2009 general rate case - southern california edison · 2009 general rate case ... o&m, part 1...

Application No.: Exhibit No.: SCE-03, Vol. 2, Pt. 1

Ch. I-VII Witnesses: T. Cohenno

A. Edeson G. Kludjian W. Lickteig

(U 338-E)

2009 General Rate Case

Transmission And Distribution Business Unit (TDBU) Volume 2 – Operation And Maintenance (O&M) Part 1, Chapters I – VII

Before the

Public Utilities Commission of the State of California

Rosemead, California

November 2007

SUMMARY CHAPTERS I-IV

• Chapter I presents an overview of the physical characteristics of the SCE transmission and

distribution (T&D) system and discusses the basis for separating FERC and CPUC

jurisdictional assets.

• Chapter II discusses the Transmission & Distribution Business Unit (TDBU) organization, its

responsibilities, description of major groups within TDBU, and general staffing levels. It

also discusses cost control processes in place, major work initiatives, and metrics for

measuring system reliability and safety.

• Chapter III presents a summary of the 2006 Test Year TDBU O&M funding request.

• Chapter IV discusses the 4-step process we use to develop forecasts of 2006 O&M

expenditures for distribution O&M activities. O&M expenses related to these activities are

generally recorded in FERC Accounts 560 through 598, either directly or through Clearing

Accounts. Subaccounts are used to isolate historical costs associated with related activities

within each FERC account. Forecasts of Test Year expenses are developed by subaccount

based on one of the forecast methodologies discussed in Chapter V and aggregated to the

FERC account level.

SCE-03: TDBU Volume 2 - O&M, Part 1

Table Of Contents Section Page Witness

-i-

I. DESCRIPTION OF THE TRANSMISSION AND DISTRIBUTION SYSTEM............................................................................................................1 A. Edeson

II. OVERVIEW OF TRANSMISSION AND DISTRIBUTION OPERATIONS...................................................................................................4

A. Cost Review Processes ..........................................................................4

B. Power Delivery ......................................................................................6

1. Safety .........................................................................................6

C. Power Delivery Business Line...............................................................9

1. Grid Operations (GO) ..............................................................10

a) Grid Control Center (GCC) .........................................11

b) Grid Management (GM) ..............................................12

c) Street & Outdoor Lighting Organization (SOLO) ........................................................................13

2. Construction & Maintenance (C&M) Organizations – Transmission, Substation, And Distribution.........................13

a) Substation Construction & Maintenance (SC&M) .......................................................................14

b) Transmission Organization ..........................................15

(1) Transmission Construction & Maintenance Crews..........................................15

(2) Transmission Planning.....................................16

c) Distribution Construction & Maintenance Divisions (DCM) .........................................................16

(1) Distribution Construction & Maintenance Crews..........................................17

(2) Construction Support Management .................17

SCE-03: TDBU Volume 2 – O&M, Part 1

Table Of Contents (Continued) Section Page Witness

-ii-

(3) Distribution Local Planning.............................20

3. Resource Planning And Performance Management (RPPM) ....................................................................................20

a) Performance Management & Analysis Organization (PM&A) .................................................20

b) Maintenance and Inspection ........................................21

(1) Transmission/Substation ISO Compliance ......................................................21

(2) Distribution CPUC Compliance ......................21

(3) Intrusive Inspections Group.............................21

(4) Deteriorated Pole Replacement Program............................................................21

c) C&M Resource Planning Group..................................22

d) Construction Methods..................................................22

e) Field Accounting Organization....................................23

(1) Work Order Administration.............................23

(2) Equipment and Material Management and Support ................................23

(3) Miscellaneous Accounting and Administrative Support....................................24

4. Central Distribution Design Organization ...............................24

a) New Development Planning ........................................25

(1) New Development Project Planning................25

(2) New Development Project Design...................25

(3) Facilities Inventory Mapping...........................26

(4) Installation Management Services ...................26



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b) Technical Design & Resource Planning ......................27

(1) Technical Design .............................................27

(2) Design Resource Planning and Performance Management ...............................27

(3) Distribution Project Management Office ...............................................................28

(4) Rule 20 Project Management Organization.....................................................28

c) Design Support Group (DSG)......................................29

(1) Quality Assurance............................................29

(2) Joint Pole Organization (JPO) .........................30

(3) Projects and Programs......................................30

5. Business Process and Technology Integration (BP&TI) ...................................................................................31

D. Engineering & Technical Services.......................................................32

1. Engineering ..............................................................................33

a) Electric System Planning (ESP)...................................33

(1) Transmission & Interconnection Planning ...........................................................33

(2) Distribution Engineering..................................33

(3) Plan Integration................................................34

b) Engineering ..................................................................34

(1) Substation Engineering Projects ......................34

(2) Transmission and Civil/Structural ...................35

(3) Standards and Publications ..............................35



-iv-

(4) Transmission and Distribution Apparatus .........................................................35

c) Engineering Advancement...........................................36

d) Project Management Office .........................................36

2. Technical Services ...................................................................38

a) TDBU Safety and Environmental Services (SES) ............................................................................39

(1) Transmission and Distribution Safety..............39

(2) Environmental Services ...................................40

(3) Programs & Services........................................40

b) TDBU Training............................................................41

c) Technical Services Support..........................................41

(1) Business and Finance.......................................41

(2) Engineering Projects ........................................42

(3) Regulatory Projects..........................................42

3. Oversight & Quality Assurance ...............................................43

a) Internal Controls ..........................................................43

b) Quality Control ............................................................43

c) Event Notification, Evaluation, and Reporting......................................................................43

