transmission & distribution (t&d) volume 01 – operational ......-2- 1 ii. 2 operational...
TRANSCRIPT
Application No.: A.16-09-001 Exhibit No.: SCE-18, Vol. 01 Witnesses: R. Woods
(U 338-E)
2018 General Rate Case Rebuttal Testimony
Transmission & Distribution (T&D) Volume 01 – Operational Overview and Risk-Informed Decision-Making
Before the
Public Utilities Commission of the State of California
Rosemead, California
June 16, 2017
SCE-18: Transmission & Distribution (T&D) Volume 01 – Operational Overview and
Risk –Informed Decision-Making Table Of Contents
Section Page Witness
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I. INTRODUCTION .............................................................................................1 R. Woods
II. Operational Excellence (OpX) ...........................................................................2
A. Intervenors’ Positions ............................................................................3
B. SCE’s Rebuttal To Inventors’ Positions ................................................3
1. Overhead Conductor Program ...................................................4
2. Poles Program ............................................................................4
III. Safety and Reliability Investment Incentive Mechanism ..................................5
A. CUE’s Position ......................................................................................7
1. Capital ........................................................................................7
2. Workforce ..................................................................................8
B. SCE’s Rebuttal To CUE’s Position .......................................................9
1. Capital ........................................................................................9
2. Workforce ..................................................................................9
IV. Asset and Operational Risk Management ........................................................11
A. Overhead Conductor Program (OCP) Risk Analysis...........................12
1. TURN’s Position ......................................................................13
2. SCE’s Response to TURN’s Position ......................................13
a) TURN’s Comparison of PRISM Scores is Fundamentally Flawed .................................................13
b) TURN Criticizes PRISM’s Decision Making Capability and Then Attempts to Use It To Justify its Own Proposed Reduction to OCP ...............13
SCE-18: Transmission & Distribution (T&D) Volume 01 – Operational Overview and
Risk –Informed Decision-Making Table Of Contents (Continued)
Section Page Witness
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c) TURN Mistakes Preliminary Scoring of Untested Pilot Mitigations for the Lack of a Comprehensive and Cost-Effective OCP Strategy ........................................................................14
3. CFC’s Position .........................................................................15
4. SCE’s Response to CFC’s Position .........................................16
5. Conclusion ...............................................................................16
Appendix A Workpapers for SCE-02, Volume 1 and Data Request Response CUE-SCE-001 Q.07 a-c Supplemental
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I. 1
INTRODUCTION 2
In SCE-02, Volume 1, SCE provided an overview of the Transmission and Distribution system 3
and explained how we support SCE’s key priorities: Be Safe In All We Do; Reinforce Grid Reliability 4
and Resiliency; Integrate Distributed Energy Resources without Compromising Safety and Reliability; 5
Improve Service and Choices to Meet Evolving Customer Needs; and Enhance Operational Efficiency 6
and Effectiveness. 7
SCE also provided direct testimony on T&D’s operational and service excellence (OpX) that 8
included benefits we forecast for 2016 through 2020. SCE also proposed changes to its Safety and 9
Reliability Investment Mechanism (SRIIM) and provided information on T&D’s Asset and Operational 10
Risk Management program. 11
While no intervenor directly addressed T&D’s forecast OpX benefits, intervenors failed to take 12
these forecast benefits into consideration when they proposed reductions to both the Overhead 13
Conductor Program (OCP) and the Poles Program. This results in duplicative forecast reductions. For 14
SRIIM, CUE proposes alternatives to both the capital and headcount components. Further, while no 15
intervenor provided testimony regarding the Asset and Operational Risk Management section overall, 16
TURN makes recommendations for the OCP based on its interpretation of SCE’s risk analysis. 17
In the testimony below, SCE explains why OpX benefits must be considered when reducing 18
forecasts based on 2016 recorded amounts, and addresses CUE’s SRIIM proposals. Finally, SCE 19
discusses how the Asset and Operation Risk Management preliminary analysis was incorrectly used by 20
intervenors to support their proposed reductions to various capital programs.21
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II. 1
OPERATIONAL EXCELLENCE (OPX) 2
As described in SCE-01, Operational and Service Excellence (OpX) represents a major strategic 3
objective for SCE.1 In order to achieve this objective, T&D has undertaken multiple efforts to identify 4
areas for improvement, focusing on those areas where we can both reduce our operating expenses 5
(O&M) and increase our productivity to complete more work with fewer resources. In direct testimony 6
SCE describes the activities undertaken to launch five OpX initiatives, presented in Table II-1, with the 7
associated forecast for O&M and capital benefits detailed in Table II-2 and Table II-3 as well as the IT 8
and capital projects that these benefits are contingent upon. Pole Program benefits are included in the 9
Poles volume due to its proposed inclusion in the Poles Loading and Deteriorated Pole Balancing 10
Account (PLDPBA). 11
Table II-1 Exhibit References for T&D OpX Initiatives
Initiative Name Exhibit Containing Detailed
Initiative Description, Supporting Calculations, and Workpapers
Witness
Bulk Power SCE-02 T&D-Vol. 12 Robert Woods
Work Order Documentation Redesign SCE-02 T&D-Vol. 13 Adebola Ayorinde
Work Management SCE-02 T&D-Vol. 14 Paul Joseph
Non-Energy Procurement SCE-07 Operational Services-Vol. 6 Kenneth Landrith
Environmental SCE-07 Operational Services-Vol. 2 Don Neal
1 See SCE-01, page 3. 2 Refer to WP SCE-02, Vol. 1, pages 34-36 (OpX Bulk Power Initiative Savings), see Appendix, pages 1-3. 3 Refer to WP SCE-02, Vol. 1, pages 37-39 (OpX Work Order Documentation Initiative Savings), see
Appendix, pages 4-6. 4 Refer to WP SCE-02, Vol. 1, pages 40-44 (OpX Work Management Initiative System/Process Savings), see
Appendix, pages 6-11.
