3. Request

In its application, SCE sought authorization to issue, sell, and deliver up to $4.5 billion of total financing authority, consisting of $3.5 billion of Debt Securities and $1 billion of Preferred Equity, in addition to previously-authorized amounts, until the aggregate principal amount authorized has been fully utilized to meet its future financing needs based on a long-term forecast covering the three-year period 2010 through 2012. Of that request, $2.3 billion consisted of duplicative requests for authority of $1.15 billion of Debt Securities and $1.15 billion of Preferred Equity, because SCE wanted flexibility to utilize what it considered the most beneficial financing at the time of issuance.

In its Response, SCE modified its request, reducing it to a total of $3.301 billion of new financing, consisting of $2.49 billion of Debt Securities and $811 million of Preferred Equity. SCE reduced its original request because it determined that it did not need to request authority for duplicate issues of Debt Securities and Preferred Equity for the same purpose, reducing its request by $1.15 billion. The balance of the reduction to SCE's request is based on the adjustment to the uses of funds as well as consideration of existing financing authority. Specifically, SCE also added two new uses of funds, including contingencies for capital expenditures given that the support for its capital expenditures are estimates, and retirement/refinancing of preferred equity that it finds may be cost effective to refinance during the period 2010-2012. SCE also adjusted its calculation of the net funding needed in order to recognize the use of existing authority. SCE plans to use the proceeds to fund for instance, payment of Net Funding of Nuclear Decommissioning Trusts, acquisition of property, construction, completion, extension, or improvement of SCE facilities, retirement/refinancing of previously issued securities, and/or reimbursement of SCE for money expended from income or its treasury funds.

The principal amount, form, and terms and conditions of each series of Debt Securities will be determined by SCE's board of directors or management according to market conditions at the time of sale or issuance. In general, each series of Long-Term Debt Securities are expected to have a maturity of up to 100 years. Medium-term notes are expected to have a maturity of between five and 30 years.

SCE seeks authorization to guarantee the Debt Securities, Preferred Equity, and other obligations of regulated direct or indirect subsidiaries or regulated affiliates of SCE, or governmental entities that issue securities on behalf of SCE. SCE seeks authorization to execute and deliver one or more indentures or supplemental indentures, and to sell, lease, assign, mortgage, or otherwise dispose of or encumber utility property, including but not limited to accounts receivables to secure Debt Securities and Preferred Equity. SCE proposes to utilize debt enhancement features, including credit enhancements, redemption provisions/call options, put options, sinking funds, tax-exemption, and warrants, to improve the terms and conditions of its Debt Securities, in order to lower its overall cost of money for the benefit of its ratepayers. In an effort to reduce the risks associated with interest rate volatility, SCE also seeks authority to utilize interest rate caps, collars, swaps, and hedges. Additionally, SCE seeks exemptions from selected elements of the Commission's Competitive Bidding Rule (CBR).