ML19347D293
| ML19347D293 | |
| Person / Time | |
|---|---|
| Site: | San Onofre  |
| Issue date: | 09/08/1980 |
| From: | Quan E CALIFORNIA, STATE OF |
| To: | |
| Shared Package | |
| ML13302A498 | List: |
| References | |
| 59788, NUDOCS 8103110754 | |
| Download: ML19347D293 (41) | |
Text
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Application No. 59788 .
k Exhibit No. -f2F l/n Witness E. Quan O Ceuunissioner Adm. Iaw Judge L. Grims B. Patrick i
CALIFCENIA PUBLIC UTILITIES CWHISSION
~
Revenue Requirements Division Rate of Retum Section STuor g -
COST OF CAPITAL M
RATE g REEi 2
g DIEO GAS A EIECEIC COMPANr I
Application No. 59788 1
1
! San Francisco, California i September 8,1980 1
8108110 W;
s EE.12E1EEEE This report was prepared by the staff of the Revenue Requirements P
Division, Rate of Retum Section, in connection with Applicaticn No. 59788 of. San Diego Gas & El.ectric Company for authoriza+, ion to increase its gas and electric rates.
Edwin Quan, Financial Eminer III, was responsible for the preparation of the report, under the general supervision of Terry ' , m ey, 1 Financial E - iner IV, and James D. Pretti, Principal Financial FJaminer.
'Ibe rate of retum recommended for the applicant is 11.22l6 which equates to an allowance of 14.# on commen stock equity.
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4 l INDEI TO TABLES Table No.
Title \
1 \
Prime Rate - Discount Rate. s
. 2 3
Yields on Public Utility Bonds - Neuy-Lued vs. Distributed .
Trends in Interest Rates.
A 5
Nominal Interest Rates - Major California Utilities,1970 - 1979.
San Diego Gas &
Iong-Tem Debt, Test Year 1981. Electric Company - Effective Interest 6
Nes Iong-Term Utility Debt Gmups, 1975 Interest Earned - Applicant and Selected
- 1979.
7 San Diego Gas & Rectric Company - Effective Dividend Rate on Preferred and Preference Stock, Test Yes 8 1981.
San Diego Gas &
Div$dends and Eamdags,Rectric 1970 - 1979.
Company Common Stock Book Value, 9
Average Gmups,1975 Common
- 197c. F. quit / Ratio - Applicarit and Selected Utility 10 Earnings Rate1975 Utility Gmups, on Avtrage
- 1979. Common Equity - Applicant and Selo;ced 11 T W RateGmups, Utility on Average 1975 -Total 1979.Capital - Applicant and Selected 12 Dividend 1975 - 1979.Payout Ratios - Applicant and Selected Utility Gmups ,
13 San Diego Gas &
Rectric Compan, - Statement of Changes in Financial Position, 1975 - 1979.
14 San Diego Gas & Rectric Company Capital Structure 15 Average Net Plant Investment 1970 - 1979.
Groups, 1975 - 1979. Applicant and Selected Utility 16 Operating 1975 - 1979.Revsnues - Applicant and Selected Utility Groups ,
17 Operating 1975 - 1979.Expenses - Applicant and Selected Utility Groups ,
18 Net Operating Income 1975 - 1979. Applicant and Selected Utility Gmups ,
19 Operating 1975 - 1979.Ratios - Applicant and Selected Utility Groups, 20 Ratio. Operating Revenues to Average Net Plant Investment -
Applicant and Selected Utility Groups, 1975 - 1^79.
21
, Ratio - Net Operating Income to Average Net Plant Investment Applicant and Selected Utility Groups, 1975 - 1979. -
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s INDEI TO TAMM Table No.
Title 22 Determination of Rates of Return Requized to eRecover Imbedd 23 Assumed Rates of Return on Cocoon ar 1981.
Equity Reconnended Rata of Return.
Appendix List of Companies Used in Study.
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s . . . . . . . . ~ . . .. . .. ._. . . . .
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l CUALIFICATIONS CTD FARED TESTD'CNY 02 E CE Q.1 Please state your name and business address.
A.1 My name is Edwin Quan. My business address is h55 Golden Gate Avenue, San Francisco, Califomia.
Q.2 By whom are you employed and in what capacity?
A.2 I am employed by the California Public Utilities Commission as a Financial Examiner in the Revenue Requirements Division.
Q.3 Please describe briefly your educational background and work experience.
A.3 I am a g.aduate of the University of California at Berkeley with a 3achelor of Science degree in Accounting. My employment with the Commission began in 1973, and during this period I have conducted fhneial examinations of various types of utilities. I have prepared exhibits and presented testimony before this Commission on accounting and financial matters in nu=erous for nal proceedings.
4.k What are your responsibilities in this proceeding?
A.k My responsibilities are to prepare a study of the cost of capital for San Diego Gas & Electric Company (SDG&I) and to recommend a fair and reasonable rate of return.
Q.5 What rate of return are you recommending for SDG&E in this proceeding?
A.5 In my opinion, a rate of return of 11.225 is fair and reasonable to both applicant and its ratepayers. This rate of return equates to an earnings
. allowance of 14.50% on common equity.
Q.6 Would you please cocpare your recommended rate of return with that requested by SDG&I?
A.6 - "he following tabulation compares SDG&E's estimated capital structure and requested rate of return with my estimated capital structure and recommenda-tion and quantifies the resulting difference in gross operating revenues.
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+ - -- - - . _ . . _ _ . _ _ _ _ .. ._ _ _
SDG&E's Requested F. ate of Return
- : Capita.lization : : '4eighted :
- Cceponent : Ratics : Cost : Cost :
Lon6-Term Debt Ek.07% 9 55% k.214 4
Bankers' Acceptances 6.18 12 50 77 Preferred Stock 12.88 8.67 1.12 Common Equity 36.87 1k.50 5 3h
! Total 100.006 11.kh6 Staff's Recommended Rate of Return Long-Tem Debt kh.h0% 9.k3% k.19%
Bankers' Aceeptances 6.60 10.50 .69 Preferred Stock 12.75 8.kh 1.08 C-n Equity 36.25 1h.50 5.26 Total 100.00% 11.226
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4 Difference .225 Tffect en Revenue Requirements l
- : Rate of Return: Staff's Estimated: Net-te-Gross: Revenue :
- Item : Oifference : Rate Base : Multiplier : Requirement :
(Dollars in Zhousands)
Long-Tem Debt 0.025 x $1,215,609 -$ 2h3 3ankers' Acceptanees .08 x 1,215,609 - 972 Preferred Stock .0L x 1,215,609 x 2.10 = 1,021 Cecmon Equity .08 x 1,215,609 x 2.10 = 2,0h2 l
Total .22% $ h,278 l
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Q.7 Please explain the basis you used in arriving at the capital structure and related costs used in detemining your rate of return recomnendation.
