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<SEC-DOCUMENT>0000827052-03-000028.txt : 20030331
<SEC-HEADER>0000827052-03-000028.hdr.sgml : 20030331
<ACCEPTANCE-DATETIME>20030328183221
ACCESSION NUMBER:		0000827052-03-000028
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20021231
FILED AS OF DATE:		20030331

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOUTHERN CALIFORNIA EDISON CO
		CENTRAL INDEX KEY:			0000092103
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				951240335
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-02313
		FILM NUMBER:		03626700

	BUSINESS ADDRESS:	
		STREET 1:		2244 WALNUT GROVE AVE
		STREET 2:		P O BOX 800
		CITY:			ROSEMEAD
		STATE:			CA
		ZIP:			91770
		BUSINESS PHONE:		6263021212

	MAIL ADDRESS:	
		STREET 1:		2244 WALNUT GROVE AVE
		CITY:			ROSEMEAD
		STATE:			CA
		ZIP:			91770
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>sce10k2002.htm
<DESCRIPTION>SCE ANNUAL REPORT ON FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>SCE Annual Report on Form 10-K
</TITLE>
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<BODY>
<PRE>
                                                             UNITED STATES
                                                  SECURITIES AND EXCHANGE COMMISSION
                                                        Washington, D.C. 20549

                                                               FORM 10-K

(Mark One)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended          December 31, 2002

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

For the transition period from ---------------------  to ---------------------------------


                                                     Commission File Number 1-2313

                                                  SOUTHERN CALIFORNIA EDISON COMPANY
                                        (Exact name of registrant as specified in its charter)

                 California                                                               95-1240335
       (State or other jurisdiction of                                                 (I.R.S. Employer
       incorporation or organization)                                                 Identification No.)

          2244 Walnut Grove Avenue
            Rosemead, California
            (Address of principal                                                            91770
             executive offices)                                                           (Zip Code)

                                  Registrant's telephone number, including area code: (626) 302-1212

                                      Securities registered pursuant to Section 12(b) of the Act:

                                                                                     Name of each exchange
             Title of each class                                                      on which registered
             -------------------                                                      -------------------
                Capital Stock
            Cumulative Preferred                                                     American and Pacific
         4.08% Series      4.32% Series
         4.24% Series      4.78% Series

                                   Securities registered pursuant to Section 12(g) of the Act: None

<PAGE>

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

As of June 28, 2002, there were 434,888,104 shares of Common Stock outstanding, all of which are held by the registrant's parent
holding company. The aggregate market value of registrant's voting and non-voting common equity held by non-affiliates was zero. As
of March 26, 2003, there were 434,888,104 shares of common stock outstanding.


                                                  DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents listed below have been incorporated by reference into the parts of this report so indicated.

(1)  Designated portions of the registrant's Annual Report to Shareholders
         for the year ended December 31, 2002....................................................  Parts I and II
(2)  Designated portions of the Joint Proxy Statement relating
         to registrant's 2003 Annual Meeting of Shareholders.....................................  Part III

==================================================================================================================================

<PAGE>
                                                           TABLE OF CONTENTS


Item                                                                                                      Page
- -----------------------------------------------------------------------------------------------------------------

Forward-Looking Statements...................................................................................  1

                                                                Part I

1.   Business ...............................................................................................  1
         Regulation..........................................................................................  1
         Properties..........................................................................................  3
         Construction Program................................................................................  5
         Nuclear Power Matters...............................................................................  5
         Fuel Supply and Purchased Power.....................................................................  7
         Environmental Matters...............................................................................  8
2.   Properties.............................................................................................. 12
3.   Legal Proceedings....................................................................................... 13
         Navajo Nation Litigation............................................................................ 13
         Power Exchange Performance Bond Litigation.......................................................... 13
         CPUC Litigation and Settlement...................................................................... 14
         CPUC Investigation Regarding SCE's Electric Line Maintenance Practices.............................. 14
4.   Submission of Matters to a Vote of Security Holders..................................................... 15
         Executive Officers of the Registrant................................................................ 15

                                                                Part II

5.   Market for Registrant's Common Equity and Related Stockholder Matters................................... 18
6.   Selected Financial Data................................................................................. 18
7.   Management's Discussion and Analysis of Results of Operations and Financial Condition................... 18
7A.  Quantitative and Qualitative Disclosures About Market Risk.............................................. 18
8.   Financial Statements and Supplementary Data............................................................. 18
9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................... 18

                                                               Part III

10.  Directors and Executive Officers of the Registrant...................................................... 18
11.  Executive Compensation.................................................................................. 19
12.  Security Ownership of Certain Beneficial Owners and Management
     and Related Stockholder Matters......................................................................... 19
13.  Certain Relationships and Related Transactions.......................................................... 19
14.  Controls and Procedures................................................................................. 19
15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K........................................ 20
         Financial Statements................................................................................ 20
         Report of Independent Accountants and Schedules Supplementing Financial Statements.................. 20
         Exhibits............................................................................................ 20
         Reports on Form 8-K................................................................................. 21
         Signatures.......................................................................................... 27

<PAGE>
                                                                PART I

                                                      FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that reflect Southern California Edison Company's (SCE) current
expectations and projections about future events based on SCE's knowledge of present facts and circumstances and assumptions about
future events.  Other information distributed by SCE that is incorporated in this report, or that refers to or incorporates this
report, may also contain forward-looking statements.  In this report and elsewhere, the words "expects," "believes," "anticipates,"
"estimates," "intends," "plans," "probable," and variations of such words and similar expressions are intended to identify
forward-looking statements.  Such statements necessarily involve risks and uncertainties that could cause actual results to differ
materially from those anticipated.  Some of the risks, uncertainties and other important factors that could cause results to differ,
or that otherwise could impact SCE are listed under the heading "Forward-Looking Information AND RISK FACTORS" in the Management's
Discussion and Analysis of Results of Operations and Financial Condition (MD&amp;A) that appears in SCE's 2002 Annual Report to
Shareholders and is incorporated by reference into Part II, Item 7 of this report.

Additional information about risks and uncertainties is contained throughout this report, in the MD&amp;A, and in the Notes to
Consolidated Financial Statements (Notes to Financial Statements) that appear in SCE's 2002 Annual Report to Shareholders and are
incorporated by reference into Part II, Item 8 of this report.  Readers are urged to read this entire report, including the
information incorporated by reference, and carefully consider the risks, uncertainties and other factors that affect SCE's business.
The information contained in this report is subject to change without notice, and SCE is not obligated to publicly update or revise
forward-looking statements.  Readers should review future reports filed by SCE with the Securities and Exchange Commission (SEC).

Item 1.  Business

SCE was incorporated in 1909 under the laws of the State of California. SCE is a public utility primarily engaged in the business of
supplying electric energy to a 50,000 square-mile area of central, coastal and southern California,excluding the City of Los Angeles
and certain other cities. This SCE service territory includes approximately 800 cities and communities and a population of more than
12 million people.  In 2002, SCE's total operating revenue was derived as follows:  33% residential customers, 45% commercial
customers, 10% industrial customers, 7% public authorities, 2% agricultural and other customers, and 3% other electric revenue.  At
December 31, 2002, SCE had consolidated assets of $18.2 billion and total shareholder's equity of $4.4 billion.  SCE had 12,113
full-time employees at year-end 2002.

Regulation

SCE's retail operations are subject to regulation by the California Public Utilities Commission (CPUC).  The CPUC has the authority
to regulate, among other things, retail rates, issuance of securities, and accounting practices.  SCE's wholesale operations are
subject to regulation by the Federal Energy Regulatory Commission (FERC).  The FERC has the authority to regulate wholesale rates as
well as other matters, including retail transmission service pricing, accounting practices, and licensing of hydroelectric projects.


Page 1
<PAGE>

Additional information about the regulation of SCE by the CPUC and the FERC, and about SCE's competitive environment, appears in the
MD&amp;A under "Regulatory Matters," and that information is incorporated herein by reference.

SCE is subject to the jurisdiction of the United States Nuclear Regulatory Commission (NRC) with respect to its nuclear power
plants. NRC regulations govern the granting of licenses for the construction and operation of nuclear power plants and subject those
power plants to continuing review and regulation.

The construction, planning, and siting of SCE's power plants within California are subject to the jurisdiction of the California
Energy Commission and the CPUC.  SCE is subject to the rules and regulations of the California Air Resources Board, State of Nevada,
and local air pollution control districts with respect to the emission of pollutants into the atmosphere;the regulatory requirements
of the California State Water Resources Control Board and regional boards with respect to the discharge of pollutants into waters of
the state; and the requirements of the California Department of Toxic Substances Control with respect to handling and disposal of
hazardous materials and wastes.  SCE is also subject to regulation by the United States Environmental Protection Agency (EPA), which
administers federal statutes relating to environmental matters.  Other federal, state, and local laws and regulations relating to
environmental protection, land use, and water rights also affect SCE.

The California Coastal Commission issued a coastal permit for the construction of San Onofre Nuclear Generating Station (San Onofre)
Units 2 and 3 in 1974.  This permit, as amended, requires mitigation for impacts to fish and the San Onofre kelp bed.  California
Coastal Commission jurisdiction will continue for several years due to ongoing implementation and oversight of these permit
mitigation conditions, consisting of restoration of wetlands and construction of an artificial reef for kelp.  These mitigation
measures were required to offset San Onofre's cooling water intake impacts to fish and kelp. SCE has a coastal permit to construct a
temporary dry cask spent fuel storage installation for San Onofre Units 2 and 3.  The California Coastal Commission also has
continuing jurisdiction over coastal permits issued for the decommissioning of San Onofre Unit 1,including for the construction of a
temporary dry cask spent fuel storage installation for spent fuel from that unit.

The United States Department of Energy has regulatory authority over certain aspects of SCE's operations and business relating to
energy conservation, power plant fuel use and disposal, electric sales for export, public utility regulatory policy, and natural gas
pricing.

In 1997, the CPUC issued a decision which established additional rules governing the relationship between California's natural gas
local distribution companies, electric utilities, and certain of their affiliates. While SCE and its affiliates have been subject to
affiliate transaction rules since the establishment of its holding company structure in 1988, these additional rules are more
detailed and restrictive.  As required by the 1997 rules and an interim CPUC resolution, SCE has filed compliance plans which set
forth SCE's implementation of the additional affiliate transaction rules.  The CPUC has not ruled on the sufficiency of SCE's
compliance plans.  In January 2001, the CPUC issued an order instituting rulemaking to commence the review of the 1997 affiliate
transaction rules that the original decision requires.  The CPUC proposed that some rules be considered for streamlining or other
revision, while inviting interested parties to submit proposals of their own.  No decision has yet been issued, and the CPUC
suspended the proceeding in light of having opened the holding company proceeding, discussed next below.

In April 2001,the CPUC adopted an order instituting investigation that reopened the past CPUC decisions authorizing the utilities to
form holding companies and initiated an investigation into whether


Page 2
<PAGE>

Edison International and PG&amp;E Corporation violated CPUC requirements to give first priority to the capital needs of their respective
utility subsidiaries; whether actions by Edison International and PG&amp;E Corporation and their respective nonutility affiliates to
shield, or "ring-fence," nonutility assets also violated the requirements that the holding companies give first priority to the
capital needs of their utility subsidiaries; whether the payment of dividends by the utilities violated requirements that the
utilities maintain dividend policies as though they were comparable stand-alone utility companies; whether there are any additional
suspected violations of laws or CPUC rules and decisions; and whether additional rules, conditions, or other changes to the holding
company decisions are necessary.  For more information on this matter, see "Regulatory Matters - Holding Company Proceeding" in the
MD&amp;A.

SCE cannot predict with certainty what effects the CPUC's investigation or any other actions by the CPUC may have on SCE.

Properties

SCE supplies electricity to its customers through extensive transmission and distribution networks.  Its transmission facilities,
which deliver power from generating sources to the distribution network, consist of approximately 8,144 circuit miles of 33 kilovolt
(kV), 55 kV, 66 kV, 115 kV, and 161 kV lines and 3,579 circuit miles of 220 kV lines (all located in California), 1,236 circuit
miles of 500 kV lines (998 miles in California, 126 miles in Nevada, and 112 miles in Arizona), and 814 substations (all in
California). SCE's distribution system, which takes power from substations to the customer, includes approximately 60,662 circuit
miles of overhead lines, 34,606 circuit miles of underground lines, 1.5 million poles, 563 distribution substations, 672,597
transformers, and 723,000 area and street lights, all of which are located in California.

SCE owns and operates the following generating facilities:  (a) an undivided 75.05% interest (1,614 megawatts (MW)) in San Onofre
Units 2 and 3, which are large pressurized water nuclear units located on the California coastline between Los Angeles and San
Diego; (b) 36 hydroelectric plants (1,175 MW) located in California's Sierra Nevada, San Bernardino and San Gabriel mountain
ranges, (c) a diesel-fueled generating plant (9 MW) located on Santa Catalina island off the Southern California coast, and
(d) an undivided 56% interest (885 MW net) in Mohave Generating Station, which consists of two coal-fueled generating units located
in Clark County, Nevada near the California border.

SCE also owns an undivided 15.8% interest (590 MW) in Palo Verde Nuclear Generating Station, which is located near Phoenix, Arizona,
and an undivided 48% interest (754 MW) in Units 4 and 5 at Four Corners Generating Station, which is a coal-fueled generating plant
located in the Four Corners area of New Mexico.  The Palo Verde and Four Corners plants are operated by other utilities.

At year-end 2002, the SCE-owned generating capacity (summer effective rating) was divided approximately as follows: 44% nuclear, 32%
coal, 23% hydroelectric, and less than 1% diesel.  The capacity factors in 2002 for SCE's nuclear and coal-fired generating units
were:  96% for San Onofre; 73% for Mohave; 72% for Four Corners; and 94% for Palo Verde.  For SCE's hydroelectric plants, generating
capacity is dependent on the amount of available water.  Therefore, while SCE's hydroelectric plants operated at a 35% capacity
factor in 2002 due to a below normal water year, these plants were operationally available for 93.4% of the year.

The San Onofre units, Four Corners station, certain of SCE's substations, and portions of its transmission, distribution and
communication systems are located on lands of the United States or others under (with minor exceptions) licenses, permits, easements
or leases, or on public streets or highways


Page 3
<PAGE>

pursuant to franchises.  Certain of such documents obligate SCE, under specified circumstances and at its expense, to relocate
transmission, distribution, and communication facilities located on lands owned or controlled by federal, state, or local
governments.

Thirty-one of SCE's 36 hydroelectric plants (some with related reservoirs) are located in whole or in part on United States lands
pursuant to 30 to 50 year FERC licenses that expire at various times between 2003 and 2029 (the remaining five plants are located
entirely on private property and are not subject to FERC jurisdiction).  Such licenses impose numerous restrictions and obligations
on SCE, including the right of the United States to acquire projects upon payment of specified compensation.  When existing licenses
expire, FERC has the authority to issue new licenses to third parties that have filed competing license applications, but only if
their license application is superior to SCE's and then only upon payment of specified compensation to SCE.  New licenses issued to
SCE are expected to contain more restrictions and obligations than the expired licenses because laws enacted since the existing
licenses were issued require FERC to give environmental purposes greater consideration in the licensing process.  SCE's applications
for the relicensing of certain hydroelectric projects with an aggregate dependable operating capacity of 134.82 MW are pending.
Annual licenses have been issued to SCE hydroelectric projects that are undergoing relicensing and whose long-term licenses have
expired. Federal Power Act Section 15 requires that the annual licenses be renewed until the long-term licenses are issued or denied.

On March 22, 2002, SCE, jointly with Pacific Terminals LLC, filed an application with the CPUC requesting authorization for the sale
of certain oil storage and pipeline facilities by SCE to Pacific Terminals. The facilities were formerly used by SCE to provide fuel
oil to its generating stations and, more recently, to conduct an oil storage and transport business for third parties.  The
agreed-upon sales price is approximately $158 million, of which approximately $47 million represents the net gain on sale. The March
2002 joint application seeks final CPUC approval of the sale.  In the application, SCE proposed that all of the net gain on sale
should be allocated to SCE shareholders.  A coalition of utility employees has opposed the sale, claiming that it could negatively
impact the environment, health and safety, competition, and jobs, and that the sale is barred by a California law prohibiting the
CPUC from approving any sale of utility generating facilities until 2006. The CPUC's Office of Ratepayer Advocates has opposed SCE's
proposed allocation of the net gain on sale, claiming that as much as 86% of the gain should be allocated to ratepayers.  Submittal
of written testimony, hearings and briefings took place in the summer and fall of 2002.  The CPUC has not yet ruled on the
application.

Substantially all of SCE's properties are subject to the lien of a trust indenture securing First and Refunding Mortgage Bonds, of
which approximately $3.7 billion in principal amount was outstanding on March 1, 2003.  Such lien and SCE's title to its properties
are subject to the terms of franchises, licenses, easements, leases, permits, contracts, and other instruments under which
properties are held or operated, certain statutes and governmental regulations, liens for taxes and assessments, and liens of the
trustees under the trust indenture. In addition, such lien and SCE's title to its properties are subject to certain other liens,
prior rights and other encumbrances, none of which, with minor or insubstantial exceptions, affect SCE's right to use such
properties in its business, unless the matters with respect to SCE's interest in the Four Corners plant and the related easement
and lease referred to below may be so considered.

SCE's rights in the Four Corners station, which is located on land of the Navajo Nation of Indians under an easement from the United
States and a lease from the Navajo Nation, may be subject to possible defects.  These defects include possible conflicting grants or
encumbrances not ascertainable because of the absence of, or inadequacies in, the applicable recording law and the record systems of
the Bureau of Indian Affairs and the Navajo Nation, the possible inability of SCE to resort to legal process to enforce its rights
against the Navajo Nation without Congressional consent, the possible impairment or termination under certain circumstances of the
easement and lease by the Navajo Nation, Congress, or


Page 4
<PAGE>

the Secretary of the Interior, and the possible invalidity of the trust indenture lien against SCE's interest in the easement,lease,
and improvements on the Four Corners station.

Construction Program

Cash spent by SCE for its construction expenditures totaled $1.0 billion in 2002, $688 million in 2001, and $1.1 billion in 2000.
Construction expenditures for 2003 are forecasted at $1.0 billion.

Nuclear Power Matters

Nuclear Plant Reactor Vessel Heads and Steam Generators Inspections

Recent nuclear industry concern has been expressed on the subject of leakage from nuclear reactor vessel head nozzle penetrations
due to leakage at the Davis-Besse nuclear plant in Ohio.  Inspections of the reactor head penetrations provide early detection of
the conditions that cause the Davis-Besse type leakage.  During scheduled refueling and maintenance outages at San Onofre Units 2
and 3, conducted in 2002 and 2003, vessel head nozzle penetrations in both units were inspected and no indications of leakage or
degradation were detected.  Inspections of Palo Verde Units 1 and 2 were also performed during scheduled refueling and maintenance
outages in 2002 and no indications of leakage or degradation were detected.  The vessel head of Palo Verde Unit 3 will be inspected
in the spring of 2003.

The San Onofre Units 2 and 3 steam generators experience tube degradation as in other nuclear power plants.  This degradation
eventually leads to reduced plant output and the need for steam generator replacement.  To date, 9% of Unit 2's tubes and 7% of
Unit 3's tubes have been removed from service.

Palo Verde Plant Steam Generator Replacements

During the fall of 2003, the steam generators are scheduled to be replaced at Palo Verde Unit 2.  A decision has also been made to
prepare for replacement of steam generators for Units 1 and 3. Although a final determination of when Units 1 and 3 steam generators
will be replaced has not yet been made, SCE and the other participants have approved the procurement of replacement steam generators
and initiation of engineering work.  This action will provide Palo Verde participants an option to replace the steam generators in
the 2005 to 2007 time period should they ultimately decide to do so.  SCE estimates that its portion of the fabrication and
installation costs and associated power upgrade modifications will be approximately $70 million over the next seven years.

Nuclear Facility Decommissioning

On June 3, 1999, the CPUC adopted a settlement agreement providing for SCE to decommission San Onofre Unit 1 using decommissioning
trust funds. On February 15, 2000, the California Coastal Commission approved SCE's application for a coastal permit to demolish and
remove San Onofre Unit 1 buildings and other structures and to construct a temporary dry cask spent fuel storage facility as part of
the decommissioning project.  On February 7, 2003, the Coastal Commission granted SCE an amendment revising this approval to allow
SCE to transport the Unit 1 reactor pressure vessel by a vehicle transporter through a state park and the federal military's Camp
Pendleton to a boat dock (the original permit authorized transport by rail).  Several parties have indicated their intent to
challenge this amendment.  SCE is unable to predict with certainty the outcome of any future litigation and the potential cost of
this matter.  Decommissioning of Unit 1 is underway and will be completed in three phases:  (1) decontamination and dismantling of
all structures and some foundations, (2) spent fuel storage monitoring, and (3) fuel storage facility dismantling, removal of
remaining foundations, and site


Page 5
<PAGE>

restoration.  Phase one is anticipated to continue through 2008.  Phase two is expected to continue until 2026. Phase three will be
conducted concurrently with the San Onofre Units 2 and 3 decommissioning projects. SCE expects that its reasonable San Onofre Unit 1
decommissioning costs will be paid from its nuclear decommissioning trust funds.  SCE maintains a customer-funded trust with a
sufficient balance to pay for its share of the estimated cost for the remaining San Onofre Unit 1 decommissioning work. SCE plans to
decommission its other nuclear generating facilities following expiration of the operating licenses as expeditiously as possible
once authorized by the NRC. The operating licenses expire in 2022 for San Onofre Units 2 and 3, and in 2024, 2026 and 2027 for the
Palo Verde units. SCE customers are continuing to contribute to the decommissioning trusts for San Onofre Units 2 and 3, and for
the Palo Verde units. Decommissioning costs are recorded as a component of depreciation expense.

Decommissioning (including Unit 1) is estimated to cost $2.5 billion (in year 2002 dollars) based on site-specific studies performed
in 1998 for the San Onofre and Palo Verde units.  This estimate considers the total cost of decommissioning and dismantling the
plant, including labor, material, burial, and other costs.  The site-specific studies are updated approximately every three years.
Changes in the estimated costs, timing of decommissioning, or the assumptions underlying these estimates could cause material
revisions to the estimated total cost to decommission.

Decommissioning expenses were $73 million in 2002, $96 million in 2001, and $106 million in 2000.  The accumulated provision for
decommissioning,excluding San Onofre Unit 1 and unrealized holding gains, was $1.6 billion at December 31, 2002, and $1.5 billion at
December 31, 2001. The remaining cost to decommission San Onofre Unit 1 was approximately $298 million at December 31, 2002, and was
recorded as a liability. Total expenditures for decommissioning of San Onofre Unit 1 through December 31, 2002, were $196 million.

Decommissioning funds collected in rates are placed in independent trusts which, together with accumulated earnings, will be
utilized solely for decommissioning.

Nuclear Insurance

Federal law limits public liability claims from a nuclear incident to $9.5 billion.  SCE and other owners of the San Onofre and Palo
Verde units have purchased the maximum private primary insurance available ($200 million at December 31, 2002, and $300 million
beginning January 1, 2003). The balance is covered by the industry's retrospective rating plan that uses deferred premium charges to
every reactor licensee if a nuclear incident at any licensed reactor in the United States results in claims and/or costs which
exceed the primary insurance at that plant site. Federal regulations require this secondary level of financial protection. The NRC
exempted San Onofre Unit 1 from this secondary level, effective June 1994. The maximum deferred premium for each nuclear incident is
$88 million per reactor, but not more than $10 million per reactor may be charged in any one year for each incident.  Based on its
ownership interests, SCE could be required to pay a maximum of $175 million per nuclear incident.  It would have to pay, however, no
more than $20 million per incident in any one year.  Such amounts include a 5% surcharge if additional funds are needed to satisfy
public liability claims and are subject to adjustment for inflation.  If the public liability limit above is insufficient, federal
regulations may impose further revenue-raising measures to pay claims, including a possible additional assessment on all licensed
reactor operators.  The Federal law requiring the nuclear insurance described above for all new NRC licensed reactors was due to
expire in August 2002.  The United States Congress has extended the expiration date of the applicable law until December 31, 2003,
and is considering amendments that, among other things, are expected to extend the law beyond 2003.


Page 6
<PAGE>

Property damage insurance covers losses up to $500 million, including decontamination costs, at the San Onofre and Palo Verde units.
Decontamination liability and property damage coverage exceeding the primary $500 million has also been purchased in amounts greater
than federal requirements.  Additional insurance covers part of replacement power expenses during an accident-related nuclear unit
outage.  These policies are issued by a mutual insurance company owned by utilities with nuclear facilities.  If losses at any
nuclear facility covered by the arrangement were to exceed the accumulated funds for these insurance programs, SCE could be assessed
retrospective premium adjustments of up to $38 million per year.  Insurance premiums are charged to operating expense.

Fuel Supply and Purchased Power

SCE obtains the power needed to serve its customers from its generating facilities and from purchases from other utilities,
independent power producers, qualifying facilities and the California Independent System Operator (ISO).  In addition, power is
provided to SCE's customers through purchases by the California Department of Water Resources ("CDWR") under contracts with third
parties.  See the discussion in the MD&amp;A under "REGULATORY MATTERS" for more information about power procurement activities. Sources
of power to serve SCE's customers during 2002 were as follows:  33.4% purchased power; 21.4% CDWR; and 45.3% SCE-owned generation
consisting of 25.7% nuclear, 14.4% coal, and 5.2% hydro.

Natural Gas Supply

SCE's only gas requirement in 2002 was for start-up use at Mohave coal-fired generation facility where firm transportation rights of
18,000 million British thermal units (mmBtu) per day were maintained on Southwest Gas Corp.'s pipeline.  SCE also maintains firm
access rights onto the Southern California Gas Company system at Wheelers Ridge for 198,863 mmBtu per day as a result of a 13-year
contract entered into in August 1993. In 2002, the CPUC instructed the investor-owned utilities to bid on El Paso Natural Gas (EPNG)
pipeline capacity in anticipation of a gas requirement in 2003.  SCE participated in the auction and was awarded 9,218 mmBtu per day
for delivery commencing in November 2002. Since there was no gas requirement on the EPNG pipeline in 2002, all capacity was released
by SCE back to the market at tariff rates. The CPUC is currently investigating whether the acquisition of the EPNG capacity was
consistent with Commission directions.

The acquired electrical capacity secured by SCE for 2003 included contracts requiring gas to be supplied as part of the contractual
obligation (tolling arrangements).  In preparation, SCE entered into a number of North American Energy Standards Board agreements
(master gas agreements) that define the terms and conditions of all transactions with a particular supplier prior to any financial
commitment.

Nuclear Fuel Supply

SCE has contractual arrangements covering 100% of the projected nuclear fuel requirements for San Onofre Units 2 and 3 through the
years indicated below:

      Uranium concentrates....................................  2008
           Conversion.........................................  2008
           Enrichment.........................................  2008
           Fabrication........................................  2005

Assuming normal operation and full utilization of existing on-site fuel-storage capacity, San Onofre Units 2 and 3 will maintain
full-core offload reserve through 2005.  The Nuclear Waste Policy Act of 1982 requires that the United States Department of Energy
provide for the disposal of utility spent


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<PAGE>

nuclear fuel beginning January 31, 1998.  The Department of Energy has defaulted on its obligation to begin acceptance of spent
nuclear fuel from the commercial nuclear industry by that date.  Additional spent fuel storage either on-site or at another location
will be required to permit continued operations beyond 2005.  Additional on-site spent fuel storage capacity is being developed as
necessary to allow for continued operation of San Onofre Units 2 and 3.

Participants in the Palo Verde units have contractual agreements to meet a majority of the 2003-2004 nuclear fuel requirements.
Negotiations are being completed with various suppliers to provide the remaining portion of the 2003-2004 requirements not currently
under contract.  With the execution of these contracts, all nuclear fuel requirements will be covered through 2008.  Fabrication
requirements are covered through 2015.

The Palo Verde plant has existing fuel storage pools and is in the process of completing construction of a new facility for on-site
dry storage of spent fuel.  With the existing storage pools and the addition of the new facility, spent fuel storage or disposal
methods will be available for use by the Palo Verde plant to allow its continued operation through the term of the plant license.

Coal Supply

SCE purchases coal pursuant to long term contracts to provide stable and reliable fuel supplies to its two coal-fired generating
stations, the Mohave and Four Corners plants.  SCE entered into a coal contract, dated September 1, 1966, with BHP Navajo Coal
Company, the predecessor to the current owner of the Navajo mine, to supply coal to Four Corners Units 4 and 5.  The initial term of
this coal supply contract for the Four Corners plant is through 2004 and includes extension options for up to 15 additional years.
For discussion of the litigation affecting the coal supply contract for the Mohave plant, see "Navajo Nation Litigation" in Part 1,
Item 3 of this report.  SCE does not have reasonable assurance of an adequate coal supply for operating the Mohave plant after 2005.
If reasonable assurance of an adequate coal supply is not obtained, it will become necessary to shut down the Mohave plant after
December 31, 2005.  For additional information, see "REGULATORY MATTERS - Mohave Generating Station Proceeding" in the MD&amp;A.

Environmental Matters

Legislative and regulatory activities in the areas of air and water pollution, waste management, hazardous chemical use, noise
abatement, land use, aesthetics, and nuclear control continue to result in the imposition of numerous restrictions on SCE's
operation of existing facilities, on the timing, cost, location, design, construction, and operation by SCE of new facilities, and
on the cost of mitigating the effect of past operations on the environment. These activities substantially affect future planning
and will continue to require modifications of SCE's existing facilities and operating procedures.  SCE is unable to predict the
extent to which additional regulations may affect its operations and capital expenditure requirements.

Air Quality

The Mohave plant located in Laughlin, Nevada, and the Four Corners plant located in the Four Corners area of New Mexico are subject
to various air quality regulations, including the federal Clean Air Act and similar state and local statutes.

Mohave Consent Decree.  In 1998, several environmental groups filed suit against the co-owners of the Mohave plant regarding alleged
violations of emissions limits.  In order to resolve the lawsuit and


Page 8
<PAGE>

accelerate resolution of key environmental issues regarding the plant, the parties entered into a consent decree, which was approved
by the court in December 1999.  The decree also addressed concerns raised by EPA programs regarding regional haze and visibility. As
to regional haze, the EPA issued final rulemaking on July 1, 1999, that did not impose any additional emissions control requirements
on the Mohave plant beyond meeting the provisions of the consent decree.  As to visibility, the EPA issued its final rule regarding
visibility impairment at the Grand Canyon on February 8, 2002. This final rule incorporated the terms of the consent decree into the
Visibility Federal Implementation Plan for the state of Nevada, making the terms of the consent decree federally enforceable.

SCE's share of the costs of complying with the consent decree and taking other actions to continue operation of the Mohave plant
beyond 2005 is estimated to be approximately $605 million over the next four years; however, SCE has suspended its efforts seeking
CPUC approval for the installation of such Mohave plant controls.  See "OTHER DEVELOPMENTS - Environmental Protection" in the MD&amp;A
for more information on these issues.

Mercury Maximum Achievable Control Technology (MACT) Determination. In December 2000, the EPA announced its intent to regulate
mercury emissions and other hazardous air pollutants from coal-fired electric power plants under Section 112 of the Clean Air Act
and indicated that it would propose a rule to regulate these emissions by no later than December 15, 2003. The regulations are
required to become final in 2004 with controls in place by 2007. This section of the Clean Air Act provides only for technology
based standards, and does not permit market trading options. Until the EPA's standards relating to emissions of mercury and other
hazardous air pollutants are actually promulgated, the potential cost of these control technologies cannot be estimated, and SCE
cannot determine the potential impact on the operations of its facilities.

National Ambient Air Quality Standard.  A new ambient air quality standard was adopted by the EPA in July 1997 to address emissions
of fine particulate matter.  It is widely understood that attainment of the fine particulate matter standard may require reductions
in emissions of nitrogen oxides and sulfur dioxides.  This standard was challenged in the courts, and on March 26, 2002, the United
States Court of Appeals for the District of Columbia Circuit upheld the EPA's revised ozone and fine particulate matter ambient air
quality standards.

Because of the delays resulting from the litigation over the standard, the EPA's new schedule for implementing the 8-hour ozone and
fine particulate matter standards calls for designation of attainment and nonattainment areas under the two standards in 2004. Once
these designations are published, states will be required to revise their implementation plans to achieve attainment of the revised
standards, and determine which plans are likely to require additional emission reductions from facilities that are significant
emitters of ozone precursors and particulates.  Any requirement imposed on SCE's coal-fired generating facilities to further reduce
their emissions of sulfur dioxide, nitrogen oxides and fine particulates as a result of the ozone and fine particulate matter
standard will not be known until the states revise their implementation plans.

New Source Review Requirements. On November 3, 1999, the United States Department of Justice filed suit against a number of electric
utilities, not including SCE, for alleged violations of the Clean Air Act's "new source review" (NSR) requirements related to
modifications of air emissions sources at electric generating stations.  Around that same time, the EPA issued requests for
information pursuant to the Clean Air Act to numerous other electric utilities seeking to determine whether these utilities also
engaged in activities in violation of the NSR requirements.  On June 27, 2000, the EPA issued a request for information to the Four
Corners plant.  On September 1, 2000, Arizona Public Service Company, the


Page 9
<PAGE>

operator of the plant, replied to the request. To date, no further action has been taken by the EPA with respect to the Four Corners
plant.

Several utilities have reached formal agreements or agreements-in-principle with the United States to resolve alleged NSR
violations.  These settlements involved installation of additional pollution controls, supplemental environment projects, and the
payment of civil penalties. The agreements provided for a phased approach to achieving required emission reductions over the next 10
to 15 years, and some called for the retirement or repowering of coal-fired generating units. The total cost of some of these
settlements exceeded $1 billion; the civil penalties agreed to by these utilities range between $1 million and $10 million. Because
of the uncertainty created by the Bush administration's review of the NSR regulations and NSR enforcement proceedings, some of these
settlements have not been finalized. However, the Department of Justice review released in January 2002 concluded "EPA has a
reasonable basis for arguing that the enforcement actions are consistent with both the Clean Air Act and the Administrative
Procedure Act." No change in the Department of Justice's position regarding pending NSR legal actions has been announced as a
result of EPA's proposed NSR reforms (discussed immediately below).

On December 31, 2002, the EPA finalized a rule to improve the NSR program.  This rule is intended to provide additional flexibility
with respect to NSR by, among other things, modifying the method by which a facility calculates the emissions' increase from a plant
modification; exempting, for a period of ten years, units that have complied with NSR requirements or otherwise installed pollution
control technology that is equivalent to what would have been required by NSR; and allowing a facility to make modifications without
being required to comply with NSR if the facility maintained emissions below plant-wide applicability limits.  Although states,
industry groups and environmental organizations have filed litigation challenging various aspects of the rule, it became effective
March 3, 2003.  It is unknown whether any litigation may lead to changes to the requirements of the new rule.

In addition to this final rule, the EPA has proposed a rule to clarify the "routine maintenance and repair" exclusion contained in
the EPA's regulations.  The public comment period for this rule has been extended to May 2, 2003.  A clearer definition of "routine
maintenance, repair and replacement," would provide SCE greater guidance in determining what investments can be made at its existing
plants to improve the safety, efficiency and reliability of its operations without triggering NSR permitting requirements.

SCE is presently unable to determine the impact of these developments relating to NSR on SCE's coal-fired generating facilities.

Greenhouse Gas Emissions Reductions.  On February 14, 2002, President Bush announced objectives to slow the growth of greenhouse gas
emissions by reducing the amount of greenhouse gas emissions per unit of economic output by 18% by 2012 and to provide funding for
climate-change related programs.  The President's proposed program does not include mandatory reductions of greenhouse gas
emissions.  However, various bills have been, or are expected to be, introduced in Congress to require greenhouse gas emissions
reductions and to address other issues related to climate change.  In addition, in February 2003, seven states gave notice of their
intent to sue EPA alleging that EPA has failed to regulate carbon dioxide and other greenhouse gas emissions from power plants as
required by the Clean Air Act.

SCE is presently unable to determine the impact of these developments relating to greenhouse gas emissions on SCE's coal-fired
generating facilities.


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<PAGE>

Federal Legislative Initiatives.  There have been a number of bills introduced in the last session of Congress and the current
session of Congress that would amend the Clean Air Act to specifically target emissions of certain pollutants from electric utility
generating stations.  These bills would mandate reductions in emissions of nitrogen oxides, sulfur dioxide and mercury; some bills
would also impose limitations on carbon dioxide emissions. The various proposals differ in many details, including the timing of any
required reductions, the extent of required reductions; and the relationship of any new obligations that would be imposed by these
bills with existing legal requirements.  There is significant uncertainty as to whether any of the proposed legislative initiatives
will pass in their current form or whether any compromise can be reached that would facilitate passage of legislation.  Accordingly,
SCE is not able to evaluate the potential impact of these proposals at this time.

Hazardous Waste Compliance and Remediation

Under various federal, state and local environmental laws and regulations, a current or previous owner or operator of any facility,
including an electric generating facility, may be required to investigate and remediate releases or threatened releases of hazardous
or toxic substances or petroleum products located at that facility, and may be held liable to a governmental entity or to third
parties for property damage, personal injury and investigation and remediation costs incurred by these parties in connection with
these releases or threatened releases. Many of these laws, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, commonly referred to as CERCLA, as amended by the Superfund Amendments and Reauthorization Act of 1986,
impose liability without regard to whether the owner knew of or caused the presence of the hazardous substances, and courts have
interpreted liability under these laws to be strict and joint and several. The cost of investigation, remediation or removal of
these substances may be substantial. In addition, persons who arrange for the disposal or treatment of hazardous or toxic
substances at a disposal or treatment facility may be liable for the costs of removal or remediation of a release or threatened
release of hazardous or toxic substances at that disposal or treatment facility, whether or not that facility is owned or operated
by that person. Some environmental laws and regulations create a lien on a contaminated site in favor of the government for damages
and costs it incurs in connection with the contamination. The owner of a contaminated site and persons who arrange for the disposal
of hazardous substances at that site also may be subject to common law claims by third parties based on damages and costs resulting
from environmental contamination emanating from that site.

Toxic Substances Control Act.  The federal Toxic Substances Control Act and accompanying regulations govern the manufacturing,
processing, distribution in commerce, use, and disposal of listed compounds, such as polychlorinated biphenyls, a toxic substance
used in certain electrical equipment.  Current costs for remediation and disposal of this substance are immaterial.

The CPUC allows SCE to recover in retail rates paid by its customers environmental remediation costs at certain sites through an
incentive mechanism.  See Note 10 of the Notes to Financial Statements and the "OTHER DEVELOPMENTS - Environmental Protection"
section in the MD&amp;A for more information.

Water Quality

Clean Water Act.  Regulations under the federal Clean Water Act require permits for the discharge of certain pollutants into United
States waters and permits for the discharge of stormwater flows from certain facilities.  Under this act, the EPA issues effluent
limitation guidelines, pretreatment standards, and new source performance standards for the control of certain pollutants. The Clean
Water Act also regulates the thermal component (heat) of effluent discharges and the location, design, and construction of cooling
water intake structures at facilities such as San Onofre.  Individual states may impose more


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<PAGE>

stringent effluent limitations than EPA.  California has an EPA program to issue individual or group (general) permits for Clean
Water Act discharges.

SCE incurs additional expenses and capital expenditures in order to comply with guidelines and standards applicable to certain of
its power plants. SCE presently has discharge permits for all applicable facilities.

The U.S. EPA is scheduled to adopt new regulations governing cooling water intake structures in February 2004.  The San Onofre
facility would be subject to these rules.  If the final rules resemble those proposed by EPA, SCE believes the new rules will not
significantly impact San Onofre and that the facility will be compliant without any physical or operational modifications.

Safe Drinking Water and Toxic Enforcement Act.  California's Safe Drinking Water and Toxic Enforcement Act prohibits the exposure of
individuals to chemicals known to the State of California to cause cancer or reproductive harm and the discharge of such chemicals
into potential sources of drinking water.  As SCE's operations call for use of different products, and as additional chemicals are
placed on the State's list, SCE is required to incur additional costs to review and possibly revise its operations to ensure
compliance with the requirements of this law.

Item 2.  Properties

The principal properties of SCE are described above under "Properties."


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<PAGE>

Item 3.  Legal Proceedings

Navajo Nation Litigation

On June 18, 1999, SCE was served with a complaint filed by the Navajo Nation in the United States District Court for the District of
Columbia (D.C. District Court) against Peabody Holding Company and certain of its affiliates (Peabody), Salt River Project
Agricultural Improvement and Power District, and SCE. The complaint asserts claims against the defendants for, among other things,
violations of the federal RICO statute, interference with fiduciary duties and contractual relations, fraudulent misrepresentation
by nondisclosure, and various contract-related claims. Peabody supplies coal from mines on Navajo Nation lands to the Mohave
Station. The complaint claims that the defendants' actions prevented the Navajo Nation from obtaining the full value in royalty
rates for the coal. The complaint seeks damages of not less than $600 million, trebling of that amount, and punitive damages of not
less than $1 billion, as well as a declaration that Peabody's lease and contract rights to mine coal on Navajo Nation lands should
be terminated. SCE joined Peabody's motion to strike the Navajo Nation's complaint.  In addition, SCE and the other defendants filed
motions to dismiss.

On March 15, 2001, the District Court granted the Hopi Tribe's motion to intervene in the litigation.  The District Court also on
that date granted Salt River's motion to dismiss the Navajo Nation's complaint against it on jurisdictional grounds.

On February 21, 2002, Peabody filed a demand to arbitrate in the United States District Court in Arizona (Arizona District Court)
pursuant to a provision of their agreement with the Navajo Nation.  At the same time, Peabody and SCE filed cross claims against the
Navajo Nation in the D.C. District Court action, alleging that the Navajo breached a settlement agreement between Peabody and the
Navajo Nation by filing their lawsuit.  Additionally, Peabody filed a motion to transfer the action to the Arizona District Court or
to stay the D.C. District Court action pending the outcome of arbitration-related proceedings. The D.C. District Court granted SCE's
and Peabody's motion for leave to file the counterclaims, but denied Peabody's motion to transfer or stay the D.C. District Court
action.  Peabody and SCE appealed that part of the order denying the requested stay. On January 16, 2003, the Arizona District Court
ruled that it did not have jurisdiction and dismissed the Arizona District Court action.

Some of the issues included in this case were recently addressed by the United States Supreme Court. The Navajo Nation had
previously filed suit in the Court of Claims against the United States Department of Interior, alleging that the Government had
breached its fiduciary duty concerning the above-referenced contract negotiations. On February 4, 2000, the Court of Claims issued a
decision in the Government's favor, finding that while there had been a breach, there was no available redress from the Government.
In its decision, the Court indicated that it was making no statements regarding, or findings in, the above federal civil court
action.  The Navajo Nation filed an appeal and the Court of Appeals ruled that the Court of Claims did have jurisdiction to award
damages and remanded the case for that purpose.  The United States filed for a Writ of Certiorari to the United States Supreme Court
which was granted.  On March 4, 2003, the Supreme Court issued its majority decision reversing the decision of the Court of
Appeals.   The Supreme Court concluded that there was no breach of a fiduciary duty and that the Navajo Nation did not have a right
to relief against the Government.

Power Exchange Performance Bond Litigation

On January 19, 2001, American Home Assurance Company (American Home) notified SCE that due to SCE's failure to comply with its
payment obligations to the California Power Exchange (PX), the PX issued a demand to American Home on a $20,000,000 pool performance
bond.  American Home


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<PAGE>

demanded payment from SCE by January 29, 2001, of $20,000,000 under an indemnity agreement between SCE and American Home.

SCE has exercised its right under the indemnity agreement to assume the defense of American Home against claims arising from the
pool performance bond. As required by the indemnity agreement, in February 2001, SCE deposited $20,200,000 in an account in trust
to be available to satisfy any judgment, should there be one, against American Home as a result of SCE's alleged default. SCE has
further instituted the alternative dispute resolution provisions provided for in the applicable PX tariff, which provide for
negotiation followed by mediation and, if unsuccessful, arbitration.

On or about September 13, 2001, the PX submitted a demand for arbitration against American Home, asserting causes of action for
breach of contract and bad faith refusal to pay.  On September 25, 2001, American Home demanded that SCE indemnify and defend
American Home in connection with the demand for arbitration, pursuant to the operative documents between the parties.  SCE assumed
the defense of the arbitration.

On March 1, 2002, SCE made payment directly to the PX on the full amount of its outstanding obligations. The PX was unwilling to
provide American Home with an exoneration of the pool performance bond, and has continued to pursue the arbitration, asserting,
among other things, that it is entitled to the face amount of the bond on account of PG&amp;E's default.

On March 19, 2002, American Home initiated suit against SCE, alleging that SCE's failure to obtain an exoneration of the bond in
connection with SCE's payment of its indebtedness was a material breach of the indemnity agreement. On April 30, 2002, SCE filed its
answer to American Home's lawsuit denying the material allegations of the complaint and filed a cross complaint against American
Home, alleging causes of action for breach of contract and bad faith, reformation of conduct, breach of fiduciary duty, and
declaratory relief.  Among other relief, SCE seeks the return of its previously deposited $20,200,000.

CPUC Litigation and Settlement

See the discussion, which is incorporated herein by this reference, under "REGULATORY MATTERS-CPUC Litigation Settlement Agreement"
in the MD&amp;A for a description of SCE's lawsuit against the CPUC, its settlement, and the appeal of the stipulated judgment approving
the settlement.

CPUC Investigation Regarding SCE's Electric Line Maintenance Practices

On August 25, 2001, the CPUC issued an order instituting investigation (OII) regarding SCE's overhead and underground electric line
maintenance practices.  The OII was based on a report issued by the CPUC's Protection and Safety Consumer Services Division (CPSD),
which alleged a pattern of noncompliance with the CPUC's general orders for the maintenance of electric lines over the period
1998-2000.  The OII also alleged that noncompliant conditions were involved in 37 accidents resulting in death, serious injury, or
property damage.  The CPSD identified 4,817 alleged violations of the general orders during the three-year period; and the OII put
SCE on notice that it is potentially subject to a penalty of between $500 and $20,000 for each violation or accident.

Prepared testimony was filed in this matter in April 2002, and hearings were conducted in September 2002.  In its opening brief on
October 21, 2002, CPSD recommended SCE be assessed a penalty of $97 million.  SCE addressed in its reply brief the legal, factual,
and equitable reasons why CPSD's penalty recommendation should be rejected.  On December 20, 2002, SCE filed a petition seeking to
set aside the CPSD's submission.  On February 21, 2003, the administrative law judge (ALJ) issued a ruling setting aside


Page 14
<PAGE>

submission, directed further briefing on the application of the appropriate standard to govern SCE's electric line maintenance
obligation, and scheduled closing argument for April 22, 2003.  On March 14, 2003, SCE and the CPSD filed additional briefs in
response to the ALJ's direction.  A decision is expected in the second or third quarter of 2003.  See the discussion under
"REGULATORY MATTERS - Electric Line Maintenance Practices Proceeding" in the MD&amp;A for additional information.

Item 4.  Submission of Matters to a Vote of Security Holders

Inapplicable

Pursuant to Form 10-K's General Instruction (General Instruction) G(3), the following information is included as an additional item
in Part I:

Executive Officers(1) of the Registrant

                                        Age at
        Executive Officer           December 31, 2002             Company Position

  John E. Bryson                           59             Chairman of the Board
  ------------------------------ ------------------------ ---------------------------------------------------------
  Alan J. Fohrer                           52             Chief Executive Officer and Director
  ------------------------------ ------------------------ ---------------------------------------------------------
  Robert G. Foster                         55             President
  ------------------------------ ------------------------ ---------------------------------------------------------
  Harold B. Ray                            62             Executive Vice President, Generation
  ------------------------------ ------------------------ ---------------------------------------------------------
  Pamela A. Bass                           55             Senior Vice President, Customer Service
  ------------------------------ ------------------------ ---------------------------------------------------------
  John R. Fielder                          57             Senior Vice President, Regulatory Policy and Affairs
  ------------------------------ ------------------------ ---------------------------------------------------------
  Stephen E. Pickett                       52             Senior Vice President and General Counsel
  ------------------------------ ------------------------ ---------------------------------------------------------
  Richard M. Rosenblum                     52             Senior Vice President, Transmission and Distribution
  ------------------------------ ------------------------ ---------------------------------------------------------
  W. James Scilacci                        47             Senior Vice President and Chief Financial Officer
  ------------------------------ ------------------------ ---------------------------------------------------------
  Mahvash Yazdi                            51             Senior Vice President and Chief Information Officer
  ------------------------------ ------------------------ ---------------------------------------------------------
  Bruce C. Foster                          50             Vice President, Regulatory Operations
  ------------------------------ ------------------------ ---------------------------------------------------------
  Frederick J. Grigsby, Jr.                55             Vice President, Human Resources and Labor Relations
  ------------------------------ ------------------------ ---------------------------------------------------------
  Thomas M. Noonan                         51             Vice President and Controller
  ------------------------------ ------------------------ ---------------------------------------------------------
  Pedro J. Pizarro                         37             Vice President, Strategy and Business Development
  ------------------------------ ------------------------ ---------------------------------------------------------

 -------------------------
(1)  The term "Executive Officers" is defined by Rule 3b-7 of the General Rules and Regulations under the Securities Exchange Act of
     1934, as amended.


