale of securities and to prescribe rates of depreciat ion and uniform systems of accounts.

The Company is also subject to regulation by the FERC and the Economic Pegulatory' Administration (" ERA") of the Department of Energy.

The FERC has authority, among other things, to regulate electric rates for sales for resale and to prescribe rates of de preciation and uniform systems of accounts; however, no approval of the FERC is required with respect to sales of the Company's secu-Itcm 1.

BUSINESS Cont'd rities.

The ERA has authority under the Powerplant and Industrial Fuel Use Act to issue exemptions from the prohibitions on the use of petroleum and natural gas in electric power plants.

The ERA also has authority to issue permits for the proposed interconnection with Mexico.

4 The Company is subject to continuing regulation by the Nuclear Regulatory Commission ("NRC") in connection with the licensing, con-struction and operation of its nuclear facilities.

NRC regulations require extensive review of the safs ty, radiological and environmental aspects of these facilities.

The Nec from time to time requires that the design of a nuclear power plant or certain of its components be reanalyzed using newly defaloped data and techniques and, if changes are necessary or desirable, requires modifications to the plant or its components as a condition of its continued operation.

An pplication to the NRC for a permanent operating license for San Onofre Unit 1 is pending.

Unit I has been operating commercially since 1968 pursuant to a provisional operating license.

The Company is also subject to regulation by the California Energy Commission (" Energy Commissich").

The Energy Commission has responsibility for developing electric demand and supply require-ments, encouraging and requiring certain types of energy conservation and developing and coordinating a program of energy research and development.

In addition, the Energy Commission certifies power plant sites and related facilities within California.

See also " Environmental Matters" below regarding other regulation of the Company by certain environmental agencies.

A number of the permits, authorizations and licenses (collec-tively " approvals") the Company obtains in connection with the con-struction and operation of its generating plants may be revoked or modified by the governmental agency granting such approval if facts l-appear or events occur which differ significantly from the facts l

and projections assumed in granting such approval.

Discharge and Air Pollution Control District permits (discussed under " Environmental Matters" below) and NRC licenses are the most significant examples of such approvals.

Certain approvals, such as discharge permits, are granted for a term less than the expected life of the facility, and will require later renewal.

In'effect, such approvals subject the l

Company to continuing regulation by the granting agency as a result of reinterpretation of matters relating to the approval.

ENVIRONMENTAL MATTERS The Compt.y is subject to numerous Federal, state and local environmen'tal laws and regulations, including those relating to air quality, water quality, land use, noise and aesthetics.

Compliance with these-laws and regulations has increased and will-continue to increase the cost of electric service substantially by requiring changes in the design and operation of existing facilities, as well as changes or delays in the location, design, construction and operation of new facilities.

The Company estinates that its capital expen-l t

Item 1.

BUSINESS Cont'd ditures for such purposes (including programs for the undergrounding of electric distribution lines and the construction of low profile substations and fuel storage facilities) will be approximately $24 million in 1980 and S37 million in 1981.

However, it is difficult to predict with precision how such laws and regulations will be applied to existing and proposed facilities, and the Company may have to revise its estimate substantially in response to developments in these areas.

Historically, the CPUC has permitted recover) of these expen-ditures through rates.

Air Ouality The San Diego Air Pollution Control District ("APCD") has adopted rules governing the sulfur content of fuels used in electric generation, the opacity of stack emissions and the magnitude of the emissions of sulfur dioxide, particulate matter and oxides of nitrogen from electric generatirg plants.

These rules are designed to implement Federal and California ambient uir quality standards now in effect and are at least as stringent as any other Federal or California air pollution regulations applicable to the Company.

The Company is currently in substantial compliance with all existing APCD rules.

There are currently seven Notices of Violation ("NOV") from the APCD for alleged violation of emissions of oxides of nitrogen snd visibility standards.

The Company negotiated an agreement to settle all of these NOV's by payment of civil penalties in the amount of S1,300.

Water Ouality The Federal Water Pollution Control Act amendments of 1972 (the "1972 Act") required the Company to obtain National Pollution Discharge Elimination System (" NPDES") permits from the California Regional Water Quality Control Board - San Diego Region for discharge of pollutants, including heated waters, from its steam electric power plants into

^he waters of the United States.

The Company has obtained NPDES pe rmi ts, expiring in June 1981, for each of its operating plants.

The Company has been required to conduct environmental studies and submit a demonstration for each of its power plant cooling water intakes in accordance with Section 316(b) of the 1972 Act.

These demonstrations will be submitted in December 1980.

Subsequent requirements to minimize the effects of the cooling water intakes may be required.

The Company is unable to predict the cost of construction or modification of the cooling water intakes that may be required.

In October 1974, the Environmental Protection Agency (" EPA")

issued regulations under the 1972 Act which would have required Encina Unit-5 and San Onofre Units 2 and 3 to comply with th_e no-dischar.ge-of-heat requirement by July 1, 1981.

San Onofre Units 2 and 3 were -

Itcm 1.

BUSINESS Cont'd cubscquantly oxcepted from the requirement.

The Company is currently seeking an exemption for Encina Unit 5 and, together with electric utilities throughout the country, has appealed these EPA regulations in a consolidated action before the U.S.

Court of Appeals (4th Cir-cuit).

On July 16, 1976, the Court remanded to the EPA the challenged regulations for further review and analysis.

Unless exemptions or other relief from these EPA regulations can be obtained, extensive and expensive modifications would be required to provide closed-cycle cooling systems for Encina Unit 5.

The EPA has yet to issue new regulations.

The Company is unable to predict the terms and conditions of new and renewal permits and their ef fect on plant or unit availability or on the cost of construction or modification of such plants or units.

However, any modifications required by such permits could involve substantial expenditures and certain plants or units may be unavail-able for electric generation while such modifications are being com-pleted.

Land Use, Noise and Aesthetics The Coastal Act of 1976 became effective January 1, 1977, re-placing the California Coastal Zone Act of 1972.

The Coastal Act establishes, among other things, a comprehensive regulatory plan relating to the use of the California coast, including designation of areas where power plants would not be consistent with the objectives of the Act.

The Company was required to obtain coastal permits for San Onofre Units 2 and 3 and Encina Unit 5, issued under the prior act.

However, the permits for San Onofre require certain marine discharge studies which are presently underway.

The Compai:' does not expect any modifications to the San Onofre discharge system a a

result of these studies.

There are currently no compliance problems with respect to applicable noise ordinances and at this time the Company does not anticipatu any such prcblems.

RESEARCH AND DEVELOPMENT The Company conducts research, development and demonstration activities in the areas of energy supply, transmission and dis-tribution, conservation and renewable energy resources and gives support to outside research organizations.

The Company is supporting the broad, coordinated technology program of the Gas Research Institute ("GRI") and the Electric Power Research Institute, and is actively participating in committees on geothermal, solar, fusion, nuclear, coal gasification and liquefaction, electrical systems.and LNG research.

Research on the use of geothermal energy in the Imperial Valley to generate electricity has led to the building and testing of a 10 !

l Itcm 1.

BUSINESS Cont'd Mw-sized geothermal loop experimental facility in the vicinity of Niland, California.

The U.S. Department of Energy

(" DOE") joined the Company as 50% participant in this project.

Operational testing started in May 1976 and terminated on September 30, 1979.

The sale or decommissioning of this facility is anticipated during 1980.

The Company has undertaken a Commercial Risk Reduction Program to address some of the problems associated with constructing and operat-ing commercial geothermal plants in the Imperial Valley.

This program is designed to explore such areas as acquiring cooling water, assessing environmental impacts, evaluating power plant economics and develop-ing reliable components.

The Company has proposed to construct at Heber in the Imperial Valley a 45 Mw net geothermal plant utilizing a binary heat exchange cycle.

To help share in the risks associated with developing new technology for the binary cycle, funding support from the DOE has been requested.

A 10 Mw geothermal plant co-sponsored with Magma Electric Company is demonstrating the utilization of Imperial Valley geo-thermal resources and the binary process of extracting energy.

The Company is evaluating the use of load management and dis-tribution automation systems on its electric network in a pilot project awarded by the DOE.

The project tects the effectiveness of sending signals over the power lines to special equipment that controls cus-tomer appliances, reads electric meters and also controls the dis-tribution circuits.

Approximately 740 customers will be involved in the test program.

The Company is currently conducting a solar energy research project to evaluate the potential for successful utilization of soler energy in building space heating, water heating and space cooling The main objectives of the project are (1) to evaluate applications.

impact of solar heating and cooling on the Company's gas and elec-the tric systems, particularly with respect to using gas or electricity as a supplementary off-peak source of energy, (2) to provide an operational system that can be used to evaluate economics and energy in the conservation potential of solar heating and cooling systems Company's service territory, (3) to collect solar data for the areas served by the Company and (4) to evaluate the potential for the Com-pany to market and maintain solar related equipment.

Late in 1977, the DOE contracted with the Company to commence the organization and management of a utility industry program aimed at evaluating the potential for the reintroduction of the HighIn Temperature Gas-Cooled Reactor into the energy marketplace.

February 1978, a group of utilities, including the Company, formed an organization called Gas-Cooled Reactor Associates, which organ-ization has become the successor to the DOE contract With the Company.. -.

= _.

Item 1.

BUSINESS Cont'd A computerized Distribution Facilities Information System is being developed to provide improved capablities for gas and electric distribution, design, mapping, planning and analysis functions.

The feasibility of on-site 40 Kw fuel cell power plants is being studied to determine their operational economics and reli-ability.

The project is being sponsored by the DOE /GRI.

The Company provides technical expertise to governmental bodies in its servica territory for a study on the use of municipal waste as a fuel to produce steam and electricity.

The Company uses the resources of the University of California -

San Diego Energy Center to perform research on specifically identified tasks.

They are presently involved in studies on Solar Applications Analysis, Energy Conservation and Cable Ampacity.

Advanced technologies are assessed to determine feasibility and potential application to benefit ratepayers.

Projects are selected with a view toward ensuring an economical, environmentally sound and reliable system.

For amounts of research and development expendicures, see Note 1 (Summary of Accounting Policies - Research, Development and Demonstration) on page 20 of the Company's 1979 Annual Report to Shareholders.

RATE MATTERS General Rate Matters On May 15, 1978, the Company filed an application with the CPUC for general rate relief for its electric and gas departments based on a 1979 test year.

The Company's application in this proc-eeding was handled by the CPUC under a new procedure designed to reduce regulatory lag by processing such cases within twelve months of the acceptance of the filing by the CPUC.

On January 16, 1979, the CPUC granted partial rate relief in the amount of S33.7 million annually and on June 5, 1979, the CPUC issued a decision, with rates effective June 10, 1979, granting an additional S37.2 million annually. The June 5th rate decision authorized a 10.59% return on rate base and a 14.5% return on common equity, based on the 1979 test year.

The decision also authorized the Company to recover virtually all the costs associated with the suspended Sundesert nuclear project either through rate base treatment or amortization.

See Note 8 of Notes to Financial Statements in the 1979 Annual Report to Shareholders for further discussion of this matter.

In the June 5th decision, the CPUC requested that the Company sub-mit its next general rate application based on the test years of 1981 l

and 1982.

The CPUC indicated that it would consider, upon showing,of

Item 1.

EUSIMPSS Cont'd need, grantina a partial general rate increase for the 198 test year, but would determine final rates based on a 1982 test year not to become effective prior to January 1, 1982.

On March 12, 1980, the Company tendered a notice of intent to the CPUC that it plans to request general rate relief for its electric and gas departments of approximately S107 million based on a 1981 test year.

'ater in the year the Company plans to file another request for genet I rate relief based on a 1982 test year.

Eneray Cost Adjustment Clause The CPUC has adopted an Energy Cost Adjustment Clause ("ECAC")

which is designed to permit the Company to recover its electric energy costs through periodic rate adjustments.

Differences between revenues derived from the ECAC and the actual energy costs are deter-mined monthly and recorded in a balancing account to eliminate any effect upon net income.

Each time ar. ECAC adjustment is made, the then existing amount in the balancing account plus interest thereon is incorporated into the adjustment.

In August 1979, the CPUC instituted a generic proceeding to determine the effectiveness of the ECAC procedures.

On January 29, 1980, the CPUC issued two interim orders.

In the first decision, the CPUC revised the rate for accruing interest on the Company's balancing accounts (including ECAC) and customer deposits from a fixed rate of 7% to a monthly floating interest rate based on the Federal Reserve Bank's published prime 90-day commercial paper rate plus 1/2 of 1%.

For March 1980, the annualized rate appli "

to the balancing accounts is 14.28S.

This revision should provide interest accruals which more closely approximate the Company's actual short-term borrowing rates.

The second interim decision implemented changes desianed to improve the matchina of cash expenses to current rates.

The modifi-cations allow the use of estimated fuel prices, estimated balancing account balances and a forecasted resource mix and sales estimate rather than the historical data previously utilized.

In addition, the CPUC decreased the minimum interval between filing dates from i

six months to four months.

The Company believes that these revised procedures provide for more timely amortization of existing balancing account undercollections and should help reduce the Company's short-term borrowing requirements.

l Effective December 20, 1979, the CPUC authorized an increase in ECAC revenues of approximately $41.5 million on an annual basis.

On January 29, 1980, the Company filed an application requestino a further increase of approximately S152 million in annualized ECAC revenues.

In this application, the Company requested permission to i

amortize the existing amount in the balancing account over a six-month period, rather than the usual twelve-month period, to accel-erate recovery of ECAC undercollections.

Hearings on this application were held in early March and the matter is awaiting decision. t

Item 1.

RUSIFFSS Cont'd Gas Rates The CPUC has authorized the Company to adopt a Purchased Gas Adjustment ("PGA") clause in its gas tariff schedules to permit the Company to offset, subject to CPUC approval, changes in the cost of gas from its suppliers, principally SoCal.

The Company maintains a PGA balancing account to adjust for over and under collections of such gas costs under this procedure.

The Company is also authorized to of fset certain gas cost increases relating to SoCal's gas exploration and development proqram.

Under these procedures, the Company has been able to offset nearly all increases in natural gas costs from its suppliers.

In connection with the implementation of a PGA on July 19, 1977, the CPUC ordered comprehensive changes in the gas rate structure for both the Company and SoCal by inverting the traditional declining block rate structure and eliminating all differences in rates relating to density and population. On May 16, 1979, the California Supreme Court annulled the CPUC decision due to lack of sufficient findings and ordered the CPUC to determine an appropriate method to spread the rate increase and to order refunds and surcharges if appropriate.

There has been no net channe in the Company's total revenues as a result of this decision.

Hearings were held in November 1079 and additional hearings are expected in 1980.

The CPUC has adopted a gas supply adjustment mechanism

(" SAM"),

which ensures that gas utilities recover the sane gas margin (gas sales revenues less gas purchase costs), but not more, found reason-able in the last general rate case.

Each month actual purchased gas costs are subtracted from recorded sales revenues and the difference is compared to the allowed margin on such sales.

Credits or debits are made to a balancing account for any variations and these are acortized through rates in subsequent periods.

Since the marain is fixed until the next rate case, the SAM, with its balancing account, should elisinate the effects on earnings caused by unexpected changes in gas supply or gas sales.

It reduces the risks to the utility but does not quarantee that the utility will earn its authorized rate of return since increases in' operating costs are not covered under this procedure.

The SAM procedure and balar.cing account became effective for the Company on October 15, 1978.

On March 9, 1979, the Company filed a PGA/ SAM application for an increase of $40.7 million annually to pass through the net effect of an increase in charges from SoCal and an overcollection in the SAM balar.:ing account.

The requested increase included SS.5 million still pending from an earlier PGA application.

On June 19, 1979, the CPUC authorized.the $5.5 million increase and by interim order authorized $18.1 million of the balance requested in the March 9, 1979 application. Both amounts were subject to surcharge or refund pending final determination as to the appropriate method of spr6ading the rate increase among different classes of customers.

Further hearings.

Item 1.

BUSINESS Cont'd on this issue and on the balance of the Company's request were held in September 1979.

On January 15, 1980, the CPUC authorized a PGA/ SAM increase of approximately S21.8 million.

In January 1980, the CPUC authorized an additional increase of

$9.8 million in purchased gas costs from SoCal to the Company.

Sub-sequently SoCal applied to the CPUC for another increase in its gas The Company has requested authority to pass on to its cus-rates.

tomers these additional increases in purchased gas costs in an aggregate amount of approximately $78 million.

This request is cur-rently pending.

