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

                                                     FORM 10-K

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I 1(a) AND (b) OF FORM 10-K AND IS THEREFORE
FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.**

(Mark One)
**|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
      For the fiscal year ended December 31, 2004.
OR
**|_|   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 333-30785

                                           California Infrastructure and Economic
                                        Development Bank Special Purpose Trust SCE-1
                                                (Issuer of the Certificates)

                                                       SCE Funding LLC
                                   (Exact Name of registrant as specified in its charter)

                       **Delaware                                                             95-4640661**
             (State or other jurisdiction                                                (I.R.S. Employer
           of incorporation or organization)                                            Identification No.)

              **2244 Walnut Grove Avenue,
            Room 212T, Rosemead, California                                                    91770**
       (Address of principal executive offices)                                             (Zip Code)

                             Registrant's telephone number, including area code:  **(626) 302-1850**

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

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

                              California Infrastructure and Economic Development Bank
                      Special Purpose Trust SCE-1 Rate Reduction Certificates, Series 1997-1:
                            Class A-6 6.38% Certificates; Class A-7 6.42% Certificates,
     maturing serially from 2006 to 2009, and underlying SCE Funding LLC Notes of the same respective classes
-------------------------------------------------------------------------------------------------------------------
                                                 (Title of Class)

Page

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

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as
of June 30, 2004 was $0.

                                        **DOCUMENTS INCORPORATED BY REFERENCE**

Not applicable.
===================================================================================================================

Page

                                                      PART I

Item 1.  Business.

General

SCE Funding LLC (Note Issuer) is a special purpose, single member limited liability company organized under the
laws of the State of Delaware.  Southern California Edison Company (SCE), as the sole member of the Note Issuer,
owns all of the equity securities of the Note Issuer.  The principal executive office of the Note Issuer is
located at 2244 Walnut Grove Avenue, Room 212T, Rosemead, California 91770.  Its telephone number is (626)
302-1850.  The Note Issuer was organized in June 1997 for the limited purposes of owning the Transition Property
(as described below) and issuing notes secured by the Transition Property and other limited collateral and
related activities, and is restricted by its organizational documents from engaging in other activities.  The
Note Issuer's organizational documents require it to operate in a manner such that it should not be consolidated
in the bankruptcy estate of SCE in the event SCE becomes subject to such a proceeding.

The only material business conducted by the Note Issuer has been the acquisition of Transition Property (which is
reported as a note receivable on the financial statements); and the issuance on December 11, 1997, of
$2,463,000,000 in principal amount of the SCE Funding LLC Notes, Series 1997-1, Class A-1 through Class A-7
(Notes), with scheduled maturities ranging from one to ten years and final maturities ranging from three to
twelve years; the receipt of amounts payable pursuant to the Transition Property; the payment of principal and
interest with respect to the Notes; and related activities.  The Notes were issued pursuant to an indenture
between the Note Issuer and Bankers Trust Company of California, N.A., (now Deutsche Bank National Trust
Company), as trustee (Indenture).  The Note Issuer sold the Notes to the California Infrastructure and Economic
Development Bank Special Purpose Trust SCE-1, a Delaware business trust (Trust), which issued certificates
corresponding to each class of Notes (Certificates) in a public offering.

The Note Issuer has no employees.  It has entered into a servicing agreement (Servicing Agreement) with SCE
pursuant to which SCE is required to service the Transition Property on behalf of the Note Issuer.  In addition,
the Note Issuer has entered into an administrative services agreement with SCE pursuant to which SCE performs
administrative and operational duties for the Note Issuer.

