ML20052G704

Annual Financial Rept 1981

ML20052G704
Person / Time
Site:	San Onofre, Palo Verde
Issue date:	02/18/1982
From:	SOUTHERN CALIFORNIA EDISON CO.
To:
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ML13310A719	List: ML13310A718 ML20052G704 ML20052G711 ML20052G720 ML20052G730
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NUDOCS 8205180587
Download: ML20052G704 (40)

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f Southern California Edison Company

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Southern Cahfornia Edison Company provides electric ser-Contents vke in a 50,000. square-mile area of Centra! and Southern California. This area includes some 800 cities and commu-2: 1.etter to Shareholders nit;es whh a population of more than eight million people.

4: Review of 1981 Edison s gross investment in utility plant totals nearly 13: Financial Review

$9.5 billion. Area generating capacity at peak during 1981 16: Responsibility for Financial Statements and totaled 15,592 megawatts (MW), which included 1 T,269 MW Report of Independent Public Accountants of Company owned tacilities and 2,323 MW of capacity 17: Financial Statements from other sources. Ot the Company-owned facilities, 31: Capital Stock-Dividend and Price information 78% was comprised of oli-and gas-fired generating units.

32: Management's Discussion and Analysis of SCE's interest m coal-tired generating units accounted Financial Condition and Results of Operations for another 12%, and 7% was in hydroelectric plants.

31; Selected Financial Data 1971-1981 The Company's 80% interest in a nuclear plant accounted for the remaining 3%

1he Company, incorporated in 1909 under the laws of California, is a public utility and its retail operations are subject to regulation by the California Public Utilities Commission which has the authority, among other things, to e tablish retail rates and to regulate security issuances, accounting and depreciation. The Company's resale operations are subject to regulation by the Federal Energy Regulatory Commission as to ratu on sales for resale, as well as to other matters including accounting and depreciation.

Under the National Energy Act, tb-federal Department of Energy has been granted regulatuiy authority over certain aspects of energy conservation, solar energy devel-opment, power plant tuel use, coal conversion, public utility regulatory policy and natural gas pricing.

T he Company's planning and siting of new plant construction are subject to the jurisdiction of the California Energy Commission. Edison also is subject to various governmental licensing requirements, to Securities and Exchange Commission filing and disclosure requirements, and to certain other federal, state and local laws and regulations, including those related to nuclear energy and nuclear plant construction, environmental protection, fuel supplies and land use.

On the Cover solar ray s rethited trom hehostats (nurrors) at solar tl ermal gercratmg station r. car Dag,ett, Ghfoniia, foim stai-hke tes.t pattern in covt r photograph W1.en tAthty h p'au d in eperation in (urrent year 1,N16 bebo< tats wd! wnsentrae suni rays en NU toot bi h tentral retener s

to vm to pot (n M MW of ciretdcd energy N1:aed sohr One, fadlity h

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'.br brpN r nt:al nyeiver ol.u gent r.eine, pl nt enr buitt and tecienuN

. avprot?c etten ov T anoa, the !kpaoment ot ! nerg, the ! os Angtles Der artment of Water and Power and the California ! nergy Commiwon

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1981 Annual Report ave-Year Compound Highlights 1981 1980 Change Growth Earnings Per Share 54.93

$3.50 40.9 %

5.3%

Common Dividends Paid Per Share (a) 53.03

$2.78 9.0 12.5 Rate of Return on Common Equity 14.87"'o 10.44 %

42.4 3.7 Operating Revenues (000) 54,054,356

$3,661,117 10.7 17.0 Energy Costs (000) 52,467,933

$2,371,827 4.1 21.9 Operating Expenses Net of Energy Costs and Taxes on Income (000) 5 897,403

$ 878,473 2.2 9.7 Kilowatt-Hour Sales (000) 62,451,319 59,915,187 4.2 3.1 Customers Served 3,232,687 3,163,968 2.2 2.8 Area Peak Demand (Megawatts) 13,738 12,841 7.0 4.0 Area Generating Capacity at Peak (Megawatts) 15,592 15,504 0.6 2.1 (a) On September 17,1981, the Company's Board of Directors authorized an increase in the common stock quarterly dividend to $0.81 from $0.74 per share, effective with the October 31,1981 payment, which is equivalent to $3.24 per share on an annual basis.

Earnings Per Share a.;d Dividends Paid Per Share Rate of Return on Common Equity a Earnings Dividends

$3.03

$2.78

$2.54

$2.24

$192 ten 197s 1979 19ao 19nt The Company's earnings per share of $4.93 for 1981 were the highest Rate of return on common equity of 14.87% for 1981 closely approached recorded in the Company's history, surpassing the previous high of $4.56 the Company's authorized return of 14.95%. 'Ihe California Public per share recorded in 1979. In addition, the 9.5% increase in the common Utilities Commission, in authorizing the Company's 1981 general rate I

f stock dividend, authorized in September, represented the sixth increase increase, also provided for a $92 million attrition allowance in 1982 in the past five years.

to help meet inflation-related costs in this non-rate case year.

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To Our More Than 190,000 Shareholders:

1981 was a year of record earnings for your Company in recognition of our improved earnings, your Board despite the continued impact of inflation on virtually of Directors declared a 9.5% increase in the common all phases of our operations. It was also the year in stock quarterly dividend by raising the rate, on an which we set in motion innovative plans to strengthen annual basis, from $2.96 per share to $3.24 per shm e further our financial integrity over the course of The Board's action represented the sixth dividend this decade through strict internal cost controls, increase in the past five years. Over that period, the renewable resources, and pract( al conservation and annual dividend increase has averaged 14%.

load management programs.

Warren Christopher rejoined the Company in Earnings }~r share improved to $4.93 compared 1981 as a Director. He had resigned in 1977 to serve to $3.50 a year ago. This improvement resulted as Deputy Secretary of State and was awarded the from our increased emphasis on cost control and Medal of Freedom, the nation's highest civilian productivity improvement programs, the timely award, for his work in helping gain the release of the authorization of the 1981 general rate increase, hot U.S. hostages in Iran.

weather-related increased kilowatt-hour sales, and In other Board actions, effective January 1,1982, increased non-cash allowances for funds used during David J. Fogarty, formerly senior vice president, was construction.

elected executive vice president, and John R. Bury, Even though ir flation continued in Southern the Company's general counsel, was elected vice California at near double-digit levels in 1981, Edison's president and general counsel.

operatig expenditures were held to an increase of Projected 1983 increases in operating and main-only 2% during the year through productivity im-tenance expenses including labor, new revenue provement programs and the efforts of our people in requirements associated with changes in tax laws, car-adhering to strict operating and maintenance budgets.

rying costs on new facilities, and continuing inflation In order to support 1981 construction and re-and increased capital costs resulted in our filing with funding requirements totaling $1.2 billion, eight the California Public Utilities Commission (CPUC) for major financings were accomplished in spite of the a general rate increase to produce additional annual most inflationary and volatile capital market in revenues of $1.247 billion, effective January 1,1983.

recent history. To help meet these requirements We are seeking an increase in the rate of return on innovatively, we became the first high quality U.S.

common equity from the 14.95% currently allowed utility to enter the European money market and to 19% and an increase in the rate of return on rate completed three Euro-Debenture issues amounting base from the present 11.2% to 14%. We are also to $175 million.

asking for CPUC support of our resource planning Approximately $275 million from our total 1981 through increased funding for research, development financings of $956 million was required for San and the demonstration of alternate and renewable Onofre Nuclear Units 2 and 3 which at year-end energy resources, and for consumer conservation were 99% complete, and 92% complete, respectively. and load management programs. Additionally, we In February 1982, following the close of licensing have requested an attrition allowance of $169 million hearings, the Nuclear Regulatory Commission issued in increased revenues for the 1984 non-rate-case year.

the Company a low-power license for Unit 2, and we Conservation programs saved more than 4.2 bil-expect that a full-power license will be issued in time lion kilowatt-hours of electricity during the year, the to permit Unit 2 to begin operation in mid-1982. We equivalent of approximately seven million barrels of expect Unit 3 to be operational in mid-1983.

fuel oil, and successes in load management encour-In keeping with the Company's objective to aged us to increase our totalload management re-provide a competitive return. its shareholders and 2

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source commitment from 1,000 megawatts (MW) to Already during the 1980s, we've seen continued 1,400 A1W by the end of the decade. Through man-improvement in the regulatory er vironment at the aged load reductions, we plan to hold growth in state level and, on the national level, the beginnings electr c peak demand to 2% annually, compared of a workable energy policy which relies heavily on to a forecasted demand growth of 2.6% annually free market forces. Last year the Economic Recovery without load management. This should result in Tax Act was enacted with provisions that should significant reductions in new plant and capital costs.

help relieve some of the intense capital pressure on Even with reduced load growth, however, utilities and provide incentives for reinvestment of Edison will need to construct and/or purchase about dividends in utility stocks.

5,860 MW of new resources during the current In the face of change, however, the goals of decade. This is equivalent to ap} roximately 40% of Edison remain unalterably the same..to provide today's existing generating system. Approximately reliable electric service to our customers at a reason-2,100 A1W of these additions are expected to be able price and to provide our shareholders with a based on alternative and renewable resources such competitive return on their investment.

as hydroelectric, including small 1 dro (plants of We are deeply appreciative of the hard work 7

less than 30 MW), cogeneration, wind, solar, geo-and innovative skills of our employees in helping us thermal and fuel cell technology.

achieve our goals. We thank you, our shareholders, Our commitment and progress toward accel-for your support, and we pledge our continuing erating the development of these resources are efforts to earn that support in the future.

detailed in the text of this report. It is important to note, however, that the Company is on schedule at p;

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t-this early stage in meeting the alternative resource

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commitments we initially outlined last year. Hydro-

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electric power, wind and cogeneration development L'.

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thus far have been the pacesetters in our shift to s

renewables. Photovoltaics, geothermal and fuel cells f

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have developed less rapidly than expected.

.y When Solar One, a pilot 10-MW central station E-

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year, it will bring us to the point where we utilize

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ifC eight primary energy resourcec-oil, natural gas, coal, hydro, nuclear, wind, geothermal and solar-c

1. vs.. ~ 6 l more than any other electric utility in the world.

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""-u is actively committed to a decade of technological transition; a decade where we believe strict internal

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cost controls and productisity programs coupled to renewable resource development at the cutting-edge Howard P. Allen William R. Gould of technology will provide the needed flexibility to President Chairman of the Board keep pace with a changing social, financial and regu-and Chief Executive Of#ccr I

latory climate. In short, we have embarked on a new way of doing business in these difficult and chang-February 18,1982 ing times.

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Year in Review Significant accomplishments in a pany was the third largest U.S. hydro-In the area of large hydro develop-number of important areas related to electric utility in the 1920s) and also ment, preliminary engineering is the Company's operating plan for this the Company's prime source of alter-in the early stages for a 200-htW decade were achieved during the year. native energy for the 1980s.

Company-owned unit at Balsam Paced by strict cost controls and Until recently,it had been presumed hieadow, near Shaver Lake, with op-productivity improvement programs, that all cost-effective hydro sites eration scheduled for 1986. Addition-and further helped by rate increases, had already been developed. As other ally, Edison is continuing to examine increased hot weather-related sales fuel costs have climbed, however, the feasibility of purchasing the out-and innovative fm' ancing, earnings more and more small hydro projects put of the proposed 284-hiW Granite were the highest ever recorded.

have become feasible. As a result, Project as well as the output of the Record purchases of lower-cost elec-the Company has scheduled 140 hiW 120-hiW Dinkey Creek Project, both tricity from other utilities supplied of generating capacity by 1990 from located on the west side of the over 26% of the Company's energy small hydro plants of under 30 htW High Sierra.

requirements in 1981 or the equivalent each and 600 hiW from large hydro of 31 million barrels of oil.

facilities. Together, these additions will Cogeneration Company-developed conservation almost double the Company's total In an effort to conserve energy re-programs continued to encourage hydro resources.

sources, the Company continued to more efficient use of electric energy, Edison completed three small hydro develop methods of capturing waste while commitments in load manage-contracts in 1981 totaling 24.5 h1W.

heat to produce or cogenerate electric-ment were significantly increased to Small hydro resources totaling 7 htW ity at large commercial, industrial and help manage demand growth for the also were achieved by the upgrading residential sites. California's first 1980s and beyond. San Onofre Nu-of Units 1 and 2 at Big Creek Plant 4 multi-unit residential cogeneration clear Units 2 and 3 moved measurably in December 1981 and January 1982, demonstration project, one of the closer to operation and progress was respectively.

most innovative of these efforts, was achieved in the accelerated develop-ment of alternative and renewable Technician watches graphic video display resources.

Together, these results are indices y Sjx of computer-controlled of the success of Edison's efforts in J]Qh'

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bR one facility, the world's 1981 to reduce its dependence on low

1. F d X sulfur fuel oil, eliminate the adverse I

financialimpact of conventional QM@.[?

targest central receiver

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located in the South-emJ

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generating plant development includ-ing capital requirements, and eco-g Tdt i"

center of display repre-nomically and efficiently meet the yz needs of its customers as the decade M

sents 300-foot central tawer receiver where progresses, reflected thermal y

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Progress and achievements during y-i placed on-line early ment of alternative and renewable re-

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sources justified a continued sense of

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vent reflective surface optimism. At this early stage, the

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newable resources for about one-third, or 2,100 megawatts (htW), of 4

SCE capacity additions this decade is

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still on target and achievable.

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Hydroelectric power is Edison's oldest (i

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dedicated in July 1981. The project is Generation Capacity Mix located at an apartment complex near Los Angeles and can provide up to 3.9 f,"*p*L"a 1981 Recorded '

1990 Projected million kilowatt-hours (KWH) of 15,592 Megawatts 18,360 Megawatts cogenerated electricity per year to the Renewable /

s are projected to be derived Edison system.

"${' 15%

from nuclear, purchases 3

A total of 156 MW of cogeneration hydro) and alternative and is on line or in the start-up phase of Hydro 6%

renewable resources.

operation. The Company's resource Purchased

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r plan calls for 1,000 MW of cogenera-15 %

power power company's g nerating tion capacity to be operational by the C'P'# i" *

Nuclear 2%

Y end of this decade of which 500 MW Projected to somprise C al 1%

Nuclear 15 %

will be a firm resource dedicated to a

imately 47%

system needs.

Coal 9%

1%d Wind power, like hydro power, can come in both small and large forms.

Small wind turbines at privately.

Oiland Gas 67%

i owned wind parks in the Tehachapi Oiland Gas 44%

Mountains and in Riverside County with total outputs of 2 MW and 5.5 MW, respectively, were contracted for the Edison generating system in 1981 following the Company's third-party wind park opportunity announcement in late 1980. Principles of agreement last year, is also undergoing redesign and corrosion problems. Progress in were also reached during the year for for planned operation in late 1982.

materials and process technologies in an additional 74 MW of both small Additionally, a vertical-axis wind tur-recent years, however, has reduced and hrge wind turbine energy from bine genertor, developed by DAF these difficulties in generating plant other developer-entrepreneurs.

Indal Ltd., has been procured for test-operation. The Company's geothermal The largest customer-owned wind ing in 1982.

resource goal is 375 MW in this decade.

turbine generator contributing to the Edison will continue to pursue In 1981, Edison'n geothermal pro-Edison system, a 40-KW Mehrkam wind generation as a viable resource grams centered on three Company-Induction Unit, was placed in service in the current decade even though owned power plants-the 10-MW in 1981 near Lancaster, along with a some early tests have reflected the Brawley unit which has been operating second 18-KW system integrated into developmental nature of this new for 18 months with an average capacity Federal Aviation Administration oper-technology, especially in hydraulics factor of 50% and availability in the ations at the Fox Field Airport near and rotor design and in scaling-up 80% to 90% range, a 10-MW Salton j

Lancaster.

from small to large wind units. The Sea geothermal project scheduled At SCE's Wind Energy Center goal is 560 MW of wind capacity by for completion at mid-year, and the near Palm Springs, developmenta!

the end of the decade, equivalent to 57-MW Heber dual-flash geothermal testing of large wind generators also 140 MW of firm capacity, a reduction plant which is planned for operation continued during the year. The which reflects the resource's intermit-in 1984.

three-bladed, horizontal axis Bendixt tent availability.

