II. Revenue

Operation of the vehicle and boat parking and storage facility is compatible with SCE's operation of the transmission lines located on the Site. Utility service will not be affected as a result of Commission approval of this lease. The license fees generated by the project are currently treated as Other Operating Revenue (OOR). The conversion of the license to a lease will increase the likelihood that the Site will generate OOR on a long-term basis for the benefit of ratepayers.

On January 30, 1998, SCE filed Advice 1286-E which sets forth proposed categories of non-tariffed products and services offered for sale by SCE and provided descriptions of the existing products and services within each category. This Advice filing was made pursuant to Rule VII.F of the Affiliate Transaction Rules contained in Appendix A of Decision (D.) 97-12-088. Attachment B to Advice 1286-E identified the Secondary Use of Transmission Right of Ways and Land and the Secondary Use of Distribution Right of Ways, Land, Facilities and Substations as categories of existing non-tariffed products and services. This filing complies with the requirements of Rule VII for existing non-tariffed products and services. The intended secondary uses as identified above are consistent with the products and services provided within these categories.

The revenue from the license and the proposed lease will be treated as OOR. In D.99-09-070, the Commission adopted a gross revenue sharing mechanism for certain of SCE's other operating revenues. The adopted gross revenue sharing mechanism applies to OOR, except for revenues that: (1) derive from tariffs, fees, or charges established by the Commission or the Federal Energy Regulatory Commission (FERC); (2) are subject to other established ratemaking procedures or mechanisms; or (3) are subject to the Demand-Side Management Balancing Account. Under the gross revenue sharing mechanism, all applicable gross revenues recorded from non-tariffed products and services subject to the mechanism will be split between shareholders and ratepayers after the Commission-adopted annual threshold level of OOR has been met. For those non-tariffs products and services deemed "active" by the Commission, the revenues in excess of the annual threshold will be split between shareholders and ratepayers on a 90%/10% basis. For those non-tariffed products and services deemed "passive" by the Commission, the revenues in excess of the annual threshold will be split between shareholders and ratepayers on a 70%/30% basis. Products and services offered under the Secondary Use of Transmission Right of Ways and Land and the Secondary Use of Distribution Right of Ways, Land, Facilities and Substations categories have been deemed "passive" for revenue sharing purposes.