Transition Property

The California Public Utilities Code (PU Code) provides for the creation of "Transition Property."  A financing
order dated September 3, 1997 (Financing Order) issued by the California Public Utilities Commission (CPUC),
together with the related Issuance Advice Letter, establishes, among other things, separate non-bypassable
charges (FTA Charges) payable by residential electric customers and small commercial electric customers in an
aggregate amount sufficient to repay in full the Certificates, fund the Overcollateralization Subaccount
established under the Indenture and pay all related costs and fees.  Under the PU Code and the Financing Order,
the owner of the Transition Property is entitled to collect FTA Charges until such owner has received amounts
sufficient to retire all outstanding series of Certificates and cover related fees and expenses and the
Overcollateralization Amount described in the Financing Order.  The Transition Property is a property right under
California law that includes, without limitation, ownership of the FTA Charges and any adjustments thereto as
described in the next paragraph.

Page 1

In order to enhance the likelihood that actual collections with respect to the Transition Property are neither
more nor less than the amount necessary to amortize the Notes in accordance with their expected amortization
schedules, pay all related fees and expenses, and fund certain accounts established pursuant to the Indenture as
required, the Servicing Agreement requires SCE, as the servicer of the Transition Property (Servicer), to seek,
and the Financing Order and the PU Code require the CPUC to approve, periodic adjustments to the FTA Charges.
Such adjustments will be based on actual collections and updated assumptions by the Servicer as to future usage
of electricity by specified customers, future expenses relating to the Transition Property, the Notes and the
Certificates, and the rate of delinquencies and write-offs. On August 19, 2004, SCE filed with the CPUC an
anniversary true-up mechanism advice letter filing.  The filing confirmed that the FTA Charges then in effect for
residential and small commercial customers were adequate to service the Notes and therefore no adjustment was
necessary at that time.  On December 15, 2004, SCE filed with the CPUC a routine annual true-up mechanism advice
letter filing.  This filing decreased the FTA Charges for residential customers by 6.6%, from .903 cents to .843
cents per kilowatt hour, and for small commercial customers by 6.6% from .955 cents to .892 cents per kilowatt
hour, effective January 1, 2005.

In June 2002, the Servicing Agreement was amended to provide for a routine quarterly true-up adjustment whenever,
at the end of any of the first three calendar quarters of a year, the energy usage by SCE's customers is at least
3% lower than assumed and the balance in the Collection Account (excluding the General Subaccount) is below the
required level.  The purpose of the amendment was to further assure that actual collections are not less than the
amounts necessary for the purposes specified in the Note Indenture.  Through December 31, 2004, it was not
necessary to file any such routine quarterly true-up adjustment.

Under the Servicing Agreement, during any period in which the Servicer does not maintain a short-term rating of
A-1 or better by Standard & Poor's or P-1 or better by Moody's Investors Service, the Servicer must remit to the
collection account maintained with the trustee for the Notes the total payments of FTA Charges estimated to have
been received by the Servicer on a given business day within two business days after receipt thereof by the
Servicer.  Because of downgrades in its short-term ratings, SCE began making such daily remittances on January 8,
2001.  SCE currently has a short-term rating of A-2 from Standard & Poor's and P-2 from Moody's.

The Trust

The Trust was organized in November 1997 solely for the purpose of purchasing the Notes and issuing the
Certificates.  It will not conduct any other material business activities.

Item 2.  Properties.

The Note Issuer has no materially important physical properties.  Its primary asset is the Transition Property
described above in Item 1 (Business).

The Trust has no materially important physical properties.  Its primary assets are the Notes described above in
Item 1 (Business).

Information about collections from the Transition Property and payments in respect of the Notes is included in
the Annual Statement (Unaudited) and the Quarterly Servicer's Certificate (Unaudited) attached hereto as Exhibits
99.1 and 99.3, respectively.

Item 3.  Legal Proceedings.

No legal proceedings affecting either the Note Issuer or the Trust occurred in 2004.

Page 2

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

Omitted with respect to the Note Issuer pursuant to Instruction I of Form 10-K.

No matters were submitted for a vote or consent of holders of the Certificates in 2004.

                                                      PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.