A.7 :tf recome?ndation is based on my esti= ate of SDGE's average of the !
l beginning and end of year capital structure for test year 1981. "'he l
, related cost rates for the respective ccaponents of the capital structure are based on an average of the estimated beginning and end of year rates.
Q.8 '4hy did you use an average year capital structure and related average year capital costs in dete. mining your recennended rate of return?
A.8 In my opinion, the use of an ave age year capital structure and related average ye'ar capital costs provides a more accurate reflection of SDGE's actual capital costs during the test year than does a year-end capital structure and related year-end capital costs. In this current proceeding, SDGE is requesting rate relief only for 1981. Ecwever, it is SDGE's plan to file a subsequent general rate relief request for the 1982-1983 period.
M or to the Commission's policy of setting rates for a definite period (one year in this application, and at least two years under the Regulatory Lag Plan), rete of return recommendations were based upon capital ratios and capital costs developed for the end of the test year. '"his approach was used in the recognition that rates would rmin in effect for scue period beyond the test year. Since SIGE is requesting rate relief only for 1981 in this proceeding, the use of an average year capital strue:ure and related average year capital costs, in my opinion, is the most accurate nethod to recogni:e the capital costs associated with the period rates are in effect.
Q.9 '4ould you please explain the differences between your projected capital structure and related costs to that of SDGE's?
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A.9 Differences in the estimatcd capital structure are minimal . W development of the test year capital structure considers recorded infor=ation as of June 30, 1980, and changes estimated to occur in the capital structure during 1980 and 1981. Also, I have developed an average year capital i
structure for 1981, whereas applicans has used a 1981 year-end capital structure. The differences in capital costs are accounted for as follows:
A. Long-Tem Debt W estbates for new issues of long-term debt for 1980 differ frem SDGE's estimates in that I have considered the actual costs associated with the actual principal amounts of the two series of long-term debt issued during the year. For example, SDGE has projected its $50 million Series "T" issue at 13 55%. I have considered the actual principal amount of the Series "I" issue,
$75 million, at the actual effective cost of 13 77%, for my calculation of the embedded cost of debt.
W projection of long-tem debt financing for 1981 is the same as that esthated by SDG&E; however, I have projected a 12% rate associated with such financing, whereas SDG&E uses a 12.1250 rate.
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l through the end of 1981 differs from StG&E's estimate in that I l have reduced the $65 million estimated balance outstandi.y by l $19 million to refleet retirements that occurred during 1980.
l Also, I have projected interest rates at 12% for the foreign
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! tem loans as compared to the 145 rate used by the applicant.
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- 3. Bankers' Acceptances SDGE finances 90$ of its fuel oil inventory with bankers' acceptances and accordingly, this assumption was used in estimating the amount of bankers' acceptances outstanding for 1981. Rf estimate of 3H7.8 millicn as the amount of bankers' acceptances included in the capital structure approxi=ates the estimate of
$114.5 million used by SDGE. I have based =y estimate on the weighted aver 36e amount of bankers' acceptances outstanding for 1981, whereas SDGE has based 1,ts esti= ate on the amount outstanding at year-end 1981. I have used a cost of 10 50% associated with the bankers' acceptances, whereas SDGE has used a cost of 12.50%.
The primary difference in the esti=ated costs of tankers' acceptances !
results from the timing of the esti=ates. My estimates were cade l with the most recent available forecasted data as of July 1980, whereas SDGE's estimates were made with earlier forecasted data.
C. Preferred Stock My projection of preferred stock financing through 1981 is the same as that esti=ated by SDGE; however, I have projected slightly lower costs associated with such financing. I have estimated a 12.5% rate for 1981 preferred stock financing, whereas SIGE projects a rate of 12.625%.
D. Ccomon Stock There is no difference in the retum en equity which SDGE is requesting and that which I am reco= mending. SDGE's 1k.50$ return on common equity requested in this case is the same as that authorized in Decision No. 90h05, dated June 5,1979, its last general rate relief decision.
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i Q.10 Do you believe that the 1h.50% return en equity requested by SIG&E and reccenended by you in this proceeding is ecuparable to the 1h.505 return on equity authori:ed SDG&E in its last general rate decision?
A.10 M.
SDG&I's last authorized retum en ccener. equity of 1k.505 was granted in June 1979, abost six months after the beginning of the test year.
Ihe rates set by that decision were intended to be in effect for a period of at least two years (1979 and 1980), and possibly an additional year (1981).
It is highly inprcbable that SX&E vill eam a retum en eccmon equity of t lk.50% over the 1979-1980 period because the spiraling level of inflation which includes both operational and financial attritien, has resulted in costs reaching unprecedented levels.
In this proceeding, my reccenendation of a 1k.505 retum en c~m equity is only for test year 1981. Later'during this year, SDG&E plans to file for additional rate relief for test period 1982-1983 . censidering i the fact that the rates resulting free this proceeding are intended to be l
i in effect for cue year as cpposed to the craditional two-year period under the Regulatory Las Plan, SDG&E should have a reasonable cpportunity to l
earn a 1k.50% retum en eccznca equity for the period in which rates will be in effect.
Q.11 Does your rate of return reccamendation consider financial attritien?
) A.ll Yes.
I Financial attritien is a result of changes in a ecc:pany's embedded t' cost of debt, and effective dividend rate en preferred stock due to the retirement and issuance of debt and preferred steck at rates exceeding f,
its current ectbedded cost.
I have censidered the esti=ated retirenents and issuances of debt and preferred stock through 1981, the period in 1
inich rates will be in effect.
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Q.12 Would you oriefly describe how you A.12 return on coct:en equity as being fair sndarrived at you reasonable for SDG&E?
The detemination of a fair and reaso the consideration of many o factors b thnable rate of return cannot be based solely on definitive fomultangible Reliance and calculations. as or precise mathematical It is of necessity a jud 6 ment detemina ti the requirements of the individual on which considers utility.
this principle in Federal Power Co The U.S. Supreme Court expresse 320 US 591, wherein it stated, "it is not thmmission rate order which counts". eory but the impact of the employed which is controlling".And "it is themethod result reach In arriving at my recommendation forth by U.S. Supreme Court decisio , I was guided by~the standards set The primary guidelines ares:as followns and prior decisions of th .
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simil e retums on investments in other entTh e commensurate
( erprises having 2.
to attract capital at reasonable confidence in the utility's nable the utilityr tThe return a es and to assure
- 3. financial integrity.
The return should balance investors and ratepayers. the interests of both the Q.13 How did you evaluate the comparison of your report for SDG&E and the selected earnings and related data A.13 The various cocrpe.risons shown igroups of utilities?
served as additional guides in arriving atn the tables fo my recommendation.
! presented in the respective tables are b The data do not consider any adjustments which ased on recorded infor~.a. tion and purposep.
L$ Some of the comanies within each grocould be c up could possibly have i
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experienced eamings above or below a reasonable norm during the period.
In addition, other differences exist between the companies with respect to such categories as inceme from other sources, acurce of supply, types of services provided, regulatory environment, and the economic conditions in their respective service areas.
