PREPARED SUPPLEMENTAL TESTIMONY OF JASON BONNETT SOUTHERN CALIFORNIA GAS COMPANY SAN DIEGO GAS & ELECTRIC COMPANY

Transcription

1 pplication No: xhibit No.: Witness: Jason onnett pplication of Southern alifornia as ompany (U 904 ) and San iego as & lectric ompany (U 902 ) for uthority to Revise their Natural as Rates ffective January 1, 2017 in this Triennial ost llocation Proceeding Phase (iled July 8, 2015) PRPR SUPPLMNTL TSTIMONY O JSON ONNTT SOUTHRN LIORNI S OMPNY SN IO S & LTRI OMPNY OR TH PULI UTILITIS OMMISSION O TH STT O LIORNI March 28, 2016

2 TL O ONTNTS I. PURPOS...1 Page II. III. IV. PROPOS RTS N RVNUS WITH N WITHOUT NORML, PRVIOUSLY UTHORIZ LISO NYON OSTS...1 RSPONSS TO RULIN QUSTIONS RRIN STOR OST LLOTION...5 TH RTS PROPOS IN THIS PROIN XLU OSTS RLT TO SS-25 WLL LK RSPONS...7 i

3 I. PURPOS The purpose of my Prepared Supplemental Testimony on behalf of Southern alifornia as ompany (Soalas) and San iego as & lectric ompany (S&) is to respond to items addressed in the March 8, 2016 dministrative Law Judge s Ruling irecting the pplicants to Serve Written Testimony Regarding (Ruling). Specifically, this Supplemental Testimony: (1) provides tables showing Soalas and S& s illustrative proposed rates and revenues both with and the normal, previously approved costs to own and operate ; (2) responds to the Ruling s questions regarding storage cost allocation; and (3) confirms that the rates requested in this proceeding do not include costs incurred in response to the recent gas leak at the natural gas storage facility II. PROPOS RTS N RVNUS WITH N WITHOUT NORML, PRVIOUSLY UTHORIZ LISO NYON OSTS The Ruling requests that Soalas and S& provide testimony regarding the 14 following: table that shows every rate and charge that Soalas asks the ommission to adopt in this proceeding, beginning January 1, 2017, that includes the recovery of Soalas s normal, previously approved costs to own and operate identified in Soalas s response to Item 1, above. 1 The Ruling provides a preferred template for the requested rate and revenue information, which clarifies that the rates are requested to be shown both with and the normal, previously approved costs to own and operate, 2 and the Ruling requests a similar table for S&. 3 1 Ruling at 2. 2 Id. at Id. at 3. 1

4 The attachment to this testimony provides the requested rate and revenue tables (ttachment ). s will be discussed in more detail below, there is only one set of illustrative rates to encompass the years 2017 through olumns,, and of the tables correspond with the illustrative rates and revenues proposed in the Revised Prepared irect Testimony of Jason onnett dated November 19, olumn shows the component of each rate that is comprised of the normal, previously approved costs to own and operate. olumn and provide the illustrative proposed rates and revenues excluding the normal, previously approved costs to own and operate. inally, olumn shows the difference between the illustrative proposed rates with and the normal, previously approved costs to own and operate. Soalas and S& are directed by the Ruling to identify all assumptions and source 12 documents used to prepare the table. 4 Preparing the illustrative rates and revenues the normal, previously approved costs to own and operate was a two-step process. irst, the authorized revenue requirement, which serves as the input to the Soalas and S& rate design models, was reduced by the normal, previously approved costs to own and operate as identified in the Prepared Supplemental Testimony of Khai Nguyen. Mr. Nguyen s testimony provides one number that was carried through the rates for the years This is because, as he explained, Soalas and S& are awaiting a ommission decision in /004, the Soalas and S& Test Year 2016 R. s such, the last year of approved revenue requirement is Soalas and S& s rates presented in this application assume Soalas and S& s 2015 approved revenue requirements. This is standard procedure for TPs, because in these proceedings the ommission is adopting a process for allocating costs, and is not adopting specific rates. Transportation rates are impacted 4 Id. at 3. 2