Page 15
<PAGE>

None of SCE's executive officers is related to each other by blood or marriage.  As set forth in Article IV of SCE's Bylaws, the
elected officers of SCE are chosen annually by and serve at the pleasure of SCE's Board of Directors and hold their respective
offices until their resignation, removal, other disqualification from service, or until their respective successors are elected. All
of the above officers have been actively engaged in the business of SCE, Edison International and/or the nonutility company
affiliates of SCE for more than five years except Frederick J. Grigsby, Jr., and Pedro J. Pizarro. Those officers who have not held
their present position with SCE for the past five years had the following business experience during that period:


Executive Officer                           Company Position                               Effective Dates
- --------------------------- ------------------------------------------------- ------------------------------------------
John E. Bryson              Chairman of the Board, SCE                        January 2003 to present
                            Chairman of the Board, President, and Chief       January 2000 to present
                            Executive Officer, Edison International
                            Chairman of the Board, Edison Capital             January 2000 to present
                            Chairman of the Board, Edison Mission Energy      January 2000 to December 2002
                            Chairman of the Board and Chief Executive         October 1990 to December 1999
                            Officer, Edison International and SCE
- --------------------------- ------------------------------------------------- ------------------------------------------
Alan J. Fohrer              Chief Executive Officer and Director, SCE         January 2003 to present
                            Chairman of the Board and Chief Executive         January 2002 to December 2002
                            Officer, SCE
                            President and Chief Executive Officer,            January 2000 to December 2001
                            Edison Mission Energy
                            Executive Vice President and Chief Financial      September 1996 to January 2000
                            Officer, Edison International
                            Chairman of the Board, Edison                     January 1998 to September 1999
                            Enterprises
                            Executive Vice President and Chief Financial      September 1996 to December 1999
                            Officer, SCE
                            Vice Chairman of the Board, Edison Mission        May 1993 to January 1999
                            Energy
- --------------------------- ------------------------------------------------- ------------------------------------------
Robert G. Foster            President, SCE                                    January 2002 to present
                            Senior Vice President, External Affairs, Edison   April 2001 to December 2001
                            International and SCE
                            Senior Vice President, Public Affairs, Edison     November 1996 to April 2001
                            International and SCE
- --------------------------- ------------------------------------------------- ------------------------------------------
Pamela A. Bass              Senior Vice President, Customer Service, SCE      March 1999 to present
                            Vice President, Customer Solutions Business       June 1996 to February 1999
                            Unit, SCE
- --------------------------- ------------------------------------------------- ------------------------------------------
John R. Fielder             Senior Vice President, Regulatory Policy and      February 1998 to present
                            Affairs, SCE
                            Vice President, Regulatory Policy and Affairs,    February 1992 to February 1998
                            SCE
- --------------------------- ------------------------------------------------- ------------------------------------------


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<PAGE>


Executive Officer                           Company Position                               Effective Dates
- --------------------------- ------------------------------------------------- ------------------------------------------
Stephen E. Pickett          Senior Vice President and General Counsel, SCE    January 2002 to present
                            Vice President and General Counsel, SCE           January 2000 to December 2001
                            Associate General Counsel, SCE                    November 1993 to December 1999
- --------------------------- ------------------------------------------------- ------------------------------------------
Richard M. Rosenblum        Senior Vice President, Transmission and           February 1998 to present
                            Distribution, SCE
                            Vice President, Distribution Business Unit, SCE   January 1996 to February 1998
- --------------------------- ------------------------------------------------- ------------------------------------------
W. James Scilacci           Senior Vice President and Chief Financial         January 2003 to present
                            Officer, SCE
                            Vice President and Chief Financial Officer, SCE   January 2000 to December 2002
                            Director, 2002 General Rate Case, SCE             August 1999 to December 1999
                            Director, Qualifying Facility Resources, SCE      January 1996 to August 1999
- --------------------------- ------------------------------------------------- ------------------------------------------
Mahvash Yazdi               Senior Vice President and Chief Information       January 2000 to present
                            Officer, SCE and Edison International
                            Vice President and Chief Information Officer,     May 1997 to December 1999
                            SCE and Edison International
- --------------------------- ------------------------------------------------- ------------------------------------------
Frederick J. Grigsby, Jr.   Vice President, Human Resources and Labor         July 2001 to present
                            Relations
                            Senior Vice President, Human Resources, Fluor     December 1998 to October 2000
                            Corporation(1)(2)
                            Vice President, Human Resources, Thermo King      December 1995 to November 1998
                            Corporation(1)(3)
- --------------------------- ------------------------------------------------- ------------------------------------------
Thomas M. Noonan            Vice President and Controller, SCE and Edison     March 1999 to present
                            International
                            Assistant Controller, SCE and Edison              September 1993 to March 1999
                            International
- --------------------------- ------------------------------------------------- ------------------------------------------
Pedro J. Pizarro            Vice President, Strategy and Business             July 2001 to present
                            Development, SCE
                            Vice President, Technology Business               September 2000 to June 2001
                            Development, Edison International
                            Director, Strategic Planning, Edison              May 1999 to September 2000
                            International
                            Consultant, McKinsey &amp; Company(1)(4)              October 1993 to April 1999
- --------------------------- ------------------------------------------------- ------------------------------------------

- -------------------
(1)  This entity is not a parent, subsidiary or other affiliate of SCE.

(2)  The Fluor Corporation is one of the world's largest, publicly owned engineering, procurement, construction, and maintenance
     services organizations.

(3)  Thermo King Corporation provides climate control solutions for global transportation industries.

(4)  McKinsey &amp; Company is a management consulting firm.


Page 17
<PAGE>

                                                                PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

Certain information responding to Item 5 with respect to frequency and amount of cash dividends is included in SCE's Annual Report
to Shareholders for the year ended December 31, 2002 (Annual Report), under Quarterly Financial Data on page 63 and is incorporated
by reference pursuant to General Instruction G(2).  As a result of the formation of a holding company described above in Item 1,
all of the issued and outstanding common stock of SCE is owned by Edison International and there is no market for such stock.

Item 201(d) of Regulation S-K, "Securities Authorized For Issuance Under Equity Compensation Plans," is not applicable because SCE
has no compensation plans under which equity securities of SCE are authorized for issuance.

Item 6.  Selected Financial Data

Information responding to Item 6 is included in the Annual Report under "Selected Financial and Operating Data:1998-2002" on page 1,
and is incorporated herein by reference pursuant to General Instruction G(2).

Item 7.  Management's Discussion and Analysis of Results of Operations and Financial Condition

Information responding to Item 7 is included in the Annual Report under "Management's Discussion and Analysis of Results of
Operations and Financial Condition" on pages 2 through 29 and is incorporated herein by reference pursuant to General Instruction
G(2).

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Information responding to Item 7A is included in the Annual Report under "Management's Discussion and Analysis of Results of
Operations and Financial Condition-MARKET RISK EXPOSURES" on pages 8 through 9, and is incorporated herein by reference pursuant to
General Instruction G(2).

Item 8.  Financial Statements and Supplementary Data

Certain information responding to Item 8 is set forth after Item 15 in Part III.  Other information responding to Item 8 is included
in the Annual Report on pages 31 through 63 and is incorporated herein by reference pursuant to General Instruction G(2).

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

                                                               PART III

Item 10.  Directors and Executive Officers of the Registrant

Information concerning executive officers of SCE is set forth in Part I in accordance with General Instruction G(3), pursuant to
Instruction 3 to Item 401(b) of Regulation S-K.  Other information responding to Item 10 will appear in SCE's definitive Joint Proxy
Statement (Proxy Statement) to be filed


Page 18
<PAGE>

with the SEC in connection with SCE's Annual Shareholders' Meeting to be held on May 15, 2003, under the heading "Election of
Directors, Nominees for Election" and is incorporated herein by reference pursuant to General Instruction G(3).

Item 11.  Executive Compensation

Information responding to Item 11 will appear in the Proxy Statement under the headings "Director Compensation," "Executive
Compensation - Summary Compensation Table," "Option/SAR Grants in 2002," "Aggregated Option/SAR Exercises in 2002 and FY-End
Option/SAR Values," "Long-Term Incentive Plan Awards in Last Fiscal Year," "Pension Plan Table," "Other Retirement Benefits,"
"Employment Contracts and Termination of Employment Arrangements," and "Compensation and Executive Personnel Committees' Interlocks
and Insider Participation," and is incorporated herein by reference pursuant to General Instruction G(3).

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information responding to Item 12 will appear in the Proxy Statement under the headings "Stock Ownership of Directors and Executive
Officers" and "Stock Ownership of Certain Shareholders" and is incorporated herein by reference pursuant to General Instruction
G(3).

Item 201(d) of Regulation S-K, "Securities Authorized For Issuance Under Equity Compensation Plans," is not applicable because SCE
has no compensation plans under which equity securities of SCE are authorized for issuance.

Item 13.  Certain Relationships and Related Transactions

Information responding to Item 13 will appear in the Proxy Statement under the headings "Certain Relationships and Transactions" and
"Other Management Transactions," and is incorporated herein by reference pursuant to General Instruction G(3).

Item 14.  Controls and Procedures

Under the Sarbanes-Oxley Act of 2002 and implementing rules and regulations adopted by the Securities and Exchange Commission (SEC),
SCE must maintain disclosure controls and procedures.  The term "disclosure controls and procedures" is defined in the SEC's
regulations to mean, as applied to SCE, controls and other procedures that are designed to ensure that information required to be
disclosed by SCE in reports filed with the SEC is recorded, processed, summarized, and reported within the time frames specified in
the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by SCE in its SEC reports is accumulated and communicated to Edison International's
management,including its Chief Executive Officer and its Chief Financial Officer, as appropriate to allow timely decisions regarding
disclosure.  The SEC's regulations also require SCE to carry out evaluations, under the supervision and with the participation of
SCE's management, including its Chief Executive Officer and its Chief Financial Officer, of the effectiveness of the design and
operation of SCE's disclosure controls and procedures.  These evaluations must be carried out within the 90-day period prior to the
filing date of certain reports, including this Annual Report on Form 10-K.

The Chief Executive Officer and the Chief Financial Officer of SCE have evaluated the effectiveness of the design and operation of
SCE's disclosure controls and procedures as of March 24, 2003.  They have


Page 19
<PAGE>

concluded that those disclosure controls and procedures, as of the evaluation date, were effective in ensuring that information
required to be disclosed by SCE in its reports filed with the SEC was (1) accumulated and communicated to SCE's management, as
appropriate to allow timely decisions regarding disclosure, and (2) recorded, processed, summarized, and reported within the time
frames specified in the SEC's rules and forms.

The Chief Executive Officer and the Chief Financial Officer of SCE also have concluded that there were no significant changes in
SCE's internal controls or in other factors that could significantly affect those controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)(1)   Financial Statements

The following items contained in the Annual Report are found on pages 2 through 63, and are incorporated by reference in this
report.

         Management's Discussion and Analysis of Results of Operations and Financial Condition
         Responsibility for Financial Reporting
         Report of Independent Accountants
         Report of Predecessor Independent Public Accountants
         Consolidated Statements of Income - Years Ended December 31, 2002, 2001 and 2000
         Consolidated Balance Sheets - December 31, 2002, and 2001
         Consolidated Statements of Cash Flows - Years Ended December 31, 2002, 2001 and 2000
         Consolidated Statements of Changes in Common Shareholders' Equity - Years Ended December 31, 2002, 2001, 2000 and 1999
         Notes to Consolidated Financial Statements

(a)(2)   Report of Independent Accountants and Schedules Supplementing Financial Statements

The following documents may be found in this report at the indicated page numbers:
                                                                                               Page
                                                                                               ----
         Report of Independent Accountants on Financial Statement Schedule                      22
         Report of Predecessor Independent Accountants on Supplemental Schedules                23
         Schedule II - Valuation and Qualifying Accounts for the
              Years Ended December 31, 2002, 2001, and 2000                                     24

Schedules I through V, inclusive, except those referred to above, are omitted as not required or not applicable.

(a)(3)   Exhibits

         See Exhibit Index beginning on page 30 of this report.

         The Company will furnish a copy of any exhibit listed in the accompanying Exhibit Index upon written request and upon
payment to the Company of its reasonable expenses of furnishing such exhibit, which shall be limited to photocopying charges and,
if mailed to the requesting party, the cost of first-class postage.


Page 20
<PAGE>

(b)      Reports on Form 8-K

         November 20, 2002
              Item 5:  Other Events       California Public Utilities Commission Litigation Settlement Agreement
         December 13, 2002
              Item 5:  Other Events       John E. Bryson to become Chairman of the Board


Page 21
<PAGE>

                                                 REPORT OF INDEPENDENT ACCOUNTANTS ON
                                                     FINANCIAL STATEMENT SCHEDULE


To the Board of Directors and Shareholder
of Southern California Edison Company:

Our audit of the consolidated financial statements referred to in our report dated March 26, 2003, appearing in the 2002 Annual
Report to Shareholders of Southern California Edison Company (which report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included an audit of the 2002 financial statement schedule information listed in
Item 15(a)(2) of this Form 10-K.  In our opinion, the 2002 financial statement schedule presents fairly, in all material respects,
the information set forth therein when read in conjunction with the related consolidated financial statements.  The 2001 and 2000
financial statement schedule information of Southern California Edison Company was audited by other independent accountants who have
ceased operations.  Those independent accountants expressed an unqualified opinion on that financial statement schedule information
in their report dated March 25, 2002.


/s/ PricewaterhouseCoopers LLP

Los Angeles, California
March 26, 2003


Page 22
<PAGE>

THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP AND HAS NOT BEEN
REISSUED BY ARTHUR ANDERSEN LLP.


                         REPORT OF PREDECESSOR INDEPENDENT PUBLIC ACCOUNTANTS
                                       ON SUPPLEMENTAL SCHEDULES


To Southern California Edison Company:

We have audited, in accordance with auditing standards generally accepted in the United States, the consolidated financial
statements included in the 2002 Annual Report to Shareholders of Southern California Edison Company incorporated by reference in
this Form 10-K, and have issued our report thereon dated March 25, 2002. Our audits were made for the purpose of forming an opinion
on those consolidated financial statements taken as a whole. The supplemental schedules listed in Part III of this Form 10-K are
the responsibility of Southern California Edison Company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and regulations, and are not part of the consolidated financial statements. These
supplemental schedules have been subjected to the auditing procedures applied in the audits of the consolidated financial
statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in
relation to the consolidated financial statements taken as a whole.


                                                              ARTHUR ANDERSEN LLP

Los Angeles, California
March 25, 2002


Page 23
<PAGE>

                                                  Southern California Edison Company

                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                                 For the Year Ended December 31, 2002


                                                                   Additions
                                                        -----------------------------
                                     Balance at          Charged to        Charged to                      Balance
                                    Beginning of          Costs and           Other                        at End
             Description               Period             Expenses          Accounts      Deductions      of Period
- -----------------------------------------------------------------------------------------------------------------------
                                                                (In thousands)
Uncollectible Accounts:
     Customers                      $    28,300      $    21,035      $       --       $    19,297      $    30,038
     All other                            3,656            4,308              --             1,940            6,024
- -----------------------------------------------------------------------------------------------------------------------
Total                               $    31,956      $    25,343      $       --       $    21,237(a)   $    36,062
- -----------------------------------------------------------------------------------------------------------------------

- ----------------
(a)  Accounts written off, net.


Page 24
<PAGE>

                                                  Southern California Edison Company

                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                                 For the Year Ended December 31, 2001


                                                                   Additions
                                                        -----------------------------
                                     Balance at          Charged to        Charged to                      Balance
                                    Beginning of          Costs and           Other                        at End
             Description               Period             Expenses          Accounts      Deductions      of Period
- -----------------------------------------------------------------------------------------------------------------------
                                                                (In thousands)
Group A:
Uncollectible Accounts:
     Customers                      $    19,793      $    28,926      $       --       $    20,419      $    28,300
     All other                            3,427            1,836              --             1,607            3,656
- -----------------------------------------------------------------------------------------------------------------------
Total                               $    23,220      $    30,762      $       --       $    22,026(a)   $    31,956
- -----------------------------------------------------------------------------------------------------------------------

Group B:
DOE Decontamination
     and Decommissioning            $    29,920      $        --      $                $     5,520(b)   $    24,400
Purchased-power settlements             466,232                               --           110,353(c)       355,879
Pension and benefits                    296,278          195,558                            72,037(d)       419,799
Maintenance Accrual
Insurance, casualty and other            64,058           54,827              --            43,815(e)        75,070
- -----------------------------------------------------------------------------------------------------------------------
Total                               $   856,488      $   250,385      $       --       $   231,725      $   875,148
- -----------------------------------------------------------------------------------------------------------------------

- --------------------
(a)  Accounts written off, net.
(b)  Represents amounts paid.
(c)  Represents the amortization of the liability established for purchased-power contract settlement agreements.
(d)  Includes pension payments to retired employees, amounts paid to active employees during periods of illness and the funding of
     certain pension benefits.
(e)  Amounts charged to operations that were not covered by insurance.


Page 25
<PAGE>

                                                  Southern California Edison Company

                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                                 For the Year Ended December 31, 2000


                                                                   Additions
                                                        -----------------------------
                                     Balance at          Charged to        Charged to                      Balance
                                    Beginning of          Costs and           Other                        at End
             Description               Period             Expenses          Accounts      Deductions      of Period
- ----------------------------------------------------------------------------------------------------------------------
                                                                (In thousands)
Group A:
Uncollectible accounts
     Customers                      $    21,656      $    24,017      $       --       $    25,880      $    19,793
     All other                            3,009            1,201              --               783            3,427
- ----------------------------------------------------------------------------------------------------------------------
Total                               $    24,665      $    25,218      $       --       $    26,663(a)   $    23,220
- ----------------------------------------------------------------------------------------------------------------------

Group B:
DOE Decontamination
     and Decommissioning            $    34,590      $        --      $     (219)(b)   $     4,451(c)   $    29,920
Purchased-power settlements             563,459           17,188              --           114,415(d)       466,232
Pension and benefits                    232,901           44,244          24,101(e)          4,968(f)       296,278
Insurance, casualty and other            68,880           42,749              --            47,571(g)        64,058
- ----------------------------------------------------------------------------------------------------------------------
Total                               $   899,830      $   104,181      $   23,882       $   171,405      $   856,488
- ----------------------------------------------------------------------------------------------------------------------

- ------------------
(a)  Accounts written off, net.
(b)  Represents revision to estimate based on actual billings.
(c)  Represents amounts paid.
(d)  Represents the amortization of the liability established for purchased-power contract settlement agreements.
(e)  Primarily represents transfers from the accrued paid absence allowance account for required additions to the comprehensive
     disability plan accounts.
(f)  Includes pension payments to retired employees, amounts paid to active employees during periods of illness and the funding of
     certain pension benefits.
(g)  Amounts charged to operations that were not covered by insurance.


Page 26
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                           SOUTHERN CALIFORNIA EDISON COMPANY

                                           By:
                                           /S/ Kenneth S. Stewart
                                           --------------------------------------
                                           Kenneth S. Stewart
                                           Assistant General Counsel

                                           Date:  March 27, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.

       Signature                                             Title                                    Date
       ---------                                             -----                                    ----

Principal Executive Officer:
     Alan J. Fohrer*                             Chief Executive Officer and Director           March 27, 2003

Principal Financial Officer:
     W. James Scilacci*                          Senior Vice President and
                                                     Chief Financial Officer                    March 27, 2003

Controller or Principal Accounting Officer:
     Thomas M. Noonan*                           Vice President and Controller                  March 27, 2003

Board of Directors:

     John E. Bryson*                             Director                                       March 27, 2003
     Bradford M. Freeman*                        Director                                       March 27, 2003
     Joan C. Hanley*                             Director                                       March 27, 2003
     Bruce Karatz*                               Director                                       March 27, 2003
     Luis G. Nogales*                            Director                                       March 27, 2003
     Ronald L. Olson*                            Director                                       March 27, 2003
     James M. Rosser*                            Director                                       March 27, 2003
     Richard T. Schlosberg, III*                 Director                                       March 27, 2003
     Robert H. Smith*                            Director                                       March 27, 2003
     Thomas C. Sutton*                           Director                                       March 27, 2003
     Daniel M. Tellep*                           Director                                       March 27, 2003

*By:

/S/ Kenneth S. Stewart
- -----------------------------
Kenneth S. Stewart
Assistant General Counsel


Page 27
<PAGE>

                                   CERTIFICATION


I, ALAN J. FOHRER, certify that:

1.   I have reviewed this annual report on Form 10-K of SCE;

2.   Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this annual report;

3.   Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual
report is being prepared;

b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and

c)   presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal controls; and

6.   The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  March 27, 2003
                                      /S/ ALAN J. FOFRER
                                --------------------------------
                                         ALAN J. FOHRER
                                     Chief Executive Officer


Page 28
<PAGE>

                                        CERTIFICATION


I, W. JAMES SCILACCI, certify that:

1.   I have reviewed this annual report on Form 10-K of SCE;

2.   Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this annual report;

3.   Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual
report is being prepared;

b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and

c)   presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal controls; and

6.   The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:  March 27, 2003
                                         /S/ W. JAMES SCILACCI
                            ------------------------------------------------
                                            W. JAMES SCILACCI
                            Senior Vice President and Chief Financial Officer


Page 29
<PAGE>

                                   EXHIBIT INDEX

Exhibit
Number                                             Description
- ------                                             -----------

3.1       Certificate of Amendment and Restated Articles of Incorporation of SCE effective June 1, 1993 (File No. 1-2313, Form
          10-K for the year ended December 31, 1993)*
3.2       Certificate of Correction of Restated Articles of Incorporation of SCE dated effective August 21, 1997 (File No.
          1-2313, Form 10-Q for the quarter ended September 30, 1997)*
3.3       Amended Bylaws of Southern California Edison Company as adopted by the Board of Directors on January 1, 2003
4.1       SCE First Mortgage Bond Trust Indenture, dated as of October 1, 1923 (Registration No. 2-1369)*
4.2       Supplemental Indenture, dated as of March 1, 1927 (Registration No. 2-1369)*
4.3       Third Supplemental Indenture, dated as of June 24, 1935 (Registration No. 2-1602)*
4.4       Fourth Supplemental Indenture, dated as of September 1, 1935 (Registration No. 2-4522)*
4.5       Fifth Supplemental Indenture, dated as of August 15, 1939 (Registration No. 2-4522)*
4.6       Sixth Supplemental Indenture, dated as of September 1, 1940 (Registration No. 2-4522)*
4.7       Eighth Supplemental Indenture, dated as of August 15, 1948 (Registration No. 2-7610)*
4.8       Twenty-Fourth Supplemental Indenture, dated as of February 15, 1964 (Registration No. 2-22056)*
4.9       Eighty-Eighth Supplemental Indenture, dated as of July 15 1992 (File No. 1-2313, Form 8-K dated July 22, 1992)*
4.10      Indenture dated as of January 15, 1993 (File No. 1-2313, Form 8-K dated January 28, 1993)*
4.11      Indenture dated as of May 1, 1995 (File No. 1-2313, Form 8-K dated May 24, 1995)*
4.12      Ninety-Seventh Supplemental Indenture, dated as of February 21, 2002 (File No. 1-2313, filed as Exhibit 4.12 to Form
          10-K for the year ended December 31, 2001)*
4.13      Ninety-Eight Supplemental Indenture, dated February 15, 2003
10.1      1981 Deferred Compensation Agreement (File No. 1-2313, filed as Exhibit 10.2 to Form 10-K for the year ended December
          31, 1981)*
10.2      1985 Deferred Compensation Agreement for Executives (File No. 1-2313, filed as Exhibit 10.3 to Form 10-K for the year
          ended December 31, 1985)*
10.3      1985 Deferred Compensation Agreement for Directors (File No. 1-2313, filed as Exhibit 10.4 to Form 10-K for the year
          ended December 31, 1985)*
10.4      Director Deferred Compensation Plan (File No. 1-9936, filed as Exhibit 10.1 to the Edison International Form 10-Q for
          the quarter ended June 30, 2002)*
10.4.1    Director Deferred Compensation Plan Amendment No. 1 (File No. 1-9936, filed as Exhibit 10.4.1 to the Edison
          International Form 10-K for the year ended December 31, 2002)*
10.5      Director Grantor Trust Agreement (File No. 1-9936, filed as Exhibit 10.10 to the Edison International Form 10-K for the
          year ended December 31, 1995)*
10.5.1    Director Grantor Trust Agreement Amendment 2002-1 (File No. 1-9936, filed as Exhibit 10.4 to the Edison International
          Form 10-Q for the quarter ended June 30, 2002)*
10.6      Executive Deferred Compensation Plan (File No. 1-9936, filed as Exhibit 10.2 to the Edison International Form 10-Q for
          the quarter ended March 31, 1998)*
10.6.1    Executive Deferred Compensation Plan Amendment No. 1 (File No. 1-9936, filed as Exhibit 10.6.1 to the Edison
          International Form 10-K for the year ended December 31, 2002)*
10.7      Executive Grantor Trust Agreement (File No. 1-9936, filed as Exhibit 10.12 to the Edison International Form 10-K for the
          year ended December 31, 1995)*
10.7.1    Executive Grantor Trust Agreement Amendment 2002-1 (File No. 1-9936, filed as Exhibit 10.3 to the Edison International
          Form 10-Q for the quarter ended June 30, 2002)*


Page 30
<PAGE>

10.8      Executive Supplemental Benefit Program (File No. 1-9936, filed as Exhibit 10.2 to the Edison International Form 10-Q for
          the quarter ended September 20, 1999)*
10.9      Dispute resolution amendment of 1981 Executive Deferred Compensation Plan, 1985 Executive and Director Deferred
          Compensation Plans and Executive Supplemental Benefit Program (File No. 1-9936, filed as Exhibit 10.21 to the Edison
          International Form 10-K for the year ended December 31, 1998)*
10.10     Executive Retirement Plan (File No. 1-9936, filed as Exhibit 10.1 to the Edison International Form 10-Q for the quarter
          ended September 30, 1999)*
10.10.1   Executive Retirement Plan Amendment 2001-1 (File No. 1-9936, filed as Exhibit 10.1 to the Edison International Form 10-Q
          for the quarter ended March 31, 2001)*
10.10.2   Executive Retirement Plan Amendment 2002-1 (File No. 1-9936, filed as Exhibit 10.10.2 to the Edison International Form
          10-K for the year ended December 31, 2002)*
10.11     Executive Incentive Compensation Plan (File No. 1-9936, filed as Exhibit 10.12 to the Edison International Form 10-K for
          the year ended December 31, 1997)*
10.12     Executive Disability and Survivor Benefit Program (File No. 1-9936, filed as Exhibit 10.22 to the Edison International
          Form 10-K for the year ended December 31, 1994)*
10.13     Retirement Plan for Directors (File No. 1-9936, filed as Exhibit 10.2 to the Edison International Form 10-Q for the
          quarter ended June 30, 1998)*
10.14     Officer Long-Term Incentive Compensation Plan (File No. 1-9936, filed as Exhibit 10.3 to the Edison International Form
          10-Q for the quarter ended March 31, 1998)*
10.15     Equity Compensation Plan (File No. 1-9936, filed as Exhibit 10.1 to the Edison International Form 10-Q for the quarter
          ended June 30, 1998)*
10.15.1   Equity Compensation Plan Amendment No. 1 (File No. 1-9936, filed as Exhibit 10.3 to the Edison International Form 10-Q
          for the quarter ended June 30, 2000)*
10.16     2000 Equity Plan (File No. 1-9936, filed as Exhibit 10.1 to the Edison International Form 10-Q for the quarter ended
          June 30, 2000)*
10.17     Forms of Agreement for long-term compensation awards under the Officer Long-Term Incentive Compensation Plan, the Equity
          Compensation Plan or the 2000 Equity Plan (File No. 1-9936, for 1992-1995 stock option awards filed as Exhibit 10.21.1
          to the Edison International Form 10-K for the year ended December 31, 1995, for 1996 stock option awards filed as
          Exhibit 10.16.2 to the Edison International Form 10-K for the year ended December 31, 1996, for 1997 stock option awards
          filed as Exhibit 10.16.3 to the Edison International Form 10-K for the year ended December 31, 1997, for 1998 stock
          option awards filed as Exhibit 10.4 to the Edison International Form 10-Q for the quarter ended June 30, 1998, for 1999
          stock option awards filed as Exhibit 10.1 to the Edison International Form 10-Q for the quarter ended March 31, 1999,
          for January 2000 stock option and performance share awards as restated filed as Exhibit 10.2 to the Edison International
          Form 10-Q for the quarter ended March 31, 2001, for May 2000 special stock option awards filed as Exhibit 10.2 to the
          Edison International Form 10-Q for the quarter ended June 30, 2000, for 2001 basic stock option and performance share
          awards filed as Exhibit 10.3 to the Edison International Form 10-Q for the quarter ended March 31, 2001, for 2001
          special stock option awards filed as Exhibit 10.4 to the Edison International Form 10-Q for the quarter ended March 31,
          2001, for 2001 retention incentives filed as Exhibit 10.5 to the Edison International Form 10-Q for the quarter ended
          March 31, 2001, for 2001 exchange offer deferred stock units filed as Attachment C of Exhibit (a)(1) to Schedule TO-I
          dated October 26, 2001, and for 2002 stock option and performance share awards filed as Exhibit 10.1 to the Edison
          International Form 10-Q for the quarter ended March 31, 2002)*
10.18     Director Nonqualified Stock Option Terms and Conditions under the Equity Compensation Plan (File No. 1-9936, filed as
          Exhibit 10.1 to the Edison International Form 10-Q for the quarter ended June 30, 2002)*


Page 31
<PAGE>

10.19     Estate and Financial Planning Program as amended April 1, 1999 (File No. 1-2313, filed as Exhibit 10.2 to Form 10-Q for
          the quarter ended June 30, 1999)*
10.20     Option Gain Deferral Plan as restated September 15, 2000 (File No. 1-9936, filed as Exhibit 10.25 to the Edison
          International Form 10-K for the year ended December 31, 2000)*
10.21     Election Terms for Warren Christopher (File No. 1-9936, filed as Exhibit 10.22 to the Edison International Form 10-K for
          the year ended December 31, 1997)*
10.22     Executive Severance Plan as adopted effective January 1, 2001 (File No. 1-9936, filed as Exhibit 10.34 to the Edison
          International Form 10-K for the year ended December 31, 2001)*
10.23     Resolution regarding the computation of disability and survivor benefits prior to age 55 for Alan J. Fohrer (File No.
          1-9936, filed as Exhibit 10.2 to the Edison International Form 10-Q for the quarter ended March 31, 2000)*
10.24     Employment Letter Agreement with Mahvash Yazdi (File No. 1-9936, filed as Exhibit 10.34 to the Edison International Form
          10-K for the year ended December 31, 2002)*
12.       Computation of Ratios of Earnings to Fixed Charges
13.       Annual Report to Shareholders for year ended December 31, 2002
23.       Consent of Independent Accountants - PricewaterhouseCoopers LLP
24.1      Power of Attorney
24.2      Certified copy of Resolution of Board of Directors Authorizing Signature
99        Statement Pursuant to 18 U.S.C. Section 1350

- -----------------
*  Incorporated by reference pursuant to Rule 12b-32.



</PRE>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>3
<FILENAME>exh302.htm
<DESCRIPTION>AMENDED BYLAWS
<TEXT>
<HTML>
<HEAD>
<TITLE>
Amended SCE Bylaws</TITLE>
</HEAD>
<BODY>
<PRE>
                                        <b>To Holders of the Company's Bylaws:




                               Effective January 1, 2003, Article IV, Section 9 and
                                      various other sections were amended to
                                   provide for the Chairman of the Board and the
                                Chief Executive Officer to be separate individuals
                                    and to delete certain outdated references.




                                                 BEVERLY P. RYDER
                                                Corporate Secretary









                                                      BYLAWS

                                                        OF

                                        SOUTHERN CALIFORNIA EDISON COMPANY

                                            AS AMENDED TO AND INCLUDING

                                                  JANUARY 1, 2003</b>




<PAGE>





                                                       <u>INDEX</u>
                                                                                                  <u>Page</u>
                                           ARTICLE I - PRINCIPAL OFFICE
Section  1.  Principal Office......................................................................1

                                             ARTICLE II - SHAREHOLDERS
Section  1.  Meeting Locations.....................................................................1
Section  2.  Annual Meetings.......................................................................1
Section  3.  Special Meetings......................................................................2
Section  4.  Notice of Annual or Special Meeting...................................................2
Section  5.  Quorum................................................................................3
Section  6.  Adjourned Meeting and Notice Thereof..................................................4
Section  7.  Voting................................................................................4
Section  8.  Record Date...........................................................................6
Section  9.  Consent of Absentees..................................................................7
Section 10.  Action Without Meeting................................................................7
Section 11.  Proxies...............................................................................7
Section 12.  Inspectors of Election................................................................8

                                              ARTICLE III - DIRECTORS
Section  1.  Powers................................................................................8
Section  2.  Number of Directors...................................................................9
Section  3.  Election and Term of Office...........................................................9
Section  4.  Vacancies.............................................................................9
Section  5.  Place of Meeting.....................................................................10
Section  6.  Organization Meeting.................................................................10
Section  7.  Special Meetings and Other Regular Meetings..........................................10
Section  8.  Quorum...............................................................................11
Section  9.  Participation in Meetings by Conference Telephone....................................11
Section 10.  Waiver of Notice.....................................................................12
Section 11.  Adjournment..........................................................................12
Section 12.  Fees and Compensation................................................................12



- -i-
<PAGE>



Section 13.  Action Without Meeting................................................................12
Section 14.  Rights of Inspection..................................................................12
Section 15.  Committees............................................................................12

                                               ARTICLE IV - OFFICERS
Section  1.  Officers.............................................................................13
Section  2.  Election.............................................................................14
Section  3.  Eligibility of Chairman..............................................................14
Section  4.  Removal and Resignation..............................................................14
Section  5.  Appointment of Other Officers........................................................14
Section  6.  Vacancies............................................................................14
Section  7.  Salaries.............................................................................15
Section  8.  Furnish Security for Faithfulness....................................................15
Section  9.  Chairman's Duties; Succession to
                      Such Duties in Chairman's Absence or Disability.............................15
Section 10.  Chief Executive Officer's Duties; Succession to Such Duties
                      in Chief Executive Officer's Absence or Disability..........................15
Section 11.  President's Duties...................................................................16
Section 12.  Chief Financial Officer..............................................................16
Section 13.  Vice Presidents' Duties..............................................................16
Section 14.  General Counsel's Duties.............................................................16
Section 15.  Associate General Counsel's and Assistant General
                      Counsel's Duties............................................................16
Section 16.  Controller's Duties..................................................................16
Section 17.  Assistant Controllers' Duties........................................................17
Section 18.  Treasurer's Duties...................................................................17
Section 19.  Assistant Treasurers' Duties.........................................................17
Section 20.  Secretary's Duties...................................................................17
Section 21.  Assistant Secretaries' Duties........................................................18
Section 22.  Secretary Pro Tempore................................................................18



- -ii-
<PAGE>



Section 23.  Election of Acting Treasurer or Acting Secretary.....................................18
Section 24.  Performance of Duties................................................................19

                                           ARTICLE V - OTHER PROVISIONS
Section  1.  Inspection of Corporate Records......................................................19
Section  2.  Inspection of Bylaws.................................................................20
Section  3.  Contracts and Other Instruments, Loans, Notes
                     and Deposits of Funds........................................................20
Section  4.  Certificates of Stock................................................................21
Section  5.  Transfer Agent, Transfer Clerk and Registrar.........................................21
Section  6.  Representation of Shares of Other Corporations.......................................21
Section  7.  Stock Purchase Plans.................................................................22
Section  8.  Fiscal Year and Subdivisions.........................................................22
Section  9.  Construction and Definitions.........................................................22

                                          ARTICLE VI - INDEMNIFICATION
Section  1.  Indemnification of Directors and Officers............................................23
Section  2.  Indemnification of Employees and Agents..............................................24
Section  3.  Right of Directors and Officers to Bring Suit........................................24
Section  4.  Successful Defense...................................................................25
Section  5.  Non-Exclusivity of Rights............................................................25
Section  6.  Insurance............................................................................25
Section  7.  Expenses as a Witness................................................................25
Section  8.  Indemnity Agreements.................................................................26
Section  9.  Separability.........................................................................26
Section 10.  Effect of Repeal or Modification.....................................................26

                                        ARTICLE VII - EMERGENCY PROVISIONS
Section  1.  General..............................................................................26
Section  2.  Unavailable Directors................................................................27
Section  3.  Authorized Number of Directors.......................................................27
Section  4.  Quorum...............................................................................27



- -iii-
<PAGE>



Section  5.  Creation of Emergency Committee......................................................27
Section  6.  Constitution of Emergency Committee..................................................27
Section  7.  Powers of Emergency Committee........................................................28
Section  8.  Directors Becoming Available.........................................................28
Section  9.  Election of Board of Directors.......................................................28
Section 10.  Termination of Emergency Committee...................................................28

                                             ARTICLE VIII - AMENDMENTS
Section  1.  Amendments.........................................................................  29



- -iv-
<PAGE>



                                                       <b>BYLAWS

                              Bylaws for the regulation, except as otherwise provided
                                    by statute or its Articles of Incorporation

                                                        of

                                        SOUTHERN CALIFORNIA EDISON COMPANY

                                            AS AMENDED TO AND INCLUDING
                                                  JANUARY 1, 2003


                                           ARTICLE I - PRINCIPAL OFFICE</b>

Section 1.        Principal Office.

        The Edison General Office,  situated at 2244 Walnut Grove Avenue,  in the City of Rosemead,  County of Los
Angeles,  State of California,  is hereby fixed as the principal  office for the transaction of the business of the
corporation.


                                             <b>ARTICLE II - SHAREHOLDERS</b>

Section 1.        Meeting Locations.

        All meetings of  shareholders  shall be held at the principal  office of the  corporation or at such other
place or places  within or without the State of  California  as may be  designated  by the Board of Directors  (the
"Board").  In the event such  places  shall  prove  inadequate  in capacity  for any  meeting of  shareholders,  an
adjournment  may be taken to and the meeting held at such other place of adequate  capacity as may be designated by
the officer of the corporation presiding at such meeting.

Section 2.        Annual Meetings.

        The annual meetings of  shareholders  shall be held on the third Thursday of the month of May of each year
at such time as the  Chairman of the Board shall  designate  on said day to elect  directors to hold office for the
year next ensuing and until their successors  shall be elected,  and to consider and act upon such other matters as
may lawfully be presented  to such  meeting;  provided,  however,  that should said day fall upon a legal  holiday,
then any such  annual  meeting  of  shareholders  shall be held at such  designated  time and place on the next day
thereafter ensuing which is not a legal holiday.


Page 1


Section 3.        Special Meetings.

        Special  meetings of the  shareholders  may be called at any time by the Board, the Chairman of the Board,
the Chief Executive  Officer,  the President,  or upon written request of any three members of the Board, or by the
holders  of shares  entitled  to cast not less than ten  percent  of the votes at such  meeting.  Upon  request  in
writing to the  Chairman of the Board,  the Chief  Executive  Officer,  the  President,  any Vice  President or the
Secretary by any person  (other than the Board)  entitled to call a special  meeting of  shareholders,  the officer
forthwith  shall cause  notice to be given to the  shareholders  entitled to vote that a meeting  will be held at a
time requested by the person or persons  calling the meeting,  not less than  thirty-five  nor more than sixty days
after the receipt of the  request.  If the notice is not given  within  twenty days after  receipt of the  request,
the persons entitled to call the meeting may give the notice.

Section 4.        Notice of Annual or Special Meeting.

        Written notice of each annual or special meeting of  shareholders  shall be given not less than ten (or if
sent by  third-class  mail,  thirty) nor more than sixty days  before the date of the  meeting to each  shareholder
entitled to vote  thereat.  Such notice  shall state the place,  date,  and hour of the meeting and (i) in the case
of a  special  meeting,  the  general  nature  of the  business  to be  transacted,  and no other  business  may be
transacted,  or (ii) in the case of an annual  meeting,  those matters which the Board,  at the time of the mailing
of the notice,  intends to present for action by the  shareholders,  but,  subject to the  provisions of applicable
law and these Bylaws,  any proper matter may be presented at an annual  meeting for such action.  The notice of any
special or annual  meeting at which  directors are to be elected  shall  include the names of nominees  intended at
the  time  of the  notice  to be  presented  by the  Board  for  election.  For any  matter  to be  presented  by a
shareholder at an annual  meeting,  including the nomination of any person (other than a person  nominated by or at
the  direction of the Board) for  election to the Board,  written  notice must be received by the  Secretary of the
corporation  from the  shareholder  not more than one hundred  eighty  days nor less than one  hundred  twenty days
prior to the date on which the  proxy  materials  for the prior  year's  annual  meeting  were  first  released  to
shareholders  by  the  corporation;  provided  however,  that  in  the  event  the  annual  meeting  to  which  the
shareholder's  written  notice relates is to be held on a date which is more than thirty days earlier or later than
the date of the annual  meeting  specified in these Bylaws,  the notice from a shareholder  must be received by the
Secretary  not  earlier  than two  hundred  twenty  days  prior  to the date of the  annual  meeting  to which  the
shareholder's  notice  relates  nor later than one  hundred  sixty days prior to the date of such  annual  meeting,
unless  less than one  hundred  seventy  days' prior  public  disclosure  of the date of the meeting is made by the
earliest possible  quarterly report on Form 10-Q, or, if impracticable,  any means reasonably  calculated to inform
shareholders including without limitation a report on Form 8-K, a press release or publication once in a

Page 2


newspaper of general  circulation in the county in which the principal office is located,  in which event notice by
the  shareholder  to be timely must be received not later than the close of business on the tenth day following the
date  of  such  public  disclosure.  The  shareholder's  notice  to the  Secretary  shall  set  forth  (a) a  brief
description of each matter to be presented at the annual meeting by the shareholder;  (b) the name and address,  as
they appear on the corporation's  books, of the shareholder;  (c) the class and number of shares of the corporation
which are beneficially  owned by the shareholder;  and (d) any material  interest of the shareholder in the matters
to be presented.  Any  shareholder  who intends to nominate a candidate  for election as a director  shall also set
forth in such a notice (i) the name,  age,  business  address and residence  address of each nominee that he or she
intends to nominate at the meeting,  (ii) the principal  occupation or employment of each nominee,  (iii) the class
and number of shares of capital stock of the  corporation  beneficially  owned by each nominee,  and (iv) any other
information  concerning  the  nominee  that  would be  required  under the  rules of the  Securities  and  Exchange
Commission  in a proxy  statement  soliciting  proxies  for the  election  of the  nominee.  The notice  shall also
include a consent,  signed by the  shareholder's  nominees,  to serve as a director of the  corporation if elected.
Notwithstanding  anything in these Bylaws to the contrary,  and subject to the provisions of any applicable law, no
business shall be conducted at a special or annual  meeting  except in accordance  with the procedures set forth in
this Section 4.

        Notice of a  shareholders'  meeting shall be given either  personally or by  first-class  mail (or, if the
outstanding  shares of the  corporation  are held of  record  by 500 or more  persons  on the  record  date for the
meeting,  by  third-class  mail) or by other means of written  communication,  addressed to the  shareholder at the
address  of such  shareholder  appearing  on the  books  of the  corporation  or given  by the  shareholder  to the
corporation  for the  purpose  of  notice;  or, if no such  address  appears  or is given,  at the place  where the
principal  office of the  corporation  is  located  or by  publication  at least  once in a  newspaper  of  general
circulation  in the county in which the  principal  office is located.  Notice by mail shall be deemed to have been
given at the time a written  notice is deposited in the United States  mails,  postage  prepaid.  Any other written
notice shall be deemed to have been given at the time it is  personally  delivered to the recipient or is delivered
to a common  carrier  for  transmission,  or actually  transmitted  by the person  giving the notice by  electronic
means, to the recipient.

Section 5.        Quorum.

        A majority of the shares entitled to vote,  represented in person or by proxy,  shall  constitute a quorum
at any  meeting of  shareholders.  The  affirmative  vote of a majority of the shares  represented  and voting at a
duly held meeting at which a quorum is present  (which  shares  voting  affirmatively  also  constitute  at least a
majority of the  required  quorum)  shall be the act of the  shareholders,  unless the vote of a greater  number or
voting by classes is required by law or the

Page 3


Articles;  provided,  however,  that the shareholders present at a duly called or held meeting at which a quorum is
present may continue to do business until  adjournment,  notwithstanding  the withdrawal of enough  shareholders to
have less than a quorum,  if any action  taken (other than  adjournment)  is approved by at least a majority of the
shares required to constitute a quorum.

Section 6.        Adjourned Meeting and Notice Thereof.

        Any shareholders'  meeting,  whether or not a quorum is present, may be adjourned from time to time by the
vote of a  majority  of the  shares,  the  holders of which are either  present in person or  represented  by proxy
thereat,  but in the absence of a quorum  (except as provided in Section 5 of this  Article) no other  business may
be transacted at such meeting.

        It shall not be  necessary  to give any  notice of the time and place of the  adjourned  meeting or of the
business to be transacted  thereat,  other than by announcement at the meeting at which such  adjournment is taken.
At the  adjourned  meeting,  the  corporation  may transact any business  which might have been  transacted  at the
original  meeting.  However,  when any  shareholders'  meeting is adjourned  for more than  forty-five  days or, if
after  adjournment a new record date is fixed for the adjourned  meeting,  notice of the adjourned meeting shall be
given as in the case of an original meeting.

Section 7.        Voting.

        The  shareholders  entitled to notice of any meeting or to vote at any such meeting  shall be only persons
in whose name shares stand on the stock  records of the  corporation  on the record date  determined  in accordance
with Section 8 of this Article.

        Voting  shall  in all  cases  be  subject  to the  provisions  of  Chapter  7 of  the  California  General
Corporation Law, and to the following provisions:

        (a)      Subject to clause (g),  shares  held by an  administrator,  executor,  guardian,  conservator  or
custodian  may be voted by such  holder  either in person or by proxy,  without a transfer  of such shares into the
holder's  name;  and shares  standing in the name of a trustee may be voted by the trustee,  either in person or by
proxy,  but no trustee  shall be entitled to vote  shares  held by such  trustee  without a transfer of such shares
into the trustee's name.

        (b)      Shares  standing in the name of a receiver may be voted by such  receiver;  and shares held by or
under the control of a receiver  may be voted by such  receiver  without the transfer  thereof into the  receiver's
name if authority to do so is contained in the order of the court by which such receiver was appointed.



Page 4


        (c)      Subject to the provisions of Section 705 of the  California  General  Corporation  Law and except
where  otherwise  agreed in writing between the parties,  a shareholder  whose shares are pledged shall be entitled
to vote such  shares  until the shares have been  transferred  into the name of the  pledgee,  and  thereafter  the
pledgee shall be entitled to vote the shares so transferred.

        (d)      Shares  standing  in the name of a minor may be voted and the  corporation  may treat all  rights
incident  thereto as exercisable by the minor,  in person or by proxy,  whether or not the  corporation has notice,
actual or  constructive,  of the non-age  unless a guardian of the minor's  property has been appointed and written
notice of such appointment given to the corporation.

        (e)      Shares  standing in the name of another  corporation,  domestic or foreign,  may be voted by such
officer,  agent or  proxyholder  as the bylaws of such other  corporation  may prescribe or, in the absence of such
provision,  as the  Board of  Directors  of such  other  corporation  may  determine  or,  in the  absence  of such
determination,  by the chairman of the board, president or any vice president of such other corporation,  or by any
other  person  authorized  to do so by the  chairman of the board,  president  or any vice  president of such other
corporation.  Shares  which  are  purported  to be voted or any proxy  purported  to be  executed  in the name of a
corporation  (whether  or not any title of the person  signing is  indicated)  shall be presumed to be voted or the
proxy executed in accordance with the provisions of this subdivision, unless the contrary is shown.

        (f)      Shares of the corporation  owned by any of its subsidiaries  shall not be entitled to vote on any
matter.

        (g)      Shares of the  corporation  held by the  corporation in a fiduciary  capacity,  and shares of the
corporation held in a fiduciary  capacity by any of its subsidiaries,  shall not be entitled to vote on any matter,
except to the extent that the settlor or  beneficial  owner  possesses and exercises a right to vote or to give the
corporation binding instructions as to how to vote such shares.

        (h)      If shares stand of record in the names of two or more persons,  whether  fiduciaries,  members of
a partnership,  joint tenants, tenants in common, husband and wife as community property,  tenants by the entirety,
voting  trustees,  persons entitled to vote under a shareholder  voting  agreement or otherwise,  or if two or more
persons  (including  proxyholders)  have the same fiduciary  relationship  respecting  the same shares,  unless the
secretary  of the  corporation  is  given  written  notice  to the  contrary  and is  furnished  with a copy of the
instrument  or order  appointing  them or creating  the  relationship  wherein it is so  provided,  their acts with
respect to voting shall have the following effect:

         (i)      If only one votes, such act binds all;

         (ii)     If more than one vote, the act of the majority so voting binds all;


Page 5


         (iii)    If more than one vote,  but the vote is evenly split on any particular  matter,  each faction may
                  vote the securities in question proportionately.

         If the  instrument  so filed or the  registration  of the shares  shows  that any such  tenancy is held in
unequal  interests,  a majority or even split for the purpose of this section  shall be a majority or even split in
interest.

         No  shareholder  of any class of stock of this  corporation  shall be entitled  to  cumulate  votes at any
election of directors of this corporation.

         Elections for directors need not be by ballot;  provided,  however,  that all elections for directors must
be by ballot upon demand made by a shareholder at the meeting and before the voting begins.

         In any  election  of  directors,  the  candidates  receiving  the  highest  number of votes of the  shares
entitled to be voted for them up to the number of directors to be elected by such shares are elected.

Section 8.        Record Date.

         The Board may fix,  in  advance,  a record  date for the  determination  of the  shareholders  entitled to
notice of any meeting or to vote or  entitled to receive  payment of any  dividend  or other  distribution,  or any
allotment of rights,  or to exercise  rights in respect of any other lawful action.  The record date so fixed shall
be not more than  sixty  days nor less than ten days  prior to the date of the  meeting  nor more than  sixty  days
prior to any other action.  When a record date is so fixed,  only  shareholders  of record at the close of business
on that date are  entitled  to notice of and to vote at the meeting or to receive the  dividend,  distribution,  or
allotment of rights, or to exercise the rights, as the case may be,  notwithstanding  any transfer of shares on the
books  of the  corporation  after  the  record  date,  except  as  otherwise  provided  by law or these  Bylaws.  A
determination  of shareholders of record entitled to notice of or to vote at a meeting of shareholders  shall apply
to any  adjournment  of the meeting unless the Board fixes a new record date for the adjourned  meeting.  The Board
shall fix a new record date if the meeting is adjourned for more than forty-five days.

         If no record date is fixed by the Board, the record date for determining  shareholders  entitled to notice
of or to vote at a meeting of  shareholders  shall be at the close of business on the business  day next  preceding
the day on which  notice is given  or, if notice is  waived,  at the close of  business  on the  business  day next
preceding  the day on which the  meeting is held.  The record  date for  determining  shareholders  for any purpose
other than as set forth in this  Section 8 or Section 10 of this  Article  shall be at the close of business on the
day on which the Board  adopts the  resolution  relating  thereto,  or the  sixtieth  day prior to the date of such
other action, whichever is later.


Page 6


Section 9.        Consent of Absentees.

         The  transactions of any meeting of  shareholders,  however called and noticed,  and wherever held, are as
valid as though had at a meeting duly held after regular call and notice,  if a quorum is present  either in person
or by proxy,  and if,  either  before or after the meeting,  each of the persons  entitled to vote,  not present in
person or by proxy,  signs a written  waiver of notice or a consent to the holding of the meeting or an approval of
the minutes thereof.  All such waivers,  consents or approvals shall be filed with the corporate  records or made a
part of the minutes of the  meeting.  Neither the  business to be  transacted  at nor the purpose of any regular or
special  meeting of shareholders  need be specified in any written waiver of notice,  consent to the holding of the
meeting or  approval of the  minutes  thereof,  except as  provided  in Section  601(f) of the  California  General
Corporation Law.

