ALJ/DKF/jva DRAFT Agenda ID #3929

Ratesetting

1/27/05 Item 28

DecisionPROPOSED DECISION OF ALJ FUKUTOME (Mailed 9/27/2004)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (U 338-E) For Approval of its 2004 Revenue Requirement and Related Estimates Under the Energy Resource Recovery Account (ERRA); And For a Commission Finding that its Procurement-Related and Other Operations were Reasonable for the Record Period September 1, 2001 Through June 30, 2003.

Application 03-10-022 (Filed October 3, 2003)

Daniel W. Douglass, by Gregory S.G. Klatt, Attorney at Law,

Alcantar & Kahl LLP, by Nora Sheriff, Attorney at Law,

and Robert B. Keeler, Attorney at Law, for

Southern California Edison Company, applicant.

William H. Booth, Attorney at Law, interested party.

Regina DeAngelis, for Office of Ratepayer Advocates, protestant.

.

OPINION RESOLVING THE REASONABLENESS PHASE OF

SOUTHERN CALIFORNIA EDISON COMPANY'S

ENERGY RESOURCE RECOVERY ACCOUNT APPLICATION

1. Summary 22

2. Procedural History 22

3. SCE's Showing 33

4. ORA Recommendations 33

5. Scope of Review for Least Cost Dispatch under SOC 4 44

5.1. Positions of the Parties 55

5.2. Discussion 77

6. Standard of Review for Least Cost Dispatch under SOC 4 99

6.1. Positions of the Parties 99

6.2. Discussion 1111

7. Forum for Review of Spot Market Transactions 1515

8. Other Least Cost Dispatch Issues 1616

9. Contract Administration and Costs 1919

10. Cogeneration QFs and Renewable Contract Administration and Costs 2121

11. Master Data Request 2222

12. Audit Issues 2424

12.1. CDWR Settlement Payment Authorization 2424

12.2. ISO Expense Adjustment 2525

12.3. Refinancing Transaction Fees 2525

12.4. Employee Related Costs 2525

13. Uncontested Costs 2727

13.1. Generation 2727

13.2. Special Contracts 2727

13.3. Cost of Collateral 2727

13.4. ISO-Related Costs 2828

13.5. Fuel Oil Inventory Carrying Costs 2828

13.6. Electric Vehicle Costs 2929

13.7. Discussion 2929

14. Confidential Information 3030

15. Comments on Proposed Decision 3131

16. Assignment of Proceeding 3232

Findings of Fact 3232

Conclusions of Law 3535

ORDER 3535

OPINION RESOLVING THE REASONABLENESS PHASE OF

SOUTHERN CALIFORNIA EDISON COMPANY'S

ENERGY RESOURCE RECOVERY ACCOUNT APPLICATION

1. Summary

This decision adopts a joint Southern California Edison Company (SCE) and Office of Ratepayer Advocates (ORA) recommendation to reduce the Energy Resource Recovery Account (ERRA) by a net amount of $3,574,000 to reconcile certain audit issues. In all other respects, the decision finds SCE's procurement related and other operations were reasonable for the record period September 1, 2001 through June 30, 2003.

The scope of least-cost dispatch review in the ERRA is defined to be the review of decisions, actions, and estimates related to the dispatch of all resources, for up to a year prior to the dispatch day. The standard of review for least-cost dispatch is compliance with Standard of Conduct #4 (SOC 4), which is an element of SCE's procurement plan.

SCE and ORA are ordered to develop and implement a master data request process to be used in future SCE ERRA filings.