EMPLOYEES OF REGISTRANT The Company had 4,740 regular employees, 19 of whom are officers, at December 31, 1979.

SEASONAL NATURE OF BUSINESS For reasons detailed in the Company's 1978 Form 10-K, the company does not consider that its financial statements are influenced by seasonal factors.

OTHER There is no single customer or small group of customers, the loss of which would have a materially adverse effect on the business of the Company.

The status of backlog of orders is not applicable to the Company or its subsidiaries.

Neither the Company nor its subsidiaries engage in business in foreign countries.

Item 2.

SUMMARY

OF OPERATIONS See " Summary of Operations" and " Management's Discussion and Analysis of the Summary of Operations" on pages 12 and 13 of the Registrant's 1979 Annual Report to Shareholders.

l l

l.

Item 3.

PROPERTIFS Substantially all utility plant is subject to the lien of the mortgage and deed of trust, dated July 1, 1940, and supplemental in-dentures thereto.

Electric Properties As of December 31, 1979, the installed generating capacity of the Company was 2,438 Megawatts, as shown in the following table:

Net Generating Plant Location Fuel Capability (Mecawatts)

Station B San Diego, CA Gas / Oil 87 Silver Gate San Diego, CA Gas / Oil 230 Encina (1)

Carlsbad, CA Gas / Oil 917 (1)

South Bay Chula Vista, CA Gas / Oil 706 San Onofre (2)

San Clemente, CA Nuclear 87 (2)

Combustion San Diego County, Gas / Oil 411 Turbines CA TOTAL 2,438 (1)

Includes 320 Mw from Encina Unit 5 operating under a sale / leaseback agreement.

(2)

Represents the Company's 20% share.

The remaining 80% is owned by Edison.

In regard to new electric generatino facilities, the Company proposes the following additions to generating capacity:

Planned Operating Net Plant / Unit Location Fuel Date Capability (Megawatts)

San Onofre San Clemente, Nuclear 1981 &

l Units 2&3 CA 1983 440 (1)

(1)

Represents the Company's 20% share.

l As of December 31, 1979, the Company owned and operated 8,162 pole I

miles of transmission and distribution overhead lines, 4,326 miles of underground lines and 218 substations.

Gas Properties

. The following table sets forth the Company's gas facilities which l

are located in San Diego and Riverside Counties, California.

I l

4 Itcm 3.

PROPERTIES Cont'd Storage Facilities e

Total Storage Delivery Plant Location Capacity Capacity LNG Plant 1 Chula Vista, CA 620,000 Mcf 120,000 Mcf/ day LNG Plant 2 Chula Vista, CA 1,200,000 Mef 120,000 Mcf/ day Transmission Facilities Total Station Location Compressor Horsepower Moreno Compressor Station Moreno, CA 7,700 Rainbow Compressor Station Rainbow, CA 3,060 As of December 31, 1979, the Company owned and operated 127 miles of high pressure transmission lines, 4,660 miles of high and low pressure distribution mains and 3,934 miles of service lines.

General Properties The 21-story corporate office building is located at 101 Ash Street, San Diego, California.

The buildina is occupied pursuant'to a long-term lease.

Terms of the lease provide for minimum annual rentals of S1,945,000 for a period of 30 years commencing in 1975 and include four separate five-year renewal options at fair market value.

Additional properties include seven district operating centers, associated facilities and equipment required for construction and maintenance of the Company's electric and gas transmission and distribution systems.

Properties of Subsidiaries The following is a brief general description of the properties owned by the Company's subsidiaries:

Applied Energy, Incorporated is engaged in special energy related services to commercial and industrial customers in S:n Diego County.

Its properties consist primarily of two owned central chilled water plants and three owned and one leased central steam plants that supply steam to local facilities.

Item 3.

PROPERTIES Cont'd Japatul Corporation is a land holding and development subsidiary.

Its largest holding is 850 acres of land adjoining Palomar Airport near Carlsbad, California.

New Albion Resources Co. is engaged in the exploration and development of fuel resources.

Its properties consist primarily of geothermal leases in California and coal leases on the Kaiparowits Plateau in southern Utah.

Califia Company is oraanized solely to facilitate financino transactions on behalf of the parent and has no properties.

Item 4.

PARENTS AND SUBSIDIARIES Parent of San Diego Gas & Electric Company:

NONE Subsidiaries of San Diego Gas & Electric Company as of March 15, 1980 are as follows:

Percentage Name of Company Controlled of Voting (All incorporated in California)

Kind of Business Stock Owned Applied Energy, Incorporated Energy Related Services 100%

Califia Company Financing for Parent 100%

Japatul Corporation Land Folding &

Development 100%

New Albion Resources Co.

Fuel Exploration

& Development 100%

All subsidiaries as of December 31, 1979 are accounted for by the equity method.

Separate financial statements have not been filed because the impact of the subsidiaries is insignificant in the aggregate.

Item 5.

LEGAL PROCEEDINGS LITIGATION FERC Consolidated Dockets E-7777 and E-7796 SDC&E is party to a contract dated January 14, 1969 among seven_ companies located in Festern States which provides for

.purc ase and sale of electricity between companies located in h

California and companies located in the Pacific Northwest (the "Seven Party Agreement").

In 1972 the FFRC instituted an investi-

-la-E

Item 5.

LEGAL PROCEEDINGS Cont'd Qation (Present Docket E-7796) to consider allegations made by California municipalities that the Seven Party Agreement is anti-competitive.

In July 1978, the Northwest Companies terminated the Agreement and requested dismissal of the proceedino.

Hearinos have been conducted on the motion for dismissal and the matter is pending before a FFRC Administrative Law Judge.

The Company is also a party to the California Power Pool Agree-ment, dated July 20, 1964 ("CPP Agreement").

In 1974 the FERC com enced an investigation ( Docke t E-7777) to consider allegations made by California municipalities that the CPP Agreement is anticorpetitive.

The Company was not made a party to the latter investigation.

In December 1978, the FERC issued an order, consolidating the two investigations, holding that the California Companies Pacific Intertie Agreement ("Intertie Agreement"), dated August 25, 1966, and all contracts and practices affecting or relating to the Intertie Agree-ment are within the range of the CPP Agreement investigation.

The Company is a party to all issues of the consolidated proceeding.

The relief sought by the municipalities, and apparently by the FERC Staff, includes (1) revision of the Seven Party Agreement and the CPP Acreement to add municipalities as parties and otherwise to modify the terms of such agreements and (2) revision of tre In-tertie Agreement to transfer richts to use transmission capacity now exercised by the California Companies (including SDGEE) to others, including municipalities.

These proceedings are now pending before an Administrative Law Judge at the FERC.

Antitrust Allegations by DWR Pefore the FERC On December 30, 1977, SDG&E reauested permission of the FERC to increase the rate for off-peak energy sold to the California Department of Water Resources ("DWR") pursuant to a contract dated August 1, 1967.

The DWR has not yet responded to SDG&E's application.

However, it has responded to comparable applications submitted by the other California utilities, which are sellers of off-peak energy under the same contract, by opposing the requested rates on the grounds, among other things, of anticompetitive conduct on the part of SDG&E and the other utilities.

The Cities of Anaheim and Riverside have moved to intervene in the proceeding, contending that limitations on the scope of the transmission service provided in the contract are anticompetitive.

SDG&E has opposed such intervention.

In May 1978, the Company submitted to the FERC a settlement agreement, executed by it and the DWR.

The FERC has taken no action on the requests to intervene or on the proposed settlement agreement.

The Company is a party to a suit by Fdison in the Los Angeles Superior Court aaainst the Los Angeles Department of Water and Power

("LADWP").

Edison seeks to enjoin the LADWP's breach of certain con-tractual provisions relating to the supply of energy by_Fdison, th Item 5.

LEGAL PROCEEDINGS Cont'd Company, Pacit'ic Gas and Electric Company and the LADWP to the State Water Project.

If this suit is unsuccessful, the Company may be required to provide a portion of the LADWP's oblication at a price below its current costs.

The Company cannot predict the financial impact of this matter on future operations.

Litigation discussed in the 1978 Form 10-K was either dismissed or settled in favor of the Company during 1979 except for San Diego Gas &

Electric Corpany vs. City of San Diego, et al.

(see the Company's Form 10-K for 1977) which is pending in the United Stttes Supreme Court.

ENVIRON" ENTAL M AT'"ERS See Item 1. BuFiness (Environrental Matters) on page R of this annual report on Form 10-K.

Item 6.

INCREASES AND DFCREASES IN OUTSTANDING SFCURITIES AND INDFBTEDNESS FOUITY SFCURITIES Common Stock, SS Dar value Par Value No. of Shares Outstanding at December 31, 1978 S137,964,045 27,592,209 Add:

Shares issued in public offering on July 17, 1979; closing date of sale July 24, 1979 (Registration No. 2-64808) 15,000,000 3,000,000 The shares were sold to the public through underwriters represented by Perrill Lynch, Pierce, Fenner & Smith Incorporated and Blyth Eastman Dillon & Co. Incorporated, at a price to the public of S15.00 and underwriting discount of 50.50 per share.

The net cash proceeds of $43.5 million were used to retire a portion of short-term indebtedness incurred for the construction program.

Shares issued pursuant to the Automatic Dividend Reinvestment Plan throughout 1970 (Registration No. 2-61421) 1,292,190-258,438 Itera 6.

INCRFASES AND DECREASES IN OUTSTANDING SECURITIES AND INDFFTEDNFSS Cont'd Shares issued pursuant to the Savings Plan throughout 1979 (Registration Nos. 2-61166 and 2-64000) 1,684,950 336,990 Outstanding at December 31, 1979

$155,941,185 31,188 237 2

DEBT SECURITIES AND OTHER INDEBTEDNESS Registered Securities

$50,000,000 First Mortgage Bonds, 9.30% Series N due 1979, were retired December 17, 1979.

Unregistered Securities Changes to Other Long-Term Debt during 1979 consisted principally of additions to Pollution Control Bonds (reference is made to Part II of the Company's March 31, 1979 Form 10-0) and seven-year inter-mediate term loans from three banks (reference is made to Part II of the Company's June 30, 1979 Form 10-0).

Item 7.

CHANGTS IN SECURITIES AND CHANGFS IN SECURITY FOR REGISTERED SECURITIES None.

Item 8.

DEFAULTS UPON SENIOR SECURITIES None.

Item 9.

APPROXIMATE NUMBER OF EOUITY SECURITY HOLDERS Title of Class Number of Record Holders (as of 12/31/79)

COMMON EOUITY:

Common Stock, S5 par value 76,447 i

PREFERRED STOCK:

Cumulative preferred stock, $20 par value 5% Series 1,717

' 1/2% Series 600 4.40%LSeries 663

_4.60% Series 221 'c

Item 9.

APPROXIMATE MUMBER OF FOUITY SECURITY HOLDERS Cont'd PREFERENCE STOCK:

(Cumulative) without par value 59.84 Series 2,071 S7.80 Series 1,341

$7.20 Series 583 S7.325 Series 1

$8.25 Series 17 S2.68 Series 3,265 S9.125 Series 3

S2.475 Series 3,425 Item 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable.

Item 11.

INDEMNIFICATION OF DIRECTORS AND OFFICFRS See the Company's annual report on Form 10-K, Item 12, for the year 1977.

Information for this item has remained unchanged since that report was filed.

Item llA.

EXECUTIVE OFFICERS OF THE REGISTRANT Name Ace Positions

• ROBERT E. MORRIS 58 Director, President and Chief Executive Officer of the Registrant since November 1075.

Senior Vice President of the Registrant from 1971 through 1975.

• THOMAS A.

PAGE 47 Director of the Registrant since April 1979.

Executive Vice President and Chief Operating Officer of the Registrant since May 1970.

With Gulf States Utilities Company a: Executive Vice President and Director from 1977 to 1978.

Executive Vice President from 1976 to 1977.

Senior Vice President-Finance in 1975.

• J.

ROBERT BELT 51 Vice President - Administrative Services of the Registrant since October 1979.

Senior Vice President - Administration of the Registrant from 1976 to 1979.

Senior Vice President of the Registrant from 1975 to 1976.

Vice President - Administrative Services of the Registrant from 1972 through 1975.

Itcm llA.

EXECOTIVE OFFICERS OF THE REGISTRANT Cont'd GARY D.

COTTON 39 Vice President - Engineering of the Regis-trant since April 1979.

Manager - Licensing and Environmental of the Registrant from 1976 to 1979.

Supervisor - Licensing and Environmental of the Registrant in 1975.

• ALTON T.

DAVIS 42 Vice President - Gas of the Registrant since April 1976.

Manager - Gas Division of the Registrant from 1975 to 1976.

Superinten-dent - Gas Operations of the Registrant from 1971 to 1975.

FRANK W.

DEVORE 52 Vice President - Governmental Affairs of the Registrant since April 1976.

Director of Governmental Affairs of the Registrant from 1975 to 1976.

Manager - Engineering Land of the Registrant from 1965 to 1975.

• DAVID W.

GILMAN 57 Vice President - Power Supply of the Regis-trant since October 1979.

Senior Vice Presi'ent - Operations of the Registrant from 1976 to 1979.

Senior Vice President of the Registrant from 1973 to 1976.

JOHN E.

HAMRICK 53 Vice President - Marketing of the Regis-trant since April 1973.

JAMES J.

HOLLEY 60 Vice President - Personnel of the Regis-trant since April 1969.

• WILLIAM J.

KARNES 57 Secretary of the Registrant since May 1974.

PHILIP M.

KLAUBER 64 Vice President - Consultant of the Regis-trant since October 1979.

Vice President -

Customer Services of the Registrant from 1965 to 1979.

• RICHARD KORPAN 38 Treasurer of the Registrant since January 1979.

With Public Service Company of Colorado as Manager - Financial Services from 1977 to 1979.

Director of Treasurer Operations from 1975 to 1977.

Acting Director of Treasurer Operations from 1974 to 1975.

RALPH L. MEYER 57 Vice President - Regulatory Services of the Registrant since October 1979.

Senior Vice President - Finance of the Registrant in 1979. Senior Vice President.and Treasurer from 1976 to 1978.

Senior Vice President of the Registrant from 1975 to 1976.

Vice President - Finance of the Registrant from 1973 to 1975..

Itcm llA.

EXFCUTIVE OFFICERS OF THE REGISTRANT Cont'd ROBERT E.

PARSLEY 58 Controller of the Registrant since June 1966.

GORDON PFARCE 50 Vice President and General Counsel of the Registrant since April 1977.

Director of the Registrant since February 1976.

Vice President - General Attorney of the Regis-trant from 1970 to 1977.

R.

DENIS RICHTER 53 Vice President - Public Relations of the Registrant since April 1976.

Director -

Public Relations of the Registrant from 1969 to 1976.

JACK E. THOMAS 48 Vice President - Customer and Operations Services of the Registrant since October 1979.

Vice President - Electric of the Registrant from 1978 to 1979.

Vice President - Distribution Services of the Registrant from 1976 to 1978.

Vice Presi-dent - Power Plant Engineering and Con-struction of the Registrant from 1974 to 1976.

• RONALD W. WATKINS 38 Vice President - Resource Planning of the Registrant since April 1979.

Manager -

Resource Planning of the Registrant from October 1976 to April 1979.

Manager -

Flectric Systems Planning of the Registrant from August 1976 to October 1976.

Resource Planning Supervisor of the Registrant from May 1976 to August 1976.

System Fore-casting Supervisor for the Registrant from December 1975 to Fay 1976.

JOHN H. WOY 63 Vice President - Regulatory Consultant of the Registrant since October 1979.

Vice President - Rates and Valuation of the Registrant from 1967 to 1979.

• Also a director or officer of one or more of the Company's four wholly-owned subsidiaries, as follows:

m -

r Itom 11A.

EXECt'TIVE OFFICFRS OF THE REGISTRANT Cont'd NEW ALBION JAPATUL APPLIED ENERGY, CALIFIA TITLE RESOURCES CO.

CORPORATION INCORPORATFD COMPANY President

• • R.

E.

Forris

• • R.

E. Morris

• • R.

E. Morris

• • R.

E.

Morris Vice President

• • T.

A.

Page and Chief Financial Officer Vice Presi-

• • R. W. Watkins

• • J.

R. Belt

• • D. W. Gilman

• • R.

Korpan dont

• • A.

T. Davis

'Vice Presi-R.

Korpan t

Finance dont Treasurer R.

L. !!aney R.

L. Haney R.

L. Haney Secretary

• • W.

