Akbar Jazayeri Vice President, Regulatory Operations Southern California Edison Company P O Box 800 Rosemead, CA 91770

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1 STATE OF CALIFORNIA PUBLIC UTILITIES COMMISSION SAN FRANCISCO, CA Edmund G. Brown Jr. Governor February 1, 2012 Advice Letter 2677-E Akbar Jazayeri Vice President, Regulatory Operations Southern California Edison Company P O Box 800 Rosemead, CA Subject: Modification to SCE Company s Preliminary Statement, Part U, California Solar Initiative Program Balancing Account Dear Mr. Jazayeri: Advice Letter 2677-E is effective December 20, Sincerely, Edward F. Randolph, Director Energy Division

2 Akbar Jazayeri Vice President of Regulatory Operations December 20, 2011 ADVICE 2677-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Modification to Southern California Edison Company s Preliminary Statement, Part U, California Solar Initiative Program Balancing Account Southern Califonia Edison Company (SCE) hereby submits for filing the following modification to its Preliminary Statement, Part U, California Solar Initiative Program Balancing Account (CSIPBA), listed on Attachment A and attached hereto. PURPOSE The purpose of this advice letter is to modify SCE s Preliminary Statement, Part U, CSIPBA, pursuant to Ordering Paragraph (OP) 2 of the California Public Utilities Commission s (Commission s) Decision (D.) , which modified the California Solar Initiative (CSI) revenue requirement. BACKGROUND On September 22, 2011, Senate Bill (SB) 585 was approved by the Governor and declared to take effect immediately as an urgency statute to address a CSI budget shortfall, which resulted from higher than anticipated performance-based incentive (PBI) payments to systems that qualified for PBI. SB 585 increased the limit on the total cost of CSI Program by $200 million, required the use of accumulated interest from customer collections prior to collecting additional funds from customers, and set the discount rate used for PBI payments at 4 percent. In implementing SB 585, the Commission issued D , Decision Modifying California Solar Initiative Budget, Revenue Requirement and Performance Based Incentives as Adopted in Decision (D.) , D and D The Commission modified the revenue requirement for each utility in light of the $200 million budget increase allowed by SB 585 based on current budget shortfalls and funding needs in each utility service territory. P.O. Box Walnut Grove Ave. Rosemead, California (626) Fax (626)

3 ADVICE 2677-E (U 338-E) December 20, 2011 PROPOSED TARIFF CHANGES In compliance with OP 2 of D , SCE modifies its Preliminary Statement Part U, CSIPBA, as follows: Year Amount* Transfer from SGPICMA on 12/31/2006 $104.6 million 2007 $147.0 million 2008 $147.0 million 2009 $ 0.0 million 2010 $110.0 million 2011 $110.0 million 2012 $110.0 million 2013 $ 74.0 million 2014 $ 74.0 million 2015 $ 82.0 million 2016 $ 81.1 million Interest/Forfeited Funds $ 17.9 million TOTAL $1,057.6 million SCE notes that the Energy Division, pursuant to OP 5 of D , is to monitor interest and forfeited funds in the CSIPBA and may annually propose changes to the CSI revenue requirement for Commission s consideration. 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 This advice filing will become effective on December 20, 2011, the same date as filed. 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 mailed to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California jnj@cpuc.ca.gov and mas@cpuc.ca.gov Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above).

4 ADVICE 2677-E (U 338-E) December 20, 2011 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 Vice President of Regulatory Operations Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, California Facsimile: (626) AdviceTariffManager@sce.com Leslie E. Starck Senior Vice President 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 Section 4 of GO 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B and R 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 advice letters filed with the Commission, log on to SCE s web site at For questions, please contact Jill Holmes at (626) or by electronic mail at Jill.Holmes@sce.com. Southern California Edison Company AJ:jh:sq Enclosures Akbar Jazayeri

5 CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: James Yee ELC GAS Phone #: (626) PLC HEAT WATER Disposition Notice to: EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 2677-E Tier Designation: 1 Subject of AL: Modification to Southern California Edison Company s Preliminary Statement, Part U, California Solar Initiative Program Balancing Account Keywords (choose from CPUC listing): Compliance, Balancing Account AL filing type: Monthly Quarterly Annual One-Time Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: D Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL 1 : Confidential treatment requested? Yes No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Resolution Required? Yes No Requested effective date: 12/20/11 No. of tariff sheets: -5- Estimated system annual revenue effect: (%): Estimated system average rate effect (%): When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: Service affected and changes proposed 1 : Pending advice letters that revise the same tariff sheets: Preliminary Statement Part U and Table of Contents None 1 Discuss in AL if more space is needed.