Section 10.       Action Without Meeting.

         Subject to Section 603 of the California  General  Corporation Law, any action which,  under any provision
of the California  General  Corporation  Law, may be taken at any annual or special meeting of shareholders  may be
taken  without a meeting  and without  prior  notice if a consent in  writing,  setting  forth the action so taken,
shall be signed by the holders of  outstanding  shares having not less than the minimum  number of votes that would
be  necessary  to  authorize  or take such action at a meeting at which all shares  entitled to vote  thereon  were
present  and voted.  Unless a record date for voting  purposes  be fixed as provided in Section 8 of this  Article,
the record date for determining  shareholders  entitled to give consent  pursuant to this Section 10, when no prior
action by the Board has been taken, shall be the day on which the first written consent is given.

Section 11.       Proxies.

Every  person  entitled  to vote shares has the right to do so either in person or by one or more  persons,  not to
exceed  three,  designated by a proxy  authorized by such  shareholder  or the  shareholder's  attorney in fact and
filed with the corporation,  in accordance with Section 178 of the California  General  Corporation Law. Subject to
the following  sentence,  any proxy duly authorized  continues in full force and effect until revoked by the person
authorizing  it prior to the vote  pursuant  thereto by a writing  delivered  to the  corporation  stating that the
proxy is revoked or by a subsequent  proxy  authorized by the person  authorizing  the prior proxy and presented to
the meeting,  or by attendance at the meeting and voting in person by the person  authorizing the proxy;  provided,
however,  that a proxy is not revoked by the death or incapacity  of the maker unless,  before the vote is counted,
written notice of such death or incapacity is received by this

Page 7




corporation.  No proxy  shall be valid after the  expiration  of eleven  months from the date of its  authorization
unless otherwise provided in the proxy.

Section 12.       Inspectors of Election.

         In advance of any  meeting of  shareholders,  the Board may appoint  any  persons  other than  nominees as
inspectors  of election to act at such meeting and any  adjournment  thereof.  If inspectors of election are not so
appointed,  or if any persons so  appointed  fail to appear or refuse to act, the chairman of any such meeting may,
and on the request of any shareholder or  shareholder's  proxy shall,  make such  appointments at the meeting.  The
number of  inspectors  shall be either  one or three.  If  appointed  at a meeting  on the  request  of one or more
shareholders or proxies,  the majority of shares present shall determine  whether one or three inspectors are to be
appointed.

         The  duties  of such  inspectors  shall be as  prescribed  by  Section  707(b) of the  California  General
Corporation Law and shall include:  determining the number of shares  outstanding and the voting power of each, the
shares  represented  at the  meeting,  the  existence  of a quorum,  and the  authenticity,  validity and effect of
proxies;  receiving  votes,  ballots or consents;  hearing and  determining all challenges and questions in any way
arising in connection with the right to vote;  counting and tabulating all votes or consents;  determining when the
polls shall  close;  determining  the result;  and doing such acts as may be proper to conduct the election or vote
with fairness to all  shareholders.  If there are three  inspectors of election,  the decision,  act or certificate
of a majority is effective in all respects as the decision,  act or  certificate  of all. Any report or certificate
made by the inspectors of election is prima facie evidence of the facts stated therein.

                                              <b>ARTICLE III - DIRECTORS</b>

Section 1.        Powers.

         Subject to limitations  of the Articles,  of these Bylaws and of the California  General  Corporation  Law
relating to action  required to be approved by the  shareholders  or by the  outstanding  shares,  the business and
affairs of the corporation  shall be managed and all corporate  powers shall be exercised by or under the direction
of the  Board.  The  Board  may  delegate  the  management  of the  day-to-day  operation  of the  business  of the
corporation  provided that the business and affairs of the  corporation  shall be managed and all corporate  powers
shall be  exercised  under the ultimate  direction of the Board.  Without  prejudice  to such general  powers,  but
subject to the same  limitations,  it is hereby  expressly  declared that the Board shall have the following powers
in addition to the other powers enumerated in these Bylaws:



Page 8


         (a)      To select and remove all the other officers,  agents and employees of the corporation,  prescribe
the powers and duties for them as may not be  inconsistent  with law, with the Articles or these Bylaws,  fix their
compensation and require from them security for faithful service.

         (b)      To conduct,  manage and control the  affairs  and  business of the  corporation  and to make such
rules and regulations  therefor not inconsistent  with law, or with the Articles or these Bylaws,  as they may deem
best.

         (c)      To adopt,  make and use a corporate  seal, and to prescribe the forms of  certificates  of stock,
and to alter the form of such seal and of such  certificates  from time to time as in their  judgment they may deem
best.

         (d)      To authorize  the  issuance of shares of stock of the  corporation  from time to time,  upon such
terms and for such consideration as may be lawful.

         (e)      To borrow money and incur  indebtedness for the purposes of the  corporation,  and to cause to be
executed and delivered  therefor,  in the corporate name,  promissory  notes,  bonds,  debentures,  deeds of trust,
mortgages, pledges, hypothecations or other evidences of debt and securities therefor.

Section 2.        Number of Directors.

         The authorized  number of directors  shall be not less than nine nor more than seventeen  until changed by
amendment of the Articles or by a Bylaw duly adopted by the  shareholders.  The exact number of directors  shall be
fixed,  within the limits  specified,  by the Board by adoption of a resolution or by the  shareholders in the same
manner provided in these Bylaws for the amendment thereof.

Section 3.        Election and Term of Office.

         The  directors  shall be  elected  at each  annual  meeting of the  shareholders,  but if any such  annual
meeting is not held or the directors are not elected  thereat,  the directors may be elected at any special meeting
of  shareholders  held for that purpose.  Each director shall hold office until the next annual meeting and until a
successor has been elected and qualified.

Section 4.        Vacancies.

         Any director  may resign  effective  upon giving  written  notice to the Chairman of the Board,  the Chief
Executive  Officer,  the President,  the Secretary or the Board,  unless the notice  specifies a later time for the
effectiveness  of such  resignation.  If the  resignation is effective at a future time, a successor may be elected
to take office when the resignation becomes effective.



Page 9


         Vacancies in the Board,  except those existing as a result of a removal of a director,  may be filled by a
majority  of the  remaining  directors,  though  less  than a quorum,  or by a sole  remaining  director,  and each
director so elected shall hold office until the next annual  meeting and until such  director's  successor has been
elected  and  qualified.  Vacancies  existing  as a  result  of a  removal  of a  director  may  be  filled  by the
shareholders as provided by law.

         A vacancy  or  vacancies  in the  Board  shall be deemed  to exist in case of the  death,  resignation  or
removal of any director,  or if the authorized  number of directors be increased,  or if the shareholders  fail, at
any annual or special  meeting of  shareholders  at which any director or directors are elected,  to elect the full
authorized number of directors to be voted for at that meeting.

         The Board may declare  vacant the office of a director  who has been  declared of unsound mind by an order
of court or convicted of a felony.

         The  shareholders  may elect a director  or  directors  at any time to fill any vacancy or  vacancies  not
filled by the  directors.  Any such  election by written  consent  other than to fill a vacancy  created by removal
requires  the  consent  of a  majority  of the  outstanding  shares  entitled  to vote.  If the Board  accepts  the
resignation  of a director  tendered  to take effect at a future  time,  the Board or the  shareholders  shall have
power to elect a successor to take office when the resignation is to become effective.

         No reduction of the  authorized  number of directors  shall have the effect of removing any director prior
to the expiration of the director's term of office.

Section 5.        Place of Meeting.

         Regular  or  special  meetings  of the Board  shall be held at any place  within or  without  the State of
California  which has been  designated  from  time to time by the  Board or as  provided  in these  Bylaws.  In the
absence of such designation, regular meetings shall be held at the principal office of the corporation.

Section 6.        Organization Meeting.

         Promptly following each annual meeting of shareholders the Board shall hold a regular meeting for the
purpose of organization, election of officers and the transaction of other business.

Section 7.        Special Meetings and Other Regular Meetings.

         Special  meetings and regular  meetings other than  organization  meetings of the Board for any purpose or
purposes may be called at any time by the Chairman of the Board, the Chief Executive  Officer,  the President,  any
Vice President, the Secretary or by any two directors.


Page 10


         Such  meetings  of the Board shall be held upon four days'  notice by mail or  forty-eight  hours'  notice
delivered  personally or by telephone,  including a voice messaging  system or other system or technology  designed
to record and  communicate  messages,  telegraph,  telex,  facsimile,  electronic  mail or other  similar  means of
communication.  Any such notice  shall be  addressed or  delivered  to each  director at such  director's  address,
telephone number, telex number,  facsimile number, E-mail address, or other designated  location(s),  as shown upon
the  records of the  corporation  or as may have been given to the  corporation  by the  director  for  purposes of
notice or, if such  information  is not shown on such  records  or is not  readily  ascertainable,  at the place in
which the meetings of the directors are regularly held.  The notice need not specify the purpose of such meeting.

         Notice  by mail  shall be  deemed to have been  given at the time a  written  notice is  deposited  in the
United States mail,  postage  prepaid.  Any other written  notice shall be deemed to have been given at the time it
is  personally  delivered  to the  recipient  or is delivered  to a common  carrier for  transmission,  or actually
transmitted by the person giving the notice by electronic  means to the  recipient.  Oral notice shall be deemed to
have been given at the time it is  communicated,  in person or by telephone,  wireless,  or other similar means, to
the  recipient  or to a person at the  office of the  recipient  who the  person  giving  the  notice has reason to
believe will promptly  communicate  it to the  recipient,  or actually  transmitted  to the recipient by the person
giving the notice by a system or technology designed to record and communicate messages.

Section 8.        Quorum.

         One-third of the number of authorized  directors  constitutes a quorum of the Board for the transaction of
business,  except to adjourn as provided  in Section ll of this  Article.  Every act or decision  done or made by a
majority  of the  directors  present at a meeting  duly held at which a quorum is present  shall be regarded as the
act of the  Board,  unless a greater  number is  required  by law or by the  Articles;  provided,  however,  that a
meeting at which a quorum is initially  present may continue to transact  business  notwithstanding  the withdrawal
of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.

Section 9.        Participation in Meetings by Conference Telephone.

         Members  of the  Board may  participate  in a meeting  through  use of  conference  telephone  or  similar
communications  equipment,  so long as all  members  participating  in such  meeting  can  hear one  another.  Such
participation constitutes presence in person at such meeting.



Page 11


Section 10.       Waiver of Notice.

         The  transactions  of any meeting of the Board,  however called and noticed or wherever held, are as valid
as though had at a meeting  duly held after  regular call and notice if a quorum is present and if,  either  before
or after the meeting,  each of the  directors not present  signs a written  waiver of notice,  a consent to holding
such meeting or an approval of the minutes  thereof.  All such waivers,  consents or approvals  shall be filed with
the corporate records or made a part of the minutes of the meeting.

Section 11.       Adjournment.

         A majority  of the  directors  present,  whether or not a quorum is present,  may  adjourn any  directors'
meeting  to another  time and place.  Notice of the time and place of  holding  an  adjourned  meeting  need not be
given to absent  directors  if the time and place is fixed at the meeting  adjourned.  If the meeting is  adjourned
for more than  twenty-four  hours,  notice of any  adjournment to another time or place shall be given prior to the
time of the adjourned meeting to the directors who were not present at the time of the adjournment.

Section 12.       Fees and Compensation.

         Directors and members of committees may receive such  compensation,  if any, for their services,  and such
reimbursement for expenses, as may be fixed or determined by the Board.

Section 13.       Action Without Meeting.

         Any action  required or permitted  to be taken by the Board may be taken  without a meeting if all members
of the Board  shall  individually  or  collectively  consent in writing to such  action.  Such  written  consent or
consents  shall  have the same  force and  effect  as a  unanimous  vote of the  Board and shall be filed  with the
minutes of the proceedings of the Board.

Section 14.       Rights of Inspection.

         Every  director  shall have the  absolute  right at any  reasonable  time to  inspect  and copy all books,
records and  documents  of every kind and to inspect the physical  properties  of the  corporation  and also of its
subsidiary  corporations,  domestic or foreign.  Such inspection by a director may be made in person or by agent or
attorney and includes the right to copy and make extracts.

Section 15.       Committees.

         The Board may appoint one or more  committees,  each consisting of two or more directors,  to serve at the
pleasure of the Board.  The Board may

Page 12




delegate to such committees any or all of the authority of the Board except with respect to:

         (a)      The  approval  of any action  for which the  California  General  Corporation  Law also  requires
shareholders' approval or approval of the outstanding shares;

         (b)      The filling of vacancies on the Board or in any committee;

         (c)      The fixing of compensation of the directors for serving on the Board or on any committee;

         (d)      The amendment or repeal of Bylaws or the adoption of new Bylaws;

         (e)      The  amendment  or repeal of any  resolution  of the Board which by its  express  terms is not so
amendable or repealable;

         (f)      A distribution to the  shareholders  of the corporation  except at a rate or in a periodic amount
or within a price range determined by the Board; or

         (g)      The appointment of other committees of the Board or the members thereof.

         Any such committee,  or any member or alternate  member thereof,  must be appointed by resolution  adopted
by a majority of the exact number of  authorized  directors as  specified in Section 2 of this  Article.  The Board
shall have the power to prescribe  the manner and timing of giving of notice of regular or special  meetings of any
committee  and the manner in which  proceedings  of any committee  shall be  conducted.  In the absence of any such
prescription,  such  committee  shall  have the power to  prescribe  the manner in which its  proceedings  shall be
conducted.  Unless the Board or such  committee  shall  otherwise  provide,  the regular and special  meetings  and
other actions of any such  committee  shall be governed by the  provisions  of this Article  applicable to meetings
and actions of the Board.  Minutes shall be kept of each meeting of each committee.

                                               <b>ARTICLE IV - OFFICERS</b>

Section 1.        Officers.

         The  officers  of the  corporation  shall  be a  Chairman  of the  Board,  a Chief  Executive  Officer,  a
President,  a Chief  Financial  Officer,  one or more Vice  Presidents,  a General  Counsel,  one or more Associate
General  Counsel,  one or more  Assistant  General  Counsel,  a Controller,  one or more Assistant  Controllers,  a
Treasurer, one or more Assistant Treasurers, a Secretary and one or more

Page 13


Assistant  Secretaries,  and such other  officers as may be elected or  appointed in  accordance  with Section 5 of
this  Article.  The Board,  the Chairman of the Board,  the Chief  Executive  Officer or the President may confer a
special title upon any Vice President not specified  herein.  Any number of offices of the  corporation may be held
by the same person.

Section 2.        Election.

         The officers of the  corporation,  except such officers as may be elected or appointed in accordance  with
the  provisions  of Section 5 or Section 6 of this  Article,  shall be chosen  annually  by, and shall serve at the
pleasure  of the Board,  and shall  hold their  respective  offices  until  their  resignation,  removal,  or other
disqualification from service, or until their respective successors shall be elected.

Section 3.        Eligibility of Chairman.

         No person  shall be eligible  for the office of  Chairman  of the Board  unless such person is a member of
the Board of the corporation; any other officer may or may not be a director.

Section 4.        Removal and Resignation.

         Any  officer  may be removed,  either  with or without  cause,  by the Board at any time or by any officer
upon whom such power or removal may be  conferred  by the Board.  Any such  removal  shall be without  prejudice to
the rights, if any, of the officer under any contract of employment of the officer.

         Any officer may resign at any time by giving written notice to the corporation,  but without  prejudice to
the rights,  if any, of the corporation  under any contract to which the officer is a party.  Any such  resignation
shall take effect at the date of the  receipt of such notice or at any later time  specified  therein  and,  unless
otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 5.        Appointment of Other Officers.

         The Board may appoint such other  officers as the business of the  corporation  may require,  each of whom
shall hold office for such period,  have such  authority,  and perform such duties as are provided in the Bylaws or
as the Board may from time to time determine.

Section 6.        Vacancies.

         A vacancy in any office  because  of death,  resignation,  removal,  disqualification  or any other  cause
shall be filled at any time deemed appropriate

Page 14


by the Board in the manner prescribed in these Bylaws for regular election or appointment to such office.

Section 7.        Salaries.

         The salaries of the Chairman of the Board,  Chief Executive Officer,  President,  Chief Financial Officer,
Vice Presidents,  General  Counsel,  Controller,  Treasurer and Secretary of the corporation  shall be fixed by the
Board.  Salaries of all other  officers  shall be as approved from time to time by the Chairman of the Board or the
Chief Executive Officer.

Section 8.        Furnish Security for Faithfulness.

         Any  officer or  employee  shall,  if  required  by the Board,  furnish to the  corporation  security  for
faithfulness to the extent and of the character that may be required.

Section 9.        Chairman's Duties; Succession to Such Duties in Chairman's Absence or Disability.

         The Chairman of the Board shall  preside at all  meetings of the  shareholders  and of the Board.  Subject
to the Board,  the  Chairman  of the Board  shall have  supervisory  power over the Chief  Executive  Officer.  The
Chairman of the Board shall keep the Board fully  informed,  and shall freely consult them  concerning the business
of the corporation.

         In the absence or  disability of the Chairman of the Board,  one of the following  shall act, in the order
indicated,  as Chairman of the Board at meetings of the Board:  first, the Chief Executive Officer,  if a member of
the Board;  second, the President,  if a member of the Board;  third, a Vice President,  if any, who is a member of
the  Board,  in order of  election;  and,  fourth,  any  member of the Board  who is  designated  by the Board as a
temporary Chairman to preside at any such meeting of the Board.

Section 10.       Chief  Executive  Officer's  Duties;  Succession  to Such  Duties  in Chief  Executive  Officer's
                  Absence or Disability.

         Subject to the supervisory  powers of the Chairman of the Board, the Chief Executive  Officer shall be the
principal  executive  officer  of the  corporation  and shall  have  charge  of the  business  of the  corporation,
including the construction of its plants and properties and the operation thereof.

         In the absence or disability of the Chief  Executive  Officer,  the Chairman of the Board shall act as the
chief  executive  officer of the  corporation;  in the absence or  disability  of the Chairman of the Board and the
Chief Executive Officer, the President shall act as the chief executive officer of the corporation;

Page 15


and in the absence or disability of the Chairman of the Board,  the Chief  Executive  Officer,  and the  President,
the next in order of  election  by the Board of the Vice  Presidents  shall act as chief  executive  officer of the
corporation.

Section 11.       President's Duties.

         The  President  shall  perform  such  other  duties as the  Chairman  of the Board or the Chief  Executive
Officer shall delegate or assign to such officer.

Section 12.       Chief Financial Officer.

         The Chief Financial  Officer of the corporation  shall be the chief  consulting  officer in all matters of
financial import and shall have control over all financial matters concerning the corporation.

Section 13.       Vice Presidents' Duties.

         The Vice  Presidents  shall perform such other duties as the Chairman of the Board or the Chief  Executive
Officer shall designate.

Section 14.       General Counsel's Duties.

         The General  Counsel shall be the chief  consulting  officer of the  corporation in all legal matters and,
subject to the  Chairman  of the Board and the Chief  Executive  Officer,  shall have  control  over all matters of
legal import concerning the corporation.

Section 15.       Associate General Counsel's and Assistant General Counsel's Duties.

         The  Associate  General  Counsel  shall  perform such of the duties of the General  Counsel as the General
Counsel shall designate,  and in the absence or disability of the General Counsel,  the Associate  General Counsel,
in order of election to that office by the Board at its latest  organizational  meeting,  shall  perform the duties
of the General  Counsel.  The Assistant  General  Counsel  shall  perform such duties as the General  Counsel shall
designate.

Section 16.       Controller's Duties.

         The  Controller  shall be the chief  accounting  officer  of the  Corporation  and,  subject  to the Chief
Financial  Officer,  shall have control over all accounting  matters  concerning the  Corporation and shall perform
such other duties as the Chairman of the Board or the Chief Executive Officer shall designate.



Page 16


Section 17.       Assistant Controllers' Duties.

         The Assistant  Controllers  shall perform such of the duties of the  Controller  as the  Controller  shall
designate, and in the absence or disability of the Controller,  the Assistant Controllers,  in order of election to
that office by the Board at its latest organizational meeting, shall perform the duties of the Controller.

Section 18.       Treasurer's Duties.

         It shall be the duty of the Treasurer to keep in custody or control all money,  stocks,  bonds,  evidences
of debt,  securities  and other  items of value  that may  belong to, or be in the  possession  or control  of, the
corporation,  and to  dispose  of the same in such  manner as the  Board,  the  Chairman  of the Board or the Chief
Executive Officer may direct, and to perform all acts incident to the position of Treasurer.

Section 19.       Assistant Treasurers' Duties.

         The  Assistant  Treasurers  shall  perform  such of the duties of the  Treasurer  as the  Treasurer  shall
designate,  and in the absence or disability of the Treasurer,  the Assistant  Treasurers,  in order of election to
that office by the Board at its latest organizational  meeting,  shall perform the duties of the Treasurer,  unless
action is taken by the Board as contemplated in Section 23 of this Article.

Section 20.       Secretary's Duties.

         The  Secretary  shall  keep  or  cause  to be  kept  full  and  complete  records  of the  proceedings  of
shareholders,  the Board and its  committees  at all  meetings,  and shall affix the  corporate  seal and attest by
signing copies of any part thereof when required.

         The Secretary  shall keep, or cause to be kept, a copy of the Bylaws of the  corporation  at the principal
office in accordance with Section 213 of the California General Corporation Law.

         The Secretary  shall be the custodian of the corporate seal and shall affix it to such  instruments as may
be required.

         The  Secretary  shall  keep on hand a supply of blank  stock  certificates  of such forms as the Board may
adopt.

         The  Secretary  shall serve or cause to be served by  publication  or otherwise,  as may be required,  all
notices of meetings and of other  corporate  acts that may by law or otherwise be required to be served,  and shall
make or

Page 17


cause to be made and  filed in the  principal  office  of the  corporation,  the  necessary  certificate  or proofs
thereof.

         An affidavit of mailing of any notice of a  shareholders'  meeting or of any report,  in  accordance  with
the provisions of Section 601(b) of the California  General  Corporation  Law,  executed by the Secretary  shall be
prima facie evidence of the fact that such notice or report had been duly given.

         The Secretary may, with the Chairman of the Board, the Chief Executive Officer,  the President,  or a Vice
President,  sign certificates of ownership of stock in the corporation,  and shall cause all certificates so signed
to be delivered to those entitled thereto.

         The Secretary shall keep all records required by the California General Corporation Law.

         The Secretary shall  generally  perform the duties usual to the office of secretary of  corporations,  and
such other duties as the Chairman of the Board or the Chief Executive Officer shall designate.

Section 21.       Assistant Secretaries' Duties.

         Assistant  Secretaries  shall  perform  such  of the  duties  of the  Secretary  as  the  Secretary  shall
designate, and in the absence or disability of the Secretary,  the Assistant Secretaries,  in the order of election
to that  office by the Board at its latest  organizational  meeting,  shall  perform  the duties of the  Secretary,
unless action is taken by the Board as contemplated in Sections 22 and 23 of this Article.

Section 22.       Secretary Pro Tempore.

         At any meeting of the Board or of the  shareholders  from which the  Secretary is absent,  a Secretary pro
tempore may be appointed and act.

Section 23.       Election of Acting Treasurer or Acting Secretary.

         The Board may elect an Acting  Treasurer,  who shall  perform all the duties of the  Treasurer  during the
absence or  disability of the  Treasurer,  and who shall hold office only for such a term as shall be determined by
the Board.

         The Board may elect an Acting  Secretary,  who shall  perform all the duties of the  Secretary  during the
absence or  disability of the  Secretary,  and who shall hold office only for such a term as shall be determined by
the Board.

         Whenever the Board shall elect either an Acting  Treasurer or Acting  Secretary,  or both, the officers of
the corporation as set forth in Section 1 of this

Page 18




Article shall include, as if therein specifically set out, an Acting Treasurer or an Acting Secretary, or both.

Section 24.       Performance of Duties.

         Officers  shall  perform  the  duties of their  respective  offices  as stated in these  Bylaws,  and such
additional duties as the Board shall designate.


                                           <b>ARTICLE V - OTHER PROVISIONS</b>

Section 1.        Inspection of Corporate Records.

         (a)      A shareholder or  shareholders  holding at least five percent in the aggregate of the outstanding
voting shares of the  corporation  or who hold at least one percent of such voting shares and have filed a Schedule
14B with the United  States  Securities  and  Exchange  Commission  relating to the  election of  directors  of the
corporation shall have an absolute right to do either or both of the following:

                  (i)      Inspect  and copy the record of  shareholders'  names and  addresses  and  shareholdings
during usual business hours upon five business days' prior written demand upon the corporation; or

                  (ii)     Obtain from the transfer  agent, if any, for the  corporation,  upon five business days'
prior  written  demand and upon the tender of its usual  charges for such a list (the amount of which charges shall
be stated to the shareholder by the transfer agent upon request),  a list of the shareholders'  names and addresses
who are entitled to vote for the election of directors and their  shareholdings,  as of the most recent record date
for which it has been compiled or as of a date specified by the shareholder subsequent to the date of demand.

         (b)      The record of  shareholders  shall also be open to inspection  and copying by any  shareholder or
holder  of a voting  trust  certificate  at any time  during  usual  business  hours  upon  written  demand  on the
corporation,  for a purpose  reasonably  related to such holder's  interest as a shareholder  or holder of a voting
trust certificate.

         (c)      The accounting  books and records and minutes of proceedings  of the  shareholders  and the Board
and committees of the Board shall be open to inspection  upon written demand on the  corporation of any shareholder
or holder of a voting  trust  certificate  at any  reasonable  time  during  usual  business  hours,  for a purpose
reasonably related to such holder's interests as a shareholder or as a holder of such voting trust certificate.



Page 19


         (d)      Any  such  inspection  and  copying  under  this  Article  may be made in  person  or by agent or
attorney.

Section 2.        Inspection of Bylaws.

         The  corporation  shall keep in its principle  office the original or a copy of these Bylaws as amended to
date, which shall be open to inspection by shareholders at all reasonable times during office hours.

Section 3.        Contracts and Other Instruments, Loans, Notes and Deposits of Funds.

         The Chairman of the Board, the Chief Executive Officer, the President,  or a Vice President,  either alone
or with the  Secretary  or an  Assistant  Secretary,  or the  Secretary  alone,  shall  execute  in the name of the
corporation  such written  instruments  as may be authorized  by the Board and,  without  special  direction of the
Board,  such  instruments  as  transactions  of the ordinary  business of the  corporation  may require  and,  such
officers without the special  direction of the Board may  authenticate,  attest or countersign any such instruments
when deemed  appropriate.  The Board may authorize any person,  persons,  entity,  entities,  attorney,  attorneys,
attorney-in-fact,  attorneys-in-fact,  agent or agents,  to enter into any  contract  or execute  and  deliver  any
instrument  in the name of and on behalf of the  corporation,  and such  authority  may be general or  confined  to
specific instances.

         No loans shall be contracted on behalf of the corporation and no evidences of such  indebtedness  shall be
issued in its name unless  authorized by the Board as it may direct.  Such  authority may be general or confined to
specific instances.

         All checks,  drafts,  or other similar orders for the payment of money,  notes, or other such evidences of
indebtedness  issued in the name of the  corporation  shall be signed by such officer or officers,  agent or agents
of the  corporation and in such manner as the Board,  the Chairman of the Board or the Chief Executive  Officer may
direct.

         Unless  authorized  by the Board or these  Bylaws,  no officer,  agent,  employee  or any other  person or
persons  shall have any power or authority to bind the  corporation  by any contract or engagement or to pledge its
credit or to render it liable for any purpose or amount.

         All funds of the  corporation  not otherwise  employed  shall be deposited from time to time to the credit
of the corporation in such banks, trust companies, or other depositories as the Board may direct.



Page 20


Section 4.        Certificates of Stock.

         Every holder of shares of the  corporation  shall be entitled to have a certificate  signed in the name of
the corporation by the Chairman of the Board, the Chief Executive Officer,  the President,  or a Vice President and
by the Treasurer or an Assistant  Treasurer or the Secretary or an Assistant  Secretary,  certifying  the number of
shares  and  the  class  or  series  of  shares  owned  by the  shareholder.  Any or all of the  signatures  on the
certificate  may be facsimile.  In case any officer,  transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a  certificate  shall have ceased to be such  officer,  transfer  agent or registrar
before  such  certificate  is issued,  it may be issued by the  corporation  with the same effect as if such person
were an officer, transfer agent or registrar at the date of issue.

         Certificates  for shares may be used prior to full payment under such  restrictions  and for such purposes
as the Board may provide;  provided,  however,  that on any certificate issued to represent any partly paid shares,
the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

         Except as provided in this Section,  no new  certificate  for shares shall be issued in lieu of an old one
unless the latter is surrendered  and canceled at the same time. The Board may,  however,  if any  certificate  for
shares is alleged to have been lost,  stolen or  destroyed,  authorize  the issuance of a new  certificate  in lieu
thereof,  and the  corporation  may  require  that  the  corporation  be given a bond or  other  adequate  security
sufficient  to indemnify  it against any claim that may be made  against it  (including  expense or  liability)  on
account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate.

Section 5.        Transfer Agent, Transfer Clerk and Registrar.

         The Board may, from time to time,  appoint  transfer  agents,  transfer  clerks,  and stock  registrars to
transfer  and  register  the  certificates  of the  capital  stock  of the  corporation,  and may  provide  that no
certificate of capital stock shall be valid without the signature of the stock  transfer  agent or transfer  clerk,
and stock registrar.

Section 6.        Representation of Shares of Other Corporations.

         The Chairman of the Board,  the Chief  Executive  Officer or any other  officer or officers  authorized by
the Board,  the Chairman of the Board or the Chief  Executive  Officer are each  authorized to vote,  represent and
exercise  on behalf of the  corporation  all  rights  incident  to any and all shares of any other  corporation  or
corporations  standing in the name of the  corporation.  The authority  herein  granted may be exercised  either by
any such officer in person or

Page 21


by any other person authorized so to do by proxy or power of attorney duly executed by said officer.

Section 7.        Stock Purchase Plans.

         The  corporation  may adopt and carry out a stock  purchase  plan or  agreement  or stock  option  plan or
agreement  providing for the issue and sale for such  consideration as may be fixed of its unissued  shares,  or of
issued shares  acquired,  to one or more of the employees or directors of the  corporation or of a subsidiary or to
a trustee on their behalf and for the payment for such shares in  installments  or at one time, and may provide for
such shares in  installments  or at one time, and may provide for aiding any such persons in paying for such shares
by compensation for services rendered, promissory notes or otherwise.

         Any such stock  purchase  plan or agreement or stock  option plan or  agreement  may include,  among other
features,  the fixing of eligibility for participation  therein, the class and price of shares to be issued or sold
under the plan or  agreement,  the number of shares which may be  subscribed  for, the method of payment  therefor,
the  reservation of title until full payment  therefor,  the effect of the  termination of employment and option or
obligation on the part of the  corporation  to repurchase the shares upon  termination of employment,  restrictions
upon  transfer of the  shares,  the time  limits of and  termination  of the plan,  and any other  matters,  not in
violation  of  applicable  law,  as may be  included  in the plan as  approved  or  authorized  by the Board or any
committee of the Board.

Section 8.        Fiscal Year and Subdivisions.

         The  calendar  year shall be the  corporate  fiscal  year of the  corporation.  For the  purpose of paying
dividends,  for making reports and for the convenient  transaction  of the business of the  corporation,  the Board
may divide the fiscal year into appropriate subdivisions.

Section 9.        Construction and Definitions.

         Unless the context  otherwise  requires,  the general  provisions,  rules of construction  and definitions
contained in the General Provisions of the California  Corporations Code and in the California General  Corporation
Law shall govern the construction of these Bylaws.




Page 22




                                           <b>ARTICLE VI - INDEMNIFICATION</b>

Section 1.        Indemnification of Directors and Officers.

         Each  person  who  was or is a  party  or is  threatened  to be  made a  party  to or is  involved  in any
threatened,  pending or completed action,  suit or proceeding,  formal or informal,  whether brought in the name of
the  corporation  or  otherwise  and  whether  of  a  civil,  criminal,   administrative  or  investigative  nature
(hereinafter  a  "proceeding"),  by reason  of the fact that he or she,  or a person of whom he or she is the legal
representative,  is or was a director  or officer of the  corporation  or is or was  serving at the  request of the
corporation as a director,  officer,  employee or agent of another corporation or of a partnership,  joint venture,
trust or other  enterprise,  including  service with respect to employee  benefit plans,  whether the basis of such
proceeding is an alleged  action or inaction in an official  capacity or in any other  capacity  while serving as a
director or officer,  shall,  subject to the terms of any agreement  between the  corporation  and such person,  be
indemnified and held harmless by the  corporation to the fullest extent  permissible  under  California law and the
corporation's Articles of Incorporation,  against all costs, charges,  expenses,  liabilities and losses (including
attorneys' fees,  judgments,  fines,  ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection  therewith,  and such  indemnification  shall continue
as to a person who has  ceased to be a director  or  officer  and shall  inure to the  benefit of his or her heirs,
executors and administrators;  provided,  however, that (A) the corporation shall indemnify any such person seeking
indemnification  in  connection  with a  proceeding  (or  part  thereof)  initiated  by  such  person  only if such
proceeding (or part thereof) was authorized by the Board of the  corporation;  (B) the corporation  shall indemnify
any such person seeking  indemnification  in connection with a proceeding (or part thereof) other than a proceeding
by or in the  name of the  corporation  to  procure  a  judgment  in its  favor  only if any  settlement  of such a
proceeding is approved in writing by the  corporation;  (C) that no such person shall be indemnified  (i) except to
the  extent  that the  aggregate  of losses to be  indemnified  exceeds  the  amount of such  losses  for which the
director or officer is paid pursuant to any directors' and officers'  liability  insurance policy maintained by the
corporation;  (ii) on account of any suit in which  judgment is rendered  against such person for an  accounting of
profits made from the purchase or sale by such person of securities of the  corporation  pursuant to the provisions
of Section  16(b) of the  Securities  Exchange  Act of 1934 and  amendments  thereto or similar  provisions  of any
federal,  state or local  statutory law; (iii) if a court of competent  jurisdiction  finally  determines  that any
indemnification  hereunder is unlawful;  and (iv) as to circumstances in which indemnity is expressly prohibited by
Section 317 of the  California  General  Corporation  Law;  and (D) that no such person shall be  indemnified  with
regard to any action brought by or in the right of the  corporation  for breach of duty to the  corporation and its
shareholders (a) for acts or omissions involving  intentional  misconduct or knowing and culpable violation of law;
(b) for acts or omissions

Page 23


that the director or officer  believes to be contrary to the best interests of the corporation or its  shareholders
or that  involve the absence of good faith on the part of the  director or officer;  (c) for any  transaction  from
which the  director  or  officer  derived an  improper  personal  benefit;  (d) for acts or  omissions  that show a
reckless  disregard for the director's or officer's duty to the corporation or its  shareholders  in  circumstances
in which the director or officer was aware,  or should have been aware,  in the ordinary  course of performing  his
or her duties, of a risk of serious injury to the corporation or its  shareholders;  (e) for acts or omissions that
constitute  an unexcused  pattern of  inattention  that amounts to an  abdication  of the  director's  or officer's
duties to the  corporation  or its  shareholders;  and (f) for costs,  charges,  expenses,  liabilities  and losses
arising  under  Section  310 or 316 of the  California  General  Corporation  Law.  The  right  to  indemnification
conferred in this Article  shall  include the right to be paid by the  corporation  expenses  incurred in defending
any proceeding in advance of its final disposition;  provided,  however, that if the California General Corporation
Law  permits the payment of such  expenses  incurred by a director or officer in his or her  capacity as a director
or officer  (and not in any other  capacity in which  service was or is rendered by such person while a director or
officer,  including,  without limitation,  service to an employee benefit plan) in advance of the final disposition
of a proceeding,  such advances  shall be made only upon delivery to the  corporation of an  undertaking,  by or on
behalf of such director or officer,  to repay all amounts to the  corporation if it shall be ultimately  determined
that such person is not entitled to be indemnified.

Section 2.        Indemnification of Employees and Agents.

         A person who was or is a party or is  threatened  to be made a party to or is involved  in any  proceeding
by reason of the fact that he or she is or was an  employee  or agent of the  corporation  or is or was  serving at
the request of the  corporation as an employee or agent of another  enterprise,  including  service with respect to
employee benefit plans,  whether the basis of such action is an alleged action or inaction in an official  capacity
or in any other  capacity  while  serving as an  employee  or agent,  may,  subject  to the terms of any  agreement
between the  corporation  and such person,  be  indemnified  and held  harmless by the  corporation  to the fullest
extent permitted by California law and the  corporation's  Articles of Incorporation,  against all costs,  charges,
expenses,  liabilities and losses,  (including attorneys' fees,  judgments,  fines, ERISA excise taxes or penalties
and amounts  paid or to be paid in  settlement)  reasonably  incurred  or  suffered  by such  person in  connection
therewith.

Section 3.        Right of Directors and Officers to Bring Suit.

         If a claim under Section 1 of this Article is not paid in full by the  corporation  within 30 days after a
written  claim has been received by the  corporation,  the claimant may at any time  thereafter  bring suit against
the corporation to recover the unpaid amount of the claim and, if successful in whole

Page 24


or in part,  the  claimant  shall also be entitled to be paid the expense of  prosecuting  such claim.  Neither the
failure of the corporation  (including its Board,  independent  legal counsel,  or its shareholders) to have made a
determination  prior to the commencement of such action that  indemnification of the claimant is permissible in the
circumstances  because he or she has met the applicable  standard of conduct,  if any, nor an actual  determination
by the corporation  (including its Board,  independent legal counsel,  or its  shareholders)  that the claimant has
not met the  applicable  standard  of  conduct,  shall be a defense to the action or create a  presumption  for the
purpose of an action that the claimant has not met the applicable standard of conduct.

Section 4.        Successful Defense.

         Notwithstanding  any other  provision of this  Article,  to the extent that a director or officer has been
successful on the merits or otherwise  (including  the dismissal of an action  without  prejudice or the settlement
of a proceeding or action  without  admission of liability) in defense of any  proceeding  referred to in Section 1
of this  Article or in  defense  of any claim,  issue or matter  therein,  he or she shall be  indemnified  against
expenses (including attorneys' fees) actually and reasonably incurred in  connection therewith.

Section 5.        Non-Exclusivity of Rights.

         The right to  indemnification  provided by this  Article  shall not be  exclusive of any other right which
any  person  may  have  or  hereafter  acquire  under  any  statute,  bylaw,  agreement,  vote of  shareholders  or
disinterested directors or otherwise.

Section 6.        Insurance.

         The  corporation  may maintain  insurance,  at its expense,  to protect itself and any director,  officer,
employee  or  agent  of the  corporation  or  another  corporation,  partnership,  joint  venture,  trust  or other
enterprise  against  any  expense,  liability  or loss,  whether  or not the  corporation  would  have the power to
indemnify such person against such expense, liability or loss under the California General Corporation Law.

Section 7.        Expenses as a Witness.

         To the extent  that any  director,  officer,  employee  or agent of the  corporation  is by reason of such
position,  or a position with another entity at the request of the  corporation,  a witness in any action,  suit or
proceeding,  he or she shall be indemnified  against all costs and expenses actually and reasonably incurred by him
or her on his or her behalf in connection therewith.



Page 25




Section 8.        Indemnity Agreements.

         The  corporation  may  enter  into  agreements  with  any  director,  officer,  employee  or  agent of the
corporation  providing  for  indemnification  to the  fullest  extent  permissible  under  the  California  General
Corporation Law and the corporation's Articles of Incorporation.

Section 9.        Separability.

         Each and every  paragraph,  sentence,  term and provision of this Article is separate and distinct so that
if any paragraph,  sentence,  term or provision hereof shall be held to be invalid or unenforceable for any reason,
such  invalidity  or  unenforceability  shall not affect the  validity or  enforceability  of any other  paragraph,
sentence,  term or provision hereof.  To the extent required,  any paragraph,  sentence,  term or provision of this
Article may be modified by a court of competent  jurisdiction  to preserve its validity and to provide the claimant
with,  subject  to the  limitations  set forth in this  Article  and any  agreement  between  the  corporation  and
claimant, the broadest possible indemnification permitted under applicable law.

Section 10.       Effect of Repeal or Modification.

         Any repeal or modification of this Article shall not adversely  affect any right of  indemnification  of a
director  or officer  existing at the time of such repeal or  modification  with  respect to any action or omission
occurring prior to such repeal or modification.


                                        <b>ARTICLE VII - EMERGENCY PROVISIONS</b>

Section 1.        General.

         The  provisions  of this  Article  shall be  operative  only during a national  emergency  declared by the
President of the United States or the person  performing the President's  functions,  or in the event of a nuclear,
atomic  or other  attack  on the  United  States  or a  disaster  making it  impossible  or  impracticable  for the
corporation to conduct its business  without  recourse to the provisions of this Article.  Said  provisions in such
event shall  override all other Bylaws of the  corporation  in conflict with any  provisions  of this Article,  and
shall  remain  operative  so long as it remains  impossible  or  impracticable  to  continue  the  business  of the
corporation  otherwise,  but  thereafter  shall be  inoperative;  provided  that all  actions  taken in good  faith
pursuant to such  provisions  shall  thereafter  remain in full force and effect unless and until revoked by action
taken pursuant to the provisions of the Bylaws other than those contained in this Article.



Page 26


Section 2.        Unavailable Directors.

         All directors of the  corporation  who are not available to perform their duties as directors by reason of
physical  or mental  incapacity  or for any other  reason or who are  unwilling  to perform  their  duties or whose
whereabouts  are  unknown  shall  automatically  cease to be  directors,  with like  effect as if such  persons had
resigned as directors, so long as such unavailability continues.

Section 3.        Authorized Number of Directors.

         The authorized  number of directors  shall be the number of directors  remaining after  eliminating  those
who have ceased to be  directors  pursuant to Section 2 of this  Article,  or the minimum  number  required by law,
whichever number is greater.

Section 4.        Quorum.

         The number of directors  necessary to constitute a quorum shall be one-third of the  authorized  number of
directors as specified in the foregoing  Section,  or such other minimum  number as,  pursuant to the law or lawful
decree then in force, it is possible for the Bylaws of a corporation to specify.

Section 5.        Creation of Emergency Committee.

         In the event the number of directors  remaining  after  eliminating  those who have ceased to be directors
pursuant to Section 2 of this  Article is less than the minimum  number of  authorized  directors  required by law,
then  until  the  appointment  of  additional  directors  to make up such  required  minimum,  all the  powers  and
authorities  which the Board could by law  delegate,  including  all powers and  authorities  which the Board could
delegate to a committee,  shall be  automatically  vested in an emergency  committee,  and the emergency  committee
shall thereafter  manage the affairs of the corporation  pursuant to such powers and authorities and shall have all
other powers and  authorities  as may by law or lawful decree be conferred on any person or body of persons  during
a period of emergency.

Section 6.        Constitution of Emergency Committee.

         The emergency  committee  shall consist of all the directors  remaining after  eliminating  those who have
ceased to be directors pursuant to Section 2 of this Article,  provided that such remaining  directors are not less
than  three in  number.  In the event  such  remaining  directors  are less  than  three in  number  the  emergency
committee  shall consist of three persons,  who shall be the remaining  director or directors and either one or two
officers or employees of the  corporation,  as the  remaining  director or directors may in writing  designate.  If
there is no remaining director, the emergency committee shall consist of the

Page 27


three most senior officers of the  corporation  who are available to serve,  and if and to the extent that officers
are not  available,  the most senior  employees of the  corporation.  Seniority  shall be  determined in accordance
with any  designation  of  seniority  in the minutes of the  proceedings  of the Board,  and in the absence of such
designation,  shall be determined by rate of remuneration.  In the event that there are no remaining  directors and
no officers or employees of the  corporation  available,  the  emergency  committee  shall consist of three persons
designated in writing by the  shareholder  owning the largest number of shares of record as of the date of the last
record date.

Section 7.        Powers of Emergency Committee.

         The  emergency  committee,  once  appointed,  shall  govern  its own  procedures  and shall  have power to
increase  the number of members  thereof  beyond the  original  number,  and in the event of a vacancy or vacancies
therein,  arising at any time, the remaining  member or members of the emergency  committee shall have the power to
fill such  vacancy  or  vacancies.  In the event at any time after its  appointment  all  members of the  emergency
committee shall die or resign or become  unavailable to act for any reason  whatsoever,  a new emergency  committee
shall be appointed in accordance with the foregoing provisions of this Article.

Section 8.        Directors Becoming Available.

         Any person who has ceased to be a director  pursuant to the  provisions  of Section 2 of this  Article and
who  thereafter  becomes  available to serve as a director  shall  automatically  become a member of the  emergency
committee.

Section 9.        Election of Board of Directors.

         The  emergency  committee  shall,  as soon after its  appointment  as is  practicable,  take all requisite
action to secure the election of a board of  directors,  and upon such election all the powers and  authorities  of
the emergency committee shall cease.

Section 10.       Termination of Emergency Committee.

         In the event, after the appointment of an emergency  committee,  a sufficient number of persons who ceased
to be directors  pursuant to Section 2 of this Article become available to serve as directors,  so that if they had
not ceased to be directors  as  aforesaid,  there would be enough  directors to  constitute  the minimum  number of
directors  required by law, then all such persons shall  automatically be deemed to be reappointed as directors and
the powers and authorities of the emergency committee shall be at an end.



Page 28




                                             <b>ARTICLE VIII - AMENDMENTS</b>

Section 1.        Amendments.

         These Bylaws may be amended or repealed  either by approval of the  outstanding  shares or by the approval
of the Board;  provided,  however,  that a Bylaw  specifying or changing a fixed number of directors or the maximum
or minimum  number or  changing  from a fixed to a variable  Board or vice versa may only be adopted by approval of
the  outstanding  shares.  The exact number of directors  within the maximum and minimum number  specified in these
Bylaws may be amended by the Board alone.



