BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ) ) ) ) )

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1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E for Authority to, Among Other Things, Increase its Authorized Revenues for Electric Service in 2015, and to Reflect That Increase in Rates. A Filed November 12, 2013 SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E AMENDMENT TO MOTION TO UPDATE ITS RESULTS OF OPERATIONS MODEL KRIS G. VYAS GLORIA M. ING Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( Facsimile: ( kris.vyas@sce.com Dated: October 27, 2015

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E for Authority to, Among Other Things, Increase its Authorized Revenues for Electric Service in 2015, and to Reflect That Increase in Rates. A Filed November 12, 2013 SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E AMENDMENT TO MOTION TO UPDATE ITS RESULTS OF OPERATIONS MODEL I. INTRODUCTION Pursuant to Rule 1.12 of the Commission s Rules of Practice and Procedure, Southern California Edison Company (SCE respectfully amends its motion requesting that the Commission allow SCE to update its Results of Operations (RO Model in this proceeding. The motion is a follow-up to discussions between SCE and the Commission s Energy Division, and the discussion that occurred on the record at the oral argument on October 14, SCE simply amends this motion to clarify that the proposed DTA/NOL normalization calculation changes are not a result of the disputed tax issues in this case regarding SCE s election of the IRS repair deduction safe harbor provisions. Instead, the proposed changes are only meant to correct the Deferred Tax Asset (DTA/Net Operating Loss (NOL calculation errors that resulted when the 2014 input assumptions to the SCE-provided RO Model were modified, which created federal taxable income in 2014 instead of the taxable loss that was reflected in the SCE-provided RO Model. This clarification is included as a result of feedback provided by the Energy Division. This motion updates SCE s Test Year 2015 General Rate Case (GRC revenue requirement to properly reflect the DTA/NOL normalization adjustment as a result of input changes to The Proposed Decision s (PD RO model uses SCE s RO Model, which did -1-

3 not anticipate that SCE s taxable income would change prior to the 2015 Test Year. Since the PD made adjustments that changed SCE s taxable income prior to 2015, the PD RO Model should be updated to accurately reflect these PD modifications. Specifically, this update revises the RO Model forecast for the DTA/NOL calculation so that rate base is dynamically increased or decreased by the DTA/NOL balance. 1 The current PD RO Model inadvertently continued to use the 2015 DTA/NOL adjustment into the years when there should have been no DTA/NOL adjustment in those years, because 2016 and 2017 continued to have federal taxable income. SCE s update will lead to a more accurate computation of the DTA/NOL to utilize in future periods where there is taxable income. 2 The proposed revenue requirement change in this motion also includes the cumulative impact of SCE s Comments Addressing Errors in the RO Model, dated October 8, SCE has provided the updated RO Model to the Energy Division. Table 1 II. CONCLUSION SCE respectfully requests that the Commission grant its motion to update the RO Model as described herein. 1 A deferred tax asset is created when SCE is unable to monetize deferred taxes as a result of a taxable loss. 2 The 2015 GRC PD resulted in a shift in 2014 from a taxable loss position to a taxable income position. SCE s RO Model for the DTA/NOL forecast inadvertently did not anticipate this shift occurring prior to the 2015 Test Year. -2-

4 Respectfully submitted, KRIS G. VYAS GLORIA M. ING /s/ Kris G. Vyas By: Kris G. Vyas Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: ( Facsimile: ( October 27,

5 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E for Authority to, Among Other Things, Increase its Authorized Revenues for Electric Service in 2015, and to Reflect That Increase in Rates. A Filed November 12, 2013 CERTIFICATE OF SERVICE I hereby certify that I have this day served a copy of SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E AMENDMENT TO MOTION TO UPDATE ITS RESULTS OF OPERATIONS MODEL on all known parties to A to each person named in the official service list by: [X] Transmitting the copies via to all parties who have provided an address [X] Placing the copies in sealed envelopes and causing such envelopes to be delivered by hand or by overnight courier to the offices of the Assigned ALJ(s or other addressee(s. ALJ Kevin R. Dudney CPUC 505 Van Ness Avenue San Francisco, CA ALJ Melanie Darling CPUC 505 Van Ness Avenue San Francisco, CA Executed this Tuesday, October 27, 2015 at Rosemead, CA. /s/ Alejandra Arzola Alejandra Arzola, Project Analyst SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

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