There is no established public trading market for the Note Issuer's equity securities.  All of the Note Issuer's
equity is owned by SCE.  The Note Issuer's equity securities, or membership interests, were sold to SCE in June
1997 in exchange for an initial capital contribution of $5,000.  The sale of the Note Issuer's membership
interests to SCE was exempt from registration under the Securities Act of 1933, as amended, pursuant to
Section 4(2) thereof.  The Note Issuer has made no other sales of unregistered securities.

The Indenture prohibits the Note Issuer from making any distributions to the sole member from the amounts
allocated to the Note Issuer unless no default has occurred and is continuing thereunder and the book value of
the remaining equity of the Note Issuer, after giving effect to such distribution, is equal to at least 0.5% of
the original principal amount of all series of Notes which remains outstanding.  As of December 31, 2004, the
original principal amount of all series of Notes (Class A-6 through A-7) which then remained outstanding and is
scheduled for liquidation during the years 2005-2007 is $738,900,000.  In 2003, the Note Issuer made a cash
distribution of $1 million to SCE.  There were no distributions in 2004 and 2002.

The registered owner for each class of the Certificates is Cede & Co., as nominee of The Depository Trust Company
(DTC).  The Note Issuer and the Trust are unable to ascertain the number of beneficial holders of Certificates.
The Certificates are not registered on any national securities exchange and do not trade on any established
trading market.

Item 6.  Selected Financial Data.

Omitted pursuant to Instruction I of Form 10-K.

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

The following analysis of the Note Issuer's results of operations is in an abbreviated format pursuant to
Instruction I of Form 10-K.

As discussed under Item 1 (Business), the Note Issuer was organized in June 1997 for limited purposes, and on
December 11, 1997, the Note Issuer issued Notes in order to purchase Transition Property, which is classified as
a note receivable on the financial statements included under Item 8 (Financial Statements and Supplementary
Data).  As the Note Issuer is restricted by its organizational documents from engaging in activities other than
those described in Item 1 (Business), income statement effects were limited primarily to income generated from
the Transition Property, interest expense on the Notes and incidental investment interest income.

In 2004, income generated from the Transition Property was $57 million compared with $72 million in 2003.   The
decrease is due to lower outstanding note receivables from SCE.  Interest expense in 2004 was $59 million
compared to $74 million in 2003.  The decrease is due to lower outstanding balances on

Page 3

the Notes.  Interest expense includes interest on the Notes, amortization of debt issuance costs and the discount
on the Notes.

During the twelve months ending December 31, 2004, the non-bypassable FTA Charges billed to residential and small
commercial customers totaled $296 million.  Collection of FTA Charges totaled $295 million.  Scheduled
distributions in 2004 were $307 million.  Collections were sufficient to cover 96% of scheduled payments on the
Notes.  The remaining amounts were overcollected funds from prior quarters that were deposited into the reserve
subaccounts as required by the note indenture.  Interest earnings on restricted and unrestricted funds and prior
period overcollections deposited to various restricted accounts are also used to assist with making the scheduled
payments on the Notes.

Forward-looking Information

In the preceding Management's Discussion and Analysis of Financial Condition and Results of Operations, and
elsewhere in this annual report, the Note Issuer uses the words could, estimates, expects, anticipates, believes,
and other similar expressions that are intended to identify forward-looking information that involves risks and
uncertainties.  Actual results or outcomes could differ materially as a result of such important factors as legal
or regulatory proceedings challenging the collection of FTA Charges or payment of Notes or Certificates.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to the Note Issuer or the Trust.

Item 8.  Financial Statements and Supplementary Data.

The financial statements and related financial information required to be filed hereunder appear on pages F-1
through F-6 of this report and are incorporated herein by reference.  In addition, attached with respect to the
Note Issuer and the Trust as Exhibits 99.1, 99.2, and 99.3 are an Annual Statement (unaudited) summarizing
certain information with respect to collections from the Transition Property and payments on the Notes and
Certificates, an Annual Certificate of Compliance (unaudited) with respect to the Servicer's activities, and the
Quarterly Servicer's Certificate (unaudited) for the collection periods September 2004 through November 2004
(dated December 14, 2004).

