alj/md2/lil/gd2/jt2 date of issuance 12/10/2012...
TRANSCRIPT
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37668274 - 1 -
ALJ/MD2/lil/gd2/jt2 Date of Issuance 12/10/2012 Decision 12-11-051 November 29, 2012 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U338E) for Authority to, Among Other Things, Increase Its Authorized Revenues For Electric Service in 2012, And to Reflect That Increase In Rates.
Application 10-11-015 (Filed November 23, 2010)
(See Appendix A for Service List)
DECISION ON TEST YEAR 2012 GENERAL RATE CASE FOR SOUTHERN CALIFORNIA EDISON COMPANY
-
A.10-11
Title DECISCALIF1. Sum
1.11.21.3
2. Po2.12.22.32.42.52.62.72.82.92.1
3. SC4. Ge
4.1
1-015 ALJ/
e
SION ON TFORNIA EDmmary ...... Proce
2. Burde3. Standlicy Matter. South
2. Foreca3. Safety4. Cost-B5. Trans6. Envir7. Econo8. Just an9. Joint C0. Differ
CEs Requeeneration ... Nucle
4.1.1.4.1.4.1.4.1.
4.1.
4.1.
4.1.4.1.2.
/MD2/lil/
TEST YEADISON CO..................dural Histen of Proof
dard of Prors ..............
hern Califoasting Met
y .................Benefit Ansparency ...onmental
omic Factond ReasonComparisorences in Pst .................................
ear GeneraSONGS .
.1.1. SO
.1.2. SO
.1.3. SOEx
.1.4. SOEx
.1.5. SO4.1.1.5.1.4.1.1.5.2.4.1.1.5.3.4.1.1.5.4.
.1.6. SaPalo Ver
/gd2/jt2
TABLE O
R 2012 GEOMPANY ...................tory ...........f .................
oof .................................
ornia Edisothodologie...................nalysis ..........................Responsib
ors ..............nable Rateson Exhibit
Parties Cap......................................ation .............................
ONGS MemONGS SafeONGS 2 & xpenses: FONGS 2 & xpenses .....ONGS 2 &
High PServicSite PaCafete
an Diego Grde Nuclea
OF CONTE
- i -
ENERAL R ...........................................................................................................
on Companes ....................................................................
bility ...........................s ................ .................pital Forec........................................................................morandumety ............. 3 OperatioERC 517, 5 3 Refuelin.................. 3 Capital EPressure T
ce Air Pipinarking anderia Remod
Gas & Electar Generati
ENTS
RATE CAS............................................................................................................nys (SCE)................................................................................................................................................
casts ..................................................................................
m Account ..................on and Ma524, 525, 5
ng and Mai..................Expenditu
Turbine Prong Project d Pedestriadeling Protric Compaion Station
SE FOR SO............................................................................................................) Capital R.......................................................................................................................................................................................................................................... (SONGSM..................aintenance28, 530 .....intenance ..................
ures ...........oject ......... .................an Lighting
oject ...........any ...........n (Palo Ver
Page
OUTHERN............................................................................................................
Requests ..............................................................................................................................................................................................................................................
MA) .............................
e (O&M) .................. Outage ........................................................................g Project ......................................rde) ...........
N ...... 1...... 2...... 6...... 8...... 9...... 9.... 10.... 13.... 15.... 16.... 17.... 20.... 20.... 22.... 24.... 24.... 25.... 27.... 28.... 29.... 29.... 30
.... 31
.... 33
.... 34
.... 35
.... 37
.... 38
.... 39
.... 40
.... 41
-
A.10-11
Title
4.2
4.3
4.4
1-015 ALJ/
e
4.1.
4.1.
2. Coal G4.2.1.4.2.2.
4.2.4.2.4.2.4.2.4.2.
3. Hydro4.3.1.4.3.2.4.3.3.4.3.4.4.3.4.3.
4.3.
4.3.5.4.3.6.
4. Gener4.4.1.4.4.4.4.4.4.2.4.4.
/MD2/lil/
.2.1. O&52
.2.2. Ca4.1.2.2.1.
4.1.2.2.2.Generation
Mohave Four Corand 510-
.2.1. Ba
.2.2. SC
.2.3. Ot
.2.4. Di
.2.5. Dioelectric G
SCEs PoPositionsO&M ExCapital E
.4.1. 20
.4.2. Ea4.3.4.2.1.
.4.3. LuFE
FERC ReAddition
ration GaMountai
.1.1. O&
.1.2. CaPeakers .
.2.1. O&55
/gd2/jt2
TABLE O(
&M Expen4, 528, 529
apital ExpeCompDocumNATM
n ................ Generatinrners Gene514 ............
ackgroundCEs Positiother Partieiscussion oiscussion o
Generationosition .......s of Other xpenses: FExpenditur10 Record
astern HydLee Vi
undy RelinERC 537 .....elicensing .nal Capitalas-Fired Ginview .......&M Expenapital Expe...................&M: 546.73.700, and
OF CONTEContd)
- ii -
nses: FERC9, 530, 531, enditures .
ponent Desmentation M Project ....................
ng Station: erating Sta.................. .................on .............s Position
of Pre-2012of Post-201 ................................... Parties .....ERC 535-5res ............ed Capital
dro Substatining Subs
ne Conveya....................................l Informatieneration ..................
nses: FERCenditures ...................
700, 548.700d 554.700 ...
ENTS
C accounts 532, and 5..................
sign Basis R Project ......................................... 506.013 anation: FER......................................................
ns ...............2 Expendit11 Expendi......................................................
545 ...............................l Expendittion Projecstation .......ance Syste....................................ion ............ ....................................
C 546, 548-....................................0, 549.700,..................
s 517, 519, 556 ..............................Review ......................................................nd 514.013
RC 500-502........................................................................tures .........itures .................................................................................................tures .........cts ...............................
em (Lundy..........................................................................................-554 ..............................................., 550.700, 5..................
Page
520, 523, ....................................
..................
..................
..................3 ................, 505-507, ............................................................................................................................................................................................................................................................
y) ................................................................................................................................................551.700, ..................
.... 41
.... 42
.... 42
.... 43
.... 44
.... 45 .... 46.... 47.... 49.... 50.... 51.... 54.... 55.... 56.... 56.... 58.... 59.... 59.... 60.... 61
.... 63
.... 65
.... 67
.... 69
.... 69
.... 69
.... 70
.... 72
.... 73
-
A.10-11
Title
4.54.6
5. TD5.1
5.2
1-015 ALJ/
e
4.4.4.4.
5. Gener6. Gener
4.6.1.4.6.4.6.4.6.4.6.4.6.2.4.6.4.6.4.6.4.6.3.
DBU ............ SCEs
5.1.1.5.1.2.5.1.3.
2. Adva5.2.1.5.2.
5.2.
5.2.
5.2.
5.2.5.2.2.
5.2.5.2.3.
/MD2/lil/
.2.2. Ca
.2.3. Mcration Prration - Ot
Solar PV.1.1. Ba.1.2. SC.1.3. Ot.1.4. Di
Catalina .2.1. O&.2.2. Ca.2.3. Un
Fuel Cell..................
s TDBU ReOther PaRIIM ......Port of L
nced TechO&M Re
.1.1. TrEn
.1.2. DiEn
.1.3. Re(R
.1.4. Plu5.2.1.4.1.
.1.5. PESummarExpendit
.2.1. PaDistribut
/gd2/jt2
TABLE O(
apital ExpecGrath Pea
roject Devether ............
V FERC 54ackgroundCEs Requether Partieiscussion ... Diesel ......&M: 548.1apital Expendersea Cals ..................................equest ........arties Posi...................
Long Beachhnology .....equest: 560ansmission
ngineeringistributionngineeringesearch, De
RD&D): 58ug-in Elect
SCEs EV Readinery of Advatures Requ
arties Position System
OF CONTEContd)
- iii -
enditures .aker Constelopment D..................49, 550 ..... of the Sol
est in the Gs Position....................................