J.

Karnes

• • W.

J.

Karnes W.

J. Karnes P.

J.

Karnes Assistant G.

S. Cohn Secretary

• • DIRECTORS There is no family relarions. hip between any of the executive officers.

R l

f I

l

. t

Item 12.

FIMAMCI AL STATEMENTS, FXHIBITS FILED AMD RFPORTS OM FORM 8-K TABLF OF COMTENTS TO FINAMCIAL STATEMENTS AND SCHEDULES The following financial statements are included in the Company's 1979 Annual Report to. Shareholders which is attached hereto and are filed as a part of this annual report on Form 10-K.

Statements of Income for the years ended December 31, 1979 and 1978 (page 14).

Balance Sheets at December 31, 1979 and 1978 (page 15).

Statements of Changes in Financial Position for the years ended December 31, 1979 and 1978 (page 16).

Statements of Changes in Capital Stock and Retained Earnings for the years ended December 31, 1979 and 1978 (page 17).

Statements of Capital Stock at December 31, 1979 and 1978 (page 17).

Statements of Long-Term Debt at December 31, 1979 and 1978 (page IR).

Schedules of Financial Information by Segments of Business for the years ended December 31, 1979 and 1978 (page 10).

Notes to Financial Statements, December 31, 1979 and 1978 (pages 20-23).

Supplementary Information to Disclose the Effects of Changing Prices (Unaudited) (pages 24-25).

The following supplementary information is included herein:

i Supplementary Notes to Financial Statements:

l l

(1)

Supplementary Income Statement Information l

(2)

Nuclear Fuel Storage and Dismantling Costs l

(3)

Supplementary Information to Disclose the Effects of Changing Prices (Unaudited) l (4)

Jointly-Owned Electric Utility Plant (5)

Long-Term Contracts for Purchase of Flectric Power l

(6)

Income Taxes (7)

' Event Subsequent to Date of Opinion of Independent Certified Public Accountant l i

Item 12.

FINANCIAL STATEMENTS, EXHIBITS FILED AND REPORTS ON FORM 8-K Cont'd Supplementary Financial Schedules:

Utility Plant for the years ended Schedule V December 31, 1979 and 1978.

Schedule VI -

Accumulated Depreciation and Amorti-zation of Utility Plant for the years ended December 31, 1979 and 1978.

All other schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the financial statements and notes in the Company's 1979 Annual Report to Shareholders.

Report of Deloitte Haskins & Sells, Certified Public Accountants.

REPORTS ON FORM 8-K No reports on Form 8-K were filed during the three months ended December 31, 1979.

EXHIBITS None.

SUPPLEMENTARY NOTES TO FINANCIAL STATEMENTS (1)

Supplementary Income Statement Information Maintenance of property, plant and equipment, other than transportation and construction eouipment, is charged to operating expenses.

Maintenance and depreciat{on of transpor-tation and construction equipment are charged :o clearing accounts and subsequently distributed to operations and construction.

Maintenance and repairs, depreciation and property taxes charged directly to operations are shown separately in the State-ments of Income.

Royalties, taxes other than income and property taxes and advertising costs have not been significant.

Rents charaed to operations are included in Note 6 of Mates to Financial Statements in the Company's 1979 Annual Report to Share-holders.

(2)

Nuclear Fuel Storage and Dismantling Costs The Company has a 20% ownership share of the San Onofre Nuclear Generating Station.

As of December 31, 1979, the Company has SI.3 million of accrued net salvage value for nuclear fuel consumed prior to 1975.

Since 1975, nuclear fuel costs associated with San Onofre Unit I have been amortized on the basis of zero net sal

• rage value.

The CPUC, in the general rate decision of July 1977, permitted the Company to amortize the accrued net salvage over a future five-year period with concurrent rate recovery. The Company makes no provision for future storage or disposal costs for spent nuclear fuel, but charges those costs to expense as incurred with rate recovery to be obtained through the provisions of the Company's ECAC.

The Company estimates its share of future dismantling and decontaminating costs for San Onofre Unit 1 will be approx-imately $11 million.

In a rate decision in June 1979, the l

CPUC granted the Company permission to adjust its depre-ciation accruals for San Onofre unit 1 so that these dis-mantling and decontaminating costs could be fully accrued l

l over the remaining life of the unit and adjusted the Com-pany's rates to reflect the revised depreciation rates.

(3)

Supplementary Information to Disclose the Effects of Changing Prices (Unaudited)

In Accounting Series Release No. 271, the Securities and Exchange Commission waived the requirement to disclose the estimated cost of replacing productive capacity if, for 1979,-

I :

T~

~

componica reported " current cost" information as required by Statement of Financial Accounting Standards No. 33.

Since the Company has disclosed " current cost" information in the Supplementary Information to Disclose the Effects of Chang-ino Prices in its Annual Report to Shareholders (pages 24-25), no attempt has been made to determine or report " replace-ment cost".

(4)

Jointly-Owned Electric Utility Plant As indicated in Note (2), the Company has a 20% share in tee San Onofre Unit 1 nuclear power plant, which is included in total plant in service (cost, S33 million).

Accumulated depre-ciation for the Company's share of such plant is S10 million at December 31, 1979.

In addition, at December 31, 1979 the Company has a 20% share (S379 million) in San Onofre Units 2 and 3, which are currently under construction, included in construction in progress.

The Company must provide its own financing for such costs.

The Company's share of direct expelses of San Onofre Unit 1 are included in the corresponding operating expenses in the Statements of Income.

(5)

Lona-Term Contracts for Purchase of Electric Sower On November 29, 1978, the Company and Tucson Electric Power Company entered into a ten-year power sale and inter-connection agreement (the " Agreement") providing for deliveries to the Company of approximately 100 to 150 Mw of power, with cer ain provisions to acquire additional power (up to 500 Mw) during the later years of the Agreement if planned transmission and generatina capability becomes available.

Estimated costs in the early phases of the contract range from a demand charge of S6.90/Kw month plus an energy charge of 12 mills / kwhr to a demand charae of $13.60/Kw month plus an energy charge of 7-10 mills / kwhr.

Energy costs for the later phases of the con-tract will be based on rate formulas contained in the Agree-ment with the actual rates established at the time the appro-priate phase begins.

The Agreement has been approved by the FERC.

During 1979 the Company entered into an agreement to pur-chase 236 Mw of power from Public Service Company of New Mexico

("PNM") beginning with the commercial operation of a planned generating unit expected May 1, 1982.

If planned generating capability does not become available, the 236 Mw of power is subject to reduction.

The capacity charge (ranging from S20.50 to S15.25/Kw month) for the six-year contract term is $297 million, assuring deliveries of the full 236 Mw.

The energy charge will be based upon future fuel and operating costs of the PNM plant. 'The Company is currently awaiting FERC approval of the agreement.

. ~.

(6)

Incoms Taxos Total income tax expense was less than the amount com-puted by applying the Federal and state statutory rates to income before income tax.

The reasons for this difference are as follows:

(Thousands of Dollars) 1979 1978 Tax expense at statutory rates

$38,089 S37,636 Reductions in taxes resulting from:

Excess of tax over book depreciation 12,454 11,099 Regulatory revenue adjustments - net 7,440 7,439 Allowance for funds used during construction 12,835 11,465 Payroll and use taxes capitalized 3,068 1,980 Employee benefits capitalized 2,634 3,001 Gain on sale of Encina Unit 5 469 (22,407)

Sundesert suspension (2,732) 19,925 Operating loss carryforward utilized 385 2,030 Othdr - net (157) 3,740 Total tax reductions 36,396 38,272 Current tax expense (credit?

1,693 (636)

Deferred tax effect of Encina Unit 5 sale - net 460 (14,036)

Deferred tax effect of Sundesert suspension - net (2,440) 12,481 Deferred tax effect of regulatory revenue adjustments - net 5,588 5,873 Deferred investment tax credits - net (54) 1,482 Deferred taxes other - net (524)

(524)

Total income tax expense S 4,723 S 4,640 Allocation of income tax expense:

Federal

$11,200

$10,180 Deferred investment tax credits - net (54) 1,482 State franchise 3,519 3,727 Deferred tax effect of Encina Unit 5 sale - net 460 (14,036)

Deferred tax effect of Sundesert

-suspension - net (2,440) 12,481 Deferred taxes other - net (524)

(5?4)

Operating expenses - income taxes 12,161 13,3f6

-Other income credits - other - net (7,438)

(8,670)

Total income tax expense S 4,723 S 4,640 (7)

Event Subs: quant to Date of Opinion of Independent Certified Public Accountants In March 1980, the Company sold $50 mi. lion of First Mortgage Bonds, 161, Series S due 2010 and 2.5 million shares of Common Stock.

SCllEDULE V SAN DIEGO OAS & CLECTRIC COMPANY UTILITY PLANT DECEMBER 31, 1978 (Thousands of Dollars)

COLUMN A COLUMN D COLUMN C COLUMN D COLUMN E COLUMN P Halance Other at Hegin-Changes Balance at ning of Additions Retirements Debit or Close of Classification Period at Cost at Cost (Credit)

Period El ctric Utility Plant Intangible Plant 195 195 Production Plant 310,749 36,173 575 346,347

Transmission Plant 105,880 17,576 1,975 3

121,484 U Distribution Plant 417,127 54,051 4,421 (1) 466,756 General Plant 9,170 320 331 (5) 9,154 Plant Held for Future Use 36,680 85 26,763(A) 63,528 Work in Progress 384,439 115,572

( 176,14 5 ) ( A) ( B)323,866 Electric Plant Acq. Adjustment 816 816 Total Electric Utility Plant 1,265,056 223,777 7,302 (149,385) 1,332,146 GCs Utility Plant Intangible Plant 85 2

87 Storage Plant 13,300 40 13,340 Production Plant 838 763 (75)

Transmission Plant 18,788 132 21 76 18,975 Distribution Plant 164,748 12,854 388 177,214 General Plant 2,210 34 61 5

2, 188 Plant IIeld for Future Use 45 45 Work in Progress 1,189 (124) 1,065 Total Gas Utility Plant 201,203 12,938 1,231 6

212,914

SCHEDULE V SAN DIEGO GAS & ELECTRIC COMPANY UTILITY PLANT DECEMBER 31, 1978 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN P Balance Other at Begin-Changes Balance ning of Additions Retirements Debit or Close oG Classification Period at Cost at Cost (Credit)

Period Steam Utility Plant Steam Plant in Service 1,260 18 1

1,277 Work in Progress 3

4 7

Total Steam Utility Plant 1,263 22 1

1,284 Common Utility Plant Common Plant in Ser'eico 20,352 2,041 554 (3) 21,836 Work in Progress 237 55 292 Total Common Utility Plant 20,589 2,096 554 (3) 22,128 Nuclear Fuel 16,694 113 (5,622)(C) 11,185 Total Utility Plant & Nuclear Fuel 1,504,805 238,946 9,090 (155,004)(D) 1,,579,657 (A)

Transfer of Sundesert nuclear project site-related costs to Plant IIeld for Future Use (B)

Sale of Encina Unit 5 ($107,043) and transfer of Sundesert nuclear project non-site-related costs ($42,339) to Deferred Debits (C)

Transfer of prepaid enrichment charges for Sundesert nuclear project to Deferred Debits (D)

All other charges are due to transfers

SCilEDULE V SAN DIEGO GAS & ELECTRIC COMPANY UTILITY PLANT DECEMBER 31, 1979 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F Balance Other at Begin-Changes Balance at ning of Additions Retirements Debit or Close of Classification Period at Cost at Cost (Credit)

Period Electric Utility Plant Intangible Plant 195 195 Production Plant 346,347 12,082 1,811 356,618 Transmission Plant 121,484 11,745 507 132,722 1 Distribution Plant 466,756 61,183 3,485 524,454

• General Plant 9,154 738 205 (10) 9,677 Plant IIeld for Future Use 63,528 2,028 65,556 Work in Progress 323,866 122,319 446,185 Electric Plant Acq. Adjustment 816 816 Total Electric Utility Plant 1,332,146 210,095

,6,008 (10) 1,536,223 Gcs Utility Plant Intangible Plant 87 87 Storage Plant 13,340 223 64 13,499 Transmission Plant 18,975 469 16 19,428 Distribution Plant 177,214 15,247 578 191,883 General Plant 2,188 92 80 2,200 Plant IIeld for Future Use 45 45 Work in Progress 1,065 (161) 904 Total Gas Utility Plant 212,914 15,870 738 228,046

SCHEDl!LS V SAN DIEGO GAS 0 ELECTRIC COMPANY UTILITY PLANT DECEMBER 31, 1979 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUSIN E COLUMN F Balance Other at Begin-Changes Balance i ning of Additions Retirements Debit or Close of Classification Period at Cost at Cost (Credit)

Period Steam Utility Plant Steam Plant in Service 1,277 8

1,285 Work in Progress 7

(7)

I y Total Steam Utility Plant 1,284 1

1,285 i

Common Utility Plant Common Plant in Service 21,836 2,343 495 10 23,694 Work in Progress 292 500 792 Total Common Utility Plant 22,128 2,843 495 10 24,486 Nuclear Fuel 11,185 11_.185 Total Utility Plant & Nuclear Fuel 1,579,657 228,809 7,241 1,801,225

SCHEDULE VI SAN DIEGO GAS & ELECTRIC COMPANY ACC[MULATED DEPRECIATION AND AMORTIZATION DECEMBER 31, 1978 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F Balance

~

at Begin-Transfers Balance a ning of Additions Retirements Debit or Close of Classification Pe r i,od at Cost at Cost (Credit)

Period Electric Utility Plant Production Plant 104,713 10,602 604 114,711 Transmission Plant 24,667 3,339 1,239 26,767 b Distribution Plant 92,692 13,869 4,051 102,510 fGeneral Plant 4,860 299 319 65 4,905 Plant Held for Future Use 235 121 25 331 Total Accumulated Depreciation 227,167 28,230 6 f38 65 249,224 2

Electric Plant Acquisition Adjustment 408 82 490 Other Utility Plant 1,550 276 (7) 1,819 Total Accumulated Amortization 1,958 358 (7) 2,309 Total Accumulated Depreciation &

Amortization 229,125 28,588 6,238 58 251,533

SCllEDULE VI SAN DIEGO GAS & EI.ECTitIC COMPANY ACCUMULATED DEPitECIATION AND AMOltTIZATION DECEMilElt 31, 1978 (Thounanda of Dollars)

COLUMN A COLUMN 11 COLUMN C COLUMN D COLUMN E COLUMN P Italance at Ilegin-Trann! era flalance at ning of Additionn itetirements Debit or Clone of Clannification Period at Cont at Cont (Credit)

Period G:s Utility Plant Storage Plant 3,816 462 (51) 4,329 Production Plant 690 1

641 (51)

(1) 1 Transmission Plant 7, fl 7 0 544 26 51 8,439

-J Distribution Plant 511,223 5,750 537 63,436 General Plant 1,091 7 11 33 22 1,15 tl Total Accumulated Depreciation 71,690 (1,1135 1_, 1116 22 77,361 Accumulated Amortization of Other Utility Plant 326 5tl 384 Total Accumulated Depreciation &

Amortization 72,016 6,119 1 1, lil6 H

77,7;.

