10. Assignment of Proceedings

Dian M. Grueneich is the assigned Commissioner and Victoria S. Kolakowski is the assigned ALJ in these proceedings.

1. The Commission approved SCE's application in A.04-12-007 for a CPCN for the Antelope-Pardee 500 kV transmission line in D.07-03-012, mailed March 6, 2007. This project is Segment 1 of the ATP.

2. The Commission approved SCE's application in A.04-12-008 for a CPCN for the Antelope-Vincent and Antelope-Tehachapi 500 kV transmission lines in D.07-03-045, mailed March 15, 2007. These lines are Segments 2 and 3, respectively, of the ATP.

3. SCE filed separate Petitions for Modification for the Decisions on July 18, 2008.

4. ALJ Victoria Kolakowski issued a ruling on October 6, 2008, consolidating A.04-12-007 and A.04-12-008, because the requested relief in the Petitions included a consolidation of the project costs for purposes of establishing the maximum total reasonable and prudent costs of construction. ALJ Kolakowski's ruling also directed SCE to provide supplemental language sufficient to meet Rule 16.4(b)'s requirement to provide specific proposed modified language.

5. SCE filed a response to ALJ Kolakowski's ruling on October 6, 2008, providing the requested supplemental language sufficient to satisfy Rule 16.4(b).

6. A proposed decision was issued on February 9, 2009, and was withdrawn in anticipation of receipt from SCE of corrected estimates of AFUDC and other relevant information.

7. SCE filed an amendment to the Petition (Amendment) on April 28, 2009 revising its AFUDC estimate and clarifying inconsistencies between this proceeding and Application 07-06-031.

8. SCE's Petitions were anticipated by the Decisions in Ordering Paragraph 6 of each decision. The delay in filing beyond one year from the issuance of the Decisions was necessitated by the development of refined engineering designs and the receipt of additional interconnection requests.

9. SCE requests modification of a requirement of taller towers in D.07-03-012, which was required as a mitigation measure for EMFs. SCE has already provided adequate low-cost/no-cost EMF mitigation far in excess of the Commission's guideline of a 15% EMF reduction, and the taller towers would be ineffective in reducing EMF given those other mitigation measures.

10. SCE has requested reasonable minor adjustments to the route of Segment 3 to accommodate requests from wind resource developers, whose project details were unknown at the time when the approved alignment was developed, and for additional engineering design reasons. These modifications are within the study area boundaries previously studied, and do not require additional environmental studies.

11. The ATP projects were planned to support wind resource generation not sufficiently developed to allow for detailed study. As additional interconnection requests have been received, SCE has been able to develop more accurate cost projections.

12. Since the evidentiary record for the ATP projects was developed, construction costs have risen beyond those anticipated by SCE.

13. The ATP projects were originally proposed and budgeted to be operated at 220 kV, and to be operated at 500 kV when sufficient resource interconnection requests were received.

14. The environmental review considered the impacts of operation of the ATP projects at the full 500 kV voltages, and hence no additional environmental review is necessary.

15. The maximum reasonable and prudent construction costs for all three segments of the ATP in D.07-03-012 and D.07-03-045 was determined to be $257.6 million in 2005 dollars, including pension and benefits, and administrative and general expenditures, but excluding AFUDC.

16. The ATP projects constructed and operated at the full 500 kV voltages will have a combined maximum reasonable and prudent construction cost of $746.0 million in 2008 dollars, including pension and benefits, and administrative and general expenditures, but excluding AFUDC.

17. A reasonable estimate of AFUDC for ATP Segments 1, 2 and 3 is $77.3 million in nominal dollars.

18. Pursuant to FERC order, SCE is already receiving CWIP incentive rate treatment for Segments 1, 2, and 3 in lieu of collecting the $77.3 million in AFUDC, and will seek retail rate recovery from the Commission for those costs - anticipated to be small - that FERC does not allow to be included in CWIP.

19. This AFUDC estimate is not included in the cost cap. However, such financing costs, either in the form of CWIP or AFUDC, should be fully disclosed in Commission proceedings prior to project approval.

20. None of the upgrades necessary to operate at 500 kV, and none of the costs for those upgrades, duplicate the substation upgrades or costs currently being considered in A.07-06-031 regarding the TRTP.

21. The modifications necessary for D.07-03-012 are in Attachment 1.

22. The modifications necessary for D.07-03-045 are in Attachment 2.

23. A.04-12-007 and A.04-12-008 should be closed.

1. SCE's Petitions, as supplemented by SCE's response of November 5, 2008 and as amended by SCE on April 28, 2009, satisfy the requirements of Rule 16.4.

2. ALJ Kolakowski's ruling consolidating the proceedings was correct and appropriate.

3. The existing mitigation measures for Segment 1 provide adequate EMF mitigation to meet Commission guidelines, and the taller towers ordered in D.07-03-012 for a portion of the line are not necessary. This tower height requirement should be modified.

4. SCE's requested modifications to the route of Segment 3 are needed to accommodate requests from wind resource developers and for additional engineering design reasons, and should be approved.

5. The approved maximum costs for the three segments of the ATP should be combined.

6. The approved maximum costs should be modified to reflect the new total of $746.0 million in 2008 dollars, including pension and benefits, and administrative and general expenditures, but excluding AFUDC.

7. The Commission should approve this increased cost cap pursuant to Public Utilities Code Section 1005.5. In authorizing this cost cap the Commission should fully expect that SCE filings at FERC seeking cost recovery for these projects will not be in excess of the maximum costs specified herein without prior notice to the Commission regarding the reasons for any inconsistency between the authorized maximum cost and its FERC filing.

8. A reasonable estimate of AFUDC for ATP Segments 1, 2 and 3 is $77.3 million in nominal dollars.

9. Pursuant to FERC order, SCE is already receiving CWIP incentive rate treatment for Segments 1, 2, and 3 in lieu of collecting the $77.3 million in AFUDC, and will seek retail rate recovery from the Commission for those costs - anticipated to be small - that FERC does not allow to be included in CWIP.

10. Cost estimates submitted to the Commission should include AFUDC or another proxy for financing costs, and should also include estimates for construction costs increases. AFUDC will not be included in the maximum cost adopted by the Commission, but will be included in the Commission's factual findings to provide full disclosure to the Commission and public regarding the potential ratepayer exposure to construction financing costs.

11. A.04-12-007 and A.04-12-008 should be closed.

12. This order should be effective immediately.

ORDER

IT IS ORDERED that:

1. Decision (D.) 07-03-012 is modified as shown in Attachment 1. All other language in D.07-03-012 shall be read and understood to conform to those modifications.

2. D.07-03-045 is modified as shown in Attachment 2. All other language in D.07-03-045 shall be read and understood to conform to those modifications.

3. Southern California Edison shall not seek ratepayer funding in excess of the maximum reasonable and prudent costs (maximum cost) specified herein in any filing at the Federal Energy Regulatory Commission without prior notice to the Commission regarding the reasons for any inconsistency between the authorized maximum cost and its FERC filing.

4. Applications (A.) 04-12-007 and A.04-07-008 are closed.

This order is effective today.

Dated September 24, 2009, at San Francisco, California.

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