on subsidiary, affiliate, and holding company transactions i

390 Pages·2015·1.02 MB·English

2014 ANNUAL REPORT
OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E)
ON SUBSIDIARY, AFFILIATE, AND
HOLDING COMPANY TRANSACTIONS
IN COMPLIANCE WITH R.92-08-008,
ORDERING PARAGRAPH NO. 2

VOLUME II
2014 ANNUAL REPORT OF
SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E)
ON SUBSIDIARY, AFFILIATE, AND HOLDING COMPANY TRANSACTIONS
IN COMPLIANCE WITH R.92-08-008,
ORDERING PARAGRAPH NO. 2

TABLE OF CONTENTS

VOLUME II
Reporting
Requirement Page

II.B.1. Requirement B, Part 1 -
PROCEDURAL & ACCOUNTING SAFEGUARDS
(Affiliate Compliance Manual) .......................................................... i
1. Affiliate Compliance Manual
REQUIREMENT B, PART 1
PROCEDURAL & ACCOUNTING SAFEGUARDS
(AFFILIATE COMPLIANCE MANUAL)

i
SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E)
RESPONSE TO ORDER INSTITUTING RULEMAKING R.92-08-008
2014
Q. II.B.1. Each utility shall submit to the Commission a description of the
procedures and controls in effect during the period covered by
the annual report, as well as copies of any guidelines and/or
policies in effect during the period covered by the annual report
that relate to any transaction between a utility and any of its
affiliated entities and that are used to ...

A. II.B.1. See Attached.

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Rev. 12/31/14

Affiliate Compliance
Manual
A Handbook for Employees Regarding
Compliance with the CPUC Affiliate
Rules
With Additional Information Regarding:
FERC Standards of Conduct
FERC Affiliate Restrictions
SCE Affiliate Policies
SCE Holding Company Conditions