6 Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Ave., San Francisco, CA and Akbar Jazayeri Vice President of Regulatory Operations Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, California Facsimile: (626) Leslie E. Starck Senior Vice President c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California Facsimile: (415)

7 Public Utilities Commission 2677-E Attachment A Cal. P.U.C. Sheet No. Title of Sheet Cancelling Cal. P.U.C. Sheet No. Revised E Preliminary Statement Part U Revised E Revised E Preliminary Statement Part U Revised E Revised E Preliminary Statement Part U Revised E Revised E Table of Contents Revised E Revised E Table of Contents Revised E 1

8 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 1 U. California Solar Initiative Program Balancing Account (CSIPBA) 1. The purpose of the CSIPBA is to track the recorded incremental California Solar Initiative (CSI) program costs and authorized distribution revenue requirement recorded in the Base Revenue Requirement Balancing Account (BRRBA) associated with the CSI program authorized in Decision (D.) , D , D , D , D and D The CSIPBA will separately track in the Performance Based Incentives (PBI) sub-account the forecast PBI payment amounts for all completed solar projects receiving PBI to ensure fund security for the duration of the PBI contract incentive periods. Definitions a. Authorized Annual Funding Levels for CSI Program per D : Year Transfer from SGPICMA on 12/31/2006 Amount* $ million 2007 $ million 2008 $ million 2009 $ 0.0 million 2010 $ million 2011 $ million 2012 $ million 2013 $ 74.0 million 2014 $ 74.0 million 2015 $ 82.0 million 2016 $ 81.1 million Interest/Forfeited Funds $ 17.9 million Total $1,057.6 million *In accordance with Conclusion of Law 8 of D , in cases where funding is or would be exhausted before the end of the funding cycle and following consultation with the Commission and the California Energy Commission (CEC) staffs, the Administrative Law Judge (ALJ) assigned to Rulemaking (R) or its successor proceeding, in consultation with the Assigned Commissioner, may increase the current period s funding by up to 15% of the budget allocated to the subsequent funding period by directing the utilities to use the subsequent period s allocated funds. In accordance with Ordering Paragraph 5 of D , the Energy Division shall monitor interest and forfeited funds in the CSIPBA and may propose changes to the CSI authorized revenues on an annual basis for Commission consideration. (I) (I) (N) (N) (N) (N) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2677-E Akbar Jazayeri Date Filed Dec 20, 2011 Decision Vice President Effective Dec 20, H22 Resolution

9 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 2 U. California Solar Initiative Program Balancing Account (CSIPBA) 2. Definitions b. PBI Program In accordance with the rules established by the Commission for the CSI Program, SCE will pay (PBI) to 1) qualifying solar energy systems equal to or greater than 100 kilowatts in size, 2) any size system that elects to receive a CSI incentive through the PBI mechanism, and 3) any size system using building integrated technology. PBI payments will be made monthly based on recorded kilowatt hours (kwh) of solar power produced over a five-year period. PBI payments will be prorated for systems that exceed 1 megawatt (MW) in size by prorating the output of the system based on the ratio of 1 MW to the size of the facility. As an alternative, and if possible, the customer may, at its election and cost, separately meter a 1 MW element of a larger solar energy system. The PBI incentive rate is confirmed when a solar energy system project receives a confirmed reservation, and will remain constant for the five-year term. The PBI rate may vary by utility service area, depending upon the pace of solar demand in each utility s service territory. Please refer to SCE s website ( to determine the currently effective incentive rate. 3. Effective Date The Effective Date of the CSIPBA is January 1, Interest Rate The Interest Rate shall be the most recent annual interest rate on Commercial Paper (prime, three months), published in the Federal Reserve Statistical Release, H.15. Should publication of the interest rate on Commercial Paper (prime, three months) be discontinued, interest shall accrue at the rate of the most recent annual interest rate on Commercial Paper that most closely approximates the rate that was discontinued, and which is published in the Federal Reserve Statistical Release H.15, or its successor publication. (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2677-E Akbar Jazayeri Date Filed Dec 20, 2011 Decision Vice President Effective Dec 20, C16 Resolution

