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<SEC-DOCUMENT>0000827052-03-000096.txt : 20030710
<SEC-HEADER>0000827052-03-000096.hdr.sgml : 20030710
<ACCEPTANCE-DATETIME>20030709200211
ACCESSION NUMBER:		0000827052-03-000096
CONFORMED SUBMISSION TYPE:	S-4
PUBLIC DOCUMENT COUNT:		13
FILED AS OF DATE:		20030710

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:		S-4
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-106917
		FILM NUMBER:		03780932

	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>S-4
<SEQUENCE>1
<FILENAME>sces4july.htm
<DESCRIPTION>SCE FORM S-4 REGISTRATION STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>
SCE Form S-4</TITLE>
</HEAD>
<BODY>
<PRE>
                       As filed with the Securities and Exchange Commission on July 10, 2003



                                                                                         Registration No. 333-_____


                                                   UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                                     Form S-4
                                              REGISTRATION STATEMENT
                                                       UNDER
                                            THE SECURITIES ACT OF 1933

                                        Southern California Edison Company
                              (Exact name of registrant as specified in its charter)


               California                                4911                               95-1240335
    (State or other jurisdiction of          (Primary Standard Industrial      (I.R.S. Employer Identification No.)
     incorporation or organization)          Classification Code Number)


                                             2244 Walnut Grove Avenue
                                            Rosemead, California 91770
                                                   626-302-1212

                     (Address, including zip code, and telephone number, including area code,
                                   of registrant's principal executive offices)

                                                Kenneth S. Stewart
                                             Assistant General Counsel
                                      2244 Walnut Grove Avenue (P.O. Box 800)
                                            Rosemead, California 91770
                                                   626-302-6601

       (Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed exchange offer: As soon as practicable after the effective date of
this registration statement.

         If any of the securities being registered on this form are being offered in connection with the
formation of a holding company and there is compliance with General Instruction G, check the following box|_|

         If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under
the Securities Act, check the following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.                 |_|

         If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check
the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering.    |_|


<PAGE>


                                          CALCULATION OF REGISTRATION FEE

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

                                                     Proposed Maximum        Proposed Maximum         Amount of
    Title of Each Class of        Amount to be           Offering           Aggregate Offering     Registration Fee
 Securities to be Registered       Registered       Price per Bond(1)            Price(1)

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

First and Refunding Mortgage
Bonds, 8% Series 2003B, Due
2007                              $965,965,000              100%                $965,965,000          $78,146.57

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

(1)   Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the
      Securities Act.

         The registrant hereby amends this registration statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.

<PAGE>




The information in this prospectus is not complete and may be changed.  We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is effective.  This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.


                                    SUBJECT TO COMPLETION, DATED [_____], 2003


                                                    PROSPECTUS


                                        SOUTHERN CALIFORNIA EDISON COMPANY

                                                 OFFER TO EXCHANGE

        $965,965,000 principal amount of its First and Refunding Mortgage Bonds, 8% Series 2003B, Due 2007,
                           which have been registered under the Securities Act of 1933,
               for any and all of its First and Refunding Mortgage Bonds, 8% Series 2003A, Due 2007


         We are offering to exchange our First and Refunding Mortgage Bonds, 8% Series 2003B, Due 2007, which
have been registered under the Securities Act of 1933, or the "exchange bonds," for our currently outstanding
First and Refunding Mortgage Bonds, 8% Series 2003A, Due 2007, or the "outstanding bonds."  The exchange bonds
are substantially identical to the outstanding bonds, except that the exchange bonds have been registered under
the federal securities laws and will not bear any legend restricting their transfer.  The exchange bonds will
represent the same debt as the outstanding bonds, and we will issue the exchange bonds under the same indenture.

         We will exchange all outstanding bonds that you validly tender and do not validly withdraw before the
exchange offer expires for an equal principal amount of exchange bonds. The exchange offer expires at 5:00 p.m.,
New York City time, on [____] 2003, unless extended. We do not currently intend to extend the exchange offer.

         You may withdraw tenders of outstanding bonds at any time prior to the expiration of the exchange offer.

         The exchange of outstanding bonds for exchange bonds will not be a taxable event for United States
federal income tax purposes.

         We will not receive any proceeds from the exchange offer.

         We do not intend to apply for listing of the exchange bonds on any securities exchange or automated
quotation system.

         Investing in the exchange bonds involves risks. See "Risk Factors" beginning on page 10.

         Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or complete.  Any representation to
the contrary is a criminal offense.



                                 The date of this prospectus is [_________], 2003


Page 1



                                                 TABLE OF CONTENTS

About This Prospectus.................................................................................. 2
Additional Information................................................................................. 3
Forward-Looking Statements............................................................................. 3
Prospectus Summary..................................................................................... 4
Recent Developments.................................................................................... 9
Selected Consolidated Financial and Operating Data.................................................... 12
Risk Factors.......................................................................................... 13
Information About Southern California Edison Company.................................................. 22
The Exchange Offer.................................................................................... 23
Use of Proceeds....................................................................................... 32
Description of the Exchange Bonds..................................................................... 32
Plan of Distribution.................................................................................. 39
Material United States Federal Income Tax Consequences................................................ 40
Legal Matters......................................................................................... 42
Experts  ............................................................................................. 43


                                               ABOUT THIS PROSPECTUS

         In this prospectus, the terms "SCE," "we," "us," or "our" refer to Southern California Edison Company,
the issuer of the outstanding bonds and the exchange bonds.  "Outstanding bonds" refers to our First and
Refunding Mortgage Bonds, 8% Series 2003A, Due 2007, of which $965,965,000 principal amount were originally
issued on February 24, 2003.  "Exchange bonds" refers to our First and Refunding Mortgage Bonds, 8% Series 2003B,
Due 2007 offered pursuant to this prospectus.  We sometimes refer to the outstanding bonds and the exchange bonds
collectively as the "bonds."

         Each broker-dealer that receives exchange bonds for its own account pursuant to the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of such exchange bonds.  The letter
of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act of 1933.  This prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of
exchange bonds received in exchange for outstanding bonds where such outstanding bonds were acquired by such
broker-dealer as a result of market-making activities or other trading activities.  We have agreed that, starting
on the expiration date of the exchange offer and ending on the close of business one year after such date, we
will make this prospectus available to any broker-dealer for use in connection with any such resale.  See "Plan
of Distribution."

         We have not authorized any dealer, salesman or other person to give any information or to make any
representation other than those contained or incorporated by reference in this prospectus. You must not rely upon
any information or representation not contained or incorporated by reference in this prospectus as if we had
authorized it. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates, nor does this prospectus constitute an offer
to sell or a solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction.

         This prospectus incorporates important business and financial information about us that is not included
in or delivered with this prospectus.  This information is available without charge to security holders upon
written or oral request.  You must make this request to Betty Hutchinson, Corporate Governance, 2244 Walnut Grove
Avenue, Rosemead, California 91770; telephone number (626) 302-2662 or facsimile number (626) 302-2610.  To
obtain timely delivery, you must request the information no later than five business days before the date you
must make your investment decision, or [__________], 2003.



Page 2

                                              ADDITIONAL INFORMATION

         This prospectus is part of a registration statement on Form S-4, the "exchange offer registration
statement," that we filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, and the rules and regulations thereunder, which we refer to collectively as the Securities Act.  The
exchange offer registration statement covers the exchange bonds being offered and encompasses all amendments,
exhibits, annexes, and schedules to the registration statement.  This prospectus does not contain all the
information in the exchange offer registration statement.  For further information about us and the exchange
offer, reference is made to the exchange offer registration statement.  Statements made in this prospectus as to
the contents of any contract, agreement, or other document referred to are not necessarily complete.  For a more
complete understanding and description of each contract, agreement, or other document filed as an exhibit to the
exchange offer registration statement, we encourage you to read the documents contained in the exhibits.

         You also may find additional information about us under "Information about Southern California Edison
Company" below, including a description of documents that are delivered with and incorporated by reference into
this prospectus and documents that are available from the Securities and Exchange Commission or our Website.


                                            FORWARD-LOOKING STATEMENTS

            This prospectus contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934.  The forward-looking statements reflect
our current expectations and projections about future events based on our knowledge of present facts and
circumstances and assumptions about future events.  Other information distributed by us that is incorporated in
this prospectus, or that refers to or incorporates this prospectus, may also contain forward-looking statements.
In this prospectus 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 us 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 that appears in our 2002 Annual Report to Shareholders and is incorporated by reference into and
provided with this prospectus.

            Additional information about risks and uncertainties is contained throughout this prospectus, and in
the Management's Discussion and Analysis of Results of Operations and Financial Condition and the Notes to
Consolidated Financial Statements that appear in our 2002 Annual Report to Shareholders and are incorporated by
reference into and provided with this prospectus.  Readers are urged to read this entire prospectus, including
the information incorporated by reference, and carefully consider the risks, uncertainties, and other factors
that affect our business.  The information contained in this prospectus is subject to change without notice, and
we are not obligated to publicly update or revise forward-looking statements.  Readers should review future
reports that we file with the Securities and Exchange Commission.


Page 3

                                                PROSPECTUS SUMMARY

         This summary highlights selected information from this prospectus, but does not contain all information
that may be important to you.  This prospectus includes or incorporates by reference specific terms of the
exchange offer, as well as information regarding our business and detailed financial data.  We encourage you to
read the detailed information and financial statements appearing elsewhere or incorporated by reference in this
prospectus.

                                        Southern California Edison Company

         We are an electric utility providing retail electric service to 4.5 million business and residential
customers over a 50,000 square mile service area in coastal, central, and southern California, excluding the City
of Los Angeles and certain other cities.  We own and operate transmission and distribution facilities and
hydroelectric, coal, and nuclear power plants for the purpose of serving our customers' electricity needs.  In
addition to power provided from our own generating resources, we procure power through long-term contracts from a
variety of sources including other utilities, merchant generators, and other non-utility generators, including
qualifying facilities.  Our customers also receive power purchased on their behalf through contracts signed by
the California Department of Water Resources.

         All of our common stock is owned by Edison International, a holding company with subsidiaries involved
in both electric utility and non-electric utility businesses.  Our principal executive offices are located at
2244 Walnut Grove Avenue, Rosemead, CA 91770, and our telephone number is (626) 302-1212.

                                      Summary of the Original Exchange Offer

Original Exchange Offer               On January 14, 2003, we commenced an exchange offer, which we refer to herein
                                      as the "original exchange offer," whereby we offered eligible holders the
                                      opportunity to exchange each $1,000 principal amount of our 8.95% Variable
                                      Rate Notes due 2003 that they held for $1,000 principal amount of the
                                      outstanding bonds.  Because the original exchange offer was not a transaction
                                      registered under the Securities Act, the outstanding bonds were only offered
                                      or issued (i) in the United States, to qualified institutional buyers, as that
                                      term is defined in Rule 144A under the Securities Act, in a private
                                      transaction in reliance upon an exemption from the registration requirements
                                      of the Securities Act, and (ii) outside the United States, to persons other
                                      than U.S. persons in offshore transactions in reliance upon Regulation S under
                                      the Securities Act.  Citigroup (formerly Salomon Smith Barney) acted as the
                                      lead dealer manager for the original exchange offer, while JPMorgan acted as
                                      the co-dealer manager.

Registration Rights Agreement         Upon the closing of the original exchange offer, we entered into a
                                      registration rights agreement with the dealer managers relating to the
                                      exchange offer covered by this prospectus.  In the registration rights
                                      agreement, we agreed, among other things to:

                                      o   use our reasonable best efforts to cause a registration statement to
                                          become effective under the Securities Act within 270 days after the
                                          original issue date of the outstanding bonds;

                                      o   use our reasonable best efforts to consummate this exchange offer within
                                          45 days after the effective date of the registration statement; and

                                      o   under certain circumstances, file, and cause to become effective, a shelf
                                          registration statement for the resale of the outstanding bonds.



Page 4

                                           Summary of the Exchange Offer

         The following is a brief summary of terms of the exchange offer covered by this prospectus.  For a more
complete description of the exchange offer, see "The Exchange Offer."

Reasons for the Exchange Offer        Pursuant to the registration rights agreement, we are offering to exchange
                                      $1,000 principal amount of our First and Refunding Mortgage Bonds, 8% Series
                                      2003B, Due 2007, which have been registered under the Securities Act, for each
                                      $1,000 principal amount of our currently outstanding First and Refunding
                                      Mortgage Bonds, 8% Series 2003A, Due 2007, which were offered without
                                      registration under the Securities Act in the initial exchange offer.

Mechanics of the Exchange Offer       We will accept any and all outstanding bonds validly tendered and not
                                      withdrawn prior to 5:00 p.m., New York City time, on [______], 2003.  Holders
                                      may tender some or all of their outstanding bonds pursuant to the exchange
                                      offer.  However, outstanding bonds must be tendered in a minimum principal
                                      amount of $250,000 and in integral multiples of $1,000 in excess thereof.
                                      Exchange bonds will be issued only in minimum denominations of $250,000 and
                                      integral multiples of $1,000 in excess thereof.  The form and terms of the
                                      exchange bonds are the same as the form and terms of the outstanding bonds
                                      except that:

                                      o   the exchange bonds have been registered under the Securities Act and will
                                          not bear any legend restricting their transfer;

                                      o   the exchange bonds bear a Series B designation and a different CUSIP
                                          number than the outstanding bonds; and

                                      o   the holders of the exchange bonds will not be entitled to certain rights
                                          under the registration rights agreement, including the provisions for an
                                          increase in the interest rate in some circumstances relating to the timing
                                          of the exchange offer.

Resales                               We believe that the exchange bonds issued in the exchange offer may be offered
                                      for resale, resold and otherwise transferred by you without compliance with
                                      the registration and prospectus delivery provisions of the Securities Act,
                                      provided that:

                                      o   you acquire the exchange bonds in the ordinary course of your business;

                                      o   you are not participating, do not intend to participate, and have no
                                          arrangement or understanding with any person to participate, in the
                                          distribution of the exchange bonds issued in the exchange offer; and

                                      o   you are not an affiliate of ours.

                                      If any of these conditions is not satisfied and you transfer any exchange
                                      bonds issued to you in the exchange offer without delivering a prospectus
                                      meeting the requirements of the Securities Act or without an exemption from
                                      registration of your exchange bonds from these requirements, you may incur
                                      liability under the Securities Act.  We will not assume, nor will we indemnify
                                      you against, any such liability.

                                      Each broker-dealer that is issued exchange bonds in the exchange offer for its
                                      own account in exchange for outstanding bonds, where such outstanding bonds
                                      were acquired by that broker-dealer as a result of market-making or other
                                      trading activities, must acknowledge that it will deliver a prospectus meeting
                                      the requirements of the Securities Act in connection with any resale of the
                                      exchange bonds.  See "Plan of Distribution."


Page 5

Expiration Date                       The exchange offer will expire at 5:00 p.m., New York City time, on [______],
                                      2003, unless we decide to extend the exchange offer.  We do not currently
                                      intend to extend the exchange offer.

Conditions to the Exchange Offer      The exchange offer is subject to certain customary conditions, including that
                                      it does not violate any applicable law or Securities and Exchange Commission
                                      staff interpretation.

Procedures for Tendering
Outstanding Bonds                     If you wish to accept the exchange offer, you must complete, sign and date the
                                      letter of transmittal, or a facsimile of the letter of transmittal, in
                                      accordance with the instructions contained in this prospectus and in the
                                      letter of transmittal.  You should then mail or otherwise deliver the letter
                                      of transmittal, or facsimile, together with the outstanding bonds to be
                                      exchanged and any other required documentation, to the exchange agent at the
                                      address set forth in this prospectus and in the letter of transmittal.

                                      By executing the letter of transmittal, you will represent to us that, among
                                      other things:

                                      o   you, or the person or entity receiving the related exchange bonds, are
                                          acquiring the exchange bonds in the ordinary course of business;

                                      o   neither you nor any person or entity receiving the related exchange bonds
                                          is engaging in or intends to engage in a distribution of the exchange
                                          bonds within the meaning of the federal securities laws;

                                      o   neither you nor any person or entity receiving the related exchange bonds
                                          has an arrangement or understanding with any person or entity to
                                          participate in any distribution of the exchange bonds;

                                      o   neither you nor any person or entity receiving the related exchange bonds
                                          is an "affiliate" of SCE, as defined in Rule 405 under of the Securities
                                          Act;

                                      o   if you are a broker-dealer, you will receive the exchange bonds for your
                                          own account in exchange for outstanding bonds acquired as the result of
                                          market making activities or other trading activities and that you will
                                          deliver a prospectus in connection with any resale of the exchange bonds;
                                          and

                                      o   you are not acting on behalf of any person or entity that could not
                                          truthfully make these statements.

                                      Alternatively, you may tender your outstanding bonds by following the
                                      procedures for book-entry delivery described in this prospectus.  See "The
                                      Exchange Offer-- Procedures for Tendering Outstanding Bonds" and "Plan of
                                      Distribution."

Effect of Not Tendering               Any outstanding bonds that are not tendered or that are tendered but not
                                      accepted will remain subject to restrictions on transfer.  Since the
                                      outstanding bonds have not been registered under the Securities Act, they bear
                                      a legend restricting their transfer absent registration or the availability of
                                      a specific exemption from registration.  Upon the completion of the exchange
                                      offer, we will have no further obligations, except under limited
                                      circumstances, to provide for registration of the outstanding bonds under the
                                      Securities Act.  See "The Exchange Offer-- Certain Consequences to Holders of
                                      Outstanding Bonds Not Tendering in the Exchange Offer."

Page 6


Interest on the Exchange
Bonds and the Outstanding Bonds       The exchange bonds will bear interest from the most recent interest payment
                                      date to which interest has been paid on the outstanding bonds or, if no
                                      interest has been paid, from February 24, 2003.  Interest on the outstanding
                                      bonds accepted for exchange will cease to accrue upon the issuance of the
                                      exchange bonds.

Withdrawal Right                      Tenders of outstanding bonds may be withdrawn at any time prior to 5:00 p.m.,
                                      New York City time, on the Expiration Date.

Federal Income Tax Consequences       The exchange of outstanding bonds for exchange bonds will not be a taxable
                                      event for United States federal income tax purposes.  You will not recognize
                                      any taxable gain or loss as a result of exchanging outstanding bonds for
                                      exchange bonds and you will have the same tax basis and holding period in the
                                      exchange bonds as you had in the outstanding bonds immediately before the
                                      exchange.  See "Material United States Federal Income Tax Consequences."

Use of Proceeds                       We will not receive any proceeds from the issuance of exchange bonds pursuant
                                      to the exchange offer.  See "Use of Proceeds."

Regulatory Approval                   We have obtained approval from the California Public Utilities Commission to
                                      issue the exchange bonds.  No other federal or state regulatory requirements
                                      must be complied with or approval obtained.

Dissenters' Right                     Holders of the outstanding bonds do not have any appraisal or dissenters'
                                      rights in connection with the exchange offer.

Exchange Agent                        The Bank of New York, acting through BNY Midwest Trust Company, is the
                                      exchange agent for the exchange offer.

                                            Terms of the Exchange Bonds

         The following is a brief summary of the terms of the exchange bonds. The financial terms and covenants
of the exchange bonds are the same as the outstanding bonds.  For a more complete description of the terms of the
exchange bonds, see "Description of the Exchange Bonds."

Issuer                                Southern California Edison Company.

Securities                            $965,965,000 in aggregate principal amount of our First and Refunding Mortgage
                                      Bonds, 8% Series 2003B, Due 2007.

Maturity Date                         February 15, 2007.

Interest Payment Dates                Semiannually on February 15 and August 15 of each year to the holders of
                                      record on the preceding February 1 and August 1, respectively.

Security                              The exchange bonds will be secured equally and ratably by a lien on
                                      substantially all of our property and franchises with all other first mortgage
                                      bonds outstanding now or in the future under our first mortgage bond
                                      indenture.  The liens will be first priority liens subject to permitted
                                      exceptions.

Ranking                               The exchange bonds will be our senior secured obligations ranking pari passu
                                      in right of payment with all our other senior secured indebtedness, and prior
                                      to all other senior indebtedness to the extent of the value of the collateral
                                      available to the holders of the exchange bonds, which collateral is shared by
                                      such holders on a ratable basis with the holders of our other first mortgage

Page 7


                                      bonds outstanding from time to time.  As of March 31, 2003, and after giving
                                      pro forma effect to the original exchange offer, we had (i) $3.7 billion of
                                      our first mortgage bonds outstanding and (ii) the capacity to issue
                                      approximately $9.9 billion of additional first mortgage bonds pursuant to the
                                      applicable terms of our first mortgage bond indenture.

Optional Redemption                   We may redeem the exchange bonds at a time, in whole or in part, at a "make
                                      whole" redemption price equal to the greater of (i) the principal amount being
                                      redeemed or (ii) the sum of the present values of the remaining scheduled
                                      payments of principal and interest on the exchange bonds being redeemed,
                                      discounted to the date fixed for redemption on a semi-annual basis (assuming a
                                      360-day year consisting of twelve 30-day months) at the Treasury Yield (as
                                      defined herein) plus 50 basis points, plus in either case accrued and unpaid
                                      interest to the date of redemption.  See "Description of the Exchange Bonds--
                                      Optional Redemption."

Future Issues of First
Mortgage Bonds                        Our first mortgage bond indenture permits us to issue additional first
                                      mortgage bonds, ranking equally and ratably with the exchange bonds, under
                                      certain circumstances.  Additional first mortgage bonds may not be issued
                                      unless net earnings (as defined) for twelve months have been at least two and
                                      one-half times our total annual first mortgage bond interest charge and other
                                      conditions are met.  At March 31, 2003, we could issue $9.9 billion of
                                      additional first mortgage bonds.  See "Description of the Exchange Bonds--
                                      Issuance of Additional Bonds."

Special Trust Fund                    We are required to deposit in a special trust fund with the indenture trustee,
                                      on each May 1 and November 1, cash equal to 1 1/2% of the aggregate principal
                                      amount of first mortgage bonds then outstanding.  Under the first mortgage
                                      bond indenture, we are able to withdraw cash from the special trust fund as
                                      long as we have sufficient additional property.  Thus, there are currently no
                                      funds on deposit in the special trust fund.  See "Description of the Exchange
                                      Bonds-- Special Trust Fund."

Absence of a Public Market
for the Exchange Bonds                The exchange bonds are new securities, for which there is no established
                                      trading market, and none may develop.  Accordingly, there can be no assurance
                                      as to the development or liquidity of any market for the exchange bonds.  We
                                      do not intend to apply for listing of the exchange bonds on any securities
                                      exchange or to arrange for any quotation system to quote them.

Credit Ratings                        The exchange bonds are rated "BB" by Standard &amp; Poor's and "Ba2" by Moody's
                                      Investors Services.

Trustee, Transfer Agent and
Book-Entry Depositary                 The Bank of New York, acting through BNY Midwest Trust Company

Paying Agent                          The Bank of New York, acting through BNY Midwest Trust Company

Risk Factors                          See "Risk Factors" and the other information in, and incorporated by reference
                                      in, this prospectus for a discussion of factors you should carefully consider
                                      before deciding to participate in the exchange offer.





Page 8

                                                Recent Developments

         CPUC Litigation Settlement Agreement and PROACT Recovery

         In November 2000, during California's electricity crisis, we filed a lawsuit against the CPUC seeking a
ruling that we were entitled under federal law to full recovery of our past electricity procurement costs.  In
October 2001, the federal district court in which this litigation had been filed entered a stipulated judgment,
which, among other things, approved a settlement agreement between us and the CPUC.  A key element of this
settlement was the establishment of a rate-recovery mechanism called the procurement-related obligations account,
or PROACT, which was designed to allow us to recover our electricity procurement undercollections in customer
rates.  The settlement allows us to recover $3.6 billion, reflecting the amount of our past undercollected
procurement costs.  Each month, we apply to the PROACT the positive or negative difference between our revenues
from retail electric rates (including surcharges) and the costs that we are authorized by the CPUC to recover in
retail electric rates.  The remaining balance in the PROACT was $351 million at May 31, 2003.  We expect to
recover the PROACT balance during summer 2003.

         The Utility Reform Network ("TURN"), a consumer advocacy group, is pursuing an appeal seeking to
overturn the stipulated district court judgment approving our settlement agreement with the CPUC.  On
September 23, 2002, the United States Court of Appeals for the Ninth Circuit issued an opinion in which it
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.  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 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
we had requested, and set a briefing schedule.  After the completion of the filing of briefs by the respective
parties, including supplemental briefs at the request of the Court about an issue related to California's open
meeting laws, the parties made oral arguments before the Court at a hearing on May 27, 2003.  We expect the
California Supreme Court to issue a ruling that answers the certified questions of state law within 90 days after
the oral argument.  Once the California Supreme Court issues its decision on the certified questions, 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.  We continue
to operate under the settlement agreement.  We continue to believe it is probable that we ultimately will recover
our past procurement costs through regulatory mechanisms, including the PROACT.  However, we cannot predict with
certainty the outcome of the pending legal proceedings.

         CPUC Generation Procurement Proceedings

         During the California energy crisis, in early 2001 the CDWR took over purchasing power for our customers
under an executive order and new law.  On October 24, 2002, the CPUC ordered us to begin, on January 1, 2003,
procurement of the amount of energy needed to serve our customers from sources other than our own generating
plants, existing power purchase contracts and CDWR power purchase contracts allocated to our customers.  This
energy is referred to as our "residual net short."  The CPUC has authorized us to record our procurement costs in
a regulatory balancing account and fully recover all reasonably incurred costs from our customers.  Any over- or
undercollections of reasonably incurred procurement costs will be amortized in future rates.  By California
statute, through the end of 2005, the CPUC is required to adjust utility rates if our over- or undercollection
exceeds 5% of

Page 9

our prior procurement costs, excluding revenues collected on behalf of the CDWR.  Nonetheless, our cash flows
remain subject to volatility resulting from our procurement activities.  In addition, we are subject to the risk
of unfavorable CPUC decisions with respect to its review of the reasonableness of our procurement costs as
discussed below.

            California law and CPUC decisions provide for us to recover our reasonably incurred power procurement
costs in customer rates.  A California statute adopted in 2002 allows us to recover reasonable procurement costs
recovered in compliance with an approved procurement plan.  In a December 2002 decision, the CPUC determined that
our maximum disallowance risk exposure for contract administration and least cost dispatch would be twice our
annual procurement administrative expenses.  In June 2003, the CPUC issued a decision, which among other things,
set the precise level of this annual cap at $37 million.  The decision, however, denied our request to extend the
scope of the disallowance cap to include all procurement plan activities.

            In addition, the CPUC recently issued five decisions addressing several applications for rehearing
and petitions for modifications that had been filed.  We are in the process of analyzing those decisions to
determine whether they provide adequate guidelines for procuring power and provide mechanisms for objectively
determining reasonableness of procurement costs for transactions outside an approved procurement plan.

            The CPUC has yet to act on a second petition for modification that we filed on March 14, 2003,
regarding hedging restrictions.

         In accordance with the CPUC's October 24, 2002 decision, we filed our long-term resource plan on
April 15, 2003, which included two plans:  a preferred plan and an interim plan.  The preferred plan contains
long-term commitments that will encourage investment in new generation and transmission infrastructure, increase
long-term reliability and decrease price volatility.  These commitments include:

o        a significant increase in cost-effective energy efficiency and demand response investments;

o        renewable contracts that will meet or exceed applicable requirements;

o        a substantial increment of new utility or third-party owned generation resources; and

o        at least two new major transmission projects that will provide the state of California access to a
              diverse set of generating resources and help facilitate a more competitive wholesale market.

         The interim plan, by contrast, relies exclusively on new short- and medium-term contracts with no
long-term resource commitments (except for new renewable contracts).  In our filing, we maintained that
implementation of our preferred plan requires resolution of various issues including (1) stabilizing our customer
base; (2) restoring our investment-grade creditworthiness; (3) restructuring regulations regarding energy
efficiency and demand response programs; (4) removing barriers to transmission development; (5) modifying prior
decisions, which impede long-term procurement; and (6) adopting a commercially realistic cost-recovery framework
that will enable utilities to obtain financing or enable contracting for new generation.

         In accordance with the CPUC's October 24, 2002 decision, we filed our short-term resource plan on May
15, 2003.  The purpose of the short-term resource plan is to set defined boundaries for per se reasonable
transactions.  It incorporates elements required by recent California legislation and CPUC decisions.  The
short-term plan is designed to establish "safe harbors" for the following types of transactions:

o        procurement of electrical energy to meet a residual net short requirement;

o        sales of surplus electrical energy to eliminate a residual net long position;

o        procurement of additional electrical capacity to meet the combination of our peak bundled load plus the
              California Independent System Operator's requirement for ancillary services;


Page 10


o        gas procurement for non-qualifying facilities generating resources under contract to us (including gas
              procurement for new tolling contracts that are needed, but have yet to be obtained);

o        transactions to hedge the risk of energy payments to qualifying facilities which are tied to the price
              of natural gas;

o        procurement of services, such as electric transmission, gas transportation, and gas storage services,
              which are required to support the foregoing transactions; and

o        any other sales transactions that become necessary when surplus conditions arise.

         Fifteen intervenors have submitted testimony on the long-term and short-term plans.  We are in the
process of analyzing that testimony and preparing rebuttal testimony, which will be served on July 14, 2003.
Hearings on the short-term plan and certain key issues in the long-term plan are expected to take place in July
and August 2003.

         CPUC Investigation Regarding Electric Line Maintenance Practices

         On August 25, 2001, the CPUC issued an order instituting investigation regarding our overhead and
underground electric line maintenance practices.  The order 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 order 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 order put us on
notice that we could be subject to a penalty of between $500 and $20,000 for each violation or accident.  In its
opening brief on October 21, 2002, the CPSD recommended that we be assessed a penalty of $97 million.

         Following additional briefing, hearings, and other proceedings, a CPUC administrative law judge issued a
presiding officer's decision on June 19, 2003.  The presiding officer's decision fines us a total of $576,000 for
alleged violations involving death, injury or property damage, failure to identify unsafe conditions, or
exceeding required inspection intervals.  The decision imposes no fines for over 98% of the alleged violations
and does not find that any of the alleged violations compromised the integrity or safety of our electric system
or were excessive compared to other utilities.  The decision orders us to consult with the CPSD and refine our
maintenance priority system consistent with the discussion in the decision.  Within 30 days after the presiding
officer's decision was issued, by July 19, 2003, any party may file an appeal or any CPUC commissioner may
request a review.  If there is no appeal or request for review within the 30 days, the presiding officer's
decision will become a final decision of the CPUC.

         We are reviewing the decision and evaluating the costs we would incur in the future to comply with the
maintenance standards set forth in the decision.  We currently expect to file an appeal of the decision before
July 19, 2003.



Page 11

                                Selected Consolidated Financial and Operating Data

         The following table shows selected historical financial and operating data of Southern California Edison
Company and its subsidiaries for the periods indicated.  You should read it together with our consolidated
financial statements and related notes, and the related Management's Discussion and Analysis of Financial
Condition and Results of Operations, provided with and incorporated by reference in this prospectus and together
with the other information provided in this prospectus.  The information as of December 31, 1998, 1999, 2000,
2001, and 2002, has been derived from our audited financial statements provided with this prospectus.  The
information as of March 31, 2002 and 2003, and for the three months then ended has been derived from our
unaudited financial statements provided with this prospectus, and, in the opinion of SCE's management, reflects
all adjustments necessary for a fair statement of the financial condition at such dates and the results of
operations for such periods.  Historical results are not necessarily indicative of the results to be obtained in
the future.

- ------------------------------------------------ -------- -----------------------------
                                                   Three Months
                                                  Ended March 31,                  Year Ended December 31,
                                                  ---------------    -------- --------- --------- --------- ---------
(Dollar amounts in millions)                       2003      2002      2002     2001      2000      1999      1998
- ------------------------------------------------ --------- --------- -------- --------- --------- --------- ---------

Income statement data:
Operating revenue                                  $1,823    $1,907    $8,706    $8,126 $  7,870  $  7,548    $7,500
Operating expenses                                  1,554     1,603     6,579     3,509   10,529     6,242     6,136
Fuel and purchased power expenses                     510       307     2,259     3,982    4,882     3,405     3,586
Income tax (benefit)                                   80        84       642     1,658   (1,022)      438       442
Provisions for regulatory adjustment clauses -
net                                                   305       671     1,502    (3,028)   2,301      (763)     (473)
Interest expense - net of amounts capitalized         124       183       584       785      572       483       485
Net income (loss)                                     105       152     1,247     2,408   (2,028)      509       515
Net income (loss) available for common stock          102       146     1,228     2,386   (2,050)      484       490
Ratio of earnings to fixed charges                4.48(a)   7.93(a)      4.21      6.15      (b)      2.94      2.95
     (a) Twelve months ended March 31
     (b) Less than 1.00
- ------------------------------------------------ --------- --------- -------- --------- --------- --------- ---------

Balance sheet data:
Assets                                           $ 20,037  $ 19,354  $ 18,314  $ 22,453 $ 15,966  $ 17,657  $ 16,947
Gross utility plant                                16,527    16,136    16,341    15,982   15,653    14,852    14,150
Accumulated provision for depreciation and
decommissioning                                     6,237     8,167     8,094     7,969    7,834     7,520     6,896
Short-term debt                                        --        --        --     2,127    1,451       796       470
Common shareholder's equity                         4,487     3,295     4,384     3,146      780     3,133     3,335
Preferred stock:
   Not subject to mandatory redemption                129       129       129       129      129       129       129
   Subject to mandatory redemption                    141       151       147       151      256       256       256
Long-term debt                                      5,119     5,812     4,504     4,739    5,631     5,137     5,447
Capital structure:
   Common shareholder's equity                     45.4%      35.1%      47.8%     38.5%    11.5%     36.2%     36.4%
   Preferred stock
      Not subject to mandatory redemption           1.3%       1.4%       1.4%      1.6%     1.9%      1.5%      1.4%
      Subject to mandatory redemption               1.4%       1.6%       1.6%      1.9%     3.8%      2.9%      2.8%
Long-term debt                                     51.9%      61.9%      49.2%     58.0%    82.8%     59.4%     59.4%
- ------------------------------------------------ --------- --------- -------- --------- --------- --------- ---------

Operating data:
Peak demand in megawatts (MW)                      13,722    13,142    18,821    17,890   19,757    19,122    19,935
Generation capacity at peak (MW)                    9,767     9,767     9,767     9,802    9,886    10,431    10,546
Kilowatt-hour deliveries (in millions)             19,187    18,615    79,693    78,524   84,430    78,602    76,595
Total energy requirement (kWh) (in millions)       18,276    16,531    71,663    83,495   82,503    78,752    80,289
Energy mix:
   Thermal                                           37.3%    42.3%      40.2%     32.5%    36.0%     35.5%     38.8%
   Hydro                                              3.6%     4.6%       5.0%      3.6%     5.4%      5.6%      7.4%
   Purchased power and other sources                 59.1%    53.1%      54.8%     63.9%    58.6%     58.9%     53.8%
Customers (in millions)                              4.55      4.49      4.53      4.47     4.42      4.36      4.27
Full-time employees                                12,257    11,736    12,113    11,663   12,593    13,040    13,177




Page 12

                                                   RISK FACTORS

         Your decisions whether or not to participate in the exchange offer and own outstanding bonds or exchange
bonds will involve some degree of risk.  You should be aware of, and carefully consider, the following risk
factors, along with all of the other information provided or referred to in this offering memorandum, before
deciding whether or not to participate in the exchange offer.

