An EDISON INTERNATIONAL Company (U 338-E) 2015 General Rate Case APPLICATION. Workpapers. Generation Hydro O&M SCE-02 Volume 07, Part 01

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1 An EDISON INTERNATIONAL Company (U 338-E) 2015 General Rate Case APPLICATION Workpapers Generation Hydro O&M SCE-02 Volume 07, Part 01 N ovem ber 2013

2 1 Workpaper - Southern California Edison / 2015 GRC - APPLICATION I. INTRODUCTION AND OVERVIEW OF OUR HYDRO GENERATION DIVISION S C E s H ydroelectric (Hydro) generating resources w ill provide an aggregate o f 1,176 M W o f low -cost, reliable electric pow er in T est Y ear W e forecast T est Y ear 2015 O & M expenses o f $53.2 m illion (constant 2012 dollars) to continue operating these resources. The capital expenditure forecast for is $438.3 m illion (nom inal dollars). These expenditures are necessary for SC E s H ydro generation to continue providing reliable service at low cost, w hile com plying w ith applicable law s and regulations, and m aintaining safe operations for em ployees and the public. This testim ony supports the reasonableness o f SC E s forecasts. A. Fundamental Characteristics of Our Generation Resources SCE has tw o types o f H ydro generation facilities: (1) w ater storage and conveyance facilities; and (2) pow erhouses and associated auxiliary equipm ent. H ydro w ater storage and conveyance facilities are used to capture, store, and direct w ater to pow erhouse facilities through a series o f reservoirs, forebays, flum es, canals, conduits, flow lines, and penstocks. The w ater arrives at the pow erhouse under pressure after having dropped from the forebay elevation, through the penstock, to the pow erhouse elevation. A t the pow erhouse the potential energy o f the pressurized w ater turns the turbine wheels, causing the turbine and generator to rotate and produce electricity. Figure I-1 below illustrates a typical H ydroelectric generating plant. 1

3 2 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Figure I-1 Typical Hydroelectric Generating Station Asrfr 1 SCE has three types o f H ydro pow erhouses based on the physical characteristics o f the Hydro 2 resources: (1) stream flow or ru n-o f the-river; 1- (2) reservoir storage; and (3) pum ped storage, w here 3 the w ater can be pum ped back to a storage facility for reuse during peak hours. 4 R un-of-the-river facilities operate w hen w ater is available in the stream s and rivers associated 5 w ith the project. W ater is diverted to the turbine-generators through various open flum es and canals, 6 flow lines, tunnels, and finally into the penstock w here it drops to the elevation o f the turbine. The 7 w ater pressure in the penstock is greatest at the b ottom w here the turbine is located. 8 H ydro facilities w ith reservoir storage have the added benefit o f storing w ater during the spring 9 and early sum m er to allow increased utilization o f the w ater during the hottest m onths in late sum m er 1 A run-of-the-river project does not have control of a storage reservoir as part of the project. Although these projects generally have dams that divert water from the river into the Hydro project water conveyance facility, the dam impoundment does not store significant amounts water. 2

4 3 Workpaper - Southern California Edison / 2015 GRC - APPLICATION and early fall. Storing w ater in reservoirs extends the w indow o f opportunity for generation beyond the ru n o ff period and allow s greater control and utilization o f the water. SCE has one pum ped storage facility, the John S. E astw ood Pow er Station, w hich operates as a reservoir storage facility w ith the benefit o f pum pback. SCE uses the pum pback capabilities w hen a safe volum e is available to pum p to in B alsam Forebay and w hen m arket conditions w arrant doing so. W hen the unit runs in the pum pback m ode, the generator is used as a m otor and the turbine is used to pum p w ater back to the u n it s storage facility. This m ode o f operation allow s reuse o f lim ited w ater resources during peak sum m er operating hours as w ell as other tim es during the year. In total, SCE operates and m aintains 33 H ydro generating plants, consisting o f 76 generating units, 33 dam s, 46 stream diversions, and 143 m iles o f tunnels, conduits, flum es, and flow lines. These resources have an aggregate 1,176 M W o f generating capacity. A ll but five o f the H ydro generating plants operate under Federal Energy R egulatory Com m ission (FERC) licenses. The units date from as early as B. Organization of Hydro Division S C E s H ydro D ivision is organized into tw o regions, N orthern and Eastern. N orthern Region, also know n as B ig Creek, is the larger, encom passing all SCE H ydro facilities in the upper San Joaquin R iver w atershed. It is located in the w estern Sierra N evada M ountains 50 m iles northeast o f Fresno. Big C reek is a com posite o f six m ajor reservoirs, 16 tunnels driven through solid granite, and nine pow erhouses, m ost o f w hich are reservoir storage plants. M ost Big C reek plants directly connect to the bulk pow er system, or 220kV transm ission system. In aggregate, the system represents approxim ately 1,014 M W, or about 86 percent o f our total H ydro generation. M ost B ig C reek plants have been in service since the early to m id-tw entieth century, and some equipm ent is m ore than 70 years old. Eastern R egion encom passes SCE H ydro facilities located in the Bishop and M ono Basin areas o f the eastern Sierra N evada M ountains, the K ern River, Kaw eah, and Tule R iver areas in the southern Sierra N evada M ountains, and the O ntario, San Bernardino, and B anning areas in the San Bernardino and San G abriel M ountains. These 24 pow erhouses connect to our sub-transm ission or distribution system s and contribute over 161 M W, or about 14 percent o f our H ydro generation. M ost o f the Eastern R egion pow erhouses are run-of-the-river plants. M ost have been in service since the late nineteenth and early tw entieth centuries, w ith some equipm ent older than 70 years. Figure I-2 is a m ap show ing the location o f H ydro facilities. 3

5 4 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Figure I-2 SCE Hydro Locations 1 Em ployees w ho w ork in the Pow er Production D epartm ent hom e office, headquartered in the 2 city o f San D im as (in Los A ngeles County), provide support to the H ydro D ivision for FERC 3 relicensing, com pliance w ith regulatory and environm ental requirem ents, hydrological and biological 4 studies, financial and budgetary assistance including preparation o f C alifornia Public U tilities 4

6 5 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 1 C om m ission and other regulatory filings and data requests, training and w ater chem istry support, dam 2 safety analysis and other engineering services, and business analysis. 3 Table I-1 below lists our H ydro generation facilities by region, and shows the capacity, year o f 4 initial operation, and type. 5

7 6 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Table I-1 SCE Hydro Generation Facilities Region Powerhouse Location (County) Generator Nameplate Capacity (MW) Type Initial Date of Operation NORTHERN Big Creek 1 Fresno Storage 1913 Big Creek 2 Fresno 66.5 Storage 1913 Big Creek 2 A Fresno 110 Storage 1928 Big Creek 3 Fresno & Madera Storage 1923 Big Creek 4 Fresno & Madera 100 Storage 1951 Big Creek 8 Fresno 75 Storage 1921 Mammoth Pool Madera 190 Storage 1960 Portal Fresno 10.8 Storage 1956 Eastwood Fresno Pump Storage 1987 TOTAL NORTHERN EASTERN Bishop/Mono Basin Projects: Bishop Creek 2 Inyo 7.32 Storage 1908 Bishop Creek 3 Inyo 7.84 Storage 1913 Bishop Creek 4 Inyo 7.96 Storage 1905 Bishop Creek 5 Inyo 4.53 Storage 1919 Bishop Creek 6 Inyo 1.6 Storage 1913 Lundy Mono 3 Storage 1911 Poole Mono Storage 1924 Rush Creek Mono Storage 1916 Kern River Projects: Kern River 1 Kern Run-of-the-river 1907 Kern River 3 Kern Run-of-the-river 1921 Kern River - Borel Kern 12 Run-of-the-river 1904 Kaweah/Tule Projects: Kaweah 1 Tulare 2.25 Run-of-the-river 1929 Kaweah 2 Tulare 1.8 Run-of-the-river 1929 Kaweah 3 Tulare 4.8 Run-of-the-river 1913 Tule River Tulare 2.52 Run-of-the-river 1909 East End Projects: Lytle Creek San Bernardino 0.5 Run-of-the-river 1904 Ontario 1 Los Angeles 0.6 Run-of-the-river 1902 Ontario 2 Los Angeles 0.32 Run-of-the-river 1963 Fontana San Bernardino 2.95 Run-of-the-river 1917 Santa Ana 1 San Bernardino 3.2 Run-of-the-river 1899 Santa Ana 3 San Bernardino 3.1 Run-of-the-river 1999 Sierra Los Angeles 0.48 Run-of-the-river 1922 Mill Creek 1 San Bernardino 0.8 Run-of-the-river 1893 Mill Creek 3 San Bernardino 3 Run-of-the-river 1903 TOTAL EASTERN TOTAL HYDRO 1,

8 7 Workpaper - Southern California Edison / 2015 GRC - APPLICATION II. OVERVIEW OF OUR O&M AND CAPITAL EXPENDITURE ESTIMATES The SCE H ydro forecast for the 2015 G eneral Rate Case dem onstrates a leveling in both O & M expense and capital expenditures. Figure II-3 shows our recorded O & M expense for and our forecast for In general, our 2015 T est Y ear O & M expense forecast is based on 2012 recorded expense for labor, and a five-year average o f the 2008 through 2012 recorded expense for nonlabor and fees. Figure II-3 Hydro O&M Expenses Recorded/Adjusted and Forecasted (Constant 2012 ($000)) , Labor (std escl) Non-Labor (std escl) Other (not escl) La b o r 22,366 25,265 29,087 29,873 28,631 28,561 28,545 28,545 N o n -Lab or 22,451 26,135 24,689 30,245 20,573 24,744 24,679 24,679 O ther T otal 44,817 51,400 53,776 60,118 49,204 53,305 53,224 53, F o recast ) The capital forecast for 2013 through is $438.3 m illion, w hich averages to approxim ately $87.6 m illion per year (nom inal dollars). This is w ithin 3 percent o f the capital expenditures recorded in The capital forecast is discussed in detail in SCE-02, Volum e 7, Part 2. Figure II-4 below shows our capital expenditure forecast o f $438.3 m illion forecast by year for

9 8 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Figure II-4 Total Hydro Capital - Forecast (Nominal ($1,000,000)) Figure II-5 below illustrates the 7 m ajor categories into w hich our capital expense budget for is divided. 8

10 9 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Figure II-5 Total Hydro Capital (Nominal $1,000,000) 9

11 1 2 3 A. Introduction III. HYDRO PRODUCTION O&M EXPENSES This chapter presents our 2015 T est Y ear O & M expense forecast. SCE records H ydro O & M expenses in FER C accounts 535 through 545. For ease o f presentation and to reduce overall page count, w e have consolidated FER C accounts that record fees 536 and 540 into 536 W ater for Power. W e have consolidated FER C accounts that record O perations related expenses 535 and 537 through 539 into 539 M iscellaneous H ydraulic Power G eneration Expenses. W e have consolidated FERC accounts that record M aintenance related expenses 541 through 545 into 545 M aintenance o f M iscellaneous H ydraulic Plant. In the pages that follow we discuss the business reasons underlying our 2015 forecast. W e then provide further discussion o f our O & M expense for each o f the three accounts; W ater for Power, M iscellaneous H ydraulic Pow er G eneration Expenses, and M aintenance o f M iscellaneous H ydraulic Plant. These expenses include costs for operating SCE s 76 H ydro generating units and associated reservoirs, dam s, w aterw ays, and m iscellaneous H ydro facilities. O ur testim ony on H ydroelectric operation and m aintenance includes an analysis o f the five years o f recorded data ( ) and our forecast for years In Section III.D, we illustrate our forecast for Test Y ear 2015 based on our analysis o f the recorded data and the facts and inform ation w e have relating to each H ydro account. B ased on our analysis o f labor and non-labor for each account, the 2015 Test Y ear forecast is $ m illion. The data is presented by account in Figure III-6 through Figure III-8. B. Estimating Methodology W e began the process o f forecasting T est Y ear H ydro O & M expenses by exam ining recorded data from 2008 through W e then adjusted the recorded data to add or rem ove one-tim e charges, or to correct accounting errors.2 These adjustm ents m ade the historical data m ore representative o f ongoing activities. A fter m aking appropriate adjustm ents we escalated the data to 2012 constant dollars. W e then tested a variety o f forecast m ethods, including: Trend analysis for three, four, and five years A verage analysis for two, three, four, and five years 2 The workpapers accompanying this testimony document all historical adjustments. 10

