Conclusions of Law

1. The Settlement Agreement fully resolves and settles all disputed issues, among the parties concerning SCE's Application in this proceeding.

2. The Settlement Agreement, as modified, we approve is reasonable in light of the whole record, consistent with law, and in the public interest.

3. The Settlement Agreement is an all-party settlement and satisfies the criteria for an All-Party Settlement.

4. The Settlement Agreement should be approved as modified herein.

5. This decision should be effective today so that the Settlement Agreement may be implemented expeditiously.

ORDER

IT IS ORDERED that:

1. The Settlement Agreement, as modified herein, should be approved.

2. Paragraph 7 of the Settlement Agreement is modified as follows:

"SCE shall file separate applications for Eligible QF Parties' non-standard contracts to the Commission for approval."

3. Paragraph 13 of the Settlement Agreement is modified as follows:

"SCE is directed to present its recommendation for the treatment of any above-market costs associated with the KRCC Contract, or similar contracts negotiated with Eligible QF Parties, in SCE's ERRA proceeding."

4. The Kern River Cogeneration Company (KRCC) Contract is approved in its entirety.

5. Any payments to be made by Southern California Edison (SCE) under the KRCC Contract are recoverable by SCE through rates or such other cost recovery mechanism as may be authorized by the Commission, subject only to Commission review in the Energy Resource Recovery Account proceeding, or its

successor ratemaking mechanism, of SCE's prudent administration of the KRCC Contract.

6. Application 05-12-030 is closed.

This order is effective today.

Dated May 25, 2006, at San Francisco, California.

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN

DIAN M. GRUENEICH

RACHELLE B. CHONG

Commissioners

Comr. Bohn recused himself from
this agenda item and was not part
of the quorum in its consideration.

APPENDIX A

LIST OF APPEARANCES

************ APPEARANCES ************ James Weil AGLET CONSUMER ALLIANCE PO BOX 37 COOL CA 95614 (530) 885-5252 jweil@aglet.org For: Aglet Consume Alliance Michael Alcantar Attorney At Law ALCANTAR & KAHL, LLP 1300 SW 5TH AVE., STE 1750 PORTLAND OR 97201 (503) 402-9900 mpa@a-klaw.com For: Cogeneration Association of California Nora Sheriff Attorney At Law ALCANTAR & KAHL 120 MONTGOMERY STREET, SUITE 2200 SAN FRANCISCO CA 94104 (415) 421-4143 nes@a-klaw.com For: Energy Producers & Users Coalition Donald Brookhyser Attorney At Law ALCANTAR & KAHL LLP 1300 S.W. 5TH AVENUE, SUITE 1750 PORTLAND OR 97201 (503) 402-9900 deb@a-klaw.com For: Cogeneration Association of California Rod Aoki Attorney At Law ALCANTAR & KAHL, LLP 120 MONTGOMERY STREET, SUITE 2200 SAN FRANCISCO CA 94104 (415) 421-4143 rsa@a-klaw.com For: Energy Producers & Users Coalition Lisa-Marie Salvacion Attorney At Law CALIFORNIA PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE SAN FRANCISCO CA 94102 (415) 703-2069 lms@cpuc.ca.gov For: DRA

Jan Reid COAST ECONOMIC CONSULTING 3185 GROSS ROAD SANTA CRUZ CA 95062 (831) 476-5700 janreid@coastecon.com For: Aglet Consumer Alliance William V. Walsh FRANK COOLEY Attorney At Law SOUTHERN CALIFORNIA EDISON 2244 WALNUT GROVE AVE., NO. 800 ROSEMEAD CA 91770 (626) 302-4531 william.v.walsh@sce.com For: Southern California Edison Co. Michel Peter Florio Attorney At Law THE UTILITY REFORM NETWORK (TURN) 711 VAN NESS AVENUE, SUITE 350 SAN FRANCISCO CA 94102 (415) 929-8876 mflorio@turn.org For: TURN Alisa Nochomovitz Attorney At Law WHITE & CASE, LLP FOUR EMBARCADERO CENTER, 24TH FLOOR SAN FRANCISCO CA 94111-3162 (415) 544-1106 anochomovitz@whitecase.com For: California Cogeneration Council Jerry R. Bloom Attorney At Law WHITE & CASE, LLP 633 WEST 5TH STREET LOS ANGELES CA 90071-2007 (213) 620-7707 jbloom@whitecase.com For: California Cogeneration Council

(END OF APPENDIX A)

APPENDIX B

LIST OF EXHIBITS

Proceeding No.								ALJ
A.05-12-030								Bruce DeBerry
EXHIBIT INDEX
Exh. No.		Date				Sponsor/Witness	Description
		Ident.		Recd.
1		4/5/06		4/5/06		So Cal Edison	Amended Application
2		4/5/06		4/5/06		So Cal Edison	Prepared Testimony-Public Version
3		4/5/06		4/5/06		So Cal Edison	Amended Prepared Testimony- Public Version
4		4/5/06		4/5/06		So Cal Edison	Rebuttal Testimony-Public Version
5		4/5/06		4/5/06		Calif.Cogeneration Council	Testimony of R. Thomas Beach
6		4/5/06		4/5/06		Division of Ratepayer Advoc.	Testimony of Rahmon Momoh-Public Version
7		4/5/06		4/5/06		Aglet Consumer Alliance	Direct Testimony
8		4/5/06		4/5/06		Aglet Consumer Alliance	Qualifications of Jan Reid
9-20		n/a		n/a		Not Assigned
21		4/5/06		4/5/06		So Cal Edison	Prepared Testimony- Confidential Version
22		4/5/06		4/5/06		So Cal Edison	Prepared Testimony Appendices B-C / Confidential
23		4/5/06		4/5/06		So Cal Edison	Rebuttal Testimony- Confidential Version
24		4/5/06		4/5/06		Division of Ratepayer Advoc.	Amended Prepared Testimony of Rahmon Momoh-Confidential Version

(END OF APPENDIX B)

D0605034 Attachment A