5 by a number of factors, including annual regulatory account balance updates, annual attrition adjustments, incremental projects (e.g. dvance Meter), and annual adjustments to the gas prices used to calculate various rate components (e.g. ompany Use uel). Second, the embedded cost of storage needed to be reduced for the normal, previously approved costs to own and operate. This reduction is described in the Prepared Supplemental Testimony of Sim-heng ung. This reduction includes costs associated with the Turbine Replacement (TR) Project approved by the ommission in from both the revenue requirement and the embedded costs, since Soalas considers this a normal, previously approved cost to own and operate. The resulting allocation of base margin costs is shown in the following Table 1 for Soalas. The table mimics the information and format presented in the Revised Prepared 12 irect Testimony of Sharim haudhury dated November 19, The first column excludes the normal, previously approved costs to own and operate. The third column is identical to Mr. haudhury s Table See Revised Prepared irect Testimony of Sharim haudhury at 31, Table 15. 3

6 1 TL 1 OST LLOTION OMPRISON ustomer lass $ 000 llocation of ase Margin % TP 2017 pplication llocation of ase Margin % Residential $1,434, % $1,464, % ore /I $225, % $232, % as / $60 0.0% $64 0.0% as ngine $3, % $3, % NV $13, % $13, % ore $1,676, % $1,715, % Noncore /I $46, % $49, % Small $7, % $8, % Large $27, % $31, % OR $5, % $5, % Retail Noncore $87, % $94, % Long each $1, % $1, % S& $14, % $20, % Southwest as $1, % $1, % Vernon $1, % $1, % N $ % $ % Wholesale $18, % $25, % US $7, % $17, % TS $150, % $150, % Noncore $263, % $287, % Soalas 6 $1,940, % $2,002, % 6 Soalas = ore + Noncore 4

7 III. RSPONSS TO RULIN QUSTIONS RRIN STOR OST LLOTION. Please cite the specific Phase 1 testimony that is the source of the storage revenue and allocations shown in Table 8. 7 The Prepared irect Testimony of Sim-heng ung in presented the embedded costs of storage. The Prepared irect Testimony of Steve Watson in presented the allocation of the embedded costs of storage to the storage functions of injection, inventory, and withdrawal, as well as the storage activities of core, load balancing, and unbundled storage. Table 4 of Mr. Watson s testimony, titled osts y unctions, shows the 2017 proposed core, load balancing, and unbundled storage costs that correspond with Table 8 of my Revised Prepared irect Testimony in this proceeding.. oes Soalas seek to admit into the evidentiary record for the written testimony from Phase 1 ( ) that is cited in Soalas response to Item 4.a? 8 No was a separately litigated proceeding that sought to establish, among other things, the costs and allocations of the storage function. That proceeding has been submitted to the ommission for decision. Motion for doption of Settlement greement was filed by seven of the ten active parties on ugust 31, The results of any ommission decision in can be separately incorporated into the rates established for Soalas and S& in their subsequent implementation advice letters.. pplication at ttachment, Table 8, does not match Jason onnett s testimony at ppendix, Table 8. Please explain why these two tables are different. 9 In my Revised Prepared irect Testimony in this proceeding, the illustrative storage revenues were inadvertently omitted from Table 8. The omission does not impact any of the 7 Ruling at 3. 8 Ruling at 3. 9 Ruling at 3. 5

8 1 2 proposed transportation rates included in the other tables. The following is the corrected rate table 8, which shows the storage costs matching those from the pplication. TL 8 ackbone Transmission Service and Storage Rates Southern alifornia as ompany 2016 TP Phase II Rates 2016 TP Phase II pplication Present Rates Rates hanges Jan-1-15 verage Jan-1-15 Jan-1-17 Jan-1-17 Rate % Rate s Rate P Vols s Rate hange hange change Mth $/th $000's Mth, Mdth $/th $000's $000's $/th % H I ackbone Transmission Service TS 2 TS SV Reservation harge $/dth/day 2,809 $ $161,782 2,818 $ $192,350 $30,567 $ % 3 TS MV Reservation harge $/dth/day $ $ TS MV tric harge $/dth $ $ TS Interruptible tric harge $/dth $ $ $ % Storage Rates: (incl. HRSM) 9 ore $000 $52,836 $65,731 $12, Load alancing $000 $10,260 $27,834 $17, Unbundled Storage $000 $26,476 $17,020 ($9,456) 12 $89,571 $110,585 $21,014. Please provide a detailed explanation of how the storage revenue shown in at ttachment, Table 8, is embedded into the rates, charges, and revenues shown in the other Tables in ppendices and of The explanation should include cites to the pplicants testimony for each step of the process that embeds the storage revenue shown in Table 8 of ppendix into the rates, charges, and revenues shown in the other Tables in ttachments and of The Prepared irect Testimony of Sharim haudhury in (the Phase 1 TP) provides this information. Specifically, Table 1 of that testimony shows the allocation of storage costs to the various storage functions (i.e. core inventory, injection, and withdrawal; load balancing inventory, injection, and withdrawal; and unbundled storage inventory, injection, and withdrawal), while Table 2 of that testimony shows the allocation factors used to incorporate functionalized storage costs into rates. That process was assumed for the purposes of presenting Phase 2 illustrative rates. To clarify, in this Phase 2, Soalas and S& are not proposing how this allocation will work. That will be ultimately be decided by the forthcoming decision in 10 Ruling at 4. 6