12 11 Workpaper - Southern California Edison / 2015 GRC - APPLICATION L ast R ecorded Y ear W e then considered the activities contained in each account, and separately decided on a forecasting m ethod for labor and non-labor expense. The chosen forecasting m ethods yielded a forecast fo r labor expenses and a forecast for non-labor expenses for each account.3 C. Hydro Production O&M Account Analysis 1. FERC Water for Power and Rent Expenses a) Description of Account The W ater for Pow er and R ent E xpense A ccount com prises all non-labor expenses from FERC accounts 536 and 540. It is reasonable to com bine these tw o accounts as they are com prised o f annual fees and rent expenses charged by various governm ental agencies w hich are sim ilar in nature. (1) FERC Account Water for Power (a) Headwater Benefit Fees H eadw ater benefits fees are indirect fees to the U.S. Arm y Corps o f Engineers4 that are paid to FER C for the benefit o f having a reservoir upstream o f our facilities, m aintained by them, resulting in additional H ydro generation. W e pay headw ater benefits for K ern R iver 1 and Borel. A dditionally, SCE collects H eadw ater B enefit Fees from Pacific Gas and Electric Com pany for w ater used at the K erckhoff Pow er plant that is supplied from dam s m aintained by SCE. These fees are recorded in FER C account 453. WP (b) Cloud Seeding Expenses Cloud seeding adds artificial condensation particles (such as dry ice and silver iodide) to clouds to create m ore precipitation than w ould occur under norm al circum stances. The increased rain and snow fall then result in increased generation at B ig Creek (c) FERC Administrative Fees W e pay FER C adm inistrative fees (H ydropow er A nnual C harges) 26 as a reim bursem ent to the U nited States governm ent, for the cost o f adm inistering Part 1 o f the Federal 3 In this GRC testimony, we prepared a separate estimate for costs in each account that fall into the labor or non-labor category. None of the Hydro accounts contain any other costs. Other costs are costs that are presented in nominal year dollars, rather than in 2012$, because of specific circumstances that govern their past and expected future escalation. 4 SCE transfers the funds to FERC, which remits them to the Army Corps of Engineers. 11

13 Pow er Act.5 FER C calculates fees using an equation that includes our H ydro generation output, our capacity, the national H ydroelectric generation output, and F E R C s expenses. (d) SWRCB Fees W e pay fees to the SW RCB for w ater quality certifications, w ater right licenses, and w ater right perm its. These fees are divided into 3 categories: W ater R ights License fees, W ater R ights Perm it fees, and W ater Q uality C ertification fees. (e) CDWR Fees for DSOD The C alifornia D epartm ent o f W ater R esources collects fees for its D ivision o f Safety o f Dams. These fees cover plan review for new or repair work, alterations, visual inspections, and review or consultation regarding the P art 1 2 R eports. (f) U.S. Geological Survey (USGS) Fees SCE Pays the U SG S for review and publication o f stream flow and reservoir records. (2) FERC Account Hydro Rent Expenses (a) Rents The FER C charges rent paym ents for SCE s use o f federal lands upon w hich the m ajority o f our H ydro facilities are located. The fee calculations are done by the B ureau o f Land M anagem ent and are based on a per acre appraisal. (b) Kaweah 3 Special Use Permit SCE pays a Special U se Perm it (SUP) for operation o f a diversion dam and flow line for K aw eah 3 w ithin Sequoia N ational Park. b) Development of Test Year Estimate for the Water for Power and Rent Expenses O ur Test Y ear 2015 estim ate for Fees is $5.971 m illion in non-labor expense. Figure III-6 show s the recorded expenses to this account in constant 2012 dollars, for the years 2008 through This figure also shows our T est Y ear 2015 forecast expressed in constant 2012 dollars. 5 See 18 C.F.R

14 13 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Figure III-6 FERC Water fo r Power and Rent Expenses (Constant 2012 $000) c) Analysis of Forecast Non -Labor Expense The sum o f the non-labor activities in this account, as noted above, are derived from the com bining o f tw o FER C accounts: 536 and 540. The recorded costs show n reflect inherent variations from y ear to year due to the uncertainty o f the FER C fees, w hich are directly affected by the precipitation at the H ydro facilities and represent the m ajority o f the costs recorded in FER C 536. The C om m ission in D has indicated that an average is appropriate for accounts w hich are influenced by w eather or other external forces beyond the control o f the utility. G iven that the annual precipitation is the prim ary factor in the am ount o f hydro generation available in a given year and the H ydro FER C fees vary w ith the generation output, it is appropriate to use an average to forecast 2015 expenses. W e have therefore base the Test Y ear non-labor forecast for this account on a five year average, w hich is $5.971 million. 13

15 FERC Miscellaneous Hydraulic Power Generation Expenses a) Description of Account WP The M iscellaneous H ydraulic Pow er G eneration Expenses A ccount com prises all labor and non-labor expenses from FER C accounts 535, 537, 538 and 539. It is reasonable to com bine these four accounts due to their sim ilar operational expenses. (1) FERC Account Operation Supervision and Engineering (a) D ispatching w ork includes directing all O & M activities associated w ith the pow erhouses in the Bishop Creek/M ono B asin area, and the associated transm ission and distribution facilities. The dispatching function is critical to the successful operation o f these facilities. E astern H ydro s C ontrol Substation contains all the supervisory control equipm ent for the Bishop Creek, C ontrol Substation o f unusual events through a dial-up system w hen not m anned. This 24-hour surveillance o f the operating equipm ent from a central point ensures system integrity and operational effectiveness. C ontrol Substation also directs all activities involving circuit sw itching o f distribution and transm ission for these pow erhouses. Dispatching M ono Basin, and K ern R iver pow erhouses. The East End and K aw eah plants have alarm s to notify the (b) Operations Supervision The follow ing locations currently each have a Supervisor o f O perations and M aintenance: B ig Creek 1, overseeing the U pper C anyon facilities; Big C reek 8, overseeing the M id Canyon facilities; and B ig C reek 3, overseeing the Low er C anyon facilities. The follow ing locations currently each have a M anager o f O perations and M aintenance: K ern R iver 3, overseeing the K ern R iver facilities; Santa A na R iver 3, overseeing the E ast End facilities; K aw eah 1, overseeing the K aw eah and Tule facilities; and at Bishop Creek 5, overseeing the Bishop Creek and M ono B asin H ydro facilities and the distribution and transm ission facilities associated w ith the northern section o f the Eastern Region. The follow ing locations currently each have a C hief Operator: K ern R iver 3, Rush Creek, and Santa A na R iver 3. A Supervisor o f O perations at Control Substation assists in overseeing operations activities.6 The Supervi sors and M anagers also oversee m aintenance activities 6 We generally use the Chief Operator and Supervisor o f Operations positions where the geography of the assigned area precludes a Supervisor/Manager of Operations and Maintenance from being able to oversee the entire operation. 14

16 15 Workpaper - Southern California Edison / 2015 GRC - APPLICATION for their facilities.7 W e charge the portion o f their salaries attributable to m aintenance oversight to A ccount 541 (M aintenance Supervision and Engineering). The non-labor expenses associated w ith this activity generally include autom otive expense, com puter services, m iscellaneous m aterial, and travel expense for Supervisors, M anagers, and C hief Operators. (c) Operations Engineering O perations Engineering provides engineering services to support H ydro facilities. W hile both regions in H ydro have sm all engineering groups (one to four em ployees), both regions also rely on other engineers w ithin the Pow er Production D epartm ent. Engineering provides support for civil, m echanical, electrical, pow er system s, dam inspection and evaluation, testing or design o f unit/station relays, and geology issues. D am inspection and evaluation are the prim ary source o f activity in this account. FER C regulations require an independent safety study every five years to ensure the integrity o f the SCE H ydro reservoir facilities, w hich is called a Part 12 report. This report is done w ith independent consultants, supervised by SCE in-house engineering, and is review ed by the C alifornia Division, Safety o f D am s (DSO D).8 (d) Operations Supervision and Engineering The portion o f the Pow er Production D epartm ent s hom e office expenditures attributed to H ydro operations. The activities include the general m anagem ent and hom e office expenses to accom plish adm inistrative tasks to support the generation operations including budget developm ent, goal setting, budget m onitoring, business plan developm ent, long-range m aintenance planning, w ork force attrition planning, regulatory proceedings, regulatory and safety com pliance activities, union activities, etc. This activity is also proportionately applicable to other generation accounts w ithin the Pow er Production Division. (2) FERC Account Hydraulic Expenses WP (a) Operation of Reservoirs, Dams, and Waterways Labor costs for daily inspections o f the reservoir facilities and m aking gate changes to regulate w ater releases. The account also includes labor costs for cleaning grids at the entrances to flow lines to rem ove debris, and rem oving o f w eeds from in and around flow lines, 7 The Supervisor of Operations at Control Substation, has the additional responsibility of overseeing the dispatching activities, and is an exception. 8 See 18 C.F.R (2013). 15

17 flum es, penstocks and other typical H ydro w aterw ays. N on-labor costs are for equipm ent and vehicles used for this activity. O perations personnel regulate w ater flow s to ensure efficient use o f w ater and m axim um generation from available resources. (b) Hydrography H ydrography expenses are for: (1) m aintenance o f w ater rights; (2) com pliance w ith w ater rights and w ater-related FER C license requirem ents; (3) O & M o f stream and reservoir gauging stations; (4) O & M o f m eteorological stations; (5) collection and analysis o f snow survey data; (6) forecasting o f w ater supply from snow survey data; and (7) adm inistration o f S C E s cloud seeding program. N on-labor costs include fees to U SG S and for equipm ent and vehicles used for this activity. (3) FERC Account Electric Expenses, WP FER C account 538 includes expenses for: (1) operating prim e m overs, generators, and their auxiliary apparatus, sw itchgear, and other electric equipm ent; (2) general supervision and direction o f our H ydro facilities operation; and (3) m anagem ent o f w ater resources for our H ydro facilities. (4) FERC Account Miscellaneous Hydraulic Power Generation Expenses (a) Field Divis ion Management Field D ivision M anagem ent costs include salaries and other 20 expenses o f all staff m anagem ent personnel and the adm inistrative support staff located at H ydro field offices. (b) License/Environmental Support This activity includes hom e office expenditures in support o f FER C Licenses, other regulatory licenses, and environm ental activities. Due to cutbacks and reduced staffing at various regulatory agencies, SCE has found it necessary to provide funds to agencies for review o f plans, projects, or proposals in a reasonable period o f time. A n exam ple o f this is SCE providing funds to State H istoric Preservation O ffice (SH PO ) for that office to hire an additional person to review our plans. The alternative is to w ait an undeterm ined period o f tim e for review and violate tim elines set by FER C for specific project com pletion dates. 16