E. Business Planning and Financial Management....................................43

1. Cost Management ....................................................................44

2. Payroll, Facilities, and Administrative Services ......................45

3. Financial Information Systems ................................................45



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4. Billing and Contract Management ...........................................45

5. Business Planning and Financial Analysis ..............................46

F. Regulatory Policy & Contracts (RP&C)..............................................47

1. Grid Contracts Group...............................................................47

2. Transmission Regulatory Group..............................................47

3. Reliability Group .....................................................................48

4. Licensing..................................................................................48

5. Distribution Regulatory Group ................................................48

G. Shop Services & Instrumentation Division..........................................48

III. SUMMARY & OVERVIEW OF O&M REQUEST.............................................52

IV. ESTIMATING METHODOLOGY.......................................................................54

A. Introduction..........................................................................................54

B. Description of Estimating Methods .....................................................54

1. Description of Functional Subaccounts ...................................54

2. Analysis and Adjustments of Historical Data..........................55

3. Estimating Test Year Expenses ...............................................56

V. WORKFORCE PLAN ............................................................................................58 G. Kludjian

A. INTRODUCTION ...............................................................................59

1. Increasing Work Loads ............................................................59

2. Capital ......................................................................................60

3. O&M........................................................................................60

B. TDBU’s Work Force Plans..................................................................61



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C. Workforce Development Within Critical Job Classifications ......................................................................................70

1. Overview..................................................................................70

2. Service Planners.......................................................................71

3. Engineers..................................................................................72

4. Linemen ...................................................................................74

5. System & Substation Operators ...............................................76

6. Maintenance Electricians .........................................................78

7. Test Technicians ......................................................................80

VI. WORKFORCE TRAINING..................................................................................83 T. Cohenno

A. Introduction..........................................................................................84

B. The TDBU Training Organization.......................................................85

1. Powerline Trades Training.......................................................86

2. Transmission Training .............................................................88

3. Substation Training..................................................................89

4. Service Planning ......................................................................91

5. Field Accounting Training.......................................................92

6. Environmental Health & Safety (EH&S) Compliance Training ...............................................................92

7. General Employee Training – Corporate Required Programs ..................................................................................93

8. System Deployment Training ..................................................93

9. Engineering Training ...............................................................94

10. Supervisory Training ...............................................................95



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11. Training Evaluation Group ......................................................95

C. Facilities Overview ..............................................................................96

1. Chino........................................................................................96

2. Alhambra..................................................................................98

3. Regional Training Centers .......................................................99

D. Analysis of Training O&M Expenses by FERC Subaccounts .........................................................................................99

VII. VEHICLE, EQUIPMENT, AND AIRCRAFT FLEET .....................................101 W. Lickteig

A. INTRODUCTION .............................................................................101

B. Vehicle Replacements........................................................................103

C. Vehicle Additions ..............................................................................106

D. TSD Base Operations.........................................................................108

E. CARB Requirements .........................................................................109

F. Fuel & Fueling ...................................................................................109

G. HERC.................................................................................................110

H. Aircraft Operations ............................................................................110


List Of Figures Figure Page

-viii-

Figure I-1 SCE Power Delivery System ......................................................................................................3

Figure II-2 TDBU Serious Work Injury Rate (2002-2006) .........................................................................7

Figure II-3 TDBU OSHA Recordable Injury Rate (2002-2006) .................................................................8

Figure III-4 Summary Of Adjusted O&M Recorded And Adjusted 2002-2006/Forecast

2007-2009 (Constant 2006 $000) ........................................................................................................53

Figure V-5 Major Drivers Affecting Workforce Requirements ................................................................62

Figure V-6 Number of Linemen (2002-2006) ...........................................................................................63

Figure V-7 TDBU Retirements and Attrition ............................................................................................64

Figure V-8 Age Distribution of TDBU Workforce (as of Year-end 2003) ..............................................65

Figure V-9 Age Distribution of TDBU Workforce (as of Year-end 2006) ...............................................66

Figure V-10 Manpower Needs For Major Job Classifications 2002-2006 Historic, 2007-

2009 Forecast (Excludes Contract Labor) ...........................................................................................68

Figure V- 11 Number of Distribution Electrical Contract Crews (2002-2006).........................................70

Figure V-12 Service Planner Workforce Needs 2002-2006 Historic, 2007-2009 Forecast ......................72

Figure V-13 Engineer Workforce Needs 2002-2006 Historic, 2007-2009 Forecast ................................74

Figure V-14 Lineman Workforce Needs 2002-2006 Historic, 2007-2009 Forecast .................................76

Figure V-15 System & Substation Operator Workforce Needs 2002-2006 Historic, 2007-

2009 Forecast .......................................................................................................................................78

Figure V-16 Maintenance Electricians Workforce Needs 2002-2006 Historic, 2007-2009

Forecast ................................................................................................................................................80

Figure V-17 Test Technicians Workforce Needs 2002-2006 Historic, 2007-2009

Forecast ................................................................................................................................................82

Figure VI-18 TDBU Training Groups .......................................................................................................86


List Of Tables Table Page

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Table I-1 SCE Power Delivery System Voltage Classification...................................................................1

Table III-2 Summary Of O&M Request 2006 To Test Year 2009 (Constant 2006 $000)........................52

Table V-3 TDBU Employees Eligible to Retire and Forecasted to Retire ................................................67

Table VII-4 TDBU Vehicle Costs (Constant 2006 $000) .......................................................................101

Table VII-5 TDBU Aircraft and HERC Costs (Constant 2006 $000).....................................................102

Table VII-6 TDBU GRC Transportation Forecast (Constant 2006 $000) ..............................................103

