April 8, 2005 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION. Revision to the Energy Resource Recovery Account

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2 Akbar Jazayeri Director of Revenue and Tariffs April 8, 2005 ADVICE 1884-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Revision to the Energy Resource Recovery Account Southern California Edison Company (SCE) hereby requests approval of the California Public Utilities Commission (Commission) to revise its Energy Resource Recovery Account (ERRA) as described below. The revised tariff sheets are listed on Attachment A and are attached hereto. PURPOSE The purpose of this Advice Filing is to modify Preliminary Statement Section ZZ, ERRA, to include payments made by SCE for its participation in the Lower Colorado River Multi-Species Conservation Program (LCR MSCP). BACKGROUND The LCR MSCP is a coordinated, comprehensive, long-term multi-agency effort to conserve and recover endangered species and protect and maintain wildlife habitat on the lower Colorado River. The MSCP s purposes are to: 1) protect the lower Colorado River environment while ensuring the certainty of existing river water supply and hydroelectric power operations; 2) address the needs of threatened and endangered wildlife under the Endangered Species Act; and 3) prevent the listing of additional endangered species on the lower Colorado River. The LCR MSCP involves a broad-based state/federal/tribal/private regional partnership, which includes water purveyors, hydroelectric power generators and users, and wildlife management agencies in Arizona, California, and Nevada. SCE is a participant in the LCR MSCP, and the term of SCE s participation will be coincident with any contract between SCE and the Federal Government providing for SCE to purchase a portion of the electrical output from the Boulder Canyon Project (Hoover). SCE s current contract for Hoover power terminates on September 30, If SCE s Hoover contract is not renewed, then SCE may terminate its participation in the LCR MSCP. P.O. Box Walnut Grove Ave. Rosemead, California (626) Fax (626)

3 ADVICE 1884-E (U 338-E) April 8, 2005 A federal/non-federal cost-sharing agreement is in place for the development of the program and implementation of conservation measures. The U.S. Department of the Interior will provide 50 percent (50%) of the total program costs, and participating entities from California, Nevada, and Arizona will jointly provide the other 50 percent (50%). Should the Commission not approve SCE s request to record payments made to the LCR MSCP in the ERRA (SCE s share will be 0.45 percent [0.45%] of the total program costs, or approximately $117,000 per annum), then (i) SCE will not provide funding to the LCR MSCP, (ii) SCE will not be a participant in the LCR MSCP, and (iii) SCE will not be entitled to receive an Incidental Take Permit from the U.S. Fish and Wildlife Service and a Section 2081 Permit from the California Department of Fish and Game under the LCR MSCP. The Fish and Wildlife Service believes that these permits are necessary to ensure compliance with the state and federal Endangered Species Acts associated with the hydroelectric operations at Hoover Dam and the power purchase agreements for that electrical output. RECOVERY PROPOSAL SCE requests Commission approval to revise its ERRA Preliminary Statement to record payments made to the LCR MSCP. Amounts recorded in SCE s ERRA (including SCE s payments to the LCR MSCP) are subject to audit in SCE s ERRA Reasonableness of Operations filing made each April 1. No cost information is required for this advice filing. This advice filing will not increase any rate or charge, cause the withdrawal of service, or conflict with any other schedule or rule. EFFECTIVE DATE SCE requests that this advice filing become effective on the 40 th calendar day after the date filed, which is May 18, NOTICE Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received by the Energy Division and SCE no later than 20 days after the date of this advice filing. Protests should be mailed to: CPUC, Energy Division Attn: Tariff Unit 505 Van Ness Avenue San Francisco, California jjr@cpuc.ca.gov and jnj@cpuc.ca.gov Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above). 1 Amounts recorded in the ERRA during the previous calendar year are reviewed by the Commission in SCE s April Reasonableness of Operations filings.

4 ADVICE 1884-E (U 338-E) April 8, 2005 In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of: Akbar Jazayeri Director of Revenue and Tariffs Southern California Edison Company 2244 Walnut Grove Avenue, Quad 3D Rosemead, California Facsimile: (626) AdviceTariffManager@sce.com Bruce Foster Vice President of Regulatory Operations c/o Karyn Gansecki 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415) Karyn.Gansecki@sce.com There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and shall be submitted expeditiously. In accordance with Section III, Paragraph G, of General Order No. 96-A, SCE is serving copies of this advice filing to the interested parties shown on the attached service list. Address change requests to the GO 96-A Service List should be directed to AdviceTariffManager@sce.com or at (626) For changes to any other Service List, please contact the Commission s Process Office at (415) or 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 open for public inspection at SCE s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE s web site at and choose Regulatory Info Center/Advice Letters. For questions, please contact Phillip Durgin at (626) or by electronic mail Phillip.Durgin@sce.com. Southern California Edison Company Akbar Jazayeri AJ:pd:mm Enclosures

5 Public Utilities Commission 1884-E Attachment A Cal. P.U.C. Sheet No. Title of Sheet Cancelling Cal. P.U.C. Sheet No. Revised E Preliminary Statement Part ZZ Revised E Revised E Table of Contents Revised E Revised E Table of Contents Revised E 1