10 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 3 U. California Solar Initiative Program Balancing Account (CSIPBA) 5. Operation of the CSIPBA Monthly entries to the CSIPBA shall be determined as follows: a. A credit entry to record 1/12 th of the CSI Program Authorized Annual Funding Level as defined in Section 2.a. above. b. A debit entry to transfer forecast five-year expected PBI payment amounts for all completed PBI contracted solar projects from the CSIP Authorized Annual Funding Level to the PBI sub-account. c. A debit entry to reflect the actual incremental program costs associated with the CSI Program excluding the actual PBI payment amounts associated with the CSI Program; In addition, an initial, one-time transfer of the recorded December 31, 2006 balance in the Solar Self-Generation Incentive Component Subaccount of the SGPIC Memorandum Account, if any, shall be made to the CSIPBA. Monthly entries to the PBI sub-account shall be determined as follows: a. A credit transferred from the CSIPBA Authorized Annual Funding Level to reserve expected PBI payment amounts for all completed PBI contracted solar projects. b. A debit entry to reflect the actual PBI payment amounts associated with the CSI Program. Any under-collection or over-collection recorded in a month may be carried over from month-to month over the duration of the CSI Program. Interest Expense shall be calculated annually by applying the Interest Rate to the average balance of the beginning-of-year and the end-of-year balances in the CSIPBA inclusive of the PBI sub-account. Since the CSIPBA is a one-way balancing account, Interest Expense shall only be calculated when the average balance in the CSIPBA is a negative (under-expended) amount. 6. Disposition of the CSIPBA Balances The Company may request disposition of over-collected balances recorded in the CSIPBA in an April Energy Resource Recovery Account (ERRA) Application, or any other proceeding authorized by the Commission. (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2677-E Akbar Jazayeri Date Filed Dec 20, 2011 Decision Vice President Effective Dec 20, H21 Resolution

11 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) 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 E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS E TABLE OF CONTENTS - RULES E TABLE OF CONTENTS - INDEX OF COMMUNITIES, MAPS, BOUNDARY DESCRIPTIONS E TABLE OF CONTENTS - SAMPLE FORMS E 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. Advanced Metering Infrastructure Balancing Account E J. Palo Verde Balancing Account E K. Nuclear Decommissioning Adjustment Mechanism E L. Purchase Agreement Administrative Costs Balancing Account E M. Income Tax Component of Contributions E N. Memorandum Accounts E E E E E E E O. California Alternate Rates for Energy (CARE) Adjustment Clause E E P. Optional Pricing Adjustment Clause (OPAC) E (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2677-E Akbar Jazayeri Date Filed Dec 20, 2011 Decision Vice President Effective Dec 20, H7 Resolution

12 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 2 PRELIMINARY STATEMENT: Cal. P.U.C. Sheet No. Q. Demand Side Management Adjustment Clause E E R. NOT IN USE E S. Procurement Energy Efficiency Balancing Account E T. Electric and Magnetic Fields Measurement Program E U. California Solar Initiative Program Balancing Account E V. Hazardous Substance Cleanup Cost Recovery Mechanism E E W. Departing Load and Customer Generation Departing Load Cost Responsibility E E X. Research, Development and Demonstration Adjustment Clause E Y. Demand Response Program Balancing Account E E Z. Songs 2&3 Steam Generator Replacement Balancing Account E E AA. California Alternate Rates for Energy (CARE) Balancing Account E BB. PBR Distribution Revenue Requirement Adjustment Factor E CC. PBR Distribution Performance Mechanism E E E DD. Cost Of Capital Trigger Mechanism E EE. Electric Deferred Refund Account E FF. Public Purpose Programs Adjustment Mechanism E E GG. Energy Efficiency Program Adjustment Mechanism E HH. Low Income Energy Efficiency Program Adjustment Mechanism E II. Bond Charge Balancing Account E JJ. Direct Access Cost Responsibility Surcharge Tracking Account E KK. NOT IN USE...-E LL. Reliability Investment Incentive Mechanism E MM. Community Choice Aggregation Balancing Account E NN. Mohave Balancing Account E OO. Pension Costs Balancing Account E PP. Post Employment Benefits Other Than Pensions Costs Balancing Account E QQ. Edison SmartConnect Balancing Account E (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 2677-E Akbar Jazayeri Date Filed Dec 20, 2011 Decision Vice President Effective Dec 20, H7 Resolution