Additionally, purchased power Schachte unit is now undergoing a negotiations continued during the major modification. It was success-Geothennal year with third-party geothermal pro-fully operated while synchronized to Geothermal power is the generation ducers in the U.S. and with Mexico's the Edison system, producing 20,000 of electricity utilizing hot water and Comision Federal de Electricdad for KWH with outputlevels of up to steam resources k>cked beneath the up to 260 MW in geothermal pur-1 MW. A vertical-axis wind turbine earth's surface. High concentrations of chases to supplement 70 MW already generator, which encountered a rotor salts inherent in some geothermal re-under contract.

failure during initial tests by Alcoa sources initially limited cost-effective applications by creating cevere scaling 5

Solar Wind turbinegenerators d t ridges of mile-high Solar power can be divided into Pi founta s,

two distinct categories: solar thermal

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$'njes which converts solar energy into Angeles. Built by an steam for electric power generation, entrepreneur-developer

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in response to Edison's and solar photovoltaic, which con-d 1980 third-party wind verts sunlight directly into electric <l e

Park Pportunity

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During 1981, the Company ex-3,s y; M are the first of 40 to 50 E

panded its efforts to provide 290 h1W

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each scheduled to c ntribute 25-to so-pursuing both technologies for central R.

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station use to help meet the overall

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Solar One, the world's largest cen-

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Cool Water Generating Station site

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operation in the spring of 1982. The

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10- A1W solarithermal system is the re-sult of a cooperative effort by Edison, the Department of Energy, the Los Angeles Department of Water and Power, and the California Energy Commission.

Concurrently, conceptual engineer-ing and financial studies are under way for a 100-N1W solar thermal cen-tral receiver plant. This resource is tion of a 3-KW solar photovoltaic currently are planned for research and plenned for development at Edison's experimental system.

development in 1982, including sub-Lucerne Valley site.

stantial alternative energy R&D.

A letter of intent has been signed to Fuct Cells The Company's research efforts in purchase electricity from a 10-h1W Fuel cells, which convert chemical 1981 included stepped-up funding solar parabolic trough project to be energy directly into electrical energy, support for a demonstration coal located at the Cool Water generating are an environmentally attractive gasification facility at Edison's Cool station, and preliminary engineering generating source provided that cur-Water Generating Station site.

has begun on a 5-h1W solar salt rent fuel cell power designs meet the Problems with financial participation pond generating facility at the Salton technical and economic objectives of by other entities were overcome and Sea. In addition, SCE is working with utility users. In this regard, the future construction of the facility began in a private contractor to develop a of Edison's program will depend upon December. When completed in mid-25-KW parabolic dish solar project.

the degree of success demonstrated 1984,it will be the nation's first power Development efforts also continued by the fuel cell facilities under develop-plant based on coal gasification in the area of solar photovoltaics, with ment with utility support in New technology and will initially process delivery to Edison last April of the York City and in Tokyo, Japan. SCE's 1,000 tons per day of Utah coal to a first of some 60 solar panels, each con-goal is 55 N1W by 1990.

medium BTU gas for electrical taining 228 laser-etched solar cells generation.

produced from dendritic-web ribbon.

Other Research and Development A comprehensive, one-year study Sites are also being studied near Edison's research and development will begin in 1982 at the Company's Palm Springs and Barstow for installa-expenditures in 1981 totaled $43 million. Huntington Beach Generating Station Expenditures of nearly $47 million 1

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to assess a process for the reduction of Peak Demand Forecast nitrogen oxides from boiler flue gas.

Also, a wood waste gasification dem_

The company is pro-onstration project was initiated during iecting a managed load weast cmwth-2m.

of burning a wood-derived gas in Demand Reductwn gra m ta stlth the the year to determine the compatibility

, p, forecast rowth rate of existing generating stations.

X' 2.6% annually. By 1990, The Company made continued load management pro-progress in marine biology and its N",' "[Ij j

d mterface with coastal generating

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11ording growth at a Managed Growth-2.0%

by 1400 megawatts.

plants, including aquaculture in the thermal discharge waters at the Re.

2.0% Ievel with load

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management should y

m ntjncS" al Stations and an artificial reef de-velopment near Camp Pendleton, requirements at a man-California.

D ageable level.

Record Peak Set During Heat Wave A record area peak demand of 13,738 A1W was set on August 27 as a result of heavy air-conditioning loads during the longest period of consis-tently hot weather in SCE's operating history. The new area peak demand

'M represents a 7.096 increase over the previous 12,841 A1W record of July 30, 1980. The annual compound growth 425 A1W are already in place with realized from the 1981 program with in peak demand over the last five the balance planned to be met through over 150 N1W of load reduction ex-years, including the 1981 peak, has the expansion of earlier experiments pected from the expansion of the pro-been 4.0%

in load cycling and through several gram by 1984.

new programs which were success-Target Of 2% Set for hianaged fully demonstrated during the year.

Demand Subscription Service:

Load Growth Such programs include:

This approach to reducing peak To help reduce the rate of growth of demand is the most technologically annual peak demand and further Residential Air-Conditioning Cycling:

innovative of Edison's residentialload defer costly new generating plant con-For several years, Edison has been management programs. Demand struction, the Company in 1981 estab-evaluating the cycling of residential Subscription Service (DSS) uses lished a managed load growth target air conditioners. The intent of this remotely-activated load controllers on of 2"6 for the 1980s compared to the program is to remotely control the use residential customer meters.

forecasted peak demand growth of of residential air conditioners during in operation, the customer selects a 2.6% without load management. It is system capacity shortages. Alore than minimum level of electrical service noteworthy that the 1981 peak de-16,000 control units were under which will satisfy the customer's basic mand exceeded the 2% load growth evaluation in the Company's service electrical requirements during utility target for only eleven hours, thus territory at year-cnd. This enabled system capacity shortages. During further underscoring the need for load Edison to determine customer ac-normal utility operating conditions, the management. The reduced load ceptance, communication system and customer has normal electrical service.

growth rate, which the Company con-cycling equipment reliability, as well During periods of system capacity siders both financially and environ-as the overall cost effectiveness of shortages, however, the customer's mentally prudent in the face of con-the program.

DSS device is remotely activated and tinued inflation, is reflected in Edison's Based on the results of the pro-the customer's load cannot exceed the commitment to vigorously pursue gram, Edison plans to install over previously agreed upon level of ser-load management to decrease demand 70,000 load control devices on cus-vice. If the customer's load exceeds his

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on its system by 1,400 N1W by 1990, tomers' air conditioners in high tem-subscribed service level, the customer's Load management programs totaling perature climates by 1984. A load total electrical service is interrupted. To reduction of approximately 5 h1W was

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restore service, the customer must turn These efforts in 1981 resulted in ment of off-peak storage applications off various appliances to lower the approximately one megawatt of load is expected to result in 14 MW of de-load and then reset the DSS device.

reduction. Based on these results, the ferred load by the end of 1984.

The Company's successful test of commerciallindustrial air-conditioning 2,600 units in 1981 has resulted in cycling program will be expanded to Energy Coalition:

plans to install more than 110,000 ad-approximately 10,000 customers by The Southern California Energy Coali-ditional units by the end of 1984. The the end of 1984 which is expected to tion, formed in 1979, is an association 1981 test yielded a load reduction of result in over 60 MW of load reduction.

of four Orange County companies approximately one megawatt. The ex-committed to cooperative load man-panded program is expected to yield Off-Peak Therinal Storage:

agement. In 1981, the Coalition signed over 140 MW of load reduction.

Edison began a program in 1981 that an operating agreement with Edison r icourages the installation of off-peak for load management and interrup-Commercial and Industrial Load Cycling:

cooling systems in large commercial tible service under an incentives During 1981, Edison initiated an exper-and industrial facilities. These systems schedule which resulted in an energy iment in commercial and industrial chill or frene water during off-peak savings of about 4 MW during the air-conditioning load control using an periods and store it for air-conditioning year. The U.S. Department of Energy AM radio station to remotely activate use during the hot hours of the day.

has adopted the concept, calling it cycling devices. This is the first load Three large customers that began

" Operation Powerplay."

management program in the United operation in 1981 shifted approxi-States to utilize AM broadcast tech-mately 3,000 tons of air-conditioning Conservation Programs Gain nology. Approximately 600 commer-load to off-peak hours of operation.

Added Momentum cial and industrial customers were This effort resulted in approximately Electric consumption by Edison's 3.2 equipped with cycling equipment 3 MW of load reduction for the year.

million customers during the year was involving 3,000 air-conditioning units. Continued emphasis in the develop-59.6 billion KWH compared to 58 billion Heat recovery system of i

e California's first multi-

• ,,a unit residential cogen-J eration demonstration 4

p project at a San Dimas apartment complex can

• o p'

,.a -

3

/

] provide up to 3.9 mil-J t

=

3

,l ~ ;.

1 lion KWH of electricity J

f

/

[7 i If a{f P

• per year to SCE's sys-h f

,'ib,.

~ $y-HM.,

tem. Edison's resource i.

$ b[M4T%

"fM A 9/

plan calls for 500 MW of i

l g

h cogeneration capacity F#

MW p n jy E

to be a firm operational

.. j /p resource by the end of

~

'I.

the decade with a total

(

r-# ' '

I-'

of156 MW presently on g

y~

3

. J line or in the start-up

~

J phase of operation.

{

. 1cass,agat m

r

A I

',r

- ~-

s

't I

(

y p.

~

9 u,

J u;n a

KWil in 1980. Conservation programs Area Capacity and Peak Demand (in megawatts) were a primary factor in holding total electric consumption by Edison's y,

m

- A record peak demand residential customers to a l.3%

of 13,738 megawatts growth rate in 1984 even though air s Area capaq umwd n August 27,

' Peak Demand 1981, representing a 7%

conditioning usage was at a high level increase over the peak due to record summer temperatures set in 1980. The 1981 and despite the fact that new resi.

peak esceeded the 2%

dential customers in the Company's growth target in large s,,I,'he$t P

service territory during the year in-m creased by 59,279 or 2.1%

um during which Southern

""2 Customer conservation efforts in um california esperienced 1981 and the higher cost of electricity "w

84 consecutive daysin

• ' h Pera um held average annual KWil residential i

l ded consumption to 5,879 KWil compared to 5,939 KWil per customer in 1980.

Customer response to the Com-pany's conservation programs and Edison's own efforts in voltage regula-tion, distribution circuit management and streetlight conversion in 1981 re-suited in savings of more than 4.2 bil-lion KWil of electricity, the equivalent of about seven million barrels of 4 ""

expensive fuel oil. The streetlight con-version program reached a 50%

D m

2n m

m completion level in 1981, with a total savings to date of more than 75 million and Edison became the first California industrial customers. By year-end, KWII through the change to high-utility to have 1,000 ZIP loans granted more than 1,000 participants repre-pressure sodium-vapor lamps.

to its customers. Conservation mea-senting 300 contracting firms were New conservation programs im-sures recommended for ZIP financing involved in the program.

piemented in 1981 included Residential are identified during the Residential In 1981, non-residential audit efforts Conservation Service, low and zero Conservation Service home energy helped businesses save 1.2 billion interest financing of conservation survey.

KWH of electricity.

hardware, and solar water heater A solar incentive program was ini-backfits.

tiated during the year to encourage John and Alice Tyler EcologyIEnergy Prize:

The Residential Conservation Ser-energy-conserving retrofit installation In 1981, Edison became the first corpo-vice is a federally-mandated program of solar water heating systems on rate winner in the eight-year history enforced through a state plan which existing electric water heaters. Qual-of the prestigious John and Alice Tyler offers comprehensive in-home energy ifying customers are eligible for a $720 Ecology-Energy Prize. The Company surveys to recommend conservation rebate on systems which meet regula-received the honor for achievements actions to residential customers. In tory requirements. A 1981 heat pump in conservation and for its commit-1981, Edison became the first utility to water heater demonstration program ment to aggressively develop renew-implement this program in California, offered an alternative where solar able and alternative energy sources.

logging more than 28,000 home en-panel applications were not practical.

The Prize was commenced in 1973 by ergy audits by year-end.

The Company initiated the " Con-the late John C. Tyler, founder and A Zero Interest Loan Program (ZIP) servation Means Business" program former chairman of the Farmers In-for financing residential conservation which involves contractors in the sell-surance Group, and his wife, Alice C.

investments was pioneered in Edison's ing of conservation. The program Tyler. Edison directed that its $100,000 Eastern Desert service area to assist provides incentives to contractors and prize be presented in equal amounts customers with high bills. By year-lighting distributors who sell energy-to the University of Southern Califor-end, more than $2 million in zero efficient lighting systems, and heating / nia and the California Institute of interest loans had been committed, air-conditioning contractors who sell Technology.

maintenance agreements and economy cycling equipment to commercial and 9

Technicians monitor

'"W-.26.,

9'4*I./fO MTT[

.}.

/[//j( /!f'a b 3%42-control room instru-jl S $$

.'u,, d +y. M e w

, f;;,;l,',;5 ~ activities of San Onotte

• .m ments dunng startup

- :Vn> s t 3.;; :::

~

gjyf/f6 t/M'E *f ((UNI

/[E ' N"#

w !.

Nuclear Unit 2 prior to

~ (7 7

1 pd,-

e i _ initial fueling. Unit 2 is jj/, II(dI

~^'p a" fl y "" p7 -

k{

l' scheduled to be opera-tional in mid-1982. San "y

e ^

_fg,

,-f';

I J

.I, 4

Onofre Nuclear Unit 3, tj q

s

},

d'.y 7,7 which is 92*o com-l

. i pi.

'y-71,

1. g/ !

plete,is scheduled to py[,f!j mid-1983. In full opera-

k. '[

'N f,

begin operation in

'N

.b tion, the two units will g

. If. ?' g; r; 3 %,i -.[

.v; join Unit i, on-line at

[>e.

' (:

/

-,2 i%:? /r,.

y.

r

[ (O y.

the same site since i

l-i

. E. $-

l 1968, to produce a total p y; : A-gn-

,) - ; h y' g V.-if>'

f

-s Edison-owned output

'y-'

g c

y,' j [iC p

• [/

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-)

ity, enough energy to of 2,000 MW of electnc-h[, ' 1/

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m

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,- M{

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. pg a

- fQQ 44 l

1 10

Generation Resources for the 1980s 1981 Sources and Distribution of Income Even with the combined impact of Edison s conservatm.n and load mar.-

,. - em q Energy costs, which m.

dources'.

m y-Distribution s wsi accounted for 57 agement programs, the Company Reinvested I

cent' ""' "I C'erV d"I-projects a need for 5,860 MW of new

[

Agricultural. 2%

carnins* -

3%

iarof revenuecollected dthn 7%

generating capacity for this decade to F

nan *{ -

recoverable under the by the company. are meet the eyectn..ty neetjs gg;ts custom-ci Resale 8%

Depreciation 5%

ers. This generation requirement is 8%

ninest.

8%

ment clause pcocedure Energy Cost Adjust-equal to about 40% of current authorities and should have no Company-owned facilities and will be i

Dividends. : 8%

impact on earnings.

supplied by 2,MO MW of nuclear capacity,1,420 MW of purchases, and i.

Other --

Industrial ' 24% -

operation '10%

2,100 MW of alternative and renew-expenso able technologies.