140, 549.140enditures .able Write-......................................................itions ..........................
h: Added F..................0.260, 580.n Operatio
g: 560.260 .n Operationg: 580.260 .evelopmen0.261 ........tric Vehicl Forecast oess: 588.26nced Tech
uest ...........tions ........m Projects
ENTS
..................truction ....Division: F....................................ar Photovo
GRC ...........ns ...................................................0, and 553..................-off: 588.2..........................................................................................Facilities a..................260, 580.2on Supervi..................n Supervis..................nt and Dem..................le (PEV) Reof PEV Ad60 ..............
hnologys C.................................... and Expe
..................
..................FERC 549 ....................................oltaic Prog........................................................................
3.140 ............................281 ......................................................................................................and Privat..................
261, 588.26ision and ..................sion and ..................monstratio..................eadiness ..
dditions .......................Capital ....................................
enditures ..
Page
..................
..................
..................
..................
..................gram .................................................................................................................................................................................................................................te Lines ......................0 ............... ..................
..................on ........................................................................
..................
..................
..................
.... 74
.... 75
.... 77
.... 79
.... 79
.... 79
.... 81
.... 81
.... 83
.... 84
.... 85
.... 86
.... 90
.... 92
.... 95
.... 95
.... 97
.... 98
.... 99
.. 102
.. 103
.. 104
.. 105
.. 107
.. 108
.. 108
.. 109
.. 112
.. 113
.. 114
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A.10-11
Title
5.3
5.4
5.5
5.6
1-015 ALJ/
e
5.2.5.2.5.2.
5.2.5.2.5.2.5.2.4.5.2.5.2.
5.2.5.2.5.5.2.6.
3. Trans561.21
5.3.1.5.3.2.
4. T&D L5.4.1.5.4.2.5.4.3.5.4.4.5.4.5.
5. T&D I5.5.1.
5.5.2.5.5.3.5.5.4.5.5.5.5.5.6.
6. T&D E
/MD2/lil/
.3.1. Ci
.3.2. Sm
.3.3. DiPr
.3.4. Int
.3.5. Su
.3.6. DiAdvance
.4.1. On
.4.2. PhAw
.4.3. CeSmart GrAdvance
smission an10, 587.210
TransmisLoad SidInterfere
Load GrowCapital ESubtransDistributSubstatioPEV Rea
InfrastructCable ReRehabilitCable-InSubstatioDistribut4 kV Circ4 kV Sub
Engineerin
/gd2/jt2
TABLE O(
rcuit Automart Distribistributionoject (DSEtegrated Sm
ubstation Aistributioned Technolnline Transhasor Measwareness (entralized rid Cyber Sed Technolnd Distribu0 .................ssion Inter
de Supportence: 587.2wth ............Expenditursmission Ltion Substaon Equipmadiness ......ture Replaeplacementation ........
n-Conduit Ron Transfotion Circuicuit Replac
bstation Eling ..............
OF CONTEContd)
- iv -
omation ....bution Tra
n System EfEEP) ..........mart Distr
Automationn Managemlogy Transsformer Msurement &(WASAS) .Remedial Security ...logy Laborution (T&D..................rconnectiot for Power210 ...............................res ............
Lines Plan .ation Plan
ment Repla..................
acement (IRnt Program..................Replaceme
ormers ......it Breakerscement Cuimination ..................
ENTS
..................ansformersfficiency E..................
ribution ....n 3 (SA3) ..
ment Systemsmission S
Monitoring & Wide-A.................. Action Sch..................ratory ProD) Electric..................n Planninr Quality, ........................................................................
n ..................acement P..................R) ..............
m and Wors..................ent ...............................s .................utovers ..... ....................................
..................s ................
Enhanceme......................................................m (DMS) .
System Pro .................rea Situati..................heme (C-R..................
ojects .........c System P..................
ng: 561.210 Radio & T..........................................................................................
Program (S....................................st Circuit ..............................................................................................................................
Page
..................
..................ent ........................................................................
ojects ...........................ional ..................
RAS) ..............................................
Planning: ..................0 ................TV ..........................................................................................
SERP) ............................................
..................
..................
..................
..................
..................
..................
..................
.. 114
.. 115
.. 117
.. 118
.. 119
.. 120
.. 121
.. 121
.. 123
.. 124
.. 127
.. 129
.. 132
.. 133
.. 134
.. 136
.. 137
.. 139
.. 141
.. 143
.. 144
.. 146
.. 147
.. 151
.. 153
.. 155
.. 156
.. 158
.. 160
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A.10-11
Title
5.7
5.8
5.9
5.1
1-015 ALJ/
e
5.6.1.
5.6.2.7. T&D C
5.7.1.5.7.2.5.7.3.5.7.4.5.7.5.5.7.6.
8. T&D I5.8.1.5.8.
5.8.5.8.
5.8.5.8.2.5.8.
5.8.5.8.5.8.
9. T&D5.9.1.
5.9.5.9.5.9.
0. T&D
/MD2/lil/
TransmisEngineerEngineer
Customer-Rule 20ARule 20BDistributDistributCustomeCustomeand 2012
InspectionO&M Ex
.1.1. W58
.1.2. Un
.1.3. Ve5.8.1.3.1.
.1.4. DiInspectio
.2.1. Ca5.8.2.1.1.5.8.2.1.2.
.2.2. W
.2.3. Joi
.2.4. ReDistribut
Field AccExpenses
.1.1. Fie
.1.2. Joi
.1.3. MiGrid Op
/gd2/jt2
TABLE O(
ssion/Subring: 560.2ring, Plann-Driven Pr
A ConversiB and 20C Ction Relocation Addeer Growth er Growth 2 .................n and Mainxpenses: 58ood Pole I3.120 .........ndergrounegetation M
Prevenistributionon and Maapital Prev
Asset Under
ood Pole Rint Pole Cremoval of Ition Planncounting, Js: 588.130 eld Accounint Pole Oriscellaneouerations ....
OF CONTEContd)
- v -
bstation Op220 ............ning and Programs ...ions ..........Conversioations .......d Facilities and Meter Expenditu..................ntenance ...83.120, 584Intrusive In..................
nd Detail InManagementive Main
n Apparatuaintenance ventive Ma Based Prerground StReplacemeredits and Idle Facilit
ning and FJoint Pole .................nting ........rganizationus Expense..................
ENTS
perations S..................
Protection S....................................
ons ...............................s ................r Sets ........ure Summ....................................4.120, 593.1nspections..................nspectionsent: Portiontenance: us: 594.120 Capital
aintenanceeventive Mtructure Rents ............ Wood Polties ............
Field Accou Expenses ....................................n ...............es ................................
Supervisio..................Studies: 5............................................................................................................
mary in 2011....................................120, 594.12s: Portions..................s: 584.120 on of 593.1 Portion of0 ................ Request ...
e Forecast .MaintenancReplacemen
..................le Disposa..................unting ...... and Misce..........................................................................................
Page
on, and ..................
580.220 ..................................................................................................................1 ....................................20 ..............s of ....................................20 .............f 593.120 .........................................................e ...............nt .................................
al ....................................................
ellaneous ..........................................................................................
.. 161
.. 163
.. 164
.. 165
.. 166
.. 169
.. 170
.. 171
.. 174
.. 176
.. 178
.. 178
.. 182
.. 184
.. 186
.. 187
.. 188
.. 190
.. 190
.. 192
.. 194
.. 195
.. 196
.. 198
.. 198
.. 198
.. 200
.. 201
.. 203
-
A.10-11
Title
5.1
1-015 ALJ/
e
5.10.1.
5.105.10
5.10
5.105.10
5.10
5.10.2.5.10
1. T&D D5.11.1.
5.115.115.115.115.11
5.11.2.
