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SOUTHERN CALIFORNIA EDISON CO. 'AA' SENIOR DEBT, PREFERRED ON FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --

SOUTHERN CALIFORNIA EDISON CO. 'AA' SENIOR DEBT, PREFERRED ON FITCHALERT
 NEGATIVE -- FITCH FINANCIAL WIRE --
 NEW YORK, Nov. 13 /PRNewswire/ -- Southern California Edison Co.'s $4 billion 'AA' first and refunding mortgage bonds and $558 million 'AA' cumulative preferred stock are placed on FitchAlert with negative implications.
 The action reflects a combination of a steady erosion of financial protection measures that are lower than those normally associated with the current ratings, a significantly weakened economic environment in the state and in the company's service territory, and a recent unfavorable administrative law judge (ALJ) recommendation. If adopted by the California Public Utilities Commission (CPUC), this recommendation will mitigate or offset the positive qualitative factors of a complex but generally constructive regulatory environment and inhibit or prevent the realization of stronger quantitative measures that are commensurate with the 'AA' category. A final decision by the CPUC is expected on Nov. 23.
 On May 8, in its annual cost of capital filing, Edison requested a revenue increase of $55 million, subsequently reduced to $41 million, to become effective on Jan. 1, 1993. The increase was based on raising the allowed return on common equity to 13.05 percent from 12.65 percent, the common equity ratio to 48 percent from 46 percent, and the preferred stock ratio to 7 percent from 6 percent.
 In response to this filing, an ALJ recommended on Oct. 23 that the rate of return on common equity be reduced to 11.80 percent from 12.65 percent and that the capital structure for rate making purposes remain at 46 percent equity, 6 percent preferred, and 48 percent debt.
 Edison's request was premised on growing investor concern about the company's total debt burden, including purchase power, and general risk trends in the industry. However, the ALJ argued that no additional equity support is necessary since purchase power contracts have no impact on the company's balance sheet. If the CPUC adopts the ALJ's recommendation, Edison's 1993 earnings would be reduced by about $43 million or 19.5 cents per share. Edison is a subsidiary of SCE Corp.
 -0- 11/13/92
 /CONTACT: Stephen Fedun of Fitch, 212-908-0568/ CO: Southern California Edison Co. ST: California IN: UTI SU: RTG


SH -- NY055 -- 0788 11/13/92 14:51 EST
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Date:Nov 13, 1992
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