Q.1h '4hy have you confined your study to the 20 utilities shown in the tables?
A.1k It is my opinion that the 20 utilities shown are regulated public utilities having business and financial risks similar to those of SDG&E and present a valid sampling for comparative purposes.
Q.15 What consideration did you give to interest coverage in deterining your recommendation?
A.15 The interest coverage that a particular level of earnings provides is an important consideration in determining a fair and reasonable return; however,
! a reasonable rate of return is not solely detemined by the interest coverage allegedly required to sustain or improve bond ratings. My reco: mended rate
' of return provides for an after-tax interest coverage of approxi=ately 2 3 times which not only allows SDG&E to meet its current fixed charge requirements but also provides sufficient flexibility to attract future capital.
Q.16 What are some of the additional factors you considered?
A.16 Scme of the additional factors which I considered in arriving at my l
l recommendation are as follows:
1 A. SDG&E is a regulated public utility engaged in a business which affects the public interest and it must provide its service at reasonable rates.
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- 3. Fair and reasonable rates nust balance the interest of the ratepayers and investors.
C. SEGE's capital structina, capital costs and financial history.
D. SDG&E's capital requirements.
E. SDG&E's innove.tive financing resulting f ,m the sale and leasebe k of the Encina 5 pcwer plant.
F. Econw.ic conditions - the effects of continued inflation and increases in embedded costs of capital.
Q.17 Do you have any further comments?
A.17 Yes. It is my opinion that the rate of return on ccamon equity that I am reccamending is both fair and ressenable and bala:.as the interests of SDGE's investors and ratepayers. I believe =y recoccendation gives adequate consideration for financial attrition in that I have considered the esti=ated retirements and issuances of debt and preferred stock through 1981, the period in which rates will be in effect. An equity allevance of 14.50%
will allow the utility to service its fixed charges and provide the cpper-tunity to pay a suitable dividend as well as provide cederate additions to retained earnings while maintaining adequace service to its customers.
Q.18 Does this conclude your testinony?
A.18 Yes, it does.
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EXPIANATION OF TA3LES This study contains 23 tables developed in the course of arriving at the reco:=aended ik.50% return on ec= mon equity and the ccrrespondins ; ate of return of 11.22% for San Diego Gas & Electric Co=pany (SDGE). Sc6 of the tables present trends and five-year averages for the yeare 1975 through 1979 in a form which
.. compares SDME's operating results with averages for ten electric utilities and ten combination gas and electric utilities. Other tables set fcrth trends in interest rates, su:mnaries of capitalization, cor:: mon stock book value, dividends and earnings, and sources of finaneir4 Table ?io.1 shows the fluctuations which have occurred in the bank prime interest rates and the Federal Reserve (1scount rad es for the period January 1977 through July 1980. The prime rate, the rate charged by the nation's largest comercial banks to their most preferred borrowers, began a steady upward c11=b in 1977, reaching double digit levels towards the end of 1978. In Cetober 1979, the Federal Reserve Board announced a major cha::ge in =enetary policy which caused the prime rate to move from the 13% level to a record high of 20% in April 1980.
Currently,theprimerateisatthe11}% level. The discount rate, the charge en loata to member banks by the Federal Reserve Bank, folicwed a similar trend as the prime indre c rate and currently is at 10%.
Table No. 2 compares yields on newly issued public utility bonds with yields on seasoned issues, grouped in categories by Moody's Rating Service Aaa to Esa. This table shows that the yields in all categories generally followed the sa=e trends as shcrt-term rates, gradually increasing through September 1979, with sharply hi# ,r rates recorded for the remainder of 1979 through the first quarter of 1980.
Table No. 3 shows interest rate trends in bond and preferred stock yields md interest rate variations fx prime ecmmercial paper, government bills, and the federal funds rate on an average annual basis for the years 1975 through 1979 Monthly fluctuations for all categeries are shown beginning in Januarf 1978 through June 1980. T.:e trends shewn are generally consistent with the patterns exhibited
- in Tables Nos. 1 and 2. .
Table No. k presents a ten-year summary of nominal interest rates developed for SDME and seven other large California utilities. Increases registered over the years reflect (a) periodic sales of new bonds at rates exceeding the average i cost of debt cutstanding; (b) refunding of low-coupon bonds at =aturity; and (c) bond l 1
retirements in acecrdance with sinking fund requirements. SDGE experienced an 1 l
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4 increase over the ten-year period slightly greater than the average increases of the other seven utilities. Over the last five years, SDGE's increase is belev the average increases of the other utilities; however, its nominal interest rate over the last five years was the highest a=ong the other utilities.
Table No. 5 shows the develop =ent of SDGE's effective interest rate on long-term debt as of Dece=ber 31, 1979, 1980, 1981 and rer the average ye_-
1981. Series "S" ami "T", issued in 1980, are included at actual costs of 16.265 and 13 77%, respectively. The series "U" issue scheduled fer 1981, is included at the estimated cost of 12%. The average effective interest rate for test year 1981 is 9 43%.
Table No. 6 presents SDGE's after-tax interest coverage for the period 1975 to 1979 compared with the other groups of selected companies. SDG&E's 1979 interest coverage of 2.11 times is below the ecverages for the selected groups.
Also, SDGE's 2.lo times coverage over the five-year period is icver than the coverages for the selected groups. SDG&E's 1981 interest covercge veuld be about 2 3 times after inecme taxes based upon the staff's reco= mended rate of return.
Table No. 7 shows the development of SDG&E's effective dividend rate on preferred and preference stock for Dece=ber 31, 1979, 1980, 1981 and for the average i
year 1981. There are no issues planned for 1980; however, for 1981, a $25 million issue is scheduled and is included at an estimated cost of 12 50%. The average uffective dividend rate on preferred and preference stock for test year 1981 is 8.hh%.
Table No. 8 su==arines data related to SDG&E's cc==on stock book value, dividends, and earnings for the years 1970 through 1979 During the period, boek value increased approxi=ately $387 3 =1111on. Earnings available for ce= mon totaled apprcxi=ately $308.8 million of which $211.4 million was paid out in dividends.
Earnings per share showed no definitive trend over the peried; however, the annual dividend rate has shown A moderate increase frem $1.08 in 1970 to $1.48 in 1979 Table No. 9 presents SDGE's average com=en equity ratio ecmpared with the other selected companies. Starting in 1976, SDG&E's average common equity ratio has increased yearly and approx 1=ates 35% in 1979 Over the five-year period, SDG&E's average ec= mon e~uity ratio has been belev the averages of the electric utility group and the combination utility group.
Table No. lo shcws SDG&E's earnings rate en average ccc=on equity for the five-year period. SDG&E's earnings rate for the five-year period was below the averages of the other groups of selected co=panies.
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Table No. 11 presents the earnings rate on average total capital from 1975 thrcugt 1979 sin u's aversse return during this period compares with the average cf the combination utility group and is slightly lower than the average of the electric utility group.
