ALJ/CAB/tcg Mailed 12/3/2004

Decision 04-12-016 December 2, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company Regarding the Future Disposition of the Mohave Generating Station.

Application 02-05-046 (Filed May 17, 2002)

(See Appendix A for List of Appearances.)

OPINION AUTHORIZING SOUTHERN CALIFORNIA EDISON COMPANY
TO MAKE NECESSARY AND APPROPRIATE EXPENDITURES
ON CRITICAL PATH INVESTMENTS AT MOHAVE WHILE CONTINUING
TO SEEK RESOLUTION OF THE WATER AND COAL ISSUES
AND TO ESTABLISH A MERMA ACCOUNT

TABLE OF CONTENTS

Title Page

OPINION AUTHORIZING SOUTHERN CALIFORNIA EDISON COMPANY TO
MAKE NECESSARY AND APPROPRIATE EXPENDITURES ON CRITICAL PATH INVESTMENTS AT MOHAVE WHILE CONTINUING TO SEEK RESOLUTION OF
THE WATER AND COAL ISSUES AND TO ESTABLISH A MERMA ACCOUNT 1

Summary 2

Background 3

Water and Coal Issues 5

Water 5

Coal 9

Procedural History 10

Motions 20

Summary of Parties' Positions 21

Edison 21

Hopi Tribe 24

Navajo Nation 28

Black Mesa Pipeline 31

Salt River Project 33

TURN 34

ORA 37

Utility Workers Union of America/United Mine Workers of
America/Coalition of California Utility Employees 38

City of Laughlin, Nevada 40

WEC 40

NRDC 42

Peabody 45

Issues Before the Commission 47

Discussion 48

Alternatives 50

Alternatives Study 52

Ratemaking Issues 59

Ratemaking Issues 62

MERMA Account 62

Other Cost Recovery 63

Preliminary Environmental Assessment 64

Comments on Proposed Decision 64

Assignment of Proceeding 65

Findings of Fact 65

Conclusions of Law 68

ORDER 70

Appendix A - List of Appearances

OPINION AUTHORIZING SOUTHERN CALIFORNIA EDISON COMPANY
TO MAKE NECESSARY AND APPROPRIATE EXPENDITURES
ON CRITICAL PATH INVESTMENTS AT MOHAVE WHILE CONTINUING
TO SEEK RESOLUTION OF THE WATER AND COAL ISSUES
AND TO ESTABLISH A MERMA ACCOUNT