June 1, In accordance with the Decision, this report is served on each of the parties to A

Transcription

1 Colin Lennard Director and Managing Attorney Environmental and Licensing June 1, 2016 Edward Randolph, Director Energy Division California Public Utilities Commission 505 Van Ness Avenue San Francisco, CA Re: Hazardous Substances Cleanup Cost Recovery Mechanism Annual Report Dear Mr. Randolph: Pursuant to Commission Decision dated May, 1994 (the Decision ), enclosed is the Southern California Edison 2016 annual report of hazardous substances costs that have been recorded in Hazardous Substances Cleanup Costs Accounts during the period of April 1, 2015, to March 31, In accordance with the Decision, this report is served on each of the parties to A If you have any questions or concerns, please contact Mark J. Passarini at (626) Sincerely, /s/ Colin Lennard Colin Lennard cc: Mark Pocta, ORA Mark J. Passarini, SCE Interested Parties of A Enclosure P.O. Box Walnut Grove Ave. Rosemead, California Fax (626) LIMS

2 2016 ANNUAL REPORT ON HAZARDOUS SUBSTANCE CLEANUP COST RECOVERY MECHANISM SUBMITTED BY: SOUTHERN CALIFORNIA EDISON COMPANY IN COMPLIANCE WITH COMMISSION DECISION NO ORDERING PARAGRAPH NO. 4 June 1, 2016

3 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 1 SOUTHERN CALIFORNIA EDISON COMPANY HAZARDOUS SUBSTANCE CLEANUP COST RECOVERY MECHANISM 2016 ANNUAL REPORT TABLE OF CONTENTS I. INTRODUCTION... 3 II. HAZARDOUS SUBSTANCE CLEANUP COSTS... 5 A. Manufactured Gas Plant (MGP) Project Summaries: Site: Bellflower MGP Site: Colton MGP Site: Corona MGP Site: Long Beach I MGP Site: Long Beach II MGP Site: Long Beach III MGP Site: Monrovia MGP Site: Pomona MGP Site: Redlands II MGP Site: Riverside MGP Site Site: San Bernardino MGP Site: Santa Ana I MGP Site: Santa Ana II MGP Site: Santa Barbara I MGP Site: Santa Barbara II MGP Site: San Pedro MGP Site: Santa Monica MGP Site: Venice MGP Site: Ventura MGP Site: Whittier MGP... 8 B. Federal Superfund Site Project Summaries: Site: Operating Industries, Inc Site: Stringfellow Site: Visalia Pole Yard Site: Casmalia Disposal... 9 C. Other Site Project Summaries: Site: Alamitos Generating Station Site: Alhambra Combined Facility Site: Ascon Landfill Site: BKK Landfill Facility Site: Cameron-Yakima Site: Cool Water Generating Station Site: Cooper Drum Site: Eastside Disposal Facility Site: El Segundo Generating Station... 12

4 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Etiwanda Generating Station Site: Fuel Oil Pipeline and Storage System Site: General Office Complex Site: Gibson Environmental Site: Highgrove Generating Station Site: Huntington Beach Generating Station Site: Jack Engle & Company Site: Lafayette Site Site: Long Beach Generating Station Site: Mandalay Generating Station Site: Mercury Refining Company Site: Mobile Smelting Site: Omega Chemical Site: Ormond Beach Generating Station Site: Pebbly Beach Generating Station Site: Quicksilver Products Inc Site: Redondo Generating Station Site: Rosen s Electrical Equipment Site: San Bernardino Generating Station Site: SCE Pole and Cribwall Firewrap Removal Site: Walker Property Facility III. HAZARDOUS SUBSTANCE THIRD-PARTY AND INSURANCE LITIGATION COSTS IV. HAZARDOUS SUBSTANCE THIRD-PARTY AND INSURANCE RECOVERIES V. DISPOSITION OF THE HAZARDOUS SUBSTANCE CLEANUP AND LITIGATION COST (HSCLC) BALANCING ACCOUNT BALANCE Table I: Hazardous Substance Cleanup and Litigation Cost Balancing Account Appendix A: Certificate of Service