- (principany '

tabor)

Nuclear Units Approach Completion in January of 1982, the Atomic Safety commercial 25%

and Licensing Board rendered a fa-vorable decision on seismic issues and Energy costs 57%

matters relating to the low-power op-eration of San Onofre Nuclear Units 2 and 3. The decision provided a basis

-Residential 26%

for the Nuclear Regulatory Commis-sion's issuance of a low-power license in February. A full-power operating

~

~

license is expected in time to permit Unit 2 to begin operation in mid-1982.

is more than 70% complete, and oper- (CDWR) which will make 225 MW of Unit 3 is scheduled to follow a year ation is scheduled for the 1983-1986 generation capacity available to the la ter.

period.

Company during peaks with the Unit I at San Onofre was returned energy returned to the Department to service in early November after Ivanpah Coal Project during off-peak periods. The contract equipment repairs were completed.

tidison anticipates the addition of brings Edison's total capacity pur-The unit has operated at approx-approximately 1,200 MW by 1993 chases with CDWR to 695 MW.

imately 90 percent of rated capacity from its 80% share in the 1,500-MW since that time. Unit I was originally California Coal Project. The coal-fired Fuel and Purchased Power Costs placed in service in January 1968.

generating station is planned to be to-Fuel and purchased power costs for

)

Subject to regulatory approvals, cated in Ivanpah Valley in the Eastern 1981 totaled $2.6 billion, as compared the City of Anaheim purchased an California desert, with $2.0 billion in 1980. Fuel oil con-additional 1.5% ownership interest in sumption during the year was 23.6 l

Units 2 and 3 in 1981. The Company's Purchased Power Resources million barrels, down from 30.2 mil-ownership interest in Unit 1 at San Edison continued to actively pursue lion barrels in 1980. This was primarily Onofre remains at 80%. Edison's inter-the acquisition of non-capital genera-due to record power purchases of ap-est in Units 2 and 3 will be reduced tion resources in an effort to reduce proximately 18.4 billion KWII in 1981, to 75.05% when the sale to the City of the large amount of capital required equivalent to 31 million barrels of oil, Anaheim is completed. SCE's total for annual construction programs, and and the availability of more than 244 megawatt ownership in the three units to further reduce dependence on ex-billion cubic feet of natural gas, equiv-is 2,000 MW.

pensive foreign oil. As opportunities alent to 42 million barrels of oil, the Edison also has a 15.8% interest arise, the Company plans to continue largest available quantity since 1970.

totaling 579 MW in three 1,222-MW to purchase generating resources con-Although a surplus of conventional units being constructed at the Palo structed and owned by others in an fuel oil exists in today's world market, Verde Nuclear Generating Station effort to reduce the need for capital Southern California utilities are re-near Phoenix, Arizona. Construction expenditures.

quired to burn a very low sulfur oil to in 1981, a capacity exchange agree-meet k) cal air pollution standards.

ment was completed with California's Department of Water Resources f

11 1

m This low-sulfur fuel oil continues to 1980; and (2) normalized accounting acts of courage and initiative by command a premium price and has for the full 10% Investment Tax Credit.

Edison people. Gold medals were limited availability in world markets.

The California Public Utilities presented to three employees who Moreover, contrary to earlier pro-Commission (CPUC),in conformance endangered their own lives while sav-jections, natural gas has largely with provisions of the Tax Act, has is-ing the lives of others. A total of seven supplanted the Company's use of fuel sued an interim order authorizing silver medals were presented for other oil and even though less costly than utilities to comply with provisions of heroic acts. Bronze medals were pre-oil, its price has increased substan-the Tax Act in establishing rates in sented to six additional employees for tially. As a result, fuel costs continued rate proceedings. The Company's 1983 humanitarian contributions ranging j

to rise, but remained below levels that general rate filing reflects the pro-from apprehension of a thief tolong-could have been expected if natural visions of the Tax Act.

term involvement with handicapped j

gas had not been available.

youngsters.

l 1983 General Rate Request Am:nded Federal Fuel Use Law As a result of continued increases in Affirmative Action Progress Continues In 1981, Congress amended the Pow-costs of providing electric service, Increases in the representation of erplant and Industrial Fuel Use Act of Edison prepared and filed during the females and minorities in the work l

1978 to remove prohibitions on the year an application with the CPUC for force continued during the year.

use of natural gas as a primary energy a general rate increase to be effective Edison's minority representation in-l source in existing powerplants. For-in 1983.

creased from 24.8% at the beginning merly, the Act limited the amount of The request,if approved, would of 1981 to 25.4% at year-end. During natural gas an existing powerplant raise annual Company revenues in the same period, female representa-could use prior to January 1,1990, to a 1983 by 51.247 billion and by an addi-tion increased from 20.2% to 20.6%.

percentage of the gas consumed dur-tional $169 million in the 1984 non-During the five-year period from l

ing the base period of 1974-1976, and rate-case year. The increase is made year-end 1976 through year-end 1981, prohibited the use of natural gas in necessary by high interest rates and minority representation in the work existing powerplants thereafter. Had capital costs, increased operation and force increased from 17.9% to 25.4%,

this Act not been amended, Edison's maintenance expenses including and females from 16.7% to 20.6%.

future costs could have increased labor, recent federal tax law changes Edison's Procurement Division substantially.

and construction and carrying costs also continued efforts in 1981 to in-associated with the need to provide crease opportunities provided to Economic Recovery Tax Act of 1981 facilities to serve new customers.

Minority Business Enterprises (MBE).

Changes made by the Economic Re-CPUC rate-case procedures call for Since the Company's Minority and covery Tax Act of 1981 (Tax Act) will a 12-month time period during which Small Business Development Program improve the Company's cash flow and extensive public hearings are held and was formally introduced in 1979, the the quality of earnings in 1983.

expert witness testimony is taken.

number of MBEs qualified to provide Provisions of theTax Actinclude:

goods and services to Edison has in-(1) normalized accounting for the tax Jack K. Horton Humanitarian Award creased by 72%, and the number of benefits derived from accelerated cost Sixteen Edison employees were the opportunities provided annually recovery depreciation on plant placed first recipients in 1981 of the Jack K.

has increased 330% over the past in service subsequent to December 31, Horton Humanitarian Awards which three years.

were established in 1980 to recognize Ptrcentage of Male, Fzmale and Minority Asian American Total Male Female Black Arnerican Indian IIispanic Minorities Employees at Ytar-End Year-End Year-End Year-End Year-End Year-End Year-End Year-End 1976 and 1981 1976 1981 1976 1981 1976 1981 1976 1981 1976 1981 1976 1%1 1976 1981 Management

• 92.9 86.3 7.1 13.7 1.8 3.2 3.6 5.1 0.6 0.5 4.3 6.7 10.3 15.5 Non-Management

• 79.2 76.0 20.8 24.0 6.7 8.9 1.7 3.1 0.8 1.0 11.9 17.3 21.2 30.2 Total Company

• 83.3 79.4 16.7 20.6 5.3 7.0 2.3 3.7 0.7 0.8 9.6 13.8 17.9 25.4 m Management empinm mdude the" Officials ased Managers"and *Treesuenals" A!brmatuts Actuon Categories.

m Wn-Mangement empIntes mdude the "Tes knuctans." "Ottice and Ciencal." " Craftsmen." " Operators."

'IshireC and "Semce Workers" Afirmatete Actum Categones.

o) Includes all desses of employees.

12

^

7

.;4 yirid nCla; pm WW J

w-Ihe s ents.md iu urrent es w hn h Common Stock Price Comparison a ear-enll had a sigmin am impa t on the ( om-nu., fina ni tal i i nnditis m d u ring 19N1 t4o lhe( ompam s wm

. ire highhghti>d in the rtill.mmg dis.

mon stoi k pnce he SCE Base:

1976 perrorme 1 n en Junne

\\,st i.idd r t%ed at. terhui i wion i

samm DJUA SCE:

$22?:

the pa,t in e s cars mm th :

aha,aIhe ompany behet es pyg^

DJUA:

107.43 pan d u nh the Nu o al fla s e a n im p.n t m 1952 a nd be -

DJIA:

990.09 lones halu-t nal.nul s tind A m *e.it tailed ret icw t tthe I)ow hines t hhts h er 12b l

t.o tors attet r m; the ( omp.m., pera.

I h " ' ' "" P ""

ton durmg IW is,, 'tained in M' a n-a tt nbu tes nu hiri this t.n ouHe perto ilQ illetlls I)1% usshJ1,lnd d jlal(s{s Of TNm U h) a n a N U'M e I inar9 tal ( inndition and Resss of Jn idend pohi s the I

( 1perathins bt7m nmg.m page '2 tit c onmt mer,t to des el tilis re}wir!

100 oping ahenutn e.ud renew able resi un es i

and impros ed earnmgs I arnings Summary w ha h ret!ct t the unple l.u nings per sha re f or 145] w cre a nientation of stnngent retind v4 4l surpassing the previous

""d""""""^t*"

high of S4 _* recorded in 1974 and rep-f nd and pnidut ta its g

l resenting a signitit int improt ement l

the <h> pressed earnings tit 53 ;()

in cf per share tei orded in 1980 l he 41"o int r e.ise in ear nings per sha re f or 19S1 retlected N) 1977 1978 1979 1980 19Mi the rt sults (it strmgent and ettet tn e ost (smtrtil and prodta in it\\ mea -

(

implemeated b\\ the Compans Sun bilhon. In addition to the impact Rate increases and Adjustments sm es mi reased kilou att -hou r sales pri-of the general rate increase and higher General Rate Increase --The CPUC mar Is athibutable to a ret ord summer weather-related kilowatt-hour sales.

granteJ the Company a general rate heat u.n c during u hit h southern the increase in 1981 revenue reflect-increase of $294 million, ettective

( ahtorma experient ed N4 conset utn e rate increases granted under the En-lanuarv 1,1981. I'his increase was au-d.n s of temper.itures exceedmg crp Cost Adjustment Clause (I CA(')

thori/ed to cover substantial intlation-Ni degrees n:m edure to provide tor the recoverv arv increases in eperating and capital higher non t ash allow ances for i > increased f uel and purchased costs along with additional expenses tunds used during oinstru tum and power costs.

for customer conservation programs the las orable impact of a general in its 1981 general rate decision, the rate un rease granted on lenuars !.1"MI.

Dividend Rate Increased CPUC also addressed the adverse im-l)espite inflation and a sluggish In keeping with the Company's ob ec-pact of inflation on the Company's l

et imonn. rate of retm n on t timmon tn e to pro \\ide a competitive return to financial condition in the 1982 non-equits for the \\ ear 1981 w as 14 C "o its shareholders, the Board or Direc.

rate-case year by authorizing the a hh h tas mabl\\ ( ompares

't, the tors on Neptember 17 1981, a u thiirized Company an additional base rate in-14 4;"o allow ed b\\ the ( alhot ma Pub a 4.;"o int rease m the common stock crease ot $92 million. ettective january lu l'tilities ( ommission K PL ( ) and uuarterly dividend rate (In an an-1,1982. I his increase was placed in to the l(I 44" i carned in 14MO [be

,m $1 bois the Board's action raised ettect on schedule.

( ompans s (ost tontrol and prt due th, Jn idend rate to 53 24 per share.

Energy Cost Ad ustments-During i

tn its ettorts contributed signJicamlv mar king the sixth increase m the divi-the course of a vean the Company is to the unpitn ement in rate of reb.ro dend rate in ttve years representmg a subject to fluctuations in both the on common etjutts in 14S!

compound annual int rease during availabihty and price of tuel oil, natural

~

Res enues : r 1981 totaled 9 M biL that time

.11".

At year-end, the divi-gas and purchased power. Under the hon an mt rease of $N T nulhon, or dend was providing an 11.1"o \\ield ECAC procedure, electric rates may be 10 ~ ' o. os ei 19x0 recorded res enues of on common stock market value of 5?5 7; per sh ire i

13 i

i

adjusted up or down three times Funds Required for Construction (in millions) annually to reflect changes in the cost

- With San Onofre of fuel and purchased power used r

' ~ - -

Nuclear Units 2 and 3 to generate electricity. Energy costs u for above or below those used in the estab-

{h ndt lished rates are accumulated in a i

respectively. and the balancing account, and the accumu-l company slower lated amount is reflected in succeed-j growth rate projections ing rate adjustments. Although cash reducing the need for

' "' P "'

', ions flow can be affected for relatively a

on t 6 short periods of time, the ECAC pro-expenditures are pro-jected at more manage-cedure has the effect of preventing ablelevels for the1982 fluctuations in e n ings as a result of through1986 timeframe.

l changes in energy costs.

During 1981, the following ECAC-

~

related rate adjustments were au-thorized by the CPUC:

• an ECAC rate decrease of $194 million annually, effective January 1, 1981, and

. a $318.3 million annualized in-crease, effective October 25,1981.

The net annualized increase in i

ECAC-related revenues for the year 1981 was $124.3 million. Effective January 5,1982, the Company was au-thorized a $172 million increase in Stock Purchase Plan and the Employee scheduled October 27 issue date when ECAC revenues for the four-month Stock Ownership Plan. Details of long-term interest rates reached period ending April 30,1982.

these issues are provided in the ac-18%%. Deferring the issue until De-Resale Rates-On December 16, companying table.

cember 1 enabled the Company to 1980, the Company filed an applica-Interest rates which reached record save more than $5 million annually in tion with the Federal Energy Regula-highs and were extremely volatile dur-interest costs.

tory Commission to increase rates ing the year made the selection and In addition, the Company issued for electricity sold to resale customers, timing of financings extremely impor-pailution control equipment bonds on such as Anaheim and Riverside, tant. For example, to take advantage tw occasions during the year.These which resell this electricity to their of rates below those prevailing in the tax-exempt financings also allowed own customers. These rates, which domestic bond market, the Company the Company to take advantage of went into effect on July 16,1981, sub-entered the European market on three lower rates.

ject to refund, are designed to in-occasions during the year. In the sec-Reflecting the $956 million of total crease revenues by $16.7 million nn an ond quarter of 1981, the Company sold capital raised in 1981, Edison's capital

{

annual basis.

two $50 million debt offerings in the structure at year-end 1981 was as Fumpean market and in the fourth follows: 47.3% debt,12.0% preferred Financing the Construction Program quarter, sold a $75 million debt offer-and preference stock, and 40.7%

A record amount of new capital, $956 ing. All of these issues were placed at common equity.

million, was raised in 1981 to fund the rates below levels existing in the In 1982, funds required for the Com-Company's continuing construction domestic market.

pany's construction expenditures are progu n. During 1981, the Company Also, on December 1, the Company projected at $873 million. For the sold eight security issues in addition completed its eighth and final major five-year period 1982 through 1986, to the ongoing sales of common stock financing of 1981, a $200 million issue funds required for construction ex-through the Dividend Reinvestment of 30-year mortgage bonds at an penditures are projected to total $4.0 and Stock Purchase Plan, the Employee interest rate of 15% %. The Company billion.

postponed this offering from the 1

14

'Ibe first finandng of 1982, Dividend Reinvestment and Stock Purchase Plan

$176,8(M),(NX) of tax-exempt pollution control bonds with a 10% interest PartiaPation in the rate, was placed on january 26. Also, i lbidend Reinvestment the Company offered on February 17, a Perwnt of Total Shareholders and Stoc k Punhase g

Pc' ant of Total Shares d"

d

'd" 1982,5 million shares of common i

stock at a public offering price of $28%

parnopating sharehold-per share, raising approximately er* as of iebruary 1.

$139 million in net proceeds. In addi-1*2 'er"""h"3 d" tion, the Company's financing plans

'"'['l'{(dPP",'['[

p for 1982 include mortgage bonds and pantisince > ear-end possibly preferred stock, as well as 19m). The increase in again pursuing the European market parbcipation is aitnbut-as a source of new capital.

{'"n'l,'P"'{i""

Ij,h[

Act of lWl, w hit h for

($1,500 on a joint return) from current

- l i.,,,

i,,,

i,,o Dividend Reinvestment Plan the y ears IW2 through Under provisions of the Economic 1*5eutudesinim l

r, Recovery Tax Act of 1981, shareholders currenvyear taxable pubhc utility companies may exclude h",'j'[,",g"P '"[[

who reinvest dividends in qualified g

joint return) remvested up to $750 of dividends per year in quahried pubhc utinty companies.

taxable income. This provision applies to dividends distributed in the years 1982 through 1985. This change has y,,

ic y

i,y begun to increase participation in the eo Dividend Reinvestment Plan.

