Southern California Edison Company s Supplemental Exhibit in Response to Administrative Law Judge s May 6, Ruling
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1 Application No.: Exhibit No.: Witnesses: A SCE- Douglas Snow Melvin Stark (U -E) Southern California Edison Company s Supplemental Exhibit in Response to Administrative Law Judge s May, 01 Ruling Before the Public Utilities Commission of the State of California Rosemead, California May, 01
2 I. INTRODUCTION On May, 01, Administrative Law Judge (ALJ) Dudney circulated an ruling to the service list in Southern California Edison Company s (SCE s) Test Year 01 General Rate Case (GRC), A ALJ Dudney asked for certain clarifications regarding SCE s position related to 01 capital expenditures (forecast versus recorded), and a further explanation of certain terms used in SCE s testimony on its Pole Loading program. The text of the ALJ s ruling is reproduced below: This ruling sets aside submission of this proceeding in order to clarify certain details of the existing record. SCE shall serve an exhibit in response to the questions below on or before May, 01. If any other party wishes to respond to SCE s exhibit, they may file a motion to do so, but should limit any such response to the information in SCE s exhibit; such a motion should be filed and served within 10 days of SCE s exhibit. The questions are: 1) 01 Recorded Capital SCE s reply brief (at page ) indicates that SCE has agreed to 01 recorded capital expenditures in most, but not all, areas of the case. However, the existing record does not provide details of 01 recorded capital expenditures for all subjects or clearly specify the exceptions to this agreement. SCE shall provide a table of 01 recorded capital expenditures including at least the following details: area/subject of the expenditure, the 01 recorded amount (in nominal$), whether or not SCE stipulates to use this amount, and identifying any relevant issue(s) in the Joint Comparison Exhibit. This table should be organized according to the common briefing outline. A spreadsheet version (e.g. Excel format) of the table should also be served via . ) Definition of terms "high wind areas" and "high wind and high fire areas" - In context of the Pole Loading Program, SCE repeatedly uses the terms "high wind areas" and "high wind and high fire areas" (e.g. SCE's opening brief at pages 9-10). SCE's testimony also identifies eight "strata" evaluated in the Pole Loading Study based on wind and fire criteria (see exhibit SCE-19VP at page A-1). SCE shall provide a definition of the terms, as used by SCE, in relation to the criteria and a table showing which of the strata are included within the definition of each term. Also, please clarify whether or not the term high wind or high fire risk areas (see, e.g. Transcript Vol. 1 at 10) covers a different set of regions than high wind and high fire areas. 1
3 It is ruled that, 1) SCE shall respond serve an exhibit in response to the questions above by May, 01. ) Submission is set aside for admission of the exhibit into evidence Below, SCE addresses the issues raised by ALJ Dudney. In Chapter II, we clarify SCE s position related to 01 capital, along with references to the relevant exhibits in the case. A table with SCE s proposal for 01 capital expenditures organized in the common briefing outline is included as an attachment. We also provide as a supporting workpaper an Excel spreadsheet with the 01 capital expenditures in the Results of Operations model format. Chapter III clarifies the definitions of the terms high wind area, high fire area, and strata, the last term as used in the sampling study SCE performed on pole loading.