5.11
/MD2/lil/
O&M Ex583.170,
0.1.1. Gr0.1.2. Tr
Op0.1.3. Tr
570.1.4. Ov0.1.5. Br
590.1.6. Ot
5.10.1.6.15.10.1.6.25.10.1.6.3
5.10.1.6.4Grid Ope
0.2.1. StrDistributio
DistributO&M Ex
1.1.1. Co1.1.2. Me1.1.3. Se1.1.4. Mi1.1.5. Ov
Br59
5.11.1.5.15.11.1.5.2
DistributExpendit
1.2.1. Di
/gd2/jt2
TABLE O(
xpenses: 56588.170, 59rid Controansmissionperations Eansmission
73.170 & 59verhead Lieakdown M3.170 .........ther Grid O1. Circui2. Outag3. Street
Efficie4. Other erations: Creet Light on Constrution Const
xpenses .....onstructioneter Relatervice Guariscellaneouverhead aneakdown M3.140 and
1. Overh2. Under
594.14tion Consttures .........istribution
OF CONTEContd)
- vi -
61.170, 56293.170, & 5l Center Cn and DistExpenses: n and Dist
98.170 ........ine OperatMaintenan..................Operationsit Mappingge Data Ma Light Mapent Street L Expenses Capital ReReplacemeuction andtruction an..................n Related Eed Expenserantees: 58us Distribund UndergMaintenan594.140 ....
head Maintrground M40 ...............truction an..................
n Storm Ca
ENTS
2.170, 573.1598.170 ......
Costs: 561.1tribution S 560.170, 5tribution S..................tions: 583.nce of Dist..................s Costs: 58g ................anagementpping andLight Evalu ..................
equest ........ent Progra
d Maintenand Mainten..................Expenses: es: 586.14087.140 .......ution Expeground Wonce Expens..................tenance Ex
Maintenanc..................
nd Mainten..................pital Expe
170, 582.17..................170 ...........
Substation 562.170 & 5Storm Expe...................170...........tribution L..................88.170 .........................t ................
d Inventoryuation) .........................................am .............ance ..........nance: .................. 583.140 ...0 .................................enses: 588ork Order ses: ..................xpenses: 5ce Expense..................nance: Ca..................
enditures ..
Page
70, .................................... 582.170 .....enses: ....................................
Lines: ........................................................................
y (Energy ..........................................................................................
..................
..................
..................
..................
.140 .......... and
..................593.140 ......es: ..................pital ....................................
.. 204
.. 205
.. 207
.. 209
.. 211
.. 213
.. 214
.. 215
.. 215
.. 216
.. 218
.. 220
.. 221
.. 224
.. 224
.. 225
.. 226
.. 227
.. 228
.. 229
.. 233
.. 235
.. 237
.. 237
-
A.10-11
Title
5.1
5.1
5.1
1-015 ALJ/
e
5.115.11
5.115.11
2. T&D 5.12.1.
5.12
5.125.12
5.12.2.5.125.125.12
3. T&D 5.13.1.
5.135.13
5.13
5.135.135.135.13
5.135.13.2.
5.135.13
4. T&D
/MD2/lil/
1.2.2. Di1.2.3. Di
Ex1.2.4. Di1.2.5. To Substatio
O&M Ex2.1.1. Tr
Ma2.1.2. Su2.1.3. Di
MaCapital E
2.2.1. Su2.2.2. Ru2.2.3. Ad Transmi
Operatio566.160,
3.1.1. Ov3.1.2. Un
563.1.3. Mi
Tr3.1.4. Tr3.1.5. Tr3.1.6. Ins3.1.7. Ro
573.1.8. Ca
Capital E3.2.1. Tr3.2.2. Tr Business
/gd2/jt2
TABLE O(
istributionistributionxpenditureistributionools and Won Construxpenses: 5ansmissionaintenance
ubstation MistributionaintenanceExpenditurubstation Cule 20B anddded Facilssion .........
ons and Ma567.160, 57verhead Trndergroun4.160 .........iscellaneouansmissionansmissionansmissionsulator Waoad and Ri71.160 .........apital-RelaExpendituransmissionansmission
s Process a
OF CONTEContd)
- vii -
n Claims Dn Breakdowes ...............n TransformWork Equip
uction and70.150, 588n Substatioe: 570.150
Miscellaneon Substatione: 592.150 res ............
Capital Mad C ............ities ............................aintenance71.160 .......ransmissio
nd Transm..................us Transmn Expensen Line Renn Maintenashing Expight of Wa..................
ated O&M res ............n Deteriorn Mainten
and Techno
ENTS
amage Cawn Mainten..................
mers ..........pment........d Maintena8.150, 592.1on Inspect ..................ous Expenn Inspectio ....................................
aintenance ......................................................e Expenses..................
on Line Insmission Line
..................mission andes: 566.160nts: 567.16nance Expepenses: 57ay (ROW) M.................. Expenses:..................
rated Polesnance Capiology Inte
apital Expenance Cap......................................................ance ..........150 ...........tion and ..................
nses: 588.1on and .................................... .......................................................................s: 563.160..................spections: e Inspectio..................d Other 0 ................60 ..............enses: 57171.160 .......Maintenan..................: 571.160....................s ................ital ............egration (B
Page
enditures .pital ..........................................................................................
..................50 .............
..................
..................
..................
..................
..................
..................0, 564.160, .................. 563.160 ...ons: ..................
..................
..................
.160 ..........
..................nce: ..........................................................................................
BP&TI) ......
.. 238
.. 238
.. 241
.. 241
.. 242
.. 243
.. 243
.. 246
.. 246
.. 248
.. 249
.. 250
.. 251
.. 253
.. 253
.. 254
.. 256
.. 257
.. 260
.. 261
.. 262
.. 263
.. 264
.. 265
.. 265
.. 267
.. 267
-
A.10-11
Title
5.1
5.1
5.1
1-015 ALJ/
e
5.14.1.5.145.14
5.14.2.5. T&D
5.15.1.
5.15.2.5.155.155.155.15.3.5.15.4.
6. T&D5.16.1.
5.165.16
7. T&D O5.17.1.5.17.2.
5.175.175.17.3.5.17.4.5.17.5.5.17.6.5.17.7.
5.17
/MD2/lil/
O&M ex4.1.1. Te4.1.2. Tr
IT)56
BP&TI CTechnica
O&M Ex598.250 ..TDBU Sa
5.2.1. Sa5.2.2. Tr5.2.3. Tr
TDBU EnTransmis573.250,
BusinessO&M Ex
6.1.1. Co6.1.2. Di
58Other Cos
TransmisDistributUtility L
7.2.1. Ind7.2.2. Un
Claims WFacility MTransmisDistributTDBUs O
7.7.1. Me
/gd2/jt2
TABLE O(
penses: FEechnology ansmission) Interdepa6.270 .........
Capital Expal Services xpenses: 56...................afety and T
afety Prograining Seaaining Delnvironmenssion and 598.250 .....
s, Regulatoxpenses: 56ompliance,istribution8.280 .........
sts and Othssion Wortion Workocating Sedividual WndergrounWrite-Offs:Maintenanssion Alloction AllocaOther Opeeter Dama
OF CONTEContd)
- viii -
ERC subacSolution Imn Substatioartmental ..................
penditures .................66.250, 588..................Training: 5rams ..........at-Time .....livery .......ntal ServicDistributio..................
ory and Fi66.280, 580, Policy, C
n Construct..................her Operatk-Order W-Order Wrervices: 58
Work-Ordend Utility L: 583.281 ..
nce Distribucated Costated Costserating Revage and Te
ENTS
ccounts 56mplementon Inform Market M..................
s ...................................8.250, 582.2..................566.250, 58......................................................
ces: 582.25on Toxic W..................
inancial Pl0.280, 588.2ontracts, ation Contr..................ting Reven
Write-Offs: rite-Offs a88.281........er Write-OLocating Se..................ution: 580ts: 568.281s: 590.281 .venues .....
emporary S
66.270 and tation: 588
mation TechMechanism
..................
..................
..................250, 573.25..................88.250 .............................................................
50 ...............Waste Disp..................anning .....280 ...........
and Billingract Manag..................
nue ............ 560.281 ..
and Under..................
