2021 general rate case rebuttal testimonyfile/sce13v1p2.pdf1 2. capital expenditure summary 2 table...

Application No.: A.19-08-013 Exhibit No.: SCE-13 Vol. 01, Part 2 Witnesses: T. Ohanian

(U 338-E)

2021 General Rate Case Rebuttal Testimony

Distribution Inspections & Maintenance and

Capital-Related Expense

Before the

Public Utilities Commission of the State of California

Rosemead, California June 12, 2020

SCE-13, Vol. 01, Part 2: Distribution Inspections & Maintenance and Capital-Related Expense

Table Of Contents

Section Page Witness

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I. INTRODUCTION .............................................................................................1 T. Ohanian

A. Summary Of Rebuttal Position ..............................................................1

1. O&M Forecast Summary ...........................................................3

2. Capital Expenditure Summary ...................................................4

II. BUSINESS PLANNING ELEMENT/GRC ACTIVITY ..................................6

A. O&M Expenses ......................................................................................6

1. Distribution Overhead Detailed Inspections ..............................6

a) SCE’s Application .........................................................6

b) Cal Advocates’ Position .................................................7

c) SCE’s Rebuttal To Cal Advocates’ Position .................7

(1) SCE’s Distribution ODI Program and SCE’s EOI Program Are Fundamentally Different ....................................7

(2) There Is No Embedded Funding In ODI For EOI ......................................................9

(3) Summary ............................................................9

2. Distribution Preventive And Breakdown O&M Maintenance .............................................................................10

a) SCE’s Application .......................................................10

b) Cal Advocates’ Position ...............................................11

c) SCE’s Rebuttal To Cal Advocates’ Position ...............11

(1) SCE Has Sufficiently Demonstrated That 2018 Was An Anomalous Year That Should Not Be Used To Set The 2021 Test Year Forecast For This Activity ....................................................12


Table Of Contents (Continued)


-ii-

(2) 2019 Recorded Costs Show That 2018 Was An Anomalous Year .......................13

(3) Cal Advocates Acknowledges 2018 Is An Anomalous Year In Its Capital Forecast Proposal For This Activity ................14

(4) Cal Advocates Inappropriately Ignores The Incremental Funding Request Included In the Forecast For Priority 3 Maintenance Items ...........................15

(5) Similar To The Distinction Between ODI And EOI, Distribution Preventive And Breakdown Maintenance And EOI Remediations Should Not Be Treated As the Same Work ................................................................17

3. Conclusion ...............................................................................17

B. Capital Expenditures ............................................................................18

1. Distribution Claim ...................................................................19



c) SCE’s Rebuttal Position To Cal Advocates’ Position ........................................................................19

2. Distribution Preventive And Breakdown Capital Maintenance .............................................................................20




3. Distribution Transformers ........................................................22





-iii-



4. Prefabrication ...........................................................................24




C. Safety and Reliability Investment Incentive Mechanism (SRIIM) ................................................................................................25

1. SCE’s Application ...................................................................25

2. Cal Advocates ..........................................................................26

a) Cal Advocates’ Position ...............................................26

b) SCE’s Rebuttal To Cal Advocates’ Position ...............26

(1) Cal Advocates Offers No Basis That SCE’s Proposed Modification To The Headcount Measurement Method Is “Unjust and Burdensome” To Ratepayers ..................................................26

(2) Cal Advocates Does Not Oppose SCE’s Proposed Change To The Capital Investment Mechanism........................28

3. CUE..........................................................................................28

a) CUE’s Position ............................................................28

b) SCE’s Rebuttal To CUE’s Position .............................28

(1) The Headcount Target Proposed by CUE Is Not Realistic Nor Achievable During This GRC Period ..............28




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(2) The Commission Must Continue Its Adopted Practice Of Adjusting The SRIIM Headcount Target Based On Authorized Capital Spending ...........................30

(3) SCE’s Proposed Modification To SRIIM Headcount Measurement Method Is Reasonable. .....................................32

(4) As No Party Directly Opposes SCE’s SRIIM Flexibility Provision For Wildfire Spending, The Commission Should Adopt This Reasonable Modification To The Capital Spending Mechanism .......................................32

4. Conclusion ...............................................................................33

Appendix A Distribution Inspections & Maintenance and Capital-Related Expenses Data Request Responses and Other Documents

1

I. 1

INTRODUCTION 2

In this volume, Southern California Edison (SCE) provides rebuttal testimony in support for its 3

forecasts for Test Year 2021 operations and maintenance (O&M) expenses and 2019-2021 capital 4

expenditures for the Inspection & Maintenance Business Planning Element (BPE) managed and 5

performed primarily by the Distribution organization. The rebuttal testimony also provides support the 6

forecasts for SCE’s Safety and Reliability Investment Incentive Mechanism (SRIIM). If approved, 7

SCE’s funding request will allow SCE to continue its inspections and maintenance activities performed 8

on SCE’s distribution lines and other distribution-system equipment located outside of substations. 9

Maintenance work includes both expense repairs and capital replacements performed on the distribution 10

grid. It also includes both planned and unplanned work, with most of the planned work performed to 11

satisfy maintenance and inspection requirements placed upon SCE by the California Public Utilities 12

Commission (CPUC) and various city and county agencies. In addition to inspection and maintenance 13

activities, the funding request will also support the following distribution construction and maintenance 14

activities: patrolling and locating trouble on the distribution system; inspecting, maintaining, and 15

replacing streetlight fixtures and lights; converting existing streetlights to LED technology; and 16

repairing third party damages to the distribution grid. 17

This rebuttal testimony addresses the various recommendations raised by Cal Advocates 18

regarding SCE’s forecasts for Test Year 2021 O&M expenses and 2019-2021 capital expenditures 19

forecast for Distribution Inspection & Maintenance. In addition, the rebuttal testimony responds to 20

various recommendations raised by the Coalition of California Utility Employees (CUE) and Cal 21

Advocates regarding the SRIIM forecast. 22

A. Summary Of Rebuttal Position 23

A summary of the forecasts for the Test Year 2021 O&M expenses and 2019-2021 capital 24

expenditures proposed by SCE and Cal Advocates are provided in Table I-1and Table I-2. Both tables 25

identify the variances between SCE’s forecast and Cal Advocates’ recommendations and provide SCE’s 26

rebuttal position. No other intervenors provided any comments on any of the O&M and capital 27

activities. The Commission should reject Cal Advocates’ recommendations and approve SCE’s forecasts 28

for O&M expenses and capital expenditures. Regarding the SRIIM, SCE recommends that the 29

Commission adopt SCE’s proposal regarding both the headcount target and headcount measurement 30

2

mechanism, and reject Cal Advocates and CUE’s recommendations. Similarly, SCE recommends the 1

Commission adopt SCE’s proposal regarding the headcount adjustment mechanism based on the 2

authorized level of T&D capital expenditures and capital spending provision related to the use of 3

wildfire mitigation capital overspending in place of SRIIM capital program underspending. 4

Table I-1 Distribution Inspection & Maintenance and Capital-Related Expense

2021 O&M Forecast Summary of SCE and Cal Advocates’ Position

(2018 Constant $000)1

1 The $2.239 million increase for Distribution Preventive & Breakdown O&M Maintenance was filed as part of

November 22, 2019 errata. An increase of $0.973 million for the same activity is submitted as part of SCE-02, Vol. 1E2, Part. 2. For Distribution Support Activity, a reduction of $46,319 is submitted as part of SCE-02, Vol. 1E2, Part. 2.

SCE Application

SCE Adjustment

SCE Revised Forecast

Cal Advocates Variance

1 Distribution Overhead Detail Inspections

4,945 - 4,945 6,551 1,606 4,945

2 Distribution Preventive and Breakdown O&M Maintenance

104,426 2,239 106,665 98,724 (7,941) 107,639

3 Distribution Underground Detail Inspections

6,158 - 6,158 6,158 - 6,158

4 Distribution Apparatus Inspection and Maintenance

5,697 - 5,697 5,697 - 5,697

5 Patrolling and Locating Trouble 22,029 - 22,029 22,029 - 22,029 6 Streetlight Operations,

Inspections, and Maintenance6,575 - 6,575 6,575 - 6,575

7 Distribution Support Activities 11,453 - 11,453 11,453 (46) 11,407 8 Total 161,283 2,239 163,522 157,187 (6,381) 164,450

SCE Rebuttal Position

Line No.

GRC Activity

2021 Forecast

3

Table I-2 Distribution Inspection & Maintenance, Infrastructure and Other

Capital Expenditures 2019-2021 Forecast Summary of SCE and Cal Advocates’ Position2

(Nominal $000)

1. O&M Forecast Summary 1

Table I-3 provides the recorded amounts for 2014-2018 and the forecast for Test Year 2

2021 O&M expenses proposed by SCE and Cal Advocates, respectively. Cal Advocates proposes 3

changes to SCE’s forecast for several GRC activities. SCE addresses Cal Advocates’ recommendations 4

in the corresponding sections below regarding these activities. 5

2 The $0.593 million decrease to Distribution Preventive and Breakdown Capital Maintenance resulted from

errata filed on November 22, 2019. For this activity, there is an additional $0.575 million decrease as reflected in SCE-02, Vol. 1E2, Part. 2.

SCE Application

SCE Adjustment

SCE Revised Forecast

Cal Advocates

1 Distribution Claim 120,933 - 120,933 127,510 6,577 127,503 2 Distribution

Preventive and Breakdown Capital Maintenance

844,976 (593) 844,383 927,967 83,584 927,364

3 Streetlight Maintenance and LED Conversions

151,945 - 151,945 151,856 (89) 151,856

4 Distribution Tools and Work Equipment

10,132 - 10,132 9,753 (379) 9,753

5 Distribution Transformers

299,224 - 299,224 310,148 10,924 305,919

6 Prefabrication 60,187 - 60,187 53,859 (6,328) 59,508 7 Total 1,487,397 (593) 1,486,804 1,581,093 94,289 1,581,903


Variance from SCE

2019 - 2021 ForecastLine No. GRC Activity

4

Table I-3 Distribution Inspection & Maintenance and Capital-Related Expenses

2014-2018 Recorded/2021 Forecast Summary of SCE and Cal Advocates’ Position

(2018 Constant $000)

2. Capital Expenditure Summary 1

Table I-4 provides the recorded amounts for 2014-2019 and the 2020-2021 capital 2

expenditure forecasts proposed by SCE and Cal Advocates, respectively. As discussed in SCE-12 3

Volume 1, SCE proposes the Commission authorize SCE’s revised capital forecast for 2019, which 4

incorporates 2019 recorded expenditures. As such, the tables displaying SCE’s rebuttal position include 5

2019 recorded costs and not SCE’s original forecast amounts. Cal Advocates proposes changes to SCE’s 6

forecasts for several GRC activities. SCE addresses Cal Advocates’ recommendations in the 7

corresponding sections below regarding these activities. 8

2014 2015 2016 2017 2018 SCECal

Advocates Variance1 Distribution Overhead

Detail Inspections7,442 7,957 7,269 7,213 8,027 4,945 6,551 1,606 4,945

2 Distribution Preventive and Breakdown O&M Maintenance

118,770 104,127 99,608 92,898 78,215 106,665 98,724 (7,941) 107,639

3 Distribution Underground Detail Inspections

5,115 5,584 5,871 5,876 5,697 6,158 6,158 - 6,158

4 Distribution Apparatus Inspection and Maintenance

5,431 4,955 6,089 7,014 6,762 5,697 5,697 - 5,697

5 Patrolling and Locating Trouble

19,270 20,543 20,019 21,511 22,029 22,029 22,029 - 22,029

6 Streetlight Operations, Inspections, and Maintenance

8,744 7,382 6,286 7,161 6,575 6,575 6,575 - 6,575

7 Distribution Support Activities

21,831 12,958 14,546 18,176 18,177 11,453 11,453 - 11,407

8 Total 186,603 163,506 159,688 159,849 145,482 163,522 157,187 (6,335) 164,450

SCE Rebuttal PositionL

ine

#

GRC ActivitiesSCE Recorded 2021 Forecast

5

Table I-4 Distribution Inspection & Maintenance Capital Expenditures

2014-2019 Recorded/2020-2021 Forecast Summary of SCE’s Position

2014 2015 2016 2017 20182019

Recorded2020

Forecast2021

ForecastTotal

2019-20211 Distribution Claim 28,290 30,823 37,318 40,853 37,299 41,848 42,157 43,498 127,503 2 Distribution

Preventive and Breakdown Capital Maintenance

218,710 256,177 277,712 280,098 255,748 363,794 277,373 286,197 927,364

3 Streetlight Maintenance and LED Conversions

81,760 48,518 28,245 34,118 54,833 52,895 48,619 50,342 151,856

4 Distribution Tools and Work Equipment

5,484 3,789 3,970 3,497 3,256 2,947 3,376 3,430 9,753


83,562 92,355 91,360 103,298 86,811 102,432 98,244 105,243 305,919

6 Prefabrication 12,895 13,692 13,659 15,183 16,789 18,267 18,843 22,398 59,508 7 Total 430,701 445,353 452,264 477,047 454,735 582,183 488,612 511,108 1,581,903


Lin

e #

GRC Activity

SCE Recorded

6

II. 1

BUSINESS PLANNING ELEMENT/GRC ACTIVITY 2

A. O&M Expenses 3

For Exhibit SCE-02, Vol. 1 Pt. 2, unopposed activities include Distribution Underground 4

Detailed Inspections $6.158 million, Distribution Apparatus Inspections and Maintenance $5.697 5

million, Patrolling and Locating Trouble $22.029 million, Streetlight Operations, Inspections, and 6

Maintenance $6.575 million, and Distribution Support Activities $11.453 million.3 7

1. Distribution Overhead Detailed Inspections 8

a) SCE’s Application 9

SCE requests funding of $4.945 million during the Test Year for Distribution 10

Overhead Detailed Inspections (ODI) as shown in Table II-5. ODI comprises inspections of the 11

overhead distribution system as required by General Order (GO) 95, including annual grid patrols and 12

overhead detailed inspections, and Wireless Technology Rate, which is an inspection of third-party 13

attachments (e.g., cable television/internet and telecommunications). SCE developed the forecast based 14

on Base Year 2018 recorded costs, excluding costs incurred by Enhanced Overhead Inspections (EOI) in 15

SCE’s High Fire Risk Area (HFRA) as described in Exhibit SCE-04, Vol. 5. SCE also proposes an 16

alternative forecast of $6.551 million, which is equivalent to SCE’s Base Year recorded expenses less 17

infrared inspection recorded costs, should the Commission not approve SCE’s full funding request for 18

EOI activities. 19

3 Due to the rebuttal errata filing, SCE will revise the funding of Distribution Support Activities from $11.453

million to $11.407 million. Refer to SCE-02, Vol. 1E2, Part. 2.