Risks Relating to the Exchange Bonds and the Exchange Offer

         If you do not properly tender your outstanding bonds, your ability to transfer such outstanding bonds
will be adversely affected.

         We will only issue exchange bonds in exchange for outstanding bonds that are timely received by the
exchange agent, together with all required documents, including a properly completed and signed letter of
transmittal.  Therefore, you should allow sufficient time to ensure timely delivery of the outstanding bonds and
you should carefully follow the instructions on how to tender your outstanding bonds.  Neither we nor the
exchange agent are required to tell you of any defects or irregularities with respect to your tender of the
outstanding bonds.  If you do not tender your outstanding bonds or if we do not accept your outstanding bonds
because you did not tender your outstanding bonds properly, then, after we consummate the exchange offer, you may
continue to hold outstanding bonds that are subject to the existing transfer restrictions.  After the exchange
offer is consummated, if you continue to hold any outstanding bonds, you may have difficulty selling them because
there will be fewer outstanding bonds remaining.

         If you are a broker-dealer or participating in a distribution of the exchange bonds, you may be required
to deliver prospectuses and comply with other requirements.

         If you tender your outstanding bonds for the purpose of participating in a distribution of the exchange
bonds, you will be required to comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale of the exchange bonds.  If you are a broker-dealer that receives
exchange bonds for your own account in exchange for outstanding bonds that you acquired as a result of
market-making activities or any other trading activities, you will be required to acknowledge that you will
deliver a prospectus in connection with any resale of such exchange bonds.

         You may be unable to sell your exchange bonds if a trading market for the exchange bonds does not
develop.

         The exchange bonds will be new securities for which there is currently no established trading market,
and none may develop.  We do not intend to apply for listing of the exchange bonds on any securities exchange or
for quotation on any automated dealer quotation system.  The liquidity of any market for the exchange bonds will
depend on the number of holders of the exchange bonds, the interest of securities dealers in making a market in
the exchange bonds and other factors.  Accordingly, we cannot assure you as to the development or liquidity of
any market for the exchange bonds.  If an active trading market does not develop, the market price and liquidity
of the exchange bonds may be adversely affected.  If the exchange bonds are traded, they may trade at a discount
from their initial offering price depending upon prevailing interest rates, the market for similar securities,
general economic conditions, our performance and business prospects and certain other factors.  In addition, if a
large amount of outstanding bonds are not tendered or are tendered improperly, the limited amount of exchange
bonds that would be issued and outstanding after we consummate the exchange offer could lower the market price of
such exchange bonds.



Page 13

         You may not be able to fully realize the value of the liens securing the outstanding bonds or the
exchange bonds.

         The security for the benefit of the holders of outstanding bonds and the exchange bonds can be released
without their consent.

         Any part of the property that is subject to the lien of the first mortgage bond indenture for the
benefit of the outstanding bonds and the exchange bonds may be released at any time with the assent of holders of
80% in amount of all bonds issued and outstanding under such indenture (excluding any bonds owned or controlled
by us).  A class vote or consent of the holders of the outstanding bonds and/or the exchange bonds would not be
required.

         You may have only limited ability to control remedies with respect to the collateral.

         Upon the occurrence of an event of default under the first mortgage bond indenture, the trustee has the
right to exercise remedies against the collateral securing the outstanding bonds and the exchange bonds.  The
trustee shall take any action if requested to do so by the holders of a majority in interest of the first
mortgage bonds then outstanding under the related indenture and if indemnified to the trustee's reasonable
satisfaction.  Thus, you may not be able to exercise any control over the trustee's exercise of remedies unless
you can obtain the consent of holders of a majority of the total amount of first mortgage bonds outstanding.  As
of March 31, 2003, there was $3.7 billion in aggregate principal amount of first mortgage bonds outstanding, of
which 26% consisted of the outstanding bonds issued in the original exchange offer.

         The collateral may not be valuable enough to satisfy all the obligations secured by the collateral.

         Our obligations under the outstanding bonds and, after the exchange offer, the exchange bonds are
secured by the pledge of substantially all of our property and franchises.  This pledge is also for the benefit
of the lenders under our senior secured credit facility and all holders of other series of our first mortgage
bonds.  The value of the pledged assets in the event of a liquidation will depend upon market and economic
conditions, the availability of buyers and similar factors.  No independent appraisals of any of the pledged
property have been prepared by us or on our behalf in connection with this exchange offer or the original
exchange offer. Although  our first mortgage bond indenture only allows us to issue first mortgage bonds with an
aggregate principal amount at any time outstanding in an amount no greater than 66?% of the aggregate value of
our bondable assets, because no appraisals have been performed in connection with this exchange offer or the
original exchange offer, we cannot assure you that the proceeds of any sale of the pledged assets following an
acceleration of maturity with respect to the outstanding bonds and, after the exchange offer, the exchange bonds
would be sufficient to satisfy, or would not be substantially less than, amounts due on the bonds and the other
debt secured by the pledged assets.

         If the proceeds of any sale of the pledged assets were not sufficient to repay all amounts due on the
bonds, you (to the extent your bonds were not repaid from the proceeds of the sale of the pledged assets) would
have only an unsecured claim against our remaining assets.  By their nature, some or all the pledged assets may
be illiquid and may have no readily ascertainable market value.  Likewise, we cannot assure you that the pledged
assets will be saleable or, if saleable, that there will not be substantial delays in their liquidation.

         In addition, the indenture governing the bonds will permit us to issue additional secured debt,
including debt secured equally and ratably by the same assets pledged to you.  This could reduce amounts payable
to you from the proceeds of any sale of the collateral.

         Bankruptcy laws may limit your ability to realize value from the collateral.

         The right of the trustee to repossess and dispose of the pledged assets upon the occurrence of an event
of default under the indenture is likely to be significantly impaired by applicable bankruptcy law if a
bankruptcy case were to be commenced by or against us before the first mortgage bond trustee repossessed and
disposed of the pledged assets.  Under Title 11 of the United States Code (the "Bankruptcy Code"), a secured
creditor is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of
security repossessed from such debtor, without bankruptcy court approval.  Moreover, the Bankruptcy Code permits
the debtor to continue to

Page 14


retain and to use collateral, including capital stock, even though the debtor is in default under the applicable
debt instruments, provided that the secured creditor is given "adequate protection."  The meaning of the term
"adequate protection" may vary according to circumstances, but it is intended in general to protect the value of
the secured creditor's interest in the collateral and may include cash payments or the granting of additional
security, if and at such times as the court in its discretion determines, for any diminution in the value of the
collateral as a result of the stay of repossession or disposition or any use of the collateral by the debtor
during the pendency of the bankruptcy case.  Generally, adequate protection payments, in the form of interest or
otherwise, are not required to be paid by a debtor to a secured creditor unless the bankruptcy court determines
that the value of the secured creditor's interest in the collateral is declining during the pendency of the
bankruptcy case.  In view of the lack of a precise definition of the term "adequate protection" and the broad
discretionary powers of a bankruptcy court, it is impossible to predict (1) how long payments under the bonds
could be delayed following commencement of a bankruptcy case, (2) whether or when the collateral agent could
repossess or dispose of the pledged assets or (3) whether or to what extent holders of the bonds would be
compensated for any delay in payment or loss of value of the pledged assets through the requirement of "adequate
protection."

         The ability of the trustee to effectively liquidate the collateral and the value received could be
impaired or impeded by the need to obtain regulatory consents.

         While we have all necessary consents to grant the security interests created by the first mortgage bond
indenture, any foreclosure thereon could require additional approvals that have not been obtained from California
or federal regulators.  We cannot assure you that these approvals could be obtained by the first mortgage bond
trustee on a timely basis or at all.

Risks Relating to Our Business

         Our financial condition, liquidity and credit ratings were adversely affected by California's
electricity crisis and we may not recover our investment grade credit rating.

         In 1994, the California Public Utilities Commission ("CPUC") and later the California Legislature
initiated an electric industry restructuring process that resulted in a multi-year freeze on the rates that we
could charge our customers beginning in 1998.  Additionally, transition cost recovery mechanisms were implemented
allowing us to recover specified costs, known as "stranded costs," associated with our power generation-related
assets.  The state law that implemented this restructuring provided for us to finance a portion of the stranded
costs that residential and small commercial customers would have paid between 1998 and 2001, and required us to
reduce rates by at least 10% to these customers, effective January 1, 1998.  Principal and interest on the debt
issued to finance these stranded costs are to be repaid until 2007 through a dedicated charge on these customers'
bills.  The reduced and frozen rates were to remain in effect until the earlier of March 31, 2002, or the date
when we recovered the CPUC-authorized stranded costs for utility-owned generation assets and obligations.

         In May 2000, we began experiencing difficulties as a result of unusually high prices for energy and
ancillary services we procured through the California Power Exchange and the California Independent System
Operator (ISO).  These high wholesale prices, coupled with the freeze on our retail rates, resulted in
substantial undercollections of power procurement costs.  Pursuant to applicable CPUC decisions, we recorded the
undercollections in a transition revenue account.  High prices continued through the remainder of year 2000, and
by year-end 2000 our resulting net transition cost undercollection was approximately $2.9 billion.

         Our significant undercollections of wholesale power costs, coupled with our anticipated near-term
capital requirements, materially and adversely affected our liquidity throughout 2001.  As a result of these
liquidity concerns, beginning in January 2001 we suspended payments of purchased power, deferred payments on
outstanding debt, and did not declare or pay dividends on any of our cumulative preferred stock or common stock.
In early 2001, our senior secured credit rating was downgraded from investment grade to "CC" by Standard and
Poor's and "B3" by Moody's.  Based on the rights to cost recovery and revenue established by a settlement
agreement with the CPUC and CPUC implementing orders, we repaid all of our undisputed past-due obligations to
creditors in March 2002 from a combination of cash on hand and the proceeds of senior secured credit facilities
and a remarketing of pollution control bonds.  Although Standard &amp; Poor's and Moody's raised their credit ratings
in March 2002, to BB and Ba2, respectively, as a result of the developments enabling us to recoup our


Page 15



undercollections, the new ratings are still below investment grade.  Whether and when our investment grade credit
ratings can be regained could have a significant impact on the value of our outstanding securities.  No
assurances, however, can be made that we will be able to regain our investment grade credit rating.

         Our settlement agreement with the CPUC is being challenged by a consumer advocacy group.

         In November 2000, during California's electricity crisis, we filed a lawsuit against the CPUC seeking a
ruling that we were entitled under federal law to full recovery of our past electricity procurement costs.  In
October 2001, the federal district court in which this litigation had been filed entered a stipulated judgment,
which, among other things, approved a settlement agreement between us and the CPUC.  A key element of this
settlement was the establishment of a rate-recovery mechanism called the procurement-related obligations account
("PROACT"), which was designed to allow us to recover $3.6 billion of procurement undercollections in customer
rates.  Each month, we apply to the PROACT the positive or negative difference between our revenues from retail
electric rates (including surcharges) and the costs that we are authorized by the CPUC to recover in retail
electric rates.  The remaining balance in the PROACT was $351 million at May 31, 2003.  We expect to recover the
PROACT balance during summer 2003.

         A consumer advocacy group is pursuing an appeal seeking to overturn the stipulated judgment approving
our settlement agreement with the CPUC.  In its consideration of this appeal, the United States Court of Appeals
for the Ninth Circuit has certified certain questions of law to the California Supreme Court about whether the
settlement agreement itself violated California law.  On November 20, 2002, the California Supreme Court issued
an order indicating that it would hear the case on an expedited schedule.  Oral arguments took place at a hearing
on May 27, 2003.  We expect the California Supreme Court to issue a ruling that answers the certified questions
of state law within 90 days after the oral argument.  In the meantime, the case is stayed in the federal
appellate court.  We continue to believe it is probable that we ultimately will recover our past procurement
costs through regulatory mechanisms, such as the PROACT.  However, we cannot predict with certainty the outcome
of these pending legal proceedings.  If we were ultimately unable to recover and retain substantially the entire
amount contemplated to be recovered by the settlement agreement, that event would have a material adverse effect
on us.

         Our resumption of the procurement of energy as of January 1, 2003, presents several risks.

         During the California energy crisis, in early 2001 the California Department of Water Resources ("CDWR")
took over purchasing power for our customers under an executive order and new law.  On October 24, 2002, the CPUC
ordered us to begin, on January 1, 2003, procurement of the amount of energy needed to serve our customers from
sources other than our own generating plants, existing power purchase contracts and CDWR power purchase contracts
allocated to our customers.  This energy is referred to as our "residual net short."  The CPUC has authorized us
to record our procurement costs in a regulatory balancing account and fully recover all reasonably incurred costs
from our customers.  Any over- or undercollections of reasonably incurred procurement costs will be amortized in
future rates.  By California statute, through the end of 2005, the CPUC is required to adjust utility rates if
our over- or undercollection exceeds 5% of our prior procurement costs, excluding revenues collected on behalf of
the CDWR.  Nonetheless, our cash flows remain subject to volatility resulting from our procurement activities.
In addition, we are subject to the risk of unfavorable CPUC decisions with respect to its review of the
reasonableness of our procurement costs as discussed below.

         Counterparty Risk:  To reduce our exposure to volatile spot market prices for power, we recently entered
into capacity contracts for up to five years.  In addition, we make short-term market purchases and sales under
power purchase and sale agreements, and the Independent System Operator procures imbalance power on our behalf.
Generally, we and our counterparties execute agreements requiring the posting of collateral to support our
respective procurement obligations for these transactions.  We are exposed to risk from changes in the credit
quality of our counterparties.  In addition, if a counterparty was to default on its obligations, we could be
exposed to potentially volatile spot markets for either our buying of replacement power or our selling of power
not purchased by the counterparty.  We have developed standards that limit extension of unsecured credit based
upon a number of objective factors.  Our credit guidelines have been set forth as part of our procurement plan
and approved by the CPUC.  In negotiating power purchase and sale contracts, we have also included collateral
requirements and credit enforcement provisions to mitigate the risk of possible defaults.  Nevertheless, there
can be no assurance that these

Page 16



actions will sufficiently protect us against the risk of a counterparty's default and the corresponding risk of
then being forced into an uncertain market for power.

         Energy Supply and Cash Flow Risk:  Taking into account the recently signed multi-year capacity
contracts, we forecast that our residual net short for 2003 will be approximately 4% of our total annual energy
requirement amount, with most of the short position occurring during off-peak hours and on weekends.  For 2003
and beyond, several factors could cause our residual net short to be much larger than expected, including the
return of direct access customers to utility service, lower utility generation due to expected or unexpected
outages or plant closures, lower deliveries under third-party power contracts, or higher than anticipated demand
for electricity.  Such an increase in our procurement requirements could lead to temporary revenue
undercollections if the costs to purchase the additional energy were to exceed the amount we are recovering in
rates.  We would not be able to recover those additional costs until we received CPUC authority to increase our
rates correspondingly.  Although, as noted above, under California law, the CPUC is required to adjust customer
rates if undercollections exceed certain levels, this potential lag time in cost recovery could adversely affect
our cash flows.

         Our procurement activities could be found unreasonable by the CPUC, resulting in cost disallowances and
subsequent refunds to customers.

         California law and CPUC decisions provide for us to recover our reasonably incurred power procurement
costs in customer rates.  A California statute adopted in 2002 allows us to recover reasonable procurement costs
recovered in compliance with an approved procurement plan.  In a December 2002 decision, the CPUC determined that
our maximum disallowance risk exposure for contract administration and least cost dispatch would be twice our
annual procurement administrative expenses.  In June, the CPUC issued a decision that, among other things, set
the precise level of this annual cap at $37 million.  The decision, however, denied our request to extend the
scope of the disallowance cap to include all procurement plan activities.

         In addition, the CPUC recently issued five decisions addressing several applications for rehearing and
petitions for modifications that had been filed.  We are in the process of analyzing those decisions to determine
whether they provide adequate guidelines for procuring power and provide mechanisms for objectively determining
reasonableness of procurement costs for transactions outside an approved procurement plan.

         The CPUC has yet to act on a second petition for modification that we filed on March 14, 2003, regarding
hedging restrictions.

         The CPUC decisions leave the possibility that we may be required to enter into contracts and make power
purchases and sales without assurance that those actions will be found to have been reasonable during
after-the-fact CPUC reviews.  If the CPUC finds our power procurement expenditures to have been unreasonable or
imprudent, the CPUC may disallow recovery of part or all of the expenditures subject to the disallowance limit,
which could adversely affect our cash flow, earnings, and liquidity.

         We may be adversely affected by fluctuations in natural gas and electric prices under the terms of
existing third-party contracts.

         In addition to the risks posed by price volatility in our power procurement activities, natural gas
price is a key input for the prices specified in a portion of our existing third-party purchased power
contracts.  During the California energy crisis, we experienced severe cost volatility associated with
third-party procurement contracts with non-utility generators called "qualifying facilities."  Under state law,
such generation-related costs will receive regulatory balancing account treatment; however, we still face
variability in cash flow and potential disallowances from CPUC reasonableness reviews of decisions regarding
hedging of such market price exposure.  Although our natural gas price exposure associated with our existing
qualifying facility procurement contracts is hedged through 2003 through financial derivatives or fixed price
contracts, no assurance can be made that in the future we will be able to hedge our risk for other commodities on
favorable terms or that the cost of such hedges will be recovered in rates.



Page 17



         The CDWR contracts which have been allocated to us may also be exposed to risk of fluctuations in
natural gas prices.  Although cost volatility related to these contracts is the financial responsibility of CDWR,
changes in CDWR's revenue requirements may impact our ability to modify our rates if the CPUC were to attempt to
manage rates to customers.  We would oppose any attempt by the CPUC to restrict our cost recovery in this
manner.  Under CPUC directive and CDWR authorization, we are responsible, as limited agent, for the administration
of CDWR's gas supplies for CDWR's power contracts and for making recommendations to CDWR on entering into
appropriate hedge arrangements to manage its natural gas price risk.  CDWR has allocated funds for financial
hedges and has executed hedge positions in line with our recommendations.

         The possible assignment of CDWR's procurement contracts to us and the other investor-owned utilities
presents risks to us.

         In January 2001, CDWR began making emergency power purchases for the customers of SCE, PG&amp;E and SDG&amp;E.
Presently, these utilities remit directly to the CDWR and do not recognize as revenue amounts which they bill to
and collect from their respective customers for electric power purchased and sold to these customers by the
CDWR.  These CDWR procurement contracts contain provisions that would allow them to be assigned to the utilities
if certain conditions are satisfied, including in some cases the utilities having unsecured credit ratings of
BBB/Baa2 or higher.  However, because power from these CDWR contracts is priced well above market rates, such an
assignment to the utilities, if actually undertaken, could require us to post significant amounts of collateral
with the contract counterparties, which would strain our liquidity.  In addition, the requirement that we take
responsibility for these ongoing fixed charges, which the credit rating agencies view as debt equivalents, could
adversely affect our credit rating.  We would oppose any attempt to assign the CDWR contracts to the utilities;
however, there is no assurance that we will not be required by the CPUC to take assignment of these contracts.

         We have a significant amount of debt which may adversely affect our ability to obtain future financing.
In addition, maturing debt could adversely affect our liquidity.

         We have a significant amount of debt.  As of March 31, 2003, we had $5.8 billion in total debt
outstanding, including (i) $1.2 billion in Rate Reduction Bonds that are non-recourse to us and (ii) $3.7 billion
of first mortgage bonds.  We may incur significant additional debt in the future.  The terms of our first
mortgage bond indenture and our senior secured credit facility do not prohibit us from incurring significant
additional debt.  All bonds issued under the first mortgage bond indenture will be pari passu in right of payment
to the outstanding bonds and the exchange bonds.  Our overall debt to capital ratio (excluding $1.2 billion in
Rate Reduction Bonds mentioned above) was 48.4% as of March 31, 2003.

         We have significant amounts of debt maturing in 2003 and 2004.  In November 2003, $34 million of 8.95%
Variable Rate Notes matures.  These notes are the remaining principal amount of the $1.0 billion of notes that
were subject to the original exchange offer described in this prospectus.  In September 2004, $125 million of 5?%
Series 93H, First and Refunding Mortgage Bonds matures.

         Our ability to make scheduled payments of principal and interest on and refinance debt, including the
exchange bonds, and fund our operations and planned capital expenditure projects, depends on our cash flow and
access to the capital markets.  We do not have complete control over our future performance since it is subject
to economic, financial, competitive, regulatory and other factors affecting our operations and the electrical
utility industry generally.  These factors could affect our ability to generate sufficient cash flow from our
operations to service our debt and to make planned capital expenditures.  In addition, we may not be able to
obtain other financing which we may need to refinance maturing indebtedness or maintain our desired liquidity.

         We are subject to material litigation and regulatory proceedings which may affect our revenues and
financial condition.

         Investors should review the descriptions of pending litigation and regulatory matters contained in our
Annual, Quarterly and Current Reports filed with the Securities and Exchange Commission and incorporated by
reference herein.  There can be no assurance that the outcome of any such matters will not adversely affect our
consolidated financial condition.


Page 18


         We are subject to an existing "general rate case" and future "cost of capital" proceedings which may
cause our revenues to decline.

         Our revenues and earnings are subject to change in regulatory proceedings known as general rate cases
and cost of capital proceedings.  General rate cases are historically conducted every three years.  During those
cases, the CPUC determines our rate base (the value of assets on which we earn a rate of return for investors),
depreciation rates, operation and maintenance costs, and administrative and general costs that we may recover
from our customers through our rates.  Cost of capital proceedings are conducted annually.  During those cases,
the CPUC authorizes our capital structure and the return on common equity applicable to the rate base determined
in the general rate case proceedings.  For 2003, our authorized return on common equity is set at 11.6%.

         On April 1, 2003, we filed a petition with the CPUC seeking to eliminate the 2004 proceeding.  This
would result in our 2003 cost of capital decision, issued on November 7, 2002, remaining in effect throughout
2004.  The CPUC has granted a temporary extension of our filing deadline of July 8, 2003, while it considers our
request.  The CPUC's Office of Ratepayer Advocates has filed a response to our petition, supporting our request
for eliminating the 2004 proceeding.  The CPUC has issued two draft decisions on this matter.  Both decisions
would approve our request to defer the 2004 cost of capital proceeding; however, while one of the draft decisions
would maintain our return on equity at its current 11.6%, the other would reduce it to 11.22% to match the return
on equity authorized for Pacific Gas and Electric Company.  This matter is on the CPUC's meeting agenda for
July 10, 2003.

         In May 2002, we filed our formal application for the 2003 general rate case seeking authority to
increase our base rates to produce a revenue increase of $286 million, updated in 2003 to $248 million.  In
October 2002, the CPUC's Office of Ratepayer Advocates recommended a $172 million decrease in our base rates.
Other interveners are also requesting additional reductions to our rates.  A final decision is expected by the
end of 2003.  If the results of this general rate case are either unfavorable to us or the case itself is not
resolved in a timely manner, our future financial performance could be adversely affected.  Because we do not
know what the outcome may be of the 2003 general rate case or any future cost of capital proceeding, there can be
no assurance that any such outcome will not have an adverse effect on our financial or operating condition.

         We are subject to overlapping regulatory schemes as well as the risk of adverse changes in applicable
regulations or legislation.

         We operate in a highly regulated environment.  For instance, our retail operations are subject to
regulation by the CPUC, and our wholesale operations are subject to regulation by the Federal Energy Regulatory
Commission.  Our nuclear power plants are subject to regulation by the United States Nuclear Regulatory
Commission, and any construction, planning or siting of our power plants in California are also subject to the
jurisdiction of the California Energy Commission and the CPUC.  Additional regulatory authorities with
jurisdiction over some of our operations include the California Air Resources Board, the California State Water
Resources Control Board, the California Department of Toxic Substances Control, the California Coastal
Commission, the United States Environmental Protection Agency, the United States Department of Energy, and
various local regulatory districts.  We must periodically apply for licenses and permits from these various
regulatory authorities as well as abide by their respective orders.  Historically, we have received the licenses
and permits necessary for our operations.  However, should we be unsuccessful in obtaining certain licenses or
permits, our business would be adversely affected.

         From time to time, special interest groups and state and federal legislators have proposed legislation
that would expand, restrict or alter our obligations and rights with respect to our obligation to deliver power
services to our customers.  We do not know what the impact to us would be of a change in the legislative or
regulatory environment in which we operate.

         We are subject to risks associated with the operation of our nuclear power generating facilities.

         We operate and are majority owner of the San Onofre Nuclear Generating Station and are part owner of the
Palo Verde Nuclear Generating Station.  The United States Department of Energy has defaulted on its obligation to
begin accepting spent nuclear fuel from commercial nuclear industry participants by January 31, 1998.  Current
capability to store spent fuel in the spent fuel pools for San Onofre Units 2 and 3 is adequate through 2005.  As
operating agent at San Onofre, we have primary responsibility for the interim storage of spent nuclear fuel.  We
are


Page 19



currently taking action to ensure that sufficient fuel storage space will be available at the San Onofre site to
allow continued operation beyond 2005.  At Palo Verde, additional interim spent fuel storage was required in 2003
for its Unit 2 and will be required in 2004 for its Units 1 and 3.  Arizona Public Service Company, operating
agent for Palo Verde, has constructed an on-site interim facility for spent fuel storage and began moving spent
fuel from Unit 2 into the facility in March 2003.  The Palo Verde interim spent fuel storage facility will begin
receiving spent fuel for Units 1 and 3 in 2004.  If we or Arizona Public Service were unable to arrange and
maintain sufficient capacity for interim spent fuel storage now or in the future, it could hinder operation of
the plants and impair the value of our ownership interests until storage could be obtained, each of which may
have a material adverse effect on us.

         Additionally, 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 at Palo Verde Unit 3 in April 2003, and no indications of leakage or degradation were
detected.  However, if any vessel head nozzle penetrations at San Onofre or Palo Verde should suffer significant
leakage, or if either of these plants should suffer any other significant operational accident or significant
release of hazardous materials, our business and operations could be adversely affected.

         Like other nuclear power plants with steam generators made of Inconel 600 mill annealed alloy, San
Onofre Units 2 and 3 have experienced degradation in their steam generators.  Presently, 9% and 7%, respectively,
of the tubes in the existing generators of Unit 2 and Unit 3 have been plugged and removed from service.  We
presently estimate that the San Onofre Units 2 and 3 generator design allows for the plugging and removal of
21.4% of the tubes before the rated capacity of the units must be reduced.  Industry experience is that the
percentage of tubes plugged accelerates as steam generators made of Inconel 600 mill annealed alloy age.  Based
on this industry experience, we have determined that San Onofre Units 2 and 3 steam generators cannot be assured
of allowing continued operation beyond the expected refueling outages in 2009-2010.  We and our co-owners at San
Onofre Units 2 and 3 are presently evaluating the cost-effectiveness of replacing the steam generators for these
units.

         The Palo Verde steam generators are also made of Inconel 600 mill annealed alloy.  During the fall of
2003, Palo Verde Unit 2 steam generators are scheduled to be replaced.  In addition, the Palo Verde owners have
approved the manufacture of two additional sets of steam generators for installation in Units 1 and 3.  The Palo
Verde owners expect that these steam generators will be installed in Units 1 and 3 in the 2005 to 2008 time
frame.  Our share of the costs of manufacture and installation of these generators is $71 million.

         Insurance.  Federal law limits public liability from a nuclear incident to $9.5 billion.  We and other
owners of the San Onofre and Palo Verde nuclear generating stations have purchased the maximum private primary
insurance available of $300 million.  If the public liability limit is insufficient, federal regulations may
impose further revenue-raising measures to pay claims, including a possible additional assessment on all licensed
reactor operators.  In the event of such an under-insured nuclear incident, a possible tension could exist
between the federal government's attempt to impose revenue-raising measures upon us and the CPUC's willingness to
allow us to pass this liability along to our customers, resulting in undercollection of our costs to operate our
business.

         A mutual insurance company owned by utilities with nuclear generation plants issues policies covering
decontamination liability and property damage.  Our participation in this mutual insurance company creates an
additional undercollection risk.  If losses at any nuclear facility covered by these mutual insurance
arrangements exceed the accumulated insurance funds, we could be assessed retrospective premium adjustments of up
to $38 million per year to cover the shortfall.  If we were unable to pass this additional premium expense along
to our customers, this undercollection may adversely affect us.

         Municipalities within our service territory may attempt to form public power entities and/or acquire our
distribution facilities for their constituencies.

         From time to time, certain municipalities within our service territory have threatened to attempt to
create "public power entities" and/or acquire our distribution facilities via condemnation proceedings.  The
local



Page 20



governments considering municipalization have said they are motivated by desires to attempt to (i) insulate the
relevant constituencies from the price volatility associated with California's energy crisis, (ii) avoid rate
payments to allow us to recover the stranded costs associated with our generation assets, (iii) obtain local
control over energy matters and (iv) most recently, to avoid the rate increases required to satisfy CDWR's
revenue requirements in connection with its procurement activities during California's energy crisis.  For
instance, certain cities of the Coachella Valley, such as the City of Indian Wells, have threatened to condemn
our facilities.  In addition, the City of Corona filed an eminent domain proceeding last year to take over our
distribution facilities; however, it has since dismissed the lawsuit and is no longer seeking to take over our
facilities in that area.  Similarly, the City of Indian Wells has publicly stated that it is abandoning its
present consideration of attempting to acquire our facilities in its area, citing our pending rate reduction.  We
are not aware of any other cities in our service territory publicly considering eminent domain actions against
us.

         Although any municipality which successfully were to condemn any of our distribution assets for its own
use would have to pay us the judicially determined "fair market value" of such assets, any such judicially
determined value may not fairly reflect the actual value of any such assets to us.  Because the cities which have
thus far threatened to condemn our facilities are only a small portion of our service territory, their ultimate
success in condemning our facilities would have been unlikely to affect us in any material respect.  However,
municipalization of a significant part of our service territory could adversely affect our business in several
ways, including, impairing our growth potential and reducing our customer and revenue base and our corresponding
ability to satisfy our existing fixed costs.

         We are subject to numerous environmental laws and regulations with respect to operation of our
facilities.

         The operation of our power generation, transmission and distribution facilities is subject to numerous
environmental laws and regulations.  Furthermore, we are subject to environmental laws and regulations which
require us to expend substantial sums to mitigate or remove the effect of our past operations on the
environment.  In addition to the existing environmental laws and regulations under which we currently operate, a
constant threat exists that new environmental standards will be developed and applied to us.  For instance,
environmental advocacy groups and regulatory agencies have been focusing considerable attention on carbon dioxide
emissions from coal-fired plants and their potential role in the "global-warming" issue.  The adoption of new
laws and regulations to implement carbon dioxide or other emission controls could adversely affect our
operations, including those of our coal-fired generating plants.

         Further focus has also been given to the potential health effects of electric and magnetic fields
("EMF") which naturally result from the generation, transmission, distribution and use of electricity.  The
California Department of Health Services recently released a report assigning a substantially higher probability
that there is a causal connection between EMF exposures and a number of diseases and conditions, including
childhood leukemia, adult leukemia, amyotrophic lateral sclerosis, and miscarriages.  It is unclear what actions
the CPUC will take to respond to the California Department of Health Services 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.  The adoption of new laws and regulations to address the EMF concern, or any litigation arising
out of these issues, could adversely affect our operations.


Risks Associated with Our Former Accountant, Arthur Andersen LLP


         Your ability to recover from our former independent certified public accountant, Arthur Andersen LLP,
may be limited.

         On May 8, 2002, we appointed PricewaterhouseCoopers LLP to be our independent certified public
accountant and we engaged them to audit our financial statements for the year ended December 31, 2002.  Our
former independent certified public accountant, Arthur Andersen LLP, was convicted on federal obstruction of
justice charges arising from the federal government's investigation of Enron Corp.  In light of the conviction,
Arthur Andersen ceased practicing before the SEC on August 31, 2002.  Arthur Andersen was the auditor of our
financial


Page 21



statements and related schedules as of December 31, 2001 and 2000, which are incorporated in this prospectus by
reference from our Annual Report on Form 10-K for the year ended December 31, 2002, and has not consented to the
use of their auditor's report with respect to such financial statements in this prospectus.  Events arising out
of the indictment and conviction may materially and adversely affect the ability of Arthur Andersen to satisfy
any claims arising from the provision of auditing services to us, including claims that may arise out of Arthur
Andersen's audit of financial statements included in this prospectus.  We have not had a re-audit of our
financial statements as of and for the year ended December 31, 2001.

                               INFORMATION ABOUT SOUTHERN CALIFORNIA EDISON COMPANY

         This prospectus is accompanied by a copy of our 2002 Annual Report to Shareholders and a copy of our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2003.  The Annual Report to Shareholders and the
Quarterly Report on Form 10-Q contain financial statements, related notes, and Management's Discussion and
Analysis of Results of Operations and Financial Condition that provide information about us and our business.  We
encourage you to read those documents carefully.  Material changes in our affairs which have occurred since the
filing of our Quarterly Report on Form 10-Q are described below under "Recent Developments."

Incorporation by Reference

         The Securities and Exchange Commission allows us to incorporate by reference the information we file
with them, which means that we can disclose important information to you by referring you to those documents.
The information incorporated by reference is an important part of this prospectus.  The following documents that
we have filed with the Securities and Exchange Commission are incorporated by reference into this prospectus:

1.       Our Annual Report on Form 10-K for the year ended December 31, 2002.

2.       Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2003.