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<DOCUMENT>
<TYPE>EX-4.13
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<DESCRIPTION>NINETY-EIGHT SUPPLEMENTAL INDENTURE
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Exhibit 4.13</TITLE>
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                                       NINETY-EIGHTH SUPPLEMENTAL INDENTURE








                                        Southern California Edison Company

                                                        to

                                               The Bank of New York

                                                        and

                                                  D. G. Donovan,

                                                     Trustees







                                           DATED AS OF FEBRUARY 15, 2003







Page 1


                  This Ninety-Eighth Supplemental Indenture, dated as of the 15th day of February, 2003, is
entered into by and between Southern California Edison Company (between 1930 and 1947 named "Southern California
Edison Company Ltd."), a corporation duly organized and existing under and by virtue of the laws of the State of
California and having its principal office and mailing address at 2244 Walnut Grove Avenue, in the City of
Rosemead, County of Los Angeles, State of California 91770, and qualified to do business in the States of
Arizona, New Mexico, and Nevada (hereinafter sometimes termed the "Company"), and The Bank of New York, a
corporation duly organized and existing under and by virtue of the laws of the State of New York, acting through
its agent, BNY Midwest Trust Company with its principal office and mailing address at 2 North LaSalle Street, in
the City of Chicago, State of Illinois 60602 (successor Trustee to Harris Trust and Savings Bank), and D. G.
Donovan of 2 North LaSalle Street, in the City of Chicago, State of Illinois 60602 (successor Trustee to R. G.
Mason, who was successor Trustee to Wells Fargo Bank, National Association, which was successor Trustee to
Security Pacific National Bank, formerly named Security First National Bank and Security-First National Bank of
Los Angeles, successor, by consolidation and merger, to Pacific-Southwest Trust &amp; Savings Bank), as Trustees
(hereinafter sometimes termed the "Trustees");

                  WITNESSETH:

                  WHEREAS, the Company heretofore executed and delivered to said Harris Trust and Savings Bank
and said Pacific-Southwest Trust &amp; Savings Bank, Trustees, a certain Indenture of Mortgage or Deed of Trust dated
as of October 1, 1923, which said Indenture was duly filed for record and recorded in the offices of the
respective recorders of the following counties:  in the State of California-Fresno County, Volume 397 of Official
Records, page 1; Imperial County, Book 1174 of Official Records, page 966; Inyo County, Volume 154 of Official
Records, page 417; Kern County, Book 379 of Trust Deeds, page 196; Kings County, Volume 84 of Deeds, page 1; Los
Angeles County, Book 2963 of Official Records, page 1; Madera County, Volume 9 of Official Records, page 63;
Merced County, Volume 363 of Official Records, page 1; Modoc County, Volume 230 of Official Records, page 119 et
seq.; Mono County, Volume 64 of Official Records, page 29; Orange County, Book 496 of Deeds, page 1; Riverside
County, Book 594 of Deeds, page 252; San Bernardino County, Book 825 of Deeds, page 1; San Diego County, Series 5
Book 1964, page 84061; Santa Barbara County, Book 229 of Deeds, page 30; Stanislaus County, Volume 465 of
Official Records, page 370; Tulare County, Volume 50 of Official Records, page 1; Tuolumne County, Volume 274 of
Official Records, page 568; and Ventura County, Volume 33 of Official Records, page 1; in the State of
Nevada-Clark County, Book 8 of Mortgages; Churchill County, Book 40 of Official Records, page 235; Lyon County,
Book 39 of Mortgages, page 1; Mineral County, Book 13 of Official Records, page 794; Pershing County, Book 15 of
Official Records, page 612; and Washoe County, Book 83 of Mortgages, page 301; in the State of Arizona-La Paz
County, Instrument No. 83-000212 of Official Records; Mohave County, Book 11 of Realty Mortgages; Maricopa
County, Docket 4349 of Official Records, page 197; and Yuma County, Docket 369, page 310; and in the offices of
the county clerks of the following counties in the State of New Mexico-McKinley County, Book Mtg. 50, page 187
and filed as Document No. 10536 in the Chattel Records; and San Juan County, Book Mtg. 630, page 13 and filed as
Document No. 17838 in the Chattel Records (hereinafter referred to as the "Original Indenture"), to secure the
payment of the principal of and interest on all bonds of the Company at any time outstanding thereunder, and (as
to certain such filings or recordings) the principal of and interest on all Debentures of 1919 (referred to in
the Original Indenture and now retired) outstanding; and

                  WHEREAS, the Company has heretofore executed and delivered to the Trustees ninety-seven certain
supplemental Indentures, dated, respectively, as of March 1, 1927, April 25, 1935, June 24, 1935, September 1,
1935, August 15, 1939, September 1, 1940, January 15, 1948, August 15, 1948, February 15, 1951, August 15, 1951,
August 15, 1953, August 15, 1954, April 15, 1956, February 15, 1957, July 1, 1957, August 15, 1957, August 15,
1958, January 15, 1960, August 15, 1960, April 1, 1961, May 1, 1962, October 15, 1962, May 15, 1963, February 15,
1964, February 1, 1965, May 1, 1966, August 15, 1966, May 1, 1967, February 1, 1968, January 15, 1969, October 1,
1969, December 1, 1970, September 15, 1971, August 15, 1972, February 1, 1974, July 1, 1974, November 1, 1974,
March 1, 1975, March 15, 1976, July 1, 1977, November 1, 1978, June 15, 1979, September 15, 1979, October 1,
1979, April 1, 1980, November 15, 1980, May 15, 1981, August 1, 1981, December 1, 1981, January 16, 1982, April
15, 1982,


Page 2


November 1, 1982, November 1, 1982, January 1, 1983, May 1, 1983, December 1, 1984, March 15, 1985, October 1,
1985, October 15, 1985, March 1, 1986, March 15, 1986, April 15, 1986, April 15, 1986, July 1, 1986, September 1,
1986, September 1, 1986, December 1, 1986, July 1, 1987, October 15, 1987, November 1, 1987, February 15, 1988,
April 15, 1988, July 1, 1988, August 15, 1988, September 15, 1988, January 15, 1989, May 1, 1990, June 15, 1990,
August 15, 1990, December 1, 1990, April 1, 1991, May 1, 1991, June 1, 1991, December 1, 1991, February 1, 1992,
April 1, 1992, July 1, 1992, July 15, 1992, December 1, 1992, January 15, 1993, March 1, 1993, June 1, 1993, June
15, 1993, July 15, 1993, September 1, 1993, October 1, 1993, and February 21, 2002, which modify, amend and
supplement the Original Indenture, such Original Indenture, as so modified, amended and supplemented, being
hereinafter referred to as the "Amended Indenture"; and

                  WHEREAS, there have been issued and are now outstanding and entitled to the benefits of the
Amended Indenture, First and Refunding Mortgage Bonds as follows:

              Series                        Due Date                       Principal Amount
              ------                        --------                       ----------------
             86D,E,F&amp;G                        2008                              196,000,000
             87A,B,C&amp;D                        2008                              135,000,000
                91A                           2021                               48,920,000
                91D                           2017                               28,585,000
                92C                           2027                               30,000,000
                92E                           2024                              190,000,000
                93C                           2026                              300,000,000
                93D                           2023                              154,540,000
                93F                           2003                              125,000,000
                93G                           2025                              225,000,000
                93H                           2004                              125,000,000
                93I                           2018                              200,000,000
               2002B                          2005                              700,000,000
               2002C                          2004                              300,000,000

                  WHEREAS, the Company proposes presently to issue in fully registered form only, without
coupons, $965,965,000 aggregate principal amount of a new series of the Company's First and Refunding Mortgage
Bonds, pursuant to a resolution of the Board of Directors or the Executive Committee of the Board of Directors of
the Company, said new series to be designated as Series 2003A (the "Bonds"), and the Company's authorized bonded
indebtedness has been increased to provide for the issuance of said Bonds; and

                  WHEREAS, the Company has acquired real and personal property since the execution and delivery
of the Ninety-Seventh Supplemental Indenture which, with certain exceptions, is subject to the lien of the
Amended Indenture by virtue of the after-acquired property clauses and other clauses thereof, and the Company now
desires in this Ninety-Eighth Supplemental Indenture (hereinafter sometimes referred to as this "Supplemental
Indenture") expressly to convey and confirm unto the Trustees all properties, whether real, personal or mixed,
now owned by the Company (with the exceptions hereinafter noted); and

                  WHEREAS, for the purpose of further safeguarding the rights and interests of the holders of
bonds under the Amended Indenture, the Company desires, in addition to such conveyance, to enter into certain
covenants with the Trustees; and

                  WHEREAS, the making, executing, acknowledging, delivering and recording of this Supplemental
Indenture have been duly authorized by proper corporate action of the Company, and the Trustees have each duly
determined to execute and accept this Supplemental Indenture;

                  NOW, THEREFORE, in order further to secure the payment of the principal of and interest on all
of the bonds of the Company at any time outstanding under the Amended Indenture, as from time to time amended and
supplemented, including specifically, but without limitation, the First and Refunding Mortgage Bonds, Series 86D,
Series 86E, Series 86F, Series 86G, Series 87A, Series 87B, Series 87C,


Page 3


Series 87D, Series 91A, Series 91D, Series 92C, Series 92E, Series 93C, Series 93D, Series 93F, Series 93G,
Series 93H, Series 93I, Series 2002B, and Series 2002C, referred to above, all of said bonds having been
heretofore issued and being now outstanding, and the Bonds, of the aggregate principal amount of $965,965,000, to
be presently issued and outstanding; and to secure the performance and observance of each and every of the
covenants and agreements contained in the Amended Indenture, and without in any way limiting (except as
hereinafter specifically provided) the generality or effect of the Original Indenture or any of said Supplemental
Indentures executed and delivered prior to the execution and delivery of this Supplemental Indenture insofar as
by any provision of any said Indenture any of the properties hereinafter referred to are subject to the lien and
operation thereof, but to such extent (except as hereinafter specifically provided) confirming such lien and
operation, and for and in consideration of the premises, and of the sum of One Dollar ($1.00) to the Company duly
paid by the Trustees, at or upon the ensealing and delivery of these presents (the receipt whereof is hereby
acknowledged), the Company has executed and delivered this Supplemental Indenture and has granted, bargained,
sold, aliened, released, conveyed, assigned, transferred, warranted, mortgaged, and pledged, and by these
presents does grant, bargain, sell, alien, release, convey, assign, transfer, warrant, mortgage, and pledge unto
the Trustees, their successors in trust and their assigns forever, in trust, with power of sale, all of the
following:

                  All and singular the plants, properties (including goods which are or are to become fixtures),
equipment, and generating, transmission, feeding, storing, and distributing systems, and facilities and utilities
of the Company in the Counties of Fresno, Imperial, Inyo, Kern, Kings, Los Angeles, Madera, Merced, Modoc, Mono,
Orange, Riverside, San Bernardino, San Diego, Santa Barbara, Stanislaus, Tulare, Tuolumne, and Ventura, in the
State of California, Churchill, Clark, Lyon, Mineral, Pershing, and Washoe, in the State of Nevada, La Paz,
Maricopa, and Mohave, in the State of Arizona, and McKinley and San Juan, in the State of New Mexico, and
elsewhere either within or without said States, with all and singular the franchises, ordinances, grants,
easements, rights-of-way, permits, privileges, contracts, appurtenances, tenements, and other rights and property
thereunto appertaining or belonging, as the same now exist and as the same or any and all parts thereof may
hereafter exist or be improved, added to, enlarged, extended or acquired in said Counties, or elsewhere either
within or without said States;

                  Together with, to the extent permitted by law, all other properties, real, personal, and mixed
(including goods which are or are to become fixtures), except as herein expressly excepted, of every kind,
nature, and description, including those kinds and classes of property described or referred to (whether
specifically or generally or otherwise) in the Original Indenture and/or in any one or more of the indentures
supplemental thereto, now or hereafter owned, possessed, acquired or enjoyed by or in any manner appertaining to
the Company, and the reversion and reversions, remainder and remainders, tolls, incomes, revenues, rents, issues,
and profits thereof; it being hereby intended and expressly agreed that all the business, franchises, and
properties, real, personal, and mixed (except as herein expressly excepted), of every kind and nature whatsoever
and wherever situated, now owned, possessed, or enjoyed, and which may hereafter be in anywise owned, possessed,
acquired, or enjoyed by the Company, shall be as fully embraced within the provisions hereof and be subject to
the lien created hereby and by the Original Indenture and said supplemental indentures executed and delivered
prior to the execution and delivery of this Supplemental Indenture, as if said properties were particularly
described herein;

                  Saving and excepting, however, anything contained herein or in the granting clauses of the
Original Indenture, or of the above mentioned Indentures supplemental thereto, or elsewhere contained in the
Original Indenture or said supplemental Indentures, to the contrary notwithstanding, from the property hereby or
thereby mortgaged and pledged, all of the following property (whether now owned by the Company or hereafter
acquired by it):  all bills, notes, warrants, customers' service and extension deposits, accounts receivable,
cash on hand or deposited in banks or with any governmental agency, contracts, choses in action, operating
agreements and leases to others (as distinct from the property leased and without limiting any rights of the
Trustees with respect thereto under any of the provisions of the Amended Indenture), all bonds, obligations,
evidences of indebtedness, shares of stock and other securities, and certificates or evidences of interest
therein, all office furniture and office equipment, motor vehicles and tools therefor, all materials, goods,
merchandise, and supplies acquired for the purpose of sale in the ordinary course of business or for consumption
in the operation of any property of the Company, and all electrical


Page 4


energy and other materials or products produced by the Company for sale, distribution, or use in the ordinary
conduct of its business--other than any of the foregoing which has been or may be specifically transferred or
assigned to or pledged or deposited with the Trustees, or any of them, under the Amended Indenture, or required
by the provisions of the Amended Indenture, so to be; provided, however, that if, upon the occurrence of a
default under the Amended Indenture, the Trustees, or any of them, or any receiver appointed under the Amended
Indenture, shall enter upon and take possession of the mortgaged and pledged property, the Trustees, or such
Trustee or such receiver may, to the extent permitted by law, at the same time likewise take possession of any
and all of the property excepted by this paragraph then on hand which is used or useful in connection with the
business of the Company, and collect, impound, use, and administer the same to the same extent as if such
property were part of the mortgaged and pledged property and had been specifically mortgaged and pledged
hereunder, unless and until such default shall be remedied or waived and possession of the mortgaged and pledged
property restored to the Company, its successors or assigns, and provided further, that upon the taking of such
possession and until possession shall be restored as aforesaid, all such excepted property of which the Trustees,
or such Trustee or such receiver shall have so taken possession, shall be and become subject to the lien hereof,
subject, however, to any liens then existing on such excepted property.

                  And the Company does hereby covenant and agree with the Trustees, and the Trustees with the
Company, as follows:

                                                      PART I

                  The Trustees shall have and hold all and singular the properties conveyed, assigned, mortgaged
and pledged hereby or by the Amended Indenture, including property hereafter as well as heretofore acquired, in
trust for the equal and proportionate benefit and security of all present and future holders of the bonds and
interest obligations issued and to be issued under the Amended Indenture, as from time to time amended and
supplemented, without preference of any bond over any other bond by reason of priority in date of issuance,
negotiation, time of maturity, or for any other cause whatsoever, except as otherwise in the Amended Indenture,
as from time to time amended and supplemented, permitted, and to secure the payment of all bonds now or at any
time hereafter outstanding under the Amended Indenture, as from time to time amended and supplemented, and the
performance of and compliance with the covenants and conditions of the Amended Indenture, as from time to time
amended and supplemented, and under and subject to the provisions and conditions and for the uses set forth in
the Amended Indenture, as from time to time amended and supplemented.

                                                      PART II

                  Article I to Article Twenty-One, inclusive, of the Amended Indenture are hereby incorporated by
reference herein and made a part hereof as fully as though set forth at length herein.

                                                     PART III

                  All of the terms appearing herein shall be defined as the same are now defined under the
provisions of the Amended Indenture, except when expressly herein otherwise defined.

                                                      PART IV

                  Pursuant to Section 1 of Article Five of the Original Indenture, as amended by Part IV, Subpart
C, of the Sixth Supplemental Indenture, dated as of September 1, 1940, the notice to be given with respect to the
redemption of the Bonds in whole or in part, shall be limited to and shall consist of the giving by the Company
or The Bank of New York, Trustee, of a notice in writing (including by facsimile transmission) of such
redemption, at least 30 days, but not more than 60 days, prior to the date fixed for redemption to the holder of
each Bond called for redemption at the holder's last address shown on the registry books of the Company.  Failure
to so provide such notice to the holder of any Bond shall not affect the validity of the redemption proceedings
with respect to any other Bond.


Page 5



                                                      PART V

                  The Bonds shall be in substantially the form set forth in a resolution of the Board of
Directors or the Executive Committee of the Board of Directors of the Company, and may have placed thereon such
letters, numbers or other marks of identification and such legends or endorsements as set forth in this
Supplemental Indenture or as may be required to comply with the Securities Act of 1933, as amended (the
"Securities Act"), any other laws, Rule 144A under the Securities Act ("Rule 144A"), Regulation S under the
Securities Act ("Regulation S"), any other rules of the Securities and Exchange Commission or any securities
exchange, or as may, consistently herewith, be determined to be necessary or appropriate by the officers
executing the Bonds, as evidenced by their execution of the Bonds.  The Bonds will be issued in minimum
denominations of $250,000 and integral multiples of $1,000 in excess thereof.

                  Bonds which initially were acquired by qualified institutional buyers as defined in Rule 144A
shall initially be represented by one or more securities in registered, global form without interest coupons
("Rule 144A Global Bonds").  Bonds which initially were acquired in offshore transactions in reliance on
Regulation S shall initially be represented by one or more separate securities in registered, global form without
interest coupons ("Regulation S Global Bonds").  The Rule 144A Global Bonds and the Regulation S Global Bonds are
collectively referred to herein as "Global Bonds".  Each certificate for Global Bonds shall represent the
aggregate principal of outstanding Bonds from time to time endorsed thereon and the aggregate principal amount of
outstanding Bonds represented thereby may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions.  Any endorsement of a Global Bond certificate to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Bonds represented thereby shall be made by BNY Midwest
Trust Company, as Agent for The Bank of New York, Trustee, as registrar for the Bonds (the "Bond Registrar"), in
accordance with instructions given by the registered holder thereof.

                  The Company initially appoints The Depository Trust Company ("DTC") to act as depositary with
respect to the Global Bonds (together with any successor, the "Depositary").  Each certificate representing
Global Bonds shall bear a legend in substantially the following form (the "Global Bond Legend"):

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
                  COMPANY, A NEW YORK CORPORATION ("DTC"), TO SOUTHERN CALIFORNIA EDISON COMPANY OR ITS AGENT FOR
                  REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
                  NAME OF CEDE &amp; CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
                  (AND ANY PAYMENT IS MADE TO CEDE &amp; CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
                  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
                  TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &amp; CO., HAS AN INTEREST
                  HEREIN.

                  Beneficial interests may not be exchanged between the Rule 144A Global Bonds and the
Regulation S Global Bonds except in the limited circumstances set forth below in this Supplemental Indenture.
Beneficial interests in the Global Bonds may not be exchanged for Bonds in certificated form ("Certificated
Bonds") except in the limited circumstances set forth below in this Supplemental Indenture.  Certificates
representing Certificated Bonds will not bear the Global Bond Legend.

                  Except as set forth in this Supplemental Indenture, each certificate evidencing the Global
Bonds or the Certificated Bonds (and any Bonds issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form (the "Private Placement Legend"):

                  THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
                  AMENDED (THE "SECURITIES ACT"), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR

Page 6


                  OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
                  SECURITIES ACT OR OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE
                  SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
                  STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.

                                                      PART VI

                  The transfer and exchange of Global Bonds or beneficial interests in Global Bonds shall be
effected through the Depositary, in accordance with the terms of the Amended Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary, which shall include restrictions
on transfer comparable to those set forth herein to the extent required by the Securities Act.

                  Prior to the expiration of the Distribution Compliance Period (as defined in Regulation S),
beneficial interests in Regulation S Global Bonds may be exchanged for beneficial interests in Rule 144A Global
Bonds only if (a) such exchange occurs in connection with a transfer of such Bonds pursuant to Rule 144A; and
(b) the transferor first delivers to the Bond Registrar a written certificate to the effect that the Bonds are
being transferred to a person (i) who the transferor reasonably believes to be a qualified institutional buyer
within the meaning of Rule 144A, (ii) purchasing for its own account or the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A, and (iii) in accordance with all applicable
securities laws of the states of the United States and other jurisdictions.

                  Beneficial interests in Rule 144A Global Bonds may be transferred to a person who takes
delivery in the form of an interest in Regulation S Global Bonds, whether before or after the expiration of the
Distribution Compliance Period, only if the transferor first delivers to the Bond Registrar a written certificate
to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if
available) and that, if such transfer occurs prior to the expiration of the Distribution Compliance Period, the
interest transferred will be held immediately thereafter through Euroclear or Clearstream.

                  A Global Bond may be exchanged for Certificated Bonds if (a) the Depositary for the Global Bond
notifies the Company that the Depositary is unwilling or unable to continue as to act as Depositary for the
Global Bond or has ceased to be a clearing agency registered under the Securities Exchange Act of 1934, and in
either case the Company fails to appoint a successor Depositary within 90 days after delivery of such notice;
(b) the Company notifies the Bond Registrar in writing that it has elected to cause the issuance of Certificated
Bonds; or (c) there has occurred and is continuing a default with respect to the Bonds under the Amended
Indenture.  Certificated Bonds delivered in exchange for any Global Bond or beneficial interests in Global Bonds
will be executed by the Company, authenticated by The Bank of New York, as Trustee, registered in the names, and
issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its
customary procedures) and will bear the Private Placement Legend, unless evidence is provided satisfactory to the
Company and the Bond Registrar demonstrating that the Private Placement Legend is not required by applicable law.

                  When Certificated Bonds are presented to the Bond Registrar with a request to register the
transfer of the Certificated Bonds or to exchange such Certificated Bonds for an equal principal amount of
Certificated Bonds of other authorized denominations, the Bond Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met; provided, however, that if such
Certificated Bonds are subject to the Private Placement Legend, such Certificated Bonds, shall be accompanied by
the following additional information and documents, as applicable: (a) if such Bonds are being delivered to the
Bond Registrar by the holder for registration in the name of such holder, without transfer, a certification from
such holder to that effect; or (b) if such Bonds are being transferred to a qualified institutional buyer within
the meaning of Rule 144A, or pursuant to an exemption



Page 7

from registration in accordance with Rule 144 under the Securities Act, or a transaction meeting the requirements
of Regulation S, or pursuant to an effective registration statement under the Securities Act, a certification to
that effect; or (c) if such Bonds are being transferred in reliance on another exemption from the registration
requirements of the Securities Act or in a transaction exempt from the registration requirements of the
Securities Act, a certification to that effect and a written opinion of counsel acceptable to the Company and to
the Bond Registrar to the effect that such transfer does not require registration under the Securities Act.

                  Upon any sale of transfer of a Bond that is subject to the Private Placement Legend (including
a Global Bond) pursuant to Rule 144 under the Securities Act, pursuant to an effective registration statement
under the Securities Act, or in connection with which the Company and the Bond Registrar receive a satisfactory
opinion of counsel to the effect that such Bond no longer will be subject to resale restrictions under federal and
state securities laws: (a) in the case of a Certificated Bond, the Bond Registrar shall permit the holder thereof
to exchange such Bond for a Certificated Bond that does not bear the Private Placement Legend and rescind any
restriction on the transfer of such Bond; and (b) in the case of a Bond represented by a Global Bond, such Bond
shall not be required to bear the Private Placement Legend, but shall continue to be subject to the provisions of
the Global Bond Legend.

                                                     PART VII

                  All, but only, the duties, responsibilities, liabilities, immunities, rights, powers, and
indemnities against liability, of the Trustees and each of them, with respect to the trust created by the Amended
Indenture, are hereby assumed by and given to the Trustees, and each of them, with respect to the trust hereby
created, and are so assumed and given subject to all the terms and provisions with respect thereto as set forth
in the Amended Indenture, as fully and to all intents and purposes as if the same were herein set forth at
length; and this Supplemental Indenture is executed by the Trustees for the purpose of evidencing their consent
to the foregoing.

                  The recitals contained herein, except the recital that the Trustees have each duly determined
to execute and deliver this Supplemental Indenture, shall be taken as the statements of the Company, and the
Trustees assume no responsibility for the correctness thereof.  The Trustees make no representations as to the
validity of this Supplemental Indenture.

                                                     PART VIII

                  As amended and supplemented by this Supplemental Indenture, the Amended Indenture is in all
respects ratified and confirmed, and the Original Indenture and all said indentures supplemental thereto
including this Supplemental Indenture, shall be read, taken, and considered as one instrument, and the Company
agrees to conform to and comply with all and singular the terms, provisions, covenants, and conditions set forth
therein and herein.

                                                      PART IX

                  In case any one or more of the provisions contained in this Supplemental Indenture should be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provisions contained in this Supplemental Indenture, and, to the extent and only to the extent
that any such provision is invalid, illegal, or unenforceable, this Supplemental Indenture shall be construed as
if such provision had never been contained herein.

                                                      PART X

                  This Supplemental Indenture may be simultaneously executed and delivered in any number of
counterparts, each of which, when so executed and delivered, shall be deemed to be an original.



Page 8


                  IN WITNESS WHEREOF, the Company has caused its corporate name and seal to be hereunto affixed
and this Supplemental Indenture to be signed by its Chairman of the Board, its Chief Executive Officer, its
President, or one of its Vice Presidents and attested by the signature of its Secretary or one of its Assistant
Secretaries, for and in its behalf; said The Bank of New York has caused its corporate name to be hereunto
affixed, and this Supplemental Indenture to be signed, by one of its Vice Presidents or Assistant Vice Presidents
or Agents; and said D. G. Donovan has hereunto executed this Supplemental Indenture; all as of the day and year
first above written.  Executed in counterparts and in multiple.


                                                              SOUTHERN CALIFORNIA EDISON COMPANY



                                                              /S/ ROBERT C. BOADA
                                                              ----------------------------------
                                                              ROBERT C. BOADA
                                                              Vice President and Treasurer


Attest:


/S/ BONITA J. SMITH
- -------------------
BONITA J. SMITH
Assistant Secretary

(Seal)





                                                              THE BANK OF NEW YORK, Trustee



                                                              /S/ DEDRA DELANEY
                                                              -----------------
                                                              DEDRA DELANEY
                                                              Agent






                                                              /S/ D. G. DONOVAN
                                                              -----------------
                                                              D. G. DONOVAN
                                                              Trustee


Page 9





STATE OF CALIFORNIA        }
                                    }  ss.
COUNTY OF LOS ANGELES      }


         On this 20th day of February, 2003, before me, JEAN ELLEN LAMBRECHT, a Notary Public, personally
appeared ROBERT C. BOADA and BONITA J. SMITH, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to
me that they executed the same in their authorized capacities, and that by their signatures on the instrument the
persons, or the entity on behalf of which the persons acted, executed the instrument.

         WITNESS my hand and official seal.




                                                              /S/ JEAN ELLEN LAMBRECHT
                                                              ------------------------
                                                              JEAN ELLEN LAMBRECHT
                                                              Notary Public, State of California




(Seal)

My Commission expires on September 24, 2004.




Page 10



STATE OF ILLINOIS }
                           }  ss.
COUNTY OF COOK    }


         On this 18th day of February, 2003, before me, K. Gibson, a Notary Public, personally appeared Dedra
Delaney, Agent of THE BANK OF NEW YORK, Trustee, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or
entity on behalf of which the person acted, executed the instrument.

         WITNESS my hand and official seal.




                                                     /S/ K. GIBSON
                                                     --------------------------------
                                                     Notary Public, State of Illinois




(Seal)

My Commission expires on July 8, 2006.




STATE OF ILLINOIS }
                           }  ss.
COUNTY OF COOK    }


         On this 18th day of February, 2003, before me, K. Gibson, a Notary Public, personally appeared D. G.
DONOVAN, Trustee, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or entity on behalf of which the
person acted, executed the instrument.

         WITNESS my hand and official seal.




                                                     /S/ K. GIBSON
                                                     --------------------------------
                                                     Notary Public, State of Illinois




(Seal)

My Commission expires on July 8, 2006.

</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>5
<FILENAME>sceexh1202.htm
<DESCRIPTION>SCE COMPUTATION OF RATIOS
<TEXT>
<HTML>
<HEAD>
<TITLE>
Exhibit 12 to SCE 2002 10-K</TITLE>
</HEAD>
<BODY>
<PRE>
                              SOUTHERN CALIFORNIA EDISON COMPANY AND CONSOLIDATED UTILITY-RELATED SUBSIDIARIES

                                                    RATIOS OF EARNINGS TO FIXED CHARGES

                                                           (Thousands of Dollars)

                                                                       Year Ended December 31,
                                            ------------------------------------------------------------------------------
                                               1997        1998         1999          2000           2001           2002
                                            ---------  ------------  ----------   -----------    -----------   -----------

EARNINGS BEFORE INCOME TAXES
  AND FIXED CHARGES:

Income before interest expense (1)       $ 1,049,866   $   999,910  $   992,354    $(1,456,584)   $ 3,192,815   $ 1,831,335
Add:
  Taxes on income (2)                        520,468       442,356      438,006     (1,021,452)     1,658,033       641,786
  Rentals (3)                                  2,639         2,208        1,901          2,905          2,128         1,240
  Allocable portion of interest
         on long-term Contracts for
         the purchase of power (4)             1,797         1,767        1,735          1,699          1,659         1,616
  Amortization of previously capitalized
         fixed charges                         1,127         1,571        1,508          1,390          1,083         1,440
                                           ----------    ----------  -----------   ------------   -----------   -----------
Total earnings before income
  taxes and fixed charges (A)            $ 1,575,897   $ 1,447,812  $ 1,435,504    $(2,472,042)   $ 4,855,718   $ 2,477,417
                                           ==========    ==========  ===========   ============   ===========   ===========


FIXED CHARGES:
  Interest and amortization              $   444,272   $   484,788  $   482,933   $    571,760   $   784,858   $   584,442
  Rentals (3)                                  2,639         2,208        1,901          2,905         2,128         1,240
  Capitalized fixed charges -
         nuclear fuel (5)                      2,398         1,294        1,211          1,538           756           520
  Allocable portion of interest on
         long-term contracts for
         the purchase of power (4)             1,797         1,767        1,735          1,699         1,659         1,616
                                           ----------    ----------  -----------   ------------   -----------   -----------
Total fixed charges (B)                  $   451,106   $   490,057  $   487,780   $    577,902   $   789,401   $   587,818
                                           ==========    ==========  ===========   ============   ===========   ===========

RATIO OF EARNINGS TO
  FIXED CHARGES (A) / (B):                      3.49          2.95         2.94         (4.28)(6)       6.15          4.21
                                           ==========    ==========  ===========   =============  ===========   ===========




(1) Includes allowance for funds used during construction and accrual of unbilled revenue.
(2) Includes allocation of federal income and state franchise taxes to other income.
(3) Rentals include the interest factor relating to certain significant rentals plus one-third of all remaining annual rentals.
(4) Allocable portion of interest included in annual minimum debt service requirement of supplier.
(5) Includes fixed charges associated with Nuclear Fuel.
(6) Ratio for 2000 is less than 1.00. In 2000, SCE needed an additional $3,049,944,000 in earnings before income taxes
    and fixed charges to achieve a 1.00 ratio.



</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>6
<FILENAME>exh1302.htm
<DESCRIPTION>SCE 2002 ANNUAL REPORT
<TEXT>
<HTML>
<HEAD>
<TITLE>
Southern California Edison Company 2002 Annual Report</TITLE>
</HEAD>
<BODY>
<PRE>









SOUTHERN CALIFORNIA EDISON COMPANY
LOGO





















                                                                                                     2002 Annual Report









<PAGE>




- -------------------------------------------------------------------------------------------------------------------
Southern California Edison Company








Southern California Edison Company (SCE) is one of the nation's largest investor-owned electric utilities.
Headquartered in Rosemead, California, SCE is a subsidiary of Edison International.

SCE, a 117-year-old electric utility, serves a 50,000-square-mile area of central, coastal and southern
California.



       <U>Contents</U>


 1     Selected Financial and Operating Data:  1998 - 2002
 2     Management's Discussion and Analysis of Results of Operations and Financial Condition
31     Consolidated Statements of Income (Loss)
31     Consolidated Statements of Comprehensive Income (Loss)
32     Consolidated Balance Sheets
34     Consolidated Statements of Cash Flows
35     Consolidated Statements of Changes in Common Shareholder's Equity
36     Notes to Consolidated Financial Statements
63     Quarterly Financial Data
64     Responsibility for Financial Reporting
65     Report of Independent Accountants
66     Report of Predecessor Independent Accountants
67     Board of Directors
67     Management Team
68     Shareholder Information




<PAGE>




- ------------------------------------------------------------------ ---------------------------------------------------
Selected Financial and Operating Data:  1998 - 2002                                Southern California Edison Company

- -----------------------------------------------------------------------------------------------------------------------
Dollars in millions                                       2002        2001         2000         1999         1998
- ---------------------------------------------------------------------------------------------------------------------

Income statement data:

Operating revenue                                      $  8,706     $ 8,126      $ 7,870      $ 7,548       $ 7,500
Operating expenses                                        6,579       3,509       10,529        6,242         6,136
Fuel and purchased power expenses                         2,259       3,982        4,882        3,405         3,586
Income tax (benefit)                                        642       1,658       (1,022)         438           442
Provisions for regulatory adjustment clauses - net        1,502      (3,028)       2,301         (763)         (473)
Interest expense - net of amounts capitalized               584         785          572          483           485
Net income (loss)                                         1,247       2,408       (2,028)         509           515
Net income (loss) available for common stock              1,228       2,386       (2,050)         484           490
Ratio of earnings to fixed charges                         4.21        6.15         *            2.94         2.95
    *less than 1.00

- ---------------------------------------------------------------------------------------------------------------------

Balance sheet data:

Assets                                                 $ 18,314    $ 22,453     $ 15,966     $ 17,657      $ 16,947
Gross utility plant                                      16,341      15,982       15,653       14,852        14,150
Accumulated provision for depreciation
 and decommissioning                                      8,094       7,969        7,834        7,520         6,896
Short-term debt                                              --       2,127        1,451          796           470
Common shareholder's equity                               4,384       3,146          780        3,133         3,335
Preferred stock:
  Not subject to mandatory redemption                       129         129          129          129           129
  Subject to mandatory redemption                           147         151          256          256           256
Long-term debt                                            4,504       4,739        5,631        5,137         5,447
Capital structure:
  Common shareholder's equity                              47.8%       38.5%        11.5%      36.2%        36.4%
  Preferred stock:
   Not subject to mandatory redemption                      1.4%        1.6%       1.9%         1.5%         1.4%
   Subject to mandatory redemption                          1.6%        1.9%       3.8%         2.9%         2.8%
  Long-term debt                                           49.2%       58.0%      82.8%        59.4%        59.4%

- ---------------------------------------------------------------------------------------------------------------------

Operating data:

Peak demand in megawatts (MW)                            18,821      17,890       19,757       19,122        19,935
Generation capacity at peak (MW)                          9,767       9,802        9,886       10,431        10,546
Kilowatt-hour deliveries (in millions)                   79,693      78,524       84,430       78,602        76,595
Total energy requirement (kWh) (in millions)             71,663      83,495       82,503       78,752        80,289
Energy mix:
  Thermal                                                40.2%       32.5%        36.0%        35.5%        38.8%
  Hydro                                                   5.0%        3.6%         5.4%         5.6%         7.4%
  Purchased power and other sources                      54.8%       63.9%        58.6%        58.9%        53.8%
Customers (in millions)                                  4.53        4.47         4.42         4.36         4.27
Full-time employees                                    12,113      11,663       12,593       13,040       13,177



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- -------------------------------------------------------------------------------------------------------------------
Management's Discussion and Analysis of Results of Operations and Financial Condition

This Management's Discussion and Analysis of Results of Operations and Financial Condition (MD&amp;A) contains
forward-looking statements.  These statements are based on Southern California Edison's (SCE) knowledge of
present facts, current expectations about future events and assumptions about future developments.
Forward-looking statements are not guarantees of performance; they are subject to risks, uncertainties and
assumptions that could cause actual future activities and results of operations to be materially different from
those set forth in this discussion.  Important factors that could cause actual results to differ include, but are
not limited to, risks discussed below under "Financial Condition," "Market Risk Exposures" and "Forward-Looking
Information and Risk Factors."

This MD&amp;A includes information about SCE, a regulated public utility company providing electricity to retail
customers in central, coastal, and southern California.

CURRENT DEVELOPMENTS

Between May 2000 and June 2001, the cost of unregulated wholesale power in California rose above revenue
collected in rates that were frozen in 1998 and SCE was not allowed by the CPUC to pass these excess costs
through to its customers.  As a result SCE incurred $4.7 billion (pre-tax) in write-offs related to its
undercollected costs and generation-related regulatory assets through August 31, 2001.  In October 2001, SCE
entered into a settlement agreement with the California Public Utilities Commission (CPUC) that allowed SCE to
recover $3.6 billion in past procurement-related costs through the creation of a procurement-related obligations
account (PROACT) regulatory asset.  The balance in this regulatory asset decreased to $574 million at year-end
2002 and SCE expects to recover the remaining balance by mid-2003.

The Utility Reform Network (TURN), a consumer advocacy group, and other parties appealed to the federal court of
appeals seeking to overturn the district court judgment that approved the settlement agreement.  In September
2002, an appeals court opinion affirmed the district court on all claims, with the exception of challenges
founded upon California state law, which the appeals court referred to the California Supreme Court.  On
November 20, 2002, the California Supreme Court issued an order indicating that it would hear the case.  The key
issues in this matter are whether the district court judgment violated California's electric industry
restructuring statute providing for a rate freeze and state laws requiring open meetings and public hearings.
SCE continues to operate under the settlement agreement and to believe it is probable that SCE will ultimately
recover its past procurement costs through regulatory mechanisms, including the PROACT.  However, SCE cannot
predict with certainty the outcome of the pending legal proceedings.

In January 2001, the state of California began purchasing power on behalf of SCE's customers because SCE's
financial condition prevented it from purchasing power supplies for its customers.  On January 1, 2003, SCE
resumed power procurement of its residual net short position (the amount of energy needed to serve SCE's
customers from sources other than its own generating plants, power purchase contracts and California Department
of Water Resources (CDWR) contracts).

These and other matters are discussed in detail in "Regulatory Matters."

RESULTS OF OPERATIONS

Earnings

In 2002, SCE earned $1.2 billion compared to earnings of $2.4 billion in 2001, and a loss of $2.1 billion in
2000.  SCE's 2002 earnings included a $480 million benefit related to the implementation of the California Public
Utilities Commission's (CPUC) utility retained generation (URG) decision.  SCE's 2001 earnings included a $2.1
billion (after tax) benefit resulting from the reestablishment of procurement-related regulatory assets and
liabilities as a result of the PROACT resolution and recovery of $178 million (after tax) of previously written
off generation-related regulatory assets, partially offset by $328 million (after tax) of net undercollected
transition costs incurred between January and August 2001.  SCE's loss in 2000 included a $2.5 billion (after
tax) write-off of regulatory assets and liabilities as of December 31, 2000.  Excluding the $480 million benefit
in 2002, the $2.0 billion benefit in 2001, and the $2.5 billion write-off in 2000, SCE's earnings were $748
million in 2002, $408 million in 2001 and $471 million in 2000.  The $340 million increase in 2002 primarily
reflects increased revenue resulting from the CPUC's 2002


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                                                                                Southern California Edison Company

decision in SCE's performance-based ratemaking (PBR) proceeding, increased earnings from SCE's larger rate base
in 2002 compared to 2001, lower interest expense, PBR rewards from prior years and increased income from San
Onofre Nuclear Generating Station (San Onofre) Units 2 and 3.  The increase was partially offset by higher
operating and maintenance expense.  The $63 million decrease in 2001 was primarily due to the February 2001 fire
and resulting outage at San Onofre Unit 3 and lower kilowatt-hour sales.

Accounting principles generally accepted in the United States require SCE at each financial statement date to
assess the probability of recovering its regulatory assets through a regulatory process.  Based on a CPUC
decision in March 2001, the $4.5 billion transition revenue account undercollection as of December 31, 2000 and
the coal and hydroelectric balancing account overcollections were reclassified, and the transition cost balancing
account (TCBA) balance was recalculated to be a $2.9 billion undercollection.  As a result, SCE was unable to
conclude that, under applicable accounting principles, the $2.9 billion TCBA undercollection (as recalculated
above) and $1.3 billion (book value) of other net regulatory assets that were to be recovered through the TCBA
mechanism by the end of the rate freeze were probable of recovery through the rate-making process as of December
31, 2000.  As a result, SCE's December 31, 2000 income statement included a $4.0 billion charge to provisions for
regulatory adjustment clauses and a $1.5 billion net reduction in income tax expense, to reflect the $2.5 billion
(after tax) write-off.

Based on the CPUC's January 23, 2002 PROACT resolution, SCE was able to conclude that $3.6 billion in regulatory
assets previously written off were probable of recovery through the rate-making process as of December 31, 2001.
As a result, SCE's December 31, 2001 consolidated income statement included a $3.6 billion credit to provisions
for regulatory adjustment clauses and a $1.5 billion charge to income tax expense, to reflect the $2.1 billion
(after tax) credit to earnings.

Operating Revenue

More than 94% of operating revenue was from retail sales.  Retail rates are regulated by the CPUC and wholesale
rates are regulated by the Federal Energy Regulatory Commission (FERC).

Due to warmer weather during the summer months, operating revenue during the third quarter of each year is
significantly higher than other quarters.

The following table sets forth the major changes in operating revenue:

- ----------------------------------------------------------------------------------------------------------
In millions                    Year ended December 31,                 2002 vs. 2001       2001 vs. 2000
- ----------------------------------------------------------------------------------------------------------

Operating revenue--
   Rate changes (including refunds)                                      $    565           $  2,338
   Direct access credit                                                      (604)               273
   Interruptible noncompliance penalty                                         (8)               117
   Sales volume changes                                                       684             (2,402)
   Other (including intercompany transactions)                                (57)               (70)
- ----------------------------------------------------------------------------------------------------------
Total                                                                    $    580           $    256
- ----------------------------------------------------------------------------------------------------------


Operating revenue increased in 2002 as compared to 2001 (as shown in the table above) primarily due to a
3(cent)-per-kWh surcharge authorized by the CPUC as of March 27, 2001.  Although the surcharge was authorized as of
March 27, 2001, it was not collected in rates until the CPUC determined how the rate increase would be allocated
among SCE's customer classes, which occurred in May 2001.  In addition, the increase in revenue resulted from an
increase in sales volume primarily due to SCE providing its customers with a greater volume of energy generated
from its own generating plants and power purchase contracts, rather than the CDWR purchasing power on behalf of
SCE's customers.  Amounts SCE bills to and collects from its customers for electric power purchased and sold by
the CDWR to SCE's customers (beginning January 17, 2001) and CDWR bond-related costs (beginning November 15,
2002) are being remitted to the CDWR and are not recognized as revenue by SCE.  These amounts were $1.4 billion
and $2.0 billion for the years ended December 31, 2002 and 2001, respectively.  The increase in operating revenue
was partially offset by a decrease in revenue arising from an increase in credits given to direct


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Management Discussion and Analysis of Results of Operations and Financial Condition


access customers in 2002, compared to 2001, due to a significant increase in the number of direct access
customers.

Operating revenue increased in 2001 (as shown in the table above), primarily due to the 4(cent)-per-kWh (1(cent) in January
and 3(cent)in June) surcharge effective in 2001, the effects of the reduced credits given to direct access customers
in 2001 and an increase in revenue related to penalties customers incurred for not complying with their
interruptible contracts.  The increases were partially offset by a decrease in retail sales volume primarily
attributable to CDWR purchases on behalf of SCE customers and conservation efforts, as well as a decrease in
revenue related to operation and maintenance services.

From 1998 through mid-September 2001, SCE's customers were able to choose to purchase power directly from an
energy service provider other than SCE (thus becoming direct access customers) or continue to have SCE purchase
power on their behalf.  On March 21, 2002, the CPUC issued a decision affirming that new direct access
arrangements entered into by SCE's customers after September 20, 2001 were invalid.  Direct access arrangements
entered into prior to September 20, 2001 remain valid.  Most direct access customers continue to be billed by
SCE, but are given a credit for the generation costs SCE saves by not serving them.  Operating revenue is
reported net of this credit.  See "Direct Access - Historical Procurement Charge" discussion under "Regulatory
Matters--Direct Access Proceedings" below.

During 2000, as a result of the power shortage in California, SCE's customers on interruptible rate programs
(which provide for lower generation rates with a provision that service can be interrupted if needed, with
penalties for noncompliance) were asked to curtail their electricity usage at various times.  As a result of
noncompliance, those customers were assessed significant penalties.  On January 26, 2001, the CPUC waived the
penalties assessed to noncompliant customers after October 1, 2000 until the interruptible programs could be
reevaluated.

Operating Expenses

Fuel expense increased in both 2002 and 2001.  The 2002 increase was primarily due to fuel related costs related
to a settlement agreement entered into with Peabody Western Coal Company associated with the Mohave Generating
Station (Mohave).  The 2001 increase was due to fuel-related refunds resulting from a settlement with another
utility that SCE recorded in the second and third quarters of 2000.

Purchased-power expense decreased in both 2002 and 2001.  The 2002 decrease resulted primarily from lower
expenses at SCE related to qualifying facilities (QFs), bilateral contracts and interutility contracts, as
discussed below.  In addition, the decrease reflects the absence of California Power Exchange (PX)/ Independent
System Operator (ISO) purchased-power expense after mid-January 2001.  PX/ISO purchased-power expense increased
significantly between May 2000 and mid-January 2001, due to dramatic wholesale electricity price increases.  In
December 2000, the FERC eliminated the requirement that SCE buy and sell all power through the PX.  Due to SCE's
noncompliance with the PX's tariff requirement for posting collateral for all transactions, as a result of the
downgrades in its credit rating, the PX suspended SCE's market trading privileges effective mid-January 2001.
The 2001 decrease resulted from the absence of PX/ISO purchased-power expense after mid-January 2001, partially
offset by increased expenses related to QFs, bilateral contracts and interutility contracts.

Federal law and CPUC orders required SCE to enter into contracts to purchase power from QFs at CPUC-mandated
prices.  These contracts expire on various dates through 2025.  In 2002, purchased-power expense declined
significantly, primarily due to lower payments to QFs.  Generally, energy payments for gas-fired QFs are tied to
spot natural gas prices.  Effective May 2002, energy payments for renewable QFs were based on a fixed price of
5.37(cent)per kWh.  During 2002, spot natural gas prices were significantly lower than the same periods in 2001.  The
decrease in 2002 purchased-power expense related to bilateral contracts and interutility contracts was also due
to the decrease in natural gas prices.  In 2001, purchased-power expense related to QFs increased due to higher
prices for natural gas.  In early 2001, structural problems in the market caused abnormally high gas prices.  The
increase related to bilateral contracts was the result of SCE not having these contracts in 2000.  The increase
related to interutility contracts was volume-driven.

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                                                                                Southern California Edison Company


Provisions for regulatory adjustment clauses - net increased in 2002 and decreased in 2001.  The 2002 increase
was primarily due to the establishment of the PROACT regulatory asset in 2001, overcollections used to recover
the PROACT balance and revenue collected to recover the rate reduction bond regulatory asset, partially offset by
the impact of SCE's implementation of CPUC decisions related to URG and the PBR mechanism, as well as the impact
of other regulatory actions.  The 2001 decrease resulted from SCE recording the $3.6 billion PROACT regulatory
asset in fourth quarter 2001.

As a result of the URG decision, SCE reestablished regulatory assets previously written off (approximately
$1.1 billion) related to its nuclear plant investments, purchased-power settlements and flow-through taxes, and
decreased the PROACT balance by $256 million, all retroactive to January 1, 2002.  The impact of the URG decision
is reflected in the financial statements as a credit (decrease) to the provisions for regulatory adjustment
clauses of $644 million, partially offset by an increase in deferred income tax expense of $164 million, for a
net credit to earnings of $480 million (see "Regulatory Matters--URG Decision" discussion).  As a result of the
CPUC decision that modified the PBR mechanism, SCE recorded a $136 million credit (decrease) to the provisions
for regulatory adjustment clauses in the second quarter of 2002, to reflect undercollections in CPUC-authorized
revenue resulting from changes in retail rates (see "Regulatory Matters--PBR Decision" discussion).

SCE's other operation and maintenance expense increased in 2002 primarily due to the San Onofre Unit 2 refueling
outage in 2002, increases in transmission and distribution maintenance and inspection activities, and cost
containment efforts that took place in 2001.  The increases were partially offset by lower expenses related to
balancing accounts.

Depreciation, decommissioning and amortization expense increased in 2002 and decreased in 2001.  The increase in
2002 was mainly due to an increase in depreciation expense associated with SCE's additions to transmission and
distribution assets and an increase in SCE's nuclear decommissioning expense.  A 1994 CPUC decision allowed SCE
to accelerate the recovery of its nuclear-related assets while deferring the recovery of its distribution-related
assets for the same amount.  Beginning in January 2002, the CPUC approved the commencement of recovery of SCE's
deferred distribution assets.  In addition, the increases reflect amortization expense on the nuclear regulatory
asset reestablished during second quarter 2002 based on the URG decision (discussed below). The decrease in 2001
was primarily due to SCE's nuclear investment amortization expense ceasing because the unamortized nuclear
investment regulatory asset was included in the December 31, 2000 write-off.

Other Income and Deductions

Interest and dividend income increased for both 2002 and 2001.  The 2002 increase was mainly due to the interest
income earned on the PROACT balance, partially offset by lower interest income due to lower average cash balances
and lower interest rates.  The 2001 increase was mainly due to an overall higher cash balance, as SCE conserved
cash due to its liquidity crisis.

Other nonoperating income increased in 2002 and decreased in 2001.  The 2002 increase was primarily due to
property condemnation settlements received, partially offset by PBR incentive awards for 1999 and 2000, which
were approved by the CPUC and recorded in 2002.  The decrease in 2001 primarily reflects the gains on sales of
marketable securities in 2000.

Interest expense - net of amounts capitalized decreased in 2002, and increased in 2001.  The 2002 decrease was
mainly due to lower short-term debt balances, as well as lower interest expense related to the suspension of
purchased power in 2001, partially offset by an increase in interest expense related to the senior secured credit
facility issued in March 2002.  The 2001 increase reflects additional long-term debt and higher short-term debt
balances.

Other nonoperating deductions decreased in 2002 and 2001, primarily due to lower accruals for regulatory matters
in both periods.

Income Taxes

Income taxes decreased in 2002 and increased in 2001.  The 2002 decrease was primarily due to a reduction in
pre-tax income.  Other decreases in tax expense resulted from a favorable resolution of tax


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- -------------------------------------------------------------------------------------------------------------------
Management's Discussion and Analysis of Results of Operations and Financial Condition


audits and the reestablishment of tax related regulatory assets upon implementation of the URG decision.  The
increase in 2001 reflects $1.5 billion in income tax expense related to the PROACT regulatory asset establishment
in fourth quarter 2001.  Absent the $1.5 billion income tax expense in 2001, SCE's income tax expense increased
due to higher pre-tax income.

SCE's federal and state statutory tax rate was 40.551% for all years presented.  The lower effective tax rate of
34% realized in 2002 was primarily due to the reestablishment of tax-related regulatory assets upon
implementation of the URG decision as well favorable resolution of tax audits.  The 2001 effective tax rate was
comparable to the composite federal and state statutory tax rate.

FINANCIAL CONDITION

Cash Flows from Operating Activities

Net cash provided by operating activities was $631 million in 2002, $3.3 billion in 2001 and $829 million in
2000.  The 2002 decrease in cash provided by operating activities was mainly due to the March 2002 repayment of
past-due obligations, partially offset by higher overcollections used to recover regulatory assets resulting from
the CPUC-approved surcharges (1(cent)per kWh in January 2001 and 3(cent)per kWh in June 2001).  The increase in 2001 was
primarily due to suspending payments for purchased power and other obligations beginning in January 2001.  Cash
provided by operating activities also reflects the CPUC-approved surcharges (1(cent)per kWh in January 2001 and 3(cent)
per kWh in June 2001) that were billed in 2001.

Cash Flows from Financing Activities

SCE's short-term debt is normally used to finance procurement-related obligations.  Long-term debt is used mainly
to finance the utility's rate base.  External financings are influenced by market conditions and other factors.

During the first quarter of 2002, SCE paid $531 million of matured commercial paper and remarketed $196 million
of the $550 million of pollution-control bonds repurchased during December 2000 and early 2001.  Also during the
first quarter of 2002, SCE replaced the $1.65 billion credit facility with a $1.6 billion financing and made a
payment of $50 million to retire the entire credit facility.  Throughout the year, SCE paid approximately $1.2
billion of maturing long-term debt.  The $1.6 billion financing included a $600 million, one-year term loan due
March 3, 2003.  SCE prepaid $300 million of this loan in August 2002 and prepaid the balance on February 11,
2003.  See additional discussion in "Liquidity Issues."

In December 1997, $2.5 billion of rate reduction notes were issued on behalf of SCE by SCE Funding LLC, a special
purpose entity.  These notes were issued to finance the 10% rate reduction mandated by state law.  The proceeds
of the rate reduction notes were used by SCE Funding LLC to purchase from SCE an enforceable right known as
transition property.  Transition property is a current property right created by the electric industry
restructuring legislation and a financing order of the CPUC and consists generally of the right to be paid a
specified amount from nonbypassable rates charged to residential and small commercial customers.  The rate
reduction notes are being repaid over 10 years through these nonbypassable residential and small commercial
customer rates, which constitute the transition property purchased by SCE Funding LLC.  The remaining series of
outstanding rate reduction notes have scheduled maturities through 2007, with interest rates ranging from 6.22%
to 6.42%.  The notes are collateralized by the transition property and are not collateralized by, or payable
from, assets of SCE or Edison International.  SCE used the proceeds from the sale of the transition property to
retire debt and equity securities.  Although, as required by accounting principles generally accepted in the
United States, SCE Funding LLC is consolidated with SCE and the rate reduction notes are shown as long-term debt
in the consolidated financial statements, SCE Funding LLC is legally separate from SCE.  The assets of SCE
Funding LLC are not available to creditors of SCE or Edison International and the transition property is legally
not an asset of SCE or Edison International.

Cash Flows from Investing Activities

Cash flows from investing activities are affected by additions to property and plant, primarily for transmission
and distribution assets, and funding of nuclear decommissioning trusts.  Decommissioning

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                                                                                Southern California Edison Company


costs are recovered in utility rates.  These costs are expected to be funded from independent decommissioning
trusts that receive SCE contributions of approximately $25 million per year.  In 1995, the CPUC determined the
restrictions related to the investments of these trusts.  They are: not more than 50% of the fair market value of
the qualified trusts may be invested in equity securities; not more than 20% of the fair market value of the
trusts may be invested in international equity securities; up to 100% of the fair market values of the trusts may
be invested in investment grade fixed-income securities including, but not limited to, government, agency,
municipal, corporate, mortgage-backed, asset-backed, non-dollar, and cash equivalent securities; and derivatives
of all descriptions are prohibited.  Contributions to the decommissioning trusts are reviewed every three years
by the CPUC.  The contributions are determined from an analysis of estimated decommissioning costs, the current
value of trust assets and long-term forecasts of cost escalation and after-tax return on trust investments.
Favorable or unfavorable investment performance in a period will not change the amount of contributions for that
period.  However, trust performance for the three years leading up to a CPUC review proceeding will provide input
into future contributions.  SCE's costs to decommission San Onofre Unit 1 are paid from the nuclear
decommissioning trust funds.  These withdrawals from the decommissioning trusts are netted with the contributions
to the trust funds in the Consolidated Statements of Cash Flows.