7

Table II-5 Distribution Overhead Detailed Inspections

2014-2018 Recorded/2021 Forecast Summary of SCE and Cal Advocates’ Position


b) Cal Advocates’ Position 1

Cal Advocates “recommends a TY expense level of $6.551 million (Labor of 2

$4.586 million and Non-Labor of $1.965 million) for SCE’s Distribution Overhead Detailed Inspections 3

O&M expenses, which is SCE’s alternate TY forecast.”4 4

c) SCE’s Rebuttal To Cal Advocates’ Position 5

(1) SCE’s Distribution ODI Program and SCE’s EOI Program Are 6

Fundamentally Different 7

Regular inspection of all overhead facilities is necessary to maintain a safe 8

and reliable electric distribution system. SCE performs this work through its distribution Overhead 9

Detailed Inspection (ODI) program. However, due to the catastrophic risks posed by wildfires, SCE 10

modified its inspection practices within its HFRA to more robustly and frequently inspect its overhead 11

distribution system. Accordingly, in 2018 and 2019, SCE developed its EOI program to perform 12

inspections that are risk-based and go above and beyond the routine compliance-based ODI inspections. 13

In its GRC Application, SCE presented two separate and distinct forecasts 14

related to distribution inspection programs: (1) ODI, which performs inspections of overhead equipment 15

in non-HFRA, and (2) EOI, which performs enhanced inspections of overhead equipment in HFRA. 16

Accordingly, SCE’s request for ODI included funding for routine compliance-based inspection work in 17

4 Exhibit PAO-06, p. 19, lines 10-13.

2014 2015 2016 2017 2018



1 Labor 4,585 4,676 5,013 5,224 4,709 3,462 4,708 1,246 2 Non-Labor 2,856 3,281 2,256 1,988 3,319 1,483 1,842 359 3 Total 7,442 7,957 7,269 7,213 8,027 4,945 6,550 1,605

2021 Forecast

Lin

e # Distribution Detailed

Overhead Inspections

SCE Recorded

8

non-HFRA only; and correspondingly, SCE’s request for EOI included funding for enhanced overhead 1

inspections work in HFRA only. Collectively, these two programs represented the totality of SCE’s 2

requested funding for distribution overhead inspections in this GRC. 3

In Exhibit SCE-15, Vol. 5, SCE provides a detailed explanation of the 4

differences between ODI and EOI. In this volume, SCE explains that “…ODI is a prescriptive interval-5

based regulatory compliance inspection program. In contrast, EOI is a risk-informed inspection and 6

remediation program that is targeting different risks that go beyond those addressed in ODI (which is 7

grounded in GO 165).”5 8

SCE appreciates Cal Advocates’ consideration of SCE’s alternative Test 9

Year 2021 forecast recommendation of $6.551 million for ODI; however, SCE respectfully disagrees 10

with Cal Advocates’ recommendation. As articulated above, Cal Advocates’ assertion that SCE’s 11

traditional compliance-based ODI program is the same as SCE’s EOI program is categorically wrong. 12

Cal Advocates incorrectly asserts SCE’s ODI Program includes recorded expenses from EOI and goes 13

on to state, “SCE has not provided any documented and/or recorded problems that demonstrated 14

specifically how its Distribution Overhead Detailed Inspections organization was prevented from 15

successfully performing its on-going and routine activities, including enhanced overhead inspections, 16

during 2014-2018.”6 First, SCE indicated in Exhibit 4, Vol. 5A that EOI had no recorded costs between 17

2014 and 2017.7 In fact, EOI did not incur expenses until the end of 2018. Further, SCE has provided 18

documentation demonstrating in substantial detail that SCE’s 2018 recorded expenses for ODI8 would 19

not be nearly sufficient to fund both the ODI program in non-HFRA and the EOI program in HFRA.9 20

5 Exhibit SCE-15, Vol. 5, Chapter II, Section F – “EOI and Remediations.”


7 Exhibit SCE-04, Vol. 5A, p. 57, Figure II-20.

8 For ODI, SCE requests funding of $4.945 million. For EOI-Distribution, SCE requests funding of $9.626 million. In its testimony, Cal Advocates proposes $6.551 million across both activities, the equivalent of 45% of SCE’s request.

9 In SCE’s response to data request PubAdv-SCE-073-TLG Q.01.e.1b, SCE explicitly states “SCE would like to clarify that, contrary to the last sentence of question b., the alternative forecasts for Distribution Preventive and Breakdown O&M Maintenance and Distribution Overhead Detail Inspections are NOT “sufficient funding for SCE’s TY activities for Enhanced Overhead Inspections.”” See Appendix A.

In response to data request PubAdv-SCE-091-GAW Q.01a, SCE states: “For years 2019-2023, SCE-02, Vol. 1, Pt. 2 includes the forecast costs for Distribution Overhead Detailed Inspections, Distribution Preventive & Breakdown O&M Maintenance, and Distribution Preventive & Breakdown Capital Maintenance. These forecasts include only the costs to perform these activities in non-HFRAs. The Enhanced Overhead Inspection

9

Cal Advocates’ conflation of ODI and EOI mischaracterizes SCE’s 1

request and would result in a Test Year forecast that will not allow SCE to sufficiently inspect 2

equipment across SCE’s service area, not allow SCE to perform the enhanced inspections in HFRA to 3

mitigate wildfire risk, and hinder SCE’s ability to reduce public safety risks on its electric system. SCE’s 4

testimony and the evidentiary record for this entire proceeding demonstrate that ODI and EOI are 5

distinct programs with separate funding requests. SCE strongly recommends the Commission adopt 6

SCE’s $4.945 million request for ODI if EOI is fully funded, or the alternative forecast of $6.551 7

million, if EOI receives no or partial funding. 8

(2) There Is No Embedded Funding In ODI For EOI 9

Cal Advocates incorrectly suggests that SCE can utilize previous GRC 10

authorized funding and reallocate the funds to other 2021 GRC programs because the funds are already 11

“embedded” in rates.10 Cal Advocates again conflates SCE’s requests and the Commission’s approved 12

ratemaking in the GRC. The Commission’s decision for SCE’s 2018 GRC (D.19-05-020) authorized a 13

revenue requirement for the years 2018-2020, while SCE’s 2021 GRC (A.19-08-013) requests a revenue 14

requirement for the years 2021-2023. SCE’s request for the 2021 GRC includes the costs for activities 15

that are necessary for the utility to perform during the period 2021-2023, including for new activities 16

such as EOI. SCE has not asked for funding for EOI in any previous GRC, so there is no embedded 17

funding in rates for this activity. Moreover, SCE’s proposed ODI forecast of $4.945 million includes an 18

adjustment to remove costs related to overhead inspection activities, including compliance activities, 19

that will be covered by the EOI program for HFRA areas.11 Simply put, there is no embedded funding to 20

be reallocated as suggested by Cal Advocates. 21

(3) Summary 22

For these reasons, the Commission should approve SCE’s Test Year 2021 23

forecast of $4.945 million for ODI and approve SCE’s separate request for EOI presented in Exhibit 24

(EOI) SCE performed at the end of 2018, which required the redeployment of resources away from Distribution Preventive & Breakdown (capital and O&M) Maintenance, was a one-time effort. SCE continues to perform Wildfire mitigation and has presented the costs to perform this work in SCE-04, Vol. 5A – Wildfire Management, and therefore, EOI financial impacts in SCE-02, Vol. 1, Pt. 2 have been removed from the forecast.” See Appendix A.


11 Refer to WP SCE-02, Vol. 1, Pt. 2 – Distribution Overhead Detailed Inspections - 2021. See Appendix A.

10

SCE-04, Vol. 5. If the Commission decides not to fully fund EOI, the Commission should adopt SCE’s 1

alternative Test Year 2021 forecast of $6.551 million for ODI. 2

2. Distribution Preventive And Breakdown O&M Maintenance 3


Distribution Preventive and Breakdown Maintenance includes the costs to make 5

repairs to distribution equipment that is either planned or unplanned. Planned maintenance work is 6

composed of repairs to SCE’s equipment and structures primarily driven from inspection activities. 7

Unplanned activities, also referred to as breakdown maintenance, include the repair of SCE equipment 8

and structures that are damaged, compromised, or have failed in service. These repairs follow the 9

Commission’s direction under GOs 95, 128, and 165 for maintenance of distribution assets. 10

SCE requests Test Year 2021 funding of $107.639 million12 for Distribution 11

Preventive and Breakdown O&M Maintenance. In describing the forecast methodology, SCE states: 12

SCE forecasts its 2021 Test Year request using a four-year average of 2014 to 2017 13 recorded costs. 2018 was not a normal operating year because, as described 14 previously, in the last quarter of 2018, SCE initiated its EOI, which required use of 15 personnel who would normally perform O&M maintenance work. Required 16 maintenance work previously scheduled for completion in 2018 was rescheduled to 17 early 2019. As such, SCE is excluding 2018 recorded costs from the average. In 18 addition to this four-year average, SCE is adding $9 million to the Test Year to 19 perform the Priority 3 maintenance items required by recent changes to GO 95.13 SCE 20 is proposing to reduce this forecast for work that will be performed under the EOI 21 program. To calculate the EOI portion of Distribution Preventive and Breakdown 22 O&M Maintenance performed in HFRAs, SCE uses the percentage of this work 23 performed on the overhead system (47%) and the percentage of circuit miles in HFAs 24 (25%).14 SCE then normalizes its forecast for ratemaking purposes for 2021 through 25 2023.15 26

12 The forecast $107.639 million reflects the errata filed on November 22, 2019 as well as the errata filed with

SCE’s rebuttal testimony. From SCE-02, Vol.1E Part 2, Test Year 2021 forecast was $106.665 million. With the rebuttal errata filing, the Test Year 2021 forecast increases to $107.638 million. The error was due to using the proportion of underground-related preventive and breakdown expenses instead of the overhead-related preventive and breakdown expenses in the formulation of the carve-out related to EOI.

13 See D.18-05-042 for the decision to amend Rule 18 of GO 95 requiring Priority 3 maintenance items to be corrected within 60 months, effective June 30, 2019. SCE’s forecast includes a level work plan that starts prior to the first due date to ensure compliance.

14 Refer to WP SCE-02, Vol. 01, Pt. 2 –Distribution Preventive and Breakdown O&M Maintenance –2021. See Appendix A.

15 Exhibit SCE-02, Vol. 1, Pt. 2, p. 19, lines 9-19.

11

SCE also provides an alternative forecast of $121.828 million should EOI funding 1

be fully or partially denied by the Commission.16 In this case, the forecast is calculated using the four-2

year average for 2014 through 2017, with no adjustments made with consideration to EOI. Table II-6 3

summarizes SCE’s request and Cal Advocates’ position. 4

Table II-6 Distribution Preventive and Breakdown O&M Maintenance

2014-2018 Recorded/2021 Forecast Summary of SCE and Cal Advocates’ Positions



Cal Advocates “recommends that the Commission adopt $98.724 million, 6

utilizing a five-year average (2014-2018) as a reasonable TY expense level for SCE’s Distribution 7

Preventive and Breakdown O&M Maintenance expenses.”17 8


The Commission should reject Cal Advocates’ recommendation for several 10

reasons including: (1) 2018 recorded costs is an anomalous year that should not be used to develop the 11

Test Year 2021 forecast for Distribution Preventive and Breakdown O&M Maintenance expenses; (2) 12

2019 recorded costs confirm that 2018 recorded costs are anomalous; (3) Cal Advocates agrees that 13

2018 recorded costs is an anomalous year that should not be used to develop the Test Year 2021 forecast 14

for Distribution Preventive and Breakdown Capital Maintenance expenses; and (4) the Test Year 2021 15

forecast for Distribution Preventive and Breakdown O&M Maintenance expenses is necessary for SCE 16

16 Exhibit SCE-02, Vol. 1, Pt. 2, p. 20, Table II-6 row “Total Preventive & Breakdown O&M Maintenance,”

normalized 2021 Test Year forecast of $121.828 million.