Offs ............ervices .......................0.282 .........1 ....................................................Services: 4
Page
588.270 ....8.270 ..........hnology ( (IMM): ......................................................50, ............................................................................................................
posal: ......................................................
g: 566.280 .gement: ......................................................
rground ................................................................................................................................................451.100 .....
.. 268
.. 268
.. 272
.. 274
.. 275
.. 275
.. 276
.. 276
.. 278
.. 280
.. 281
.. 282
.. 283
.. 283
.. 284
.. 286
.. 288
.. 289
.. 292
.. 292
.. 294
.. 294
.. 296
.. 296
.. 298
.. 299
.. 299
-
A.10-11
Title
6. Cu6.16.2
6.3
6.4
1-015 ALJ/
e
5.17
5.17ustomer Se
. SCEs2. Policy
6.2.1.6.2.2.6.2.3.6.2.4.6.2.5.6.2.6.
3. CustoFERC
6.3.1.6.3.2.6.3.3.6.3.4.
6.3.6.3.6.3.6.3.5.6.3.6.6.3.7.6.3.8.6.3.6.3.6.3.9.
6.3.6.3.10.
4. Custo6.4.1.
/MD2/lil/
7.7.2. TrNo
7.7.3. Otervice Busins and Partiy Consider
IntegratiCustomeDynamicPlug-In EHome ANovemb
omer ServiC 901-905, 5
BusinessMeter ReSmartCoCustome903.500,
.4.1. Cr
.4.2. Bil
.4.3. CuUncollecMiscellanCSBU SaMeter Ex
.8.1. Tu
.8.2. TeEnergy Tand Supe
.9.1. EnRepair B
omer ServiCustome
/gd2/jt2
TABLE O(
ansmissionon-CAISOther SCE Cness Unit .es Positiorations .......ion of Smaer Growth .c Pricing ...Electric Verea Netwo
ber 30, 2011ce Operati580, 586, 58s Units Maeading Exponnect Opeer Records903.700 - 9
redit: 903.2lling: 903.ustomer Coctible Expeneous Exp
afety: FERxpenses: Furn Off andest and InsTheft, Custervision: F
nergy Thefilling Metece and Info
er Assistan
OF CONTEContd)
- ix -
n ServicesO Services: Concerns ....................ns ...............................
art-Connec....................................
ehicle Costork Costs ..1 Windstorions Divisi87, 597 ......
anagementpenses: FEerations Ce and Colle
903.800 .....200 ............500 ...........ommunica
ense: FERCpense: FERRC 580 .......FERC 586 ..d Turn Onpect Metertomer InstFERC 587 .ft: 587.200 ers: 597.40ormation D
nce: FERC
ENTS
s for Gener 456.340 ............................................................................
ct Costs an....................................
ts ..................................rm Responion (CSOD..................
t and SuppERC 902 ....enter (SOCections: - 90......................................................ation OrgaC 904 .........RC 905 ...........................................
n Services: rs: 586.400
tallation, an.................. ..................00 ..............Delivery ...
C Account 9
ration: 456..........................................................................................
nd Benefits........................................................................nse ............
D) O&M: ..................
port: FERC..................C): 902.3003.100-903......................................................
anization: ........................................................................ 586.100 ...0 ................nd Manag........................................................................908 ............
Page
6.308 & .......................................................................................... ...........................................................................................................
..................C 901 ...........................
00 ...............3.300, ...................................................... 903.800 ................................................................................................................
gement ..........................................................................................
.. 300
.. 301
.. 302
.. 303
.. 304
.. 305
.. 309
.. 310
.. 312
.. 313
.. 317
.. 319
.. 320
.. 322
.. 323
.. 325
.. 327
.. 329
.. 332
.. 336
.. 337
.. 338
.. 339
.. 339
.. 339
.. 341
.. 341
.. 342
.. 344
.. 345
-
A.10-11
Title
6.5
6.6
6.77. Inf
7.17.2
7.3
1-015 ALJ/
e
6.4.6.4.6.4.6.4.2.6.4.3.6.4.4.6.4.5.6.4.6.
5. Gener6.5.1.6.5.6.5.6.5.2.6.5.3.6.5.4.
6. Capita6.6.1.6.6.2.6.6.3.6.6.4.6.6.5.6.6.6.6.6.7.6.6.
7. Otherformation . Partie
2. Policy7.2.1.7.2.2.7.2.7.2.3.
3. O&M
/MD2/lil/
.1.1. Ac
.1.2. En
.1.3. PrBusinessRate ComLocal PuBusiness2013 For
ral Plant CStructure
.1.1. En
.1.2. MeOffice FuSpecializMetering
alized SoftAlerts anInteractivCustomeEnhanceHAN SuPlug-In ERegulato
.7.1. DyTo
r OperatingTechnolog
es Positiony Consider
Market REnterpris
.2.1. ERProducti
M: FERC 51
/gd2/jt2
TABLE O(
ccount Manergy Centogram Ma
s Unit Manmmunicatiublic Affairs License Tecasts base
Capital Expes and Impnergy Centeter Shop .urniture anzed Equipmg Capital Rtware ........nd Notificave Voice Rer Relationd Meter an
upport andElectric Veory Mandaynamic Priools ............g Revenuegy and Busns ...............rations .......Redesign &se Resourc
RP Benefitsivity, Bene17, 920, 921
OF CONTEContd)
- x -
anagementters: 908.6anagementnagement aions: 916.6rs: FERC 9
Tax: FERCed on Sma
pendituresprovementters .............................nd Equipmment .........Requireme..................ations .......Response ..nship Manand Usage C
d Trouble Sehicle Suppate and Coicing Rate ..................es ...............siness Inte....................................
& Technoloce Plannins ................
efits and Sa1, 931 ........
ENTS
t: 908.600 .610 .............t: 908.640 .and Suppo600 ............920 .............
C 408...........artConnect ..................ts ...................................................
ment .............................
ents ..................................................................agement ...CapabilitieShooting ...port Systemmpliance . Analysis a....................................gration (IT....................................ogy Upgra
ng (ERP) ......................
avings .........................
..................
..................
..................ort: 907.60......................................................t Integratio......................................................................................................................................................................................................es ................................ms ..............................and Manag....................................T&BI) ...........................................ade (MRTU........................................................................
Page
..................
..................
..................00 .....................................................................on ............................................................................................................................................................................................................................................................................................gement ..........................................................................................
U) ......................................................................................
.. 345
.. 347
.. 349
.. 353
.. 353
.. 354
.. 357
.. 357
.. 358
.. 359
.. 360
.. 361
.. 362
.. 363
.. 364
.. 366
.. 367
.. 368
.. 370
.. 371
.. 372
.. 374
.. 375
.. 376
.. 378
.. 379
.. 380
.. 383
.. 383
.. 385
.. 385
.. 386
.. 388
-
A.10-11
Title
7.4
7.5
7.6
1-015 ALJ/
e
7.3.1.7.3.
7.3.2.7.3.3.7.3.7.3.
4. Capita7.4.1.7.4.
7.4.7.4.7.4.7.4.7.4.7.4.2.7.4.
7.4.5. Capita
7.5.1.6. Capita
7.6.1.
7.6.2.7.6.3.7.6.4.7.6.5.7.6.6.7.6.7.
/MD2/lil/
Applicat.1.1. O&
FEO&M TeO&M Inf
.3.1.Comp
.3.2.O&M FERC
al ExpendHardwar
.1.1. UnEx
.1.2. PC
.1.3. Ru
.1.4. Co
.1.5. Fib
.1.6. SaExpande
.2.1. Ca(M
.2.2. Neal Expend
Projects Lalized Soft
ComputeFacility MCustomeEnterprisEnterprisRevenueEnergy MDesign M(DSRP) aDerivatio
/gd2/jt2
TABLE O(
tion Servic&M for NeERC 920, 92echnology frastructuruting ServBusiness O 920, 921 ....itures Hare ReplacencontestedxpenditureCs and Reluggedized opper Wireber Optic C
atellite Termed Infrastruapital Expe
MRN) and Dext Generaitures OpLess than $tware Soer Aided DManagemeer Data Wase Platformse Platform
e ProtectionManager RManager Dand Capitaon Project .