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

None.

Item 9A.  Controls and Procedures.

Not applicable to the Trust or the Note Issuer.

Item 9B.  Other Information.

None.

Page 4

                                                     PART III

Item 10.  Directors and Executive Officers of the Registrant.

Omitted pursuant to Instruction I of Form 10-K.

Item 11.  Executive Compensation.

Omitted pursuant to Instruction I of Form 10-K.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

Omitted pursuant to Instruction I of Form 10-K.

Item 13.  Certain Relationships and Related Transactions.

Omitted with respect to the Note Issuer pursuant to Instruction I of Form 10-K.

Not applicable to the Trust.

Item 14.  Principal Accounting Fees and Services.

Not applicable to the Trust or the Note Issuer.

                                                      PART IV

Item 15.  Exhibits and Financial Statement Schedules.

(a)      The following documents are filed as part of this report:

         1.       Financial Statements.

                  The following financial statements of the Note Issuer and report of independent public
                  accountants are included in Item 8 (Financial Statements and Supplementary Data):

                  Report of Independent Registered Public Accounting Firm
                  Balance Sheets
                  Statements of Operations and Changes in Member's Equity
                  Statements of Cash Flows
                  Notes to Financial Statements

         2.       Financial Statement Schedule.

                  None.

         3.       Exhibits.

                  See the Exhibit Index of this report below.

Page 5

                                                         SIGNATURES

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

                                                          SCE FUNDING LLC
                                                           as Registrant

                                                          By:

                                                          /s/ W. James Scilacci
                                                          -------------------------------------
                                                          W. James Scilacci
                                                          President

                                                          Date:  March 16, 2005

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

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

/s/ W. James Scilacci                              Director and President         March 16, 2005
------------------------------------------------    (Principal Executive
W. James Scilacci                                         Officer)

/s/ Mary C.Simpson                                 Director and Treasurer         March 16, 2005
------------------------------------------------  (Principal Financial and
Mary C. Simpson                                     Accounting Officer)

/s/ Anand Maniktala                                Director                       March 16, 2005
------------------------------------------------
Anand Maniktala

Page 6

                                                            Exhibit IndexExhibitNumber

       3.1                 Certificate of Formation (File No. 333-30785, filed as Exhibit 3.1 to
                           SCE Funding's Form S-3, dated July 3, 1997)*

       3.2                 Limited Liability Company Agreement (File No. 333-30785, filed as
                           Exhibit 3.2 to SCE Funding's Form S-3, File No. 333-30785)*

       3.3                 Amended and Restated Limited Liability Company Agreement (File No.
                           333-30785, filed as Exhibit 3.3 to SCE Funding's Form S-3, dated
                           November 10, 1997)*

       4.1                 Note Indenture (incorporated by reference to the same titled exhibit
                           to the Note Issuer's Current Report on Form 8-K filed with the
                           Commission on December 11, 1997)*

       4.2                 Series Supplement (File No. 333-30785, filed as Exhibit 4.2 to SCE
                           Funding's Form 8-K, dated December 11, 1997)*

       4.3                 Note (File No. 333-30785, filed as Exhibit 4.3 to SCE Funding's Form
                           8-K, dated December 11, 1997)*

       4.4                 Amended and Restated Declaration and Agreement of Trust (File No.
                           333-30785, filed as Exhibit 4.4 to SCE Funding's Form 8-K, dated
                           December 11, 1997)*

       4.5                 First Supplemental Agreement of Trust (File No. 333-30785, filed as
                           Exhibit 4.5 to SCE Funding's Form 8-K, dated December 11, 1997)*

       4.6                 Rate Reduction Certificate (File No. 333-30785, filed as Exhibit 4.6
                           to SCE Funding's Form 8-K, dated December 11, 1997)*

      10.1                 Transition Property Purchase and Sale Agreement (File No. 333-30785,
                           filed as Exhibit 10.1 to SCE Funding's Form 8-K, dated December 11,
                           1997)*

