ADVICE LETTER (AL) SUSPENSION NOTICE ENERGY DIVISION

Transcription

1 ADVICE LETTER (AL) SUSPENSION NOTICE ENERGY DIVISION Utility Name: Southern California Edison Co. Utility Number/Type: U 338-E Advice Letter Number(s): 3695-E Date AL(s) Filed: Nov. 16, 2017 Utility Contact Person: Darrah Morgan Utility Phone No.: (626) Date Utility Notified: Dec. 15, 2017 [ ] ed to: darrah.morgan@sce.com; advicetariffmanager@sce.com ED Staff Contact: Michael Zelazo ED Staff michael.zelazo@cpuc.ca.gov ED Staff Phone No.: (916) [X] INITIAL SUSPENSION (up to 120 DAYS from the expiration of the initial review period) This is to notify that the above-indicated AL is suspended for up to 120 days beginning December 19, 2017 for the following reason(s) below. If the AL requires a Commission resolution and the Commission s deliberation on the resolution prepared by Energy Division extends beyond the expiration of the initial suspension period, the advice letter will be automatically suspended for up to 180 days beyond the initial suspension period. [ ] A Commission Resolution is Required to Dispose of the Advice Letter [ ] Advice Letter Requests a Commission Order [X] Advice Letter Requires Staff Review The expected duration of initial suspension period is 120 days [ ] FURTHER SUSPENSION (up to 180 DAYS beyond initial suspension period) The AL requires a Commission resolution and the Commission s deliberation on the resolution prepared by Energy Division has extended beyond the expiration of the initial suspension period. The advice letter is suspended for up to 180 days beyond the initial suspension period. If you have any questions regarding this matter, please contact Michael Zelazo at michael.zelazo@cpuc.ca.gov or (916) cc: EDTariffUnit * Note: reference Decision D , dated February 21, 2002, and Rule 7.5 in appendix A of D.O

2 Russell G. Worden Managing Director, State Regulatory Operations November 16, 2017 ADVICE 3695-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Implementation of Southern California Edison Company s Consolidated Revenue Requirement and Rate Change on January 1, 2018 PURPOSE Southern California Edison Company (SCE) files this advice letter to consolidate the effect of revenue requirement changes authorized or expected to be authorized by the California Public Utilities Commission (Commission) and the Federal Energy Regulatory Commission (FERC) in various decisions effective as of January 1, SCE will file a supplement to this advice letter in late December 2017 in order to update the final revenue requirements and rates that SCE will implement on January 1, The supplemental advice letter will include all applicable tariff sheets. BACKGROUND As discussed in more detail below, this Commission and the FERC have authorized or are expected to authorize SCE to change various components of its revenue requirements and rates on January 1, SCE s estimated consolidated revenue requirement change to be reflected in January 1, 2018 rate levels is an increase $ million. Although a Proposed Decision (PD) has not yet been issued at the time this advice filing was finalized in SCE s 2018 Energy Resource Recovery Account (ERRA) Forecast Proceeding (A ), a decision is expected by year-end and, therefore, SCE has included the expected revenue requirement changes resulting from a 2018 ERRA Forecast decision herein. 1 1 Based on the Scoping Memo and Ruling of Assigned Commissioner dated July 24, 2017 in A , if parties stipulate to a shortened comment period by November 13, 2017, a PD can be mailed as late as November 27, 2017 and still enable a final decision at the December 14, 2017 Commission Conference. On November 13, 2017, SCE informed the assigned Administrative Law Judge and the service list that no party had objected to a shortened comment period. P.O. Box Rush Street Rosemead, California (626) Fax (626)

3 (U 338-E) November 16, 2017 At this time, estimated year-end 2017 balancing account balances are based on recorded activity through October 2017 and estimated November and December 2017 activity. In the supplement to this advice filing to be filed in late December 2017, SCE will update the expected year-end 2017 balances to include recorded entries through November 30, 2017 and estimated December 2017 activity. These balances will then be implemented into rate levels effective January 1, JANUARY 1, 2018 CONSOLIDATED REVENUE REQUIREMENT Table 1 below summarizes the revenue requirement changes by proceeding that the Commission and the FERC have authorized, or are expected to authorize, in various proceedings effective January 1, These changes are discussed in more detail below. Table 1 Southern California Edison Company January 1, 2018 Consolidated Revenue Requirements In Rate Levels By Proceeding TOTAL SYSTEM ($000) Column 1 Revenue Requirement Component Column 2 Column 3 Column 4 Column 5 Revenue Rqmts Revenue Rqmts Change In October 1, 2017 January 1, 2018 Revenue Rate Levels Rate Levels Requirements Authority For Change ERRA FORECAST PROCEEDING Fuel and Purchased Power 4,584,334 4,412,513 (171,820) A , 11/09/17 Update Testimony 3. GHG Cost 313, ,231 3, GHG Revenue Return (327,941) (376,087) (48,146) 5. ERRA Balancing Account (94,007) 353, , New System Generation Balancing Account 8,896 (151,822) (160,718) 7. TOTAL 4,485,057 4,555,647 70, GRC PROCEEDING Generation O&M and Capital 787, , Peaker O&M and Capital (New System Gen) 56,525 56, Distribution O&M and Capital 4,796,259 4,796, Subtotal 5,640,432 5,640, GRC Memo Account - 2 Year Amortization (197,836) - 197,836 D , Advice 3314-E-A 14. Tax Refund ( Incre. Repair Deductions) (134,998) 5, ,934 Advice 3368-E 15. Pole Loading & Deteriorated Poles Balancing Account (36,601) (43,999) (7,398) D Tax Accounting Memorandum Account (TAMA) (208,205) (226,879) (18,674) D , Advice 3610-E-A 17. Pension/PBOP/Medical Balancing Accounts (36,557) (43,791) (7,234) D Non-utility Affiliate Credits (11,261) (11,261) TOTAL 5,014,974 5,320, , Other 21. BRRBA Balancing Account 246,840 52,488 (194,352) D NDAM Balancing Account (3,384) (73) 3,311 D CARE Balancing Account (21,773) (10,715) 11,057 D PPPAM Balancing Account 97,490 7,238 (90,252) D SONGS Settlement Revenue Requirement 236, ,056 (44,881) D , Advice 3685-E 26. Self-Generation Incentive Program (SGIP) 28,324 56,648 28,324 D , Advice 3592-E 27. CA Solar Initiatives/MASH/SASH 8,943 6,070 (2,873) D , Advice 3212-E 28. Low Income Programs (ESAP & CARE) 69,599 69, D Statewide ME&O 7,028 8,753 1,725 D , Advice 3677-E 30. Charge Ready Phase 1 Pilot 6,101 6,101 - D , Advice Pending ERRA Review (103,661) - 103,661 D ERRA Review - (34,486) (34,486) A , Proposed Decision MRTUMA 17,513 - (17,513) D Demand Response Programs 77,742 48,988 (28,754) A , Advice 3465-E-A 35. EPIC - RD&D and Renewables 70,651 70,651 - A Energy Efficiency 337, ,893 (21,296) Advice 3465-E-B 37. Energy Efficiency Incentives 17,455 25,107 7,652 Advice 3655-E 38. Energy Efficiency Incentives One-time Refund (12,522) - 12,522 D FERC Base Transmission 1,188,758 1,162,882 (25,876) Docket No. ER FERC Transmission Balancing Accounts (176,935) (195,111) (18,176) Docket No. ER18-184, ER TOTAL 2,092,296 1,782,105 (310,191) 42. DWR 43. Power Charge Bond Charge 418, ,243 (7,632) R , Proposed Decision 45. TOTAL 418, ,243 (7,632) 46. TOTAL REVENUE REQUIREMENT CHANGE 12,011,201 12,069,434 58,232

