2015 General Rate Case
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1 Application No.: Exhibit No.: Witnesses: SCE-11 R. Lisbin (U 338-E) 2015 General Rate Case Compliance Before the Public Utilities Commission of the State of California Rosemead, California November 2013
2 SCE-11: Compliance Table Of Contents Section Page Witness I. SUMMARY...1 R. Lisbin II. SUMMARY OF COMPLIANCE ACTION ITEMS...2 Appendix A Witness Qualifications... -i-
3 SCE-11: Compliance List Of Tables Table Page Table II-1 Southern California Edison Company 2015 General Rate Case Reporting and Compliance Items...2 -ii-
4 I. SUMMARY The California Public Utilities Commission s (CPUC or Commission) Standard Requirement List Of Documentation Supporting An NOI requires that applicants submit all studies and information required to be submitted in the rate case by the Commission in prior rate case decisions and subsequent policy statement or decisions. The purpose of this exhibit is to demonstrate that Southern California Edison Company (SCE or Company) has submitted all required studies and information in this application. SCE complies with all relevant orders of the Commission. We identified Commission compliance action items by reviewing the Ordering Paragraphs, Conclusions of Law, Findings of Fact, and discussions contained in Commission decisions, resolutions, and Administrative Law Judge (ALJ Rulings). We reviewed Commission directives pertaining to the previous three SCE general rate cases. In addition, we reviewed Commission directives pertaining to other SCE proceedings and other electric utility or generic proceedings since SCE s last GRC. Of all the potential SCE compliance action items identified, only those that impact this general rate case are addressed in this exhibit. One-time compliance items that were completed in the 2012 GRC are not included in this 2015 Compliance exhibit. The attached list identifies the compliance action items by proceeding in which the compliance item arose. For each compliance action item, we have provided the following information: The CPUC decision which resulted in the compliance action item. For example, SCE s 2012 GRC refers to SCE s Test Year 2012 general rate case decision. Action Required. This usually consists of a verbatim quote of the applicable language from the decision. In general, if the decision cite includes an Ordering Paragraph, the Action Required will only quote such Ordering Paragraph. In some instances, other decision language will be quoted if we believe it is helpful in clarifying the Action Required. Decision Reference. This indicates where in the CPUC decision the identified compliance action may be found. The Decision Reference may refer to any combination of Ordering Paragraph, Conclusion of Law, Finding of Fact, or Discussion pages. Compliance Action/Status. Here, we provide a brief summary of the status of any compliance action items and give a reference (to SCE's exhibits or workpapers in this proceeding) where compliance with a particular item is addressed. 1
5 II. SUMMARY OF COMPLIANCE ACTION ITEMS The following Table II-1 summarizes all compliance action items that impact this Test Year 2015 General Rate Case. Item No. Table II-1 Southern California Edison Company 2015 General Rate Case Reporting and Compliance Items Action Required Decision Reference Compliance Action/Status SCE s 2012 GRC 1 Because the Commission and the public should be able to track the progress of previously authorized large capital projects from one general rate case to the next, for Generation and Transmission and Distribution Business Unit capital expenditures in excess of $1 million, Southern California Edison Company shall submit with its direct testimony in its next general rate case, tables which provide historical and forecast California Public Utilities Commission jurisdictional amounts by sub-categories, as follows: 1) The table for each business unit shall provide five years ( ) of recorded costs, 2012 authorized capital spending, and Southern California Edison Company s 2013, 2014, and 2015 capital requests by organization within these business units 2) For the Generation table, the data shall be presented by generation source categories; for the Transmission and Distribution table, the data should be presented by organization (e.g., Infrastructure Replacement, Capital Maintenance, etc.). Ordering Paragraph 7 Nuclear Generation SCE-02, Vols 2 & 3 Non-Nuclear Generation SCE-02, Vol 5, Vol 6 (Part 2), Vol 7 (Part 2) & Vols 8-10 T&D SCE-03, Vol 1 2
