February 4, 2003 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION

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2 Akbar Jazayeri Director of Revenue and Tariffs February 4, 2003 ADVICE 1683-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Tariff Revisions Necessary to Implement the Bill Limiter Provisions in Compliance with Decision In compliance with the California Public Utilities Commission (Commission) Decision (D.) (Decision), Southern California Edison Company (SCE) hereby submits for filing the following changes to its tariff schedules. The revised tariff sheets are listed on Attachment A and are attached hereto. PURPOSE This advice filing revises: (1) Preliminary Statement, Part N, Memorandum Accounts, to establish the Interruptible Bill Limiter (IBL) Memorandum Account; (2) the Settlement Rates Balancing Account (SRBA); and (3) Schedule I-6, Time-Of- Use, General Service Large Interruptible, to modify the bill limiter provision, in compliance with D BACKGROUND In D , the Commission directed SCE to modify its bill limiter provision for Interruptible customers to limit its application to the portion of existing rates that were in effect prior to the addition of Commission-approved surcharges in SCE filed tariffs which became effective May 15, 2002, implementing, among other things, the revisions to the application of the bill limiter, as ordered in D On May 21, 2002, the California Industrial Users And California Large Energy Consumers Association filed a petition to modify D (Petition). The Petition proposed to continue application of the bill limiter to rates in place before the 2001 increases, as well as to the 2001 surcharges. Additionally, the Petition proposed to use a portion of the catch-up surcharge revenues to fully fund the P.O. Box Walnut Grove Ave. Rosemead, California (626) Fax (626)

3 ADVICE 1683-E (U 338-E) February 4, 2003 portion of the interruptible credit not currently recovered in rates. 1 SCE filed comments in support of the Petition provided that the Commission would designate a source of revenue for SCE to recover the associated revenue shortfall. SCE recommended a ratemaking treatment to recover the revenue shortfall. D approved the Petition, with the provision that the revenue deficiency resulting from the bill limiter be funded using the ratemaking treatment recommended by SCE. Pursuant to D , SCE hereby submits its tariff modifications revising the bill limiter provision in Schedule I-6, establishing the IBL Memorandum Account, and revising the SRBA. Specifically, Schedule I-6 is revised to provide that the bill limiter will be calculated using the rates and bill limiter percentages that were in effect prior to March 31, 2002, which include the 2001 surcharges. Additionally, as recommended by SCE, the IBL Memorandum Account is established to record the revenue impact of reinstating the bill limiter to the level that was in effect prior to March 31, As discussed on page 3 of D , the reinstatement of the bill limiter will lower the amount of Surplus that is applied to the recovery of the Procurement Related Obligations Account (PROACT). Therefore, in order to avoid extending the PROACT recovery period due to the decrease in Surplus, SCE is modifying the SRBA. 2 Each month, SCE will credit the SRBA with the difference between SCE s recorded revenue with the bill limiter reinstated to the level prior to March 31, 2002, and revenue calculated assuming that the bill limiter is not reinstated. In addition, SCE will debit the IBL Memorandum Account with this recorded revenue difference each month. SCE will dispose of the balance recorded in the IBL Memorandum Account by recovering the balance in post-proact rate levels from Large Power customers. EFFECTIVE DATE Pursuant to D , Ordering Paragraph 2, this advice filing is effective five days after filing which is February 9, 2003, unless suspended by the Energy Division Director. 1 Petition Of California Industrial Users And California Large Energy Consumers Association To Modify D , pg Under Commission-approved PROACT ratemaking structure, the difference between SCE s revenues from Settlement Rates and SCE s Recoverable Costs (this difference is defined as Surplus) is determined on a monthly basis through the operation of the SRBA.

4 ADVICE 1683-E (U 338-E) February 4, 2003 NOTICE Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received by the Energy Division and SCE no later than 20 days after the date of this advice filing. Protests should be mailed to: IMC Program Manager Energy Division c/o Jerry Royer California Public Utilities Commission 505 Van Ness Avenue, Room 4002 San Francisco, California Facsimile: (415) jjr@cpuc.ca.gov Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above). In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of: Akbar Jazayeri Director of Revenue and Tariffs c/o Emelyn Lawler Southern California Edison Company 2244 Walnut Grove Avenue, Rm. 303 Rosemead, California Facsimile: (626) Emelyn.Lawler@sce.com Bruce Foster Vice President of Regulatory Operations c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415) Karyn.Gansecki@sce.com There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and shall be submitted expeditiously.