Liquidity Issues

SCE expects to meet its continuing obligations in 2003 from cash on hand, which was $1.0 billion at December 31,
2002, and operating cash flows.

Sustained high wholesale energy prices from May 2000 through June 2001 and a delay by the CPUC in passing those
costs on to ratepayers resulted in significant undercollections of wholesale power costs.  These
undercollections, coupled with SCE's anticipated near-term capital requirements and the adverse reaction of the
credit markets to continued regulatory uncertainty regarding SCE's ability to recover its current and future
power procurement costs, materially and adversely affected SCE's liquidity throughout 2001.  As a result of its
liquidity concerns, beginning in January 2001, SCE suspended payments for purchased power, deferred payments on
outstanding debt, and did not declare or pay dividends on any of its cumulative preferred stock or common stock.

In January 2002, the CPUC adopted a resolution implementing a settlement agreement with SCE.  Based on the rights
to power procurement cost recovery and revenue established by the agreement and the PROACT resolution, SCE repaid
its undisputed past-due obligations and near-term debt maturities in March 2002, using cash on hand resulting
from rate increases approved by the CPUC in 2001 and the proceeds of $1.6 billion in senior secured credit
facilities and the remarketing of $196 million in pollution-control bonds.  The $1.6 billion financing included a
$600 million, one-year term loan due on March 3, 2003.  SCE prepaid $300 million of this loan on August 14, 2002
and the remaining $300 million on February 11, 2003.  The $1.6 billion financing also included a $300 million
line of credit, which is fully drawn and expires March 2004, and a $700 million term loan with a March 2005 final
maturity.  Under the term loan, net cash proceeds for the issuance of capital stock or new indebtedness must be
used to reduce the term loan subject to certain exceptions.

On February 24, 2003, SCE completed an exchange offer for its 8.95% variable rate notes due November 2003.  A
total of $966 million of these notes were exchanged for $966 million of a new series of first and refunding
mortgage bonds due February 2007.  As a result of the exchange offer and the $300 million payment on February 11,
2003, SCE's remaining significant debt maturities in 2003 are approximately $159 million, comprising $34 million
of the 8.95% variable rate notes due November 2003 that were not exchanged and $125 million in first and
refunding mortgage bonds due June 2003.  In addition, approximately $250 million of rate reduction notes are due
throughout 2003.  These notes have a separate cost recovery mechanism approved by state legislation and CPUC
decisions.

SCE currently expects to recover the PROACT balance in mid-2003.  Material factors affecting the timing of
recovery of the PROACT balance are discussed in "Regulatory Matters--PROACT Regulatory Asset." As of December 31,
2002, SCE's common equity to total capitalization ratio, for rate-making purposes, was approximately 62%.  This
is substantially greater than the CPUC-authorized level of 48%.  SCE's settlement agreement with the CPUC
provides that the CPUC will not impose any penalty on SCE for noncompliance with the authorized capital structure
during the PROACT recovery period.  SCE expects to rebalance its capital structure to CPUC-authorized levels in
the future by paying dividends to its parent,

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Management's Discussion and Analysis of Results of Operations and Financial Condition


Edison International, and issuing debt as necessary.  Factors that affect the amount and timing of such actions
include, but are not limited to, the outcome of the pending appeal of the stipulated judgment approving SCE's
settlement agreement with the CPUC (See "Regulatory Matters--CPUC Litigation Settlement Agreement), SCE's access
to the capital markets, and actions by the CPUC. SCE resumed procurement of its residual net short on January 1,
2003 and as of February 28, 2003 posted $86 million in collateral to secure its obligations under power purchase
contracts and to transact through the ISO for imbalance power.  See "Market Risk Exposures--SCE's Market Risks"
below.

SCE's liquidity may be affected by, among other things, matters described in "Regulatory Matters--CPUC Litigation
Settlement Agreement,--CDWR Revenue Requirement Proceeding, and--Generation Procurement Proceedings" sections.

COMMITMENTS

SCE's commitments for the years 2003 through 2007 are estimated below:

- ----------------------------------------------------------------------------------------------------------

In millions                                        2003       2004        2005      2006        2007
- ----------------------------------------------------------------------------------------------------------

Long-term debt maturities and
   sinking fund requirements                     $ 1,671     $  671      $ 1,142   $  446     $  246
Estimated noncancelable lease payments                13         11            8        6          4
Fuel supply contract payments                        155        118          121      124        127
Purchased-power capacity payments                    597        595          578      543        543
Preferred securities redemption
   requirements                                        9          9            9        9          9
- ----------------------------------------------------------------------------------------------------------


SCE's projected construction expenditures for 2003 are $1.0 billion.

MARKET RISK EXPOSURES

SCE's primary market risks include interest rate, generating fuel commodity price and credit risks.

Interest Rate Risk

SCE is exposed to changes in interest rates primarily as a result of its borrowing and investing activities used
for liquidity purposes and to fund business operations, as well as to finance capital expenditures. The nature
and amount of SCE's long-term and short-term debt can be expected to vary as a result of future business
requirements, market conditions and other factors. As the result of California's energy crisis, SCE has been
required to pay significantly higher interest rates, which intensified its liquidity crisis during 2001 (further
discussed in "Financial Condition--SCE's Liquidity Issues").

Changes in interest rates also impact SCE's authorized rate of return on common equity, which is established in
SCE's annual cost of capital proceeding.  See "Regulatory Matters--Cost of Capital Decision."

At December 31, 2002, SCE did not believe that its short-term debt was subject to interest rate risk, due to the
fair market value being approximately equal to the carrying value.  At December 31, 2002, the fair market value
of SCE's long term debt was $4.5 billion.  A 10% increase in market interest rates would have resulted in a $164
million decrease in the fair market value of SCE's long-term debt.  A 10% decrease in market interest rates would
have resulted in a $190 million increase in the fair market value of SCE's long-term debt.

Commodity Price Risk

Under the CPUC settlement agreement, SCE is permitted full recovery of its past power procurement costs.
Thereafter, SCE expects to recover its reasonable power procurement costs in customer rates through regulatory
mechanisms established in rate-making proceedings.  Assembly Bill (AB) 57, which the Governor of California
signed in September 2002, provides that the CPUC shall adjust rates, or order refunds, to amortize
undercollections or overcollections of power procurement costs.  Until January 1,

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                                                                                Southern California Edison Company


2006, the CPUC must adjust rates if the undercollection or overcollection exceeds 5% of SCE's prior year's
procurement costs, excluding revenue collected for the CDWR.  As a result of these regulatory mechanisms, changes
in energy prices may impact SCE's cash flows but are not expected to have an impact on earnings.

On January 1, 2003, SCE resumed procurement of its residual net short (the amount of energy needed to serve SCE's
customers from sources other than its own generating plants, power purchase contracts and CDWR contracts).  SCE
forecasts that its average 2003 residual net short, on an energy basis, will be approximately 4% of the total
energy needed to serve SCE's customers, with most of the short position occurring during off-peak hours.  SCE's
residual net short exposure was larger during the first quarter of 2003, because of a planned refueling outage at
San Onofre Unit 3.  In the second half of 2003, this exposure declines significantly as more power deliveries are
scheduled to commence under existing CDWR contracts that are allocated to SCE's customers.  Factors that could
cause SCE's residual net short to be larger than expected include:  direct access customers returning to utility
service from their energy service provider; lower utility generation; lower deliveries from QFs, CDWR or
interutility contracts; or higher load requirements.

To reduce SCE's residual net short exposure, SCE entered into six transition capacity contracts with terms of up
to 5 years.  Through fuel tolling arrangements, SCE is responsible for providing natural gas when the underlying
contract facilities are called upon to provide energy.  SCE has not hedged its expected natural gas use for these
capacity contracts.  In addition, pursuant to CPUC decisions, SCE arranges for natural gas and related services
for the CDWR contracts allocated by the CPUC to SCE.  Financial and legal responsibility for the allocated
contracts remain with the CDWR.  Neither the CDWR, nor SCE, on behalf of the CDWR, has hedged the expected
natural gas requirements for the allocated contracts.  To the extent the price of natural gas were to increase
above the levels assumed for cost recovery purposes, state law permits the CDWR to recover its actual costs
through rates established by the CPUC.

SCE has entered into power purchase contracts with gas-fired and non-gas QFs.  To mitigate the volatility
experienced in 2000 and 2001 associated with the gas-fired QFs, SCE entered into hedging instruments to hedge a
majority of its natural gas price risk exposure for 2002 and 2003.  After 2003, SCE will be subject to natural
gas price risk exposures for its gas-fired QFs.  A 10% increase in the projected forward curve for natural gas
prices in 2004 could increase payments made to these QFs by approximately $65 million.  SCE is not exposed to
energy price risk associated with most of its non-gas QFs, as such contracts are based on a fixed price of 5.37(cent)
per kWh through May 2007.  SCE expects to fully recover its QF procurement costs in customer rates through
regulatory mechanisms established in rate-making proceedings.

As mentioned above, SCE purchased $209 million in hedging instruments (gas call options) in October and November
2001 to hedge a majority of its natural gas price exposure associated with non-renewable QF contracts for 2002
and 2003.  See "Regulatory Matters--Hedging Cost Recovery Decision."  At December 31, 2002, the fair value of the
gas call option was $77 million, compared with the original book value of remaining options of $116 million.  At
December 31, 2002, a 10% increase in market gas prices would have resulted in a $49 million increase in the fair
market value of the SCE's gas call options.  A 10% decrease in market gas prices would have resulted in a $34
million decrease in the fair market value of the gas call options.  Any fair value changes for gas call options
are offset through a regulatory mechanism.

Credit Risk

The reduction in the credit quality of many trading parties increases SCE's credit and market risk.  In the event
a counterparty were to default on its obligations, SCE would be exposed to potentially higher costs for
replacement power.  SCE has developed standards that limit extension of unsecured credit based upon a number of
objective factors.  In negotiating capacity contracts, SCE also has included collateral requirements and credit
enforcements to mitigate the risk of possible defaults.  However, these actions may not protect SCE in the event
of bankruptcy of a counterparty.

See additional discussion on these matters in "Regulatory Matters--CPUC Litigation Settlement Agreement,
- --Generation Procurement Proceedings and--Wholesale Electricity Markets" below.


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REGULATORY MATTERS

In the mid-1990s, state lawmakers and the CPUC initiated the electric industry restructuring process.  Under
state law, beginning in January 1, 1998 a multi-year freeze on the rates SCE could charge its customers was
implemented.  In addition, a transition cost recovery mechanism was adopted to allow SCE to recover its stranded
costs associated with generation-related assets.  These frozen rates (except for the surcharge effective in 2001)
were to remain in effect until the earlier of March 31, 2002 or the date when the CPUC-authorized costs for
utility-owned generation assets and obligations were recovered.  As a result of CPUC orders, SCE divested its
gas-fired generation plants, representing approximately 9,500 MW of capacity.  Between May 2000 and June 2001,
prices charged by sellers of power escalated far beyond what SCE was allowed by the CPUC to charge its
customers.  As a result, SCE incurred $2.7 billion (after tax), or $4.7 billion (pre-tax), in write-offs through
August 31, 2001.  In January 2001, the State of California began purchasing power on behalf of SCE's customers
because SCE's financial condition prevented it from purchasing power supplies for its customers.  In a lawsuit
filed against the CPUC in November 2000, SCE asserted claims under the federal "filed rate doctrine," for
recovery of its electricity procurement related costs.  See "--CPUC Litigation Settlement Agreement" for further
discussion of the lawsuit.

SCE has restored substantially all of its write-offs as a result of the implementation of a settlement with the
CPUC of the filed rate doctrine lawsuit in fourth quarter 2001 and the CPUC's URG decision in second quarter 2002
to return SCE's retained generation assets to cost-based ratemaking.  In addition, on January 1, 2003, SCE
resumed procurement of its residual net short position.

This section of the MD&amp;A presents regulatory matters using three main subsections:  generation and power
procurement, transmission and distribution, and other regulatory matters.

Generation and Power Procurement

This subsection of "Regulatory Matters" discusses:  the settlement agreement with the CPUC to allow recovery of
undercollected power procurement costs arising from the California energy crisis in 2000 and 2001 and an
intervenor's lawsuit seeking to overturn this agreement; the PROACT regulatory asset allowed in the settlement
agreement; separate proceedings related to direct access, surcharge decisions, hedging cost recovery, the return
of utility-retained generation assets to cost-based ratemaking, power procurement, the allocation of the CDWR
contracts; and the ultimate disposition of Mohave.

CPUC Litigation Settlement Agreement

In November 2000, SCE filed a lawsuit against the CPUC in federal district court seeking a ruling that SCE is
entitled to full recovery of its electricity procurement costs incurred during the energy crisis in accordance
with the tariffs filed with the FERC.  In October 2001, the federal district court entered a stipulated judgment
approving an agreement between the CPUC and SCE to settle the pending lawsuit.  On January 23, 2002, the CPUC
adopted a resolution implementing the settlement agreement.  See discussion below in "--PROACT Regulatory Asset."

Key elements of the settlement agreement include the following items:

o    Establishment of the PROACT, as of September 1, 2001, with an opening balance equal to the amount of
     SCE's procurement-related liabilities as of August 31, 2001 less SCE's cash and cash equivalents as of that
     date, and less $300 million.

o    Beginning on September 1, 2001, SCE will apply to the PROACT, on a monthly basis, the difference between
     SCE's revenue from retail electric rates (including surcharges) and the costs that SCE is authorized by the
     CPUC to recover in retail electric rates.  Unrecovered obligations in the PROACT will accrue interest from
     September 1, 2001.

o    Maintain current rates (including surcharges) in effect until December 31, 2003, subject to certain
     adjustments, or, if earlier, until the date that SCE recovers the entire PROACT balance.  If SCE has not
     recovered the entire balance by December 31, 2003, the unrecovered balance will be amortized in rates for up
     to an additional two years.



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o    During the period that SCE is recovering its previously incurred procurement-related obligations, no
     penalty will be imposed by the CPUC on SCE for any noncompliance with CPUC-mandated capital structure
     requirements.

o    SCE can incur up to $250 million of costs to acquire financial instruments and engage in other
     transactions intended to hedge fuel cost risks associated with SCE's retained generation assets and power
     purchase contracts with QFs and other utilities.  See discussion in "Market Risk Exposures--SCE's Market
     Risks" and "--Hedging Cost Recovery Decision."

o    SCE will not declare or pay dividends or other distributions on its common stock (all of which is held
     by its parent) prior to the earlier of the date SCE has recovered all of its procurement-related obligations
     in the PROACT or January 1, 2005.  However, if SCE has not recovered all of its procurement-related
     obligations by December 31, 2003, SCE may apply to the CPUC for consent to resume common stock dividends,
     and the CPUC will not unreasonably withhold its consent.

o    Subject to certain qualifications, SCE will cooperate with the CPUC and the California Attorney General
     to pursue and resolve SCE's claims and rights against sellers of energy and related services, SCE's defenses
     to claims arising from any failure to make payments to the PX or ISO, and similar claims by the State of
     California or its agencies against the same adverse parties.  During the recovery period discussed above,
     refunds obtained by SCE related to its procurement-related liabilities will be applied to the balance in the
     PROACT.  See "--Wholesale Electricity Markets."

The settlement agreement states that one of its purposes is to restore the investment grade creditworthiness of
SCE as rapidly as reasonably practicable so that it will be able to provide reliable electrical service as a
state-regulated entity as it has in the past.  SCE cannot provide assurance that it will regain investment grade
credit ratings by any particular date.

TURN and other parties appealed to the federal court of appeals seeking to overturn the stipulated judgment of
the district court that approved the settlement agreement.  On March 4, 2002, the United States Court of Appeals
for the Ninth Circuit heard argument on the appeal, and on September 23, 2002, the court issued its opinion.  In
the opinion, the court affirmed the district court on all claims, with the exception of the challenges founded
upon California state law, which the appeals court referred to the California Supreme Court.  Specifically, the
appeals court affirmed the district court in the following respects:  (1) the district court did not err in
denying the motions to intervene brought by entities other than TURN; (2) the district court did not err in
denying standing for the entities other than TURN to appeal the stipulated judgment; (3) the district court was
not deprived of original jurisdiction over the lawsuit; (4) the district court did not err in declining to
abstain from the case; (5) the district court did not exceed its authority by approving the stipulated judgment
without TURN's consent; (6) the district court's approval of the settlement agreement did not deny TURN due
process; and (7) the district court did not violate the Tenth Amendment of the United States Constitution in
approving the stipulated judgment.  In sum, the appeals court concluded that none of the substantive arguments
based on federal statutory or constitutional law compelled reversal of the district court's approval of the
stipulated judgment.

However, the appeals court stated in its opinion that there is a serious question whether the settlement
agreement violated state law, both in substance and in the procedure by which the CPUC agreed to it.  The appeals
court added that if the settlement agreement violated state law, the CPUC lacked capacity to consent to the
stipulated judgment, and the stipulated judgment would need to be vacated.  The appeals court indicated that, on
a substantive level, the stipulated judgment appears to violate California's electric industry restructuring
statute providing for a rate freeze.  The appeals court also indicated that, on a procedural level, the
stipulated judgment appears to violate California laws requiring open meetings and public hearings.  Because
federal courts are bound by the pronouncements of the state's highest court on applicable state law, and because
the federal appeals court found no controlling precedents from California courts on the issues of state law in
this case, the appeals court issued a separate order certifying those issues in question form to the California
Supreme Court and requested that the California Supreme Court accept certification.


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The appeals court stayed further proceedings in the case pending a response from the California Supreme Court on
the request for certification.  The appeals court did not stay the continued operation of the settlement
agreement, thus collection of past procurement costs under PROACT is continuing.  On October 29, 2002, SCE filed
briefs requesting that the California Supreme Court answer the appeals' court certification and requesting that
the hearing of the matter be placed on the California Supreme Court's March 2003 calendar, or heard at the
court's earliest convenience and requesting that the California Supreme Court reformulate one of the certified
questions.  On November 20, 2002, the California Supreme Court issued an order indicating that it would hear the
case, and would reformulate the certified question as requested by SCE.  The court ordered that all briefing be
submitted by March 2003 and further stated that the case would be scheduled for expedited oral argument after
briefing has been completed.  SCE and the CPUC filed their respective opening briefs on the merits of the
certified questions.  TURN filed its answering brief, and SCE and the CPUC filed reply briefs.  Various third
parties, including the Governor, submitted friend-of-the-court briefs concerning the certified questions.  In
addition, the California Supreme Court requested that the parties provide supplemental briefing with respect to
an issue related to California's open meeting laws.  The parties have complied with such request.  SCE continues
to operate under the settlement agreement.  SCE continues to believe it is probable that SCE ultimately will
recover its past procurement costs through regulatory mechanisms, including the PROACT.  However, SCE cannot
predict with certainty the outcome of the pending legal proceedings.

PROACT Regulatory Asset

In accordance with the settlement agreement and an implementing resolution adopted by the CPUC, in the fourth
quarter of 2001, SCE established the PROACT regulatory balancing account, with an initial balance of $3.6 billion
reflecting the net amount of past procurement-related liabilities to be recovered by SCE.  Each month, SCE
applies to the PROACT the positive or negative difference between SCE's revenue from retail electric rates
(including surcharges) and the costs that SCE is authorized by the CPUC to recover in retail electric rates.  The
balance in the PROACT was $2.6 billion at December 31, 2001, $574 million on December 31, 2002 and $594 million
on February 28, 2003.  SCE previously projected that it would recover the remaining balance of the
procurement-related obligations in the PROACT by the end of 2003.  Based on decisions made by the CPUC at the end
of 2002, SCE now believes it will recover the PROACT balance by mid-2003.  There still exist potential factors
that could change SCE's estimate of the timing of PROACT recovery.  These factors include:

o    the level of output of SCE's generating plants and contract power deliveries (for example, lower than
     forecasted output could slow PROACT recovery);

o    authorized revenue changes for distribution, transmission, and SCE retained-generation costs (see
     discussion in "--2003 General Rate Case Proceeding", "--PBR Decision" and "--URG Decision");

o    outcome of issues currently being addressed in the CPUC's power procurement proceedings, including
     further adjustments to the CPUC-authorized allocation among the California utilities of power contracted by
     the CDWR for 2003 and the related CDWR revenue requirement impacts;

o    SCE's share of the CDWR revenue requirement (see discussion in "--CDWR Power Purchases and Revenue
     Requirement Proceedings");

o    level of retail sales (for example, higher than forecasted sales would accelerate PROACT recovery);

o    level of direct access (see "--Direct Access Proceedings" discussions below);

o    direct access customers' contribution to recovery of SCE's PROACT-related costs and to the CDWR's costs
     (see "--Direct Access Proceedings" discussions regarding the historical procurement charge and exit fees
     below);


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o    a decision by the CPUC, which could be made under the settlement agreement, directing $150 million of surplus
     revenue to be used for any utility purpose (which would delay PROACT recovery); and

o    potential energy supplier refunds (see discussion in "--Wholesale Electricity Markets").

The following is an update on various regulatory proceedings impacting the timing of PROACT recovery:

Direct Access Proceedings

Direct Access - Historical Procurement Charge
- ---------------------------------------------

From 1998 through mid-September 2001, SCE's customers were able to choose to purchase power directly from an
energy service provider other than SCE (thus becoming direct access customers) or continue to purchase power from
SCE.  (Customers who continue to purchase power from SCE are referred to as bundled service customers).  On
March 21, 2002, the CPUC issued a final decision affirming that new direct access arrangements entered into by
SCE's customers after September 20, 2001, are invalid.  This decision did not affect direct access arrangements in
place before that date.  Direct access customers receive a credit for the generation costs SCE saves by not
serving them.  Operating revenue is reported net of this credit.  Because of this credit, direct access power
purchases resulted in additional undercollected power procurement costs to SCE during 2000 and 2001.  On July 17,
2002, the CPUC issued an interim decision to establish a nonbypassable historical procurement charge requiring
direct access customers to pay $391 million of SCE's past power procurement costs and directed SCE to reduce the
PROACT balance by $391 million and create a new regulatory asset for the same amount.  The historical procurement
charge is to be collected from direct access customers by reducing their existing generation credit by 2.7(cent)per
kWh (effective July 27, 2002) until the CPUC issues and implements an order to determine a surcharge for direct
access customers' share of the CDWR's costs, as discussed in the paragraph below.  Once that surcharge was
implemented on January 1, 2003, the contribution by direct access customers to the historical procurement charge
was reduced from 2.7(cent)per kWh to 1(cent)per kWh until the $391 million is collected, with the remainder of the 2.7(cent)
per kWh utilized for CDWR's costs associated with direct access customers.  On October 16, 2002, SCE filed a
petition with the CPUC to modify the historical procurement charge interim decision to provide that direct access
customers be responsible for $497 million of SCE's past procurement costs.  In subsequent testimony, SCE reduced
its request to $493 million.  Once the interim decision becomes permanent, SCE will evaluate whether a new
regulatory asset could be created.  If such a regulatory asset was created, the net effect of this action would
be to accelerate PROACT recovery.  Evidentiary hearings on SCE's petition to modify were held on March 4, 2003,
and a decision is expected in May or June 2003.

Direct Access - Exit Fees
- -------------------------

In addition to the historical procurement charge, the CPUC, in a November 7, 2002 decision, assigned
responsibility for a portion of four other cost categories to the direct access customers.  The first category
consists of the CDWR's power procurement costs incurred between January 17, 2001 and September 30, 2001.  The
CDWR sold approximately $11 billion in bonds in fourth quarter 2002 to repay the amounts it borrowed to pay these
costs.  The CPUC decision stated that the direct access customers are responsible for paying a portion of the
bond charge to recover the principal and financing costs associated with these bonds.  The second category
relates to the CDWR's power procurement costs for the last quarter of 2001 and the year 2002.  The CPUC stated
that direct access customers must pay a share of these costs to make bundled service customers indifferent to
suspension by the CPUC of the direct access program on September 20, 2001.  The third category includes the CDWR
long-term contract costs for 2003 and beyond.  The CPUC decision stated that a portion of these costs should be
paid by direct access customers to keep bundled service customers indifferent to the later suspension of direct
access on the premise that the CDWR signed some of its long-term contracts with the expectation of serving the
load that switched to direct access after July 1, 2001.  Finally, the last category relates to the above-market
costs of SCE's URG (e.g., qualifying facilities contract costs) that pursuant to AB 1890 are to be recovered from
all customers on an ongoing basis.  The CPUC decision states that:  (1) the bond charge is applicable to all
direct access customers except those who were continuously on direct access and never


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used any CDWR power (less than 1% of SCE's load); (2) the next two categories of costs are applicable to direct
access customers who took bundled service at any time after February 1, 2001; and (3) the last category is
applicable to all direct access customers, including continuous direct access customers.  The cap on the amount
of exit fees to be paid by direct access customers will be addressed in hearings scheduled to begin in early
April 2003.  The exact amount of exit fees to be paid by direct access customers will be determined on an annual
basis after the CDWR's submission of its requested revenue requirement to the CPUC.

The impact of the November 7, 2002 decision is incorporated into SCE's current projection of the timing of PROACT
recovery.

Surcharge Decisions

A March 2001 CPUC decision authorized a 3(cent)-per-kWh revenue surcharge and made permanent a 1(cent)-per-kWh temporary
surcharge authorized in January 2001, with the restriction that the revenue arising from both surcharges apply
only to ongoing procurement charges and future power purchases.  On November 7, 2002, the CPUC issued a decision
modifying the March 2001 decision to allow the surcharge revenue to be used not only for power costs but also for
returning SCE to reasonable financial health.  The decision stated that the extent to which the surcharge revenue
could be used for future power costs or obtaining reasonable financial health would be the subject of future
proceedings.  The decision ordered SCE to continue tracking the surcharge revenue in balancing accounts, subject
to later adjustment and possible refund.  See "--Customer Rate-Reduction Plan." This decision is incorporated into
SCE's current projection of the timing of PROACT recovery.

The CPUC allowed the continuation of the 0.6(cent)-per-kWh temporary surcharge that was scheduled to terminate in June
2002 and required SCE to track the associated revenue in a balancing account for rate-making purposes, until the
CPUC determines the use of the surcharge.  The continuation of the surcharge resulted in a $187 million cash
increase in 2002 and is expected to result in an increase of $352 million in 2003, but has no impact on
earnings.  A December 17, 2002, CPUC decision authorized SCE to use the revenue associated with this surcharge to
partially offset its and the CDWR's higher 2003 revenue requirement, and SCE has incorporated that assumption
into its current projection of the timing of PROACT recovery.  For financial reporting purposes, amounts billed
in 2002 as a result of this surcharge are credited to a regulatory liability account, because the surcharge is to
be used to recover costs to be incurred in the future. This account will be amortized into revenue in 2003.

Hedging Cost Recovery Decision

Pursuant to its authority mentioned in "--CPUC Litigation Settlement Agreement," SCE purchased $209 million in
hedging instruments (gas call options) in late 2001 to hedge a majority of its natural gas price exposure
associated with QF contracts for 2002 and 2003.  A February 13, 2003 CPUC decision allows SCE to transfer the
entire $209 million into the PROACT regulatory asset during first quarter 2003.  SCE has incorporated this
decision into its current projection of the timing of PROACT recovery.

URG Decision

On April 4, 2002, the CPUC issued a decision to return generation assets retained by SCE (utility-retained
generation) to cost-of-service ratemaking until the implementation of the 2003 general rate case (GRC) proceeding
described below.  The URG decision:

o    Allows recovery of incurred costs for all URG components other than San Onofre Units 2 and 3, subject to
     reasonableness review by the CPUC;

o    Retains the incremental cost incentive pricing mechanism (ICIP) for San Onofre Units 2 and 3 through
     2003;



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o    Establishes an amortization schedule for SCE's nuclear facilities that reflects their current remaining Nuclear
     Regulatory Commission license durations, using unamortized balances as of January 1, 2001 as a starting
     point;

o    Establishes balancing accounts for the costs of utility generation, purchased power, and ancillary
     services from the ISO; and

o    Continues the use of SCE's last CPUC-authorized return on common equity of 11.6% for SCE's URG rate base
     other than San Onofre Units 2 and 3, and keeps in place the 7.35% return on rate base for San Onofre Units 2
     and 3 under the ICIP.

Based on this decision, during the second quarter of 2002, SCE reestablished for financial reporting purposes
regulatory assets related to its unamortized nuclear facilities, purchased-power settlements and flow-through
taxes, reduced the PROACT regulatory asset balance (by $256 million), and recorded a corresponding credit to
earnings of $480 million after tax.  The reduction in the PROACT balance reflects a change in SCE's unamortized
nuclear facilities amortization schedule to reflect a ten-year amortization period rather than a four-year
amortization period, which was used to calculate the surplus revenue contributed to the PROACT, for rate-making
purposes, during the last four months of 2001.

CDWR Power Purchases and Revenue Requirement Proceedings

In accordance with an emergency order signed by the governor, the CDWR began making emergency power purchases for
SCE's customers on January 17, 2001.  Amounts SCE bills to and collects from its customers for electric power
purchased and sold by the CDWR are remitted directly to the CDWR and are not recognized as revenue by SCE.  In
February 2001, AB 1 (First Extraordinary Session, AB 1X) was enacted into law.  AB 1X authorized the CDWR to
enter into contracts to purchase electric power and sell power at cost directly to SCE's retail customers, and
authorized the CDWR to issue bonds to finance electricity purchases.  In addition, the CPUC has the
responsibility to allocate the CDWR's revenue requirement among the customers of SCE, Pacific Gas and Electric
(PG&amp;E), and San Diego Gas &amp; Electric (SDG&amp;E).

On February 21, 2002, the CPUC allocated to SCE's customers $3.5 billion (38.2%) of the CDWR's total power
procurement revenue requirement of $9 billion for the period 2001 and 2002.  This resulted in an average annual
CDWR revenue requirement of $1.7 billion being allocated to SCE.  In its February 21, 2002 decision, the CPUC
ordered that allocation of that revenue requirement to each utility be trued-up based on the CDWR's actual
recorded costs for the 2001-2002 period and a specific methodology set forth in that decision.

On October 24, 2002, the CPUC issued a decision that adopts a methodology for establishing a charge to repay the
CDWR's $11 billion bond issue.  The bond charge is to be set by dividing the annual revenue requirement for
bond-related costs by an estimate of the annual electricity consumption of bundled service customers subject to
the charge.  The charge will apply to electricity consumed on and after November 15, 2002 and will be set
annually based on annual expected debt-related costs and projected electricity consumption.  For 2003, the CPUC
allocated to SCE's customers $331 million (about 44%) of the CDWR's bond charge revenue requirement of $745
million.  The bond charge is set at a rate of 0.513(cent)per kWh for SCE's customers.  In a November 7, 2002
decision, the CPUC assigned responsibility for a portion of the bond charge to direct access customers (see
"--Direct Access--Exit Fees").  This decision is incorporated into SCE's current projection of the timing of PROACT
recovery.

On December 17, 2002, the CPUC adopted an allocation of the CDWR's forecast power procurement revenue requirement
for 2003, based on the quantity of electricity expected to be supplied under the CDWR contracts to customers of
each of the three utility companies by the CDWR.  SCE's allocated share is $1.9 billion of the CDWR's total 2003
power procurement revenue requirement of $4.5 billion.  In a February 13, 2003 decision on rehearing of the
December 17, 2002 decision, the CPUC increased the CDWR's total revenue requirement by $29 million, restoring it
to the level originally requested by the CDWR.  This is an interim allocation and will be superseded by a later
allocation after the CDWR submits a supplemental determination of its 2003 revenue requirement.  The CPUC stated
that the later allocation could result in a reduction in the CDWR's revenue requirement, with a corresponding
decrease in the

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CDWR's rate charged to bundled service customers.  The CPUC's December 17, 2002 decision did not address issues
relating to the true-up of the CDWR's 2001-2002 revenue requirement, stating that those issues will be addressed
after actual data for 2002 becomes available, expected in April 2003.  A true-up of the CDWR's revenue
requirement, as well as the additional allocation of contracts, have not been incorporated into SCE's current
projection of the timing of PROACT recovery.

Generation Procurement Proceedings

In October 2001, the CPUC issued an Order Instituting Rulemaking directing SCE and the other major California
electric utilities to provide recommendations for establishing policies and mechanisms to enable the utilities to
resume power procurement by January 1, 2003.  Although the proceeding began before the enactment of AB 57, that
statute (in its draft form, and, after enactment, in its final form) has guided the proceeding.  Senate Bill (SB)
1078 has also had an impact on this proceeding, as described below.

AB 57, which provides for SCE and the other California utilities to resume procuring power for their customers,
was signed into law by the Governor of California in September 2002.  A second senate bill was enacted not long
after AB 57 to shorten the period between the adoption of a utility's initial procurement plan and the resumption
of procurement from 90 days to 60 days.  Under these statutes, SCE is effectively allowed to recover procurement
costs incurred in compliance with an approved procurement plan.  Only limited categories of costs, including
contract administration and least-cost dispatch, are subject to reasonableness reviews.

In addition, SB 1078, which was signed into law by the Governor in September 2002 and is effective January 1,
2003, provides that, commencing January 1, 2003, SCE and other California utilities shall increase their
procurement of renewable resources by at least an additional 1% of their annual electricity sales per year so
that 20% of the utility's annual electricity sales are procured from renewable resources by no later than
December 31, 2017.  Utilities are not required to enter into long-term contracts for renewable resources in excess
of a market-price benchmark to be established by the CPUC pursuant to criteria set forth in the statute.  Similar
provisions are also found in AB 57.

The CPUC issued four major decisions in this proceeding in 2002 addressing:  (1) transitional procurement
contracts; (2) the allocation of contracts previously entered into by the CDWR among the three major California
utilities; (3) the resumption of power procurement activities by these utilities on January 1, 2003 and adoption
of a regulatory framework for such activities; and (4) SCE's short-term procurement plan for 2003.

The first decision, relating to transitional procurement contracts, was issued on August 22, 2002.  It authorized
the utilities to enter into capacity contracts between the effective date of the decision and January 1, 2003,
referred to as the transitional procurement period.  Under this decision, the CPUC would approve or disapprove
the transitional contracts proposed by a utility by means of an expedited advice letter process.  As a result of
this process, SCE entered into six transitional capacity contracts with terms up to five years.  These contracts
were approved by the CPUC.

This decision also required the utilities to procure, during the transitional procurement period, at least 1% of
their annual electricity sales through a competitive procurement process set aside for renewable resources.  The
utilities were required to solicit bids for renewable contracts with terms of five, ten and fifteen years and to
enter into contracts providing for the commencement of deliveries by the end of 2003.  In accordance with this
CPUC directive, SCE conducted a solicitation of offers from owners of renewable resources and, based upon the
results of the solicitation, provisionally entered into six contracts, subject to subsequent CPUC approval.

On December 24, 2002 and January 14, 2003, SCE filed advice letters seeking CPUC approval of these six renewable
contracts.  On January 30, 2003, the CPUC issued a resolution approving four of the six renewable contracts.  In
addition, draft resolutions have been issued disapproving the two remaining renewable contracts, with an
alternative draft resolution approving one of the two remaining contracts.  The CPUC is expected to rule on the
remaining contracts in the second quarter of 2003.


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The second decision addressed the issue of allocating among the three major California utilities the contracts
previously entered into by the CDWR.  In this decision, issued on September 19, 2002, the CPUC allocated the CDWR
contracts on a contract-by-contract basis.  Under the decision, utility responsibility for the contracts is
limited to that of scheduling and dispatch.  The decision significantly reduces SCE's net short and also
increases the likelihood that SCE will have excess power during certain periods.  Wholesale revenue from the sale
of such surplus energy is to be prorated between the CDWR and SCE, pursuant to several CPUC orders.  Under the
decision, SCE acts as limited agent for the CDWR for contract implementation, but legal title, financial
reporting and responsibility for the payment of contract-related bills remain with the CDWR.  On January 17,
2003, the CDWR filed a petition to modify the September 19, 2002 decision requesting the allocation of four
additional contracts that are not currently part of the CDWR's 2003 revenue requirement.  The CPUC allocated one
of the four contracts to SCE in a February 27, 2003 decision.

The third decision was issued on October 24, 2002.  It ordered the utilities to resume procurement and adopting
the regulatory framework for the utilities resuming full procurement responsibilities on January 1, 2003.  The
decision distinguished the utilities' responsibilities on the basis of short-term (2003) versus long-term
(2004-2024) procurement.  It adopted the utilities' procurement plans filed on May 1, 2002, and directed that they
be modified prior to January 1, 2003 to reflect the decision, the allocation of existing CDWR contracts, and any
transitional procurement done under the August 22, 2002 decision.  The October 24, 2002 decision also set forth a
detailed process and procedural schedule to develop long-term procurement planning that includes the filing by
each utility of a long-term plan by April 1, 2003 and an evidentiary hearing in early July 2003.  In addition,
the decision called for each of the utilities to establish a balancing account, to be known as the energy
resource recovery account, to track energy costs.  These balancing accounts will be used for examining
procurement rate adjustments on a semi-annual basis, as well as on a more expedited basis in the event fuel and
purchased-power costs exceed a prescribed threshold.  The decision also provided clarification as to certain
elements of the CPUC's August 22, 2002 order regarding interim procurement of additional renewable resources and
established a schedule for parties to provide comments in January 2003 on various aspects of SB 1078
implementation in anticipation of an implementation report to be submitted by the CPUC to the legislature by
June 30, 2003.  On November 25, 2002, SCE filed an application with the CPUC for rehearing of the October 24
decision seeking the correction of legal errors in the decision.  The CPUC has not yet ruled on SCE's application
for rehearing, but has indicated that it will address SCE's application and others in future decisions.

The fourth decision, issued on December 19, 2002, approved modified short-term procurement plans filed in
November 2002 by SCE, PG&amp;E, and SDG&amp;E.  It modified and clarified the cost-recovery mechanisms and standards of
behavior adopted in the October 24 decision, and provided further guidance on the long-term planning process to
be undertaken in the next phase of the power procurement proceeding.  The CPUC found that the utilities were
capable of resuming full procurement on January 1, 2003 and ordered that they take all necessary steps to do so.

Among other things, the December 19, 2002 decision determined that SCE's maximum disallowance risk exposure for
procurement activities, contract administration and least-cost dispatch would be capped at twice SCE's "annual
procurement administrative expenses."

On January 21, 2003, SCE filed an application for rehearing of the December 19, 2002 procurement plan decision.
Issues addressed included certain standard of conduct provisions, bilateral contracting, level of customer risk
tolerance, lack of an appropriate tracking mechanism for certain costs, lack of definition for least cost
dispatch, and the finding that SCE was non-compliant with the August 22, 2002 decision.  SCE has filed a petition
for modification which addressed, among other things, the need for the cap on SCE's maximum disallowance risk
exposure to be extended to cover all procurement activities.

On March 4, 2003, SCE also filed a motion for consolidated consideration of the numerous applications for
rehearing and petitions for modification that have been filed, and will be filed, on the various CPUC decisions
addressing the investor owned utilities management of their power supply portfolios.  In the motion, SCE urged
the CPUC to conduct a comprehensive review of its procurement decisions and act on the various applications for
rehearing and petitions for modification in an integrated manner, avoiding the piecemeal action that failed to
fully resolve the outstanding issues.


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In accordance with the CPUC's October 24, 2002 decision, on February 3, 2003, SCE and the other utilities filed
outlines of their long-term procurement plans.  SCE proposed in its outline that the CPUC separate the proceeding
so that SCE would file a separate 2004 short-term procurement plan as well as its long-term plan.  The assigned
administrative law judge agreed with this proposal.  SCE plans to file the long-term resource plan and the 2004
short-term procurement plan on April 1, 2003 and May 1, 2003, respectively.  Hearings on the short-term plan and
certain key issues in the long-term plan are expected to take place in June and July 2003.  The issues that will
be incorporated into the long-term plan were addressed during the prehearing conference on March 7, 2003.
Pursuant to a ruling of the assigned administration law judge, issues related to implementation of SB 1078 will
be determined on a separate, expedited schedule.  Testimony on the implementation of SB 1078 will be filed on
March 27, 2003, and hearings will be held in April 2003.  A preliminary decision is expected in June 2003,
followed by a report by the CPUC to the Legislature on June 30, 2003.

CDWR Contracts

On December 19, 2002, the CPUC adopted an operating order under which SCE, PG&amp;E, and SDG&amp;E perform the
operational, dispatch, and administrative functions for the CDWR's long-term power purchase contracts, beginning
January 1, 2003.  The operating order sets forth the terms and conditions under which the three utility companies
administer the CDWR contracts and requires the utility companies to dispatch all the generating assets within
their portfolios on a least-cost basis for the benefit of their ratepayers.  PG&amp;E and SDG&amp;E filed an emergency
motion in which they sought to substitute their negotiated operating agreements with the CDWR for the CPUC's
operating order.  The CPUC has not yet ruled on their motion and it is not clear what impact, if any, a CPUC
ruling on their motion will have on SCE.  On February 24, 2003, the assigned administrative law judge issued a
draft decision approving the two negotiated operating agreements subject to certain additions and deletions to
the terms agreed to by the parties.  This draft decision is subject to comments and must be approved by the CPUC
before it is final.

The CPUC also approved amendments to the servicing agreements between the utilities and the CDWR relating to
transmission, distribution, billing, and collection services for the CDWR's purchased power.  The servicing order
issued by the CPUC identifies the formulas and mechanisms to be used by SCE to remit to the CDWR the revenue
collected from SCE's customers for their use of energy from the CDWR contracts that have been allocated to SCE.

Mohave Generating Station Proceeding

On May 17, 2002, SCE filed with the CPUC an application to address certain issues facing the future extended
operation of Mohave, which is partly owned by SCE.  Mohave obtains all of its coal supply from the Black Mesa
Mine in northeast Arizona, located on lands of the Navajo Nation and Hopi Tribe (the Tribes).  This coal is
delivered from the mine to Mohave by means of a coal slurry pipeline, which requires water that is obtained from
groundwater wells located on lands of the Tribes in the mine vicinity.

Due to the lack of progress in negotiations with the Tribes and other parties to resolve several coal and water
supply issues, SCE's application stated that it probably would not be possible for SCE to extend Mohave's
operation beyond 2005.  Uncertainty over a post-2005 coal and water supply has prevented SCE and the other Mohave
co-owners from starting to make approximately $1.1 billion (SCE's share is $605 million) of Mohave-related
investments that will be necessary if Mohave operations are to extend past 2005, including the installation of
pollution control equipment that must be put in place pursuant to a 1999 Consent Decree related to air quality,
if Mohave's operations are extended past 2005.

SCE's May 17, 2002, application requested either:  a) pre-approval for SCE to immediately begin spending up to
$58 million on Mohave pollution controls in 2003, if by year-end 2002 SCE had obtained adequate assurance that
the outstanding coal and slurry-water issues would be satisfactorily resolved; or b) authority for SCE to
establish certain balancing accounts and otherwise begin preparing to terminate Mohave's coal-fired operations at
the end of 2005.

The CPUC issued a ruling on January 7, 2003, requesting further written testimony from SCE and initial written
testimony from other parties on specified issues relating to Mohave and its coal and slurry-water

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supply.  The ruling states that the purpose of the CPUC proceeding is to determine whether it is in the public
interest to extend Mohave operations post 2005.  In its supplemental testimony submitted on January 30, 2003, SCE
stated, among other things, that the currently available information is not sufficient for the CPUC to make this
determination at this time.  The testimony states that neither SCE nor any other party has sufficient assurance
of whether and how the currently unresolved coal and water supply issues will be resolved.  Unless all key issues
are resolved in a timely way, Mohave will cease operation as a coal-fired plant at the end of 2005 under the
terms of the consent decree and the existing coal supply agreements.  In that event, there would be no need for
the CPUC to make the determination it has described, since extension of the present operating period would not be
an option.  SCE's supplemental testimony accordingly requests that the CPUC authorize the establishment of the
balancing accounts that SCE first requested in its May 17, 2002 application, in order to prepare for an orderly
shutdown of Mohave by the end of 2005, but the testimony also states that even with such authorization, SCE will
continue to work with the relevant stakeholders to attempt to resolve the issues surrounding Mohave's coal and
slurry-water supply.

On January 14, 2003, the Natural Resources Defense Council, Black Mesa Trust and others served a notice of intent
to sue the U.S. Department of the Interior and other federal government agencies and individuals, challenging the
failure of the government to issue a final permit to Peabody Western Coal Company for the operation of the Black
Mesa Mine.  The prospective plaintiffs claim that the federal government must begin a proceeding for issuance of
a final permit to Peabody rather than allow Peabody to continue long-term operation of the Black Mesa Mine on an
interim basis including groundwater extraction for use in the coal slurry pipeline.  The notice indicates that
the prospective plaintiffs would then challenge any issuance of a permanent mining permit for the Black Mesa Mine
unless, at a minimum, an alternate source of slurry water is obtained.  If the prospective plaintiffs prevail in
any future lawsuit, the coal supply to Mohave could be interrupted.

For additional matters related to Mohave see the "Other Developments--Navajo Nation Litigation" section.

In light of all of the issues discussed above, SCE concluded that it is probable Mohave will be shut down at the
end of 2005.  Because the expected undiscounted cash flows from the plant during the years 2003-2005 were less
than the $88 million carrying value of the plant as of December 31, 2002, SCE incurred an impairment charge of
$61 million.  However, in accordance with accounting standards for rate-regulated enterprises, this incurred cost
was deferred and recorded as a regulatory asset, based on SCE's expectation that any unrecovered book value at
the end of 2005 would be recovered in future rates through the rate-making mechanism discussed in its May 17,
2002 application and again in its January 30, 2003 supplemental testimony.

The outcome of SCE's application is not expected to impact Mohave's operation through 2005.  Consequently, this
matter has no impact on the timing of PROACT recovery.

Transmission and Distribution

This subsection of "Regulatory Matters" discusses the certain key regulatory proceedings.

PBR Decision

On April 22, 2002, the CPUC issued a decision that modified the PBR mechanism in the following significant
respects:

o    SCE's current PBR distribution sales mechanism was converted to a revenue requirement mechanism to
     prevent material revenue undercollections or overcollections resulting from errors in estimates of electric
     sales.  A balancing account has been established to record any undercollections or overcollections,
     effective retroactively as of June 14, 2001.

o    A methodology was adopted to set SCE's distribution revenue requirement for June 14 to December 31,
     2001, calendar year 2002 and calendar year 2003 until replaced by the GRC.  The methodology (a) established
     2000 as the base year, (b) annually adjusts SCE's distribution revenue requirement by the change in the
     Consumer Price Index minus a productivity factor of 1.6%, and (c) annually increases SCE's distribution
     revenue requirement to account for additional costs of


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     expanding the distribution network to connect new customers (an allowance of about $650 per customer).

o    The performance benchmarks for worker safety, customer satisfaction and outage frequency have been
     updated effective in 2002 to reflect historical improvements in SCE's performance.  These changes will
     reduce rewards SCE would earn compared to the previous standards.

As a result of this decision, in 2002, SCE recorded credits to earnings of approximately $26 million for revenue
undercollections during the period June 14, 2001 through December 31, 2001, and credits to earnings of $73
million for the year ended December 31, 2002.  All of these amounts are on an after-tax basis.  This decision is
incorporated into SCE's current projection of the timing of PROACT recovery.

2003 General Rate Case Proceeding

In December 2001, SCE submitted a notice of intent to file its 2003 GRC with the CPUC, requesting an increase of
approximately $500 million in revenue (compared to 2000 recorded revenue) for its distribution and generation
operations.  On May 3, 2002, SCE filed its formal application for the 2003 GRC.  After taking into account the
effects of the CPUC's April 22, 2002 PBR decision, SCE requested a revenue requirement increase of $286 million.
The requested revenue increase is primarily related to capital additions, updated depreciation costs and
projected increases in pension and benefit expenses.  In October 2002, the CPUC's Office of Ratepayer Advocates
issued its testimony and recommended a $172 million decrease in SCE's base rates.  Several other intervenors have
also proposed further reductions to SCE's request or have made other substantive proposals regarding SCE's
operations.  Direct evidentiary hearings were concluded in January 2003.  Rebuttal testimony has been filed and
rebuttal hearings were held in late February 2003.  A final decision is expected in the third quarter of 2003.

Cost of Capital Decision

On November 7, 2002, the CPUC issued a decision in SCE's cost of capital proceeding, adopting an 11.6% return on
common equity for 2003 for SCE's CPUC jurisdictional assets.  The 2003 cost of capital decision also established
authorized costs for long-term debt and preferred stock, and established SCE's authorized rate-making capital
structure for 2003 (although it does not apply during the PROACT recovery period), in addition to setting SCE's
authorized return on common equity.  This decision is incorporated into SCE's current projection of the timing of
PROACT recovery.

Electric Line Maintenance Practices Proceeding

In August 2001, the CPUC issued an order instituting investigation (OII) regarding SCE's overhead and underground
electric line maintenance practices.  The OII is based on a report issued by the CPUC's Protection and Safety
Consumer Services Division (CPSD), which alleges SCE had a pattern of noncompliance with the CPUC's General
Orders for the maintenance of electric lines over the period 1998-2000.  The OII also alleges that noncompliant
conditions were "involved" in 37 accidents resulting in death, serious injury, or property damage.  The CPSD
identified 4,817 alleged violations of the General Orders during the three-year period.  The OII placed SCE on
notice that it is potentially subject to a penalty of between $500 and $20,000 for each violation or accident.

Prepared testimony was filed on this matter in April 2002 and hearings were concluded in September 2002.  In
opening briefs filed on October 21, 2002, the CPSD recommended SCE be assessed a penalty of $97 million, while
SCE requested that the CPUC dismiss the proceeding and impose no penalties.  SCE stated in its opening brief that
it has acted reasonably, allocating its financial and human resources in pursuit of the optimum combination of
employee and public safety, system reliability, cost-effectiveness, and technological advances.  SCE also
encouraged the CPUC to transfer consideration of issues related to development of standardized inspection
methodologies and inspector training to an Order Instituting Rulemaking to revise these General Orders opened by
the CPUC in October 2001, or to a new rulemaking proceeding.  On March 14, 2003, SCE and the CPSD filed Opening
Briefs in response to the assigned administrative law judge's direction to address application of the appropriate
standard to govern SCE's electric line maintenance obligation.  Oral arguments are scheduled for April 22, 2003.
A decision is

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expected in the second or third quarter of 2003.  SCE is unable to predict with certainty whether this matter
ultimately will result in any material financial penalties or impacts on SCE.