Table VII-7 TDBU Fleet as of February 28, 2007...................................................................................104

Table VII-8 TDBU Vehicle Replacement Plan .......................................................................................106

Table VII-9 TDBU Vehicle Addition Plan..............................................................................................107

Table VII-10 TSD Projected Cost of Vehicle Additions (Constant 2006 $000) .....................................107

1

I. 1

DESCRIPTION OF THE TRANSMISSION AND DISTRIBUTION SYSTEM 2

Our transmission and distribution system includes 1.486 million wood poles, 98,291 circuit 3

miles, 335,504 underground structures, 692,694 transformers, 50,840 switches, 621,002 street lights, and 4

various other pieces of equipment used to deliver power to our customers. The system is divided into 5

three voltage classifications: transmission, sub-transmission, and distribution, as shown in Table I-1 6

below. 7

Table I-1 SCE Power Delivery System Voltage Classification

Line No. Voltage Classification Voltage Range Typical Voltages Circuit Miles of Line

1 Transmission 161kV and above 220kV and 500kV 5,127

2 Sub-transmission 55kV to 138 kV 66kV, and 115kV 7,098

3 Distribution 33kV and below 12kV and 16kV 86,066

It may be helpful to the reader to understand how facilities at different voltage levels work 8

together to enable us to provide safe, reliable electric service to our customers. Transmission facilities 9

operating at 500 kilovolt (kV) and 220kV integrate available generating resources. These facilities 10

deliver power to wholesale and large retail customers, transfer power from one utility to another, and 11

supply power to our sub-transmission system for ultimate distribution to our retail customers. They 12

include approximately 1,238 miles of 500kV transmission lines that provide our major interconnections 13

with utilities in northern California, the Pacific Northwest, and the Southwest. These transmission 14

facilities deliver power from large generating stations and from other utility systems. The 500kV lines 15

serve seven major bulk-power transmission substations (500kV to 220kV or “AA”-stations) where 16

voltages are stepped down to 220kV, the prevalent voltage for our Los Angeles Basin area transmission 17

system. In the Los Angeles basin area, 220kV transmission lines form a network, or grid, which 18

transmits power from generating stations throughout our service territory, as well as from the AA-19

stations. The network supplies power to more than 40 transmission substations (220kV to 115/66kV or 20

“A”-stations). 21

2

The A-stations, where 220kV voltages are typically stepped down to 115kV or 66kV via “A-1

bank” transformers, are source stations for our 115kV, 66kV, and 55kV sub-transmission systems. 2

The sub-transmission system delivers power over more than 7,000 circuit miles of 115kV, 66kV, 3

and 55kV lines to large retail customers, wholesale customers, and distribution substations (or “B”-4

stations). 5

The B-stations, where sub-transmission voltages are stepped down to distribution voltages 6

(typically 33kV, 16kV, 12kV, or 4kV) via “B-bank” transformers, represent the interface between the 7

sub-transmission system and the distribution system. 8

More than 4,300 distribution circuits deliver power from the B-stations to 689,700 distribution 9

transformers throughout our service territory. These distribution transformers, located above ground on 10

pole tops, at ground level on concrete pads, and below ground in underground vaults, reduce the primary 11

distribution voltage (e.g., 12kV) to a secondary-voltage level which is useful for our customers (e.g., 12

120/240 Volt for a residential customer). 13

Figure I-1 is a simplified representation of our power delivery system which shows the break 14

point between FERC-jurisdictional transmission facilities and CPUC-jurisdictional distribution facilities. 15

3

Figure I-1 SCE Power Delivery System

220 kV

500 kV

AA AA AA

66 kV 115 kV

A A A

B B B B B B

TRANSMISSION

DISTRIBUTION

SUBTRANSMISSION

12/16 kVPrimary

120/240VSecondary

ISO TRANSMISSION GRID(FERC-JURISDICTIONAL)

NON-ISO DISTRIBUTION SYSTEM(CPUC-JURISDICTIONAL)

TO CUSTOMERS TO CUSTOMERS

All of our 500kV lines, 220kV lines (with some exceptions) and 500/220kV transformers (“AA”-1

banks) are part of the ISO-controlled transmission grid and fall under the jurisdiction of FERC. 2

Virtually all of our 220/66kV and 220/115kV transformers (A-banks), sub-transmission system 3

facilities, and distribution system facilities are considered, and collectively referenced as, the non-ISO 4

distribution system. These non-ISO facilities fall under the CPUC’s jurisdiction.1 5

1 Some exceptions to the non-ISO classification are our Antelope/Bailey, Devers/Mirage and Victor/Kramer sub-

transmission systems, which operate in parallel with the 220kV transmission system and are considered part of the ISO-controlled transmission grid.

4

II. 1

OVERVIEW OF TRANSMISSION AND DISTRIBUTION OPERATIONS 2

In this section I describe TDBU’s organizational work groups, their operations and maintenance 3

(O&M) functions, and their staffing levels, and summarize the typical expenses charged to FERC 4

accounts relating to those work groups. First, however, I discuss a few general issues concerning our 5

organization and how they influence our O&M costs. 6

A. Cost Review Processes 7

We achieve cost review for operations and maintenance expenses and capital expenditures 8

through our budgeting process. Capital and O&M are projected in advance. The Business Oversight 9

Team reviews the proposed work. This team is a working group of Executives and TDBU senior 10

management, and they carefully review TDBU’s need for the work, estimates of costs, and the priority 11

for each component. The team focuses on the following questions: 12

(1) Does the work need to be done, and/or is it discretionary? 13

(2) What is the unit cost comparison (cost per unit of work)? 14

(3) What is the best source of labor/resources for achieving the required work? 15