5 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 3 I. INTRODUCTION Pursuant to Decision No. (D.) , dated May 4, 1994, Southern California Edison Company (SCE) hereby files its 2016 Annual Report to the California Public Utilities Commission (Commission) on Hazardous Substance Cleanup Cost Recovery Mechanism activities. Decision No approved and adopted a Settlement Agreement, appended as Appendix A to the decision, which established the Hazardous Substance Cleanup Cost Recovery Mechanism. 1 In approving the Settlement Agreement, the Commission revised the utilities procedure for recovery and allocation of costs associated with cleaning up certain properties contaminated with hazardous substances (and related recoveries) between SCE customers and shareholders. Pursuant to the Mechanism adopted by the Commission in D , recoverable Hazardous Substance Cleanup Costs ( Covered Hazardous Substance Cleanup Costs ) are defined as: [A]ll costs paid by a utility to clean up hazardous substance contamination which are paid to persons or entities who are not funded through the utility's base rates. Hazardous Substance Cleanup Costs include without limitation, investigation costs, remediation costs, monitoring costs, closure costs, agency oversight fees, permit fees, and hazardous waste taxes, as well as payments made by utilities to satisfy claims against them which relate to costs to clean up hazardous substance contamination that have been or will be incurred by persons or entities other than the utilities. 2 Under the Hazardous Substance Cleanup Cost Recovery Mechanism, SCE will recover the following from its customers without reasonableness review: (1) 90 percent of Covered Hazardous Substance Cleanup Costs; (2) 70 percent of Covered Insurance Litigation Costs; and (3) 90 percent of Covered Third-Party Litigation Costs. The remainder of these costs is the responsibility of SCE s shareholders. The shareholders cost responsibility, along with the opportunity to recover these costs through successful insurance and third-party recoveries, provide SCE an appropriate incentive to cost-effectively fulfill its obligations for addressing its hazardous substance cleanup efforts as required by law. 1 The Mechanism set forth in the Settlement Agreement grew out of a collaborative process initiated by the Office of Ratepayer Advocates ( ORA ), Southern California Gas Company (SoCalGas), Pacific Gas and Electric Company (PG&E), SCE, San Diego Gas & Electric Company (SDG&E), and Toward Utility Rate Normalization (TURN) in order to resolve hazardous waste cost recovery related issues presented in D Those parties, working in concert with the California Environmental Protection Agency and the United States Environmental Protection Agency, Region IX, formed a Collaborative Group, which submitted a report on the recovery of hazardous waste expenses ( Collaborative Report ). The Collaborative Group could not resolve all of the issues it considered, and its reservations were documented in the Report. Ultimately, some but not all of the participants (ORA, PG&E, SDG&E, SCE, and SoCalGas), reached settlement regarding an alternative procedure for recovery of hazardous substance cleanup expenses. As the Commission noted in D , the Mechanism included in the Settlement Agreement and adopted by the Commission was in conformance with the findings and recommendations of the Collaborative Report. However, there were some minor differences in the definitions of hazardous substance cleanup costs. 2 The description of Covered Hazardous Substance Cleanup Costs in the Collaborative Report is not identical to the definition adopted by the Commission in Appendix A of D Further, D , dated July 3, 1996, requires that a utility seeking to add a new a site to the Mechanism by advice letter filing demonstrate all of the costs for which recovery is being sought are hazardous waste cleanup costs (including insurance litigation costs) found appropriate for recovery in the Collaborative Report. However, as discussed above, and in note 1, the Collaborative Report describes the collaborative negotiation process and principles that lead to the Mechanism set forth in the Settlement Agreement, but the Commission approved and adopted the Mechanism described in the Settlement Agreement. Thus, in the event of a conflict with respect to a specific definition or operative requirement, SCE has followed--and will continue to follow-- the terms of the Mechanism adopted in D