3.       Our Current Reports on Form 8-K dated January 13, February 4, and May 7, 2003.

4.       Our 2002 Annual Report to Shareholders.

5.       The following portions of our Joint Proxy Statement dated April 7, 2003, which portions were also
              incorporated by reference into our Annual Report on Form 10-K:

a.       "Stock Ownership of Directors and Executive Officers" from pages 18-19 and "Stock Ownership of Certain
                  Shareholders" from pages 20-21 (Part III, Item 12 of Form 10-K).

b.       "Election of Directors, Nominees for Election" from pages 8-10 (Part III, Item 10 of Form 10-K).

c.       "Director Compensation" from pages 14-17, "Executive Compensation" from pages 22-31, "Employment
                  Contracts and Termination of Employment Arrangements" from pages 31-32, and "Compensation and
                  Executive Personnel Committees' Interlocks and Insider Participation" from page 36 (Part III,
                  Item 11 of Form 10-K).

d.       "Certain Relationships and Transactions" and "Other Management Transactions" from pages 36-37 (Part III,
                  Item 13 of Form 10-K).

         We file annual, quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission.  You may read and copy any materials that we file at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.  You may obtain
information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330.  The Securities and Exchange Commission maintains an Internet site at http://www.sec.gov that
contains reports, proxy and information statements, and other information regarding issuers that file
electronically.



Page 22



You can access our filings from that site.  Our filings of Forms 10-K, 10-Q and 8-K, and our Annual Report and
Proxy Statement are also available at our parent's website at http://www.edison.com/investors/sec_filings.asp.

                                                THE EXCHANGE OFFER

Original Exchange Offer

         On January 14, 2003, we commenced the original exchange offer.  In the original exchange offer, we
offered eligible holders the opportunity to exchange each $1,000 principal amount of 8.95% Variable Rate Notes
due 2003 that they held for $1,000 principal amount of the outstanding bonds.  At the time of the original
exchange offer, $1.0 billion in aggregate principal amount of these 8.95% Variable Rate Notes due 2003 was
outstanding.

         Because the original exchange offer was not a transaction registered under the Securities Act, the
outstanding bonds were only offered or issued (i) in the United States, to qualified institutional buyers, as
that term is defined in Rule 144A under the Securities Act, in a private transaction in reliance upon an
exemption from the registration requirements of the Securities Act, and (ii) outside the United States, to
persons other than U.S. persons in offshore transactions in reliance upon Regulation S under the Securities Act.
Citigroup (formerly Salomon Smith Barney) acted as the lead dealer manager for the original exchange offer, while
JPMorgan acted as the co-dealer manager.

Registration Rights Agreement

         The original exchange offer was consummated on February 24, 2003, at which time we exchanged
$965,965,000 in aggregate principal amount of the outstanding bonds for an equal principal amount of our
outstanding 8.95% Variable Rate Notes due 2003.  The outstanding bonds are subject to broad transfer restrictions
owing to the fact that they are not registered under the Securities Act.  Consequently, in connection with the
issuance of the outstanding bonds, we entered into a registration rights agreement with the dealer managers for
the original exchange offer.  This registration rights agreement requires us to register the exchange bonds under
the Securities Act and to offer to exchange the exchange bonds for the outstanding bonds.  The exchange bonds
will be issued without a restrictive legend and generally may be resold without registration under the Securities
Act.  We are effecting the exchange offer to comply with the registration rights agreement.

         The registration rights agreement requires us to:

         o    file a registration statement for the exchange offer and the exchange bonds within 180 days after
              the issue date of the outstanding bonds;

         o    use our reasonable best efforts to cause the registration statement to become effective under the
              Securities Act within 270 days after the issue date of the outstanding bonds;

         o    use our reasonable best efforts to consummate the exchange offer within 315 days after the issue
              date of the outstanding bonds; and

         o    under certain circumstances, file a shelf registration statement for the resale of the outstanding
              bonds and use our reasonable best efforts to cause such shelf registration statement, if any, to
              become effective under the Securities Act.

         These requirements under the registration rights agreement will be satisfied when we complete the
exchange offer.  However, if we fail to meet any of these requirements, we must pay to the holders of the
outstanding bonds additional interest on the such bonds as liquidated damages, and such additional interest will
accrue on the principal amount of the outstanding bonds (in addition to the stated interest on such bonds).
Additional interest will accrue at a rate of 0.25% per annum during the first 60-day period immediately following
the occurrence of any such default under the registration rights agreement and shall increase to a maximum 0.50%
per annum thereafter.  Following the cure of all such defaults, if any, the accrual of such additional interest
on the outstanding bonds would cease and the interest rate would revert to the original 8% rate.  Any such
additional


Page 23



interest, if payable, would constitute liquidated damages and be the exclusive remedy (monetary or otherwise)
available to any holder of the outstanding bonds with respect to any such default under the registration rights
agreement.

         We agreed to keep the exchange offer for the outstanding bonds open for not less than 20 business days
and not more than 30 business days (or longer if required by applicable law) after the date on which notice of
such exchange offer is mailed to the holders of the outstanding bonds.  Under the registration rights agreement,
our obligations to register the exchange bonds will terminate upon the completion of the exchange offer.
However, under certain circumstances specified in the registration rights agreement, we may be required to file a
"shelf" registration statement for a continuous offer in connection with the outstanding bonds pursuant to
Rule 415 under the Securities Act.

         This summary includes only the material terms of the registration rights agreement.  For a full
description, you should refer to the complete copy of the registration rights agreement, which has been filed as
an exhibit to the exchange offer registration statement for the exchange offer and the exchange bonds.  See
"Additional Information" above.

Transferability of the Exchange Bonds

         Based on an interpretation of the Securities Act by the staff of the Securities and Exchange Commission
in several no-action letters issued to third parties not related to SCE, the exchange bonds would, in general, be
freely tradable after the completion of the exchange offer without further compliance with the registration and
prospectus delivery requirements of the Securities Act.  However, any participant in the exchange offer described
in this prospectus who is an affiliate of SCE or who intends to participate in the exchange offer for the purpose
of distributing the exchange bonds:

         o    will not be able to rely on the interpretations of the Securities and Exchange Commission staff;

         o    will not be entitled to participate in the exchange offer; and

         o    must comply with the registration and prospectus delivery requirements of the Securities Act in
              connection with any sale or transfer of the outstanding bonds unless such sale or transfer is made
              pursuant to an exemption from such requirement.

         Each holder of outstanding bonds who wishes to exchange outstanding bonds for exchange bonds pursuant to
the exchange offer will be required to represent that:

         o    it is not an affiliate of SCE;

         o    the exchange bonds to be received by it will be acquired in the ordinary course of its business; and

         o    at the time of the exchange offer, it has no arrangement with any person to participate in the
              distribution (within the meaning of the Securities Act) of the exchange bonds.

         To participate in the exchange offer, you must represent as the holder of outstanding bonds that each of
these statements is true.

         In addition, in connection with any resales of the exchange bonds, any broker-dealer that acquired
exchange bonds for its own account as a result of market-making or other trading activities, which we refer to as
an "exchanging broker-dealer," must deliver a prospectus meeting the requirements of the Securities Act.  The
Securities and Exchange Commission has taken the position that exchanging broker-dealers may fulfill their
prospectus delivery requirements with respect to the exchange bonds with the prospectus contained in the
registration statement for the exchange offer.  Under the registration rights agreement, we are required to allow
exchanging broker-dealers and any other person, if any, subject to similar prospectus delivery requirements, to
use this prospectus in connection with the resale of exchange bonds.



Page 24



The Exchange Offer

         Upon the terms and subject to the conditions in this prospectus and in the letter of transmittal, we
will accept any and all outstanding bonds validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on [____], 2003.  We will issue $1,000 principal amount of exchange bonds in exchange for each $1,000
principal amount of outstanding bonds accepted in the exchange offer.  Holders may tender some or all of their
outstanding bonds pursuant to the exchange offer.  However, outstanding bonds may be tendered only in a minimum
principal amount of $250,000 and in integral multiples of $1,000 in excess thereof.  Exchange bonds will be
issued only in minimum denominations of $250,000 and integral multiples of $1,000 in excess thereof.

         The form and terms of the exchange bonds are the same as the form and terms of the outstanding bonds
except that:

         o    the exchange bonds have been registered under the Securities Act and will not bear any legend
              restricting their transfer;

         o    the exchange bonds bear a Series B designation and a different CUSIP number from the outstanding
              bonds; and

         o    after consummation of the exchange offer, holders of the exchange bonds will not be entitled to any
              rights under the registration rights agreement, including the provisions for an increase in the
              interest rate on the outstanding bonds in some circumstances relating to the timing of the exchange
              offer.

         The exchange bonds will evidence the same debt as the outstanding bonds.  Holders of exchange bonds will
be entitled to the benefits of our first mortgage bond indenture under which the outstanding bonds were issued.

         As of the date of this prospectus, $965,965,000 in aggregate principal amount of outstanding bonds was
outstanding.  We have fixed [_____], 2003 as the date on which this prospectus and the letter of transmittal will
be initially mailed to the record holders of the outstanding bonds as of [____], 2003.  We intend to conduct the
exchange offer in accordance with the applicable requirements of the Securities Act, the Securities Exchange Act
of 1934, and the rules and regulations of the Securities and Exchange Commission under the Securities Act and the
Securities Exchange Act.

Interest on the Exchange Bonds

         The exchange bonds will bear interest from the most recent interest payment date to which interest has
been paid on the outstanding bonds or, if no interest has been paid, from February 24, 2003.  Interest on the
outstanding bonds accepted for exchange will cease to accrue upon the issuance of the exchange bonds.

         Interest on the bonds is payable semiannually on February 15 and August 15 of each year to the holders
of record on the preceding February 1 and August 1, respectively.

Conditions to the Exchange Offer

         Notwithstanding any other provisions of the exchange offer, or any extension of the exchange offer, we
will not be required to issue exchange bonds, and we may terminate the exchange offer or, at our option, modify,
extend or otherwise amend the exchange offer, if any of the following conditions has not been satisfied or waived
on the expiration date of the exchange offer, as it may be extended from time to time:

         o    no action or event shall have occurred or been threatened, no action shall have been taken, and no
              statute, rule, regulation, judgment, order, stay, decree or injunction shall have been promulgated,
              enacted, entered, enforced or deemed applicable to the exchange offer or the exchange of exchange
              bonds for outstanding bonds under the exchange offer by or before any court or governmental
              regulatory or administrative agency, authority or tribunal, that either:



Page 25


              (a) challenges the making of the exchange offer or the exchange of exchange bonds for outstanding
                  bonds under the exchange offer or might, directly or indirectly, prohibit, prevent, restrict or
                  delay consummation of, or might otherwise adversely affect in any material manner, the exchange
                  offer or the exchange of exchange bonds for outstanding bonds under the exchange offer; or

              (b) in our reasonable judgment, could materially adversely affect our business, condition
                  (financial or otherwise), income, operations, properties, assets, liabilities or prospects or
                  materially impair the contemplated benefits to us of the exchange offer or the exchange of
                  exchange bonds for outstanding bonds under the exchange offer;

         o    there shall not have occurred (a) any general suspension of or limitation on trading in securities
              on the New York Stock Exchange or in the over-the-counter market (whether or not mandatory),
              (b) any material adverse change in the prices of the outstanding bonds, (c) a material impairment in
              the general trading market for debt securities, (d) a declaration of a banking moratorium or any
              suspension of payments in respect of banks by federal or state authorities in the United States
              (whether or not mandatory), (e) a commencement of a war, armed hostilities, terrorist act or other
              national or international calamity directly or indirectly relating to the United States, (f) any
              limitation (whether or not mandatory) by any governmental authority on, or other event having a
              reasonable likelihood of affecting, the extension of credit by banks or other lending institutions
              in the United States, (g) any material adverse change in securities or financial markets in the
              United States generally, or (h) in the case of any of the foregoing existing at the time of the
              commencement of the exchange offer, a material acceleration or worsening thereof; and

         o    the trustee with respect to the first mortgage bond indenture for the outstanding bonds and
              exchange bonds shall not have objected in any respect to, or taken any action that could, in our
              reasonable judgment, adversely affect the consummation of, the exchange offer or the exchange of
              exchange bonds for outstanding bonds under the exchange offer, nor shall such trustee have taken
              any action that challenges the validity or effectiveness of the procedures we have used in making
              the exchange offer or the exchange of the outstanding bonds under the exchange offer.

         The foregoing conditions are for our sole benefit and may be waived by us in whole or in part at our
absolute discretion.  Any determination made by us concerning an event, development or circumstance described or
referred to above shall be conclusive and binding.

         If any of the foregoing conditions are not satisfied or waived on the expiration date of the exchange
offer, we may:

         o    terminate the exchange offer and return all tendered outstanding bonds to the holders thereof;

         o    modify, extend or otherwise amend the exchange offer and retain all tendered outstanding bonds
              until the expiration date, as extended, subject, however, to the withdrawal rights of holders (See
              "--Withdrawal of Tenders" and "--Expiration Date; Extensions; Amendments; Termination"); or

         o    waive the unsatisfied conditions with respect to the exchange offer and accept all outstanding
              bonds tendered and not previously withdrawn.

         We reserve the right, in our absolute discretion, to purchase or make offers to purchase any outstanding
bonds that remain outstanding subsequent to the expiration date for the exchange offer and, to the extent
permitted by applicable law, purchase outstanding bonds in the open market, in privately negotiated transactions
or otherwise.  The terms of any such purchases or offers could differ from the terms of the exchange offer.  Any
purchase or offer to purchase will not be made except in accordance with applicable law and will in no event be
made prior to the expiration of ten business days after the expiration date.



Page 26


Certain Consequences to Holders of Outstanding Bonds Not Tendering in the Exchange Offer

         Consummation of the exchange offer may have adverse consequences to holders of outstanding bonds who
elect not to tender their bonds in the exchange offer.  In particular, the trading market for unexchanged
outstanding bonds could become more limited than the existing trading market for the outstanding bonds and could
cease to exist altogether due to the reduction in the amount of the outstanding bonds remaining upon consummation
of the exchange offer.  A more limited trading market might adversely affect the liquidity, market price and
price volatility of the outstanding bonds.  If a market for unexchanged outstanding bonds exists or develops, the
outstanding bonds may trade at a discount to the price at which they would trade if the amount outstanding were
not reduced.  There can, however, be no assurance that an active market in the unexchanged outstanding bonds will
exist, develop or be maintained or as to the prices at which the unexchanged outstanding bonds may be traded.
This would result in less protection for holders of unexchanged outstanding bonds.  See "Risk Factors--If you do
not properly tender your outstanding bonds, your ability to transfer such outstanding bonds will be adversely
affected."

Expiration Date; Extensions; Amendments; Termination

         For purposes of the exchange offer, the term "expiration date" means 5:00 p.m., New York City time, on
[_____], 2003, subject to our right to extend such date and time for the exchange offer in our absolute
discretion, in which case the expiration date means the latest date and time to which the exchange offer is
extended.

         We reserve the right, in our absolute discretion, to (i) extend the exchange offer, (ii) terminate the
exchange offer if a condition to our obligation to deliver the exchange bonds is not satisfied or waived on the
expiration date, as extended, or (iii) amend the exchange offer by giving oral or written notice of such delay,
extension, termination or amendment to the exchange agent.  If the exchange offer is amended in a manner we
determine constitutes a material change, we will extend the exchange offer for a period of two to ten business
days, depending upon the significance of the amendment and the manner of disclosure to the holders, if the
exchange offer would otherwise have expired during the two to ten business day period.

         We will promptly announce any extension, amendment or termination of the exchange offer by issuing a
press release to the Dow Jones News Service.  We will announce any extension of the expiration date no later than
9:00 a.m., New York City time, on the first business day after the previously scheduled expiration date.  We have
no other obligation to publish, advertise or otherwise communicate any information about any extension, amendment
or termination.

Settlement Date

         The exchange bonds will be issued in exchange for the outstanding bonds in the exchange offer on the
settlement date, which will be the third business day, or as soon as practicable thereafter, following the
expiration date of the exchange offer.  We will not be obligated to deliver exchange bonds unless the exchange
offer is consummated.

Effect of Tender

         Any tender by a holder (and our subsequent acceptance of such tender) of outstanding bonds will
constitute a binding agreement between that holder and us upon the terms and subject to the conditions of the
exchange offer described herein and in the letter of transmittal.  The acceptance of the exchange offer by a
tendering holder of the outstanding bonds will constitute the agreement by that holder to deliver good and
marketable title to the tendered outstanding bonds, free and clear of any and all liens, restrictions, charges,
pledges, security interests, encumbrances or rights of any kind of third parties.

Letter of Transmittal; Representations, Warranties and Covenants of Holders of Outstanding bonds

         Upon the submission of the letter of transmittal, or agreement to the terms of the letter of transmittal
pursuant to an agent's message, a holder, or the beneficial holder of such outstanding bonds on behalf of which
the



Page 27



holder has tendered, will, subject to that holder's ability to withdraw its tender, and subject to the
terms and conditions of the exchange offer generally, be deemed, among other things, to:

         o    irrevocably sell, assign and transfer to or upon our order or the order of our nominee all right,
              title and interest in and to, and any and all claims in respect of or arising or having arisen as a
              result of such holder's status as a holder of, all outstanding bonds tendered thereby, such that
              thereafter it shall have no contractual or other rights or claims in law or equity against us or
              any fiduciary, trustee, fiscal agent or other person connected with the outstanding bonds arising
              under, from or in connection with such outstanding bonds;

         o    waive any and all rights with respect to the outstanding bonds tendered thereby (including, without
              limitation, any existing or past defaults and their consequences in respect of such outstanding
              bonds); and

         o    release and discharge us and the trustee for the outstanding bonds from any and all claims such
              holder may have, now or in the future, arising out of or related to the outstanding bonds tendered
              thereby, including, without limitation, any claims that such holder is entitled to receive
              additional principal or interest payments with respect to the outstanding bonds tendered thereby or
              to participate in any redemption or defeasance of the outstanding bonds tendered thereby.

         In addition, such holder of outstanding bonds will be deemed to represent, warrant and agree that:

         o    it has received and reviewed this prospectus;

         o    it is the beneficial owner (as defined below) of, or a duly authorized representative of one or
              more such beneficial owners of, the outstanding bonds tendered thereby and it has full power and
              authority to execute the letter of transmittal;

         o    the outstanding bonds being tendered thereby were owned as of the date of tender, free and clear of
              any liens, charges, claims, encumbrances, interests and restrictions of any kind, and we will
              acquire good, indefeasible and unencumbered title to such outstanding bonds, free and clear of all
              liens, charges, claims, encumbrances, interests and restrictions of any kind, when we accept the
              same;

         o    it will not sell, pledge, hypothecate or otherwise encumber or transfer any outstanding bonds
              tendered thereby from the date of the letter of transmittal and agrees that any purported sale,
              pledge, hypothecation or other encumbrance or transfer will be void and of no effect;

         o    in evaluating the exchange offer and in making its decision whether to participate therein by
              submitting a letter of transmittal and tendering its outstanding bonds, such holder has made its
              own independent appraisal of the matters referred to herein and in any related communications and
              is not relying on any statement, representation or warranty, express or implied, made to such
              holder by us or the exchange agent other than those contained in this prospectus (as amended or
              supplemented to the expiration date);

         o    the execution and delivery of the letter of transmittal shall constitute an undertaking to execute
              any further documents and give any further assurances that may be required in connection with any
              of the foregoing, in each case on and subject to the terms and conditions set out or referred to in
              this offering memorandum;

         o    the submission of the letter of transmittal to the exchange agent shall, subject to the terms and
              conditions of the exchange offer constitute the irrevocable appointment of the exchange agent as
              its attorney and agent, and an irrevocable instruction to such attorney and agent to complete and
              execute all or any form(s) of transfer and other document(s) at the discretion of such attorney and
              agent in relation to the outstanding bonds tendered thereby in favor of us or such other person or
              persons as it may direct and to deliver such form(s) of transfer and other document(s) in the
              attorney's and agent's


Page 28



              discretion and/or the certificate(s) and other document(s) of title relating to such outstanding bonds'
              registration and to execute all such other documents and to do all such other acts and things as
              may be in the opinion of such attorney or agent necessary or expedient for the purpose of, or in
              connection with, the acceptance of the exchange offer, and to vest in us or our nominees such
              outstanding bonds; and

         o    the terms and conditions of the exchange offer shall be deemed to be incorporated in, and form a
              part of, the letter of transmittal which shall be read and construed accordingly.

         The representations and warranties and agreements of a holder tendering outstanding bonds shall be
deemed to be repeated and reconfirmed on and as of the expiration date and the settlement date.  For purposes of
this prospectus, the "beneficial owner" of any outstanding bonds shall mean any holder that exercises investment
discretion with respect to such outstanding bonds.

Absence of Dissenters' Rights

         Holders of the outstanding bonds do not have any appraisal or dissenters' rights in connection with the
exchange offer.

Acceptance of Outstanding Bonds Tendered; Delivery of Exchange Bonds

         On the settlement date, exchange bonds to be issued in partial or full exchange for outstanding bonds in
the exchange offer, if consummated, will be delivered in book-entry form.

         We will be deemed to have accepted validly tendered outstanding bonds that have not been validly
withdrawn as provided in this prospectus when, and if, we have given oral or written notice thereof to the
exchange agent.  Subject to the terms and conditions of the exchange offer, delivery of the exchange bonds
through the settlement date will be made by the exchange agent on the settlement date upon receipt of such
notice.  The exchange agent will act as agent for tendering holders of the outstanding bonds for the purpose of
receiving outstanding bonds and transmitting exchange bonds as of the settlement date.  If any tendered
outstanding bonds are not accepted for any reason set forth in the terms and conditions of the exchange offer,
such unaccepted outstanding bonds will be returned without expense to the tendering holder as promptly as
practicable after the expiration or termination of the exchange offer.

Procedures for Tendering Outstanding Bonds

         A holder of outstanding bonds who wishes to accept the exchange offer, and whose outstanding bonds are
held by a custodial entity such as a bank, broker, dealer, trust company or other nominee, must instruct this
custodial entity to tender such holder's outstanding bonds on the holder's behalf pursuant to the procedures of
the custodial entity.

         To tender in the exchange offer, a holder of outstanding bonds must either (i) complete, sign and date
the letter of transmittal (or a facsimile thereof) in accordance with its instructions (including guaranteeing
the signature(s) to the letter of transmittal, if required), and mail or otherwise deliver such letter of
transmittal or such facsimile, together with the certificates representing the outstanding bonds specified
therein, to the exchange agent at the address set forth in the letter of transmittal for receipt on or prior to
the Expiration Date or (ii) comply with the Automated Tender Offer Program ("ATOP") procedures for book-entry
transfer described below on or prior to the expiration date.

         The exchange agent and the Depository Trust Company ("DTC") have confirmed that the exchange offer is
eligible for ATOP.  The letter of transmittal (or facsimile thereof), with any required signature guarantees, or
(in the case of book-entry transfer) an agent's message in lieu of the letter of transmittal, and any other
required documents, must be transmitted to and received by the exchange agent on or prior to the expiration date
of the exchange offer at one of its addresses set forth in this prospectus.  Outstanding bonds will not be deemed
surrendered until the letter of transmittal and signature guarantees, if any, or agent's message, are received by
the exchange agent.


Page 29


         The method of delivery of outstanding bonds, the letter of transmittal, and all other required documents
to the exchange agent is at the election and risk of the holder.  Instead of delivery by mail, holders should use
an overnight or hand delivery service, properly insured.  In all cases, sufficient time should be allowed to
assure delivery to and receipt by the exchange agent on or before the expiration date.  Do not send the letter of
transmittal or any outstanding bonds to anyone other than the exchange agent.

         If you are tendering your outstanding bonds in exchange for exchange bonds and anticipate delivering
your letter of transmittal and other documents other than through DTC, you are urged to contact promptly a bank,
broker or other intermediary (that has the capability to hold bonds custodially through DTC) to arrange for
receipt of any exchange bonds to be delivered pursuant to the exchange offer and to obtain the information
necessary to provide the required DTC participant with account information in the letter of transmittal.

         Book-Entry Delivery Procedures for Tendering Outstanding Bonds Held with DTC

         If you wish to tender outstanding bonds held on your behalf by a nominee with DTC, you must (i) inform
your nominee of your interest in tendering your outstanding bonds pursuant to the exchange offer, and
(ii) instruct your nominee to tender all outstanding bonds you wish to be tendered in the exchange offer into the
exchange agent's account at DTC on or prior to the expiration date.  Any financial institution that is a nominee
in DTC, including Euroclear and Clearstream, must tender outstanding bonds by effecting a book-entry transfer of
the outstanding bonds to be tendered in the exchange offer into the account of the exchange agent at DTC by
electronically transmitting its acceptance of the exchange offer through the ATOP procedures for transfer.  DTC
will then verify the acceptance, execute a book-entry delivery to the exchange agent's account at DTC, and send
an agent's message to the exchange agent.  An "agent's message" is a message, transmitted by DTC to and received
by the exchange agent and forming part of a book-entry confirmation, which states that DTC has received an
express acknowledgement from an organization that participates in DTC (a "participant") tendering outstanding
bonds that the participant has received and agrees to be bound by the terms of the letter of transmittal and that
we may enforce the agreement against the participant.  A letter of transmittal need not accompany tenders
effected through ATOP.

         Proper Execution and Delivery of Letter of Transmittal

         Signatures on a letter of transmittal or notice of withdrawal described below (see "--Withdrawal of
Tenders"), as the case may be, must be guaranteed by an eligible institution unless the outstanding bonds
tendered pursuant to the letter of transmittal are tendered (i) by a holder who has not completed the box
entitled "Special Delivery Instructions" or "Special Issuance and Payment Instructions" on the letter of
transmittal or (ii) for the account of an eligible institution.  If signatures on a letter of transmittal, or
notice of withdrawal, are required to be guaranteed, such guarantee must be made by an eligible institution.

         If the letter of transmittal is signed by the holder(s) of outstanding bonds tendered thereby, the
signature(s) must correspond with the name(s) as written on the face of the outstanding bonds without alteration,
enlargement or any change whatsoever.  If any of the outstanding bonds tendered thereby are held by two or more
holders, all such holders must sign the letter of transmittal.  If any of the outstanding bonds tendered thereby
are registered in different names on different outstanding bonds, it will be necessary to complete, sign and
submit as many separate letters of transmittal, and any accompanying documents, as there are different
registrations of certificates.

         If outstanding bonds that are not tendered for exchange pursuant to the exchange offer are to be
returned to a person other than the holder thereof, certificates for such outstanding bonds must be endorsed or
accompanied by an appropriate instrument of transfer, signed exactly as the name of the registered owner appears
on the certificates, with the signatures on the certificates or instruments of transfer guaranteed by an eligible
institution.

         If the letter of transmittal is signed by a person other than the holder of any outstanding bonds listed
therein, such outstanding bonds must be properly endorsed or accompanied by a properly completed bond power,
signed by such holder exactly as such holder's name appears on such outstanding bonds.  If the letter of
transmittal or any outstanding bonds, bond powers or other instruments of transfer are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and, unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with the letter of transmittal.


Page 30



         No alternative, conditional, irregular or contingent tenders will be accepted.  By executing the letter
of transmittal (or facsimile thereof), the tendering holders of outstanding bonds waive any right to receive any
notice of the acceptance for exchange of their outstanding bonds.  Tendering holders should indicate in the
applicable box in the letter of transmittal the name and address to which payments, and/or substitute
certificates evidencing outstanding bonds for amounts not tendered or not exchanged are to be issued or sent, if
different from the name and address of the person signing the letter of transmittal.  If no such instructions are
given, outstanding bonds not tendered or exchanged will be returned to such tendering holder.

         All questions as to the validity, form, eligibility (including time of receipt), and acceptance and
withdrawal of tendered outstanding bonds will be determined by us in our absolute discretion, which determination
will be final and binding.  We reserve the absolute right to reject any and all tendered outstanding bonds
determined by us not to be in proper form or not to be tendered properly or any tendered outstanding bonds the
acceptance of which would, in the opinion of our counsel, be unlawful.  We also reserve the right to waive, in
our absolute discretion, any defects, irregularities or conditions of tender as to particular outstanding bonds,
whether or not waived in the case of other outstanding bonds.  Our interpretation of the terms and conditions of
the exchange offer (including the instructions in the letter of transmittal) will be final and binding on all
parties.  Unless waived, any defects or irregularities in connection with tenders of outstanding bonds must be
cured within such time as we shall determine.  Although we intend to notify holders of defects or irregularities
with respect to tenders of outstanding bonds, neither we, the exchange agent nor any other person will be under
any duty to give such notification or shall incur any liability for failure to give any such notification.
Tenders of outstanding bonds will not be deemed to have been made until such defects or irregularities have been
cured or waived.

         Any holder whose outstanding bonds have been mutilated, lost, stolen or destroyed will be responsible
for obtaining replacement securities or for arranging for indemnification with the trustee of the outstanding
bonds.  Holders may contact the exchange agent for assistance with such matters.

Withdrawal of Tenders

         You may withdraw tenders of outstanding bonds at any time prior to the later of 5:00 p.m., New York City
time, on [__________], 2003 (the "expiration date").  Tenders of outstanding bonds may not be withdrawn after
that time unless the exchange offer is extended with changes in the terms of the exchange offer that are, in our
reasonable judgment, materially adverse to the tendering holders of the outstanding bonds.

         For a withdrawal of a tender to be effective, a written or facsimile transmission notice of withdrawal
must be received by the exchange agent prior to the deadline described above at one of its addresses set forth in
this prospectus.  The withdrawal notice must specify the name of the person who tendered the outstanding bonds to
be withdrawn, must contain a description of the outstanding bonds to be withdrawn, the certificate numbers shown
on the particular certificates evidencing such outstanding bonds, if applicable, and the aggregate principal
amount represented by such outstanding bonds; and must be signed by the holder of such outstanding bonds in the
same manner as the original signature on the letter of transmittal (including any required signature guarantees)
or be accompanied by evidence satisfactory to us that the person withdrawing the tender has succeeded to the
beneficial ownership of the outstanding bonds.  In addition, the notice of withdrawal must specify, in the case
of outstanding bonds tendered by delivery of certificates for such outstanding bonds, the name of the registered
holder (if different from that of the tendering holder) or, in the case of outstanding bonds tendered by
book-entry transfer, the name and number of the account at DTC to be credited with the withdrawn outstanding
bonds.  The signature on the notice of withdrawal must be guaranteed by an eligible institution unless the
outstanding bonds have been tendered for the account of an eligible institution.

         Withdrawal of tenders of outstanding bonds may not be rescinded, and any outstanding bonds properly
withdrawn will thereafter be deemed not validly tendered for purposes of the exchange offer.  Properly withdrawn
outstanding bonds may, however, be retendered by again following one of the procedures described in "--Procedures
for Tendering Outstanding Bonds" prior to the expiration date.



Page 31


Exchange Agent

         The Bank of New York, acting through BNY Midwest Trust Company has been appointed the exchange agent for
the exchange offer.  Letters of transmittal and all correspondence in connection with the exchange offer should
be sent or delivered by each holder of outstanding bonds, or a beneficial owner's commercial bank, broker,
dealer, trust company or other nominee, to the exchange agent at the following addresses and telephone numbers:

          By Mail or Overnight Courier:                                  By Hand:
            BNY Midwest Trust Company                            BNY Midwest Trust Company
            Corporate Trust Operations                          Corporate Trust Operations
               Reorganization Unit                                  Reorganization Unit
           101 Barclay Street - 7 East                       101 Barclay Street - Lobby Window
                New York, NY 10286                                  New York, NY 10286
                Attn.: Mr. Kin Lau                                  Attn.: Mr. Kin Lau

                                  By Facsimile (for Eligible Institutions only):
                                                  (212) 298-1915
                                                   Confirmation:
                                                  (212) 815-3750

            Additionally, any questions concerning tender procedures and requests for additional copies of the
letter of transmittal should be directed to the exchange agent.  Holders of outstanding bonds may also contact
their commercial bank, broker, dealer, trust company or other nominee for assistance concerning the exchange
offer.  We will pay the exchange agent's reasonable and customary fees for its services and will reimburse it for
its reasonable, out-of-pocket expenses in connection therewith.

                                  DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH
                                    ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

Other Fees and Expenses

         We will bear the expenses of soliciting tenders of the outstanding bonds.  The principal solicitation is
being made by mail; additional solicitations may, however, be made by telegraph, facsimile transmission,
telephone or in person by the exchange agent, as well as by our officers and other employees and those of our
affiliates.

         Tendering holders of outstanding bonds will not be required to pay any fee or commission.  If, however,
a tendering holder handles the transaction through its broker, dealer, commercial bank, trust company or other
institution, such holder may be required to pay brokerage fees or commissions.

                                                  USE OF PROCEEDS

         We will not receive any proceeds from the issuance of the exchange bonds in the exchange offer.  We will
receive in exchange outstanding bonds in like principal amount.  We will retire or cancel all of the outstanding
bonds tendered in the exchange offer.

         We issued $965,965,000 of outstanding bonds in the original exchange offer.  We did not not receive any
proceeds from the issuance of the outstanding bonds in the original exchange offer; rather we received in
exchange a like principal amount of 8.95% Variable Rate Notes, due 2003.

                                         DESCRIPTION OF THE EXCHANGE BONDS

         The exchange bonds are an additional series of our secured debt securities created by resolution of our
Board of Directors or the Executive Committee thereof, and will be issued under a Trust Indenture dated as of
October 1, 1923, between us and The Bank of New York and D.G. Donovan, as Trustees (the "Trustees"), as amended
and supplemented by supplemental indentures including the Ninety-Ninth Supplemental Indenture to be


Page 32


dated as of a date before the expiration date (collectively, the "Indenture").  A working copy of the
Indenture consisting of the original indenture and the supplemental indentures that amended it (omitting property
descriptions) may be found on our parent's website at http://www.edison.com/investors/debt_publications.asp.  A
copy of the Indenture also may be obtained directly from us upon request.  See "Where You Can Find More
Information".  The bonds of all series issued and to be issued under the Indenture are referred to herein as the
"Bonds."

         The following summary of the Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all of the provisions of the Indenture, including definitions of terms
used in the Indenture.  We urge you to review the Indenture because it, and not this description, defines your
rights as a holder of exchange bonds.

General

         The exchange bonds will be limited to an aggregate principal amount equal to the aggregate principal
amount of outstanding bonds.

         The exchange bonds will mature on February 15, 2007, and will bear interest at the rate of 8% per annum
from the most recent interest payment date to which interest has been paid on the outstanding bonds or, if no
interest has been paid, from February 24, 2003, payable semiannually on February 15 and August 15 of each year to
the holders of record on the preceding February 1 and August 1, respectively.

