Resolution Of Remaining Chapter 11 Disputed Claims	12 Months Ended
Dec. 31, 2014
Resolution Of Remaining Chapter 11 Disputed Claims	NOTE 12: RESOLUTION OF REMAINING CHAPTER 11 DISPUTED CLAIMS Various electricity suppliers filed claims in the Utility's proceeding filed under Chapter 11 of the U.S. Bankruptcy Code seeking payment for energy supplied to the Utility's customers between May 2000 and June 2001. These claims, which the Utility disputes, are being addressed in various FERC and judicial proceedings in which the State of California, the Utility, and other electricity purchasers are seeking refunds from electricity suppliers, including governmental entities, for overcharges incurred in the CAISO and the California Power Exchange wholesale electricity markets during this period. While the FERC and judicial proceedings are pending, the Utility has pursued, and continues to pursue, settlements with electricity suppliers. The Utility entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utility's refund claims against these electricity suppliers. These settlement agreements provide that the amounts payable by the parties are, in some instances, subject to adjustment based on the outcome of the various refund offset and interest issues being considered by the FERC. Any net refunds, claim offsets, or other credits that the Utility receives from electricity suppliers through resolution of the remaining disputed claims, either through settlement or through the conclusion of the various FERC and judicial proceedings, are refunded to customers through rates in future periods. Interest accrues on the remaining net disputed claims at the FERC-ordered rate, which is higher than the rate earned by the Utility on the escrow balance. Although the Utility has been collecting the difference between the accrued interest and the earned interest from customers in rates, these collections are not held in escrow. If the amount of accrued interest is greater than the amount of interest ultimately determined to be owed on the remaining net disputed claims, the Utility would refund to customers any excess interest collected. The amount of any interest that the Utility may be required to pay will depend on the final determined amount of the remaining net disputed claims and when such interest is paid. In July 2014, a settlement agreement between the Utility and an electric supplier became effective, resolving a portion of the Utility's disputed claims. The settlement will result in refunds to customers of $312 million and will be returned through rates in future periods. The Utility is uncertain when and how the remaining disputed claims will be resolved. In August 2014, the Utility received a letter from the California Power Exchange clarifying its ultimate intent to offset the Utility's remaining disputed claims principal and interest balances through net settlement. Accordingly, the Utility has presented $434 million of net Disputed claims and customer refunds on the Consolidated Balance Sheets at December 31, 2014, which includes both principal and interest. At December 31, 2013, the Consolidated Balance Sheets reflected $154 million of Disputed claims and customer refunds and $710 million of Interest payable. At December 31, 2014 and 2013, the Utility held $291 million, respectively, in escrow, including earned interest, for payment of the remaining net disputed claims liability. These amounts are included within restricted cash on the Consolidated Balance Sheets.

Resolution Of Remaining Chapter 11 Disputed Claims

12 Months Ended

Dec. 31, 2014

Resolution Of Remaining Chapter 11 Disputed Claims

NOTE 12: RESOLUTION OF REMAINING CHAPTER 11 DISPUTED CLAIMS

Various electricity suppliers filed claims in the Utility's proceeding filed under Chapter 11 of the U.S. Bankruptcy Code seeking payment for energy supplied to the Utility's customers between May 2000 and June 2001. These claims, which the Utility disputes, are being addressed in various FERC and judicial proceedings in which the State of California, the Utility, and other electricity purchasers are seeking refunds from electricity suppliers, including governmental entities, for overcharges incurred in the CAISO and the California Power Exchange wholesale electricity markets during this period.

While the FERC and judicial proceedings are pending, the Utility has pursued, and continues to pursue, settlements with electricity suppliers. The Utility entered into a number of settlement agreements with various electricity suppliers to resolve some of these disputed claims and to resolve the Utility's refund claims against these electricity suppliers. These settlement agreements provide that the amounts payable by the parties are, in some instances, subject to adjustment based on the outcome of the various refund offset and interest issues being considered by the FERC.

Any net refunds, claim offsets, or other credits that the Utility receives from electricity suppliers through resolution of the remaining disputed claims, either through settlement or through the conclusion of the various FERC and judicial proceedings, are refunded to customers through rates in future periods.

Interest accrues on the remaining net disputed claims at the FERC-ordered rate, which is higher than the rate earned by the Utility on the escrow balance. Although the Utility has been collecting the difference between the accrued interest and the earned interest from customers in rates, these collections are not held in escrow. If the amount of accrued interest is greater than the amount of interest ultimately determined to be owed on the remaining net disputed claims, the Utility would refund to customers any excess interest collected. The amount of any interest that the Utility may be required to pay will depend on the final determined amount of the remaining net disputed claims and when such interest is paid.

In July 2014, a settlement agreement between the Utility and an electric supplier became effective, resolving a portion of the Utility's disputed claims. The settlement will result in refunds to customers of $312 million and will be returned through rates in future periods. The Utility is uncertain when and how the remaining disputed claims will be resolved.

In August 2014, the Utility received a letter from the California Power Exchange clarifying its ultimate intent to offset the Utility's remaining disputed claims principal and interest balances through net settlement. Accordingly, the Utility has presented $434 million of net Disputed claims and customer refunds on the Consolidated Balance Sheets at December 31, 2014, which includes both principal and interest. At December 31, 2013, the Consolidated Balance Sheets reflected $154 million of Disputed claims and customer refunds and $710 million of Interest payable.

At December 31, 2014 and 2013, the Utility held $291 million, respectively, in escrow, including earned interest, for payment of the remaining net disputed claims liability. These amounts are included within restricted cash on the Consolidated Balance Sheets.