18 17 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 1 2 (c) FERC License Application and Compliance Expense FER C License Com pliance Expense includes inform ational m eetings, field studies, investigations, and data collection to com ply w ith FER C license requirem ents. (d) Safety This activity includes labor and other costs o f m ost H ydro em ployees attending safety m eetings and costs o f m aterials, supplies and program developm ent expenses. (e) Training Expenses Training Expenses include the salary o f the Training A dm inistrator and costs associated w ith em ployees attending training sessions. (f) Warehousing This activity includes payroll, autom otive, and other expenses associated w ith perform ing w arehousing and storekeeping activities. Includes, but is not lim ited to, storing, receiving, shipping, transporting, and inventorying expense, supervision, accounting, and docum ent preparation for m aterials and spare parts, m aintenance and repair o f m aterial handling and storage equipm ent (if applicable), and jan ito rial services. (g) Hydro Chargebacks H ydro C hargebacks include the labor, m aterial, contract, and other expenses from SCE service providers supporting Hydro. These charges cover such things as vehicles and fuel, com puter system s, supplies and m aintenance, som e o f the expense for helicopter use in Hydro areas, com m unications equipm ent and service, m aterial m anagem ent charges, m ailing service, expenses fo r hazardous w aste disposal, and other m iscellaneous services. (h) Miscellaneous Camp/Station Labor M iscellaneous C am p/station labor includes cam p and station expenses not included in other operational expense categories. This includes routine janitorial service for H ydro generating stations and appurtenant structures, such as m achine shops and w elding shops. The costs o f perform ing the follow ing cam p duties: (1) m aintaining grounds; (2) w eeding; (3) collecting and disposing o f garbage; (4) rem oving snow w ithin the cam p area (including snow on cam p roads); (5) trim m ing trees in cam p areas; (6) operating w aste w ater treatm ent plants; (7) w ater quality testing; (8) m aintaining the B ig C reek guest lodge and several additional guest room s; and (9) other incidental w ork connected w ith cam p operation. 17

19 1 2 (i) Other Expenses O ther Expe nses include m iscellaneous em ployee expenses and non-labor costs not assigned to other H ydro accounts, including office supplies and equipm ent, utility and com m unications service, sm all tools, gaskets, packing m aterial, hoses, indicating lam ps, em ployee safety equipm ent and first-aid supplies, som e autom otive, transportation (vehicle and helicopter) charges, com puter service charges, m iscellaneous m aterial used in plant operations, and m eal expenses associated w ith labor-related overtim e assignm ents publications, m onthly reports, and som e engineering charges not affecting individual plants. b) Development of Test Year Estimate for the Miscellaneous Hydraulic Power Generation Expenses O ur Test Y ear 2015 estim ate for the M iscellaneous H ydraulic Pow er G eneration Expense A ccount is $ m illion, including $ m illion labor expense and $ non-labor expense. A t the end o f 2012, as part o f the com pany s O perational Excellence effort, the Pow er Supply Training division w as centralized into the H um an R esources D epartm ent, w hich is now responsible for providing Pow er Supply em ployees w ith Pow er Production-specific training. W hile the internal reporting structure has changed for the im pacted em ployees, the associated labor and non-labor expenses w ill continue to record to Pow er Production FER C account 539 as the activities o f these em ployees continue to support Pow er Production. Therefore, the recorded expenses for these em ployees for the historical period as w ell as the 2015 Test Y ear forecast are included in this Exhibit. Pow er Production realized a savings o f $0.225 m illion associated w ith this O perational Excellence initiative. For m ore detailed analysis o f these savings, as w ell as a description o f the functions perform ed by these new ly centralized em ployees, see SCE-06, Volum e 01. Figure III-7 shows the recorded expenses to this account, after adjustm ents, in constant 2012 dollars, for the years 2008 through This figure also show s our T est Y ear 2015 forecast, expressed in constant 2012 dollars. 18

20 19 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Figure III-7 FERC Miscellaneous Hydraulic Power Generation Expenses (Constant 2012 $000) , Labor (std escl) Non-Labor (std escl) Other (not escl) Labor 14,237 16,313 20,030 20,174 19,195 19,125 19,109 19,109 Non-Labor 10,422 11,784 12,410 14,971 11,504 12,144 12,079 12,079 Other _ Total 24,659 28,097 32,440 35,145 30,699 31,269 31,188 31,188 < Forecast > (1) Analysis of Forecast Labor Expense In our 2012 GRC filing (D ), SCE-02, Vol. 07, III. C. 1-2, SCE forecasted the need for increased funding to hire additional H ydro staff. This additional staff w as needed to address the increasing w orkload o f regulatory com pliance, including N E R C Reliability Standards com pliance, to address other areas exp eriencing increased w orkloads, and to address other needs. The staff increase initiated in 2009, w hich explains the increasing level o f labor costs recorded betw een 2009 and As 2012 recorded staffing m ost closely represents current and future forecast staffing levels, we use 2012 recorded labor as the basis for our T est Y ear forecast. Also, in D and D , the C PU C stated that if recorded expenses in an account have been relatively stable for three or m ore years, the last recorded year is an appropriate base estim ate. Labor costs in this account have been relatively stable s ince 2010, and reflect our current staffing requirem ents; therefore the last year recorded provides our basis for estim ating T est Y ear 2015 o f $ m illion. 19

21 (2) Analysis of Forecast Non-Labor Expense The increase in costs show n betw een 2008 and 2010 w ere prim arily due to increased vehicle and air operations cost chargebacks, w hich continue to occur yearly. The increasing costs recorded during 2008 through 2010 reflect these increases, as w ell as other norm al variability in our annual non-labor operations expenses. In 2011, H ydro experienced low precipitation levels. Hydro took advantage o f the reduced production-related w ork load to conduct a higher level o f annual m aintenance, including w ork on infrastructure such as cam ps, trails, and other support facilities. As explained above, som e o f the w ork and costs that support these m aintenance activities, such as regulatory perm itting, and helicopter and vehicle fleet operations, record to H ydro operations accounts. Therefore, recorded operations non-labor costs continued to trend up from 2010 to In 2012, precipitation levels w ere again very low. H ow ev er, as m uch o f the m aintenance back-log had been addressed in 2011, overall H ydro spending in 2012 w as m uch low er than 2011, including non-labor for the operations accounts. W hile 2008 through 2010 expenses trended upw ard, expenses in 2011 and 2012 fluctuated greatly. W ork accelerated in 2011 due to very low rainfall, resulting in low er expenses in The 2012 base year is therefore not a sufficient forecast to support operations activities during the 2015 T est Y ear. A five-year average best reflects historical and future expenses, w hich yields a nonlabor Test Y ear forecast o f $ m illion for H ydro operations accounts. 3. FERC Maintenance of Miscellaneous Hydraulic Plant a) Description of Account The M aintenance o f M iscellaneous H ydraulic Plant A ccount com prises all labor and non-labor from FER C A ccounts 541, 542, 543, 544, and 545. It is reasonable to com bine these five accounts due to their sim ilarities o f H ydro m aintenance expenses. WP (1) FERC Account Maintenance Supervision and Engineering This activity includes inspection o f reservoirs, dam s, canals, flum es, and other appurtenant hydraulic structures to com ply w ith state and federal regulatory requirem ents,9 as w ell as costs for condition analysis, engineering recom m endations, and m andated reports.10 The testing, inspection, and reporting function is necessary to assure that the physical condition o f facilities and 9 23 CA ADC T. 23, and 18 C.F.R. Part Id 20

22 21 Workpaper - Southern California Edison / 2015 GRC - APPLICATION equipm ent is safe for continued operation through: (1) technical inspection; (2) electrical and m echanical engineering; (3) civil, structural, and geotechnical engineering; (4) construction m anagem ent and cost engineering; and (5) perform ance engineering and testing. This activity also includes all expenses for supervision o f repairs to H ydro production facilities, structures, and equipm ent, as w ell as expenses for tests, inspections, and preparation o f reports by engineering support personnel. Routine general supervision labor includes: (1) planning and scheduling equipm ent m aintenance activity; (2) com piling and analyzing unit condition reports; (3) m aintaining a list o f w orkforce availability; (4) correlating w ater m ovem ent requirem ents w ith u nit condition and staff availability; and (5) coordinating availability o f specialized m aintenance equipm ent. G eneral m aintenance supervision coordinates availability o f labor resources, fuel resources, and equipm ent to efficiently m aintain equipm ent, as needed. L abor also includes the engineering required to support the H ydro m aintenance program. This engineering w ork supports the m aintenance o f structures, w ater conveyance devices, turbines and generators, controls, autom ation, and other equipm ent such as filters, blow ers, transform ers, and dams. N on-labor includes transportation, travel and lodging expenses, m iscellaneous equipm ent m aterials and supplies, as w ell as contracted engineering w ork The activity includes m aintenance costs fo r H ydro structures and lines. The structures include pow erhouses, com pany housing and garages, m achine/electrical/carpenter shops, office structures, and m iscellaneous outbuildings. B uilding m aintenance activities include structural repairs, painting interior/exterior finishes, plum bing repairs and m inor system upgrades, electrical system repairs, and ro o f repairs. Labor includes SCE staffing costs for SCE personnel perform ing these repairs. N on-labor includes costs o f contractors and supplies for perform ing these repairs. M iscellaneous non-labor expenses include costs for contract janitorial service, transportation, and refuse service, as w ell as the costs o f m aintaining distribution voltage electric lines that serve H ydro facility com plexes exclusively. (3) FERC Account Maintenance of Reservoirs, Dams and This activity includes the m aintenance o f reservoirs, dam s, and w aterw ays includes m aintaining reservoirs, dam s, w aterw ays, intakes, forebays, penstocks, tunnels, tailraces, 21

23 canals, flum es, snow shelters, and other structure s and appurtenant facilities used in connection w ith H ydro works. L abor includes: (1) applying concrete gunite to repair aged and w eather-dam aged surfaces o f dam s and intakes; (2) repacking joints and repairing leaks in steel penstock pipes and flum es; (3) m aintaining w ater-diverting equipm ent such as valves and spillw ays; and (4) repairing w ood-fram e structures appurtenant to H ydro facilities, such as flow line trestles, snow shelter survival cabins, gatehouses, and hydraulic equipm ent shelters. These repairs include painting, carpentry, and plum bing. Tim berland m ainte nance expenses include labor and non-labor for general supervision, tim ber surveys, scaling and m easuring tim ber, fire-suppression work, and detection and control o f insects and disease. L abor activities include: (1) im provem ent o f tim ber stands by ground preparation; (2) planting o f young trees and seeds; and (3) rem oval o f trees and lim bs to yield higher quality and production in existing tim ber stands in the Shaver Lake area. N on-labor includes purchase o f young trees and seeds, insecticides, and contract labor. W e perform tim berland m aintenance to fulfill our license agreem ents w ith the U S Forest Service (USFS), w hich perm it us to operate facilities in lands under U SFS jurisdiction. N on-labor also includes contracting expense, autom otive expense, com puter services charge backs, travel expense, and m ateri als such as lum ber, pipe, paint, concrete, conduit, and m iscellaneous hardw are supplies. (4) FERC Account Maintenance of Electrical Plant This activity includes all m aintenance associated w ith Electrical Plant, w hich includes the costs to repair and overhaul hydraulic, m echanical, and electrical facilities and appurtenances identified w ith prim e m overs and generators from the low er penstock valve to the tailrace (the location w here the w ater leaves the turbine and exits the pow erhouse). This account includes costs to m aintain hydraulic generators, turbines, w aterw heels, governors, turbine shut o ff valves, draft tubes, controls, and other accessory equipm ent. L abor costs include: (1) hydraulic and electrical inspections and repairs; (2) overhaul o f generators, turbines, valves, and governors; (3) condition testing o f field coils and electrical w indings; (4) repair and calibration o f generation unit control and m onitoring devices; and (5) generator cleaning. N on-labor costs include the follow ing m aterials: valves, pipe, conduit, relays, circuit breakers, tem perature m onitors, valve packing m aterial, steel, w elding m aterials, and m iscellaneous m echanical and electrical hardw are. C A ISO requires that w e m aintain the controls and valves in excellent condition. For exam ple, if H ydro is operating w ith the A utom atic G eneration 22