6 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 4 The 2016 Annual Report provides the Commission documentation of costs recorded in the Hazardous Substance Cleanup and Litigation Cost Balancing Account during the period April 1, 2015 through March 31, SCE will continue to record costs incurred after this date in the Hazardous Substance Cleanup Cost Recovery Mechanism. These costs will be included in the 2017 Annual Report to the Commission covering the period April 1, 2016, through March 31, Pursuant to D , SCE s Annual Report is to be filed with the Commission by June 1 of each year and should include the following information for the reporting period: 1. The name of each Site for which costs were incurred; 2. The location of each Site; 3. The amount of Covered Hazardous Substance Costs incurred for each Site; 4. The amount of Internal Hazardous Substance Costs included within these costs, if any; 5. The total Covered Third-Party Litigation Costs and Covered Insurance Litigation Costs incurred for all Sites; and 6. The Amount of Covered Third-Party Recoveries and Covered Insurance Recoveries obtained for all Sites. 3 The report also describes the costs so that the Energy Division can determine whether the costs have been properly accounted for by SCE, and whether reported Internal Hazardous Substance Cleanup Costs are already being recovered in rates. This 2016 Annual Report is being served upon each of the parties to Application No A total of $2,009, in Hazardous Substance Cleanup Costs was eligible for inclusion in the Hazardous Substance Cleanup Mechanism during the period April 1, 2015, through March 31, 2016 (Report Period). Ninety percent of this amount may be recovered from customers under the balancing account mechanism. of the costs described in this report and recorded in the Hazardous Substance Cleanup Mechanism are Internal Hazardous Substance Cleanup Costs. Hazardous Substance Cleanup Costs are addressed in Section II. Hazardous Substance Third-Party and Insurance Litigation Costs are addressed in Section III. A total of $13, in Third-Party Litigation Costs was incurred during this period. No Insurance Litigation costs were incurred during this period (see Table I). Hazardous Substance Third-Party and Insurance Recoveries are addressed in Section IV. There were no recoveries net of insurance litigation costs during this period (see Table I). No amounts were transferred from the Covered Insurance Recoveries Tracking Account to customers through the Hazardous Substance Cleanup and Litigation Cost Balancing Account. 3 Per Appendix A, VII.B.5. of D

7 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 5 II. HAZARDOUS SUBSTANCE CLEANUP COSTS The following section identifies the name and the location of all sites included in the Hazardous Substance Cleanup Cost Recovery Mechanism as of March 31, 2016, and one hundred percent of the Covered Hazardous Substance Cleanup Costs incurred at each of the following sites during the Report Period. SCE is providing this information for all sites for which it has current authorization under D , even if no costs have been incurred. In this 2016 Annual Report, SCE grouped its sites into three categories: (A) Manufactured Gas Plant (MGP) Sites; (B) Federal Superfund Sites; and (C) Other Sites. A. Manufactured Gas Plant (MGP) Project Summaries 4 : 1. Site: Bellflower MGP Bellflower, California 2. Site: Colton MGP Colton, California 3. Site: Corona MGP Corona, California Recorded Expenses: $2, Remediation, Cleanup, Monitoring, and Reporting a. DTSC (agency oversight) $ 2, TOTAL $ 2, Site: Long Beach I MGP Long Beach, California 4 SCE has entered into agreements with SoCalGas to initially share the costs of remediation of former manufactured gas plant sites on a 50/50 percent basis. Both SCE and SoCalGas have mutual involvement through ownership and/or operation of these facilities. Reimbursements by either company under the provisions of these agreements are duly noted for each MGP site where appropriate.

8 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 6 5. Site: Long Beach II MGP Long Beach, California 6. Site: Long Beach III MGP Long Beach, California 7. Site: Monrovia MGP Monrovia, California 8. Site: Pomona MGP Pomona, California 9. Site: Redlands II MGP Redlands, California Recorded Expenses: $ Remediation a. DTSC (agency oversight) $ b. SoCalGas (reimbursement to SoCalGas for its costs) $ TOTAL $ Site: Riverside MGP Site Riverside, California Recorded Expenses: $ Remediation a. SoCalGas (reimbursement to SoCalGas for its costs) $ TOTAL $ Site: San Bernardino MGP San Bernardino, California Recorded Expenses: $ Remediation b. SoCalGas (reimbursement to SoCalGas for its costs) $ TOTAL $

9 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Santa Ana I MGP Santa Ana, California Recorded Expenses: $ Remediation c. SoCalGas (reimbursement to SoCalGas for its costs) $ TOTAL $ Site: Santa Ana II MGP Santa Ana, California Recorded Expenses: $6, Remediation, Monitoring, and Reporting a. DTSC (agency oversight) $ 6, TOTAL $ 6, Site: Santa Barbara I MGP Santa Barbara, California Recorded Expenses: $53, Remediation Completion Actions, and Long Term Monitoring a. DTSC (agency oversight) $ 1, b. URS Corporation (remedial contractor) $ 52, TOTAL $ 53, Site: Santa Barbara II MGP Santa Barbara, California Recorded Expenses: $29, Remediation a. SoCalGas (reimbursement to SoCalGas for its costs) $ 29, TOTAL $ 29, Site: San Pedro MGP San Pedro, California 17. Site: Santa Monica MGP Santa Monica, California