4 II. CLARIFICATION OF SCE S PROPOSAL RELATED TO CAPITAL EXPENDITURES (SPONSORED BY DOUGLAS SNOW) A. SCE Stipulates To Using 01 Recorded Capital Spending In All But Two Areas As stated on page five of SCE s Reply Brief, when SCE submitted its rebuttal testimony, SCE adopted 01 recorded capital spending in virtually every area of the case. In fact, there are only two areas of the case where SCE did not stipulate to the use of 01 recorded capital expenditures. First, no intervening party challenged SCE s forecast for Palo Verde. Therefore, SCE s forecast amount of $0.10 million should be adopted. In addition, no intervenor challenged the capital forecast for SCE s Corporate Center. Therefore, SCE s forecast of $1.09 million should be adopted. In Appendix A, as required by ALJ Dudney s Ruling, SCE has provided 01 recorded capital expenditures in nominal dollars by Operating Unit and subject area. An Excel spreadsheet is also attached per ALJ Dudney s ruling. 1
5 III. DEFINITION OF THE TERMS HIGH WIND AND HIGH FIRE, CLARIFICATION OF THE STRATA USED IN THE POLE LOADING SAMPLING STUDY AND CLARIFICATION OF THE TRANSCRIPTS (SPONSORED BY MELVIN STARK) A. Definition of Terms High Wind and High Fire 1. High Wind Areas Pursuant to GO 9 Rule 1.1, SCE reflects knowledge of local conditions in the design of its equipment, to the extent those known local conditions exceed the minimum requirements specified in GO 9. An example is the wind pressure used when calculating the safety factor formula for pole design. SCE defines high wind areas as regions in which, based on SCE s judgement and the analyses of subject matter experts, the appropriate wind load used for pole design exceeds the GO 9 minimum standard of eight pounds per square foot (psf), as explained in Exhibit SCE-0, Vol 0, Part, page, line -. SCE maintains maps of high wind areas based on this definition, and has updated those maps as a result of the study cited in Exhibit SCE-0, Vol. 0, Part, page 1, lines -10 and Data Request TURN-SCE-0, Question.a.. High Fire Areas The California Department of Forestry and Fire Protection defines the boundaries of Extreme and Very High Fire Hazard Severity Zones cited in GO 1. 1 SCE s testimony generally refers to these regions as high fire areas. The California Department of Forestry and Fire Protection does take into account some wind data when defining high fire areas. But wind is only one factor in creating these maps, along with fuel type, moisture, and slope of terrain, among others. As a result, though high fire areas often overlap with high wind areas, the two areas cover different geographic regions throughout SCE s service territory. The Commission has recently issued a Rulemaking that will succeed R , and which will complete the development of utility fire-threat maps in conjunction with the California Department of Forestry and Fire Protection. 1 Extreme and Very High Fire Threat Zones are designated on the Fire and Resource Assessment Program (FRAP) Map prepared by the California Department of Forestry and Fire Protection s Fire and Resource or the modified FRAP Map prepared by San Diego Gas & Electric Company (SDG&E) and adopted by Decision in Phase of Rulemaking
6 B. Strata of Poles in High Fire and High Wind Areas SCE provided a breakdown of pole population counts (the strata ) by high fire and design wind load on page of the Pole Loading Study, served July 1, 01, pursuant to D High wind areas are those areas where the wind load used for pole design exceeds eight pounds per square foot. A copy of that table is shown below: Table III-1 Strata Defined in SCE s Pole Loading Study SCE provided a similar table in response to TURN-SCE-0 Question 1.b. dated May, 01. Note there is a slight difference in the total count of poles due to the change in the pole population over time: Table III- Pole Population Categorized by Wind Pressure and Fire Area Designation Wind Rating (psf) no HFA Number of Poles HFA Total 0,1 1,0 0,19 0,11,19,0 1 0,99 9,01 0,9 1 10,10 9, 1,9,10 1,0, Total 1,09,10 9, 1,,90
7 SCE also illustrated the intersection of high fire and high wind areas using a map provided in response to TURN-SCE-0 Question 1.a. C. Clarification of Oral Testimony The ALJ s seeks clarification of a passage of oral testimony, referring to Volume 1 of the Transcripts at page 10. Q. One thing that you make reference to as I understand it is that the pole loading program is intended to focus as a top priority on the high wind and high fire risk areas of Edison s service territory in the early years. Is that a correct understanding? A. Yes. We have a risk-based approach to what we re going after first in the program. Q. And do you have a sense just as a general matter what percentage of Edison s poles are in high wind or high fire risk areas as you've identified them to date? A. Approximately 0 percent reside in those areas. Mr. Trainor s response reflects the approximate percentage of SCE s pole population contained within high fire OR high wind areas, which are highlighted in Table III- below: Table III- Population of Poles in a High Fire or High Wind Area High Wind Wind Rating (psf) no HFA Number of Poles HFA Total 0,1 1,0 0,19 0,11,19,0 1 0,99 9,01 0,9 1 10,10 9, 1,9,10 1,0, Total 1,09,10 9, 1,,90 HFA or > psf,0 9% 1 1 To summarize, the references in this portion of the transcript should be read as referring to all poles that are in a High Wind Area, a High Fire area, or both a High Wind and a High Fire Area.