Table No.12 compares SDGE's dividend pryout ra:;io with that of the groups of selected companies. Since 1977, SDGE's paycut ratio has increased steadily to over 80% in 1979 over the five-year period, SDGE's average payout ratio compares with those of the other groups of selected companies.
l l Table No. 13 presents a Statement of Changes in Financial Position for SDGE for the years 1975 through 1979 The primary sources of funds generated during the period were net income, 21.15%; depreciation and a=ortization, 13.815; sale of common stock,16 96%; sale of preference stock, 6.38%; and sale of first zertgage bonds and other long-term debt, 2h.30%.
SDGE expended 69 95% for plant construction and returned 16.82% to investors in the form of dividends. Approx 1=ately 5% of the funds were used to retire long-term debt.
Table No.14 presents a su:m ary or SDGE's capital structure for the years 1970 through 1979 SDGE's common equity ratio averaged 33.6h% over the ten-year period; however, during the past few years the equity ratio nas steadily increased reaching approximately 37 00% in 1979 Table No.15 shows the average net plant invest =ent of SIGG and the selected utility groups for the years 1975 through 1979 Net plant invest =ent
consists of gross utility plant, less depreciation and amortization reserves, j
advances for construction and deferred income taxes. SDGE's average net plant l
invest =ent increased by 61% during the period compared to increments ranging frem 57% to 62% for the other groups.
Table No.16 shows that SDGE's operating revenues have increased at a rate ecmparable with those of the selected utility groups. This growth rate, as with the other companies, has surpassed the growth trend experienced in its average net plant investment.
Table No.17 shows SDGE's operating expenses increasing at a rate over the five-year period comparable with its increases in operating revenues. The other selected utility groups have experienced operating expense increases co= parable with operating revenue trends over the five-year pericd.
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Table No.18 shows that 3DGE's trend of net cperating income over the
five-year pericd was peater than these experienced by the other selected utility
, youps.
1 Table No. 19 brings together the results illustrated in Tables Nes. 16 and 17 This table shows that SDG E's operatir4 ratio and those of other selected utility groups re=ained fairly constant ever the five-year pericd.
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Table No. 20 cc= pares ratios of cperating revenues to average net plant
investment for SDGE and the other groups of selected ec=panies. SDGE's grcwth rate over the five-year.. period cc= pares with that experienced by the electrie utility group and exceeds that experienced by the ec=bination utility group.
Table No. 21 presents the ratio of net operating inccme to average tet plant invest =ent and is basically the equivalent cf rate of return on average recorded net plant investment. Fcr the five-year pericd, SDGE's rate is ec= parable i
to those of the selected utility groups. These rates are less than the earnings rates on total capital shown in Table No.11 which includes earnings derived frc=
cther inceme, pri=arily allowances for funds used during ecnstruction.
- able No. 22 shows various earnings rates en co:m:en equity ranging from 13 00% to 15 00% ami combines them with the embedded cost of SDGE's debt and preferred and preference stcck to produce various rates of return based upon the projected l
i average capital structure fer test year 1981. The resulting rates of return range frc= 10.67% to 11.40%.
l Table No. 23 contains =y rate of return recc::r:endation for 3DGE in these
- proceedings of 1h.50% en ecemon equity which equates to a rate of return en rate base
! of 11.225 for test year 1981.
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l TA 3 50. 1 SAN DIIDO GAS & TTTC T C CCMPANY Y =e ?. ate - Discount ?. ate
- : : : 0:.scoun: : ;
Tear : Menth -
N e Rate : Rate : 1 (a) , (b) (c) 1977 Jar:uary ' 6-1/4 % 5-1/1%
. Febr ary F.ar2-April.
May 6-1/2-6-3/A -
June 6-3/A July August 6-3/A - 7 September 7-1/A 5-3/4 Cctcher 7-1/2-7-3/A 6 November -
December 1978 Janua:-r 7-3/A-8 ' 1/2 Fac'ruary yg.3 April Mar 3-1/C.-3-1/2 7 June 3-3/4. - 9 July 7-1/A August 7 1/A 3/L September 9-1/A -1/2 3/A 7-3/A 8 Oct cer 9-3/L 10-1/A 8-1/2 Novaraber 10-1/2 3/A 11-1/2 91/2 December 11-1/2 3/A 1979 Jar:uary 11-3/A Tebr:.ary Mar-A April yg June 11-3/L-11-1/2 July n-1/2-11-3/L 9-1/2-10 August 11-3/A 12-1/L 10 1/2 September 12-1/L 3/L -:3 14- G-Lt IC-1/2 - 11 Octcher 13-1/2 1/2 - 15 11 - 12 November 15-1/4-15-1/2-15-3/L 12 .
December 15-1/2-15-1/L 1980 January 15-1/A February 15-1/4 3/4 12 - 13 March 17-3/4 131/2-191/2 13 Acril 20 3/4 - 19 1/2 May 1a 1/2 171/2 161/2 -
11-1/2 1!. 12 June 13 12 12 11 .
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. TAB 1E NO, 3 . ,
SAN DIh00 G & FlEC'IRIC COMPANY Trends in Inter = t R:tes .
- : Ik>nd Yi elds : : U.S. : U.S, a :
- : U.S. : Stato a ;Prererred: Prime Government:Goverssnents :
- Governments and : : : Public : Stock : Commercial : 3 Honths 3-5 Years : Federals
- I.ong-Tena : Local Industrials : Rails : Utilities: Yield : Paper t hills : Issues : Funds :
(a) (b) (c) (d) (a) (f) (g) (h) (1) (j) 1975 Average 6.98% 7.0$$ 9.25$ 9.39 % 9.88% 0.38% 6.33% 5.80% 7 55% 5.82%
1976 Ayerage 6.78 6.64 8.84 8.85 9.17 7 97 5.35 4.98
. 6.94 5.05 1977' Average 7 06 5.68 8.28 8.13 8 58 7.60 5.60 5.27 6.85 -5.54 1978 Average 7 89 6.03 8.90 8.64 9.22 8.'!5 7.99
' 7 19 8.30 7.94 1979 Average 8.74 6.52 9.84 9.55 10.39 9.07 10.91 10.07 9.58 11.20 .
