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

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


                                                   FORM 10-Q

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

(Mark One)
|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended                       September 30, 2006

                                                                           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


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  whether  the  registrant  is a large  accelerated  filer,  an  accelerated  filer,  or
non-accelerated  filer. See definition of "accelerated  filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act.
Large Accelerated Filer |_|                       Accelerated Filer |_|               Non-Accelerated Filer |X|

Indicate by check mark  whether the  registrant  is a shell  company (as defined in Rule 12b-2 of the  Exchange
Act).
                                                                                       Yes |_|    No |X|


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                                         PART I-FINANCIAL INFORMATION

Item 1.  Financial Statements

                                                SCE FUNDING LLC
                                                BALANCE SHEETS
                                                (in thousands)

                                                     September 30,     December 31,
                                                         2006              2005
                                                     (Unaudited)

                           ASSETS

Current Assets:
        Cash and equivalents                       $        1,867    $          879
        Restricted funds                                   60,461            56,890
        Current portion of note receivable                246,664           246,300
        Prepayments and other current assets                    6                 2
                                                   ----------------- -----------------
           Total Current Assets                           308,998           304,071
                                                   ----------------- -----------------


Other Assets and Deferred Charges:
        Note receivable - net of discount                  65,941           242,544
        Unamortized bond issuance costs                     2,280             3,648
                                                   ----------------- -----------------
           Total Other Assets and Deferred Charges         68,221           246,192
                                                   ----------------- -----------------
        Total Assets                                      377,219           550,263
                                                   ================= =================


        LIABILITIES AND MEMBER'S EQUITY

Current Liabilities:

        Interest payable                           $         280                438
        Current portion of long-term debt                246,664            246,300
        Miscellaneous accrued expenses                    22,683             21,636
                                                   ----------------- -----------------
           Total Current Liabilities                     269,627            268,374
                                                   ----------------- -----------------


Long term debt - net of discount                          68,198            246,166
                                                   ----------------- -----------------

Member's equity                                           39,394             35,723
                                                   ----------------- -----------------

        Total Liabilities and Member's Equity      $     377,219      $     550,263
                                                   ================= =================



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


Page 2





                                                SCE FUNDING LLC
                            STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER'S EQUITY
                                                 (Unaudited)
                                                (in thousands)


                                                     9 Months Ended
                                                      September 30,
                                               ----------------------------
                                                   2006           2005


OPERATING REVENUE:

         Interest income                       $       24,876  $     35,762
                                               -------------- -------------
            Total Operating Revenue                    24,876        35,762
                                               -------------- -------------


OPERATING EXPENSES:

         Interest expense                              22,082        33,873
         Other expenses                                   928         1,507
                                               -------------- -------------

            Total Operating Expenses                   23,010        35,380
                                               -------------- -------------


            Net Income                                  1,866           382


         Member's Equity, beginning of period         35,723         33,612
         Capital Transfer from SCE                     1,805          2,266
                                               -------------- -------------
            Member's Equity, end of period     $      39,394  $      36,260
                                               ============== =============



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



Page 3






                                        SCE FUNDING LLC
                                    STATEMENTS OF CASH FLOWS
                                          (Unaudited)
                                         (in thousands)

                                                               9 Months Ended
                                                                September 30,
                                                        ------------------------------
                                                            2006            2005
                                                        -------------   --------------

Cash Flows from Operating Activities:
Net Income                                              $       1,866   $          382
Adjustments to reconcile net income to net cash
used by operating activities:
Amortizations                                                       3                2
Changes in working capital:
     Restricted funds                                          (3,571)          (2,362)
     Prepayment and other current assets                           (4)               8
     Interest payable                                            (158)            (157)
     Miscellaneous accrued expenses                             1,047              573
                                                        -------------   --------------

Net Cash Used by Operating Activities                            (817)          (1,554)
                                                        -------------   --------------

Cash Flows from Financing Activities:
     Payment of principal on rate reduction notes            (177,656)        (177,288)
     Capital Transfer from SCE                                  1,805            2,266
                                                        -------------   --------------
Net Cash Used by Financing Activities                        (175,851)        (175,022)
                                                        -------------   --------------

Cash Flows from Investing Activities:
     Note receivable collections from SCE                     177,656          177,288
                                                        -------------   --------------
Net Cash Provided by Investing Activities                     177,656          177,288
                                                        -------------   --------------

Net increase in cash and equivalents                              988              712
Cash and equivalents, beginning of period                         879            1,915
                                                        -------------   --------------
Cash and equivalents, end of period                     $       1,867   $        2,627
                                                        =============   ==============

Cash payments for interest                              $      20,820   $       32,610
                                                        -------------   --------------



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



Page 4





SCE FUNDING LLC

NOTES TO FINANCIAL STATEMENTS


        In the opinion of management, all adjustments have been made that are necessary to present a fair
statement of the financial position and results of operations for the periods covered by this report.

        SCE Funding LLC's significant accounting policies were described in Note 2 of "Notes to Financial
Statements" included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2005, filed
with the Securities and Exchange Commission. SCE Funding LLC follows the same accounting policies for interim
reporting purposes. Results of operations for the interim periods are not necessarily indicative of results
to be expected for a full year. This quarterly report should be read in conjunction with SCE Funding LLC's
2005 Annual Report on Form 10-K.

Note 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. All of the issued and outstanding common stock of SCE
is owned by its parent holding company, Edison International. SCE Funding LLC was organized in June 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


Page 5




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.

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

        The following analysis of the Note Issuer's financial condition and results of operations is in an
abbreviated format pursuant to Instruction H of Form 10-Q. Such analysis should be read in conjunction with
the Financial Statements included herein, and the Financial Statements and Notes to the Financial Statements
included in SCE Funding LLC's 2005 Annual Report on Form 10-K.

