ALJ/MFG/hl2 Mailed 1/23/2004

Decision 04-01-048 January 22, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (U 338-E) For Approval of its 2003 Revenue Requirement and related Estimates Under the Energy Resource Recovery Account (ERRA); For Approval of its 2003 AB57 Trigger and Threshold Amounts; and For Approval of a Proposed Scope and Schedule for ERRA Proceedings.

Application 03-04-022

(Filed April 1, 2003)

Robert Keeler, Attorney at Law, for Southern California

Edison Company, applicant.

Regina DeAngelis, Attorney at Law, for the Office of

Ratepayer Advocates

OPINION ON

SOUTHERN CALIFORNIA EDISION COMPANY'S

ENERGY RESOURCE RECOVERY ACCOUNT

Table of Contents

Title Page

OPINION ON SOUTHERN CALIFORNIA EDISON COMPANY'S

ENERGY RESOURCE RECOVERY ACCOUNT 2 2

I. Summary 2 2

II. Background 2 2

III. Evidentiary Hearing 3 3

A. NUIP Reward 3 3

1. Appropriate Issue? 4 4

2. Reasonableness 5 5

B. Interest Rate 6 6

1. Appropriate Issue? 7 7

2. Interest Rate 7 7

C. Semiannual Schedule 11 11

1. Forecasts 11 11

a. Transition Year Forecasts 11 11

b. Number of Future Forecasts 12 12

c. Appropriate Semiannual Application 13 13

2. Reasonableness Review 13 13

D. Revenue Requirement Forecast 15 15

E. Trigger Mechanism 16 16

IV. Procedural Matters 17 17

V. Comments on Proposed Decision 18 18

VI. Assignment of Proceeding 19 19

Findings of Fact 19 19

Conclusions of Law 21 21

ORDER 22 22

OPINION ON

SOUTHERN CALIFORNIA EDISION COMPANY'S

ENERGY RESOURCE RECOVERY ACCOUNT

I. Summary

This decision adopts a 2003 Energy Resource Recovery Account (ERRA) fuel and purchased power revenue requirement forecast of $2.505 billion with an annual sales forecast of 79,796 gigawatt hours (GWh) and bundled service load of 73,262 GWh for Southern California Edison Company (SCE). A 2003 trigger amount is set at $228.593 million and threshold amount at $285.741 million. Forecasts and reasonableness reviews shall be conducted annually.

This decision also adopts the three-month commercial paper interest rate index with a temporary premium of three-fourths the difference between the three-month commercial paper rate and SCE's actual cost of short-term financing for ERRA undercollected balances. Finally, the decision adopts tariff changes incorporating ERRA trigger and threshold amounts and excludes Electric Energy Transactions Administration (EETA) costs from ERRA.