(4) Does the work need to be performed in the year scheduled? 16

If the work is approved by the Business Oversight Team, the approved project includes a scoping 17

of the work to be performed, designation of resources to perform the work, and an estimate of the cost to 18

accomplish all required and approved work. From these project specifications, we develop operational 19

budgets. 20

We allocate funds through budgets to reflect the scope of work for each functional group within 21

TDBU departments. These groupings of functional work are called “budget items” for capital and 22

“function numbers” for O&M. Function numbers are similar types of work, grouped to facilitate their 23

effective tracking and management. Budgets are assigned to functional, area of responsibility (AOR) 24

managers. These managers are responsible for the expenditures and are evaluated throughout the year, 25

both on functional performance and cost control. 26

5

Function charges are accumulated and reported each month. Over or under-spending in each 1

function number is studied to understand what occurred, and to determine if corrective action is required 2

to meet annual targets. This process of managing our budget requires the support and detailed attention 3

of many people. Front line employees assign charges to function numbers, analysts review the details of 4

such charges, AOR managers assess the causes of variance (if any), and senior managers provide 5

direction and guidance as needed. 6

Generally, the FERC subaccounts that we report on in regulatory proceedings do not precisely 7

describe our work activities. For this reason, we must translate our function numbers into FERC 8

accounts for our regulatory filings. Our day-to-day cost control of function numbers operates, in most 9

cases, at a much more granular level than FERC accounts. 10

A brief illustration demonstrates the complexity of the FERC accounting categories for SCE. 11

Assume a construction crew is assigned to install facilities that will connect a new residential customer. 12

The costs of the project are recorded in a number of budget items, function numbers, and FERC 13

accounts. In the process of installing the new facilities, if it proves necessary to rearrange or modify a 14

portion of the existing system, the labor associated with that rearrangement is charged to a function 15

number that translates to FERC Account 593.300, part of Maintenance of Overhead Lines. If, in order 16

to complete the project, the crew needs to replace a pole, the labor and material is charged to a capital 17

project. If, however, it is only necessary to replace a cross-arm or insulator on the pole, the labor and 18

material is, again, charged through a function number to FERC Account 593.300. Generally, the 19

installation of the new facilities is charged to customer growth; however, if a transformer required for 20

the project is a used item we withdraw from our inventory, the labor to install the transformer may be 21

charged to FERC Account 583.200, part of Overhead Line Expense. If a meter is required to connect 22

the customer, the labor for installing it is charged to FERC Account 586.100, Meter Expense. If a used 23

meter is installed, it will require an adjustment in FERC Account 586.200, Meters In/Out. As this 24

example illustrates, a very simple assignment to connect a new residential customer can involve a 25

number of capital budget items and several FERC O&M subaccounts. 26

6

We only find a direct one-to-one relationship between the FERC accounting and our AOR 1

assignments in a relatively sparse number of activities, such as FERC Account 596, Street Lighting and 2

Signal System Maintenance. In contrast, we have 78 separate function numbers that are all summarized 3

into FERC Account 588. Accordingly, we typically forecast, budget, and control costs at more granular 4

levels of detail than provided in the FERC accounts. Our workpapers describe the relationship between 5

our function numbers (which perhaps more concretely describe our daily activities) and each FERC 6

account. 7

In summary, we review and control costs on a monthly basis; we do so at the AOR level by 8

budget item and function number. This level of accounting more accurately reflects our management 9

structure and assignment of responsibilities. Budget items and function numbers are summarized into 10

FERC accounts as required for regulatory reporting purposes. 11

B. Power Delivery 12

1. Safety 13

The safety of our customers and our employees remains our top priority. Our reliability 14

and cost performance is the result of our employees’ hard work; work that must often be performed 15

under inherently hazardous circumstances. We have taken, and will continue to take, a very aggressive 16

approach to providing our employees a safe work environment. We measure our success by reductions 17

in our TDBU Serious Work Injury Rate.2 Since 2004, we established this new metric as a TDBU goal to 18

further enhance our safety program and performance and maintain a sharp focus on the most severe 19

injuries and the rate at which they are occurring. Through this performance metric, we keep careful 20

track of these events and identify areas of concern and needed focus to reduce the serious work injury 21

rate. Figure II-2 shows TDBU Serious Work Injury Rates from 2002 to 2006. 22

2 A “TDBU Serious Work Injury” is any incident resulting in major broken bones or fractures, second-degree or higher

electrical burns or electrical flashes, an amputation, or a fatality. The rate is a measurement of occurrences per every 200,000 employee hours worked. The TDBU Serious Work Injury definition includes more incidents than the Cal-OSHA serious injury rate, which is driven primarily by injuries requiring a hospital stay of greater than 24 hours.

7

Figure II-2 TDBU Serious Work Injury Rate

(2002-2006)

0.350.37

0.26

0.45

0.32

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

2002 2003 2004 2005 2006

Year

Serio

us W

ork

Inju

ry R

ate/

200,

000

Hou

rs

While we did not have a specific goal in 2006 that directly centered on reducing our 1

TDBU Occupational Safety and Health Administration (OSHA) recordable injury rates, these injury 2

rates are still tracked and reported to senior management. Figure II-3 shows the TDBU OSHA 3

recordable rates from 2002 to 2006. 4

TDBU has very rigorous injury reporting and investigation procedures. The fundamental 5

purpose of this process is to learn from each event and then build on the experience to prevent similar 6

errors and events in the future. All injuries, other than very minor first aid incidents, are reported within 7

