State regulators on Thursday cleared Southern California Edison to raise electricity rates by 5 percent to cover the cost of providing "safe and reliable" electricity and integrating renewable energy sources.
"While today's decision results in a rate increase for SCE's ratepayers, this is a necessary investment in our future," said California Public Utilities Commissioner Mike Florio.
Edison estimated residential customers’ monthly bills will increase an average of about $7. The hike is retroactive to January of this year, but won't go into effect until early 2013.
The rate increase was shy of the 16.6 percent requested by the private utility.
The commission ordered Edison to try harder to cut costs, and the commission disallowed some of what it called "non- essential" projects. The ruling will force the utility to cut operations and maintenance expenses by about $258 million and spending on capital projects by $756 million.
CPUC Commissioner Timothy Alan Simon, who led the review, said the decision strikes a balance between the goals of the utility and protecting ratepayers.
"This decision ensures that SCE is able to invest in smart energy systems, renewables and safety and reliability while its ratepayers are protected under the CPUC's prudent review," Simon said.
The decision authorizes Edison to beef up equipment inspections and to use new technology to better track the condition and service record of the utility's assets. Regulators also ordered an independent review of SCE's system utility poles to determine whether current loads meet legal standards and an independent audit of SCE's spending on infrastructure repair and replacement.
The report by the CPUC addressed widespread criticism over Southern California Edison's response to a 2011 windstorm. The commission required SCE to the commission with a progress report next year on the utility's stated commitments to improve communications with customers during emergencies.
— Patch editor Jenna Chandler contributed to this report.