      10.2                 Transition Property Servicing Agreement (File No. 333-30785, filed as
                           Exhibit 10.2 to SCE Funding's Form 8-K, dated December 11, 1997)*

Page 7

      10.3                 Note Purchase Agreement (File No. 333-30785, filed as Exhibit 10.3 to
                           SCE Funding's Form 8-K, dated December 11, 1997)*

      10.4                 Fee and Indemnity Agreement (File No. 333-30785, filed as Exhibit 10.4
                           to SCE Funding's Form 8-K, dated December 11, 1997)*

      10.5                 Amendment to Transition Property Servicing Agreement (File No.
                           333-30785, filed as Exhibit 10.5 to SCE Funding's Annual Report on
                           Form 10-K, dated March 28, 2003)*

       23                  Consent of PricewaterhouseCoopers LLP

       31                  Rule 13a-14(a)/15d-14(a) Certification

       32                  Section 1350 Certification

      99.1                 Annual Statement (Unaudited)

      99.2                 Annual Certificate of Compliance (Unaudited)

      99.3                 Quarterly Servicer's Certificate (Unaudited)

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

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

Page 8

                              Report of Independent Registered Public Accounting Firm

To the Board of Directors and
Member of SCE Funding LLC

In our opinion, the accompanying balance sheets and the related statements of operations, cash flows and changes
in member's equity present fairly, in all material respects, the financial position of SCE Funding LLC at
December 31, 2004 and 2003, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2004 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 audits.  We conducted our
audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board
(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, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California
March 15, 2005

Page

Item 8.  Financial Statements

                                                  SCE FUNDING LLC
                                                  BALANCE SHEETS
                                                As of December 31,
                                                  (in thousands)
                                                  --------------

                           ASSETS                                    2004                      2003
                           ------                                    ----                      ----

Current Assets:
     Cash and equivalents                                      $       1,915           $       1,443
     Restricted funds                                                 61,375                  66,470
     Current portion of note receivable                              246,300                 246,300
     Interest receivable                                                   8                       5
                                                             ------------------------------------------
         Total Current Assets                                        309,598                 314,218
                                                             ------------------------------------------

Other Assets and Deferred Charges:
     Note receivable - net of discount                               486,953                 731,363
     Unamortized bond issuance costs                                   5,473                   7,297
                                                             ------------------------------------------
         Total Other Assets and Deferred Charges                     492,426                 738,660
                                                             ------------------------------------------

                        Total Assets                           $     802,024           $   1,052,878
                                                             ==========================================

              LIABILITIES AND MEMBER'S EQUITY
              -------------------------------

Current Liabilities:
     Interest payable                                          $         656           $         875
     Current portion of long-term debt                               246,300                 246,300
     Miscellaneous accrued expenses                                   29,059                  35,782
                                                             ------------------------------------------
         Total Current Liabilities                                   276,015                 282,957
                                                             ------------------------------------------

Long term debt - net of discount                                     492,397                 738,628
                                                             ------------------------------------------
Commitments (Notes 4 & 5)
Member's equity                                                       33,612                  31,293
                                                             ------------------------------------------

           Total Liabilities and Member's Equity               $     802,024           $   1,052,878
                                                             ==========================================

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

Page F-1

                                                  SCE FUNDING LLC
                              STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER'S EQUITY
                                              Year Ended December 31,
                                                  (in thousands)

                                                                2004                2003            2002
                                                                ----                ----            ----

OPERATING REVENUE:
    Interest income                                            $60,129              $75,147        $92,282
                                                   ----------------------- ---------------- ------------------
       Total Operating Revenue                                  60,129               75,147         92,282
                                                   ----------------------- ---------------- ------------------

OPERATING EXPENSES:
    Interest expense                                            59,000               74,299         90,450
    Other expenses                                               2,376                2,986          3,616
                                                   ----------------------- ---------------- ------------------
       Total Operating Expenses                                 61,376               77,285         94,066
                                                   ----------------------- ---------------- ------------------