         Principal of and interest on the exchange bonds initially will be payable at The Bank of New York, c/o
BNY Midwest Trust Company, Chicago, Illinois, or at the office or agency in New York, New York, designated by us
for that purpose; and interest on the exchange bonds will be paid by check mailed to the address of the person
entitled thereto as it appears in the register for the exchange bonds.  The exchange bonds may be presented for
registration, transfer and exchange at The Bank of New York, c/o BNY Midwest Trust Company, Chicago, Illinois, or
at the office or agency in New York, New York, designated for such purpose.

         The exchange bonds will be issued only in fully registered form, without coupons, in denominations of
$250,000 or any integral multiple of $1,000 in excess thereof.

Optional Redemption

         We may redeem the exchange bonds at any time, in whole or in part, at a "make whole" redemption price
equal to the greater of (1) the principal amount redeemed or (2) the sum of the present values of the remaining
scheduled payments of principal and interest on such exchange bonds being redeemed, discounted to the date fixed
for redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Yield plus 50 basis points, plus in each case accrued and unpaid interest to the date fixed for
redemption.

         "Treasury Yield" means, for any date fixed for redemption, the rate per year equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the date fixed for
redemption.

         "Comparable Treasury Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term to stated maturity of the exchange bonds
that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing
new issues of corporate debt securities of comparable maturity to the remaining term of the exchange bonds.

         "Comparable Treasury Price" means, for any date fixed for redemption, (1) the average of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding the date fixed for redemption, as set forth in the daily statistical release
(or any successor release) published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (2) if that release (or any successor release) is not published or
does not contain those prices on that business day, (A) the average of the Reference Treasury Dealer Quotations
for the


Page 33



date fixed for redemption, or (B) if the Independent Investment Banker obtains fewer than four Reference Treasury
Dealer Quotations, the average of all of the Quotations.

         "Independent Investment Banker" means Citigroup Global Markets Inc. or its successor or, if such firm or
its successor is unwilling or unable to select the Comparable Treasury Issue, one of the remaining Reference
Treasury Dealers appointed by The Bank of New York, as Trustee, after consultation with us.

         "Reference Treasury Dealer" means (1) Citigroup Global Markets Inc. and any other primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer") designated by, and not affiliated
with Citigroup Global Markets Inc. or its successors, provided, however, that if Citigroup Global Markets Inc. or
any of its designees ceases to be a Primary Treasury Dealer, we will appoint another Primary Treasury Dealer as a
substitute and (2) any other Primary Treasury Dealer selected by us.

         "Reference Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any date fixed for
redemption, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to
the Independent Investment Banker by the Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding the date fixed for redemption.

         To exercise our option to redeem any such exchange bonds, we will mail you a notice of redemption at
least 30 days but not more than 60 days prior to the date fixed for redemption.  If we elect to redeem fewer than
all the exchange bonds, The Bank of New York, as Trustee, will select the particular bonds to be redeemed on a
pro rata basis, by lot or by such other method of random selection, if any, that The Bank of New York, as
Trustee, deems fair and appropriate.

         Any notice of redemption, at our option, may state that the redemption will be conditional upon receipt
by the paying agent, on or prior to the date fixed for the redemption, of money sufficient to pay the principal,
premium, if any, and interest, if any, on the bonds and that if the money has not been so received, the notice
will be of no force and effect and will not be required to redeem the exchange bonds.

         There will be no provisions for any maintenance or sinking funds for the exchange bonds.

Security

         The exchange bonds when issued, will, as to the security afforded by the Indenture, be secured equally
and ratably with all other Bonds by a legally valid first lien or charge on substantially all of the property and
franchises now owned by us (with exceptions and exclusions noted below).  Such lien and our title to our
properties are subject to the terms of franchises, licenses, easements, leases, permits, contracts and other
instruments under which properties are held or operated, statutes and governmental regulations, liens for taxes
and assessments, and liens of the Trustees.  In addition, such liens and our title to our properties are subject
to other liens, prior rights and other encumbrances, none of which, with minor or insubstantial exceptions
affects from a legal standpoint the security for the exchange bonds or our rights to use such properties in our
business, unless the matters with respect to our interest in the Four Corners Generating Station and the related
easement and lease referred to in the following paragraph may be so considered.

         Our rights and the rights of the Trustees in the Four Corners Generating Station in northern New Mexico,
located on land of the Navajo Nation under an easement from the United States and a lease from the Navajo Nation,
may be subject to possible defects, including 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, our possible inability to resort to legal process to enforce our rights
against the Navajo Nation without Congressional consent, possible impairment or termination under certain
circumstances of the easement and lease by the Navajo Nation, Congress, or the Secretary of the Interior, and the
possible invalidity of the Indenture lien against our interest in the easement, lease, and improvements at the
Four Corners Generating Station.  We cannot predict what effect, if any, such possible defects may have on our
interest in the Four Corners Generating Station.


Page 34


         The Indenture provides that property hereafter acquired (other than excepted kinds noted below) is to
become subject to the lien of the Indenture (Indenture-- "Granting" clauses).  Such property may be subject to
prior liens and other encumbrances.

         Properties excepted from the lien of the Indenture include cash, accounts receivable, deposits, bills
and notes, contracts, leases under which we are lessor, securities not specifically required to be pledged,
office equipment, vehicles, and all materials, supplies and electric energy acquired or produced for sale,
consumption or use in the ordinary conduct of business.  (Indenture -- "Excepting" clauses, as supplemented by
Sixth Supplemental Indenture)

Credit Ratings

         The exchange bonds are rated "BB" by Standard &amp; Poor's and "Ba2" by Moody's Investors Services.

Special Trust Fund

         We are required to deposit in a Special Trust Fund with The Bank of New York, as Trustee, on each May 1
and November 1, cash equal to 1 1/2% (subject to redetermination by agreement between us and The Bank of New York,
as Trustee) of the aggregate principal amount of the Bonds and underlying bonds then outstanding (excluding
certain Bonds and underlying bonds, such as Bonds called for redemption), less certain amounts paid or credited
in respect of underlying bonds.  (Indenture-- Secs. 1 and 3, Art. Four, as supplemented by Third Supplemental
Indenture)  The term "underlying bonds" is defined in the Indenture to mean any securities or other evidence of
indebtedness secured by property subsequently acquired by us.  Amounts in the Special Trust Fund may, in general,
be paid out for payment, redemption (at the redemption prices, including applicable premiums, set forth in the
Bonds and subject to the limitation on refunding applicable to various series) or purchase of Bonds or underlying
bonds, or to reimburse us for the acquisition of certain additional properties.  (Indenture-- Sec. 2, Art. Four)
The foregoing deposit requirement has not affected our cash flow, because the cash deposited has been
simultaneously offset by its payment to us to reimburse us for the acquisition of additional properties.  Thus,
there currently are no funds on deposit in the Special Trust Fund.

Issue of Additional Bonds

         In general, additional Bonds, ranking equally and ratably with the exchange bonds, may be issued in
principal amounts equal to:

a.       Certain Bonds and underlying bonds acquired, redeemed or otherwise retired.  (Indenture-- Secs. 3 and
              12, Art. Two, as supp'd by Art Three, Fourth Supplemental Indenture)

b.       Cash deposited to pay or redeem Bonds or underlying bonds.  (Indenture-- Secs. 4 and 13, Art. Two)

c.       66?% of the net amount of additional property constructed or acquired by us and not theretofore used for
              other purposes under the Indenture, subject to certain restrictions.  (Indenture-- Secs. 6, 7, 9
              and 10, Art. Two, as supp'd by Secs. 1, 2, 3 and 10, Art. Three, Fourth Supplemental Indenture)

d.       Cash deposited in an advance construction account with The Bank of New York, as Trustee (in certain
              events with such Trustee's consent), to be withdrawn to reimburse us for 66?% of unbonded
              additional property.  (Indenture-- Sec. 11, Art. Two, as supp'd by Sec. 4, Art. Three, Fourth
              Supplemental Indenture)

         The exchange bonds will be issued under the provisions referred to in clause (a) directly above.  As of
March 31, 2003, the amount of Bonds acquired, redeemed or otherwise retired against which Bonds might be issued
under the Indenture pursuant to clause (a) above was approximately $2.4 billion.  The net amount of additional
property against which Bonds might be issued under the Indenture pursuant to clause (c) above was approximately
$11.3 billion, resulting in the ability to issue $7.5 billion of Bonds pursuant to clause (c) (i.e. $11.3 billion
x .6666 = $7.5 billion).  The aggregate amount of Bonds which we could issue under clauses (a) and (c) above
would, if other


Page 35


conditions were met, be approximately $9.9 billion.  As of March 31, 2003, without giving pro forma
effect to the exchange offer, we had $3.7 billion of its first mortgage bonds outstanding.

         Furthermore, in addition to the Indenture's bondable property requirement described in clause (c) above,
the Indenture also provides that additional Bonds may not be issued unless our net earnings (as defined) for
twelve months shall have been at least two and one-half (2.5x) times our total annual first mortgage bond
interest charge.  (Indenture-- Sec. 5, Art. Two, as supp'd by Sec. 6, Art. Three, Fourth Supplemental Indenture)
For the twelve months ended March 31, 2003, such net earnings were 10.8 times such annual bond interest charges.
We do not expect the net earnings requirement to be a practical limit on our ability to issue additional Bonds
under clauses (a) and (c) above.  Notwithstanding the net earnings requirement, additional Bonds may be issued
under the provisions referred to in (a) and (b) above under some circumstances involving, among other things,
issuance of Bonds not bearing a higher interest rate than the Bonds to be retired, issuance of Bonds to pay or
redeem Bonds maturing within two years and issuance of Bonds on the basis of acquisition, redemption or other
retirement of underlying bonds.  (Indenture-- Secs. 3, 5, 12 and 13, Art. Two, as supp'd by Secs. 5, 6, 7 and 8,
Art. Three, Fourth Supplemental Indenture)  Additional Bonds may not be issued under the provisions referred to
in paragraphs (c) and (d) above during any period when indebtedness secured by a prior lien on acquired utility
property has not been established as underlying bonds.  (Indenture-- Sec. 8, Art. Two, as supp'd by Sec. 2, Art.
Three, Fourth Supplemental Indenture)

         Other than the security afforded by the lien of the Indenture and restrictions on the issuance of
additional Bonds described above, there are no provisions of the Indenture which afford holders of the exchange
bonds protection against us increasing our ratio of total debt to total "bondable" assets.

Defaults and Other Provisions

         The Indenture provides that the following are defaults:

         o    default in payment of principal;

         o    default for 60 days in payment of interest or satisfaction of the Special Trust Fund obligation;

         o    default under our covenants and conditions in the Indenture or in the Bonds for 60 days after
              notice by The Bank of New York, as Trustee;

         o    certain acts of bankruptcy and certain events in bankruptcy, insolvency, receivership or
              reorganization proceedings; and

         o    our failure to discharge or stay within 60 days any judgment against us for the payment of money in
              excess of $100,000.  (Indenture-- Sec. 1, Art. Seven, as supp'd by Part IV. E., Sixth Supplemental
              Indenture)

         A California court may not strictly enforce certain of our covenants contained in the Indenture or the
exchange bonds or allow acceleration of the due date of the exchange bonds if it concludes that such enforcement
or acceleration would be unreasonable under the then existing circumstances.  However, acceleration would be
available if an event of default occurs as a result of a material breach of a material covenant contained in the
Indenture or the exchange bonds.

         The Indenture and the Trust Indenture Act of 1939 require us to file with a Trustee documents and
reports with respect to the absence of default and compliance with the terms of the Indenture annually and upon
the authentication and delivery of additional Bonds, the release of cash or property, the satisfaction and
discharge of the Indenture, or any other action requested to be taken by a Trustee at our request.  (Indenture--
Art. Two, as supp'd by Art. Three, Fourth Supplemental Indenture; Sec. 14, Art. Three, Sec. 2, Art. Four, and
Art. Eight, as supp'd by Part IV. G., Sixth Supplemental Indenture; Art. Ten; and Arts. Nineteen and Twenty,
Sixth Supplemental Indenture)



Page 36



         The holders of a majority in principal amount of outstanding Bonds may require the Trustees to enforce
the lien of the Indenture upon the happening (and continuance for the prescribed grace period, if any) of any of
the defaults referred to above, and upon the indemnification of the Trustees to their reasonable satisfaction.
(Indenture-- Sec. 2, Art. Seven, as supp'd by Sixth Supplemental Indenture)

Concerning the Trustees

         We maintain bank deposits with The Bank of New York and intend to borrow money from such bank from time
to time.

         Neither by the Indenture nor otherwise are the Trustees restricted from dealing in the exchange bonds as
freely as though they were not Trustees.  (Indenture-- Sec. 1, Art. Eighteen, Sixth Supplemental Indenture)
However, the Trust Indenture Act provides that if either Trustee acquires or has acquired a conflicting interest,
as defined in the Trust Indenture Act, and a default under the Indenture occurs or has occurred, such Trustee
must within 90 days following the default eliminate such conflict, cure the default or resign.  The Trust
Indenture Act provides that a Trustee with an uncured conflict of interest will not be required to resign if it
can show that the conflict will be cured or the default waived within a reasonable time and a stay of its duty to
resign is not inconsistent with the interests of the holders of the outstanding Bonds.  In certain cases, the
Indenture and the Trust Indenture Act require a Trustee to share the benefit of payments received as a creditor
after the beginning of the third month prior to a default.  (Indenture-- Sec, 4, Art. Eighteen, Sixth
Supplemental Indenture)

Modification of the Indenture

         The holders of 80% in principal amount of all Bonds outstanding may authorize release of trust property,
waive defaults and authorize certain modifications of the Indenture.  However, our obligation to pay principal
and interest will continue unimpaired; and such modifications may not include, among other things, modifications
giving any Bonds preference over other Bonds or authorizing any lien prior to that of the Indenture.  In
addition, modifications of rights of any series require the assent of the holders of 80% in principal amount of
the Bonds of such series.  (Indenture-- Art. Fourteen, as amended by First Supplemental Indenture)

Book-Entry, Delivery and Form

         The exchange bonds will be represented by one or more permanent global bonds in definitive, fully
registered form without interest coupons. Upon issuance, the exchange bonds will be deposited with the Trustee as
custodian for DTC in New York, New York, and registered in the name of DTC or its nominee.

         Ownership of beneficial interests in a global bond will be limited to persons who have accounts with
DTC, which we refer to as "participants," or persons who hold interests through participants.  Ownership of
beneficial interests in a global bond will be shown on, and the transfer of that ownership will be effected only
through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).

         So long as DTC, or its nominee, is the registered owner or holder of any of the exchange bonds, DTC or
that nominee, as the case may be, will be considered the sole owner or holder of such exchange bonds represented
by the global bond for all purposes under the Indenture and the exchange bonds.  No beneficial owner of an
interest in a global bond will be able to transfer such interest except in accordance with DTC's applicable
procedures, in addition to those provided for under the Indentures and, if applicable, those of Euroclear and
Clearstream Banking.

         Payments of the principal of, and interest on, a global bond will be made to DTC or its nominee, as the
case may be, as the registered owner thereof.  None of SCE, the Trustee or any paying agent will have any
responsibility or liability for any aspect of the records relating to or payments made on account of beneficial
ownership interests in a global bond or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.



Page 37



         We expect that DTC or its nominee, upon receipt of any payment of principal or interest in respect of a
global bond, will credit participants' accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of such global bond as shown on the records of DTC or its nominee.
We also expect that payments by participants to owners of beneficial interests in such global bond held through
such participants will be governed by standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of nominees for such customers.  Such
payments will be the responsibility of such participants.

         Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules
and procedures and will be settled in same-day funds.  Transfers between participants in Euroclear and
Clearstream Banking will be effected in the ordinary way in accordance with their respective rules and operating
procedures.

         We expect that DTC will take any action permitted to be taken by a holder of bonds only at the direction
of one or more participants to whose account the DTC interests in a global bond is credited and only in respect
of such portion of the aggregate principal amount of bonds as to which such participant or participants has or
have given such direction.  However, if there is an event of default under the bonds, DTC will exchange the
applicable global bond for certificated bonds, which it will distribute to its participants.

         A global bond is exchangeable for definitive exchange bonds in registered certificated form if:

         o    DTC (i) notifies us that it is unwilling or unable to continue as depositary for the global bonds,
              and we fail to appoint a successor depositary, or (ii) has ceased to be a clearing agency
              registered under the Securities Exchange Act of 1934;

         o    at our option, we notify the Trustee in writing that we have elected to cause the issuance of the
              certificated securities; or

         o    there has occurred and is continuing a default or event of default with respect to the exchange
              bonds.

         In addition, beneficial interests in a global bond may be exchanged for certificated securities upon
prior written notice given to the Trustees by or on behalf of DTC in accordance with the Indenture.  In all
cases, certificated securities delivered in exchange for any global bond or beneficial interests in global bonds
will be registered in the names, and issued in any approved denominations, requested by or on behalf of the
depositary (in accordance with its customary procedures).

         DTC has advised us that:  DTC is a limited purpose trust company organized under the laws of the State
of New York, a "banking organization" within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency"
registered pursuant to the provisions of Section 17A of the Exchange Act.  DTC was created to hold securities for
its participants and facilitate the clearance and settlement of securities transactions between participants
through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical
movement of certificates.  Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies and certain other organizations that clear through or maintain a custodial
relationship with a participant, either directly or indirectly, whom we refer to as indirect participants.

         Although DTC, Euroclear and Clearstream Banking are expected to follow the foregoing procedures in order
to facilitate transfers of interests in a global bond among participants of DTC, Euroclear and Clearstream
Banking, they are under no obligation to perform or continue to perform such procedures, and such procedures may
be discontinued at any time.  None of SCE, the Trustee or the paying agent will have any responsibility for the
performance by DTC, Euroclear or Clearstream Banking or their respective participants or indirect participants of
their respective obligations under the rules and procedures governing their operations.



Page 38



         Same Day Settlement and Payment

         We will make payments in respect of the exchange bonds represented by the global bonds (including
principal, interest and premium, if any) by wire transfer of immediately available funds to the accounts
specified by the global bondholder.  We will make all payments of principal, interest and premium with respect to
certificated securities by wire transfer of immediately available funds to the accounts specified by the holders
thereof or, if no account is specified, by mailing a check to that holder's registered address.  The exchange
bonds represented by the global bonds are expected to trade in DTC's Same Day Funds Settlement System, and any
permitted secondary market trading activity in the exchange bonds will, therefore, be required by DTC to be
settled in immediately available funds.  We expect that secondary trading in any certificated securities will
also be settled in immediately available funds.

         Because of time zone differences, the securities account of a Euroclear or Clearstream participant
purchasing an interest in a global bond from a participant in DTC will be credited and any crediting of this type
will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement
processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement
date of DTC.  DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests
in a global bond by or through a Euroclear or Clearstream participant to a participant in DTC will be received
with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash
account only as of the business day for Euroclear or Clearstream following DTC's settlement date.

                                               PLAN OF DISTRIBUTION

         Each broker-dealer that receives exchange bonds for its own account pursuant to the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of such exchange bonds.  This
prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange bonds received in exchange for outstanding bonds where such outstanding bonds were
acquired as a result of market-making activities or other trading activities.  We have agreed that, starting on
the expiration date of the exchange offer and ending on the close of business one year after such date, we will
make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any
such resale.

         We will not receive any proceeds from any sale of exchange bonds by brokers-dealers.  Exchange bonds
received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of
options on the exchange bonds or a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated prices.  Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange bonds.  Any
broker-dealer that resells exchange bonds that were received by it for its own account pursuant to the exchange
offer and any broker or dealer that participates in a distribution of such exchange bonds may be deemed to be an
"underwriter" within the meaning of the Act and any profit of any such resale of exchange bonds and any
commissions or concessions received by any such persons may be deemed to be underwriting compensation under the
Securities Act.  The letter of transmittal states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.

         For a period of one year after the expiration date of the exchange offer, we will promptly send
additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that
requests such documents in the letter of transmittal.  We have agreed to pay all expenses incident to the
exchange offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of
the outstanding bonds (including any broker-dealers) against certain liabilities, including liabilities under the
Securities Act.



Page 39


                                   MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

         The following summary describes the material United States federal income tax consequences resulting
from the exchange of outstanding bonds for the exchange bonds by a holder.  This discussion applies only to a
holder of bonds who holds such bonds as capital assets within the meaning of the Internal Revenue Code of 1986,
as amended (the "Code"), and does not address holders of bonds that may be subject to special rules.  Holders that
may be subject to special rules include:

         o    some United States expatriates;

         o    banks, thrifts or other financial institutions;

         o    regulated investment companies or real estate investment trusts;

         o    insurance companies;

         o    tax-exempt entities;

         o    S Corporations;

         o    broker-dealers or dealers in securities or currencies;

         o    traders in securities;

         o    U.S. holders (as defined below) whose functional currency is not the U.S. dollar;

         o    persons that hold the bonds as part of a straddle, hedge, conversion or other risk reduction or
              constructive sale transaction; and

         o    persons subject to the alternative minimum tax provisions of the Code.

         If a partnership or other entity taxable as a partnership holds bonds, the tax treatment of a partner in
the partnership will generally depend on the status of the partner and the activities of the partnership.  Such
partner should consult its tax advisor as to the tax consequences of the partnership owning and disposing of
bonds.

         This summary does not discuss all of the aspects of United States federal income taxation which may be
relevant to investors in light of their particular circumstances.  In addition, this summary does not discuss any
United States state or local income or foreign income or other tax consequences.  This summary is based upon the
provisions of the Code, United States Treasury Regulations, rulings and judicial decisions, all as in effect as
of the date of this prospectus and all of which are subject to change or differing interpretation, possibly with
retroactive effect.  We have not requested, and do not plan to request, any rulings from the Internal Revenue
Service (the "IRS") concerning the tax consequences of the exchange of the outstanding bonds for the exchange
bonds or the ownership or disposition of the exchange bonds.  The statements set forth below are not binding on
the IRS or on any court.  Thus, we can provide no assurance that the statements set forth below will not be
challenged by the IRS, or that they would be sustained by a court if they were so challenged.  Certain tax
matters were passed upon for us by Munger, Tolles &amp; Olson LLP, Los Angeles, California, in an opinion that was
filed with the registration statement of which this prospectus is a part.

         You should consult your own tax advisor regarding the particular United States federal, state and local
and foreign income and other tax consequences of exchanging the outstanding bonds for the exchange bonds.

         As used herein, the term "U.S. Holder" means a beneficial owner of an exchange bond who or which is, for
United States federal income tax purposes, a citizen or resident of the United States, a corporation created or
organized in or under the laws of the United States or any state thereof (including the District of Columbia), or
an



Page 40


estate or trust treated as a United States person under section 7701(a)(30) of the Code.  The term "Non-U.S.
Holder" means any beneficial owner of an exchange bond that is not a U.S. Holder.

The Exchange

         The exchange of the outstanding bonds for the exchange bonds in the exchange offer will not be treated
as an "exchange" for federal income tax purposes, because the exchange bonds will not be considered to differ
materially in kind or extent from the outstanding bonds.  Accordingly, the exchange of outstanding bonds for
exchange bonds will not be a taxable event to holders for federal income tax purposes.  Moreover, the exchange
bonds will have the same tax attributes as the outstanding bonds and the same tax consequences to holders as the
outstanding bonds have to holders, including without limitation, the same issue price, adjusted issue price,
adjusted tax basis and holding period.  Therefore, references to "bonds" apply equally to the exchange bonds and
the outstanding bonds.

U.S. Holders

         Payments or Accruals of Interest.  Payments or accruals of interest on a bond will be taxable to you as
ordinary interest income at the time that you receive or accrue such amounts in accordance with your regular
method of tax accounting.

         Purchase, Sale and Retirement of Bonds.  In general, your tax basis in a bond generally will equal the
cost of the bond to you. Your basis will increase by any amounts that you are required to include in income under
the rules governing market discount (discussed below) and will decrease by the amount of any amortized premium
(also discussed below) and any payments other than interest made on the bond. The amount of any subsequent
adjustments to your tax basis in a bond in respect of market discount and premium will be determined in the
manner described below.

         When you sell or exchange a bond, or if a bond that you hold is retired, you generally will recognize
gain or loss equal to the difference between the amount you realize on the transaction (less any accrued
interest, which will be subject to tax in the manner described above under "Payments or Accruals of Interest")
and your tax basis in the bond.

         Except as discussed below with respect to market discount, the gain or loss that you recognize on the
sale, exchange or retirement of a bond generally will be capital gain or loss.  The capital gain or loss on the
sale, exchange or retirement of a bond will be long-term capital gain or loss if you have held the bond for more
than one year on the date of disposition.  Capital gains realized by individuals on assets held for longer than
one year are subject to taxation at preferential rates.  The tax deductibility of capital losses is subject to
limitations.

         Premium.  If you purchase a bond at a cost greater than the bond's remaining redemption amount, you will
be considered to have purchased the bond at a premium, and you may elect to amortize the premium as an offset to
interest income, using a constant yield method, over the remaining term of the bond.  If you make this election,
it generally will apply to all debt instruments that you hold at the time of the election, as well as any debt
instruments that you subsequently acquire.  In addition, you may not revoke the election without the consent of
the IRS.  If you elect to amortize the premium, you will be required to reduce your tax basis in the bond by the
amount of the premium amortized during your holding period.  If you do not elect to amortize premium, the full
amount of premium will be included in your tax basis in the bond.  Therefore, if you do not elect to amortize the
premium and you hold the bond to maturity, you generally will be required to treat the premium as capital loss
when the bond matures.

         Market Discount.  If you purchase a bond at a discount from the bond's redemption amount, and the
discount is 0.25% or more of the redemption amount multiplied by the number of remaining whole years to maturity,
the bond will be considered to bear "market discount" in your hands. In this case, any gain that you realize on
the disposition of the bond generally will be treated as ordinary interest income to the extent of the market
discount that accrued on the bond during your holding period.  In addition, you may be required to defer the
deduction of a portion of the interest paid on any indebtedness that you incurred or maintained to purchase or
carry

Page 41



the bond.  In general, market discount will be treated as accruing ratably over the term of the bond, or, at your
election, under a constant yield method.

         You may elect to include market discount in gross income currently as it accrues (on either a ratable or
constant yield basis), in lieu of treating a portion of any gain realized on a sale of the bond as ordinary
income.  If you elect to include market discount on a current basis, the interest deduction deferral rule
described above will not apply.  If you do make such an election, it will apply to all market discount debt
instruments that you acquire on or after the first day of the first taxable year to which the election applies.
The election may not be revoked without the consent of the IRS.

         Treasury regulations implementing the market discount rules have not yet been issued; therefore, you
should consult your own tax advisor regarding the application of these rules and the advisability of making any
of the elections relating thereto.

         Backup Withholding Tax and Information Reporting.  Unless a U.S. Holder is an exempt recipient, such as
a corporation, payments under the bonds, and the proceeds received from the sale of bonds, will generally be
subject to information reporting and will generally also be subject to United States federal backup withholding
tax if such U.S. Holder fails to supply accurate taxpayer identification numbers or otherwise fails to comply
with applicable United States information reporting or certification requirements.  Any amounts so withheld do
not constitute a separate tax and will be allowed as a credit against the U.S. Holder's United States federal
income tax liability.

Non-U.S. Holders

         Interest.  The payment of interest on the bonds will not be subject to United States federal withholding
tax if:  (1) the Non-U.S. Holder does not actually or constructively own 10% or more of the total voting power of
all of our voting stock and is not a controlled foreign corporation that is related to us within the meaning of
the Code, and (2) the Non-U.S. Holder provides a statement signed under penalties of perjury that includes its
name and address and certifies that it is a Non-U.S. Holder in compliance with applicable requirements (or
satisfies certain documentary evidence requirements for establishing that it is a Non-U.S. Holder).  If the
foregoing exceptions do not apply, payments of interest will generally be subject to gross withholding at the
rate of 30% (or such lower rate as is available to a Non-U.S. Holder under an applicable treaty).

         Gain or loss on disposition.  A Non-U.S. Holder will not be subject to United States federal income tax
on gain realized on the sale, exchange, maturity or redemption of a bond unless (1) such gain is effectively
connected with the conduct by the Non-U.S. Holder of a trade or business in the United States or (2) in the case
of gain realized by an individual holder, the holder is present in the United States for 183 days or more in the
taxable year of the sale and either (A) such gain or income is attributable to an office or other fixed place of
business maintained in the United States by such holder or (B) such holder has a tax home in the United States.

         Information reporting and backup withholding.  In general, backup withholding and information reporting
will not apply to payments made by us or our paying agents, in their capacities as such, to a Non-U.S. Holder if
the holder has provided the required certification that it is a Non-U.S. Holder, provided that neither we nor our
paying agent has actual knowledge that the holder is a U.S. Holder.

                                                   LEGAL MATTERS

         The validity of the exchange bonds offered hereby will be passed upon for us by Kenneth S. Stewart,
Assistant General Counsel of SCE.  As to matters governed by Arizona and Nevada law, such counsel will rely upon
opinions of Steptoe &amp; Johnson LLP and Hale Lane Peek Dennison and Howard, respectively; and as to matters
governed by New Mexico law and (with regard to matters affecting our interest in the Four Corners Generating
Station in New Mexico and the easement and lease therefor) federal and Navajo Nation law, such counsel will rely
upon the opinion of Rodey, Dickason, Sloan, Akin &amp; Robb, P.A.

         Mr. Stewart is a salaried employee of SCE and shares in the benefits available to employees.  At
June 30, 2003, he had a direct or indirect interest in 59,763 shares of common stock of Edison International, the
parent

Pagd 42


holding company of SCE.  His ownership includes shares owned of record or beneficially owned through a dividend
reinvestment plan, as well as nonqualified stock options, performance shares, and deferred stock units awarded
under incentive compensation plans.  He owns no securities of SCE.

                                                      EXPERTS

         The financial statements of SCE incorporated in this prospectus by reference to the Annual Report to
Shareholders of SCE for the year ended December 31, 2002, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing
and accounting.

         The financial statements and the related financial statement schedules of SCE for the year ended
December 31, 2001 and 2000, have been audited by Arthur Andersen LLP, independent accountants, as stated in their
report dated March 25, 2002.  Arthur Andersen has not consented to the incorporation by reference of their report
in this prospectus, and we have dispensed with the requirement to file Arthur Andersen's consent in reliance on
Rule 437a under the Securities Act.  Because Arthur Andersen has not consented to the inclusion of their report
in this prospectus, your ability to assert claims against Arthur Andersen LLP may be limited.  See "Risk
Factors-- Risks Associated with our Former Accountant, Arthur Andersen LLP."



Page 43


                                        SOUTHERN CALIFORNIA EDISON COMPANY

                                                 OFFER TO EXCHANGE

        $965,965,000 principal amount of its First and Refunding Mortgage Bonds, 8% Series 2003B, Due 2007
                           which have been registered under the Securities Act of 1933,
         for any and all of its outstanding First and Refunding Mortgage Bonds, 8% Series 2003A, Due 2007.

                                                    PROSPECTUS

                                                  [______], 2003






Page 44




                                                      PART II

                                      INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.   Indemnification of Directors and Officers.

         Section 317 of the California Corporations Code provides that a corporation shall have the power to
indemnify any person who was or is a party or is threatened to be made a party to any proceeding or action by
reason of the fact that he or she is or was a director, officer, employee or other agent of such corporation or
is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise.  Section 317 also grants authority to a corporation to include in its articles
of incorporation indemnification provision in excess of that permitted in Section 317, subject to certain
limitations.

         Article Eighth of the Restated Articles of Incorporation of the registrant authorizes the registrant to
provide indemnification of directors, officers, employees, and other agents through bylaw provisions, agreements
with agents, votes of shareholders or disinterested directors, or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.

         Article VI of the Amended Bylaws of the registrant contains provisions implementing the authority
granted in Article Eighth of the Restated Articles of Incorporation.  The Amended Bylaws provide for the
indemnification of any director or officer of the registrant, or any person acting at the request of the
registrant as a director, officer, employee or agent of another corporation or other enterprise, for any
threatened, pending or completed action, suit or proceeding to the fullest extent permissible under California
law and the Restated Articles of Incorporation of the registrant, subject to the terms of any agreement between
the registrant and such a person; provided 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' or officers' liability insurance policy maintained by the registrant;
(ii) on account of any suit in which judgment is rendered for an accounting of profits made from the purchase or
sale of securities of the registrant pursuant to 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 the indemnification is unlawful; (iv) for acts or omissions
involving intentional misconduct or knowing and culpable violation of law; (v) for acts or omissions that the
director or officer believes to be contrary to the best interests of the registrant or its shareholders, or that
involve the absence of good faith; (vi) for any transaction from which the director or officer derived an
improper personal benefit; (vii) for acts or omissions that show a reckless disregard for the director's or
officer's duty to the registrant 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 registrant; (viii) 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 registrant or its shareholders; (ix) for costs,
charges, expenses, liabilities and losses arising under Section 310 or 316 of the California Corporations Code;
or (x) as to circumstances in which indemnity is expressly prohibited by Section 317 of the California
Corporations Code.  The exclusions set forth in clauses (iv) through (ix) above shall apply only to
indemnification with regard to any action brought by or in the right of the registrant for breach of duty to the
registrant or its shareholders.  The Amended Bylaws of the registrant also provide that the registrant shall
indemnify any director or officer in connection with (a) a proceeding (or part thereof) initiated by him or her
only if such proceeding (or part thereof) was authorized by the Board of Directors of the registrant or (b) a
proceeding (or part thereof) other than a proceeding by or in the name of the registrant to procure a judgment in
its favor, only if any settlement of such a proceeding is approved in writing by the registrant.  Indemnification
shall cover 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
the director or officer.

         The registrant has directors' and officers' liability insurance policies in force insuring directors and
officers of the registrant and its subsidiaries.  The registrant has also entered into written agreements with
each of its directors incorporating the indemnification provisions of its Amended Bylaws.


Page II-1


         Insofar as  indemnification  for liabilities  arising under the Securities Act of 1933 may be permitted to
directors,  officers or persons  controlling the registrant  pursuant to the foregoing  provisions,  the registrant
has been informed that in the opinion of the Securities and Exchange  Commission  such  indemnification  is against
public policy as expressed in the Act and is therefore unenforceable.

Item 21.   Exhibits and Financial Data Schedules.

         (a)  Exhibits

              See Exhibit Index.

         (b)  Financial Statement Schedules

         Schedules are omitted since the information required to be submitted has been included in the
Supplemental Consolidated Financial Statements of the Company or the notes thereto, or the required information
is not applicable.