Steam Utility Plant Accumulated Depreciation 1,0 19 33 1

1,051 Accumulated Amortization 1

1 Total Accumulated Depreciation &

Amortization 1,020 11 1

1,052

SCHEDULE VI S AN DIEGO G AS & ELECTRIC COMPANY ACCUMULATED DEPRECIATION AND AMORTIZATION DECEMBER 31, 1978 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN P Balance at Begin-T ra ns f e rs Balance at ning of Additions Retirements Debit or Close of Classification Period at Cost at Cost (Credit)

Period Common Utility Plant Accumulated Depreciation 7,415 642 485 (86) 7,486 Nuclear Fuel Accumulated Amortization 6,049 1,471 (391) 7,129

'T;tal Accumulated Depreciation &

Amortization 315,625 37,627 7,910 (397) 344,945 a

SCHEDULE VI SAN DIEGO GAS & ELECTRIC COMPANY ACCUMULATED DEPRECIATION AND AMORTIZATION DECEMBER 31,1979 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN P Balance at Begin-

• ransfers Balance ai ning of Additions Retirements Jebit or Close of Classification Period at Cost at Cost (Credit)

Period Electric Utility Plant Production Plant 114,711 12,074 1,447 125,338 Transmission Plant 26,767 3,787 392 30,162 d,

Distribution Plant 102,510 15,431 2,228 115,713 y>

General Plant 4,905 264 155 5,014 Plant Held for Future Use 331 120 13 438 Total Accumulated Depreciation 249,224 31,676 4,235 276,665 Electric Plant Acquisition Adjustment 490 81 571 Other Utility Plant 1,819 306 06 2,059 Total Accumulated Amortization 2,309 387 66 2,630 Total Accumulated Depreciation &

Amortization 251,533 32,063 4,301 279,295 f

1

SCHEDULE VI SAN DIEGO GAS & ELECTRIC COMPANY ACCUMULATED DEPRECIATION AND AMORTIZATION DECEMBER 31,1979 (Thousands of Dollars)

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN P Balance at Begin-Transfers Balance a' ning of Additions Retirements Debit or Close of Classification Period at Cost at Cost (Credit)

Period Gcs Utility Plant Storage Plant 4,329 465 63 4,731 Production Plant (1)

(1) 1 Transmission Plant 8,439 554 2

8,991 o Distribution Plant 63,436 6,231 513 69,154 General Plant 1,158 66 54 1,170 Total Accumulated Depreciation 7_7,361 7,316 632 84,045 Accumulated Amortization of Other Utility Plant 384 60 8

436 Total Accumulated Depreciation &

Amortization 77,745 7,376 640 84,481 Steam Utility Plant-Accumulated Depreciation 1,051 33 1,084 Accumulated Amortization 1

I Total Accumulated Depreciation &

Amortization 1,052 33 1,085

SCllEDULE VI SAN DIEGO GAS L ELECTRIC COMPANY ACCUMULATED DEPRECIATION AND AMORTIZATION DECEMBER 31,1979 (Thousands of Dollars) i' COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN P Balance at Begin-Transfers Balance e ning of Additions Retirements Debit or Close of Classification Period at Cost at Cost (Credit)

Period Common Utility Plant Accumulated Depreciation 7,486 683 324 7,845 Nuclear Fuel Accumulated Amortization 7,129 1,602 8,731 7' Total Accumulated Depreciation &

Amortization 344,945 41,757 5,265 381,437

LJUlUILLU Haskins-Sells Swte 1100 1010 Second A.e%e San D ego Catt:m a 92:07 (714)232-6501 TWX 910-335-1573 OPINION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS San Diego Gas & Electric Company:

We have examined the financial statements, sucolementary notes to financial statements and sucolementary financial schedules of San Diego Gas & Electric Company listed in the accompanying table of contents, which you are filing as part of your Annual Report (Form lO-K) to the Securities and Exchange Commission for the year ended December 31, 1979.

Our examinations were made in accordance with generally accepted auditing 3tandards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, such financial statements present fairly the financial position of the Company at December 31, 1979 and 1978, and the results of its operations and changes in its financial position for the years then ended, in conformity with generally accepted accounting principles apolled on a consistent basis.

Also, in our opinion, the supplementary notes to financial statements and supplementary financial schedules, when considered in relation to the basic financial statements, present fairly in all material respects the information shown therein.

DELOITTE HASKINS & SELLS l

San Diego, California February 8, 1980 PART II Items 13 throuah 15 The Company has filed definitive copies of its Proxy Statement with the Commission, pursuant to Regulation 14-A.

Therefore, Items 13 to 15, inclusive, have been omitted.

l SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SAN DIEGO GAS & ELECTRIC COMPANY (Registrant)

Date MAR 2 7199D By (Signature)

R.

E.

Parsley Controller l

I ;-

1

.#,a.

Haskj[s IeIs i

Suite 11N 1010 Second Avenue San D' ego. Cahf orn,a 92101 (71 4 232-6501 TWX 910 335-1573 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS San Diego Gas & Electric Company:

We hereby consent to the incorocration by reference in Registration Statement No. 2-66733 on Form S-16 of our opinion dated February 8, 1980 apoearing in the Annual ReDort on Form 10-K of San Diego Gas & Electric Comoany for the year ended December 31, 1979.

DELOITTE HASKINS & SELLS San Diego, California March 24, 1980

. d

9 t

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.

20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quar ter Ended.. Epptppbpy, )p,, J99p..... Commission file number...};3??9,,,

.................... S. A. N.. D. I. E. G. O.. G. A. S.. &.. E. L. E. C. T. R. I. C.. C. O. M. P. A. N. Y...........

(Exact name of registrant as specified in its charter)

......... C. A. L. I. F. O. R. N. I. A.................................9 5..118 4 8 00................

(State or other jurisdiction of (I.R.S. Employer incorporation or organization)

Identification No.)

.k9k. Ash,gggggg;,qan,gjgggg,ga}((ggg{a,,,,,,,,,,,,,,,,,,,,,,,,g2}g},,,,,,,,,

~ (Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code.... !3ki). 232;j2g2,,,,,,,,

...............................53.ggaggg,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Former name, former address and former fiscal year, if changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),.and (2). has been subject to such filing requirements for the past 90 days.

Yes...X...

No.......

~

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this' report.

[ Common. Stock outstanding September 30,'1980:

36,248,897 Page 1 of 13

A FINANCIAL STATEMENTS SAN DIEGO GAS & ELECTRIC COMPANY STATEMENTS OF INCOPI (Unaudited)

THREE MT."THS ENDED SEPTEMBER 30, 19B0 1979 (Thousands of Dollars)

OPERATING REVENUES Electric.......................................... $ 217 461 S 162 183 Gas...............................................

37 132 31 215 Steam.............................................

254 182 Total Operating Revenues...................

254 847 193 580 OPERATINO EXPENSES Electric Fuel & Purchased Energy..................

142 132 89 523 Gas Fuel..........................................

22 359 16 039 Other Operating...................................

33 393 27 369 M a i n t e na nc e.......................................

9 050 7 170 Depreciation......................................

13 437 12 602 Taxes:

Property........................................

3 438 3 562 Income..........................................

2 609 5 413 Other...........................................

812 618 To ta l Opera ting Ex pe ns e s...................

227 230 162 296 OPERATING INCOME......................................

27 617 31 284 OTHER INCOME CREDITS AND (DEBITO)

Allowance for Other Funds Used Dur i ng Cons truc tio n.............................

6 400 5 219 Provision for Exchange Los s.......................

(26 000)

Income and O ther Tax e s............................

8 873 2 496 Other--Net 2 730 822 Total Other Income Credits (Debits)........

(7 997) 8 537 INCOME BEFORE INTEREST CHARGES........................

19 620 39 821 INTEREST' CHARGES Lo ng -Te rm D e b t....................................

16 593 14 245 S hor t-Te rm D eb t a nd O the r.........................

6 395 1 741 Allowance for Borrowed Funds Used During Construction.............................

(3 211)

(2 083)

Net Interest Charges.......................

19 777 13 903 NET INCOM0 'before preferred dividend requirements)...

(157) 25 918 P-

.ted Dividend Requirements...................

4 411 4 411 EARNI.

?PLICABLE TO COMMON SHARES..................

(4 568) 21 507 Common Stock Dividends Declared...................

14 500 11 785 Ea r ning s Reinve s ted............................... S (19 0 6 8 )

S 9 722"~

WEIGHTED AVERA7E COMMON SHARES OUTSTANDIN0............

34 632

,3J 249 EARNINGS PER CC MMON S HARE............................. S (0.13) 3 0.71 DIVIDENDS DECLALED PER COMMON SHARE...................

S 0.40 0.39 Certain 1979 assunts have been reclassified for comparability.

2

i t

a FINANCIAL STATEMENTS SAN DIEGO GAS & ELECTRIC COMPANY STATEMENTS OF INCOME (Unaudited) i NINE MONTHS ENDED t

SEPTEMBER 30, 1980 1979 (Thousands of Dollars)

(

OPERATING REVENUES Electric.......................................... S 554 062 S 424 114 Gas...............................................

136 867 107 778 Steam.......................

639 755 Total Operating Revenues...................

691 568 532 647 OPERATING EXPENSES Electric Fuel & Purchased Energy..................

342 890 233 470 Gas Fuel..........................................

92 397 66 966 Other Operating...................................

95 410 81 039 Maintenance.......................................

25 826 23 040 Depreciation......................................

40 311 35 324 Taxes:

Property........................................

10 217 9 835 Income..........................................

8 187 9 216 Other...........................................

2 647 2 422 Total Operating Expenses...................

617 885 461 312 OPERATING INCOME......................................

73 683 71 335 OTHER INCOME CREDITS AND (DEBITS)

Allowance for Other Funds Used During Construction.............................

18 009 12 358 P rovi s i on f or Ex ch an g e Los s.......................

(26 000)

Income and Other Taxes............................

15 581 5 164 Other--Net 10 725 2 653 Total Other Income Credits (Debits )........

18 315 20 175 INCOME BEFORE INTEREST CHARGES........................

91 998 91 510 INTEREST CHARGES Long-Term Debt...................................

46 673 40 275 Short-Term Debt and Other.........................

22 693 5 228 Allowance for Borrowed Funds Used During Construction.............................

(11 087)

(4 938) l Ne t Inter es t Charg es.......................

58 279 40 565

[

NET INCOME (before preferred dividend requirements)...

33 719 50 945 Prefer'.ed Dividend Requirements...................

13 232 13 232 EARNINGS APPLICABLE TO COMMON SHARES..................

20 487 37 713 Common Stock Dividends Declared...................

39 368 31 792 Earnings Reinvested............................... S (18 881)

S 5 921 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING............

33 371 28 589 EARNINGS PER COMMON SHARE.............................

S 0.61 S

1.32 DI' 'DENDS DECLARED PER COMMON SHARE................... $

1.16 S

1.10 Certain 1979 amounts have been reclassified for comparability.

3 L

FINANCIAL STATEMENTS SAI DIEGO GAS & ELECTRIC COMPANY BALANCE SHECTS (Unaudited)

SEPICMBER 30, ASSETS 1980 1979 UTILITY PLANT--At Original Costs

(

usands of Dollars)

Property, Plant and Equipment..............................

$1 956 591 31 740 781 Acc umul a ted Depre ci a tion...................................

(411 384)

(373 180)

Net Utility Plant........................................

1 545 207 1 367 601 N ON-UTI LI TY P LANT-- N e t........................................

5 187 5 235 INVESTMENTS IN AND ADVANCES TO SUBSIDIARIES............................................

26 340 25 948 CURRENT ASSETS Cash and Temporary Inve stments.............................

1 026 3 151 Re c e i va b l e s -- Ne t...........................................

74 201 77 111 Materials and Supplies--At Average Cost....................

25 632 19 127 Fuel Inventory--At Average Cost............................

125 093 52 971 Regulatory Balancing Accounts - Undercollected.............

60 510 41 264 Other......................................................

1 752 1 /54 Total Current Assets.....................................

288 214 195 378 DEFERRED CHARGES AND OTHER ASSETS.............................

58 376 85 029 70TAL.........................................................

S1 923 324 S1 679 191 CAPITALIZATION AND LIABILITIES CAPITALIZATION Common Stock...............................................

S 181 244 S 155 077 P r e mi ums and Expens e.......................................

254 510 217 129 Retained Earnings..........................................

147 927 163 848 Total Common Equity......................................

583 681 536 054 Preferred Stock:

Not Subj ect to Mandatory Redemption......................

128 500 128 500 Subj e c t t o M an da t o ry Re de mp ti on..........................

85 000 85 000 First Mortgage Bonds.......................................

615 212 491 095 Sinking Fund Debentures....................................

22 988 23 755 Oth e r Lo n g-Te rm De b t.......................................

94 135 124 768 Total Long-Term Debt (Net of premium, discount, sinking fund requirements and current portion).........

732 335 639 618 Total Capitalization.....................................

1 529 516 1 389 l',2 CURRENT LIABILITIES Notes Payable to Subsidiaries...............................

14 005 Commercial Paper............................................

50 000 27 02)

Bankers' Acceptances.......................................

100 000 20 000 Accounts Payable...........................................

78 412 42 031 Dividends Payable..........................................

18 910 16 196 Customer Deposits..........................................

6 872 6 125 Taxes Accrued..............................................

17 453 19 623 Interest Accrued...........................................

14 102 14 321 Re gulato ry Balancing Accounts - Overcollected..............

16 233 21 448 Current Portion of Long-Te rm Debt..........................

2 919 52 991 other......................................................

15 765 11 696 Total Current Liabilities................................

334 671 231 452 CUSTOMER ADVANCES FOR CONSTRUCTION............................

26 882 23 905 RES ERVES AND DEFERFED CREDITS.................................

32 255 34 662 TOTAL.........................................................

S1 923 324

$1 679 lol Certain 1979 amounts have been reclassified for comparability.

4

FINANCf AL STATEMEN'IS SAN DIEGO GAS & ELECTRIC COMPANY STATEMENTS OF CHANGES IN FINANCI AL POSITION (Unaudited)

NINE MONTHS ENDED SEPTEMBER 30, 1980 1979 FUNDS PROVIDED:

(Thousands of Dollars)

OPERATIONS:

N e t In come.............................................

S 33 719 S 50 945 Charges' (Credits) to Income Not Affecting Funds:

Provision for Exchange Loss..........................

26 000 Depreciation.........................................

40 311 35 324 Allowan ce for Funds Used During Construction.........

(29 096)

(17 296)

Regulatory Revenue Adjustment s.......................

(3 221) 4 e57 other--Net...............,...........................

(2 408)

(142)

Funds Provided f.om Operations.....................

65 305 73 688 LONG-TERM FINANCING:

Proceeds from:

Sale of Common Stock.................................

61 337 49 632 Sale o f Fi rst Mort gage Bon ds.........................

123 717 Other Long-Term Debt.................................

1 010 69 081 Re ti re men t o f Lon g-Te rm De bt...........................

(32 960)

(2 946)

Funds Provided from Long-Term Financing............

153 104 115 767 OTHER SOURCES:

Custoner Advances for Construction......................

2 305 2 614 Decrease in Advances to Subsidiaries...................

1 804 538 Net Decrease (Increase) in Deferred Charges and Other Assets.........................................

1 126 (172)

Other Sources..........................................

2 203 2 283 Punds Provided from Other Sources..................

7 438 5 263 Total............................................

$225 847 S194 718 FUNDS APPLIED:

Additions to Utility P2 ant (ey'ltding Allowance for Funds Used During Construction)........................

$131 654

$144 762 Divide nds on Pre fe rred - Stock.............................

13 232 13 232 Divi de nds on Common Stock................................

39 368 31 792 In c re as e in Working Capit al..............................

41 593 4 932 Total............................................

S225 847 S194 718 L

WORKING CAPITAL CHANGES 1

J (Other Than Current Portion of Long-Term Debt and Regulatory Revenue Adjustments) :

Receivables (Net of Provision for Exchange Loss).........

S 13 850

$ (5 348)

Materials and Supplies...................................

3 410 (3 428)

~

Fuel-Inv;entory...........................................

52 516 8 333

- Sh o r t-Te rm Debt..........................................

(8 585)

(2 126)

Accounts Payable.........................................

(4 595) 13 221 Taxes, Interest Accrued and Other........................

(15 003)

(5 720)

Increase-in Working Capital......................

S 41 593 S 4 932 Certain 1979 amounts have been reclassified for comparability.

5

SAN DIEGO GAS & ELECTRIC COMPAMY NOTES TO FINANCIAL STATEMENTS (Unaudited) 1.

In the opinion of the Company, all adjustments necessary to present a fair statement of the results of m,wrations for the period covered by this report have been made.

The ad,ustments consisted only of normally recurring accruals, except for S4.9 million in one-tir.e write-of fs in May 1979 related to the Company's suspended nuclear project (S3.6 million) and the interim rent on Encina Unit 5 (Sl.3 million) as required by the Company's June 5,1979 general rate decision and the establishment in September 1980 of a reserve for loss of $26.0 million related to fuel oil exchange transactions (see Note 4). The results of operations for the interim periods are not necessarily indicative of the results to be ex-pected for the full year.

2.

The Company's significant accounting policies are described.n Note 1 of Notes to Financial Statements ' ncluded in its 1979 Annual Report on Form 10-K filed with the Securities td Exchange Commission.

For interim reporting purposes, the Company follows these same basic account-ing policies.

This interim report should be read in conjunction with the Company's most ::ecent annual report and subsequent interim reports.

3.

In August 1980, the Company issued $75 million in first mortgage bonds, 13-5/8s, series "T" due 2010.

