Findings of Fact

1. SCE provides all of the gas, water and electric service in Catalina and has done so since 1962; there are 1,335 commercial and residential gas customers in Avalon.

2. The last general rate case for gas distribution costs occurred in 1987, and SCE has not sought an increase in its authorized distribution costs since that time.

3. Through a Gas Cost Adjustment Clause, SCE is permitted to pass through to customers its wholesale cost of liquefied petroleum gas used in Catalina.

4. In this application, SCE seeks an increase in its gas distribution costs from current base rate revenues in Test Year 2005 of $430,000 to $1,157,482 in Test Year 2005.

5. A major factor driving SCE's proposed increase is a $1.3 million replacement of the 30-year-old gas vaporization system and plant in Avalon.

6. Among SCE's other major capital expenditures affecting gas rates are a basement upgrade in SCE's Avalon building, a new gas distribution line to serve 24 new customers, and replacement of gas pipeline in Pebbly Beach Village.