9 s noted above, there is an outstanding settlement agreement before the ommission on this topic.. re the costs for provided in response to Item 1, above, included in the $ million of storage revenue shown in at ttachment, Table 8? 11 Yes IV. TH RTS PROPOS IN THIS PROIN XLU OSTS RLT TO SS-25 WLL LK RSPONS The Ruling states the following: This proceeding will not set rates and charges to recover costs incurred in response to the recent gas leak in. Please state if any such costs are included in the rates and charges that the pplicants ask the ommission to adopt in this proceeding. If the answer is yes, the pplicants shall revise their previously served written testimony to remove such costs, and serve the revised testimony with and redline revisions. 12 s stated previously, in this Phase 2 TP Soalas and S& are not requesting to recover in proposed rates any costs incurred in response to the recent gas leak at the natural gas storage facility. The authorized margin that is reflected in the proposed rates was established by the ommission in , Soalas and S& s Test Year 2012 R. Soalas and S& are currently awaiting a proposed decision on Soalas and S& s Test Year 2016 R, which was litigated well before the discovery of the SS-25 well leak. ny costs related to response to the SS-25 well leak would have to be proposed to the ommission for recovery in a subsequent proceeding. In conclusion, the rates presented in this testimony--as well as the other testimony in this proceeding--do not include costs related to response to the SS-25 well leak. This concludes my Prepared Supplemental Testimony. 11 Ruling at Ruling at 4. 7

10 ttachment Requested Rate and Tables

11 Soalas s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = Residential ustomer harge $/customer $ ,617,752 $674,130 $0.00 $10.00 $674,130 $0 Residential aseline Trans. Rate ( SITM adder) $ ,839,570 $574,155 $ $ $550,767 ($23,387) Residential Nonbaseline Trans. Rate ( SITM adder) $ ,298 $334,285 $ $ $326,857 ($7,429) Residential Master Meter ustomer harge $/customer $ $280 $0.00 $ $280 $0 Residential Master Meter aseline Trans. Rate ( SITM adder) $ ,428 $1,023 $ $ $1,018 ($5) Residential Master Meter Nonbaseline Trans. Rate ( SITM adder) $ ,863 $370 -$ $ $376 $5 Residential SITM dder to tric Rate Residential T dder to tric Rate Residential Submeter redit ($/unit/day) $ ,800,739 $3,988 $ $ $3,988 $0 ($ ) 49,671 ($2) $ ($ ) ($2) $0 ($ ) 148,373 ($14,831) $ ($ ) ($14,831) $0 Residential $1,573,398 $1,542,582 ($30,816) ore ommercial and Industrial ustomer harge $/customer $15 207,317 $37,317 $0 $15 $37,317 $0 ore ommercial and Industrial Tier 1 Rate ( SITM adder) $ ,321 $86,238 $ $ $82,987 ($3,251) -1

12 Soalas s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = ore ommercial and Industrial Tier 2 Rate ( SITM adder) $ ,170 $95,856 $ $ $92,339 ($3,517) ore ommercial and Industrial Tier 3 Rate ( SITM adder) $ ,694 $25,288 $ $ $24,465 ($823) ore ommercial and Industrial SITM dder to tric Rate $ ,008,238 $2,233 $ $ $2,233 $0 T dder to tric Rate ore ommercial and Industrial NV ustomer harge, P1 $/customer NV ustomer harge, P2 $/customer ($ ) 137,753 ($4) $ ($ ) ($4) $0 $246,928 $239,337 ($7,591) $ $36 $0 $13 $36 $0 $ $101 $0 $65 $101 $0 NV Uncompressed Rate ( SITM adder) $ ,095 $11,739 $ $ $11,055 ($684) NV ompressed Rate ( SITM adder) $ ,099 $2,164 $ $ $2,164 $0 NV SITM dder to tric Rate $ ,073 $348 $ $ $348 $0 NV $14,388 $13,704 ($684) -2