OF CONTEContd)
- xi -
ces: 920, 92ew Softwar21 ..............and Risk Mre Operativices: FEROperations..................ardware ...
ement ........d Hardwares ...............ated Hard Laptops ..e ................Cable ........minal Equucture ......enditures: Disaster Ration Netwperating S$1 million
oftware AsDesign (CAent (CAFMarehouse ..m User Intm Search an and Law
ReplacemenDistributional Work Or..................
ENTS
21 ..............re Applica..................Managemeons: FERC
RC 920, 921s Managem......................................................
re Forecast..................
dware ..............................................................
uipment ....................... Mobile R
Recovery ...work SCESoftware ....n ..................
set ManagAD)/CompM) Replace
..................erface Refr
and Classifw Claims M
nt ..............n Service Rrder Unit E..................
..................ations: ..................ent: FERCC 920, 921,1 .................ment: ......................................................t Capital ..............................................................................................................................
Radio Netw..................Enet II ...........................................gement (SAputer Aide
ement ..........................resh ..........fication .....
Manageme..................Request PrEstimate ..................
Page
..................
..................C 920, 921 .., 931 ............................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................work
..................
..................
..................
..................AM) ...........ed ........................................................................nt ................................
ricing
..................
.. 388
.. 390
.. 392
.. 394
. 394
. 395
.. 397
.. 399
.. 399
.. 400
.. 401
.. 402
.. 404
.. 405
.. 406
.. 406
.. 407
.. 408
.. 410
.. 412
.. 413
.. 415
.. 416
.. 417
.. 418
.. 420
.. 422
-
A.10-11
Title
7.7
7.88. Hu
8.1
8.2
8.38.48.5
8.6
1-015 ALJ/
e
7. Other7.7.1.7.7.2.7.7.3.7.7.4.7.7.7.7.5.
8. Informuman Reso. Partie
8.1.1.8.1.2.
2. O&M8.2.1.8.2.8.2.8.2.8.2.8.2.2.
3. Capita4. Short-5. Emplo
566.25588.27
6. Pensio8.6.1.8.6.8.6.2.8.6.3.8.6.8.6.
8.6.8.6.
/MD2/lil/
r CapitalizeERP ProjData ArcBusinessTechnolo
.4.1. CoNERC/C
mation Tecources, Benes Position
Total CoEqual Op
M Human RSalaries a
.1.1. HR
.1.2. Ex
.1.3. Ex
.1.4. StoJoint Par
al Expend-Term Inceoyee Recog50, 582. 17070, 588.280ons and Be
Pensions.1.1.Pensio
Post RetiOther Be
.3.1. 40
.3.2. Me8.6.3.2.1.
.3.3. Di
.3.4. Gr
/gd2/jt2
TABLE O(
ed Softwarject ............chiving ......s Analyticsogy and Riommon EnCIP .............chnology Rnefits, and ns and Polimpensatiopportunity
Resources Dand RelateR Departmxecutive Ofxecutive Ouock Optionrties Execuitures - Caentives (STgnition Pr0, 588.130, 0, 920/921,enefits: FEs .................on Policy Rirement Beenefits........1(k) Savinedical Pro
Dentaisability Prroup Life I
OF CONTEContd)
- xii -
re ..................................................s Improvemisk Manag
nterprise Se..................Review in Other Comicy Considon Study (Ty and WorDepartmened Expense
mental: FEfficers Coutside Servns and Lonutive Comapitalized STI): FERC ograms: 5 588.140, 5, and 926 ..ERC 926......................
Recommenenefits Oth..................
ngs Plan: Fgrams: FE
al and Visiorograms ...Insurance .
ENTS
..................
..................
..................ment .........gement ......ervices (CE..................Next GRCmpensatioderations ..TCS) .........
rkforce Divnt: FERC es ...............
ERC 920, 92ompensatiovices: FERng-Term I
mpensation Software .. 500, 588, 9560.220, 56588.150, 588......................................................
ndations ....her Than P..................
FERC 926 ..ERC 926 ....on Plans .......................................
..................
..................
..................
..................
..................ES) .............................
C ................on (HR).........................................versity ...... 920, 921, 9..................21, 923, 926on: FERCRC 923 ......Incentives Recomme..................905, and 922.170566.18.170, 588.........................................................................Pensions (P............................................................................................................
Page
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................923, 926 ......................6 ................
C 920, 921 .................... (LTI) ........endations ...................20/921 ......160, .250, ........................................................................PBOPS) ................................................................................................................
.. 425
.. 426
.. 428
.. 429
.. 430
.. 431
.. 433
.. 435
.. 436
.. 437
.. 438
.. 444
.. 446
.. 447
.. 447
.. 448
.. 450
.. 451
.. 452
.. 454
.. 455
.. 458
.. 460
.. 460
.. 464
.. 465
.. 467
.. 467
.. 468
.. 471
.. 472
.. 473
-
A.10-11
Title
9. Ad9.1
9.29.3
9.4
9.5
9.6
9.79.89.9
9.1
10. Pow
1-015 ALJ/
e
8.6.8.6.
dministrati. Finan
9.1.1.9.1.9.1.2.9.1.3.9.1.4.
2. Risk C3. Law D
9.3.1.9.3.2.9.3.3.
9.3.4.4. Claim
9.4.1.5. Work
9.5.1.6. Ethics
9.6.1.9.6.2.
7. Regul8. Corpo9. Corpo
9.9.1.9.9.2.9.9.3.
0. Prope9.10.1.9.10.2.
wer Procu
/MD2/lil/
.3.5. Mi
.3.6. Exive and Ge
ncial OrganControlle
.1.1. CaAudit SeTreasureTax Dep
Control: FDepartmen
In-HouseOutside CorporatFERC 92Capital E
ms: FERC 9Claims R
kers CompWorkers
s and ComOutside Capital EManagem
latory Poliorate Memorate Com
Labor anOutside Commun
erty and LiPropertyLiability
urement Bu
/gd2/jt2
TABLE O(
iscellaneouxecutive Beeneral (A&nizations: er: FERC 9apital Expeervices: FEer: FERC 9artment: FERC 920/9
nt: FERC 9e Legal ReCounsel: te Governa
20/921, 930Expenditur920/921, 92Reserve Npensation: s Compens
mpliance: FServices: 9
Expenditurment Systeicy and Aff
mbership Dmmunicationd ExpenseServices: Fnications Piability Insy Insurance Insuranceusiness Un
OF CONTEContd)
- xiii -
us Benefit enefits ......
&G) ............FERC 920/920/921, 9enditures: ERC 920/9920/921, 93FERC 920/921, 923 ...920/921, 9esources: FFERC 923,ance and M0 ................res Electr24, 925 .....
Navajo Na FERC 925
sation ClaiFERC 920/923 ...........re Enterpem (CMS) fairs (RP&
Dues and Fons: FERC es: FERC 9FERC 923
Products: surance: Fe: FERC 9e: FERC 92nit (PPBU)
ENTS
Programs..................................../921, 923,
923, 926 ..... IFRS Proj
921 .............30 ............../921 ............................
923, 928, 93FERC 920/, 928 ..........Miscellane..................ronic Disc..................
ation Royal5 .................ms Reserv
/921, 923 .....................prise Com ..................
&A): FERCees: 930.2 920/921, 9920/921.... ..................FERC 930
FERC 924, 24 ..............25 .............. ..................
s ..................................................... 926, 930 ....................ject ....................................................................................30 ............./921 ............................
eous Expen..................
covery Proj..................lty Litigati..................
ve: FERC 9....................................
mpliance ..................C 920/921 00 .............923, 930 ....................................... ................. 925 ................................................................