       Net Loss                                                 (1,247)              (2,138)        (1,784)
                                                   ----------------------- ---------------- ------------------

   Member's Equity - beginning of year                          31,293               73,484         54,616
   Deemed Dividend to SCE                                            -              (44,771)             -
    Member Contributions -- net                                  3,566                4,718         20,652
                                                   ----------------------- ---------------- ------------------
       Member's Equity, end of year                            $33,612              $31,293        $73,484
                                                   ======================= ================ ==================

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

Page F-2

                                                  SCE FUNDING LLC
                                              STATEMENTS OF CASH FLOWS
                                              Year Ended December 31,
                                                   (in thousands)

                                                                 2004                2003               2002
                                                                 ----                ----               ----
Cash flows from Operating Activities:

Net Loss                                                    $  (1,247)        $   (2,138)        $   (1,784)
Adjustments to reconcile net loss to net cash
used by operating activities:
Amortizations                                                       3                  2                  2
Changes in working capital:
     Restricted funds                                           5,095            (19,217)           (12,441)
     Other receivable                                              (3)                (1)                (2)
     Interest payable                                            (219)              (216)              (214)
     Miscellaneous accrued expenses                            (6,723)            16,842             (9,892)
                                                            -------------------------------------------------
Net Cash Used by Operating Activities                          (3,094)            (4,728)           (24,331)
                                                            ------------------------------------------------

Cash Flows from Financing Activities:
Payment of principal on rate reduction notes                 (246,300)          (246,300)          (246,300)
                                                            ------------------------------------------------
Net Cash Used by Financing Activities                        (246,300)          (246,300)          (246,300)
                                                            ------------------------------------------------

Cash Flows from Investing Activities:
Note Receivable Collections from SCE                          246,300            246,300            249,989
Member Contributions -- net                                     3,566              4,718             20,652
                                                            -----------------------------------------------
Net Cash Provided by Investing Activities                     249,866            251,018            270,641
                                                            -----------------------------------------------

Net Increase (decrease) in cash and equivalents                   472                (10)                10
Cash and equivalents, beginning of year                         1,443              1,453              1,443
                                                            -----------------------------------------------
Cash and equivalents, end of year                           $   1,915         $    1,443         $    1,453
                                                            ===============================================

Cash payments for interest                                  $  57,325         $   72,961         $   88,432
                                                            -------------------------------------------------

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

Page F-3

                                                  SCE FUNDING LLC
                                           NOTES TO FINANCIAL STATEMENTS
                                                 DECEMBER 31, 2004

1.  Basis of Presentation.

The financial statements include the accounts of SCE Funding LLC (also referred to as the Note Issuer), a
Delaware special purpose limited liability company, whose sole member is Southern California Edison Company
(SCE), a provider of electric services to retail customers in central, coastal and southern California.  All of
the issued and outstanding common stock of SCE is owned by its parent holding company, Edison International.  SCE
Funding LLC was formed on June 27, 1997, in order to effect the purchase from SCE of Transition Property (as
defined below) and to fund such purchase from the issuance of the SCE Funding LLC Notes, Series 1997-1, Class A-1
through Class A-7 (Notes) to the California Infrastructure and Economic Development Bank Special Purpose Trust
SCE-1 (Trust) which issued certificates (Certificates) with terms and conditions similar to the Notes.  The
proceeds from the sale of the Transition Property resulted in a reduction in revenue requirements sufficient to
enable SCE to provide a 10% electric rate reduction to SCE's residential and small commercial customers in
connection with electric industry restructuring mandated by California Assembly Bill 1890, as amended by
California Senate Bill 477 (collectively, the electric restructuring legislation).  This rate reduction became
effective January 1, 1998.