24 23 Workpaper - Southern California Edison / 2015 GRC - APPLICATION C ontrol ancillary service from the CAISO, the generation units m ust ram p autom atically from CA ISO com m and, using the autom ated valves and controls. (5) FERC Account Maintenance of Miscellaneous Hydraulic Plant This activity includes all m iscellaneous m aintenance required to m aintain H ydro tools and w ork equipm ent, as w ell as production roads, trails, and bridges. This account includes costs o f repairing m achine shop tools and w ork e quipm ent, com pressed air system s, signal system s, pow erhouse cranes and m onorail hoists, and other m iscellaneous equipm ent not included in other station equipm ent repair functions, costs to m aintain and clear all production roads, bridges, trails, aerial tram w ays, inclines, and penstock tram w ays, including costs for snow rem oval, costs for repairing property and equipm ent dam aged by flood or storms. C om puter/ telecom m unications support and expenses related to these activities are also recorded in this account. N on-labor costs include equipm ent, m aterials, or contract expenses for the above work. b) 2015 Estimate for the Maintenance of Miscellaneous Hydraulic Plant Account O ur T est Y ear 2015 estim ate for the M aintenance o f M iscellaneous H ydraulic Plant A ccount is $ m illion, including $9.436 m illion labor and $6.629 m illion non-labor. Figure III-8 shows the recorded expenses to this account in constant 2012 dollars, for the years 2008 through Figure III-8 also shows our T est Y ear 2015 forecast, expressed in constant 2012 dollars. 23

25 Figure III-8 FERC Maintenance o f Miscellaneous Hydraulic Plant (Constant 2012 $000) , ,000 8,000 6, Labor (std escl) Non-Labor (std escl) Other (not escl) Labor 8,129 8,952 9,057 9,698 9,436 9,436 9,436 9,436 N on-labor 7,224 7,364 7,273 8,238 3,049 6,629 6,629 6,629 O ther Total 15,353 16,316 16,330 17,936 12,485 16,065 16,065 16, Forecast > (1) Analysis of Recorded and Forecast Maintenance of Miscellaneous Hydraulic Plant Labor Expenses In our 2012 GRC filing, SCE-02, Vol. 07, III., C. 1-2, SCE forecasted the need for increasing staffing levels due to the increased need for perform ing additional m aintenance, including repairs and preventative m aintenance w ork on flow lines, penstocks, pow erhouses, dam s, and structures. The staff increase w as initiated in 2010, w hich explains the increasing level o f labor costs recorded betw een 2010 and L abor costs decreased slightly in 2012 due to slight staffing reductions and a decrease in overtim e costs and com m ensurate w ith the com pletion o f the higher-than-typical m aintenance undertaken in 2011, as further explained below. H ow ever, w e continue to experience high m aintenance dem ands on our aging hydro infrastructure. W e do not believe that hydro m aintenance needs for the foreseeable future w ill be significantly different from those experienced during As 2012 recorded staffing m ost closely represents current and future forecast staffing levels, w e use 2012 recorded labor as the basis for our Test Y ear forecast. 24

26 25 Workpaper - Southern California Edison / 2015 GRC - APPLICATION (2) Analysis of Recorded and Forecast Maintenance Non-Labor Expenses W hile labor costs for m aintenance increased during 2008 through 2010, non-labor costs w ere relatively stable during this tim e. M uch o f this increased level o f m aintenance w as labor intensive, and non-labor m aintenance costs that record to m aintenance accounts w ere relatively flat. H ow ever, as explained in m ore detail above, the non-labor accounts for m aintenance support activities, such as vehicle fleet costs and perm itting, that record to the H ydro operations accounts did increase during 2008 through 2010 com m ensurate w ith the increased level o f m aintenance. In 2011, H ydro experienced low precipitation levels. H ydro took advantage o f the reduced production-related w ork load to conduct a higher level o f annual m aintenance, including w ork on infrastructure such as cam ps, trails and other support facilities. These activities explain the increase in 2011 for the non-labor costs in this account. In 2012, precipitation levels were again very low. H ow ever, as m uch o f the m aintenance back-log had been addressed in 2011, overall H ydro spending in 2012 w as m uch low er than in 2011, including non-labor for the m aintenance accounts. W hile m aintenance non-labor expenses w ere relatively stable from , w eather attributed to the variations seen betw een 2011 and W ork accelerated in 2011 due to very low rainfall, resulting in low er expenses in The last recorded year is therefore not a sufficient forecast to support m aintenance activities during the T est Year. A five-year average best reflects historical and future operational expenses, w hich yields a non-labor T est Y ear forecast o f $6.629 m illion for H ydro m aintenance accounts. D. Hydro Production Total Estimate O ur total H ydro Test Y ear O & M expense forecast o f $ m illion is sum m arized in Table III- 2 below. This table contains the H ydro O & M expense for each FERC account w ith labor and non-labor. The table show s the recorded expenses for 2008 through 2012 and the forecast expenses for 2013 through

27 26 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Table III-2 Hydro Recorded and Forecast Expense By FERC Account (Constant 2012 $000) Line Hydro Recorded/Adjusted and Forecast Expense By FERC A ccount (Constant 2012 $000) Recorded NO. FERC ACCT Method Labor N/A 2. Water for Power Non-Labor 4,805 6,986 5,006 7,037 6,020 5,971 5, Five Year Average 3. Other N/A 4- Forecast Total 4,805 6,986 5,006 7,037 6,020 5,971 5, Labor ,313 20,030 20,174 19,195 19,125 19,109 19,109 Last Recorded Year 6. Miscellaneous Hydraulic Non-Labor 10,422 11,784 12,410 14,971 11,504 12,144 12,079 12,079 Five Year Average 7. Power Generation Other N/A 8. Expenses Total ,097 32,440 35, ,269 31,188 31,188 Estimate Labor 8,129 8,952 9,057 9,698 9,436 9,436 9,436 9,436 Last Recorded Year 10. Maintenance of Non-Labor 7,224 7,364 7,273 8,238 3,049 6,629 6,629 6,629 Five Year Average 11. Miscellaneous Hydraulic Other N/A 12. Plant Total 15,353 16,316 16,330 17,936 12,485 16,065 16,065 16, Labor 22,366 25,265 29,087 29,872 28, Total Operations & Non-Labor 22,451 26, ,246 20,573 24, Maintenance Other Total 44,817 51,399 53,776 60, ,224 26

28 2015 General Rate Case - APPLICATION INDEX OF WORKPAPERS EXHIBIT SCE-02, Vol 7 Part 1/Generation - Hydro O&M DOCUMENT PAGE(S) HYDRO ACCOUNTS Account 536: Water for Power and Rent Expenses 1-18 Account 539: Miscellaneous Hydraulic Power Generation Expenses Account 539: Operational Excellence Workpaper Account 545: Maintenance of Miscellaneous Hydraulic Plant Account 453: Sales of Water & Water Power Accounts: 535, 537, 538, 540, 541, 542, 543,

29 1 Beginning of Workpapers for: A ctivity: 536 Water for Power W ATER FOR POW ER Forecast Method Chosen 2012$ (000) Recorded Forecast Labor N/A 0 0 Non-Labor Five Year Average 6,020 5,971 Other N/A 0 0 Total 6,020 5,971 Description of Includes cost of water purchased for hydraulic-power generation including such items as: - Cost of water purchased from others; - Periodic payments for licenses or permits from any governmental agency for water rights; and, - Periodic payments for riparian rights. Also includes payroll and other costs incurred in conducting weather-modification programs including minor servicing and repairs to equipment and contract costs for operation of silver-iodide smoke generators and cloud seeding by aircraft radar operations that includes aircraft transponder tracking capability, solid-state seeding devices, and cloud-seeding studies and reports. Includes the rents for property of others used, occupied, or operated in connection with hydraulic-power generation including amounts payable to the United States for the occupancy and use of public lands for reservoirs, dams, flumes, forebays, penstocks, powerhouses, etc., but not including transmission rights-of-way. See Appendix C for Final Cost Centers included in this activity.

30 2 Workpaper - Southern California Edison / 2015 GRC - APPLICATION A ctivity: 536 W ater for Power WATER FOR POW ER FERC Form 1 Recorded (Nominal $) Labor Non-Labor Other DETERMINATION OF RECORDED/ADJUSTED Recorded Period $ (000) , , ,077 0 Total 926 4,026 4,028 2,081 4, ,651 0 Adjustments- (Nominal $) - see Appendix B for additional detail Labor (54) (61) (22) (4) (6) Non-Labor 3,482 2, ,783 1,369 Other Total 3,428 2, ,779 1,363 Recorded/Adjusted (Nominal $) Labor Non-Labor 4,354 6,264 4,582 6,860 6,020 Other Total 4,354 6,264 4,582 6,860 6,020 E scalation: Labor Non-Labor Other Recorded/Adjusted (Constant 2012$) Labor Non-Labor ,986 5,006 7,036 6,020 Other Total ,986 5,006 7,036 6,020 Recorded Adjusted (2012$) 8, , Labor (std escl) Non-Labor (std escl) Other (not escl)

31 3 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 536 Water for Power W ATER FOR POW ER Forecasting Methods - Sum m ary of Results of all Methods Studied $ (000) 2 Recorded Years ( ): Results of Averaging (A2) sd** Chosen Labor no Non-Labor 6,528 6,528 6, no Other no Total 6,528 6,528 6,528 n/a n/a 3 Recorded Years ( ): Results of Linear Trending (T3) Results of Averaging (A3) r2* Chosen sd** Chosen Labor no no Non-Labor 7,035 7,542 8, no 6,020 6,020 6, no Other no no Total 7,035 7,542 8,049 n/a n/a 6,020 6,020 6,020 n/a n/a 4 Recorded Years ( ): Results of Linear Trending (T4) Results of Averaging (A4) r2* Chosen sd** Chosen Labor no no Non-Labor 6,045 5,958 5, no 6,262 6,262 6, no Other no no Total 6,045 5,958 5,871 n/a n/a 6,262 6,262 6,262 n/a n/a 5 Recorded Years ( ): Results of Linear Trending (T5) Results of Averaging (A5) r2* Chosen sd** Chosen Labor no no Non-Labor 6,714 6,962 7, no 5,971 5,971 5, yes Other no no Total 6,714 6,962 7,210 n/a n/a 5,971 5,971 5,971 n/a n/a Other Methods: Labor Non-Labor Other Total Last Recorded Year (LRY) Itemized Forecast (IF) Chosen Chosen no no 6,020 6,020 6,020 no no no no 6,020 6,020 6,020 n/a n/a Forecast Adjustments: Labor Non-Labor Other Total Base Forecast Method Adjustments* Method N/A A5 5,971 5,971 5,971 N/A ,971 5,971 5, * r2 = R Squared (Based on recorded years data) ** sd = standard deviation (Based on recorded years data) *** See Appendix B For Additional Detail

32 4 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 536 Water for Power WATER FOR POWER Results: Forecasting Results Method Selected Labor N/A Non-Labor Five Year Average 5,971 5,971 5,971 Other N/A Total 5,971 5,971 5,971 Analysis of Forecasting Methods Analysis of Linear Trending Method: Linear trending is not applicable to either non-labor costs as they have not indicated a trend in the last several years. Analysis of Averaging Method: In D and D , the CPUC stated that for those accounts which have significant fluctuations in recorded expenses from year to year, an average of recorded expenses is appropriate. Non-labor costs in this account have fluctuated significantly from year to year, so a five-year average is an appropriate forecast. We used a five-year average as there is no valid reason to exclude any year in the estimate. Analysis of Last Recorded Year (2012): In D and D , the CPUC stated that if costs have shown a trend in a certain direction over three or more years, the last year recorded is an appropriate base estimate. Costs in this account have not shown a trend. Analysis of Itemized Forecast Method: Not applicable.