8 Appendix A
9 Southern California Edison 01 Recorded/Adjusted Capital Expenditures Nominal, $000 Joint Comparison 01 Recorded SCE Section Exhibit Operating Unit Exhibit Reference Total FERC CPUC Stipulation / 1. Summary of Recommendations. Policy. Evidentiary Standards and the Burden of Proof. Risk Management and Safety Matters. Generation.1. Generation Power Procurement SCE-0, Volume Power Procurement SCE-001, SCE-, Vol 1, p Yes SCE-0, Volume Op EX Savings - Power Procurement SCE-001, SCE-, Vol 1, p Generation Power Production.. Generation Nuclear Generation SCE-0, Volume SONGS & SCE-001, SCE-, Vol 1, p Palo Verde 1/ SCE-0, Volume Palo Verde SCE-001, SCE-, Vol 1, p 9 0,9-0,9 No.. Generation Coal Generation..1. Mohave SCE-0, Volume, Part Mohave SCE-001, SCE-, Vol 1, p Yes SCE-0, Volume, Part Four Corners SCE-001, SCE-, Vol 1, p Generation Hydroelectric Generation SCE-0, Volume, Part Hydro SCE-001, SCE-, Vol 1, p 9 0,09-0,09 Yes SCE-0, Volume, Part Power Production Department SCE-001, SCE-, Vol 1, p Yes.. Generation Gas-Fired Generation..1. Mountainview SCE-0, Volume Mountainview SCE-001, SCE-, Vol 1, p 9 9,1-9,1 Yes... Peakers SCE-0, Volume 9, Chapter Peakers SCE-001, SCE-, Vol 1, p 9 - Yes.. Generation Other..1. Solar Photovoltaic... SPVP Capital Expenditures SCE-0, Volume 10 Solar PV SCE-001, SCE-, Vol 1, p 9, -, Yes... SPVP Reasonableness Review... Catalina SCE-0, Volume 10 Pebbly Beach SCE-001, SCE-, Vol 1, p 9 1,010-1,010 Yes... Fuel Cells SCE-0, Volume 10 Fuel Cells/Gen Plan Strat SCE-001, SCE-, Vol 1, p Transmission and Distribution / SCE-0 IT in TD Total IT in TD SCE-001, SCE-, Vol 1, p 9,00 -,00 Yes.1. T&D Policy.. T&D Engineering and Grid Technology SCE-0, Volume Engineering & Grid Technology SCE-001, SCE-, Vol 1, p 9,,, Yes..1. Centralized Remedial Action Scheme / Centralized Remedial Action Scheme TURN-1, SCE-, Vol, p 10,1,90, Yes.. T&D Electric System Planning SCE-0, Volume System Planning Capital Projects SCE-001, SCE-, Vol 1, p 9 1,,,0 9,00 Yes.. T&D Infrastructure Replacement SCE-0, Volume Infrastructure Replacement Programs SCE-001, SCE-, Vol 1, p 9 00,9,0, Yes.. T&D Customer-Driven Programs and Distribution Construction SCE-0, Volume Customer Driven Programs and Distribution Construction SCE-001, SCE-, Vol 1, p 9,9 9,91 Yes.. T&D Distribution Inspection and Maintenance SCE-0, Volume, Part 1 Distribution Maintenance SCE-001, SCE-, Vol 1, p 9,,0, Yes TURN-, SCE-, Vol, p 10.. T&D Pole Loading SCE-0, Volume, Part Pole Loading Program SCE-001, SCE-, Vol 1, p T&D Grid Operations SCE-0, Volume Grid Operations SCE-001, SCE-, Vol 1, p 9,9 1, Yes.9. T&D Transmission & Substation Maintenance SCE-0, Volume Transmission & Substations Maintenance SCE-001, SCE-, Vol 1, p 9 1,1,1 9,99 Yes EXCLUDED - BEYOND 01 Excluded from GRC - TD SCE-001, SCE-, Vol 1, p 9,19 1,0 1,1 Yes.10. T&D Safety, Training, and Environmental Programs.11. T&D Other Costs and Other Operating Revenue. Customer Service.1. Summary of Request for Customer Service Operating Unit (CSOU).. Customer Service O&M.. Customer Service Capital SCE-0, Volume Meters SCE-001, SCE-, Vol 1, p 9 1, - 1, Yes SCE-0, Volume Specialized Equipment SCE-001, SCE-, Vol 1, p 9 1,09-1,09 Yes SCE-0, Volume Structures and Improvements SCE-001, SCE-, Vol 1, p SCE-0, Volume Specialized Equipment SCE-001, SCE-, Vol 1, p Yes SCE-0, Volume Structures and Improvements SCE-001, SCE-, Vol 1, p Yes.. Customer Service Other Operating Revenue. Information Technology and Business Integration.1. Information Technology O&M.1.1. Information Technology.. Information Technology Capital SCE-0, Volume 1 Hardware SCE-001, SCE-, Vol 1, p 9 19, - 19, Yes.. Information Technology Capitalized Software SCE-0, Volume, Part 1 Capitalized Software SCE-001, SCE-, Vol 1, p 9,91 -,91 Yes SCE-0, Volume, Part Capitalized Software SCE-001, SCE-, Vol 1, p 9 1,99-1,99 Yes.. Other Capitalized Software..1. Safety, Security & Compliance... Financial Services... Corporate Center... Customer Service... Power Supply... T&D 9. Human Resources, Benefits and Other Compensation 9.1. Human Resources Department Expenses 9.. Short Term Incentives 9.. Long Term Incentives 9.. Recognition Programs 9.. Pension and Benefits Programs
