SCE Rate Outlook Akbar Jazayeri Vice President of Regulatory Operations CMTA Meeting July 24, 2008
2008 Revenue Requirement By Function TOTAL SYSTEM BUNDLED SERVICE Rate Component $millions % $millions % c/kwh 1. Generation 2. - Base 1,217 10.6% 1,217 11.1% 1.5 3. - Other 3,714 32.4% 3,511 32.0% 4.4 4. Total Generation 4,931 43.0% 4,728 43.1% 5.9 5. Distribution 6. - Base 2,897 25.3% 2,769 25.3% 3.5 7. - Other 446 3.9% 407 3.7% 0.5 8. Total Distribution 3,343 29.1% 3,176 29.0% 4.0 9. Transmission 482 4.2% 439 4.0% 0.6 10. Public Purpose Programs 340 3.0% 308 2.8% 0.4 11. Nuclear Decommissioning 52 0.5% 47 0.4% 0.1 12. Subtotal SCE 9,148 79.7% 8,698 79.3% 10.9 13. DWR Power Charge 1,927 16.8% 1,914 17.5% 2.4 14. DWR Bond Charge 398 3.5% 352 3.2% 0.4 15. Subtotal DWR 2,325 20.3% 2,266 20.7% 2.8 16. TOTAL 11,473 100.0% 10,964 100.0% 13.7 SAR: 13.7 c/kwh Bundled Sales: 79,768 GWh 2
2008 Revenue Requirement By Type of Cost TOTAL SYSTEM BUNDLED SERVICE Rate Component $millions % $millions % c/kwh 1. Base 1/ 4,431 38.6% 4,277 39.0% 5.4 2. Fuel and Purchased Power 2/ 6,007 52.4% 5,791 52.8% 7.3 3. Other 3/ 1,035 9.0% 896 8.2% 1.1 4. TOTAL 11,473 100.0% 10,964 100.0% 13.7 1/ Includes Generation, Distribution and Transmission 2/ Includes DWR Power 3/ Includes Non-base Distribution, Nuclear Decommissioning, Public Purpose Programs, Balancing Accounts, and DWR Bond SAR: 13.7 c/kwh Bundled Sales: 79,768 GWh 3
2008 SCE Non-Mandated Revenue Requirement ($millions) 2008 Total Revenue Requirement 11,473 Less Mandates: DWR (Power and Bond) 2,325 QF/Renewables 2,221 CA Solar Initiative/Self Gen 177 Public Purpose Pgms 282 Demand Response 41 CEC (RD&D and Renewables) 58 Rate Reduction Bonds - Subtotal 5,104 Subtotal - Non-Mandates 6,369 56% 4
Est. 2009 Bundled Service System Average Rate Buildup (cents/kwh) 18.0 16.0 14.0 13.7 0.9 0.4 0.1 0.2 0.2 15.1 (0.2) (0.2) 12.0 10.0 8.0 6.0 4.0 2.0 - Jun-08 2009 GRC Bal Accts Low Income Prgms SmartConnect DA CRS Renew Refund Sales Grow th Jan-09 Note: Does not include forecast ERRA under-collection in 2008 or increased fuel and purchased power costs forecast for 2009. 5
Average Bundled Service and DA Rate Comparisons - As filed 2009 Rate Levels w/phase 2 Revenue Allocation and Rate Proposals Bundled Service DA Service Current Rate (c/kwh) Proposed Rate (c/kwh) Percent Change Current Rate (c/kwh) Proposed Rate (c/kwh) Percent Change Total Residential 14.91 17.38 16.5% 8.77 8.99 2.6% Total LSMP 14.56 15.33 5.2% 6.37 4.94-22.5% TOU-8-Sec 12.37 12.63 2.1% 6.01 4.04-32.8% TOU-8-Pri 11.70 11.58-1.0% 5.60 3.60-35.7% TOU-8-Sub 7.63 8.80 15.3% 3.79 2.12-44.0% Total Large Power 10.79 11.21 3.9% 4.88 3.04-37.6% Total Ag.&Pumping 11.19 13.69 22.3% 4.99 5.45 9.4% Total Street Lighting 18.63 22.63 21.5% 5.92 7.41 25.2% Total System 13.73 15.13 10.2% 5.28 3.59-31.9% Note: Street Lighting rate impacts are overestimated due to overestimated lamp volumes. To be corrected in subsequent filing. 6
Status of ERRA Balancing Account Month-End Balances $millions 800 600 400 200 0-200 -400-600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Original Forecast Recorded/Update Note: Negative amounts are over-collections, and positive amounts are under-collections. The Rec/Update line includes recorded data through May and updated gas prices for the June through December period. If this forecast materializes, SCE will file an ERRA Trigger Application in July-August time frame to implement a rate increase at the end of summer season (i.e. October 2008) 7
Average Rate Group Rate Levels as a Percent of SAR - Impact and Recovery from 2001 Crisis Rate Changes Rate Group 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Current 2009 GRC Cost Based Domestic 118% 115% 114% 104% 96% 99% 103% 104% 108% 109% 110% 114% LSMP 107% 106% 104% 110% 113% 111% 111% 110% 106% 106% 105% 102% Large Power 70% 72% 77% 85% 90% 87% 82% 81% 81% 79% 78% 75% Agriculture 92% 85% 87% 85% 79% 76% 77% 77% 77% 83% 82% 91% Street Lighting 176% 142% 138% 127% 123% 120% 121% 114% 116% 122% 128% 134% System 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Notes: During the energy Crisis of 2001-2002, the Commission adopted a 3 /kwh surcharge. The majority of the impact of this increase went to Large Power and Commercial customers. SCE, over time, is driving towards getting each group to pay its cost to service. 8
DA Cost Responsibility Surcharge Under-collection 600 500 400 ($millions) 300 200 100 - (100) Jan 06 May 08 Jul 09 9
Other Issues AB1X Residential Rate Cap SCE is continuing its efforts in both regulatory and legislative arenas to find a reasonable solution to the residential rate cap problem Absent a change the forecast differential between upper and lower tier rates is not sustainable GHG Reduction Costs Prior to rules being established, carbon prices being known or reasonably predictable, and allowance allocations being finalized, it is difficult to determine these costs and their impacts on SCE rates A command and control approach resulting in substantial acceleration of renewable procurement and other costly measures (e.g., forced divestiture of coal assets/contracts) could have significant impact on SCE s rates A market-based approach with a reasonable allocation of allowances will minimize the impact on SCE s rates 10