33 5 Witness: 536 Water for Power WATER FOR POW ER Recorded / Forecast $ (000) 8, , Labor (std escl) Non-Labor (std escl) Cither (not escl) Recorded Period Forecast Expenses (constant 2012$) Labor (standard escalation) $ (000) Non-Labor (standard escalation) 4,805 6,986 5,006 7,036 6,020 5,971 5,971 5,971 Other (not escalatable) Total 4,805 6,986 5,006 7,036 6,020 5,971 5,971 5,971 Labor Prior year Total Change Total Non-Labor Prior year Total 6,020 5,971 5,971 Change (49) 0 0 Total 6,020 5,971 5,971 5,971 Other Prior year Total Change Total Total Change Labor Non-Labor Other Total (49) N/A (49) 0 0

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35 7 536 W ater for Power WATER FOR POWER APPENDIX A Detail Description of Final Cost Centers Included in This Activity

36 8 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 536 Water for Power W ATER FOR POW ER Description of Final Cost Centers included in this activity: * See A ppendix C fo r S um m ary F in al C ost Centers SUMM ARY 536 WATER FOR POWER Includes cost of water purchased for hydraulic-power generation including such items as: - Cost of water purchased from others; - Periodic payments for licenses or permits from any governmental agency for water rights; and, - Periodic payments for riparian rights. Also includes payroll and other costs incurred in conducting weather-modification programs including minor servicing and repairs to equipment and contract costs for operation of silver-iodide smoke generators and cloud seeding by aircraft radar operations that includes aircraft transponder tracking capability, solid-state seeding devices, and cloud-seeding studies and reports. SUMM ARY 540 RENTS Includes the rents for property of others used, occupied, or operated in connection with hydraulic-power generation including amounts payable to the United States for the occupancy and use of public lands for reservoirs, dams, flumes, forebays, penstocks, powerhouses, etc., but not including transmission rights-of-way.

37 9 536 Water for Power WATER FOR POW ER Recorded/Adjusted (Constant 2012$) By Final Cost Center $ (000) * See Appendix C fo r Sum m ary Final Cost Centers SUMM ARY 536 WATER FOR POWER 3,660 4,056 4,375 3,331 4,857 SUMM ARY 540 RENTS 1,145 2, ,699 1,163 Total 4,805 6,987 5,005 7,030 6,020 ** Due to rounding, totals m ay not tie to other workpaper pages.

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39 W ater for Power WATER FOR POWER APPENDIX B Detail of Total Company Adjustments to Recorded

40 12 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 536 Water for Power WATER FOR POWER Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Labor (54) (61) (22) (4) (6) Non-Labor 3,482 2, ,783 1, Other Total 3,428 2, ,779 1, Organizational Unit Adjustment 1 G B U -C P T-O U -H Y D R O FEE CONSOLIDATION The adjustment consolidates Hydro fee amounts from FERC 539 and 540 to FERC 536. Labor Non-Labor 1,037 2, ,679 1, Other Total 1,037 2, ,679 1, Organizational Unit Adjustment 2 GBU-CPT-O U -HYDRO NHD ACCRUAL CORRECTION Amounts recorded to this account reflect accrual estimates. This adjustment corrects the account to equal actual costs. Labor Non-Labor 1,962 (408) Other Total 1,962 (408) Organizational Unit Adjustment 3 GBU-CPT-O U -HYDRO NHD SWRB TO 536 This adjusment moves State Water Resources Control Board (SW RCB ) fees to the correct FERC 536 from 539. Labor Non-Labor Other Total Organizational Unit Adjustment 4 GBU-CPT-O U -HYDRO EHD ACCRUAL CORRECTION Amounts recorded to this account reflect accrual estimates. This adjustment corrects the account to equal actual costs. Labor Non-Labor Other Total

41 Water for Power WATER FOR POWER Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Organizational Unit Adjustment 5 GBU-CPT-O U -HYDRO CDW R FEE TO 536 This adjustment transfers California Department of Water Resources fees to the correct FERC 536 from FERC 539 Labor Non-Labor Other Total Organizational Unit Adjustment 6 GBU-CPT-O U -HYDRO EHD USGS FEES FROM 539 This adjustment transfers United States Geological Service (USGS) fees to the correct FERC 536 from FERC 539. Labor Non-Labor Other Total Organizational Unit Adjustment 7 GBU-CPT-O U -HYDRO NHD CLOUD SEEDING SCE used a new vendor in 2008 (partial year) and 2009 at a higher cost than previous years. This adjustment corrects 2008 to equal present costs. Labor Non-Labor Other Total Organizational Unit Adjustment 8 GBU-CPT-O U -HYDRO NHD FEE TO 536 This adjustment moves Northern Hydro fees from FERC 539 to the correct FERC 536. Labor Non-Labor Other Total Organizational Unit Adjustment 9 GBU-CPT-O U -HYDRO EHD LABOR TO 539 This adjustment moves Eastern Hydro labor charges to the correct FERC 539 from FERC 536. Labor (10) (1) Non-Labor Other Total (10) (1)

42 14 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 536 Water for Power WATER FOR POWER Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Organizational Unit Adjustment 10 GBU-CPT-O U -HYDRO NHD LABOR TO 539 This adjustment moves Northern Hydo labor charges to the correct FERC 539 from FEC 536. Labor (44) (60) (22) (4) (6) Non-Labor Other Total (44) (60) (22) (4) (6) 0 0 0

43 W ater for Power W ATER FOR POW ER APPENDIX C Final Cost Centers Included in This Activity

44 16 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 536 W ater for Power W ATER FO R POW ER Final Cost Centers included in this activity: Summary Final Cost Centers: 536 WATER FOR POWER F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F RENTS F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F201123

45 17 A ctivity : 536 Water for Power WATER FOR POWER Individual Final Cost Centers:

46 18 Workpaper - Southern California Edison / 2015 GRC - APPLICATION End of Workpapers for: 536 W ater for Power W ATER FOR POW ER

47 19 Beginning of Workpapers for: Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Forecast Method Chosen 2012$ (000) Recorded Forecast Labor Last Recorded Year Adj. 19,195 19,109 Non-Labor Five Year Average Adj. 11,504 12,080 Other N/A 0 0 Total 30,699 31,189 Description of Includes salaries and expenses of personnel engaged in routine patrolling of waterways, cleaning trash racks, removing debris and sluicing storage reservoirs, cutting and removing brush along waterways, operating intake gates, and other hydraulic works. Also includes supplies used or consumed in connection with operation of above. Includes payroll, supplies, and other costs incurred in operating prime movers, generators, auxiliary apparatus, switchboards, and other electrical equipment at hydraulic generating stations. Includes payroll and other costs incurred by employees, other than plant-operating personnel, in performing routine janitor service in hydraulic-power generating stations and appurtenant structures such as machine shops and welding shops. Also includes miscellaneous costs such as small tools, gaskets, packing waste, hoses, indicating lamps, first-aid supplies, and employees service facilities expense. Include in this account demurrage charges for oxygen and acetylene. Also includes payroll and other costs incurred in performing camp duties such as care of grounds, hoeing weeds, collecting and disposing of garbage and trash, removing snow within the camp area including the camp roads, trimming trees in camp areas, sewer-plant operation and cleaning, water-quality testing, and other incidental work in connection with operating the camp. Also includes supplies used or consumed in performance of above duties. See Appendix C for Final Cost Centers included in this activity.

48 20 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES DETERMINATION OF RECORDED/ADJUSTED I Recorded Period $ (000) FERC Form 1 Recorded (Nominal $) Labor 5,799 7,092 8,650 9,557 8,699 Non-Labor 5,527 7,618 8,843 12,285 9,170 Other Total 11,326 14,710 17,493 21,842 17,869 Adjustments- (Nominal $) - see Appendix B for additional detail Labor 6,674 7,644 10,069 9,978 10,496 Non-Labor 3,916 2,948 2,517 2,313 2,334 Other Total 10,590 10,592 12,586 12,291 12,830 Recorded/Adjusted (Nominal $) Labor 12,473 14,736 18,719 19,535 19,195 Non-Labor 9,443 10,566 11,360 14,598 11,504 Other Total 21,916 25,302 30,079 34,133 30,699 Escalation: Labor Non-Labor Other Recorded/Adjusted (Constant 2012$) Labor 14,237 16,313 20,030 20,174 19,195 Non-Labor 10,422 11,784 12,410 14,972 11,504 Other _ Total 24,659 28,097 32,440 35,146 30,699 Recorded Adjusted (2012$) ,000 0 s Labor (std escl) Non-Labor (std escl) Other (not escl)

49 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Forecasting Methods - Sum m ary of Results of all Methods Studied $ (000) 2 Recorded Years ( ): Results of Averaging (A2) sd** Chosen Labor 19,685 19,685 19, no Non-Labor 13,238 13,238 13,238 1,734 no Other no Total 32,923 32,923 32,923 n/a n/a 3 Recorded Years ( ): Results of Linear Trending (T3) Results of Averaging (A3) r2* Chosen sd** Chosen Labor 18,965 18,547 18, no 19,800 19,800 19, no Non-Labor 12,056 11,602 11, no 12,962 12,962 12,962 1,469 no Other no no Total 31,021 30,149 29,278 n/a n/a 32,762 32,762 32,762 n/a n/a 4 Recorded Years ( ): Labor Non-Labor Other Total 5 Recorded Years ( ): Results of Linear Trending (T4) Results of Averaging (A4) r2* Chosen sd** Chosen 21,126 22,005 22, no 13,098 13,270 13, n no 18,928 18,928 18,928 1,556 no 12,668 12,668 12,668 1,370 no no 34,224 35,275 36,326 n/a n/a 31,596 31,596 31,596 n/a n/a Results of Linear Trending (T5) Results of Averaging (A5) r2* Chosen sd** Chosen Labor 22,123 23,501 24, no 17,990 17,990 17,990 2,336 no Non-Labor 13,824 14,359 14, no 12,219 12,219 12,219 1,520 yes Other no no Total 35,947 37,860 39,773 n/a n/a 30,209 30,209 30,209 n/a n/a Other Methods: Labor Non-Labor Other Total Last Recorded Year (LRY) Itemized Forecast (IF) Chosen Chosen 19,195 19,195 19,195 yes no 11,504 11,504 11,504 no no no no 30,699 30,699 30,699 n/a n/a Forecast Adjustments: Labor Non-Labor Other Total Base Forecast Method Adjustments* Method LRY 19,195 19,195 19,195 A5 12,219 12,219 12,219 N/A (70) (86) (86) (74) (139) (139) ,414 31,414 31,414 (144) (225) (225) * r2 = R Squared (Based on recorded years data) ** sd = standard deviation (Based on recorded years data) *** See Appendix B For Additional Detail