Wholesale Electricity Markets

On April 25, 2001, after months of high power prices, the FERC issued an order providing for energy price
controls during ISO Stage 1 or greater power emergencies (7% or less in reserve power).  The order establishes an
hourly clearing price based on the costs of the least efficient generating unit during the period.  Effective
June 20, 2001, the FERC expanded the April 25, 2001 order to include non-emergency periods and price mitigation in
the 11-state western region through September 30, 2002.  On July 17, 2002, the FERC issued an order reviewing the
ISO's proposals to redesign the market and implementing a market power mitigation program for the 11-state
western region.  The FERC declined to extend beyond September 30, 2002 all of the market mitigation measures it
had previously adopted.  However, effective October 1, 2002, the FERC extended a requirement, first ordered in
its June 19, 2001 decision, that all western energy sellers offer for sale all operationally and contractually
available energy.  It also ordered a cap on bids for real-time energy and ancillary services of $250/MWh to be
effective beginning October 1, 2002 and ordered various other market power mitigation measures.  Implementation
of the $250/MWh bid cap and other market power mitigation measures were delayed until October 31, 2002 by a FERC
order issued September 26, 2002.  The FERC did not set a specific expiration date for its new market mitigation
plan.  SCE cannot yet determine whether the new market mitigation plan adopted by the FERC will be sufficient to
mitigate market price volatility in the wholesale electricity markets in which SCE will purchase its residual net
short electricity requirements (i.e., the amount of energy needed to serve SCE's customers from sources other
than its own generating plants, power purchase contracts and CDWR contracts).

On August 2, 2000, SDG&amp;E filed a complaint with the FERC seeking relief from alleged energy overcharges in the PX
and ISO market.  SCE intervened in the proceeding on August 14, 2000.  On August 23, 2000, the FERC issued an
order initiating an investigation of the justness and reasonableness of rates charged by sellers in the PX and
ISO markets.  Those proceedings were consolidated.  On July 25, 2001, the FERC issued an order that limits
potential refunds from alleged overcharges by energy suppliers to the ISO and PX spot markets during the period
from October 2, 2000 through June 20, 2001, and adopted a refund methodology based on daily spot market gas
prices.  An administrative law judge conducted evidentiary hearings on this matter in March, August and October
2002 and issued and initial decision on December 12, 2002.

On November 20, 2002, in the consolidated proceeding, the FERC issued an order authorizing 100 days of discovery
by market participants into market manipulation and abuse during the period January 1, 2000 through June 20,
2001.  SCE joined with the California parties (PG&amp;E, the California Attorney General, the Electricity Oversight
Board, and the CPUC to submit briefs and evidence demonstrating that sellers and marketers violated tariffs,
withheld power, and distorted and manipulated the California electricity markets.

At a FERC meeting on March 26, 2003, the FERC issued orders that initiated procedures for determining additional
refunds arising from market manipulation by energy suppliers.  Based on public comments at the meeting and the
FERC's press releases, it appears that the FERC acknowledges that there was pervasive gaming and market
manipulation of the electric and gas markets in California and on the west coast.  A new FERC staff report issued
on March 26, 2003 also describes many of the techniques and effects of electric and gas market manipulation.  The
FERC will be modifying the administrative law judge's initial decision of December 12, 2002 to reflect the fact
that the gas indices used in the market manipulation formula overstated the cost of gas used to generate
electricity.

SCE has not yet completed an evaluation of the FERC actions taken on March 26, 2003 and cannot determine the
timing or amount of any potential refunds.  Under the settlement agreement with the CPUC, any refunds will be
applied to reduce the PROACT balance until the PROACT is fully recovered.  After PROACT recovery is complete, 90%
of any refunds will be refunded to ratepayers.

Other Regulatory Matters

This subsection of "Regulatory Matters" discusses an SCE plan to reduce customer rates after the PROACT has been
fully recovered and the current status of the holding company proceeding.


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Customer Rate-Reduction Plan

On January 17, 2003, SCE filed with the CPUC a detailed plan outlining how customer rates could be reduced later
in 2003 when SCE expects to have completed recovery of uncollected procurement costs incurred on behalf of its
customers during the California energy crisis and reflected in the PROACT.  In its January 17, 2003 filing, SCE
proposed that the CPUC apply rate reductions of about $1.3 billion in the same manner it applied a series of rate
surcharges during the height of the energy crisis in 2001, primarily to rates paid by business and higher-use
residential customers.  If approved by the CPUC, after PROACT recovery is completed, bills for larger-use
residential customers would decline 8%, and average rates would decline 19% for small and medium business
customers and 26% for larger-use business customers.  The CPUC has set a prehearing conference for March 21, 2003
and has asked for additional evidence on the effect on rates of applying the reductions on an equal
cents-per-kilowatt-hour basis across all customer classes rather than as SCE has proposed.  SCE cannot predict
when the matter will be decided.

Holding Company Proceeding

In April 2001, the CPUC issued an OII that reopens the past CPUC decisions authorizing utilities to form holding
companies and initiates an investigation into, among other things:  whether the holding companies violated CPUC
requirements to give first priority to the capital needs of their respective utility subsidiaries; any additional
suspected violations of laws or CPUC rules and decisions; and whether additional rules, conditions, or other
changes to the holding company decisions are necessary.  On January 9, 2002, the CPUC issued an interim decision
on the first priority condition.  The decision stated that, at least under certain circumstances, the condition
includes the requirement that holding companies infuse all types of capital into their respective utility
subsidiaries when necessary to fulfill the utility's obligation to serve.  The decision did not determine if any
of the utility holding companies had violated this condition, reserving such a determination for a later phase of
the proceedings.  On February 11, 2002, SCE and Edison International filed an application before the CPUC for
rehearing of the decision.  On July 17, 2002, the CPUC affirmed its earlier decision on the first priority
condition and also denied Edison International's request for a rehearing of the CPUC's determination that it had
jurisdiction over Edison International in this proceeding.  On August 21, 2002, Edison International and SCE
jointly filed a petition requesting a review of the CPUC's decisions with regard to first priority
considerations, and Edison International filed a petition for a review of the CPUC decision asserting
jurisdiction over holding companies, both in state court as required.  PG&amp;E, SDG&amp;E and their respective holding
companies filed similar challenges, and all cases have been transferred to the First District Court of Appeals in
San Francisco.  The CPUC filed briefs in opposition to the writ petitions.  SCE, Edison International, and the
other petitioners filed reply briefs on March 6, 2003.  No hearings have been scheduled.  The court may rule
without holding hearings.  SCE cannot predict with certainty what effects this investigation or any subsequent
actions by the CPUC may have on SCE.

OTHER DEVELOPMENTS

Environmental Protection

SCE is subject to numerous environmental laws and regulations, which require it to incur substantial costs to
operate existing facilities, construct and operate new facilities, and mitigate or remove the effect of past
operations on the environment.

As further discussed in Note 10 to the Consolidated Financial Statements, SCE records its environmental
liabilities when site assessments and/or remedial actions are probable and a range of reasonably likely cleanup
costs can be estimated.  SCE's recorded estimated minimum liability to remediate its 41 identified sites is $99
million.  The sites include SCE's divested gas-fueled generation plants, for which SCE retained some liability as
a result of their sale.  SCE believes that, due to uncertainties inherent in the estimation process, it is
reasonably possible that cleanup costs could exceed its recorded liability by up to $282 million.

The CPUC allows SCE to recover environmental-cleanup costs at certain sites, representing $38 million of its
recorded liability, through an incentive mechanism, which is discussed in Note 10.  SCE has recorded a


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regulatory asset of $70 million for its estimated minimum environmental-cleanup costs expected to be recovered
through customer rates.

SCE's identified sites include several sites for which there is a lack of currently available information.  As a
result, no reasonable estimate of cleanup costs can be made for these sites.  SCE expects to clean up its
identified sites over a period of up to 30 years.  Remediation costs in each of the next several years are
expected to range from $10 million to $25 million.  Recorded costs for the 2002 were $25 million.

Based on currently available information, SCE believes it is unlikely that it will incur amounts in excess of the
upper limit of the estimated range and, based upon the CPUC's regulatory treatment of environmental-cleanup
costs, SCE believes that costs ultimately recorded will not materially affect its results of operations or
financial position.  There can be no assurance, however, that future developments, including additional
information about existing sites or the identification of new sites, will not require material revisions to such
estimates.

In 1999, SCE and other co-owners of the Mohave plant entered into a consent decree to resolve a federal court
lawsuit that had been filed alleging violations of various emissions limits.  This decree, approved by the court
in December 1999, required certain modifications to the plant in order for it to continue to operate beyond 2005.

The Clean Air Act requires power producers to have emissions allowances to emit sulfur dioxide.  Power companies
receive emissions allowances from the federal government and may bank or sell excess allowances.  SCE expects to
have excess allowances under Phase II of the Clean Air Act (2000 and later).

SCE's share of the costs of complying with the consent decree and taking other actions to continue operation of
the Mohave station beyond 2005 is estimated to be approximately $605 million over the next four years.  This
amount is included in the $2.0 billion for SCE's projected environmental capital expenditure (discussed below).
SCE has received from the State of Nevada a permit to construct the necessary controls.  However, SCE has
suspended its efforts to seek CPUC approval to install the Mohave controls because it has not obtained reasonable
assurance of adequate coal and water supplies for operating Mohave beyond 2005.  Unless adequate coal and water
supplies are obtained, it will become necessary to shut down the Mohave station after December 31, 2005.  If the
station is shut down at that time, the shutdown is not expected to have a material adverse impact on SCE's
financial position or results of operations, assuming the remaining book value of the station (approximately $27
million as of December 31, 2002) and the related regulatory asset (approximately $61 million as of December 31,
2002), and plant closure and decommissioning-related costs are recoverable in future rates.  SCE cannot predict,
with certainty, what effect any future actions by the CPUC may have on this matter.  See "Regulatory
Matters--Mohave Generating Station Proceeding" for further discussion of the Mohave issues.

SCE's projected environmental capital expenditures are $2.0 billion for the 2003-2007 period, mainly for
undergrounding certain transmission and distribution lines.

Electric and Magnetic Fields

Electric and magnetic fields (EMFs) naturally result from the generation, transmission, distribution and use of
electricity.  Since the 1970s, concerns have been raised about the potential health effects of EMFs.  After
30 years of research, no health hazard has been established.  Many of the questions about specific diseases have
been successfully resolved due to an aggressive international research program.  Potentially important public
health questions remain about whether there is a link between EMF exposures in homes or work and some diseases,
including childhood leukemia and a variety of other adult diseases (e.g., adult cancers and miscarriages), and
because of these questions, some health authorities have identified magnetic field exposures as a possible human
carcinogen.

In October 2002, the California Department of Health Services (CDHS) released its report evaluating the possible
risks from electric and magnetic fields (CDHS Report) to the CPUC and the public.  The CDHS Report's conclusions
contrast with other recent reports by authoritative health agencies in that the CDHS has assigned a substantially
higher probability to the possibility that there is a causal connection between


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EMF exposures and a number of diseases and conditions, including childhood leukemia, adult leukemia, amyotrophic
lateral sclerosis, and miscarriages.

This report concludes a program initiated by the CPUC's 1993 Interim EMF Decision.  Under the policies advanced
by that decision, utilities have already committed to funding research, providing education materials to
employees and customers, and taking proactive steps to lower magnetic fields from new facilities.

It is not yet clear what actions the CPUC will take to respond to the CDHS Report and to the recent EMF reports
by other health authorities such as the National Institute of Environmental Health Sciences, the World Health
Organization's International Agency for Research on Cancer, and the United Kingdom's National Radiation
Protection Board.  Possible outcomes include, but are not limited to, continuation of current policies and
imposition of more stringent policies to implement greater reductions in EMF exposures.  The costs of these
different outcomes are unknown at this time.

Navajo Nation Litigation

Peabody Holding Company (Peabody) supplies coal from mines on Navajo Nation lands to Mohave.  In June 1999, the
Navajo Nation filed a complaint in federal district court against Peabody and certain of its affiliates, Salt
River Project Agricultural Improvement and Power District, and SCE.  The complaint asserts claims against the
defendants for, among other things, violations of the federal RICO statute, interference with fiduciary duties
and contractual relations, fraudulent misrepresentation by nondisclosure, and various contract-related claims.
The complaint claims that the defendants' actions prevented the Navajo Nation from obtaining the full value in
royalty rates for the coal.  The complaint seeks damages of not less than $600 million, trebling of that amount,
and punitive damages of not less than $1 billion, as well as a declaration that Peabody's lease and contract
rights to mine coal on Navajo Nation lands should be terminated.

In February 2002, Peabody and SCE filed cross claims against the Navajo Nation, alleging that the Navajo Nation
had breached a settlement agreement and final award between Peabody and the Navajo Nation by filing their lawsuit.

The Navajo Nation had previously filed suit in the Court of Claims against the United States Department of
Interior, alleging that the Government had breached its fiduciary duty concerning contract negotiations including
the Navajo Nation and the defendants.  In February 2000, the Court of Claims issued a decision in the
Government's favor, finding that while there had been a breach, there was no available redress from the
Government.  Following appeal of that decision by the Navajo Nation, an appellate court ruled that the Court of
Claims did have jurisdiction to award damages and remanded the case to the Court of Claims for that purpose.  On
June 3, 2002, the Government's request for review of the case by the United States Supreme Court was granted.  On
March 4, 2003, the Supreme Court reversed the appellate court and held that the Government is not liable to the
Navajo Nation as there was no breach of a fiduciary duty.

SCE cannot predict with certainty the outcome of the 1999 Navajo Nation's complaint against SCE, nor the impact
on this complaint or the Supreme Court's decision on the outcome of the Navajo Nation's suit against the
Government, or the impact of the complaint on the operation of Mohave beyond 2005.

Employee Compensation and Benefit Plans

SCE measures compensation expense related to stock-based compensation by the intrinsic value method.  If SCE were
to adopt the fair-value method of accounting and charge the cost of the stock options to expense, effective with
stock options granted in 2002, SCE's earnings for the year ended December 31, 2002, would have been reduced by
approximately $1 million, based on a Black-Scholes option-pricing model.

Under accounting standards for pension costs, if the accumulated benefit obligation (ABO) exceeds the market
value of plan assets at the measurement date, the difference may result in a reduction to shareholder's equity
through a charge to other comprehensive income.  As of December 31, 2002, the $41 million in ABO for one of SCE's
two pension plans, measured using a discount rate that represented the market interest rate for high quality
fixed income investments, exceeded the market value of the


Page 24
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- ---------------------------------------------------------------------------------------------------------------------
                                                                                Southern California Edison Company


related pension plan assets, resulting in a $5 million (net of tax) reduction to shareholder's equity.  As of
December 31, 2002, the $2.1 billion in ABO of the other pension plan was approximately $140 million less than the
market value of the related plan assets, resulting in no additional reduction to shareholder's equity.  For this
plan, a reduction of shareholder's equity may be required at the next measurement date in December 2003,
depending on such factors as the discount rate, plan asset rate of return experience and contributions made by
SCE in 2003.  See additional discussion in "Critical Accounting Policies--Pensions."

San Onofre Inspection

SCE's San Onofre Unit 2 returned to service on July 2, 2002 after a 43-day outage for scheduled refueling and
maintenance.  SCE's San Onofre Unit 3 returned to service on February 17, 2003 after a 42-day outage for
scheduled refueling and maintenance.  During these outages, detailed inspections of the reactor vessel head
nozzle penetrations were conducted.  The subject of reactor vessel head nozzle penetrations has received industry
attention recently due to the leakage from such nozzles at the Davis Besse nuclear plant in Ohio.  The
inspections conducted at San Onofre Units 2 and 3 found no indications of leakage or degradation in the reactor
vessel head nozzle penetrations.

Federal Income Taxes

On August 7, 2002, Edison International received a notice from the IRS asserting deficiencies in federal
corporate income taxes for Edison International's 1994 to 1996 tax years.  Included in these amounts are
deficiencies asserted against SCE.  Substantially all of SCE's tax deficiencies are timing differences and,
therefore, amounts ultimately paid, if any, would benefit it as future tax deductions.  Edison International is
challenging the deficiencies asserted by the IRS.  SCE believes that it has meritorious legal defenses to
deficiencies asserted against it and believes that the ultimate outcome of this matter will not result in a
material impact on its consolidated results of operations or financial position.

Edison International is, and may in the future be, under examination by tax authorities in varying tax
jurisdictions with respect to positions it takes in connection with the filing of its tax returns.  Matters
raised upon audit may involve substantial amounts, which, if resolved unfavorably, an event not currently
anticipated, could possibly be material.  However, in SCE's opinion, it is unlikely that the resolution of any
such matters will have a material adverse effect upon its financial condition or results of operations.

CRITICAL ACCOUNTING POLICIES

The accounting policies described below are viewed by management as critical because their application is the
most relevant and material to SCE's results of operations and financial position and these policies require the
use of material judgments and estimates.

Asset Impairment

SCE evaluates long-lived assets whenever indicators of potential impairment exist.  Accounting standards require
that if the undiscounted expected future cash flow from a company's assets or group of assets is less than its
carrying value, an asset impairment must be recognized in the financial statements.  The amount of impairment is
determined by the difference between the carrying amount and fair value of the asset.

The assessment of impairment is a critical accounting estimate because significant management judgment is
required to determine:  (1) if an indicator of impairment has occurred, (2) how assets should be grouped, (3) the
forecast of undiscounted expected future cash flow over the asset's estimated useful life, and (4) if an
impairment exists, the fair value of the asset or asset group.  Factors SCE considers important, which could
trigger an impairment, include operating losses from a project, projected future operating losses, the financial
condition of counterparties, or significant negative industry or economic trends.

During the fourth quarter of 2002, SCE assessed the impairment of its Mohave plant due to the probability of a
plant shutdown at the end of 2005.  Because the expected undiscounted cash flows from the plant during the years
2003-2005 were less than the $88 million carrying value of the plant as of December 31,


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- -------------------------------------------------------------------------------------------------------------------
Management's Discussion and Analysis of Results of Operations and Financial Condition


2002, SCE incurred an impairment charge of $61 million.  However, in accordance with accounting principles for
rate regulated companies, this incurred cost was deferred and recorded as a regulatory asset, due to the
expectation that the unrecovered book value of Mohave at the time of shutdown will be recovered through the
rate-making process.  See "Regulatory Matters--Mohave Generating Station Proceeding" and "--Rate Regulated
Enterprises."

Income Taxes

The accounting standard for income taxes requires the asset and liability approach for financial accounting and
reporting for deferred income taxes.  SCE uses the asset and liability method of accounting for deferred income
taxes and provides deferred income taxes for all significant income tax temporary differences.

As part of the process of preparing its consolidated financial statements, SCE is required to estimate its income
taxes in each of the jurisdictions in which it operates.  This process involves estimating actual current tax
expense together with assessing temporary differences resulting from differing treatment of items, such as
depreciation, for tax and accounting purposes.  These differences result in deferred tax assets and liabilities,
which are included within SCE's consolidated balance sheet.  Management continually evaluates its income tax
exposures and provides for allowances and/or reserves as deemed necessary.

Pensions

Pension obligations and the related effects on results of operations are calculated using actuarial models.  Two
critical assumptions, discount rate and expected return on assets, are important elements of plan expense and
liability measurement.  These critical assumptions are evaluated at least annually.  Other assumptions, such as
retirement, mortality and turnover, are evaluated periodically and updated to reflect actual experience.

The discount rate enables SCE to state expected future cash flows at a present value on the measurement date.  At
the December 31, 2002 measurement date, SCE used a discount rate of 6.5% that represented the market interest
rate for high-quality fixed income investments.

To determine the expected long-term rate of return on pension plan assets, current and expected asset allocations
are considered, as well as historical and expected returns on plan assets.  The expected rate of return on plan
assets was 8.5%.  Actual return on plan assets resulted in losses in the pension trusts of $311 million in 2002.
However, accounting principles provide that differences between expected and actual returns are recognized over
the average future service of employees.

At December 31, 2002, SCE's pension plans included $2.6 billion in projected benefit obligation (PBO), $2.2
billion in ABO and $2.3 billion in plan assets.  A 1% decrease in the discount rate would increase the PBO by
$205 million, and a 1% increase would decrease the PBO by $190 million, with corresponding changes in the ABO.  A
1% decrease in the expected rate of return on plan assets would decrease pension expense by $26 million.

SCE records pension expense equal to the amount funded to the trusts, as calculated using an actuarial method
required for ratemaking purposes, in which the impact of market volatility on plan assets is recognized in
earnings on a more gradual basis.  Any difference between pension expense calculated in accordance with
ratemaking methods and pension expense or income calculated in accordance with accounting standards, is
accumulated in a regulatory asset or liability, and will, over time, be recovered from or returned to
ratepayers.  As of December 31, 2002, this cumulative difference amounted to a regulatory liability of $185
million, meaning that the ratemaking method has resulted in recognizing $185 million more in expense that the
accounting method since implementation of the pension accounting standard in 1987.

Under accounting standards, if the ABO exceeds the market value of plan assets at the measurement date, the
difference may result in a reduction to shareholders' equity through a charge to other comprehensive income, but
would not affect current income.  The reduction to other comprehensive


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                                                                                Southern California Edison Company


income would be restored through shareholders' equity in future periods to the extent the market value of trust
assets exceeded the ABO.

Rate Regulated Enterprises

SCE applies accounting principles for rate-regulated enterprises to the portion of its operations, in which
regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on
capital.  Due to timing and other differences in the collection of revenue, these principles allow an incurred
cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset
if it is probable that the cost is recoverable through future rates and conversely allow creation of a regulatory
liability for probable future costs collected through rates in advance.  SCE's management continually assesses
whether the regulatory assets are probable of future recovery by considering factors such as the current
regulatory environment, the issuance of rate orders on recovery of the specific incurred cost or a similar
incurred cost to SCE or other rate-regulated entities in California, and assurances from the regulator (as well
as its primary intervenor groups) that the incurred cost will be treated as an allowable cost (and not
challenged) for rate-making purposes.  Because current rates include the recovery of existing regulatory assets
and settlement of regulatory liabilities, and rates in effect are expected to allow SCE to earn a reasonable rate
of return, management believes that existing regulatory assets and liabilities are probable of recovery.  This
determination reflects the current political and regulatory climate in California and is subject to change in the
future.  If future recovery of costs ceases to be probable, all or part of the regulatory assets and liabilities
would have to be written off against current period earnings.  At December 31, 2002, the balance sheet included
regulatory assets, less regulatory liabilities, of $4.3 billion.  Management continually evaluates the
anticipated recovery of regulatory assets, liabilities, and revenue subject to refund and provides for allowances
and/or reserves as deemed necessary.

SCE applied judgment in the use of the above principles when:  it concluded, as of December 31, 2000, that $4.2
billion of generation-related regulatory assets and liabilities were no longer probable of recovery, and wrote
off these assets as a charge to earnings, in fourth quarter 2001; it created the $3.6 billion PROACT regulatory
asset, in second quarter 2002; it restored $480 million (after-tax) of generation-related regulatory assets based
on the URG decision; in fourth quarter 2002, it established a $61 million regulatory asset related to the
impaired Mohave plant.  In all instances, SCE recorded corresponding credits to earnings upon concluding that
such incurred costs were probable of recovery in the future.  See further discussion in "Results of
Operations--Earnings (Loss) from Continuing Operations" and "Regulatory Matters--PROACT Regulatory Asset,--URG
Decision, and--Mohave Generating Station Proceeding" sections.

NEW ACCOUNTING STANDARDS

On January 1, 2001, SCE adopted a new accounting standard for derivative instruments and hedging activities.
Adoption of this standard had no material impact on SCE's financial statements.  Effective April 1, 2002, SCE
also adopted an authoritative accounting interpretation to this standard, which precludes fuel contracts that
have variable amounts from qualifying under the normal purchases and sales exception.  The adoption of this
interpretation had no impact on SCE's financial statements.

Effective January 1, 2003, SCE will adopt a new accounting standard, Accounting for Asset Retirement Obligations,
which requires entities to record the fair value of a liability for a legal asset retirement obligation in the
period in which it is incurred.  When the liability is initially recorded, the entity capitalizes the cost by
increasing the carrying amount of the related long-lived asset.  Over time, the liability is increased to its
present value each period, and the capitalized cost is depreciated over the useful life of the related asset.
Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a
gain or loss upon settlement.  However, rate-regulated entities may recognize regulatory assets or liabilities as
a result of timing differences between the recognition of costs as recorded in accordance with this statement and
costs recovered through the ratemaking process. Regulatory assets and liabilities may be recorded when it is
probable that the asset retirement costs will be recovered through the rate-making process. Upon adoption, the
cumulative effect of applying this standard will be recorded as a change in accounting principle and will be
presented after net income (loss) on the consolidated statements of income (loss).


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- -------------------------------------------------------------------------------------------------------------------
Management's Discussion and Analysis of Results of Operations and Financial Condition


SCE estimates the impact of adopting this standard will be as follows:

o    SCE will adjust its nuclear decommissioning obligation to reflect the fair value of decommissioning its
     nuclear power facilities. SCE will also recognize asset retirement obligations associated with the
     decommissioning of other coal-fired generation assets.

o    At December 31, 2002, the total nuclear decommissioning obligation accrued for SCE's active nuclear
     facilities was $2.0 billion and is included in accumulated provision for depreciation and decommissioning on
     the consolidated balance sheet.  SCE has accrued, at December 31, 2002, $12 million to decommission certain
     coal-fired generation assets based on its estimate of the decommissioning obligation under the accounting
     principles in effect at that time. These decommissioning obligations are also included in accumulated
     provision for depreciation and decommissioning on the consolidated balance sheet.

o    SCE estimates that it will record a $190 million decrease to its recorded nuclear and coal facility
     decommissioning obligations for asset retirement obligations in existence as of January 1, 2003.  The
     estimated cumulative effect of a change in accounting principle from unrecognized accretion expense and
     adjustments to depreciation, decommissioning and amortization expense accrued to date is a $408 million gain
     (pre-tax), which will be reflected as a regulatory liability as of January 1, 2003.

FORWARD-LOOKING INFORMATION AND RISK FACTORS

In the preceding MD&amp;A and elsewhere in this quarterly report, the words estimates, expects, anticipates,
believes, predict, and other similar expressions are intended to identify forward-looking information that
involves risks and uncertainties.  Actual results or outcomes could differ materially from those anticipated.
Risks, uncertainties and other important factors that could cause results to differ, or that otherwise could
impact SCE, include, among other things:

o    the outcome of the pending appeal of the stipulated judgment approving SCE's settlement agreement with
     the CPUC, and the effects of other legal actions, if any, attempting to undermine the provisions of the
     settlement agreement or otherwise adversely affecting SCE;

o    changes in prices and availability of wholesale electricity, natural gas, other fuels, transmission
     services, and other changes in operating costs, which could affect the timing of SCE's energy procurement
     cost recovery or otherwise impact SCE's operations and financial results;

o    the effects of declining interest rates and investment returns on employee benefit plans and nuclear
     decommissioning trusts;

o    changing conditions in wholesale power markets, such as general credit constraints and thin trading
     volumes, that could make it difficult for SCE to enter into hedging agreements;

o    the actions of securities rating agencies, including the determination of whether or when to make
     changes in SCE's credit ratings, the ability of SCE to regain investment-grade ratings, and the impact of
     current or lowered ratings and other financial market conditions on the ability of SCE to obtain needed
     financing on reasonable terms;

o    actions by state and federal regulatory and administrative bodies setting rates, adopting or modifying
     cost recovery, holding company rules, accounting and rate-setting mechanisms or otherwise changing the
     regulatory and business environments within which SCE does business, as well as legislative or judicial
     actions affecting the same matters;


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- ---------------------------------------------------------------------------------------------------------------------
                                                                                Southern California Edison Company


o    the effects of increased competition in energy-related businesses, including new market entrants and the
     effects of new technologies that may be developed in the future;

o    threatened attempts by municipalities within SCE's service territory to form public power entities
     and/or acquire SCE's facilities for customers;

o    new or increased environmental requirements that could require capital expenditures or otherwise affect
     the operations and cost of SCE, and possible increased liabilities under new or existing requirements; and

o    weather conditions, natural disasters, and other unforeseen events.




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                                       [THIS PAGE LEFT INTENTIONALLY BLANK]


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- -------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Income (Loss)                                        Southern California Edison Company


In millions                    Year ended December 31,                2002              2001               2000
- -------------------------------------------------------------------------------------------------------------------
Operating revenue                                                  $ 8,706             $ 8,126           $ 7,870
- -------------------------------------------------------------------------------------------------------------------

Fuel                                                                    243                212               195
Purchased power                                                       2,016              3,770             4,687
Provisions for regulatory adjustment clauses - net                    1,502             (3,028)            2,301
Other operation and maintenance                                       1,926              1,771             1,772
Depreciation, decommissioning and amortization                          780                681             1,473
Property and other taxes                                                117                112               126
Net gain on sale of utility plant                                        (5)                (9)              (25)
- -------------------------------------------------------------------------------------------------------------------

Total operating expenses                                              6,579              3,509            10,529
- -------------------------------------------------------------------------------------------------------------------

Operating income (loss)                                               2,127              4,617            (2,659)
Interest and dividend income                                            262                215               173
Other nonoperating income                                                82                 57               118
Interest expense - net of amounts capitalized                          (584)              (785)             (572)
Other nonoperating deductions                                             2                (38)             (110)
- -------------------------------------------------------------------------------------------------------------------

Income (loss) before taxes                                            1,889              4,066            (3,050)
Income tax (benefit)                                                    642              1,658            (1,022)
- -------------------------------------------------------------------------------------------------------------------

Net income (loss)                                                     1,247              2,408            (2,028)
Dividends on preferred stock                                             19                 22                22
- -------------------------------------------------------------------------------------------------------------------

Net income (loss) available for common stock                       $ 1,228             $ 2,386           $(2,050)
===================================================================================================================



Consolidated Statements of Comprehensive Income (Loss)

In millions                    Year ended December 31,                2002              2001               2000
- -------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                   $ 1,247            $ 2,408          $ (2,028)
Other comprehensive income, net of tax:
   Minimum pension liability adjustment                                  (5)                --                --
   Unrealized gain on securities - net                                   --                 --                 3
   Cumulative effect of change in accounting for derivatives             --                398                --
   Unrealized gain (loss) on and amortization of
       cash flow hedges                                                  11               (420)               --
   Reclassification adjustment for loss included
       in net income (loss)                                              --                 --               (25)
- -------------------------------------------------------------------------------------------------------------------

Comprehensive income (loss)                                         $ 1,253            $ 2,386          $ (2,050)
===================================================================================================================










                    The accompanying notes are an integral part of these financial statements.



Page 31
<PAGE>



- -------------------------------------------------------------------------------------------------------------------
Consolidated Balance Sheets


In millions                                          December 31,                       2002                2001
- -------------------------------------------------------------------------------------------------------------------

ASSETS
- -------------------------------------------------------------------------------------------------------------------

Cash and equivalents                                                               $      992          $   3,414
Receivables, less allowances of $36 and $32
   for uncollectible accounts at respective dates                                         767              1,093
Accrued unbilled revenue                                                                  437                451
Fuel inventory                                                                             12                 14
Materials and supplies, at average cost                                                   159                146
Accumulated deferred income taxes - net                                                    42                433
Regulatory assets - net                                                                   509                 83
Prepayments and other current assets                                                      104                145
- -------------------------------------------------------------------------------------------------------------------

Total current assets                                                                    3,022              5,779
- -------------------------------------------------------------------------------------------------------------------

Nonutility property - less accumulated provision
   for depreciation of $29 and $17 at respective dates                                    154                159
Nuclear decommissioning trusts                                                          2,210              2,275
Other investments                                                                         214                224
- -------------------------------------------------------------------------------------------------------------------

Total investments and other assets                                                      2,578              2,658
- -------------------------------------------------------------------------------------------------------------------

Utility plant, at original cost:
   Transmission and distribution                                                       14,202             13,568
   Generation                                                                           1,457              1,729
Accumulated provision for depreciation
   and decommissioning                                                                 (8,094)            (7,969)
Construction work in progress                                                             529                556
Nuclear fuel, at amortized cost                                                           153                129
- -------------------------------------------------------------------------------------------------------------------


Total utility plant                                                                     8,247              8,013
- -------------------------------------------------------------------------------------------------------------------

Regulatory assets - net                                                                 3,838              5,528
Other deferred charges                                                                    629                475
- -------------------------------------------------------------------------------------------------------------------

Total deferred charges                                                                  4,467              6,003
===================================================================================================================





- -------------------------------------------------------------------------------------------------------------------

Total assets                                                                       $   18,314          $  22,453
===================================================================================================================










                    The accompanying notes are an integral part of these financial statements.



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- -------------------------------------------------------------------------------------------------------------------
                                                                                 Southern California Edison Company

In millions, except share amounts                    December 31,                      2002                2001
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDER'S EQUITY
- -------------------------------------------------------------------------------------------------------------------

Short-term debt                                                                    $      --           $   2,127
Long-term debt due within one year                                                      1,671              1,146
Preferred stock to be redeemed within one year                                              9                105
Accounts payable                                                                          745              3,261
Accrued taxes                                                                             699                823
Other current liabilities                                                               1,439              1,645
- -------------------------------------------------------------------------------------------------------------------

Total current liabilities                                                               4,563              9,107
- -------------------------------------------------------------------------------------------------------------------

Long-term debt                                                                          4,504              4,739
- -------------------------------------------------------------------------------------------------------------------

Accumulated deferred income taxes - net                                                 2,658              3,365
Accumulated deferred investment tax credits                                               148                153
Customer advances and other deferred credits                                              964                739
Power-purchase contracts                                                                  309                356
Accumulated provision for pensions and benefits                                           356                420
Other long-term liabilities                                                               152                148
- -------------------------------------------------------------------------------------------------------------------

Total deferred credits and other liabilities                                            4,587              5,181
- -------------------------------------------------------------------------------------------------------------------

Commitments and contingencies
   (Notes 2, 9 and 10)

Preferred stock:
   Not subject to mandatory redemption                                                    129                129
   Subject to mandatory redemption                                                        147                151
- -------------------------------------------------------------------------------------------------------------------

Total preferred stock                                                                     276                280
- -------------------------------------------------------------------------------------------------------------------

Common stock (434,888,104 shares outstanding at each date)                              2,168              2,168
Additional paid-in capital                                                                340                336
Accumulated other comprehensive loss                                                      (16)               (22)
Retained earnings                                                                       1,892                664
- -------------------------------------------------------------------------------------------------------------------

Total common shareholder's equity                                                       4,384              3,146
===================================================================================================================







Total liabilities and shareholder's equity                                         $   18,314          $  22,453
===================================================================================================================









                    The accompanying notes are an integral part of these financial statements.



Page 33
<PAGE>


- ------------------------------------------------------------ -------------------------------------------------------
Consolidated Statements of Cash Flows

In millions                    Year ended December 31,                   2002              2001            2000
- -------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss)                                                     $ 1,247          $  2,408          $(2,028)
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
   Depreciation, decommissioning and amortization                         780               681            1,473
   Other amortization                                                     106                82               97
   Deferred income taxes and investment tax credits                      (640)            1,313             (928)
   Regulatory assets - long-term - net                                  1,860            (3,135)           1,759
   Gas call options                                                        14               (91)              20
   Net gain on sale of marketable securities                               --                --              (41)
   Other assets                                                             7               (68)              24
   Other liabilities                                                      132                17              (13)
   Changes in working capital:
     Receivables and accrued unbilled revenue                             338              (243)            (282)
     Regulatory assets - short-term - net                                (426)             (278)              97
     Fuel inventory, materials and supplies                               (11)              (16)              29
     Prepayments and other current assets                                  41               (21)             (14)
     Accrued interest and taxes                                          (191)              365               48
     Accounts payable and other current liabilities                    (2,626)            2,251              588
- -------------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                                 631             3,265              829
- -------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
Long-term debt issued                                                     (32)               --            1,760
Long-term debt repaid                                                  (1,200)               --             (525)
Bonds remarketed (repurchased) and funds held in trust - net              191              (130)            (440)
Redemption of preferred securities                                       (100)               --               --
Rate reduction notes repaid                                              (246)             (246)            (246)
Nuclear fuel financing - net                                              (59)              (21)               9
Short-term debt financing - net                                          (527)              676              655
Dividends paid                                                            (40)               (1)            (395)
- -------------------------------------------------------------------------------------------------------------------

Net cash provided (used) by financing activities                       (2,013)              278              818
- -------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
Additions to property and plant - net                                  (1,046)             (688)          (1,096)
Net funding of nuclear decommissioning trusts                             (12)              (36)             (69)
Proceeds from sales of marketable securities                               --                --               41
Sales of investments in other assets                                       18                12               34
- -------------------------------------------------------------------------------------------------------------------

Net cash used by investing activities                                  (1,040)             (712)          (1,090)
- -------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and equivalents                        (2,422)            2,831              557
Cash and equivalents, beginning of year                                 3,414               583               26
- -------------------------------------------------------------------------------------------------------------------

Cash and equivalents, end of year                                     $   992          $  3,414          $   583
===================================================================================================================









                    The accompanying notes are an integral part of these financial statements.



Page 34
<PAGE>



- --------------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Changes in Common                                            Southern California Edison Company
Shareholder's Equity

                                                                           Accumulated                    Total
                                                          Additional          Other       Retained       Common
                                              Common        Paid-in       Comprehensive   Earnings    Shareholder's
In millions                                    Stock        Capital       Income (Loss)   (Deficit)      Equity
- --------------------------------------------------------------------------------------------------------------------


Balance at December 31, 1999                 $ 2,168        $ 335             $ 22      $    608         $ 3,133
- --------------------------------------------------------------------------------------------------------------------

Net loss                                                                                  (2,028)         (2,028)
Unrealized gain on securities                                                    8                             8
   Tax effect                                                                   (5)                           (5)
Reclassified adjustment for loss
  included in net income                                                       (41)                          (41)
   Tax effect                                                                   16                            16
Dividends declared on common stock                                                          (279)           (279)
Dividends declared on preferred stock                                                        (22)            (22)
Stock option appreciation                                                                     (1)             (1)
Capital stock expense and other                                (1)                                            (1)
- --------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2000                 $ 2,168        $ 334              $--      $ (1,722)        $   780
- --------------------------------------------------------------------------------------------------------------------

Net income                                                                                 2,408           2,408
Cumulative effect of change in
  accounting for derivatives                                                   398                           398
Unrealized loss on and amortization of
  cash flow hedges                                                            (420)                         (420)
Dividends accrued on preferred stock                                                         (22)            (22)
Capital stock expense and other                                 2                                              2
- -------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2001                 $ 2,168        $ 336            $ (22)     $    664         $ 3,146
- --------------------------------------------------------------------------------------------------------------------

Net income                                                                                 1,247           1,247
Minimum pension liability adjustment                                            (9)                           (9)
  Tax effect                                                                     4                             4
Amortization of loss on cash flow hedges                                         4                             4
  Tax effect                                                                     7                             7
Dividends accrued on preferred stock                                                         (19)            (19)
Capital stock expense and other                                 4                                              4
- -------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2002                 $ 2,168        $ 340            $ (16)      $ 1,892         $ 4,384
===================================================================================================================

Authorized common stock is 560 million shares with no par value.








                    The accompanying notes are an integral part of these financial statements.





Page 35
<PAGE>




- -------------------------------------------------------------------------------------------------------------------
Notes to Consolidated Financial Statements



Significant accounting policies are discussed in Note 1, unless discussed in the respective Notes for specific
topics.

Note 1.  Summary of Significant Accounting Policies

Southern California Edison Company (SCE) is a rate-regulated electric utility that supplies electric energy to a
50,000 square-mile area of central, coastal and southern California.

Basis of Presentation

The consolidated financial statements include SCE and its subsidiaries.  Intercompany transactions have been
eliminated.

SCE's accounting policies conform to accounting principles generally accepted in the United States, including the
accounting principles for rate-regulated enterprises, which reflect the rate-making policies of the California
Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC).  In 1997, due to changes
in the rate recovery of generation-related assets, SCE began using accounting principles applicable to
enterprises in general for its investment in generation facilities.  In April 2002, SCE reapplied accounting
principles for rate-regulated enterprises to assets that were returned to cost-based regulation under the
utility-retained generation (URG) decision (see "URG Proceeding" in Note 2).

Financial statements prepared in compliance with accounting principles generally accepted in the United States
require management to make estimates and assumptions that affect the amounts reported in the financial statements
and Notes.  Actual results could differ from those estimates.  Certain significant estimates related to
regulatory matters, financial instruments, decommissioning and contingencies are further discussed in Notes 2, 3,
9 and 10 to the Consolidated Financial Statements, respectively.

SCE's outstanding common stock is owned entirely by its parent company, Edison International.

Cash Equivalents

Cash equivalents include time deposits and other investments with original maturities of three months or less.
All investments are classified as available for sale.  For a discussion of restricted cash, see "Restricted Cash"
section.

Debt and Equity Investments

Net unrealized gains (losses) on equity investments are recorded as a separate component of shareholder's equity
under the caption "Accumulated other comprehensive income."  Unrealized gains and losses on decommissioning trust
funds are recorded in the accumulated provision for decommissioning, except for San Onofre Nuclear Generating
Station (San Onofre) Unit 1, which is recorded against the related regulatory asset.  All investments are
classified as available-for-sale.

Fuel Inventory

Fuel inventory is valued under the last-in, first-out method for fuel oil and under the first-in, first-out
method for coal.

New Accounting Standards

On January 1, 2001, SCE adopted a new accounting standard for derivative instruments and hedging activities.
Adoption of this standard had no material impact on SCE's financial statements.  Effective April 1, 2002, SCE
also adopted an authoritative accounting interpretation to this standard, which precludes fuel contracts that
have variable amounts from qualifying under the normal purchases and sales exception.  The adoption of this
interpretation had no impact on SCE's financial statements.

Effective January 1, 2003, SCE will adopt a new accounting standard, Accounting for Asset Retirement Obligations,
which requires entities to record the fair value of a liability for a legal asset retirement


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obligation in the period in which it is incurred.  When the liability is initially recorded, the entity
capitalizes the cost by increasing the carrying amount of the related long-lived asset.  Over time, the liability
is increased to its present value each period, and the capitalized cost is depreciated over the useful life of
the related asset.  Upon settlement of the liability, an entity either settles the obligation for its recorded
amount or incurs a gain or loss upon settlement.  However, rate-regulated entities may recognize regulatory
assets or liabilities as a result of timing differences between the recognition of costs as recorded in
accordance with this statement and costs recovered through the ratemaking process. Regulatory assets and
liabilities may be recorded when it is probable that the asset retirement costs will be recovered through the
rate-making process.

SCE estimates the impact of adopting this standard will be as follows:

o    SCE will adjust its nuclear decommissioning obligation to reflect the fair value of decommissioning its
     nuclear power facilities. SCE will also recognize asset retirement obligations associated with the
     decommissioning of other coal-fired generation assets.

o    At December 31, 2002, the total nuclear decommissioning obligation accrued for SCE's active nuclear
     facilities was $2.0 billion and is included in accumulated provision for depreciation and decommissioning on
     the consolidated balance sheet.  SCE has accrued, at December 31, 2002, $12 million to decommission certain
     coal-fired generation assets based on its estimate of the decommissioning obligation under the accounting
     principles in effect at that time. These decommissioning obligations are also included in accumulated
     provision for depreciation and decommissioning on the consolidated balance sheet.

o    SCE estimates that it will record a $190 million decrease to its recorded nuclear and coal facility
     decommissioning obligations for asset retirement obligations in existence as of January 1, 2003.  The
     estimated cumulative effect of a change in accounting principle from unrecognized accretion expense and
     adjustments to depreciation, decommissioning and amortization expense accrued to date is a $408 million gain
     (pre-tax), which will be reflected as a regulatory liability as of January 1, 2003.

Nuclear

During the second quarter of 1998, SCE reduced its remaining nuclear plant investment by $2.6 billion (book value
as of June 30, 1998) and recorded a regulatory asset on its balance sheet for the same amount in accordance with
asset impairment accounting standards.  For this impairment assessment, the fair value of the investment was
calculated by discounting expected future net cash flows.  The reclassification had no effect on SCE's 1998
results of operations.

SCE had been recovering its investments in San Onofre Units 2 and 3 and Palo Verde Nuclear Generating Station
(Palo Verde) on an accelerated basis, as authorized by the CPUC.  The accelerated recovery was to continue
through December 2001, earning a 7.35% fixed rate of return on investment.  San Onofre's operating costs,
including nuclear fuel and nuclear fuel financing costs, and incremental capital expenditures, were recovered
through an incentive pricing plan that allows SCE to receive about 4(cent)per kilowatt-hour through 2003.  Any
differences between these costs and the incentive price would flow through to shareholders.  Palo Verde's
accelerated plant recovery, as well as operating costs, including nuclear fuel and nuclear fuel financing costs,
and incremental capital expenditures, were subject to balancing account treatment through December 31, 2001.  The
San Onofre and Palo Verde rate recovery plans and the Palo Verde balancing account were part of the transition
cost balancing account (TCBA).  See further discussion of the TCBA in "Regulatory Assets and Liabilities."

The nuclear rate-making plans and the TCBA mechanism were to continue for rate-making purposes at least through
2001 for Palo Verde operating costs and through 2003 for the San Onofre incentive pricing plan.  However, due to
the various unresolved regulatory and legislative issues, as of December 31, 2000, SCE was no longer able to
conclude that the unamortized nuclear investment was probable of recovery through the rate-making process.  As a
result, this balance was written off as a charge to earnings at that time.  As a result of the CPUC's April 4,
2002 decision that returned SCE's URG assets to cost-based ratemaking, SCE reestablished for financial reporting
purposes its unamortized nuclear investment and related flow-through taxes, retroactive to August 31, 2001, based
on a 10-year recovery period, effective


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Notes to Consolidated Financial Statements


January 1, 2001, with a corresponding credit to earnings.  SCE adjusted the procurement-related obligations
account (PROACT) regulatory asset balance to reflect recovery of the nuclear investment in accordance with the
final URG decision.

In a September 2001 decision, the CPUC granted SCE's request to continue the current rate-making treatment for
Palo Verde, including the continuation of the existing nuclear unit incentive procedure with a 5(cent) per kWh cap on
replacement power costs, until resolution of SCE's next general rate case or further CPUC action.  Palo Verde's
existing nuclear unit incentive procedure calculates a reward for performance of any unit above an 80% capacity
factor for a fuel cycle.  The San Onofre Units 2 and 3 incentive ratemaking plan will continue until December 31,
2003.  In its general rate case, SCE has requested to transition San Onofre Units 2 and 3 back to traditional
cost-of-service ratemaking on January 1, 2004 and to return Palo Verde to traditional cost-of-service ratemaking
upon the effective date of the decision on that application.

Other Nonoperating Income and Deductions

Other nonoperating income and deductions are as follows:

         In millions         Year ended December 31,                   2002           2001           2000
- ----------------------------------------------------------------------------------------------------------

         Gain on sale of marketable securities                        $  --          $  --         $   41
         Property condemnation settlement                                38             --             --
         Allowance for funds used during construction                    19             16             21
         Other                                                           25             41             56
- ----------------------------------------------------------------------------------------------------------

         Total other nonoperating income                              $  82          $  57         $  118
- ----------------------------------------------------------------------------------------------------------

         Provisions for regulatory issues and refunds                 $ (35)         $   7         $   78
         Other                                                           33             31             32
- ----------------------------------------------------------------------------------------------------------

         Total other nonoperating deductions                          $  (2)         $  38         $  110
- ----------------------------------------------------------------------------------------------------------


Planned Major Maintenance

Certain plant facilities require major maintenance on a periodic basis.  All such costs are expensed as incurred.

Purchased Power

SCE purchased power through the California Power Exchange (PX) and California Independent System Operator (ISO)
from April 1998 through mid-January 2001.  SCE has bilateral forward contracts with other entities and
power-purchase contracts with other utilities and independent power producers classified as qualifying facilities
(QFs).  Purchased power detail is provided below:

         In millions         Year ended December 31,                 2002             2001           2000
- ----------------------------------------------------------------------------------------------------------

         PX/ISO:
         Purchases                                               $     75          $   775       $   8,449
         Generation sales                                              --              324           6,120
- ----------------------------------------------------------------------------------------------------------

         Purchased power - PX/ISO - net                                75              451           2,329
         Purchased power - bilateral contracts                         61              188              --
         Purchased power - interutility/QF contracts                1,880            3,131           2,358
- ----------------------------------------------------------------------------------------------------------

         Total                                                   $  2,016          $ 3,770       $   4,687
- ----------------------------------------------------------------------------------------------------------


Net PX/ISO amounts for 2002 reflect only billing adjustments.  These billing adjustments are recovered through
the PROACT and have no impact on earnings.

From January 17, 2001 to December 31, 2002, the California Department of Water Resources (CDWR) purchased power
for delivery to SCE's customers in an amount equal to the difference between customer requirements and supplies
provided through QF and bilateral contracts, and SCE's utility retained generation.


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                                                                                Southern California Edison Company


Effective January 1, 2003, SCE assumed responsibility for power requirements not met by the CDWR.  Power
purchased by the CDWR for delivery to SCE's customers is not considered a cost to SCE.

Regulatory Assets and Liabilities

In accordance with accounting principles for rate-regulated enterprises, SCE records regulatory assets, which
represent probable future revenue associated with certain costs that will be recovered from customers through the
rate-making process, and regulatory liabilities, which represent probable future reductions in revenue associated
with amounts that are to be credited to customers through the rate-making process.

The TCBA was established for the recovery of generation-related transition costs during the four-year rate freeze
period.  The transition revenue account (TRA) was a CPUC-authorized regulatory asset account in which SCE
recorded the difference between revenue received from customers through frozen rates and the costs of providing
service to customers, including power procurement costs.

The gains resulting from the sale of 12 of SCE's generating plants during 1998 were credited to the TCBA.  The
coal and hydroelectric generation balancing accounts tracked the differences between market revenue from coal and
hydroelectric generation and the plants' operating costs after April 1, 1998.

On March 27, 2001, the CPUC issued a decision stating, among other things, that the rate freeze had not ended and
the TCBA mechanism was to remain in place.  However, the decision required SCE to recalculate the TCBA
retroactive to January 1, 1998, the beginning of the rate freeze period.  The new calculation required the coal
and hydroelectric balancing account overcollections (which amounted to $1.5 billion as of December 31, 2000) to
be transferred monthly to the TRA, rather than annually to the TCBA (as previously required).  In addition, it
required the TRA to be transferred to the TCBA on a monthly basis.  Previous rules had called only for
overcollections to be transferred to the TCBA monthly, while undercollections were to remain in the TRA until
they were recovered from future overcollections or the end of the rate freeze, whichever came first.

