4. DRA's Review

DRA letter of August 11, 2008 states that its review led it to the following findings:

A. Utility Retained Generation: DRA's review of the testimony and responses to data requests indicate that SCE did not appear to have unreasonable outages and SCE's fuel procurement costs appear reasonable.

B. Qualifying Facilities Contracts: DRA reviewed SCE's request that the Commission find its QF contract management and costs during the Record Period to be reasonable. DRA reviewed contract management of Edison's PURPA contracts, contract development, amendments, assignments, uncontrollable force administration, forced outage claim administration, dispute resolution, and contract termination. DRA did not uncover evidence that SCE failed to administer these programs within Commission guidelines. Therefore, DRA does not object to SCE's costs for administering QF contracts.

C. Non-QF Contracts: DRA believes that SCE's ongoing Non-PURPA contract administration activities appear to have been conducted in a prudent manner and that there are no outstanding issues pertaining to contract administration or compliance monitoring. Accordingly, DRA does not object to SCE's request that the Commission find its Non-PURPA contract administration activities reasonable.

D. Least Cost Dispatch: DRA believes that SCE's electricity and gas transactions during the Record Period were generally consistent with observed daily prices as observed in ICE markets and intra-hour bids in the California Independent System Operator (CAISO) market. Given current market uncertainties, the mandate to serve ratepayers, and other factors that impact dispatch decisions, DRA believes that SCE's gas and electricity transactions during the Record Period appear reasonable and therefore does not protest SCE's assertion that it effected Least Cost Dispatch.

E. Balancing Account Review: DRA's review of SCE balancing accounts revealed no items of a material nature requiring adjustments to SCE's ERRA balancing account. DRA did not discover exceptions to the ERRA requirements adopted by the Commission. In addition to the ERRA balancing account, DRA found no exceptions with regard to the 10 other ratemaking accounts included in SCE's ERRA application. DRA thus believes that SCE's requested net revenue increase in 2009 of $13.947 million, which pertains to the recorded costs and revenues of two Memorandum Accounts and Franchise Fees and Uncollectibles, is reasonable, accurately recorded and recoverable.⁷

In addition, DRA reports that it toured the solar facility at Kramer Junction, which enabled DRA to examine how SCE manages electric generation resources for which it contracts.

Based on its review, DRA does not oppose the relief SCE is seeking in this application and does not believe evidentiary hearings are necessary.

⁷ DRA Letter at 1-2.