At the end of 1981, approximately 1981 financings:

26,600 shareholders, or about 17.4% of Coupon Amount

("'*""

the eligible holders of Edison's com-mon stock, were participating in the January Common Stock-Dividend Reinvestment and Stock 8,(XXI,0lk) shares @ $24%

$189 Purchase Plan (DRP). At year-end March Pollution Control Bonds-1981, approximately 16.0 million shares Four Corners Generating Station 3 Years 81 h%

93 were enrolled in DRP representing March Euro-Debentures 6 Years 14 %

50 18.3% of the total number of shares May First & Refunding Mortgage Bonds 10 Years 15%%

200 outstanding. During 1981, DRP par-June Euro-Debentures 7 Years 14% %

50 ticipants purchased approximately 1.9 million shares by reinvesting over July Pouution Control Bonds-l

$47 million of dividends and optional Hundngton Beach Generating Station 40 Years 10% %

8 payments.

October Euro-Debentures 5 Years 16% %

75 As of February 1,1982, approu December First & Refunding Mortgage Bonds 30 Years 15% %

200 mately 27,900 shareholders, represent-Ongoing Dividend Reinvestment and Stock Purchase Plan 47 ing 18.3% of eligible shareholders, Employee Stock Purchase Plan 28 were participating in DRP. At that Employee Stock O.vnership Plan 16 time, approximately 15.9 million shares Total

$956 were enrolled in DRP, representing l

18.2% of the total number of shares outstanding.

v 15

l Southern California Edison Company Responsibility for Financial Statements The management of Southern California Edison Company with, the independent accountants develop and maintain has prepared and is responsible for the financial state-an understanding of the Company's accounting and ments and the other related financial data contained in financial controls, and conduct such tests and related this Annual Report. The financial statements, which procedures as they deem necessary to render their include amounts based on estimates and judgments of opinion as to the fairness of the financial statements.

management, have been prepared in conformity with The Audit Committee of the Board of Directors, generally accepted accounting principles applied on a composed entirely of directors who are not officers or em-consistent basis, ployees of the Company, meets periodically with the To meet its responsibilities with respect to financial in-management of the Company, the independent public formation, the Company maintains a system of internal accountants and the internal auditors to make inquiries as accounting controls which is designed to provide reason-to the manner in which the responsibilities of each are able assurance that assets are safeguarded from loss or being discharged. In addition, the Audit Committee recom-unauthorized use and that the financial records properly mends to the Board of Directors the annual appointment reflec' the authorized transactions of the Company. This of the independent public accountants with whom the system is supported by written policies and procedures, Audit Committee reviews the scope of the audit and the organization structures that provide for appropriate divi-nature of other services provided as well as the related sion of responsibility, the selection and training of quali-fees, the accounting principles being applied by the Com-fled personnel and is augmented by programs of internal pany in financial reporting, the scope of internal financial audits. There are limits inherent in all systems of internal auditing pmcedures, and the adequacy of internal ac-accounting control based on the recognition that the counting controls.

cost of such system should not exceed the benefits to be To further assure independence in performing and derived. The Company believes its system of internal reporting the results of audits, representatives of the inde-accounting control appropriately balances this cost-pendent public accountants and the Company's staff of benefit relationship.

internal auditors have full and free access to meet with An independent examination of these financial state-the Audit Committee, without members of Company ments has been conducted by Arthur Andersen & Co.,

management being present, to discuss any accounting, independent public accountants,in accordance with gen-auditing, or financial reporting matter.

erally accepteu auditing standards, in connection there-Report of Independent Public Accountants To the Shareholder 3 and the Board of Directors, Southern California Edison Company:

We have examined the balance sheets and statements of above present fairly the financial position of the Company capital stock and long-term debt of Southern California as of December 31,1981 and 1980, and the results of its Edison Company (a California corporation, hereinafter operations and the sources of its funds used for construc-referred to as the " Company"), as of December 31,1981 tion expenditures for each of the three years in the period and 1980, and the related statements of income, earnings ended December 31,1981, and further, in our opinion, the reinvested in the business, additional paid-in capital and quarterly financial data set forth in Note 7 of " Notes to sources of funds used for construction expenditures for Financial Statements" summarize fairly the results of op-each of the three years in the period ended December 31, erations for each quarter within such years, allin confor-1981. Our examinations were made in accordance with mity with generally accepted accounting principles generally accepted auditing standards and, accordingly, applied on a consistent basis.

included such tests of the accounting records and such other auditing procedures as we considered necessary in g[4y 4 the circumstances, and also mcluded similar examinations of the financial statements for each quarter within each of Los Angeles, California ARTilUR ANDERSEN & CO.

the years.

February 5,1982 in our opinion, the financial statements referred to 16

l Southern Cahfornia Edtson Company Statements of Income Thousands of Dollars Year Ended December 31, 1981 1980 1979 Operating Revenues:

Sales (Notes 1 and 2)...

54,026,548

$3,631,373

$2,553,126 Other......

27,808 29,744 10,848 Total operating revenues (Note 7) 4,054,356 3,661,117 2, % 3,974 Operating Expenses:

Fuel.......

2,078,393 1,729,552 1,433,658 Purchased power (Note 9).

479,813 280,675 99,245 Provision for energy cost adjustments (Notes 1 and 4).

0 0,273) 361,600 (188,880)

Subtotal-energy costs..

2,467,933 2,371,827 1,344,023 Other operation expenses (Notes 2,5,6 and 9).

441,939 392,593 322,191 Maintenance (Note l).

193,397 228,269 177,407 Provision for depreciation (Note 1) 202,182 187,959 178,637 Taxes on income-current and deferred (Notes I and 4) 197,865 38,683 100,292 Property and other taxes (Note 4).

59,885 69,652 56,428 Total operating expenses (Note 8) 3,563,201 3,288,983 2,178,978 i

Operating income (Note 7) 491,155 372,134 384,996 Other Income and Allowance for equity funds used during Income Deductions:

construction (Note l) 162,879 121,488 92,019 Interest income.........

39,025 33,889 22,860 Other-net (Notes I and 4) 68,157 31,882 24,879 Total other income and income deductions.

270,061 187,259 139,758 Total Income before Interest Charges..

761,216 559,393 524,754 Interest Charges:

Interest on long-term debt.

271,324 227,163 179,626 Other interest and amortization (Note 1).

69,653 55,493 25,4 %

Total interest charges.....

340,977 282,6 %

205,082 Allowance for debt funds used during construction (Note 1).

(69,673)

(40,799)

(26,547)

Net interest charges.

271,304 241,857 178,535 Net Income (Note 7)..

489,912 317,536 346,219 Dividends on Cumulative Preferred and Preference Stock 67,888 60,950 53,738 Earnings Available for Common and Original Preferred Stock.....

$ 422,024

$ 256,5%

$ 292,481 Weighted Average Shares of Common and Original Preferred Stock Outstanding and Common Stock Equivalents (000) 85,610 73,241 64,202 Earnings Per Share:

Primary (Notes 1 and 7).

$4.93

$3.50

$4.56 Fully diluted (Notes 1 and 7).

$4.91

$3.48

$4.39 Dividends Declared Per Common Share.................

$3.10

$2.84

$2.60

- The acwmpanying notes are an integral part of these financial statements.

17

Southern Cahfornia Edison Cornpany Balance Sheets Thousands of Dollars December 31, Assets 1981 1980 Utility Plant:

Utility plant, at original cost (Notes I,2 and 8).

$6,115,484

$5,785,200 Less-Accumulated provision for depreciation (Notes I and 8).

2,015,212 1,840,233 Net utility plant.

4,100,272 3,944, % 7 Construction work in progress (Notes 5 and 8).

3,377,644 2,600,460 Nuclear fuel, at amortized cost.

24,542 20,649 Total utility plant..

7,502,458 6,566,076 Other Property and Investments:

Real estate and other, at cost-less accumulated provision for depreciation.

9,194 9,7M Subsidiary companies (Note 1) 124,558

%,757 Total other property and investments.

133,752 106,511 Current Assets:

Cash and temporary cash investments (Note 3).

10,409 7,642 Receivables,less reserves of $10,682,000 and

$8,005,000 for uncollectible accounts at respective dates (Note 1).

306,267 288,979 Fuel stock, at cost (First-in, First-out) (Note 3) 579,633 593,008 63,197 48,942 Materials and supplies, at average cost Regulatory balancing accounts-net (Notes 1 and 4) 39,441 Accumulated deferred income taxes-net 4,872 29,343 (Notes I and 4)..

Prepayments and other (taxes, insurance, etc.).

38,943 54,040 1,042,762 1,021,954 Total current assets.

Deferred Charges:

Unamortized debt expense (Note 1).

22,368 18,880 27,203 20,477 Other deferred charges....

Total deferred charges 49,571 39,357

$8,728,543

$7,733,898 The accernpanying notes are an integral part of these financial staternents.

18

};

, S<mthern California Edison Company Thousands of Dollars December 31,

' Ccpitalization and Liabilities 1981 1980 4

Capitalization:

Preferred Stock-subject to mandatory redemption l:: purch=e requirements:

Cumulative Preferred Stock...

$ 337,500

$ 337,500 Preference Sto.k.

62,000 62,000 Preferred Stock-other:

Original Preferred Stock 4,000 4,000 Cumulative Preferred Stock.

458,755 458,755

+

' Preference Stock...

13,553 19,897 Common Stock, including additional stated capital 776,523 673,921 Other Shareholders' Equity:

Additional paid-in capital.............

953,268 763,519 Earnings reinvested in the business.

1,238,317 1,092,137 -

Long-term debt (Note 1).

3,444,080 2,945,824

{

Total capitalization...

7,287,996 6,357,553 I

Current Liabilities:

Accounts payable.....

360,018 356,340 Commercial paper payable (Note 3).

266,500 1M,975 Notes payable to banks (Notc 3)...

28,687 19,998 Current maturities of long. term debt.

121,025 143,548 Customer refunds.

3,939 66,160 Taxes accrued (Note 4).

61,774 121,916 Interest accrued.

85,089 66,124 i

Customer deposits 12,518 11,242 I

Dividends declared.

75,036 ~

'60,292 Regulatory balancing accounts-net (Notes i and 4).

37,518 Other............

72,330 26,167 Total current liabilities 1,086,916 1,074,280 f

Commitments and Contingencies (Notes 2 and 9) -

l Reserves and Deferred Credits:

Customer advances and other deferred credits '...

66,697 63,652 ~

Accumulated deferred income taxes and investment tax credits (Notes 7 and 4).......

247,711 198,476 Reserves for pensions, insuranee, etc. (Note 6)...

39,223-39,937 Total reserves and deferred credits.............

353,631 302,065

$8,728,543

$7,733,898 The accompanying notes are an integral part of these fTitancial statements.

19 =

1 Southern California Edison Com;any Statenients of Sources of Funds Used for Thousands of Dollars Year Ended December 31, Construction ExEenditures 1981 1980 1979 Funds Provided By-Operations:

Net income (Note 7)

$489,912

$317,536

$346,219 Non-cash items in net income-202,182 187,959 178,637 Depreciation (Note 1)..

Allowance for debt end equity funds used during construction (Note 1)..

(232,552)

(162,287)

(118,566)

Investment tax cred;ts deferred-net 47,386 25,235 45,533 (Notes 1 and 4).

Other-net.

3,701 29,271 7,136 510,629 397,714 458,959 Total funds from operations.

(336,546)

(273,312)

(221,400)

Dividends.

Total funds from operations-reinvested 174,083 124,402 237,559 Long-term Financing:

Sales of securities-Long-term debt.

634,435 350,000 355,000 Preferred stock 75,000 127,500 Common stock (a) 292,356 258,607 62,002 Reduction of long-term debt-current maturities (121,025)

(143,548)

(84,544)

Conversion of preference stock..

(6,344)

(7,169)

(13,828)

Total funds from long-term financing 799,422 532,890 446,130 Other Sources (Uses) of Funds-Working cap' ital changes-Receivables-net (17,288)

(76,251)

(1,103)

Fuel stock and materials and supplies (Note 3)

(880)

(284,654)

(165,812)

Regulatory balancing accounts-net (37,568) 235,512 (162,586)

(Notes I and 4).

Accounts payable....

3,678 67,443 134,402 Net short-term borrowings and current maturities of long-term debt 87,691 89,797 185,002 (43,805) 60,337 64,823 Other changes in working capital.....

Net (increase) decrease in working capital..

(8,172) 92,184 54,726 Sale of non-current assets.

50,623 89,557 Other-net.

(59,193)

(57,523)

(64,268)

Total other sources (uses) of funds..

(16,742) 124,218 (9,542)

$956,763

$781,510

$674,147 Funds Used for Construction Expenditures.

(a) Includes conversions of Preference Stock,5.20% Convertible Series, to Common Stock.

j 1

The aarmpanying notes are an integral part of these financial statements.

l 20

Southern Cdifornia Edison Cornpany Statements of Earnings Reinvested Thousands of Dollars in the Business Year Ended December 31, 1981 1980 1979 Balance at january l........

$1,092,137

$1,0M,2%

$ 931,217 Add:

Net income.....

489,912 317,536 346,219 1,582,049 1,371,832 1,277,436 Dcduct:

Dividends declared on capital stock-Original preferred.

1,454 1,334 1,219 Cumulative preferred 62,504 55,230 47,574 Preference 5,384 5,720 6,164 Common-$3.10 per share for 1981, l

$2.84 per share for 1980 and

$2.60 per share for 1979 267,204 211,028 166,443 Capital stock expense 7,186 6,383 1,740 343,732 279,695 223,140 Balance at December 31(a).

$1,238,317

$1,092,137

$1,05f,2%

(a) Indudes undistributed earnings of unconsolidated subsidiaries of $16,325.000 at December 31.1981.

Statements of Additional Paid-in Capital Thousands of Dollars Year Ended December 31, 1981 1980 1979 Balance at January 1

$763,519

$601,578

$%9,673 Premium received on sale of common stock, 189,754 161,949 31,908 Payments made in lieu of issuing fractional shares of common stock (5)

(8)

(3)

Balance at December 31

$953,268

$763,519

$601,578 I

t i

l t

The acamtpanying notes are an integral part of these financial statements.

21

Soufhern California Edison Company nousands of Dollars December 31,1981 Statements of Capital Stock Redemp, ion Slaied g,ug Shares Price Outstanding Per Share 1981 1980 j

Preferred Stock-Subject to Mandatory Redemption /

l Repurchase Requirements (a)(b):

l

$100 Cumulatsve Preferred-par value $100 per share (f):

7.325% Series.

750,000

$110.00

$ 75,000

$ 75,000 7.80% Series.

6tX),0tX) 110.00 60,000 60,0tX) 8.54% Series.,

750,000 108.M 75,000 75,000 8.70% Series A.

525,000 110.00 52,500 52,500 12.00% Series.

750,000 112.00 75,000 75,0tX) 5337,500

_$337,500 Preference-par value $25 per shaw. 7.375% Series.

2,480,000 25.75

$ 62,0tX)

$ 62,0tX)

Preferred Stock-Other:

Original Preferred-5%, prior, cumulative, participating, not redeemabic, authorized 4NO,0lX) shares, par value $8% per share.

4NO,0tX)

$ 4,000

$ 4,000 Cumulative Preferred-authorized 24,000,000 shares, par value

$25 per share (a):

4.08% Series.

1,0lX),000

$ 25.50

$ 25,000

$ 25,000 4.24% Series.

1,200,000 25.80 30,000 30,000 4.32% Series.

1,653,429 28.75 41,336 41,336 4.78% Series.

1,296,769 25.80 32,419 32,419 5.80% Series.