6 2 In its GRCs, SCE should establish that proposed capital projects are necessary and that SCE has prudently examined alternatives for cost-effectiveness before seeking Commission approval. Conclusion of Law 4 Nuclear Generation SCE-02, Vol 2 Non-Nuclear Generation SCE-02, Vol 6 (Part 2), Vol 7 (Part 2) & Vols 8-10 T&D SCE-03 Customer Service SCE-04, Vols 2 & 3 SCE-05, Vol 2 IT SCE-05, Vol 1, Vol 2 (Part 1) & Vol 2 (Part 2) 3 In its next GRC application, SCE should provide the Commission a clear explanation of the workload analysis used to develop estimated labor increases, and an explanation of why new employees must be hired during the test year. Ordering Paragraph 8 and Conclusion of Law 5 SCE s testimony provides a reasonably clear explanation of the workload analysis used to develop estimated labor increases, and explains why new employees need to be hired during the test year. 4 With SCE s next general rate case application, SCE shall provide a summary of San Onofre Nuclear Generating Station- Safety Culture programs, achievements, and three years of recorded expenses. Ordering Paragraph 9 SCE-02, Vol 1 5 In its next general rate case application, Southern California Edison Company shall provide the Commission with a summary of actions taken and total expenses incurred to address regulatory concerns of the Nuclear Regulatory Commission beginning in 2009, any shareholder costs, and identify whether any of the expenses are recurring its next general rate case application. Ordering Paragraph 12 SCE-02, Vol 1 3
7 6 In its next general rate case application, SCE shall provide the Commission with an estimate of unused distribution capacity for the test year, including other Commission Findings of Fact (e.g. from the Resource Adequacy and Long-Term Procurement Proceedings), and address it in connection with SCE s forecast Load Growth during the rate cycle at issue. Ordering Paragraph 16 SCE-03, Vol 3 7 If the Four Corners sale does not occur, SCE should limit post-2011 funding to O&M and capital expenditures identified in the Decommissioning Case and include in the 2015 GRC a showing that each post-2011 expenditure is reasonable, necessary, and in service of Decommissioning. The showing of necessity shall include an analysis of expected failure and available less costly alternatives. Conclusions of Law 30 and Section , page 55 SCE-02, Vol 6, Part 2 appendices 8 In future GRCs, SCE must clearly explain why new employees must be hired during a test year and the relationship of the timing of new hires to SCE's provision of safe and reliable delivery of service. Conclusions of Law 33 and Section 4.3.3, page 58 SCE s testimony explains why new employees need to be hired during the test year and the relationship of the timing to safe and reliable delivery of service. 9 It is reasonable for SCE to provide a cost/ benefits analysis of the Smart Grid Cyber Security Solution in its next GRC, including the optimal timing for deployment in an evolving technological environment. Conclusions of Law 82 SCE-03, Vol 2 10 It is reasonable to require SCE to provide a least cost analysis in the next GRC to support new construction versus leasing the laboratory space. Conclusions of Law 84 SCE-03, Vol 2 11 SCE should carefully document the data collection from the Cable-in-Conduit (CIC) pilot program, as well as other efforts it undertakes to develop a best practice and most cost-effective method for replacements. This information shall be submitted in support of future GRC requests in this category to assist the Commission and to illustrate that ratepayers achieved value from SCE's "lessons learned." Conclusions of Law 106 and Section 5.5.2, page 153 SCE-03, Vol 4 4
8 12 SCE should document the B-Bank transformer replacements performed in this rate cycle and submit the names, locations, and ages of the replaced transformers in support of future GRC requests in this category. Conclusions of Law 110 SCE-03, Vol 4 13 We expect SCE to replace 175 distribution circuit breakers within the authorized funding in 2012 and report on this activity in the next GRC. Section 5.5.4, page 156 SCE-03, Vol 4 14 Because the Commission will evaluate the value of an accelerated inspection program, with its next general rate case application, Southern California Edison Company shall provide information summarizing how many priority 1, 2, and 3 conditions were identified by the actual number of intrusive wood pole inspections performed in 2012 and In the next GRC, SCE should include with any request for additional funding