17 Exhibit PAO-06, p. 27, line 3-6.

2014 2015 2016 2017 2018



1 Labor 47,810 48,299 50,038 48,336 44,442 48,408 44,801 (3,607) 2 Non-Labor 70,959 55,828 49,570 44,562 33,772 59,231 53,923 (5,308)

3 Total 118,769 104,127 99,608 92,898 78,214 107,639 98,724 (8,915)

Lin

e # Distribution Preventive

and Breakdown O&M Maintenance

SCE Recorded 2021 Forecast

12

to complete Priority 3 maintenance items as mandated by the Commission. SCE explains each of these 1

reasons in further detail below. 2

(1) SCE Has Sufficiently Demonstrated That 2018 Was An Anomalous 3

Year That Should Not Be Used To Set The 2021 Test Year Forecast 4

For This Activity 5

SCE has clearly documented actions taken in late 2018 to transfer 6

resources from preventive and breakdown maintenance activities to wildfire mitigation programs in 7

order to expeditiously combat wildfire risks to the public associated with SCE’s electrical equipment. 8

For example, in response to a data request from Cal Advocates, SCE provided the following response: 9

Recorded costs incurred in 2018 are not representative of a full year of maintenance 10 because SCE redirected its workforce to perform EOI. EOI was a short-term, 11 comprehensive detailed inspection of SCE’s overhead system in the 2018-2019 time 12 period in SCE’s HFRA and was critical to reducing the risk of fire ignition associated 13 with utility infrastructure. 14

SCE has experienced disruptive events in the past. However, at the end of 2018 SCE 15 moved crews from other districts to focus efforts on EOI and mitigation of wildfire 16 risk. Almost every region within SCE’s service territory was affected by EOI. The 17 inclusion of data from calendar year 2018, which was an anomalous year for SCE, in 18 calculating the funding needed to perform maintenance on our distribution system 19 will not provide the resources necessary to continue to maintain our distribution 20 system.18 21

In addition, in direct testimony, SCE explained: 22

In 2018, SCE’s recorded expenses were $13.9 million lower than 2017 due to a one-23 time, temporary change in maintenance repair scheduling. This temporary change was 24 implemented to accommodate the Enhanced Overhead Inspection (EOI) activity.19 25

**** 26

In the last quarter of 2018, SCE accelerated wildfire mitigation efforts that impacted 27 capital maintenance work performed by both SCE and contractor personnel. Some 28 work previously scheduled to be complete in 2018 was rescheduled to 2019.20 21 29

18 See SCE’s response to question 1.d.4 in data request PubAdv-SCE-066-TLG Q.01.a-e. See Appendix A.

19 Exhibit SCE-02, Vol. 1, Pt. 2, pp. 18-19, lines 9-1.

20 Id., p. 22, lines 5-7.

21 Cal Advocates makes the claim that 2018 must be considered a normal year for SCE, as we did not defer or postpone work (see SCE’s response to question 1.d.1 in data request PubAdv-SCE-066-TLG Q.01.a-e, Appendix A). The terms “defer” and “postpone” for SCE refers to a change in work schedule date that would

13

These responses and testimony explain the reasons for the anomaly in 1

2018 recorded costs and the reasons why including 2018 costs in an averaging methodology would be 2

inappropriate, misleading, and result in under-funding for distribution maintenance activities important 3

to safety and reliability. 4

(2) 2019 Recorded Costs Show That 2018 Was An Anomalous Year 5

Table II-7 shows that in 2019, recorded O&M expenses increased to 6

$121.761 million22 from $78.215 million in 2018. The increase in recorded costs further illustrates that 7

2018 was an anomalous year, in part due to planned maintenance in 2018 for wildfire-related activities 8

being shifted and rescheduled to 2019 due to EOI.23 In other words, 2019 recorded costs show that SCE 9

completed a typical scope of maintenance activities plus various activities that had been rescheduled in 10

2018 in order to meet G0 95 requirements. SCE additionally provides 2019 recorded capital 11

expenditures in Table II-7 to demonstrate the sharp increase of overall Distribution Preventive and 12

Breakdown Maintenance work in that year. While O&M maintenance and capital work are separate 13

from an accounting standpoint, the origin of both planned work categories (which are identified through 14

inspection findings) and the electrical crews who perform the work are the same. Given the significant 15

increase of both O&M and capital work performed in 2019, it is abundantly clear that 2018 should be 16

considered an anomalous year and not included when forecasting Test Year amounts.24 17

have an impact on meeting the required compliance due date. SCE was able to reschedule the work from 2018 to 2019 without putting at risk the compliance deadlines for that work. In our view, there were no deferrals or postponements leading to compliance deadline impacts.

22 See SCE’s response to data request PubAdv-SCE-056-TXB Q.01 supplemental. See Appendix A.

23 SCE employed additional contractor resources and incurred SCE labor premium time costs in order to complete the higher level of work performed than planned.

24 By comparison, in constant 2018 dollars, SCE’s four-year average (2014 – 2017) is $103.851 million and SCE’s six-year average (2014-2019) is $102.563 million.

14

Table II-7 Distribution Preventive and Breakdown Maintenance O&M and Capital

2018 and 2019 Recorded Costs (Constant 2018 $000)

(3) Cal Advocates Acknowledges 2018 Is An Anomalous Year In Its 1

Capital Forecast Proposal For This Activity 2

Contrary to its O&M analysis of this activity, Cal Advocates agrees with 3

SCE and excludes 2018 recorded costs, using the four-year average methodology in the development of 4

its forecast proposal for Distribution Preventive & Breakdown Capital Maintenance: 5

[S]ince work in 2018 was deferred to 2019, the Public Advocates Office has 6 concluded that 2019 recorded data is also unusual, as it will be unusually high due to 7 the inclusion of 2018 projects that were not finished as scheduled. Therefore, the 8 Public Advocates Office has excluded both 2018 and 2019 data from the forecasting 9 average. In effect, we are using the same 4-year average (2014 through 2017) as SCE, 10 the result being that our forecasts for 2020 and 2021 are the same as SCE's.25 11

**** 12

…[T]he expenditures for 2019 were larger than SCE anticipated; this is not an 13 unexpected result, given the fact that SCE has already stated that 2018 capital projects 14 would be rescheduled for 2019. Given this fact, the Public Advocates Office’s use of 15 the 2014 through 2017 average to derive its forecasts is reasonable.26 16

Cal Advocates cannot have it both ways. The same rationale agreed to by 17

Cal Advocates for using a four-year average to forecast capital maintenance expenses should apply to 18

the forecast for O&M maintenance. The only difference between the capital work and O&M work for 19

Distribution Preventive and Breakdown Maintenance activities is the accounting rules that dictate which 20

work must be capitalized and which should be expensed. Otherwise, the need to shift resources from this 21


26 Id., p. 16, lines 6-10.

2018 2019 Variance Variance %Distribution Preventive and Breakdown O&M Maintenance 78,215 121,761 43,547 56%Distribution Preventive and Breakdown Capital Maintenance 255,748 350,289 94,541 37%

333,962 472,050 138,088 41%

Recorded Costs (Constant 2018 $000)

15

work to wildfire mitigation work in late 2018 is the same across both capital and O&M activities. The 1

effect that this temporary shift had on rendering 2018 recorded costs anomalous and an inappropriate 2

data source for use in forecasting these activities is the same. Cal Advocates supports a four-year 3

average methodology excluding anomalous 2018 recorded costs for the Distribution Preventive and 4

Breakdown Capital Maintenance forecast. Therefore, it makes sense to use a four-year average 5

methodology excluding anomalous 2018 recorded costs for the Distribution Preventive and Breakdown 6

O&M Maintenance forecast. 7

(4) Cal Advocates Inappropriately Ignores The Incremental Funding 8

Request Included In the Forecast For Priority 3 Maintenance Items 9

(a) Priority 3 Maintenance Items Need to Be Completed Within A 10

Compliance Timeframe And Therefore, Comprise New And 11

Incremental Work 12

In D.18-05-042, the Commission approved a Settlement 13

Agreement signed by 25 parties agreeing to amendments to GO 95 Rule 18. Regarding Priority 3 14

maintenance items, the amendments include: 15

(i) Redefining Priority 3 from “Acceptable safety and/or 16

reliability risk” to “Any risk of low potential impact to safety and reliability.”27 17

(ii) “[Establishing] a 60-month timeframe, with specified 18

exceptions that could be corrected on an opportunity basis, i.e. when the utility performs 19

other work where the exception is located.”28 20

When the Commission adds to SCE’s compliance requirements by 21

mandating a remediation timeframe, SCE is justified in requesting funding to meet the costs required to 22

fulfil the compliance obligations. In addition, the proposal by Cal Advocates to deny funding for 23

correcting Priority 3 maintenance items within the 60-month timeframe ultimately leaves SCE 24

potentially unable to meet our compliance obligation. 25

27 D.18-05-042, p.10.

28 Id., p. 11.

16

Effective June 30, 2019, Priority 3 maintenance items are 1

mandated by the Commission to be performed in a 60-month timeframe.29 While Priority 3 maintenance 2

items typically have been completed as opportunity maintenance items by SCE, the mandated 3

compliance deadline imposes new urgency for this work. As a result of the Priority 3 compliance 4

obligations, SCE now must include the completion of scheduled Priority 3 maintenance items as a 5

separate element in its work planning to meet the compliance timeframe of 60 months. 6

To plan and schedule the work so that it is able meet the deadline 7

for Priority 3 maintenance items, SCE requires funding, just as it does for Priority 1 and Priority 2 8

maintenance items. Priority 3 maintenance items should not be treated any differently. As clearly 9

described in SCE’s response to a data request from Cal Advocates, SCE’s funding request includes costs 10

relating to fulfilling its compliance obligations to complete Priority 3 maintenance items: 11

As stated in testimony at SCE-02, Vol. 1, Pt. 2, page 4, footnote 1; page 9, footnote 8; 12 and page 19, footnote 17, CPUC Decision (“D.”)18-05-042 amended Rule 18 of G.O. 13 95 requiring Priority 3 maintenance items to be corrected within 60 months, effective 14 June 30, 2019. In order to be in compliance with the Commission’s direction, SCE’s 15 forecast includes a level work plan that starts prior to the first due date to help ensure 16 compliance.30 SCE anticipates Priority 3 volume will be significant, and the work 17 plan reflects the ramping up of this work to ensure that SCE performs all work in 18 compliance with the required due dates.31 SCE’s forecast to schedule and repair 19 identified Priority 3 maintenance items, in addition to those which will continue to be 20 identified through on-going, annual inspections, will provide the funding necessary to 21 meet the Commission’s guidance in D.18-05-042.32 22

(b) The Commission Has Approved SCE’s Estimates For New 23

Work In Past Rate Cases 24

Because Priority 3 maintenance items historically have been 25

excluded from Rule 18 timeframes, SCE has corrected these items on an opportunity basis without 26

tracking their incremental costs. In addition, SCE did not segregate accounting or work management 27

29 D.18-05-042, p.2.

30 SCE currently identifies approximately 90,000 Priority 3 maintenance item notifications annually. Approximately 30% of these notifications get corrected in concert with other work, while the remaining 70% will be remediated as individual jobs.

31 The compliance due dates start in 2024, however, due to the volume of work, SCE must ramp up remediation work to allow for all work to be done by the due dates. It would not be feasible or prudent to perform all required Priority 3 work in 2024, as that would displace emergent work and higher priority and safety-focused Priority 2 work.

32 See SCE’s response to question 1c in data request PubAdv-SCE-066-TLG Q.01a-e. See Appendix A.

17

details for these items. As such, SCE evaluated the volume of Priority 3 work now subject to this new 1

regulatory requirement, in concert with input from subject matter experts across our service area, to put 2

forth a modest estimate of the future costs that SCE must necessarily incur to adhere to the compliance 3

requirements now applicable to this work. The costs SCE will incur to maintain compliance for this 4

subset of work will increase each year, as the identified Priority 3 work approaches its compliance due 5

date. 6

The Commission routinely authorizes costs for new projects and 7

programs that do not have historical data and are proposed based on forecast costs. For many of these 8

programs, they cannot start until the Commission has authorized the costs. If the Commission were to 9

not authorize funds for new projects, there would never be new projects. The Commission can evaluate a 10

program based on its merits, even when those costs and potential benefits are entirely forecasts. The 11

argument that a particular project or program has not been sufficiently justified because there are no 12

historical costs to evaluate is flawed. 13

SCE has provided estimates on the work required for scheduled 14

Priority 3 maintenance items. The Commission has enough evidence to review and evaluate this work on 15

its merits. 16

(5) Similar To The Distinction Between ODI And EOI, Distribution 17

Preventive And Breakdown Maintenance And EOI Remediations 18

Should Not Be Treated As the Same Work 19

Cal Advocates suggests that EOI O&M Repairs are duplicative of SCE’s 20

Distribution Preventive and Breakdown Maintenance O&M work.33 This is incorrect and SCE clearly 21

addresses this misinterpretation in Exhibit SCE-15 Vol. 5 Section II.C. In short, this activity addresses 22

findings based on ODI, while EOI remediations addresses findings based on EOI. In Section 23

II.A.1.c)(1), SCE provides key factors that distinguish ODI from EOI. 24

3. Conclusion 25

The Commission should reject Cal Advocates’ recommendations to use the five-year 26

recorded cost average for the Test Year forecast and withhold any funding for Priority 3 maintenance 27

items for the following reasons: (1) 2018 recorded costs is an anomalous year that should not be used to 28

33 Exhibit PAO-06, p. 23, n. 57.

18

develop the Test Year 2021 forecast for Distribution Preventive and Breakdown O&M Maintenance 1

expenses; (2) 2019 recorded costs confirm that 2018 record are anomalous; (3) Cal Advocates agrees 2

that 2018 recorded costs is an anomalous year that should not be used to develop the Test Year 2021 3

forecast for Distribution Preventive and Breakdown Capital Maintenance expenses; and (4) the Test 4

Year 2021 forecast for Distribution Preventive and Breakdown O&M Maintenance expenses is 5

necessary for SCE to complete Priority 3 maintenance items as mandated by the Commission. By 6

accepting any portion of Cal Advocates’ recommendation, the Commission would be approving a 7

forecast that reduces SCE’s ability to meet our compliance obligations in the performance of preventive 8

and breakdown O&M maintenance activities. 9

B. Capital Expenditures 10

SCE was unopposed for Streetlight Maintenance and LED Conversions for 2020-2021 total of 11

$98.961 million and Distribution Tools and Work Equipment for 2020-2021 total of $6.807 million. Cal 12

Advocates recommended various changes to SCE’s capital expenditure forecasts for: (1) Distribution 13

Claim; (2) Distribution Preventive and Breakdown Capital Maintenance; (3) Distribution Transformers; 14

and (4) Prefabrication. Table II-8 summarizes SCE’s request and Cal Advocates’ position, and SCE 15

addresses these recommendations below. 16

Table II-8 Distribution Inspection & Maintenance Capital Expenditures

2019 Recorded and 2020-2021 Forecast SCE and Cal Advocates’ Positions

Line No.