24 hours on an on-line injury reporting system. Potentially serious injuries are immediately reported to 8

the Grid Control Center who then notifies Workers’ Compensation, Corporate Safety (for reporting to 9

Cal-OSHA), and Claims (for reporting to the CPUC). In addition, all safety incidents (i.e. injuries, 10

vehicle accidents, switching errors, etc.) are entered into the Preliminary Incident Report system, which 11

in turn immediately notifies all subscribers of the incident. 12

All injuries are investigated for the purpose of determining the cause and, as appropriate, 13

providing a corrective action. Depending on the nature of the injury the investigation may include root 14

8

cause evaluation, apparent cause evaluation, or simply be an event fact-finding report. For Cal-OSHA 1

serious injuries, there is an internal requirement to provide senior management with a preliminary 2

evaluation report within three days and a preliminary corrective action report within four weeks. 3

Figure II-3 TDBU OSHA Recordable Injury Rate

(2002-2006)

3.85

4.54 4.66

7.186.78

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2002 2003 2004 2005 2006

Year

TDB

U O

SHA

Rec

orda

ble

Inju

ry R

ate

In addition, our program consists of actions at many levels, including the following: 4

(1) we conduct regular safety and environmental training classes for our employees; (2) we support joint 5

management and employee safety teams that examine different safety issues; and (3) we conduct 6

preventive programs to reduce the largest contributors to injuries on the job. One such program is a 7

regular stretching and muscle-strengthening program for field employees.3 To take another example, we 8

implemented a program to train all qualified electrical workers in Power Delivery’s revised personal 9

grounding program. The overhead grounding program was completed in 2005 and the underground 10

program was completed in 2006. Our efforts in the area of safety complement the initiatives and 11

measures of SCE’s Employee Health and Safety organization. 12

3 To improve the consistent application of the program, we have certified all front-line managers and supervisors in this

stretching and therapeutic exercise program.

9

Our experience and analysis shows that the single most significant factor in avoiding 1

serious injuries is our workers’ own focus on, and attentiveness to, their safety while they are in the 2

field. To increase employee awareness and promote the attitude that safety is a personal responsibility, 3

we include an annual safety goal in our result-sharing program, in conjunction with monthly recognition 4

programs, to provide a continual reminder that safety is a critical element of our overall performance.4 5

C. Power Delivery Business Line 6

The Power Delivery Business Line has approximately 4,396 employees, who provide services to 7

customers in our 50,000 square mile service territory. The services our employees provide are: (1) the 8

delivery of electrical energy through the existing distribution, substation and transmission system to our 9

four million customers; (2) network expansion and the connection of new customers, and (3) providing 10

street or outdoor lighting. 11

In this testimony, the other witnesses and I describe how our Test Year 2009 estimates support 12

the operation and maintenance of power delivery assets, and the specific initiatives we are engaged in to 13

enhance the value this system provides our customers. We discuss our recorded and future funding 14

requirements for O&M. For consistency, and to allow for comparison of costs to the level of business 15

activity, we will refer to all O&M costs in constant 2006 dollars. 16

The employees in the Power Delivery Business Line are generally located in one of eight 17

regions, in Santa Ana, or in our General Office in Rosemead. In the eight regions, there are 35 work 18

locations, four Grid Operations Centers (GOC), and about 860 substations. Additionally, the Power 19

Delivery Business Line maintains headquarters at the Santa Ana facility, with staff support for 20

automated electric design, facility inventory mapping, project management, and engineering. Moreover, 21

we operate a state-of-the-art training facility for year-round training of our Power Delivery employees at 22

our Chino Substation facility. 23

The management oversight of the employees in the regions and GOC is provided by one of four 24

managers. Those employees in our General Office and in Santa Ana are part of the Business Line 25 4 The safety goal was eliminated for employee compensation purposes. However, safety is included as a goal in each

employee’s individual performance plan.

10

management team, and are charged with developing the strategies and policies to enhance customer 1

value and improve work methods and project management oversight. Employees in the regions and 2

GOCs deliver the services to our customers. 3

Our Design Work Force consists of service planners, designers, and clerical support. Our service 4

planners, technical specialists, and project program managers are responsible for the design of all capital 5

projects. These individuals, reporting to design or project managers, provide full project management 6

services for either a geographical area or a specific type of project. The actual design, construction, 7

operation, or maintenance of the power delivery system falls under the jurisdiction of our Construction 8

and Maintenance Managing Director or Grid Operations Director. 9

Most planning, design, budgeting, construction, operation, and maintenance activities are 10

managed at our field locations. Our automated design centers and project management teams are 11

located in Santa Ana and in our General Office. In the Transmission and Distribution Business Unit, we 12

have divided our service territory into eight geographic regions. 13

The Power Delivery Business Line primarily consists of the “hardhat” personnel working on the 14

distribution portion of our system. These employees construct, operate, inspect, test, repair, and replace 15

our conductors, cable, towers, poles, equipment, apparatus, and underground structures. They also 16

manage any contractors who perform the same work. This organization includes all of our linemen, 17

designers, electrical crew foremen, cable splicers, groundmen, network operators, troublemen, and 18

service planners. We have combined, under one Vice-President, the workers in this business line that 19

are most responsible for employee safety, network operation, emergency response, repair skills, service 20

connections, and G.O. 165 inspection cycles. 21

I will now discuss the organizations that make up the Power Delivery Business Line. 22

1. Grid Operations (GO) 23

GO, comprised of 626 employees, monitors, operates, and controls the entire Edison 24

electrical system 24 hours a day, 7 days a week. GO coordinates with the Independent System Operator 25

(ISO) and other utilities to ensure acceptable operating parameters are maintained. GO personnel 26

normally identify and evaluate electrical system problems, restore service, and make repairs to lines and 27