10 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Venice MGP Venice, California Activities 19. Site: Ventura MGP Ventura, California Recorded Expenses: $53, Remediation, Waste Disposal, Reporting, and Monitoring a. SoCalGas (reimbursement to SoCalGas for its costs) $ 53, TOTAL $ 53, Site: Whittier MGP Whittier, California Recorded $0.00

11 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 9 B. Federal Superfund Site Project Summaries: 1. Site: Operating Industries, Inc. Monterey Park, California 2. Site: Stringfellow Riverside, California 3. Site: Visalia Pole Yard Visalia, California 4. Site: Casmalia Disposal Santa Barbara County, California

12 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 10 C. Other Site Project Summaries: 1. Site: Alamitos Generating Station Long Beach, California Recorded Expenses: $296, Closure Plan Preparation, Retention Basin Investigation, and Groundwater Monitoring a. Copying and printing (public participation and report copying) $ b. Jamison & Associates, Inc. (closure plan consultant) $ 139, c. Patrick Hamilton (site investigation/groundwater monitoring consultant) $ 76, d. Weck Analytical Environmental (soil/water analyses) $ 67, e. DTSC (agency oversight) $ 11, TOTAL $ 296, Site: Alhambra Combined Facility Alhambra, California Recorded Expenses: $41, Site Investigation and Remediation a. The Source Group (assessment and remediation consultant) $ 18, b. Clean Harbors Environmental (waste disposal) $ c. Arcadis US Incorporated (indoor air quality monitoring 9, $ Building AD) d. DTSC (agency oversight) $ 13, TOTAL $ 41, Site: Ascon Landfill Huntington Beach, California Recorded Expenses: $256, State Superfund Investigation and Remediation a. Ascon Remediation Fund $ 130, b. Bingham McCutchen LLP (legal representation) $ 126, TOTAL $ 256,768.61

13 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: BKK Landfill Facility West Covina, California Recorded Expenses: $379, Landfill O&M, Site Characterization, Remediation, and Legal Representation a. Bingham McCutchen LLP Client Trust Account $ 210, b. BKK Joint Defense Group Members $ 169, TOTAL $ 379, Site: Cameron-Yakima Yakima, Washington 6. Site: Cool Water Generating Station Daggett, California 7. Site: Cooper Drum South Gate, California Recorded Expenses: $ Participation in Settlement Negotiations a. Bingham McCutchen LLP (legal representation/settlement negotiations) $ TOTAL $ Site: Eastside Disposal Facility Bakersfield, California

14 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: El Segundo Generating Station El Segundo, California Recorded Expenses: $75, Closure Plan, Retention Basin Investigation, and Groundwater Monitoring a. DTSC (agency oversight) $ 9, b. Patrick Hamilton (soil investigation/groundwater monitoring consultant) $ 16, c. Weck Analytical Environmental (soil/water analyses) d. Jamison & Associates, Inc. (closure plan consultant) e. Copying, printing, and graphics services $ 13, $ 35, $ TOTAL $ 75, Site: Etiwanda Generating Station Etiwanda, California 11. Site: Fuel Oil Pipeline and Storage System Various 12. Site: General Office Complex Rosemead, California 13. Site: Gibson Environmental Bakersfield, California

15 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Highgrove Generating Station Grand Terrace, California 15. Site: Huntington Beach Generating Station Huntington Beach, California Recorded Expenses: $127, Soil Investigation and Groundwater Monitoring a. Patrick Hamilton (soil investigation/groundwater monitoring consultant) $ 31, b. Weck Analytical Environmental (soil/water analysis) $ 32, c. Jamison & Associates, Inc. (closure plan consultant) $ 9, d. Copying, printing, & general business services $ e. Environmental Applications (RCRA facility investigation work plan) $ 27, f. DTSC (agency oversight) $ 25, TOTAL $ 127, Site: Jack Engle & Company South Gate, California 17. Site: Lafayette Site Costa Mesa, California Recorded Expenses: $74, Preliminary Site Assessment a. Geosyntec Consultants, Inc. (remedial investigation) $ 57, b. DTSC (agency oversight) c. Advanced Technology Laboratories (sample analysis) d. Clean Harbors Environmental (waste disposal) $ $ $ 15, TOTAL $ 74,885.95

