July 6, 2001 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION. Extension of the Electric Vehicle Adjustment Clause (EVAC)

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1 Akbar Jazayeri Director of Revenue and Tariffs July 6, 2001 ADVICE 1558-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Extension of the Electric Vehicle Adjustment Clause (EVAC) Southern California Edison Company (SCE) hereby submits for filing the following changes to its tariff schedules. The revised tariff sheets are listed on Attachment A and are attached hereto. PURPOSE This advice filing proposes to modify Paragraphs 2.g (Definitions- Electric Vehicle (EV) Program Period) and 5 (Reports on EV Program) of the EVAC in Part U of SCE s Preliminary Statement in order to extend the program period and the EVAC mechanism by one year 1. Currently, the EV program period is defined as the period of time beginning on January 1, 1996, and ending on December 31, SCE is seeking to extend the EVAC mechanism for one year until December 31, This extension is necessitated by the delay of SCE s 2002 Test Year (TY) General Rate Case (GRC) to a 2003 TY authorized in Decision (D.) issued on June 14, SCE is not requesting any funding above the amount authorized by the California Public Utilities Commission (Commission) for the original six-year EV program. BACKGROUND Description of SCE s EV Program On November 21, 1995, the Commission issued D (LEV decision) in R /I , the Low Emission Vehicle (LEV) Investigation and Rulemaking. In the LEV decision, the Commission adopted for SCE a number of programs and activities consistent with the Commission s existing guidelines for 1 Or until such time as a final decision is reached in SCE s 2003 Test Year General Rate Case. P.O. Box Walnut Grove Ave. Rosemead, California (626) Fax (626)

2 ADVICE 1558-E (U 338-E) July 6, 2001 LEV programs 2. The Commission found that the LEV programs are necessary for SCE to: (1) meet federal Energy Policy Act (EPAct) requirements; (2) provide long-term benefits to ratepayers by reducing transmission and distribution (T&D) costs for servicing a growing electro-drive load; (3) serve the EV customer safely, efficiently, conveniently, and cost-effectively; and (4) assist the customers in obtaining information regarding the safe, efficient, reliable, and cost-effective operation and recharging of electro-drive technologies. The LEV programs and activities currently reflected in the EVAC balancing account meet traditional utility activity guidelines for providing safe, reliable, and efficient service to ratepayers, and have been successful to date in reducing both the utility- and customer-side costs for electro-drive charging installations. In late 1995, when the LEV technologies were relatively new, the necessary funding level for these programs was uncertain. Therefore the Commission, in its LEV Decision, determined that the costs associated with the LEV programs and activities should be handled through a balancing account mechanism. The Commission authorized such a mechanism on January 10, 1996, with the filing of Advice 1182-E. The Commission authorized funding for the LEV programs through December 31, A total of $44.7 million in 1992 dollars 4 was authorized for use over this six-year program period. All expenditures have been or are subject to annual reasonableness reviews by the Commission in the annual Revenue Adjustment Proceeding (RAP). All expenditures through 1999 reviewed by the Commission to date have been found reasonable 5. By the end of 2000, SCE had expended approximately 55 percent of the funding authorized for the six-year program period. Thus, SCE does not require, and is not seeking in this advice letter or any other forum, additional funding for the one-year extension. For 2002, SCE must continue the LEV programs to comply with the existing federal EPAct requirements as well as state and local requirements. These requirements include the California Air Resources Board s (CARB) Zero-Emission Vehicle (ZEV) mandate, state and local programs for airport equipment electrification, and off-road vehicle programs for electric-powered forklifts and burden carriers. Due in part to these mandates, EVs are now a regular part of SCE s fleet, and their share of the total SCE fleet will increase in 2002 in compliance with the federal EPAct requirements. 2 See D See Part U of SCE s Preliminary Statement. 4 In SCE s 1998 final RAP Decision, the CPUC authorized funding adjustments for inflation, resulting in the total LEV funding amounting to over $56.7 million after adjustment for inflation. 5 See for example D issued on January 4, 2001.