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Table II-2 T&D OpX Capital Benefits
Total Company – Nominal $000
Table II-3 T&D OpX O&M Benefits
Constant 2015 $000
A. Intervenors’ Positions 1
As stated above, T&D received no direct objections to its forecast OpX O&M and capital 2
benefits. However, reductions proposed by intervenors for both the Overhead Conductor Program (OCP) 3
and pole replacement programs ignore the forecast capital benefits. SCE discusses the appropriate 4
treatment in the following sections. 5
B. SCE’s Rebuttal To Inventors’ Positions 6
When SCE forecasts the future benefits associated with its OpX initiatives in T&D, the total 7
benefits were shown separately from forecast capital and O&M for ease of presentation. As the forecast 8
benefits are realized, the benefits (in the form of lower recorded costs) are spread across the multiple 9
projects and programs presented in T&D’s showing and not in the accounts used for forecasting 10
purposes. To the extent the Commission adopts a lower forecast in 2017-2018 based on the lower 2016 11
unit costs realized as a result of SCE’s OpX initiatives, a portion of these benefits will be double-12
counted. SCE respectfully requests that the Commission consider this potential overlap with forecast 13
OpX benefits when the Commission is deciding upon individual projects or program forecasts. 14
Activity 2016 2017 2018Total
2017-2018 2016 2017 2018Total
2017-2018 VarianceT&D OpX Capital Savings (NEP Non-Poles) $ - $ (59,873) $ (77,460) $(137,333) $ - $ (59,873) $ (77,460) $(137,333) $ - T&D OpX Capital Savings (Non-Poles) $(18,849) $ (53,357) $ (68,070) $(121,427) $(18,849) $ (53,357) $ (68,070) $(121,427) $ - Total Capital - Operational Overview and Risk-Informed Decision-Making $(18,849) $(113,230) $(145,529) $(258,759) $(18,849) $(113,230) $(145,529) $(258,759) $ -
SCE Forecast ORA Forecast
GRCAccount Description SCE ORA
ORAVariance TURN
TURNVariance
568.281 Operational Excellence Savings - Transmission (2,536)$ (2,536)$ -$ n/a n/a580.281 Operational Excellence Savings - Distribution (7,464)$ (7,464)$ -$ n/a n/a
Total SCE-02, Volume 1 (10,000)$ (10,000)$ -$ n/a n/a
2018 Forecast
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1. Overhead Conductor Program 1
The recorded 2016 costs for the Overhead Conductor Program were much lower than our 2
forecast unit costs, and the effectiveness of T&D’s OpX initiatives was one of the primary drivers.5 3
While no intervenor proposed forecasts based on 2016 recorded costs, if the Commission were to use 4
2016 as a basis for adopted funding, SCE requests that the Commission consider to the OpX benefits. 5
2. Poles Program 6
TURN recommends a reduction of $1,645 per distribution pole replacement based on the 7
increase in contractor costs per pole from 2012 to 2015,6 but does not address the overlap between their 8
proposed reduction and SCE’s forecast OpX savings. This overlap averages approximately $1,100 per 9
distribution pole.7 In other words, TURN is proposing a reduction of $1,645 per pole in addition to 10
SCE’s proposed OpX benefit of $1,100 included in the Pole Program forecast. If the Commission were 11
to adopt TURN’s proposed reduction of $1,645 for pole unit costs, the Commission should also subtract 12
the savings already incorporated in SCE’s Pole Program forecast. SCE addresses TURN’s proposal for 13
Pole Program unit costs in SCE-18, Volume 9.14
5 See SCE-18, Volume 8 – Infrastructure Replacement. 6 TURN-12, page 32. 7 SCE-02, Vol. 9, page 53, line 6.
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III. 1
SAFETY AND RELIABILITY INVESTMENT INCENTIVE MECHANISM 2
The Safety and Reliability Investment Mechanism (SRIIM) is designed to align with the 3
Commission’s stated goal “to create incentives that align SCE’s financial interests with the community’s 4
interests in safety, reliability, resiliency, and cost.”8 SRIIM is comprised of two components: (1) capital 5
expenditures focused on core safety and reliability-related projects and programs; and (2) the hiring of 6
craft employees who perform the work on safety and reliability-related projects and programs. 7
SCE agrees with the Commission’s decision in D.15-11-0219 that recognizes the importance of 8
the SRIIM mechanism and finds that “encouraging SCE to spend its authorized capital forecast on key 9
programs to meet this goal and retain employees in classifications responsible for this work is 10
reasonable.” SCE proposes to continue SRIIM for 2018 through 2020, with three enhancements to the 11
capital mechanism and four enhancements to the workforce mechanism. 12
Our capital request in this case has been informed in part by new risk analyses, as described in 13
SCE-02, Volume 1. Based on this, SCE proposes three modifications to the capital spending categories 14
to better align with the recent changes we have initiated to address safety and reliability. The proposed 15
changes to the capital mechanism are: (1) change the programs included in SRIIM by adding OCP and 16
4kV Overload-Driven Cutovers and removing Underground Structures and Underground Switch 17
Replacements; (2) set the capital target based on actual authorized capital expenditures, including 18
Operational Excellence benefits; and (3) designate that any spending in the High Priority categories in 19
excess of authorized amounts, without the two conditions adopted in the 2015 GRC, be used to achieve 20
the target established in the SRIIM capital categories to account for unforeseen conditions beyond 21
SCE’s control. 22
SCE’s craft employees are critical to achieving the Company’s strategic objectives of providing 23
safe and reliable service. If SCE fails to achieve the headcount target, SCE agrees to refund customers in 24
the same manner as approved in the 2015 SRIIM and described in direct testimony, such that SCE 25
would refund $20,000 for each employee shortfall relative to the target, up to 50 employees short, and 26