of Asset Based Preventative Maintenance, a description of how many replacements were performed annually after 2010, the number of new replacements identified, and the number, priority, and estimated cost of backlog replacement projects, if any. Ordering Paragraph 19 Conclusions of Law 148 SCE-03, Vol 6, Part 1 SCE-03, Vol 6, Part 1 16 In the next GRC, SCE shall include with any request for funding of the Underground Structure Replacement program, a description of how many replacements were performed annually after 2010, the number of new replacements identified, and the number, priority, and estimated backlog of replacement projects, if any. Conclusions of Law 151 SCE-03, Vol 6, Part 1 17 Because the reliability consequences of inservice failure of transmission poles is substantial, Southern California Edison Company shall provide with its next general rate case application, a summary of the transmission pole inspection results by category (i.e., 1, 2, or 3) of identified repair. Ordering Paragraph 20 SCE-03, Vol 6, Part 1 5
9 18 In order to provide the Commission with data to evaluate the reasonableness of the Transmission program, SCE should provide a cost-benefit analysis in the next GRC related to the Transmission program expenses and the consequential benefits to ratepayers. Conclusions of Law 216 and Section , page 260 SCE-03, Vol 8 19 With its next general rate case application, Southern California Edison Company shall identify the portion of 2012 recorded costs related to terminated, superseded, and completed activities, and a review of steps considered or taken to minimize training costs, including low or no cost vendor support of new technologies. Ordering Paragraph 21 SCE-03, Vol 9 and related workpapers titled Cost Savings and Superseded Programs Worksheet 20 In the next GRC, SCE should provide a breakdown by subaccount of how much OOR was recorded in other subaccounts with the offsetting expense, and how much had not been offset by the end of the calendar year in which it was recorded. 21 If SCE chooses to use this forecast method in the GRC, SCE shall provide an analysis of the historical ratios of transmission and distribution work-order write-offs to test year authorized and recorded transmission or distribution capital expenditures, respectively, and establish that the ratio is actually reliable as a forecast tool. Conclusions of Law 251 Section 5.17, page 291 SCE-03, Vol 10 SCE-03, Vol Because the Commission needs to evaluate the SmartConnect program after full deployment, Southern California Edison Company is directed to provide [in its next GRC] a spreadsheet of SmartConnect costs and benefits credited by Federal Energy Regulatory Commission account/subaccount and capital program. This is not a duplicate reasonableness review. Moreover, SCE shall provide documentary support for its calculation of ratepayer benefits forecast for the next rate cycle. Ordering Paragraph 23, Conclusion of Law 257 and Section 6.2.1, page 309 SCE-04, Vol 1 and Supplemental Workpapers 23 In order to provide the Commission with a complete review of expenses related to Dynamic Pricing (DP) activities, Southern California Edison Company shall track DP expenses recovered through the general rate case (GRC) and include the Ordering Paragraph 25 SCE-04, Vol 3 6
10 results with its next GRC application. 24 SCE should work with CBOs whenever reasonably possible when implementing customer outreach and marketing to lowincome, minority, senior, and small business communities. In the next GRC, SCE shall provide in its testimony a description of its efforts to include and work with CBOs in all aspects of customer education and outreach. Conclusions of Law 290 and Section , page 352 SCE-04, Vol 2 25 SCE should provide a cost-benefit information in the next GRC if it seeks to recover Phase 2 CRM costs. Conclusions of Law 318 SCE-05, Vol 2 26 If SCE seeks cost recovery for Revenue Protection Investigation System (RPIS) in the next GRC, it should include in its testimony a discussion of whether any such cost savings or functional economies were available. Page 420 Section SCE is not seeking cost recovery for the RPIS in this GRC. 27 Because it is in ratepayers interest to undertake a more detailed review of SCE s capitalized software requests in the next GRC, particularly related to SCE s cost estimation methodology, approach to costeffectiveness, and whether reasonable metrics exist to measure benefits. SCE is directed to provide the following as part of its testimony in support of forecast capitalized