4. Cost Recovery

SCE expects to incur approximately $41.31 million (2008$) in O&M and $875.0 million (2008$) in direct capital expenditures over the 2008 through 2014 program period, and requests that the Commission find reasonable up to $962.5 million (2008$)in direct capital expenditures during the 2008 through 2014 program period.⁵³ SCE has also requested authority to establish the Solar PV Program Balancing Account (SPVPBA) to record the difference between: (1) the actual incremental O&M and capital-related revenue requirement and; (2) the recorded Solar PV Program-related revenue. We find these cost estimates reasonable.

DRA in comments to the PD recommends an annual review of SCE's plant operation via a Tier 3 advice letter.⁵⁴ DRA also suggests that SCE's lease costs above $21,000/MW/Year (20% over SCE's estimate) and SCE's annual O&M costs above $33,000/Year (20% over SCE's estimate) be disallowed.⁵⁵ As discussed below, we will review SCE's operation of SPVP (including SCE's maintenance practices and performance of the facilities) in its ERRA proceeding, and review all program costs (including O&M costs) in SCE's GRC. We direct that SCE's lease costs and SCE's annual O&M costs be subject to reasonableness review in SCE's GRC.

⁵³ The $962.5 million includes a 10% adder.

⁵⁴ DRA Comments at p. 2.

⁵⁵ Ibid.