Item 22.   Undertakings

         The registrant hereby undertakes:

         (1)  to file, during any period in which offers or sales are being made, a post-effective amendment to
              this registration statement

              (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

              (ii)to reflect in the prospectus any facts or events arising after the effective date of the
                  registration statement (or the most recent post-effective amendment thereof) which,
                  individually or in the aggregate, represent a fundamental change in the information set forth
                  in the registration statement.  Notwithstanding the foregoing, any increase or decrease in
                  volume of securities offered (if the total dollar value of securities offered would not exceed
                  that which was registered) and any deviation from the low or high end of the estimated maximum
                  offering range may be reflected in the form of prospectus filed with the Commission pursuant to
                  Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20%
                  change in the maximum aggregate offering price set forth in the "Calculation of Registration
                  Fee" table in the effective registration statement; and

              (iii)        to include any material information with respect to the plan of distribution not
                  previously disclosed in the registration statement or any material change to such information
                  in the registration statement.

         (2)  that, for the purpose of determining any liability under the Securities Act of 1933, each such
              post-effective amendment shall be deemed to be a new registration statement relating to the
              securities offered therein, and the offering of such securities at that time shall be deemed to be
              the initial bona fide offering thereof.

         (3)  to remove from registration by means of a post-effective amendment any of the securities being
              registered which remain unsold at the termination of the offering.

         (4)  to respond to requests for information that is incorporated by reference into the prospectus
              pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such
              request, and to send the incorporated documents by first class mail or other equally prompt means.
              This includes information contained in documents filed subsequent to the effective date of the
              registration statement through the date of responding to the request.


Page II-2


         (5)  to supply by means of a post-effective amendment all information concerning a transaction, and the
              company being acquired involved therein, that was not the subject of and included in the
              registration statement when it became effective.

         (6)  to deliver or cause to be delivered with the prospectus, to each peson to whom the prospectus is
              sent or given, the latest annual report to security holders that is incorporated by reference in
              the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or 14c-3 under
              the Securities Exchange Act of 1934; and, where interim financial information required to be
              presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver or cause to
              be delivered to each person to whom the prospectus is sent or given, the latest quarterly report
              that is specifically incorporated by reference in the prospectus to provide such interim financial
              information.

         Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.



Page II-3


                                                    SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, Southern California Edison Company certifies
that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has
duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Rosemead, State of California, on the 9th day of July, 2003.

                                                      SOUTHERN CALIFORNIA EDISON COMPANY

                                                      BY:       /s/ Kenneth S. Stewart

                                                --------------------------------------------------
                                                           Name:  Kenneth S. Stewart
                                                           Title:  Assistant General Counsel

         Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed
by the following persons in the capacities and on the dates indicated.

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

           Principal Executive Officer:

                           /s/ ALAN J. FOHRER*                       Chief Executive Officer        July 9, 2003
           ----------------------------------------------------
                             Alan J. Fohrer

           Principal Financial Officer:

                         /s/ W. JAMES SCILACCI*                     Senior Vice President and       July 9, 2003
           ----------------------------------------------------      Chief Financial Officer
                            W. James Scilacci

           Controller or Principal Accounting Officer:

                          /s/ THOMAS M. NOONAN*                   Vice President and Controller     July 9, 2003
           ----------------------------------------------------
                            Thomas M. Noonan

           Board of Directors:

                           /s/ JOHN E. BRYSON*                               Director               July 9, 2003
           ----------------------------------------------------
                             John E. Bryson

                           /s/ ALAN J. FOHRER*                               Director
          ----------------------------------------------------
                             Alan J. Fohrer

                        /s/ BRADFORD M. FREEMAN*                             Director               July 9, 2003
          ----------------------------------------------------
                           Bradford M. Freeman

                           /s/ JOAN C. HANLEY*                               Director               July 9, 2003
           ----------------------------------------------------
                             Joan C. Hanley

                            /s/ BRUCE KARATZ*                                Director               July 9, 2003
           ----------------------------------------------------
                              Bruce Karatz

                          /s/ LUIS G. NOGALES*                               Director               July 9, 2003
           ----------------------------------------------------
                             Luis G. Nogales

                          /s/ RONALD L. OLSON*                               Director               July 9, 2003
           ----------------------------------------------------
                             Ronald L. Olson

                          /s/ JAMES M. ROSSER*                               Director               July 9, 2003
           ----------------------------------------------------
                             James M. Rosser


pAGE ii-4


                     /s/ RICHARD T. SCHLOSBERG III*                          Director               July 9, 2003
           ----------------------------------------------------
                        Richard T. Schlosberg III

                          /s/ ROBERT H. SMITH*                               Director               July 9, 2003
           ----------------------------------------------------
                             Robert H. Smith

                          /s/ THOMAS C. SUTTON*                              Director               July 9, 2003
           ----------------------------------------------------
                            Thomas C. Sutton

                          /s/ DANIEL M. TELLEP*                              Director               July 9, 2003
           ----------------------------------------------------
                            Daniel M. Tellep


           *By: /s/ KENNETH S. STEWART
           -----------------------------------------------
                 Kenneth S. Stewart, Attorney-in-Fact



pAGE ii-5

                                                   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 SCE as adopted by the Board of Directors on January 1, 2003 (File No. 1-2313, Form
         10-K for the year ended December 31, 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     Form of Ninety-Ninth Supplemental Indenture
4.11     Form of First and Refunding Mortgage Bond, 8% Series 2003B, Due 2007
4.12     Registration Rights Agreement, dated February 24, 2003
5        Opinion of Kenneth Stewart, Assistant General Counsel of SCE, as to the legality of the securities being
         registered
8        Opinion of Munger, Tolles &amp; Olson LLP, counsel to SCE, as to certain tax matters
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)*
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)*


Page II-6


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, 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,
         and for 2003 stock option and performance share awards filed as Exhibit 10.1 to the Edison International
         Form 10-Q for the quarter ended March 31, 2003)*
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)*
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)*


Page II-7


10.25.   Retention Incentive Award for Harold B. Ray (File No. 1-2313, filed as Exhibit 10.2 to the SCE Form 10-Q
         for the quarter ended March 31, 2003)*
12.      Statement re Computation of Ratios of Earnings to Fixed Charges
13.1     Annual Report to Shareholders for year ended December 31, 2002
13.2     Quarterly Report on Form 10-Q for the quarter ended March 31, 2003
23.1     Consent of Independent Accountants - PricewaterhouseCoopers LLP
23.2     Consent of Kenneth Stewart, (included in Exhibit 5)
23.3     Consent of Munger, Tolles &amp; Olson LLP (included in Exhibit 8)
24.1     Power of Attorney
24.2     Certified copy of Resolution of Board of Directors Authorizing Signature
25       Form T-1 Statement of Eligibility Under Trust Indenture Act of 1939 of The Bank of New York and D.G.
         Donovan relating to first and refunding mortgage bonds of SCE

*  Incorporated by reference to the indicated file and document pursuant to Rule 411


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<DESCRIPTION>FORM OF 99TH SUPPLEMENTAL INDENTURE
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                                        NINETY-NINTH SUPPLEMENTAL INDENTURE




                                        Southern California Edison Company

                                                        to

                                               The Bank of New York

                                                        and

                                                  D. G. Donovan,

                                                     Trustees








                                            DATED AS OF _________, 2003







<PAGE>



                  This Ninety-Ninth Supplemental Indenture, dated as of the ____ day of_________, 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-eight 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, February 21, 2002, and February 15, 2003, 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
                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
               2003A                          2007                              965,965,000

                  WHEREAS, the Company proposes presently to issue in fully registered form only, without
coupons, $___________ 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 2003B (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-Eighth 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-Ninth 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, Series 2002C, and Series 2003A, referred to above, all of said bonds having
been heretofore issued and being now outstanding, and the Bonds, of the aggregate principal amount of
$______________, 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, 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.

                  The Bonds shall initially be represented by one or more securities in registered, global form
without interest coupons ("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 inasumch as the registered owner hereof, Cede &amp; Co., has an interest
                  herein.

                  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.

                                                      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 restriction
on transfer set forth herein) and the procedures of the Depositary.

                  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



Page 6

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).

                  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.

                                                     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 7

                  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




                                                              [Name]
                                                              [Title]


Attest:



[Name]
[Title]

(Seal)



                                                              THE BANK OF NEW YORK, Trustee


                                                              Name:
                                                              Agent







                                                              D. G. DONOVAN
                                                              Trustee


Page 8




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


         On this ___ day of ________, 2003, before me, ___________, a Notary Public, personally appeared
_____________and ____________, 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.





                                                              Notary Public, State of California




(Seal)

My Commission expires on ____________________.




Page 9



STATE OF ILLINOIS }
                           }  ss.
COUNTY OF COOK    }


         On this ____ day of ___________, 2003, before me, __________________, a Notary Public, personally
appeared _______________, 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.





                                                     Notary Public, State of Illinois




(Seal)

My Commission expires on ________________________.




STATE OF ILLINOIS }
                           }  ss.
COUNTY OF COOK    }


         On this ____ day of ___________, 2003, before me, __________________, 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.





                                                     Notary Public, State of Illinois




(Seal)

My Commission expires on ___________________________.

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<DESCRIPTION>FORM OF 1ST AND REFUNDING MORTRGAGE BOND
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S4 Exhibit 4.11 Form of First and Refunding Mortgage Bonds, Series 2003B, Due 2007</TITLE>
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<PRE>


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 inasumch as the registered owner hereof, Cede &amp; Co., has an interest
herein.


                                            SOUTHERN CALIFORNIA EDISON COMPANY
                                First and Refunding Mortgage Bonds, Series 2003B, Due 2007

No. R-1                                                                $_______________
                                                                       CUSIP NO. ______
                                                                       ISIN No. _______

         SOUTHERN CALIFORNIA EDISON COMPANY, a corporation organized and existing under and by virtue of the laws of the
State of California (hereinafter called the "Company"), for value received, hereby promises to pay to Cede &amp; Co., the
registered owner hereof, the principal sum of $__________ on February 15, 2007, and to pay interest on the unpaid
principal amount hereof to the registered owner hereof from _________, 2003, until said principal sum shall be paid, at
the rate of 8.00% per annum, payable semiannually on February 15 and August 15 in each year.  Such interest shall be paid
to the person in whose name this Bond is registered at the close of business on the February 1 preceding such February 15
and the August 1 preceding such August 15, whether or not a business day.

         The principal of and interest on this Bond are payable at the offices of BNY Midwest Trust Company, as Agent for
The Bank of New York, Trustee, in Chicago, Illinois, or at such other agency or agencies as may be designated by the
Company, in such coin or currency of the United States of America as at the time of payment is legal tender for public
and private debts.

         This Bond is one of a series, designated as "Series 2003B, Due 2007," of a duly authorized issue of bonds of the
Company, known as its "First and Refunding Mortgage Bonds," issued and to be issued in one or more series under and all
equally and ratably secured by a Trust Indenture dated as of October 1, 1923, and indentures supplemental thereto,
including the Ninety-Ninth Supplemental Indenture, dated as of ___________, 2003, which have been duly executed,
acknowledged and delivered by the Company to The Bank of New York and D. G. Donovan, or one of their predecessors, as
Trustees, to which original indenture and indentures supplemental thereto (collectively, the "Trust Indenture") reference
is hereby made for a description of the property, rights and


Page 1

franchises thereby mortgaged and pledged, the nature and extent of the security thereby created, the rights of the
holders of this Bond and of the Trustees in respect of such security, and the terms, restrictions and conditions upon
which the bonds are issued and secured.

         This Bond may be redeemed, in whole or in part, at the option of the Company, at any time prior to its maturity,
after notice given by first class mail, postage prepaid, to the registered owner hereof at the last address shown on the
registry books of the Company, by the Company or The Bank of New York, Trustee, at least 30 days, but not more than 60
days, before the date fixed for redemption, at a redemption price equal to the greater of (1) the principal amount
redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the
portion of this Bond being redeemed, discounted to the date fixed for redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Yield (as defined below) plus 50 basis points, plus in
each case accrued and unpaid interest to the date fixed for redemption.

         "Treasury Yield" means, for any date fixed for redemption, the rate per year equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue (as defined below), assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable Treasury Price (as defined below) for the
date fixed for redemption.

         "Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment
Banker (as defined below) as having a maturity comparable to the remaining term to stated maturity of this Bond that would
be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of this Bond.

         "Comparable Treasury Price" means, for any date fixed for redemption, (1) the average of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business
day preceding the date fixed for redemption, as set forth in the daily statistical release (or any successor release)
published by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or (2) if that release (or any successor release) is not published or does not contain those prices on that
business day, (A) the average of the Reference Treasury Dealer Quotations (as defined below) for the date fixed for
redemption, or (B) if the Independent Investment Banker obtains fewer than four Reference Treasury Dealer Quotations, the
average of all of the Quotations.

         "Independent Investment Banker" means Citigroup Global Markets Inc. or its successor or, if such firm or its
successor is unwilling or unable to select the Comparable Treasury Issue, one of the remaining Reference Treasury Dealers
(as


Page 2

defined below) appointed by The Bank of New York, Trustee, after consultation with the Company.

         "Reference Treasury Dealer" means (1) Citigroup Global Markets Inc. and any other primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer") designated by, and not affiliated with, Citigroup Global
Markets Inc. or its successors, provided, however, that if Citigroup Global Markets Inc. or any of its designees ceases
to be a Primary Treasury Dealer, the Company will appoint another Primary Treasury Dealer as a substitute, and (2) any
other Primary Treasury Dealer selected by the Company.

         "Reference Treasury Dealer Quotations" means, for each Reference Treasury Dealer and any date fixed for
redemption, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the
Independent Investment Banker by the Reference Treasury Dealer at 5:00 p.m. on the third business day preceding the date
fixed for redemption.

         If the Company elects to redeem fewer than all the Series 2003B Bonds, The Bank of New York, Trustee, will select
the particular bonds to be redeemed on a pro rata basis, by lot or by such other method of random selection, if any, that
The Bank of New York, Trustee, deems fair and appropriate.

         Any notice of redemption, at the Company's option, may state that the redemption will be conditional upon receipt
by the paying agent, on or prior to the date fixed for the redemption, of money sufficient to pay the principal of and
premium, if any, and interest, if any, on the Series 2003B Bonds to be redeemed and that if the money has not been so
received, the notice will be of no force and effect and the Company will not be required to redeem this Bond.

         The Trust Indenture makes provision for a Special Trust Fund and permits the use of moneys therein for the
purpose, among others, of redeeming or purchasing this Bond.

         If default shall be made in the payment of any installment of principal of or interest on this Bond or in the
performance or observance of any of the covenants and agreements contained in the Trust Indenture, and such default shall
continue as provided in the Trust Indenture, then the principal of this Bond may be declared and become due and payable
as provided in the Trust Indenture.

         This Bond is transferable only on the books of the Company at any of the places designated above for the payment
of the principal of and premium, if any, or interest on this Bond, or at such other agency or agencies as may be
designated by the Company, by the registered owner or by an attorney of such owner duly authorized in writing, on
surrender hereof properly endorsed, and upon such surrender hereof, and the payment of charges, a new registered bond or
bonds of this series, of an equal aggregate


Page 3

principal amount, will be issued to the transferee in lieu hereof, as provided in the Trust Indenture.

         The terms of the Trust Indenture may be modified as set forth in the Trust Indenture; provided, however, that,
among other things, (a) the obligation of the Company to pay the principal of and premium, if any, and interest on all
bonds outstanding under the Trust Indenture, as at the time in effect, shall continue unimpaired, (b) no modification
shall give any of said bonds any preference over any other of said bonds, and (c) no modification shall authorize the
creation of any lien prior to the lien of the Trust Indenture on any of the trust property.

         No recourse shall be had for the payment of the principal of and premium, if any, or interest on this Bond, or
any part thereof, or for or on account of the consideration herefor, or for any claim based hereon, or otherwise in
respect hereof, or of the Trust Indenture, against any past, present or future stockholder, officer or director of the
Company or of any predecessor or successor company, whether for amounts unpaid on stock subscriptions, or by virtue of
any statue or constitution, or by the enforcement of any assessment or penalty, or because of any representation or
inference arising from the capitalization of the Company or of such predecessor or successor company, or otherwise; all
such liability being, by the acceptance hereof and as a part of the consideration for the issue hereof, expressly
released.

         This Bond shall not be valid or obligatory for any purpose until it shall have been authenticated by the
execution of the certificate of authentication hereon of The Bank of New York, Trustee, or its successor in trust.

         IN WITNESS WHEREOF, said Southern California Edison Company has caused this Bond to be executed in its name by
its President or one of its Vice Presidents and its corporate seal to be hereto affixed and attested by its Secretary or
one of its Assistant Secretaries, as of __________, 2003, such execution and attestation to be by manual or facsimile
signatures.

                                                            SOUTHERN CALIFORNIA EDISON COMPANY

ATTEST: ______________________                              By: ___________________________
              Assistant Secretary                                      Vice President

                                                   Trustee's Certificate

         This is to certify that this Bond is one of the Bonds, of the series designated therein, described and referred
to in the Trust Indenture within mentioned.

                                            THE BANK OF NEW YORK,
                                            TRUSTEE


                                            By _________________________________
                                                              Authorized Officer


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<DESCRIPTION>REGISTRATION RIGHTS AGREEMENT
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S$ Exhibit 4.12</TITLE>
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<PRE>
                                        <b>SOUTHERN CALIFORNIA EDISON COMPANY

                           First and Refunding Mortgage Bonds, 8% Series 2003A, Due 2007

                                           REGISTRATION RIGHTS AGREEMENT</b>

                                                                                                  February 24, 2003



Salomon Smith Barney Inc.
J.P. Morgan Securities Inc.
   as Dealer Managers

c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York  10013

Ladies and Gentlemen:

                  Southern California Edison Company, a California corporation (the "Company"), proposes to issue
its First and Refunding Mortgage Bonds, 8% Series 2003A, Due 2007 (the "New Bonds") as part of an exchange offer
(the "Initial Exchange Offer") for its outstanding 8.95% Variable Rate Notes due 2003 (the "Old Notes"), upon the
terms set forth in a Dealer Manager Agreement (the "Dealer Manager Agreement") dated as of January 14, 2003
between the Company and you as dealer managers (the "Dealer Managers"), relating to the Initial Exchange Offer.
The New Bonds are to be issued under an indenture (the "Indenture") dated as of October 1, 1923, as amended and
supplemented by supplemental indentures, between the Company and The Bank of New York and D.G. Donovan, as
trustees.  To satisfy a condition to your obligations under the Dealer Manager Agreement, the Company agrees with
you for your benefit and the benefit of the holders from time to time of the New Bonds (each a "Holder" and,
together, the "Holders"), as follows:

1.       <u>Definitions</u>.  Capitalized terms used herein without definition shall have their respective meanings set
forth in the Dealer Manager Agreement.  As used in this Agreement, the following capitalized defined terms shall
have the following meanings:

                  "Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.

                  "Affiliate" shall have the meaning specified in Rule 405 under the Act and the terms
"controlling" and "controlled" shall have meanings correlative thereto.

                  "Broker-Dealer" shall mean any broker or dealer registered as such under the Exchange Act.



Page 1

                  "Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New York City.

                  "Closing Date" shall mean the date of the first issuance of the New Bonds.

                  "Commission" shall mean the Securities and Exchange Commission.

                  "Dealer Managers" shall have the meaning set forth in the preamble hereto.

                  "Dealer Manager Agreement" shall have the meaning set forth in the preamble hereto.

                  "Deferral Period" shall have the meaning indicated in Section 4(k)(ii) hereof.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

                  "Exchange Bonds" shall mean debt securities of the Company identical in all material respects
to the New Bonds (except that the transfer restrictions shall be modified or eliminated, as appropriate) to be
issued under the Indenture.

                  "Exchange Offer Registration Period" shall mean the one-year period following the consummation
of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect
suspending the effectiveness of the Exchange Offer Registration Statement.

                  "Exchange Offer Registration Statement" shall mean a registration statement of the Company on
an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements
to such registration statement, including post-effective amendments thereto, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

                  "Exchanging Dealer" shall mean any Holder (which may include the Dealer Managers) that is a
Broker-Dealer and elects to exchange for Exchange Bonds any New Bonds that it acquired for its own account as a
result of market-making activities or other trading activities (but not directly from the Company or any
Affiliate of the Company) for Exchange Bonds.

                  "Final Memorandum" shall mean the offering memorandum, dated January 14, 2003, relating to the
New Bonds, including any and all exhibits thereto and any information incorporated by reference therein as of
such date.

                  "Holder" shall have the meaning set forth in the preamble hereto.

                  "Indenture" shall have the meaning set forth in the preamble hereto.

                  "Initial Exchange Offer" shall have the meaning set forth in the preamble hereto.



Page 2

                  "Losses" shall have the meaning set forth in Section 6(d) hereof.

                  "Majority Holders" shall mean, on any date, Holders of a majority of the aggregate principal
amount of New Bonds registered or to be registered under a Registration Statement.

                  "Managing Underwriters" shall mean the investment banker or investment bankers and manager or
managers that administer an underwritten offering, if any, under a Shelf Registration Statement.

                  "NASD Rules" shall mean the Conduct Rules and the By-Laws of the National Association of
Securities Dealers, Inc.

                  "New Bonds" shall have the meaning set forth in the preamble hereto.

                  "Old Notes" shall have the meaning set forth in the preamble hereto.

                  "Prospectus" shall mean the prospectus included in any Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion of the New Bonds or the Exchange
Bonds covered by such Registration Statement, and all amendments and supplements thereto, including any and all
exhibits thereto and any information incorporated by reference therein.

                  "Registered Exchange Offer" shall mean the proposed offer of the Company to issue and deliver
to the Holders of the New Bonds that are not prohibited by any law or policy of the Commission from participating
in such offer, in exchange for the New Bonds, a like aggregate principal amount of the Exchange Bonds.

                  "Registration Default Damages" shall have the meaning set forth in Section 8 hereof.

                  "Registration Statement" shall mean any Exchange Offer Registration Statement or Shelf
Registration Statement that covers any of the New Bonds or the Exchange Bonds pursuant to the provisions of this
Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in
each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by
reference therein.

                  "Shelf Registration" shall mean a registration effected pursuant to Section 3 hereof.

                  "Shelf Registration Period" has the meaning set forth in Section 3(b) hereof.

                  "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company
pursuant to the provisions of Section 3 hereof which covers some or all of the New Bonds or Exchange Bonds, as
applicable, on an appropriate form under Rule 415 under the Act,



Page 3

or any similar rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference therein.

                  "Trustee" shall mean the trustee with respect to the New Bonds and the Exchange Bonds under the
Indenture.

                  "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission promulgated thereunder.

                  "underwriter" shall mean any underwriter of New Bonds in connection with an offering thereof
under a Shelf Registration Statement.

2.       Registered Exchange Offer.  (a)  The Company shall prepare and, not later than 180 days following the
         -------------------------
Closing Date, shall file with the Commission the Exchange Offer Registration Statement with respect to the
Registered Exchange Offer.  The Company shall use its reasonable best efforts to cause the Exchange Offer
Registration Statement (i) to become effective under the Act within 270 days of the Closing Date and (ii) to
consummate the Registered Exchange Offer within 315 days of the Closing Date.

(b)      Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence
the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each eligible
Holder electing to exchange New Bonds for Exchange Bonds (assuming that (A) each such Holder makes certain
representations and warranties to the Company , including representations that (i) it is not an Affiliate of the
Company, (ii) any Exchange Bonds to be received by it will be acquired in the ordinary course of such Holder's
business, (iii) if such Holder is not a Broker-Dealer, that it is not engaged in, and does not intend to engage
in, the distribution of the Exchange Bonds, (iv) if such Holder is a Broker-Dealer, it will receive Exchange
Bonds for its own account in exchange for New Bonds that were acquired as a result of market making activities or
other trading activities and that such Broker-Dealer will deliver a Prospectus in connection with any resale of
the Exchange Bonds and (v) it has no arrangements or understandings with any person to participate in the
distribution of the Exchange Bonds and (B) such Holder is not prohibited by any law or policy of the Commission
from participating in the Registered Exchange Offer) to transfer such Exchange Bonds from and after their receipt
without any limitations or restrictions under the Act and without material restrictions under the state
securities or blue sky laws of a substantial proportion of the several states of the United States.

(c)      In connection with the Registered Exchange Offer, the Company shall:

         (i)      mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement,
                  together with an appropriate letter of transmittal and related documents;

         (ii)     keep the Registered Exchange Offer open for not less than 20 Business Days and not more than 30 Business
                  Days after the date notice thereof is mailed to the Holders (or, in each case, longer if
                  required by applicable law);



Page 4


         (iii)    use its reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective
                  under the Act, supplemented and amended as required, under the Act to ensure that it is
                  available for sales of Exchange Bonds by Exchanging Dealers during the Exchange Period;

         (iv)     utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of
                  Manhattan in New York City, which may be the Trustee or an Affiliate thereof;

         (v)      permit Holders to withdraw tendered New Bonds at any time prior to the close of business, New York time,
                  on the last Business Day on which the Registered Exchange Offer is open;

         (vi)     if requested by the Commission or then required under applicable interpretations of the Commission's
                  staff, prior to effectiveness of the Exchange Offer Registration Statement, provide a
                  supplemental letter to the Commission (A) stating that the Company is conducting the Registered
                  Exchange Offer in reliance on the position of the Commission in <u>Exxon Capital Holdings
                  Corporation</u> (pub. avail. May 13, 1988), <u>Morgan Stanley and Co., Inc.</u> (pub. avail. June 5,
                  1991); and (B) including a representation that the Company has not entered into any arrangement
                  or understanding with any person to distribute the Exchange Notes to be received in the
                  Registered Exchange Offer and that, to the best of the Company's information and belief, each
                  Holder participating in the Registered Exchange Offer is acquiring the Exchange Notes in the
                  ordinary course of business and has no arrangement or understanding with any person to
                  participate in the distribution of the Exchange Notes; and

         (vii)    comply in all respects with all applicable laws relative to the Registered Exchange Offer.

(d)      As soon as practicable after the close of the Registered Exchange Offer, the Company shall:

         (i)      accept for exchange all New Bonds tendered and not validly withdrawn pursuant to the Registered Exchange
                  Offer in accordance with the terms of the Exchange Offer Registration Statement and letter of
                  transmittal which shall be an exhibit thereto;

         (ii)     deliver to the Trustee for cancellation in accordance with Section 4(s) all New Bonds so accepted for
                  exchange; and

         (iii)    cause the Trustee promptly to authenticate and deliver to each Holder of New Bonds a principal amount of
                  Exchange Bonds equal to the principal amount of the New Bonds of such Holder so accepted for
                  exchange.

(e)      Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the
Registered Exchange Offer to participate in a distribution of the Exchange Bonds (x) could not under Commission
policy as in effect on the date of this Agreement rely on



Page 5


the position of the Commission in <u>Exxon Capital Holdings Corporation</u> (pub. avail. May 13, 1988) and <u>Morgan
Stanley and Co., Inc.</u> (pub. avail. June 5, 1991), as interpreted in the Commission's letter to Shearman &amp;
Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the registration and
prospectus delivery requirements of the Act in connection with any secondary resale transaction, which must be
covered by an effective registration statement containing the selling security holder information required by
Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of Exchange Bonds obtained by
such Holder in exchange for New Bonds acquired by such Holder directly from the Company or one of its
Affiliates.  Accordingly, the Company's obligation to accept for exchange a Holder's New Bonds tendered in the
Registered Exchange Offer shall be conditioned upon such Holder representing to the Company that, at the time of
the consummation of the Registered Exchange Offer:

         (i)      that any Exchange Bonds received by such Holder will be acquired in the ordinary course of such Holder's
                  business;

         (ii)     that such Holder will have no arrangement or understanding with any person to participate in the
                  distribution of the Exchange Bonds within the meaning of the Act;

         (iii)    that such Holder is not an Affiliate of the Company;

         (iv)     that if such Holder is a Broker-Dealer that it will receive Exchange Bonds for its own account in
                  exchange for New Bonds acquired as a result of market making activities or other trading
                  activities and acknowledges that such Holder will deliver a Prospectus in connection with any
                  resale of the Exchange Bonds.

3.       <u>Shelf Registration</u>.  (a)  If (i) due to any change in law or applicable interpretations thereof by the
Commission's staff, the Company determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof; or (ii) for any other reason the Registered
Exchange Offer is not consummated within 315 days of the date hereof or (iii)  due to any change in law or
applicable interpretations thereof by the Commission's staff, any Holder eligible to participate in the
Registered Exchange Offer on the date hereof is rendered ineligible to participate in the Registered Exchange
Offer, the Company shall effect a Shelf Registration Statement in accordance with subsection (b) below.  Nothing
in this Section 3(a) shall require the Company, following consummation of a Registered Exchange Offer as
contemplated by Section 2 hereof, to thereafter effect a Shelf Registration Statement in respect of offers and
sales of New Bonds by Holders that were eligible to participate in the Registered Exchange Offer but failed to
tender such New Bonds for exchange.

(b)       (i)  The Company shall as promptly as practicable (but in no event more than 180 days after so
          required or requested pursuant to this Section 3), file with the Commission and shall use its
          reasonable best efforts to cause to be declared effective under the Act within 270 days after
          so required or requested, a Shelf Registration Statement relating to the offer and sale of the
          New Bonds or the


Page 6



         Exchange Bonds, as applicable, by the Holders thereof from time to time in accordance with the
         methods of distribution elected by such Holders and set forth in such Shelf Registration
         Statement; provided, however, that no Holder shall be entitled to have the New Bonds held by it
         covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound
         by all of the provisions of this Agreement applicable to such Holder.

         (ii)     The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously
                  effective, supplemented and amended as required by the Act, in order to permit the Prospectus
                  forming part thereof to be usable by Holders for a period the "Shelf Registration Period") from
                  the date the Shelf Registration Statement is declared effective by the Commission until the
                  earlier of (A) the second anniversary of the date hereof or (B) the date upon which all the New
                  Bonds or Exchange Bonds, as applicable, covered by the Shelf Registration Statement have been
                  sold pursuant to the Shelf Registration Statement.  The Company shall be deemed not to have
                  used its reasonable best efforts to keep the Shelf Registration Statement effective during the
                  Shelf Registration Period if it voluntarily takes any action that would result in Holders of
                  New Bonds covered thereby not being able to offer and sell such New Bonds at any time during
                  the Shelf Registration Period, unless such action is (x) required by applicable law or
                  otherwise undertaken by the Company in good faith and for valid business reasons (not including
                  avoidance of the Company's obligations hereunder) including the acquisition or divestiture of
                  assets, and (y) permitted pursuant to Section 4(k)(ii) hereof.

         (iii)    The Company shall cause the Shelf Registration Statement and the related Prospectus and any amendment or
                  supplement thereto, as of the effective date of the Shelf Registration Statement or such
                  amendment or supplement, (A) to comply in all material respects with the applicable
                  requirements of the Act; and (B) not to contain any untrue statement of a material fact or omit
                  to state a material fact required to be stated therein or necessary in order to make the
                  statements therein (in the case of the Prospectus, in the light of the circumstances under
                  which they were made) not misleading.

4.       <u>Additional Registration Procedures</u>.  In connection with the obligations of the Company pursuant to
Section 2 and 3 hereof, the following provisions shall apply.

(a)      The Company shall:

         (i)      furnish to you and to counsel for the Holders, not less than five (5) Business Days prior to the filing
                  thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf
                  Registration Statement, and each amendment thereof and each amendment or supplement, if any, to
                  the Prospectus included therein (including all documents incorporated by reference therein
                  after the initial filing) and shall use its reasonable best efforts to reflect in each such
                  document, when so filed with the Commission, such comments as you reasonably propose;



Page 7


         (ii)     include the information set forth in (A) <u>Annex A</u> hereto on the facing page of the Exchange Offer
                  Registration Statement, (B) <u>Annex B</u> hereto in the forepart of the Exchange Offer Registration
                  Statement in a section setting forth details of the Registered Exchange Offer, (C) <u>Annex C</u>
                  hereto in the underwriting or plan of distribution section of the Prospectus contained in the
                  Exchange Offer Registration Statement, and (D) <u>Annex D</u> hereto in the letter of transmittal
                  delivered pursuant to the Registered Exchange Offer; and

         (iii)    in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell New
                  Bonds pursuant to the Shelf Registration Statement as selling security holders.

(b)      The Company shall ensure that:

         (i)      Any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any
                  amendment or supplement thereto complies in all material respects with the Act; and

         (ii)     Any Registration Statement and any amendment thereto does not, when it becomes effective, contain an
                  untrue statement of a material fact or omit to state a material fact required to be stated
                  therein or necessary to make the statements therein not misleading.

(c)      The Company shall advise you, the Holders of New Bonds covered by any Shelf Registration Statement and
any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Company
a telephone or facsimile number and address for notices, and, if requested by you or any such Holder or
Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall
be accompanied by an instruction to suspend the use of the Prospectus until the Company shall have remedied the
basis for such suspension):

         (i)      when a Registration Statement and any amendment thereto has been filed with the Commission and when the
                  Registration Statement or any post-effective amendment thereto has become effective;

         (ii)     of any request by the Commission for any amendment or supplement to the Registration Statement or the
                  Prospectus or for additional information;

         (iii)    of the issuance by the Commission of any stop order suspending the effectiveness of the Registration
                  Statement or the institution or threatening of any proceeding for that purpose;

         (iv)     of the receipt by the Company of any notification with respect to the suspension of the qualification of
                  the securities included therein for sale in any jurisdiction or the institution or threatening
                  of any proceeding for such purpose; and



Page 8


         (v)      of the happening of any event that requires any change in the Registration Statement or the Prospectus
                  so that, as of such date, they (A) do not contain any untrue statement of a material fact and
                  (B) do not omit to state a material fact required to be stated therein or necessary to make the
                  statements therein (in the case of the Prospectus, in the light of the circumstances under
                  which they were made) not misleading.

(d)      The Company shall use its reasonable best efforts to prevent the issuance of any order suspending the
effectiveness of any Registration Statement or the qualification of the securities therein for sale in any
jurisdiction and, if issued, to obtain as soon as possible the withdrawal thereof.

(e)      The Company shall furnish to each Holder of New Bonds covered by any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto,
including all material incorporated therein by reference, and, if the Holder so requests in writing, all exhibits
thereto (including exhibits incorporated by reference therein).

(f)      The Company shall, during the Shelf Registration Period, deliver to you and each Holder of New Bonds
covered by any Shelf Registration Statement, and any sales or placement agents or underwriters acting on behalf
of such Holder, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included
in such Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably
request.  The Company consents to the use of the Prospectus or any amendment or supplement thereto by each of the
foregoing in connection with the offering and sale of the New Bonds covered by the Prospectus, or any amendment
or supplement thereto, included in the Shelf Registration Statement.

(g)      The Company shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy
of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material
incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto
(including exhibits incorporated by reference therein).

