II. Background

Decision (D.) 02-10-062 established an ERRA balancing account for the major energy utilities to track fuel and purchased power revenues against actual recorded costs. That decision required the major energy utilities to establish an annual ERRA fuel and purchased power revenue requirement forecast and an annual ERRA reasonableness review through the application process.

An October 1^st date was set for SCE's annual ERRA forecast application. However, that date was subsequently changed to August 1^st pursuant to D.04-01-050. An April 1^st date was set for SCE's annual ERRA reasonableness application. The purpose of that latter application, now before us, is to review the reasonableness of SCE's energy resource contract administration, least-cost dispatch, ERRA, and other non-ERRA balancing account mechanisms.