5 ADVICE 1683-E (U 338-E) February 4, 2003 In accordance with Section III, Paragraph G, of General Order No. 96-A, SCE is mailing copies of this advice filing to the interested parties shown on the attached service list and R Address change requests to the attached GO 96-A Service List should be directed to Emelyn Lawler at (626) or Emelyn.Lawler@sce.com. Changes to the R Service List, please contact the Commission s Process Office at (415) or ven@cpuc.ca.gov. Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing open for public inspection at SCE s corporate headquarters. For questions, please contact Lisa Vellanoweth at (626) or by electronic mail at Lisa.Vellanoweth@sce.com. Southern California Edison Company AJ:lv Enclosures Akbar Jazayeri

6 Public Utilities Commission 1683-E Attachment A Cal. P.U.C. Sheet No. Title of Sheet Cancelling Cal. P.U.C. Sheet No. Revised E Preliminary Statement Part N Revised E* Revised E* Preliminary Statement Part N Revised E Revised E** Preliminary Statement Part Z Revised E* Revised E* Schedule I-6 Revised E** Revised E Table of Contents Revised E Revised E Table of Contents Revised E Revised E Table of Contents Revised E 1

7 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E* PRELIMINARY STATEMENT Sheet 2 N. MEMORANDUM ACCOUNTS 2. Definitions. d. Specified Project Section Interest Bearing No. Specified Project Memorandum Account* (1) Not Used (2) Not Used (3) Demand Reduction and Self-Generation Program Yes Incremental Cost (DRSGPIC) Memorandum Account (4) Catastrophic Event Yes (5) Not Used (6) Local Area Revenue Mechanism Yes (7) Capital Additions Tracking Account No (8) CDWR Charges and Net Short Procurement Costs Tracking Account No (9) Commission Directed Tracking Account No (10) Research, Development, and Demonstration Royalties Yes (11) Interruptible Bill Limiter (IBL) Memorandum Account Yes (12) Not Used (13) Not Used (14) Income Tax Component of Contribution Yes Memorandum Account (15) Demand Side Management Earnings Yes Memorandum Account (16) Not Used (17) Electric Vehicle Memorandum Account Yes (18) Independent System Operator Memorandum Account Yes (ISO Memorandum Account) (19) Power Exchange Memorandum Account Yes (PX Memorandum Account) (20) Transition Cost Audit Memorandum Account Yes (TCA Memorandum Account) (21) Divestiture of Fossil Generation Yes Memorandum Account (DFG Memorandum Account) (22) Telecommunication Lease Revenue Memorandum Yes Account (TLR Memorandum Account) (23) Competition Transition Charge Exemption Yes Memorandum Account (CTCE Memorandum Account) (24) Industry Restructuring Memorandum Account Yes (IR Memorandum Account) (25) PBR Distribution Revenue Sharing Memorandum Account Yes (26) PBR Distribution Rate Performance Memorandum Account Yes (PDRPMA) (27) Secondary Land Use Revenue Memorandum Account Yes (SLUR Memorandum Account) (28) Not Used (29) Reduced Return On Equity Memorandum Account Yes (RROE Memorandum Account) (30) Rate Reduction Bond Memorandum Account Yes (RRB Memorandum Account) (31) Risk Management Tools Memorandum Account Yes (RMTMA Memorandum Account) (32) Flexible Pricing Options (FPO)/Competition Transition Charge (CTC) Memorandum Account Yes (FPO/CTC Memorandum Account) (33) Not Used (N) * Interest shall accrue monthly to interest-bearing Memorandum Accounts by applying the Interest Rate to the average of the beginning and ending balance. (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, H10 Resolution