2,200,000 25.25 55,000 55,000 8.85% Series 2,000,000 26.50 50,000 50,0tX) 9.20% Series.

2,000,000 26.50 50,000 50,000

$100 Cumulative Preferred-authoriicd 12,000,000 shares, par value

$100 per share (a):

7.58% Series.

750,000 105.00 75,000 75,0tX) 8.70% Series.

500,000 107.00 50,000 50,000 8.%% Series.

500,0lX) 107.00 50,000 50,000 H58,755

$458,755 Preference-authoriecd 10,000,000 shares, par value

$25 per share (a)(c)(f):

5.20% Convertible Series.

M2,139 25.00

$ 13,553

$ 19,897

$100 Preference-authoriicd 2,000,000 shares, par value

$100 per share.

Common Stock-authorized 140,000,0lX) shares, par value $8% per share, including additional stated capital (c) (d) (e) (f).

87,603,272

$776,523

$673,921 (a) Allseriesof $100CumulativePreferred (2) Based upon 2.5% of shares originally out-(e) ne Company anticipates that 5,000,000 Stock, Cumulative Preferred Stock and Prefer-standing and increasing to 5.5% by 2003.

shares of Common Stock will be issued on ence Stock are redeemable at the option of (3) Based upon 2.5% of shares originally out-February 24,1982, the Company. De various series of the $100 standing and increasing to 9.5% by 2000.

Cumulative Preferred Stock, and the Preference (f) Transactions.m the capital stock accounts Stock,7.375% Series, are subject to certain For each of the five 12-month periods sub-during 1981,19H0 and 1979 reflect the following:

restrictions on redemption for refunding pur-sequent to December 31,1981, the aggregate In 1981,8,000,000 shares of Common Stock at poses. Authoriied shares of Preferred Stock-mandatory redemption or repurchase re-an initial public offering price of $24.375 per Subject to Mandatory Redemption or Repur-quirements will be: none for 1982, $4,500,000 for share were issued; in 1980,7,000,000 shares of 1983, H,500,000 for 1984, $18,212,500 for 1985 Common Stock at an initial public offering price chase Requirements are included under and $22,712,500 for 1986.

of $23.128 per share and 750,000 shares of $100 Preferred Stock-Other.

Cumulative Preferred Stock,12% Series were (b) Preferred Stock Subject to Mandatory (c) Under a prescribed formula, the conversion ssued; in 1979,525,000 shares of $100 Cumula-Redemption or Repurchase Requirements:

price of the Preference Stock,5.20% Convert-tive Preferred Stock,8.70% Series A and ible Series is adjusted when additional shares of 750,000 shares of $100 Cumulative Preferred Redemptkm or Repurchase Common Stock are sold by the Company. De Stock,8.54% Series, were issued. Additional u,w, shares of Common Stock reserved for conversion shares of Common Stock were issued for the G"'y Q

gg and the adjusted conversion prices per share Dividend Reinvestment and Stock Purchase

• "' 8' IOU"*S-Plan (DRP), Employee Stock Purchase Plan

$100 Cumulatiw Demlvr 31, (ESPP), Employee Stock Ownership Plan PMmed 1981 1980 (ESOP), and the conversion of 253,761, 7.325 %

7/31183 30,000

$100 286,780 and 553,140 shares in the respective Shares of Common 7.80 %

11/30i83 15,000(2) 5100 years of Preference Stock,5.20% Convertible 8.M %

6/30i86 22,500

$100 es 2Mrks) as foHows Adj t n

km 8.70% A 6/30/85 13,125(3) $1u" price per share

$31.50

$32.50 Shares issued 12.00 %

12/31/86 22,500

$100 1981 1980 1979 t

Prrferrna (d) At December 31,1981, there were 5,575,702 7.375 %

211/85 4 % 000

$ 25 authorizad and unissued shares of Common DRP..

. 1,906,474 1,751,330 1,165,073 Stock reserved for sale and issuance under ESPP.

. 1,053,413 953,885 756,427 ESOP m 591,084 1,033,794 30,282 (1) Plus accumulatcd unpaid dividends.

provisions of the Company's stock purchase 5.20% Series 196,483 219,873 406,573 Redemption or repurchase to continue plans. On February 1,1982, the Company rnnually untd all shares are redeemed issued 587,126 shares of Common Stock under or repurchased.

these plans.

The aatnnpanying notes are an integral part of thesepnancial staternents.

l

-22

Southms California Edison Company Statements of Long-term Debt nousanas of Douars Year Ended December 31, 1981 1980

. ~.

First and Refunding Mortgage Bonds (a):

(b) The Company has entered into a financing Series G, Due 1981 (3%%)

5

$ 40,000 agreement, as amended, with certain English Senes II, Due 1982 (4%%)

37,;00 37,500 banks pursuant to which it issued promissory Series I, Due 1982 (4% %).

40,000 40,000 notes payable in pounds sterhng. These notes Series I, Due 1982 (th %)

80,000 40,000 are secured by a pledge of the Company's cus-Series K, Due 1983 (4%%)

0,000 50,000 tomer accounts receivable. On June 28,1976, the Series L, Due 1985 (5%)..

30,wo 30,000 Company entered into forward exchange con-Series M, Due 1985 (4%%)

60,000 60,000 tracts with a Ur ited States bank to purchase at Series N, Due 1986 (4%%)

30,000 30,000 various times from February 1979 to August Series 0, Due 1987 (4% %)

40,000 40,(xx) 1983, pounds sterling to repay substantially all Series P, Due 1987 (4% %)

50,000 50,000 of the promissory notes, Series Q, Due 1988 (4 %%)

60,0m 60,000 (c) On March 19,1981, the City of Farmington, Series R, Due 1989 (45e%)

60,000 60,000 New Mexico (City) issued and sold $92,500,000 Series S, Due 1990 (4%%)

60 000 60,000 aggregate principal amount of Pollution Control Series T, Due 1991 (5% %)

75,000 75,000 Revenue Bonds,1981 Series A (Bonds). The net Series U, Due 1991 (6%%)

80,000 80,000 proceeds have been depo ited with a Trustee Series V, Due 1992 (5% %)

80,000 80,000 and, af ter escluding capitalized interest, repre-Series W.

Due 1993 (68/s%)

100,000 100,000 sent funds on which the Company may draw to Series X, Due 1994 (7%%)

75,000 75,000 defray its construction and other specified costs Series Y, Due 1994 (8%%)

100,000 100,000 of pollution control facilities being built at the Series Z, Due 1995 (7Ts %)

100,000 100,000 Four Corners Generating Station.ne Company Series AA, Due 1996 (8%)

100,000 100,000 s obligated to pay the principal and interest on Series 3B, Due 1997 (7%%)

125,000 125,000 the City's Bonds. The Company has provided Series CC, Due 1999(8%%).

100,000 100,000 an irrevocable Documentary Letter of Credit Series DDP, Due 1999 (7%) (a).

15,030 15,030 drawn on a commercial bank (Bank) to the Trus-Series EE, Due 1981 (9%).

100,000 tee in the amount of the Company's obligation.

Series FF, Due 2000 (8% %)

150,000 150,000 The Company is obligated to reimburse the Series GG, Due 2001 (8?e %)

I25,0w 125,000 Bank for amounts drawn under the Irrevocable Series lill, Due 2002 (8%%)

125,000 125,000 Documentary Letter of Credit.

Series li, Due 1984 (7%%)

75,000 75,0tU Series JJ, Due 2003 (9Ve%)

200,000 200,000 (d) During 1981, Southern Cabfomia Edison Series KK, Due 20N (9.95%) (a),

105,000 105,000 Finance Company N. V. (Finance), an affiliate Series LL, Due 1987 (9Fe%)

50,000 50,000 of the Company, sold $175,000,000 principal Series MM, Due 2004 (11% %).

200,000 200,000 amount of Guaranteed Debentures Due Series NN, Due 2005 (15Ve%).

200,000 200,000 1986-1988 to representatives of purchasers in Series 00, Due 2010 (13% %).

150,0u0 150,000 European countries. Payment of the principal Series PP, Due 1991 (15% %)..

200,000 and interest on the Debentures is uncondition-Series QQP, Due 2021 (10% %) (e).

s,300 ally guaranteed by the Company. Tha net Series RR, Due 2011 (15% %).

200,000 proceeds of the Debentures were loaned by 3,295,830 3,027,530 Finance to the Company in exchange for the First Mortgage Bonds Company's promissory notes.

(Cdectnc)(a)

Due 1984-1991 (3% %-5%%)

60,000 60,000 (c) On August 19,1981, the Cahfornia Pollution Promissory Notes (b) Due 1982-1983 (5%%),....

7,027 10.576 Control Financing Authority (Authority) issued Promissory Notes (d) Due 1986-1988 (14 16% %).

175,000

$8,300,000 of Pollution Control Revenue Bonds, Pollution Control Series 1981, Due August 1, 2021 (10% %). The net Indebtedness (c)

Due 1984 (8%%).

92,500 proceeds have been deposited in a Construction Principal amounts outstanding......

3,630,357 3,098,106 Fund and are being utdized to finance the acquisi-Current maturities of long-term debt (f).

I121,025)

(143,M8) tion and construction of pollution control facili-Unamortized remium (discount)-net.

(16,252)

(8,7M) ties at the liuntington Beach Generating Station.

Securities hel by trustees (c) (e).

(49,000)

The Company has issued and sold to the Au-thority an identical principal amount of the Totallong term debt.

53,444,0x0 52,945,824 Company's First and Refunding Mortgage Bonds, Series QQP, with the same maturity (t) The authorized principal amount of each ments. In addition, an amount equivalent to date and interest rate as the Authonty's bends.

series of First and Refundmg Mortgage Bonds is the excess of 15% of defined operating revenues (f) Current maturities of long-term debt on equal to the amount outstanding. The Trust In-over costs of maintenance of the property December 31,1981 include 5%% Promissory i

I denture under which these bonds are issued subject to the lien of such indenture is required Notes Due February 28,1982, in the amount of permits the issuance from time to time of addi-to be deposited with the trustee annually. Dese

$1,765,000 and Due August 31,1982,in the tional bonds, including additional bonds equal deposit requirements of such indentures may amount of $1,760,000 and First and Refunding in principal amount to bonds retired, pursuant be or have been satisfied by property additions Mortgage Bonds, Series II, Due February 15, to the restrictions and conditions contained and replacements, and by delivery and cancella-1982 (4%%)in the amount of $37,500,000, therein. De trust indenture requires semi-tion of bonds outstanding under the applicable Series I, Due July 1,1982 (4% %) in the amount (nnual deposits with the Trustees of 1% % of indenture. The Series DDP and KK, First and of $40,000,000 and Series J, Due September 1, the principal amount of the Company's out-Refunding Mortgage Bonds, are subject to man-1982 (4%%)in the amount of $40,000,000. The t tanding First and Refunding Mortgage Bonds datory sinking fund requirements commencing amounts of long-term debt maturing in the four c nd the Calectric First Mortgage Bonds. ne on July 1,1990 and June 15,1985, respectively.

twelve-month periods subsequent to December C:lectric Indenture requires an annual cash de-In addition, on February 4,1982, the Company 31,1982 will be: $53,501,000 in 1983; $175,500,000 posit with the Trustee of 1% of the principal sold $176,800,000 First and Refunding Mortgage in 1984; $278,050,000 in 1985; and $118,250,000 in amount of Calectric First Mortgage Bonds issued Bonds, Series SSP, Due 1%5, (10%) to finance 1986. ne amounts for 1985 and 1986 include or 166%% of such amount if property additions pollution control facilities at the Four Corners mandatory sinking fund requirements for First I re used to.atisfy the annual deposit require-Generating Station-and Refunding Mortgage Bonds, Series KK.

The accvmpanying notes are an integral part of thesefinancial statements.

23

i Southern California Edison Cornpany Notes to Financial Statements Note 1-Summary of Significant Accounting Policies Rcrenues and Regulatory Balancing Accounts-Customers are billed monthly on a cycle basis and revenues are recorded when customers are billed. As authorized by

'Ihe Company.is a pubh.c utility primarily engaged in the CPUC, the Company has established several regulatory the business of supplying electric energy in portions of balancing accounts for most of its energy costs. The central and southern Califorma, excluding the City of Los Energy Cost Adjustment Clause (ECAC) balancing account Angeles and certain other cities. The accounting records is M by the Company to record monthly entries to of the Company are maintamed m accordance with the adjust the results of operations for the variation between Uniform System of Accounts as prescribed by the Federal ECAC-related energy costs incurred and those included Energy Regulatory Commission (FERC) and adopted by in rates billed to customers. Such variations, including the Califorma Public Utilities Commissmn (CPUC).

interest thereon, are accumulated in the balancing account until they are refunded to, or recovered from, utility Utility Plant-customers through CPUC-authorized rate adjustments.

The cost of additions and replacements of retirement units ECAC-related energy costs include incurred transportation of property is capitalized and included m, utility plant.

and interim storage costs related to spent nuclear fuel.The Such cost mcludes labor, matenal, mdirect charges for en-income tax effects of ECAC variations are deferred. Billed gineering, supervision, transportation, etc., and an allow-revenues and incurred energy costs are utilized in the ance for debt and equity funds used during construction determination of taxable income. The CPUC has also au-(AFUDC). The amount of AFUDC capitalized is also re-thorized the recovery of $39,000,000 of fuel oil carrying ported in the Statements of Income as a reduction of costs relating principally to prior accounting periods and, mterest charges for the debt component of AFUDC and as consistent with the Company's policy of recording reve-other income for the equity component. Although nues when customers are billed, the Company has rec-AFUDC increases net income,it does not represent cur-ognized revenues of $14,800,000 in 1981.

rent cash earnings. The AFUDC rate was 8.77% for 1981, 7.82% for 1980 and 7.76% for 1979, and is based upon a Subsidiaries-formula prescribed by the FERC.

The Company's investments in unconsolidated subsidiary C mPanies, all of which are wholly-owned, are accounted The cost of minor additions and repairs is charged to f r by the equity method. None of the Company's maintenance expense and the original cost,less net sal-wholly-owned subsidianes is considered significant for vage, of retired property units is charged to the accumu-fin "Cial reporting purposes.

lated provision for depreciation.

Earnings Per Share-pr a h.on-Primary earnings per share are determined by dividing For financial reporting purposes, depreciation of utility the earnings available for Common and Original Preferred plant is computed on a straight-line remaining life basis Stock by a weighted average number of such shares out-and approximated 3.6%,3.5%, and 3.5% of average standing. After providing for cumulative preferred and depreciable plant for the years 1981,1980, and 1979, re-preference dividend requirements, effect is given to the spectively. The Company's rates are designed to recover participating provisions of the Original Preferred E.ock the onginal cost of utility plant, including the estimated and Common Stock Equivalents for funds held fo, the decommissioning costs of $58,000,000 (stated in current purchase of the Company Stock by the Employee Stock year dollars) for nuclear generation facilities in service, Purchase Plan Trustee in each period. Fully-diluted earn-through depreciation expense over the estimated remam-ings per share give effect to the dilution which would ing useful lives of the facilities.

result from the conversion of convertible securities ou'-t standing at the end of each period and treat all actual c nversi ns during each period as if they took place at the Acc nting policies with respect to taxes on income and beginning of the period. In the computations of fully-related investment tax credits are set forth in Note 4, diluted earnings per share, consideration has been given together w.th supplementary income tax m. formatm.

i n.

to the dilutive effect of potential conversion of the Prefer-ence Stock,5.20% Convertible Series, and, for 1979 only, Dcht Prcrniurn and Dismunt-the 3%% Convertible Debentures, Due 1980.

Debt premium or discount and related expenses are amortized to income over the lives of the issues to which they pertain.