8 D.15-11-021, page 39. 9 Id.
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$80,000 per employee thereafter. SCE proposes to continue the mechanism established in the 2015 GRC 1
so that, if any employee shortfall develops in the fourth quarter of 2020, SCE should have the first 2
quarter of 2021 to address the shortfall. 3
We propose to continue the SRIIM workforce headcount target with four enhancements to the 4
existing mechanism. The proposed changes for the workforce component of SRIIM are: (1) add 5
foreman/troubleman trainer and operator trainee classifications; (2) increase the headcount target from 6
2,225 to 2,375; (3) adjust the headcount target by one-half of the percentage change in the authorized 7
versus requested T&D capital; and (4) change the measurement period from a single day to any time 8
during the period of September 1, 2020 and December 31, 2020, such that if SCE meets the headcount 9
during this period it will be deemed to have satisfied the workforce component of SRIIM. 10
Table III-4 2018 SRIIM Categories and Capital Expenditure Forecasts10,11
10 SCE forecast based on Errata served on June 16, 2017. See response to CUE-SCE-001-Q.7; a-c-Supplemental
on Appendix, pages 12-18. 11 Post-OpX savings are calculated by multiplying the CPUC capital expenditure forecasts against OpX
Reduction % (OpX capital savings forecast / total CPUC capital expenditure forecast).
PROGRAMPRIMARY DRIVER
2018-2020 CAPITAL EXPENDITURE
FORECASTS (Constant 2015 in
millions, CPUC Jurisdictional only)
2018-2020 Post-OpX CAPITAL
EXPENDITURE FORECASTS (Constant 2015 in millions, CPUC
Jurisdictional only)TESTIMONY REFERENCE
Worst Circuit Rehabilitation Reliability $355 $338 SCE-02 T&D-Vol. 8Cable Life Extension Reliability $68 $64 SCE-02 T&D-Vol. 8CIC Replacement Reliability $117 $111 SCE-02 T&D-Vol. 8Transformer Bank Replacement Reliability $146 $138 SCE-02 T&D-Vol. 8Circuit Breaker Replacement Reliability $109 $104 SCE-02 T&D-Vol. 8Overhead Conductor Program Safety $393 $373 SCE-02 T&D-Vol. 84 kV Overload-Driven Cutovers Reliability $102 $97 SCE-02 T&D-Vol. 3TOTAL $1,290 $1,227
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Table III-5 2018 SRIIM High Priority Categories and Capital Expenditure Forecasts12,13
Table III-6 Proposed 2018 SRIIM Workforce Categories
Distribution Apprentice Groundman Senior Patrolman Distribution Groundman Troubleman
Distribution Apprentice Lineman Foreman/Troubleman Trainer* Distribution Lineman Operator Trainee*
Distribution Sr. Cable Splicer System Operator Distribution E-Crew Foreman Substation Operator
Transmission Apprentice Groundman Substation Apprentice Electrician Transmission Groundman Substation Electrician
Transmission Apprentice Lineman Test Technician Transmission Lineman Supervising Test Technician
*Indicates newly proposed classification
A. CUE’s Position 1
1. Capital 2
For the core SRIIM categories, CUE agrees with adding the Overhead Conductor 3
Program and the 4kV Overload-Driven Cutovers, but also suggests adding the 4kV Substation 4
Elimination Program due to it substantial impact on reliability. CUE disagrees with removing both the 5
12 SCE forecast based on Errata served on June 16, 2017. See response to CUE-SCE-001-Q.7; a-c-Supplemental
in Appendix, pages 12-18. 13 Post-OpX savings are calculated by multiplying the CPUC capital expenditure forecasts against OpX
Reduction % (OpX capital savings forecast / total CPUC capital expenditure forecast).
PROGRAM
2018-2020 CAPITAL EXPENDITURE
FORECASTS (Constant 2015 in millions, CPUC
Jurisdictional only)
2018-2020 Post-OpX CAPITAL EXPENDITURE
FORECASTS (Constant 2015 in millions, CPUC
Jurisdictional only)TESTIMONY REFERENCE
Customer Growth $1,550 $1,474 SCE-02 T&D-Vol. 2
Storms $121 $115SCE-02 T&D-Vol. 5SCE-02 T&D-Vol. 7
Claims $94 $90SCE-02 T&D-Vol. 5SCE-02 T&D-Vol. 7
TOTAL $1,764 $1,678
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Underground Structures and Underground Switch Replacement programs, stating that these programs 1
have safety as a primary driver and that SCE has not provided data showing “how these two programs 2
actually compare to other SRIIM programs in their safety and reliability impacts per dollar expended.”14 3
CUE recommends the capital targets be updated to reflect CUE’s proposed additions and 4
deletions, as well as the increased capital expenditures CUE proposes in four SRIIM categories of Worst 5
Circuit Rehabilitation, CIC Replacement Program, 4 kV Substation Elimination, and Underground Oil-6
Filled Switch Replacement. Finally, CUE agrees with SCE that forecasts should be adjusted to include 7
Operational Excellence benefits. 8
For the two limits on diversion of spending, CUE asserts the “Commission's line of 9
reasoning was reasonable in 2015, and it is still reasonable. Small overruns (under 10 percent) of High 10
Priority spending may be absorbed by cuts in places other than the SRIIM categories, consistent with the 11
Commission's focus on improving safety and reliability.”15 And CUE states that “if the overruns can be 12
paid for without reducing SCE's profits below its authorized rate, then there is certainly no reason to cut 13
back on safety and reliability spending in the SRIIM categories. CUE no longer proposes the stricter 14
constraints that it argued for in the last GRC, but the Commission should reject SCE's attempt to reargue 15
for the position that it lost in that same GRC.”16 16
2. Workforce 17
CUE agrees with SCE’s proposal to modify the workforce categories to add 18
foreman/troubleman trainer and operator trainee classifications. CUE accepts SCE's proposed headcount 19
target of 2,375 workers at the end of 2020, an increase of 6.7 percent over the current SRIIM target, as 20
reasonable in the face of increasing customer counts and worsening SAIDI. 21
CUE rejects the notion that the reason SCE needs more employees to perform safety and 22
reliability-related work is solely driven by capital expenditures. CUE further argues that “…to the extent 23
the Commission reduces the authorized capital expenditures for reliability-improving projects, the need 24
for O&M work to restore power and repair outages may well go up, not down.”17 Finally, “CUE accepts 25
14 CUE Prepared Opening Testimony of David Marcus, page 42, lines 13-14. 15 Id. at page 46, lines 1-4. 16 Id. at page 46, lines 4-8 (citations omitted). 17 Id. at page 45, lines 1-3.
