9. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Robert Barnett is the assigned ALJ in this proceeding.

Findings of Fact

1. SCE's updated ERRA proceeding revenue requirement is $3.448 billion, which represents an increase of $277 million from the current ERRA proceeding revenue requirement, and is $155 million less than the estimated 2011 ERRA proceeding revenue requirement originally forecast in SCE's August Application.

2. The decrease in SCE's updated ERRA proceeding request is primarily due to a reduction in the 2011 average gas price forecast and the rescheduling of a SONGS Unit 2 refueling outage from 2011.

3. The updated ERRA revenue requirement for 2011 is based on a gas price forward curve of $4.18/MMBtu. This is a $1.05/MMBtu reduction in the gas price used to support SCE's original request.

4. SCE is no longer requesting an estimated $0.870 million associated with availability incentive payments for the Mountainview. SCE has agreed to record these incentive payments as they are earned in the ERRA balancing account and present these amounts for review in its annual April ERRA review proceeding.

5. DRA does not oppose SCE's updated 2011 ERRA revenue requirement request.

6. In the compliance advice letter that SCE will file to implement this decision, SCE will utilize the most recent available data needed to calculate the CRS components applicable to DA, DL, and CCA customers.

7. SCE's updated total system 2011 consolidated revenue requirement is estimated to increase by $403.8 million. This is the sum of: (1) SCE's requested total system 2011 ERRA proceeding revenue requirement increase of $276.9 million; (2) an estimated $133 million increase associated with SCE's GRC base revenue requirement; (3) an estimated $237.6 million increase resulting from various other revenue requirement changes; and (4) an estimated $243.8 million decrease in DWR's 2010 power charge and bond charge revenue requirements.

8. Although the overall consolidated revenue requirement is expected to increase by approximately $403.8 million, after taking into account the estimated increase in kWh sales in 2011, total estimated 2011 rate levels will increase by $183.4 million.

9. SCE will implement its consolidated revenue requirement via an advice letter instead of future ERRA forecast applications.

Conclusions of Law

10. It is reasonable to adopt SCE's updated forecast 2011 ERRA proceeding revenue requirement changes and revenues as set forth herein.

11. SCE's updated 2011 ERRA proceeding revenue requirement of $3.448 billion is adopted.

12. SCE's total system 2011 consolidated revenue requirement increase of $403.8 million is adopted. Although the overall consolidated revenue requirement is expected to increase by approximately $403.8 million, after taking into account the estimated increase in kWh sales in 2011, total estimated 2011 rate levels will increase by $183.4 million.

13. SCE's forecast estimates for its 2011 load and sales, energy production and costs, power procurement and ERRA balancing account financing costs, and fuel inventory and collateral carrying costs are reasonable and are adopted.

14. SCE's request to consolidate its ERRA proceeding revenue requirement with other rate changes adopted in other proceedings on or before March 1, 2011 is adopted, or as soon thereafter as possible.

15. SCE's proposal to update the DA CRS to include final figures for the DWR power charge is adopted.

ORDER

IT IS ORDERED that:

1. Southern California Edison Company shall make an advice filing within ten days of the effective date of this decision to implement new rates as authorized in this and other decisions, to be effective beginning March 1, 2011, or as soon thereafter as possible.

2. Southern California Edison Company shall include a final consolidated revenue requirement table in its advice filing that includes all Commission-adopted amounts as of that date.

3. Southern California Edison Company shall conduct a sensitivity analysis on the forecast prior to filing its next five (5) annual Energy Resource Recovery Account Forecast Applications and shall include the results of that analysis in the workpapers that accompany those applications and direct testimony. Unless Southern California Edison Company and the Commission's Division of Ratepayer Advocates later agree to a revised methodology, the sensitivity analysis shall be based on a gas price change equal to two (2) times the standard deviation of the projected 12-month gas price strip of the forecast year. The 12-month projected gas prices shall also be based on the most recent 20 days historical gas price data. Finally, Southern California Edison Company shall assume a proportional change in power prices to keep the Implied Market Heat Rate constant. Southern California Edison Company and the Commission's Division of Ratepayer Advocates shall meet after Southern California Edison Company files its August 2016 Energy Resource Recovery Account Forecast Application to discuss whether an upfront sensitivity analysis is warranted for future Energy Resource Recovery Account Forecast Applications.

4. Southern California Edison Company's public (redacted) Exhibits SCE-1 through SCE-4 and confidential (unredacted) Exhibits SCE-1-A and SCE-4-A shall be entered into the record of this proceeding, plus Exhibit DRA-1.

5. Southern California Edison Company's confidential Exhibits SCE-1-A and SCE-4-A are filed under seal pursuant to Decision 06-06-066 and shall remain sealed for a period of three years from the effective date of this decision.

6. Hearings are no longer necessary.

7. Application 10-08-001 is closed.

This order is effective today.

Dated April 14, 2011, at San Francisco, California.

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