24 1

l

~

Southern California Edison Cornpany Note 2-Commitments and Contingencies sale purchases from the Company. The foregoing pro-ceedings involve complex issues of law and fact, and, Constructen prograin and fuel supply-The Company has sigmficant purchase commitments in although the Company is unable to predict their final out-come,it has categorically denied the allegations of these connection with its continuing construction program. As resale customers.

of December 17,1981 (the date of the Company's latest ap-proved budget), funds required for construction expen-Leases and Rentals-ditures are estimated at $872,859,000 for 1982, $803,698,000 for 1983 and $775,634,000 for 1984. Minimum long-tenn The Company has entered into various arrangements to commitments of approximately $9.5 billion existed on lease automotive equipment, computer equipment, nu-December 31,1981 under the Company's fuel supply and clear fuel, office space, oil storage facilities and other inci-dental equipment and property. These agreements are ac-transportation arrangements.

counted for as operating leases based upon ratemaking Government licenses-Practices. The present value of the minimum commit-The terms and provisions of licenses granted by the ments under capital leases are not considered matenal for United States cover the Company's major and certain fin ncial reporting purposes.

minor hydroelectric plants. These licenses also cover certam storage and regulating reservoirs and related trans-Note 3-Compensating Balances and Short-Term Debt mission facilities. All of the above licenses expire at in order to continue lines of credit with various banks, the various times between 1982 and 2009. The licenses contain Company presently maintains deposits aggregating ap-numerous restrictions and obligations on the part of the proximately $12,000,000 which are not legally restricted as Company, including the right of the United States to to withdrawal. The lines of credit, which are also available acquire Company properties or the FERC to issue a license to support commercial paper, amounted to $551,000,000 to a new licensee under certain conditions and upon the and $555,000,000 as of December 31,1981 and December payment to the Company of specified compensatien.

31,1980, respectively. In addition, the Company also has lines of credit totaling $35,000,000 and $20,000,000 as of Resale revenues-December 31,1981, and December 31,1980, respectively, Pursuant to FERC procedures, on February 1,1976, which may be utilized for general corporate purposes.

August 16,1979, and July 16,1981, increases in the Company's resale rates became effective, subject to refund The Company has an additional $150,000,000 line of credit with interest to the extent that any of the increases are which may be utilized only for the purchase of fuel oil subsequently determined to be inappropriate. Effective through the use of bankers' acceptances. Notes issued May 2,1974, a Fuel Clause Adjustment was added under this agreement are secured by a pledge of the to the Company's resale rates and has been modified Company's fuel oilinventory.

concurrent with the subsequent base rate increases beginning with the February 1,1976 increase. As of Note 4-Taxes December 31,1981, approximately $565,000,000 had been l

billed subject to refund. The Company believes that any In cc rdance with CPUC requirements, no deferred m.,-

amounts which the FERC may require the Company to c me taxes are provided tor net increases or decreases in refund should not have a material financial effect on the inc me tax expense which result from reporting certam transactions for income tax purposes in a period different

• P' "Y' from that in which they are reported in the financial Lqal matters-statements. The major items for which deferred income In March 1978, five resale customers filed a suit against jaws m pr vided are the additionalinvestment tax cred-the Company in federal court alleging violation of certain its (ITC) discussed below, and the tax effects of resale rev-antitrust laws. The complaint seeks damages in excess of enues and regulatory balancing account provisions.

$23,000,000, consequential damages and a trebling of such l

damages, and certain injunctive relief, and alleges that the Although a portion of the Company's ITC have been li PP ed as a current reduction of income tax expense, ad-Company (i) is engaging in anti-competitive behair by charging more for wholesale electricity sold to resale ditional ITC, permitted by the Tax Reduction Act of 197a, and the Tax Reform Act of 1976, have been deferred and customers than the Company charges certain classes of its retail customers, and (ii) has taken actions alone and in are being amortized as reductions to income tax expense concert with other utilities to prevent or limit such resale ratably over the lives of the properties which gave rise to the credits.

customers from obtaining bulk power supplies from other sources to reduce or replace the resale customers' whole-25

Southern California Edison Company.

Notes to Financial Statements (continued)

For plant additions after December 31,1980 (post-1980 Note 5-Research and Development property), provisions of the Economic Recovery Tax Act of Research and Development (R&D) costs are expensed cur-1981 apply to tax depreciation and ITC. Under these rently if they are of a general nature. Plant-related R&D provisions tax depreciation is based upon generally costs are accumulated in construction work in progress shorter lives, and additional ITC are available. In addition, (CWIP) until a determination is made as to whether such there are provisions which require the adoption of nor-projects will result in construction of electric plant. If no malization accounting for post-1980 property with respect construction of electric plant ultimately results, the costs to the difference between tax depreciation and deprecia-are generally charged to operating expense. The balance tion of tax basis using book method and lives.There are of R&D expenditures included in CWIP at December 31, also provisions which no longer permit the flow through 1981,1980 and 1979 was $51,372,000, $35,076,000, and of ITC. Under transitional rules of the Act, these new

$29,438,000 respectively.

normalization provisions are not applicable to the Com-Housands of Dollars pany for 1981 and will first apply,in part,in 1982.

Year Ended December 31, 981 1980 1979 Supplementary information regarding taxes on income R&D charged to espense.

$26,542

$21,964

$15,778 R&D charged to NP-net.

16.297 N,812 12,260 and other taxes is set forth in the following table:

Total R&D espenditures.

$42,839

• 41,776

$28,038

"*'"="

Thousands of Dollars Year Ended December 31, 1981 1980 1979 Note 6-Employee Benefit Plans Pension Plan-Current:

Federal 5 44,800

$ 38,582

$ 6,717 The Company's current pension program is based on a State.

2s,629 36,909 4,019 trusteed pension plan, which is non-contributory by em-70.429 75,491 10,736 ployees. Company contributions are determined on the Deferred-Federal and State:

basis of a level premium funding method.There are no un-4 funded prior service costs. The annual normal cost of the R

aoy la accou ts.

(1 22) 3 Other.

(7591 14,921 (13,644) plan is funded by the Company. Pension costs are re-73,17s (67.166) 66,037 served for on the basis of actuarial determinations and Total tases on income.

51n,604

$ 8,325

$ 76,773 amounted to $36,137,000, $40,321,000 and $37,456,000 for 1981,1980 and 1979, respectively. The dechne in pension Tases on income included in operatmg expenses....

$197,865 5 38,683

$100,292 costs for 1981 is due to an investment return in excess of other income.

-(54,261) the actuarial return assumption and changes in actuarial Tancs on income included in (30,358)

(23,519) assumptions.

Total tases on income.

5143,604

$ 8,325

$ 76,773 housands of Dollars Differences between the federal December 31, stctutory tas rate and the 1980(a) 1979 re n1 k s n

fits Federal statutory tax rate.

46.0 %

46.0 %

46.0 %

Vested.....

$383,676

$301,429 Allowance for debt and equity '

Nonvested.

16,621 19,965 funds used during construction....

(16.9)

(22.9)

(12.9)

$400,297

$321,394 Percentage repair allowance.

(3.5)

(3.3)

Net assets available for benefits.

$478,658

$375,846 Admuustrative and general espenses capitalized.

(1.5)

(3.4)

(2.2)

(a) latest available information.

Investment tas credits-net.

(4.3)

(6.8)

(8.1)

Nudear fuellease Actuarial rate of return assumptions of 6.5% and 5.5%

interest capitalized.

(3.01 (3.3)

(0.9) were used in determining the actuarial present value of

[r accumulated plan benefits for1980 and 1979, respectively.

i on,

All other differences.

(0.2)

- (3.3)

(3.7)

Effective tas rate.

22.7 %

2.6%

18.1 %

Otlier tases included in operating espenses:

Property.......

$ 41,632

$ 54,114

$ 48,300 Payroll and other.

18,253 15,538 8,128

$ 59,885

$ 69,652 5 56,428 26

Southern California Edison Company Employee Stock Purchase Plan-Note 8-Jointly-Owned Utility Projects Under the Employee Stock Purchase Plan adopted to The Company owns undivided interests in several supplement em ployees' income a fter retirement, em ployees jointly-owned generating stations and transmission sys-may elect to contribute specified percentages of their tems for which each participant must provide its own regular monthly base pay to a trustee for the purchase of financing. The Company's proportionate share of expenses Company Common Stock. The Company contributes pertaining to such projects is included in the appropriate to the Plan an amount equal to one-half of the employees' category of operating expenses in the Statements of In-contributions, less forfeitures. The Company's contribu-come. In the table below, the amounts represent the tions to this Plan amounted to $4,452,000, $3,679,000 and Company's share for each such project as reported on the

$3,263,000 for 1981,1980 and 1979, respectively. In addi-Balance Sheets:

tion, employees may elect to contribute up to 5% of their Thousanas of ooriars regular monthly base pay through supplemental contribu-Decemt tions without regard to their years of service. These sup-Jl;';'lg,'er 31.1981 e,,i,,,

co, mon,,,

plemental contributions are not matched by the Company.

I;'lajja [Ja.";aj f,gAa, gl,'lf,'P p,,,,

Axis Generating station...$ 12,285 80 $

2 33.3 %

Employee Stock Ownership Plan-Cool Water Coal Gasification 7,936 16.7 Under the Employee Stock Ownership Plan (ESOP), shares El Dorado system.

19,747 5,639 625 60.0(a) of Company Common Stock are purchased for the benefit I "'1"** C'"*'i"8 g

a y e of eligible employees and held in trust using funds gener-hiohave Generating station. 187,316 47,007 2,364 56.0 ated by additional 1% and %% investment tax credits Pacific Intertie DC system 67,822 18,708 1,033 50.0 and matching etaployee contributions for the %% ITC.

I'Uin "e

enn ing 526,457 15.8 The Company has elected the additional 1% ITC for the san onofre cenerating years 1976 through 1980, and the %% ITC for the years 1978 station-Unit 1.

. 266,0n4 61,110 45,415 80.0 through 1980. As of December 31,1981,1,961,301 shares of S's"tS""n ""'$"$.

2,241,320 75.05 Uni 2 Common Stock were held by the Trustee under the Plan.

san onofre cenerating In addition, as of December 31,1981, the Company had a station, Common liability to the Plan in the amount of $10,179,000.

~

So ar e e rat For the years 1978 through 1980 the amounts of ESOP Project.

16,729 80.0 ITC were higher than those utilized in the Federalincome Total.

. 5658,460 $172,046 $2,924,576 tax returns for such years. All of the 1978 and 1979 ESOP ITC were utilized in the 1980 Federal income tax return.

I') R'P"" ' C mPosite rate.

However, none of the 1980 ESOP ITC was utilized in the 1980 Federalincome tax return. If not completely utilized Note 9--Long-term Purchased Power and Transmission Contracts in 1981 or future income tax returns, the excess ITC would expire in 1995, in which event the Company would be Under firm contracts, the Company has agreed to pur-i allowed a tax deduction for the amounts contributed chase portions of the generating output of certain to the ESOP.

facilities and to purchase firm transmission service where appropriate. Although the Company has no investment in N:t2 7-Quarterly Financial Data such facilities, these contracts provide that the Company Earnings Pay certain minimum amounts (which are based at least Thousanas or ooiiars rer share n part on the debt service requirements of the provider)

Three Atonths Enaea ncf e

In e enmary Dlu whether or not the facility or transmission line is operat-December 31,1981.. 51,039,320 $113.026 $127,862 $1.27 $1.26 ing. None of such power contracts provides, or is september 30,1981, 1,122,674 150,996 147,944 1.51 1.51 expected to provide,in excess of five percent of the Company's current or estimated future operating s a ch 31,1 1 December 31,1980.

% 9,227 91,N9 70,495 0.71 0.71 capacity. The cost of power and firm transmission service sept:mber 30,1980.

1,058,916 103,011 88,427 0.99 0.98 June 30,1980.

828,028 88,996 76,929 0.84 0.82 M rch 31,1980...

804,946 88,478 81,685 0.%

0.93 December 31,1979..

709,252 100,352 92,538 1.19 1.15 september 30,1979.

684,334 106,738 98,822 1.32 1.27 June 30,1979...

566,656 81,748 71,183 0.91 0.88 March 31,1979.

603,733

%,159 83,677 1.13 1.09 27

Southern California Edison Company Notes to Financial Statements (continued) obtained under the contracts, including payments made Transmission service

• "' i" * ""d 5) wh:n a facility or transmission line is not operating, is included in Purchased Power and Other Operation Date of Expiration.....

December 31,1w4 July 19,2016 Expcnses, respectively, in the Statements of Income.

Variable Cornponents of,

. Pro. rata 5 hare of Actual operating o "'"aa 'ad

'ad M'**a'a

Contract $

Information as of December 31,1981 Pertaining to such r

uainten.nce cmts

< mts contracts iS Summarized in the followiHg table 3; Required Future Mirumum Annual Payments Purchased Power 1982.

~

$1,058

$ 6,100 (DoHars in Thousands) 1983.

976 6,000 1984.

909 5,900 Navato Layoff Hoover Sales Oroville-Thermahto 1985.,

5,800 D:tiof Expiration,

. December 31,1984 May 31,19R7(b)

Apnll,1983 1986.

5,700 Shue of Effective Later years.

120,315 Operating Capacity-Total.......

2,943 149,815 M;pwatts (MW)..

327.5 (a) 391.0 (c) 340 Less Amount Representing Interest to Share of Energy Output,

14.6 %

7.9%

37.6 %

Reduce Total to Present Value.

(182)

(88,926)

Estimated Annual Cost.

$38,850

$1,872

$5,985 (e)

Total at Present Value.

$2,761 5 60,889 Compmy,s Portion of Estimated AnnualCost Total Payments for Ea 3 of the Applicable to Supplier's Three Tears in the Period Ended Annual Minimum Debt December 31,1981 Service Requirement.

$ 4,870(d)

$ 456

$5,234 (d) 1981.

$1,214

$6,443 Company's A4tocable 1980..

1,200 6,954 Portion of Interest of 1979..

1,183 7,096 Supplier included in Annual Minimum Debt Service Requirement..

$ 3,509(d)

> 74

$4,495 (d)

Retzted Long-term Debt or Lease Obligations Out:tanding of Company..

None None None Varu ble Components,,.. Pro-rata $hm of Smd on us.

None of Contracts Actual operanng, Government cost Maintenance, and of Sernce, Fuel Conts currentiv 2.1 nulls lLWit Required Future Miniraum Annual Payments 1982.

$ 8,230

$1,280

$5,%5 1983.

7,590 1,400 1,4%

1984.

7.070 1,540 1985..

1,"00 1986..

1,860 Later years.

854 Total.

22,890 8,6M 7,481 Less Amount Represent-ing Interest to Reduce Total to Present Value..

(1,414)

(832)

(439)

Totd at Present Value.

$21,476

$7,802

$7,042 Tottl Purchases for Each of the Three Yerrs in the Period Ended December 31,1981 1981.

$34,792

$1,812

$6,415 1980.

35.621 2,500 6,5%

1979.

32,596 1,872 6,038 (1) The Company has agreed to certain reductions in its share of effective operating capacity prior to the December 31,1984 termination date.

(b) The Company has certain renewal rights under the existing agreement.

(c) Effective operating capacity may vary according to water availability tnd othet conditions.

(d) Based on amortuation of the suppliers debt service obligation estendmg over a 50-year period. The Company's obligation to purchase power ternunates prior to the espiration of the 50-year period.

(1) Brsed on average energy deliveries over the life of the contract. Actual delivenes vary according to water availability.

28.

Southern California Edison Company Supplementary Information to Disclose the Effects of Accounting Standards Board (FASB) for the purpose Changing Prices (Unaudited) of providing certain information about the effects of both general inflation (represented by constant dollar The Company's primary financial statements are stated amounts) and changes in specific prices (represented on the basis of historical costs in accordance with generally by current cost amounts).

accepted accounting principles. During periods of This information inherently involves the use of as-significant changes in price levels, amounts reported on sumptions, approximations and estimates, and there-l this basis reflect dollars of varying purchasing power fore, should be viewed in that context and not as pre-l and accordingly do not measure the effects of inflation.

cise measurements of the effects of inflation on the The following supplementary information is presented Company.

in accordance with the requirements of the Financial Thousands of Dolla-s Stat: ment of Earnings Available for Common and As Re rted Ad usted For i

Original Preferred Stock Adjusted for Changing Prices

$m,'y

^dd"lg r jn Ch f r the Year Ended December 31,1981 F

"d I ar)

(Current t) gta ts (C

ta Total Operating Revenues.