        The Note Issuer is a special purpose, single member limited liability company organized in June 1997
for the limited purposes of owning the Transition Property (as described below) and issuing notes secured
primarily by the Transition Property. SCE is the sole member of the Note Issuer. 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 Note Issuer issued $2,463,000,000 in principal amount of the Notes in December 1997 with scheduled
maturities ranging from 1 to 10 years and final maturities ranging from 3 to 12 years, pursuant to an
indenture with Deutsche Bank National Trust Company (formerly Bankers Trust Company of California, N.A.), as
trustee (Note Indenture). The Note Issuer also entered into a servicing agreement (Servicing Agreement) with
SCE that requires SCE to service the Transition Property on behalf of the Note Issuer.

        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 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
Note 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.

        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


Page 6




fund certain accounts established pursuant to
the Note Indenture as required, the Servicing Agreement requires SCE, as the Servicer of the Transition
Property 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 15, 2006,
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, 2005, SCE filed with the CPUC a
routine annual true-up mechanism advice letter filing. This filing decreased the FTA Charges for residential
customers by 7.0%, from .843 cents to .784 cents per kilowatt hour, and for small commercial customers by
7.0% from .892 cents to .829 cents per kilowatt hour, effective January 1, 2006.

        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 September 30, 2006, 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 and 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 short-term ratings of A-2 from Standard and Poor's and P-2
from Moody's.

        The Note Issuer is limited by its organizational documents from engaging in any activities other than
owning the Transition Property, issuing notes secured by the Transition Property and other limited
collateral, and activities related thereto. Accordingly, income statement effects are limited primarily to
income generated from the Transition Property, interest expense on the Notes, servicing fees to SCE, and
incidental investment interest income. During the nine month period ended September 30, 2006, income
generated from the Transition Property was $23 million compared to $34 million for the same period in 2005.
The decrease is due to a lower outstanding note receivable from SCE. Interest expense for the nine months
ended September 30, 2006 was $22 million compared to $34 million for the same period in 2005. The decrease is
due to a lower outstanding balance of the Notes. Interest expense includes interest on the Notes,
amortization of debt issuance costs and the discount on the notes.

        The Note Issuer uses collections with respect to the Transition Property to make scheduled principal
and interest payments on the Notes. Interest income earned on the Transition Property is expected to offset
(1) interest expense on the Notes, (2) amortization of debt issuance


Page 7




costs and the discount on the Notes, and
(3) the fees charged by SCE for servicing the Transition Property and providing administrative services to
the Note Issuer.

        Attached as Exhibit 99 is the Quarterly Servicer's Certificate for the collection period June 2006
through August 2006 (dated September 20, 2006), delivered pursuant to the Note Indenture, which includes
information relating to the collections and distributions of the FTA Charges, and the balances in the reserve
subaccounts under the Note Indenture. As noted therein on page 2 line 4e, collections of FTA Charges and
interest earnings thereon (the General Subaccount Balance) totaled $73.1 million and were sufficient to pay
100% of all scheduled distributions and related expenses on the Notes ($73.1 million) for the scheduled Note
payment due (September 25, 2006), requiring a principal withdrawal of $0.98 million from the reserve
subaccount as provided under the Note Indenture.

Forward-looking Information

        In the preceding Management's Discussion and Analysis of Financial Condition and Results of
Operations, and elsewhere in this quarterly report, there are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the Note Issuer's
current expectations and projections about future events based on its knowledge of present facts and
assumptions about future events and include any statement that does not directly relate to a historical or
current fact. In this report, the words "could," "estimates," "expects," "projects," "will," "should," and
variations of such words and similar expressions, or discussions of strategy or of plans, 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 and uncertainties that
could cause actual results to differ materially or otherwise affect the Note Issuer are the commencement and
outcome of voter initiatives and legal or regulatory proceedings challenging the collection of FTA Charges or
payment of the Notes or Certificates. The information contained in this report is subject to change without
notice. Forward-looking statements speak only as of the date they are made and the Note Issuer is not
obligated to publicly update or revise forward-looking statements. Readers should review future reports filed
by the Note Issuer with the Securities and Exchange Commission.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

        Omitted with respect to the Note Issuer pursuant to Instruction H of Form 10-Q.



                                                    PART II

Item 1.  Legal Proceedings.


        Omitted because there are no reportable proceedings.


Item 2.  Changes in Securities and Use of Proceeds.

        Omitted with respect to the Note Issuer pursuant to Instruction H of Form 10-Q.
Page 8






Item 3.  Defaults Upon Senior Securities.

        Omitted with respect to the Note Issuer pursuant to Instruction H of Form 10-Q.


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

        Omitted with respect to the Note Issuer pursuant to Instruction H of Form 10-Q.


Item 5.  Other Information.

        Attached, with respect to the Note Issuer and the Trust, as Exhibit 99 is the Quarterly Servicer's
Certificate for the collection period June 2006 through August 2006 (dated September 20, 2006), delivered
pursuant to the Note Indenture, which includes information relating to the collection and distributions of
the FTA Charges and the balances in the reserve subaccounts under the Note Indenture.

Item 6.  Exhibits.

        (a)    See the Exhibit Index of this report below.


Page 9








                                                  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.

Dated:  November 3, 2006                       SCE FUNDING LLC
                                               as Registrant


                                               By         /s/ Thomas M. Noonan
                                               -----------------------------------------
                                               Name:      Thomas M. Noonan
                                               Title:     Chief Executive Officer










Item 6.  Exhibit Index

            SCE Funding LLC

            32         Statement Pursuant to 18 U.S.C. 1350
            99         Quarterly Servicer's Certificate (Unaudited)