S C E R EG U LA T OR Y O P ER A T I O NS

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Rev. 12/31/14
TABLE OF CONTENTS
(cid:2) (cid:2)
Chapter 1. Introduction .............................................................................. 1
(cid:2) (cid:2)
Chapter 2. Definitions ................................................................................ 9
(cid:2) (cid:2)
Section 2.01 Definitions ...................................................................... 10
(cid:2) (cid:2)
Chapter 3. Implementation ...................................................................... 20
(cid:2) (cid:2)
Section 3.01 Classes of Affiliates ....................................................... 21
(cid:2) (cid:2)
Section 3.02 Applicability of Rules Other Than the ATRs .................. 24
(cid:2) (cid:2)
Section 3.03 Affiliates Officer ............................................................. 25
(cid:2) (cid:2)
Section 3.04 Compliance Plans ......................................................... 28
(cid:2) (cid:2)
Section 3.05 Affiliates Controller and Affiliates Counsel .................... 29
(cid:2) (cid:2)
Section 3.06 Interpretation ................................................................. 30
(cid:2) (cid:2)
Section 3.07 Policy Updates .............................................................. 31
(cid:2) (cid:2)
Section 3.08 Rule Updates ................................................................. 32
(cid:2) (cid:2)
Section 3.09 Regulatory Oversight - Availability of Witnesses .......... 33
(cid:2) (cid:2)
Section 3.10 Responsibility of Affiliates ............................................. 34
(cid:2) (cid:2)
Chapter 4. Information ............................................................................. 35
(cid:2) (cid:2)
Section 4.01 Acquisition of Information .............................................. 36
(cid:2) (cid:2)
Section 4.02 Customer Information .................................................... 38
(cid:2) (cid:2)
Section 4.03 Customer Information - Release ................................... 41
(cid:2) (cid:2)
Section 4.04 Non-Customer Specific, Non-Public Information .......... 42
(cid:2) (cid:2)
Section 4.05 Employee Information Directories ................................. 46
(cid:2) (cid:2)
Section 4.06 Modeling Data ............................................................... 47
(cid:2) (cid:2)
Section 4.07 Gas Transportation........................................................ 48
(cid:2) (cid:2)
Section 4.08 Proprietary Information .................................................. 49
(cid:2) (cid:2)
Section 4.09 Supplier Information ...................................................... 51
(cid:2) (cid:2)
Section 4.10 Use of EIX Shareholder Information ............................. 53
(cid:2) (cid:2)
Chapter 5. Nondiscrimination ................................................................. 54
(cid:2) (cid:2)
Section 5.01 Nondiscrimination - No Preferential Treatment ............. 55
(cid:2) (cid:2)
Section 5.02 Access to Supply, Capacity, Services and Information . 57
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(cid:2) (cid:2)
Section 5.03 Assignment of Customers ............................................. 59
(cid:2) (cid:2)
Section 5.04 Discounts ....................................................................... 60
(cid:2) (cid:2)
Section 5.05 Nondiscrimination - Purchasing .................................... 62
(cid:2) (cid:2)
Section 5.06 Processing Requests for Service .................................. 64
(cid:2) (cid:2)
Section 5.07 Tariffs ............................................................................ 65
(cid:2) (cid:2)
Section 5.08 Types of Transactions Permitted .................................. 66
(cid:2) (cid:2)
Chapter 6. Separation – General ............................................................ 68
(cid:2) (cid:2)
Section 6.01 Separation of Corporate Entities ................................... 69
(cid:2) (cid:2)
Section 6.02 Separation of Accounting .............................................. 70
(cid:2) (cid:2)
Section 6.03 Separation – Applicability to All Relationships .............. 71
(cid:2) (cid:2)
Chapter 7. Separation – Advertising & Marketing ............................... 72
(cid:2) (cid:2)
Section 7.01 Appearances ................................................................. 73
(cid:2) (cid:2)
Section 7.02 Advice/Assistance to Customers ................................... 74
(cid:2) (cid:2)
Section 7.03 Joint Activities ................................................................ 77
(cid:2) (cid:2)
Section 7.04 Leads ............................................................................. 80
(cid:2) (cid:2)
Section 7.05 Service Provider Lists ................................................... 81
(cid:2) (cid:2)
Section 7.06 Marketing Affiliate Products to Utility Employees .......... 84
(cid:2) (cid:2)
Section 7.07 Referrals ........................................................................ 86