$4,054,356

$4,054,356

$4,054,3%

i Operating Expenses:

Provision for depreciation.

202,182 468,000 552,000 Other operating expenses.

3,361,019 3,361,019 3,361,019 Other income and deductions (270,061)

(270,061)

(270,061)

Net interest charges,

271,304 271,304 271,304 Dividends on cumulative preferred and preference stock.

67,888 67,888 67,888 3,632,332 3,898,150 3,982,150 Earnings available for common and original preferred stock (excluding reduction of utility plant to net recoverable cost).

$ 422,024

$ 156,2%

$ 72,206 Other Adjustments For Changing Prices:

Excess of increase in general price level of $1,149,000,000 over increase in specific prices of $1,102,000,000 of utility plant held during the year (b).

$ (47,00l3 Reduction of utility plant to net recoverable cost.

$ (348,000)

$ (217,000)

Gain from decline in purchasing pow (r of net monetary liabilities.

$ 375,000

$ 375,000 (a) Average 1981 dollars.

(b) At December 31,1981, current cost of utility plant, net of accumulated depreciation, was $14,000,000,000 while related historical cost and net recoverable cost was $7,502,000,000. The difference of $6,498,000,000, which includes $1,102,000,000 for the current year, represents the changes in specific prices (current cost) of utility plant from the date the plant was originally acquired.

l 29

Southern California Edison Company l

l Supplementary laformation (continued) l Fiva Y;ar Comparison of Selected Supplementary Financial Data Adjusted fer the Effects of Changing Prices (Data adjusted for the effects of changing pnces are reported in average 1981 dollars.)

Year Ended December 31, In Thousands of Dollars, Except Per Share Amounts 1981 1980 1979 1978 1977 Total Operating Revenues As reported 54,054,350 $3,661,117 $2,563,974 $2,328,798 $2,064,914

$4,054,35t.

$4,041,000 $3,213,000 $3,246,000 $3,099,000 In constant 1981 dollars.....

Earnings Available for (Loss on) Common and Original Preferred Stock (a)

As reported..................

$422,024

$256,586

$292,481 In constant 1981 dollars.

$156,206

$ 42,543

$151,760

$ 72,206

$(47,%2)

$ 70,315 At current cost.

Earnings (Loss) Per Share on Common and Original Preferred Stock (a)

As reported.

$4.93

$3.50

$4.56

$1.82

$.58

$2.36 In constant 1981 dollars.

$.84

$ (.65)

$1.10 At current cost........

Excess of Increase in General Price Level Over increase in Specific Prices of Utility Plant after Reduction to Net Recoverable Cost.

$264,000

$462,000

$622,000 Net Assets at Year End at Net Recoverable Cost As reported......

52,968,108 $2,529,577 $2,233,133 In constant 1%1 dollars and current cost.

$2,866,000 $2,671,000 $2,646,000 Gain from Decline in Purchasing Power of Net Monetary Liabilities

$375,000

$491,000

$%7,000

' Cash Dividends Declared Per Common Share

$3.10

$2.84

$2.60

$2.30

$2.%

As reported........

in constant 1981 dollars.....

$3.07

$3.10

$3.22

$3.18

$3.07 Market Price Per Share at Year End in historical dollars...

$28.75

$25.625

$24.50

$25.75

$26.375 In constant 1981 dollars...

$27.76

$27.01

$29.03

$34.57

$38.61 Average Consumer Price Index 272.4 246.8 217.4 195.4 181.5 (Base Year 1%7 = 100)

(a) hxdudes Reduction of Utility Plant to Net Recoverable Cost.

The amounts adjusted for general inflation represent his-reported in the Handy-Whitman Index of Public Utility torical costs of utility plant restated in terms of dollars of Construction Costs. This method is intended to measure equal purchasing power (constant dollars) as measured by income after reflecting the cost of providing electric the Consumer Price Index for all Urban Consumers. This service at current price levels.

method is intended to measure income after restating all In accordance with procedures specified by the FASB, revenues and expenses in dollars of equivalent purchas-total operating revenues and all expenses other than ing power.

depreciation were considered to reflect the average price The current cost amounts reflect the changes in speciric level for the current year and accordingly remain un-prices of utility plant from the date the plant was acquired changed from those amounts reported in the Company's

. to the present, and differ from constant dollar amounts to - primary financial statements. The current year's provision the extent that prices in general have increased more or for depreciation on the constant dollar and current cost less rapidly than specific prices. The current cost of utility amounts of utility plant was determined by applying the plant represents the estimated cost of replacing existing _ Company's average annual depreciation rates to the plant assets and was determined by restaung its historical indexed plant amounts.

cost using Company projections of year-end indices to be No adjustments to income tax expense have been made

l l

Southern California Edison Company i

Supplementary Information (continued) in computing the impact of inflation since only historical ratemaking process gives no recognition to the current l

costs are deductible for income tax purposes.

cost of replacing utility plant, based on past ratemaking Fuel inventories and the cost of fuel consumed in the practices, the Company believes it will be allowed to re-generation of electricity have not been restated from their cover and earn a return on the increased cost of its historical cost. The recovery of fuel and purchased power investment when replacements of ut2ity plant occur.

costs are limited to historical costs through the operation During inflationary periods, holders of monetary assets of the Company's energy cost adjustment clauses. For this experience a loss of general purchasing power while holders reason fuelinventories and deferred recoverable energy of monetary liabilities experience a gain. The gain from the costs are effectively monetary assets.

decline in purchasing power of net monetary liabilities is Under ratemaking procedures prescribed by the regula-primarily attributable to the substantial amount of debt tory commissions exercising rate jurisdiction over the which has been used to finance utility plant. However, to Company, only the historical cost of utility plant is re-properly reflect the economics of rate regulation, the gain coverable through future depreciation charges. Therefore, from the decline in purchasing power of net monetary the cost of utility plant, stated in terms of constant dollars liabilities, including Cumulative Preferred and Preference or current cost, exceeding the historical cost of utility Stock, is offset by the reduction to the recoverable cost of plant is not presently recoverable through depreciation utility plant. The Company, therefore, does not have the charges, and, accordingly, the excess is reflected as a re-opportunity to realize such holding gain on net monetary duction of utility plant to net recoverable cost. While the liabilities.

Capital Stock-Dividend and Price Information Quarterly liigh and low Sales Prices ($)

Di nds Calendar Quarter-1981 Calendar Quarter-1980 Class and Per 1

2 3

4 1

2 3

4 Series of Stock Share (a)(f) liigh Low 11igh Low liigh Low liigh Low liigh Low liigh Low liigh Low liigh Low Original Preferred

.74 24 % 22 26 22 %

27 23 %

27 % 24 26 22 %

28 % 19 %

27 23 %

25 % 22 Cumulative Preferred:

4.08 %

.25%

85s 7 8% 7 7% 6%

8% 6%

10 % 6%

10 7%

9% 7%

9 7

4.24 %

.26%

8% 7%

8% 7%

8re 6%

9% 6%

10 % 7%

10 % 8 10Ys 8 8% 7%

4.32 %

.27 8% 7%

8% 7%

8% 7 8% 6%

9% 7%

10 % 7%

11 % 8 8% 7%

4.78 %

.29%

9% 7%

9Vs 7%

9% 7%

9 7%

11 % 8 11 % 8%

11 % 8%

10 % 7%

5.80 %

.36 %

11Fs 10 115s 9%

10 % 9%

10 % 9 13 % 105:

14 % 10 %

14 % 11 %

12 % 10 8.85 %

.553125 17 15 %

16 % 14 %

15Te 14 %

16te 14 20 % ISTs 22re 15 %

21 % 16 %

17 % 14 %

9.20 %

.57%

17 % 16 17 15 %

16 % 14 %

17 % 14 %

20 % 15 % 22 % 16 %

22 % 17 %

19 % 15

$100 Cumulative Preferred:

7.325% (b) 1.83 %

7.58 %

1.89 %

57 % 54 55 % 50 M

48 %

53 48 67 % 54 74 % 51 70 % 60 625s 50 %

7.80% (b) 1.95 8.M %

2.13 %

(c)

(c)

(c)

(c) 72 % 62 %

62 % 61 %

92 % 79 93 74 90 88 % 87 70 %

8.70 %

2.17 %

66 59 64 57 62 58%

61 % 55 %

79 56 % M 60 82 67 %

71 59 %

8.70%-A (b) 2.17 %

8.96 %

2.24 68 % 63 66 % 61 64 58 %

66 56 %

77 % 66 85 58 % 82 % 72 %

74 % 62 12.00 %

3.00 100 % 95 99 94 % 97 % 88 % 93 % 82Vs -

101 97 Preference:

5.20 %

.32%

20 17 %

21 % 19 21 % 19 24 20 %

17 % 15 %

20 % 16 %

19 % 18 % 20 % 17 %

Convertible 7.375% (b)

.460938 Common (d)(c)

.74 26 % 22 %

28 24 28 % 24 %

30 % 26 %

24 % 20 %

27 % 21 %

26 % 24 % 26 % 23 %

- (a) Quarterly dividends were paid at the rates indicated in each quarter of 1981 except the fourth quarter dividend on Original Preferred Stock and Comme Stock which was at the rate of $0.81 per share.

(b) There are no prices as these issues are private placements and shares are not traded.

(c) No shares traded.

(d) Dividends declared on Common Stock totaled $3.10 and $2.84 for 1981 and 1980, respectively.

(e) As of December 31,1981, there were approximately 152,000 Common Stock shareholders.

(f) The Indenture securing the Company's First and Refunding Mortgage Botids provides,in substance, that the Company shall not pay any cash dividends except out of its earnings reinvested in the business and net income.

31

--m-

, Southern California Edisam Company Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations increases in other operation expenses continue to be The Company's results of operations for 1981 were fa-due to system growth and to the impact of inflation on vorably affected by a decision, effective January 1,1981, the costs ot ; abor, material and services. The Company, from the California Public Utilities Commission (CPUC) however, is continuing its efforts to alleviate the impact of which authorized a general rate increase of $294 mil-inflation on these expenses with continued emphasis on lion annually. In addition, the decision provided for an productivity and cost controls.

attrition allowance to help meet inflation-related cost in-Maintenance expense reflects the impact of inflation as creases which have been a primary cause of fluctuations well as varying weather conditions. The comparative de-in net income between rate cases. The attrition allowance creases for1981 are principally the result of the large main-was implemented on January 1,1982, and increased base tenance expenditures which were incurred in 1980 at the rates by 592 million annually.

Mohave and San Onofre (Unit 1) Generating Stations.

The following table presents amounts and percentages Taxes on income for 1981 increased over 1980 primarily of increase (decrease) in the rate components of operat-as a result of increased pre-tax net income. Additionally, ing revenues from the prior years.

income taxes increased because of adjustments to pre-tax income, including the loss, due to recent Federal legisla-htations of Dollars

, of the percentage repair allowance deduction for f mP r Y ars 1981

% 1980

% 1979 periods after 1980.

U R nm

$',', nB The Company's reported net income reflects, in addi-y{

tion to the items discussed above, the impact of higher Adjustment Clause $ (19) (0.9) $ 973 80.6 $ 75 6.6 Annual Energy Rate 32 -

interest charges which were due to additional short-and Base Rates 280 23.3 31 2.6 153 15.1 long-term debt outstanding and higher interest rates. The Resale & Special additional indebtedness was incurred by the Company Contracts 102 41.5 74 43.0 30 21.0 primarily in connection with its continuing construction Revenue (2) (6.5) 19 174.2 (23)(68.3)

Program, which is also responsible for the increasing levels of the non-cash allowance for debt and equity Total Operating Revenues 3 10.7 $1,097 42.8 $ 235 10.1 funds used during construction.

Earnings available for common and original preferred KWil Sc' =s (stillions) 2,536 4.2 397 0.7 2,491 4.4 stock were affected by the additional dividend require-Customers 68,719 2.2 81,586 2.6 95,S37 3.2 ments of a series of $100 cumulative preferred stock issued For 1981, total operating revenues increased as a result of in October 1980 and two series of $100 cumulative pre-the net effect of the general rate mcrease, increased sales ferred stock issued in 1979. Earnings per share have been to other utilities, an annual energy rate which became impacted by the dilutive effect of an increasing number of effective on October 25,1981, and lower energy cost ad-outstanding shares of Common Stock sold to help finance justment clause revenues which are offset by energy costs the Company's continuing construction program.

and do not affect earnings. Kilowatt-hour sales increased A discussion relating to supplementary information to 4.2% for 1981 primarily as a result of unusually high tem-disclose the effects of changing prices follows the " Notes peratures experienced in Southern Califorma in the third to Financial Statements" on page 29 of this report.

quarter and mereased sales to other utilities.

The following table presents amounts and percentages Liquidity of increase (decrease) from the prior years in selected L quidity refers to the ability of a company to generate items from the Statements of Income.

funds, whether from operations,long-term financings stations of Douars, or other sources, adequate to meet its needs. The follow-Escept Earnings Per Share Data ing table provides a summary of the Company's sources Increase (Decrease) from Prior Years 1981 1980 1979 of funds used for Construction expenditures for the years Other Operation Espenses $ 49 12.6 $ 70 21.9 $ 39 13.6 1981,1980 and 1979.

hiaintenance Espense (35) (15.3) 51 28.7 13 8.1 htillions of Dollars Tases on Income 159 (a)

(62) (61.4) 27 37.8 Total Ir.terest Charges 58 20.6 78 37.8 22 12.3 1981 1980 1979 Allowance for Debt and Funds Provided by Operations-Reinvested 5174 $ 125 $ 238 Equity Funds Used Funds Provided by Long-term Financing-net 800 533 446 Dunng Construction 70 43.3 44 36.9 40 51.2 Other Sources (Uses) of Funds (17) 124 (10)

Net income 172 54.3 (29) (8.3) 95 37.6 Funds Used for Construction

$ 957 $ 782 $ 674 Earnings Available for Common and Original Funds Provided by Operations as a Percent Pwferred Stock 165 64.5 (36) (12.3) 40 44.6 of Funds Used for Construction 18 %

16 % 35 %

Earnings Per Share 1.43 40.9 (1.06) (23.2) 1.04 29.5 Weighted Average Number The Company is engaged in an extensive construction of Shares (htilhons) 12 16.9 9

14.1 7 11.7 program designed to accommodate existing and projected (a) Indicates over 200%.

demands on its electric system. Because of the high level 32 of construction work in progress primarily related to the

Southern California Edison Company construction of San Onofre Units 2 and 3, a significant of capital. The Company's estimates and underlying as-portion of the Company's net income in recent years sumptions are subject to continuous review and periodic has been attributable to the Allowance for Funds Used revision.