4 (U 338-E) November 16, 2017 Table 2 below summarizes these same revenue requirement changes by unbundled rate components (e.g., Generation, Distribution, and Transmission). Table 2 Southern California Edison Company 2018 Consolidated Revenue Requirements by Rate Component Revenue Requirements Revenue Requirements Change In October 1, 2017 January 1, 2018 Revenue Rate Levels Rate Levels Requirements GENERATION SERVICE Generation Rate Component: 3. SCE: 4. Fuel and Purchased Power 3,898,157 3,873,994 (24,163) 5. Green Rate Tariff 1, (675) ERRA Review - (3,381) (3,381) 7. SONGS 2&3 Settlement Rev Rqmt 236, ,056 (44,881) 8. Demand Response Programs 2,044 1,156 (888) 9. Aliso Canyon DR Programs 4,404 - (4,404) 10. ERRA Balancing Account (94,007) 360, , GRC Memo Account - 2 Year Amortization (251,935) - 251, BRRBA Balancing Account 34,747 5,331 (29,416) 13. Tax Refunds ( Incre. Repair Deductions) 58,902 (2,139) (61,041) 14. TAMA Transfer incl. interest 1,008 (14,553) (15,561) ERRA Review (MRTU & PDDMA) (20,655) - 20, MRTUMA Transfer (D ) 17,513 - (17,513) 17. GHG Cost 313, ,231 3, Generation O&M and Capital 787, , Medical Programs Balancing Account (4,150) (3,035) 1, Pension Balancing Account (1,036) (1,277) (241) 21. PBOPs Balancing Account (1,797) (2,485) (688) 22. Net Generator Refunds (ESMA/LCTA) - (7,060) (7,060) 23. Total SCE Generation 4,983,156 5,505, , DWR Power Charge Total Generation Rate Component 4,983,156 5,505, , DELIVERY SERVICE 27. Nonbypassable New System Generation Service Component: 28. Peaker O&M and Capital (GRC) 56,525 56, New Generation CAM Capacity & CHP 659, ,700 (153,467) 30. New System Generation Balancing Account 8,896 (151,822) (160,718) 31. Total New System Generation 724, ,403 (314,185) 32. Distribution Rate Component: 33. BRRBA Balancing Account 212,092 47,157 (164,936) 34. Tax Accounting Memorandum Account (TAMA) (209,213) (212,326) (3,114) 35. Tax Refunds ( Incre. Repair Deductions) (193,899) 8, , ERRA Review (DRPBA & PAACBA) (83,005) - 83, Pole Loading & Deteriorated Poles Balancing Account (36,601) (43,999) (7,398) 38. LCR (DR-related) 4,932 11,753 6, Distribution O&M and Capital 4,796,259 4,796, Pension Balancing Account 1,131 (6,952) (8,082) 41. Medical Programs Balancing Account (20,926) (16,517) 4, PBOPs Balancing Account (9,779) (13,525) (3,747) 43. Non-utility Affiliate Credits (11,261) (11,261) Demand Response Programs 25,223 37,577 12, Demand Response IDSM Programs 11,878 10,255 (1,623) 46. Demand Response Capacity Contracts 29,099 - (29,099) 47. Demand Response Purchase Agreement Admin (567) 48. Aliso Canyon DR Programs 4,527 - (4,527) 49. Self-Generation Incentive Program (SGIP) 28,324 56,648 28, CA Solar Initiatives/MASH/SASH 8,943 6,070 (2,873) 51. Charge Ready Pilot 6,101 6, GRC Memo Account - 2 Year Amortization 54,099 - (54,099) 53. EE Incentives 17,455 25,107 7, Energy Efficiency Incentives One-time Refund (12,522) - 12, GHG Revenue (Adj.) (327,941) (376,087) (48,146) 56. Total Distribution Rate Component 4,295,482 4,324,335 28, Nuclear Decommissioning Rate Component: 58. Spent Nuclear Fuel 4,157 4, ERRA Review - (31,105) (31,105) 60. NDAM Balancing Account (3,384) (73) 3, Total Nuclear Decommissioning Rate Component: 773 (26,817) (27,589) 62. Public Purpose Programs Rate Component: 63. CARE Balancing Account (21,773) (10,715) 11, PPPAM Balancing Account 25,535 (49,525) (75,060) 65. EPIC - RD&D and Renewables 70,651 70, Procurement Energy Efficiency 325, ,517 (25,342) 67. On-Bill Financing 11,330 15,376 4, LCR (EE-Related) 16,321 15,780 (541) 69. CIA 71,955 56,763 (15,192) 70. Statewide ME&O 7,028 8,753 1, Energy Savings Assistance Program 63,100 63, CARE Program Administration 6,499 6,348 (151) 73. Total Public Purpose Programs Rate Component 576, ,214 (99,291) 74. Transmission Rate Component: 75. Base Transmission 1,188,758 1,162,882 (25,876) 76. Transmission Balancing Accounts (176,935) (195,111) (18,176) 77. Total Transmission Rate Component 1,011, ,772 (44,052) 78. DWR Bond Charge 418, ,243 (7,632) 79. Total Delivery Service 7,028,046 6,564,149 (463,896) 80. Total SCE Revenue Requirement 11,592,327 11,658,190 65, Total DWR Revenue Requirement 418, ,243 (7,632) 82. Total Company Revenue Requirement 12,011,201 12,069,434 58,232