(cid:2) (cid:2)
Section 7.08 Referrals – Voice Response Units ................................ 89
(cid:2) (cid:2)
Section 7.09 Soliciting for Affiliates .................................................... 90
(cid:2) (cid:2)
Section 7.10 Trade Shows ................................................................. 91
(cid:2) (cid:2)
Section 7.11 Tying Prohibited ............................................................ 92
(cid:2) (cid:2)
Section 7.12 Utility Bill Envelope ........................................................ 93
(cid:2) (cid:2)
Section 7.13 Utility Name and Logo (Disclaimers) ............................. 95
(cid:2) (cid:2)
Chapter 8. Separation – Affiliated Qualifying Facilities .................... 105
(cid:2) (cid:2)
Section 8.01 Separation – Affiliated Qualifying Facilities ................. 106
(cid:2) (cid:2)
Chapter 9. Separation of Employees ................................................... 108
(cid:2) (cid:2)
Section 9.01 Joint Employment Prohibited ...................................... 109
(cid:2) (cid:2)
Section 9.02 Shared Officers ........................................................... 110
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(cid:2) (cid:2)
Section 9.03 Support Staff for Shared Officers ................................ 114
(cid:2) (cid:2)
Section 9.04 Awards ........................................................................ 115
(cid:2) (cid:2)
Section 9.05 Benefits Accounting..................................................... 116
(cid:2) (cid:2)
Section 9.06 Executive Compensation ............................................ 117
(cid:2) (cid:2)
Section 9.07 Employee Movement .................................................. 118
(cid:2) (cid:2)
Section 9.08 Diversion of Management Talent Prohibited ............... 119
(cid:2) (cid:2)
Section 9.09 Executive Movement ................................................... 120
(cid:2) (cid:2)
Section 9.10 Employee Movement – Initial Communications .......... 121
(cid:2) (cid:2)
Section 9.11 Employee Movement – Protecting Utility Information . 122
(cid:2) (cid:2)
Section 9.12 Residency Requirements ............................................ 124
(cid:2) (cid:2)
Section 9.13 Termination of Access ................................................. 125
(cid:2) (cid:2)
Section 9.14 Transfer Fees .............................................................. 126
(cid:2) (cid:2)
Section 9.15 Property Transfer ........................................................ 129
(cid:2) (cid:2)
Section 9.16 Professional Development Programs .......................... 130
(cid:2) (cid:2)
Section 9.17 Recruiting/Staffing....................................................... 131
(cid:2) (cid:2)
Section 9.18 Temporary Use - Directly Requested Services ........... 132
(cid:2)
Section 9.19 Temporary Use - Incidental Services for Class B .............
(cid:2)
Affiliates....................................................................... 137
(cid:2) (cid:2)
Section 9.20 Temporary Use - Intercompany Service Request (ISR)138
(cid:2) (cid:2)
Section 9.21 Temporary Use - 30% Limitation ................................. 140
(cid:2) (cid:2)
Chapter 10. Separation – Facilities and Equipment ........................ 142
(cid:2) (cid:2)
Section 10.01 Class A Affiliates – Use of Facilities & Equipment . 143
(cid:2) (cid:2)
Section 10.02 Class B Affiliates – Use of Facilities & Equipment . 148
(cid:2) (cid:2)
Chapter 11. Separation – Financial .................................................... 149
(cid:2) (cid:2)
Section 11.01 Ring-Fencing And Affiliate Investments................... 150
(cid:2) (cid:2)
Section 11.02 Utility Capital Requirements .................................... 152
(cid:2) (cid:2)
Section 11.03 Utility Debt Guarantees ........................................... 155
(cid:2) (cid:2)
Section 11.04 Utility Dividend Policy .............................................. 156
(cid:2) (cid:2)
Chapter 12. Separation - Shared Support ......................................... 157
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(cid:2) (cid:2)
Section 12.01 Shared Support - General ....................................... 158
(cid:2) (cid:2)
Section 12.02 Corporate Governance ............................................ 161
(cid:2) (cid:2)
Section 12.03 Permissible Corporate Support Services ................ 162
(cid:2) (cid:2)
Section 12.04 Authorization for Corporate Support Services ......... 163
(cid:2) (cid:2)
Section 12.05 Directly Requested Services ................................... 165
(cid:2) (cid:2)
Section 12.06 Accounting - General ............................................... 169
(cid:2)
Section 12.07 Accounting Categories – Directly Chargeable ................
(cid:2)
Activities .................................................................. 171
(cid:2) (cid:2)
Section 12.08 Accounting Categories – Time-Identified Activities . 173
(cid:2)
Section 12.09 Accounting Categories - Automatically Allocated ..........