1978 January 7 50 5 71 8.60 8.20 8.87 7 93 6 79 6.44 7 71 6.70 February 7.60 5.62 8.65 8.32 8.90 7.99 6.80 6.45 7.76 6.78 March 7.63 5.61 8.66 8.4t 8.93 8.07 6.00 6.29 7 76 6.79 April 7 74 5.00 8.72 8.L9 9.05 8.06 6.86 6.29 7.90 6.09 May 7 87 6.03 8.84 8.60 9.19 8.11 7 11 6.41 8.10 7.36 June 7.94 6.22 8.92 8.68 9.33 8 31 7.63 6.73 8.31 7.60 July 8.09 6.28 9.05 8.70 9.38 8.42 7 91 7.01 8.54 7.81 August 7 87 6.12 8.95 8 72 9.21 8.26 7 90 % 08 8 31 8.04 September 7.82 6.09 8.90 8.68 9.17 8.24 8.44 7.85 8 38 8 45 October 8.07 6.13 9.03 8.74 9.37 8.29 9.03 7 99 8.61 8.96 November 8.16 6.19 9.21 9.01 9.58 8.43 10.23 8.64 8.97 9.76 December 8.36 6.51 9.31 9.15 9.67 8.84 10.43 9.08 9.23 10.03 1979 January 8.43 6.47 9.44 9.21 9.85 8.79 10.32 9.35 9.36 10.07
! February 8.43 6.31 9.42 9.22 9.84 8.77 10.01 9.32 9.16 10.06 March 8.45 6.33 9.50 9.30 10.02 8 77 9.96 9.48 9.25 10.09 April 8.44 6,29 9.57 9.38 10.05 8.29 10.39 9.46 9.32 10.01 May 8.55 6.25 9.69 9.48 10.23 8.82 9.98 9.61 9.30 10.24 June 8.32 6.13 9.57 9.44 10.04 .8.87 9.71 9.06 8.89 10.29 July 8.35 6.13 9.47 9.45 9.90 8.93 3.82 9.24 8.88 10 47 August 8.42 6.20 9.52 9.48 9.97 9.02 10.39 9.52 9.08 10.94 September 8.68 6.52 9.66 9.50 10.19 9.16 11.60 10.26 NNr h*N N kN 13;$ kk!h 9 46 gg {gg g .h6 gf 11 December 9.59 7.22 11.02 10 44 11.68 lb.*M 12.80 12.04 10 45 13 78 1980 January 10.03 7.35 11.35 10.68 12.12 10.14 12.66 12.00 10 76 13.82 February 11.55 8.16 12.35 11.06 13 48 10.55 13.60 12.86 12.52 14.13 March 11.87 9.17 13 11 11 43 14 33 11.26 16.50 15.20 13 41 17.19 April 10.83 8.63 12.93 11.63 13.50 11.06 14 93 13 20 11 50 17.61 May 9.82 7.59 12.04 11.54 12.17 10.20 9.29 8.58 9 44 10.98 June 9 40 7.63 11 41 11.26 11.87 9 78 8.03 7.07 8.97 9 47 SOURCES: .F.ederal .. . . . n , Reserve Bulletina.
..a o . . ..m.,
C TAB M No. 4 SAN DIEGo GAS & ELEC1RIC COMPANY Nominal Interest Rates Major California Utilities 1970 1979
- : : : : : : : : : : : Increase : Increase 2
- Company : 1970 : 1971 : 1972 : 1973 : 1974 : 1975 : 1976 : 1977 : 1978 : 1979 : 70 - 79 : 7A _ 79 :
(i) (j)
(a) (b) (c) (d) (e) (f) (g) (h) (k) (1) 7 Pacific Gas and Electric 4 8$ 5.15 5 37% 5 43% 5.94 6 4% 6.55 6.91% 7 23% 7.5% 57% 2$
Southern California Edison 5.00 5.07 5 26 5.36 5.95 6.07 6.27 6.38 6.72 6.85 37 15 ,
Genero1 Telephone 5.73 5.81 5.97 6.09 6.24 6.16 6.18 6.30 6.67 8.04 40 29 Pocific Telephone 5 40 5.93 5.95 6.10 6.59 6.62 6.67 6.77 7.36 8.33 54 26 Pacific Ltg. Utility System 4 64 5 40 , 5.61 5.86 5.96 6.76 7 02 6.92 7.22 7 21 55 21 California Water Service 4.70 4 97 4 97 5.59 5 54 6.99 7.60 7.60 7,71 7.86 67 42 Southern California Water 4 90 4 96 4 97 5.28 5.26 5 35 6.18 6.29 7.09 7.66 56 46 San Diego Gas & Electric 5 28 5.28 5.86 6.60 7.09 7 01 7.04 7.F2 8.27 8.36 58 18 Nominal rate developed by dividing interest charges for the year by the average of beginning and end-of-year long-term debt and short-te:1n debt for capital purposes.
TABLE NO. 5 SAN DIIDO GAS & EIECTRIC COGANY Effective Interest Rate en kng Term Debt Test Year 1981
- : Par : Net : Annual : Effective:
- Item : Value : Proceeds : Charre : Rate :
Balance Outstanding, # "8 ""M December 31,1979 $646,422 $639,245 $50,772 7.94%
Issues for 1980 Due 2010 50,000 49,331 8,022 16.26 SeriesS,1o%,/8%,Due2010 Series T, 13-5 75,000 74,344 10,241 13. 77 Retim ments
~
Sinking Fund Debentures (775) (762) (36)
Other kneTem Debt (21,283) (21,231) (2,493 )
Adjustment of Foreign Tem kans to 12% - - 2 .3 73 h u nte Outstanding, December 31. 1980 $7L9,364 $740,927 $68,879 9 30%
Estimated Issue for 1981 Series U, 12%, Due 2011 75,000 75,000 9,000 12.00 Retirements '
NHng Fund Debentums (775 (762) (36)
Other kng-Tem Debt (2.106)) (2.071) (194)
Balance Outs +2nMngy December 31, 1981 $a21.LS3 $813.094 $77.6L9 9.55 %
Average Year 1981 $783.983 $775. 595 $73.149 ,
9.43%
k Mc/
1
. ~ - . . , . ,
TABLE 6 SAN DIEGO GAS & ELECTRIC COMPANY TIMES LONG-TERN OEBT INTEREST EARNE0*
TRENO AND 5-YEAR AVERAGES 1975 - 1979 I I SAN O! EGO I TEN I TEN 1 I YEAR I GAS & 3 ELECTRIC I COMBINATION I I I ELECTRIC i UTILITIES I UTILITIES I 1J15 1 76 2.26 2.34 1976 2.25 2.35 2.33 1977 2.22 2.33 2.34 1978 2.17 2.27 '
2.34 1979 2.11 2.16 2.27 5-YR AVERAGE 2.10 2.27 , 2.32 INDEX-1975 100 100 100 1976 128 104 100 1977 126 103 100 i
1978 123 100 100 1979 120 96 97 5-YR AVERAGE 119 101 99 i
- AFTER INCOME TAXE3 SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNIT.
i N000Y'S PUBLIC UTILITY MANUAL.
ANNUAL REPORTS TO STOCKHOLDERS.
ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMISSION.
l l
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I TABIZ NO. 7 SAN DIILO GAS & E1ECMIC CCMPA?Tf Effective Dividend Rate en Preferred and Preference Stock Test Year 19E
- : Far : Net : Annual : Effective :
- Item : Value : P:-oceeds : Charge : Rate :
(Dollars in Thousands)
Cumulative Pmferred Stock s 27,500 s 27,747 s 1,276 4.60%
Cumulative Prefennce Stock 186,000 167,307 16,367 g,74 Balance Outstand 4ng, December 31, 1979 3213,500 $215,054 $17,643 8.20%
Issue for 1980 - - -
Balance Outstanding, December 31,19% $213,500 $215,054 317,643 8.20%
Estimated Issue for 1981 12.5% Series 25.000 25,000 3,125 12 50 hhnee Outst2nding, December 31,19g $238.VJO $2LO.05L $20.768 8.65%
Average Year 1981 $226,000 $227,554 $19,206 8.44%
l J
TABLE No. 8 SAN DIl00 GAS & EIEC'IRIC COMPANY Common Stock Book Value, DLvidenda, Earnings 1970 - 1979
- : Net Earnings:Dividerxis: : Dividends: : : : : :
- : : After : on : Earnings To: to Book : Dividend: Shares Book Value Earnings: Dividend :
- Book Value : Preferred : Common :Dook Value : Value : Payout soutstarxiing:Per Share : Per : Rate :
- Year : December 31: Dividervis : Stock : Percent : Percent : Ratio : December 31 December 31: Share :Per Shares (a) (b) (c) (d) (e) (f) (g) ('h) (1) (j) 1970 $153,959 $18,206 $10,800 11.83% 701% 59 3 4 10,000 $15 40 $1.82 $1.08 1971 161,774 18,938 10,800 11 71 6.68 57 03 10,000 16.18 1.89 1.08 1972 198,519 19.133 11,850 9.64 5.97 61.93 11,500 17 26 1.66 1.11 1973 230,236 20,700 14,400 8.99 6.25 69.57 13,500 17 05 1 53 1.20 1974 263,414 28,644 16,800 10.87 6.38 58.65 15,500 16.99 1.85 1.20 1975 274,821 15,969 19,95n 5.81 7.26 124 93 17,000 16.17 .94 1.20 1976 322,466 38,594 21,799 11.97 6.76 56.48 19,281 16.72 2.00 1.20 1977 393,151 46,487 25,944 11.32 6.60 55.81 22,649 17.36 2.05 1.28 1978 480,454 49,572 35,457 10 32 7.38 71 53 27,593 17 41 1.80 1 40
'1979 541,225 52,523 43,643 9.70 8.06 83 09 31,188 17 35 1.68 1 48 Columns a, b, c, and g are in tlx)usands.
S0tAICE: Annual Reports to Stocidx)1ders.
TABLE 9 SAN DIEGO GAS i ELECTRIC COMPANY AVERAGE CONMON EQUITY RATIO TRENO AND 5-YEAR AVERAGES 1975 - 1979 I I SAN O! EGO I TEN I TEN I I YEAR I GAS & I ELECTRIC i COMBINATION I I i ELECTRIC i UTILITIES I UTILITIES I 1975 30.591 31.77% 32.982 1976 29.73 32.75 34.01 1977 30.33 34.05 34.51 1978 32.96 34.99 35.75 1979 34.93 35.39 - 35.94 5-YR AVERAGE 31.71 33.79 34.64 INDEX-1975 100 100 103 1976 97 103 103 1977 99 107 105 1978 108 110 108 1979 114 111 109 5-YR AVERAGE 104 106 105 SOURCES: 5-YEAR STUO!ES, RATE OF RETURN UNIT.
MOODY'S PUBLIC UTILITY MANUAL.
ANNUAL REPORTS TO STOCKMOLDERS.
ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES CONNISSION.
TABLE 10 SAN DIEGO GAS & ELECTRIC COMPANY EARNINGS RATE ON AVERAGE COMMON EQUITY i TREND AND 5-YEAR AVERAGES 1975 - 1979 I i SAN OIEGO I TEN I TEN I i YEAR I GAS & 4 ELECTRIC I COMBINATION I I I ELECTRIC i UTILITIES I UTILITIES I 19T5 5.93% 12.73% 11.911 1976 12.92 13.36 11.11 1977 12.96 12.41 11.47 i
l 1978 11.35 11.95 11.62 1979 10.28 11.02 11.45 I
, 5-YR AVERAGE 10.69 12.29 11.51
(
INDEX-1975 100 100 100 1976 218 105 93 1977 219 97 96 1978 191 94 98 1979 173 ST 96 5-YR AVERAGE 180 97 97 SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNIT.
MOODY'S PUBLIC UTILITY MANUAL.
AhMUAL REPORTS TO STOCKHOLDERS.
j ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMISSION.
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. r TABLE 11 I SAN OIEGO GAS i ELECTRIC COMPANT
[
EARNIhES RATE ON AVERAGE TOTAL CAPITAL TRENO AND 5-YEAR AvCRAGES 1975 - 1979 I I SAM OIEGO I TEM i TE4 i I YEAR I GAS & I ELECTRIC 1 COM91 MAT!0N I 1 I ELECTRIC i UTILITIES I UTILITIES I !
1975 6.80% 5.73I S.42% i 1976 9.03 9.18 8.40 '
1977 9.30 9.04 8.65 1978 9.34 9.13 5.91 1979 9.13 9.09 9.08 i
5-YR AVERAGE 8.72 9.03 8.69 IMOEI-1975 100 100 100 1976 133 105 100 1977 137 104 103 l
1978 137 105 106 1979 134 104 108 5-YR AVERAGE 123 103 103
- SOURCES
- 5-YEAR STUDIES, RATE OF RETURN UNIT.
MOODY'S PUBLIC UTILITY MAhuAL.
AMMUAL REPORTS 10 STOCKNOLDERS.
Ah4UAL REPORT 5 TO CALIFORh!A PUBLIC UTILITIES COMMISSION.
i
. ' TABLE 12
- SAN DIEGO GAS & ELECTRIC COMP ANY l
l OIVIDEND PAYOUT RATIO TREND AND 5-YEAR AVERAGES i
1975 - 1979 I i SAN DIEGO I TEN I TEN I i YEAR I GAS & I ELECTRIC 1 COMBINATION I 8 I ELECTRIC 1 UTILITIES I UTILITIES I l
1975 124.93Z 69.671 69.95Z 1976 56.48 68.74 75.54 1977 56.05 78.84 74.61 1978 71.53 81.62 74.73 1979 83.09 92 50 79.81
, 5-YR AVERAGE 78.42 78.29 74.93 INDEX-1975 100 100 100 1976 45 99 108 1977 45 113 107 i 1978 57 117 107 19T9 67 133 114 5-YR AVERAGE 63 112 107 SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNii.
MOODY'S PUBLIC UTILITY MANUAL.
ANNUAL REPORTS TO STOCKHOLDERS.
AhMUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMISSICN.
i
TABLE NO, 13 .