5 (U 338-E) November 16, 2017 ESTIMATED 2018 TOTAL SYSTEM CONSOLIDATED REVENUE REQUIREMENT CHANGES ERRA Forecast Proceeding In May 2017, SCE filed Application (A.) , SCE s ERRA 2018 Forecast of Operations. On November 9, 2017, SCE submitted testimony updating its 2018 ERRA Forecast revenue requirements. SCE s updated 2018 ERRA forecast revenue requirement of $4.556 billion represents an increase of $70.6 million from the authorized 2017 revenue requirement. As shown on Lines 1 through 6 of Table 1, the update testimony includes a decrease in the estimated 2018 fuel and purchased power costs of $ million, an increase related to the estimated December 31, 2017 balancing account balances of $ million, and a decrease in the net impact of Greenhouse (GHG) Cap-and-Trade costs and GHG revenue returns of $ million. SCE currently expects a final decision in December 2017 to adopt its 2018 updated revenue requirements and has reflected them herein. As shown on Line 7 of Table 1 above, the 2018 ERRA Proceeding Forecast revenue requirement results in an increase of $ million. In addition, since SCE s 2018 ERRA Forecast proceeding includes the GHG forecast costs and GHG allowance revenue returns, in the December 2017 supplement to this advice filing, SCE will implement tariff modifications necessary to issue the 2018 semiannual California residential Climate Credit and to include forecast GHG costs and revenue returns in rates beginning January 1, Table 2 breaks out the ERRA-related revenue requirement changes by rate component. 2. General Rate Case (GRC)-Related Balancing and Memorandum Accounts The Pensions Costs Balancing Account (PCBA), Preliminary Statement Part OO, is a two-way balancing account that records the difference between pension expenses authorized in D , and recorded pension expenses, after capitalization. The Post-Employment Benefits Other than Pensions Costs Balancing Account (PBOP BA), Preliminary Statement Part PP, is a two-way balancing account that records the difference between PBOP expenses authorized in D , and recorded PBOP expenses, after capitalization. The Medical Programs Balancing Account (MPBA), Preliminary Statement Part VV, is a two-way balancing account to record the difference between: (1) medical, dental, and vision expenses authorized by D , and (2) recorded medical, dental, and vision expenses, after capitalization. On an annual basis, any over- or under-collections in the PCBA, PBOP BA, and MPBA as of December 31 of the prior year are transferred to the Base Revenue Requirement Balancing Account (BRRBA) to be recovered from or returned to customers. As shown on Line 17 of Table 1, SCE will reflect a decrease of $7.234 million, including Franchise Fees & Uncollectibles (FF&U) expense, associated with the differences in the PCBA,

6 (U 338-E) November 16, 2017 PBOP BA and the MPBA year-end 2015 and 2016 balances in the January 1, 2018 consolidated revenue requirement. The Tax Accounting Memorandum Account (TAMA), Preliminary Statement Part N.38, is a two-way account to track the impact on the authorized CPUC-jurisdictional revenue requirement as adopted in D resulting from: (1) any income tax accounting method change associated with the Internal Revenue Service (IRS) or California Franchise Tax Board (CFTB) for tax years 2015 through 2017; (2) any changes in Federal or California tax law, final or temporary regulations or other administrative guidance that impacts the determination of depreciation and/or repair deductions for tax years ; (3) the difference between authorized and recorded Federal and California non-pole loading net repair deductions for ; (4) any adjustments arising from audits, administrative appeals proceeding or litigation impacting items 1-3 above; and (5) a change in authorized revenue requirements as determined by the Commission, if any, resulting from an IRS private letter ruling regarding compliance with normalization regulations. On May 31, 2017, SCE filed Advice 3610-E to report on the 2016 recorded operation of the TAMA as supplemented on November 6, 2017 in Advice 3610-E-A. Advice 3610-E is currently suspended for Staff Review; however, for the purposes of this initial January 1, 2018 consolidated revenue requirement and rate change advice letter, SCE is assuming the Energy Division will approve this Tier 2 advice letter, as supplemented by Advice 3610-E-A, by year-end 2017 and that SCE will transfer $ million as set forth in Advice 3610-E-A to the BRRBA in December As shown on Line 16 of Table 1, SCE will reflect a decrease of $ million, including FF&U, associated with the difference between the TAMA year-end 2015 and 2016 balances in the January 1, 2018 consolidated revenue requirement. The Pole Loading and Deteriorated Pole Programs Balancing Account (PLDPBA), Preliminary Statement Part J, is a two-way balancing account to record the difference between: (1) the recorded capital-related revenue requirements for the Pole Loading and the Deteriorated Pole programs; (2) operating expenses for the Pole Loading Program; and (3) the authorized pole programs revenue requirement as adopted in D On an annual basis, any over- or under-collection in the PLDPBA as of December 31 of the prior year is transferred to the BRRBA to be recovered from or returned to customers. As shown on Line 15 of Table 1, SCE will reflect a decrease of $7.398 million, including FF&U, associated with the difference between the PLDPBA year-end 2015 and 2016 balances in the January 1, 2018 consolidated revenue requirement. 2 In the event Energy Division approval is not received by the time SCE files its updated January 1, 2018 consolidated revenue requirement and rate change advice letter in late December, as shown on Line 16 of Table 1, SCE will not reflect a decrease of $ million, including FF&U and interest, in January 1, 2018 rate levels but instead will reflect an increase of $ million since SCE will have refunded the 2015 TAMA balance by year-end 2017.