During Construction (AFUDC), which does not represent The timing, type and amount of all additionallong-term current cash income of the Company. AFUDC constituted financing are also influenced by market conditions, rate approximately 47%,51% and 34% of net income for the relief and other factors, including limitations imposed by years 1981,1980 and 1979, respectively. AFUDC is expected the Company's Artic!?s of Incorporation and Trust to decline significantly when San Onofre Units 2 and 3 are Indenture.

l placed in service with a resulting reduction in this non-Funds provided by long-term financing after giving cash portion of net income. Assuming the costs incurred effect to the reduction of long-term delt, securities held l

in connection with the construction and operation of by trustees and the conversion of preference stock these units receive appropriate and timely rate treatment, amounted to $800 million in 1981. This reflects pollution sufficient revenues are expected to be authorized to offset control equipment financing bond issues and unsecured the decline in AFUDC.

debt offerings in the European market, as well as tra-ditional public debt and equity offerings. In addition, the Ccpital Resources Company uses short-term borrowings as a part of normal To provide the funds for construction expenditures for daily operations and to meet interim cash needs for capi-the five years through 1986 estimated to total $4.0 billion tal projects, pending periodic reductions or repayment and to meet long-term debt maturities and preferred stock through long-term financing. The Company has a total of sinking fund requirements aggregating $796 million dur-

$736 million of available short-term borrowing facilities ing such years, the Company estimates that approxi-with foreign and domestic banks. At December 31,1981, mately $2.9 billion, or 60%, of such expe 'ditures will be approximately $295 million of such borrowings were provided by long-term financing. The bak nce of funds outstanding.

required for these purposes is expected to be obtained The Company's long-term goal is to maintain a capital from operations, primarily during the latter part of such structure with approximately equal amounts of debt and period, with a substantial majority of construction equity. The Company's capital structure at the end of the funds in 1982 projected to be obtained from external years 1981,1980 and 1979 is shown below:

sources.

I*I I*U I*

The Company's estimates of funds available from oper-ations assume the receipt of adequate and timely rate re.

L ns. Term Debt 47.3 % 46.3 % 47.4 %

tief, the timely inclusion of the new San Onofre Units and ho"'nm"o r ui 7

Palo Verde Units in rate base and the realization of its 100.0% 100.0% 100m assumptions regarding cost increases, mcluding the cost Operating Revenues and Kilowatt-Hour Sales Class of Service Operating Revenues (Thousands of Dollars)

Kilowatt-Hour Sales (000)

% of

% of 1%1 total 1981 1980 change 1981 total 1%1 1980 change Residential 27.5

$1,115,758 $1,026,778 8.7 26.7 16,688,956 16,471,840 1.3 Agricultural 1.9 75,257 68,503 9.9 1.8 1,116,308 964,452 15.7 Commercial 26.9 1,090,694 979,051 11.4 24.9 15,562,087 14,778,843 5.3 Industrial 26.2 1,063,823 997,831 6.6 27.2 17,000,598 16,777,563 1.3 Public Authorities.

8.2 331,972 312,578 6.2 7.5 4,667,700 4,623,8 %

0.9 Interdepartmental.

77 51 51.1 1,218 1,138 7.0 Resale.

6.0 244,720 198,543 23.3 7.3 4,539,467 4,415,038 2.8 Subtotal......

96.7 3,922,301 3,583,335 9.5 95.4 59,576,334 58,032,760 2.7 Resale-Special Contracts.

2.5 99,240 44,631 122.4 2.6 1,639,158 1,071,184 53.0 Public Authorities-Special.

0.1 5,007 3,407 47.0 '

2.0 1,235,827 811,243 52.3 Total Sales of Electric Energy.....

99.3 4,026,548 3,631,373 10.9 100.0 62,451,319 59,915,187 4.2 Other Electric Revenues 0.7 27,808 29,744 (6.5)

Total.......

100.0

$4,054,356 $3,661,117 10.7 100.0 62,451,319 59,915,187 4.2 33

Southern Cahfornia Edison Company Selected Financial Data 1971-1981 1981 1980

$4,054,356 $3,661,117 Summary of Operations Operating Revenues 3,563,201 3,288,983 (in thousands except percent Operating Expenses..

and per share data)

Energy Costs (a)..

2,467,933 2,371,827 Taxes on income-Current and Deferred (a).

197,865 38,683 -

Allowance for Debt and Equity Funds Used During 232,552 162,287 Construction.

Interest Charges.

340,977 282,656 489,912 317,536 Net Income..

Earnings Available for Common and Original

$ 422,024 $ 256,586 Preferred Stock.

Weighted Average Shares of Common and Original Preferred Stock Outstanding and Common Stock Equivalents.

85,610 73,241 Per Share Data:

Primary Earnings.

$4.93

$3.50

$4.91

$3.48 Fully Diluted Earnings

$3.10

$2.84 Dividends Declared Per Common Share.....

61.5 %

79.4 %

Dividend Payout Ratio (paid basis).

$8,728.543 $7,733,8%

Balance Sheet Data Total Assets..

9,517,670 8,406,309 (in thousands of dollars except Gross Utility Plant.

2,015,212 1,840,233 percent and per share data)

Accumulated Provision for Depreciation Percent of Cross Utility Plant.......

21.2 %

21.9 %

Long-term Debt (excludes current maturities) (b) :

Bonds.....

3,224,867 2,938,796 Debentures 219,213 7,028 Other Preferred Stock-Subject to Mandatory 399,500 399,500 Redemption / Repurchase Requirements 476,308 482,652 Preferred Stock-Other Common Stock, including Additional Stated Capital.

776,523 673,921 Additional Paid-in Capital.

953,268 763,519 Earnings Reinvested in the Business.

$1,238,317 $1,092,137 Capital Structure (percent):

Long-term Debt (excludes current maturities) (b):

Bonds.

44.3 %

46.2 %

Debentures 3.0 0.1 Other 12.0 13.9 '

Preferred & Preference Stock.

Common Equity.......

40.7 39.8 14.87 %

10.44 %

Rate of Return on Common Equity..

Book Value Per Common Share 533.74

$33.19 15,592 15,504 Operating and Area Generating Capacity at Peak (MW) (c)..

69,179,641 65,459,278 Sales Data Total Energy Requirement (KWH) (000)

Percent Output:

67.7 %

71.4 %

Thermal..............

Hydro-Company Plants...

5.7 9.0 Purchased Power & Other Sources.

26.6 19.6 62,451,319 59,915,187 Kilowatt-Hour Sales (000) 3,232,687 3,163,968 Number of Customers........

Average Annual KWH Sales Per Residential Customer....

5,879 5,939 Number of Employees..

14,569 14,157 Area Peak Demand (MW)...

13,738 12,841 (a) Included in Operating Expenses.

34.

l Southern California Edison Company 1979 1978 1977 1976 1975 1974 1973 1972 1971

$2,563,974 $2,328,798 $2,064,914 $1,846,540 $1,M7,134 $1,360,959 $1,075,949 $ 927,674 $ 802,434 2,178,978 2,004,197 1,734,192 1,539,400 1,380,528 1,108,249 843,530 709,724 612,732 1,344,023 1,240,029 1,040,091 916,131 824,826 541,890 344,990 240,135 192,982 100,292 72,803 68,792 59,506 46,623 70,618 46,496 44,542 38,542 118,566 78,421 60,238 47,610 26,773 16,163 10,190 7,152 15,859 205,082 182,658 161,078 144,368 126,185 112,959 97,728 91,752 82,308 346,219 251,683 251,979 226 798 176,781 160,344 146,110 135,M8 127,297

$ 292,481 $ 202,226 $ 206,330 $ 185,047 $ 137,177 $ 124,6% $ 117,268 $ 110,469 $ 105,752 64,202 57,477 54,347 48,678 47,%5 44,580 43, % 5 43,%5 43,041

$4.56

$3.52

$3.80

$3.80

$2.86

$2.80

$2.67

$2.51

$2.46

$4.39

$3.38

$3.63

$3.61

$2.75

$2.68

$2.57

$2.43

$2.37

$2.60

$2.30

$2.06

$1.68

$1.68

$1.68

$1.56

$1.56

$1.51%

55.7 %

63.6 %

50.5 %

44.2 %

58.7 %

58.9 %

58.4 %

62.2 %

61.0 %

$6,977,237 $6,057,697 $5,725,266 $5,020,843 $4,729,444 $4,481,488 $3,893,379 $3,774,664 $3,498,985 7,577,670 6,810,891 6,191,733 5,658,433 5,147,333 4,766,175 4,458,631 4,233,067 3,998,045 1,676,148 1,519,174 1,383,009 1,258,327 1,149,311 1,051,024 958,210 851,910 779,409 22.1 %

22.3 %

22.3 %

22.2 %

22.3 %

22.1 %

21.5 %

20.1 %

19.5 %

2,685,632 2,388,212 2,219,716 2,055,966 1,931,757 1,863,951 1,640,349 1,MO,139 1,584,840 75,046 75,135 75,224 75,313 75,401 75,490 75,579 74,902 60,575 14,216 20,023 20,671 25,968 14,327 6,871 7,991 7,991 324,500 197,000 197,000 75,000 75,000 75,000 75,000 489,822 503,650 518,172 537,753 537,753 487,753 437,753 437,753 362,753 577,259 547,166 470,374 442,741 395,709 395,709 362,376 362,376 362,376 601,578 569,673 443,109 427,422 350,503 350,503 316,636 316,636 316,636

$1,054,296 $ 931,217 $ 862,956 $ 769,425 $ 671,548 $ 616,562 $ 569,938 5 512,164 $ 470,754 46.4 %

45.7 %

46.2 %

46.7 %

47.5 %

48.1 %

47.1 %

48.9 %

49.9-/o 1.4 1.5 1.7 1.9 1.9 2.2 2.3 2.4 1.0 0.3 0.4 0.5 0.6 0.4 0.2 0.2 0.2 14.1 13.4 14.9 13.9 15.1 14.5 14.7 13.1 11.4 38.5 39.2 37.0 37.2 34.9 35.1 35.8 35.5 36.1 13.58 %

10.74 %

11.98 %

12.40 %

9.78 %

9.35 %

9.59 %

9.42 %

9.58 %

$34.22

$32.57

$32.30

$30.67

$29.64

$28.50

$28.46

$27.14

$26.20 15,071 14,966 14,278 14,071 13,941 13,750 13,500 12,819 11,575 66,216,910 63,877,116 ' 63,344,706 59,427,973 56,279,231 55,105,988 57,730,121 55,686,776 52,672,084 82.1 %

73.9%

87.5 %

75.2 %

76.2 %

75.2 %

84.9 %

86.6 %

80.0 %

7.6 9.2 2.4 4.3 8.4 10.0 9.0 6.4 8.4 1

10.3 16.9 10.1 20.5 15.4 14.8 6.1 7.0 11.6 59,517,861 57,027,035 57,726,273 53,685,378 51,327,508 51,089,981 54,092,934 52,309,906 48,8 %,493 3,082,382 2,986,545 2,900,856 2,814,403 2,749,680 2,691,691 2,626,492 2,566,341 2,497,342 6,010 5,883 5,630 5,650 5,5%

5,541 5,885 5,777 5,642 12,917 12,845 12,671 12,510 12,377 12,970 13,391 12,907 12,534 12,662 12,159 11,564 11,292 10,369 10,279 10,535 10,317 9,817.

(b) The years subsequent to 1971 include unamortized premium or discount related to each category of long-term debt.

(c) Includes 2,323,2,283 and 1,944 MW available from others in 1981,1980 and 1979, respectively.

Southerri California Edison Company Board of Directors Willi 1m R. Gould Chairman of the Board and Chief Executive Ofpcer Howard P. Allen, Presiden!-

Roy A. Anderson, Chairman of the Board and Chief Executite Offcer, Inckheed Corporation, Burbank, California Norman Barker,Ir., Chairman of the Board and Chief Executive Officer, First Interstate Bank of California, and Vice Chairman of the Board, First interstate Bancorp, Los Angeles California

. Edward W. Carter, Chairman of the Board. Carter Hawley Hale Stores, Inc., Los Angeles, California Warren Christopher, Senior Partner, Law Firm of O'Afelveny & Afyers, Ins Angeles, California Walter B. Gerken, Chairman ofihe Board and Chief Executite Offcer, Pacifc Aiutual Life Insurance Company, Newport Beach, California loan C. tfanley, General Partner and hfanager, htiramonte Vineyards. Rancho California, California lack K. Iforton Chairman of the Execulite Committee and Consultant (Retired Chairman of the Board and Chief Executive Offcer, Southern California Edison Company), las Angeles, California Frederick G. Larkin, Jr., Chairman of the Executive Committee, Security Pacifc National Bank, Los Angeles, California T. M. McDaniel,)r., Corporate Director and Consultant iRetired President, Southern California Edison Company), San Atarino, California John V. Newman, President, CBS-Sony California, Inc. (Citrus Production), Oxnard, California Gerald i1. Phipps, President, Gerald H. Phipps, Inc., General Contractors iBuilding Construction), Dent ; Colorado Henry T. Segerstrom, htanaging Partner. C. J. Segerstrom & Sons (Real Estate Development), Costa htesa, California E. L. Shannon, Jr.. Chairman of the Board and Chief Executite Ofpcer, Santa Fe International Corporation (Oil Service Engineering, Petroleum Exploration and Production), Alhambra, California H. Russell Smith, Chairman of the Board, Avery International (Afanufacturer of Self-Adhesize Products), Pasadena, California Richard R. Von Hagen, President, Lloyd Corporation, Ltd. (Real Estate Development and Production of Oil and Gas), Beverly Hills, California Executive Officers William R. Gould, Chairman of the Board and Chief Executite Offcer Howard P. Aller, Presideni H. ' red Christie, Executits Vice President and Chief Financial Offcer F

"' David ]. Fogarty, Senior Vice President A. Arenal, Vice President iEngineering and Construction)

G.J. Bjorklund, Vice President (System Detyloimrent)

Robert Dietch, Vice President (Nuclear Engineering and Operations)

C. E. Hathaway, Vice President (Human Resources) loe T. Head, Jr., Vice President iPower Supply)

P. L. Martin, Vice President (Customer Service)

A. L. Maxwell, Vice President and Comptroller Edward A. Myers, Jr., Vice President (Conservation, Communicatinms and Revenue Services)

Michael L Noel, Vice President and Treasurer L.T. Papay, Vice President (Adtunced Engineering)

William H. Seaman, Vice President (Fuel Supply)

Robert E. Umbaugh, Vice President (Administration)

• John R. Bury, General Counsel Honor Muller, Secretary it) Mr. Fogarty uws einted Exnutnt Vice President. effatwe lanuary l.1982 (2) Mr. Bury uws einted Vice President and Central Counsel. effative January 1.1982 l

-36

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.a 1982 Annual Shareholders' Meeting:

For Investor Relations:

Registrar of Stock.

The annual meeting of shareholders of InstitutionalInvestors contact:

Security Pacific b.ational Bank Southern California Edison Company Treasurer's Department Los Angeles, California will be hekt at 10 a.m., Thursday, April Manager of Investor Relations 15,1982, at the Company's Corporate Telephone (213) 572-l90 Dividend Reinvestment and lleadquarters,2244 Walnut Grove Stock Purchase Plan Agent:

Avenue, Rosemead, California 91770.

Individual Shareholders contact:

Bank of America N.T. & S. A.

Telephone (213) 572-1212.

Southern California Edison Company San Francisco, California Secretary's Department-Room 240 Statistical Supplement:

Post Office %x 400 Stock Exchange Listings:

A comprehensive financial and statistical Rosemead California 91770 Common Stock:

l supplement to this report is available in New York Stock Exchange l

limited quantity. A copy may be requested for Dividend Reinvestment and Pacific Stock Exchange by writing to the Manager of Investor Stock Purchase Plan information:

London Stock Exchange Relations, Southern California Edison Telephone (213) 572-1852 or Company, P.O. Box 800, Rosemead, (213) 572-1995 Preferred and Preference Stocks:

California 91770.

American Stock Exchange For other shareholder inquiries:

Pe-ific Stock Exchange lluis Annual Report and the statements and fDividends, account status, etcJ statistics contained hcrcin have h en assemNed Telephone (213) 572-1997 Ticker Symbol:

for general informative purposes and are SCE (Common Stock) not intended to induce, or for use in wnnection Stock Transfer Agent:

reith, any sale or purchase of sccurifics.

Southern California Edison Company Media Listings:

linder no circumstanas is this report or any Post office Box 400 Scaled part of its contents to be amsidend a pro-Rosemead, California 91770 spectus, or as an offer to sell, or the solicitaticn Te!ephone (213) 572-1393 or of an offer to buy, any scctmties.

(213) 572-1394

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