2. Southern California Edison Company's Original Forecast

Southern California Edison Company (SCE) filed this Energy Resource Recovery Account (ERRA) forecast application on August 2, 2010 (the August Application). In its August Application, SCE requested the Commission to: (1) authorize SCE's 2011 ERRA proceeding revenue requirement in the amount of $3.603 billion and (2) consolidate all Commission-authorized revenue requirements (including the ERRA proceeding revenue requirement) and set unbundled rate components to recover those revenue requirements beginning January 1, 2011.

SCE's original sales and load forecast for 2011 is shown in Table III-6 on page 14 of Exhibit SCE-1. As shown in Table III-6, the retail sales forecast of 84,729 gigawatt-hours (GWh) less 10,319 GWh of direct access sales yielded a bundled service customer sales forecast of 74,410 GWh. The bundled customer sales forecast was then multiplied by the average annual distribution loss factor. This procedure produced an Independent System Operator (ISO) level bundled service customer load forecast for 2011.

SCE's original 2011 ERRA proceeding revenue requirement of $3.603 billion represented an increase of $431.8 million from the ERRA revenue requirement included in its 2010 rate levels. This increase was the sum of a $349 million increase in SCE's generation service revenue requirement and an $82.8 million increase in SCE's delivery service revenue requirement. SCE itemized all of the components of its requested ERRA revenue requirement for calendar year 2011. Fuel and purchased power expenses comprised most of the ERRA revenue requirement. However, it also included: (1) the estimated December 31, 2010 balances in various balancing accounts that SCE needs to recover from or return to customers and (2) other miscellaneous expenses, such as spent nuclear fuel expense and Department of Energy decontamination and decommissioning fees.

As in the past, SCE is utilizing this proceeding to consolidate all Commission-adopted revenue requirements into rate levels at one time upon a final Commission decision in this proceeding. SCE's direct testimony sets forth its initial proposed 2011 consolidated revenue requirement by Commission proceeding to be reflected in 2011 rates. That testimony showed the following estimated changes in 2011 revenue requirements: (1) an increase of $431.8 million from this ERRA proceeding; (2) an increase of $184.7 million from the 2009 general rate case (GRC) proceeding; (3) an estimated increase of $97.2 million from various miscellaneous proceedings; and (4) a decrease of $90.2 million from the Department of Water Resources (DWR) power and bond charges. After taking estimated 2011 sales changes into account, SCE requested a consolidated, total system revenue increase of $623.5 million.