(h)      The Company shall promptly deliver to each person required to deliver a Prospectus during the Exchange
Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer
Registration Statement and any amendment or supplement thereto as any such person may reasonably request.  The
Company consents to the use of the Prospectus or any amendment or supplement thereto by any Exchanging Dealer and
any such other person that may be required to deliver a Prospectus following the Registered Exchange Offer in
connection with the offering and sale of the Exchange Bonds covered by the Prospectus, or any amendment or
supplement thereto, included in the Exchange Offer Registration Statement.

(i)      The Company shall use its reasonable best efforts to arrange, if necessary, for the qualification of the
New Bonds or the Exchange Bonds, as the case may be, for sale under the state securities or "blue sky" laws of
such jurisdictions as any Holder shall reasonably request by

Page 9


the time the Exchange Offer Registration Statement or Shelf Registration Statement, as
applicable, is declared effective by the Commission and shall maintain such qualification in effect so long as
required to enable each such Holder or any underwriter to consummate the initial disposition of such New Bonds or
Exchange Bonds by such Holder in such jurisdiction; provided that in no event shall the Company be obligated to
(i) qualify to do business or as a dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 4(g) or (ii) take any action that would subject it to general service of
process or taxation in any such jurisdiction where it is not then so subject.

(j)      The Company shall cooperate with the Holders of New Bonds to facilitate the timely preparation and
delivery of certificates representing Exchange Bonds or New Bonds to be issued or sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations and registered in such names as
Holders may request.

(k)      (i)  Upon the occurrence of any event contemplated by subsections (b)(ii) through (v) above, the
Company shall promptly  (or within the time period provided for by clause (ii) hereof, if applicable) prepare a
post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related
Prospectus or file any other required document so that, as thereafter delivered to the persons entitled to
delivery pursuant to Section 4(b), the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.  In such circumstances, the period of
effectiveness of the Exchange Offer Registration Statement provided for in Section 2 shall be extended by the
number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(c) to
and including the date when the persons entitled to delivery thereof pursuant to Section 4(c) shall have received
such amended or supplemented Prospectus pursuant to this Section.

         (ii)  Upon the occurrence or existence of any pending corporate development or any other material event that,
in the sole judgment of the Company, makes it appropriate to suspend the availability of a Shelf Registration
Statement and the related Prospectus, the Company shall give notice (without notice of the nature or details of
such events) to the Holders that the availability of the Shelf Registration is suspended and, upon actual receipt
of any such notice, each Holder agrees not to sell any New Bonds pursuant to the Shelf Registration until such
Holder's receipt of copies of the supplemented or amended Prospectus provided for in Section 3(i) hereof, or
until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus.
The period during which the availability of the Shelf Registration Statement and the Prospectus is suspended (the
"Deferral Period") shall not exceed 45 days in any three-month period or 90 days in any twelve-month period.

(l)      Not later than the effective date of any Exchange Offer Registration Statement, the Company shall
provide a CUSIP number for the Exchange Bonds registered under such Exchange Offer Registration Statement and
provide the Trustee with printed certificates for such Exchange Bonds, in a form eligible for deposit with The
Depository Trust Company.



Page 10


(m)      The Company shall comply with all applicable rules and regulations of the Commission and shall make
generally available to its security holders, as soon as reasonably practicable, an earnings statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder.

(n)      The Company shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner.

(o)      The Company may require each Holder of securities to be sold pursuant to any Shelf Registration
Statement to furnish to the Company such information regarding the Holder and the distribution of such securities
as the Company may from time to time reasonably require for inclusion in such Shelf Registration Statement.  The
Company may exclude from such Shelf Registration Statement the New Bonds of any Holder that fails to furnish such
information within a reasonable time after receiving such request.

(p)      In the case of any Shelf Registration Statement, the Company shall enter into customary agreements
(including, if requested, an underwriting agreement in customary form) and take all other appropriate actions in
order to expedite or facilitate the registration or the disposition of the New Bonds, and in connection
therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and
procedures no less favorable than those set forth in Section 6 hereof.

(q)      In the case of any Shelf Registration Statement, the Company shall:

         (i)      make reasonably available for inspection by the selling Holders of New Bonds to be registered
                  thereunder, any underwriter participating in any disposition pursuant to such Shelf
                  Registration Statement, and any attorney, accountant or other agent retained by the selling
                  Holders or any such underwriter all relevant financial and other records and pertinent
                  corporate documents of the Company reasonably requested by any such persons;

         (ii)     cause the Company's officers, directors, employees, accountants and auditors to supply all relevant
                  information reasonably requested by the selling Holders or any such underwriter, attorney,
                  accountant or agent in connection with any such Registration Statement as is customary for
                  similar due diligence examinations;

         (iii)    make such representations and warranties to the Holders of New Bonds registered thereunder and the
                  underwriters, if any, in form, substance and scope as are customarily made by issuers to
                  underwriters in primary underwritten offerings and covering matters including, but not limited
                  to, those set forth in the Dealer Manager Agreement;

         (iv)     obtain opinions of counsel to the Company and updates thereof  (which counsel and opinions (in form,
                  scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any)
                  addressed to each selling Holder and the underwriters, if any, covering such matters as are
                  customarily covered in opinions requested in underwritten offerings and such other matters as

Page 11


                  may reasonably be requested by such Holders and underwriters, provided that outside
                  counsel shall not be required to opine on the enforceability of the Indenture or the New Bonds
                  provided that inside counsel so opines;

         (v)      in connection with an underwritten registration, obtain "cold comfort" letters and updates thereof from
                  the independent certified public accountants of the Company (and, if necessary, any other
                  independent certified public accountants of any subsidiary of the Company or of any business
                  acquired by the Company for which financial statements and financial data are, or are required
                  to be, included in the Registration Statement), addressed to the underwriters, if any, and use
                  reasonable efforts to have such letter addressed to the selling Holders of New Bonds in
                  customary form and covering matters of the type customarily covered in "cold comfort" letters
                  in connection with similar underwritten offerings; provided, however, the Company shall not be
                  required to undertake or obtain a re-audit of its financial statements for any period ending
                  before December 31, 2001; and

         (vi)     deliver such documents and certificates as may be reasonably requested by the Majority Holders or the
                  Managing Underwriters, if any, including those to evidence compliance with Section 4(k) and
                  with any customary conditions contained in the underwriting agreement or other agreement
                  entered into by the Company.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this paragraph (q) shall be performed at (A) the
effectiveness of such Registration Statement and each post-effective amendment thereto; and (B) each closing
under any underwriting or similar agreement as and to the extent required thereunder.

(r)      In the case of any Exchange Offer Registration Statement, the Company shall, if requested by you or by a
Broker-Dealer that holds New Bonds that were acquired as a result of market-making or other trading activities:

         (i)      make reasonably available for inspection by the requesting party, and any attorney, accountant or other
                  agent retained by the requesting party, all relevant financial and other records and pertinent
                  corporate documents of the Company reasonably requested by any such persons; and

         (ii)     cause the Company's officers, directors, employees, accountants and auditors to supply all relevant
                  information reasonably requested by the requesting party or any such attorney, accountant or
                  agent in connection with any such Registration Statement as is customary for similar due
                  diligence examinations.

         (iii)    make such representations and warranties to the requesting party in form, substance and scope as are
                  customarily made by issuers to underwriters in primary underwritten offerings and covering
                  matters including, but not limited to, those set forth in the Dealer Manager Agreement;



Page 12


         (iv)     obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form,
                  scope and substance) shall be reasonably satisfactory to the requesting party and its counsel,
                  addressed to the requesting party, covering such matters as are customarily covered in opinions
                  requested in underwritten offerings and such other matters as may be reasonably requested by
                  the requesting party or its counsel, provided that outside counsel shall not be required to
                  opine on the enforceability of the Indenture or the New Bonds or Exchange Bonds provided that
                  inside counsel so opines;

         (v)      obtain "comfort" letters and updates thereof from the independent certified public accountants of the
                  Company (and, if necessary, any other independent certified public accountants of any
                  subsidiary of the Company or of any business acquired by the Company for which financial
                  statements and financial data are, or are required to be, included in the Registration
                  Statement), addressed to the requesting party, in customary form and covering matters of the
                  type customarily covered in "comfort" letters in connection with primary underwritten
                  offerings, or if requested by the requesting party or its counsel in lieu of a "comfort"
                  letter, an agreed-upon procedures letter under Statement on Auditing Standards No. 35, covering
                  matters requested by the requesting party or its counsel; and

         (vi)     deliver such documents and certificates as may be reasonably requested by the requesting party or its
                  counsel, including those to evidence compliance with Section 4(k) and with conditions
                  customarily contained in underwriting agreements.

The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this Section shall be performed at the
close of the Registered Exchange Offer and the effective date of any post-effective amendment to the Exchange
Offer Registration Statement.

(s)      If a Registered Exchange Offer is to be consummated, upon delivery of the New Bonds by Holders to the
Company (or to such other person as directed by the Company) in exchange for the Exchange Bonds, the Company
shall mark, or cause to be marked, on the New Bonds so exchanged that such New Bonds are being cancelled in
exchange for the Exchange Bonds.  In no event shall the New Bonds be marked as paid or otherwise satisfied.

(t)      The Company shall use its reasonable best efforts if the New Bonds have been rated prior to the initial
sale of such New Bonds, to confirm such ratings will apply to the New Bonds or the Exchange Bonds, as the case
may be, covered by a Registration Statement.

(u)      In the event that any Broker-Dealer shall underwrite any New Bonds or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the NASD Rules)
thereof, whether as a Holder of such New Bonds or as an underwriter, a placement or sales agent or a broker or
dealer in respect thereof, or otherwise, the Company shall assist such Broker-Dealer in complying with the NASD
Rules.



Page 13


         (v)      The Company shall use its reasonable best efforts to take all other steps necessary to effect the
registration of the New Bonds or the Exchange Bonds, as the case may be, covered by a Registration Statement.

5.       <u>Registration Expenses</u>.  The Company shall bear all expenses incurred by it in connection with the
performance of its obligations under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration
Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel (which
shall initially be Cleary, Gottlieb, Steen &amp; Hamilton, but which may be another nationally recognized law firm
experienced in securities matters) designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and in the case of any Exchange Offer Registration Statement, will reimburse the Dealer
Managers for the reasonable fees and disbursements of counsel acting in connection therewith, provided that the
Company's reimbursement obligation under this Section 5 shall be limited to $20,000 in the aggregate.  Except as
set forth in this Section 5, the Company will not be responsible for any fees or costs of the Holders, the Dealer
Managers or any of their respective agents or representatives in connection with the Exchange Offer Registration
Statement or the Shelf Registration Statement.

6.       <u>Indemnification and Contribution</u>.  (a)  The Company agrees to indemnify and hold harmless each Holder of
New Bonds or Exchange Bonds, as the case may be, covered by any Registration Statement, each Dealer Manager and,
with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer, the
directors, officers, employees, Affiliates and agents of each such Holder, Dealer Manager or Exchanging Dealer
and each person who controls any such Holder, Dealer Manager  or Exchanging Dealer within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement as originally filed or in any amendment thereof, or in any
preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any preliminary Prospectus or the Prospectus, in the
light of the circumstances under which they were made) not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action; <u>provided, however</u>, that the Company
will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein
in reliance upon and in conformity with written information furnished to the Company by or on behalf of the party
claiming indemnification specifically for inclusion therein;  <u>provided further</u>, that with respect to any untrue
statement or omission of material fact made in any preliminary prospectus, the indemnity agreement contained in
this Section 6(a) shall not inure to the benefit of any underwriter or Exchanging Dealer from whom the person
asserting any such loss, claim, damage or liability purchased the securities concerned, to the extent that any
such loss, claim, damage or liability of such underwriter occurs under the circumstance where it shall have been
determined by a court of competent jurisdiction by final and

Page 14

nonappealable judgment that (w) the Company had previously furnished copies of the Prospectus
to the underwriter or Exchanging Dealer, (x) delivery of the Prospectus was required by the Act to be made to
such person, (y) the untrue statement or omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the Prospectus. This indemnity agreement
shall be in addition to any liability that the Company may otherwise have.

                  The Company also agrees to indemnify as provided in this Section 6(a) or contribute as provided
in Section 6(d) hereof to Losses of each underwriter, if any, of New Bonds, registered under a Shelf Registration
Statement, their directors, officers, employees, Affiliates or agents and each person who controls such
underwriter on substantially the same basis as that of the indemnification of the Dealer Managers and the selling
Holders provided in this Section 6(a) and shall, if requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 4(p) hereof.

(b)      Each Holder of securities covered by a Registration Statement  severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its officers who signs such Registration
Statement and each person who controls the Company within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity.  This indemnity agreement will be in
addition to any liability that any such Holder may otherwise have.

(c)      Promptly after receipt by an indemnified party under this Section 6 or notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above.  The indemnifying party shall be entitled to appoint counsel (including local
counsel) of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not
appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below);
<u>provided, however</u>, that such counsel shall be satisfactory to the indemnified party.  Notwithstanding the
indemnifying party's election to appoint counsel (including local counsel) to represent the indemnified party in
an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there
may be legal defenses

Page 15

available to it and/or other indemnified parties that are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of the institution
of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel
at the expense of the indemnifying party.  An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.

(d)      In the event that the indemnity provided in paragraph (a) or (b) of this Section is unavailable to or
insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall
have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with investigating or defending any loss,
claim, liability, damage or action) (collectively "Losses") to which such indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the
one hand, and such indemnified party, on the other hand, from the Initial Exchange Offer and the Registration
Statement which resulted in such Losses; <u>provided, however</u>, that in no case shall any Dealer Manager be
responsible for any amount in excess of the fee payable to such Dealer Manager under the Dealer Manager
Agreement, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or
commission applicable to the New Bonds or Exchange Bonds, as the case may be, purchased by such underwriter under
the Registration Statement which resulted in such Losses.  If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection
with the statements or omissions which resulted in such Losses as well as any other relevant equitable
considerations.  Benefits received by the Company shall be deemed to be equal to the total net proceeds from the
Initial Exchange Offer (before deducting expenses) as set forth in the Final Memorandum.  Benefits received by a
Dealer Manager shall be deemed to be equal to the fee payable to such Dealer Manager under the Dealer Manager
Agreement, and benefits received by any other Holders shall be deemed to be equal to the value of receiving New
Bonds or Exchange Bonds, as applicable, registered under the Act.  Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such Losses.  Relative fault shall be
determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such untrue statement or
omission.   The parties agree that it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation
which does not take account of the equitable considerations referred to above.  Notwithstanding the

Page 16


provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  For purposes of this Section, each person who controls a Holder within the meaning
of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have
the same rights to contribution as such Holder, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement
and each director of the Company shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).

(e)      The provisions of this Section will remain in full force and effect, regardless of any investigation
made by or on behalf of any Holder or the Company or any of the indemnified persons referred to in this Section
6, and will survive the sale by a Holder of securities covered by a Registration Statement.

7.       <u>Underwritten Registrations</u>.  (a)  If any of the New Bonds covered by any Shelf Registration Statement
are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders.

(b)      No person may participate in any underwritten offering pursuant to any Shelf
Registration Statement, unless such person (i) agrees to sell such person's New Bonds or Exchange Bonds, as the
case may be, on the basis reasonably provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting
arrangements.

8.       <u>Registration Defaults</u>.  If any of the following events shall occur, then the Company shall pay
additional interest on the outstanding principal amount of the New Bonds as liquidated damages (the "Registration
Default Damages") to the Holders of New Bonds in respect of the New Bonds as follows:

(a)      if any Registration Statement required by this Agreement is not filed with the Commission on or prior to
the date specified for such filing in this Agreement, then Registration Default Damages shall accrue on the New
Bonds at a rate of.25% per annum for the first 60 days from and including such specified date and .50% per annum
thereafter; or

(b)      if any Registration Statement required by this Agreement is not declared effective by the Commission on
or prior to the date by which reasonable best efforts are to be used to cause such effectiveness under this
Agreement, then commencing on the day after such specified date, Registration Default Damages shall accrue on the
New Bonds at a rate of .25% per annum for the first 60 days from and including such specified date and .50% per
annum thereafter; or

(c)      if any Registration Statement required by this Agreement has been declared effective but ceases to be
effective at any time at which it is required to be effective under this Agreement, then commencing on the day
the Registration Statement ceases to be effective,


Page 17


Registration Default Damages shall accrue on the New Bonds at a rate of .25% per annum for the
first 60 days from and including such date on which the Registration Statement ceases to be effective and .50%
per annum thereafter;

<u>provided, however</u>, that (1) upon the filing of the Registration Statement (in the case of paragraph (a) above),
(2) upon the effectiveness of the Registration Statement (in the case of paragraph (b) above), or (3) upon the
effectiveness of the Registration Statement which had ceased to remain effective (in the case of paragraph (c)
above), Registration Default Damages shall cease to accrue.  Any Registration Default Damages will be the
exclusive remedy (monetary or otherwise) available to any Holder of the New Bonds with respect to any of the
events referred to in clauses (a), (b) and (c) of this Section 8.

9.       <u>No Inconsistent Agreements</u>.  The Company has not entered into, and agrees not to enter into, any
agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or
that otherwise conflicts with the provisions hereof.

10.      <u>Amendments and Waivers</u>.  The provisions of this Agreement may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of the Holders of a majority of the aggregate principal amount of the
New Bonds (or, after the consummation of any Registered Exchange Offer in accordance with Section 2 hereof, the
Holders of a majority of the aggregate principal amount of the Exchange Bonds ); <u>provided</u> that, with respect to
any matter that directly or indirectly affects the rights of the Dealer Managers hereunder, the Company shall
obtain the written consent of the Dealer Managers; <u>provided, further</u>, that no amendment, qualification,
supplement, waiver or consent with respect to Section 8 hereof shall be effective as against any Holder unless
consented to in writing by such Holder; and <u>provided, further</u>, that the provisions of this Article 10 may not be
amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the  Dealer Managers and each Holder.
Notwithstanding the foregoing (except the foregoing provisos), a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose New Bonds or
Exchange Bonds, as the case may be, are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the
basis of New Bonds or Exchange Bonds, as the case may be, being sold rather than registered under such
Registration Statement.

11.      <u>Notices</u>.  All notices and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery:

(a)      if to a Holder, at the most current address given by such Holder to the Company in accordance with the
provisions of this Section 11, which address initially is, with respect to each Holder, the address of such
Holder maintained by the Registrar under the Indenture;



Page 18


(b)      if to the Dealer Managers, initially at the address or addresses set forth in the Dealer Manager
Agreement; and

(c)      if to the Company, initially at its address set forth in the Dealer Manager Agreement.

                  In the case of notices and communications to the Company or the Dealer Managers, all such
notices and communications shall be deemed to have been duly given when received.  In the case of notices and
communications to the Holders, all such notices and communications shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; two Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt is confirmed, if telecopied; and on the next
Business Day if timely delivery to a courier guaranteeing overnight delivery is made.

                  The Dealer Managers or the Company by notice to the other parties may designate additional or
different addresses for subsequent notices or communications

12.      <u>Remedies</u>.  Without limiting the remedies available to the Holders, the Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of
this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law
would be adequate.

13.      <u>Successors</u>.  This Agreement shall inure to the benefit of and be binding upon the parties hereto, their
respective successors and assigns, including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of New Notes and the Exchange Notes, and the indemnified persons referred to
in Section 6 hereof.  The Company hereby agrees to extend the benefits of this Agreement to any Holder of New
Notes and the Exchange Notes, and any such Holder may specifically enforce the provisions of this Agreement as if
an original party hereto.

14.      <u>Counterparts</u>.  This Agreement may be signed in one or more counterparts, each of which shall constitute
an original and all of which together shall constitute one and the same agreement.

15.      <u>Headings</u>.  The section headings used herein are for convenience only and shall not affect the
construction hereof.

16.      <u>Applicable Law</u>.  This Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed in the State of New York.  The parties hereto
each hereby waive any right to trial by jury in any action, proceeding or counterclaim arising out of or relating
to this Agreement.

17.      <u>Severability</u>.  In the event that any one of more of the provisions contained herein, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected



Page 19>


thereby, it being intended that all of the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.

18.      <u>Securities Held by the Company, etc</u>.  Whenever the consent or approval of Holders of a specified
percentage of principal amount of New Bonds or Exchange Bonds is required hereunder, New Bonds or Exchange Bonds,
as applicable, held by the Company or its Affiliates (other than subsequent Holders of New Bonds or Exchange
Bonds if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such New Bonds
or Exchange Bonds) shall not be counted in determining whether such consent or approval was given by the Holders
of such required percentage.



Page 20

                  If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding
agreement between the Company and the Dealer Managers.

                                                              Very truly yours,

                                                              Southern California Edison Company



                                                              By: /S/Robert C. Boada
                                                                  ------------------------------
                                                                  Name: Robert C. Boada
                                                                  Title: Vice President &amp; Treasurer


The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.

Salomon Smith Barney Inc.



By: /S/ Dean Keller
    ------------------------------------
    Dean Keller
Title: Director




J.P. Morgan Securities Inc.



By:  /S/ Maria Sramek
    ----------------------------------------------
Name: Maria Sramek
Title: Vice President







Page 21




                                                      ANNEX A

                  Each broker-dealer that receives Exchange Bonds for its own account pursuant to the Registered
Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange
Bonds.  The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of the Act.  This prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of
Exchange Bonds received in exchange for New Bonds where such New Bonds were acquired by such broker-dealer as a
result of market-making activities or other trading activities.  The company has agreed that, starting on the
expiration date and ending on the close of business one year after the expiration date, it will make this
prospectus available to any broker-dealer for use in connection with any such resale.  See "Plan of Distribution".



Page 22



                                                      ANNEX B

                  Each broker-dealer that receives Exchange Bonds for its own account in exchange for New Bonds,
where such New Bonds were acquired by such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange
Bonds.  See "Plan of Distribution".



Page 23



                                                      ANNEX C

                                               PLAN OF DISTRIBUTION

                  Each broker-dealer that receives Exchange Bonds for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Bonds.
This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Bonds received in exchange for New Bonds where such New Bonds were acquired
as a result of market-making activities or other trading activities.  The company has agreed that, starting on
the expiration date and ending on the close of business one year after the expiration date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such
resale.  In addition, until __________, ______, all dealers effecting transactions in the Exchange Bonds may be
required to deliver a prospectus.

                  The company will not receive any proceeds from any sale of Exchange Bonds by brokers-dealers.
Exchange Bonds received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the
writing of options on the Exchange Bonds or a combination of such methods of resale, at market prices prevailing
at the time of resale, at prices related to such prevailing market prices or negotiated prices.  Any such resale
may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form
of commissions or concessions from any such broker-dealer and/or the purchasers of any such Exchange Bonds.  Any
broker-dealer that resells Exchange Bonds that were received by it for its own account pursuant to the Registered
Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Bonds may be deemed
to be an "underwriter" within the meaning of the Act and any profit of any such resale of Exchange Bonds and any
commissions or concessions received by any such persons may be deemed to be underwriting compensation under the
Act.  The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus,
a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Act.

                  For a period of one year after the expiration date, the company will promptly send additional
copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal.  The company has agreed to pay all expenses incident to the
Registered Exchange Offer (including the expenses of one counsel for the holder of the New Bonds) other than
commissions or concessions of any brokers or dealers and will indemnify the holders of the New Bonds (including
any broker-dealers) against certain liabilities, including liabilities under the Act.



Page 24




                                                      ANNEX D

<u>Rider A</u>


PLEASE FILL IN YOUR NAME AND ADDRESS BELOW IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:
                  --------------------------------------------
Address:
                  --------------------------------------------


<u>Rider B</u>


If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the Exchange Bonds in the
ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of
Exchange Bonds and it has no arrangements or understandings with any person to participate in a distribution of
the Exchange Bonds.  If the undersigned is a Broker-Dealer that will receive Exchange Bonds for its own account
in exchange for New Bonds, it represents that the New Bonds to be exchanged for Exchange Bonds were acquired by
it as a result of market-making activities or other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange Bonds; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Act.










</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>6
<FILENAME>s4exh5.htm
<DESCRIPTION>OPINION OF K. STEWART, ASST. GEN. COUNSEL
<TEXT>
<HTML>
<HEAD>
<TITLE>
S4 Exhibit 5 Opinion of Kenneth Stewart, Asst. Gen. Counsel of SCE</TITLE>
</HEAD>
<BODY>
<PRE>
                                                   July 9, 2003


Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770

                        Re:  Registration Statement on Form S-4 of
                             Southern California Edison Company
                             -------------------------------------

Ladies and Gentlemen:

                  I am an Assistant General Counsel of Southern California Edison Company, a California
corporation ("SCE").  In connection with the registration statement on Form S-4 to be filed on July 10, 2003 (the
"Registration Statement"), by SCE with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), you have requested my opinion with respect to the
matters set forth below.

                  I have reviewed the prospectus that is a part of the Registration Statement.  That prospectus,
as amended or supplemented (the "Prospectus"), will provide for the registration of up to $1,000,000,000
aggregate principal amount of First and Refunding Mortgage Bonds, 8% Series 2003B, Due 2007 (the "Bonds"), which
may be issued by SCE.  The Bonds will be issued pursuant to the trust indenture dated as of October 1, 1923, as
heretofore amended and supplemented, and as further supplemented by the Ninety-Ninth Supplemental Indenture
thereto (collectively, the "Indenture"), in each case between SCE and The Bank of New York and D. G. Donovan, as
successor trustees (the "Trustees").

                  In my capacity as Assistant General Counsel, I am generally familiar with the proceedings taken
and proposed to be taken by SCE for the authorization and issuance of the Bonds.  For purposes of this opinion, I
have assumed that those proceedings will be properly completed, in accordance with all requirements of applicable
federal and California laws, in the manner presently proposed.

                  I have made legal and factual examinations and inquiries, including an examination of originals
and copies certified or otherwise identified to my satisfaction, of the documents, corporation records and
instruments of SCE that I have deemed necessary or appropriate for purposes of this opinion.  In my examination,
I have assumed the genuineness of all signatures, the authenticity of all documents submitted to me as originals,
and the conformity to authentic original documents of all documents submitted to me as copies.

                  I have been furnished with, and with your consent have exclusively relied upon, certificates of
officers of SCE as to certain factual matters.  In addition, I have obtained and relied upon certificates and
assurances from public officials that I have deemed necessary.



Page 1



Southern California Edison Company
July 9, 2003



                  Subject to the foregoing and the other qualifications set forth herein, it is my opinion that:
When (a) the Bonds have been duly established in accordance with the terms of the Indenture (including, without
limitation, the adoption by SCE's Board of Directors or the Executive Committee thereof of any necessary further
resolutions duly authorizing the issuance and delivery of the Bonds), duly authenticated by the Trustee, and duly
executed and delivered on behalf of SCE in accordance with the terms and provisions of the Indenture and as
contemplated by the Registration Statement and the Prospectus, and (b) each of the Registration Statement and any
required post-effective amendment thereto have all become effective under the Securities Act, and assuming that
(i) the terms of the Bonds as executed and delivered are as described in the Registration Statement and the
Prospectus, (ii) the Bonds as executed and delivered do not violate any law applicable to SCE or result in a
default under or breach of any agreement or instrument binding upon SCE, (iii) the Bonds as executed and
delivered comply with all requirements and restrictions, if any, applicable to SCE, whether imposed by any court
or governmental or regulatory body having jurisdiction over SCE, and (iv) the Bonds are then issued and sold as
contemplated in the Registration Statement and the Prospectus, the Bonds will constitute valid and legally
binding obligations of SCE enforceable against SCE in accordance with the terms of the Bonds.

                  In addition to any assumptions, qualifications and other matters set forth elsewhere herein,
the opinions set forth above are subject to the following:

                  (A)      My opinions with respect to the legality, validity, binding effect and enforceability
of the Bonds are subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, equitable subordination, reorganization, moratorium, or similar law affecting creditors'
rights generally and to the effect of general principles of equity, including (without limitation) concepts of
materiality, reasonableness, estoppel, good faith, and fair dealing (regardless of whether considered in a
proceeding in equity or at law).  I express no opinion as to the availability of equitable remedies.  In applying
such equitable principles, a court, among other things, might not allow a creditor to accelerate the maturity of
a debt or enforce a guaranty thereof upon the occurrence of a default deemed immaterial or for non-credit reasons
or might decline to order a debtor to perform covenants.  Such principles applied by a court might also include a
requirement that a creditor act with reasonableness and in good faith.

                  (B)      My opinions with respect to the legality, validity, binding effect, and enforceability
of the Bonds are also subject to (i) the terms of the franchises, licenses, easements, leases, permits,
contracts, and other instruments under which the property subject to the Indenture is held or operated, (ii) in
respect of nuclear energy facilities included within the property subject to the Indenture, the provisions of the
Atomic Energy Act of 1954, as amended, and regulations thereunder, (iii) in respect of SCE's interest in the Four
Corners Generating Station in New Mexico, and the easement and lease therefor, possible defects in title,
including 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

Page 2



Southern California Edison Company
July 9, 2003


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 and, in the case of SCE's lease,
possible impairment or termination under certain circumstances by Congress or the Secretary of the Interior, and
(iv) such other liens, prior rights and encumbrances none of which (with the possible exception of the matter
referred to in clause (iii) above), with minor or insubstantial exceptions, affects from a legal standpoint the
security for the Bonds or SCE's right to use such properties in its business.

                  (C)      Certain rights, remedies and waivers with respect to the Bonds may be unenforceable in
whole or in part, but the inclusion of such provisions in the Bonds does not affect the validity of the Bonds,
taken as a whole, and, except as set forth in Paragraphs (A) and (B) above, the Indenture and the Bonds, taken as
a whole, contain adequate provisions for enforcing payment of the obligations with respect to the Bonds; however,
the unenforceability of such provisions may result in delays in or limitations on the enforcement of the parties'
rights and remedies under the Indenture or the Bonds (and I express no opinion as to the economic consequences,
if any, of such delays or limitations).

                  (D)      I express no opinion on (i) any conflicts between any provision in the Indenture or
the Bonds and the real property antideficiency, fair value, and/or one form of action provisions of California
law, or any law governing foreclosure and disposition procedures regarding any real or personal property
collateral, or any limitations on attorneys' or trustees' fees, and (ii) the effect of Section 1708 of the
California Public Utilities Code which, among other matters, provides that the California Public Utilities
Commission may at any time, upon notice to the parties, and with opportunity to be heard, rescind, alter, or
amend any order or decision made by it.

                  (E)      I am a member of the Bar of the State of California.  My opinions expressed herein are
limited to the laws of the State of California and the federal laws of the United States of America, except to
the extent that my opinions are affected by the laws of the States of Arizona, Nevada, and New Mexico, in which
states the Company owns certain assets and conducts certain business operations.  As to matters governed by
Arizona and Nevada law, I am relying upon opinions of Steptoe &amp; Johnson LLP and Hale Lane Peek Dennison and
Howard, respectively; and as to matters governed by New Mexico law and (with regard to matters affecting the
Company's interest in the Four Corners Generating Station in New Mexico and the easement and lease therefor)
federal and Navajo Nation law, I am relying upon opinions of Rodey, Dickason, Sloan, Akin &amp; Robb, P.A.

                  (G)      This opinion letter is an expression of my professional judgment on the legal issues
explicitly addressed.  By rendering the opinions herein, I do not become an insurer or guarantor of the
expression of such professional judgment.  Nor does the rendering of such opinions guarantee the outcome of any
legal dispute that may arise out of the contemplated transactions.  The rendering of the opinions herein does not
create any express or implied contract or agreement between or with any person entitled to rely thereon and me.
My opinions



Page 3


Southern California Edison Company
July 9, 2003




set forth herein are based upon the facts in existence and laws in effect on the date hereof, and are rendered as
of the date hereof, and I expressly disclaim any obligation to update my opinions herein, regardless of whether
changes in such facts or laws come to my attention after the delivery hereof.

                  I consent to your filing this opinion as an exhibit to the Registration Statement and to the
reference to me under the caption "Legal Matters" in the Prospectus.  In giving this consent, I do not hereby
admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act and
regulations of the Commission issued thereunder.

                                                     Very truly yours,


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


</PRE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8
<SEQUENCE>7
<FILENAME>s4exh8.htm
<DESCRIPTION>OPINION OF MUNGER, TOLLES & OLSON, LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>
S4 Exhibit 8 Opinion of Munger, Tolles &amp; Olson, LLP</TITLE>
</HEAD>
<BODY>
<PRE>
                                                                                        EXHIBIT 8

                                       OPINION OF MUNGER, TOLLES &amp; OLSON LLP
                              AS TO CERTAIN UNITED STATES FEDERAL INCOME TAX MATTERS

                                                   July 10, 2003



Southern California Edison Company
2244 Walnut Grove Avenue
Rosemead, California 91770

Ladies and Gentlemen:

            We have acted as special counsel to Southern California Edison Company, a California corporation (the
"Corporation"), in connection with the preparation and filing of a Registration Statement on Form S-4 (File No.
___________) (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), relating to the registration under the Act of $965,965,000
aggregate principal amount of First and Refunding Mortgage Bonds, 8% Series 2003B, Due 2007 (the "Exchange
Bonds"), to be offered by the Corporation in exchange for a like principal amount of its issued and outstanding
First and Refunding Mortgage Bonds, 8% Series 2003A, Due 2007 (the "Outstanding Bonds").

            We hereby confirm, based on the assumptions and subject to the qualifications and limitations set
forth therein, that the statements in the section of the Registration Statement captioned "Material United States
Federal Income Tax Consequences," to the extent that such statements constitute statements of law, reflect our
opinion of the material federal income tax consequences regarding the exchange of Outstanding Bonds for Exchange
Bonds.  No opinion is expressed on matters other than those specifically referred to herein.

            We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to
the use of our name and reference to our opinion under the heading "Material United States Federal Income Tax
Consequences" in the Registration Statement.  In giving this consent, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities Act and regulations of the
Commission issued thereunder.