50 22 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Results: Forecasting Results Method Selected Labor Last Recorded Year Adj. 19,125 19,109 19,109 Non-Labor Five Year Average Adj. 12,145 12,080 12,080 Other N/A Total 31,270 31,189 31,189 Analysis of Forecasting Methods Analysis of Linear Trending Method: Linear trending is not applicable to either labor or non-labor costs as neither has indicated a trend in the last three years. Analysis of Averaging Method: While 2008 through 2010 non-labor expenses trended upward, expenses in 2011 and 2012 varied due to weather considerations. Work was accelerated in 2011 due to very low rainfall, resulting in lower expenses in The 2012 base year is therefore not a sufficient forecast to support operations activities during the 2015 test year. A five year average best reflects historical and forecast expenses for non-labor. Labor costs in this account have been stable since 2010 so averaging is not appropriate method to use. Analysis of Last Recorded Year (2012): In D and D , the CPUC stated that if recorded expenses in an account have been relatively stable for three or more years, the last recorded year is an appropriate base estimate. Labor costs in this account have been stable from 2010 to 2012, so the last year recorded provides our base for estimating test year Non-labor costs have fluctuated over the historical period so last recorded year is not an appropriate method. Analysis of Itemized Forecast Method: Not applicable.

51 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Recorded / Forecast $ (000) : m I , Labor (std escl) Non-Labor (std escl) Other (not escl) I Recorded Period Forecast Expenses (constant 2012$) Labor (standard escalation) 14,237 16,313 20,030 20,174 19,195 19,125 19,109 19,109 Non-Labor (standard escalation) 10,422 11,784 12,410 14,972 11,504 12,145 12,080 12,080 Other (not escalatable) Total 24,659 28,097 32,440 35,146 30,699 31,270 31,189 31,189 $(000) Labor Prior year Total 19,195 19,125 19,109 Change (70) (16) 0 Total 19,195 19,125 19,109 19,109 Non-Labor Prior year Total 11,504 12,145 12,080 Change 641 (65) 0 Total 11,504 12,145 12,080 12,080 Other Prior year Total Change Total Total Change Labor (70) (16) 0 Non-Labor 641 (65) 0 Other Total N/A 571 (81) 0

52 24 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES This p a g e sh ow s the ch a n g e s in Labor, N o n -L a b o r, an d O th e r ex p en d itu res fo re cast during through , including reaso n s fo r th e addition o f personn el (labor), in creased office supplies required due to an increase in activity (non-labor) Labor: (7 0 ) C o s t reductions realized from the centralizatio n o f S C E e m p lo y e e s into the H u m an R e s o u rc e s and C orporate Finance groups. N on -Labor: 641 C o s t reductions realized from the centralizatio n o f contingent w o rkers into th e H u m an R e s o u rc e s and C o rp o ra te F in an ce organizations. N o n -lab o r sh o w s a positive a d ju s tm e n t due to co m p arison with the forecast of a 5 year average to last recorded year. O ther: 0 Not applicable.

53 25 Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES This p a g e sh ow s the ch a n g e s in Labor, N o n -L a b o r, an d O th e r ex p en d itu res fo re cast during through , including reaso n s fo r th e addition o f personn el (labor), in creased office supplies required due to an increase in activity (non-labor) Labor: (1 6 ) C o s t reductions realized from the centralizatio n o f S C E e m p lo y e e s into the H u m an R e s o u rc e s and C orporate Finance groups. N on -Labor: (6 5 ) C o s t reductions realized from the centralizatio n o f contingent w o rkers into th e H u m an R e s o u rc e s and C orporate Finance organizations. O ther: 0 Not applicable.

54 26 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES This p a g e sh ow s the ch a n g e s in Labor, N o n -L a b o r, an d O th e r ex p en d itu res fo re cast during through , including reaso n s fo r th e addition o f personn el (labor), in creased office supplies required due to an increase in activity (non-labor) Labor: 0 Not applicable. N on -Labor: 0 Not applicable. O ther: 0 Not applicable.

55 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES APPENDIX A Detail Description of Final Cost Centers Included in This Activity

56 28 Workpaper - Southern California Edison / 2015 GRC - APPLICATION A ctivity: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC p o w e r g e n e r a t io n e x p e n s e s Description of Final Cost Centers included in this activity: * See A ppendix C fo r S um m ary F inal C ost Centers SUM M ARY 535 OPERATIONS SUPPORT AND ENGINEERING Includes salaries and expenses incurred in the direct operation and supervision of hydraulic generating stations. This includes all wages (labor) and miscellaneous expenses (non-labor) associated with dispatching, operations supervision, and operational engineering. SUM M ARY 537 CAMP EDISON Includes salaries, transportation expense and other costs incurred in the m anagem ent of picnic facilities and campgrounds at Camp Edison Shaver Lake. SUM M ARY 537 HYDRAULIC EXPENSE Includes salaries and expenses of personnel engaged in routine patrolling of waterways, cleaning trash racks, removing debris and sluicing storage reservoirs, cutting and removing brush along waterways, operating intake gates, and other hydraulic works. Also includes supplies used or consumed in connection with operation of above. SUM M ARY 538 ELECTRICAL EXPENSE Includes payroll, supplies, and other costs incurred in operating prime movers, generators, auxiliary apparatus, switchboards, and other electrical equipment at hydraulic generating stations. SUM M ARY 539 MISCELLANEOUS HYDRAULIC EXPENSE Includes payroll and other costs incurred by employees, other than plant-operating personnel, in performing routine janitor service in hydraulic-power generating stations and appurtenant structures such as machine shops and welding shops. Also includes miscellaneous costs such as small tools, gaskets, packing waste, hoses, indicating lamps, first-aid supplies, and employees service facilities expense. Include in this account demurrage charges for oxygen and acetylene. Also includes payroll and other costs incurred in performing camp duties such as care of grounds, hoeing weeds, collecting and disposing of garbage and trash, removing snow within the camp area including the camp roads, trimming trees in camp areas, sewer-plant operation and cleaning, water-quality testing, and other incidental work in connection with operating the camp. Also includes supplies used or consumed in performance of above duties.

57 29 Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Recorded/Adjusted (Constant 2012$) By Final Cost Center $ (000) * See Appendix C fo r Sum m ary Final Cost Centers SU M M A RY 535 OPERATIONS SUPPORT AND ENGINEERING 5,184 6,599 7,732 6,961 6,987 SUMM ARY 537 CAMP EDISON SUMM ARY 537 HYDRAULIC EXPENSE 2,162 2,115 2,892 3,514 1,639 SUMM ARY 538 ELECTRICAL EXPENSE 3,570 3,077 3,286 3,419 2,939 SUMM ARY 539 MISCELLANEOUS HYDRAULIC EXPENSE 12,919 15,429 17,691 20,459 18,470 Total 24,656 28,082 32,437 35,138 30,699 ** D ue to rounding, totals m a y n o t tie to o th e r w orkpaper pages.

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59 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES APPENDIX B Detail of Total Company Adjustments to Recorded

60 32 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Labor 6,674 7,644 10,069 9,978 10,496 (70) (86) (86) Non-Labor 3,916 2,948 2,517 2,313 2,334 (74) (139) (139) Other Total 10,590 10,592 12,586 12,291 12,830 (144) (225) (225) Company Wide Adjustment 1 GRC-KBS-CW -FYA OPX REDUCTIONS CENTRALIZATION This future year adjustment reflects the anticipated savings from the centralization of the finance and job skills training functions. Labor (70) (86) (86) Non-Labor (74) (139) (139) Other Total (144) (225) (225) Organizational Unit Adjustment 1 GBU-CPT-O U -HYDRO OPERATIONS CONSOLIDATION This adjustment consolidates Hydro operations from FERC 535, 537 and 538 to FERC 539. Labor 6,597 7,583 9,546 9,133 9, Non-Labor 3,886 3,833 4,150 5,122 2, Other O o Total 10,483 11,416 13,696 14,255 12, Organizational Unit Adjustment 2 GBU-CPT-O U -M V MAPPING ADJ TO HYDRO This adjustment moves Engineering & Technical Service expenses from FERC 550 to Hydro FERC 537, 539, and 545. Labor Non-Labor Other (1,600) (145) Total 0 0 (1,100) Organizational Unit Adjustment 3 GBU-CPT-O U -HYDRO NHD LABOR TO 539 This adjustment moves Northern Hydo labor charges to the correct FERC 539 from FEC 536. Labor Non-Labor Other Total

61 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Organizational Unit Adjustment 4 A&G HRBEN -W LS.CPT-OUX-ACE TRANSFER - GENERATION This adjustment transfers July through December 2008 ACE Award costs that were charged in error to Miscellaneous Benefits to the appropriate business units. Labor Non-Labor Other Total Organizational Unit Adjustment 5 GBU-CPT-O U -HYDRO NHD LABOR TO 539 This adjustment moves Northern Hydro labor charges to the correct FERC 539 from FERC 540. Labor Non-Labor Other Total Organizational Unit Adjustment 6 GBU-CPT-O U -HYDRO EHD LABOR TO 539 This adjustment moves Eastern Hydro labor charges to the correct FERC 539 from FERC 536. Labor Non-Labor Other Total Organizational Unit Adjustment 7 GBU-CPT-O U -HYDRO EHD LABOR TO 539 This adjustment moves labor charges to the correct FERC 539 from FERC 540. Labor Non-Labor Other Total Organizational Unit Adjustment 8 GRC-MJP.CPT-OUX-A & G TO HYDRO This adjustment transfers expenses related to hydrogeneration from FERC to various hydro activities. Labor 3 (4) 0 (4) Non-Labor 12 (10) (33) (29) Other Total 15 (14) (33) (33)

62 34 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Organizational Unit Adjustment 9 GBU-CPT-O U -HYDRO CDW R FEE TO 536 This adjustment transfers California Department of W ater Resources fees to the correct FERC 536 from FERC 539. Labor Non-Labor 0 (49) Other Total 0 (49) Organizational Unit Adjustment 10 GBU-CPT-O U -HYDRO FEE CONSOLIDATION The adjustment consolidates Hydro fee amounts from FERC 539 and 540 to FERC 536. Labor Non-Labor (71) Other Total (71) Organizational Unit Adjustment 11 GBU-CPT-O U -HYDRO NHD CLOUD SEEDING SCE used a new vendor in 2008 (partial year) and 2009 at a higher cost than previous years. This adjustment corrects 2008 to equal present costs. Labor Non-Labor (97) Other Total (97) Organizational Unit Adjustment 12 GBU-CPT-O U -HYDRO EHD USGS FEES FROM 539 This adjustment transfers United States Geological Service (USGS) fees to the correct FERC 536 from FERC 539. Labor Non-Labor (190) Other Total (190) Organizational Unit Adjustment 13 GBU-CPT-O U -HYDRO EHD LAND RENT TO 540 This adjustment moves Eastern Hydro land rent fees to the correct FERC 540 from FERC 539. Labor Non-Labor 0 (413) Other Total 0 (413)