In September, the Company sold 2,000,000 shares,of common stock for $14.00 per share.

Net proceeds to the Company, which totaled $74.2 million for the bonds and $26.9 million for the common stock, were used to retire a portion of short-term indebted-ness and $30 million of the foreign term loans incurred for the con-struction program.

4.

At September 30, 1980 and 1979, the C7mpany had placed on exchange 1.92 million barrels of fuel oil (cost, $11.2 million) and 3.05 million barrels of fuel oil (cost, S53.2 million), respectively.

Of the total on exchange at September 30, 1980, 1.89 million barrels (cost, $30.6 million) are due from an independent oil distributor for exchange transactions originally occurring in 1978.

The magnitude of the transactions relative to the size of the distributor caused the Company in 1978 to obtain the right to certain assets which partially collateralized its receivable.

Repayment of the receivable depended on t

the ability of the distributor to achieve profitable operations or realization of the assets pledged as collateral.

Repayments during 1979 and 1980 totaled $5.1 million and $3.3 million, respectively.

The distributor has sustained continued losses ar.d, during October of 1980, requested an amendment of the existing agreement to provide for more i

liberal repayment terms. Also in October of 1980, the Company received

.a report by. independent mining and geological engineers concerning the F

operation of the coal mine facility, which now is the principal collateral for the receivable. Based on the report and an analysis of the potential cash return from the coal facility, the Company has recorded a reserve for loss 'of $26.0"million - (30.55 per share based on the average number of 6

shares during the nine months ended September 30, 1980) as of

_ September 30, 1980. Should the coal operation fail to achieve profitable operations or the Company not realize the vclue of the collateral, it may be necessary to record an additional estimated loss of $4.6 million.

In the opinion of management, the reserve for loss as of September 30, 1980, is adequate.

5.

The Company filed a notice of intent for a 1982 general rate increase on September 19, 1980. The notice of intent requests S17s million to cover the increased cost of doing business (ex-cluding fuel costs).

HeGrings have concluded on the Company's S145 million application for a 1981 general rate increase which was filed on July 1, 1980.

During the hearings, the amount requested. for 1981 was reduced to

$111 million principally as a result of certain aspects of the case being transferred to other cases. 2ne increased rates are expected to be effective in January 1981.

6.

On June-30, 1980, Japatul Corporation, a wholly-owned subsidia ry of the Company, sold a portion of its land holdings for $14 million subject to repurchase for one year of any or all of the land if the Buyer is unable to obtain certain necessary approvals.

The transaction will not be recognized until, in the opinion of management, the repurchase option will not be invoked by the Buyer.

The sales proceeds were loaned to the Company and the loan is assigned to a bank as collateral for a letter of credit given the Buyer supporting the repurchase agreement. A gain of approximately

$7 million will be recognized when the transaction is finalized.

7

SAN DIEGO GAS & ELECTRIC COMPANY MANAGEMENT'S ANALYSIS OF QUARTERLY STATEMENTS OF INCOME OPERATING REVENUES 2

The.following table sets forth the amounts of changes in the Company's electric and gas revenues, together with. the approximate amounts of increases and decreases attributable to certain factors.

Millions of Dollars Quarter Ending Year-to-Date September 30, 1980 September 30, 1980 September 30, 1980 Vs.

vs.

Vs.

September 30, 1979 June 30, 1980 September 30, 1979 Electric Revenues:

Rate Increases

$86.8 S53.3 S146.1 Sales Volume Change 1.8 14.5 3.9 Net Revenue Deferred (32.4)

(18.3)

(18.4)

Miscellaneous-Revenue (0.9) 0.1 (1.7)

Net Increase S55.3

$49.6

$129.9 Gas Revenues:

Rate Increases S 4.8 S 3.3 S 25.3

. Revenue Applicable to. Interdepartmental Sales (4.7) 0.3 (5.2)

Sales Volume Change (1.2)

(12.4)

(13.8)

Net Revenue Deferred 7.0 2.0 22.6 Miscellaneous Revenue 0.2 Net Increase (Decrease)

S 5.9 S {6_. 8)

$ 29.1 COST OF ELECTRIC FUEL AND PURCHASED ENERGY Increases in the cost of fuel have occurred primarily because of increasing prices of fuel oil, natural gas and purchased power. The Company expects.these. costs to continue to rise, although such cost increases are expected to be' offset by increased sevenue'. collected under the Energy Cost I

Adjustment Clause (ECAC)~.

- COST OF GAS RJEL The cost of. gas purchased for resale increased in this quarter and year-to-date in comparison with the same periods of 1979 primarily due to rising prices from the Company's supplier. The cost of gas decreased during the current quarter when coupared to the second quarter-of 1980 'due to a seasonal decrease in demand. The Company expects the cost of gas purchased for resale to continue to rise, although such increases are expected to be offset by increased revenue through the Company's Purchased Gas Adjustment Clause -(PGA).

8

CTTHER OPERATING EXPENSES o

Other operating expenses have increased in each period as a result of generally rising costs and an increased number of customers.

DEPRECIATION Depreciation expense increased in the current quarter and year-to-date in comparison with the same periods last year due to the amortization of certain non-site costs related to the suspended Sundesert nuclear project as well as additional plant in service.

INCOME TAXES

'/

Inccne tax expense increased in the current quarter when corpared to the previous quarter.

Income tax expense decreased in the current quarter and year-to-date when compared to the same periods of 1979. These increases and decreases reflect changes in taxable operating income (also see other Income L

Credits) and a higher statutory state franchise tax rate for 1980. Due to timing differences, investment tax credits and a net operating loss carry-forward, the-income tax expense is less than the amount cceputed by applying the' federal and state statutory rates to income before inecxne taxes.

OTHER' INCOME CREDITS The Allowance for Funds Used During Construction (AFUDC), which is not an item of current cash income, increased in total for the current quarter and year-to-date when compared to the same periods of 1979. These increases in AFUDC (other funds component included in Other Incczne Credits and borrowed funds component included in Interest Charges) are the result of the use of a higher rate and a larger balance of construction not included in rate base, primarily related to San Onofre Units 2 and 3.

The increase for year-to-date 1980 ' compared to 1979 also reflects the elimination of the effect of the one-time charge in May 1979 of $3.1 million for AFUDC related to the suspended Sundesert nuclear project. ArDDC for the current quarter has decreased when

-compared to the second quarte of 1980. This decrease is the result of the

.use of a lower rate for AFUD for the third quarter based upon the application of the Federal Energy Regulatory Cormission's formula for the computation of AFUDC.

The' Provision for Exchange Loss was established in September 1... to

~

. provide for a probable loss en fuel oil exchange transactions with United Petroletun D} stributors, Inc.

See Note 4 of Notes to Financial Statements for further discussion of this item.

Income and Other Taxes ' increased in each period. These increases

-reflect the tax effect of the provision for loss on the fuel oil exchange transactions (see Note 4) as well as more interest expense allocated to -

property not included in' rate base..Both increased the related income tax credit. This income tax credit offsets income taxes recorded as an operating expense and discussed above.

9

other-Net income increased for the current quarter and year-to-date when ecnpared to the same periods last year. Contributing to the increases are increased interest inccce on the undercollected balances for ECAC and PGA and increased earnings from the Company's subsidiaries. Other-Net inccce decreased for the current quarter compared to the second quarter of 1980. This decrease is the result of smaller undercollected balances for ECAC and PGA and a seasonal decrease in earnings from the subsidiaries.

INTEREST CHARGES Net interest charges increased in each period. These increases are the result of increases in debt issued to finance the Company's construction program and fuel inventory and, for the current quarter and year-to-date 1980 compared to the same periods of 1979, hicher averase interest rates on the Company's borrowings.

DIVIDENDS Ccemon stock dividends declared have increased as a result of additional common shares being issued throughout 1979 and 1980 and, for 1980 versus 1979, the increase from S0.36 to S0.38 in quarterly dividends declared per share for the first two quarters of 1980 and the increase in the third quarter dividend from S0.38 to S0.40.

p NET INCOME For the quarter ended September 30, 1980, the-Cesspny had a loss of 13 cents per share compared to earnings of 36 cents for the previous quarter and 71 cents for the same quarter last year.

Year-to-date earnings per ccxmon

- share for September 30,1980 were 50.61 cccpared to S1.32 for year-to-date last year.

The decrease in the current quarter cccpared to the previous quarter is l.

the - result of the effect of the establishment of a S26 million provision for i

fuel oil exchange loss (SO.52 per share) discussed in Note 4 of Notes to Financial Statements.

The decrease in the current quarter compared to the same quarter last year and year-to-date 1980 compared to 1979 is due to the effect of the pro-vision for exchange loss mentioned above as well as the dilutive effect of additional cormon shares outstanding.

e f

10 -

~

I PART II - OfrHER INFOFF.ATION All items that might have been reported under this part have been previously a ported (see Registration No. 2 4 8740), except as follows:

ITEM 5. - INCREASE IN A.SOUNT Ol7TSTANDING OF SECURITIES OR INDEBTEDNESS Cocumon Stock, $5 Par Value Nu.ber of Sh ares (a)

Connon Stock outstanding June 30, 1980 34,069,429 Add:

(i)- Common Stock issued September 1980 2,000,000 (ii) Savings Plan for quarter ended September 30, 1980 89,648 (iii) Dividend Fainvestment Plan for quarter ended Septembar 30, 1980 89,820 Total Ccx=non stod outstanding as of September 30, 1980 36,248,897 (b). On September 11,1340 the Cogany issued 2,000,000 shares of Co con Stock, $5 Par Value, ?ursuant to an underwriting agreement dated September 5,1980 bet eeen - the Co:pany and Merrill Lynch, Pierce, Fenner -

& Smith Incorporated and Blyth Eastman Paine Webber Incorporated, as representatives for a group of underwriters. None of the underwriters were affiliates of the Company.

The proceeds received by the Company from the sale of the stock were S27,020,000 (before ' deducting expenses of the issue estimated at S130,000)and were applied to the retirement of a portion of the Ccepany's outstanding short-term debt incurred for the temporary financing of the Company's construction program.

l

- The stock was registered pursuant to the Securities Act of 1933 under a registration statement on Form S-16 (File No. 2-6874C) which became' effective September 5,1980.-

The proceeds from the sale of the stock were credited to the appropriate capital share accounts,-including $17,020,000 credited to Premiums and

(

Expense (before deducting expenses of the issue).

(c)

During the quarter ended ~ September 30, 1980, the Company issued 89,648.

shares of Common Stock pursuant to its Savings Plan and 89,820 shares of Common Stock pursuant-to its Dividend Reinvestment Plan. The proceeds

to the Company from these ~ issues were $1,266,931 and $1,280,139,

~

,respectively and were applied to finance additions to the Corpany's utility properties.

The stock 'wasfregistered under the Securities Act of 1933 as followi :

-(i) Savings Plan-(File Nos'. 2-61166, 2-64000 and 2-67249) and (ii)

Dividend Reinvestment Plan (File Nos. 2-61421 ' and 66733).

.The proceedsf from the sales of the stock were credited to the appropriate capital ~ share accounts, including $1,649,730 credited to Premium and Expense.

11 w.

Ic:n g-Ter: Debt (a)

Icng-Ter: Cett

$691,973,0C0 outsta.d:ng at June 33, 1983; $735,254,000 outstanding at Septerher 30, 1950, of u.,ch 52,96 5,000 a.d $2,919,00? are recorded as current liabilities as of J=e 30 and Septenter 30,19&O, respectively.

(b) Cn August 6,1930 the Ccepany issued S75,000,000 principal a:c".t of First Mortgage Scnds, 13-5/St, series --" due 2010, (the

• Scads *),

pursuant to an underwriting agreerent dated July 30, 1950 tete en the Ccepany and Merrill I.ynch, Pierce, Tenner E Sni" rycrated and Blyth East =an Paine Webber In crporated, as representatives fer a group cf underwriters. Ncne of the =dertriters were af filiates of the Ccepany.

The proceeds from the sale of the Eccds were 574,343,750 (before dedu ting expenses cf the issue estinated at 5175,CCC) and were applied to the retirement of a portion of the Cc=pany's outs = g shcrt-tern dett and foreign ter Icans incurred fer the te perary financing cf the Ceranf's constructica progran.

The Ecnds were registered pursuant to the Securities Act of 1933 = der a registration statenent en Fors 5-16 (File No. 2-6 5420; -tirt. te-~

effective July 30, 1980.

ITEM 6. - DECEEASE IN Rem.T GUISTANOING or SEmITITS OR IEEECI t:EE5 Iccc-Ter= Debt (a)

IcLg-Ter: Debt: 5691,673,000 cutsta. ding at J=e 30, 19 E0 ; 5735,254,000 cutstanding at Septe=ber 30, 1993, cf which S2,965,C00 and 32,919,000 are reecrded as current liabilities as of J=e 30 a.d Septerber 30, 1920, respectively.

(b) In July, August and Septe:ber 1950, the Ccepany repaid $10,000,C00, 59,000,000 and S11,000,000, respectively, cf

• he tctal 565,000,0Co in seven-year intermediate ters loans free three foreign banks, which was criginally borrowed in April 1979. The lean is shcr.m en the balance sheet under the category of *Cther Icng-Ter= Dett."

ITEM 8. - U.m.x )'ATERIA!J.Y IMFCFTr.'? E'.*D.3 II.ECTRIC RATES - DIEROY CCST A3JUSD'.D.T CIA 05E (ECAC)

Cn Septeder 18, 1980 EDG&E filed with the CP*I an applicatico requesting a S24.8 zillico electric rate reduction. This reduction is a result cf a reduced level of undercollecticns _in : the ECAC halancing acccent and ' changes in the' price of fuel cil and natural gas. The decrease requested vculd result in decreases of.1764 per Iwhr for dc==estic lifeline,.347c per Kwhr for dc=estic~ non-lifeline and.2460 per Kvhr for ncn-d:=estic sales. Hearings have been set for Decenter 2 - 5 in San Diego.

ITEM 9(b) - EXHIBITS M D REPCRTS CN FOEM B-K Thero;were no reports-en Form 8-K filed for the three cenths ended September 30, 1980.

12

. _ = - - _ _

i f

a SIGNATURES T

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report to be signed on its behalf by the undersigned thereunto duly authorized.

i a

SAN DIEGO GAS & ELECTRIC COMPANY (Registrant) i NOV 131980 sy (signature)

R.E. Parsley, Controller i

s I

r a

L i

l' I

[-

L a

e 5

13

I

~

-2 4)

Fuel Adjustment Clauses Although earnings per share increased substantially in 1979, cash flow was adversely affected during the year by rising energy costs for generation which, at the time, were not fully reflected in the Company's rates through the Energy Cost Adjustment Clause (ECAC).

Under the ECAC procedure, energy costs above or below those used in establishing rates are accumulated in a balancing account, and the accumulated amount is reflected in succeeding rate adjustments.

In 1979 the CPUC authorized two energy cost adjustment increases total-ing approximately $500 million annually. At year-end 1979, accumu-lated net undercollections and accrued interest in the balancing account amounted to approximately $304 million.

To improve cash flow, Edison petitioned the CPUC on December 21, 1979, to modify an earlier ECAC decision to accelerate the recovery of undercollections already incurred. On January 29,1980, the CPUC granted the Company's request and authorized an ECAC increase to recover $81 million during the period between February 3 to April 30,1980, instead of later in the year.

In addition, the CPUC instituted a number of interim changes which are intended to improve the cash recovery aspect of the ECAC proce-dure.

First, the CPUC increased the frequency for filing ECAC adjust-ments from two to three times per year and adopted the use of more current energy prices and balancing account amounts as well as esti-mates of energy mix, rather than the historical data previously used, for determining energy cost billing factor adjustments.

Secondly, more flexibility has been provided for determining the period during which undercollected energy costs are to be recovered.

In another decision, the C;UC revised the rate for accruing interest on under or overcollected amounts in the balancing account from a fixed rate of 7% to a floating rate which more nearly matches current short-term borrowing or investment rates. Currently that rate is approximately 13%.

5) Test Year A fully projected test year is allowed so that a decision may be received prior to or early in the test year period.

Es.b5

Subject:

Financial qualifications of Southern California Edison Company et al. to operate the San Onofre Nuclear Generating Station, Unit Nos. 2 and 3.

Responses to NRC request for data as applies to San Diego Gas &

Electric Company:

Item 1. a.

Will be sent under separate cover.

b.

1980 unit price per Kwh to all classes of on system customers was 8.10c.