7 (U 338-E) November 16, 2017 On February 22, 2016, SCE filed Advice 3368-E to reduce SCE s BRRBA by a cumulative $234 million to account for higher repair deductions that were not reflected in rates authorized in SCE s 2012 GRC D or 2015 GRC D Advice 3368-E, which included a 2016 BRRBA credit of $133.4 million, was approved by letter from the Director of the Energy Division dated April 12, 2016 and made effective March 23, SCE made a $133.4 million credit to BRRBA in April 2016 and reflected a $ million, including FF&U, reduction in rates on January 1, In Advice 3368-E, SCE estimated a second credit to BRRBA after the audit statute of limitation for tax year 2013 has closed. However, the audit statute of limitation for tax year 2013 remains open and, as set forth in Advice 3368-E, SCE made a debit to BRRBA in September 2017 in the amount of $5.868 million to account for the recovery of the depreciation offset related to the first credit. As shown on Line 14 of Table 1, SCE will reflect an increase of $ million, including FF&U, associated with repair deductions in the January 1, 2018 consolidated revenue requirement. Advice 3314-E-A filed on December 23, 2015 implemented the 2015 GRC Decision (D ). As part of that implementation, SCE returned the balance recorded in the 2015 GRC Revenue Requirement Memorandum Account (GRC RRMA) to customers over a two-year period effective January 1, As shown on Line 13 of Table 1, SCE will reflect an increase of $ million, including FF&U, on January 1, 2018 since SCE will have refunded the 2015 GRC RRMA balance by year-end Table 2 breaks out the GRC-related balancing and memorandum account revenue requirement changes by rate component. 3. Other Revenue Balancing Accounts Pursuant to the 2015 ERRA Forecast Proceeding Settlement Agreement adopted in D , SCE omits consideration of four of its major balancing accounts (BRRBA, Nuclear Decommissioning Adjustment Mechanism (NDAM), California Alternate Rates for Energy (CARE) balancing account and the Public Purpose Programs Adjustment Mechanism (PPPAM)) from its annual ERRA Forecast proceeding and instead presents them for review in the year-end consolidated revenue requirement and rate change advice letter. Therefore, in this advice filing SCE provides the expected December 31, 2017 balances in these accounts based on recorded activity through October 2017 and estimated November and December 2017 activity. In the supplement to this advice filing filed in late December 2017, SCE will update the expected year-end 2017 balances to include recorded entries through November 30, 2017 and estimated December 2017 activity. These balances will then be implemented into rate levels effective January 1, i. BRRBA SCE is forecasting a year-end 2017 BRRBA over collection of $ million (including FF&U) based on recorded amounts through October 31, 2017 and a forecast of entries for November and December However, as shown on Line 21 of Table 1 above, SCE shows a year-end 2017 BRRBA under collection of $ million. The

8 (U 338-E) November 16, 2017 $ million estimated ending balance has been adjusted to remove certain revenue requirement amounts that record to the BRRBA but are broken out separately on Table 1 for discussion purposes in this advice letter. These other items are shown on Line GRC Memorandum Account 2 Year Amortization, Line 14 Tax Refund ( Incremental Repair Deductions), Line 15 Pole Loading and Deteriorated Poles Balancing Account (PLDPBA), Line 16 Tax Accounting Memorandum Account (TAMA), Line 17 Pension/PBOP/Medical balancing accounts, Line ERRA Review, and Line 37 Energy Efficiency (EE) Incentives. A detailed reconciliation of these amounts and all monthly entries for both the generation and distribution subaccounts of the BRRBA is provided in Appendix A. Table 2 also provides both the distribution subaccount and generation subaccount estimated December 31, 2017 BRRBA balances (adjusted for these same items). ii. NDAM SCE is forecasting a year-end 2017 NDAM over collection of $ million (including FF&U) based on recorded amounts through October 31, 2017 and a forecast of entries for November and December However, as shown on Line 22 of Table 1 above, SCE shows a year-end 2017 NDAM over collection of $0.073 million. The $ million estimated ending balance has been adjusted to remove Department of Energy (DOE) Litigation proceeds that record to the NDAM but are broken out separately on Table 1 for discussion purposes in this advice letter (included in Line ERRA Review). Detailed support for this amount and all monthly entries in the NDAM balancing account is provided in Appendix A. iii. CARE Balancing Account As shown on Line 23 of Table 1, SCE is forecasting a year-end 2017 CARE balancing account over collection of $ million (including FF&U) based on recorded amounts through October 31, 2017 and a forecast of entries for November and December Detailed support for this amount and all monthly entries in the CARE balancing account is provided in Appendix A. iv. PPPAM As shown on Line 24 of Table 1, SCE is forecasting a year-end 2017 PPPAM under collection of $7.238 million (including FF&U) based on recorded amounts through October 31, 2017 and a forecast of entries for November and December Detailed support for this amount and all monthly entries in the PPPAM balancing account is provided in Appendix A.