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SCE's proposal to focus compliance on the last quarter of 2020. However, compliance should be 1
measured based on the average headcount during that quarter, not the highest single day.”18 2
B. SCE’s Rebuttal To CUE’s Position 3
1. Capital 4
SCE agrees with CUE’s recommendation that 4kV Substation Elimination should be 5
included in the SRIIM capital target, since this program provides both safety and reliability benefits for 6
SCE’s customers. The purpose of SRIIM is to help ensure funding for the programs that provide safety 7
and reliability benefits; including additional programs with strong safety or reliability connections 8
furthers the intent of the SRIIM mechanism. SCE believes that CUE’s proposal to retain Underground 9
Structures and Underground Switch Replacements and add 4kV Substation Elimination is reasonable. 10
For the two limits on diversion of spending, SCE concedes that the 10 percent buffer is 11
reasonable, as most programs have some element of safety or reliability trade-off even if they are not in 12
SRIIM. Maintaining the 10% buffer introduces a reasonable tradeoff for forces beyond SCE’s control 13
for customer growth, storms, and claims. 14
2. Workforce 15
The SRIIM workforce mechanism should be linked to the authorized capital, as proposed 16
by SCE. It would be burdensome and unfair to SCE and its workforce to continue to hire additional 17
employees with a decreased scope of work. ORA proposed more than a 20% reduction for 2018; if this 18
is adopted it would not be reasonable to concurrently increase SCE’s workforce.19 SCE agrees with CUE 19
that the workforce is instrumental to maintaining reliability as well as performing restoration during 20
major events. However, the volatility of these events makes it impractical to hire additional resources 21
just for these circumstances. 22
To the degree that the Commission recommends higher workforce counts, additional 23
funds for training programs will be necessary to provide proper employee training and should be 24
authorized. At a minimum, on a percentage basis, for every one percent increase in SRIIM employee 25
18 Id. at page 45, lines 15-17. 19 ORA proposed a $788M reduction, or 21.2% of 2018 initially proposed $3.7B T&D, total company nominal.
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headcount there will need to be a ten percent increase in Training Seat-Time for Transmission and 1
Distribution Personnel.20 2
SCE agrees with CUE’s proposal to measure headcount as an average of the last quarter 3
of 2020, and recommends that the Commission adopt this proposal.4
20 Training Seat-Time is presented in SCE-02, Vol. 12, GRC Accounts 566.250 and 588.250.
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IV. 1
ASSET AND OPERATIONAL RISK MANAGEMENT 2
At the request of the California Public Utilities Commission’s Safety and Enforcement Division 3
(SED), SCE provided supplemental testimony (Exhibit SCE-14) that consolidated all of SCE’s direct 4
testimony on safety and risk-informed decision-making, plus the responses SCE had provided to SED’s 5
data requests in this proceeding.21 In this testimony, SCE presented information on risk-informed asset 6
analysis within SCE and the T&D Organization as of March 2016. We presented this material to 7
demonstrate the progress made towards complying with D.14-12-025. That decision directs the utilities 8
to evaluate safety and other risks, and manage and mitigate such risks by implementing a risk-informed 9
decision-making methodology. 10
T&D’s implementation of SCE’s risk-informed planning process and risk management 11
framework is known as the Prioritized Risk-Informed Strategic Management (PRISM) approach. 12
PRISM leverages an event-based methodology to identify risks and assess the value of mitigations using 13
a uniform, quantitative framework. This methodology evaluates the contributing factors that cause an 14
event to happen, as well as the potential negative outcomes and consequences that are produced when 15
that event occurs, followed by an assessment of the mitigations that reduce the frequency and impact of 16
identified risks. SCE’s approach relies on robust data, quantitative models, and subject-matter expertise. 17
We calibrate the results of these risk identification, mitigation assessment and scoring efforts through a 18
formal governance process. We use these results to inform and influence operational and planning 19
decisions. 20
As described in direct testimony, while SCE’s risk-informed planning approach is relatively new, 21
it has influenced some operational decisions and scoping efforts, and was one of many factors 22
considered in funding allocation decisions for this GRC22. However, as stated in testimony, our risk 23
analysis and resulting risk spend efficiency (RSE) metric, “has not matured sufficiently to drive our 24
2018 GRC request at a program or project level.”23 25
21 See Pre-Hearing Conference Transcript, pages 23 – 25. 22 SCE-14, page 22. 23 SCE-14, page 53.
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As stated by ORA, “the Commission should not base its decision on safety-related cost recovery 1
on SCE’s risk-informed decision-making analyses. The current methodology is insufficiently developed 2
to be applied in this GRC. The methodology is still evolving and additional work is needed to develop it 3
fully in the Safety Mitigation and Assessment Plan (S-MAP) proceeding.” 24 CUE points out that this 4
GRC is SCE’s last to use the historical framework where safety and reliability is an output of the 5
process, not the input that drives the Commission’s determination of the appropriate revenue 6
requirement.25 CUE also points out that “there is still too much uncertainty in every stage of the process 7
to be confident that risks and their consequences have been properly quantified, let alone mitigation 8
measures and their effects on reducing consequences. On the other hand risk analysis continues to show 9
promise of ultimately being a valuable tool if the data problems can be resolved.”26 10
SCE agrees that the progress to date and the preliminary results shown should be considered 11
with some degree of caution by the Commission in this rate case. Moreover, intervenors including 12
TURN, CFC, and CUE utilized this analysis as part of their recommendations for both the Overhead 13
Conductor and Grid Modernization Programs. The following sections describe the appropriateness of 14
the inclusion of this preliminary analysis. 15
A. Overhead Conductor Program (OCP) Risk Analysis 16
In compliance with D.14-12-025, SCE has started to perform risk analysis on various programs 17
and assets. SCE performed preliminary risk analysis of its OCP.As mentioned previously, this is an 18
ongoing process, and SCE continues to work to refine and enhance its risk analysis to be used for 19
decision-making in future GRCs. We provided the preliminary results as part of our opening testimony, 20
and provided additional details through the discovery process. The analysis was intended to demonstrate 21
the methodology SCE intends to use in identifying, evaluating, and measuring risks; it was not intended 22
for use in determining SCE’s OCP request in this GRC proceeding. 23
SCE appreciates TURN and CFC’s use of the data provided in the preliminary PRISM analysis 24
for OCP. But as clearly stated in SCE’s testimony, workpapers, and data requests responses, the 25