Item 2 & 3 - The estimates of costs of permanently shutting down each unit and of the annual cost to maintain the shutdown facility in a safe condition are made by SCE.

SDG&E anticipates obtaining the equired funds through rates from customers taking electric service while the units are in service.

Currently the CPUC permits the inclusion of the above estimated costs as negative salvage in the determination of the appropriate de-preciation accrual for nuclear units.

Item 4 - Provided by Southern California Edison Company.

Item 5. a.

Enclosed are 15 copies of SEC Form S-16 for the reg-istration and sale of 2,000,000 shares of Common Stock in September, 1980.

15 copies of SEC Form 10-0 for third quarter 1980.

15 copies of SEC Form 10-K for the year 1979.

15 copies of the 1980 Annual Report to Shareholders.

5. b.

Aspects of regulatory environment:

1)

Allowance for Funds Used During Construction (AFUDC)

AFUDC is computed and added to construction work in progress.

Construction work in progress is not included in rate base.

The amount of AFUDC which has been capitalized is recovered through depreciation once construction work in progress has been completed and has been included in rate base.

All calculations for AFUDC are net of tax.

2)

Rate Base Rate base is computed on a depreciated original cost basis.

o 3)

Deferred Income Taxes The California Public Utility Commission generally supports the flow-through method of accounting for s

g W

c.

tax adjustments resulting from book to tax timing differences.

Therefore, no provision is made for deferred taxes relating to these timing differences except for deferred energy costs and certain plant sales and abandonments.

4)

Investment Tax Credits Of the 11% investment tax credits available, the 4% investment tax credits are immediately flowed

.through to the ratepayers under IRC Section 46 (f) (3).

The 6% investment tax credits are ratably flowed through to the ratepayers over the

~ book lives of the respective properties which generated such investment tax credits, IRC Section 46(f)(2).

The remaining 1% investment tax: credit, Telating to the Company's employee

stock ~ ownership plan is not flowed through to the ratepayers, pursuant to 7.RC Section 46(f)(9).

.5)

Fuel Adjustment Clausej SDG&E's tariffs incorporate an Energy Cost Adjustment Clause (ECAC).

This clause permits the recovery, on a dollar-for-dollar basis,-of 1 generation and. purchased power costs.

The mechanism includes a balancing account such that any under or over collection due to a difference between current ECAC expenses.and ECAC r2 venues is reflected in future ECAC revenues.

6) ~ Test Year A fully projected test year is allowed so that.

-a decision may be received _ prior-to or.carly in the test year period.

, 5.c.

Lee attached form,as well as copies of exhibits:

l1982 pending' general rate case 1)l-Cost of Capital and Rate of Return

2)~ :ComparativeLFinancial Data and Summary of Earnings Staff exhibits, examinefs report and; final opinion

-have'not-been: issued as yet.

1981 generalErate' case (Decision'#92557 dated 12/30/80 11)) : Cost:f of-Capital and' Rate of -Return 4

2)' LComparative Financial Data and Summary of Earnings i3). Cost ofLCapital.and Rate of Return CPUC' ut n u

y

-_.._._.._-----.m_-

{.

4)

Electric Results of Operations - CPUC 5)

Gas Results of Operations - CPUC l

6)

Decision #92557 - CPUC 5.d.

See attached form

l QTTActetWT FOR ITEM No. 5.C RATT DEVEL0m4ENTS SOUTER.o CALIFORNI A EDl50m Electric Base Electric Electric Granted Rates ECAC CLMAC Test Year Utilized 1981 1981 1981 Annual amount of revenue increase requested - test year bests (000's)

$302.200 Oate petition filed 12/26/79 Annual amount of revenue Increase allcased-test year basis (000's)

$294,2006

( $ 193,800) ** ($12,000)**

Percent increase In revenues atlmsed 8.4 Date of final order 12/30/80 12/30/80 12/30/50 Effective Dete 01/31/91 81/01/81 81/91/81 Rate N o finding (000's) 94,715,713 l

Construction work In progress i

included in Rete Base (900's)

Rete of ret' urn on rats base authorized II.2 a

Rete of return on cm equity authorized 14.35 Ravenue Effect (900's)

Amount received in year granted Amount received In sesequent year (if not evellable, annuellre enount received in year Branted)

Electric Electric No. Ollling Sefer Demo.

Pendine Recueets Offset Offtot Test year utilized 1981 1980 Amount (900's) 6,300**

4,100 Percent increase 8.2 0.1 Sete petition filed

$2/09/01 18/03/88 Bete by dich decision must be issued Rate of return en rate base requested R/A N/A Rete of return on cnamen equity requested R/A N/A Amount of rate base requested E/A R/A Amount of construction work la progress requested for inclusion in rats bene E/A N/A

• $31,327 M operational attrition ellesed o* Annuallzed

I e

March 5,1981 5.b.

Aspects of Regulatory Environnent:

1) Allowance for Funds Used Durine Construction (ADC)

ADC is the generally accepted utility accounting procedure designed to capitalize the cost of both debt and equity funds used to finance plant additions during construction periods and to restore net income to the level which would have been experienced without the construc-tion program through a transfer of such costs from the incore state-ment to the balance sheet as utility plant construction work in progress. Such costs are recovered from customers as a cost of service through provisions for depreciation in future periods.

Although ADC increases net incoce, it does not represent current cash earnings. The effective annual ADC rate was 7.76*, for 1979 and 6.96% for 1978, based upon a fomula prescribed by the FERC which provides for the separate computation of ADC applicable to debt funds and to equity funds and pemits semi-annual compounding.

2) Rate Base Rate base is computed on a depreciated original cost basis.

3) Deferred Income Taxes and Investment Tax Credits As required by the CPUC, no provisions are made for incore tax reduc-tions (net) which result from reporting certain transactions for income tax purposes'in a period different from that in which they are reported in the financial statements, except for certain investment tax credits (ITC) discussed below, the tax effects of the ECAC balan-cing account provisions and certain resale revenues.

Effective January 1, 1976, pursuant to FERC procedure, the Company began providing deferred income taxes for certain tiraing differences allocable' to resale rates. The revenues related to such deferred income taxes are being collected subject to refund, as discussed in Note 3, pending action by the FERC.

ITC not deferred have been applied as a current reduction of inco e tax expense. Additional ITC, made available to the Company under the provisions of the Tax Reduction Act of 1975 and the Tax Reform Act of 1976, have been deferred and are being amortized to income tax expense ratably over the service lives of the properties generating such credits.

The Company has reduced its deferred income tax provision and the balance of accumulated deferred income taxes--net, in the amount of

$68.128,000, _ representing ITC in excess of those utilized to date or to be utilized on the 1979 federal income tax return, pending their utilization in future incoce tax returns. Such ITC were generated in 1979 and, if not utilized, would expire in 1986.

a g.i

+' <

g.c, Application No. 5935t

/7~6~'

/

Witness Date Sr - & O SHOWING OF APPLICANT 4-2-80 SCE PUC

~~', -

Ti t le of Exhibit Ex. ho.

Ex. No.

SCE-1 1

Financial Characteristics - Cost of Money and Required Return SCE-2 2

Results of Operations /1976-1981 Recorded -

Adjusted - Estimated SCE-3 3

Qualifications of Witnesses SCE-4 4

Prepored Tes timony SCE-5 5

Status v.

Activities Required for Compliance with Ordering Paragraphs of Decision No. 89711 EAM-l 6

1981 Conservation and Lood Management Program EAM-2 7

t umoni ca t i ons Exhibit (Conservation and Non-conservation)

EAM-3 8

tonservation Measurenent EAM-4 9

tonservotion and Load Monagement - 1978 Year E nd Repor t/ Sun.nor y of Pesults RD-l 10

( verpl iance wi th vol unt ary Gui del i nes t rooo l ga ted by the Council on Woge and Price ttability RD-2 11 l' r e pa re d Te s t i mon y of Ronald Daniels Regarding ixhibit RD-l RLL-l 12 tearginal Cost and Marginal Revenue and Rates RLL-2 13 l'repared Testimony of Rodney L. Larson 1:egarding Exhi bi t MLL-1, Section I-4 and l'repared Testimony of Warren E.

Ferguson 1;egarding Exhibit RLL-l, Section 5 RLL-3 14 CPUC Jurisdictional Results of Operation RLL-4 IS t'repared Testimony or Rodney L.

Larson negarding Exhibit RLL-3 J

}Ki c, #

i Application No.

59351 Showing of Applicant Witness Date SCE PUC Title of Exhibit Ex. No.

Ex. No.

WEF-l 16 Alternative Rote Designs WEF-2 17 Prepared Testimony of Warren E. Ferguson Regarding Exhibit WEF-1 FAf i-l 18 Research and Developmen t Programs Prepored Testimony of Francis A. McCrackin FAM-2 19 Regarding Exhibi t FAM-l Summary of Adjustments made by CPUC Staf f NONE 20 which are not Contested by Edison 21 19/9 Annual F.eport 1979 Financial and Statistical Report 22 23 October 11, 1979, Prospectus MM Bonds $200,000,000 24 February 5, 1980, Prospectus Common Stock 7 Million Shares 25 March 31, 1980, Prospectus NN bonds $200,000,000 26 Financial Characteristics Cost of Money and Required Return Update Let ter f rom Loui s Martinez, President -

27 Altran Electronics, Inc. to Leonard M.

Grimes, Jr., Comui ss ione r - CPUC Southern California Edison Company - Summary 28 of Kilowatt Hours, Sales and Customers Expected Economic Loss Due to Project 29 Cance l l a t i on

%f E

$4.

As fded with the Securities and Exchange Commi,sion on September 5,1980 Registration No. 2-68740 SECURITIES AND EXCHANGE C014DIISSION Washington, D. C. 20549 Amendment No.1 to Form S-16 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 San Diego Gas & Electric Company (Exact name of registrant as specified in charter)

California 95-1184800 (State or other jurisdiction of incorporation (LR.S. Employer IdentiScation Number) or organization) 101 Ash Street, San Diego, California 92101 (Addren of principal executive offices)

Registrant's telephone number, including area code (714) 232-4252 LESUE P. JAY OHCKERING & GREGORY Three Embarcadero Center San Francisco, California 94111 (Name and addrese of agent for service)

Copies to:

ORRICK, HERRINGTON, ROWLEY & SUTCUFFE 600 Montgomery Street San Francisco, California 94111 Approximate Date of Commencement of Proposed Sale to the Public:

September 5,1980 This Registration Statement shall hereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or on such date as the Comnussion, acting pursuant to said Section 8(a),

may determine.

PART H INFORMATION NOT REQUIRED IN PROSPECTUS Items 13. List of Exhibits.*

3 Opinion and Consent cf Counsel.

• As permitted by Rule 472(d), the revised forms of the underwsiting documents are not filed herewith, the only changes being the insertion of information which appears elsewhere in this amendment, the correction of typographical errors and other immaterial changes.

E II-1

& _ _.- _ __~ _ _ _

i l

SIGNATURES

=

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 4th day of September,1980.

SAN DIEGO GAS & ELECTRIC COMPANY By LESLIE P. JAY (1xslie P. Jay, Attorney-in-fact)

Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature Title I) ate (i) Principal Executive OITicer:

• ROBERT E. MORRIS President and Director September 4,1980 (Robert E. Morris)

(ii) Principal Financial Ollicen

• TIIOMAS A. PAGE Executive Vice President September 4,1980 (Thomas A. Page) and Director (iii) Principsi Accounting Ollicer:

• ROBERT E. PARSLEY Controller September 4,1980 (Robert E. Parsley)

(iv) Directors:

• BRUCE R. IIAZARD Director September 4,1980 (Bruce R. Ilazard)

• WILLIAM D. McELROY Director September 4,1980 (William D. McElroy)

• GORDON PEARCE Director September 4,1980 (Gordon Pearce)

• O. MORRIS SIEVERT Director September 4,1980 (O. Morris Sievert)

'CATIIERINE FITZGERALD WIGGS Director September 4,1980 (Catherine Fitzgerald Wiggs)

• By LESLIE P. JAY (Leslie P. Jay, Attorney-in-fact)

II-2

)

I CONSENT OF COUNSEL The consent of Chickering & Gregory, counsel for the Company, is included in their opinion filed as Exhibit 3.

II-3

M.

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PROSI'1:CTliS

$200,000,000 Southern California Edison Company FIRST AND R1? FUNDING JIORTGAGliILONDS, SliRil!S NN,15%% DUli 2005 Interest payable April I and Octuber i The how Ilands erill he redermable as the eption of the Company, in whole or in part, at any time on 30 days' notice, at the redemption prices herein, provided that, prior en April 1,1985, nn redemption may be made through refunding at an ofretire interest cost en she Company of less than 15.3f>Ve per annum. 3rr " Description of Nese llands - Redemptinn" herein.

Application arill be made to list the Sree Ronds on the American Stork Exchange, l.isting erill be sub} ret to meeting the trutuirements of the Eschenge, including these relating ta distributtors.

THESE SECURITHLS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COAfAllSSION NOR HAS THE COAfAtlSSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATIUN TO THE CONTRARY IS A CRIAllNAL OFFENSE.

PillCH 99.209c' AND ACCRUI!D INTERI!ST Understriting Prire to Discounts and Prueredsto Public(I)

Commissions (2)

Company (1)(3)

Pe r Bo n d...........

PU.?tki%

.t:83%

98.511%

$108,,'HO,fM

$1.. fir.lM

$ 19?.0.4,'O b Total.

(1) Plus accrued interest from April 1,1980,if any.

(2) The Company has agreed to indemnify the several Underecriters against erreain liabilities, including liabilities under the Securities Act of 1933.

(3) liefore deduction of expenses payable by the Company estimated at $281,000.

The undersigned and the other several Underirriters named trithin ofered to purchase the

.Yeu' Bonds at public sale under a sealed bid in accordarr. trith the Company's Public Invitation for Bids and have entered into an.lgreement trith the Company trith respect thereto.

The.Yere Bonds are ofered, subject to prior sale,1then, as and if issued by the Company and accepted by the Underteriters named herein and subject to the approval of certain legal matters by counsel. It is expected that delivery of the.Vete Bonds in fully registered form trill be made on or about.lpril 9,1980 at the o))Ece of.tinrgan Stanley & Co. Incorporated. 33 IVater Street,

.Vete York,.Y.Y., against payment therefor in.Vetr York funds.

SALOMON BROTHERS MORGAN STANL1!Y & CO.

Incorporated BEAR, STEA RNS & CO.

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.11 arch 31,1930 i

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a T

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW BONDS HEREBY OFFERED OR ANY OTHER BONDS OF THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAllIN THE OPEN MARKET. SUCH TRANS-ACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE OR IN THE OVER-THE COUNTER MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

AVAILABLE INFORMATION Southern California Edison Company (the " Company") is subject to the informational requirements of the Securities Exchange Act of 1934 (the " Exchange Act") and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the " Commission"). Such reports, proxy statements and other information on file car, be inspected and copied at the offices of the Commission at Room 6101,1100 L Street, N.W., Washington, D.C.; Room 1228, Everett McKinley Dir<sen Building, 219 South Dearborn Street, Chicago, Illinois; Room 1100, Federal Building,26 Federal Plaza, New York, New York; and Suite 1710, Tis'. man Building,10960 Wilshire Boulevard, Los Angeles, California. Copies of this material can also be obtained at prescribed rates from the Commission at its principal office at 500 North Capitol Street, N.W., Washington, D.C. 20549. Certain securities of the Company are listed on the New York, American and Pacific Stock Exchanges. Reports, proxy statements and other information concerning the Company can be inspected at the respecSe offices of these exchanges at Room 401,20 Broad Street, New York, New York; 86 Trinity Place, New York, New York; and 301 Pine Street, San Francisco, California.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission by the Company are incorporated by reference in this Prospectus:

1. Annual Report on Form 10-K for the year ended December 31,1979.

2. Definitive Proxy Statement dated March 5,1980 for the Company's Annual Meeeting of Shareholders to be held on April 17,1980.

All documents filed by the Company purcuant to Sections 13,14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the New Bonds covered by this Prospectus shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing such documents.

The Company hereby undertakes to provide without charge to each person to whom a copy of this Prospectus has been delivered, on the written request of any such person a copy of any or all of the documents referred to above which have been or may be incorporated by reference in this Prospectus other than exhibits to such documents. Written requests for such copies should be directed to: Southern California Edison Company, P. O. Box 800, Rosemead, Califomia 91770, Attention: Treasurer.