63 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Organizational Unit Adjustment 14 GBU-CPT-O U -HYDRO NHD SW RB TO 536 This adjusment moves State W ater Resources Control Board (SW RCB) fees to the correct FERC 536 from 539. Labor Non-Labor (914) Other Total (914) Organizational Unit Adjustment 15 GBU-CPT-O U -HYDRO NHD FEE TO 536 This adjustment moves Northern Hydro fees from FERC 539 to the correct FERC 536. Labor Non-Labor (8) Other Total (8) Organizational Unit Adjustment 16 GBU-CPT-O U -HYDRO EHD SUP This adjustment moves Kaweah Special Use Permit (SUP) fees to the correct FERC 540 from FERC 539. Labor Non-Labor 0 (413) 0 (1,460) (217) Other Total 0 (413) 0 (1,460) (217) 0 0 0

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65 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES APPENDIX C Final Cost Centers Included in This Activity

66 38 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES Final Cost Centers included in this activity: Summary Final Cost Centers: 535 OPERATIONS SUPPORT AND ENGINEERING F F F F F F F F F F F F F F F F F F F F F F F F CAMP EDISON F F HYDRAULIC EXPENSE F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F E LECTRICAL EXPENSE F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F M ISCELLANEO US F F HYDRAULIC EXPENSE F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F528596

67 39 Workpaper - Southern California Edison / 2015 GRC - APPLICATION A ctivity: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC p o w e r g e n e r a t io n e x p e n s e s Individual Final Cost Centers:

68 40 Workpaper - Southern California Edison / 2015 GRC - APPLICATION End of Workpapers for: Witness: 539 Miscellaneous Hydraulic Power Generation Expenses MISC. HYDRAULIC POW ER GENERATION EXPENSES

69 41 ADJUSTMENT FOR GRC - TEST YEAR 2015 Adjustment Code: GRC-KBS-CW-FYA OP EX SAVINGS Description: This adjustment reflects anticipated Operations Excellence savings Background SCE has initiated a number of process changes and will continue to do so going forward to improve operational excellence. SCE plans to reduce SCE and contingent worker headcount to recognize efficiency gains (productivity) resulting from the improved work processes. SCE and contingent worker headcount reductions have occurred or are planned to occur in 2012, 2013, 2014, and The savings in 2013 and 2014 are reflected at the 100% level. The O&M savings for are normalized to derive the Test Year 2015 forecast. Per D , SCE s adjustment, expected to occur in 2015 only, reflects 50% of the reduction as sharing th e...savings between ratepayers and shareholders will provide a solid incentive for Edison to continue to vigorously pursue cost control goals. There are three types o f adjustments: An adjustment for the centralization o f both HR Training and the Finance organization Operational units direct savings (reductions) An offset for 2015 estimated severance, only if reductions are forecast to occur during 2015 For O&M, these adjustments are made as future year adjustments which will reduce the O&M expense forecast in 2015 to reflect the savings associated with the reduction o f SCE and contingent worker headcount. For capital, these adjustments reduce the capital request in the year in which the SCE and contingent worker headcount reduction is expected to occur. Assumptions Labor: SCE headcount reductions will primarily occur in March, April, and May 2013 Some of the headcount reductions in 2013 will he offset by new employees hired as a result of a skill gap (headcount was reduced because they did not have necessary skills to perform job function, but position was not eliminated and will be filled) Calculation of savings resulting from headcount reductions in 2014 assumed a June 2014 date

70 42 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Calculation of savings resulting from headcount reductions in 2015 assumed a June 2015 date, were normalized over the rate case cycle, and savings were shared 50/50% per CPUC D, Savings calculation used a YE average salary specific to each individual Operating Unit Non-Labor: Contingent Workers Contingent worker headcount reductions will primarily occur in March, April, and May 2013 Calculation of savings resulting from contingent worker reductions in 2014 assumed a June 2014 date Calculation of savings resulting from contingent worker reductions in 2015 assumed a June 2015 date, were normalized over the rate case cycle, and savings were shared 50/50% per CPUC D Employee-Related Non-Labor Savings calculation used a four-year average rate for employee-related non-labor expenses specifically calculated for each individual Operating Unit

71 External Edison Carrier Corporate Balancing Total Company Power Delivery Relations Generation Power Supply Services Center Account Workpaper - Southern California Edison / 2015 GRC - APPLICATION 4^ CO Cumulative Total Development of Non-Labor per Labor $ to be used in Budget Transfers Training/Conferences 89,706,262 35,670,407 2,661, ,699,369 6,865,694 53,217 5,994,685 2,761,644 Employee Related - Other 71,958,676 33,022,534 1,531,820 5,418,658 2,565, ,554 26,562,778 2,457,568 Travel Meals & Entertainment 193,477, ,731,347 5,557,818 12,403,287 9,583,549 1,793,801 16,720,222 10,687,776 Total Non-Labor 355,142, ,424,288 9,750,885 53,521,315 19,015,007 2,246,571 49,277,684 15,906,988 Total Salaries 5,203,917,357 2,925,941,105 93,931, ,880, ,848,884 41,341, ,393,779 (420,130) Percentages Training/Conferences 1.72% 1.22% 2.83% 3.73% 2.46% 0.13% 0.66% % Employee Related - Other 1.38% 1.13% 1.63% 0.57% 0.92% 0.97% 2.92% % Travel Meals & Entertainment 3.72% 4.67% 5.92% 1.30% 3.44% 4.34% 1.84% % Total 6.82% 7.02% 10.38% 5.60% 6.82% 5.43% 5.42% %

72

73 45 Beginning of Workpapers for: 545 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT Labor Non-Labor Other Total Forecast Method Chosen Last Recorded Year Five Year Average N/A 2012$ (000) Recorded Forecast ,436 9,436 3,049 6, ,485 16,065 Description of Includes part of the salaries of supervisors of Operation and Maintenance, and other expenses incurred in the direct repair supervision of hydraulic generating stations. Includes Engineering, Research and Environment (ER&E) charges incurred in connection with repairs to hydraulic production facilities, structures, and equipment. Also includes services and expenses of ER&E personnel in making tests or inspections and preparing reports. Includes payroll and other costs incurred in repairing powerhouse structures, camp structures, cottage structures, camp utilities, camp fences, camp roads, and fire-fighting equipment for general use. Also includes payroll and other costs incurred in repairing ranges, water heaters, and refrigerators in company houses. Includes payroll and other costs incurred in repairing reservoirs, dams, waterways, intakes, forebays, penstocks, tailraces, structures (including snow-shelter cabins), and appurtenant facilities used in connection with hydraulic works. Includes payroll and other costs incurred in repairing and overhauling hydraulic, mechanical, and electrical facilities and appurtenances identified with prime movers and generators from the lower penstock valve to tailrace. Includes payroll and other costs incurred in repairing machine-shop tools and work equipment, compressed air systems, signal systems, and other miscellaneous equipment not properly included in other station equipment repair functions. Includes payroll and other costs incurred in repairing powerhouse station cranes and monorail hoists. Includes payroll and other costs incurred in maintaining and clearing, including snow removal, all production roads, bridges, trails, aerial tramways, inclines, and penstock tramways. See Appendix C for Final Cost Centers included in this activity.

74 46 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 545 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT I DETERMINATION OF RECORDED/ADJUSTED Recorded Period $ (000) FERC Form 1 Recorded (Nominal $) Labor 1,319 1,517 1,489 1,454 1,088 Non-Labor 1,230 1,973 1,523 1, Other Total 2,549 3,490 3,012 3,178 1,883 Adjustments- (Nominal $) - see Appendix B for additional detail Labor 5,803 6,570 6,975 7,937 8,348 Non-Labor 5,315 4,630 5,134 6,308 2,254 Other Total 11,118 11,200 12,109 14,245 10,602 Recorded/Adjusted (Nominal $) Labor 7,122 8,087 8,464 9,391 9,436 Non-Labor 6,545 6,603 6,657 8,032 3,049 Other Total 13,667 14,690 15,121 17,423 12,485 E scalation: Labor Non-Labor Other Recorded/Adjusted (Constant 2012$) Labor 8,129 8,952 9,057 9,698 9,436 Non-Labor 7,224 7,364 7,273 8,238 3,049 Other Total 15,353 16,316 16,330 17,936 12,485 18,000 16, ,000 8,000 6,000 Recorded Adjusted (2012$) I I I= Labor (std escl) Non-Labor (std escl) Other (not escl)

75 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT Forecasting Methods - Sum m ary of Results of all Methods Studied $ (000) 2 Recorded Years ( ): Results of Averaging (A2) sd** Chosen Labor 9,567 9,567 9, no Non-Labor 5,643 5,643 5,643 2,594 no Other no Total 15,210 15,210 15,210 n/a n/a 3 Recorded Years ( ): Results of Linear Trending (T3) Results of Averaging (A3) r2* Chosen sd** Chosen Labor 9,776 9,966 10, no 9,397 9,397 9, no Non-Labor 1,963 (149) (2,261) 0.59 no 6,186 6,186 6,186 2,253 no Other no no Total 11,739 9,817 7,894 n/a n/a 15,583 15,583 15,583 n/a n/a 4 Recorded Years ( ): Results of Linear Trending (T4) Results of Averaging (A4) r2* Chosen sd** Chosen Labor 9,809 10,018 10, no 9,286 9,286 9, no Non-Labor 3,486 2,288 1, no 6,481 6,481 6,481 2,017 no Other no no Total 13,295 12,306 11,317 n/a n/a 15,767 15,767 15,767 n/a n/a 5 Recorded Years ( ): Results of Linear Trending (T5) Results of Averaging (A5) r2* Chosen sd** Chosen Labor 10,063 10,399 10, no 9,055 9,055 9, no Non-Labor 4,387 3,639 2, no 6,629 6,629 6,629 1,828 yes Other no no Total 14,450 14,038 13,627 n/a n/a 15,684 15,684 15,684 n/a n/a Other Methods: Labor Non-Labor Other Total Last Recorded Year (LRY) Itemized Forecast (IF) Chosen Chosen 9,436 9,436 9,436 yes no 3,049 3,049 3,049 no no no no 12,485 12,485 12,485 n/a n/a Forecast Adjustments: Labor Non-Labor Other Total Base Forecast Method Adjustments* Method LRY 9,436 9,436 9,436 A5 6,629 6,629 6,629 N/A ,065 16,065 16, * r2 = R Squared (Based on recorded years data) ** sd = standard deviation (Based on recorded years data) *** See Appendix B For Additional Detail

76 48 Workpaper - Southern California Edison / 2015 GRC - APPLICATION A ctivity: Witness: 545 Maintenance of Miscellaneous Hydraulic Plant M AINTENANCE OF MISC. HYDRAULIC PLANT Results: Forecasting Results Method Selected Labor Last Recorded Year 9,436 9,436 9,436 Non-Labor Five Year Average 6,629 6,629 6,629 Other N/A Total 16,065 16,065 16,065 Analysis of Forecasting Methods Analysis of Linear Trending Method: Linear trending is not applicable to either labor or non-labor costs as neither has indicated a trend in the last several years. Analysis of Averaging Method: While 2008 through 2010 non-labor expenses remained relatively stable, expenses in 2011 and 2012 varied due to weather considerations. Work was accelerated in 2011 due to very low rainfall, resulting in lower expenses in The 2012 base year is therefore not a sufficient forecast to support operations activities during the 2015 test year. A five year average best reflects historical and forecast expenses for non-labor. Labor costs in this account have been stable since 2009 so averaging is not appropriate method to use. Analysis of Last Recorded Year (2012): In D and D , the CPUC stated that if recorded expenses in an account have been relatively stable for three or more years, the last recorded year is an appropriate base estimate. Labor costs in this account have been stable since 2009, so the last year recorded provides our base for estimating test year Non-labor costs have fluctuated over the last three years, so last recorded year is not an appropriate method. Analysis of Itemized Forecast Method: Not applicable.