16 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Long Beach Generating Station Long Beach, California 19. Site: Mandalay Generating Station Oxnard, California Recorded Expenses: $184, Soil Remediation and Retention Basin Groundwater Monitoring a. DTSC (agency oversight) $ 24, b. Jamison & Associates (closure plan consultant) $ 4, c. Saddleback Surveys, Inc. (well surveying) $ 3, d. Patrick Hamilton (soil investigation/groundwater monitoring consultant) $ 56, e. Weck Analytical Environmental (soil/water analyses) $ 38, f. Copying, printing and graphics services $ 1, g. Clean Harbors Environmental (waste disposal) $ 2, h. Advanced Technology Laboratories (soil/water analyses) $ i. Leighton Consulting, Incorporated (well repairs, $ 52, abandonments and installations) j. PSC Industrial Outsourcing, LP (disposal services for waste associated with Leighton well work) $ 1, TOTAL $ 184, Site: Mercury Refining Company Albany, New York 21. Site: Mobile Smelting Mojave, California Recorded Expenses: $30, Participation in Settlement Negotiations a. U.S. Environmental Protection Agency (settlement negotiations) $ 30, TOTAL $ 30,912.00

17 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Omega Chemical Whittier, California 23. Site: Ormond Beach Generating Station Oxnard, California Recorded Expenses: $84, Groundwater Remediation and Retention Basin Groundwater Monitoring a. DTSC (oversight) $ 30, b. Patrick Hamilton (soil investigation/groundwater monitoring/remediation system O&M and monitoring consultant) $ 20, c. Weck Analytical Environmental (soil/water analyses) $ 11, d. Jamison & Associates, Inc. (closure plan consultant) $ 22, e. Copying, printing and general business services $ TOTAL $ 84, Site: Pebbly Beach Generating Station Avalon, California Recorded Expenses: $65, Remediation, Monitoring, Reporting, and Waste Disposal a. Worley Parsons Group Inc. (groundwater sampling and oil recovery) b. Advanced Technology Laboratories (sample analysis) $ $ 59, , TOTAL $ 65, Site: Quicksilver Products Inc. Brisbane, California

18 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report Site: Redondo Generating Station Redondo Beach, California 27. Site: Rosen s Electrical Equipment Pico Rivera, California Recorded Expenses: $245, Post-Closure Operation and Maintenance b. Rosen s Electrical Equipment Co. (funding for post closure trust account) $ 245, TOTAL $ 245, Site: San Bernardino Generating Station San Bernardino, California 29. Site: SCE Pole and Cribwall Firewrap Removal Various 30. Site: Walker Property Facility Santa Fe Springs, California

19 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 17 III. HAZARDOUS SUBSTANCE THIRD-PARTY AND INSURANCE LITIGATION COSTS In 1994, SCE initiated insurance recovery litigation against several insurance carriers. Insurance litigation costs incurred in 1994 were determined to be included in base rates as part of SCE s 1992 General Rate Case (GRC). SCE s 1995 GRC revenue requirement authorization did not include any cost for this type of property insurance litigation. Thus, insurance recovery costs incurred after January 1, 1995, the effective date of the 1995 GRC revenue requirement, are not covered through SCE s base rates. Rather, they are considered Covered Insurance Litigation Costs and are subject to the Hazardous Substance Cleanup Cost Recovery Mechanism. For this Report Period, no Insurance Litigation Costs were incurred for sites covered. A total of $13, in Third-Party Litigation Costs was incurred during the Report Period for all sites covered in this 2016 Annual Report. 5 5 This amount is also included in the total Covered Hazardous Substance Costs for the BKK Landfill Facility in Section II. As directed by Decision No , Appendix A, p. 15, this report provides a site-by-site list of Covered Hazardous Substance Costs, which includes both Hazardous Substance Cleanup Costs and Third Party Litigation Costs, as well as a cumulative total of Third Party Litigation Costs for all Sites.