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SELECTED INFORMATION The following material is qualified in its entirety by the detailed information ano financial statements appearing elsewhere in this Prospectus, including the documents incorporated by raference in this Prospectus.

THE OFFERING Securities to be Offered

$200,000,000 principal amount of First and Refunding Mortgage Bonds, Series NN, Due 2005 Bidding Date Monday, March 31,1980 Interest Payment Dates Aprl! 1 and October 1 Proposed Listing American Stock Exchange Use of Proceeds To reimburse the Company for a portion of its construction expenditures THE COMPANY Customers (December 31, 1979) 3,082,000 Total (Summer Rated) System Operating Capacity (Kw)

(December 31,1979) 14,932,000 Kilowatt-Hour Consumption (1979) 59,517,861,000 Funds Required for Construction Expenditures (1980-84)

$3,610,764,000 Energy Sources (1979)

Oil 44%; Natural Gas 23%; Coal 11%;

Hydrcelectric 8%; Nuclear 4%; Pur-chased Power 10%

FINANCIAL INFORMATION (Dollars in Thousands)

Year Ended December 31, 1975 1976 1977 1978 1979 income Statement Data:

Total Opert. ting Revenues

$1,647,134 $1,846,540 $2.064,914 $2,328,798 $2,563,974 Operating income 266,606 307,140 330,722 324,601 384,996 Total Interest Charges 126,185 144,368 161,078 182,658 205,082 Net income 176,781 226,798 251.979 251,683 346,219 Ratio of Earnings to Fixed Charges -

Actual 2.63 2,83 2.79 2.54 2.90*

Pro Forma 2.16' Outstanding December 31,1979 Amount Percent Capitalization:

Long-Term Debt

$2,830,751

$3,030,751 486%

Preferred and Preference Stock 814,322 814,322 13.0 Common Equity 2.233,133 2.395,008

_38.4

$5,878.206

$6.240,081 100.0 %

Total Ccpitaltzation

• Forinformation concerning upplemental ratios of earnings to fixed charges see page 5.

• Gives effect to the proposed sale of the New Bonds and the sale of 7,000,000 shares of Common Stock in February 1980.

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THE COMPANY The Company, incorporated in 1909 under California law, is a pub!!c utility primarily engaged in the business of supplying electric energy in portions of central and southern California, excluding the City of Los Angeles and certain other cities. The mailing address and telephone number of the Company are, respc *ely, P.O. Box 800, Rosemead, California 91770 and (213) 572-1212.

USE OF PROCEEDS AND CONSTRUCTION PROGRAM The net proceeds from the sa!e of $200,000,000 principal amount of F rst and Refunding Mortgage Bonds, Series NN (the "New Bonds") will be used to reimburse the Company for a portion of its construction expenditures. The amounts so reimbursed will become a part of the general treasury funds of the Company. The Company proposes to use such reimbursed trer.aury funds to repay a portion of its outstanding short-term debt expected to aggregate approximately $400,000,000 at the time of the receipt of the proceeds from the safe of the New Bonds. For information concerning an option of the Company to sell less than all of the New Bonds, see " Underwriters."

Funds used by the Company for construction expenditures totaled $500,269,000 in 1977,

$567,831,000 in 1978 and $674,147,000 in 1979. As of February 22,1980, construction expendi-tures for the 1980-1984 period were estimated as follows:

(Thousands of dollars) 1980 1981 1932 1983 1934 Electric generating plants.

$621.052 5 730.568 $544.027 $384,046 $519.042 Electric transmission lines and cubstations 67,115 95.502 56,205 110,761 156.437 Electric distribution !!nes and substations 179.631 168,850 178.58o 187,605 187,162 Other expenditures 27,033 14 888 9.852 12.276 20,112 Total construction additions 894.831 1,009.808 788.664 694,688 882,773 Less allowance for funds used during construction 167.000 212.000 148,000 73.000 60,000 Funds required for construction expenditures s727.831 $_797.808 $640.664 $6_21488 $822.773 Approximately 50% of the total electric generating plant expenditures for the years 1980 through 1984 are related to the construction of new nuclear units at San Onofre and Palo Verde.

The Company's share of the total cost of construction for these units is estimated to be $2.6 billion and $900,000,000, respectively, of which $1.54 billion and $236,000,000, respectively, had been expended through December 31,1979.

. The Company's construction program and related expenditures are subject to continuous review and periodic revisions because of changes in estimated system load growth, rates of inflation, receipt of adequate and timely rate relief, the availability and timing of environmental, siting and other regulatory approvals, the scope of modifications required by regulatory agencies, tne availability and costs of external',ources of capital and other factors beyond the Company's control.

FINANCING PROGRAM

- To finance its construction program as shown in the above table for the five years through 1984, and to meet long-term debt maturities and preferred stock sinking fund requirements

aggregating $507,017,000 during such years, the Company estimates that approximately $2.5 billion will be required from external sources. The balance of funds recuirred for those purposes is expected to be obtained from intemal sources. The Company's ability to finance a portion of its continuing construction program from internal sources is largely dependent upon the timely recovery of increased energy costs through operation of its Energy Cost Adjustment Clause.

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FINANCIAL INFORMATION Not income for 1979 was $346,219,000, as compared with $251,683,000 for 1978. Approxi-mately 57% of such increase was attributable to a general rate increase, a substantial portion of which became effective in July 1978 and the balance of which became effective on January 1, 1979, and 22% was attributable to a 4.4% increase in kilowatt-hour consumption due largely to a substantial number of now customers. The remainder of the increase reflects a higher non-cash allowance for debt and equity funds used during construction ("ADC"), primarily related to construction of San Onofre Nuclear Generating Station Units 2 and 3. and an increase in the A OC rate from 6.96% to 7.76%, effec'ive January 1,1979.

Net income for the fourth quarte of 1979 was $92,538,000 as compared with $85,455,000 for the fourth quarter of 1978. Resulu for the fourth quarter of 1979 were affected by a 31%

increase in operating and maintenance costs and a 22% increase in interest expense. Because such increased costs are expected to continue to affect the Company's net income, the Com-pany, on December 26,1979, filed an application for a general rate increase designed to increaso annual revenues by approximately $340,000,000 based on a 1981 test year.

In addition to the ratios of earnings to fixed charges under " Selected Information-Financial Information," supplemental ratios of earnings to fixed charges have been calculated pursuant to Accounting Series Release No.122 of the Securities and Exchange Commission.

Such ratios, which reflect interest amounts related to a nuclear fuel lease and debt obligations of a partnership engaged in uranium mining and milling activities in which a wholly-owned subsidiarv of the Corr pany is a partner, were 2.79 on an actual basis and 2.09 on a pro forma basis for 1979.

DESCRIPTION OF THE NEW BONDS The Now Bonds will be of an additional series created by resolution of the Company's Board of Directors (the " Resolution") and wit, be issued under a Trust Indenture dated as of October 1,1923 between the Company and Harris Trust and Savings Bank and Wells Fargo Bank, National Association, as Trustees (the " Trustees"), as amended and supplemented by supplemental indentures, including a Forty-Fifth Supplemental Indenture dated as of April 1, 1980 (co!!ectively, the " Mortgage").

The New Bonds will be due April 1,2005 and will bear interest at the rate specified on the cover of the Prospectus, payable semiannually by check from Harris Trust and Savings Bank, on April 1 and October 1 to the holders of record on March 15 and September 15, respectively.

Principal and interest will initially be payable at Harris Trust and Savings Bank, Chicago, Illinois, at Wells Fargo Bank, National Association, Los Angeles, California or at Bankers Trust Company, New York, New York.

The New Bonds will be issued only as fully registered bonds.

The statements below are brief summaries of certain provisions relating to the New Bonds, the Resolution and the Mortgage, and an indenture ("Catectric Indenture"), under which the First Mortgage Bonds of California Electric Power Company ("Calectric"), merged into the Company in 1963, were issued, all of which instruments are referred to below. The statements below make use of defined terms, do not purport to be complete and are qualified in their entirety by the parenthetical references to the Resolution, Mortgage and Catectric Indenture, which are exhibits to the Registration Statement of which this Prospectus is a part.

Redemption The New Bonds will be redeemable by the Company, in whole or in part, at any time upon 30 days notice, at the prices referred to under " Redemption Prices of the New Bonds."

~ However, no New Bonds may be redeemed prior to April 1,1985 (through operation of the 5

Special Trust Fund or otherwise) for the purpose or in anticipation of refunding through funds borrowed by the Company at an effective interest cost of less than the effective interest cost of the New Bonds. (Resolution)

Security in the opinion of counsel for the Company, the New Bonds, when issued, will, as to the security afforded by the Mortgage, be secured equally and ratably with all other bonds issued and to be issued under the Mortgage (the " Bonds") by a legally valid first lien or charge on substantially all of the property and franchises now owned by the Company (with exceptions and exclusions hereinafter noted). Such lien and the Company's title to its properties are subject to the terms of franchises, licenses, easements, leases, permits, contracts and other instruments under which properties are held or operated. certain statetes and governmental regulations, tiens for taxes and assessments, liens of the Truutees, and the lien of the Calectric Indenture to the extent referred to below and of the trustees thereunder. In addition, such liens and the Company's title to its properties are subject to certain other liens, prior rights and other encumbrances none of which, with minor or insubstantial exceptions, in the opinion of counsel for the Company, affects from a legal standpoint the security for the New Bonds or the Company's right to use such properties in its business, unless the matters with respect to the Company's interest in the Four Corners Project and the related easement rd lease referred to in the following paragraph may be so considered.

h Onrnnany's rights and the rights of the Trustees in the Four Corners Project in northern New Mexico located on land of The Navajo Tribe of Indians under an easement from the United States and a lease from the Tribe may,in the opinion of counsel for the Company, be subject to r

possibie ' defects. Including possible conflicting grants or encumbrances not ascertalnable because of the absence of or inadequacies in the applicable recording law and the record systems of the Bureau of Indian Affairs and the Tribe, the possible inability of the Company to resort to legal process to enforce its rights against the Tribe without Congressional consent and, in the case of the lease, possible impairment or termination under certait circumstances by Congress or the Secretary of the Interior. The Company cannot predict whr't effect, if any, such possible defects may have on its inteiest in the Four Corners Proje The Mortgage provides that property hereafter acquired (other than excepted kinds noted

[

below) is to become subject to the lien of the Mortgage. (Mortgage

" Granting" clauses)

Such property rnay be subject to prior tiens and other encumbrances.

Properties excepted from the lien of the Mortgage include cash, accounts receivable, deposits, bills and notes, contracts, leases under which the Company is lessor, securities not

(

specifically required to be pledged, office equipment, vehicles, and all materials, supplies, and electric energy acquired or produced for sale, consumption or use in the ordinary conduct of business. (Mortgage "Excepting" clauses, as supp'd by Sixth Supplemental Indenture) Th3

. Company has pledged its customer. accounts receivable as security for certain promissory notes, of which $14,217,000 aggregate principal amount wra outstanding at December 31,1979.

- The lien of the Catectric Indenture extends, as a tien prior to that of the Mortgage, to most i

of the properties acquired in the Calectric merger and to all subsequent substitutions, replace-ments, additions, alterations, improvements, and enlagements, heretofore or hereafter made, to, of, or upon any properties subject to the lien of the Calectric Indenture; and such lien also extends, as a prior lien.(with certain exceptions), to any properties voluntarily subjected to such lien or included in property additions utilized under the Calectric Indenture. (Calectric

. Indenture-Article I of Thirteenth Supplement) These outstanding Catectric First Mortgage Bonds have been_ established as underlying bonds under the Mortgage, and additional bonds 6

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may not be issued under the Cafectric Indenture unless pledged or otherwise subjected to the lien of the Mortgage. (Mortgage-Sec. 5, Art. Three)

Special Trust Fund The Company is required to deposit in a Special Trust Fund with Harris Trust and Savings Bank,on each May 1 and November 1, cash equal to 1% % (subject to redetermination by agree-ment between the Company and Harris Trust and Savings Bank) of the aggregate principal amount of the Bonds and underlying bonds then outstanding (excluding certain Bonds and underlying bonds, such as Bonds r,atled for redemption),less certain amounts paid or credited in respect of underlying bonds. (Mortgage-Secs.1 and 3, Art. Four, as supp'd by Third SupplementalIndenture) Amounts in the Special Trust Fund may, in general, be paid out for payment, redemptico (at the redemption prices set forth it' the Bonds and subject to the limitation on refunding applicable to various series) or pure. we of Bonds or underlying bonds, or to reimburse the Company for the acquisition of certain additional properties. (Mortgage-Sec. 2, Art. Four) The foregoing deposit requirement has not affected the cash flow of the Company since the cash deposited has been simultaneously offset by its payment to the Company to reimburse it for the acquisition of additional property, issue of Additional Bonds in general, additional Bonds, ranking equally and ratably with the New Bonds, may be issued in principal amount equal to:

(a) Certain Bonds and underlying bonds acquired, redeemed u otherwise retired.

(Mortgage-Secs. 3 and 12, Art. Two, as supp'd by Art. Three, Fourth Supplemental

' Indenture)

(b) Cash deposited to pay or redeem Bonds or underlying bonds. (Mortgage -Secs.

4 snd 13, Art. Two)

(c) 66%% of the net amount of additional property constructed or acquired by the Company or its subsidiaries and not theretofore used for other purposes under the Mort-gage, subject to certain restrictions. (Mortgage-Secs. 6,7,9 and 10, Art. Two, as supp'd by Secs.1,2,3 and 10, Art. Three, Fourth Supr'emental indenture)

(d) Cash deposited in an advance construction account with Harris Trust and Savings Bank (in certain events with such Trustee's consent), to be withdrawn to reimburse the Company for 66%% of unbonded additional property. (Mortgage - Sec.11, Art. Two, as supp'd by Sec. 4, Art. Three, Fourth Supplemental Indenture)

Additional Bonds may not be issued unless net earnings (as defined) for twelve months shall have been at least two and one-half times the total annual bond interest charges of the Company. (Mortgage-Sec. 5, Art. Two, as supp'd by Sec. 6, Art. Three, Fourth Supplemental Indenture) For the year ended December 31, 1979, and after giving effect to the issuance

,of the New Bonds at 15%%, such net earnings were 3.18 times such annual bond interest charges. Notwithstanding such restriction, additional Bcads may be issued under the provisions referred to in (a) and (b) above under'certain circumstances involving, among other things, issuance of Bonds nct bearing a higher interest rate than the Bonds to be retired, issuance of

. Bonds to pay or redeem Bonds maturing within two years and issuance of Bonds on the basis -

of acquisition, redemption or other retirement of underlying bonds. (Mortgage-Secs. 3, S, 12 and 13, Art. Two, as supp'd by Secs. 5,6,7 and 8, Art. Three, Fourth Supplementalindenture)

Additional Bonds may not be issued under the provisions referred to in (c) and (d) above during any period when indebtedness secured by a prior lien on acquired utility property has not 7

4 been established as underlying bonds. (Mortgage -Sec. 8, Art. Two, as supp'd by Sec. 2, Art. Three, Fourth Supplemental Indenture)

The New Bonds will be issued under the provisions referred to in (c) above.

As of December 31,1979, the net amount of additional property against which Bonds might be issued pursua,it to (c) above was approximately $626,000,000, which would, if o2er con-ditions are met, permit the Company to issue approximately $417,000,000 of additional Bonds, including the New Bonds.

Defaults and Other provisions The Mortgage provides that the following are defaults: default in payment of principal; default for 60 days in payment of interest or satisfaction of the Special Trust Fund obligation; default under the covenants and conditions of the Company in the Mortgage or in the Bonds for 60 days after notice by Harris Trust and Savings Bank, Trustee; certain acts of bankruptcy and certain events in bankruptcy, insolvency, receivership or reorganization proceedings; and failure to discharge or stay within 60 days judgments against the Company for the payment of g

money in excess of $100,000. (Mortgago -Sec.1, Art. Seven, as supp'd by Part IV. E., Sixth SupplementalIndenture)

The Mortgage requires the Company to file with a Trustee documents and reports with respect to the absence of default and compliance with the terms of the Mortgage in all cases upon the authentication and delivery of additional Bonds, the release of cash or property, the satisfaction and discharge of the Mortgage, or any other action requested to be taken by a Trustee at the request of the Company. (Mortgage - Art. Two, as supp'd by Art. Three, Fourth Supplemental Indenture; Sec.14, Art. Three, Sec. 2, Art. Four, and Art. Eight, as supp'd by Part IV. G., Sixth SupplementalIndenture: Art. Ten; and Arts. Nineteen and Twenty, Sixth Sup-piemental Indecture)

The holders of a majority in principal amount of outstanding Bonds may require the Trustees to enforce the lien of the Mortgage upon the happening (and continuance for the prescribed grace period, if any) of any if the defaults referred to above, and upon the indemnification of the Trustees to their reasonable satisfaction. (Mortgage-Sec. 2, Art. Seven, as supp'd by Sixth SupplementalIndenture )

Concerning the Trustees Harris Trust and Savings Bank is a trustee of the Company's current pension program and, for that purpose, holds trust assets with an approximate aggregate market value of $17,884,000 as of December 31,1979. The Company maintains deposits with Harris Trust and Savings Bank and Wells Fargo Bank, National Association, and intends to borrow money from such banks from time to time.

