ALJ/MFG/hl2 Date of Issuance 5/30/2008

Decision 08-05-035 May 29, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (U338E) for Authorized Cost of Capital for Utility Operations for 2008.	Application 07-05-003 (Filed May 8, 2007)
And Related Matters.	Application 07-05-007 Application 07-05-008

(See Decision 07-12-049 for List of Appearances.)

DECISION ESTABLISHING A MULTI-YEAR

COST OF CAPITAL MECHANISM
FOR THE MAJOR ENERGY UTILITIES

1. Summary

This decision establishes a uniform multi-year cost of capital mechanism (CCM) for Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E) and Pacific Gas and Electric Company (PG&E). SCE, SDG&E, and PG&E's next full cost of capital application is to be filed on April 20, 2010 for a test year 2011 returns on equity (ROE). Those first complete filings under the CCM shall also address the parties' experience with the CCM and whether modifications to the mechanism are warranted. Details of the CCM are set forth in Section 5.6 and examples of how the CCM would work are attached in Appendix A.