20 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 18 IV. HAZARDOUS SUBSTANCE THIRD-PARTY AND INSURANCE RECOVERIES As a result of the insurance litigation effort identified in Section III of this report, as of March 31, 2016, SCE s insurance recovery totals $27,313, This includes all recoveries during the reporting periods from 1995 through 2010, inclusive. No disclosures were made during the 1995 period because disclosure would have compromised the ongoing settlement negotiations with other defendants (Exhibit A, 1995 Annual Report). No disclosures were made after 2010 since the Insurance Recoveries option was exhausted. The insurance recoveries covered a number of sites, most of which were covered sites included in the Hazardous Substance Cleanup Cost Recovery Mechanism. The insurance recoveries shall be allocated as follows: Reporting Year Insurance Recoveries Shareholder Allocation Customer Allocation Remaining Balance $ 17,546,770 $ 2,525,363 $ 1,540,442 $ 13,708, $ 5,122,553 $ 878,839 $ 489,649 $ 18,339, $ 2,707,077 $ 825,286 $ 91,884 $ 21,337, $ 1,530,000 $ 961,694 $ 106,854 $ 22,951, $ 0 $ 822,458 $ 91,384 $ 23,271, $ 0 $ 2,399,623 $ 1,493,264 $ 20,823, $ 0 $ 3,002,095 $ 2,283,938 $ 16,150, $ 0 $ 3,495,834 $ 2,146,897 $ 10,744, $ 0 $ 2,537,781 $ 1,822,653 $ 6,491, $ 342,724 $ 1,886,869 $ 1,423,408 $ 3,626, $ 19,748 $ 1,465,865 $ 669,971 $ 1,623, $ 32,847 $ 1,092,023 $ 148,657 $ 472, $ 0 $ 431,795 $ 47,977 $ $ 6,760 $ 5,070 $ 1,690 $ $ 4,624 $ 3,468 $ 1,156 $ 0 Total $ 27,313,103 $ 22,334,063 $ 12,359,824 $ 0 Pursuant to the Hazardous Substance Cleanup Cost Recovery Mechanism, upon receipt of an insurance recovery, SCE customers and shareholders must be reimbursed for their respective shares of the Covered Insurance Litigation Costs (customers 70% and shareholders 30%). Following the full reimbursement for Covered Insurance Litigation Costs, customers shall receive 10% and shareholders 90% of their respective shares of Cleanup Costs. SCE received no insurance recoveries during the Report Period. SCE did not receive any Third-Party Recoveries this period. As noted above in footnote 4, SCE has entered into agreements with SoCalGas to initially share costs for remediation of former manufactured gas plants on a 50/50 percent basis. Both companies have mutual involvement through ownership and/or 6 This amount reflects total insurance recoveries net of legal fees, disbursements, and allocations to non-covered Sites. 7 The remaining balance already includes interest (see Table I). 8 This amount includes $8,861 of insurance recovered during the period (including interest).

21 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 19 operation of these facilities. Reimbursements by either company under the provisions of these agreements are duly noted in the recorded expenses described in detail above in Section II.

22 Hazardous Substance Cleanup Cost Recovery Mechanism 2016 Annual Report 20 V. DISPOSITION OF THE HAZARDOUS SUBSTANCE CLEANUP AND LITIGATION COST (HSCLC) BALANCING ACCOUNT BALANCE In D , the Commission authorized the establishment of the HSCLC Balancing Account. This mechanism records customers share of costs and related recoveries associated with hazardous waste projects. As authorized by D , SCE will transfer the appropriate portion of costs described in this 2016 Annual Report as recorded in the HSCLC Balancing Account to the appropriate ratemaking mechanism, which is currently the distribution sub-account of the Base Revenue Requirement Balancing Account (BRRBA), 91 days after the filing date of this report. 9 Amounts recorded in the distribution sub-account of the BRRBA are recovered through distribution rate levels upon Commission approval. Thus, as shown on Table I, the estimated August 31, 2016, balance in the HSCLC that will be transferred to the BRRBA is $1.815 million The amount transferred to the BRRBA will be the balance of the HSCLC Balancing Account as of March 31, 2016, plus interest of that balance through August 31, As shown on Table I, in the Adjustment column, SCE transferred $1.850 million including interest to BRRBA in September This amount was included in SCE s 2015 Annual Report. 10 The three-month commercial paper interest rate has been estimated for the months of May through August The final amount transferred to the BRRBA will reflect recorded interest rates as appropriate.