GRC Activity 2019 Recorded

2020 Forecast 2021 Forecast

Total2019-2021

2019 Recorded 2020 2021

Total2019-2021

Variance From SCE2019-2021

1 Distribution Claim 41,848 42,157 43,498 127,503 41,848 42,167 43,495 127,510 7

2

Distribution Preventive and Breakdown Capital Maintenance

363,794 277,373 286,197 927,364 363,794 277,715 286,458 927,967 603

3

Streetlight Maintenance and LED Conversions

52,895 48,619 50,342 151,856 52,895 48,619 50,342 151,856 0

4Distribution Tools and Work Equipment

2,947 3,376 3,430 9,753 2,947 3,376 3,430 9,753 0

5Distribution Transformers

102,432 98,244 105,243 305,919 102,432 98,569 109,147 310,148 4,229

6 Prefabrication 18,267 18,843 22,398 59,508 18,267 17,583 18,009 53,859 (5,649)7 Total 582,183 488,612 511,108 1,581,903 582,183 488,029 510,881 1,581,093 (810)

SCE Rebuttal Position Cal Advocates

19

1. Distribution Claim 1


Distribution Claim includes the costs incurred by SCE to repair damage to the 3

distribution system caused by another party. SCE uses a five-year average of recorded expenditures 4

from 2014-2018 to forecast the Test Year expenditures for Distribution Claim resulting in a funding 5

request of $82.054 million for the 2020-2021 total as shown in Table II-9. 6

Table II-9 Distribution Claim

CWBS Element CET-PD-CL-DC 2019 Recorded/2020-2021 Forecast

Summary of SCE and Cal Advocates’ Position (Nominal $000)


Cal Advocates “agrees that a 5-year average is a reasonable forecasting 8

methodology. However, since it had access to recorded 2019 data…the 5-year average used by the 9

Public Advocates Office was shifted by one year, utilizing the years 2015 through 2019. As a result of 10

incorporating the additional year of data, the Public Advocates Office has developed Distribution Claim 11

forecasts of $42.167 million for 2020 and $43.495 million for 2021.”34 12

c) SCE’s Rebuttal Position To Cal Advocates’ Position 13

Due to the minor difference between SCE’s and Cal Advocates’ respective 14

proposals for Distribution Claims, SCE does not oppose Cal Advocates' proposal to use the five-year 15

average including recorded costs from 2015 through 2019 to develop the capital expenditure forecast for 16

this activity. 17


Line No.

Inspections & Maintenance

2019 Recorded

2020 Forecast

2021 Forecast

Total2019-2021

2019 Recorded

2020 Forecast

2021 Forecast

Total2019-2021


1 Distribution Claim 41,848 42,157 43,498 127,503 41,848 42,167 43,495 127,510 7


20

2. Distribution Preventive And Breakdown Capital Maintenance 1


Distribution Preventive and Breakdown Capital Maintenance includes the costs to 3

replace distribution equipment identified through SCE’s Distribution Inspection and Maintenance 4

Program. SCE capitalizes this work according to SCE’s accounting policy. See Section II.A.2.a) for 5

more details on the work description for this activity. 6

SCE applies the same forecast methodology for the capital work as for work 7

funded by Distribution Preventive and Maintenance O&M expenses. Specifically, SCE applies a four-8

year average using the period 2014 through 2017 recorded capital expenditures and reduces the average 9

by the portion of recorded costs related to overhead prevention and breakdown capital work in HFRA. 10

Similar to the forecast methodology for the O&M expense work in this activity, 2018 costs have not 11

been included as 2018 was an anomalous year for this work. Similar to the work reflected in recorded 12

O&M expenses in 2018, capital work was re-scheduled to accommodate the urgent need for resources 13

for EOI. 14

After incorporating the errata filed on November 22, 2019, SCE’s request for the 15

Test Year is $286.196 million as shown in Table II-10. 16

21

Table II-10 Distribution Preventive and Breakdown Capital Maintenance

Multiple CWBS Elements35,36 2019 Recorded/2020-2021 Forecast



Cal Advocates “excluded both 2018 and 2019 data from the forecasting average. 2

In effect, [it was] using the same 4-year average (2014 through 2017) as SCE, the result being that [its] 3

forecasts for 2020 and 2021 are the same as SCE's.”37 In determining its proposal, Cal Advocates 4

explains that “since work in 2018 was deferred to 2019, the Public Advocates Office has concluded that 5

2019 recorded data is also unusual, as it will be unusually high due to the inclusion of 2018 projects that 6

were not finished as scheduled. Therefore, the Public Advocates Office has excluded both 2018 and 7

2019 data from the forecasting average.”38 Finally, Cal Advocates “has incorporated these revised EOI 8

numbers for its 2020 and 2021 forecasts.”39 9


SCE agrees with Cal Advocates’ position to apply the four-year average across 11

2014 through 2017 and apply EOI adjustments and the errata filed in November 2019. 12

35 Distribution Preventive and Breakdown Capital Maintenance includes CWBS Elements CET-PD-BM-BD,

CET-PD-BM-EP, CET-PD-CR-IF, CET-PD-IR-EP, CET-PD-IR-NP, CET-PD-IR-PM, AND CET-PD-IRSB.

36 See SCE’s response to PubAdv-SCE-091-GAW question 2(a)-(d).(i)-(iii). See Appendix A.


38 Id., lines 22-26.

39 Id., p. 16, lines 15-16. The revision of the EOI adjustment dollars was submitted as errata on November 22, 2019.

Line No.

Inspections & Maintenance

2019 Recorded

2020 Forecast

2021 Forecast

Total2019-2021

2019 Recorded

2020 Forecast

2021 Forecast

Total2019-2021


1 Distribution Preventive and Breakdown Capital Maintenance

363,794 277,373 286,197 927,364 363,794 277,715 286,458 927,967 603


22

However, SCE clarifies that the EOI adjustment submitted in testimony, and 1

revised in the errata filed November 22, 2019, relates to ensuring that SCE does not request funding for 2

preventive and breakdown maintenance work in both Exhibit SCE-02, Vol. 01 Part. 2 and Exhibit SCE-3

04, Vol. 05. To clarify, SCE reduces the Distribution Preventive and Breakdown Capital Maintenance 4

expenditures in 2014 through 2017 so as to exclude this work activity in HFRA from this forecast. 5

Therefore, Cal Advocates’ statement that “SCE has adjusted its 4-year average by subtracting its 6

Enhanced Overhead Inspection (EOI) program” is incorrect, as spending for EOI did not occur in 2014 7

through 2017. 8

3. Distribution Transformers 9


T&D capitalizes distribution transformers rated less than 500kVA at the time of 11

purchase. SCE installs and removes a large volume of distribution transformers on a regular basis. The 12

work performed in many of SCE’s distribution capital programs require the installation or replacement 13

of transformers. These programs include, for example, new service connections, distribution preventive 14

and breakdown maintenance, and claims. SCE’s transformer purchases provide an inventory that allows 15

SCE to have the necessary equipment available to perform construction work and to replace failed or 16

deteriorated transformers. This work includes three sub-activities: (1) transformers for routine, on-going 17

programs; (2) transformers installed in concert with the PLP; and (3) transformers installed as part of the 18

Wildfire Covered Conductor Program (WCCP). 19

To develop the transformer forecast for each activity, SCE used the capital 20

expenditures forecast for each work activity and the total count of transformers for the same activity. 21

The transformer acquisition cost multiplied by the total count of transformers for each activity and each 22

year for 2019-2023 provide the total Distribution Transformer capital expenditure forecast as shown in 23

Table II-11. 24

23

Table II-11 Distribution Transformers

CWBS Element CET-PD-OT-TR40 2019 Recorded/2020-2021 Forecast



Cal Advocates’ forecast uses their proposed capital expenditure inputs in SCE’s 2

model.41 Cal Advocates proposes forecasts of $94.785 million and $104.040 million for 2020 and 2021, 3

respectively, for Distribution Transformers. 4


Cal Advocates agrees with SCE’s methodology and develops its forecast using 6

the same computer model SCE applied in the development of our forecast.42 The only unknown variable 7

at this point is what capital forecast for each of the 44 different types of capital programs will be adopted 8

by the Commission. Until that number is known, SCE stands by its 2020 and 2021 forecast. Once a final 9

capital forecast is adopted by the Commission, Distribution Transformers capital expenditures should be 10

adjusted accordingly. 11

40 Distribution Transformers includes CWBS Elements CET-PD-OT-TR, CET-PD-OT-TR-PL, and CET-PD-

OT-TR-FR.


42 Id., p. 23, line 3-8.

Line No.

Capital Related Expense & Other

2019 Recorded

2020 Forecast 2021 Forecast

Total2019-2021 2019 2020 2021

Total2019-2021



102,432 98,244 105,243 305,919 102,432 98,569 109,147 310,148 4,229


24

4. Prefabrication 1


Prefabrication activities provide distribution crews with the materials needed for 3

daily construction or maintenance work and involve staging material for the construction crews, 4

assembling prepackaged kits, and properly disposing of materials removed from jobsites. 5

For Pole Loading Program Prefabrication, SCE is proposing to use 2.83% of the 6

forecast for Pole Loading Program (PLP) Replacement and Underbuild. For non-PLP Prefabrication 7

costs, SCE is proposing last year recorded as the forecast.43 Table II-12 summarizes SCE’s request and 8

Cal Advocates’ position. 9

Table II-12 Prefabrication

CWBS Element CET-PD-OT-PF 2019 Recorded/2020-2021 Forecast



Cal Advocates “does not object to the methodology developed by SCE to derive 11

its forecasts for the Prefabrication forecasts.”44 Its proposed forecast of $17.583 million and $18.009 12

million for 2020 and 2021, respectively, results from “independently [developing] its own [Pole Loading 13

Program] forecasts.”45 14

43 Exhibit SCE-02, Vol. 02 Pt. 2, p. 54, lines 22-24.


45 Id., line 4.

Line No.

Capital Related Expense & Other

2019 Recorded

2020 Forecast

2021 Forecast

Total2019-2021 2019 2020 2021

Total2019-2021


1 Prefabrication 18,267 18,843 22,398 59,508 18,267 17,583 18,009 53,859 (5,649)


25


Cal Advocates agrees with SCE’s methodology to use a ratio of 2.83% to allocate 2

Prefabrication-related costs for Pole Loading Program Replacements and Underbuild. Therefore, the 3

only unknown variable at this point is what the adopted capital forecast will be for these activities. Until 4

that number is known, SCE stands by its 2020 and 2021 forecast. Once a final capital forecast for those 5

activities is adopted, Prefabrication capital expenditures should be adjusted accordingly, using the 6

methodology proposed by SCE and agreed to by Cal Advocates. 7

C. Safety and Reliability Investment Incentive Mechanism (SRIIM) 8

1. SCE’s Application 9

The SRIIM is a mechanism which the Commission has previously adopted to incentivize 10

SCE to spend authorized dollars on programs that support safety and reliability, and to maintain a 11

workforce of field employees to support the safe and reliable operation of the electric grid. SRIIM is 12

composed of two components: (1) Workforce: Hiring field personnel that directly work on projects and 13

programs related to safety and reliability; and (2) Capital Investment: Spending on projects and 14

programs for safety and reliability. 15

In this GRC, SCE proposes the following changes to the SRIIM adopted in SCE’s 2018 16

GRC with regards to SCE’s workforce: (1) removing Distribution and Transmission Apprentice 17

Groundman positions and adding Distribution Apparatus Technician and Foreman positions to the 18

workforce classification, (2) increasing the SRIIM headcount target above the 2018 GRC authorized 19

levels to 2,465 workers, and (3) modifying the current headcount measurement mechanism to account 20

for achieving the headcount level of 2,465 at some point in the last two quarters of the GRC cycle.46 21

With regards to the level of capital spending, SCE proposes that the Commission 22

continue the capital investment component of the SRIIM mechanism, with the modification that any 23

underspending in the SRIIM capital categories can be offset by one or more of the following conditions: 24

1) Spending in excess of 110% of the authorized amount for “High Priority” programs 25

(Storms, Claims, and Customer Driven/Requested work)47 and 26

46 Exhibit SCE-02, Vol. 01 Pt. 2, pp. 61-63.

47 High Priority capital programs include those in Exhibit SCE-02, Vol. 01, Part 2 (specifically, Distribution Claim, Distribution Transformers); Exhibit SCE-02, Vol. 02 (specifically, Transmission Claims); Exhibit

26

2) Spending above Commission-authorized amounts in wildfire mitigation programs that 1

use the same types of resources as those performing SRIIM work.48 2

2. Cal Advocates 3

a) Cal Advocates’ Position 4

Cal Advocates recommends that SCE continue the SRIIM as adopted in SCE’s 5

2018 GRC with the only exception being the modification to its Workforce Categories.49 Cal Advocates 6

recommends that SCE’s proposal to remove the job classifications of Distribution Apprentice 7

Groundman and Transmission Apprentice Groundman from the workforce categories and include the 8

job classifications of Distribution Apparatus Technician and Distribution Apparatus be adopted.50 9

b) SCE’s Rebuttal To Cal Advocates’ Position 10

(1) Cal Advocates Offers No Basis That SCE’s Proposed Modification To 11

The Headcount Measurement Method Is “Unjust and Burdensome” 12

To Ratepayers 13

Cal Advocates asserts that SCE’s proposed changes to the headcount 14

measurement methodology is “unjust and burdensome to ratepayers.”51 As discussed below, no part of 15

SCE’s proposal would be unjust and burdensome to customers – in fact SCE’s proposal has nothing to 16

do with customers at all. When SCE asked Cal Advocates to substantiate its claim that our proposal 17

would be unjust and burdensome to customers, Cal Advocates responded that it would be “ ‘unjust and 18

SCE-02, Vol. 02 (specifically, Substation Claims); Exhibit SCE-02, Vol. 04, Part 3 – Chapter II (all New Service Connections programs), and Chapter III (specifically, Relocations, Rule 20 Conversions, and Distribution Added Facilities); Exhibit SCE-04, Vol. 02 (specifically, Transmission/Substation and Distribution Storm Response).

