Summary of Proposed Modifications to
the Amended Servicing Agreement

The proposed modifications to the Amended Servicing Agreement and related attachments have been compared to the Amended Servicing Agreement that was approved in D.02-04-047, and to Amendment No. 1 approved in D.02-07-039. In addition, the proposed modifications have been reviewed in light of the Contract Allocation Decision. Appendix A of this decision reflects the proposed modifications to the Amended Servicing Agreement through the use of underlining and strikeout markings.

The proposed modifications fall into the following categories:

· Definitions and requirements relating to the DWR contracts allocated to SCE in the Contract Allocation Decision.

· Definitions and requirements relating to the surplus energy sales and remittances that SCE will be responsible for.

· Definitions and requirements relating to the Operating Order.

· Incorporation of Amendment No. 1 into the modified version of the Amended Servicing Agreement.

· Certain attachments to be provided by SCE in Service Attachment 2.

· Incorporation of Attachment F, approved in D.02-07-039, into the modified version of the Amended Servicing Agreement.

In addition to the proposed modifications, additional changes have been made to the Amended Servicing Agreement and the related attachments. These additional changes are described in the discussion section below, and also reflect that SCE is being ordered to provide the services in accordance with the attached Servicing Order and that an Operating Order is expected to be approved, rather than an Operating Agreement.