24 ORA-05, page 2. 25 CUE Prepared Opening Testimony of David Marcus, page 1. 26 Id. at pages 47-48.
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information was not used in determining SCE’s request in this GRC. This analysis needs to be further 1
expanded, validated, and refined before it can be solely relied on for making funding decisions. 2
1. TURN’s Position 3
TURN states: “While the PRISM is premised on the promise of better risk-informed 4
decision making in the future, its time has clearly not yet arrived.”27 TURN then uses the output of the 5
PRISM preliminary analysis for OCP to evaluate SCE’s forecast for OCP.28 6
2. SCE’s Response to TURN’s Position 7
a) TURN’s Comparison of PRISM Scores is Fundamentally Flawed 8
SCE has completed multiple rounds of risk-scoring for OCP. In the first half of 9
2015, SCE completed the first round of scoring for several pilot programs, including those referenced by 10
TURN (Single-phase automatic reclosers, ClampStar, High-Impedance Relays, and Analog Radio 11
Detection). This scoring was based on broad assumptions linked to equipment manufacturer claims, and 12
not based on in situ field testing on SCE’s grid. In subsequent rounds of scoring, SCE focused on 13
mitigations such as reconductoring and fusing, which have been field-tested on SCE’s grid and which 14
have empirically-observed results. 15
Due to the different scoring methods used in the first and subsequent rounds of 16
OCP risk scoring, it is not appropriate to compare the two as the same. It is not an “apples to apples” 17
comparison. TURN’s comparison of scores from the first round of OCP scores to subsequent scoring 18
ignores these differences and the degree to which mitigations are ready to be deployed across SCE’s 19
service territory. SCE cannot wait for PRISM to be fully functional before it makes spending decisions 20
for critical programs that impact employee and public safety. 21
b) TURN Criticizes PRISM’s Decision-Making Capability and Then Attempts 22
to Use It To Justify its Own Proposed Reduction to OCP 23
TURN has mistaken the long-term intent and purpose of PRISM with its current 24
capabilities. SCE has been very clear, and TURN concurs, that our current state of risk scoring is not 25
fully developed, and that the metrics and scoring results provided cannot be used at this time to 26
27 TURN-04, page 18. 28 Id. at page 21.
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definitively make comparisons within or across programs. SCE intends to demonstrate its full capability 1
in risk scoring in its first RAMP filing due on November 1, 2018. TURN’s use of PRISM scores to 2
evaluate OCP is incorrect and premature. 3
c) TURN Mistakes Preliminary Scoring of Untested Pilot Mitigations for the 4
Lack of a Comprehensive and Cost-Effective OCP Strategy 5
TURN takes scoring results from a preliminary set of mitigations, some of which 6
have not been tested or deployed on SCE’s systems, and attempts to redesign SCE’s Overhead 7
Conductor Program. SCE recognizes the need to continually evaluate conditions on its system and find 8
optimal solutions to address problems. However, substituting preliminary risk analysis of untested 9
mitigations in place of proven solutions does not result in a comprehensive and cost-effective strategy to 10
reduce the risk to employees and the public that can result from the very real risk of wire down events. 11
SCE’s Transmission & Distribution group follows a standard pilot process to 12
carefully evaluate the impact of new equipment to SCE’s system before creating a Standard that enables 13
widespread use. This includes the OCP “pilot mitigations” from the PRISM analysis that were 14
preliminarily scored. The pilot process also provides insight and information that may be used to refine 15
the preliminary PRISM analysis. TURN incorrectly assumes that the OCP pilot mitigations are ready for 16
widespread deployment. Table IV-7 provides the current status of each of the pilot mitigations. 17
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Table IV-7 Summary of Overhead Conductor Program Pilots
OCP Mitigation
Pilot
Current Status as of May 2017
Comments
High Impedance Relays
Pilot process ongoing
In pilot deployments on SCE’s system, the High Impedance Relays are not able to accurately detect energized wire down events, and are frequently triggering false positives (i.e., falsely detecting wire down events when none occurred). SCE continues to work with manufacturers to determine the situations when High Impedance Relays can be best deployed.
Single-phase Automatic Reclosers
Pilot process ongoing
SCE is researching and working with suppliers to develop improvements to these technologies to help mitigate conditions which may cause the down wire. Furthermore, SCE continues to explore features which may be incorporated into these products to improve the ability to detect and isolate energized down wire for some High Impedance fault conditions.
Analog Radio Detection
Pilot process ongoing
This project has been renamed to MADEC (Meter Alarming of Down Energized Conductors). MADEC continues to be evaluated, and currently we are developing a detection algorithm as well as updates to the back office (software and hardware) systems.
ClampStar Pilot process complete; Standard created
ClampStar Standard was created in 2016; PRISM scoring update is in progress.
