The Public Interest: In all cases, the harm will be evaluated from the perspective of the public interest.

These factors are intertwined and will be discussed together. We start with the size of the company. SCE is the largest supplier of electricity in Southern California. Its 13,000 employees provide 13,000,000 people with electricity. Its operating revenue and after tax net income for 2001 to 2006 are:

(000,000) From SCE Annual Reports
	2006	2005	2004	2003	2002	2001
Operating Revenue	10,312	9,500	8,450	8,850	8,700	8,125
Net Income	827	749	921	882	747	2,408

It is apparent that there are few companies in California that are comparable in revenue and in income to SCE. Companies that are comparable include Pacific Bell (or AT&T in its most recent incarnation), PG&E, and SoCalGas. To deter future violations and reflect the financial resources of the utility a substantial fine is warranted.

The public interest requires a substantial fine. California's ratepayers paid to SCE $80,714,000 in rates which were based on false and misleading data, known by management to be false and misleading, for a period of seven years. The fine must be sufficiently large so that SCE and the other investor owned utilities will understand manipulation and false reporting of data will be pursued and fined on a level that will make this behavior very risky. The United States Supreme Court has expressed the principle:

Imposing exemplary damages on the corporation when its agent commits intentional fraud creates a strong incentive for vigilance by those in a position "to guard substantially against the evil to be prevented." Louis Pizitz Dry Goods Co. v. Yeldell, 274 US 112, 116, 71 L Ed 952, 47 S Ct 509, 51 ALR 1376 (1927). If an insurer were liable for such damages only upon proof that it was at fault independently, it would have an incentive to minimize oversight of its agents. Imposing liability without independent fault deters fraud more than a less stringent rule. It therefore rationally advances the State's goal. (Pacific Mut. Life Ins. Co. v. Haslip (1991) 499 US 1, 14, 113 L Ed 2d 1, 17, 111 S Ct 1032; See also Mary M .v. City of Los Angeles (1991) 54 Cal.3d 202, 209, 285 Cal.Rptr. 99, 184 P. 2d 1341.)

To create a "strong incentive for vigilance," a substantial fine is required. In determining the amount of the fine we have considered the facts that tend to mitigate the degree of wrongdoing, and we conclude there are significant mitigating factors as discussed further below.