COM/DGX/jt2 Mailed 7/27/2007

Decision 07-07-042 July 26, 2007

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Southern California Edison Company's (U 338-E)
Application for Approval of Advanced Metering
Infrastructure Pre-Deployment Activities and
Cost Recovery Mechanism.

Application 06-12-026
(Filed December 21, 2006)

DECISION APPROVING PRE-DEPLOYMENT FUNDING FOR SOUTHERN CALIFORNIA EDISON COMPANY'S ADVANCED METERING INFRASTRUCTURE PROJECT

Table of Contents

Title Page

DECISION APPROVING PRE-DEPLOYMENT
FUNDING FOR SOUTHERN CALIFORNIA EDISON COMPANY'S
ADVANCED METERING INFRASTRUCTURE PROJECT 1 1

1. Summary 2 2

2. Background 2 2

3. Outstanding Procedural Matters 3 3

4. Minimum Functionality Criteria 3 3

5. Summary of Party Positions 4 4

6. Should Ratepayers Fund Any AMI Pre-Deployment Activities? 7 7

7. Definition of Pre-Deployment 9 9

7.1 Discussion and Conclusion 11 11

8. Which Proposed Activities Should be Funded? 12 12

8.1 Discussion 14 14

8.2 Funding Approved 16 16

8.2.1 AMI Product Management 19 19

8.2.2 Information Technology 19 19

8.2.3 Business Process and Organizational Readiness 21 21

8.2.4 Field Deployment 22 22

8.2.5 Customer Tariffs and Programs 23 23

8.2.6 Systems Integrator 24 24

8.2.7 Program Management and Organization 25 25

8.2.8 Contingency 26 26

8.3 Associated Revenue Requirement 26 26

9. What Ratemaking Accounts Need to be Modified or Created? 28 28

9.1 Discussion and Conclusion 29 29

10. Comments on Proposed Decision 30 30

11. Assignment of Proceeding 31 31

Findings of Fact 31 31

Conclusions of Law 33 33

ORDER 34 34

Appendix A - List of Appearances

DECISION APPROVING PRE-DEPLOYMENT FUNDING FOR SOUTHERN CALIFORNIA EDISON COMPANY'S ADVANCED METERING INFRASTRUCTURE PROJECT

1. Summary

This decision approves pre-deployment funding in the amount of $45.22 million for Southern California Edison Company's (SCE) Advanced Metering Infrastructure (AMI) Project. The approved amount will cover SCE's expenditures for its pre-deployment activities in the categories of AMI product management, information technology, business process and organizational readiness, field deployment, customer tariffs and programs, systems integration, and program management and organization. The funding of these activities will further the development of the details of SCE's final AMI proposal, provide information to develop or refine the associated cost-benefit analysis, and assist parties and the Commission in analyzing SCE's final AMI deployment business case. Furthermore, these activities will incur minimal risk of stranded costs.

Other activities for which SCE requests funding in this application are considered as deployment, and as such it will be more appropriate to review them as part of the company's deployment application, expected later this year. This decision adopts specific ratemaking and cost recovery treatment for the authorized funds and continues SCE's existing memorandum account to enable SCE to record costs for activities that are not authorized in today's decision.