Once a new mitigation goes through the pilot and subsequent review and approval 1
by the Standards Committee, SCE will revise the methodology as appropriate when developing specific 2
scope for OCP. As stated in SCE-18, Volume 8, as cost efficiencies and lower cost mitigations are 3
available, SCE will deploy them. But SCE will increase the annual miles mitigated with the full funding 4
(i.e., SCE will reinvest the savings back into the program to do more work with the same costs). 5
3. CFC’s Position 6
CFC addresses SCE’s use of Risk Spend Efficiency (RSE) in two of its Exhibits. In one 7
example, CFC states: “SCE uses several methods for choosing financially efficient alternatives; 8
‘reasonable cost,’ ‘Risk Spend Efficiency (RSE),’ and ‘cost effectiveness’ appear in the application, and 9
in company responses to data requests. However, the ‘reasonable cost,’ RSE, and ‘cost effectiveness’ are 10
-16-
not the same as affordability.”29 The second reference to SCE’s RSE is in relation to OCP, and CFC 1
states: “Unlike the As Low As Reasonably Practicable (ALARP) method, that requires declaring a 2
valuation of saved life (VSL), SCE’s RSE approach does not include quantifying the benefit of life 3
saved. For this reason, it is not clear whether the OCP expenditures proposed for the 2018 GRC term are 4
optimal.”30 5
4. SCE’s Response to CFC’s Position 6
SCE agrees with CFC that RSE is not the same as affordability. RSE is used to measure 7
the efficiency of a mitigation to reduce risk and enable a relative comparison of risk reduction 8
efficiencies across or within programs. Affordability metrics can be used for different purposes, such as 9
measuring costs to customers or impacts to rates. That said, SCE would like to clarify again that RSE 10
was not used in this GRC to develop project or program forecasts; rather, RSE was used as one of 11
several inputs in assessing the scope of OCP. 12
Further, CFC’s comparison of SCE’s RSE to ALARP is a topic that is being discussed as 13
part of the ongoing S-MAP proceeding. SCE, along with other utilities and parties, continue to address 14
the appropriate methodologies that should be used to assess and mitigate risks in various forums. 15
5. Conclusion 16
SCE appreciates TURN and CFC’s interest in the data provided in SCE’s preliminary 17
OCP risk analysis. However, as previously stated, this information was not, and should not, be used in 18
determining SCE’s request in this GRC. The information needs to be expanded, validated, and refined, 19
before it can be solely relied upon for making funding decisions.20
29 CFC-01, page 4. 30 CFC-04, page 5.
Appendix A Workpapers for SCE-02, Volume 1 and Data Request Response CUE-SCE-001 Q.07 a-c
Supplemental
1
A-1
INIT
IATI
VE D
ESCR
IPTI
ON
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)A
nnua
l SCE
Cap
ital E
xpen
ditu
res
Savi
ngs
(Nom
inal
)($
000)
($00
0)
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)($
000)
Escalatio
nratesu
sed
2016
2017
2018
2019
2020
1.02
1.04
1.07
1.10
1.13
Ann
ual S
CE C
apita
l Exp
endi
ture
s Sa
ving
s (C
onst
ant)
($00
0)
1:Savingsa
redu
eto
aredu
ctioninhe
adcoun
t.As
aresultallsavings
arelabo
r.
2:2016
savingsw
erecalculated
basedon
aph
ased
approa
ch.
3:To
talRed
uctio
nof
65FTE's:Cu
mulativesavingsa
gainst2015
budget
areas
follows:
(52FTE'sin2016,61FTE'sin2017
and65
FTE'sin2018).
4:Av
eragesavingsratepe
rheadcou
ntredu
ctionof
$99K
,$111K
,and
$102Kin2016,2017an
d2018,respe
ctively.
5:$5.1M
ofanticipated
savingsin2016
wereoffset
by$3.8M
oftransitionalsup
portcosts(tempo
rarycontingent
workers,transition
sinsupp
orto
fem
ployeesw
inding
down,ne
wprocessimplem
entatio
ns/revision
s,etc.)related
tothereorgforn
etsavingso
f$1.3M
.
6:SavingsC
apita
lvsO
&M
split
is95%to
5%,re
spectiv
ely.Ba
sedon
analysisof
the2015
budget,employeesw
ithininitiativescop
echarged
A-2
T&D
Bul
k Po
wer
Initi
ativ
e Sa
ving
s
TOTA
L BU
DG
ET -
201
5 Ba
selin
e Bu
dget
2016
Pha
sed
2017
Tot
al20
18 T
otal
FTE
168
12,6
56,0
0 0
16
818
,984
,000
16
818
,984
,000
Fle x
173,
400,
000
17
5,10
0,00
0
175,
100,
000
Tota
l18
516
,056
,000
18
524
,084
,000
185
24,0
84,0
00
BPI O
NLY
- 2
016
Hea
dcou
nt20
16 P
hase
d20
17 H
C20
17 T
otal
2018
HC
2018
Tot
alFT
E62
4,87
4,20
0
657,
939,
000
65
7,87
7,90
0Va
cant
231,
079,
050
23
2,67
8,10
0
232,
741,
400
Supp
lem
enta
l13
2,53
3,33
3
174,
850,
000
17
5,10
0,00
0Tr
ansi
tiona
l20
1,24
8,67
5
468
,80 0
0-
Hom
e O
ffice
151,
175,
130
15
1,76
2,69
5
151,
762,
695
Tota
l13
310
,910
,388
12
417
,298
,595
120
17,4
81,9
95
Tran
sitio
n Co
sts
3,80
0,00
0
-
-
Revi
sed
Tota
l14
,710
,388
17
,298
,595
17,4
81,9
95
Savi
ngs
1,34
5,61
2
6,
785,
405
6,60
2,00
5
Hea
dcou
nt R
educ
tion
(Cum
ulat
ive)
5261
65A
vera
ge s
avin
gs p
er h
eadc
ount
red
ucti
on11
1,23
6$
101,
569
$20
16 a
vera
ge s
avin
gs b
efor
e tr
ansi
tion
cos
ts98
,954
$Assum
ptions
1: S
avin
gs a
re d
ue to
a re
duct
ion
in h
eadc
ount
. As
a re
sult
all s
avin
gs a
re la
bor.
2: T
he fu
ll ye
ar b
asel
ine
budg
et s
how
n in
201
7 an
d 20
18 is
pro
-rat
ed to
refle
ct s
avin
gs in
eig
ht m
onth
s fo
r 201
6 Ph
ased
val
ues,
give
n sa
ving
s w
ere
real
ized
beg
inni
ng in
May
of 2
016.