8 Southern California Edison Revised Cal. PUC Sheet No E* Rosemead, California Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 12 N. MEMORANDUM ACCOUNTS 11. Interruptible Bill limiter (IBL) Memorandum Account a. Purpose The purpose of the IBL Memorandum Account is to track on a monthly basis, the revenue impact caused by reinstating the Interruptible Bill Limiter, which is effective on the date the Commission approves Advice 1683-E pursuant to D , to the level authorized prior to March 31, 2002, pursuant to D b. Definitions 1. Interest Rate The Interest Rate shall be 1/12 of the most recent month s interest rate on Commercial paper (prime, three months) published in the Federal Reserve Statistical Release, G.13. Should publication of the Interest rate on Commercial Paper (prime, three month) be discontinued, interest will accrue at the rate of 1/12 of the most recent month s interest rate on Commercial Paper, which most closely approximates the rate that was discontinued, and which is published in the Federal Reserve Statistical Release, G.13, or its successor publication. 2. Franchise Fees and Uncollectible Accounts Expense: c. Operation of the IBLMA Franchise Fees and Uncollectible Accounts Expenses (FF&U) shall be calculated using the factors most recently authorized by the CPUC. A debit entry shall be made to the IBL Memorandum Account at the end of each month to record the reduction in SCE s billed revenue caused by reinstating the Interruptible Bill Limiter effective February 9, 2003 to the level authorized prior to March 31, (Less amounts for Franchise Fees and Uncollectibles) Interest shall accrue to the IBL Memorandum Account by the three-month commercial paper rate (as published in the Federal Reserve Statistical Release, G.13, or its successor publication) to the average of the beginning and ending balance. d. Disposition of the Balance SCE shall recover the balance recorded in the IBL Memorandum Account in Post-PROACT rate levels. (N) (N) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, H18 Resolution

9 Southern California Edison Revised Cal. PUC Sheet No E** Rosemead, California Cancelling Revised Cal. PUC Sheet No E* PRELIMINARY STATEMENT Sheet 4 Z. SETTLEMENT RATES BALANCING ACCOUNT 3. Definitions l. DWR Bond Charge Revenues DWR Bond Charge Revenues are the monthly amount of billed revenues associated with those non-exempt customers responsible for repaying the DWR for its bond-related costs through the DWR Bond Charge. m. Total Retail Electric Revenues shall be equal to the sum of the following: 4. Operation of the SRBA (1) The total amount of revenues billed each month (including CPUC-authorized surcharges, and all CPUC-authorized discounts reflected on customers bills (e.g., the 10% rate reduction, and the 20/20 program) associated with the kwh provided by SCE and DWR; and (2) The change (plus or minus) in total Unbilled Revenues (i.e., the reversal of prior month s estimate, plus the current month s estimate). Total Electric Revenues will include amounts recorded from the nonbypassable Historical Procurement Charge (charged to Direct Access customers pursuant to D ) until such time as SCE is directed by the Commission to credit the balance in the Historical Procurement Charge Balancing Account. In order to determine amounts to be transferred to the PROACT, entries to the SRBA shall be made monthly based upon the following calculations: a. Credit entry equal to SCE Retail Electric Revenues determined as follows: (1) Credit entry equal to the Total Retail Electric Revenue; (2) A debit entry equal to the provision for Franchise Fee Requirements associated with item (1); (3) Sum of items (1) and (2) is equal to the total amount of retail revenue available to be allocated between SCE and DWR. (4) A debit entry equal to the DWR Power Sale Revenues; (5) A debit entry equal to DWR Bond Charge Revenues; (6) A debit entry equal to the provision for Uncollectibles associated with Total Retail Electric Revenues reduced by the amount of DWR Power Sale Revenue and DWR Bond Charge Revenue (items (1), (4) and (5) above; (7) A debit entry to remove the surcharge revenues equal to the amount recorded in the Catch-Up Surcharge Revenue (CUSR) Memorandum Account (see Preliminary Statement, Part N). (8) A debit or credit entry to remove the baseline allocation-related over-or undercollection equal to the amount recorded in the Baseline Balancing Account (BBA) See Preliminary Statement, Part I; (9) A credit entry to remove the bill limiter undercollection equal to the amount recorded in the Interruptible Bill Limiter (IBL) Memorandum Account See Preliminary Statement, Part N, Section 11. (10) A debit or credit entry to remove the CARE subsidy-related over- or under-collection equal to the amount recorded in the CARE Balancing Account (CBA) (see Preliminary Statement, Part AA). (11) The sum of items (3), (4), (5), (6), (7), (8), (9), and (10) is equal to SCE Retail Electric Revenues. (N) (N) (T) (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, W12 Resolution