                                                              Very truly yours,

                                                              /s/ MUNGER, TOLLES &amp; OLSON LLP

</PRE>
</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>8
<FILENAME>s4exh12.htm
<DESCRIPTION>STMT RE COMP OF RATIOS OF EARNINGS
<TEXT>
<HTML>
<HEAD>
<TITLE>
S4 Exhibit 12</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,
                                      -------------------------------------------------------------     12 Months        12 Months
                                                                                                          Ended            Ended
                                         1998         1999          2000         2001        2002     March 31, 2003  March 31, 2002
                                      ----------   ----------    -----------  ----------  ----------  --------------  --------------


EARNINGS BEFORE INCOME TAXES
  AND FIXED CHARGES:

Income before interest expense (1)   $  999,910    $  992,354   $(1,456,584)  $3,192,815   $1,831,335  $1,725,195    $3,913,542
Add:
  Taxes on income (2)                   442,356       438,006    (1,021,452)   1,658,033      641,786     637,466     2,152,980
  Rentals (3)                             2,208         1,901         2,905        2,128        1,240         807         2,009
  Allocable portion of interest
       on long-term Contracts for
       the purchase of power (4)          1,767         1,735         1,699        1,659        1,616       1,604         1,649
  Amortization of previously
       capitalized fixed charges          1,571         1,508         1,390        1,083        1,440       1,448         1,229
                                      ----------    ----------   -----------   ----------   ----------  ----------    ----------
Total earnings before income
  taxes and fixed charges (A)        $1,447,812    $1,435,504   $(2,472,042)  $4,855,718   $2,477,417  $2,366,520    $6,071,409
                                      ==========    ==========   ===========   ==========  ==========  ==========    ==========




FIXED CHARGES:
  Interest and amortization          $  484,788    $  482,933   $   571,760   $  784,858   $  584,442  $  525,249    $  760,936
  Rentals (3)                             2,208         1,901         2,905        2,128        1,240         807         2,009
  Capitalized fixed charges -
       nuclear fuel (5)                   1,294         1,211         1,538          756          520         194           806
  Allocable portion of interest on
       long-term contracts for
       the purchase of power (4)          1,767         1,735         1,699        1,659        1,616       1,604         1,649
                                      ----------    ----------   -----------   ----------  ----------- -----------   ----------
Total fixed charges (B)              $  490,057    $  487,780   $   577,902   $  789,401   $  587,818  $  527,854    $  765,400
                                      ==========    ==========   ===========   ==========  ==========  ==========    ==========


RATIO OF EARNINGS TO
  FIXED CHARGES (A) / (B):                 2.95          2.94        (4.28)(6)      6.15        4.21        4.48          7.93
                                      ==========    ==========   ===========   ==========  ==========  ==========    ==========






(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.







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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13.1
<SEQUENCE>9
<FILENAME>s4exh131.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



Page 1
<PAGE>



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


Page 2
<PAGE>

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


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


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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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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).


Page 27
<PAGE>

- -------------------------------------------------------------------------------------------------------------------
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;


Page 28
<PAGE>

- ---------------------------------------------------------------------------------------------------------------------
                                                                                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.




Page 29
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                                       [THIS PAGE LEFT INTENTIONALLY BLANK]


Page 30
<PAGE>



- -------------------------------------------------------------------------------------------------------------------
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.



Page 32
<PAGE>



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


Page 36
<PAGE>

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

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


Page 37
<PAGE>

- -------------------------------------------------------------------------------------------------------------------
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.


Page 38
<PAGE>

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


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



Page 59
<PAGE>

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


Page 61
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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.



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




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



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



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- -------------------------------------------------------------------------------------------------------------------
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-13.2
<SEQUENCE>10
<FILENAME>s4exh132.htm
<DESCRIPTION>SCE 2003 FIRST QUARTER 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>
SCE First Quarter 2003 10-Q</TITLE>
</HEAD>
<BODY>
<PRE>
===================================================================================================================

                                                   <b>UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                                     FORM 10-Q

(Mark One)

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

For the quarterly period ended                   March 31, 2003
                               -----------------------------------------------------------------------------------

/  /   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
                        (P. O. Box 800)
                     Rosemead, California                                         91770
           (Address of principal executive offices)                            (Zip Code)

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

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

Indicate  the  number of shares  outstanding  of each of the  issuer's  classes of common  stock,  as of the latest
practicable date:

                             Class                                         Outstanding at May 12, 2003
- ----------------------------------------------------------      ---------------------------------------------------
                  Common Stock, no par value                                       434,888,104


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


<PAGE>






SOUTHERN CALIFORNIA EDISON COMPANY

INDEX


                                                                                                           Page
                                                                                                            No.
                                                                                                           ----
Part I.  Financial Information:

         Item 1.   Consolidated Financial Statements:

                   Consolidated Statements of Income - Three Months
                      Ended March 31, 2003 and 2002                                                         1

                   Consolidated Statements of Comprehensive Income -
                      Three Months Ended March 31, 2003 and 2002                                            1

                   Consolidated Balance Sheets - March 31, 2003
                      and December 31, 2002                                                                 2

                   Consolidated Statements of Cash Flows -
                      Three Months Ended March 31, 2003 and 2002                                            4

                   Notes to Consolidated Financial Statements                                               5

         Item 2.   Management's Discussion and Analysis of Results
                      of Operations and Financial Condition                                                13

         Item 3.   Quantitative and Qualitative Disclosures About Market Risk                              28

         Item 4.   Controls and Procedures                                                                 28


Part II. Other Information:

         Item 1.   Legal Proceedings                                                                       29

         Item 6.   Exhibits and Reports on Form 8-K                                                        30

         Signatures

         Certifications




<PAGE>



SOUTHERN CALIFORNIA EDISON COMPANY

PART I            FINANCIAL INFORMATION

Item 1.           Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF INCOME

                                                                               Three Months Ended
                                                                                    March 31,
- -------------------------------------------------------------------------------------------------------------------

In millions                                                               2003                      2002
- -------------------------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------
                                                                                   (Unaudited)
Operating revenue                                                      $ 1,823                  $  1,907
- -------------------------------------------------------------------------------------------------------------------

Fuel                                                                        58                        52
Purchased power                                                            452                       255
Provisions for regulatory adjustment clauses - net                         305                       671
Other operation and maintenance                                            485                       414
Depreciation, decommissioning and amortization                             213                       182
Property and other taxes                                                    41                        29
- -------------------------------------------------------------------------------------------------------------------

Total operating expenses                                                 1,554                     1,603
- -------------------------------------------------------------------------------------------------------------------

Operating income                                                           269                       304
Interest and dividend income                                                39                       109
Other nonoperating income                                                   27                        10
Interest expense - net of amounts capitalized                             (124)                     (183)
Other nonoperating deductions                                              (26)                       (4)
- -------------------------------------------------------------------------------------------------------------------

Net income before tax                                                      185                       236
Income tax                                                                  80                        84
- -------------------------------------------------------------------------------------------------------------------

Net income                                                                 105                       152
Dividends on preferred stock                                                 3                         6
- -------------------------------------------------------------------------------------------------------------------

Net income available for common stock                                  $   102                  $    146
- -------------------------------------------------------------------------------------------------------------------



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                                               Three Months Ended
                                                                                    March 31,
- -------------------------------------------------------------------------------------------------------------------

In millions                                                               2003                      2002
- -------------------------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------
                                                                                   (Unaudited)
Net income                                                              $  105                   $   152
Other comprehensive income, net of tax:
   Amortization of cash flow hedges                                          1                         1
- -------------------------------------------------------------------------------------------------------------------

Comprehensive income                                                    $  106                   $   153
- -------------------------------------------------------------------------------------------------------------------




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

<PAGE>

Page 1


SOUTHERN CALIFORNIA EDISON COMPANY

CONSOLIDATED BALANCE SHEETS

                                                                         March 31,                December 31,
In millions                                                                2003                       2002
- --------------------------------------------------------------------------------------------------------------------

                                                                        (Unaudited)
ASSETS

Cash and equivalents                                                   $   1,079                  $     992
Restricted cash                                                               45                         47
Receivables, less allowances of $24 and $36
   for uncollectible accounts at respective dates                            661                        767
Accrued unbilled revenue                                                     414                        437
Fuel inventory                                                                12                         12
Materials and supplies, at average cost                                      159                        159
Accumulated deferred income taxes - net                                       --                         42
Regulatory assets - net                                                      350                        509
Prepayments and other current assets                                         164                         57
- -------------------------------------------------------------------------------------------------------------------

Total current assets                                                       2,884                      3,022
- -------------------------------------------------------------------------------------------------------------------


Nonutility property - less accumulated provision
   for depreciation of $32 and $29 at respective dates                       157                        154
Nuclear decommissioning trusts                                             2,147                      2,210
Other investments                                                            317                        214
- -------------------------------------------------------------------------------------------------------------------

Total investments and other assets                                         2,621                      2,578
- -------------------------------------------------------------------------------------------------------------------

Utility plant, at original cost:
   Transmission and distribution                                          14,334                     14,202
   Generation                                                              1,460                      1,457
Accumulated provision for depreciation and decommissioning                (6,237)                    (8,094)
Construction work in progress                                                589                        529
Nuclear fuel, at amortized cost                                              144                        153
- -------------------------------------------------------------------------------------------------------------------

Total utility plant                                                       10,290                      8,247
- -------------------------------------------------------------------------------------------------------------------

Regulatory assets - net                                                    3,609                      3,838
Other deferred charges                                                       633                        629
- -------------------------------------------------------------------------------------------------------------------

Total deferred charges                                                     4,242                      4,467
- -------------------------------------------------------------------------------------------------------------------







Total assets                                                           $  20,037                  $  18,314
- -------------------------------------------------------------------------------------------------------------------



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

<PAGE>

Page 2



SOUTHERN CALIFORNIA EDISON COMPANY

CONSOLIDATED BALANCE SHEETS

                                                                         March 31,                December 31,
In millions, except share amounts                                          2003                       2002
- --------------------------------------------------------------------------------------------------------------------

                                                                        (Unaudited)
LIABILITIES AND SHAREHOLDER'S EQUITY

Short-term debt                                                        $      --                  $      --
Long-term debt due within one year                                           705                      1,671
Preferred stock to be redeemed within one year                                 9                          9
Accounts payable                                                             751                        745
Accrued taxes                                                                835                        699
Accumulated deferred income taxes - net                                      139                         --
Other current liabilities                                                  1,567                      1,439
- -------------------------------------------------------------------------------------------------------------------

Total current liabilities                                                  4,006                      4,563
- -------------------------------------------------------------------------------------------------------------------

Long-term debt                                                             5,119                      4,504
- -------------------------------------------------------------------------------------------------------------------


Accumulated deferred income taxes - net                                    2,540                      2,658
Accumulated deferred investment tax credits                                  147                        148
Customer advances and other deferred credits                                 647                        964
Power-purchase contracts                                                     259                        309
Accumulated provision for pensions and benefits                              401                        356
Asset retirement obligations                                               2,006                         --
Other long-term liabilities                                                  155                        152
- -------------------------------------------------------------------------------------------------------------------

Total deferred credits and other liabilities                               6,155                      4,587
- -------------------------------------------------------------------------------------------------------------------

Commitments and contingencies
   (Notes 2 and 3)

Preferred stock:
   Not subject to mandatory redemption                                       129                        129
   Subject to mandatory redemption                                           141                        147
- -------------------------------------------------------------------------------------------------------------------

Total preferred stock                                                        270                        276
- -------------------------------------------------------------------------------------------------------------------


Common stock (434,888,104 shares outstanding at each date)                 2,168                      2,168
Additional paid-in capital                                                   342                        340
Accumulated other comprehensive loss                                         (16)                       (16)
Retained earnings                                                          1,993                      1,892
- -------------------------------------------------------------------------------------------------------------------

Total common shareholder's equity                                          4,487                      4,384
- -------------------------------------------------------------------------------------------------------------------



Total liabilities and shareholder's equity                             $  20,037                  $  18,314
- -------------------------------------------------------------------------------------------------------------------



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

<PAGE>

Page 3

SOUTHERN CALIFORNIA EDISON COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                               Three Months Ended
                                                                                    March 31,
- -------------------------------------------------------------------------------------------------------------------

In millions                                                               2003                      2002
- -------------------------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------
                                                                                   (Unaudited)
Cash flows from operating activities:
Net income                                                             $   105                  $    152
Adjustments to reconcile net income to
 net cash provided (used) by operating activities:
   Depreciation, decommissioning and amortization                          213                       182
   Other amortization                                                       24                        25
   Deferred income taxes and investment tax credits                          9                      (162)
   Regulatory assets - long-term - net                                      69                       537
   Gas call options                                                        (15)                      (23)
   Power contracts collateral                                              (39)                       --
   Other assets                                                            (37)                       17
   Other liabilities                                                       (23)                      112
   Changes in working capital:
      Receivables and accrued unbilled revenue                             129                       377
      Regulatory assets - short-term - net                                 159                        83
      Fuel inventory, materials and supplies                                --                        (2)
      Prepayments and other current assets                                (105)                       25
      Accrued interest and taxes                                           128                        56
      Accounts payable and other current liabilities                       141                    (2,343)
- -------------------------------------------------------------------------------------------------------------------

Net cash provided (used) by operating activities                           758                      (964)
- -------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
Long-term debt issuance costs                                              (11)                      (31)
Long-term debt repaid                                                     (304)                     (400)
Bonds remarketed and funds held in trust                                    --                       192
Redemption of preferred stock                                               (5)                       --
Rate reduction notes repaid                                                (62)                      (62)
Nuclear fuel financing - net                                                --                       (59)
Short-term debt financing - net                                             --                      (527)
Dividends paid                                                              (4)                      (27)
- -------------------------------------------------------------------------------------------------------------------

Net cash used by financing activities                                     (386)                     (914)
- -------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
Additions to property and plant                                           (267)                     (229)
Net funding of nuclear decommissioning trusts                              (21)                       (6)
Sales of investments in other assets                                         3                         2
- -------------------------------------------------------------------------------------------------------------------

Net cash used by investing activities                                     (285)                     (233)
- -------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and equivalents                             87                    (2,111)
Cash and equivalents, beginning of period                                  992                     3,414
- -------------------------------------------------------------------------------------------------------------------

Cash and equivalents, end of period                                    $ 1,079                  $  1,303
- -------------------------------------------------------------------------------------------------------------------


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



<PAGE>
Page 4


SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Management's Statement

In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to
present a fair statement of the financial position, results of operations and cash flows in accordance with
accounting principles generally accepted in the United States for the periods covered by this report.  The
results of operations for the period ended March 31, 2003 are not necessarily indicative of the operating results
for the full year.

The quarterly report should be read in conjunction with Southern California Edison's (SCE) 2002 Annual Report on
Form 10-K filed with the Securities and Exchange Commission.

Note 1.  Summary of Significant Accounting Policies

Basis of Presentation

SCE's significant accounting policies were described in Note 1 of "Notes to Consolidated Financial Statements"
included in its 2002 Annual Report.  SCE follows the same accounting policies for interim reporting purposes.

Certain prior-period amounts were reclassified to conform to the March 31, 2003 financial statement presentation.

New Accounting Standard

Effective January 1, 2003, SCE adopted 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 standard and
the recovery of costs through the rate-making process. Regulatory assets and liabilities may also be recorded if
it is probable that the asset retirement obligation (ARO) will be recovered through the rate-making process.

SCE's impact of adopting this standard was:

o    SCE adjusted its nuclear decommissioning obligation to reflect the fair value of decommissioning its
     nuclear power facilities. SCE also recognized AROs associated with the decommissioning of coal-fired
     generation assets.

o    At December 31, 2002, SCE had accrued $2.3 billion to decommission its nuclear facilities and
     $12 million to decommission its share of a coal-fired generating plant, under accounting principles in effect
     at that time.  Of these amounts, $298 million to decommission its inactive nuclear facility was recorded in
     other long-term liabilities, and the remaining $2.0 billion was recorded as a component of the accumulated
     provision for depreciation and decommissioning on the consolidated balance sheets in the 2002 Annual Report.


<PAGE>
Page 5

SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

o    As of January 1, 2003, SCE reversed the $2.3 billion it had previously recorded for decommissioning,
     recorded the fair value of its AROs of approximately $2.0 billion in the deferred credits and other
     liabilities section of the balance sheet, and increased its unamortized nuclear investment by $303 million.
     The cumulative effect of a change in accounting principle from unrecognized accretion expense and
     adjustments to depreciation, decommissioning and amortization expense recorded to date was a $354 million
     after-tax gain, which under accounting standards for rate-regulated enterprises was deferred as a regulatory
     liability, partially offset by a $235 million deferred tax asset, as of January 1, 2003.  Accretion and
     depreciation expense resulting from the application of the new standard is expected to be approximately $143
     million in 2003.  This cost will reduce the regulatory liability, with no impact on earnings.  As of March
     31, 2003, SCE's ARO for its nuclear facilities totaled approximately $2.0 billion and its nuclear
     decommissioning trust assets had a fair value of $2.1 billion.  If the new standard had been in place on
     January 1, 2002, SCE's ARO as of that date would have been $1.98 billion.  Approximately $1.9 billion
     collected through rates for cost of removal of plant assets not considered to be legal obligations remain in
     accumulated depreciation and decommissioning.

Stock-Based Employee Compensation

SCE has three stock-based employee compensation plans, which are described more fully in Note 7 of SCE's 2002
Annual Report.  SCE accounts for these 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.  The following table
illustrates the effect on net income if SCE had used the fair-value accounting method.

                                                                                 Three Months Ended
                                                                                      March 31,
- ----------------------------------------------------------------------------------------------------------

         In millions                                                          2003               2002
- ----------------------------------------------------------------------------------------------------------

                                                                                     (Unaudited)
         Net income available for common stock, as reported                $   102            $   146
         Add: stock-based compensation expense using
            the intrinsic value accounting method - net of tax                   1                  1
         Less: stock-based compensation expense using
            the fair-value accounting method - net of tax                        1                  1
- ----------------------------------------------------------------------------------------------------------

         Pro forma net income available for common stock                   $   102            $   146
- ----------------------------------------------------------------------------------------------------------



<PAGE>
Page 6

SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Supplemental Cash Flows Information
                                                                                 Three Months Ended
                                                                                      March 31,
- ----------------------------------------------------------------------------------------------------------

         In millions                                                          2003               2002
- ----------------------------------------------------------------------------------------------------------

                                                                                     (Unaudited)
         Non-cash investing and financing activities:

         Details of senior secured credit facility transaction:
           Retirement of credit facility                                   $    --           $ (1,650)
           Senior secured credit facility replacement                           --              1,600
- ----------------------------------------------------------------------------------------------------------

         Cash paid on retirement of credit facility                        $    --           $    (50)
- ----------------------------------------------------------------------------------------------------------


         Details of long-term debt exchange offer:
           Variable rate notes redeemed                                    $  (966)          $     --
           First and refunding notes issued                                    966                 --
- ----------------------------------------------------------------------------------------------------------


Note 2.  Regulatory Matters

Further information on regulatory matters, including proceedings for California Department of Water Resources
power purchases and revenue requirements, electric line maintenance practices, generation procurement, Mohave
Generating Station, utility-retained generation, and wholesale electricity markets, is described in Note 2 of
"Notes to Consolidated Financial Statements" included in SCE's 2002 Annual Report.

California Public Utilities Commission (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 procurement-related
obligations account (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.  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

<PAGE>
Page 7

SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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 has set oral arguments for May 27, 2003.  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, and also 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.

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.  Pacific Gas and
Electric and San Diego Gas &amp; Electric 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 it.

Note 3.  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


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SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


course of business.  SCE believes the outcome of these other proceedings will not materially affect its results of
operations or liquidity.

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.

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 40 identified sites is $100 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 $288 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 $39 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 $71 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 the twelve months
ended March 31, 2002 were $22 million.

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SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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 Internal Revenue Service 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 the United States District Court for the District of Columbia (D.C. 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 and that the Navajo Nation did not have a right to relief
against the Government.  Based on the Supreme Court's analysis, on April 28, 2003, SCE filed a motion to dismiss or,
in the alternative, for summary judgment in the D.C. District Court action.  The motion remains pending.



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Page 10

SOUTHERN CALIFORNIA EDISON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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 ($300 million).  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.

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


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Page 11


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.

Note 4.  Subsequent Event

On April 16, 2003, SCE fully repaid a $300 million senior secured credit facility.  This revolver was secured by
first and refunding mortgage bonds.  SCE may draw upon the $300 million available credit until the agreement
expires on March 1, 2004.




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Page 12




Item 2.    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) for the first
quarter of 2003 discusses material changes in the results of operations, financial condition and other
developments of Southern California Edison Company (SCE) since December 31, 2002 and as compared to the first
quarter of 2002.  This discussion presumes that the reader has read or has access to SCE's MD&amp;A for the calendar
year 2002 (the year-ended 2002 MD&amp;A), which was included in SCE's 2002 annual report to shareholders and
incorporated by reference into SCE's Annual Report on Form 10-K for the year ended December 31, 2002.

This MD&amp;A contains forward-looking statements.  These statements are based on SCE's 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."  The following discussion provides updated information about material developments since the issuance
of the year-ended 2002 MD&amp;A and should be read in conjunction with the financial statements contained in this
quarterly report and SCE's Annual Report on Form 10-K for the year ended December 31, 2002.

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

As discussed in detail in "Regulatory Matters--CPUC Litigation Settlement Agreement," 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.  The Utility Reform Network (TURN), a consumer advocacy group, and
other parties appealed to the federal court 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 and has scheduled oral arguments for May 27, 2003.

RESULTS OF OPERATIONS

First Quarter 2003 vs. First Quarter 2002

Earnings

SCE earned $102 million in the first quarter of 2003, compared with $146 million in the same period last year.
The $44 million decrease primarily reflects a planned refueling outage at San Onofre Nuclear Generating Station
(San Onofre) during the first quarter of 2003.  The decrease also includes higher operating and maintenance
expenses from higher health-care costs and storm-damage expenses, partially offset by higher performance-based
ratemaking (PBR) revenue due to an April 22, 2002 CPUC decision that modified the PBR mechanism (see "Regulatory
Matters--PBR Decision" in the year-ended 2002 MD&amp;A for further discussion).

In January 2002, the CPUC approved the creation of the  procurement-related  obligations account (PROACT) to record
the recovery of $3.6 billion of SCE's procurement-related obligations pursuant to

<PAGE>

Page 13


the  settlement  agreement  between  SCE and the CPUC.  In February  2003,  the CPUC  allowed SCE to transfer  $209
million into its PROACT for natural gas hedging costs.  The remaining  PROACT balance was  $640 million as of March
31, 2003 and $512 million as of April 30, 2003.

Operating Revenue

Approximately 93% 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 and higher electricity usage during the summer months, operating revenue during the third
quarter of each year is significantly higher than other quarters.

Operating revenue decreased in 2003 primarily due to an allocation adjustment for the California Department of
Water Resources (CDWR) energy purchases and remittance of CDWR bond related charges, partially offset by an
increase in revenue from lower credits given to direct access customers (1.7(cent)per kWh decrease as discussed
below).

Amounts SCE bills and collects from its customers for electric power purchased and sold by the CDWR to SCE's
customers (beginning January 17, 2001), CDWR bond-related costs (beginning November 15, 2002) and direct access
exit fees (beginning January 1, 2003) are remitted to the CDWR and are not recognized as revenue by SCE.  These
amounts were $424 million and $341 million for the three months ended March 31, 2003 and 2002, respectively.

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.  Direct access customers continue to be given a credit,
currently 7.5(cent)per kWh, for the generation costs SCE saves by not serving them.  Effective July 27, 2002, the
CPUC reduced the direct access credit by 2.7(cent)per kWh to collect a nonbypassable historical procurement charge.
Beginning on January 1, 2003, the contribution by direct access customers to SCE was reduced to 1(cent)per kWh, with
the remaining 1.7(cent)per kWh allocated to the CDWR for its costs associated with direct access customers.
Operating revenue is reported net of this credit.  See "Regulatory Matters--Direct Access Proceedings" discussion
below.

Operating Expenses

Purchased-power expense increased significantly in 2003 primarily due to higher expenses related to power
purchased by SCE from qualifying facilities (QFs), as discussed below.

Federal law and CPUC orders required SCE to enter into contracts to purchase power from QFs at CPUC-mandated
prices.  Energy payments for gas-fired QFs are generally tied to spot natural gas prices.  Effective May 2002,
energy payments for most renewable QFs were based on a fixed price of 5.37(cent)per kWh, compared with an average of
2.87(cent)per kWh during the first quarter of 2002.  During 2003, spot natural gas prices were higher compared to the
same period in 2002.  The increase in 2003 purchased-power expense related to bilateral contracts and
interutility contracts was also due to the increase in natural gas prices, as well as an increase in the number
of bilateral contracts entered into during 2003.

Provisions for regulatory adjustment clauses - net decreased in 2003 primarily due to a decrease in
overcollections used to recover the PROACT balance resulting from higher QF costs and an allocation adjustment
for CDWR energy purchases.


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Page 14


Other operation and maintenance expense increased in 2003 primarily due to the San Onofre Unit 3 planned
refueling outage, higher health-care costs, higher storm-damage expenses, higher spending on certain
CPUC-authorized programs, and a nuclear insurance refund in 2002 with no comparable refund received yet in 2003.

Depreciation, decommissioning and amortization expense increased in 2003, 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.

Other Income and Deductions

Interest and dividend income decreased in 2003 mainly due to lower interest income from a lower PROACT balance
and lower average cash balances and lower interest rates.

Other nonoperating income increased in 2003 mainly due to SCE's accrual of 2002 PBR revenue under the PBR sharing
mechanism filed with the CPUC during first quarter 2003.

Interest expense - net of amounts capitalized decreased in 2003, mainly due to lower interest expense related to
the suspension of payments for purchased power during 2001 and early 2002.  These obligations were paid in March
2002.  In addition, interest expense - net of amounts capitalized decreased due to lower interest expense
resulting from lower short-term and long-term debt balances and lower interest rates on long-term debt.

Other nonoperating deductions increased in 2003 mainly due to accruals for regulatory matters at SCE.

Income Taxes

Income taxes decreased in 2003 primarily due to a decrease in pre-tax income, partially offset by lower tax
expense in 2002 reflecting a favorable resolution of tax audits.

SCE's composite federal and state statutory rate was approximately 40.551% for both periods presented.  The
higher effective tax rate of 44% realized in the first quarter of 2003 was primarily due to property related
flow-through taxes.

FINANCIAL CONDITION

Cash Flows from Operating Activities

Net cash provided by operating activities was $758 million in the first quarter of 2003 and net cash used by
operating activities was $964 million in the first quarter of 2002.  The change was mainly due to the March 2002
repayment of past-due obligations, partially offset by higher overcollections used to recover regulatory assets.
The change was also due to timing of cash receipts and disbursements related to working capital items.

Cash Flows from Financing Activities

Net cash used by financing activities was $386 million in the first quarter of 2003 and $914 million in the first
quarter of 2002.

During the first quarter of 2003, SCE repaid $300 million of a one-year term loan due March 3, 2003, which was
part of the $1.6 billion financing that took place in the first quarter of 2002.


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During the first quarter of 2002, SCE repaid $531 million of commercial paper, $400 million of its maturing
principal on its senior unsecured notes, 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
remainder of the credit facility.  The $1.6 billion financing included a $600 million, one-year term loan due
March 3, 2003 (see additional discussion in "Liquidity Issues").

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.

Liquidity Issues

SCE expects to meet its continuing obligations in 2003 from cash and equivalents on hand and operating cash
flows.  SCE had $1.1 billion in cash and equivalents as of March 31, 2003.

In January 2002, the CPUC adopted a resolution implementing a settlement agreement with SCE.  Based on the rights
to recover its past procurement-related costs, SCE repaid its undisputed past-due obligations and near-term debt
maturities in March 2002, using cash on hand resulting and the proceeds of $1.6 billion credit facilities and the
remarketing of $196 million in pollution-control bonds.  The $1.6 billion credit facilities 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 credit facilities also included a $300
million revolving line of credit, which, at March 31, 2003 was fully drawn and expired March 2004, and a $700
million term loan with a March 2005 final maturity.  On April 16, 2003, SCE paid off the full amount of its
revolving line of credit.  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, 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 $246 million of rate reduction notes are due throughout 2003.  These notes have a separate cost
recovery mechanism approved by state legislation and CPUC decisions.

Currently, SCE expects to recover the PROACT balance during the summer of 2003.  Material factors affecting the
timing of recovery of the PROACT balance are discussed in the "Regulatory Matters" section in the year-ended 2002
MD&amp;A.

As of March 31, 2003, 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, 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.


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Page 16


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) on January 1, 2003 and
as of April 30, 2003, posted $98 million in collateral to secure its obligations under power purchase contracts
and to transact through the Independent System Operator (ISO) for imbalance power.

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 long-term debt maturities and sinking fund requirements for the five twelve-month periods following March
31, 2003 are:  2004-- $705 million; 2005-- $1.3 billion; 2006-- $446 million; 2007-- $1.2 billion; and 2008--
$184 million.  These amounts have been updated to reflect the $966 million exchange offer that took place on
February 24, 2003.

SCE has entered into six transition capacity contracts, which contain capacity payment provisions.  SCE's
commitments under these contracts for the five twelve-month periods following March 31, 2003 are:  2004-- $66
million; 2005-- $69 million; 2006-- $69 million; 2007-- $69 million; and 2008-- $54 million.

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.  In addition, SCE's return on common equity is set annually
based on forecasts of interest rates and other factors.

Commodity Price Risk

Under the CPUC settlement agreement, SCE is permitted full recovery of its past procurement-related 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, 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.  SCE forecasts that its average 2003
residual net short, on an energy basis, will be approximately 3% 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



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Page 17


customers returning to utility service from their energy service provider; lower utility generation; lower deliveries from
QFs, CDWR or interutility contracts; and 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.  SCE anticipates it will need additional capacity and/or ancillary services to hedge its peak
requirement.

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 remains 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.

REGULATORY MATTERS

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

Generation and Power Procurement

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 procurement-related 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.  Other provisions of the settlement agreement are described in the "CPUC Litigation Settlement Agreement"
disclosure in the year-ended 2002 MD&amp;A.  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 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 its opinion, the federal court of appeals 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.
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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Page 18


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 concerning the merits of 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.  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 this directive from the court.
Various third parties, including the Governor of California, submitted friend-of-the-court briefs concerning the
certified questions, and SCE and TURN filed answering briefs, which responded to various points raised in the
friend-of-the-court briefs.  The California Supreme Court has scheduled oral arguments for May 27, 2003.  Once
the California Supreme Court issues its decision on the certified questions, 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.

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 regulatory balancing account was $574 million at December 31, 2002, $640 million at March
31, 2003 and $512 million at April 30, 2003.  The balance in the PROACT reflects the transfer of $209 million of
risk management hedging costs allowed by the CPUC in February 2003, an allocation adjustment for CDWR energy
purchases and reduced surplus revenue used to recover PROACT due to the San Onofre outage.  SCE believes it will
recover the PROACT balance during the summer of 2003.  Potential factors that could change SCE's estimate of the
timing of PROACT recovery are described in the "PROACT Regulatory Asset" disclosure in the year-ended 2002 MD&amp;A.

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

Direct Access Proceedings

<u>Direct Access - Historical Procurement Charge</u>

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.


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Several parties filed applications for rehearing of the interim decision with the CPUC, which were later denied.
Several parties also filed petitions for review of the interim decision with the California Supreme Court.
The petitions filed with the California Supreme Court were held pending the CPUC's ruling on the applications
for rehearing.  In March 2003, two petitions for review were filed with the California Supreme Court.  SCE cannot
predict with certainty the outcome of the petitions before the California Supreme Court.

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 issued and implemented 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 for the collection of the
$391 million, 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.  Evidentiary hearings on
SCE's petition to modify were held on March 4, 2003, and a decision is expected in mid-2003.  Once the interim
decision becomes permanent, SCE will evaluate whether a new regulatory asset could be created.  If such a
regulatory asset were created, the net effect of this action would be to accelerate PROACT recovery.

<u>Direct Access - Exit Fees</u>

On November 7, 2002, the CPUC issued a decision assigning 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 finance a portion of the costs incurred during the California energy crisis.  The CPUC
decision stated that the direct access customers were responsible for paying a portion of the CDWR 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 must 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 utility
retained generation (e.g., QFs' contract costs) that pursuant to AB 1890 are to be recovered from all customers
on an ongoing basis.  The CPUC decision stated that:  (1) the bond charge is applicable to all direct access
customers except those who were continuously on direct access and never 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.

Evidentiary hearings to reassess the 2.7(cent)per kWh cap on the amount of exit fees to be paid by direct customers
were conducted in April 2003, and a decision is expected in May or June 2003.  If revised, the new cap is
expected to take effect on July 1, 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 submits its requested revenue requirement to the CPUC.  In
a separate decision, the CPUC adopted similar exit fees for customers who install their own generation facilities
or arrange to purchase power from another entity that installs



<PAGE>

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generation facilities on or adjacent to their property.  In addition, the CPUC issued two proposed decisions to
impose similar exit fees on customers whose load would be served by a municipal entity.

<u>Direct Access - Switching Exemptions</u>

Under the switching exemptions, direct access customers with a pre-September 20, 2001 contract with an energy
service provider are allowed to switch back and forth between bundled service and direct access.  In a May 8,
2003 decision, the CPUC allowed the continuation of switching, but adopted rules to regulate and restrict it.
Among these rules are:

o    Direct access customers are only allowed to return to bundled service on a transitional basis for a
     period of 60 days, while switching from one energy service provider to another, or for similar reasons where
     a temporary "safe harbor" is needed.  After this 60-day transition period, they must remain on bundled
     service for three years.  While in the safe harbor these customers must pay all incremental short term
     powers costs incurred on their behalf and the applicable direct access exit fees.

o    Direct access customers who switch back to bundled service other than for transition purposes must stay
     on bundled service for a minimum three-year period.

o    Direct access customers intending to return to bundled service for other than transition purposes must
     provide a six-month advance notice.  Similarly, if a customer intends to return to direct access after
     satisfying its three year minimum stay on bundled service, it must provide six-months advance notice.

o    Direct access customers returning to bundled service will be responsible for any exit fee
     undercollection, due to the 2.7(cent)per kWh cap, incurred will they received direct access service.

The impact of the CPUC's decisions on direct access cost responsibilities are incorporated into SCE's current
projection of the timing of PROACT recovery.

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 allowed 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.

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 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 1X (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 is responsible for
allocating 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).

As discussed in the "CDWR Power Purchases and Revenue Requirement Proceedings" disclosure in the year-ended 2002
MD&amp;A, the CPUC has allocated to SCE's customers:  $3.5 billion of total power procurement revenue requirement
of $9 billion for the period 2001 and 2002; $331 million of the 2003


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bond charge revenue requirement of $745 million; and approximately $1.9 billion of the total 2003 power procurement
revenue requirement of $4.5 billion.  The CPUC has not yet ruled on issues relating to the true-up of the CDWR's
2001-2002 revenue requirement and the allocation to each utility.  A true-up of the CDWR's revenue requirement, as
well as the additional allocation of contracts, is not incorporated into SCE's current projection of the timing
of PROACT recovery.