23 Hazardous Substance Clean Up Cost Recovery Mechanism 2016 Annual Report Table I - HAZARDOUS SUBSTANCE CLEANUP AND LITIGATION COST BALANCING ACCOUNT (As of March 31, 2016)

24 Southern California Edison Company Hazardous Substance Cleanup Cost Recovery Mechanism Hazardous Substance Cleanup and Litigation Cost (HSCLC) Balancing Account Total (100%) 90% of 10% of Total CPUC CPUC Less Beginning Covered Hazardous Covered Hazardous Covered Hazardous Recoverable Jurisdictional Jurisdictional Revenue Under/(Over) Average Interest Monthly Ending Period Balance Adjustments Substance Costs Substance Costs Substance Costs Costs Factor Costs Requirement Collection Balance Rate * Interest Balance Total ** $ 1,849,064 $ (1,849,967) $ 2,009,934 $ 1,808,942 $ 200,992 $ 1,808,942 $ 1,808,942 $ - $ 1,808,942 $ 7,142 $ 1,815,181

25 Hazardous Substance Clean Up Cost Recovery Mechanism 2016 Annual Report APPENDIX A

26 Hazardous Substance Clean Up Cost Recovery Mechanism 2016 Annual Report CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of SOUTHERN CALIFORNIA EDISON COMPANY HAZARDOUS SUBSTANCE CLEANUP COST RECOVERY MECHANISM 2016 ANNUAL REPORT on all parties identified on the attached service list(s). Service was effected by one or more means indicated below: Transmitting the copies via to all parties who have provided an address. First class mail will be used if electronic service cannot be effectuated. Executed this 1 st day of June, 2016, at Rosemead, California. /s/ Irene Gutierrez Irene Gutierrez, Legal Assistant SOUTHERN CALIFORNIA EDISON COMPANY Post Office Box Walnut Grove Avenue Rosemead California 91770

27 ************ SERVICE LIST *********** Last Updated on 14-APR-2016 by: DC3 A NOPOST A ,A ,A ************** PARTIES ************** Barbara S. Benson PACIFIC GAS AND ELECTRIC COMPANY PO BOX , MAIL CODE B30A SAN FRANCISCO CA (415) Michael Thorp SAN DIEGO GAS & ELECTRIC CO./SOCAL GAS 555 W. 5TH STREET, SUITE 1400 LOS ANGELES CA (213) Oliva Samad Senior Attorney SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE / PO BOX 800 ROSEMEAD CA (626) olivia.samad@sce.com Igor Grinberg PACIFIC GAS AND ELECTRIC COMPANY REGULATORY AFFAIRS ONLY ONLY CA (415) ixg8@pge.com Jasmin Anes Regulatory Case Mgr. PACIFIC GAS AND ELECTRIC COMPANY ONLY ONLY CA (415) JJAv@pge.com Richard Batey WESTINGHOUSE ELECTRIC CORP E. GARVEY AVENUE S, NO. 325 WEST COVINA CA William Messner SOUTHERN CALIFORNIA EDISON COMPANY 2244 WAKNYT GRIVE AVENYE ROSEMEAD CA william.messner@sce.com Robert Finkelstein THE UTILITY REFORM NETWORK 785 MARKET ST., STE SAN FRANCISCO CA (415) X-307 bfinkelstein@turn.org ********** STATE EMPLOYEE *********** ********* INFORMATION ONLY ********** Karen Peterson EDSON + MODISETTE 925 L STREET, SUITE 1490 SACRAMENTO CA Jasmin Anes PACIFIC GAS & ELECTRIC COMPANY 77 BEALE STREET, MC B9A SAN FRANCISCO CA (415) jjav@pge.com - 1-

28 Non- Recipients Karen Peterson Edson & Modisette 925 L Street, Suite 1490 Sacramento, CA Richard Batey Westinghouse Electric Corp E. Garvey Avenue S, No. 325 West Covina, CA 91790