SAN D110.0 f A3 & EIECutIC OnMPANY Statement of Changes in Financial Ibsition 1975 - 1979 O
- : : : : : 5 Year : 1%rcent
- Ites : 1975 1976 1977 a 1978 1978 : Total a or total Sauges of Fusmis (Dollars in Thousands)
From oneret Inns Net Income 3 25,WG s 50,500 3 60,200 s 66,800 $ 70,200 s 273,400 21.15%
Deprweintion armi Amortisation 28,900 30,300 33,'l00 38,000 47,600 178,500 13.81 Alloisance for 1%nds Used During Construction (8,200) (13,100) I ;20,600 (21,a)0) <;25,300ll 6.93 L gulatory Revenue Adjustments - 7,900 1,32,400 (200) I,16,300) I;3.17;l (41,000;J(89.600 l J l
Oths: 4 L 2,0n0 8,200 (2,400 2,200 (2,(in > 7,400 .57 Total Fross Operations L8. LOG O.200 3d.500 85.000 73.ui0 328.100 2s.rJ Fn a Financ*na Sale of Common Stock 15,400 29,(4X) M 500 71,800 51,900 219,200 16.96 Sale of Pmference Stock - 26,200 29,d10 26,400 - 82,400 6.38 Sale of First, h rtgage Ihwuls 44,400 48,tRJO 49,400 - 181,900 14.08 '
Sale of Corporete Office Building 39,(300 19, 40 19,l00 1.52 Sale of beina 5 - - - 131,(o0 - 131,(o0 10.18 ,
Other Inne-Tern !bbt 2,900 9,70 45,200 4,70 69,(in 132,100 10.22 7btal Frum Financing 77,2(o 109,900 174.3m 2#0,900 121.5.10 7f/>, th) 59.34 , -
Ot.har S>urces l Customer Advances For Construction (100) 2,100 4 tin 2,a00 3,300 12,800 .99 3 Ilocrease in Orking Capital 37,800 7,300 26,,300 - 116,l00 188,000 14.55 8 Advances to Sesidiaries (10,100) 1,900 (3,300) (3,100) 1,100 (13,500) (1.04) i Other Sources (Uses) (3,400) 9,n o 1,200 400 2,300 9,'40 , 73 Total Other Sources 24,200 20,
$ - - '/> $ 43,500 10.16f, $153,959 35.96f,
- 428,143 200.00f, 1971 276,798 55.20 - - 63,500 12.66 161,134 32.14 501,432 100.00 1972 331,023 54 44 - - 78,500 12.91 198,519 32.65 608,042 100.00 1973 330,065 49 35 - - 108,500 16.22 230,236 34 43 668,801 100.00 1974 401,161 50.27 - - 133,500 16. 73 263,414 33 00 798,075 100.00 1975 443,284 50.11 33,110 3.74 133,500 15.09 274,821 31.06 884,715 100.00 1976 494,148 49.14 30,550 3.04 158,500 15 76 322,466 32.06 1,005,664 100.00 1977 587,850 48 35 46,200 3 80 188,500 15.51 393,151 32 34 1,215,701 100.00 1978 629,510 46.73 23,600 1 75 213,500 15.85 480,454 35.67 1,347,064 100.00 1979 646,422 44 24 60,000 4 11 213,500 14 61 541,225 37.04 1,461,147 100.00 10 Year Average 50.17 1.64 14 55 33.64 100.00 SotAlCE: Annual Reports to Stockholders.
l l l l i ~ TABLE 15 l SAN DIEGO GAS & ELECTRIC COMPANY i AVER AGE NE T PLA NI I NVESTMEN T TRENO AND 5-YEAR AVERAGES 1975 - 1979 l I I SAN DIEGO I TEN I TEN I I YEAR I GAS 1 I ELECTRIC 1 COM81 NATION I I I ELECTRIC i UTILITIES I UTILITIES I l 1979 810,601 696,055 649,777 1976 924,573 799,990 942,168 1977 1,081,594 907,106 1,058,582 l 1978 1,191,697 1,017,325 1,188,811 l l 1979 1,304,316 1,128,421 1,333,968 l 5-YR AVERAGE 1,062,556 909,779 1,074,661 INDEX-1975 10 100 100 1976 114 11S 111 1977 133 130 125 1978 147 \6 140 1977 161 16i 157 5-YR AVERAGE 131 131 126 00LLARS IN THOUSANDS SOURCES: 5-TEAR STUDIES, RATE OF RETURN UNIT. l MOODY'S PUBLIC UTILITY NANUAL. ! ANNUAL REPORTS TO STOCKNOLDERS. l ANNUAL REPORTS TO CALIFORNI A PUBLIC UTILITIES COMMISSION. l I l _ , __, _ ., T ABLE 16 SAN DIEGO GAS & ELECTRIC COMPANY 1 GPERAIING REVENUES TRENO AND 5-YEAR AVERAGES
- 1975 - 1979 I 4 $AN DIEGO I TEN I TEN I I YEAR I GAS & I ELECTRIC I COMBINATION I I i ELECTNIC 1 Uf!LITIES I UTILITIE5 i 1975 374,252 220,919 352,272 l 1976 447,653 269,412 396,969 i
l 1977 508,039 323,845 470,724 1978 614,431 381,658 546,192 1979 745,232 427,761 616,569 5-YR AVERAGE 537,921 324,719 476,545 ' INDEX-1975 100 100 100 l 1976 120 122 113 1977 136 147 134 1978 164 17? 155 1979 199 1'/ 4 175 5-YR AVERAGE 144 147 135 4 DOLLAR $ IN THOUSANOS l SOURCES: 5-YEAR Siuo!ES, RATE OF RETURN UNIT. MOODY'S PUBLIC UTILITY HANUAL. AhNUAL REPORTS TO S TOCKHOLDERS. j ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMIS5!0N. l T A BLE 17 SAN DIEGO GAS & ELECTRIC COMPANY OPERATING EXPENSES TREND ANO 5-YEAR AVERAGES 1975 - 1979 .................................................... I I I SAN O! EGO I TEN I TEN i I i YEAR f GAS & I ELECTRIC 4 COM8INATION I I I ELECTRIC 1 UTILITIES I UTILITIES I 1975 326,990 171,146 2 88,6 il5 1976 376,437 211,252 329,",07 1977 424,966 259,633 394,623 1978 523,022 308,549 460,606 l 1979 647,999 355,551 525,484 5-YR AVERAGE 459,882 261,226 399,781 INDEX-1975 100 100 100 1976 115 123 114 1977 130 152 137 1578 160 180 160 1979 198 208 162 5-YR AVERAGE 141 153 138 DOLLARS IN THOUSAM,5 SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNIT. MOODY'S PUBLIC UTILITY HANUAL. ANNUAL REPORTS TO STOCKHOLDERS. ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMISSION. J . TABLE IS SAN DIEGO GAS & ELECTRIC COMPANY NET OPERATING INCOME TRENO AND 5-YEAR AVERAGES 1975 - 1979 I I SAN DIEGO I TEM i . TEN I i YEAR I GAS & I ELECTRIC 1 COMBINATION l ! I I ELECTRIC I UTILITIES I UTILITIES I l 1975 47,262 49,773 63,587 1976 71,216 58,160 67,461 I l l t 1977 83,073 64,211 76,101 1978 91,409 73,109 85,585 l 1979 97,233 72,209 91,085 5-YR AVERAGE 78,038 63,492 76,764 : INOEX-19T5 100 100 100 i 1976 151 117 106 ! 1977 176 129 120 1978 193 147 135 1979 206 145 143 l 5-YP AVERAGE 165 128 121 P I l l 00LLARS IN THOUSAN05 ' SOURCES: 5-YE AR 51 L'0!ES, RA TE OF RETURN UNI T. MOODY'S PUBLIC UTILITY MANUAL. ANNUAL REPORTS TO STOCKHOLDERS. AhNUAL REPORTS TO CALIFORNI A PUBLIC UTILITIES COMMISSION. i T A BLE 19 SAN DIEGO GAS & ELECTRIC COMPANY 4 OPERATING RATIOS TRENO AND 5-YEAR AVERAGES