SCE Funding LLC was organized for the limited purposes of issuing the Notes and purchasing Transition Property.
Transition Property is the right to be paid a specified amount from non-bypassable tariffs authorized by the
California Public Utilities Commission (CPUC) pursuant to the 1995 electric restructuring legislation.  For
financial reporting purposes, the purchase of the Transition Property by the Note Issuer from SCE was treated as
the issuance of a promissory note by SCE to SCE Funding LLC, in the amount of approximately $2.5 billion.
Accordingly, the purchase of the Transition Property is classified as a note receivable on the accompanying
financial statements.  Notwithstanding such classification, the Transition Property, for legal purposes, has been
sold by SCE to SCE Funding LLC.

SCE Funding LLC is restricted by its organizational documents from engaging in any other activities.  In
addition, its organizational documents require it to operate in such a manner that it should not be consolidated
in the bankruptcy estate of SCE, in the event SCE becomes subject to such a proceeding.

SCE Funding LLC is legally separate from SCE.  The assets and revenues of the Note Issuer, including, without
limitation, the Transition Property, are not available to creditors of SCE or Edison International, and the note
receivable from SCE to SCE Funding LLC (i.e., the Transition Property) is not legally an asset of SCE or Edison
International.

2.  Summary of Accounting Policies

Cash Equivalents

Cash equivalents include working funds and short-term investments with initial maturities of 90 days or less.

Page F-4

Restricted Funds

SCE Funding LLC is required to maintain funds of approximately 0.5% of the outstanding principal balance of the
Notes.  These funds are invested in short-term securities with maturities of 90 days or less.  They are to be
used to make scheduled payments on the Notes to the Trust and to pay other expenses of SCE Funding LLC in the
event that collections of the non-bypassable tariffs prove insufficient to make such payments.

Miscellaneous Accrued Expenses

Effective January 1, 2001, because of lower credit ratings, SCE was required to begin making daily rather than
monthly remittances to the collection account maintained with the trustee for the Notes.  The result is an
acceleration of cash collections.  These accelerated payments and amounts collected in excess of current
commitments are classified as miscellaneous accrued expenses on the financial statements. These pre-collection
amounts will be applied against SCE's future remittance obligations.

Unamortized Debt Issuance Expenses

The costs associated with the issuance of the Notes to the Trust have been capitalized and are being amortized
over the life of the Notes.

Member's Equity

Pursuant to the indenture for the Notes, SCE Funding LLC is restricted from making distributions to SCE to the
extent that such distributions would cause the book value of the remaining equity in SCE Funding LLC to decline
below 0.5 percent of the original principal amount of all series of Notes which remain outstanding.  As of
December 31, 2004, the original principal amount of all series of Notes outstanding was $738,900,000.  In 2003,
SCE Funding LLC made a cash distribution of $1 million to SCE.  There were no distributions in 2004 and 2002.

In 2003, SCE Funding LLC made a non-cash deemed dividend of $44,771,000 relating to excess collections previously
reflected as capital contributions.  This amount was reflected as a reduction of SCE Funding LLC's Note
Receivable from SCE, as well as an increase in the pre-collection amounts included in miscellaneous accrued
expenses.

Income Taxes

SCE Funding LLC is a single-member limited liability company.  Accordingly, for federal and state income tax
purposes, any income tax effect of SCE Funding LLC's activities will be reflected in SCE's financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions.  These estimates and assumptions may affect the
reported amount of revenue, expenses, assets, and liabilities and disclosure of contingencies.  Actual results
could differ from these estimates.

Page F-5

3.  Fair Value of Financial Instruments

Due to their short maturities, amounts reported for cash equivalents and restricted funds approximate fair
value.  In addition to these amounts, at December 31, 2004 and 2003, SCE Funding LLC had a financial asset
(representing its note receivable from SCE), and financial liabilities (representing its Notes to the Trust) each
with a cost basis of approximately $733 million and $978 million, respectively.  The note receivable is carried
at cost which approximates fair value.  Fair value is estimated based on brokers' quotes of notes with similar
characteristics.  Financial liabilities are recorded at cost, with an approximate fair value of $739 million and
$985 million at December 31, 2004 and 2003 respectively, and their fair value is based on brokers' quotes.