3:
Tot
al R
educ
tion
of 6
5 FT
E's:
Cum
ulat
ive
savi
ngs
agai
nst 2
015
budg
et a
re a
s fo
llow
s: (5
2 FT
E's
in 2
016,
61
FTE'
s in
201
7 an
d 65
FTE
's in
201
8).
4: A
vera
ge s
avin
gs ra
te p
er h
eadc
ount
redu
ctio
n of
$99
K, $
111K
, and
$10
2K in
201
6, 2
017
and
2018
, res
pect
ivel
y.
In-S
cope
for
Bulk
Pow
er In
itia
tive
- 2
015
O&
M v
s Ca
pita
l cos
tsSu
mm
ary
Tota
lO
&M
Capi
tal
FTE
Engi
neer
ing
100%
Dire
ct c
harg
e to
Cap
ital
5,25
5,84
8
5,25
5,84
8
45Re
al P
rope
rtie
sSp
lit b
etw
een
O&
M/C
apita
l2,
512,
266
33
4,34
1
2,17
7,92
4
31Re
al P
rope
rtie
sO
verh
ead
943,
134
11
3,17
6
829,
958
MPO
Ove
rhea
d4,
683,
258
56
1,99
1
4,12
1,26
7
109
MPO
100%
Dire
ct c
harg
e to
Cap
ital
7,98
3,20
6
7,98
3,20
6To
tal S
taf f
21,3
77,7
11
1,
009,
508
20
,368
,203
185
5%95
%O
&M
Capi
tal
5: $
5.1M
of a
ntic
ipat
ed s
avin
gs in
201
6 w
ere
offs
et b
y $3
.8M
of t
rans
ition
al s
uppo
rt c
osts
(tem
pora
ry c
ontin
gent
wor
kers
, tra
nsiti
ons
in s
uppo
rt o
f em
ploy
ees
win
ding
dow
n, n
ew p
roce
ss
impl
emen
tatio
ns/r
evis
ions
, etc
.) re
late
d to
the
reor
g fo
r net
sav
ings
of $
1.3M
.6:
Sav
ings
Cap
ital v
s O
&M
spl
it is
95%
to 5
% ,r
espe
ctiv
ely.
Bas
ed o
n an
alys
is o
f the
201
5 bu
dget
, em
ploy
ees
with
in in
itiat
ive
scop
e ch
arge
d ap
prox
imat
ely
95%
of t
heir
time
to c
apita
l pr
ojec
ts. S
ee ta
ble
belo
w fo
r mor
e de
tails
.
A-3
A-4
INIT
IATI
VE D
ESCR
IPTI
ON
Capital
Non
Poles
Poles
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)A
nnua
l SCE
Cap
ital E
xpen
ditu
res
Savi
ngs
(Nom
inal
)($
000)
($00
0)
Non
Poles
Poles
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)Escalatio
nratesu
sed
2016
2017
2018
2019
2020
($00
0)1.02
1.04
1.07
1.10
1.13
Ann
ual S
CE C
apita
l Exp
endi
ture
s Sa
ving
s (C
onst
ant)
($00
0)
Non
Poles
Poles
A-5
WorkOrder
Documen
tatio
nAn
alysis
Workpaper
117em
ployees
or29
%
59em
ployees
or17
%
CostCe
nters:Actual/Plan/Va
riance
Date:
CostCe
nter/G
roup
D300
016
Total
****
LABO
RSU
MMAR
Y16
,182
,815
.42
16,182
,815
.42
96%
16,066
,065
.30
16,066
,065
.30
97%
32,248
,880
.72
97%
****
MAT
ERIALSU
MMAR
Y16
8,74
3.75
602,65
9.47
4%17
8,24
5.62
488,97
7.03
3%1,09
1,63
6.50
3%****
CONTR
ACTSU
MMAR
Y49
,478
.21
124,73
9.16
****
ALLO
CATIONSSU
MMAR
Y5,12
4.58
1,24
3.27
****
OTH
ERSU
MMAR
Y38
4,43
7.51
185,99
2.25
****
INDIRE
CTSU
MMAR
Y21
,296
.38
11,184
.69
Total
16,811
,895
.85
16,785
,474
.89
16,567
,470
.29
16,555
,042
.33
33,340
,517
.22
2014
2015
A-6
A-7
INIT
IATI
VE D
ESCR
IPTI
ON
Capital
Non
Poles
Poles
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)A
nnua
l SCE
Cap
ital E
xpen
ditu
res
Savi
ngs
(Nom
inal
)($
000)
($00
0)
Non
Poles
Poles
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)($
000)
Escalatio
nratesu
sed
2016
2017
2018
2019
2020
1.02
1.04
1.07
1.10
1.13
Ann
ual S
CE C
apita
l Exp
endi
ture
s Sa
ving
s (C
onst
ant)
($00
0)
Non
Poles
Poles
Assumptions
andCa
lculations:
A-8
WM
PhaseI
Savings
KeyT&
DOutcomeMetric
(s)
StrategicW
orkInitiation
$13,80
0,00
0
1.Crew
Prod
uctiv
ity:R
educehrs/un
itthroughmorestrategicinitiationandprioritiza
tion
ofworkforinternalcrews
$1,500
,000
UnitR
ateThroughp
ut
2.Crew
Utilization:
Higher
sche
dulingloadinggivenmorestrategicscop
eselectionand
release(asw
ellassched
ulemgm
t.)$1
1,90
0,00
0Crew
CostEfficiency
3.Supp
ort
Plan
ning
Prod
uctiv
ity:R
educeplanning
effortrequ
iredto
supp
ortcon
struction
givenmorestrategicinitiation
$400
,000
Supp
ortp
erFron
tline
Optim
izedSupp
ortM
odels
$2,200
,000
4.Supp
ort
IndirectRe
source
Levels:Streamlineactiv
ities/con
solidaterepo
rtingfor
indirectsupp
ortroles
(i.e.,analysts)intheregion
s$5
00,000
Supp
ortp
erFron
tline
5.Supp
ort
Sche
dulin
gProd
uctiv
ity:Streamlinehand
offs,red
ucere
workforroles
(RPP
M,P
Spec)involvedinsche
duling
$1,700
,000
Supp
ortp
erFron
tline
(FTE
"avoidance")
Continuo
usIm
provem
ent/
WorkMetho
d s$7
,300
,000
O/A
6.Co
ntinuo
usIm
provem
ent:
Individu
alsavingso
pportunitie
side
ntified
bytheOU.
