SecProbe.io

CORRESP
1
filename1.htm

EIX Correspondence

(Edison International letterhead)

August 19, 2009

Mr. William Thompson
Branch Chief
Division of Corporation Finance
United States Securities and Exchange Commission
Washington, D.C. 20549-3561

Dear Mr. Thompson:

This letter is submitted on behalf of Edison International and Southern
California Edison Company (SCE) in response to comments from the staff
of the Division of Corporation Finance of the Securities and Exchange
Commission (the Commission) with respect to the companies' (1) Form
10-K for the fiscal year ended December 31, 2008; (2) Definitive Proxy
Statement on Schedule 14A; and (3) Form 10-Q for the fiscal quarter
ended March 31, 2009, as set forth in your letter to Mr. Theodore F.
Craver, Chairman of the Board, President and Chief Executive Officer of
Edison International, dated July 14, 2009.

For reference purposes, the text of your letter has been reproduced in
this letter, with our responses appearing below each numbered comment.

Edison International

Form 10-K for Fiscal Year Ended December 31, 2008

Item 9A. Controls and Procedures, page 51

1.    We refer you to your response to comment one in our letter dated
      August 9, 2007 submitted on August 30, 2007.  In the response,
      you indicated that you intended to disclose in future annual
      report filings that (i) the scope of your evaluation of internal
      control over financial reporting does not include an evaluation
      of internal control over financial reporting for certain variable
      interest entities consolidated pursuant to FIN 46(R) together
      with key sub-totals such as total and net assets, revenues and
      net income that result from consolidation of such entities and
      (ii) your conclusion regarding the effectiveness of internal
      control over financial reporting does not extend to the internal
      controls of such VIEs.  Please tell us why you concluded the
      additional disclosures you intended to provide are not required.
      Otherwise, please include the disclosures in future annual report
      filings.  Also, please tell

Page 2
      us whether the scope of your
      evaluation of internal control over financial reporting includes
      entities that you proportionately consolidate.  If the scope of
      your evaluation does not include proportionately consolidated
      entities, please provide similar disclosures in regard to those
      entities.  The additional disclosures should also note that the
      financial statements include the accounts of certain entities
      consolidated pursuant to FIN 46(R) and/or accounted for via
      proportionate consolidation in accordance with EITF 00-1 but that
      management has been unable to assess the effectiveness of
      internal control at those entities due to the fact that you do
      not have the ability to dictate or modify the controls of the
      entities and do not have the ability, in practice, to assess
      those controls.  Please refer to Questions 1 of "Frequently Asked
      Questions Regarding Management's Report on Internal Control Over
      Financial Reporting and Certification of Disclosure in Exchange
      Act Periodic Reports" available on our website at
      www.sec.gov/info/accountants/controlfaq.htm.

      Response:

      Variable Interest Entities:

      Edison International will add the following additional disclosure
      in its 2009 Form 10-K:

            Edison International consolidates four variable interest
            entities under FIN 46(R), but does not control the
            operating activities of these entities or have the ability
            to dictate or modify the controls of these entities.
            Accordingly, the scope of evaluation of internal control
            over financial reporting does not include an evaluation of
            internal control over financial reporting for these
            variable interest entities.  A summary of the key
            sub-totals of these entities is set forth in the following
            table (in millions):

                  ----------------------------------------------------
                                                          2008
                  ----------------------------------------------------
                  At December 31,
                        Total Assets                      $416
                  For the year ended December 31,
                       Revenue                            $410
                       Operating Expenses                 $243
                       Net Income                         $ 88
                  ----------------------------------------------------

            Accordingly, the conclusion regarding the effectiveness of
            internal control over financial reporting does not extend
            to the internal controls of such variable interest
            entities.

Page 3

      Jointly Owned Utility Plants -

      Edison International proportionately records its share of
      expenses for jointly owned utility projects as described in Note
      13 to the Consolidated Financial Statements. Edison
      International's scope of evaluation of internal control over
      financial reporting includes SCE's interests in such jointly
      owned utility projects.

