ALJ/HSY/acr/oma Date of Issuance 3/30/2012

Decision 12-03-034 March 22, 2012

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of Application of Southern California Edison Company (U338E) for Approval of Agreements to Sell Its Interests in Four Corners Generation Station.

Application 10-11-010
(Filed November 15, 2010)

Russell A. Archer, for Southern California Edison Company, Applicant.

Matt Miley, for California Public Utilities Commission, Division of Ratepayer Advocates.

Hayley Goodson, for The Utility Reform Network.

Timothy J. O'Connor, Attorney at Law for Energy Program Environmental Defense Fund.

Suma Peesapati, for Sierra Club.

DECISION APPROVING SOUTHERN CALIFORNIA EDISON COMPANY'S SALE OF ITS INTEREST IN FOUR CORNERS GENERATING STATION

DECISION APPROVING SOUTHERN CALIFORNIA EDISON COMPANY'S SALE OF ITS INTEREST IN FOUR CORNERS GENERATING STATION 1 1

1. Summary 2 2

2. Procedural Background 2 2

3. Environmental Review Process 5 5

4. Discussion 7 7

4.1. Is SCE's ownership of its interest in Four Corners no longer necessary or useful in the performance of its duties to the public? 7 7

4.2. Will divestiture of SCE's interest impair the reliability of the electric supply? 7 7

4.3. Is the divestiture pursuant to the Purchase and Sale Agreement reasonable? 8 8

4.3.1. Is the divestiture consistent with EPS? 8 8

4.3.2. Is the value of the Sale Agreement reasonable? 10 10

4.4. Are SCE's proposed 2012 capital expenditures in Four Corners reasonable? 12 12

4.5. What is the appropriate ratemaking treatment of the gain on sale? 16 16

4.5.1. Ratemaking Mechanics 16 16

4.5.2. Proceeds from termination of transmission rights 16 16

4.5.3. Liabilities for pension and other post-retirement benefits 17 17

4.5.4. Recovery of outside counsel expenses 20 20

4.6. Are there unavoidable significant environmental impacts of the proposed project? 25 25

5. Comments on Proposed Decision 28 28

6. Assignment of Proceeding 31 31

Findings of Fact 31 31

Conclusions of Law 33 33

ORDER 34 34

DECISION APPROVING SOUTHERN CALIFORNIA EDISON COMPANY'S SALE OF ITS INTEREST IN FOUR CORNERS GENERATING STATION

1. Summary

This decision approves Southern California Edison Company's agreement to sell its interest in Four Corners Generating Station. As the lead agency for environmental review of this project, the Commission finds that the negative declaration prepared for this project meets the requirements of the California Environmental Quality Act and that the project will not have any significant adverse environmental impacts. This proceeding is closed.