- 1975 - 1979 i O 4 I SAN DIEGO I TEN 4 TEN I
~ 8 YEAR 8 GAS 1 1 ELECTRIC l COMBINATION I I I ELECTRIC I UTILITIES t UTILITIES 4 1975 87.371 76.871 81.98% 1976 84.09 77.39 83.03 1977 83.65 79 10 83.85 1978 , 85.12 80 10 84.15 1979 86.95 S2.67 84.96 5-YR AVERAGE 85.44 79.23 83.60 INDEX-1975 100 100 100 1976 96 101 101 1977 96 103 102 1978 97 104 103 1979 100 108 104 5-YR AVERAGE 98 103 102 SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNIT. MOODY'S PUBLIC UTILITY NANUAL. ANNUAL REPORTS TO STOCKHOLDERS. ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMISSION. l r l l l l .s. TABLE 20 l . 1 SAN DIEGO GAS & ELECTRIC COMPANY RATIO: OPERAT!hG REVENUES TO AVERAGE NPI TREND AND 5-YEAR AVERAGES 1975 - 1979 4 i SAN DIEGO I TEN I TEN I I YEAR I GAS & 8 ELECTRIC i COMBINATION i 4 I ELECTRIC i UTILITIES I UTILITIES I 1975 46.17% 32.56% 41.881 1976 48.42 34.82 42.64 19FT 46.9T 37.26 44.92 1978 51.56 39.83 46.65 1979 57.14 40.89 46.92 i 5-YR AVERAGE 50.05 37.07 44.60 INDEX-1975 100 100 100 1976 105 107 102 1977 102 114 107 1978 112 122 111 1979 124 126 112 5-YR AVERAGE 108 114 106 e i SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNIT. MOODY'S PUBLIC UTILITY MANUAL. ANNUAL REPORTS TO STOCXHOLDERS. ANNUAL REPORT 3 TO CALIFORNIA PUBLIC UTILITIES COMMIS$10N. l 12 T A8LE 21 SAN DIEGO GAS & ELECTRIC COMPANY I RATIO: OF NET OPR. INCOME TO AVERAGE NPI TRENO AND 5-YEAR AVERAGES 4 19 T 5 - 1979 i
4 i SAN O! EGO 8 TEN 4 TEN 4 I YEAR I GAS & I ELECTRIC 8 COMBINATION I I I ELECTRIC 1 UTILITIES a UTILITIES 1 1975 5.831 7.292 7.48% J i 1976 7.70 7.48 7.13 1977 7.68 7.33 7.12 { 1978 7.6T 7.49 7.14 1979 7.45 6.73 6.80 5-YR AVERAGE T. 27 T. 27 7.13 INDEX-1975 100 100 100 1976 132 103 95 I i 1977 132 101 95 1978 132 103 95 ! 1979 128 92 91 5-YR AVERAGE 125 100 95 SOURCES: 5-YEAR STUDIES, RATE OF RETURN UNIT. MOODY'S PUBLIC UTILITY MANUAL. ANNUAL REPORTS TO STOCKHOLDERS. ANNUAL REPORTS TO CALIFORNIA PUBLIC UTILITIES COMMISSION. ~ TABLE NO. 22 SAN DIE 0 CAS & ELECTRIC COMPANY Determination of Rates of Return Required to Recover Imbedded Costs of Debt and Preferred Steck at Various Assumed Rates of Return on Common Equ4t,y Average Year 1981
- : Assumed Eamings Rate on Cmsnon Stock hiuity Capital : Cost Component 2: 13.00% : 13.25% : 13.50% : Weighted 13 .75% Cost
- 14.ml : 14.25% : 14.50% : 14.75% : 15.00 Totals
- : Ratio :Factora :
(a) (b) (c) (d) (e) (f) (g) (h) (1) (j) (k) long-Tern Debt 44.40% 9.43)s 4,19 4 19 4.19 4.19 4 19 4.19 4.19 4 19 4.19 Bankers: Acceptances 6.60 10.50 .69 69 69 69 69 69 69 69 69 Preferred Stock 12. 75 8.44 1.08 1.08 1.08 1.08 1.08 1.08 1.08 1.08 1.08 Common Equity 36.25 4.71 4.80 4.89 4.98 5.08 5.17 5.26 5.35 5.44 Total 100.00% 10.67% 10.76% 10.85% 10.94% 11.04% 11.13 % 11.22% 11.31% 11.40% 1] Capital Ratios estimated on an average year basis. 2j As shown in Tables Nos. 5 and 7. TABLE NO. 23 _ SAN DIEDO GAS & EIIITRIC CCMPANY Recomended Rate of Return l
- - : Capital : Cost : Weighted : '
- Component : Ratios : Factors : Cost :
Iong-Tem Debt 1.4.40% 9.43% 4.19% Bankers' Acceptances 6.60 10.50 .69 Preferred Stock 12. 75 8.4A 1.08 Comon Fquity 36.25 14.50 5.26 Total g Q l I e 9 4 r o Y l 9 APPEIDII SAN DIILO GAS & ELECT.IC CCMPAPI List of Companies Used in Study , Combination Utilities Gas and Electric (10) . Arizona Public Service Co=pany i Central Illi::ois Public Service Cocpany Cincinnati Gas and Electric Cec:pe.;rf Dayton Powr and Light Con:pany Delmarva Power and Light Co:::pany T114nnis Power Coc:paq New York State Electric and Gas Company Public Seririce Company of Colorado Rochester Gas and nectric Coc:pany South Carolina Electric and Gas Cocpa q Electrie Utilities (10) Arkansas Power and Light Comparry Columbus and Southem Chio nectric Co=pany IM4=nnylis Power and Light Coc:pany Kansas City Power and Light Co=pany Cklahoma Gas and nectric Company Portland General nectric Compa:rf Puget Sound Power and Light Company Southwestern Public Service Cc:::pany Tampa Eectric Company Utah Power and Light Cocipany i