I (1)- VEBA 3 TBO

Appendix I
	CALCULATION OF SFAS 106 TBO AMORTIZATION ADJUSTMENT
	Reduction of TBO Amortization Expense Included in Annual Accrual of SFAS 106 Costs if VEBA 3 Contributions in 1989 & 1990 Had Been Expensed Instead of Capitalized
			Amounts in
			$000's		Reference
1.	1989 VEBA 3 Contribution		117,000		D.92-12-015, 46 CPUC 2d 499, 526 (Note 1)
2.	1990 VEBA 3 Contribution		91,000		D.92-12-015, 46 CPUC 2d 499, 526 (Note 1)
3.	Total Contributions for 1989 and 1990		208,000		Line 1 + Line 2
4.	Less: VEBA 3 Contributions Included in TBO Curtailment Loss in 1993		(55,078)		Note 2, Line 19.
5.	Net Reduction to TBO		152,922		Line 3 - Line 4
6.	Intrastate Factor		0.8043		Exh. Phase 2A: 404, Attach. 7-6, 7-7, and 7-8
7.	Intrastate Amount		122,995		Line 5 x Line 6
8.	Amortization Period		20		D.92-12-015, Ordering Paragraph 1.c
9.	Reduction in Annual TBO Amortization Expense		6,150		Line 7 divided by Line 8
10.	Regulated Factor		0.9409		Exh. Phase 2A: 404, Attach. 7-6, 7-7, and 7-8
11.	Expense Factor		0.9180		Exh. Phase 2A: 404, Attach. 7-6, 7-7, and 7-8
12.	Reduction in Pre-Tax Intrastate Regulated Expense		5,312		Line 9 x Line 10 x Line 11
13.	Tax Factor		0.59254		(1 - .40746 (Combined Fed. and State Tax))
14.	After-Tax Intrastate Regulated Expense		3,147		Line 12 x Line 13
15.	Cumulative Reduction to Pre-Tax TBO Amortization Expense for 1993 - 1998		31,871		Line 12 x 6
16.	Cumulative Reduction to After-Tax TBO Amortization Expense for 1993 - 1998		18,885		Line 14 x 6
	Note 1: D.92-12-015 referred to the VEBA 3 contributions as "pre-funding."