77 49 Witness: 545 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT Recorded / Forecast $ (000) 18,000 16, ,000 8,000 6, Labor (std escl) Non-Labor (std escl) Cither (not escl) Recorded Period Forecast Expenses (constant 2012$) Labor (standard escalation) 8,129 8,952 9,057 9,698 9,436 9,436 9,436 9,436 $ (000) Non-Labor (standard escalation) 7,224 7,364 7,273 8,238 3,049 6,629 6,629 6,629 Other (not escalatable) Total 15,353 16,316 16,330 17,936 12,485 16,065 16,065 16,065 Labor Prior year Total 9,436 9,436 9,436 Change Total 9,436 9,436 9,436 9,436 Non-Labor Prior year Total 3,049 6,629 6,629 Change 3, Total 3,049 6,629 6,629 6,629 Other Prior year Total Change Total Total Change Labor Non-Labor Other Total , N/A 3,

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79 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT APPENDIX A Detail Description of Final Cost Centers Included in This Activity

80 52 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 545 Maintenance of Miscellaneous Hydraulic Plant M AINTENANCE OF M ISC. HYDRAULIC PLANT Description of Final Cost Centers included in this activity: * See A ppendix C fo r S um m ary F in al C ost Centers SUM M ARY 541 MAINTENANCE SUPPORT AND ENGINEERING Includes part of the salaries of Supervisors of Operation and Maintenance, and other expenses incurred in the direct repair supervision of hydraulic generating stations. Includes Engineering, Research and Environment (E R & E) charges incurred in connection with repairs to hydraulic production facilities, structures, and equipment. Also includes services and expenses of ER&E personnel in making tests or inspections and preparing reports. SUM M ARY 542 MAINTENANCE OF STRUCTURES Includes payroll and other costs incurred in repairing powerhouse structures, camp structures, cottage structures, camp utilities, camp fences, camp roads, and fire-fighting equipment for general use. Also includes payroll and other costs incurred in repairing ranges, water heaters, and refrigerators in company houses. SUM M ARY 543 MAINTENANCE OF RESERVOIRS, DAMS & WATERWAYS Includes payroll and other costs incurred in repairing reservoirs, dams, waterways, intakes, forebays, penstocks, tailraces, structures (including snow-shelter cabins), and appurtenant facilities used in connection with hydraulic works. SUM M ARY 544 MAINTENANCE OF ELECTRICAL PLANT Includes payroll and other costs incurred in repairing and overhauling hydraulic, mechanical, and electrical facilities and appurtenances identified with prime movers and generators from the lower penstock valve to tailrace. SUM M ARY 545 CAMP EDISON Includes salaries, transportation expense, and other costs incurred in road repair, plumbing repair, painting, and other activities connected with maintenance of picnic facilities and campgrounds at Camp Edison Shave Lake. SUM M ARY 545 MAINTENANCE OF MISCELLANEOUS HYDRAULIC PLANT Includes payroll and other costs incurred in repairing machine-shop tools and work equipment, compressed air systems, signal systems, and other miscellaneous equipment not properly included in other station equipment repair functions. Includes payroll and other costs incurred in repairing powerhouse station cranes and monorail hoists. Includes payroll and other costs incurred in maintaining and clearing, including snow removal, all production roads, bridges, trails, aerial tramways, inclines, and penstock tramways. SUM M ARY MAINTENANCE OF HYDRAULIC PLANT Includes payroll and other costs incurred in repairing machine-shop tools and work equipment, compressed air systems, signal systems, and other miscellaneous equipment not properly included in other station equipment repair functions. Includes payroll and other costs incurred in repairing powerhouse station cranes and monorail hoists. Includes payroll and other costs incurred in maintaining and clearing, including snow removal, all production roads, bridges, trails, aerial tramways, inclines, and penstock tramways. F CAMP EDISON Includes salaries and other expenses incurred in connection with general supervision, timber surveys, scaling and measuring of timber and various forest products, fire-suppression work, and detection and control of insects and disease. Also includes improvement of timber stands by ground preparation, purchase and planting of young trees and seeds, and the removal of trees and limbs to produce higher quality and production in existing timber stands.

81 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT R ecorded/adjusted (C onstant 2012$) By Final C ost C enter $ (000) * See Appendix C fo r Sum m ary Final Cost Centers SUMMARY 541 MAINTENANCE SUPPORT AND ENGINEERING 2,129 2,381 2,936 3,397 2,999 SUMMARY 542 MAINTENANCE OF STRUCTURES 1,568 1,467 2,110 2,548 1,009 SUMMARY 543 MAINTENANCE OF RESERVOIRS, DAMS & WATERWAYS 2,997 3,285 3,230 3,965 2,697 SUMMARY 544 MAINTENANCE OF ELECTRICAL PLANT 5,690 5,126 4,532 5,180 4,285 SUMMARY 545 CAMP EDISON SUMMARY 545 MAINTENANCE OF MISCELLANEOUS HYDRAULIC PLANT 2,764 3,641 3,073 2, SUMMARY MAINTENANCE OF HYDRAULIC PLANT F CAMP EDISON Total 15,354 16,300 16,320 17,919 12,485 ** Due to rounding, totals m ay not tie to other workpaper pages.

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83 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT APPENDIX B Detail of Total Company Adjustments to Recorded

84 56 Workpaper - Southern California Edison / 2015 GRC - APPLICATION A ctivity: 545 Maintenance of Miscellaneous Hydraulic Plant M AINTENANCE OF MISC. HYDRAULIC PLANT Detail of Total Com pany Adjustm ents to Recorded Expenses Adjs - (Nominal $) $ (000) Labor 5,803 6,570 6,975 7,937 8, Non-Labor 5,315 4,630 5,134 6,308 2, Other Total 11,118 11,200 12,109 14,245 10, Organizational Unit Adjustment 1 GBU-CPT-O U -HYDRO MAINTENANCE CONSOLIDATION The adjustment consolidates Hydro maintenance FERC 541 through 544 to FERC 545. Labor 5,803 6,570 6,475 7,937 8, Non-Labor 5,315 4,630 5,637 6,908 2, Other Total 11,118 11,200 12,112 14,845 11, Organizational Unit Adjustment 2 GBU-CPT-O U -M V MAPPING ADJ TO HYDRO This adjustment moves Engineering & Technical Service expenses from FERC 550 to Hydro FERC 537, 539, and 545. Labor Non-Labor 0 0 (503) (600) (511) Other Total 0 0 (3) (600) (511) 0 0 0

85 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT APPENDIX C Final Cost Centers Included in This Activity

86 58 Workpaper - Southern California Edison / 2015 GRC - APPLICATION Witness: 545 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT Final Cost Centers included in this activity: Summary Final Cost Centers: 541 MAINTENANCE SUPPORT AND ENGINEERING F F F F F F F F F F F F F F MAINTENANCE OF STRUCTURES F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F M A INTENANCE OF RESERVOIRS, DAMS & WATERWAYS F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F MAINTENANCE OF ELECTRICAL PLANT F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F CAMP EDISON F F MAINTENANCE OF MISCELLANEOUS HYDRAULIC PLANT F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F MAINTENANCE OF HYDRAULIC PLANT F F F200874

87 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT Individual Final Cost Centers: F515225

88 60 Workpaper - Southern California Edison / 2015 GRC - APPLICATION End of Workpapers for: Witness: 545 Maintenance of Miscellaneous Hydraulic Plant MAINTENANCE OF MISC. HYDRAULIC PLANT

89 61 Beginning of Workpapers for: 453 Sales of Water and W ater Power SALES OF WATER & WATER POW ER Forecast Method 2012$ (000) Chosen Recorded Forecast OOR Itemized Forecast Description of This activity includes revenues based on settlement agreements made between SCE and PG&E. PG&E pays SCE for the headwater benefits received by PG&E's Kerchoff plant in the San Joaquin basin. The payments represent PG&E's share of the costs incurred by SCE to operate and maintain dams and diversions upstream. See Appendix C for GL Account Numbers included in this activity.

90 62 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 453 Sales of Water and W ater Power SALES OF WATER & WATER POWER DETERM INATION OF RECO RDED/ADJUSTED [ Recorded Period $ (000) FERC Form 1 Recorded Revenue (Nominal $) Adjustm ents - (Nominal$) - see Appendix B for additional detail Recorded/Adjusted Revenue - See Appendix A for additional detail 1,000 -O O R - Recorded Adjusted (2012$)

91 Sales of Water and Water Power SALES OF WATER & WATER POW ER Forecasting Methods - Summary of Results of all Methods Studied -2012$ (000) 2 Recorded Years ( ): Results of Averaging (A2) sd** Chosen no 3 Recorded Years ( ): Results of Linear Trending (T3) Results of Averaging (A3) r2* Chosen sd** Chosen OOR (33) (199) (365) 0.98 no no 4 Recorded Years ( ): Results of Linear Trending (T4) Results of Averaging (A4) r2* Chosen sd** Chosen OOR (144) (376) (609) 0.94 no no 5 Recorded Years ( ): Results of Linear Trending (T5) Results of Averaging (A5) r2* Chosen sd** Chosen OOR no no Other Methods: Last Recorded Year (LRY) Chosen CO o CM Itemized Forecast (IF) ^r o CM 2015 Chosen OOR no yes Forecast Adjustments: OOR Base Forecast Method Adjustments*** Method IF * r2 = R Squared (Based on recorded years data) ** sd = standard deviation (Based on recorded years data) *** See Appendix B For Additional Detail

92 64 Workpaper - Southern California Edison / 2015 GRC - APPLICATION 453 Sales of Water and Water Power SALES OF WATER & WATER POW ER Results? OOR Forecasting Results Method Selected Itemized Forecast Analysis of Forecasting Methods Analysis of Linear Trending Method: Linear trending is not representative because it includes historical costs that are not predicable and may not occur in the future. See itemized forecast below. Analysis of Averaging Method: Averaging is not representative because it includes historical costs that are not predicable and may not occur in the future. See itemized forecast below. Analysis of Last Recorded Year (2012): Last recorded year is not representative because it includes historical costs that are not predicable and may not occur in the future. See itemized forecast below. Analysis of Itemized Forecast Method: SCE is selecting an itemized forecast based on a 5-year average for G/L account , less true up amounts for prior years, contracts of sales of water and power to Pacific Gas & Electric Company for the Headwater contract. The Headwater contract will continue, whereas the San Joaquin contracts for the Lake Isabella Dam are not predicable and are excluded from the 5-year average ($232 thousand for and $147 thousand for ).

93 Sales of Water and W ater Power SALES OF WATER & WATER POW ER Recorded / Forecast NominalS (000) 1, =. : : 1, = Recorded Period $ (000) Forecast Revenues (Nominal 2012$) ! 2013! 2014 j 2015 OOR OOR Prior Year Total Change Total