3 ADVICE 1558-E (U 338-E) July 6, 2001 EVs and other electro-drive technologies continue to evolve and come to market, thereby impacting utility systems. As such, SCE must continue to test the technology and evaluate system impacts, in order to both meet customers needs for safe, reliable, energy-efficient charging and provide data and information beneficial to the cost-effective deployment and operation of the technologies. The current LEV programs allow SCE to comply with the EPAct. Specifically, as an alternative fuel provider, SCE is required by EPAct to acquire a prescribed percentage of alternate fuel vehicles (AFV) based on the actual number of corporate fleet light duty vehicles (LDV) that are replaced. The minimum EPAct acquisition percentage was 30 percent of total LDV purchases in 1998, 50 percent in 1999, 70 percent in 2000, and 90 percent in 2001 and thereafter. 6 In 1995, SCE committed to achieve these EPAct requirements through the continued deployment of EVs in its fleet. 7 Based on historical experience, SCE estimates that our corporate fleet LDV acquisitions may range from vehicles in In addition to fleet vehicle acquisition requirements, the LEV Program in 2002 will involve conducting a variety of EPAct-related activities such as providing vehicle training, model fleet administration, vehicle maintenance, EPAct compliance support, infrastructure and vehicle evaluation, battery testing and other fleet functions required to comply with EPAct. The LEV programs also allow SCE to comply with various state and local mandates on air quality. Specifically, CARB has promulgated a ZEV mandate. As modified on January 25, 2001, the mandate stipulates that a minimum of two percent or up to ten percent or more of all light duty vehicles marketed by major carmakers in 2003 must be zero-emission vehicles. CARB also has a requirement that 15 percent of new buses marketed must be zero-emission. SCE s role is to understand the charging dynamics of all these vehicles in order to accommodate the user s need for safe, efficient charging, and to mitigate any negative impacts the charging of these vehicles may have on the utility system and other utility customers. In addition to CARB, other local and state air quality regulators are attempting to institute clean technology programs. These agencies are moving to require airport equipment electrification, state and transit fleet conversion to electric and other alternative fuels, and off-road vehicle rules that would require an increase in electric forklifts and other zero-emission off-road vehicles. The increased use of these machines in Southern California also requires SCE s participation in assuring the safe and energy-efficient charging, and the management of system impacts. SCE will continue to incur costs in 2002 similar to those costs included in the EVAC mechanism in order to comply with a variety of federal, state and local regulations. SCE included such costs in its 2002 TY NOI for a GRC submitted in July In 6 10 CFR Part 490, Subpart D, Section ; EPAct, Section 501(c). 7 Letter from John Bryson, CEO of SCE, to Kenneth Katz, USDOE, invoking the electric vehicle option for SCE fleet, under EPAct Section 501(c), dated December 15, 1995.

4 ADVICE 1558-E (U 338-E) July 6, 2001 D , the 2002 TY GRC was deferred to 2003, yet SCE will continue to incur compliance related costs. Currently Effective EVAC Mechanism Pursuant to D , SCE filed Advice 1142-E on January 10, 1996 that established Part U of the Preliminary Statement to include the currently effective EVAC one-way balancing account. Consistent with D , the EVAC records the costs and revenue requirement associated with the authorized LEV programs and permits recovery of the LEV program costs in the year following the expenditures. This means that the LEV program expenditures found to be reasonable by the Commission are not collected in rates until the year after they are spent. The EVAC also includes a detailed funding flexibility component and various reporting requirements on LEV program expenditures and the operation of the EVAC mechanism. Proposed Modification to EVAC SCE proposes to extend the operation of the EVAC by one additional year as a result of the deferral of SCE s 2002 TY GRC to 2003 TY GRC. As described above, SCE expected to include the on-going requirements associated with the compliance with federal, state and local requirements in its 2002 GRC. With the issuance of D , SCE can only include the on-going LEV compliance costs beginning in 2003 in the 2003 TY GRC. Unless the EVAC is extended one additional year, 8 SCE will have no available means to record and recover mandated compliance costs incurred in The extension of the EVAC mechanism for one year is reasonable because SCE will incur costs in 2002 related to compliance with federal, state and local requirements that have been included as part of the EVAC balancing account. SCE recommends that all other provisions of the EVAC mechanism remain unchanged including the funding shifting requirements and the reporting requirements. SCE further recommends that the costs incurred in 2002 continue to be reviewed for reasonableness in the RAP proceeding (or its successor proceeding). 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 respectfully requests that this advice filing become effective on the 40 th calendar day after the date filed, which is August 15, Or until such time as a final decision is reached in SCE s 2003 TY GRC.