10 Southern California Edison Revised Cal. PUC Sheet No E* Rosemead, California Cancelling Revised Cal. PUC Sheet No E** Schedule I-6 Sheet 7 TIME-OF-USE GENERAL SERVICE - LARGE - INTERRUPTIBLE SPECIAL CONDITIONS 12. Customer-Owned Electrical Generating Facilities: a. Where customer-owned electrical generating facilities are used to meet a part or all of the customer's electrical requirements, service shall be provided concurrently under the terms and conditions of Schedule S and this Schedule. Parallel operation of such generating facilities with SCE's electrical system is permitted. A Generation Agreement is required for such operation. b. Customer-owned electrical generating facilities used solely for auxiliary, emergency, or standby purposes (auxiliary/emergency generating facilities) to serve the customer's load during a period when SCE's service is unavailable and when such load is isolated from the service of SCE are not subject to Schedule S. However, upon approval by SCE, momentary parallel operation may be permitted in order for the customer to avoid interruption of load during a Period of Interruption or to allow the customer to test the auxiliary/emergency generating facilities. A Momentary Parallel Generation Contract is required for this type of service. 13. Bill Limiter: This special condition is applicable to Schedule I-3 and I-5 interruptible customers of record on December 31, 1992, who were transferred to this Schedule on January 1, 1993 coincident with the expiration of Schedule I-3 and I-5. For such customers, each monthly bill under this Schedule, excluding the Public Utilities Commission Reimbursement Fee, CARE Surcharge, as set forth in Preliminary Statement, Part O, Section 5, Power Factor Adjustment, and Excess Transformer Capacity Charge, is calculated using current rates (actual monthly bill) and then using the appropriate rates from the customers applicable interruptible schedule in effect on December 31, 1992 (comparison monthly bill). The actual monthly bill cannot exceed the comparison monthly bill by more than the percentage shown for the appropriate service voltage level, as follows: Voltage Percentage Below 2kV 70.8% (C) 2kV - 50kV 78.3% Above 50kV 99.9% (C) This Special Condition expires on January 1, 1999.* This Special Condition is not applicable to customers who newly take service concurrently under Schedule S on or after January 1, (C) (C) * This change is suspended consistent with Commission Resolution E-3765 until modified or eliminated in the rate design phase of SCE s next general rate case or similar proceeding. (C) (C) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, H15 Resolution

11 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 1 Cal. P.U.C. Sheet No. TITLE PAGE E TABLE OF CONTENTS - RATE SCHEDULES E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS E TABLE OF CONTENTS - RULES E TABLE OF CONTENTS - BASELINE REGIONS E TABLE OF CONTENTS - SAMPLE FORMS E PRELIMINARY STATEMENT: A. Territory Served E B. Description of Service E C. Procedure to Obtain Service E D. Establishment of Credit and Deposits E E. General E F. Symbols E G. Gross Revenue Sharing Mechanism E E H. Baseline Service E I. Baseline Balancing Account E J. Employee-Related Balancing Account E K. Nuclear Decommissioning Adjustment Mechanism E L. Performance-Based Ratemaking Exclusions Distribution Adjustment Mechanism E M. Income Tax Component of Contributions E N. Memorandum Accounts E E E E E E E E E E O. California Alternative Rates for Energy (CARE) Adjustment Clause E P. Optional Pricing Adjustment Clause (OPAC) E (T) (T) (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, H12 Resolution

12 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 2 PRELIMINARY STATEMENT: (Cont'd) Cal. P.U.C. Sheet No. Q. Demand Side Management Adjustment Clause (DSMAC) E E R. Historical Procurement Charge Balancing Account E S. NOT IN USE...-E T. Electric and Magnetic Fields Measurement Program E U. Electric Vehicle Adjustment Clause (EVAC) E V. Hazardous Substance Cleanup Cost Recovery Mechanism E E W. Competition Transition Charge Responsibility (CTC) E E X. Research, Development and Demonstration Adjustment Clause (RDDAC) E Y. Economic Development Adjustment Clause (EDAC) E Z. Settlement Rates Balancing Account E AA. California Alternate Rates for Energy (CARE) Balancing Account E BB. Nongeneration Base Rate Adjustment Mechanism (NBRAM) E E CC. Base Rate Performance Mechanism (BRPM) E E DD. Cost Of Capital Trigger Mechanism E EE. Electric Deferred Refund Account (EDRA) E FF. Public Purpose Programs Adjustment Mechanism E GG. Energy Efficiency Program Adjustment Mechanism (EEPAM E HH. Low Income Energy Efficiency Program Adjustment Mechanism (LIEEPAM) E II. Bond Charge Balancing Account (BCBA) E JJ. PENDING...-E KK. NOT IN USE...-E LL. PENDING...-E MM. Procurement Related Obligations Account (PROACT) E NN. PENDING... -E OO. PENDING... -E PP. PENDING... -E QQ. PENDING... -E RR. PENDING... -E SS. PENDING... -E TT. PENDING... -E UU. Independent System Operator Balancing Account (ISOBA) E VV. Purchased Power Balancing Account (PPBA) E WW.Native Load Balancing Account E E XX. Electric Distribution Revenue Adjustment Balancing Account (EDRABA) E E YY. El Paso Turned-Back Capacity Balancing Account (ETCBA) E ZZ. Energy Resource Recovery Account E (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, H11 Resolution