(cid:2)
Activities ................................................................... 175
(cid:2) (cid:2)
Section 12.10 Accounting Procedures - Labor Loading ................. 177
(cid:2) (cid:2)
Section 12.11 Accounting Procedures – Multi-Factor Allocation .... 178
(cid:2)
Section 12.12 Accounting Procedures – Allocation by Equity ..............
(cid:2)
Investment and Advances ....................................... 180
(cid:2)
Section 12.13 Accounting Procedures – Allocation by Number of .......
(cid:2)
Employees ............................................................... 181
(cid:2) (cid:2)
Section 12.14 Accounting Procedures - Budgeting ........................ 182
(cid:2)
Section 12.15 Accounting Procedures - Recording Hours Worked ......
(cid:2)
for Affiliates.............................................................. 183
(cid:2) (cid:2)
Section 12.16 Expense Project Numbers ....................................... 186
(cid:2) (cid:2)
Section 12.17 Insurance Premium Allocation ................................. 187
(cid:2) (cid:2)
Section 12.18 Payroll Services ....................................................... 189
(cid:2) (cid:2)
Section 12.19 Joint Purchases ....................................................... 190
(cid:2) (cid:2)
Section 12.20 Research and Development .................................... 195
(cid:2) (cid:2)
Section 12.21 Tax Services ............................................................ 197
(cid:2) (cid:2)
Chapter 13. Separation – SCE Subsidiaries ..................................... 199
(cid:2) (cid:2)
Section 13.01 Subsidiaries of SCE ................................................. 200
(cid:2) (cid:2)
Chapter 14. Separation - Transfers of Goods and Services ............................ 203
(cid:2)
Section 14.01 Affiliate Officer Approval for Transfers of Goods ............
(cid:2)
and Services ............................................................ 204
(cid:2) (cid:2)
Section 14.02 Billing Affiliates ......................................................... 206
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(cid:2) (cid:2)
Section 14.03 Competitive Bidding Required ................................. 207
(cid:2) (cid:2)
Section 14.04 Pricing Transfers of Goods and Services ................ 209
(cid:2) (cid:2)
Section 14.05 Royalties .................................................................. 214
(cid:2) (cid:2)
Chapter 15. Separation - Utility Services .......................................... 215
(cid:2) (cid:2)
Section 15.01 Joint CPUC-Authorized Services ............................. 216
(cid:2) (cid:2)
Section 15.02 New Products and Services .................................... 217
(cid:2) (cid:2)
Section 15.03 Products/Services Offered Prior to 12/16/97 ........... 221
(cid:2) (cid:2)
Chapter 16. Recordkeeping & Reporting .......................................... 234
(cid:2) (cid:2)
Section 16.01 Accounting Principles .............................................. 235
(cid:2) (cid:2)
Section 16.02 Independent Audits .................................................. 236
(cid:2) (cid:2)
Section 16.03 New Affiliates Reporting .......................................... 238
(cid:2) (cid:2)
Section 16.04 Compliance Plans – Updates .................................. 240
(cid:2) (cid:2)
Section 16.05 Discounts – Notice of Availability ............................. 241
(cid:2) (cid:2)
Section 16.06 Affiliate Entity List .................................................... 243
(cid:2) (cid:2)
Section 16.07 Utility Entity List ....................................................... 244
(cid:2) (cid:2)
Section 16.08 Entity Lists – Confidentiality ..................................... 245
(cid:2) (cid:2)
Section 16.09 FERC Requirements – Preemption ......................... 246
(cid:2) (cid:2)
Section 16.10 Maintenance of Records .......................................... 247
(cid:2) (cid:2)
Section 16.11 Periodic Reports ...................................................... 249
(cid:2) (cid:2)
Section 16.12 Periodic Reports – Employee Movement ................ 251
(cid:2)
Section 16.13 Periodic Reports – Non-Tariffed Products and ...............
(cid:2)
Services .................................................................. 253
(cid:2) (cid:2)
Section 16.14 Timeliness and Availability of Records ................... 256
(cid:2)
Section 16.15 Reporting Transfers of Goods and Services ..................
(cid:2)
Over $100,000 ........................................................ 259
(cid:2) (cid:2)
Section 16.16 Proper Sales Pricing ................................................ 260
(cid:2) (cid:2)
Section 16.17 Self-ReportingViolations ......................................... 261
(cid:2) (cid:2)
Chapter 17. Penalties and Complaints .............................................. 262
(cid:2) (cid:2)
Section 17.01 Penalties and Complaints: Civil Relief .................... 263
(cid:2) (cid:2)
Section 17.02 Penalties and Complaints: Counting Violations ....... 264
vi