13 Soalas s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = Non-Residential as ir onditioning ustomer harge $/customer $150 9 $16 $0 $150 $16 $0 Non-Residential as ir onditioning tric Rate ( SITM adder) $ $55 $ $ $52 ($4) Non-Residential as ir onditioning SITM adder $ $2 $ $ $2 $0 Non-Residential as ir onditioning T dder to tric Rate ($ ) 0 $0 $ ($ ) $0 $0 Non-Residential as ir onditioning ngine ustomer harge $/customer $73 $ $70 ($4) $ $427 $0 $50 $427 $0 ngine tric Rate ( SITM adder) $ ,699 $2,045 $ $ $2,045 $0 ngine SITM adder ngine T dder to tric Rate $ ,699 $46 $ $ $46 $0 ($ ) 0 $0 $ ($ ) $0 $0 ngine $2,518 $2,518 $0 Noncore istribution ustomer harge $/customer $ $2,452 $0 $350 $2,452 $0-3

14 Soalas s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = Noncore istribution ommercial and Industrial Tier 1 Rate ( SITM adder) Noncore istribution ommercial and Industrial Tier 2 Rate ( SITM adder) Noncore istribution ommercial and Industrial Tier 3 Rate ( SITM adder) Noncore istribution ommercial and Industrial Tier 4 Rate ( SITM adder) Noncore istribution ommercial and Industrial SITM dder to tric Rate $ ,573 $15,542 $ $ $15,071 ($471) $ ,061 $15,978 $ $ $15,510 ($467) $ ,960 $5,056 $ $ $4,918 ($138) $ ,508 $9,924 $ $ $9,698 ($226) $ ,666 $1,897 $ $ $1,897 $0 Noncore istribution ommerical and Industrial $50,848 $49,545 ($1,303) lectric eneration istribution Tier 1 ustomer harge $/customer $ $121 $0 $50 $121 $0 lectric eneration istribution Tier 1 Rate ( H adder) $ ,207 $6,495 $ $ $6,387 ($109) lectric eneration istribution Tier 2 Rate ( H adder) $ ,889 $6,378 $ $ $6,286 ($92) lectric eneration istribution R dder to tric Rate $ ,838 $1 $ $ $1 $0-4

15 Soalas s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = istribution lectric eneration Transmission Level Service-ommercial & Industrial Reservation Service rate $/therm/day Transmission Level Service-ommercial & Industrial Usage rate (w/ csitma & carb adder) $/therm Transmission Level Service-ommercial & Industrial lass verage rate (w/ csitma & carb adder) $/therm $12,995 $12,795 ($200) $ $ $ $0 $ $ $ $0 $ $ $ $0 Transmission Level Service- lectric eneration, OR Reservation Service rate $/therm/day Transmission Level Service-lectric eneration, OR Usage rate (w/ & carb adder) $/therm Transmission Level Service- lectric eneration, OR lass verage rate (w/carb adder) $/therm $ $ $ $0 $ $ $ $0 $ ($ ) $ $0 Transmission Level Service- Wholesale Reservation Service rate $/therm/day $ $ $ $0 Transmission Level Service- Wholesale Usage rate (w/ & carb adder) $/therm $ $ $ $0-5

16 Soalas s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = Transmission Level Service-Wholesale lass verage rate (w/carb adder) $/therm $ $ $ $0 verage Transmission Level Service Transmission Level Service - S Wholesale ackbone Transmission Service $/dth/day $ ,378,340 $46,723 $ $ $41,011 ($5,712) $ ,251,556 $17,469 $ $ $11,264 ($6,206) $ ,818 $192,350 $ $ $192,350 $0 Unbundled Storage $17,020 $7,451 ($9,569) $2,174,711 $2,112,626 ($62,085) OR ustomer harge $/customer $ $102 $0 $500 $102 $0 OR istribution Rate ( H adder) OR istribution R dder to tric Rate $ ,620 $6,171 $ $ $6,074 ($97) $ $0 $ $ $0 $0 istribution OR $6,273 $6,176 ($97) Transmission OR verage $ ,950 $1,232 $ $ $1,073 ($159) OR $7,505 $7,249 ($256) -6