Schedule II Valuation and Qualifying Accounts, page 58

2.    Please disclose the nature of amounts charged to other accounts.
      Refer to Rule 12-09 of Regulation S-X.

      Response:

      Edison International will add the following footnote to describe
      the nature of $48 million charged to other accounts in our 2009
      Form 10-K.

      New Footnote to Schedule II, Valuation and Qualifying Accounts

         On September 15, 2008, Lehman Brothers Holdings filed for
         protection under Chapter 11 of the U.S. Bankruptcy Code. EME
         had power contracts with Lehman Brothers Commodity Services,
         Inc., a subsidiary of Lehman Brothers Holdings, for Midwest
         Generation for 2009 and 2010. Lehman Brothers Commodity
         Services also filed for bankruptcy protection on October 3,
         2008. The obligations of Lehman Brothers Commodity Services
         under the power contracts were guaranteed by Lehman Brothers
         Holdings. EME has established claims in the amount of $48
         million related to the contracts terminated with Lehman
         Brothers Holdings and its subsidiary through the termination
         provisions of its master netting agreements with a Lehman
         Brothers Holdings subsidiary. Such claims have been fully
         reserved and are included net in "Receivables, less allowances
         for uncollectible accounts" on Edison International's
         Consolidated Balance Sheet.

Exhibit 12 - Computation of Ratios of Earnings to Fixed Charges and
Preferred and Preference Stock

3.    Please show us your calculation of earnings for the most recent
      year in a format that identifies each of the items in instruction
      (C) of Item 503(d) of Regulation S-K.  In addition, tell us why
      your treatment of minority interest, equity in income from equity
      investees and distributed income from equity investees in your
      earnings computations comply with the instructions to Item 503(d)
      Regulation S-K.  In future filings please show your computations
      to derive income from continuing operations before fixed charges
      and taxes starting with income from continuing operations before
      tax and minority interest.

Page 4

      Response:

      Attachment A includes a copy of Edison International's
      calculation for 2008 in the format requested.  The Ratios of
      Earnings to Fixed Charges and Preferred and Preference Stock are
      not materially different than presented in the 2008 Form
      10-K.

      Edison International will revise the format of the Ratio of
      Earnings to Fixed Charges and Preferred and Preference Stock
      calculation to be consistent with instruction (C) of Item 503(d)
      in its 2009 Form 10-K.

Exhibit 13 - Selected Portions of the Annual Report to Shareholders
from the Year Ended December 31, 2008

Management's Discussion and Analysis of Financial Condition and Results
of Operations, page 8

Edison International (Consolidated) Results of Operations and
Historical Cash Flow Analysis, page 64

4.    Your presentation of average realized prices, as computed in the
      footnotes to the tables on pages 72 and 75, appear to represent
      non-GAAP financial measures since you exclude certain GAAP
      amounts in the calculations.   Please tell us whether you
      consider average realized prices of the Illinois plants and Homer
      City facilities statistical measures that are based on GAAP
      numbers and explain the basis for your conclusion.  Otherwise,
      please revise your disclosures to identify the measures as
      non-GAAP financial measures, provide a reconciliation of
      operating revenues of the nonutility power generation segment to
      realized revenues of the Illinois plants and Homer City
      facilities and disclose the reasons why management believes that
      the presentation of the non-GAAP financial measures provides
      useful information to investors regarding your results of
      operations.  Please refer to Item 10(e) of Regulation S-K.

      Response:

      Additional disclosure has been added to the second quarter of
      2009 Form 10-Q together with a reconciliation of the operating
      revenues of the Illinois Plants and Homer City to the operating
      revenues of the non-utility power generation segment.

