2. Background

On March 27, 2008, SCE filed this application seeking authorization of its SPVP and associated cost recovery mechanism. In addition, SCE seeks authorization to establish a memorandum account to record the costs associated with the SPVP.

The Division of Ratepayer Advocates (DRA), Recurrent Energy (Recurrent), The Utility Reform Network (TURN), Californians for Renewable Energy (CARE), The California Large Energy Consumers Association (CLECA), Cooperative Community Energy Corporation (CCEnergy), The Solar Alliance and The Vote Solar Initiative (Joint Solar Parties), The Independent Energy Producers Association (IEP), and The California Solar Energy Industries Association (Cal SEIA) filed protests or responses to the application and identified several possible issues for Commission consideration. SCE filed a response on May 8, 2008.

A prehearing conference (PHC) was held on July 10, 2008. The assigned Commissioner and the assigned Administrative law Judge (ALJ) issued a Scoping Memo and Ruling on July 25, 2008, which delineated the scope and the schedule for this application. The following issues were identified:

1. Whether to approve SCE's proposed SPVP and funding either as proposed in the application or with modifications.

a) Information that may be useful for evaluating the reasonableness of this proposal will be:

· Whether the cost estimates are reasonable.

· Whether elements of SCE's plans are reasonable.

· What is the cost-effectiveness of the proposed plan.

· What are the benefits to ratepayers.

· Whether the proposed costs are reasonable in comparison to other RPS projects bidding into SCE's competitive solicitation for renewable energy projects.

· Whether the proposed costs are reasonable in comparison to other potential utility-owned renewable energy projects.

· Whether the proposed costs are reasonable in comparison to distributed solar installations under the CSI.

· How the proposed program complements or conflicts with existing Commission and State policies to promote renewable and distributed generation.

· Whether the proposed program meets the requirements of Pub. Util. Code § 2775.5.

· Whether any specific measures or mechanisms should be established to ensure system performance.

2. Whether to approve SCE's proposed cost recovery mechanism and the proposed rate of return.

Issues not in the proceeding:

· SCE's Advice Letter 2226-E requesting authority for a mechanism to recover start-up costs for SCE's SPVP. This Advice Letter will be examined by the Energy Division, and the Commission will address it through a resolution.

Hearings were conducted on November 3 through November 6, 2008. TURN, The Greenlining Institute (Greenlining), Recurrent, The Solar Alliance, Coalition of California Utility Employees (CCUE), SCE, First Solar, DRA, and CARE filed briefs. DRA, CARE, CCUE, Greenlining, SCE, Solar Alliance, IEP, and City of Victorville and San Joaquin Valley Power Authority filed reply briefs.

A final oral argument was held before the full Commission on March 25, 2009.