$7,300
,000
N/A
Total
$23,30
0,00
0
Assumptions
andCa
lculations:
A-9
INIT
IATI
VE D
ESCR
IPTI
ON
Capital
Non
Poles
Poles
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)A
nnua
l SCE
Cap
ital E
xpen
ditu
res
Savi
ngs
(Nom
inal
)($
000)
($00
0)
Non
pole
Pole
Ann
ual O
&M
Sav
ings
by
year
(Con
stan
t 201
5)($
000)
2016
2017
2018
2019
2020
1.02
1.04
1.07
1.10
1.13
Ann
ual S
CE C
apita
l Exp
endi
ture
s Sa
ving
s (C
onst
ant)
($00
0)
Non
pole
Pole
A-10
WM
PhaseII
Opp
ortunity
&SubOpp
ortunity
KeyT&
DOutcomeMetric
(s)
StrategicW
orkInitiation
$2,000
,000
I1Bu
ndlin
gof
Tran
smission
deterio
ratedpo
les:Bu
ndlingadjacent
deterio
ratedpo
lesto
increasesc
rewprod
uctiv
ityandalleviatede
pend
ency
issue
s$1
,000
,000
Quantity
ofbu
ndledpo
les
I2Expa
nsionof
IWPto
covera
ddition
alworktype
s:Includ
eadditio
nalw
orktype
sin
IWPto
facilitatemorestrategicinitiationandprioritiza
tionof
scop
e$5
00,000
Quan
tyof
redu
ndantp
rojects
I3Preinitiationscop
econtrol:Pe
rformingthorou
ghpreinitiationjobwalks
toiden
tify
thecorrectscope
before
investingsig
nificante
ngineerin
gresources
$500
,000
Quan
tyof
SCRs
Schedu
lingan
dCo
ordina
tion
$1,200
,000
S1Co
ordina
tionan
dde
pend
ency
man
agem
ent:Im
provecoordinatio
nof
resourcesa
ndde
pend
encies
acrossT&
D(electricalcheckerreq
uests,en
gine
eringtim
elines,etc.)
S2Sche
dulin
gtoolsa
ndintegration:Enhancetools(P6
)and
processestoen
ablebe
tter
long
term
sch.visib
ility
andmgm
t.acrossTransm
ission,GridOps,&
SC&M
$1,200
,000
UnitR
ateThroughp
ut&Crew
CostEfficiency
Continuo
usIm
provem
ent/
WorkMetho
ds$1
4,50
0,000
W1–System
Ope
ratorR
esou
rceAllocatio
n:Mod
ifySystem
Ope
ratord
eskassig
nmen
tmetho
dology
toen
ablemoretim
elyandtargeted
focuso
ncapitaland
O&M
tasks(i.e.,
developing
separate
capital&
O&M
workde
sks)
TBD
TBD
W2
GridOps
switching:M
odify
existingsw
itching
policiestoallowDB
Lcontractorsthe
ability
toselfpe
rform
selected
simpledistrib
utionsw
itching
toim
provetheirp
rodu
ctivity
,whilealso
freeingup
GridOps
resourcestope
rform
othe
rtasks
(*po
tentialincreaseinOHallocatedto
O&M,anticipated
tobe
<$1M
)$5
,000
,000
Outageplan
tostarta
ndfin
ishvs
actualvaria
nce
W3
LeaveAs
Is/Rep
airv
sRep
lace
ofde
terio
ratedTPo
les:Mod
ifywoo
dpo
leintrusive
inspectio
nproced
ures
toallowsomepo
lesw
ithvoidstobe
leftas
isandothe
rsto
berepaire
dusingtrusses;sim
ilartoindu
stry
bestpractices
$8,000
,000
Quantity
ofLeaveas
is&repaire
dTpo
les
W4
Substatio
nDe
sign
PackageQua
lity:Re
vise
engine
eringde
signs
toresolverecurring
NCR
stoincrease
crew
utilizatio
nby
minim
izing
rework,false
startsandcrew
idletim
ewaitin
gford
esignmod
ificatio
ns$5
00,000
Quantity
ofRe
curringissue
sresolved
W5
SASUpgrade
swith
HybridSo
lutio
n :InstallSA3
/HMIH
ybrid
system
storeplace
obsolete
hardwarewith
amorereadily
available,reliable,intelligent,flexible,andsecure
techno
logy
solutio
n$1
,000
,000
Quantity
ofSA
SHy
bridinstalls
Total
$17,70
0,000
Assumption:
Savingstobe
ginin20
17AllSavings
estim
ates
arefora
fullyear.201
7Ph
ase2savingsd
ollarswereredu
cedby
25%to
accoun
tfor
anAp
ril20
17estim
ated
implem
entatio
ndate.
A-11
A-12
A-13
2018 2019 2020
2018 2019 2020
2018 2019 2020
Page 1 of 5
A-14
PROGRAM PRIMARY DRIVER
LEADING INDICATOR OFPROGRAM IMPACT AND
EFFECTIVENESS
2018 2020 CAPITALEXPENDITURE
FORECASTS (Constant2015 $millions, CPUCJurisdictional only)16
2018 2020 Post OpXCAPITAL
EXPENDITUREFORECASTS (Constant2015 $millions, CPUCJurisdictional only)17
TESTIMONYREFERENCE
PROGRAM
2018 2020 CAPITALEXPENDITURE
FORECASTS (Constant2015 in millions, CPUCJurisdictional only)18
2018 2020 Post OpXCAPITAL EXPENDITUREFORECASTS (Constant2015 in millions, CPUCJurisdictional only)19
TESTIMONYREFERENCE
Page 2 of 5
A-15
Page 3 of 5
A-16
Page 4 of 5
A-17
Page 5 of 5
A-18