48 This includes capital costs for SCE’s Wildfire Covered Conductor Program and Enhanced Overhead Inspection and Remediation Program (specifically, EOI Capital Expenditures), both of which are presented in Exhibit SCE-04, Vol. 05 – Wildfire Management.

49 Accordingly, Cal Advocates would propose an initial headcount target of 2,375, as was adopted in SCE’s 2018 GRC, that would then be adjusted based on the amount of authorized T&D capital.

50 Exhibit PAO-06, pp. 69-70.

51 Exhibit PAO-06, p. 70, line 10.

27

burdensome to ratepayers’ because SCE would not have to provide refunds to customers….”52 This is 1

unresponsive, and accordingly Cal Advocates’ assertion should be rejected. 2

SCE has presented a sound proposal for minor modifications to the 3

headcount measurement methodology. This proposal balances the need to grow the skilled field crews 4

who perform hazardous work on the electric grid, with the reality that the labor markets for skilled 5

worker positions are fluid. Cal Advocates claims that “SCE has not provided any recorded and verifiable 6

problems it had with the headcount measurement mechanism”53 and that “SCE has not provided any 7

documentation demonstrating that the adopted method to measure headcount was ineffective and 8

prevented it from capturing the fluctuations in headcount and achieving the target level.”54 SCE 9

disagrees. The SRIIM was established to incentivize SCE to invest in the resources – both financial and 10

human – to support the safety and reliability of the electric system. The mechanism, as currently 11

structured, affords very little flexibility to adapt to emergent events that may impact achieving this 12

workforce target at the end of a three-year period. The modification proposed by SCE - to exceed the 13

target headcount level over the course of the six-month period at the end of 2023 - would allow for a 14

more natural management of our headcount and remove any incentive to perform aggressive short-term 15

hiring, unnecessary retention activities, and other practices simply to meet a target. In summary, SCE’s 16

proposal continues to provide a very aggressive headcount target that will serve to grow SCE’s skilled 17

workforce in alignment with SCE’s adopted capital expenditure forecasts. 18

The labor market for SRIIM job classifications has evolved significantly 19

since the SRIIM was first created and is expected to continue to evolve throughout the GRC period. In 20

response to data request questions posed by the California Coalition of Utility Employees (CUE), SCE 21

offered that “[t]he headcount in any job classification can vary with short notice. Backfilling with 22

qualified candidates takes time, especially in the current labor market. Therefore, SCE proposes to 23

modify the headcount measurement mechanism…. This modification will allow SCE flexibility to 24

respond to unexpected attrition should it occur at the very end of the cycle.”55 25

52 See Cal Advocates’ response to question 3 in data request SCE-PubAdv-007-JF. See Appendix A.


54 Id., pp. 69-70, lines 15-2.

55 See SCE’s response to question 25d in data request CUE-SCE-002 question 25.a-d. See Appendix A.

28

(2) Cal Advocates Does Not Oppose SCE’s Proposed Change To The 1

Capital Investment Mechanism 2

In a response to a data request, Cal Advocates states “[t]he Public 3

Advocates Office’s Exhibit PAO-6 pp. 67-70 did not comment on or oppose SCE’s TY proposal for the 4

capital component for the Safety and Reliability Investment Incentive Mechanism (SRIIM).”56 5

Therefore, they are unopposed to SCE’s proposal regarding the capital investment mechanism. 6

3. CUE 7

a) CUE’s Position 8

CUE proposes the following in regard to SRIIM: (1) approval of SCE’s proposed 9

changes to the workforce classification; (2) “…endorsement of SCE’s [capital spending] proposal [to 10

add wildfire mitigation overspending to offset SRIIM capital category underspending] is contingent on 11

eliminating the dependence of the SRIIM headcount on requested versus authorized T&D capital;”57 (3) 12

removal of the headcount dependence on T&D capital funding on the basis that “the adjustment 13

provision conflicts with SCE’s request to adjust the capital spending portion so that funding of SRIIM 14

activities can be transferred to wildfire spending;”58 and (4) rejection of “SCE’s proposal to modify 15

headcount measurement and continue with the current method of averaging over the last quarter in the 16

GRC period.”59 17

b) SCE’s Rebuttal To CUE’s Position 18

(1) The Headcount Target Proposed by CUE Is Not Realistic Nor 19

Achievable During This GRC Period 20

CUE proposes setting SCE’s SRIIM headcount target at 2,608. This is 143 21

workers more than SCE’s proposal of 2,465, and 233 workers more than Cal Advocates proposal. CUE 22

arrives at 2,608 by applying a 6.25% annual growth rate of SCE SRIIM workers from 2021 through 23

56 See Cal Advocates’ response to questions 1 and 2 in data request SCE-PubAdv-007-JF. See Appendix A.

57 Testimony of Robert Earle on Behalf of the Coalition of California Utility Employees (“Exhibit CUE Testimony”), p. 32, lines 21-23.

58 Id., p. 35, lines 12-14.

59 Id., p. 37, lines 1-2.

29

2023 to the Commission-adopted adjusted headcount target of 2,175 from SCE’s 2018 GRC. CUE bases 1

this calculation on a data request response in which SCE states that it assumed crew “growth rates would 2

diminish over time and would stabilize to between 5% - 7.5% per year in 2021-2023.”60 3

To clarify, the estimated crew growth rates provided in this data request 4

response were general guidance and do not constitute a specific hiring plan for SCE crew resources. For 5

example, in a subsequent data request response, SCE stated: 6

SCE established this growth rate based on historical experience and subject matter 7 expert guidance that SCE can add between 40 and 60 electrical construction crews 8 [over the three-year period] as has been done in the past. This is the equivalent of two 9 new source contract vendors of 20 to 30 crews. SCE expects to achieve this growth 10 rate at reasonable costs without sacrificing safety or efficiency.61 11

SCE further clarified this estimate when providing more specific detail to 12

SCE’s annual staffing plans for field crews: “SCE plans to add 40 crews per year with half of them 13

being SCE crews.”62 This hiring plan – which amounts to a target of 20 SCE field crews per year – 14

represents SCE’s net increase in field crews when accounting for attrition. SCE generally assumes four 15

people per crew on average for planning purposes, however the actual deployment can vary from two to 16

five or more people per crew based on job-specific details.63 In developing its SRIIM headcount target 17

for this GRC, SCE considered a hiring plan of adding 20 SCE crews per year (or ~80 SCE employees 18

per year) net of attrition, which would amount to approximately 60 additional crews (or ~240 net 19

additional SCE employees) by the end of 2023. SCE added these 240 additional SCE employees to the 20

baseline SRIIM headcount levels at the time we developed our GRC Application (2,225), to set the 21

SRIIM headcount target for this GRC at 2,465. 22

SCE relies on a mix of SCE employees and contractors to perform critical 23

work on the grid. It is not feasible to grow the workforce through just SCE employees at a pace that can 24

keep up with demand, and accordingly, SCE employs an execution workforce consisting of both SCE 25

employees and contractors. These crews include skilled positions that require significant training before 26

60 See SCE’s response to question 1a in data request CUE-SCE-001 Q.01a-b. See Appendix A.

61 See SCE’s response to question 1f in data request CUE-SCE-004 Q.01e-h. See Appendix A.

62 See SCE’s response to question 2.d.i. in data request CUE-SCE-004 Q.02.d. See Appendix A.

63 See SCE’s response to question 1.e. in data request CUE-SCE-004 Q.01e-h: “SCE generally assumes four people per crew on average for planning purposes, however the actual deployment can vary from two to five or more people per crew based on job-specific details.” See Appendix A.

30

they can work on and around high voltage electric equipment. There are limits to how many crews SCE 1

can train and grow in a given year – both in terms of time and available budget – and SCE’s forecast for 2

training costs in this GRC would not be sufficient to accommodate CUE’s target headcount level. These 3

limits can be further hampered by extreme events, such as the COVID-19 pandemic and social 4

distancing requirements. In addition, SCE cannot simply hire and train hundreds of groundmen without 5

also growing the more senior ranks of linemen and foremen to guide and train these new workers. SCE 6

must grow its internal crew workforce in a measured and coordinated manner to help ensure the safety 7

of our crews. 8

Going forward, the specific distribution of SCE employee and contractor 9

crews is dependent upon our ability to grow our internal workforce safely and the availability of 10

contractor crew resources. For example, in 2019, SCE grew its execution workforce by approximately 11

100 crews – the vast majority of which were contractor crews. While this may not be representative of 12

SCE’s future mix to satisfy its work needs, it illustrates the dynamic nature of staffing crew resources. 13

For this reason, the headcount target must be based on the specific information about SCE’s staffing 14

plans for SCE-only crews. 15

The Commission should adopt SCE’s headcount target of 2,465 as it is 16

based on careful annual planning and provides an aggressive target that SCE can achieve in a safe and 17

efficient manner. SCE appreciates CUE’s recommendation and desire to rapidly grow the workforce; 18

however, its target of 2,608 is outside the reach of what SCE can safely do, and would introduce 19

unnecessary costs and inefficiencies into the business. 20

(2) The Commission Must Continue Its Adopted Practice Of Adjusting 21

The SRIIM Headcount Target Based On Authorized Capital 22

Spending 23

In the 2018 GRC, the Commission approved adjusting the target 24

headcount by one-half the percentage point change of the authorized T&D capital expenditures versus 25

requested T&D capital expenditures.64 CUE recommends the Commission now remove this provision by 26

suggesting that: (1) it would conflict with SCE’s request to adjust the capital spending portion so that 27

64 Id.

31

funding of SRIIM activities can be transferred to wildfire spending,65 and (2) not all work performed by 1

SRIIM workers supports capital programs. SCE disagrees with CUE’s recommendation and strongly 2

urges the Commission to maintain this necessary component of the SRIIM. 3

For any business, it is sound and prudent practice to align staffing levels to 4

the required work and available funds. In short, businesses typically hire and maintain employees when 5

they have the financial means to compensate them. The same principle applies to SCE. In adopting the 6

headcount adjustment mechanism in SCE’s 2018 GRC, the Commission appropriately recognized that it 7

is prudent to align the headcount target to authorized funding. This should continue as an uncontroverted 8

practice in this GRC. To illustrate the prudency of this practice, SCE offers an example from this GRC. 9

SCE has requested capital investment for covered conductor to mitigate the catastrophic risk of 10

wildfires. TURN has suggested reducing SCE’s request by over 75%, a reduction of ~$2.0 billion over 11

the three-year GRC period. Because SRIIM job classifications support SCE’s wildfire mitigation efforts, 12

SCE developed its proposed SRIIM headcount target in consideration of this capital investment. If the 13

Commission were to adopt TURN’s recommended funding levels for covered conductor, it would be 14

imprudent for SCE to staff up to its initial headcount target. This would have the effect of requiring SCE 15

to hire crews for work that will not exist. Removing this adjustment mechanism would risk prudent 16

financial management of the utility and our workforce. 17

CUE also contends that because SRIIM workers can also support O&M 18

activities, the capital spending adjustment is not appropriate. CUE is correct that SRIIM workers can 19

support O&M activities. However, at this time, O&M activities have not been and are still not a driver 20

of the SRIIM mechanism. O&M activities largely pertain to repair work and minor maintenance items 21

on the electric system. This work is generally stable year-to-year and over GRC cycles and remains a 22

relatively small component of the overall work performed. Much of the increased O&M requested in 23

T&D in this GRC is to support Vegetation Management activities, which do not use SRIIM workers. 24

Accordingly, it is appropriate for T&D capital expenditures to continue to serve as the mechanism to 25

align SRIIM target headcount to Commission-authorized funding in line with previous GRC decisions. 26

65 Exhibit CUE Testimony, p. 35.

32

(3) SCE’s Proposed Modification To SRIIM Headcount Measurement 1

Method Is Reasonable. 2

SCE appreciates CUE’s feedback on this proposal. However, for the 3

reasons discussed in SCE’s rebuttal testimony to Cal Advocates on this matter above, the Commission 4

should find reasonable SCE’s proposed modification to how SCE is determined to have achieved the 5

SRIIM headcount target, from using a three-month average to a point-in-time measurement over a six- 6

month period. 7

(4) As No Party Directly Opposes SCE’s SRIIM Flexibility Provision For 8

Wildfire Spending, The Commission Should Adopt This Reasonable 9

Modification To The Capital Spending Mechanism 10

CUE agrees with SCE’s recommended modification to the capital 11

spending component, which would allow spending above Commission-authorized amounts in wildfire 12

mitigation programs that use the same types of resources as those performing SRIIM work to offset 13

reduced spending in SRIIM programs. CUE acknowledges that “SCE’s request is generally reasonable 14

because the wildfire mitigation programs are basically related to safety and reliability,”66 and that 15

“[a]llowing SCE flexibility in safety and reliability spending is reasonable.”67 SCE appreciates CUE’s 16

support for allowing flexibility to pivot to safety and reliability risks as they present themselves, as this 17

serves the best interests of our customers. 18

CUE, however, further states that its full support for this modification is 19

subject to the Commission removing the headcount target adjustment mechanism. SCE disagrees with 20

this position and sees no relationship between this provision and the headcount target. SCE’s proposal to 21

be able to adjust capital spending between Infrastructure Replacement (IR) and Wildfire would in no 22

way conflict with the Commission-approved practice of adjusting the target SRIIM headcount by one-23

half the percentage point change in the authorized T&D capital expenditures versus requested T&D 24

capital expenditures. The headcount adjustment is based on what SCE requested versus what the 25

Commission authorized. This is a one-time calculation. The capital spending provision SCE has 26

66 Exhibit CUE Testimony, p.32, lines 20-21.

67 Id., p. 33, line 2.

33

requested is to be able to shift capital resources to address emergent safety risks, should they arise, 1

without undue penalty.68 2

The headcount adjustment mechanism appropriately right-sizes the 3

headcount target to align to the amount of funding authorized by the Commission. SCE does not agree 4

with CUE’s approval of this flexible capital spending provision merely contingent upon the removal of 5

an unrelated provision. The Commission should adopt the capital spending mechanism as proposed by 6

SCE, conditionally supported by CUE, and unopposed by any other Party, on the basis that it is 7

reasonable and will help ensure the safety and reliability of the grid. 8

4. Conclusion 9

In this GRC, SCE proposes the following changes to the SRIIM adopted in SCE’s 2018 10

GRC with regards to SCE’s workforce: (1) removing Distribution and Transmission Apprentice 11

Groundman positions and adding Distribution Apparatus Technician and Foreman positions to the 12

workforce classification, (2) increasing the SRIIM headcount target above the 2018 GRC authorized 13

levels to 2,465 workers, and (3) modifying the current headcount measurement mechanism to account 14

for achieving the headcount level of 2,465 at some point in the last two quarters of the GRC cycle.69 15

With regards to the level of capital spending, SCE proposes that the Commission 16

continue the capital investment component of the SRIIM mechanism, with the modification that any 17

underspending in the SRIIM capital categories can be offset by one or more of the following conditions: 18

1) Spending in excess of 110% of the authorized amount for “High Priority” programs 19

(Storms, Claims, and Customer Driven/Requested work)70 and 20

68 This flexible safety provision will have no impact on SRIIM workers. SRIIM job classifications support work

across the electric system, i.e. work performed within these job classifications is not isolated to only programs that are included in the SRIIM capital spending component. Rather, work in the SRIIM job classifications contribute to IR, Wildfire, Preventive Maintenance, and other programs. Accordingly, the SRIIM headcount target is not constrained to any capital program – it applies to all programs and activities performed on the grid.