Page
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................nses: ..................ject .............................ion ..............................925 ................................................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
.. 474
.. 475
.. 477
.. 478
.. 478
.. 481
.. 482
.. 483
.. 485
.. 486
.. 488
.. 488
.. 490
.. 493
.. 494
.. 495
.. 498
.. 499
.. 500
.. 501
.. 503
.. 503
.. 504
.. 506
.. 508
.. 508
.. 510
.. 511
.. 512
.. 512
.. 513
.. 514
-
A.10-11
Title
10.10.10.10.10.10.10.
11. Op11.11.
11.
11.11.
1-015 ALJ/
e
.1. DRA
.2. Marke
.3. Marke
.4. Energ
.5. Renew
.6. Powe
.7. Capita10.7.1.10.7.2.
10.7
10.7
10.7perations S.1. O&M.2. Corpo
FERC11.2.1.11.2.2.
.3. Corpo11.3.1.
.4. Corpo
.5. Opera
/MD2/lil/
s Position et Redesiget Strategy
gy Supply wable and r Procuremal Expend
CommunCapitaliz
7.2.1. Po10.7.2.1.110.7.2.1.2
10.7.2.1.3
10.7.2.1.4
7.2.2. Int10.7.2.2.110.7.2.2.210.7.2.2.310.7.2.2.410.7.2.2.5
7.2.3. CoSupport Bu
M - A&G: FEorate Envir
C 920/921, Outside Corporat
orate ResoRents: 93
orate Securations Sup
/gd2/jt2
TABLE O(
..................gn and Tecy and Resoand Mana Alternativment Finanitures ........nication Eqzed Softwaost-MRTU 1. CAISO2. Future
Enhan3. Long-
Marke4. Data M
(Phasetegrated D1. Aggre2. Risk M3. Energ4. Energ5. Energommodity usiness UnERC 920/9ronment, H923, 925 ....Services: Fte Safety: urces: FER31 ..............rity: FERCport Servi
OF CONTEContd)
- xiv -
..................hnology U
ource Plannagement: Fve Power: nce: FERC..................quipment are ............. Energy MO Market Ee Market ancements (Term, Midet SimulatiManagemees 3 and 4)
Demand Reegated DemManagemey Procuremy Procuremy Planning Managem
nit (OSBU) 921, 923, 92Health & S..................FERC 923 FERC 925 RC 920/92..................C 920/921,ces (OS): F
ENTS
..................Upgrade (Mning: FERFERC 557 .. FERC 557
C 557 ............................ ....................................
Market OpeEnhancemand Perform(2012-2014d-Term, anion Tools ..ent Platfor) .................esponse (Dmand Respent ADR ....ment Planment Plang Platform
ment Platfo ..................25, 931, anSafety (CEH.................. .................. ..................
21, 931, 935.................., 923 ..........FERC 920/
..................MRTU) .....RC 557 ........................7 .......................................................................................
erations ....ment Progra
mance ) ................
nd Short-T..................rm Upgrad..................
DR) ............ponse (AD..................
nning .........nning Manam ................orm (CMP)..................nd 935 ......H&S): ......................................................5 ..................................................../921 .........
Page
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................ams ...........
..................Term
..................de ....................................
DR) .................................................agement .....................) .....................................................
..................
..................
..................
..................
..................
..................
..................
.. 516
.. 518
.. 519
.. 522
.. 526
.. 528
.. 531
.. 532
.. 532
.. 533
.. 534
.. 535
.. 536
.. 537
.. 538
.. 539
.. 540
.. 540
.. 541
.. 541
.. 542
.. 544
.. 545
.. 546
.. 548
.. 548
.. 550
.. 552
.. 553
.. 555
-
A.10-11
Title
11.11.
11.11.
11.
11.11.11.11.
12. Ra12.12.12.12.12.
13. Sal13.
14. Co14.
15. Oth
1-015 ALJ/
e
.6. Real P
.7. Suppl11.7.1.
.8. Trans
.9. Capita11.9.1.11.9.2.11.9.3.
.10. Corpo11.10.1.11.10.2.11.10.3.
11.111.1
11.10.4.11.10.5.11.10.6.
.11. CEH&
.12. Corpo
.13. Trans
.14. Other11.14.1.
temaking..1. Elimin.2. Sale o.3. Other.4. Credi.5. Shareles and Cu.1. Sales
ost Escalati.1. Laborher Opera
/MD2/lil/
Properties:lier Divers
Parties Psportation al Expend
Parties PContingeFurnitur
orate ResoNew BuiHeadquaCritical F
10.3.1. AD10.3.2. Ro
ExField FacNew FielBlankets
&S Capitorate Secursportation r Capital P
OnBoard..................nation or M
of Four Corr Operatingt to Catalinholder Sha
ustomer FoForecast ...ion .............r Escalationting Reven
/gd2/jt2
TABLE O(
: FERC 92sity and DePositions ...Services Ditures ........
Positions ....ency and Pe Costs .....urces - Capildings ......arters ........Facilities ...DC .............osemead Dxtension ....cility Assetld Facilitie ..................al ...............rity CapiServices
Projects ......d Technolo...................Modificatiorners .........g Revenuena Electricaring of Pe
orecast .............................................n ................nue (OOR)
OF CONTEContd)
- xv -
0/921 .......evelopmen..................
Division (T....................................Project Ma..................pital .................................................................................
Data Center..................t Preservates ...................................................ital ............ Capital .....................
ogy Project..................on of Acco..................es (OOR) Sc for A&G ension and........................................................................) ................
ENTS
..................nt: FERC ..................
TSD) ...............................................
anagement............................................................................................................r (RDC) ..................tion .......................................................................................................................t ...................................
ounts ...........................
Service Fee Allocationd Benefit C..........................................................................................
.................. 920/921 ..........................................................................t Costs .................................................................................................................. Useful Lif........................................................................................................................................................................................................................e Implemen ................Costs ..................................................................................................
Page
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................
..................fe ........................................................................................................................................................................................................................ntation ...................................................................................................................................
.. 556
.. 558
.. 559
.. 562
.. 565
.. 566
.. 568
.. 570
.. 571
.. 572
.. 574
.. 575
.. 576
.. 577
.. 578
.. 580
.. 581
.. 584
.. 585
.. 587
.. 588
.. 589
.. 591
.. 592
.. 593
.. 594
.. 594
.. 595
.. 595
.. 596
.. 596
.. 597
.. 599
-
A.10-11
Title 16. Po
16.16.16.16.
17. Pro18. Ele
18.18.
19. Tax19.
19.19.
20. Ra20.20.
20.
1-015 ALJ/
e
st Test-Yea.1. SCEs.2. DRA.3. Aglet.4. Discuoductivity ectric Plant.1. Corpo.2. Gainsxes .............1. Incom
19.1.1.
19.1.2.19.1.3.19.1.4.
.2. Payro
.3. Propete Base ......1. Fixed .2. Adjus
20.2.1.20.2.2.
.3. Work20.3.1.20.3.2.
20.320.320.320.320.320.320.320.3
/MD2/lil/
ar Ratemas Position ..s Position s Position
ussion ........ ..................t .................orate Cents and Losse..................
me Taxes ...Effects oReauthorMeals anResearchEmploye
oll Tax .......erty taxes .................... Capital ....stments .....
CustomeCustome
king CapitaMaterialWorking
3.2.1. Ca3.2.2. Pr3.2.3. Ga3.2.4. Ot3.2.5. Lo3.2.6. De3.2.7. Le3.2.8. Le
/gd2/jt2
TABLE O(
king (PTY................... ..................
n ..........................................................................er Capital es on Sale ......................................f Tax Relierization, an
nd Entertaih and Deveee Stock Ow...............................................................................................er Advanceer Depositsal ................s and Supp
g Cash .......ash Balancepaymentas Optionsther Accouong-Term Ieductions tead/Lag Stead/Lag St
OF CONTEContd)
- xvi -
YR) ......................................................................................................................... Budget .... of Propert....................................ef, Unempnd Job Creinment (Melopment (wnership ..........................................................................................es ..............s ..................................plies (M&S..................es ..............s ...............
s .................unts ReceivIncentive Pto Claims tudy Revtudy Exp
ENTS
..................
