SCE Advice Letter to Implement Settlement with Commission

On November 14, 2001, SCE filed an advice to establish the ratemaking
necessary to implement a number of regulatory components included in its
October 2nd Settlement with the Commission

The settlement agreement described the operation a new account termed the
PROACT that the Commission will establish by order. The advice letter
provides the structure and operation of the PROACT, The beginning balance of
the PROACT will consists of the unrecovered procurement related obligation
as of September 1, 2001. Beginning on Sept. 1, on a monthly basis, the
following amounts will be recorded in the PROACT: (1) SCE's Surplus
(recorded revenues minus recoverable costs); (2) all refunds related to
procurement related liabilities; (3) securitization proceeds, (4) interest
expense.

The advice letter provides a detailed explanation as to how SCE's surplus
and recoverable costs will be calculated.

In addition, the advice letter addresses settlement rates. SCE notes that,
under the Settlement, the Commission agreed to maintain electric retail
rates for retail customers at no less than the Settlement Rates during the
Repayment Period. Settlement Rates are defined in the Settlement as " gross
electric retail rates (including surcharges)". In its advice letter, SCE
proposes to define gross electric retail rates to mean the system average
rates. By defining it that way, the Commission can change the revenue
allocation between rate groups, as well as effect some rate
increases/decreases in certain rate components as long as such revisions do
not result in a change in SCE's system average rates.

SCE has asked for a September 1, 2001 effective date for the advice filing.

Under standard procedures, protests on the filing would be due December 4th.
SCE has asked for an accelerated schedule of November 28. To date, as far as
I am aware, it has not been granted.

Please let me know as soon as possible if Enron would like to weigh in on
this advice filing.

Jeanne