software projects in its next GRC: 1) A table listing capitalized software projects funded during , as identified in this GRC across all business units. The table shall include, for each project, SCE s final 2012 GRC forecast, as well as authorized and recorded expenditures; 2) Information about whether SCE employs best industry practices in making its capitalized software project cost estimates, particularly as to inhouse labor, project management and contingency; 3) Information about how SCE is effectively optimizing experience and assets to minimize costs of software development and implementation; 4) Information about how SCE is cost effectively planning its system design, including maximizing use of custom over-the-counter software and life Ordering Paragraph 27 and Conclusions of Law 377 and 378 SCE-05, Vol 1 7
11 extension activities, to meet growing demand for technology solutions; and 5) Information about whether reasonable metrics are available to measure productivity results from IT solutions. 28 Southern California Edison Company (SCE) shall continue reporting on workforce composition in its general rate case, modified to include a 10-year comparison by job classification and an explanation of steps SCE has taken to ensure top management leadership development for underrepresented groups. Ordering Paragraph 28 SCE-06, Vol 1 29 Southern California Edison Company (SCE) shall provide in its next general rate case, a five-year ( ) summary of the type of complaints made to the Equal Employment Office and a description of anti-discrimination and sexual harassment prevention training provided to SCE employees during that period, including any substantial revisions to scheduling and content. Ordering Paragraph 29 SCE-07, Vol 2 five-year summary of the types of complaints made to the Equal Employment Office. SCE-06, Vol 1 description of antidiscrimination and sexual harassment prevention training. 30 Within six months of the effective date this decision, Division of Ratepayer Advocates and Southern California Edison (SCE) are directed to jointly hold a workshop open to all parties in this proceeding to discuss whether design modifications should be made to the next Total Compensation Study or an alternative method of data gathering should be utilized for the next SCE rate case. Ordering Paragraph 30 SCE-06, Vol 2, Part 1 SCE submitted the Report on the Total Compensation Study Workshop in Advice 2854-E.. 31 If SCE and DRA undertake an RFP for a compensation study in a future GRC, SCE shall ensure that applicants are required to disclose if they receive more than 10% of their annual revenues from other SCE contracts. Conclusions of Law 382 SCE-06, Vol 2, Part 1 32 SCE shall include in its testimony in the next GRC, a description of the programs developed and implemented by these employees to address the NRC's concerns about safety culture at SONGS. Conclusions of Law 387 SCE-06, Vol 1 8
12 33 Because there have been many changes to public and private pension design since Southern California Edison Company (SCE) last reviewed its pension policies in 1999, as part of its testimony in the next general rate case, SCE shall provide a review of its pension policies, in light of best practices and economic conditions, to support its rate recovery request for pension plan funding. Ordering Paragraph 33 SCE-06, Vol 2, Part 1 34 SCE should take this opportunity to more effectively integrate its Ethics and Compliance activities company-wide. In the next GRC, SCE shall provide a description of program improvements achieved by Ethics and Compliance department since 2010 and a clear description of the scope of its jurisdiction. Conclusions of Law 444 & 445 SCE-07, Vol 2 35 In the next GRC, SCE shall provide a costbenefit analysis of the Energy Efficiency Blanket projects it has implemented since 2009, and allocate quantified cost savings after 2011 as an offset to revenue requirement through the BRRBA. Section ,page 584 SCE-08, Vol 3, Part 2 36 SCE began collecting aged data for use in its life analysis in June SCE has acknowledged the reliability limits of its life analysis based on simulated life data. We agree that aged data is likely to be more reliable. In the next GRC, SCE should inform the Commission whether it used any aged data, and if not, when sufficient data is expected to be available. 37 In its next GRC, SCE should include a better description of changes to underlying causes of retirement, life characteristics, or mix of investments considered when forecasting average service life (ASL) or net salvage rates (NSR) in an account. Section 22.6, pages Section 22.6, page 685 SCE-10, Vol 2 SCE-10, Vol 3 38 SCE shall provide testimony in its next GRC to provide more information about cost of removal (COR) in asset accounts where SCE's proposed NSR is at least 25% more than comparable industry averages. Section 22.6, page 686 SCE-10, Vol 2 9
