ALJ/MFG/sid Mailed 1/13/2006

Decision 06-01-007 January 12, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (U 338-E) for a Commission Finding that its Procurement-Related and Other Operations for the Recorded Period January 1 Through December 31, 2004 Complied with its Adopted Procurement Plan; for Verification of its Entries in the Energy Resource Recovery Account and other Regulatory Accounts; for Recovery of a Nuclear Unit Incentive Reward of $12.6 million; and for Recovery of $6.7 Million Recorded in the Electric Energy Transaction Administration Memorandum Account.

Application 05-04-004 (Filed April 1, 2005)

Robert Keeler, Attorney at Law, for Southern California Edison Company, applicant.

Regina DeAngelis, Attorney at Law, for the Office of Ratepayer Advocates.

OPINION ON THE REASONABLENESS AND PRUDENCE

OF SOUTHERN CALIFORNIA EDISON COMPANY'S

ENERGY RESOURCE RECOVERY ACCOUNT &

OTHER BALANCING ACCOUNTS

I. Summary

We find Southern California Edison Company's (SCE) administration of power purchase agreements and its least-cost dispatch activities for the period beginning January 1, 2004 and ending December 31, 2004 (Record Period) reasonable and prudent. We also find its $171.9 million undercollected Energy Resource Recovery Account (ERRA), $12.6 million Palo Verde Nuclear Unit Incentive Procedure (NUIP) reward amount, $6.4 million undercollected Electrical Energy Transaction Administration Memorandum Account (EETAMA), and other regulatory account balances at December 31, 2004 identified in the body of this order reasonable and recoverable.