69 Exhibit SCE-02, Vol. 01 Pt. 2, pp. 61-63.

70 High Priority capital programs include those in Exhibit SCE-02, Vol. 01, Part 2 (specifically, Distribution Claim, Distribution Transformers); Exhibit SCE-02, Vol. 02 (specifically, Transmission Claims); Exhibit SCE-02, Vol. 03 (specifically, Substation Claims); Exhibit SCE-02, Vol. 04, Part 3 – Chapter II (all New Service Connections programs), and Chapter III (specifically, Relocations, Rule 20 Conversions, and Distribution Added Facilities); Exhibit SCE-04, Vol. 02 (specifically, Transmission/Substation and Distribution Storm Response).

34

2) Spending above Commission-authorized amounts in wildfire mitigation programs that 1

use the same types of resources as those performing SRIIM work.71 2

SCE recommends that the Commission adopt SCE’s proposal regarding both the 3

headcount target and headcount measurement mechanism, and reject Cal Advocates’ and CUE’s 4

recommendations. Similarly, SCE recommends the Commission adopt SCE’s proposal regarding the 5

headcount adjustment mechanism based on the authorized level of T&D capital expenditures and capital 6

spending provision related to the use of wildfire mitigation capital overspending in place of SRIIM 7

capital program underspending. 8

71 This includes capital costs for SCE’s Wildfire Covered Conductor Program and Enhanced Overhead

Inspection and Remediation Program (specifically, EOI Capital Expenditures), both of which are presented in Exhibit SCE-04, Vol. 05 – Wildfire Management.

Appendix A

Distribution Inspections & Maintenance and Capital-Related Expenses Data Request

Responses and Other Documents

SCE-13 Vol. 01, Part 2: Rebuttal Testimony on Distribution Inspections & Maintenance and Capital-Related Expenses

Appendix A Index of Data Request Responses and Other Documents

A1

DATA REQUESTS/DOCUMENTS PAGE(S)

PubAdv-SCE-073-TLG Q.01.e.1b A2-A3

PubAdv-SCE-091-GAW Q.01.a A4 WP SCE-02, Vol. 1, Pt. 2– Distribution Overhead Detailed Inspections – 2021 A5 WP SCE-02, Vol. 01, Pt. 2–Distribution Preventive and Breakdown O&M Maintenance –2021

A6

PubAdv-SCE-066-TLG Q.01.a-e A7-A11

PubAdv-SCE-056-TXB Q.01 supplemental A12

PubAdv-SCE-091-GAW Q.02.a-d.i-iii A13-A14

SCE-PubAdv-007-JF A15-16

CUE-SCE-002 Q.25.a-d A17-A18

CUE-SCE-001 Q.01.a-b A19-A20

CUE-SCE-004 Q.01.e-h A21

CUE-SCE-004 Q.02.d A22-A23

SCE-02, Vol. 1E, Part 2 A24-A34

SCE-02, Vol. 1E2, Part 2 A35-A48

Southern California Edison A.19-08-013 – SCE 2021 General Rate Case

DATA REQUEST SET P u b A d v - S C E - 0 7 3 - T L G

To: Public Advocates Office Prepared by: Nancy Foehner

Job Title: Senior Project Manager Received Date: 1/13/2020

Response Date: 1/28/2020

Question 01.e.1b: Referring to Exhibit SCE-04, Vol. 5A, page 5, SCE forecasts $105.447 million for its Wildfire Management O&M expenses for TY 2021.

e. Referring to Exhibit SCE-04, Vol. 5A, page 57, Figure II-20, SCE forecasts $58.914 million forits Enhanced Overhead Inspections O&M expenses in the TY. SCE does not show any recordedexpenses for 2014-2017.

1) Referring to Exhibit SCE-02, Vol. 1, Part 2, page 18, SCE forecasts $94.021 million for itsDistribution Preventive and Breakdown O&M Maintenance expenses. SCE includes an alternative forecast of $104.426 million if its Enhanced Overhead Inspections proposal is not adopted in its Wildfire Management activities.

Referring to Exhibit SCE-02, Vol. 1, Part 2, page 10, SCE forecasts $4.945 million for its Distribution Overhead Detail Inspections. SCE includes an alternative forecast of $6.551 million if its Enhanced Overhead Inspections proposal is not adopted in its Wildfire Management activities.

b) Provide documentation that explains SCE’s forecast in more detail. In particular, explainand provide supporting detail on SCE’s assertions that if its forecast of $58.914 million is not adopted, SCE requests that its alternative forecasts of $104.426 million for Distribution Preventive and Breakdown Maintenance and $6.551 million for Distribution Overhead Detail Inspections be adopted as sufficient funding for SCE’s TY activities for Enhanced Overhead Inspections.

Response to Question 01.e.1b: Please note: SCE identified errors in the Application for SCE-02, Vol. 2, Pt. 1 and served errata on November 22, 2019 correcting these errors. In response to CalAdv-SCE-066-TLG, Question 1, SCE provided the errata, revised workpaper, and revised testimony tables in attachments named CalAdv-SCE-066-TLG-Q1_SCE02V1EP2.pdf, CalAdv-SCE-066-TLG-Q1_Preventive-Breakdown-O&M-WP-112219Errata.xlsx, and Cal-Adv-SCE-066-TLG-Q1_RevisedTables.xlsx, respectively. SCE’s responses to questions in the data request will refer to the revised version shown in the attachments.

SCE would like to clarify that, contrary to the last sentence of question b., the alternative forecasts for Distribution Preventive and Breakdown O&M Maintenance and Distribution Overhead Detail Inspections are NOT “sufficient funding for SCE’s TY activities for Enhanced Overhead Inspections.”

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PubAdv-SCE-073-TLG: 01.e.1b Page 2 of 2

Table II-6 from SCE-02, Vol. 1, Pt. 2 shows the forecast for Distribution Preventive and Breakdown O&M Maintenance with and without EOI. SCE’s forecast for Distribution Preventive and Breakdown O&M Maintenance if EOI is NOT adopted is $121.828 million. This amount is calculated by normalizing the forecast amounts for 2021-2023 shown in Table II-6 on the line labeled “Total Preventive & Breakdown O&M Maintenance.” The text of this data request incorrectly states that the amount shown in Table II-6, on the line labeled “Preventive & Breakdown O&M Maintenance with EOI Funded,” is the amount SCE is requesting if EOI is NOT funded. To be clear, SCE’s request for Preventive & Breakdown O&M Maintenance if EOI is not funded is $121.828 million.

At the time SCE developed its forecasts, presented in SCE’s testimony and workpapers for SCE-02, Vol. 1, Pt. 2 for both the Overhead Detailed Inspections and the Preventive and Breakdown O&M Maintenance, SCE clearly explains that it is reducing the forecast by 25% to exclude the portion of the overhead distribution system which is in the HFRA because if EOI is funded all inspection and maintenance work performed in the HFRA will be performed under EOI. SCE’s testimony and workpapers make clear that SCE has made a 25% reduction to its forecast to remove the HFRA work from the forecast for Distribution Overhead Detailed Inspections and Preventive and Breakdown O&M Maintenance.

If the EOI is not funded and the alternative forecasts of $121.828 million for Preventive and Breakdown O&M Maintenance and $6.551 million for Overhead Detailed Inspections are not authorized, then SCE will be left with funding sufficient to inspect and maintain only 75% of its distribution system, which could result in damage to our system remaining unidentified for unacceptable periods of time. Similarly, failure to fund the Preventive and Breakdown O&M Maintenance at the alternative level, absent funding for EOI, would provide insufficient funding necessary to perform identified maintenance in the HFRA.

2014 2015 2016 2017 2018 Preventive and Breakdown O&M Maintenance 118,770$ 104,127$ 99,608$ 92,898$ 78,215$


Priority 3 Maintenance Items - 3,000 9,000 18,000 27,000 Total Preventive & Breakdown O&M Maintenance 103,828$ 106,828$ 112,828$ 121,828$ 130,828$

Reduction for EOI Performed in HFA (6,434) (13,250) (14,016) (15,164) (16,312) Preventive & Breakdown O&M Maintenance with EOI Funded 97,394$ 93,578$ 98,812$ 106,664$ 114,516$

2021 Normalized 106,664$

Recorded

Forecast

Table II-6 - Revised to Include November 22, 2019, ErrataDistribution Preventive and Breakdown O&M Maintenance

Forecast Calculation for Priority 3 and EOIConstant 2018 ($000)

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of 2

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DATA REQUEST SET P u b A d v - S C E - 0 6 6 - T L G

To: Public Advocates Office Prepared by: Nancy Foehner

Job Title: Senior Project Manager Received Date: 1/7/2020


Question 01.a-e: Referring to Exhibit SCE-02, Vol. 1, Part 2, page 1, SCE forecasts $161.284 million for its Distribution Inspections & Maintenance and Capital-Related O&M expenses for TY 2021.

a. Provide 2019 recorded adjusted expenses for each of the Business Units/GRC Activitiesincluded in the Business Planning Element for SCE’s Distribution Inspections & Maintenance and Capital-Related O&M expenses.

b. Provide SCE’s staffing level and associated labor expenses for employees recording costs toSCE’s Distribution Inspections & Maintenance and Capital-Related expenses for 2014-2019.

c. Referring to page 18, Figure II-7, for SCE’s Distribution Preventive and Breakdown O&MMaintenance expenses, SCE shows a forecast of $94.021 million for TY 2021. In SCE’s response to data request PubAdv-SCE-010-TLG, Q.1, SCE provided a TY forecast of $104.426 million for its Distribution Preventive and Breakdown O&M Expenses. On page 20, Table II-6, SCE shows a TY forecast of $86.133 million for 2021. SCE calculated its TY forecast by utilizing a four-year average (2014-2017) and then added incremental funding of $9.0 million for Priority 3 Maintenance Items and includes a proposed reduction of $26.695 million for Enhanced Overhead Inspections (EOI) performed in HFA.

Provide documentation that identifies the line item detail and that demonstrates the breakdown of the individual line item forecast estimates included in the incremental request of $9.0 million for Priority 3 Maintenance Items and the proposed decrease of $26.695 million for Reduction for EOI Performed in HFA.

d. Referring to page 19, lines 9 through 12, SCE states it “forecasts its 2021 test year requestusing a four-year average of 2014-2017 costs” because “2018 was not a normal operating year” due to SCE initiating its Enhanced Overhead Inspection program which utilized personnel that “normally perform O&M maintenance work.” SCE’s expenses declined each year between 2014 and 2017, from $118.770 million in 2014 to $92.898 million in 2017, a decrease between 2014 and 2017 of $25.873 million.

1) Provide documentation that explains and identifies all O&M maintenance work thatSCE postposed/deferred each year between 2014-2017, during the time period its recorded expenses were declining.

2) If SCE was able to successfully complete all scheduled maintenance projects on time

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PubAdv-SCE-066-TLG: 01.a-e Page 2 of 5

between 2014-2017, provide documentation that explains in detail and demonstrates specifically how SCE was able to successfully complete all scheduled maintenance work between 2014 and 2017 when its recorded expenses were declining each year.

3) Regarding SCE’s Enhanced Overhead Inspection work that was performed in the lastquarter of 2018, provide documentation that identifies the specific Business Planning Element, Business Unit/GRC Activity, accounts and recorded costs where SCE reallocated funding and recorded expenses incurred by its “personnel who would normally perform O&M maintenance work” for its Distribution Preventive and Breakdown O&M Maintenance activities.

4) Provide documentation that explains in detail and demonstrates SCE management’sutilization of including 2014 recorded expenses of $118.770 million in its TY forecast calculation (the highest recorded for the five-year period (2014-2018) but excluded 2018 expenses of $78.215 million (the lowest recorded for the five-year period (2014-2018) from its TY calculation.

e. Referring to page 34, lines 25-26, SCE states it “expects that streetlight sales and LEDconversions will not result in a decrease in operations and maintenance costs for streetlights.” SCE’s expenses declined by $2.169 million between 2014 and 2018. SCE utilized 2018 recorded expenses of $6.575 million as its TY forecast.

1) Provide 2019 recorded adjusted expenses for SCE’s Streetlight Operations,Inspections and Maintenance.

2) Referring to page 34, line 27, SCE states it has “entered into sales agreements withseveral cities…,” provide documentation that identifies all sales agreements and the associated cities, and the status of the sales as of December 31, 2019 (i.e., sales completed and ownership transferred, or in process and expected transfer dates).