There are many factors that affect SCE's ability to recover its regulatory assets.  SCE assessed the probability
of recovery of its generation-related regulatory assets in light of the CPUC's March 27, 2001 decisions,
including the retroactive transfer of balances from SCE's TRA to the TCBA and related changes.  These decisions
and other regulatory and legislative actions did not meet SCE's prior expectation that the CPUC would provide
adequate cost recovery mechanisms.  SCE was unable to conclude that its generation-related regulatory assets were
probable of recovery through the rate-making process as of December 31, 2000.  Therefore, in accordance with
accounting rules, SCE recorded a $2.5 billion after-tax charge to earnings at that time, to write off the TCBA
and other regulatory assets.

In addition to the TCBA, generation-related regulatory assets totaling $1.3 billion (including the unamortized
nuclear investment, flow-through taxes, unamortized loss on sale of plant, purchased-power settlements and other
regulatory assets) were written off as of December 31, 2000.

In accordance with an October 2001 settlement agreement between the CPUC and SCE, the CPUC passed a resolution on
January 23, 2002, allowing SCE to establish the PROACT regulatory asset for previously incurred energy
procurement costs, retroactive to August 31, 2001.  The settlement agreement called for the end of the TCBA
mechanism as of August 31, 2001 and continuation of the rate freeze (including surcharges) until the earlier of
December 31, 2003, or the date SCE recovers its previously incurred (undercollected) power procurement costs.
During a period beginning on September 1, 2001 and ending on the earlier of the date that SCE has recovered all
of its procurement-related obligations recorded in the PROACT or December 31, 2005, SCE applies to the PROACT the
difference between SCE's revenue from retail electric rates (including surcharges) and the costs that SCE is
authorized by the CPUC to recover in retail electric rates.  The balance in the PROACT accrues interest.  If SCE
has not recovered the entire balance by December 31, 2003, the unrecovered balance will be amortized for up to an
additional two years.

Based on the CPUC's April 2002 decision related to SCE's utility-retained generation, during the second quarter
of 2002, SCE reestablished for financial reporting purposes regulatory assets related to its unamortized nuclear
facilities, purchased-power settlements and flow-through taxes.


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Notes to Consolidated Financial Statements


Due to the current status of the Mohave Generating Station (Mohave) Proceeding (discussed in Note 2), SCE has
concluded that it is probable Mohave will be shut down at the end of 2005 and that its book value must be reduced
to fair value in accordance with an impairment-related accounting standard.  Based on SCE's expectation that any
unrecovered book value at the end of 2005 would be recovered in future rates through the rate-making mechanism
discussed in its May 17, 2002 application and again in its January 30, 2003 supplemental testimony, and in
accordance with accounting standards for rate-regulated enterprises, SCE reclassified for financial reporting
purposes approximately $61 million of Mohave's $88 million book value (at December 31, 2002) to a regulatory
asset as of December 31, 2002.

Regulatory assets, less regulatory liabilities, included in the consolidated balance sheets are:

       In millions                           December 31,                         2002               2001
- -----------------------------------------------------------------------------------------------------------

       PROACT - net                                                             $   574          $  2,641
       Rate reduction notes - transition cost deferral                            1,215             1,453
       Unamortized nuclear investment - net                                         630                --
       Unamortized coal plant investment - net                                       61                --
       Other:
         Flow-through taxes - net                                                 1,336             1,017
         Unamortized loss on reacquired debt                                        237               254
         Environmental remediation                                                   70                57
         Regulatory balancing accounts and other - net                              224               189
- -----------------------------------------------------------------------------------------------------------

       Total                                                                    $ 4,347          $  5,611
- -----------------------------------------------------------------------------------------------------------


The regulatory asset related to the rate reduction notes will be recovered over the terms of those notes.  The
net regulatory asset related to the unamortized nuclear investment will be recovered by the end of the remaining
useful lives of the nuclear assets.  SCE has requested a four-year recovery period for the net regulatory asset
related to its unamortized coal plant investment.  CPUC approval is pending. The other regulatory assets and
liabilities are being recovered through other components of electric rates.

Balancing account undercollections and overcollections accrue interest based on a three-month commercial paper
rate published by the Federal Reserve.  PROACT accrues interest based on the interest expense for the debt issued
to finance the procurement-related obligations, net of interest income on SCE's cash balance.  Income tax effects
on all balancing account changes are deferred.

Related Party Transactions

Certain Edison Mission Energy (a wholly owned subsidiary of Edison International) subsidiaries have 49% - 50%
ownership in partnerships (QFs) that sell electricity generated by their project facilities to SCE under
long-term power purchase agreements with terms and pricing approved by the CPUC.  SCE's purchases from these
partnerships were $548 million in 2002, $983 million in 2001 and $716 million in 2000.

SCE holds $153 million in notes receivable from affiliates, due in June 2007.  The notes were issued by Edison
International in second quarter 1997, and assigned to SCE in fourth quarter 1997.  A $78 million note receivable
from Edison Mission Energy bears interest at LIBOR plus 0.275%; and a $75 million note receivable from Edison
Capital bears interest at a 30-day commercial paper rate.

Restricted Cash

SCE had restricted cash of $47 million at December 31, 2002 and $35 million at December 31, 2001, which was
included in the caption "prepayments and other current assets" on the balance sheets.  These restricted amounts
are used exclusively to make scheduled payments on the current maturities of rate reduction notes issued on
behalf of SCE by a special purpose entity.


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                                                                                Southern California Edison Company

Revenue

Operating revenue is recognized as electricity is delivered and includes amounts for services rendered but
unbilled at the end of each year.  Amounts charged for services rendered are based on CPUC-authorized rates.
Rates include amounts for current period costs, plus the recovery of previously incurred costs (see discussions
under "Regulatory Assets and Liabilities").  However, in accordance with accounting standards for rate-regulated
enterprises, amounts currently authorized in rates for recovery of costs to be incurred in the future are not
considered as revenue until the associated costs are incurred.

Since January 17, 2001, power purchased by the CDWR or through the ISO for SCE's customers is not considered a
cost to SCE, because SCE is acting as an agent for these transactions.  Further, amounts billed to ($1.4 billion
in 2002 and $2.0 billion in 2001) and collected from its customers for these power purchases and CDWR
bond-related costs (effective November 15, 2002 for bond-related costs) are being remitted to the CDWR and are
not recognized as revenue to SCE.

Stock-Based Employee Compensation

SCE has three stock-based employee compensation plans, which are described more fully in Note 7.  SCE accounts
for those plans using the intrinsic value method.  Upon grant, no stock-based employee compensation cost is
reflected in net income, as all options granted under those plans had an exercise price equal to the market value
of the underlying common stock on the date of grant.  Compensation expense recorded under the stock-compensation
program was $7 million in 2002, $1 million in 2001 and $4 million in 2000.  The following table illustrates the
effect on net income if the company had used the fair-value accounting method.

         In millions         Year ended December 31,                 2002             2001           2000
- ----------------------------------------------------------------------------------------------------------

         Net income (loss) available
             for common stock, as reported                       $  1,228          $ 2,386       $ (2,050)
         Less: Additional stock-based compensation
             expense using the fair-value
             accounting method - net of tax                            (2)               3              4
- ----------------------------------------------------------------------------------------------------------

         Pro forma net income (loss)
            available for common stock                            $ 1,230          $ 2,383       $ (2,054)
- ----------------------------------------------------------------------------------------------------------


Supplemental Accumulated Other Comprehensive Income (Loss) Information

Supplemental information regarding SCE's accumulated other comprehensive income (loss) is:

     In millions                      December 31,                                2002           2001
- --------------------------------------------------------------------------------------------------------

     Minimum pension liability - net1                                           $   (5)        $   --
     Cumulative effect of change in accounting
       for derivatives                                                              --            398
     Unrealized losses on cash flow hedges - net                                   (11)          (420)
- --------------------------------------------------------------------------------------------------------

     Accumulated other comprehensive loss                                       $  (16)        $  (22)
- --------------------------------------------------------------------------------------------------------

     ----------------
     1 The minimum pension liability is discussed in Note 7, Employee Compensation and Benefit Plans.

Unrealized gains (losses) on cash flow hedges relate to SCE's interest rate swap (the swap terminated on
January 5, 2001 but the related debt matures in 2008).  The unamortized loss of $11 million (as of December 31,
2002 net of tax) on the interest rate swap will be amortized over a period ending in 2008.  Approximately $2
million, after tax, of the unamortized loss on this swap will be reclassified into earnings during 2003.


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Notes to Consolidated Financial Statements


Supplemental Cash Flows Information

SCE supplemental cash flows information is:

     In millions           Year ended December 31,                                2002        2001        2000
- -----------------------------------------------------------------------------------------------------------------

     Cash payments for interest and taxes:
     Interest - net of amounts capitalized                                    $    487      $  455      $  303
     Tax payments (receipts)                                                     1,110        (105)        306

     Non-cash investing and financing activities:
     Details of senior secured credit facility transaction:
       Retirement of credit facility                                          $  1,650          --          --
       Cash paid on retirement of credit facility                                  (50)         --          --
- -----------------------------------------------------------------------------------------------------------------

     Senior secured credit facility replacement                               $  1,600          --          --
- -----------------------------------------------------------------------------------------------------------------


Utility Plant

Utility plant additions, including replacements and betterments, are capitalized.  Such costs include direct
material and labor, construction overhead and an allowance for funds used during construction (AFUDC).  AFUDC
represents the estimated cost of debt and equity funds that finance utility-plant construction.  AFUDC is
capitalized during plant construction and reported in current earnings in other nonoperating  income.  AFUDC is
recovered in rates through depreciation expense over the useful life of the related asset.  Depreciation of
utility plant is computed on a straight-line, remaining-life basis.

AFUDC - equity was $11 million in 2002, $7 million in 2001 and $11 million in 2000.  AFUDC - debt was $8 million
in 2002, $9 million in 2001 and $10 million in 2000.

Replaced or retired property and removal costs less salvage are charged to the accumulated provision for
depreciation.  Depreciation expense stated as a percent of average original cost of depreciable utility plant was
4.2% for 2002, and 3.6% for 2001 and 2000.

Estimated useful lives of SCE's property, plant and equipment, as authorized by the CPUC, are as follows:

- ----------------------------------------------------------------------------------------

           Generation plant                                     30 years to 45 years
           Distribution plant                                   24 years to 53 years
           Transmission plant                                   40 years to 60 years
           Other plant                                           5 years to 40 years
- ----------------------------------------------------------------------------------------


SCE's net investment in generation-related utility plant was $842 million at December 31, 2002 and $1.0 billion
at December 31, 2001.

Nuclear fuel is recorded as utility plant in accordance with CPUC rate-making procedures.

Note 2.  Regulatory Matters

CPUC Litigation Settlement Agreement

In 2001, SCE and the CPUC entered into a settlement of SCE's lawsuit against the CPUC, which sought a ruling that
SCE is entitled to full recovery of its past electricity procurement costs.  A key element of the settlement
agreement was the establishment of a $3.6 billion rate-recovery mechanism called the PROACT as of August 31,
2001.  The Utility Reform Network (TURN), a consumer advocacy group, and other parties appealed to the federal
court of appeals seeking to overturn the stipulated judgment of the district court that approved the settlement
agreement.  On March 4, 2002, the court of appeals heard argument on the appeal, and on September 23, 2002 the
court issued its opinion.  In the opinion, the court affirmed the district court on all claims, with the
exception of the challenges founded upon California state law, which the appeals court referred to the California
Supreme Court.  Specifically, the appeals court affirmed the district court in the following respects:  (1) the
district court did not err in denying the motions


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to intervene brought by entities other than TURN; (2) the district court did not err in denying standing for the
entities other than TURN to appeal the stipulated judgment; (3) the district court was not deprived of original
jurisdiction over the lawsuit; (4) the district court did not err in declining to abstain from the case; (5) the
district court did not exceed its authority by approving the stipulated judgment without TURN's consent; (6) the
district court's approval of the settlement agreement did not deny TURN due process; and (7) the district court
did not violate the Tenth Amendment of the United States Constitution in approving the stipulated judgment.  In
sum, the appeals court concluded that none of the substantive arguments based on federal statutory or
constitutional law compelled reversal of the district court's approval of the stipulated judgment.

However, the appeals court stated in its opinion that there is a serious question whether the settlement
agreement violated state law, both in substance and in the procedure by which the CPUC agreed to it.  The appeals
court added that if the settlement agreement violated state law, the CPUC lacked capacity to consent to the
stipulated judgment, and the stipulated judgment would need to be vacated.  The appeals court indicated that, on
a substantive level, the stipulated judgment appears to violate California's electric industry restructuring
statute providing for a rate freeze.  The appeals court also indicated that, on a procedural level, the
stipulated judgment appears to violate California laws requiring open meetings and public hearings.  Because
federal courts are bound by the pronouncements of the state's highest court on applicable state law, and because
the federal appeals court found no controlling precedents from California courts on the issues of state law in
this case, the appeals court issued a separate order certifying those issues in question form to the California
Supreme Court and requested that the California Supreme Court accept certification.

The California Supreme Court accepted the certification, reformulated one of the certified questions as SCE had
requested, and set a briefing schedule that will be followed by oral argument.  SCE and the CPUC filed their
respective opening briefs on the certified questions on December 20, 2002.  TURN filed its answering brief on
January 24, 2003 and SCE and the CPUC filed reply briefs on February 13, 2003.  Various third parties, including
the Governor, submitted friend-of-the-court briefs concerning the certified questions.  In addition, the
California Supreme Court requested that the parties provide supplemental briefing with respect to an issue
related to California's open meeting laws.  The parties have complied with such request.  The California Supreme
Court will set a hearing date on the matter.  Once the California Supreme Court rules, the matter will return to
the Ninth Circuit, which in turn should be guided by the California Supreme Court's answers and interpretations
of state law.  In the meantime, the case is stayed in the federal appellate court.  SCE continues to operate
under the settlement agreement.  SCE continues to believe it is probable that SCE ultimately will recover its
past procurement costs through regulatory mechanisms, including the PROACT.  However, SCE cannot predict with
certainty the outcome of the pending legal proceedings.

Under the settlement agreement, SCE cannot pay dividends or other distributions on its common stock (all of which
is held by its parent, Edison International) prior to the earlier of the date on which SCE has recovered all of
its procurement-related obligations or January 1, 2005, except that if SCE has not recovered all of its
procurement-related obligations by December 31, 2003, SCE may apply to the CPUC for consent to resume common
stock dividends prior to January 1, 2005 and the CPUC will not unreasonably withhold its consent.

CDWR Power Purchases and Revenue Requirement Proceedings

In accordance with an emergency order signed by the governor, the CDWR began making emergency power purchases for
SCE's customers on January 17, 2001.  Amounts SCE bills to and collects from its customers for electric power
purchased and sold by the CDWR are remitted directly to the CDWR and are not recognized as revenue by SCE.  In
February 2001, Assembly Bill 1 (First Extraordinary Session, AB 1X) was enacted into law.  AB 1X authorized the
CDWR to enter into contracts to purchase electric power and sell power at cost directly to SCE's retail customers
and authorized the CDWR to issue bonds to finance electricity purchases.  In addition, the CPUC has the
responsibility to allocate the CDWR's revenue requirement among the customers of SCE, Pacific Gas and Electric
(PG&amp;E) and San Diego Gas &amp; Electric (SDG&amp;E).

On February 21, 2002, the CPUC allocated to SCE's customers $3.5 billion (38.2%) of the CDWR's total power
procurement revenue requirement of $9 billion for 2001 and 2002.  This resulted in an average


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Notes to Consolidated Financial Statements


annual CDWR revenue requirement of $1.7 billion being allocated to SCE.  In its February 21, 2002 decision, the
CPUC ordered that allocation of that revenue requirement to each utility be trued-up based on the CDWR's actual
recorded costs for the 2001-2002 period and a specific methodology set forth in that decision.

On October 24, 2002, the CPUC issued a decision which adopts a methodology for establishing a charge to repay
bond-related costs resulting from the CDWR's $11 billion bond issue.  The bond charge is to be set by dividing
the annual revenue requirement for bond-related costs by an estimate of the annual electricity consumption of
bundled service customers subject to the charge.  The charge will apply to electricity consumed on and after
November 15, 2002 and will be set annually based on annual expected debt-related costs and projected electricity
consumption.  For 2003, the CPUC allocated to SCE's customers $331 million (about 44%) of the CDWR's bond charge
revenue requirement of $745 million.  The bond charge is set at a rate of 0.513(cent)per kWh for SCE's customers.  In
a November 7, 2002 decision, the CPUC assigned responsibility for a portion of the bond charge to direct access
customers.

On December 17, 2002, the CPUC adopted an allocation of the CDWR's forecast power procurement revenue requirement
for 2003, based on the quantity of electricity expected to be supplied under the CDWR contracts to customers of
each of the three utility companies by the CDWR.  SCE's allocated share is $1.9 billion of the CDWR's total 2003
power procurement revenue requirement of $4.5 billion.  This is an interim allocation and will be superseded by a
later allocation after the CDWR submits a supplemental determination of its 2003 revenue requirement.  The CPUC
stated that the later allocation could result in a reduction in the CDWR's revenue requirement, with a
corresponding decrease in the CDWR's rate charged to bundled service customers.  The CPUC's December 17, 2002
decision did not address issues relating to the true-up of the CDWR's 2001-2002 revenue requirement, stating that
those issues will be addressed after actual data for 2002 becomes available, expected in April 2003.

Electric Line Maintenance Practices Proceeding

In August 2001, the CPUC issued an Order Instituting Investigation (OII) regarding SCE's overhead and underground
electric line maintenance practices.  The OII is based on a report issued by the CPUC's Protection and Safety
Consumer Services Division (CPSD), which alleges SCE had a pattern of noncompliance with the CPUC's General Orders
for the maintenance of electric lines over the period 1998-2000.  The OII also alleges that noncompliant
conditions were involved in 37 accidents resulting in death, serious injury or property damage.  The CPSD
identified 4,817 alleged "violations" of the General Orders during the three-year period.  The OII placed SCE on
notice that it is potentially subject to a penalty of between $500 and $20,000 for each violation or accident.

Prepared testimony was filed on this matter in April 2002, and hearings were concluded in September 2002.  In
opening briefs filed on October 21, 2002, the CPSD recommended that SCE be assessed a penalty of $97 million,
while SCE requested that the CPUC dismiss the proceeding and impose no penalties.  SCE stated in its opening
brief that it has acted reasonably, allocating its financial and human resources in pursuit of the optimum
combination of employee and public safety, system reliability, cost-effectiveness, and technological advances.
SCE also encouraged the CPUC to transfer consideration of issues related to development of standardized
inspection methodologies and inspector training to an Order Instituting Rulemaking to revise these General Orders
opened by the CPUC in October 2001 or to a new rulemaking proceeding.  On March 14, 2003, SCE and the CPSD filed
opening briefs in response to the assigned administrative law judge's direction to address application of the
appropriate standard to govern SCE's electric line maintenance obligation.  Oral arguments are scheduled for
April 22, 2003.  A decision is expected in the second or third quarter of 2003.  SCE is unable to predict with
certainty whether this matter ultimately will result in any material financial penalties or impacts on SCE.

Generation Procurement Proceedings

In October 2001, the CPUC issued an Order Instituting Rulemaking directing SCE and the other major California
electric utilities to provide recommendations for establishing policies and mechanisms to enable the utilities to
resume power procurement by January 1, 2003.  Although the proceeding began before the enactment of Assembly Bill
57 (AB 57), that statute (in its draft form, and, after enactment, in its final form) has guided the proceeding.
Senate Bill 1078 (SB 1078) has also had an impact on this proceeding, as described below.


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AB 57, which provides for SCE and the other California utilities to resume procuring power for their customers,
was signed into law by the Governor of California in September 2002.  A second senate bill was enacted not long
after AB 57 to shorten the time period between the adoption of a utility's initial procurement plan and the
resumption of procurement from 90 to 60 days.  Under these statutes, SCE is effectively allowed to recover
procurement costs incurred in compliance with an approved procurement plan.  Only limited categories of costs,
including contract administration and least-cost dispatch, are subject to reasonableness reviews.

In addition, SB 1078, which was signed into law by the Governor in September 2002 and is effective January 1,
2003 provides that, commencing January 1, 2003, SCE and other California utilities shall increase their
procurement of renewable resources by at least an additional 1% of their annual electricity sales per year so
that 20% of the utility's annual electricity sales are procured from renewable resources by no later than
December 31, 2017.  Utilities are not required to enter into long-term contracts for renewable resources in excess
of a market-price benchmark to be established by the CPUC pursuant to criteria set forth in the statute.  Similar
provisions are also found in AB 57.

The CPUC issued four major decisions in this proceeding in 2002 addressing:  (1) transitional procurement
contracts; (2) the allocation of contracts previously entered into by the CDWR among the three major California
utilities; (3) the resumption of power procurement activities by these utilities on January 1, 2003 and adoption
of a regulatory framework for such activities; and (4) SCE's short-term procurement plan for 2003.

The first decision, relating to transitional procurement contracts, was issued on August 22, 2002.  It authorized
the utilities to enter into capacity contracts between the effective date of the decision and January 1, 2003
referred to as the transitional procurement period.  Under this decision, the CPUC would approve or disapprove
the transitional contracts proposed by a utility by means of an expedited advice letter process.  As a result of
this process, SCE entered into six transitional capacity contracts with terms up to five years.  These contracts
were approved by the CPUC.

This decision also required the utilities to procure, during the transitional procurement period, at least 1% of
their annual electricity sales through a competitive procurement process set aside for renewable resources.  The
utilities were required to solicit bids for renewable contracts with terms of five, ten and fifteen years and to
enter into contracts providing for the commencement of deliveries by the end of 2003.  In accordance with this
CPUC directive, SCE conducted a solicitation of offers from owners of renewable resources and, based upon the
results of the solicitation, provisionally entered into six contracts, subject to subsequent CPUC approval.  On
December 24, 2002 and January 14, 2003, SCE filed advice letters seeking CPUC approval of these six renewable
contracts.  On January 30, 2003, the CPUC issued a resolution approving four of the six renewable contracts.  In
addition, draft resolutions have been issued disapproving the two remaining renewable contracts, with an
alternative draft resolution approving one of the two remaining contracts.  The CPUC is expected to rule on the
remaining contracts in the second quarter of 2003.

The second decision addressed the issue of allocating among the three major California utilities the contracts
previously entered into by the CDWR.  In this decision, issued on September 19, 2002, the CPUC allocated the CDWR
contracts on a contract-by-contract basis.  Under the decision, utility responsibility for the contracts is
limited to that of scheduling and dispatch.  The decision significantly reduces SCE's net short and also
increases the likelihood that SCE will have excess power during certain periods.  Wholesale revenue from the sale
of such surplus energy is to be prorated between the CDWR and SCE, pursuant to several CPUC orders.  Under the
decision, SCE acts as limited agent for the CDWR for contract implementation, but legal title, financial
reporting and responsibility for the payment of contract-related bills remain with the CDWR.  On January 17,
2003, the CDWR filed a petition to modify the September 19, 2002 decision requesting the allocation of four
additional contracts which are not currently part of the CDWR's 2003 revenue requirement.  The CPUC allocated one
of the four contracts to SCE in a February 27, 2003 decision.

The third decision was issued on October 24, 2002.  It ordered the utilities to resume procurement and adopting
the regulatory framework for the utilities resuming full procurement responsibilities on January 1,

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Notes to Consolidated Financial Statements


2003.  The decision distinguished the utilities' responsibilities on the basis of short-term (2003) versus
long-term (2004-2024) procurement.  It adopted the utilities' procurement plans filed on May 1, 2002 and directed
that they be modified prior to January 1, 2003 to reflect the decision, the allocation of existing CDWR
contracts, and any transitional procurement done under the August 22, 2002 decision.  The October 24, 2002
decision also set forth a detailed process and procedural schedule to develop long-term procurement planning that
includes the filing by each utility of a long-term plan by April 1, 2003 and an evidentiary hearing in early July
2003.  In addition, the decision called for each of the utilities to establish a balancing account, to be known
as the energy resource recovery account, to track energy costs.  These balancing accounts will be used for
examining procurement rate adjustments on a semi-annual basis, as well as on a more expedited basis in the event
fuel and purchased-power costs exceed a prescribed threshold.  The decision also provided clarification as to
certain elements of the CPUC's August 22, 2002 order regarding interim procurement of additional renewable
resources and established a schedule for parties to provide comments in January 2003 on various aspects of
SB 1078 implementation in anticipation of an implementation report to be submitted by the CPUC to the legislature
by June 30, 2003.  On November 25, 2002, SCE filed an application with the CPUC for rehearing of the October 24
decision seeking the correction of legal errors in the decision.  The CPUC has not yet ruled on SCE's application
for rehearing, but has indicated that it will address SCE's application and others in future decisions.

The fourth decision, issued on December 19, 2002, approved modified short-term procurement plans filed in
November 2002 by SCE, PG&amp;E, and SDG&amp;E.  It modified and clarified the cost-recovery mechanisms and standards of
behavior adopted in the October 24 decision, and provided further guidance on the long-term planning process to
be undertaken in the next phase of the power procurement proceeding.  The CPUC found that the utilities were
capable of resuming full procurement on January 1, 2003 and ordered that they take all necessary steps to do so.

Among other things, the December 19, 2002 decision determined that SCE's maximum disallowance risk exposure for
procurement activities, contract administration and least-cost dispatch, would be capped at twice SCE's annual
procurement administrative expenses.

On January 21, 2003, SCE filed an application for rehearing of the December 19 procurement plan decision.  Issues
addressed included certain standard of conduct provisions, bilateral contracting, level of customer risk
tolerance, lack of an appropriate tracking mechanism for certain costs, lack of definition for least cost
dispatch, and the finding that SCE was non-compliant with the August 22, 2002 decision.  SCE has filed a petition
for modification which addressed, among other things, the need for the cap on SCE's maximum disallowance risk
exposure to be extended to cover all procurement activities.

On March 4, 2003, SCE also filed a motion for consolidated consideration of the numerous applications for
rehearing and petitions for modification that have been filed, and will be filed, on the various CPUC decisions
addressing the investor owned utilities management of their power supply portfolios.  In the motion, SCE urged
the CPUC to conduct a comprehensive review of its procurement decisions and act on the various applications for
rehearing and petitions for modification in an integrated manner, avoiding the piecemeal action that failed to
fully resolve the outstanding issues.

In accordance with the CPUC's October 24, 2002 decision, on February 3, 2003, SCE and the other utilities filed
outlines of their long-term procurement plans.  SCE proposed in its outline that the CPUC separate the proceeding
so that SCE would file a separate 2004 short-term procurement plan as well as its long-term plan.  The assigned
administrative law judge agreed with this proposal.  SCE plans to file the long-term resource plan and the 2004
short-term procurement plan on April 1, 2003 and May 1, 2003, respectively.  Hearings on the short-term plan and
certain key issues in the long-term plan are expected to take place in June and July 2003.  The issues that will
be incorporated into the long-term plan were addressed during the prehearing conference on March 7, 2003.
Pursuant to a ruling of the assigned administration law judge, issues related to implementation of SB 1078 will
be determined on a separate, expedited schedule.  Testimony on the implementation of SB 1078 will be filed on
March 27, 2003 and hearings will be held in April 2003.  A preliminary decision is expected in June 2003,
followed by a report by the CPUC to the legislature on June 30, 2003.



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                                                                                Southern California Edison Company


Holding Company Proceeding

In April 2001, the CPUC issued an order instituting investigation that reopens the past CPUC decisions
authorizing utilities to form holding companies and initiates an investigation into, among other things:  whether
the holding companies violated CPUC requirements to give first priority to the capital needs of their respective
utility subsidiaries; any additional suspected violations of laws or CPUC rules and decisions; and whether
additional rules, conditions, or other changes to the holding company decisions are necessary.  On January 9,
2002, the CPUC issued an interim decision on the first priority condition.  The decision stated that, at least
under certain circumstances, the condition includes the requirement that holding companies infuse all types of
capital into their respective utility subsidiaries when necessary to fulfill the utility's obligation to serve.
The decision did not determine if any of the utility holding companies had violated this condition, reserving
such a determination for a later phase of the proceedings.  On February 11, 2002, SCE and Edison International
filed an application before the CPUC for rehearing of the decision.  On July 17, 2002, the CPUC affirmed its
earlier decision on the first priority condition and also denied Edison International's request for a rehearing
of the CPUC's determination that it had jurisdiction over Edison International in this proceeding.  On August 21,
2002, Edison International and SCE jointly filed a petition requesting a review of the CPUC's decisions with
regard to first priority considerations, and Edison International filed a petition for a review of the CPUC
decision asserting jurisdiction over holding companies, both in state court as required.  PG&amp;E and SDG&amp;E and
their respective holding companies filed similar challenges, and all cases have been transferred to the First
District Court of Appeals in San Francisco.  The CPUC filed briefs in opposition to the writ petitions. Edison
International, SCE and the other petitioners filed reply briefs on March 6, 2003.  No hearings have been
scheduled.  The court may rule without holding hearings.  SCE cannot predict with certainty what effects this
investigation or any subsequent actions by the CPUC may have on SCE or any of its subsidiaries.

Mohave Generating Station Proceeding

On May 17, 2002, SCE filed with the CPUC an application to address certain issues facing the future extended
operation of Mohave which is partly owned by SCE.  Mohave obtains all of its coal supply from the Black Mesa Mine
in northeast Arizona, located on lands of the Navajo Nation and Hopi Tribe (the Tribes).  This coal is delivered
from the mine to Mohave by means of a coal slurry pipeline, which requires water that is obtained from
groundwater wells located on lands of the Tribes in the mine vicinity.

Due to the lack of progress in negotiations with the Tribes and other parties to resolve several coal and water
supply issues, SCE's application stated that it probably would not be possible for SCE to extend Mohave's
operation beyond 2005.  Uncertainty over a post-2005 coal and water supply has also prevented SCE and the other
Mohave co-owners from starting to make approximately $1.1 billion (SCE's share is $605 million) of Mohave-related
investments that will be necessary if Mohave operations are to extend past 2005, including the installation of
pollution-control equipment that must be put in place pursuant to a 1999 Consent Decree related to air quality,
if Mohave's operations are extended past 2005.

SCE's May 17, 2002 application requested either:  a) pre-approval for SCE to immediately begin spending up to $58
million on Mohave pollution controls in 2003, if by year-end 2002, SCE had obtained adequate assurance that the
outstanding coal and slurry-water issues would be satisfactorily resolved; or b) authority for SCE to establish
certain balancing accounts and otherwise begin preparing to terminate Mohave's coal-fired operations at the end
of 2005.

The CPUC issued a ruling on January 7, 2003 requesting further written testimony from SCE and initial written
testimony from other parties on specified issues relating to Mohave and its coal and slurry-water supply.  The
ruling states that the purpose of the CPUC proceeding is to determine whether it is in the public interest to
extend Mohave operations post 2005.  In its supplemental testimony submitted on January 30, 2003, SCE stated,
among other things, that the currently available information is not sufficient for the CPUC to make this
determination at this time.  The testimony states that neither SCE nor any other party has sufficient assurance
of whether and how the currently unresolved coal and water supply issues will be resolved.  Unless all key
unresolved issues are resolved in a timely way, moreover, Mohave will cease operation as a coal-fired plant at
the end of 2005 under the terms of the consent decree and the existing coal supply agreements.  In that event,
there would be no need for the CPUC to make the determination it has described, since extension of the present
operating period would not be an option.  SCE's supplemental testimony accordingly requests that the CPUC
authorize the establishment of the


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Notes to Consolidated Financial Statements


balancing accounts that SCE first requested in its May 17, 2002 application in order to prepare for an orderly
shutdown of Mohave by the end of 2005, but the testimony also states that even with such authorization, SCE will
continue to work with the relevant stakeholders to attempt to resolve the issues surrounding Mohave's coal and
slurry-water supply.

On January 14, 2003, the Natural Resources Defense Council, Black Mesa Trust and others served a notice of intent
to sue the U.S. Department of the Interior and other federal government agencies and individuals, challenging the
failure of the government to issue a final permit to Peabody Western Coal Company for the operation of the Black
Mesa Mine.  The prospective plaintiffs claim that the federal government must begin a proceeding for issuance of
a final permit to Peabody rather than allow Peabody to continue long-term operation of the Black Mesa Mine on an
interim basis including groundwater extraction for use in the coal slurry pipeline.

The notice indicates that the prospective plaintiffs would then challenge any issuance of a permanent mining
permit for the Black Mesa Mine unless, at a minimum, an alternate source of slurry water is obtained.  If the
prospective plaintiffs prevail in any future lawsuit, the coal supply to Mohave could be interrupted.

In light of all of the issues discussed above, SCE has concluded that it is probable Mohave will be shut down at
the end of 2005.  Because the expected undiscounted cash flows from the plant during the years 2003-2005 were
less than the $88 million carrying value of the plant as of December 31, 2002, SCE incurred an impairment charge
of $61 million.  However, in accordance with accounting standards for rate-regulated enterprises, this incurred
cost was deferred and recorded as a regulatory asset, based on SCE's expectation that any unrecovered book value
at the end of 2005 would be recovered in future rates through the rate-making mechanism discussed in its May 17,
2002 application and again in its January 30, 2003 supplemental testimony.

URG Decision

On April 4, 2002, the CPUC issued a decision to return URG assets to cost-based ratemaking through the end of
2002.  After that time, SCE's URG-related revenue requirement will be determined through the 2003 general rate
case proceeding.  Key elements of the URG decision are: retention of the San Onofre incentive pricing mechanism
through 2003; recovery of incurred costs for all URG components other than San Onofre; establishment of an
amortization schedule for SCE's nuclear plants based on their remaining useful lives; and establishment of
balancing accounts for utility generation, purchased power and ISO ancillary services.

Based on this decision, during second quarter 2002, SCE reestablished for financial reporting purposes regulatory
assets related to its unamortized nuclear plant, purchased-power settlements and flow-through taxes, reduced the
PROACT balance, and recorded a corresponding credit to earnings of $480 million after tax.  The impact of the URG
decision is reflected in the financial statements as a credit (decrease) to the provisions for regulatory clauses
of $644 million, partially offset by an increase in deferred income tax expense of $164 million.  The reduction
in the PROACT balance reflects a change in the amortization schedule of SCE's unamortized nuclear facilities from
the schedule required to be used to calculate the surplus revenue contributed to the PROACT, for rate-making
purposes, during the last four months of 2001.  Implementation of the URG decision, together with the PROACT
mechanism, allowed SCE to reestablish substantially all of the regulatory assets previously written off to
earnings.

Wholesale Electricity Markets

On April 25, 2001, after months of high power prices, the FERC issued an order providing for energy price
controls during ISO Stage 1 or greater power emergencies (7% or less in reserve power).  The order establishes an
hourly clearing price based on the costs of the least efficient generating unit during the period.  Effective
June 20, 2001, the FERC expanded the April 25, 2001 order to include non-emergency periods and price mitigation in
the 11-state western region through September 30, 2002.  On July 17, 2002, the FERC issued an order reviewing the
ISO's proposals to redesign the market and implementing a market power mitigation program for the 11-state
western region.  The FERC declined to extend beyond September 30, 2002 all of the market mitigation measures it
had previously adopted.  However, effective October 1, 2002, the FERC extended a requirement, first ordered in
its June 19, 2001 decision, that all


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                                                                                Southern California Edison Company


western energy sellers offer for sale all operationally and contractually available energy.  It also ordered a
cap on bids for real-time energy and ancillary services of $250/MWh to be effective beginning October 1, 2002 and
ordered various other market power mitigation measures.  Implementation of the $250/MWh bid cap and other market
power mitigation measures were delayed until October 31, 2002 by a FERC order issued September 26, 2002.  The
FERC did not set a specific expiration date for its new market mitigation plan.  SCE cannot yet determine whether
the new market mitigation plan adopted by the FERC will be sufficient to mitigate market price volatility in the
wholesale electricity markets in which SCE will purchase its residual net short electricity requirements
(i.e., the amount of energy needed to serve SCE's customers from sources other than its own generating plants,
power purchase contracts and CDWR contracts).

On August 2, 2000, SDG&amp;E filed a complaint with the FERC seeking relief from alleged energy overcharges in the PX
and ISO market.  SCE intervened in the proceeding on August 14, 2000.  On August 23, 2000, the FERC issued an
order initiating an investigation of the justness and reasonableness of rates charged by sellers in the PX and
ISO markets.  Those proceedings were consolidated.  On July 25, 2001, the FERC issued an order that limits
potential refunds from alleged overcharges by energy suppliers to the ISO and PX spot markets during the period
from October 2, 2000 through June 20, 2001, and adopted a refund methodology based on daily spot market gas
prices.  An administrative law judge conducted evidentiary hearings on this matter in March, August and October
2002 and issued and initial decision on December 12, 2002.

On November 20, 2002, in the consolidated proceeding, the FERC issued an order authorizing 100 days of discovery
by market participants into market manipulation and abuse during the period January 1, 2000 through June 20,
2001.  SCE joined with the California parties (PG&amp;E, the California Attorney General, the Electricity Oversight
Board, and the CPUC to submit briefs and evidence demonstrating that sellers and marketers violated tariffs,
withheld power, and distorted and manipulated the California electricity markets.

At a FERC meeting on March 26, 2003, the FERC issued orders that initiated procedures for determining additional
refunds arising from market manipulation by energy suppliers.  Based on public comments at the meeting and the
FERC's press releases, it appears that the FERC acknowledges that there was pervasive gaming and market
manipulation of the electric and gas markets in California and on the west coast.  A new FERC staff report issued
on March 26, 2003 also describes many of the techniques and effects of electric and gas market manipulation.  The
FERC will be modifying the administrative law judge's initial decision of December 12, 2002 to reflect the fact
that the gas indices used in the market manipulation formula overstated the cost of gas used to generate
electricity.

SCE has not yet completed an evaluation of the FERC actions taken on March 26, 2003 and cannot determine the
timing or amount of any potential refunds.  Under the settlement agreement with the CPUC, any refunds will be
applied to reduce the PROACT balance until the PROACT is fully recovered.  After PROACT recovery is complete, 90%
of any refunds will be refunded to ratepayers.

Note 3.  Derivative Instruments and Hedging Activities

SCE's risk management policy allows the use of derivative financial instruments to manage financial exposure on
its investments, fluctuations in interest rates and energy prices, but prohibits the use of these instruments for
speculative or trading purposes.

On January 1, 2001, SCE adopted a new accounting standard for derivative instruments and hedging activities.  SCE
also adopted subsequent interpretations of this standard issued in July 2001, October 2001 and December 2001.
The standard requires derivative instruments to be recognized on the balance sheet at fair value unless they meet
the definition of a normal purchase or sale.  The normal purchases and sales exception requires, among other
things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course
of business.  Gains or losses from changes in the fair value of a recognized asset or liability or a firm
commitment are reflected in earnings for the ineffective portion of the hedge.  For a hedge of the cash flows of
a forecasted transaction, the effective portion of the gain or loss is initially recorded as a separate component
of shareholder's equity under the caption "accumulated other comprehensive income," and subsequently reclassified
into earnings when the forecasted transaction affects earnings.  The ineffective portion of the hedge is
reflected in earnings immediately.


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Notes to Consolidated Financial Statements


SCE recorded its interest rate swap agreement (terminated January 5, 2001) and its block forward power-purchase
contracts at fair value effective January 1, 2001.  The unamortized loss of $11 million (as of December 31, 2002
net of tax) on the interest rate swap will be amortized over a period ending in 2008, when the related debt
matures.  Due to downgrades in SCE's credit ratings and SCE's failure to pay its obligations to the PX, the PX
suspended SCE's market trading privileges and sought to liquidate SCE's remaining block forward contracts.
Before the PX could do so, on February 2, 2001, the state seized the contracts.  On September 30, 2001, a federal
appeals court ruled that the Governor of California acted illegally when he seized the contracts held by SCE.  In
conjunction with its settlement agreement with the CPUC, SCE has agreed to release any claim for compensation
against the state for these contracts.  However, if the PX prevails in its claims against the state, SCE may
receive some refunds.

SCE has bilateral forward power contracts, which are considered normal purchases under accounting rules.  SCE is
exposed to credit loss in the event of nonperformance by the counterparties to its bilateral forward contracts,
but does not expect the counterparties to fail to meet their obligations.  The counterparties are required to
post collateral depending on the creditworthiness of each counterparty.

In October and November 2001, SCE purchased $209 million of call options that mitigate its exposure to increases
in natural gas prices during 2002 and 2003.  This amount is being recovered through the PROACT mechanism.
Amounts paid to QFs for energy are based on natural gas prices.  Any fair value changes for gas call options are
offset through a regulatory balancing account; therefore, fair value changes do not affect earnings.

SCE purchases power from certain QFs in which the contract pricing is based on a natural gas index, but the power
is not generated with natural gas.  A portion of these contracts is not eligible for the normal purchases and
sales exception under accounting rules, and the fair value is recorded on the balance sheet.  Any fair value
changes for these QF contracts are offset through a regulatory mechanism; therefore, fair value changes do not
affect earnings.

Fair values of financial instruments are:

       In millions                          December 31,                2002                  2001
- -----------------------------------------------------------------------------------------------------

       Financial assets:
       Decommissioning trusts                                        $ 2,210               $ 2,275
       Gas options                                                        77                    91

       Financial liabilities:
       DOE decommissioning and
          decontamination fees                                            22                    25
       QF power contracts                                                 70                    --
       Short-term debt                                                    --                 2,103
       Long-term debt                                                  4,543                 4,659
       Long-term debt due within one year                              1,722                 1,153
       Preferred stock subject to mandatory redemption                   129                   118
       Preferred stock to be redeemed within one year                      8                   102
- -----------------------------------------------------------------------------------------------------


The fair value of financial assets is based on quoted market prices.

Financial liabilities' fair values are based on:  discounted future cash flows for U.S. Department of Energy
(DOE) decommissioning and decontamination fees; financial models for QF power contracts; and brokers' quotes for
short-term debt, long-term debt and preferred stock.

Due to their short maturities, amounts reported for cash equivalents approximate fair value.

Note 4.  Debt

Almost all SCE properties are subject to a trust indenture lien.  SCE has pledged first and refunding mortgage
bonds as security for borrowed funds obtained from pollution-control bonds issued by government agencies.  SCE
used these proceeds to finance construction of pollution-control facilities.  Bondholders have limited discretion
in redeeming certain pollution-control bonds, and SCE has


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                                                                                Southern California Edison Company


arrangements with securities dealers to remarket or purchase them if necessary.  As a result of investors'
concerns regarding SCE's liquidity difficulties and overall financial condition, SCE had to repurchase
$550 million of pollution-control bonds in December 2000 and early 2001 that could not be remarketed in accordance
with their terms.  On March 1, 2002, SCE remarketed $196 million of the pollution-control bonds that SCE had
repurchased in late 2000.

Debt premium, discount and issuance expenses are amortized over the life of each issue.  Under CPUC rate-making
procedures, debt reacquisition expenses are amortized over the remaining life of the reacquired debt or, if
refinanced, the life of the new debt. California law prohibits SCE from incurring or guaranteeing debt for its
nonutility affiliates.

In December 1997, $2.5 billion of rate reduction notes were issued on behalf of SCE by SCE Funding LLC, a special
purpose entity.  These notes were issued to finance the 10% rate reduction mandated by state law.  The proceeds
of the rate reduction notes were used by SCE Funding LLC to purchase from SCE an enforceable right known as
transition property.  Transition property is a current property right created by the restructuring legislation
and a financing order of the CPUC and consists generally of the right to be paid a specified amount from
nonbypassable rates charged to residential and small commercial customers.  The rate reduction notes are being
repaid over 10 years through these nonbypassable residential and small commercial customer rates, which
constitute the transition property purchased by SCE Funding LLC.  The notes are collateralized by the transition
property and are not collateralized by, or payable from, assets of SCE or Edison International.  SCE used the
proceeds from the sale of the transition property to retire debt and equity securities.  Although, as required by
accounting principles generally accepted in the United States, SCE Funding LLC is consolidated with SCE and the
rate reduction notes are shown as long-term debt in the consolidated financial statements, SCE Funding LLC is
legally separate from SCE.  The assets of SCE Funding LLC are not available to creditors of SCE or Edison
International and the transition property is legally not an asset of SCE or Edison International.

Long-term debt is:

     In millions              December 31,                              2002                    2001
- ----------------------------------------------------------------------------------------------------------

     First and refunding mortgage bonds:
       2002 - 2026 (5.625% to 7.25% and variable)                    $ 2,275                 $ 1,175
     Rate reduction notes:
       2002 - 2007 (6.22% to 6.42%)                                    1,232                   1,478
     Pollution-control bonds:
       2005 - 2040 (5.125% to 7.2% and variable)                       1,216                   1,216
     Bonds repurchased                                                  (354)                   (550)
     Funds held by trustees                                              (21)                    (20)
     Debentures and notes:
       2001 - 2029 (5.875% to 7.625% and variable)                     1,750                   2,450
     Subordinated debentures:
       2044 (8.375%)                                                     100                     100
     Commercial paper for nuclear fuel                                    --                      60
     Long-term debt due within one year                               (1,671)                 (1,146)
     Unamortized debt discount - net                                     (23)                    (24)
- ----------------------------------------------------------------------------------------------------------

     Total                                                           $ 4,504                 $ 4,739
- ----------------------------------------------------------------------------------------------------------


Long-term debt maturities and sinking-fund requirements for the next five years are:  2003 - $1.7 billion; 2004 -
$671 million; 2005 - $1.1 billion; 2006 - $446 million; and 2007 - $246 million.

On February 24, 2003, SCE completed an exchange offer of the $1.0 billion of variable rate notes due November
2003.  A total of $966 million of these notes were exchanged for $966 million of a new series of first and
refunding mortgage bonds due February 2007.  The new debt was issued with an 8% interest rate.  Approximately $34
million of the exchanged variable rate notes remain outstanding and are due in November 2003.

Short-term debt is used to finance fuel inventories, balancing account undercollections and general cash
requirements, including power purchase payments.  At December 31, 2001, commercial paper intended to


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Notes to Consolidated Financial Statements


finance nuclear fuel scheduled to be used more than one year after the balance sheet date was classified as
long-term debt in connection with refinancing terms under five-year term lines of credit with commercial banks.

Short-term debt is:

       In millions                    December 31,                            2002               2001
- -----------------------------------------------------------------------------------------------------------

       Commercial paper                                                    $    --            $   531
       Bank loans                                                               --              1,650
       Other                                                                    --                  6
       Amount reclassified as long-term debt                                    --                (60)
- -----------------------------------------------------------------------------------------------------------

       Total                                                               $    --            $ 2,127
- -----------------------------------------------------------------------------------------------------------
       Weighted average interest rates                                          --               5.3%


As of December 31, 2002, SCE had no available short-term credit lines and had fully drawn a long-term credit line
of $300 million.

Note 5.  Preferred Stock

Authorized shares of preferred and preference stocks are:  $25 cumulative preferred - 24 million; $100 cumulative
preferred - 12 million; and preference - 50 million.  All cumulative preferred stocks are redeemable.
Mandatorily redeemable preferred stocks are subject to sinking-fund provisions.  When preferred shares are
redeemed, the premiums paid are charged to common equity.

Preferred stock redemption requirements for the next five years are:  2003 - $9 million; 2004 - $9 million; 2005
- - $9 million; 2006 - $9 million and 2007 - $9 million.

Cumulative preferred stocks are:

Dollars in millions, except per share amounts        December 31,                             2002            2001
- -------------------------------------------------------------------------------------------------------------------

                                              December 31, 2002
                                       --------------------------------
                                         Shares            Redemption
                                       Outstanding            Price
                                       -----------        -------------

Not subject to mandatory redemption:
$25 par value:
4.08% Series                             1,000,000         $ 25.50                          $  25          $  25
4.24                                     1,200,000           25.80                             30             30
4.32                                     1,653,429           28.75                             41             41
4.78                                     1,296,769           25.80                             33             33
- -------------------------------------------------------------------------------------------------------------------
Total                                                                                       $ 129          $ 129
- -------------------------------------------------------------------------------------------------------------------

Subject to mandatory redemption:
$100 par value:
6.05% Series                               750,000        $ 100.00                          $  75          $  75
6.45                                            --             --                              --            100
7.23                                       807,000          100.00                             81             81
Preferred stock to be redeemed within one year                                                 (9)          (105)
- -------------------------------------------------------------------------------------------------------------------
Total                                                                                       $ 147          $ 151
- -------------------------------------------------------------------------------------------------------------------


In 2002, SCE redeemed 1,000,000 shares of 6.45% Series preferred stock.  There were no other redemptions, and no
issuances, of preferred stock in the last three years.

The 7.23% Series preferred stock has mandatory sinking funds, requiring SCE to redeem at least 50,000 shares per
year from 2002 through 2006, and 750,000 shares in 2007.  However, SCE is allowed to credit previously
repurchased shares against the mandatory sinking fund provisions.  Since SCE had previously repurchased 193,000
shares of this series, no shares were redeemed in 2002.  At December 31, 2002,


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                                                                                Southern California Edison Company


SCE had 143,000 of previously repurchased, but not retired, shares available to credit against the mandatory
sinking fund provisions.

Note 6.  Income Taxes

SCE and its subsidiaries are included in Edison International's consolidated federal income tax and combined
state franchise tax returns.  Under an income tax allocation agreement approved by the CPUC, SCE's tax liability
is computed as if it filed a separate return.

Income tax expense includes the current tax liability from operations and the change in deferred income taxes
during the year.  Investment tax credits are amortized over the lives of the related properties.