Generation Procurement Proceedings

The CPUC's Order Instituting Rulemaking, issued in October 2001, establishes the policies and mechanisms
necessary for SCE and the other major California electric utilities to resume power procurement as of January 1,
2003.  In 2002, the CPUC issued four decisions:  (1) on August 22, 2002, regarding transitional procurement
contracts; (2) on September 19, 2002, regarding the allocation of contracts previously entered into by the CDWR
among the three major California utilities; (3) on October 24, 2002, for the resumption of power procurement
activities by these utilities on January 1, 2003, and adoption of a regulatory framework for such activities; and
(4) on December 19, 2002, concerning SCE's short-term procurement plan for 2003.  See the "Regulatory
Matters--Generation Procurement Proceedings" in the year-ended 2002 MD&amp;A for detailed discussion of these matters.
SCE has filed numerous applications for rehearing and petitions for modifications of those decisions and, on
March 4, 2003, filed a motion for consolidated consideration urging the CPUC to conduct a comprehensive review of
its procurement decisions.

On December 24, 2002 and January 14, 2003, SCE filed advice letters seeking CPUC approval of six renewable
contracts provisionally entered into by SCE pursuant to the August 22, 2002 decision on transitional procurement
contracts.  On January 30, 2003, the CPUC issued a resolution approving four of the six contracts.  An additional
renewable contract was approved by the CPUC resolution issued May 8, 2003.  The CPUC is expected to rule on the
remaining contract in the second quarter of 2003.

On February 3, 2003, SCE filed a petition for modification regarding the CPUC's December 19, 2002 decision.
Among other things, the petition requested clarification of the cap on SCE's maximum disallowance risk exposure
and extension of the cap's scope to all procurement activities.  The CPUC has issued two proposed decisions.
While both proposed decisions clarify the level of cap, only one of them would expand the cap to cover all
procurement-related activities.  The proposed decisions, which are scheduled for decision on May 22, 2003,
largely adopt the other modifications requested.  SCE also filed a second petition for modification, on March 14,
2003, regarding hedging restrictions and the definition of least cost dispatch.  No action has been taken on the
second petition.

In accordance with the CPUC's October 24, 2002 decision, SCE filed its long-term resource plan on April 15,
2003.  SCE's long-term resource plan included two plans, a preferred plan and an interim plan.  The preferred
plan contains long-term commitments that will encourage investment in new generation and transmission
infrastructure, increase long-term reliability and decrease price volatility.  These commitments include:

o    a significant increase in cost-effective energy efficiency and demand response investments;

o    renewable contracts that will meet or exceed the requirements of the Renewable Portfolio Standard (see
     below);

o    a substantial increment of new utility or third-party owned generation resources; and

o    at least two new major transmission projects that will provide the state of California access to a
     diverse set of generating resources and help facilitate a more competitive wholesale market.


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The interim plan, by contrast, relies exclusively on new short- and medium-term contracts with no long-term
resource commitments (except for new renewable contracts).  In its filing, SCE maintained that implementation of
its preferred plan requires resolution of various issues including (1) stabilizing SCE's customer base;
(2) restoring SCE's investment-grade creditworthiness; (3) restructuring regulations regarding energy efficiency
and demand response programs; (4) removing barriers to transmission development; (5) modifying prior decisions,
which impede long-term procurement; and (6) adopting a commercially realistic cost-recovery framework that will
enable utilities to obtain financing or enable contracting for new generation.

SCE expects to file its 2004 short-term procurement plan on May 15, 2003.  Hearings on the short-term plan and
certain key issues in the long-term plan are expected to take place in July and August 2003.

As described in the year-ended 2002 MD&amp;A, Senate Bill (SB) 1078 was signed into law in September 2002 and
provides for SCE and other California utilities to increase their procurement of renewable resources.  Pursuant
to a ruling of the CPUC's assigned administrative law judge, issues related to implementation of Renewable
Portfolio Standard issues in SB 1078 are being determined on a separate, expedited schedule.  Testimony on the
implementation of SB 1078 was filed and hearings were held in April 2003.  A preliminary decision on Renewables
Portfolio Standard issues 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.  In March 2003, the CPUC approved the negotiated operating agreements with the CDWR submitted by
PG&amp;E and SDG&amp;E, subject to certain modifications.  Those modifications included eliminating provisions which
would permit termination of the agreements by the utilities, a provision which would permit additional guidance
from the CDWR as to the performance of the utilities' obligations, a provision which would permit the direct
collection from the CDWR of fees for administering the CDWR contacts and certain other provisions that permit the
CDWR to direct the actions of the utilities under the contracts.  The decision also required PG&amp;E, SDG&amp;E and SCE
to file gas supply plans for the purchase of natural gas for the CDWR contracts allocated to the utilities.
SCE's gas supply plan was filed on April 18, 2003.  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.

Transmission and Distribution

2003 General Rate Case Proceeding

On May 3, 2002, SCE filed its formal application for the 2003 GRC, requesting a revenue requirement increase of
$287 million over 2000 recorded revenue.  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

<PAGE>

Page 23

operations. Evidentiary hearings were concluded in March 2003.  On April 18, 2003, SCE filed its post-hearing
opening brief, reducing its requested increase from $286 million to $248 million.  On April 30, 2003, the CPUC
ordered SCE to shorten and refile its opening brief by May 14, 2003 and file a reply brief by May 28, 2003.

During the proceeding, the CPUC's Office of Ratepayer Advocates was granted a three-month extension to submit its
testimony, which moved other procedural milestones by three months, including the expected date for a final
decision.  In response to the extension of the proceeding schedule, SCE filed a motion requesting authorization
to establish an account tracking SCE's requested revenue requirement during the period between May 22, 2003, the
date a final decision was originally expected, and the date a final decision is adopted.  This would effectively
allow the final decision in the general rate case to apply to the account, with the amounts tracked becoming
subject to recovery or refund depending on the outcome of the proceeding.  A proposed decision was issued
approving SCE's request to track the revenue requirement and is on the agenda for the CPUC's May 22, 2003
conference.  A final decision on the general rate case proceeding is expected in the third quarter of 2003.

Cost of Capital Filing

SCE's annual cost of capital applications with the CPUC are required to be filed by May 8 of each year, with
decisions rendered in such proceedings becoming effective for the following year.  On April 1, 2003, SCE filed a
petition with the CPUC seeking to eliminate the 2004 proceeding.  This would result in SCE's 2003 cost of capital
decision, issued on November 7, 2002, remaining in effect throughout 2004.  The CPUC has granted a temporary
extension of SCE's filing deadline to July 8, 2003 while it considers SCE's request.  On April 24, 2003, the
CPUC's Office of Ratepayer Advocates filed a response to SCE's petition supporting SCE's request for eliminating
the 2004 proceeding.

Transmission Overhead Proceeding

Since the initiation of the ISO in April 1998, transmission cost recovery has been under the FERC authority.  In
July 2000, the FERC issued a final decision in SCE's 1998 FERC transmission rate case in which it ordered a
reduction of approximately $38 million to SCE's proposed annual base transmission revenue requirement of $213
million.  Of the total reduction of $38 million, about $24 million was associated with the FERC's rejection of
SCE's proposed method for allocating overhead costs to transmission operations.  SCE filed for rehearing of the
FERC decision in August 2000, asking that the FERC reconsider the decision assuming that the CPUC does not allow
SCE to recover the $24 million in CPUC jurisdictional rates.  SCE continued to collect the $24 million annually
in FERC rates subject to refund until new transmission rates became effective on September 1, 2002.  In February
2001, SCE filed with the CPUC a request to recover in CPUC rates the overhead costs not permitted in FERC rates
(amounting to $108 million as of March 31, 2003).  On May 6, 2003, the assigned CPUC administrative law judge
issued a proposed decision rejecting the request.  SCE intends to challenge this proposed decision on the grounds
that the costs at issue were already found to be reasonable by the CPUC in SCE's 1995 general rate case, and SCE
is being denied the recovery of these costs solely due to different methodologies employed by the CPUC and the
FERC for allocation of overhead costs which are not directly assignable to the transmission and distribution
functions. A final CPUC decision on this matter is expected in June 2003.

Wholesale Electricity and Gas Markets

In response to a consolidated proceeding related to the justness and reasonableness of rates charged by sellers
in the PX and ISO markets as described in the "Regulatory Matters--Wholesale Electricity Markets" disclosure in
the year-ended 2002 MD&amp;A, the FERC issued orders that initiated procedures for determining additional refunds
arising from market manipulation by energy suppliers.  A new FERC staff report issued on March 26, 2003 found that
there was pervasive gaming and market manipulation of the

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electric and gas markets in California and in the west coast and also described 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.  Further enforcement actions by the FERC are expected. SCE cannot, at
this time, 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

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.  As originally proposed by SCE, after PROACT recovery is completed, bills for larger-use
residential customers would have declined 8%, and average rates reduced 19% for small and medium business
customers and 26% for larger-use business customers.  Under a settlement reached with the active parties to the
proceeding, somewhat different rate reductions for customer groups have been proposed:  8% for residential, 18%
for small business, 13% for medium business, and 19% for large business.  The settlement also calls for a
modified procedure implementing those settlement rates, now with rates reduced sooner based on a forecast of
PROACT recovery rather than later based on verification.  On April 23, 2003, SCE submitted the settlement to the
CPUC for approval.  SCE cannot predict whether or not the CPUC will approve the settlement, or when.

NEW ACCOUNTING STANDARD

Effective January 1, 2003, SCE adopted 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 standard and
the recovery of costs through the rate-making process. Regulatory assets and liabilities may also be recorded if
it is probable that the asset retirement obligation (ARO) will be recovered through the rate-making process.

SCE's impact of adopting this standard was:

o    SCE adjusted its nuclear decommissioning obligation to reflect the fair value of decommissioning its
     nuclear power facilities. SCE also recognized AROs associated with the decommissioning of coal-fired
     generation assets.

o    At December 31, 2002, SCE had accrued $2.3 billion to decommission its nuclear facilities and
     $12 million to decommission its share of a coal-fired generating plant, under accounting principles in effect
     at that time.  Of these amounts, $298 million to decommission its inactive nuclear facility was recorded in
     other long-term liabilities, and the remaining $2.0 billion was recorded as a component of

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     the accumulated provision for depreciation and decommissioning on the consolidated balance sheets in the 2002
     Annual Report.

o    As of January 1, 2003, SCE reversed the $2.3 billion it had previously recorded for decommissioning,
     recorded the fair value of its AROs of approximately $2.0 billion in the deferred credits and other
     liabilities section of the balance sheet, and increased its unamortized nuclear investment by $303 million.
     The cumulative effect of a change in accounting principle from unrecognized accretion expense and
     adjustments to depreciation, decommissioning and amortization expense recorded to date was a $354 million
     after-tax gain, which under accounting standards for rate-regulated enterprises was deferred as a regulatory
     liability, partially offset by a $235 million deferred tax asset, as of January 1, 2003.  Accretion and
     depreciation expense resulting from the application of the new standard is expected to be approximately $143
     million in 2003.  This cost will reduce the regulatory liability, with no impact on earnings.  As of March
     31, 2003, SCE's ARO for its nuclear facilities totaled approximately $2.0 billion and its nuclear
     decommissioning trust assets had a fair value of $2.1 billion.  If the new standard had been in place on
     January 1, 2002, SCE's ARO as of that date would have been $1.98 billion.  Approximately $1.9 billion
     collected through rates for cost of removal of plant assets not considered to be legal obligations remain in
     accumulated depreciation and decommissioning.

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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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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Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Information responding to Item 3 is included in Item 2, Management's Discussion and Analysis of Results of
Operations and Financial Condition, under Market Risk Exposures, and is incorporated herein by reference.

Item 4.    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 SCE'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 Quarterly Report on Form 10-Q.

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 May 12, 2003.  They have 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.



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PART II  OTHER INFORMATION

Item 1.  Legal Proceedings

Navajo Nation Litigation

As previously reported in Part I, Item 3 of SCE's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 (2002 Form 10-K), 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.

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.  Based on the
Supreme Court's analysis, SCE filed on April 28, 2003, a motion to dismiss or, in the alternative, for summary
judgment in the D.C. District Court action.  The motion remains pending.

CPUC Litigation and Settlement

As previously reported in Part I, Item 3 of SCE's 2002 Form 10-K, 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.  See the
discussion, which is incorporated herein by this reference, in Part 1, Item 2, Management's Discussion and
Analysis of Results of Operation and Financial Condition under "SCE'S REGULATORY MATTERS - CPUC Litigation
Settlement Agreement" for a description of SCE's lawsuit against the CPUC, its settlement, and the appeal of the
stipulated judgment approving the settlement.

DTSC Enforcement Action

SCE has received a Draft Enforcement Order and related documents from the California Department of Toxic
Substances Control (DTSC), seeking penalties totaling $383,400.  The DTSC alleges that SCE failed, during a 13
month period ending in March 2002, to properly maintain prescribed levels of financial assurance in connection
with its on-site management of hazardous waste at the San Onofre Nuclear Generating Station.  SCE has the right
to request a meeting with the DTSC, as well as to a hearing before an administrative law judge, to resolve these
allegations.


<PAGE>

Page 29


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         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 (File No. 1-2313, Form 10-K for year ended December 31, 2002)*

         10.1     Terms of 2003 stock option and performance share awards under the Equity Compensation Plan or
                  the 2000 Equity Plan (File No. 1-9936, filed as Exhibit 10.1 to the Edison International Form
                  10-Q for the quarter ended March 31, 2003)*

         10.2     Retention Incentive Award for Harold B. Ray

         99       Statement Pursuant to 18 U.S.C. 1350


(b)      Reports on Form 8-K:

         Date of Report                        Date Filed                       Item(s) Reported
         --------------                        ----------                       ----------------

         January 13, 2003                      January 17, 2003                       5
         February 4, 2003                      February 5, 2003                       5


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



<PAGE>

Page 30



                                                    SIGNATURES


Pursuant to the requirements 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
                                                                       (Registrant)


                                                     By       /s/ THOMAS M. NOONAN
                                                              --------------------------------
                                                              THOMAS M. NOONAN
                                                              Vice President and Controller

                                                     By       /s/ KENNETH S. STEWART
                                                              --------------------------------
                                                              KENNETH S. STEWART
                                                              Assistant General Counsel and
                                                              Assistant Secretary


May 13, 2003



<PAGE>



                                                   CERTIFICATION


I, ALAN J. FOHRER, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of SCE;

2.   Based on my knowledge, this quarterly 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 quarterly report;

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly
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 quarterly 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 quarterly 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 quarterly report (the "Evaluation Date"); and

c)   presented in this quarterly 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 quarterly 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:  May 13, 2003

                                                /S/ ALAN J. FOHRER
                                         --------------------------------
                                                  ALAN J. FOHRER
                                              Chief Executive Officer


<PAGE>


                                                   CERTIFICATION


I, W. JAMES SCILACCI, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of SCE;

2.   Based on my knowledge, this quarterly 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 quarterly report;

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly
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 quarterly 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 quarterly 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 quarterly report (the "Evaluation Date"); and

c)   presented in this quarterly 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 quarterly 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:  May 13, 2003

                                               /S/ W. JAMES SCILACCI
                                      ---------------------------------------
                                                 W. JAMES SCILACCI
                                 Senior Vice President and Chief Financial Officer



EXHIBIT 10.2

                                                  <b>RETENTION AWARD
                                                   Harold B. Ray

                                                       Terms</b>

<b>Amount</b>
$600,000 present value, equally divided between deferred cash and EIX stock units.

<b>Vesting</b>
The deferred cash and EIX stock units will vest 100% on the first day of the month in which HBR attains age 65
(August 2005).  The award is forfeited if HBR voluntarily terminates his employment earlier.

<b>Deferred Cash</b>
Deferred cash will be credited under the Executive Deferred Compensation Plan (EDCP) on January 2, 2003.  This
retention award is not subject to the double death benefit provided in Article 8 of the EDCP.

<b>Stock Units</b>
$300,000 will be converted to EIX stock units based on the average of the closing prices of EIX common stock for
the last 60 days of 2002, and the EIX stock units will be credited to an unfunded bookkeeping account on January
2, 2003.  The EIX stock units will accrue dividend equivalents if dividends are paid on EIX common stock and will
accumulate without interest.  The EIX stock units and dividend equivalents will be paid in cash on the first day
of the month in which HBR attains age 65 at a value equal to the average of the closing prices of EIX common
stock for the 60 days prior to that date.  At least six months prior to the scheduled payment date, HBR may elect
to defer payment under the terms of the DCP.

<b>Involuntary Severance, Death or Disability</b>
In the event HBR's employment is terminated due to involuntary severance, death or disability, a pro rata portion
of the retention award will vest and be paid based on the number of full months worked prior to such termination
divided by the total number of months in the vesting period.  The EIX stock units so vested will be paid at a
value equal to the average of the closing prices of EIX common stock for the 60 days prior to the date employment
ends.






EXHIBIT 99

                                   <b>STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350,
                            AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</b>


In connection with the accompanying Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (the
"Quarterly 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, based on his
knowledge, that:

        1.    The Quarterly 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 Quarterly 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 Quarterly 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 original of this written statement required by Section 906 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>11
<FILENAME>srexh231.htm
<DESCRIPTION>CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>
<HTML>
<HEAD>
<TITLE>
S$ Exhibit 23.1 Consent of Independent Accountants</TITLE>
</HEAD>
<BODY>
<PRE>
                                        Consent of Independent Accountants


We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Southern
California Edison Company of our report dated March 26, 2003 relating to the financial statements, which appears
in Southern California Edison Company's 2002 Annual Report to Shareholders, which is incorporated by reference in
its Annual Report on Form 10-K for the year ended December 31, 2002. We also consent to the incorporation by
reference of our report dated March 26, 2003 relating to the financial statement schedule, which appears in such
Annual Report on Form 10-K. We also consent to the references to us under the heading "Experts" in such
Registration Statement.




/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP


Los Angeles, California
July 8, 2003

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.1
<SEQUENCE>12
<FILENAME>s4exh241.htm
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<HTML>
<HEAD>
<TITLE>
S4 Exhibit 24.1</TITLE>
</HEAD>
<BODY>
<PRE>
                                    SOUTHERN CALIFORNIA EDISON COMPANY

                                             POWER OF ATTORNEY

                  The undersigned, SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation (the "Company"),
and certain of its officers and directors do each hereby constitute and appoint, BEVERLY P. RYDER, MARY C.
SIMPSON, GEORGE T. TABATA, KENNETH S. STEWART, PAIGE W. R. WHITE, TIMOTHY W. ROGERS, DEBORAH FESTA, BONITA J.
SMITH, PEGGY A. STERN, RAYNA M. MORRISON, EILEEN B. GUERRERO, DARLA FRUSHER, POLLY L. GAULT, and DOUGLAS G.
GREEN, or any of them, to act severally as attorney-in-fact for the Company to execute, sign, file or cause to be
filed, on its behalf and in its name any registration statement and any exhibits, amendments, and/or supplements
thereto to be filed by the Company with the Securities and Exchange Commission for the purpose of registering up
to $1,000,000,000 principal amount of the Company's First and Refunding Mortgage Bonds under the Securities Act
of 1933, as amended.

                  Executed at Rosemead, California, as of this 13th day of January, 2003.


                                                 SOUTHERN CALIFORNIA EDISON COMPANY


                                                 By:      /S/ Alan J. Fohrer
                                                          ----------------------------
                                                          Alan J. Fohrer
                                                          Chief Executive Officer

Attest:

/S/ Beverly P. Ryder
- ----------------------
BEVERLY P. RYDER
Secretary


Page 1

                                        Southern California Edison Company
                                                 Power of Attorney


Principal Executive Officer:

/S/ Alan J. Fohrer
- -----------------------------------------------------
Alan J. Fohrer                                                  Chief Executive Officer
                                                                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/ John E. Bryson                         Director           /S/ James M. Rosser                     Director
- --------------------------------------                        -----------------------------------
John E. Bryson                                                James M. Rosser


/S/ Bradford M. Freeman                    Director           /S/ Robert H. Smith                     Director
- --------------------------------------                        -----------------------------------
Bradford M. Freeman                                           Robert H. Smith


/S/ Joan C. Hanley                         Director           /S/ Richard T. Schlosberg, III          Director
- --------------------------------------                        -----------------------------------
Joan C. Hanley                                                Richard T. Schlosberg, III


/S/ Bruce Karatz                           Director           /S/ Thomas C. Sutton                    Director
- --------------------------------------                        -----------------------------------
Bruce Karatz                                                  Thomas C. Sutton


/S/ Luis G. Nogales                        Director           /S/ Daniel M. Tellep                    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>13
<FILENAME>s4exh242.htm
<DESCRIPTION>CERT COPY OF BD OF DIRS RESOLUTION
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD><TITLE>S4 Exhibit 24.2</TITLE>
<META content="MSHTML 6.00.2715.400" name=GENERATOR></HEAD>
<BODY><PRE>                                                     CERTIFICATION
                                                     -------------



                  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 Executive Committee of the Board of Directors of the
corporation, duly adopted at a meeting of the Executive Committee held on JANUARY 13, 2003.

Dated:  July 8, 2003


                                                                  /S/ Bonita J. Smith
                                                              --------------------------------
                                                                   Assistant Secretary
                                                                SOUTHERN CALIFORNIA EDISON
                                                                         COMPANY



<PAGE>



                                         RESOLUTION OF THE EXECUTIVE COMMITTEE
                                             OF THE BOARD OF DIRECTORS OF
                                          SOUTHERN CALIFORNIA EDISON COMPANY
                                               Adopted: January 13, 2003

                                RE: APPROVAL OF EXCHANGE OFFER AND RELATED TRANSACTIONS


                  WHEREAS, there has been presented to this Executive Committee of the Board of Directors a
substantially final form of Offering Memorandum (the "Offering Memorandum") and other materials describing a proposed
exchange offer and related transactions (the "Exchange Offer"), in which this corporation will offer to exchange up
to $1 billion principal amount of its newly issued First and Refunding Mortgage Bonds (the "New Bonds") for an equal
principal amount of its outstanding 8.95% Variable Rate Notes due 2003 (the "Old Notes") and carry out various
related transactions;

                  WHEREAS, with the Exchange Offer this corporation will need to enter into a Dealer Manager
Agreement (the "Dealer Manager Agreement") with Salomon Smith Barney Inc. and J.P. Morgan Securities Inc. (the
"Dealer Managers"), a Registration Rights Agreement (the "Registration Rights Agreement") with the Dealer Managers,
and an Exchange Agent and Information Agent Agreement (the "Exchange Agent Agreement") with Mellon Investor Services,
LLC, substantially upon such terms as described in the Offering Memorandum and other materials presented to this
Executive Committee;

                  WHEREAS, to consummate the Exchange Offer, it will be necessary for this corporation to issue and
deliver the New Bonds under the Trust Indenture dated as of October 1, 1923, from this corporation to Harris Trust
and Savings Bank (now The Bank of New York, successor Trustee) and Pacific-Southwest Trust &amp; Savings Bank (now D. G.
Donovan, successor Trustee), Trustees, as amended and supplemented (the "Indenture"), including a supplemental
indenture to be executed, delivered, and recorded in connection with the issuance of the New Bonds (the "Supplemental
Indenture");



Page 1



                  WHEREAS, after review of the terms of the Exchange Offer, and with the advice of management and
legal counsel, this Executive Committee has determined that the Exchange Offer is in the best interests of this
corporation and its shareholders; and

                  WHEREAS, this Executive Committee desires to approve and authorize those actions by or on behalf of
this corporation that are necessary to implement and consummate the Exchange Offer;

                  NOW, THEREFORE, BE IT RESOLVED, that this Board of Directors hereby authorizes and approves the
Exchange Offer and the transactions contemplated thereby, including but not limited to: (1) the offer of the New
Bonds in exchange for the Old Notes and the making of an early participation payment, as set forth in the Offering
Memorandum; (2) the execution, delivery, and recording of the Supplemental Indenture and the issuance and delivery of
up to $1 billion principal amount of the New Bonds, with the terms of the series of the New Bonds to be established
by a separate resolution adopted by this Executive Committee in accordance with the Indenture and Supplemental
Indenture; and (3) the execution, delivery, and performance of the Dealer Manager Agreement, Registration Rights
Agreement, Exchange Agreement, and any other agreements necessary to carry out or consummate the Exchange Offer.



Page 2



                  BE IT FURTHER RESOLVED, that this Executive Committee hereby authorizes and directs the Chairman of
the Board, the Chief Executive Officer, the President, the Senior Vice President and Chief Financial Officer, the
Vice President and Controller, the Vice President and Treasurer, or any Assistant Treasurer, and each of them acting
alone, to execute and deliver the Supplemental Indenture, the Dealer Manager Agreement, the Registration Rights
Agreement, the Exchange Agent Agreement, and such other agreements or documents as the officer acting may deem
necessary or appropriate to carry out or consummate the Exchange Offer.

                  BE IT FURTHER RESOLVED, that to fulfill this corporation's obligations under the Registration
Rights Agreement each of officers of this corporation is authorized to prepare, execute, and file, or cause to be
prepared, executed, and filed, with the Securities and Exchange Commission (the "SEC") one or more registration
statements and any exhibits, supplements, and/or amendments thereto for the purpose of registering the New Bonds
under the Securities Act of 1933, as amended.

                  BE IT FURTHER RESOLVED, that the Chairman of the Board, the Chief Executive Officer, the President,
the Senior Vice President and Chief Financial Officer, the Vice President and Controller, the Vice President and
Treasurer, or any Assistant Treasurer is authorized to execute and deliver on behalf of this corporation and in its
name a power of attorney appointing Beverly P. Ryder, Mary C. Simpson, George T. Tabata, Kenneth S. Stewart, Paige W.
R. White, Timothy W. Rogers, Deborah Festa, Bonita J. Smith, Peggy A. Stern, Rayna M. Morrison, Eileen B. Guerrero,
Darla Frusher, Polly L. Gault and Douglas G. Green, or any one of them, to act severally as attorney-in-fact for this
corporation to execute, sign, file, or cause to be filed, on its behalf and in its name, any registration statement
and any exhibits, amendments, and/or supplements thereto to be filed by this corporation with the SEC for the purpose
of registering the New Bonds under the Securities Act of 1933.


Page 3



                  BE IT FURTHER RESOLVED, that the Chairman of the Board, the Chief Executive Officer, the President,
the Senior Vice President and Chief Financial Officer, the Vice President and Controller, the Vice President and
Treasurer, or any Assistant Treasurer is authorized, at his or her discretion and in the name and on behalf of this
corporation, or otherwise, to execute and file, or cause to be filed, such consents to service of process, powers of
attorney, applications, and other documents with such state authorities and to do such other acts and things as the
officer acting or counsel for this corporation shall deem necessary or appropriate to register or qualify any of the
New Bonds for offer and sale under the securities, Blue Sky, or other similar laws of any states or jurisdictions;
provided, however, that this corporation shall not, pursuant to this authorization, qualify as a foreign corporation
in any such state or jurisdiction.

                  BE IT FURTHER RESOLVED, that each of the officers of this corporation is authorized to execute on
behalf and in the name of this corporation the documents specified or contemplated in these resolutions through the
act of a duly appointed power of attorney.

                  BE IT FURTHER RESOLVED, that this Executive Committee hereby authorizes each of the officers of
this corporation, or their designees, to execute and deliver, in the name and on behalf of this corporation or
otherwise, all such agreements, contracts, undertakings, deeds, instruments, certificates, opinions, or other
documents, and to do and perform, or cause to be done and performed, all such acts, deeds, and things, as each such
officer or designee may deem necessary, advisable or appropriate to effect or carry out fully the purposes and
intents of this resolution.



Page 4



                  BE IT FURTHER RESOLVED, that any actions previously taken by the officers, employees, or agents of
this corporation in connection with the Exchange Offer and the transactions contemplated thereby that were consistent
with this resolution are hereby ratified, approved and confirmed.


APPROVED:



/s/ John E. Bryson
- -----------------------------------------
John E. Bryson
Chairman of the Board



/S/Stephen E. Pickett
- -----------------------------------------
Senior Vice President and General Counsel

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25
<SEQUENCE>14
<FILENAME>s4exh25.htm
<DESCRIPTION>FORM T-1 STMT OF ELIGIBILITY
<TEXT>
<HTML>
<HEAD>
<TITLE>
Form T-1</TITLE>
</HEAD>
<BODY>
<PRE>
=========================================================================================================
                                                     <b>FORM T-1

                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                             STATEMENT OF ELIGIBILITY
                                    UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                                     CORPORATION DESIGNATED TO ACT AS TRUSTEE

                                       CHECK IF AN APPLICATION TO DETERMINE
                                       ELIGIBILITY OF A TRUSTEE PURSUANT TO
                                         SECTION 305(b)(2)           |__|

                                               THE BANK OF NEW YORK
                                (Exact name of trustee as specified in its charter)</b>

New York                                                                         13-5160382
(State of incorporation                                                          (I.R.S. employer
if not a U.S. national bank)                                                     identification no.)

One Wall Street, New York, N.Y.                                                  10286
(Address of principal executive offices)                                         (Zip code)


                                        <b>Southern California Edison Company
                                (Exact name of obligor as specified in its charter)</b>


California                                                                       95-1240335
(State or other jurisdiction of                                                  (I.R.S. employer
incorporation or organization)                                                   identification no.)



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

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

                           First and Refunding Mortgage Bonds, 8% Series 2003B, Due 2007
                                        (Title of the indenture securities)

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

<PAGE>



<b>1.      General information.  Furnish the following information as to the Trustee:

        (a)    Name and address of each examining or supervising authority to which it is subject.</b>

- -------------------------------------------------------------------------------------------------------------
                  Name                                                                  Address
- -------------------------------------------------------------------------------------------------------------

        Superintendent of Banks of the State of                           2 Rector Street, New York,
        New York                                                          N.Y.  10006, and Albany, N.Y. 12203

        Federal Reserve Bank of New York                                  33 Liberty Plaza, New York,
                                                                          N.Y.  10045

        Federal Deposit Insurance Corporation                             Washington, D.C.  20429

        New York Clearing House Association                               New York, New York   10005

        (b)    Whether it is authorized to exercise corporate trust powers.

        Yes.

<b>2.      Affiliations with Obligor.</b>

        If the obligor is an affiliate of the trustee, describe each such affiliation.

        None.

<b>16.     List of Exhibits.

        Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by
        reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act")
        and 17 C.F.R. 229.10(d).</b>

        1.     A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as
               now in effect, which contains the authority to commence business and a grant of powers to exercise
               corporate trust powers.  (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration
               Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No.
               33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)

        4.     A copy of the existing By-laws of the Trustee.  (Exhibit 4 to Form T-1 filed with Registration
               Statement No. 33-31019.)

        6.     The consent of the Trustee required by Section 321(b) of the Act.  (Exhibit 6 to Form T-1 filed
               with Registration Statement No. 33-44051.)

        7.     A copy of the latest report of condition of the Trustee published pursuant to law or to the
               requirements of its supervising or examining authority.



Page 2




                                                     <b>SIGNATURE</b>



        Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on
its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on
the 2nd day of July, 2003.


                                                           THE BANK OF NEW YORK



                                                           By:       /s/ ROBERT A. MASSIMILLO
                                                               --------------------------------------------
                                                               Name:   ROBERT A. MASSIMILLO
                                                               Title:     VICE PRESIDENT



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                                                                                                          <b>EXHIBIT 7</b>

- -------------------------------------------------------------------------------------------------------------------
                                        Consolidated Report of Condition of

                                               THE BANK OF NEW YORK

                                     of One Wall Street, New York, N.Y. 10286

                                      And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business March 31, 2003, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

                                                                                              Dollar Amounts
ASSETS                                                                                          In Thousands
Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin..                                           $4,389,492
   Interest-bearing balances...........................                                            3,288,212
Securities:
   Held-to-maturity securities.........................                                              654,763
   Available-for-sale securities.......................                                           17,626,360
Federal funds sold in domestic offices.................                                            1,759,600
Securities purchased under agreements to
   resell.............................................                                               911,600
Loans and lease financing receivables:
   Loans and leases held for sale......................                                              724,074
   Loans and leases, net of unearned
     income.....................32,368,718
   LESS: Allowance for loan and
     lease losses..................826,505
   Loans and leases, net of unearned
     income and allowance...................31,542,213
Trading Assets.........................................                                            7,527,662
Premises and fixed assets (including capitalized
   leases).............................................                                              825,706
Other real estate owned................................                                                  164
Investments in unconsolidated subsidiaries and
   associated companies................................                                              260,940
Customers' liability to this bank on acceptances
   outstanding.........................................                                              225,935
Intangible assets
   Goodwill............................................                                            2,027,675
   Other intangible assets.............................                                               75,330
Other assets...........................................                                            4,843,295
                                                                                                 -----------
Total assets...........................................                                          $76,683,021
                                                                                                 ===========


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


LIABILITIES
Deposits:
   In domestic offices.................................                                          $33,212,852
   Noninterest-bearing.......................12,997,086
   Interest-bearing..........................20,215,766
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                                           24,210,507
   Noninterest-bearing..........................595,520
   Interest-bearing..........................23,614,987
Federal funds purchased in domestic
  offices...........................................                                                 375,322
Securities sold under agreements to repurchase.........                                              246,755
Trading liabilities....................................                                            2,335,466
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                                                  959,997
Bank's liability on acceptances executed and
   outstanding.........................................                                              227,253
Subordinated notes and debentures......................                                            2,090,000
Other liabilities......................................                                            5,716,796
Total liabilities......................................                                          $69,374,948
Minority interest in consolidated
   subsidiaries......................................                                                540,772


EQUITY CAPITAL
Perpetual preferred stock and related
   surplus...........................................                                                      0
Common stock...........................................                                            1,135,284
Surplus................................................                                            1,056,295
Retained earnings......................................                                            4,463,720
Accumulated other comprehensive income.........                                                     (112,002)
Other equity capital components.....................                                                       0
- --------------------------------------------------------------- ---------------------------------------------
Total equity capital...................................                                            6,767,301
                                                                                                 ------------
Total liabilities minority interest and equity capital.                                          $76,683,021
                                                                                                 ============


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





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         I, Thomas J. Mastro,  Senior Vice  President and  Comptroller  of the  above-named  bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge and belief.

                                                                                         Thomas J. Mastro,
                                                                     Senior Vice President and Comptroller

         We, the undersigned  directors,  attest to the correctness of this statement of resources and liabilities.
We declare  that it has been  examined  by us, and to the best of our  knowledge  and belief has been  prepared  in
conformance with the instructions and is true and correct.


Thomas A. Renyi         ]
Gerald L. Hassell       ]
Alan R. Griffith        ]                                          Directors


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