Response to Question 01.a-e:

Please note: SCE identified errors in the Application for SCE-02, Vol. 2, Pt. 1 and served errata on November 22, 2019 correcting these errors. SCE has attached the errata, revised workpaper, and revised testimony tables in the attachments CalAdv-SCE-066-TLG-Q1_SCE02V1EP2.pdf, CalAdv-SCE-066-TLG-Q1_Preventive-Breakdown-O&M-WP-112219Errata.xlsx, and PubAdv-SCE-066-TLG-Q1_RevisedTables.xlsx, respectively. SCE’s responses to questions in the data request will refer to the revised version shown in the attachments. To aid in responding to this data request SCE has reproduced the testimony tables using the revised amounts.

Question 1.a SCE will publish 2019 recorded expenses by March 30, 2020.

Question 1.b SCE’s labor forecast for O&M expenses presented in SCE-02, Vol. 2, Pt. 1 is based on the forecast work volume necessary to perform each activity. These forecasts are based on work volumes, run-rates, or historical labor expenses. The labor forecast represents a resource requirement and is not based on a specific staffing level or headcount. Employees who perform the work presented in SCE-02, Vol. 1, Pt. 2 possess the same skills allowing SCE to deploy this labor resource based on geography, work volume, and resource requirements specific to the work.

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Question 1.c SCE submitted errata on November 22, 2019, to correct the amounts shown in SCE-02, Vol. 1, Pt. 2, Figure II-7 and Table II-6 and CalAdv-SCE-010-TLG, Q.1. Revised values for Figure II-7 and Table II-6 are shown below and provided in the attached file, Cal-Adv-SCE-066-TLG-Q1_RevisedTables.xlsx.

As stated in testimony at SCE-02, Vol. 1, Pt. 2, page 4, footnote 1; page 9, footnote 8; and page 19, footnote 17, CPUC Decision (“D.”)18-05-042 amended Rule 18 of G.O. 95 requiring Priority 3 maintenance items to be corrected within 60 months, effective June 30, 2019. In order to be in compliance with the Commission’s direction, SCE’s forecast includes a level work plan that starts prior to the first due date to help ensure compliance. SCE currently has approximately 1,000,000

2014 2015 2016 2017 2018 2019 2020 2021Labor 47,810 48,299 50,038 48,336 44,442 45,804 43,892 48,408

Non-Labor 70,959 55,828 49,570 44,562 33,772 51,591 49,686 58,257 Other

Total Expenses 118,770 104,127 99,608 92,898 78,215 97,395 93,578 106,664 Ratio of Labor to Total 40% 46% 50% 52% 57% 47% 47% 45%

Recorded Forecast

Figure II-7 - Revised to Include November 22, 2019, ErrataDistribution Preventive and Breakdown O&M Maintenance Expenses

Recorded (2014-2018) / Forecast (2019-2021)Constant 2018 ($000)



Priority 3 Maintenance Items - 3,000 9,000 18,000 27,000 Total Preventive & Breakdown O&M Maintenance 103,828$ 106,828$ 112,828$ 121,828$ 130,828$

Reduction for EOI Performed in HFA (6,434) (13,250) (14,016) (15,164) (16,312) Preventive & Breakdown O&M Maintenance with EOI Funded 97,394$ 93,578$ 98,812$ 106,664$ 114,516$

2021 Normalized 106,664$

Recorded

Forecast

Table II-6 - Revised to Include November 22, 2019, ErrataDistribution Preventive and Breakdown O&M Maintenance

Forecast Calculation for Priority 3 and EOIConstant 2018 ($000)

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identified Priority 3 maintenance items identified. Of the one million identified Priority 3 maintenance items, approximately 335,000 have been identified within the last five years. SCE’s forecast to schedule and repair already identified priority 3 maintenance items, in addition to those which will continue to be identified through on-going, annual inspections, will provide the funding necessary to meet the Commission’s guidance in D.18-05-042.

SCE’s methodology for calculating the portion of Distribution Preventive and Breakdown O&M Maintenance Expenses performed in the CPUC’s identified High-Fire Threat Districts (“HFTD”) in addition to additional non-HFTD High Fire Threat Areas (“HFRA”) is explained in detail in workpaper WP SCE-02, Vol. 02, Pt. 1, pp. 35-37 –Distribution Preventive and Breakdown O&M Maintenance – 2021. The revised workpaper is included with this response in CalAdv-SCE-066-TLG-Q1_Preventive-Breakdown-O&M-WP-112219Errata.xlsx. SCE’s methodology, explained in more detail in workpapers, used historical recorded data to identify the percentage of work performed on the overhead system. This is appropriate because the Enhanced Overhead Inspection (“EOI”) initiative is performed only on SCE’s overhead system. After calculating the percentage of work forecast on the overhead system, SCE reduced this amount by 25.05% for the percentage of circuit miles within HFRA.

Question 1.d.1 As stated in SCE-02, Vol. 1, Pt. 2, pages 18-19, lines 9-1, “In 2018, SCE’s recorded expenses were $13.9 million lower than 2017 due to a one-time, temporary change in maintenance repair scheduling. This temporary change was implemented to accommodate EOI) activity.” SCE did not postpone or defer any maintenance work during 2014-2018.

Question 1.d.2 Distribution maintenance items are identified through inspections and prioritized based on conditions as required by G.O. 95. SCE’s inspections programs, which drive the maintenance items included in this activity, are performed on a three-year cycle for underground assets and a five-year cycle for overhead assets. Year-over-year fluctuations reflect the cyclical nature of the inspections which in turn drive the maintenance activities. Please also see response to Question 1.d.4.

Question 1.d.3 It has not been SCE’s typical practice to track re-allocated funds. SCE manages its budgets based on the authorized revenue requirement which follows the Commission’s adopted forecast of factoring in capital expenditures, O&M expenses, depreciation, escalation, etc. Actual O&M expenses incurred in any particular program or project may vary from what was forecast, as the GRC forecasts were initially developed years earlier, and what was actually authorized in the CPUC’s D.19-05-020, which for the 2018 GRC was finalized in 2019. Moreover, SCE’s programs necessarily adapt when emergent needs arise, new or better data becomes available, external factors impact SCE, unforeseen changes to the transmission system occur, new or modified compliance requirements are introduced, etc. Please see SCE-06, Volume 2, for additional detail on SCE’s capital allocation process.

A10


Question 1.d.4 SCE’s Preventive O&M Maintenance Expenses include maintenance items identified through SCE’s inspection programs. Most of these maintenance items will be identified through future inspections. SCE’s Breakdown O&M Maintenance Expenses include maintenance work performed on a reactive basis. Because these two combined activities constitute on-going maintenance of the system, SCE relies on historical recorded data to forecast the test year. As explained in response to Question 1.d.2, the maintenance items included in this activity are identified through inspections which are performed on either a three- or five-year cycle. The year-over-year fluctuations reflect the cyclical nature of the inspections which drive the resulting maintenance items.

Recorded costs incurred in 2018 are not representative of a full year of maintenance because SCE redirected its workforce to perform EOI. EOI was a short-term, comprehensive detailed inspection of SCE’s overhead system in the 2018-2019 time period in SCE’s HFRA and was critical to reducing the risk of fire ignition associated with utility infrastructure.

SCE has experienced disruptive events in the past. However, at the end of 2018 SCE moved crews from other districts to focus efforts on EOI and mitigation of wildfire risk. Almost every region within SCE’s service territory was affected by EOI. The inclusion of data from calendar year 2018, which was an anomalous year for SCE, in calculating the funding needed to perform maintenance on our distribution system will not provide the resources necessary to continue to maintain our distribution system.

Question 1.e.1 SCE will publish 2019 recorded expenses by March 30, 2020.

Question 1.e.2 Please see attached file “CalAdv-SCE-066-TLG-Q1_StreetlightSalesQueue.xlsx.”

A11

Southern California Edison A.19-08-013 – SCE 2021 GRC

DATA REQUEST SET P u b A d v - S C E - 0 5 6 - T X B

To: Public Advocates Office Prepared by: Aquanetta Hardy

Job Title: Rates, Sr. Advisor Received Date: 3/30/2020


Question 01 Supplemental: Please provide recorded adjusted expenses for 2019 delineated by labor, non-labor and other in base year 2018 and nominal dollars for the various SCE witnesses/exhibits. Include details to show accounts/sub-accounts. Provide escalation rates.

Response to Question 01 Supplemental:

Please see the attached preliminary view of its 2019 recorded/adjusted expenditures in constant and nominal dollars delineated by labor, non-labor as of March 27, 2020. The O&M amounts presented as of this date are preliminary and subject to change, and only include adjustments to account for:

1. Removal of Balancing and Memorandum Accounts where recovery is sought outside the GRC2. Removal of Shareholder expenses3. Removal of direct SONGS-related expenses4. Removal of CS Re-platform in accordance with SCE amended testimony submission5. Removal of miscellaneous Non-GRC de minimis items

Removal of the above categories required no adjustments from Labor/Non-Labor to Other, therefore no recorded amounts are shown in “Other”.

A12

Ratepayer Advocates in the Gas, Electric, Telecommunications and Water Industries

PUBLIC ADVOCATES OFFICE DATA RESPONSE

Southern California Edison Company Test Year 2021 General Rate Case A.19-08-013

Date: 8 April 2020

Origination Date: 24 April 2020

Response Due: 8 May 2020

To: Jesse Feinberg, [email protected]

cc: [email protected] [email protected] [email protected]

From: Truman Burns, Project Coordinator Public Advocates Office 505 Van Ness Avenue, Room 4104 San Francisco, CA 94102 [email protected]

Response by: Tamera Godfrey Phone: 415-703-1367Email: [email protected]

Data Request No: SCE-PubAdv-007-JF

SCE Questions: 1. See Exhibit SCE-02, Volume 1, Part 2, pp. 64, Lines 9-10 regarding SCE’s proposed

change to the capital component of the SRIIM Mechanism to allow for flexibility inaddressing emergent safety and reliability issues. Referring to Cal Advocates’ testimony(PAO-06, p. 69), where it states, “SCE should continue the SRIIM as adopted in SCE’s2018 GRC, with the only exception being the modification to the Workforce Categories,” isSCE correct to interpret this statement as Cal Advocates opposes SCE’s proposed changeto the capital investment component of SRIIM?

2. If the answer to question 1 is “Yes”, please provide all justification and rationale (includingall research, analysis, documentation, etc.) supporting Cal Advocates’ position. If theanswer is “No”, please clarify Cal Advocates’ position on SCE’s proposed change to thecapital investment component of SRIIM.

3. Referring to PAO-06, p. 70, Line 10, please provide all justification and rationale(including all research, analysis, documentation, etc.) supporting Cal Advocates’position that SCE’s proposed changes to the headcount measurement methodology is“unjust and burdensome to ratepayers.” The response should specifically address whyCal Advocates asserts the proposed changes are both (1) unjust and (2) burdensome.

A15

2

Public Advocates Office Response:

1-2.The Public Advocates Office’s Exhibit PAO-6 pp. 67-70 did not comment on or oppose SCE’sTY proposal for the capital component for the Safety and Reliability Investment Incentive Mechanism (SRIIM).

3. As discussed on page 70 of Exhibit PAO-6, SCE’s proposal to change the headcount measurement mechanism to account for achieving the headcount level at some point in the last two quarters of the GRC cycle is “unjust and burdensome to ratepayers” because SCE would not have to provide refunds to customers for failing to achieve the headcount target if SCE achieved the headcount level for one day, one week, or one month in a six month period. SCE’s Safety and Reliability Investment Incentive Mechanism (SRIIM) is a mechanism adopted by the Commission to “incentivize SCE to spend authorized dollars on programs that support safety and reliability, and to maintain a workforce of field employees to support the safe and reliable operation of the electric grid.” If SCE fails to achieve the headcount target, it agreed to refund customers in the same manner as approved in the 2018 SRIIM (i.e., SCE would refund $20,000 for each employee shortfall relative to the target, up to 50 employees short, and $80,000 per employee thereafter). SCE has not provided any recorded and verifiable problems it had with the headcount measurement mechanism adopted by the Commission for determining its SRIIM headcount based on an average over the last quarter of 2020. SCE has not provided any documentation demonstrating that the adopted method to measure headcount was ineffective and prevented it from capturing the fluctuations in headcount and achieving the target level.

END OF RESPONSE

A16


DATA REQUEST SET C U E - S C E - 0 0 1

To: CUE Prepared by: Brent Fielder

Job Title: Principle Manager Received Date: 3/25/2020


Question 01.a-b: Regarding the statement (Ex. SCE-01, Vol. 1, p. 11:17-19): “We have effectively managed our processes to work more efficiently and we face real-world resource constraints driven by the need to address and mitigate emergent risks related to wildfires.”

a. Please provide any and all support for: “…we face real-world resource constraints driven bythe need to address and mitigate emergent risks related to wildfires.” Please include any quantitative studies or estimates along with back up for those quantitative estimates that support this statement.

b. What has SCE done to address these “resource constraints” including but not limited to multi-year or multi-GRC planning, apprenticeship programs, employee recruitment and retention efforts, and more efficient deployment of existing resources.

Response to Question 01.a-b:

a. Please provide any and all support for: “…we face real-world resource constraintsdriven by the need to address and mitigate emergent risks related to wildfires.” Please include any quantitative studies or estimates along with back up for those quantitative estimates that support this statement.

Considering the work required to maintain and operate the electric system, and the need to immediately and substantially address wildfire risk, SCE undertook an effort to examine how SCE could modify the allocation of available resources to rapidly and effectively deploy wildfire mitigation programs. SCE found that, in many cases, the same resources that are required to support wildfire mitigation activities are responsible for implementing SCE’s traditional infrastructure replacement work. These resources are finite, and SCE faces real resource constraints. SCE evaluated these constraints by estimating the potential increase in execution capacity associated with adding additional SCE and contract resources to the extent possible. SCE assumed that we could grow the execution workforce by ~10%-20% per year in 2019 and 2020. For example, this translated to a potential increase of up to 100 electrical crews in 2019 alone. However, it is important to note that other resources (e.g., engineers, planners, support personnel) were a comparable problem. SCE assumed these growth rates would diminish over time and would stabilize to between 5%-7.5% per year in 2021-2023. SCE notes that these assumptions were developed based on historical experience and subject matter expertise. Through this evaluation, SCE recognized that it couldn’t grow the workforce fast enough to meet the demands of the wildfire

A19

CUE-SCE-001: 01.a-b Page 2 of 2

program.