The components of the net accumulated deferred income tax liability are:

     In millions                               December 31,                         2002                 2001
- ----------------------------------------------------------------------------------------------------------------

     Deferred tax assets:
     Accrued charges                                                              $   416            $    472
     Investment tax credits                                                            73                  72
     Property-related                                                                 178                 192
     Regulatory balancing accounts                                                  5,365               1,709
     Unrealized gains or losses                                                       274                 310
     Other                                                                            212                 244
- ----------------------------------------------------------------------------------------------------------------
     Total                                                                        $ 6,518            $  2,999
- ----------------------------------------------------------------------------------------------------------------
     Deferred tax liabilities:
     Property-related                                                             $ 2,399           $   2,248
     Capitalized software costs                                                       204                 224
     Regulatory balancing accounts                                                  6,054               2,929
     Unrealized gains and losses                                                      171                 208
     Other                                                                            306                 322
- ----------------------------------------------------------------------------------------------------------------
     Total                                                                        $ 9,134           $   5,931
- ----------------------------------------------------------------------------------------------------------------
     Accumulated deferred income taxes - net                                      $ 2,616           $   2,932
- ----------------------------------------------------------------------------------------------------------------

     Classification of accumulated deferred income taxes:
     Included in deferred credits                                                 $ 2,658           $   3,365
     Included in current assets                                                        42                 433


The components of income tax expense (benefit) by location of taxing jurisdiction are:

     In millions                 Year ended December 31,             2002             2001                2000
- ----------------------------------------------------------------------------------------------------------------

     Current:
     Federal                                                     $    990         $    240           $   (104)
     State                                                            273               29                 --
- ----------------------------------------------------------------------------------------------------------------

                                                                    1,263              269               (104)
- ----------------------------------------------------------------------------------------------------------------
     Deferred:
     Federal                                                         (504)            1052               (746)
     State                                                           (117)             337               (172)
- ----------------------------------------------------------------------------------------------------------------

                                                                     (621)           1,389               (918)
- ----------------------------------------------------------------------------------------------------------------
     Total                                                       $    642          $ 1,658           $ (1,022)
- ----------------------------------------------------------------------------------------------------------------



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Notes to Consolidated Financial Statements


The major components of deferred tax expense (benefit), which arise from tax credits and timing differences
between financial and tax reporting, are:

     In millions                 Year ended December 31,             2002             2001               2000
- ----------------------------------------------------------------------------------------------------------------

     Deferred - federal and state:
     Accrued charges                                             $     56          $   (79)         $    (133)
     Investment tax credits                                            (6)              (6)               (41)
     Property-related                                                  74              174               (302)
     Regulatory asset amortization                                    (99)            (138)               251
     Regulatory balancing accounts                                   (575)           1,345               (740)
     State tax privilege year                                         (76)             (36)                31
     Unbilled revenue                                                  --              101                 20
     Pension reserve                                                   34               (4)                 1
     Other                                                            (29)              32                 (5)
- ----------------------------------------------------------------------------------------------------------------
     Total                                                       $   (621)         $ 1,389          $    (918)
- ----------------------------------------------------------------------------------------------------------------


The federal statutory income tax rate is reconciled to the effective tax rate below:

                                 Year ended December 31,             2002             2001              2000
- --------------------------------------------------------------------------------------------------------------
     Federal statutory rate                                          35.0%            35.0%             35.0%
     Favorable resolution of audit                                   (1.9)             --                --
     Investment tax credits                                          (0.3)            (0.1)              1.4
     Property-related and other                                      (4.2)             0.1              (6.6)
     State tax - net of federal deduction                             5.4              5.8               3.7
- --------------------------------------------------------------------------------------------------------------
     Effective tax rate                                              34.0%            40.8%             33.5%
- --------------------------------------------------------------------------------------------------------------


The composite federal and state statutory income tax rate was 40.551% for all years presented.  The lower
effective tax rate of 34% realized in 2002 was primarily due to reestablishing a tax-related regulatory asset due
to implementation of the URG decision and recording the benefit of favorable settlement of Internal Revenue
Service (IRS) audits.

As a matter of course, SCE is regularly audited by federal and state taxing authorities.  For further discussion
of this matter, see "Federal Income Taxes" in Note 10.

Note 7.  Employee Compensation and Benefit Plans

Employee Savings Plan

SCE has a 401(k) defined-contribution savings plan designed to supplement employees' retirement income.  The plan
received employer contributions of $30 million in 2002, $29 million in 2001 and $29 million in 2000.

Pension Plan

SCE has defined-benefit pension plans, including executive and non-executive plans, which cover employees meeting
minimum service requirements.  The non-executive plan has a cash balance feature.  SCE recognizes pension expense
for the non-executive plan as calculated by the actuarial method used for ratemaking.

At December 31, 2002, the accumulated benefit obligation of the executive pension plan exceeded the related plan
assets at the measurement date. In accordance with accounting standards, SCE recorded an additional minimum
liability of $12 million, with corresponding charges of $3 million as an intangible asset and $9 million as a
reduction to shareholder's equity through a charge to accumulated other comprehensive income. The charge to
accumulated other comprehensive income would be restored through shareholder's equity in future periods to the
extent the fair value of the plan assets exceed the accumulated benefit obligation.


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                                                                                Southern California Edison Company


The projected benefit obligation and accumulated benefit obligation for the executive pension plans were
$55 million and $41 million, respectively, as of December 31, 2002, and $44 million and $32 million, respectively,
as of December 31, 2001.  There were no plan assets for the executive plans at December 31, 2002, or December 31,
2001.  As of December 31, 2002 and 2001, the fair value of plan assets exceeded the accumulated benefit
obligation for the non-executive plans.

Information on plan assets and benefit obligations is shown below:

In millions                             Year ended December 31,                         2002              2001
- -------------------------------------------------------------------------------------------------------------------

Change in projected benefit obligation
Benefit obligation at beginning of year                                               $ 2,371          $ 2,247
Service cost                                                                               69               69
Interest cost                                                                             158              157
Actuarial loss                                                                             90               84
Benefits paid                                                                            (138)            (186)
- -------------------------------------------------------------------------------------------------------------------

Projected benefit obligation at end of year                                           $ 2,550          $ 2,371
- -------------------------------------------------------------------------------------------------------------------

Change in plan assets
Fair value of plan assets at beginning of year                                        $ 2,723          $ 3,067
Actual return on plan assets                                                             (311)            (162)
Employer contributions                                                                      7                4
Benefits paid                                                                            (138)            (186)
- -------------------------------------------------------------------------------------------------------------------

Fair value of plan assets at end of year                                              $ 2,281          $ 2,723
- -------------------------------------------------------------------------------------------------------------------

Funded status                                                                          $ (269)        $    352
Unrecognized net loss (gain)                                                              394             (222)
Unrecognized transition obligation                                                         11               17
Unrecognized prior service cost                                                            98              112
- -------------------------------------------------------------------------------------------------------------------

Recorded asset                                                                       $    234         $    259
- -------------------------------------------------------------------------------------------------------------------

Discount rate                                                                           6.5%             7.0%
Rate of compensation increase                                                           5.0%             5.0%
Expected return on plan assets                                                          8.5%             8.5%


Expense components are:

In millions                      Year ended December 31,                2002            2001              2000
- -------------------------------------------------------------------------------------------------------------------

Service cost                                                          $   69          $    69           $   64
Interest cost                                                            158              157              158
Expected return on plan assets                                          (224)            (251)            (266)
Special termination benefits                                              --               13               --
Net amortization and deferral                                             21               (7)             (38)
- -------------------------------------------------------------------------------------------------------------------
Expense under accounting standards                                        24              (19)             (82)
Regulatory adjustment - deferred                                         (18)              39               88
- -------------------------------------------------------------------------------------------------------------------
Total expense recognized                                              $    6          $    20           $    6
- -------------------------------------------------------------------------------------------------------------------


Postretirement Benefits Other Than Pensions

Employees retiring at or after age 55 with at least 10 years of service are eligible for postretirement health
and dental care, life insurance and other benefits.



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Notes to Consolidated Financial Statements


Information on plan assets and benefit obligations is shown below:

In millions                     Year ended December 31,                                 2002              2001
- -------------------------------------------------------------------------------------------------------------------

Change in benefit obligation
Benefit obligation at beginning of year                                              $  1,925          $ 1,762
Service cost                                                                               42               44
Interest cost                                                                             133              129
Actuarial loss                                                                             82               61
Benefits paid                                                                             (79)             (71)
- -------------------------------------------------------------------------------------------------------------------

Benefit obligation at end of year                                                    $  2,103          $ 1,925
- -------------------------------------------------------------------------------------------------------------------

Change in plan assets
Fair value of plan assets at beginning of year                                       $  1,139          $ 1,200
Actual return on plan assets                                                             (148)             (92)
Employer contributions                                                                    160              102
Benefits paid                                                                             (79)             (71)
- -------------------------------------------------------------------------------------------------------------------

Fair value of plan assets at end of year                                             $  1,072          $ 1,139
- -------------------------------------------------------------------------------------------------------------------

Funded status                                                                        $ (1,031)        $   (786)
Unrecognized net loss                                                                     702              390
Unrecognized transition obligation                                                        268              295
- -------------------------------------------------------------------------------------------------------------------

Recorded asset (liability)                                                         $      (61)        $   (101)
- -------------------------------------------------------------------------------------------------------------------

Discount rate                                                                           6.75%             7.25%
Expected return on plan assets                                                          8.2%              8.2%


Expense components are:

In millions                      Year ended December 31,                2002            2001              2000
- -------------------------------------------------------------------------------------------------------------------

Service cost                                                         $    42         $     44          $    39
Interest cost                                                            133              129              121
Expected return on plan assets                                           (93)             (98)            (106)
Special termination benefits                                              --                2               --
Net amortization and deferral                                             37               27               27
- -------------------------------------------------------------------------------------------------------------------

Total expense                                                        $   119         $    104          $    81
- -------------------------------------------------------------------------------------------------------------------


The assumed rate of future increases in the per-capita cost of health care benefits is 9.75% for 2003, gradually
decreasing to 5.0% for 2008 and beyond.  Increasing the health care cost trend rate by one percentage point would
increase the accumulated obligation as of December 31, 2002 by $341 million and annual aggregate service and
interest costs by $33 million.  Decreasing the health care cost trend rate by one percentage point would decrease
the accumulated obligation as of December 31, 2002 by $274 million and annual aggregate service and interest
costs by $26 million.

Stock-Based Employee Compensation

In 1998, Edison International shareholders approved the Edison International Equity Compensation Plan, replacing
the long-term incentive compensation program that had been adopted by Edison International shareholders in 1992.
The 1998 plan authorizes a limited annual number of Edison International common shares that may be issued in
accordance with plan awards.  The annual authorization is cumulative, allowing subsequent issuance of previously
unutilized awards.  In May 2000, the Edison International Board of Directors adopted an additional plan, the 2000
Equity Plan, under which stock options, including the special options discussed below, may be awarded.

Under the 1992, 1998 and 2000 plans, options on 6.7 million shares of Edison International common stock are
currently outstanding to officers and senior managers of SCE.


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                                                                                Southern California Edison Company


Each option may be exercised to purchase one share of Edison International common stock and is exercisable at a
price equivalent to the fair market value of the underlying stock at the date of grant.  Options generally expire
10 years after date of grant and vest over a period of up to five years.

Edison International stock options awarded prior to 2000 include a dividend equivalent feature.  Dividend
equivalents on stock options issued after 1993 and prior to 2000 are accrued to the extent dividends are declared
on Edison International common stock and are subject to reduction unless certain performance criteria are met.
Only a portion of the 1999 Edison International stock option awards include a dividend equivalent feature.

Options issued after 1997 generally have a four-year vesting period.  The special options granted in 2000 vest
over five years, in 25% increments beginning in May 2002.  Earlier options had a three-year vesting period with
one-third of the total award vesting annually.  If an option holder retires, dies, is terminated by the company,
or is terminated while permanently and totally disabled (qualifying event) during the vesting period, the
unvested options will vest on a pro rata basis.

Unvested options of any person who has served in the past on the SCE management committee (which was dissolved in
1993) will vest and be exercisable upon a qualifying event.  If a qualifying event occurs, the vested options may
continue to be exercised within their original terms by the recipient or beneficiary except that in the case of
termination by the company where the option holder is not eligible for retirement, vested options are forfeited
unless exercised within one year of termination date.  If an option holder is terminated other than by a
qualifying event, options which had vested as of the prior anniversary date of the grant are forfeited unless
exercised within 180 days of the date of termination.  All unvested options are forfeited on the date of
termination.

The fair value for each option granted, reflecting the basis for the pro forma disclosures in Note 1, was
determined on the date of grant using the Black-Scholes option-pricing model.  The following assumptions were
used in determining fair value through the model:

         December 31,                        2002                    2001                  2000
- ----------------------------------------------------------------------------------------------------------

         Expected life                 7 years - 10 years      7 years - 10 years    7 years - 10 years
         Risk-free interest rate         4.7% - 6.1%              4.7% - 6.1%            4.7% - 6.0%
         Expected dividend yield             1.8%                    3.3%                   4.5%
         Expected volatility               18% - 54%               17% - 52%              17% - 46%
- ----------------------------------------------------------------------------------------------------------


The expected dividend yield above is computed using an average of the previous 12 quarters.  The expected
volatility above is computed on a historical 36-month basis.

The application of fair-value accounting to calculate the pro forma disclosures is not an indication of future
income statement effects.  The pro forma disclosures do not reflect the effect of fair-value accounting on
stock-based compensation awards granted prior to 1995.

The weighted-average fair value of options granted during 2002 and 2001 was $7.86 per share option and $4.53 per
share option, respectively.  The weighted-average remaining life of options outstanding as of December 31, 2002
and December 31, 2001 was 6 years.

For the years after 1999, a portion of the executive long-term incentives was awarded in the form of performance
shares.  The 2000 performance shares were restructured as retention incentives in December 2000, which pay as a
combination of Edison International common stock and cash if the executive remains employed at the end of the
performance period.  The performance period ended December 31, 2001 for half of the award, and ends on
December 31, 2002 for the remainder.  Additional performance shares were awarded in January 2001 and January
2002.  The 2001 performance shares vest December 31, 2003 half in shares of Edison International common stock and
half in cash.  The 2002 performance shares vest December 31, 2004 also half in shares of common stock and half in
cash.  The number of shares that will be paid out from the 2002 performance share awards will depend on the
performance of Edison International common stock relative to the stock performance of a specified group of peer
companies.  The 2000 and 2001 performance shares and deferred stock unit values are accrued


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Notes to Consolidated Financial Statements


ratably over a three-year performance period.  The 2002 performance shares will be valued based on Edison
International's stock performance relative to the stock performance of other such entities.

In March 2001, deferred stock units were awarded as part of a retention program.  These vested and were paid on
March 12, 2003 in shares of Edison International common stock.

In October 2001, a stock option retention exchange offer was extended, offering holders of Edison International
stock options granted in 2000 the opportunity to exchange those options for a lesser number of deferred stock
units.  The exchange ratio was based on the Black-Scholes value of the options and the stock price at the time
the offer was extended.  The exchange took place in November 2001; the options that participants elected to
exchange were cancelled, and deferred stock units were issued.  Approximately three options were cancelled for
each deferred stock unit issued.  Twenty-five percent of the deferred stock units will vest and be paid in Edison
International Common Stock per year over four years, with the first vesting and payment date in November 2002.
The following assumptions were used in determining fair value through the Black-Scholes option-pricing model:
expected life - 8 to 9 years; risk-free interest rate - 5.10%; expected volatility - 52%.

See Note 1 for SCE's accounting policy and expenses related to stock-based employee compensation.

Note 8.  Jointly Owned Utility Projects

SCE owns interests in several generating stations and transmission systems for which each participant provides
its own financing.  SCE's share of expenses for each project is included in the consolidated statements of income.

The investment in each project as of December 31, 2002 is:

                                                  Investment          Accumulated
                                                      in           Depreciation and        Ownership
         In millions                               Facility          Amortization          Interest
- -------------------------------------------------------------------------------------------------------

         Transmission systems:
           Eldorado                              $      45            $     12                60%
           Pacific Intertie                            246                  86                50%
         Generating stations:
           Four Corners Units 4 and 5 (coal)           480                 374                48%
           Mohave (coal)1                              341                 253                56%
           Palo Verde (nuclear)2                     1,631               1,424                16%
           San Onofre (nuclear)2                     4,305               3,859                75%
- -------------------------------------------------------------------------------------------------------

         Total                                   $   7,048            $  6,008
- -------------------------------------------------------------------------------------------------------

         -----------------------
         1   A portion is included in regulatory assets on the balance sheet.  See Note 1.
         2   Included in regulatory assets on the balance sheet.


Note 9.  Commitments

Leases

SCE has operating leases, primarily for vehicles, with varying terms, provisions and expiration dates.  Operating
lease expense was $16 million in 2002, $19 million in 2001 and $20 million in 2000.



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                                                                                Southern California Edison Company


Estimated remaining commitments for noncancelable leases at December 31, 2002 are:

         Year ended December 31,                                             In millions
- ------------------------------------------------------------------------------------------

         2003                                                                 $   13
         2004                                                                     11
         2005                                                                      8
         2006                                                                      6
         2007                                                                      4
         Thereafter                                                                9
- ------------------------------------------------------------------------------------------
         Total                                                                $   51
- ------------------------------------------------------------------------------------------


Nuclear Decommissioning

Decommissioning is estimated to cost $2.5 billion in current-year dollars, based on site-specific studies
performed in 2001 for San Onofre and Palo Verde.  Changes in the estimated costs, timing of decommissioning, or
the assumptions underlying these estimates could cause material revisions to the estimated total cost to
decommission in the near term.  SCE estimates that it will spend approximately $11.8 billion through 2060 to
decommission its nuclear facilities.  This estimate is based on SCE's current-dollar decommissioning costs,
escalated at rates ranging from 0.9% to 10.0% (depending on the cost element) annually.  These costs are expected
to be funded from independent decommissioning trusts, which effective June 1999 receive contributions of
approximately $25 million per year.  SCE estimates annual after-tax earnings on the decommissioning funds of 3.7%
to 6.4%. If the assumed return on trust assets is not earned, it is probable that additional funds needed for
decommissioning will be recoverable through rates.

Decommissioning of San Onofre Unit 1 (shut down in 1992 per CPUC agreement) started in 1999 and will continue
through 2008.  All of SCE's San Onofre's Unit 1 decommissioning costs will be paid from its nuclear
decommissioning trust funds.  The estimated remaining cost to decommission San Onofre Unit 1 is recorded as a
liability ($298 million at December 31, 2002).  Total expenditures for the decommissioning of San Onofre Unit 1
were $197 million through December 31, 2002.

SCE plans to decommission its active nuclear generating facilities by a prompt removal method authorized by the
Nuclear Regulatory Commission.  Decommissioning is expected to begin after the plants' operating licenses
expire.  The operating licenses expire in 2022 for San Onofre Units 2 and 3, and in 2026 and 2028 for the Palo
Verde units.  Decommissioning costs, which are recovered through non-bypassable customer rates as authorized by
the CPUC, are recorded as a component of depreciation expense.

Decommissioning expense was $73 million in 2002, $96 million in 2001 and $106 million in 2000.  The accumulated
provision for decommissioning, excluding San Onofre Unit 1 and unrealized holding gains, was $1.6 billion at
December 31, 2002 and $1.5 billion at December 31, 2001.

Decommissioning funds collected in rates are placed in independent trusts, which, together with accumulated
earnings, will be utilized solely for decommissioning.

Trust investments (cost basis) include:

                                             Maturity
- ------------------------------------------------------------------------------------------------------------------
     In millions                               Dates                 December 31,       2002               2001
- ------------------------------------------------------------------------------------------------------------------

     Municipal bonds                        2002 - 2039                              $    442           $   463
     Stocks                                     --                                        752               637
     U.S. government issues                 2002 - 2032                                   252               332
     Short-term and other                   2002 - 2003                                   321               334
- ------------------------------------------------------------------------------------------------------------------
     Total                                                                           $  1,767           $ 1,766
- ------------------------------------------------------------------------------------------------------------------



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Notes to Consolidated Financial Statements


Trust fund earnings (based on specific identification) increase the trust fund balance and the accumulated
provision for decommissioning.  Net earnings (loss) were $(25) million in 2002, $13 million in 2001 and
$38 million in 2000.  Proceeds from sales of securities (which are reinvested) were $3.8 billion in 2002, $3.9
billion in 2001 and $4.7 billion in 2000.  Approximately 91% of the cumulative trust fund contributions were
tax-deductible.

Other Commitments

SCE has fuel supply contracts which require payment only if the fuel is made available for purchase.  Certain SCE
gas and coal fuel contracts require payment of certain fixed charges whether or not gas or coal is delivered.

SCE has power-purchase contracts with certain QFs (cogenerators and small power producers) and other utilities.
These contracts provide for capacity payments if a facility meets certain performance obligations and energy
payments based on actual power supplied to SCE.  There are no requirements to make debt-service payments.  In an
effort to replace higher-cost contract payments with lower-cost replacement power, SCE has entered into
purchased-power settlements to end its contract obligations with certain QFs.  The settlements are reported as
power purchase contracts on the balance sheets.

SCE has unconditional purchase obligations for part of a power plant's generating output, as well as firm
transmission service from another utility.  Minimum payments are based, in part, on the debt-service requirements
of the provider, whether or not the plant or transmission line is operable.  SCE's minimum commitment under both
contracts is approximately $134 million through 2017.  The purchased-power contract is expected to provide
approximately 5% of current or estimated future operating capacity, and is reported as power purchase contracts
(approximately $30 million).  The transmission service contract requires a minimum payment of approximately
$6 million a year.

Certain commitments for the years 2003 through 2007 are estimated below:

         In millions                                         2003       2004       2005       2006       2007
- --------------------------------------------------------------------------------------------------------------

         Fuel supply contract payments                      $ 155      $ 118      $ 121      $ 124      $ 127
         Purchased-power capacity payments                    597        595        578        543        543
- --------------------------------------------------------------------------------------------------------------


Note 10.  Contingencies

In addition to the matters disclosed in these Notes, SCE is involved in other legal, tax and regulatory
proceedings before various courts and governmental agencies regarding matters arising in the ordinary course of
business.  SCE believes the outcome of these other proceedings will not materially affect its results of
operations or liquidity.

Energy Crisis Issue

In October 2000, a federal class action securities lawsuit was filed against SCE and Edison International.  The
lawsuit, as amended, involved securities fraud claims arising from alleged improper accounting for the
energy-cost undercollections.  The complaint was supposedly filed on behalf of a class of persons who purchased
Edison International common stock between July 21, 2000 and April 17, 2001.  This lawsuit was consolidated with
another similar lawsuit filed on March 15, 2001.  SCE and Edison International filed a motion to dismiss the
lawsuits for failure to state a claim and on March 8, 2002, the district court dismissed the complaint with
prejudice.  The plaintiffs have dismissed their appeal and on April 26, 2002, the federal court of appeals
dismissed the appeal with prejudice.

Environmental Remediation

SCE is subject to numerous environmental laws and regulations, which require it to incur substantial costs to
operate existing facilities, construct and operate new facilities, and mitigate or remove the effect of past
operations on the environment.


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                                                                                Southern California Edison Company


SCE records its environmental remediation liabilities when site assessments and/or remedial actions are probable
and a range of reasonably likely cleanup costs can be estimated.  SCE reviews its sites and measures the
liability quarterly, by assessing a range of reasonably likely costs for each identified site using currently
available information, including existing technology, presently enacted laws and regulations, experience gained
at similar sites, and the probable level of involvement and financial condition of other potentially responsible
parties.  These estimates include costs for site investigations, remediation, operations and maintenance,
monitoring and site closure.  Unless there is a probable amount, SCE records the lower end of this reasonably
likely range of costs (classified as other long-term liabilities) at undiscounted amounts.

SCE's recorded estimated minimum liability to remediate its 41 identified sites is $99 million.  The sites
include SCE's divested gas-fueled generation plants, for which SCE retained some liability after their sale.  The
ultimate costs to clean up SCE's identified sites may vary from its recorded liability due to numerous
uncertainties inherent in the estimation process, such as: the extent and nature of contamination; the scarcity
of reliable data for identified sites; the varying costs of alternative cleanup methods; developments resulting
from investigatory studies; the possibility of identifying additional sites; and the time periods over which site
remediation is expected to occur.  SCE believes that, due to these uncertainties, it is reasonably possible that
cleanup costs could exceed its recorded liability by up to $282 million.  The upper limit of this range of costs
was estimated using assumptions least favorable to SCE among a range of reasonably possible outcomes.

The CPUC allows SCE to recover environmental remediation costs at certain sites, representing $38 million of its
recorded liability, through an incentive mechanism (SCE may request to include additional sites).  Under this
mechanism, SCE will recover 90% of cleanup costs through customer rates; shareholders fund the remaining 10%,
with the opportunity to recover these costs from insurance carriers and other third parties.  SCE has
successfully settled insurance claims with all responsible carriers.  SCE expects to recover costs incurred at
its remaining sites through customer rates.  SCE has recorded a regulatory asset of $70 million for its estimated
minimum environmental-cleanup costs expected to be recovered through customer rates.

SCE's identified sites include several sites for which there is a lack of currently available information,
including the nature and magnitude of contamination and the extent, if any, that SCE may be held responsible for
contributing to any costs incurred for remediating these sites.  Thus, no reasonable estimate of cleanup costs
can be made for these sites.

SCE expects to clean up its identified sites over a period of up to 30 years.  Remediation costs in each of the
next several years are expected to range from $15 million to $25 million.  Recorded costs for 2002 were $25
million.

Based on currently available information, SCE believes it is unlikely that it will incur amounts in excess of the
upper limit of the estimated range for its identified sites and, based upon the CPUC's regulatory treatment of
environmental remediation costs, SCE believes that costs ultimately recorded will not materially affect its
results of operations or financial position.  There can be no assurance, however, that future developments,
including additional information about existing sites or the identification of new sites, will not require
material revisions to such estimates.

Federal Income Taxes

On August 7, 2002, Edison International received a notice from the IRS asserting deficiencies in federal
corporate income taxes for its 1994 to 1996 tax years.  Included in these amounts are deficiencies asserted
against SCE.  The vast majority of SCE's tax deficiencies are timing differences and, therefore, amounts
ultimately paid, if any, would benefit it as future tax deductions.  SCE believes that it has meritorious legal
defenses to deficiencies asserted against it and believes that the ultimate outcome of this matter will not
result in a material impact on its results of operations or financial position.

Navajo Nation Litigation

Peabody Holding Company (Peabody) supplies coal from mines on Navajo Nation lands to Mohave.  In June 1999, the
Navajo Nation filed a complaint in federal district court against Peabody and certain of its


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Notes to Consolidated Financial Statements


affiliates, Salt River Project Agricultural Improvement and Power District, and SCE.  The complaint asserts
claims against the defendants for, among other things, violations of the federal RICO statute, interference with
fiduciary duties and contractual relations, fraudulent misrepresentation by nondisclosure, and various
contract-related claims.  The complaint claims that the defendants' actions prevented the Navajo Nation from
obtaining the full value in royalty rates for the coal.  The complaint seeks damages of not less than
$600 million, trebling of that amount, and punitive damages of not less than $1 billion, as well as a declaration
that Peabody's lease and contract rights to mine coal on Navajo Nation lands should be terminated.

In February 2002, Peabody and SCE filed cross claims against the Navajo Nation, alleging that the Navajo Nation
had breached a settlement agreement and final award between Peabody and the Navajo Nation by filing their lawsuit.

The Navajo Nation had previously filed suit in the Court of Claims against the United States Department of
Interior, alleging that the Government had breached its fiduciary duty concerning contract negotiations including
the Navajo Nation and the defendants.  In February 2000, the Court of Claims issued a decision in the
Government's favor, finding that while there had been a breach, there was no available redress from the
Government.  Following appeal of that decision by the Navajo Nation, an appellate court ruled that the Court of
Claims did have jurisdiction to award damages and remanded the case to the Court of Claims for that purpose.  On
June 3, 2002, the Government's request for review of the case by the United States Supreme Court was granted.  On
March 4, 2003, the Supreme Court reversed the appellate court and held that the Government is not liable to the
Navajo Nation as there was no breach of a fiduciary duty and that the Navajo Nation did not have a right to
relief against the Government.

SCE cannot predict with certainty the outcome of the 1999 Navajo Nation's complaint against SCE, nor the impact
on this complaint or the Supreme Court's decision on the outcome of the Navajo Nation's suit against the
government, or the impact of the complaint on the operation of Mohave beyond 2005.

Nuclear Insurance

Federal law limits public liability claims from a nuclear incident to $9.5 billion.  SCE and other owners of the
San Onofre and Palo Verde nuclear generating stations have purchased the maximum private primary insurance
available ($200 million at December 31, 2002 and $300 million beginning January 1, 2003).  The balance is covered
by the industry's retrospective rating plan that uses deferred premium charges to every reactor licensee if a
nuclear incident at any licensed reactor in the U.S. results in claims and/or costs which exceed the primary
insurance at that plant site.  Federal regulations require this secondary level of financial protection.  The
Nuclear Regulatory Commission exempted San Onofre Unit 1 from this secondary level, effective June 1994.  The
maximum deferred premium for each nuclear incident is $88 million per reactor, but not more than $10 million per
reactor may be charged in any one year for each incident.  Based on its ownership interests, SCE could be
required to pay a maximum of $175 million per nuclear incident.  However, it would have to pay no more than
$20 million per incident in any one year.  Such amounts include a 5% surcharge if additional funds are needed to
satisfy public liability claims and are subject to adjustment for inflation.  If the public liability limit above
is insufficient, federal regulations may impose further revenue-raising measures to pay claims, including a
possible additional assessment on all licensed reactor operators.  The U.S. Congress has extended the expiration
date of the applicable law until December 31, 2003 and is considering amendments that, among other things, are
expected to extend the law beyond 2003.

Property damage insurance covers losses up to $500 million, including decontamination costs, at San Onofre and
Palo Verde.  Decontamination liability and property damage coverage exceeding the primary $500 million also has
been purchased in amounts greater than federal requirements.  Additional insurance covers part of replacement
power expenses during an accident-related nuclear unit outage.  A mutual insurance company owned by utilities
with nuclear facilities issues these policies.  If losses at any nuclear facility covered by the arrangement were
to exceed the accumulated funds for these insurance programs, SCE could be assessed retrospective premium
adjustments of up to $38 million per year.  Insurance premiums are charged to operating expense.



Page 62
<PAGE>

- -------------------------------------------------------------------------------------------------------------------
                                                                                Southern California Edison Company


Spent Nuclear Fuel

Under federal law, the U.S. Department of Energy (DOE) is responsible for the selection and development of a
facility for disposal of spent nuclear fuel and high-level radioactive waste.  Such a facility was to be in
operation by January 1998.  However, the DOE did not meet its obligation.  It is not certain when the DOE will
begin accepting spent nuclear fuel from San Onofre or from other nuclear power plants.  Extended delays by the
DOE could lead to consideration of costly alternatives involving siting and environmental issues.  SCE has paid
the DOE the required one-time fee applicable to nuclear generation at San Onofre through April 6, 1983
(approximately $24 million, plus interest).  SCE is also paying the required quarterly fee equal to 0.1(cent)per kWh
of nuclear-generated electricity sold after April 6, 1983.

SCE, as operating agent, has primary responsibility for the interim storage of its spent nuclear fuel at
San Onofre.  The San Onofre Units 2 and 3 spent fuel pools currently contain San Onofre Unit 1 spent fuel in
addition to spent fuel from Units 2 and 3.  Current capability to store spent fuel in the Units 2 and 3 spent
fuel pools is adequate through 2005.  SCE plans to move the Unit 1 spent fuel to an interim spent fuel storage
facility by the third quarter of 2003.  The spent fuel pool storage capacity for Units 2 and 3 will then
accommodate needs until 2007 for Unit 2 and 2008 for Unit 3.  SCE expects to begin using an interim spent fuel
storage facility for Units 2 and 3 spent fuel by early 2006.  Palo Verde on-site spent fuel storage capacity will
accommodate needs until 2003 for Unit 2, and until 2004 for Units 1 and 3.  Arizona Public Service Company,
operating agent for Palo Verde, expects to begin using an interim spent fuel storage facility in the first half
of 2003.


- -------------------------------------------------------------------------------------------------------------------
Quarterly Financial Data (Unaudited)
                                                 2002                                        2001
                           --------------------------------------------   -----------------------------------------
In millions                 Total    Fourth    Third    Second     First  Total   Fourth    Third   Second   First
- -------------------------------------------------------------------------------------------------------------------

Operating revenue          $8,706    $1,952   $2,714    $2,133   $1,907   $8,126  $2,296   $2,726   $1,592  $1,512
Operating income (loss)     2,127       264      452     1,107      304    4,617   3,956    1,294      204    (837)
Net income (loss)           1,247       157      238       700      152    2,408   2,310      657       34    (593)
Net income (loss) available for
  common stock              1,228       153      234       695      146    2,386   2,304      652       28    (598)
Common dividends declared      --        --       --        --       --       --      --       --       --      --
- -------------------------------------------------------------------------------------------------------------------




Page 63
<PAGE>





- -------------------------------------------------------------------------------------------------------------------
Responsibility for Financial Reporting                                          Southern California Edison Company

The management of Southern California Edison Company (SCE) is responsible for the integrity and objectivity of
the accompanying financial statements.  The statements have been prepared in accordance with accounting
principles generally accepted in the United States and are based, in part, on management estimates and judgment.

SCE maintains systems of internal control to provide reasonable, but not absolute, assurance that assets are
safeguarded, transactions are executed in accordance with management's authorization and the accounting records
may be relied upon for the preparation of the financial statements.  There are limits inherent in all systems of
internal control, the design of which involves management's judgment and the recognition that the costs of such
systems should not exceed the benefits to be derived.  SCE believes its systems of internal control achieve this
appropriate balance.  These systems are augmented by internal audit programs through which the adequacy and
effectiveness of internal controls and policies and procedures are monitored, evaluated and reported to
management.  Actions are taken to correct deficiencies as they are identified.

SCE's independent accountants, PricewaterhouseCoopers LLP, are engaged to audit the financial statements in
accordance with auditing standards generally accepted in the United States and to express an informed opinion on
the fairness, in all material respects, of SCE's reported results of operations, cash flows and financial
position.

As a further measure to assure the ongoing objectivity of financial information, the audit committee of the board
of directors, which is composed of outside directors, meets periodically, both jointly and separately, with
management, the independent accountants and internal auditors, who have unrestricted access to the committee.
The committee recommends annually to the board of directors the appointment of a firm of independent accountants
(who are ultimately responsible to the board and the committee) to conduct audits of SCE's financial statements;
considers the independence of such firm and the overall adequacy of the audit scope and SCE's systems of internal
control; reviews financial reporting issues; and is advised of management's actions regarding financial reporting
and internal control matters.

SCE maintains high standards in selecting, training and developing personnel to assure that its operations are
conducted in conformity with applicable laws and is committed to maintaining the highest standards of personal
and corporate conduct.  Management maintains programs to encourage and assess compliance with these standards.





/S/ Thomas M. Noonan                                                   /S/ Alan J. Fohrer
- -----------------------------------                                    --------------------------------------
Thomas M. Noonan                                                       Alan J. Fohrer
Vice President                                                         Chief Executive Officer
and Controller


March 26, 2003



Page 64
<PAGE>



- -------------------------------------------------------------------------------------------------------------------
Report of Independent Accountants                                               Southern California Edison Company




To the Board of Directors and
Shareholder of Southern California Edison Company:

In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income
(loss), comprehensive income (loss), changes in common shareholder's equity, and cash flows present fairly, in
all material respects, the financial position of Southern California Edison Company and its subsidiaries at
December 31, 2002, and the results of their operations and their cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.  These financial statements are
the responsibility of the Company's management; our responsibility is to express an opinion on these financial
statements based on our audit.  We conducted our audit of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.  The
financial statements of the Company as of December 31, 2001, and for each of the two years in the period ended
December 31, 2001, were audited by other independent accountants who have ceased operations.  Those independent
accountants expressed an unqualified opinion on those financial statements in their report dated March 25, 2002.



/s/ PricewaterhouseCoopers LLP



Los Angeles, California
March 26, 2003



Page 65
<PAGE>



- -------------------------------------------------------------------------------------------------------------------
Report of Predecessor Independent Accountants                                   Southern California Edison Company



                        THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR
                             ANDERSEN LLP AND HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP




To Southern California Edison Company:

We have audited the accompanying consolidated balance sheets of Southern California Edison Company (SCE, a
California corporation) and its subsidiaries as of December 31, 2001, and 2000, and the related consolidated
statements of income (loss), comprehensive income (loss), cash flows and changes in common shareholder's equity
for each of the three years in the period ended December 31, 2001.  These financial statements are the
responsibility of SCE's management.  Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States.  Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of SCE and its subsidiaries as of December 31, 2001, and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity
with accounting principles generally accepted in the United States.




                                                              /S/ ARTHUR ANDERSEN LLP
                                                              -------------------------------------------
                                                              ARTHUR ANDERSEN LLP


Los Angeles, California
March 25, 2002



Page 66
<PAGE>



- -------------------------------------------------------------------------------------------------------------------
Board of Directors                                                              Southern California Edison Company
- -------------------------------------------------------------------------------------------------------------------

John E. Bryson
Chairman of the Board,
President and Chief Executive Officer,
Edison International
Chairman of the Board,
Southern California Edison Company

Alan J. Fohrer
Chief Executive Officer
Southern California Edison Company

Bradford M. Freeman
Founding Partner,
Freeman Spogli &amp; Co.
(private investment company),
Los Angeles, California

Joan C. Hanley
The Former General Partner and Manager,
Miramonte Vineyards,
Rancho Palos Verdes, California


Bruce Karatz
Chairman and
Chief Executive Officer,
KB Home (homebuilding),
Los Angeles, California

Luis G. Nogales
Managing Partner,
Nogales Investors and Managing Director, Nogales Investors LLC (private equity investment companies),
Los Angeles, California

Ronald L. Olson
Senior Partner,
Munger, Tolles and Olson (law firm),
Los Angeles, California

James M. Rosser
President,
California State University, Los Angeles,
Los Angeles, California

Richard T. Schlosberg, III
President and Chief Executive Officer,
The David and Lucile Packard Foundation (private family foundation),
Los Altos, California

Robert H. Smith
Managing Director,
Smith and Crowley Inc.
(merchant banking),
Pasadena, California

Thomas C. Sutton
Chairman of the Board and
Chief Executive Officer
Pacific Life Insurance Company,
Newport Beach, California

Daniel M. Tellep
Retired Chairman of the Board,
Lockheed Martin Corporation
(aerospace),
Saratoga, California

- -------------------------------------------------------------------------------------------------------------------
Management Team
- -------------------------------------------------------------------------------------------------------------------

John E. Bryson
Chairman of the Board

Alan J. Fohrer
Chief Executive Officer

Robert G. Foster
President

Harold B. Ray
Executive Vice President,
Generation

Pamela A. Bass
Senior Vice President,
Customer Service

John R. Fielder
Senior Vice President,
Regulatory Policy and Affairs

Stephen E. Pickett
Senior Vice President and
General Counsel

Richard M. Rosenblum
Senior Vice President,
Transmission and Distribution

W. James Scilacci
Senior Vice President and
Chief Financial Officer

Mahvash Yazdi
Senior Vice President and
Chief Information Officer

Emiko Banfield
Vice President, Shared Services

Robert C. Boada
Vice President and Treasurer

Clarence Brown
Vice President,
Corporate Communications

Diane L. Featherstone
Vice President and General Auditor

Bruce C. Foster
Vice President, Regulatory Operations

A. Larry Grant1
Vice President, Power Delivery

Frederick J. Grigsby, Jr.
Vice President, Human Resources and Labor Relations

Harry B. Hutchison
Vice President, Customer Service Operations

James A. Kelly
Vice President,
Regulatory Compliance and Environmental Affairs

Russell W. Krieger
Vice President,
Power Production

Thomas M. Noonan
Vice President and Controller

Dwight E. Nunn
Vice President, Nuclear Engineering
and Technical Services

Barbara J. Parsky
Vice President,
Corporate Communications

Pedro J. Pizarro
Vice President,
Strategy and Business Development

Frank J. Quevedo
Vice President, Equal Opportunity

Dale E. Shull, Jr.2
Vice President, Power Delivery

Anthony L. Smith
Vice President, Tax

Joseph J. Wambold
Vice President, Nuclear Generation

Beverly P. Ryder
Corporate Secretary


1 Effective April 1, 2003
  Formerly Vice President,
  Engineering and Technical Services
2 Retiring April 1, 2003


Page 67
<PAGE>


Shareholder Information
- -------------------------------------------------------------------------------------------------------------------

Annual Meeting of Shareholders

Thursday, May 15, 2003
10:00 a.m.
Hyatt Regency Long Beach
200 South Pine Avenue
Long Beach, California

- -------------------------------------------------------------------------------------------------------------------

Corporate Governance Practices

A description of SCE's corporate governance practices is available on our Web site at www.edisoninvestor.com.
The Nominating/Corporate Governance Committee periodically reviews the Company's corporate governance practices
and makes recommendations to the Company's Board that the practices be updated from time to time.

- -------------------------------------------------------------------------------------------------------------------

Stock Listing and Trading Information

SCE Preferred Stock

SCE's listed preferred stocks are listed on the American and Pacific stock exchanges under the ticker symbol SCE.
Previous day's closing prices, when traded, are listed in the daily newspapers in the American Stock Exchange
composite table. The 6.05% and 7.23% series of the $100 cumulative preferred stock are not listed; however, the
7.23% series are traded over-the-counter.  The listed preferred stocks may be purchased through any brokerage
firm.  Firms handling unlisted series can be located through your broker.

- -------------------------------------------------------------------------------------------------------------------

Transfer Agent and Registrar

Wells Fargo Bank Minnesota, N.A., which maintains shareholder records, is the transfer agent and registrar for
SCE's preferred stocks. Shareholders may call Wells Fargo Shareowner Services, (800) 347-8625, between 7 a.m. and
7 p.m. (Central Time), Monday through Friday, to speak with a representative (or to use the interactive voice
response unit 24 hours a day, seven days a week) regarding:

o   stock transfer and name-change requirements;
o   address changes, including dividend addresses;
o   electronic deposit of dividends;
o   taxpayer identification number submission or changes;
o   duplicate 1099 forms and W-9 forms;
o   notices of, and replacement of, lost or destroyed stock certificates and dividend checks; and
o   requests for access to online account information.

The address of Wells Fargo Shareowner Services is:

161 North Concord Exchange Street
South St. Paul, MN 55075-1139
FAX:  (651) 450-4033
E-mail:  stocktransfer@wellsfargo.com

SCE Web Address:
www.edisoninvestor.com+



Page 68
<PAGE>














                                    SOUTHERN CALIFORNIA EDISON COMPANY LOGO

                               2244 Walnut Grove Avenue, Rosemead, California 91770
                                                  (626) 302-1212
                                                  www.edison.com


</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>7
<FILENAME>exh2302.htm
<DESCRIPTION>CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>
<HTML>
<HEAD>
<TITLE>
Exhibit 23 - Consent of Independent Accountants</TITLE>
</HEAD>
<BODY>
<PRE>
                                        Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 33-50251 and
333-44778) of Southern California Edison Company of our report dated March 26, 2003 relating to the financial
statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on
Form 10-K. We also consent to the incorporation by reference of our report dated March 26, 2003 relating to the
financial statement schedule, which appears in this Form 10-K.



/s/ PricewaterhouseCoopers LLP


Los Angeles, California
March 26, 2003

</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.1
<SEQUENCE>8
<FILENAME>exh24102.htm
<DESCRIPTION>SCE POWER OF ATTORNEY
<TEXT>
<HTML>
<HEAD>
<TITLE>
Exhibit 24.1 Power of Attorney</TITLE>
</HEAD>
<BODY>
<PRE>
                                    SOUTHERN CALIFORNIA EDISON COMPANY

                                             POWER OF ATTORNEY

                  The undersigned,  SOUTHERN  CALIFORNIA EDISON COMPANY, a California  corporation,  and certain of
its officers  and/or  directors do each hereby  constitute  and appoint,  STEPHEN E.  PICKETT,  W. JAMES  SCILACCI,
THOMAS M. NOONAN, BEVERLY P.  RYDER, KENNETH S.  STEWART, MARY C. SIMPSON,  PAIGE W. R.  WHITE, TIMOTHY W.  ROGERS,
DEBORAH M.  FESTA, EILEEN B. GUERRERO,  RAYNA M.  MORRISON,  BONITA J.  SMITH, PEGGY A.  STERN, POLLY L. GAULT, and
DOUGLAS G.  GREEN, or any of them, to act as  attorney-in-fact,  for and in their  respective  names,  places,  and
steads,  to execute,  sign,  and file or cause to be filed an Annual  Report on Form 10-K for the fiscal year ended
December 31,  2002,  Quarterly  Reports on Form 10-Q for each of the first three  quarters of fiscal year 2003, any
Current  Reports on Form 8-K from time to time during  2003 and through  February  19,  2004,  or in the event this
Board of Directors does not meet on February 19, 2004,  through the next  succeeding date on which this Board holds
a regular meeting,  and any and all supplements and amendments  thereto,  to be filed by Southern California Edison
Company with the Securities and Exchange  Commission,  under the Securities  Exchange Act of 1934 as amended,  (the
"Act"),  for the purpose of complying with Sections 13 or 15(d) of the Act,  granting unto said  attorneys-in-fact,
and each of them,  full power and  authority  to do and perform all and every act and thing  whatsoever  requisite,
necessary  and  appropriate  to be done in and about the  premises as fully and to all intents and  purposes as the
undersigned  or any of them might or could do if  personally  present,  hereby  ratifying and approving the acts of
each of said attorneys-in-fact.

                  Executed at Rosemead, California, as of this 20th day of February, 2003.

                                                 SOUTHERN CALIFORNIA EDISON COMPANY


                                                 By:      /S/ John E. Bryson
                                                          -----------------------------
                                                          John E. Bryson
                                                          Chairman of the Board


Attest:

/S/ Beverly P. Ryder
- ---------------------------
Beverly P. Ryder
Secretary


Page 1
<PAGE>



                                      2003 Southern California Edison Company
                                       10-K, 10-Q, and 8-K Power of Attorney


Principal Executive Officer:

/S/ John E. Bryson
- ----------------------------
John E. Bryson                                                  Chairman of the Board
                                                                and Director


Principal Financial Officer:

/S/ W. James Scilacci
- ----------------------------
W. James Scilacci                                               Senior Vice President and
                                                                Chief Financial Officer


Controller and Principal Accounting Officer:

/S/ Thomas M. Noonan
- ----------------------------
Thomas M. Noonan                                                Vice President and Controller


Additional Directors:



/S/ Alan J. Fohrer                                   /S/ James M. Rosser
- ----------------------------       Director          --------------------------------   Director
Alan J. Fohrer                                       James M. Rosser



/S/ Bradford M. Freeman                              /S/ Robert H. Smith
- ----------------------------       Director          --------------------------------   Director
Bradford M. Freeman                                  Robert H. Smith


/S/ Joan C. Hanley                                   /S/ Richard T. Schlosberg, III
- ----------------------------       Director          --------------------------------   Director
Joan C. Hanley                                       Richard T. Schlosberg, III


/S/ Bruce Karatz                                     /S/ Thomas C. Sutton
- ----------------------------       Director          -------------------------------    Director
Bruce Karatz                                         Thomas C. Sutton


/S/ Luis G. Nogales                                  /S/ Daniel M. Tellep
- ---------------------------        Director          -------------------------------    Director
Luis G. Nogales                                      Daniel M. Tellep


/S/ Ronald L. Olson
- ---------------------------        Director
Ronald L. Olson


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.2
<SEQUENCE>9
<FILENAME>exh24202.htm
<DESCRIPTION>CERT COPY OF BD RESOLUTION AUTHORIZING SIGNATURE
<TEXT>
<HTML>
<HEAD>
<TITLE>
Exhibit 24.2 Board Resolution Authorizing Signature</TITLE>
</HEAD>
<BODY>
<PRE>









                  I, Bonita J. Smith, Assistant Secretary of Southern California Edison Company, certify that the
attached is an accurate and complete copy of a resolution of the Board of Directors of the corporation, duly
adopted at a meeting of its Board of Directors held on February 20, 2003.

                  Dated:  March 19, 2003.




                                                     /S/ Bonita J. Smith
                                                     ----------------------------------
                                                     Bonita J. Smith
                                                     Assistant Secretary
                                                     Southern California Edison Company


<PAGE>


                                      RESOLUTION OF THE BOARD OF DIRECTORS OF
                                        SOUTHERN CALIFORNIA EDISON COMPANY
                                            Adopted: February 20, 2003
                                           RE: FORMS 10-K, 10-Q, AND 8-K

                  WHEREAS, the Securities Exchange Act of 1934, as amended, and regulations thereunder, require
that Annual, Quarterly, and Current Reports be filed with the Securities and Exchange Commission ("Commission"),
and it is desirable to effect such filings over the signatures of attorneys-in-fact;

                  NOW, THEREFORE, BE IT RESOLVED, that each of the officers of this corporation is hereby
authorized to file or cause to be filed with the Commission the Annual Report on Form 10-K of this corporation
for the fiscal year ended December 31, 2002, Quarterly Reports on Form 10-Q for each of the first three quarters
of fiscal year 2003, Current Reports on Form 8-K from time to time during 2003 and through February 19, 2004, or
in the event this Board of Directors does not meet on February 19, 2004, through the next succeeding date on
which this Board holds a regular meeting, and any required or appropriate supplements or amendments to such
reports, all in such forms as the officer acting or counsel for this corporation considers appropriate.

                  BE IT FURTHER RESOLVED, that each of the officers of this corporation is hereby authorized to
execute and deliver on behalf of this corporation and in its name a power of attorney appointing Stephen E.
Pickett, W. James Scilacci, Thomas M. Noonan, Beverly P. Ryder, Kenneth S. Stewart, Mary C. Simpson, Paige W. R.
White, Timothy W. Rogers, Deborah M. Festa, Eileen B. Guerrero, Rayna M. Morrison, Bonita J. Smith, Peggy A.
Stern, Polly L. Gault, and Douglas G. Green, and each of them, to act severally as attorney-in-fact for this
corporation for the purpose of executing and filing with the Commission the above-described reports and any
amendments and supplements thereto.

APPROVED:


/S/ John E. Bryson
- -------------------------------------
John E. Bryson
Chairman of the Board


/S/ Stephen E. Pickett
- -------------------------------------
Stephen E. Pickett
Senior Vice President and General Counsel



<PAGE>


</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>10
<FILENAME>exh9902.htm
<DESCRIPTION>STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
<HTML>
<HEAD>
<TITLE>
Exhibit 99 - Statement Pursuant to 18 U.S.C. Section 1350</TITLE>
</HEAD>
<BODY>
<PRE>
                                   STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350,
                            AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Annual Report on Form 10-K for the year ended December 31, 2002
(the Annual Report) of Southern California Edison Company (the "Company"), and pursuant to 18 U.S.C. Section 1350,
as enacted by Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies, to the best of
his or her knowledge, that:

1.       The Annual Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

2.       The information contained in the Annual Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.




                                                              /S/ Alan J. Fohrer
                                                              --------------------------------------
                                                              Alan J. Fohrer
                                                              Chief Executive Officer
                                                              Southern California Edison Company



                                                              /S/ W. James Scilacci
                                                              --------------------------------------
                                                              W. James Scilacci
                                                              Chief Financial Officer
                                                              Southern California Edison Company

     This statement accompanies the Annual Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and
     shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company
     for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

     A signed orginal of this written statement required by Section 906 has been provided to Southern California
     Edison Company and will be retained by Southern California Edison Company and furnished to the Securities and
     Exchange Commission or its staff upon request.


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