5 ADVICE 1558-E (U 338-E) July 6, 2001 NOTICE Anyone wishing to protest this advice filing may do so by sending a letter via US mail, facsimile, or electronically, which must be received by SCE no later than 20 days after the date of this advice filing. Protests should be mailed to: IMC Program Manager Energy Division California Public Utilities Commission 505 Van Ness Avenue, Room 4002 San Francisco, California Facsimile: (415) jjr@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 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, Rm. 303 Rosemead, California Facsimile: (626) lawlerem@sce.com Bruce Foster Vice President of Regulatory Operations Southern California Edison Company 601 Van Ness Avenue, Suite 2040 San Francisco, California Facsimile: (415) fosterbc@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.

6 ADVICE 1558-E (U 338-E) July 6, 2001 In accordance with Section III, Paragraph G, of General Order No. 96-A, SCE is mailing copies of this advice filing to the interested parties shown on the attached service list. Address change requests to the attached GO 96-A Service List should be directed to Emelyn Lawler at (626) or by electronic mail at Emelyn.Lawler@sce.com. 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 Jim Yee at (626) or by electronic mail at James.Yee@sce.com. Southern California Edison Company AJ:pk/jy/eml Enclosures Akbar Jazayeri

7 Public Utilities Commission 1558-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 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 Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 2 U. Electric Vehicle Adjustment Clause (EVAC) 2. Definitions: d. Expense Program Area: The Expense Program Area is that portion of SCE's EV Program in which SCE has been authorized to spend up to the authorized level of funds for all general expenses associated with SCE's EV Program excluding the Capital and RD&D Program Area expenses. e. Franchise Fees and Uncollectible Accounts: Franchise Fees and Uncollectible Accounts shall be the rate derived from SCE's most recent general rate case decision to provide for franchise fees and uncollectible accounts expense. f. Interest Rate: The interest rate shall be the most recent monthly interest rate on Commercial Paper (prime, three months), published in the Federal Reserve Statistical Release, G.13. Should publication of the interest rate on Commercial Paper (prime, three months) be discontinued, interest will so accrue at the rate of the most recent annual interest rate on Commercial Paper which most closely approximates the rate that was discontinue, and which is published in the Federal Reserve Statistical Release, G.13, or its successor publication. g. Electric Vehicle Program Period: The Electric Vehicle Program Period, as authorized by the Commission, shall be that period of time beginning on January 1, 1996 and ending on December 31, (T) (T) (C) 3. Electric Vehicle Adjustment Account: SCE shall maintain an Electric Vehicle Adjustment Account (EVAA). Entries to be made to this account at the end of each month shall be determined from the following calculations: a. Expenditures for the Expense Program Area of the EV Program recorded during the month, b. Plus: Expenditures for the RD&D Program Area of the EV Program recorded during the month, (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1558-E John R. Fielder Date Filed Jul 6, 2001 Decision Senior Vice President Effective Jan 23, H12 Resolution G-3322