9 (U 338-E) November 16, San Onofre Nuclear Generating Station (SONGS) OII Settlement Revenue Requirement SCE filed Advice 3685-E on November 1, 2017 to implement the 2018 SONGS OII Settlement revenue requirement in the amount of $ million in generation rates effective January 1, This 2018 SONGS OII Settlement revenue requirement includes the 2018 cost of debt and the cost of preferred stock as adopted in D and filed with the Commission in Advice 3665-E dated September 29, In Advice 3499-E, SCE included the 2017 SONGS OII Settlement revenue requirement in the amount of $ million in generation rates effective January 1, Therefore, as shown on Line 25 of Table 1, SCE is decreasing its generation rates by $ million, including FF&U, to reflect the 2018 SONGS Settlement revenue requirement in January 1, 2018 rates Self Generation Incentive Program (SGIP) Revenue Requirement On April 6, 2017, the Commission issued D increasing the budget for SGIP consistent with the authorization established by Assembly Bill Beginning in 2017, Pacific Gas and Electric Company (PG&E), SCE, San Diego Gas & Electric Company (SDG&E), and Southern California Gas Company are to collect on an annual basis through 2019, double the amount collected in calendar year SCE s authorized SGIP funding level in 2008 was set at $28 million in D SCE filed Advice 3592-E on April 14, 2017 setting its annual SGIP funding level to be collected from all customers at $56 million, or double the 2008 funding amount of $28 million. Advice 3592-E was approved by letter from the Director of the Energy Division dated June 22, 2017 and made effective May 14, Therefore, as shown on Line 26 of Table 1, SCE is increasing its distribution rates by $ million, including FF&U, to reflect the 2018 SGIP revenue requirement of $ in January 1, 2018 rates California Solar Initiatives (CSI) Revenue Requirement On June 10, 2015, SCE filed Advice 3212-E-A modifying SCE s Preliminary Statement Part U, California Solar Initiative Program Balancing Account (CSIPBA), pursuant to D , to reflect extended Multifamily Affordable Solar Housing (MASH) and 3 As described in Advice 3685-E, and for the purposes of this initial consolidated revenue requirement and rate change advice filing, SCE is assuming the Commission will issue a final decision before year-end 2017 in A approving SCE s proposal to reduce the SONGS regulatory asset by approximately $72 million. A PD was received on October 26, 2017 in A adopting this proposal. 4 The additional $28 million of authorized funding in 2017 was recorded in the BRRBA and is reflected in the year-end 2017 estimated BRRBA balance.

10 (U 338-E) November 16, 2017 Single Family Affordable Solar Homes (SASH) program authorized funding for the period Consistent with D and Preliminary Statement Part U, and as shown on Line 27 of Table 1, SCE is including $6.070 million, including FF&U, for CSI in distribution rate levels in This is a $2.873 million decrease from the 2017 revenue requirement of $8.943 million CARE Administration Program and Energy Savings Assistance Program (ESAP) Revenue Requirements On November 10, 2016, the Commission issued D in the Low Income Program Plans and Budgets A This decision sets forth the parameters for the administration and participation in the CARE Program and the ESA Program and adopts annual funding amounts for these programs through Consistent with Ordering Paragraphs (OP) 2 and 4 of D , and as shown on Line 28 of Table 1, SCE is including $ million in funding for the ESAP and $6.348 million for the CARE Administration Program, for a total 2018 ESAP and CARE Administration Program revenue requirement of $ million, including FF&U. SCE will reflect the $ million in the Public Purpose Program Charge (PPPC) rate levels on January 1, 2018, which results in an increase of $0.015 million over current 2017 funding levels Statewide Marketing, Education & Outreach (Statewide ME&O) Revenue Requirements On October 16, 2017, SCE filed Advice 3677-E in compliance with Commission D Decision Approving Implementer for Statewide Marketing, Education, and Outreach (ME&O) Program and Providing Guidance for 2017 Activities. In Advice 3677-E, SCE submitted its October 1, 2017 through September 30, 2018 Statewide ME&O Budget for the continued collection of Statewide ME&O funding from customers. Consistent with OP 7 in D , dated September 19, 2016, and Advice Letter 3677-E, SCE is including $8.653 million ($8.753 million increased for FF&U) for authorized energy efficiency and demand response Statewide ME&O activities in its January 1, 2018 consolidated revenue requirement. As shown on Line 29 of Table 1, this results in an increase of $1.725 million, including FF&U, over current 2017 Statewide ME&O funding levels. The 2018 SME&O revenue requirement of $8.753 million will be included in the PPPC rate levels effective January 1, Charge Ready Program (CRP) Revenue Requirement On January 14, 2016, the Commission issued D , which adopted with modifications, the Settlement Agreement between SCE and the Settling Parties to implement Phase 1 of the Charge Ready Program and Market Education Program. D also adopted SCE s proposal to establish a Charge Ready Program balancing account to recover the revenue requirements associated with up to $22

