9. What Ratemaking Accounts Need to be Modified or Created?

SCE proposes to modify its existing Advanced Metering Infrastructure Balancing Account (AMIBA) to create two sub-accounts, one to record any additional Phase 1 costs, and a second for approved Phase 2 costs. SCE requests that upon approval of this application and the changes to its AMIBA, it be allowed to transfer expenditures approved in this decision that are already recorded in its Advanced Metering Infrastructure Memorandum Account (AMIMA) to the modified AMIBA. Costs for approved activities would then be recorded in the AMIBA as they are incurred, and would be transferred each month to SCE's Base Revenue Requirement Balancing Account (BRRBA). SCE proposes recovering these amounts through its distribution rates, consistent with the current process for recovering Phase 1 costs. The needed change in distribution rates to collect approved costs would be initiated either through an advice letter or on January 1, 2008, along with other rate changes authorized in SCE's Energy Resource Recovery Account proceeding.

DRA does not object to this proposed cost-recovery mechanism, but TURN recommends applying one-way balancing account treatment to Edison's request, or approving two-way balancing account treatment to TURN's lower recommendation of $19 million, with an absolute cap for recovery in Phase 2 at 20% above that amount.⁴⁵ TURN's underlying concern appears to be ensuring that no costs beyond those approved by this Commission are recorded and recovered from ratepayers.

9.1 Discussion and Conclusion

We believe that SCE's proposed cost recovery mechanism is reasonable and should be adopted for the costs approved here. The proposed mechanism will only allow approved costs to be recorded in the AMIBA, and therefore only the actual expenditures associated with approved activities will be collected from ratepayers.

In order to record the costs authorized in this decision, SCE will need to modify the definition of pre-deployment costs currently set forth in its AMIBA. It is reasonable to authorize SCE to make modifications to the language of its AMIBA account to provide for recording of the costs authorized today. SCE shall file an Advice Letter with the Energy Division within 10 days of the effective date of this decision that updates its AMIBA tariff sheets consistent with the limitations on costs described in this decision. Because we have reviewed these categories of costs in this application and found them reasonable, subsequent review of these costs should be limited to verification that the costs recorded are consistent with the limitations set forth in this decision.

On January 5, 2007, the Commission approved SCE's request in Advice Letter 2063-E to create an Advanced Metering Infrastructure Memorandum Account as of December 22, 2006, to record certain types of costs while this application was pending. SCE may transfer any recorded costs that are consistent with the activities and dollars authorized in this decision from the AMIMA to its AMIBA. SCE should file an Advice Letter to affect the transfer. SCE may continue to utilize the existing AMIMA account to record the costs of activities described that do not receive pre-approved ratepayer funding in this decision. SCE may request that the Commission review the reasonableness of the costs recorded in the AMIMA in a subsequent proceeding and authorize recovery of such costs as are determined to be reasonable.

⁴⁵ TURN Opening Brief, p. 11.