8. Depreciation Expense and Reserve

ORA reviewed and considers reasonable SCE's method of calculating depreciation rates, net salvage value, depreciation expense and weighted average depreciation reserve. The differences in the estimates are due primarily to the $100,000 difference in the capital cost of the Pebbly Beach Village line replacement. In addition, there is a timing difference in the calculation of weighted average balances for plant-in-service. ORA also excludes Construction Work in Progress from rate base on grounds that accounting principles call for this amount to be booked to Allowance for Funds Used During Construction, and these expenses are recovered only after the new plant comes into service. We adopt ORA's estimates, adjusted to recognize $100,000 for the Pebbly Beach work.