13 39 Going forward, SCE shall consult with DRA, CCUE, TURN and other interested parties about the feasibility of developing a RIIM-like program for the next GRC which includes both key reliability and safety expenditures. Section , page 700 SCE-03, Vol 1 ; consultations are ongoing 40 The Vote Solar Initiative s Settlement with Southern California Edison Company submitted for approval on September 2, 2011 is adopted without modification. Settlement Terms: II.B.8. In its next general rate case application, expected to be filed in 2013, SCE will explain any difference between its Dependable Generation calculation for DG and the Commission s adopted counting rules for the resource adequacy capacity of wholesale generation using the same technologies as the DG units. II.B.10. SCE will report the results of the pilot RFP in SCE s next general rate case application. Ordering Paragraph 42 and SCE and VSI Settlement submitted on September 2, 2011 SCE-03, Vol 3 D Adoption of Practices to Reduce the Number of Gas and Electric Service Disconnections 41 Decision directs the utilities to review in their next GRC the reasonableness of costs tracked in the memorandum accounts established for implementing new service disconnection practices. D Smart Grid OIR Privacy 42 SCE is required to conduct an independent audit of its data privacy and security practices as required by Rule 9(d) of the Rules Regarding Privacy and Security Protection for Energy Usage Data in Attachment D of D SCE must report the audit findings as part of each general rate case application filed after D SCE s 2006 GRC D Pages D Ordering Paragraph 4 SCE-04, Vol 2 SCE has hired KPMG to conduct the required audit. SCE expects to submit the results of the audit with its Application. 10
14 43 For future requests for ratepayer funding of NEI [Nuclear Energy Institute] dues, SCE should provide detailed descriptions of the activities, the associated costs, and the resulting company and ratepayer benefits associated with participation in that organization. D Conclusions of Law 2 SCE-02, Vol 1 11
15 Appendix A Witness Qualifications
16 SOUTHERN CALIFORNIA EDISON COMPANY QUALIFICATIONS AND PREPARED TESTIMONY OF RANDY B. LISBIN Q. Please state your name and business address for the record. A. My name is Randy B. Lisbin, and my business address is 2244 Walnut Grove Avenue, Rosemead, California Q. Briefly describe your present responsibilities at the Southern California Edison Company. A. I am the Manager of Energy Regulation Compliance in the Regulatory Operations organization. My responsibilities include management of SCE s Energy Regulation Compliance Program; SCE s response to CPUC and FERC regulatory audits; and compliance oversight related to the CPUC and FERC affiliate transaction rules. Q. Briefly describe your educational and professional background. A. I received a Bachelor of Arts degree in Economics from Occidental College in I received a Master's Degree in Business Administration at the Peter F. Drucker Graduate Management Center at the Claremont Graduate University in From 1981 through 1993, I held various analytical and managerial positions within SCE s regulatory organizations with responsibility for regulatory case management, development of regulatory incentive mechanisms, tariff development and implementation, revenue requirement calculations, and regulatory economic analysis. From 1994 through 1995, I was the Regulatory Affairs Manager for SCE s ENVEST Pilot Program. I returned to Regulatory Compliance in 1996 and have held various management positions within the Regulatory Compliance organization. Q. What is the purpose of your testimony in this proceeding? A. The purpose of my testimony in this proceeding is to sponsor Exhibit SCE-11, entitled Compliance. Q. Was this material prepared by you or under your supervision? A. Yes, it was. Q. Insofar as this material is factual in nature, do you believe it to be correct? A. Yes, I do. A-1
17 Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best judgment? A. Yes, it does. Q. Does this conclude your qualifications and prepared testimony? A. Yes, it does. A-2
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