As such, and in light of assessing overall grid and societal needs, SCE made a conscious decision to pursue important system augmentation, infrastructure replacement, and load growth activities at a slower pace for the near future in order to divert necessary resources to implement higher safety risk reduction wildfire mitigation work. SCE is mindful of its responsibility as stewards of customer funding and has put forward a request in this 2021 GRC that provides significant immediate and longer-term value while maintaining affordability for customers. SCE performed a risk analysis to evaluate the public safety impacts of shifting resources from traditional infrastructure replacement programs to wildfire mitigation work. This analysis shows the safety benefit gained through the enhanced portfolio of wildfire mitigation exceeds the safety reduction in other risk initiatives, specifically contact with overhead conductor and underground equipment failure risks (which are further described in SCE’s 2018 RAMP Report).

For additional discussion on SCE’s resource constraints and the allocation from traditional IR programs to wildfire see SCE-02 Volume 1, Part 1 Distribution Infrastructure Replacement, SCE-01 Volume 2 pp. 24-25 Risk-Informed Strategy & Business Plan, and SCE-04 Volume 5 Wildfire Management.

b. What has SCE done to address these “resource constraints” including but not limited tomulti-year or multi-GRC planning, apprenticeship programs, employee recruitment and retention efforts, and more efficient deployment of existing resources.

SCE has and is continuing to analyze operational data and modify its planning and deployment approaches to help improve performance in 2020 and beyond through multi-year planning. SCE will continue to realign existing resources to support heavily impacted work areas. SCE plans to add additional crews beginning in 2021 to increase SCE crew capacity across various work types through hiring groundman and other entry level positions and continues to have an active apprenticeship program. SCE will continue to keep its crews fully scheduled with work, which may include covered conductor work. Scope of work exceeding regional capacity of SCE crews are generally completed by contractors.

A20



To: CUE Prepared by: Jesse Feinberg

Job Title: Senior Advisor Received Date: 4/20/2020


Question 01.e-h: In reference to the response to Question 1.a.:

e. The response refers to electrical crews. How many personnel are in anelectrical crew on average?

f. Why was it that SCE assumed these growth rates would diminish overtime and would stabilize to between 5%-7.5% per year in 2021-2023. Please provide any evidence for this statement.

g. Have the assumptions behind the statement, SCE assumed these growthrates would diminish over time and would stabilize to between 5%-7.5% per year in 2021-2023 changed at all?

h. Please provide any documentation for the statement that SCE notes thatthese assumptions were developed based on historical experience and subject matter expertise.

Response to Question 01.e-h:

e. SCE generally assumes four people per crew on average for planning purposes, however theactual deployment can vary from two to five or more people per crew based on job-specific details.

f. SCE established this growth rate based on historical experience and subject matter expertguidance that SCE can add between 40 and 60 electrical construction crews as has been done in thepast. This is the equivalent of two new source contract vendors of 20 to 30 crews. SCE expects toachieve this growth rate at reasonable costs without sacrificing safety or efficiency.

g. SCE continues to reevaluate its assumptions. At this time its assumptions remains unchanged.

h. See response f above.

A21



To: CUE

Prepared by: Jesse Feinberg Job Title: Senior Advisor Received Date: 4/20/2020


Question 02.d: In reference to the response to Question 1.b.: d. In reference to the statement, SCE plans to add additional crews beginning in 2021 to increase SCE crew capacity across various work types through hiring groundman and other entry level positions and continues to have an active apprenticeship program. i. How many additional crews does SCE plan to add in each of the years 2021 to 2026? ii. How many additional groundmen does SCE plan to add (above replacing those lost through attrition or change of position) in each of the years 2021 to 2026? iii. How many additional personnel in other entry level positions does SCE plan to add (above replacing those lost through attrition or change of position) in each of the years 2021 to 2026? iv. Please provide details that support the statement that SCE continues to have an active apprenticeship program. v. Please provide any documents that describe SCE s apprenticeship programs. vi. How many personnel did SCE have enrolled in apprenticeship programs for each of the years 2010 to 2019? vii. How many personnel does SCE plan to have enrolled in apprenticeship programs for each of the years 2020 to 2029? Response to Question 02.d:

i. SCE Plans to add 40 crews per year with half of them being SCE crews.

ii. Years after 2024 are beyond the scope of this GRC, and SCE has only forecast at this time through 2023. SCE intends to add (net) approximately 15-20 groundmen each year with a total of 100 or more (gross) hired per year to address attrition.

iii. Years after 2024 are beyond the scope of this GRC, and SCE has only forecast at this time through 2023. SCE intends to onboard approximately 500-600 “other entry level positions” through 2023. SCE has a number of entry level positions within T&D, including positions that support and oversee personnel for the additional crews, support personnel at yards, local planning, engineering and other groups that support the field

A22

CUE-SCE-004: 02.d Page 2 of 2

activities. These roles will provide management; field safety oversight; operational oversight and technical support for field crews; coordination of outages; purchase of material; scheduling of jobs and customer contacts; and oversight of contract crews.

iv. SCE will continue to have an active Lineman Apprenticeship Program to support its plan to add 20 SCE Crews per year. We have only evaluated through 2023, and SCE plans to add (net) 36 apprentice each year with a total enrollment of 96 (gross) per year as the training program is a multi-year effort.

v. See attached “CUE-SCE-004 Q2.d. - Apprentice Lineman Program Policies”.

vi. Lineman Apprenticeship Program Enrollment Year Enrolled

Personnel 2010 392 2011 327 2012 260 2013 173 2014 153 2015 158 2016 238 2017 283 2018 280 2019 298

vii. Years after 2024 are beyond the scope of this GRC, and SCE has only forecast at this

time through 2023. SCE anticipates approximately 275-300 personnel enrolled in apprenticeship programs each year, from 2020-2023.

A23



A24

Figure II-7 Distribution Preventive and Breakdown O&M Maintenance Expenses

Recorded (2014-2018)/Forecast (2019-2021) (Constant 2018 $000)

Continued

LaborNon-Labor

Other

A26


Forecast Calculations for Priority 3 and EOI (Constant 2018 $000)

A27

Figure II-8 Distribution Preventive and Breakdown Capital Maintenance

Multiple CWBS Elements Recorded (2014-2018)/Forecast (2019-2023)

(Total Company - Nominal $000)

A28

2020: $277,373 2021; $286,197 2022: $294,474 2023: $302,946


Forecast Calculations for EOI (Nominal $000)

A29

Table III-10 Distribution Support Activities O&M Expenses


LaborNon-Labor

Other

A32

2019: $16,073 2020: $11,407 2021: $11,407

2019: $9,182 2020: $8,051 2021: $8,051

Table III-11 Distribution Support Activities

2021 Test Year Request (Constant 2018 $000)

A33

$3,196

Table III-14 Transformer Requirements for

Distribution Preventive and Breakdown Capital Maintenance Forecast Calculations for EOI

(Nominal $000)

A34

2019: $45,513 2020: $49,108 2021: $52,282 2022: $55,350 2023: $58,580

2019: $43,544 2020: $43,215 2021: $44,590 2022: $45,880 2023: $47,199



A35

Figure II-7 Distribution Preventive and Breakdown O&M Maintenance Expenses


Continued

LaborNon-Labor

Other

A37


Forecast Calculations for Priority 3 and EOI (Constant 2018 $000)

A38

Figure II-8 Distribution Preventive and Breakdown Capital Maintenance

Multiple CWBS Elements Recorded (2014-2018)/Forecast (2019-2023)


A39


Forecast Calculations for EOI (Nominal $000)

A40

Figure III-19 Wildfire Covered Conductor Program Transformers

WBS Element CET-PD-OT-TR-WF Recorded 2014-2018 / Forecast 2019-2023


A43

FR

Workpaper Title: Distribution Preventive and Breakdown O&M Maintenance - 2021Exhibit: SCE-02, Vol. 1, Pt. 2Name: Distribution Maintenance and Inspection and Capital Related Expense and OtherWitness: Terry OhanianActivity Name: Distribution Preventive and Breakdown O&M Maintenance

1. Calculation of Percentage Overhead vs Underground for Preventive & Breakdown O&M Maintenance This calculation uses the sum of 2014-2017 recorded for both Preventive & Breakdown Maintenance to calculate the percentage of this work performed on the overhead system. FERC 593 is overhead and FERC 594 is underground.

Nominal $000 % Recorded2014-2017 by OH/UG

593 - Preventive & Breakdown Maintenance 183,871 47%594 - Preventive & Breakdown Maintenance 206,705 53%Total Maintenance of Overhead & Underground Lines 390,576

2018 was excluded from calculation because it is not used for developing forecast.

2. Recorded for each sub-activity within Distribution Preventive & Breakdown O&M Maintenance Shows calculation of labor and non-labor percentages by each sub-activity. These calculations use 2014-2017 recorded. Shows calculation of 4-year average (2014-2017) recorded for each sub-activity.

Average % Labor /Distribution Preventive O&M Maintenance 2014 2015 2016 2017 2018 2014-2017 Non-Labor

Labor 22,541 21,430 22,098 18,463 17,962 21,133 34.1%Non-Labor 55,659 40,819 36,779 29,940 23,139 40,800 65.9%Other - - - - - - 0.0%Total 78,200 62,249 58,877 48,403 41,101 61,932 100%

Distribution Breakdown O&M MaintenanceLabor 24,357 25,899 27,119 28,936 25,487 26,578 65.8%Non-Labor 14,668 14,427 12,157 14,030 9,999 13,821 34.2%Other - - - - - - 0.0%Total 39,026 40,326 39,276 42,966 35,486 40,398 100%

Preventive Transformer MaintenanceLabor 847 916 757 871 936 848 95.4%Non-Labor 73 18 22 51 83 41 4.6%Other - - - - - - 0.0%Total 920 934 779 922 1,019 889 100%

Graffiti Removal Labor 65 55 64 65 57 62 9.9%Non-Labor 558 563 612 542 551 569 90.1%Other - - - - - 0.0%Total 623 618 676 607 609 631 100%

Total Preventive & Breakdown O&M MaintenanceLabor 47,810 48,299 50,038 48,336 44,442 48,621 46.8%Non-Labor 70,959 55,828 49,570 44,562 33,772 55,230 53.2%Other - - - - - - 0.0%Total 118,770 104,127 99,608 92,898 78,215 103,851 100%

3. Distribution Preventive O&M Maintenance and Distribution Breakdown O&M Maintenance combined. Calculation shows the labor / non-labor percentage for the two sub-activities.

Total Labor 47,711 46.6%Total Non-Labor 54,620 53.4%Total 102,331 100%

2018 Constant $000Recorded

Page 1 of 5

A44


4. Development of Forecast for Distribution Preventive and Breakdown O&M Maintenance.

2019 2020 2021 2022 20234.a. Forecast using 4-year average, 2014-2017, with the exception of Graffiti Removal.Distribution Preventive O&M Maintenance - 2014 through 2017 Average

Labor 21,133 21,133 21,133 21,133 21,133Non-Labor 40,800 40,800 40,800 40,800 40,800Other - - - - - Total 61,932 61,932 61,932 61,932 61,932

Distribution Breakdown O&M Maintenance - 2014 through 2017 AverageLabor 26,578 26,578 26,578 26,578 26,578Non-Labor 13,821 13,821 13,821 13,821 13,821Other - - - - - Total 40,398 40,398 40,398 40,398 40,398

Preventive Transformer Maintenance - 2014 through 2017 AverageLabor 848 848 848 848 848Non-Labor 41 41 41 41 41Other - - - - - Total 889 889 889 889 889

Graffiti Removal - Last Year RecordedLabor 57 57 57 57 57Non-Labor 551 551 551 551 551Other - - - - - Total 609 609 609 609 609

Total Preventive & Breakdown O&M MaintenanceLabor 48,616 48,616 48,616 48,616 48,616Non-Labor 55,212 55,212 55,212 55,212 55,212Other - - - - - Total 103,828 103,828 103,828 103,828 103,828

4.b. Calculates increase due to change in Priority 3 due date.Uses the Distribution Preventive O&M Maintenance Labor/Non-Labor percentages, 34.1% and 65.9%.

Labor - 1,024 3,071 6,142 9,213Non-Labor - 1,976 5,929 11,858 17,787Other - - - - - Total - 3,000 9,000 18,000 27,000

4.c. Calculates amount of work performed in High Fire AreasIncludes Distribution Preventive O&M Maintenance, Distribution Breakdown O&M Maintenance, and increase due to Priority 3 change.Applies the 47% for overhead work and 25.05% for HFA. Assumes half-year for 2019. Uses combined Labor / Non-Labor percentages.

Labor (2,813) (5,747) (5,989) (6,351) (6,713)Non-Labor (3,221) (6,674) (7,140) (7,840) (8,539)Other - - - - - Total (6,034) (12,421) (13,129) (14,190) (15,252)

4.d. Sum of 4.a., 4.b., and 4.c.2019 2020 2021 2022 2023

Labor 45,803 43,893 45,698 48,407 51,116Non-Labor 51,992 50,514 54,001 59,231 64,460Other - - - - - Total 97,795 94,407 99,699 107,638 115,577

4.e. Distribution Preventive and Breakdown O&M Maintenance forecast with test year normalized.Total Forecast for Distribution Preventive & Breakdown O&M Maintenance Normalized

2019 2020 2021Labor 45,803 43,893 48,407Non-Labor 51,992 50,514 59,231Other - - -

2018$Forecast

Corrected to refer to D15 and

not D16 (see Rev 1)

Page 2 of 5

A45


Total 97,795 94,407 107,638

Page 3 of 5

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