Page 5

Critical Accounting Estimates and Policies, page 87

5.    Please revise to describe the material implications of
      uncertainties associated with the methods, assumptions and
      estimates underlying your critical accounting measurements that
      have had or that you reasonably expect will have a material
      impact on financial condition and operating performance and on
      the comparability of reported information among periods.  Your
      disclosures should supplement, not duplicate, the accounting
      policies disclosed in the notes to the financial statements.  For
      example, you should analyze to the extent material, such factors
      as how you arrived at each estimate, how accurate the
      estimate/assumption has been in the past, how much the
      estimate/assumption has changed in the past and whether the
      estimate/assumption is reasonably likely to change in the
      future.  We would expect you to provide quantitative as well as
      qualitative disclosure when quantitative information is
      reasonably available and to provide greater insight into the
      quality and variability of information regarding financial
      condition and operating performance.  Also, since each critical
      accounting estimate and related assumptions are based on matters
      that are uncertain or difficult to measure, you should analyze
      and disclose their specific sensitivity to change, based on other
      outcomes that are reasonably likely to occur and would have a
      material effect.  Please refer to Item 303(a)(3)(ii) of
      Regulation S-K as well as the Commission's Guidance Regarding
      Management's Discussion and Analysis of Financial Condition and
      Results of Operations.

      Response:

      Edison International will enhance its Critical Accounting
      Estimates and Policies disclosures to describe the material
      implications of uncertainties associated with the methods,
      assumptions and estimates under Item 303(a)(3)(ii) of Regulation
      S-K in its 2009 Form 10-K.

Notes to Consolidated Financial Statements, page 125

Note 1. Summary of Accounting Policies, page 125

Earnings Per Share, page 128

6.    Please clarify whether you allocate undistributed earnings to the
      participating securities for purposes of computing basic earnings
      per share.  Refer to Issue 3 of EITF 03-6.  Please note any
      participant rights that are contingent or subject to discretion
      should be disclosed in accordance with paragraph 4 of SFAS 129.
      Also, please tell us the nature of the adjustments related to
      assumed conversions in the diluted earnings per share calculation.

Page 6

      Response:

      Under the two-class method, we allocate undistributed earnings to
      common stock and participating securities on a one to one ratio,
      as if all of the earnings for the period have been distributed.
      Edison International's participating securities provide the
      holder with the ability to participate in all dividends declared
      with the holders of common stock on an equal basis as disclosed
      in Note 1 to the Consolidated Financial Statements:

            "Edison International's participating securities are stock
            based compensation awards payable in common shares,
            including stock options, performance shares and restricted
            stock units, which earn dividend equivalents on an equal
            basis with common shares..."

      Edison International only includes vested stock-based awards in
      the computation of basic earnings per share and does not have
      participating securities with contingencies or that are subject
      to discretion.

      Edison International uses the treasury stock method under
      paragraph 17 of SFAS 128 to calculate diluted EPS.  In applying
      the treasury method, all dilutive potential common shares,
      regardless of whether they are exercisable, are treated as if
      they have been exercised. All Edison International stock-based
      awards payable in stock are assumed to be converted and are
      considered in the diluted computation, taking into consideration
      proceeds received upon exercise, compensation cost attributable
      to future services not yet recognized, and the amount of excess
      tax benefits, if any. Edison International then ranks the
      dilutive impacts of the stock-based awards beginning with non
      participating securities followed by participating securities.

Note 4. Income Taxes, page 144

Accounting for Uncertainty in Income Taxes, page 146

7.    Please tell us how the liability for unrecognized tax benefits is
      classified in your consolidated balance sheet for each year
      presented.  In addition, please tell us the nature of the items
      netted against the liability as disclosed in note 3 to the table
      of commitments on page 95.

      Response:

      At December 31, 2008, the liability was recorded within the
      captions "Accrued taxes" and "Other deferred credits and other
      long term liabilities" on the

Page 7

      Consolidated Balance Sheet. At
      December 31, 2007, the liability was recorded within the captions
      "Other current assets" and "Other deferred credits and other long
      term liabilities" on the Consolidated Balance Sheet.

      At December 31, 2008, Edison International had a consolidated net
      liability recorded for uncertain tax positions of $450 million,
      compared to a liability for unrecognized tax benefits of $2.237
      billion. The difference is mainly due to the presentation of
      potential affirmative claim refunds. The $450 million net
      liability for uncertain tax positions includes liabilities
      expected to be paid to taxing authorities net of refunds expected
      to be received from taxing authorities, by tax jurisdiction.  We
      have also netted potential refunds from affirmative claims.

      During the second quarter of 2009, Edison International completed
      a settlement of tax matters with the Internal Revenue Service
      (referred to as the "Global Settlement").  The Global Settlement
      is described on pa