11 (U 338-E) November 16, 2017 million (2014$) in direct capital and O&M costs to implement the Phase 1 of the Charge Ready and Market Education Programs. By the end of November, SCE will file an advice letter to implement the 2018 CRP Phase 1 revenue requirement in rate levels on January 1, 2018, in accordance with D This 2018 CRP Phase 1 revenue requirement will include the 2018 cost of capital as adopted in D and filed with the Commission in Advice 3665-E dated September 29, SCE will provide the 2018 CRP Phase 1 revenue requirement in the supplement to this advice filing in late December ERRA Review Application In D , dated October 27, 2016, the Commission approved the Settlement Agreement between SCE and the ORA regarding SCE s 2014 ERRA Review application which, among other items, authorizes SCE to return to customers a net revenue requirement decrease of $ million, including FF&U. The $ million refund was reflected in January 1, 2017 rate levels. As shown on Line 31 of Table 1, SCE will reflect an increase of $ million, including FF&U, on January 1, 2018 since SCE will have refunded the 2014 ERRA Review refund to customers by year-end Table 2 breaks out this revenue requirement change by rate component ERRA Review Application On October 26, 2017, a PD was issued in SCE s 2015 ERRA Review A , which among other items, directs SCE to refund to customers through BRRBA a net amount of $81,000 due to an under-collection in the Renewables Portfolio Standard Costs Memorandum Account (RPSCMA) of $1.021 million and an over-collection in the Project Development Division Memorandum Account (PDDMA) of $1.102 million. This PD also approves SCE s proposed disposition of the net balance in the DOE Litigation Memorandum Account as follows: (1) credit $ million to the NDAM, (2) credit $3.261 million to the generation subaccount of the BRRBA, and (3) reduce the SONGS Units 2 & 3 regulatory asset by $ million ($ million less $1.461 million in litigation/consultant costs), including all interest accrued up to the time of the transfers. As shown on Line 32 of Table 1, SCE will return to customers a total of $ million, including FF&U and interest, associated with the RPSCMA, PDDMA and DOE litigation refunds in rate levels on January 1, The reduction to the SONGS Units 2 & 3 regulatory asset is included in the 2018 SONGS Settlement revenue requirement shown on Line 25 of Table 1. Table 2 breaks out this revenue requirement change by rate component. A final decision is expected by year-end and, therefore, SCE has included the expected revenue requirement changes resulting from a 2015 ERRA Review decision herein. If a final decision is not issued by year-end 2017, SCE will not reflect these revenue requirement changes in its supplement to this advice filing in late December 2017.

12 (U 338-E) November 16, MRTU Cost Recovery On July 14, 2016, the Commission approved D for 2010 Utility Expenditures for CAISO Market Redesign Technology Upgrade (MRTU) implementation activities. D authorized SCE to recover $17.3 million related to its 2010 MRTU revenue requirement. In July 2016, SCE transferred $ million to the generation subaccount of the BRRBA and reflected an increase of $ million, including FF&U, associated with the 2010 MRTU recovery in the January 1, 2017 consolidated revenue requirement recovered through generation rate levels. As shown on Line 33 of Table 1, SCE will reflect a decrease of $ million, including FF&U, in generation rates on January 1, 2018 since SCE will have collected the 2010 MRTU revenue requirement by year-end Demand Response (DR) Programs Revenue Requirement On January 17, 2017, SCE filed its Application of Southern California Edison Company (U338E) for Approval of its Demand Response Programs (A ). SCE s 2018 DR funding request as updated in a July 19, 2017 late-filed exhibit is $ million. SCE currently expects a Commission decision on this application by year-end In the event a Decision has not been issued by the December 14, 2017 Commission Conference, in the supplement to this advice filing to be filed in late December 2017, SCE will not reflect the $ million in January 1, 2018 rate levels. Therefore, as shown on Line 34 of Table 1, SCE is reflecting a 2018 DR funding level of $ million plus IDSM funding of $ million 6 for a total of $ million, including FF&U, in its January 1, 2018 rate levels, which is a decrease of $ million over the 2017 DR revenue requirement of $ million. Table 2 breaks out this revenue requirement change by rate component Electric Program Investment Charge (EPIC) Revenue Requirement At the time this advice letter was finalized, a PD in A to determine the EPIC Investment Plan and associated funding levels has not been issued. If a final Commission decision is approved at the December 14, 2017 Commission Conference, SCE will include the 2018 authorized EPIC funding amount in its supplemental advice filing to be filed in late December Energy Efficiency (EE) Programs Revenue Requirement On January 17, 2017, SCE filed its Application of Southern California Edison Company (U338E) for Approval of Energy Efficiency Rolling Portfolio Business Plan (A ) 5 A PD in A was mailed on November 9, At the time this advice letter was finalized, SCE s review of the PD is on-going. SCE will reflect the ultimate Commissionadopted 2018 DR funding level in its supplemental advice filing to be filed in late December. 6 See item 13 for discussion of IDSM funding.