6 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 4 ZZ. ENERGY RESOURCE RECOVERY ACCOUNT 3. Operation of the ERRA Entries to the ERRA shall be made on a monthly basis as follows: a. Credit entry equal to the recorded ERRA Revenue; b. A debit entry equal to recorded URG Fuel and Fuel-related expenses; c. A debit entry equal to Palo Verde Nuclear Unit Incentive Procedure (NUIP) rewards subsequent to Commission approval; d. A debit entry equal to recorded Qualifying Facilities (QF) contracts expenses (including contract restructuring expenses), net of recorded revenues, refunds, or other credits; e. A debit entry equal to recorded Interutility contracts expenses, net of recorded revenues, refunds or other credits; f. A debit entry equal to recorded Bilateral contracts expenses; g. A debit entry equal to recorded Residual Net Short Requirement expenses; h. A debit entry equal to other expenses associated with SCE s purchased power activities to the extent not recovered elsewhere (such as the costs associated with purchasing Firm Transmission Rights, and payments made in support of the Lower Colorado River Multi-Species Conservation Program); i. A debit entry equal to recorded ISO expenses; j. A credit entry equal to Excess Energy Sales Revenues allocated to SCE; k. A credit entry equal to recorded Reliability Must Run (RMR) contracts and ancillary services revenue ii/ ; l. A debit entry equal to the incentive payments to customers participating in the Statewide Pricing Pilot (SPP) program authorized in Phase 1 of Decision , Advanced Metering, Demand Response, and Dynamic Pricing Proceeding; m. A credit entry equal to proceeds received from the sale or exercise of hedging instruments; n. A credit entry equal to recorded revenues billed under Schedule PC-TBS, Procurement Charge Transitional Bundled Service; o. A credit entry equal to any litigation settlement proceeds as authorized by the Commission; and p. A debit entry equal to the recorded costs associated with the subscription, retention and disposition of turned-back capacity on The El Paso Interstate Pipeline (net of recorded proceeds realized from the short-term release of capacity to another party); q. A debit entry equal to recorded Mountainview PPA costs including: i. O&M Costs both pre-authorized changes and fixed variable O&M ii. Capital Costs including all applicable return, depreciation, and taxes both the initial Mountainview plant investment and any subsequent Commission-approved capital additions iii. Availability incentives; and iv. Heat Rate Incentives; r. A debit entry equal to recorded 20/20 Rebate Program Costs including: i. 20/20 Rebate amount included on customers bills increased for FF&U ii. Incremental O&M Costs incurred to implement the Summer 2004 and /20 programs. The sum of (a) through (r) equals the activity recorded in the ERRA each month. Interest shall accrue monthly to the ERRA by applying the Interest Rate to the average of the beginning and ending monthly ERRA balances. ii/ Generation-related Other Operating Revenue (OOR) is recorded in the Native Load Balancing Account. (T) (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1884-E John R. Fielder Date Filed Apr 8, 2005 Decision Senior Vice President Effective Oct 27, H10 Resolution E-3954

7 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 1 Cal. P.U.C. Sheet No. TITLE PAGE E TABLE OF CONTENTS-RATE SCHEDULES E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS E TABLE OF CONTENTS - RULES E TABLE OF CONTENTS - BASELINE REGIONS E TABLE OF CONTENTS - SAMPLE FORMS E 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. NOT IN USE... -E J. Employee-Related Balancing Account E K. Nuclear Decommissioning Adjustment Mechanism E L. Performance-Based Ratemaking Exclusions Distribution Adjustment Mechanism E M. Income Tax Component of Contributions E N. Memorandum Accounts E E E E E E , E E E O. California Alternative Rates for Energy (CARE) Adjustment Clause E P. Optional Pricing Adjustment Clause (OPAC) E (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1884-E John R. Fielder Date Filed Apr 8, 2005 Decision Senior Vice President Effective Oct 27, H6 Resolution E-3954

8 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 2 Cal. P.U.C. Sheet No. PRELIMINARY STATEMENT: (Cont'd) Q. Demand Side Management Adjustment Clause (DSMAC) E E R. Historical Procurement Charge Balancing Account E S. Procurement Energy Efficiency Balancing Account (PEEBA) E T. Electric and Magnetic Fields Measurement Program E U. NOT IN USE...-E V. Hazardous Substance Cleanup Cost Recovery Mechanism E E W. Departing Load Responsibility E E X. Research, Development and Demonstration Adjustment Clause (RDDAC) E Y. NOT IN USE...-E Z. NOT IN USE...-E AA. California Alternate Rates for Energy (CARE) Balancing Account E BB. Nongeneration Base Rate Adjustment Mechanism (NBRAM) E E CC. Base Rate Performance Mechanism (BRPM) E E E DD. Cost Of Capital Trigger Mechanism E EE. Electric Deferred Refund Account (EDRA) E FF. Public Purpose Programs Adjustment Mechanism E E GG. Energy Efficiency Program Adjustment Mechanism (EEPAM E HH. Low Income Energy Efficiency Program Adjustment Mechanism (LIEEPAM) E II. Bond Charge Balancing Account (BCBA) E JJ. PENDING...-E KK. NOT IN USE...-E LL. PENDING...-E MM. Community Choice Aggregation Implementation Cost Balancing Account E NN. NOT IN USE... -E OO. NOT IN USE... -E PP. NOT IN USE... -E QQ. NOT IN USE... -E RR. NOT IN USE... -E SS. NOT IN USE... -E TT. NOT IN USE... -E UU. Independent System Operator Balancing Account (ISOBA) E VV. Purchased Power Balancing Account (PPBA) E WW. Community Choice Aggregation Cost Responsibility Surcharge Tracking Account E XX. NOT IN USE... -E YY. Base Revenue Requirement Balancing Account (BRRBA) E E ZZ. Energy Resource Recovery Account E E AAA. Post Test Year Ratemaking Mechanism (PTYR) E E BBB. Employee Safety and Distribution Reliability Performance Incentive Mechanism (SRPIM) E (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1884-E John R. Fielder Date Filed Apr 8, 2005 Decision Senior Vice President Effective Oct 27, H7 Resolution E-3954