11

equipment that are within their capability. Repairs beyond the capability of GO personnel are performed 1

by Construction and Maintenance Crews, who are often assisted by GO personnel. Additionally, Grid 2

Operations personnel perform inspections of electrical system lines and equipment, and respond to 3

customer-reported problems. 4

There are three functional groups within Grid Operations: Grid Control Center, Grid 5

Management (made up of Distribution Operations and Substation Operations), and Street & Outdoor 6

Lighting. These groups are organizationally independent, but interact with each other through approved 7

processes and procedures. 8

a) Grid Control Center (GCC) 9

GCC has 25 employees, who monitor the bulk power system in coordination with 10

the ISO. GCC also interfaces with other utilities, the Western Electricity Coordinating Council 11

(WECC), and the Department of Energy (DOE). 12

GCC performs the following tasks: 13

• Ensures the Bulk Power System is operating within design parameters. 14

• Directs mitigation efforts when operating parameters are exceeded. 15

• Notifies SCE management of notable system events. 16

• Reviews and approves bulk power line and equipment outage requests, in 17

accordance with ISO and SCE procedures. 18

• Performs loading studies to facilitate short and long term operations planning. 19

• Develops reviews and approves operating procedures. 20

• Maintains a library of operating procedures and system diagrams. 21

• Maintains active membership and participation in WECC. 22

• Ensures the Energy Management System (EMS) provides the required 23

information to the Grid Control Center Dispatchers. 24

• Manages curtailments of firm and interruptible load during system 25

emergencies. 26

12

• Coordinates operational issues related to the construction and energizing of 1

new substation equipment. 2

b) Grid Management (GM) 3

GM has 545 employees, who operate the transmission and distribution system in 4

accordance with approved processes and procedures. GM facilitates real-time operations of the electric 5

system by dispatching real-time switching on the transmission system for routine work and emergency 6

outages. GM monitors and controls distribution system operation, and responds to customer calls when 7

service problems or line and equipment damage is reported. GM also inspects electrical lines and 8

equipment in accordance with approved maintenance programs. GM personnel are responsible for 9

coordinating all storm-related electrical system restorations. 10

GM uses the Energy Management System to operate the transmission and 11

distribution system. GM uses the Outage Management System (OMS) to manage distribution system 12

outages, customer outages, and distribution system repairs. In addition, GM updates the Geographic 13

Information System (GIS) database (which serves OMS). This activity ensures that system information 14

and graphics represent current conditions. 15

GM serves as the central point of interface with the SCE phone centers to inform 16

customers of their current service status. GM also interfaces with Corporate Communications and 17

Public Affairs to provide updates with regard to service disruptions and restoration efforts. 18

GM performs the following tasks, among others: 19

• Operates transmission and distribution system using the Energy 20

Management System. 21

• Facilitates planned line and equipment outages. 22

• Performs emergency operations. 23

• Performs line and equipment inspections. 24

• Restores electrical service to customers. 25

• Performs relatively minor repairs. 26

• Maintains GIS database of distribution circuits and equipment. 27

13

• Creates switching programs and Station instructions. 1

c) Street & Outdoor Lighting Organization (SOLO) 2

SOLO has 56 employees, who manage, inspect, and perform basic repairs on 3

street and outdoor lighting; the repairs spring from street light patrols and customer requests. SOLO 4

also provides technical advice to our customers regarding street and outdoor lighting application, 5

maintenance, and replacement, upon request. 6

SOLO maintains a Geographic Information System (GIS) database of SCE-owned 7

and Customer-owned un-metered street lights. This database ensures data integrity and provides a 8

visual representation of the inventory being billed to various street light customers. To ensure accurate 9

billing, the SOLO database interfaces electronically with the SCE's Customer Service System (CSS). 10

SOLO provides the following services: 11

• Inspects urban street lights annually. 12

• Inspects rural street lights biannually. 13

• Performs basic street light repairs. 14

• Maintains a GIS database of installed un-metered street lights. 15

• Provides electronic updates to CSS, our customer billing system. 16

• Designs and manages replacement of deteriorated steel and fiberglass 17

street light poles. 18

• Selects and reviews material (industry standard and new, innovative 19

concepts) for street lighting such as street light poles, street light heads 20

and lamps, etc. 21

• Maintains oversight over street light vendor contracts. 22

• Provides technical advice regarding street and outdoor lighting. 23

2. Construction & Maintenance (C&M) Organizations – Transmission, Substation, 24

And Distribution 25

The Construction and Maintenance (C&M) organizations is responsible for our 26

construction actions on our transmission and distribution system, and most of our inspection and 27

14

maintenance activities. They are the largest single group of our employees, and represent the largest 1

share of our O&M and capital resources. 2

Our field construction work force consists of electrical foremen, apparatus and test 3

technicians, electricians, structural mechanics, welders, linemen, cable splicers, inspectors, equipment 4

operators, support specialists, apprentices, and groundmen. 5

These personnel perform the difficult tasks necessary to construct and maintain the 6

electrical transmission, substation and distribution systems. They are a highly trained work force who 7

deals with energized high-voltage circuits on a daily basis. During storms and major outages, they work 8

extended rotating shifts until service is restored. They repair failed equipment, climb poles, work with 9

and around energized equipment and conductors, descend into wet vaults, troubleshoot customer 10

complaints, and replace transformers, sometimes in challenging areas such as customer’s backyards. 11

An integral part of the success of the C&M organizations lies with our employees in the 12

Logistics/scheduling workgroup. This workgroup is a subset of the C&M organization, and schedules 13

resources to accomplish the work and meet customer requests for such items as new service connections. 14