Neither by the Mortgar,e nor otherwise are the Trustees restricted from dealing in the New Bonds as freely as ' hough they were not Trustees. However, the Mortgage provides that if either Trustee acquires a conflicting interest, as defined, it must eliminate such conflict or resign, and in certain cases it is required to share the benefit of payments received as a creditor after the beginning of the fourth month prior to a default. (Mortgage-Sec.1, Art.

Eighteen, Sixth SupplementalIndenture) 8

g,.

$ws3*.-> ; o r ; # - # N y

Modification of the Mortgago The holders of S0% in principal amount of all Bonds outstandino may authorize relemse of trust property, waive defaults and authorize certain modifications of the Mortgage. However the obligation of the Company to pay principal and interest will continue unimpaired; and sucF modifications may not include, among other things, modifications giving any Bonds preference over other Bonds or authorizing any lien prior to that of the Mortgage. In addition, modifications of rights of any series require the assent of the holders of 80% in principal amount of the Bonds 1

of such series. (Mortgage-Art. Fourteen, as 3 mended by First Supplemental Indenture)

REDEMPTION PRICES OF THE NEW BONDS The redemption pilces of the New Bonds are the following percentages of the principal amount thereof during the respective periods indicated:

from date of issue to March 31,1931 115.13%

April 1,1993 to March 31,1994 106.93 %

y April 1,1981 to March 31,1982 114.50 %

April 1,1994 to March 31,1995 106.30 %

April 1,1982 to March 31,1983 113.87 %

April 1,1995 to March 31,1996 105.67 %

April 1,1983 to March 31,1984 113.24 %

April 1,1996 to March 31,1997 105.04 %

April 1,1984 to March 31,1985 112.61 %

April 1,1997 to March 31,1998 104.41 %

Aprll 1,1985 to Mar :h 31,1986 111.98 %

April 1,1998 to March 31,1999 103.78 %

April 1,1986 to March 31,1987 111.35 %

April 1,1999 to March 31,2000 103.15 %

April 1,1987 to March 31,1988 110.72 %

April 1,2000 to March 31,2001 102.52 %

April 1,1988 to March 31,1989 110.v9%

April 1,2001 to March 31,2002 101.89 %

April 1,1989 to March 31,1990 109.46 %

April 1,2002 to March 31,2003 101.26 %

April 1,1990 to March 31,1991 108.83 %

April 1,2003 to March 31,2004 100.63 %

April 1,1991 to March 31,1992 108.20 %

April 1,2004 to March 31,2005 100.00 %

April 1,1992 to March 31,1993 107.57 %

in each case with accrued interest to the redemption date.

EXPERTS The financial statements and schedules incorporated by reference in this Prospectus for the periods indicated in their reports have been examined by Arthur Andersen & Co., inde-pendent public accountants, and are included in this Prospectus in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports.

LEGAL OPINIONS The validity of the New Bonds will be passed upon for the Company by O'Melveny & Myers, 611 West Sixth Street, Los Angeles, California 90017, special counsel for the Company, and by John R. Bury, General Counsel, or Charles R. Kocher Assistant General Counsel of the Company, and for the Underwriters by Sullivan & Cromwell,125 Broe) Street, New York, New York 10004. As to matters governed by Arizona and Nevada law such counsel will rely upon opinions of Snell & Wilmer,3100 Valley Center, Phoenix, Arizona 850~, and Woodburn, Wedge, Blakey and Jeppson, a Nevada professional corporation, First National Bank Building, One East First Street, Reno, Nevada 89505, respectively; and as to matters governed by New Mexico law and (with regard to matters affecting the interest of the N,pany in the Four Corners Project and the easement and lease therefor) federal and Navajo Tribal law, such ccunsel will rely upon the opinion of Rodey, Dickason, Sloan, Akin & Robb, P.A., a New Mexice professional corpora-tion, First Naticnal Bank Building, Albuquerque, New Mexico 8710'*

As to the incorporation of the Company and all other matters governed by California law, Sullivan & Cromwell will rely upon the opinions of O'Melveny & Myers and Mr. Bury or Mr. Kocher.

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The statements of law and legal cccclusions under the following captions have, to the extent indicated below, been prepared or reviewed by the counsel indicaMd and have been included herein upon the authority of such counsel: under " Description of the New Bonds,"

except for the second paragraph und9r " Security," by O'Melveny & Myers and Mr. Bury and Mr. Kocher; and under " Description of the New Bonds" in the second paragraph under

• Security," concerning the interest of the Company in the Four Corners Project and the easement and lease therefor, by Hodey, D' tason, Sloan, Akin & Robb, P.A. The statements of law and legal conclusions under the follt ing captions of the Company's Annual Report on Form 10-K for the year ended December 31, 1979 which is incorporated by reference in this Prospectus have, to the extent indicated below, been reviewed by the counsel indicated and have been included in this Prospectuu upon the authority rs such counsel: under " Regulation" i

by O'Melveny & Myers, Mr. Bury and Mr. Kocher; and uiMer " Fair employment practices matters"in the third sentence of the third paragraph by Mr. Koci.sr.

Mr. Bury and Mr. Kocher are employees of the Company and as such are salaried and share in the benefits accruing to such employees. As of December 31, 1979, Mr. Bury and Mr. Kocher had a direct or indirect interest in 2,981 and 141 shares of the Company's Common Stock, respectively. These shares include those credited and conditionally credited to their respective accounts as of December 31, 1979 with the trustees of the Company's Employee Stock Ownership Plan and Employee Stock Purchase Plan and with the agent for the Company's Dividend Reinvestment and Stock Purchase Plan.

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UNDERWRITERS Under the terms and subject to certain condons contained in the Agreement, the under-writers named below (the " Underwriters") have severally agreed to purchase and the Company has agreed to sell to them, severally, the respective principal amounts of New Bonds set fodh below. The Bond Purchase Agreement provides that the Underwriters will be cD! iga' 4 to purchase all of the New Sonds if any are purchased, provided, however, that under certain circumstances involving a default by one or more Underwriters, the Company may elect to terminate the Bond Purchase Agreement, or to sell tes.s than all of the New Bonds to the Underwriters.

Principal Name Amount Salcmon Brothers S 77,500,000 Morgan Stanley & Co. Incorporated 77,500,000

(

Bear, $! earns & Co.

42.200,000

(

Baste Securities Corporation 1.000,000 Equitable Securities Corporation 300.000 Hanifen, Imhoff & Samford, Inc.

300.000 Sade & Co.

300,0C0 Scherck, Stein & Franc, Inc.

300,000 Scott & Stringfellow, Inc.

300,000 Young, Smith & Peacock, Inc.

300,000 Total

$200,000,C_CO The Underwriters through their representatives, Saiomon Brothers; Morgan Stanley & Co.

Incorpcrated and Bear, Stearns & Co., have advised the Company as follows:

The several Underwriters propose to offer part of the New Bonds directly to the public at the public offering price set forth on the cover page of this Prospectus and part to dealers at a price which represents a concession of.50 of 1% of the principal amount under the public offering price, and any Underwriter may offer New Bonds to certain brokers or dealers who are either a parent or subsidiary of such Underwriter at not less than such price to dealers. The Underwriters may allow and such dealers may reallow a concession, not in excess of.25 of 1% of the principal amount, to certain other dealers.

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f Thl', Prospectus contains information con-ce ning the Company and its New Donds, but does not contain all of the information set forth in the Registration Statement and the exhibits relating thereto, which the Company has filed with the Securities and Exchange SOU/hern Ca//[Orn/a Commission, Washington, D. C., under the Securities Act of 1933, and to which refer-Edison Company enco is hereby made.

TABLE OF CONTENTS Page Available information 2

Incorporation of Certain Documents by Reference 2 Selected Information 3

The Company 4

Use of Proceeds and Construction Program 4

Financing Program 4

Financial information 5

Descriptron of the New Bonds 5

Redemption Prices of the New Bonds 9

't

{5Tst :l!1tl IEefililtl511g Experts g

Legal Opinions 9

][t)Tig lge ISO 11 tis Underwriters 11 Series XX, I) tie 2005

!T%5 No dealer, salesman or other peu,on has been authorized to give any information or to make any representation not contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the PROSPECTUS Company or th) Underwriters. This Prospec-tus does not constitute an offer to sell or a solicitation of ar. offer to buy any of the securities offered hereb,v in any jurisdiction to any person to whom it is unlawful to me.ke such offer in such jurisdiction.

L

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4-17-80 g i

Application No. S9351 Exhibit No. (SCE - 26)

Witness: H. F. Christie Date:

SOUTHERN CALIFORNIA EDISON COMPAhY FINANCIAL CHARACTERISTICS COST OF MONEY AND REQUIRED RETURN UPDATE Before the PUBLIC UTILITIES C05NISSION OF THE STATE OF CALIFORNIA

' Rosemead, California

' April 1980-a

YEAR-END EARNINGS / PRICE RATIOS 20 I.argest Electrics SCE Standard 6 Poor's 400 Industrials Ratio Cost Difference Cost Difference Line So. Calif.

Te+-5 Total So. Calif.

Total No.

Years Edison Aa Only Group Aa Only Group Ratio Edison Aa Only Group (1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10) 1.

1969 7.80%

7.99%

7.66%

(.19)

.14 6.04%

1.76 1.95 1.62 2.

1970 8.40 7.63 7.36

.77 1.04 5.36 3.04 2.27 2.00 3.

1971 8.34 7.74 7.75

.60

.60 5.30 3.04 2.44 2.45 4.

1972 9.04 8.67 8.36

.37

.68 5.18 3.86 3.49 3.18

5. -

1973 14.4 3 10.99 11.49 3.44 2.94 8.15 6.28 2.84 3.34 6.

1974 16.00 14.03 15.28 1.97

.72 12.67 3.33 1.36 2.61 7.

1975 14 57 11.76 11.82 2.81 2.75 8.48 6.09 3.28 3.34 8.

1976 16.61 10.78 10.77 5.83 5.82 8.94 7.67 1.84 1.83 9.

1977 14.41 11.19 11.61 3.22 2.80 11.05 3.36

.14

.56 10.

1978 13.67 12.20 12.80 1.47

.87 12.28 1.39

(.08)

.52 11.

1979*

18.61 13.16 13.70 5.45 4.91 12.82 5.79

.34

.88 Averages 12.

1969-1978 12.33 %

'10.30 % 10.49%

2.03 1.84 8.35%

3.98 1.95 2.15

-i 13.

1969-1973 9.60 8.60 8.52 1.00 1.08 6.01 3.60 2.60 2.52 Er 14.

1974-1978 15.05 11.99 12.46 3.06 2.59 10.08 4.37 1.31 1.77 T

15.

1970-1979 13.41 10.82 11.09 2.59 2.31 9.02 4.39 1.79 2.07 ra 16.

1970-1974 11.24 9.81 10.04 1.43 1.20 7.33 3.91 2.48 2.72 17.

1975-1979 15.57 11.82

12. 14 3.76 3.43 10.71 4.'i6 1.10 1.43

?

Sources:

Annual Reports and Statistical Supplements

~1 Standard G Poor's Stock Guides 3*

Standard 6 Poor's Analyst's llandbook

• Standard 6 Poor's Industrial Rat 3o estimate for year-end 1979.

YEAR-END PRICE / BOOK -

COMPARISONS n

20 Largest Electrics Standard 6 Poor's 400 Industrials

. Ratio Deficit Deficit Line So. Calif.

Total Total So. Calif.

Total No.

Year Edison ~

Aa Only Group Aa Only Group Ratio Edison Aa Only Group (1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10) 1.

1969 1.28x 1.76x 1.77x

.48

.49 1.96x

.68

.20

.19 2.

1970 1.30 1.85.

1.83

.55

.53 1.92

.62

.07

.09 3.

1971 1.13_

1.74 1.66

.61

.53 2.04

.91

.30

.38 4.

1972-1.02 1.57 1.54

.55

.52 2.26 1.24

.69

.72 5,

1973

.65-1.16 1.08

.51

.43 1.74 1.09

.58

.66 6.

1974

.61

.86

.76

.25

.15 1.13

.52

.27

.37 7.

1975

.66 1.06 1.01

.40

.35 1.42

.76

.36

.41 8.

1976

.75 1.18 1.13

.43

.38 1.57

.82

.39

.44 9.

1977

.82 1.09 1.05

.27

.23 1.27

.45

.18

.22 10.

1978

.79

.91

.89

.12

.10

-1.19

.47

.28

.30

' ll. -

1979*

.72

.84

.80

.12

.08 N.A.

Averages 12.

1969-1978

.90x 1.3 2K 1.27x

.42

.37 1.65x

.76

.33

.38 13.

1969-1973 1.08 1.62 1.58

.54

.50 1.98

.91

.37

.41 14.

1974-1978

.73 1.02

.97

.29

.24 1.32

.60

.30

.35 I

f 15.

1970-1979

.85 1.23 1.18

.38

.33 1.62 ")

.76(a)

.35(")

.40 ")

16.

1970-1974

.94 1.44 1.37

.49

.43 1.82(b)

.88(b)

.38(b)

.34( )

.44 17.

1975-1979

.75 1.02

.98

.27

.23 1.36

.61

.30 N. A.~ : Not Available

(")1970-1978 j

(b)1975-1978 E

j[

• Sept. 1979 Book Value, year-end 1979 price.

13 O

EE Sources: Annual Reports and Statistical Supplements Standard G Poor's Stock Guide Standard 6 Poor's Analyst's Guide

4-17-80 Table 22 SOUTHERN CALIFORNIA EDISON PRICE BOOK ADJUSTED RETURN ON C0FNON EQUITY Moody's Return on Year-end Adjusted Aa Public Line Common Price / Book Return Utility Bond No.

Year Equity (a)

Ratio (a)

(2+3)

Yields (1)

(2)

(3)

(4)

(5) 1.

1973 9.59%

.65 14.8%

7.72'5 2.

1974 9.52

.61 15.6 9.04 3.

1975 9.84

.66 14.9 9.44 4.

1976 12.07

.75 16.1 8.92 5.

1977 12.05

.82 14.7 8.43 6.

1978

'10.54

.79 13.3 9.10 7.

1979 13.64

.72 18.9 10.22 Averages 8.

1973-1978 14.9*5 8.78%

9.

1973-1979 15.5 8.98

10. <

1974-1979-15.6 9.19

(*)1973-1977 Restated

Sources

Annual Reports and Sta tistical Supplements Survey of Current Business Moody's Bond Surveys

4-17-80 Table 23 i

S0lmiERN CALIFORNIA EDISON EARNINGS / PRICE COST OF CA~ ITAL i

Recorded Expected Per Share Basis (")

Per Share Basis (b)

Line Average Cost Total Year-end Cost No.

Year Earnings Price (2+3)

Earnings Price (5+6)

(1)

(2)

(3)

(4)

(5)

(6)

(7) 1 1.

1974

$2.80

$18.04 15.56

$2.75

$17.500 15.7's 2.

1975 2.26 18.83 15.2 3.00 19.625 15.3 3.

1976 3.80 20.71 18.3 3.79 22.875 16.6 4.

1977 3.80 24.73 15.4 4.26 26.375 16.2 5.

1978 3.52 25.55 13.8 4.16 25.750 16.2 6.

1979 4.56 25.85 17.7 4.74 24.500 19.3 Averages 7.

1974-1978 15. 6 *.

16.0%

8.

1975-1979 16.1 16.7 l

l l

(*) Restated Earnings 1974-1977

.(b) Exponential-Curve Fit, (y.= aebx). Restated Earnings 1974-1977.

' Source: ~ Annual 5 Statistical Supplements

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