13 (U 338-E) November 16, 2017 which includes SCE s proposed annual EE budget. In addition, in compliance with D , Administrative Law Judges Ruling Modifying Schedule dated June 9, 2017, and the Energy Division s 2018 Energy Efficiency Portfolio Filing and Reporting Guidance dated July 24, 2017, SCE filed Advice 3654-E on September 1, 2017 to submit its interim 2018 EE Program Budget (including the budget for IDSM) for approval by the Commission. This advice letter is currently suspended for Staff Review. For the purposes of this initial January 1, 2018 consolidated revenue requirement and rate change advice letter, SCE is assuming Advice 3654-E will remain suspended, with the ultimate 2018 EE funding levels to be authorized in the Commission s decision on A expected in the first quarter of 2018, with a true up advice letter to be filed on March 1, 2018 to reflect the Commission s final decision on the business plans. Therefore, SCE is reflecting a 2018 EE revenue requirement set at 2017 authorized levels in its January 1, 2018 consolidated revenue requirement and rate change. SCE filed Advice 3465-E-B 7 on July 28, 2017 setting forth the 2017 annual EE program and portfolio budget request. Advice 3465-E-B was approved by letter from the Director of the Energy Division dated July 28, 2017 and made effective October 1, In Advice 3465-E-B, the 2017 EE Programs funding level was set at $ million 8 and the IDSM funding level was set at $ million 9. As shown on Line 36 of Table 1, SCE is reflecting a 2018 EE revenue requirement of $ million, including FF&U, in its January 1, 2018 PPPC rate levels, which is a decrease of $ million over the 2017 EE revenue requirement reflected in January 1, 2017 rate levels of $ million. 16. Energy Efficiency Incentives In compliance with D , as modified by D , on September 1, 2017, SCE submitted Tier 3 Advice 3655-E for approval of its program year (PY) 2015 Part (2) and PY 2016 Part (1) Energy Efficiency incentive awards for a total amount of $ million. A Draft Resolution addressing Advice 3655-E was issued on November 13, 2017 with a total EE incentive award for SCE of $ million. For the purposes of this initial January 1, 2018 consolidated revenue requirement and rate change advice letter, SCE is assuming the Commission will approve SCE s EE incentive award amount by year-end SCE will reflect the ultimate Commission-adopted 2018 EE incentive award amount in its supplemental advice filing to be filed in late December. 7 This advice filing replaced in its entirety Advice 3465-E filed on September 1, 2016 and Advice 3465-E-A filed on December 14, The 2017 EE Programs funding level is comprised of a 2017 EE Portfolio budget set at the prior-year level of $ million less $ million in program cycle unspent and uncommitted funds for a net amount of $ million. In addition, this funding amount includes $15.2 million in EE Financing Program funding. 9 The IDSM funding amount is included in the DR funding amount collected in distribution rate levels.

14 (U 338-E) November 16, 2017 As shown on Line 37 of Table 1, SCE is reflecting a 2018 EE Incentives Award revenue requirement of $ million, including FF&U, in its January 1, 2018 consolidated revenue requirement and distribution rate levels, which is an increase of $7.652 million over the 2017 EE incentives revenue requirement of $ million. In addition, as shown on Line 38 of Table 1, SCE is removing from distribution rates a refund in the amount of $ million, including FF&U, related to the one-time refund for RRIM awards that was reflected in January 1, 2017 rate levels in accordance with D SCE is removing this refund from January 1, 2018 rates since SCE will have refunded this amount to customers by year-end 2017, which results in an increase of $ million in distribution rate levels FERC-Jurisdictional Revenue Requirement On October 27, 2017, in Docket No. ER filed at FERC, SCE submitted its replacement rate mechanism to recover SCE s FERC-jurisdictional transmission costs (TO2018).This filing sets forth SCE s proposed Base TRR and associated Base transmission rates to be effective on January 1, SCE s currently-effective Formula Rate (the Original Formula Rate ), specifies that the Original Formula Rate expires at the end of 2017 unless the replacement rate mechanism had not yet been made effective by FERC. Additionally, the protocols to the Original Formula Rate require that SCE must file a replacement rate mechanism to recover SCE s CPUC-jurisdictional transmission costs no later than 60 days prior to January 1, 2018, and that SCE shall request an effective date of January 1, SCE proposes that its retail Base TRR be set at $1, million effective January 1, SCE also filed 2018 Annual Update (TO12) on October 27, 2017 in FERC Docket No. ER FERC will determine which of these two proposals will be effective sometime in late December For the purposes of this initial year-end consolidated revenue requirement and rate change advice letter, SCE assumes the TO2018 replacement rate mechanism TRR amount will be reflected in January 1, 2018 transmission rates. The TO2018 revenue requirement determines a transmission $/kwh rate based on sales used in the TO2018 docket; that approved rate multiplied by the 2018 ERRA Forecast adopted sales forecast results in a forecast 2018 FERC TRR revenue amount of $1, million. As shown on Line 39 of Table 1, SCE is reflecting a 2018 Base TRR revenue amount of $1, million, including FF&U, which is a decrease of $ million from the 2017 Base TRR (TO11) revenue amount of $1, million. 10 In its TO12 Annual Update, SCE proposes a Base TRR of $1, million. This Base TRR will be effective January 1, 2018, if FERC suspends the replacement rate mechanism (TO2018) filed concurrently.

15 (U 338-E) November 16, 2017 a. Transmission Revenue Balancing Account Adjustment (TRBAA), Reliability Service Balancing Account Adjustment (RSBAA) and Transmission Access Charge Balancing Account (TACBA) The RSBAA update for 2018 was filed with FERC on October 31, 2017 in Docket No. ER , and the TRBAA update for 2018 was filed at FERC on October 24, 2017 in Docket No. ER Both filings are expected to be approved by FERC effective January 1, SCE s Transmission Owner Tariff Change Adjustment (TOTCA) is comprised of the estimated retail TRBAA rate of negative $ /kWh associated with a negative $ million revenue requirement, the proposed retail RSBAA amount of positive $4.354 million, both to be effective January 1, 2018, and a TACBA amount of negative $ million accepted by FERC for filing in Docket No. ER , effective June 1, The TOTCA revenue requirement determines a transmission $/kwh rate for each balancing account based on sales used in those dockets; those approved rates multiplied by the 2018 ERRA Forecast adopted sales forecast results in a forecast 2018 transmission balancing accounts TOTCA revenue requirement in the amount of negative $ million, including FF&U. As shown on Line 40 of Table 1, this results in a decrease of $ million from the 2017 FERC TOTCA revenue amount of negative $ million currently recovered in transmission rates Department of Water Resources (DWR) Power and Bond Charges On August 7, 2017, the California DWR submitted its 2018 revenue requirement determinations to the Commission. On October 30, 2017, a PD was issued setting forth SCE s DWR revenue requirements for SCE expects to receive a final decision before year-end 2017 with 2018 DWR rates to be reflected in SCE s customers bills for service rendered on and after January 1, As set forth in the PD, SCE s 2018 DWR allocated revenue requirements, including Franchise Fees, consists of a DWR Power Charge revenue requirement of zero with a corresponding DWR Energy Credit of $ per kwh and a DWR Bond Charge revenue requirement of $ million based on the DWR Bond Charge of $ million per kwh and 2018 sales. As shown on Line 44 of Table 1, this results in a net decrease of $7.632 million from the 2017 DWR revenue requirement of $ million. 11 On November 9, 2017, SCE filed Advice 3690-E setting forth revisions to the RSBAA and the TRBAA to be reflected in transmission rates effective January 1, 2018.