9 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 5 U. Electric Vehicle Adjustment Clause (EVAC) 4. Funding Flexibility Mechanism. The Expense Program Area of SCE's EV Program consists of the five individually defined Programs as follows: a. Electric Transportation Departmental Overhead Program b. Model EV Fleet Program c. System Impact/Assessment Program d. Technology Introduction & Customer Education Program e. Infrastructure Installation Program Funds may be shifted in, to, or out of the Electric Transportation Departmental Overhead Program and the Model EV Fleet Program without restrictions. Funds may also be shifted in to the System Impact/Assessment Program, Technology Introduction & Customer Education Program and the Infrastructure Installation Program without restrictions. Funds may be shifted out of the System Impact/Assessment Program, Technology Introduction & Customer Education Program and the Infrastructure Installation Program, up to 50% of the authorized funding level adopted in Commission Decision No , only upon Commission approval of an advice letter requesting the shift of funds. Funds may be shifted out of these three programs in excess of 50% of the authorized funding level only upon Commission approval of an application requesting the shift of funds. 5. Report on the Electric Vehicle Program: On a monthly basis SCE shall submit to the California Public Utilities Commission ("Commission") a report which shall contain a summary of the operation of the EVAC. Such summary shall include a schedule which shows the monthly entries to the EVAA and the cumulative monthly balance of the EVAA for the then current calendar year. At the end of the EV Program Period, SCE shall submit a report to the Commission in compliance with Decision No which shall set forth: (1) the monthly entries to the EVAA; (2) the cumulative monthly balances in the EVAA; (3) the derivation of the amount to be refunded to ratepayers, if any; (4) fund shifting between programs; and (5) any authorized increases to the Program Area funding levels. The report shall cover the entire EV Program period. Disposition of the ending balance in the EVAA as of December 31, 2002, shall be subject to the Commission's decision rendered in SCE's RAP or other proceeding expressly authorized by the Commission subsequent to that date. (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1558-E John R. Fielder Date Filed Jul 6, 2001 Decision Senior Vice President Effective Jan 23, W11 Resolution G-3322

10 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Revised Cal. PUC Sheet No E PRELIMINARY STATEMENT Sheet 5 (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1558-E John R. Fielder Date Filed Jul 6, 2001 Decision Senior Vice President Effective Jan 23, W11 Resolution G-3322

11 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 (T) 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. Generation Asset Balancing Account E J. NOT IN USE... K. NOT IN USE... L. NOT IN USE... 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 (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1558-E John R. Fielder Date Filed Jul 6, 2001 Decision Senior Vice President Effective Jan 23, H19 Resolution G-3322

12 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California Cancelling Cal. PUC Sheet No. 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. Transition Revenue Account (TRA) E S. Envest SCE Pilot Program Adjustment Mechanism (EPPAM) E E T. Electric and Magnetic Fields Measurement Program E U. Electric Vehicle Adjustment Clause (EVAC) E V. Hazardous Substance Cleanup Cost Recovery Mechanism E E W. Competition Transition Charge Responsibility (CTC) E E X. Research, Development and Demonstration Adjustment Clause (RDDAC) E Y. Economic Development Adjustment Clause (EDAC) E Z. NOT IN USE... AA. BB. Demand Reduction and Self-Generation Program Incremental Cost (DRSGPIC) E Nongeneration Base Rate Adjustment Mechanism (NBRAM) E E CC. Base Rate Performance Mechanism (BRPM) E E DD. Cost Of Capital Trigger Mechanism E EE. Electric Deferred Refund Account (EDRA) E FF. NOT IN USE... GG. Energy Efficiency Program Adjustment Mechanism (EEPAM E HH. Low Income Energy Efficiency Program Adjustment Mechanism (LIEEPAM) E II. JJ. Public Purpose Adjustment Mechanism (PPAM) E Transition Costs Balancing Account E E E E E E E E E KK. Emergency Procurement Surcharge Balancing Account (EPSBA) E (T) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 1558-E John R. Fielder Date Filed Jul 6, 2001 Decision Senior Vice President Effective Jan 23, H15 Resolution G-3322

January 18, 2002 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION

January 18, 2002 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION Akbar Jazayeri Director of Revenue and Tariffs January 18, 2002 ADVICE 115-G (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Decrease in Santa Catalina Island