..................
..................
..................
..................
..................
..................
..................ty ...................................................
ployment Ineation Act
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A.10-11
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A.10-11
Title
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 2 -
DECISION ON TEST YEAR 2012 GENERAL RATE CASE FOR SOUTHERN CALIFORNIA EDISON COMPANY
1. Summary
In this decision, we authorize Southern California Edison Company (SCE)
to recover from ratepayers an increase of $271.9 million 5.04% over present rates,
representing the reasonable costs of providing safe and reliable electrical service
to its customers in 2012.
The decision is the result of the Commissions detailed review of the future
operations and service requirements claimed by one of the largest utilities in the
country. The Commission holds safety, reliability, and just and reasonable rates
for customers as the basis of our review. SCE, like other electric utilities, is in a
period of transitionwith dual responsibilities to inspect, maintain and replace
vast existing infrastructure, and also to respond to national, state, and
Commission policies requiring additional renewable energy sources and new
technologies for tomorrows more efficient energy service. The technological
changes are expected to result in efficiencies, better service, and lower costs to
ratepayers over time.
On the other hand, southern California has severely felt the effects of the
recent economic recession, and most ratepayers have reduced resources to
support rate increases. In order to keep rates just and reasonable, our decision
imposes some belt tightening on SCE, including more efforts at cost
effectiveness, slower implementation of some activities, and disallowance of
non-essential costs and projects. The decision reduces SCEs Test Year 2012
company-wide request for Operations and Maintenance (O&M) expenses by
approximately $258 million and reduces SCEs 2010-2012 capital spending
request by approximately $756 million.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 3 -
SCE serves 4.9 million customers in a 50,000 square mile area of central,
coastal, and southern California. SCEs service territory includes hundreds of
cities and communities with a collective population of more than 13 million
people. To provide electrical service, SCE employs over 19,000 people, and
works with thousands of contractors to operate and maintain its infrastructure,
including 88,207 miles of overhead and underground distribution lines, as well
as its nuclear, hydroelectric, and gas- and diesel-fired plants.
This decision authorizes $5.671 billion base revenue requirement for Test
Year (TY) 2012 for SCE. We find that the authorized revenue requirement
provides SCE with sufficient funding to provide safe and reliable service at just
and reasonable rates. The adopted revenue requirement represents a 17.44%
increase over the 2009 authorized revenue requirement of $4.829 billion, a 18.57%
increase over SCEs 2009 recorded base revenue requirement of $4.783 billion,
and 5.04% increase over the projected revenue requirement at present rate levels
of $5.399 billion, and a 9.9% reduction from the updated 2012 revenue
requirement requested by SCE of $6.294 billion.1
The adopted methodology for calculating post-test year revenue
requirement results in a revenue requirement for 2013 of $6.078 billion and for
2014 of $6.426 billion. This decision also authorizes a 20.73% increase in SCEs
total company rate base between 2009 and 2012. In 2009, the authorized rate base 1 When SCE filed its request for a 2012 TY revenue requirement with the Commission on November 23, 2010, it requested a revenue requirement of $6.285 billion. In July 2011, SCE reduced parts of its request by approximately $71.4 million to reflect agreed-upon changes with Division of Ratepayer Advocates and intervenors, corrections to the Results of Operations model, and updated numbers. Exhibit SCE-25, Vol. 01 at 1. Later, in SCEs update testimony filed on October 24, 2011 SCE presented an updated revenue requirement of $6.294 billion.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
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was $14.77 billion. Today, we increase the authorized rate base to $17.814 billion.
However, when SCEs sale of the Four Corners Generating Station is completed,
all associated assets will be removed from rate base.
As a result of this decision, SCE total projected company revenue
requirement for 2012 is approximately $6.126 billion.
It is an enormous challenge for the Commission and the public to review
SCEs proposal within the time available, particularly when few issues were
resolved by settlement. Several parties asked the Commission to improve the
transparency of SCEs testimony and data responses. The decision includes
initiatives and orders to SCE to improve the consistency and clarity of crucial
information SCE will provide in future general rate cases.
Safe operations continue to be a top priority, and we recognize the
importance of SCE knowing the condition of its assets, particularly poles and
wires which can cause great damage if downed. In this decision, we authorize
enhanced equipment inspections and new technology to better track the
condition and service record of SCEs assets. We also order an independent
assessment of SCEs system utility poles to determine whether current loads
meet legal standards.
SCE has faced two significant challenges to operations in the preceding
12 months: the December 2011 windstorms and extended shut down of the two
nuclear power plants at San Onofre (SONGS). In this decision, we find it is in the
best interest of ratepayers for Test Year O&M and post-2011 capital expenditures
related to SONGS to be tracked in a memorandum account for separate review
and be subject to refund. Regarding SCEs much-criticized response to the
windstorm, in 2013, SCE is required to provide the Commission with a progress
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 5 -
report on various initiatives SCE stated it would take to improve its emergency
communications and responses to service communities and customers.
We remain committed to authorizing recovery only for those expenses
necessary to provide safe and reliable electric service. Going forward, SCE
proposes to invest billions of dollars in Information Technology (IT) solutions.
These capitalized costs are substantial, the assets are short-lived, project costs are
difficult to estimate and benefits can be tough to quantify. Therefore, to assist
the Commission with reviewing these expenses in SCEs next GRC, the decision
requires SCE to provide specific testimony in its next GRC about SCEs
capitalized software cost estimation methodology, approach to cost-effectiveness,
and whether reasonable metrics exist to measure benefits.
Another significant change in this rate cycle, is the full deployment of
Edison SmartConnect, or smart meters, scheduled for the end of 2012. The
decision integrates SmartConnect into regular operations in 2013 with separate
forecasts, and shifts funding into general rates from a dedicated balancing
account. We have also reduced rate recovery for the replaced electromechanical
meters.
In addition, SCE has reached three settlements on specified issues with
intervening parties: Disability Rights Advocates, Vote Solar Initiative, and
California Coalition of Utility Employees (CCUE). This decision finds that the
proposed settlements are a reasonable resolution of the specified issues in light of
the record that are consistent with the law and in the public interest.
Consequently, the decision approves these settlements. However, in relation to
the settlement with CCUE, we order SCE to obtain an independent audit of
SCEs Reliability Investment Incentive Mechanism.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 6 -
1.1. Procedural History On November 23, 2010, SCE filed its TY2012 GRC application. In support
of its application, SCE provided thousands of pages of testimony and supporting
work papers, and sponsored more than 88 witnesses. The prehearing conference
in this proceeding was held on January 31, 2011.
SCE proposed a procedural schedule based on the Commissions 1989 Rate
Case Plan, as modified by numerous subsequent decisions. The Division of
Ratepayer Advocates (DRA) and The Utility Reform Network (TURN) proposed
a more extended schedule similar to the schedules adopted by the Commission
for other large energy utility GRCs for the last ten years. Both parties were
concerned about use of their limited resources given the fact that San Diego
Gas & Electric Company and Southern California Gas Company also had just
filed applications for their consolidated GRCs. Other parties sought delayed
schedules for a number of different reasons.
On December 29, 2010, TURN filed a motion asking the Commission to
authorize a GRC Revenue Requirement Memorandum Account (RRMA) to track
the change in revenue requirement ultimately adopted in this proceeding during
the period between January 1, 2012 and the date a final decision is adopted.
The assigned Commissioner adopted a schedule with the goals of
providing sufficient time for DRA to competently produce Results of Operation
and for other parties to review SCEs extensive application and testimony. In the
Scoping Memorandum and Ruling, issued March 2, 2011, the Commissioner
found that the public interest was best served by adopting a realistic procedural
schedule and authorizing the RRMA in case the final decision was not adopted
prior to December 31, 2011.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
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Parties were encouraged to engage in alternative dispute resolution and
settlement discussions. Three parties reached a settlement with SCE on discrete
issues within the GRC. On August 22, 2011, SCE and DisabRA filed a joint
motion for approval of settlement agreement. On September 19, 2011, SCE and
VSI filed a joint motion for approval of settlement agreement. On October 20,
2011, SCE and CCUE also filed a joint motion for approval of a settlement.