The Logistics/scheduling workgroup also runs projections for upcoming work, and designates and 15

assigns priorities and resources according to these projections. 16

The C&M groups have approximately 3,026 employees. These groups are made up of 17

the following four organizations: Substation Construction & Maintenance, Transmission and 18

Distribution Construction & Maintenance. 19

a) Substation Construction & Maintenance (SC&M) 20

The Substation Construction & Maintenance organization has 520 employees, 21

including 460 union personnel. Field personnel are divided into three main areas: Substation 22

Construction, Substation Maintenance, and Substation Test and Apparatus. 23

Substation Construction personnel are based out of a central location in 24

Alhambra, and are deployed throughout the SCE service territory to perform all aspects of substation 25

construction. 26

15

Both the Substation Maintenance and Test organizations are organized into two 1

geographical divisions. Substation Maintenance is made up of 22 crews of 4 to 10 electricians, each 2

with a management supervisor (foreman). Substation Maintenance performs a variety of routine but 3

necessary maintenance work on substation equipment. They also respond to emergency situations and 4

support substation construction. 5

The Apparatus and Test organization, as its name indicates, is split into an 6

Apparatus arm and a Testing arm. The Test organization is comprised of nine first-line Supervisors with 7

crews of eight to thirteen test technicians and supervising test technicians. Our Test organization 8

handles the maintenance, commissioning, and testing of substation protection and controls equipment. 9

Apparatus is comprised of 13 (typically) two-person crews deployed at numerous 10

locations throughout SCE’s service territory. Distribution apparatus foremen and distribution apparatus 11

technicians are responsible for distribution feeder equipment such as field capacitors and controls, 12

remote control switches, automatic reclosers, and distribution automation equipment. 13

b) Transmission Organization 14

The Transmission organization has 260 employees, including union personnel, 15

who operate line and patrol trucks and work out of seven primary geographic divisions or grids. 16

(1) Transmission Construction & Maintenance Crews 17

Transmission crews, comprised of 232 employees, also fall into two types 18

-- transmission construction line crews, and transmission patrol crews. Transmission construction line 19

crews are typically seven-person crews, including a management foreman who leads the crew. 20

Transmission crews perform all overhead and underground new construction, rebuild and maintain 21

defined portions of the transmission systems (i.e., 33kV and above), and support storm and emergency 22

restoration of the transmission system. Patrol crews are typically staffed with two persons, a Senior 23

Patrolman and a lineman. These crews patrol the transmission system and perform light maintenance on 24

poles, towers, crib walls and underground structures -- work which can be performed by a trained two-25

person crew. Patrols may be performed by vehicle, by helicopter or by foot depending on terrain or 26

other conditions. Patrol crews also perform other functions such as washing sub-transmission insulators, 27

16

assisting transmission construction line-crews on an as-needed basis, routine and emergency switching, 1

and emergency and post-storm restoration of the transmission systems. 2

We typically require vehicles for Transmission to support our field 3

construction and maintenance activities. These vehicles consist of heavy line trucks, service vans, pick-4

up trucks, cable dollies, and cranes. 5

(2) Transmission Planning 6

Transmission Planning: (1) performs design and cost development 7

activities for overhead and underground sub-transmission and distribution systems; (2) provides cost 8

support for System Planning and Transmission Engineering on 500/220kV tower lines; and (3) performs 9

design and project management functions for joint Transmission/Distribution projects. 10

In addition, this subgroup, consisting of 28 employees, processes 11

recommendations for approval of rights-of-way and secondary use requests from external clients. This 12

includes reviewing (and then approving or denying) lease, license, consent, and grant-out requests by 13

authorizing use of SCE’s property and land assets. The subgroup also reviews and provides 14

recommendations for proposed guidelines and criteria pertaining to secondary use of SCE rights-of-way. 15

For example, third parties enter agreements with SCE to use its rights-of-way for nurseries or 16

attachments to transmission towers for cell site antennas. This group is responsible for ensuring that 17

governing conditions exist and are followed for this type of use. 18

c) Distribution Construction & Maintenance Divisions (DCM) 19

The Distribution Construction & Maintenance organization has approximately 20

2,246 employees, including union personnel. These employees operate line/trouble trucks and work out 21

of two primary geographic divisions, each subdivided into four regions, which are further subdivided 22

into thirty-eight work locations. The DCM organization also encompasses the Construction Support 23

group, which is responsible for Vegetation Management, Region Supply Centers, Contractor Material 24

Support, Overhead Detail Inspection (ODI), and Underground Civil Construction and Inspection. 25

17

(1) Distribution Construction & Maintenance Crews 1

Distribution crews, comprised of 1,684 employees, generally fall into two 2

types: (1) Electrical distribution crews, which are typically three-person crews, including an electrical 3

foreman who leads the crew. Electrical distribution crews perform the new construction of both 4

overhead and underground distribution lines, and rebuilding and maintenance of the distribution system. 5

They respond to storms and provide emergency restoration of power. (2) Van crews, which are typically 6

staffed with two persons reporting to a General Foreman. These crews perform underground 7

construction and maintenance, annual underground circuit inspections (including minor repairs), and 8

support storm and emergency restoration as feasible for a two-man crew. 9

Vehicles for Distribution Crews -- consisting of heavy line trucks, service 10

vans, pick-up trucks, cable dollies, and cranes -- are typically required to support our field construction 11

and maintenance activities. 12

DCM utilizes Construction/Material Coordinators (CCM) and Scheduler 13

personnel in the districts to support distribution construction and maintenance crews. CCM and 14