17 S& s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = Residential ustomer harge $/customer $ ,624 $106,155 $0.00 $10.00 $106,155 $0 Residential aseline Trans. Rate ( SITM adder) $ ,947 $72,888 $ $ $70,240 ($2,648) Residential Nonbaseline Trans. Rate ( SITM adder) $ ,035 $62,164 $ $ $60,888 ($1,276) Residential SITM dder to tric Rate Residential Submeter redit - S ($/unit/day) Residential Submeter redit - T ($/unit/day) LN acility harge, domestic use $/month $ ,048 $288 $ $ $288 $0 ($ ) 5,870 ($820) $ ($ ) ($820) $0 ($ ) 27,189 ($4,062) $ ($ ) ($4,062) $0 $ $57 $0.00 $14.79 $57 $0 LN tric Surcharge $/th $ $12 $ $ $12 $0 mployee iscount ($349) ($349) $0 ity of San iego ranchise ee ifferential $1,092 $1,075 ($18) Residential $237,425 $233,484 ($3,941) ore ommercial and Industrial ustomer harge $/customer $10 30,265 $3,632 $0 $10 $3,632 $0-7

18 S& s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = ore ommercial and Industrial Tier 1 Rate ( SITM adder) $ ,658 $17,729 $ $ $17,214 ($515) ore ommercial and Industrial Tier 2 Rate ( SITM adder) $ ,219 $7,544 $ $ $7,019 ($525) ore ommercial and Industrial Tier 3 Rate ( SITM adder) $ ,783 $857 $ $ $759 ($98) ore ommercial and Industrial SITM dder to tric Rate $ ,649 $204 $ $ $204 $0 ity of San iego ranchise ee ifferential ore ommercial and Industrial NV ustomer harge, P1 $/customer NV ustomer harge, P2 $/customer NV Uncompressed Rate ( SITM adder) NV ompressed Rate ( SITM adder) $167 $160 ($6) $30,132 $28,987 ($1,144) $13 28 $4 $0 $13 $4 $0 $65 10 $8 $0 $65 $8 $0 $ ,501 $1,390 $ $ $1,309 ($81) $ $772 $ $ $772 $0-8

19 S& s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = NV SITM dder to tric Rate $ ,409 $13 $ $ $13 $0 ity of San iego ranchise ee $3 $2 ifferential ($0) NV $2,190 $2,109 ($81) Noncore istribution ustomer harge $/customer $ $177 $0 $350 $177 $0 Noncore istribution ommercial and Industrial Rate ( SITM adder) $ ,807 $257 $ $ $211 ($46) Noncore istribution ommercial and Industrial SITM dder to tric Rate $ ,154 $28 $ $ $28 $0 Noncore istribution ommerical and Industrial lectric eneration istribution Tier 1 ustomer harge $/customer $462 $416 ($46) $50 46 $28 $0 $50 $28 $0 lectric eneration istribution Tier 1 Rate ( H adder) $ ,210 $1,598 $ $ $1,598 $0 lectric eneration istribution Tier 2 Rate ( H adder) $ ,596 $2,329 $ $ $2,329 $0-9

20 S& s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = lectric eneration istribution R dder to tric Rate ($ ) 88,669 ($4) $ ($ ) ($4) $0 istribution lectric eneration Transmission Level Service-ommercial & Industrial Reservation Service rate $/therm/day Transmission Level Service-ommercial & Industrial Usage rate (w/ csitma & carb adder) $/therm Transmission Level Service-ommercial & Industrial lass verage rate (w/ csitma & carb adder) $/therm $3,951 $3,951 $0 $ $ $ $ $ $ $ $ $ Transmission Level Service- lectric eneration Reservation Service rate $/therm/day Transmission Level Service-lectric eneration Usage rate (w/ & carb adder) $/therm Transmission Level Service- lectric eneration lass verage rate (w/carb adder) $/therm $ $ $ $ $ $ $ $ $

21 S& s Rates / harges and s, With & ( ) Rate or harge Rate/harge orecast = x osts Rate / harge on 1/1/17 = x hange in = verage Transmission Level Service $ ,243 $7,765 $ $ $6,765 ($1,000) $281,925 $275,713 ($6,212) -11