SCEs application generated a significant amount of interest from
customers residing in SCEs service area. In response to this interest, the
Commission held PPHs between June 8, 2011 and June 23, 2011 in
San Bernardino, Garden Grove, Oxnard, Visalia, Long Beach, Palm Springs, and
San Clemente. Evidentiary hearings were held in Los Angeles on July 25 and
July 26, 2011 and continued in San Francisco on August 8 through 26, 2011.
Parties submitted concurrent opening and reply briefs on September 26, 2011 and
October 17, 2011, respectively.
Pursuant to the Rate Case Plan, SCE, Pacific Gas and Electric Company,
and DRA submitted Update Testimony on October 24, 2011 to reflect changes in
cost of labor, non-labor escalation factors, and governmental action. A hearing
was held regarding the Update Testimony on November 3, 2011. Some parties
submitted opening and reply briefs related to the Update Testimony on
November 15, 2011 and November 22, 2011, respectively.
Beginning on November 30, 2011, electric utility customers across
Southern California experienced power outages as heavy winds ripped through
the region. The severe wind conditions resulted in downed trees and power
lines, road debris, and other safety-related problems across SCEs service
territory. Some SCE customers were still without service one week later. The
Administrative Law Judge scheduled a January 26, 2012 PPH in Temple City, the
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 8 -
heart of the damaged area, to hear firsthand from the public about the sufficiency
of SCEs emergency response. Four Commissioners participated in the well-
attended hearing. At the request of the Commission, SCE submitted information
on February 8, 2012 about its damage claims outreach to low-income and
minority communities affected by the power outages.
Lists of all parties, their acronyms, and other acronyms used in the GRC
are attached as Appendices A and B to this decision.
1.2. Burden of Proof Pub. Util. Code 4512 provides, in part, that all charges demanded or
received by any public utility shall be just and reasonable.
Section 454 provides:
Except as provided in 455, no public utility shall change any rate or so alter any classification, contract, practice, or rule as to result in any new rate, except upon a showing before the commission and a finding by the commission that the new rate is justified.
Where a utility fails to demonstrate that its proposed revenue
requirements are just and reasonable, the Commission has the authority to
protect ratepayers by disallowing expenditures that the Commission finds
unreasonable. As the applicant, SCE has the burden of affirmatively establishing
the reasonableness of all aspects of its application, including that it is entitled to
the relief it is seeking in this proceeding. Other parties do not have the burden of
proving the unreasonableness of SCEs showing.
2 Unless otherwise indicated, all other references to Code or Section means the California Public Utilities Code.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 9 -
As a general matter, with respect to individual uncontested issues in this
proceeding, we find that SCE has made a prima facie just and reasonable
showing, unless otherwise stated in this opinion.3
1.3. Standard of Proof With the burden of proof placed on the applicant in rate cases, the
Commission has held that the standard of proof the applicant must meet is
that of a preponderance of evidence.4 Evidence Code 190 defines proof as
the establishment by evidence of a requisite degree of belief.5 We have
analyzed the record in this proceeding within these parameters.
2. Policy Matters We confirm that the Commissions mandate is specific and requires a
balancing of interests to authorize rate recovery only for those just and
reasonable costs necessary for safe and reliable service. This requires a hard look
at each proposed expense, including whether it is necessary during the coming
rate cycle and is appropriately calculated. Given the Commissions
forward-looking charge to move the utilities toward more diverse and renewable
sources of energy, and a substantial emphasis on operational and public safety,
we must look beyond mere maintenance of the status quo.
3 In this context, uncontested means there was never opposition to the issue. It does not include issues resolved by settlement or stipulation. 4 The Commission has, at times, incorrectly referred to this standard as clear and convincing evidence; see, In the Matter of the Application of California Water Company, Decision (D.) 03-09-021 at 17. 5 Application of Pacific Gas and Electric Company, D.00-02-046 at 38, quoting Application of PT&T Co. for A General Rate Increase (1970) 2CPUC2d 89, 98-99.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
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Under cost-of-service ratemaking principles, the utility is generally entitled
to its reasonable costs and expenses, as well as the opportunity, but no
guarantee, to earn a rate of return on the utilitys rate base. Generally, requests
for additional funds have to be justified or established as reasonable by
comparison to other alternatives. For example, it is not enough for the utility to
merely assert that equipment failures would occur or safety would be
compromised absent approval of a certain expense.
Ratepayers are entitled to the Commissions sharp eye and consideration
of other options before committing their hard-earned cash. Therefore, we have
neither accepted all requests nor adopted across-the-board percentage
reductions. Instead, the decision is the result of scrutinizing each request
according to the standards and policy articulated here.
2.1. Southern California Edison Companys (SCE) Capital Requests
SCEs capital spending requests are forecast to grow substantially
during the five year period (2010-2014) covered in SCEs testimony. In this
General Rate Case (GRC), we are primarily focused on California Public Utilities
Commission (CPUC or Commission) jurisdictional expenditures which increase
from 2010 recorded spending of $2.23 billion to almost $3 billion in 2012, and
much more in the following years.
The main drivers of SCEs application are the capital expenditures SCE
claims it must make to replace an aging infrastructure and to expand the system
to accommodate the increased loads and new power sources that have
developed since the system was built.6 SCE relies on various projections of its
6 SCE-01 at 1.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
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aging assets and equipment failures to support much of its capital request.
Another significant component is SCEs estimates of capital spending necessary
to quickly implement a variety of advanced technologies and programs related
to state and Commission policies associated with smart grid implementation,
including smart meters, demand side management, and dynamic pricing.
A portion of SCEs revenue request is for capital investments for which
SCE received authorized funding in the 2009 GRC, but did not actually fund.
Another reason for the size of SCEs revenue request is that it spent more than
authorized in the 2009 GRC, which SCE claims caused deferred maintenance and
undermined its ability to earn the authorized return for its shareholders. SCE
contends that ratepayers are not disadvantaged as long as the utility is investing
capital at authorized levels, and does not over-earn.
Contrary to SCEs claim it was underfunded in the 2009 GRC and had to
spend more than authorized, The Utility Reform Network (TURN) points out
that if one excludes one-time costs, amounts the Commission expressly excluded
from rates, and amounts subject to balancing account treatment, SCEs spending
was below authorized levels. According to TURN, instead of resulting in a low
return for shareholders, the actual 2009 rate of return was 9.55%, 80 basis points
higher than authorized.
TURN, Division of Ratepayer Advocates (DRA), Aglet Consumer Alliance
(Aglet), and Joint Parties7 reject the proposition that all $2.259 billion in capital
additions are essential and protest that SCE often failed to adequately justify, or
7 Joint Parties is comprised of three organizations which participated jointly: Black Economic Council, National Asian American Coalition, and Hispanic Business Chamber of Greater Los Angeles.
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A.10-11-015 ALJ/MD2/lil/gd2/jt2
- 12 -
quantify the benefits of, a project. TURN also criticizes SCE for failing to
prioritize any of its spending requests, essentially taking the position that all are
equally necessary.
SCE and Coalition of California Utility Employees (CCUE) vigorously
attack nearly all proposals to cut SCEs capital spending as leading to many
negative consequences, including layoffs and compromised reliability. In
addition, SCE contends that basic principles of cost-of-service ratemaking
provide SCE with flexibility to shift funding from categories that formed the
basis of a prior GRC forecast to other, more pressing needs if intervening facts
require it.
However, the Commission has found that this management flexibility is
not absolute. For example, in the 2009 GRC, we rejected SCEs additional
funding for deferred activities purportedly made to accommodate unanticipated
customer and load growth, because the growth was not unique circumstances.8
In