4.  Long-Term Debt

In December 1997, SCE Funding LLC issued approximately $2.5 billion of Notes to the Trust.  There were originally
seven classes of Notes.  The first five classes of Notes (Classes A-1 through A-5) matured in December 1998,
March 2000, 2001, and 2002, and September 2003, respectively.  The remaining two classes of Notes have maturities
in 2006 and 2007, respectively, with interest rates of 6.38% and 6.42%, respectively.  The Notes are secured
solely by the Transition Property (see Note 1) and certain other assets of SCE Funding LLC, and the holders of
the Notes do not have any recourse to any assets or revenue of SCE or Edison International.  For financial
reporting purposes the Transition Property is shown as a note receivable, with the same scheduled maturities and
interest rates as the Notes to the Trust (see table below).  Notwithstanding such classification of the
Transition Property, the Transition Property has been sold by SCE to SCE Funding LLC.

Principal and interest payments on the Notes are due quarterly and are paid from funds deposited with the Trustee
by SCE as servicer of the Transition Property.  Because of the negative impact the California energy crisis has
had on SCE's credit ratings, effective January 2001, SCE began making daily rather than monthly remittances to
the trustee.  The debt service requirements include an overcollateralization amount of approximately $1.2 million
per year, which will be retained for the benefit of the holders of the Notes.  Any amounts not required for debt
service will be returned to SCE Funding LLC and ultimately to SCE.  The required annual liquidation amount of the
Notes for the years 2005-2007 is $246.3 million.  Scheduled maturities and interest rates for the Notes payable
to the Trust at December 31, 2004, are as follows:

                                            Scheduled                Interest              Amount
             Class                        Maturity Date                Rate            (in thousands)
             -----                        -------------                ----             ------------

              A-6                 September 25, 2006                  6.38%                  423,956
              A-7                 December 26, 2007                   6.42%                  314,944
                                                                                   -----------------
                                                                                   $         738,900
                                Less:  Current Maturities                                   (246,300)
                                Less:  Unamortized Discount                                     (203)
                                                                                   -----------------
                                Long-Term Debt Net of Discount                     $         492,397
                                                                                   =================

5.  Significant Agreements and Related Party Transactions

Under the Transition Property Servicing Agreement, SCE, the servicer, is required to manage and administer the
Transition Property of SCE Funding LLC and to collect the non-bypassable tariffs from the electricity ratepayers
on behalf of SCE Funding LLC.  SCE Funding LLC shall pay an annual

Page F-6

servicing fee equal to 0.25% of the outstanding principal balance of the Notes for so long as the non-bypassable
tariff is included as a line item on the bills otherwise sent to electricity ratepayers or 1.5% of the
outstanding principal balance of the Notes if the non-bypassable tariff is not included as a line item on bills
otherwise sent to electricity ratepayers but, instead, is billed separately to electricity ratepayers.  SCE
Funding LLC incurred a total of $2.3 million in servicing, administration and trustee fees in 2004.  SCE is also
entitled to receive as compensation any interest earnings on the non-bypassable tariff collections, and any late
payment charges collected from SCE's customers prior to remittance to the Trust.

The Trust was created solely for the purpose of purchasing the Notes from SCE Funding LLC, issuing the
Certificates, and applying the payments received in respect of the Notes to the payment of interest and principal
in respect of the Certificates.  Under the Trust Agreement, Deutsche Bank National Trust Company, the Certificate
Trustee, is responsible for purchasing the Notes and authenticating and delivering the Certificates to the
investors.  Deutsche Bank National Trust Company, the Delaware Trustee, is responsible for the maintenance of all
records that are necessary to form and maintain the existence of the Trust.  All fees and expenses of the
Certificate Trustee and the Delaware Trustee are paid by SCE Funding LLC.

Page F-7
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