16 (U 338-E) November 16, 2017 REVENUE ALLOCATION AND RATE DESIGN Pursuant to D , approving SCE s 2015 GRC Phase 2 Settlement Agreements, SCE scales the currently effective rates for the Otherwise Applicable Tariffs (OATs) on a functional System Average Percent Change (SAPC) basis to recover its authorized functional revenue requirements. Optional rates are then rebalanced to ensure revenue neutrality with the OAT. Currently-effective rates are multiplied by the authorized 2018 sales forecast to produce present rate revenues. Present rate revenues are compared to the applicable authorized revenue requirement for each function. Utility Retained Generation (URG), Distribution, New System Generation, Nuclear Decommissioning, and Public Purpose Programs (PPP) Charges are scaled based on the ratio of the applicable authorized revenue requirement to present rate revenues. The authorized SCE Generation revenue requirement is first reduced to reflect the contribution of DA and CCA customers through the revised DA CRS revenues. DEFAULT TIME-OF-USE (TOU) PILOT PLAN D ordered SCE, PG&E, and SDG&E to conduct two residential TOU pilots to help inform the full scale roll-out of default TOU to eligible residential customers starting in The first pilot, the 18-month TOU Opt-in Pilot that was launched in June 2016, was designed to provide key information on rate design, technology, effective marketing and education, and to help SCE determine if TOU rates cause unreasonable hardship for senior citizens or economically vulnerable customers in hot climate zones. 12 The second pilot is the 2018 Default TOU Pilot, which is also intended to help inform the transition to default TOU but with different key objectives compared to those in the Optin TOU Pilot. Resolution E-4847 approved Advice 3531-E and Advice 3531-E-A filed in accordance with D and Administrative Law Judge Ruling issued on December 29, 2015 and SCE s plan to default approximately 400,000 residential customers onto TOU rates in March This Default TOU Pilot will begin in March 2018 and continue for one year. Customers will remain on their default TOU rate at the end of the Pilot period unless they are removed from the Pilot due to ineligibility or choose to opt-out. Customers will be defaulted to either Option 4-9 PM or Option 5-8 PM. 13 Both Options are being offered in Schedule TOU-D, Time-of-Use Domestic, and tariffs reflecting the new rates, time periods, specific provisions, and applicable Bill Protection provision will be provided in SCE s supplemental advice letter mentioned herein. In addition, Option 4-9 PM and Option 5-8 PM will be eligible for SCE s Level Pay Plan; thus, SCE s Rule 9, Rendering and Payment of Bills, will be revised accordingly within the supplemental advice letter. 12 Advice 3404-E established Schedule TOU-DPP, Time-of-Use Domestic Pilot Program, in accordance with Resolution E Schedule TOU-DPP will close to existing customers as of December 31, Existing customers will transition to another rate schedule during their December billing period. SCE will withdraw Schedule TOU-DPP from service in a subsequent advice letter. 13 Option 4-9 PM will have a summer weekday on-peak period from 4-9 PM. Option 5-8 PM will have a summer weekday on-peak period from 5-8 PM.

17 (U 338-E) November 16, 2017 PROPOSED TARIFF CHANGES As discussed above, SCE will file a supplement to this advice letter late December 2017 in order to update the final revenue requirements and rates that SCE will implement on January 1, 2018 and at that time include all of the applicable tariff sheets. The tariff changes submitted in late December 2018 will also include modifications to SCE s residential rate schedules to include the authorized 2018 semi-annual California Climate Credit and also modifications to eligible small business general service and agricultural pumping rate schedules to update the volumetric dollars per kwh GHG allowance revenues credit to offset the amount of cap-and-trade costs adopted by the Commission in the 2018 ERRA Forecast proceeding. In addition, the Commission issued Draft Resolution M-4832 that, if approved, will increase the electric Public Utilities Commission Reimbursement Fee (PUCRF) from $ /kWh to $ /kWh. If the Commission approves this increase at its December 14, 2017 Conference, SCE will include the updated PUCRF in its tariffs filed in the supplement to this advice letter to be filed in late December. This advice filing will not cause the withdrawal of service or conflict with any other schedule or rule. TIER DESIGNATION Pursuant to General Order (GO) 96-B, Energy Industry Rule 5.1, this advice letter is submitted with a Tier 1 designation. EFFECTIVE DATE SCE requests that this advice filing become effective on January 1, 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 no later than 20 days after the date of this advice filing. Protests should be submitted to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California EDTariffUnit@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 AL should also be sent by letter and transmitted via facsimile or electronically to the attention of:

18 (U 338-E) November 16, 2017 Russell Worden Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California Telephone: (626) Facsimile: (626) AdviceTariffManager@sce.com Laura Genao Managing Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 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. In accordance with General Rule 4 of GO 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B, A , A , I et al, R , A et al, A et al, A , A , A , A , A , A , A , R , R , R , R , R , and A service lists. Address change requests to the GO 96-B service list should be directed by electronic mail to AdviceTariffManager@sce.com or at (626) For changes to all other service lists, please contact the Commission s Process Office at (415) or by electronic mail at Process_Office@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 at SCE s corporate headquarters. To view other SCE ALs filed with the Commission, log on to SCE s web site at