13 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 4 RATES SCHEDULES Schedule Cal. P.U.C. No. Title of Sheet No. GENERAL SERVICE/INDUSTRIAL AEDR Attraction Economic Development Rate E EEDR Expansion Economic Development Rate E GS-1 General Service - Non Demand E GS-2 General Service - Demand E GS-APS General Service - Automatic Powershift, Non-Demand E E GS-APS-E General Service - Automatic Powershift Enhanced E E I-6 Time-of-Use, General Service - Large - Interruptible E E I-6-BIP General Service Large Base Interruptible Program E REDR Retention Economic Development Rate E RTP-2 General Service - Large, Real Time Pricing Test E E RTP-2-I General Service - Large, Real Time Pricing Test, Interruptible E RTP-3 General Service - Large, Real Time Pricing E E RTP-3-GS General Service Real Time Pricing E SSGDR Simplified Self-Generation Deferral Rate E TOU-EV-3 General Service Time-Of-Use Electric Vehicle Charging E TOU-EV-4 General Service - Time-Of-Use Electric Vehicle Charging E E TOU-GS-1 General Service - Non Demand E TOU-GS-2 General Service - Time-of-Use - Demand Metered E E TOU-GS-2-SOP Time-of-Use, General Service - Demand Metered E E (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1683-E John R. Fielder Date Filed Feb 4, 2003 Decision Senior Vice President Effective Feb 21, H14 Resolution

14 February 13, 2003 California Public Utilities Commission 505 Van Ness Avenue, Room 4005 San Francisco, CA Attn: Jerry Royer Energy Division Re: Substitute Sheets for Advice 1683-E Dear Mr. Royer: Enclosed is an original and six copies of Attachment A and various substitute tariff sheets for Advice 1683-E. These substitute sheets are necessary to ensure that all appropriate, approved revisions are contained in affected tariff sheets. The following revisions are submitted at the request of the Energy Division: 1) Sheet No E* is included to revise text in Section 11.a. to provide that the reinstating of the Interruptible Bill Limiter will become effective on the date the Commission approves Advice 1683-E, filed in compliance with Decision ; 2) Sheet No E*, the canceling sheet number is being replaced with Cancelling Sheet No E* so that the required revisions are inserted in the currently effective tariff sheet as opposed to the previously submitted sheet, which was a sheet from another pending advice filing; and 3) Sheet No E* is modified to add the word consistent to the footnote, as it was inadvertently omitted. Please replace the enclosed sheets in your master Advice 1683-E file and distribute copies to the appropriate people reviewing the Advice Letter. If you have any questions, please contact Dara Morgan at (626) Sincerely, Enclosures 1683-Esub.doc copy: R service list

15 February 20, 2003 California Public Utilities Commission 505 Van Ness Avenue, Room 4005 San Francisco, CA Attn: Jerry Royer Energy Division Re: Substitute Sheets for Advice 1683-E Dear Mr. Royer: Enclosed is an original and six copies of Attachment A and a substitute tariff sheet for Advice 1683-E. Sheet No E** is submitted to revise text in Section 4.a.(11) to add (10) to the listed items to be summed, as it was inadvertently omitted and is necessary to sustain consistency with the renumbering of Section 4.a. Please replace the enclosed sheets in your master Advice 1683-E file and distribute copies to the appropriate people reviewing the Advice Letter. If you have any questions, please contact Ruby Galvan at (626) Sincerely, Enclosures 1683-Esub.doc copy: Bruce Kaneshiro R service list