Supportive regulatory mechanisms established by the California Public Utilities Commission (CPUC) allow utility Southern California Edison (SCE) timely and certain recovery of costs. Despite the potential for a reshuffling of commissioners beginning next year, we expect the regulatory framework that supports SCE's credit quality to remain. Federal Energy Regulatory Commission (FERC) rulings continue to be supportive of SCE's transmission investments, with an estimated 26% of SCE's forecast capital spending from 2010-2014 expected to be FERC jurisdictional. The advent of shale gas production is expected to shift supply/demand dynamics for U.S. natural gas. Sustained lower gas prices would be a boon for SCE, which is heavily dependent on natural gas as a power supply fuel, perhaps creating headroom in which to