10 Joint Comparison 01 Recorded SCE Section Exhibit Operating Unit Exhibit Reference Total FERC CPUC Stipulation / Pensions 9... PBOPs 9... Other Benefits 10. Safety, Security & Compliance Ethics and Compliance 10.. Corporate Environmental, Health, and Safety SCE-0, Volume Corporate Environment, Health and Safety SCE-001, SCE-, Vol 1, p Yes Marine Mitigation Projects 10.. Corporate Security and Business Resiliency SCE-0, Volume Corporate Security and Business Resiliency SCE-001, SCE-, Vol 1, p 9, -, Yes 11. Financial, Legal, and Operational Services (FL&OS) Financial Services 11.. Audit Services 11.. Property and Liability Insurance 11.. Legal Law Claims Workers Compensation 11.. Operational Services Operational Services O&M (other than Corporate Real Estate (CRE)) Operational Services Capital (other than CRE) SCE-0, Volume, Part Supply Management SCE-001, SCE-, Vol 1, p Yes SCE-0, Volume, Part Transportation SCE-001, SCE-, Vol 1, p 9 1,01-1,01 Yes SCE-0, Volume Other - F&E TD SCE-001, SCE-, Vol 1, p 9 - Yes CRE O&M CRE Capital SCE-0, Volume, Part Corporate Real Estate SCE-001, SCE-, Vol 1, p 9 9, - 9, Yes 1. External Relations 1.1. Corporate Communications 1.. Corporate Membership Dues & Fees 1.. Integrated Planning & Environmental Affairs 1.. Regulatory Operations and Regulatory Policy & Affairs 1.. Local Public Affairs 1. Ratemaking 1. Jurisdictional Issues 1. Sales and Customer Forecast 1. Other Operating Revenue 1. Cost Escalation 1. Post Test Year Ratemaking 19. Electric Plant 1/ SCE-10, Volume Corporate Center SCE-001, SCE-, Vol 1, p 9 - No 0. Depreciation 1. Taxes. Rate Base.1. Customer Advances.. Materials and Supplies.. Working Cash.. Lead Lag Study.. Customer Deposits.. AFUDC. Results of Examination. Operational Excellence SCE-0, Volume 1 Op EX Savings - CS SCE-001, SCE-, Vol 1, p SCE-0, Volume, Part 1 Op EX Savings - TD SCE-001, SCE-, Vol 1, p SCE-0, Volume, Part Op EX Savings - OS SCE-001, SCE-, Vol 1, p Joint Testimony Regarding Accessibility Issues. Settlements. Other Issues.1. Edison Name and Logo Total,,1 90,00,0,191 1/ SCE agrees to 01 recorded except for Palo Verde (SCE-1, p. 1) and Corporate Center (SCE-10, Vol., p. 1), which was uncontested by intervenors. Accordingly, no adjustment was made to the RO Model. / SCE-, Vol., p. 9 & SCE-, Vol., p. 10; TURN-1 Centralized Remedial Action Scheme 01 recorded inadvertently reported,9 and has been updated to,1. / Per D , Marine Mitigation was removed in SCE's December 01 Update Testimony, SCE-, p. 0. / SCE-, Vol. 01, SCE-001, pp. 9-1; SCE-, Vol. 1, Appendix B, pp. -. / Although the capital expenditures tie out in total between the 01 GRC RO Model and testimony, these expenditures may not tie by Work Breakdown Structure (WBS) elements. This is due to the time lag between the time SCE filed its NOI and when capital expenditures are actually recorded in SAP. As a result, new WBS elements may be established and the original WBS elements may not be used. In order to tie back to the RO Model, SCE has to allocate recorded capital expenditures to the pre-established WBS elements. / Includes 01 recorded IT capital expenditures recorded in the various T&D projects. Reconciling Items Palo Verde 1/ 1-1 Corporate Center 1/ 1-1 Total,,00 90,00,0,0 Non - GRC 19, - 19, Grand Total (SCE-),,0 90,00,,9 Marine Mitigation /,1 -,1 Total from JCE (SCE-) /,,9 90,00,,19
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