Schedulers prepare jobs for line crews by scheduling outages, arranging circuit switching, ensuring 15

materials are ordered and staged, and performing inspections on some customer installations. 16

(2) Construction Support Management 17

The Construction Support Management group has 170 employees that are 18

responsible for management over company personnel and contractors performing various civil/structural 19

and electrical improvements to the distribution system in the following areas: 20

(a) Vegetation Management 21

The Vegetation Management Organization has 18 employees who 22

provide administration, inspection, technical direction and management of a contract work force. The 23

group maintains a computer-based inventory that identifies 1.28 million trees, by species and growth 24

rates, physically located under or near our 54,000 miles of overhead primary conductors in accordance 25

with G.O. 95, Rule 35 and Public Resource Code Section 4293. Trees are maintained at a minimum of 26

18 inches clearance from high voltage conductors and 4-foot minimum in PRC-regulated areas. We 27

18

perform vegetation management on a year-round basis in order to ensure public and employee safety, 1

and to eliminate vegetation-caused service interruptions. We historically trim an average of 58 percent 2

of our identified trees each year and have a removal program that helps reduce the need for trimming in 3

the future. In addition we have a mid-cycle trim on a 12 month cycle. 4

We typically employ over 200 Contract Line Clearing crews 5

working around our electrical system every business day. They perform a variety of tasks ranging from 6

trimming trees directly below the lines to removing very large branches hanging over our lines, as well 7

as, total removal when cost effective and permitted by owners. Approximately 90 percent of our 8

contractor work is paid for through a negotiated lump sum contracted price. 9

Vegetation Management protects wilderness areas from equipment 10

related fires and protects our poles from fire damage should any wild fire occur. We maintain 11

vegetation clearance around approximately 70,000 subject poles in accordance with Public Resource 12

Code Section 4292. Since 1998, we surveyed all poles and placed physical reflective yellow strips on 13

each non-exempt pole. Non-exempt poles are classified by the hardware on them, such as: fuse holders, 14

lightening arrestors, and certain connectors. The non-exempt poles are identified in our inventory 15

records and on facility maps. 16

(b) Regional Supply Centers 17

The Regional Supply Centers, with 71 employees, are located in 18

Ventura, Rialto and Dominguez Hills. They serve 15 Districts, Project Stores and Contractor Satellite 19

Staging Areas in the Metro West, Metro East, Desert and North Coast Regions. The Regional Supply 20

Centers are responsible for delivering and prefabricating materials for planned and emergency work 21

orders, knockdown street light pick-up,5 and the pre-setting of transformers. They prefabricate 22

transformer banks, single phase, 3-phase transformers, switches, and cross arms. 23

5 SCE relies on contractors to install, repair, or replace street light poles, also known as electroliers. In the event, that an

electrolier is knocked down or broken by a third party (i.e., automobile accident), SCE will send a crew out to pick up the damaged pole and properly dispose of it.

19

(c) Contractor Material Support 1

The Contractor Material Support organization is the process owner 2

for the Contractor Project Stores and the Contract Satellite Staging Areas (CSSA). This group of two 3

employees is specifically responsible for the care and custody of work order and inventoried material 4

used by our outside contractors. This group also sets up and closes CSSA and provides support to the 5

Regional Project Superintendents for temporary office trailers and other activities needed to ensure that 6

CSSA are set up and functioning effectively and in compliance. This group also conducts quarterly 7

audits at the CSSA to ensure compliance with the Site Management Checklist, identifying key sight 8

compliance responsibilities. 9

(d) Overhead Detail Inspection Group (ODI) 10

The ODI group is responsible for GO 165 detail inspection 11

requirements for distribution poles. This includes repair of public level infractions during the course of 12

inspections. This group of 37 employees performs approximately 300,000 inspections and 150,000 13

compliance repairs per year. ODI also validates information in the maintenance data base and performs 14

asset corrections. 15

Corrected maintenance data and prioritized work requests are 16

uploaded daily to the Work Management System. Mapping and accounting personnel continually make 17

data corrections to update SCE systems. Work requests are evaluated and scheduled for corrective 18

maintenance by District and contract crews. 19

(e) Underground Civil Construction and Inspection (U/G Civil) 20

The U/G Civil group, consisting of 42 employees, is responsible 21

for inspecting SCE and customer-owned conventional underground distribution systems to ensure 22

compliance with SCE underground standards and specifications. The group also coordinates the District 23

maintenance support involving all Civil Construction work. The U/G Civil group also serves as the 24

process owner for the U/G Civil contracted sourcing agreements. Their area of responsibility includes 25

inspection of Rule 20 A&B, DSP, Regional and District civil maintenance, major relocations, and 26

developer-financed residential, commercial, and industrial projects. 27

20

(3) Distribution Local Planning 1

Distribution Local Planning is responsible for the vast majority of design 2

transactions within the Power Delivery Business Line, including most residential and small commercial 3

applications such as new overhead service with single transformer, new underground service with single 4

transformer, and new commercial for small stand-alone facilities. Under the oversight of 8 regional 5

managers, Distribution Local Planning accomplishes its work within 24 major and 10 smaller work 6

locations throughout the service territory. 7

Distribution Local Planning responds to customer requests within assigned 8

geographical territories -- managing expectations and ensuring those expectations are met regardless of 9

whether additional support is received from other Design workgroups. They prepare all designs capable 10

of being produced by templates in simple desktop or laptop automation. Distribution Local Planning 11

also produces all non-automated and complex customer designs that are not assigned to other groups 12

within the Design Organization. Distribution Local Planning consists of approximately 392 personnel. 13

3. Resource Planning And Performance Management (RPPM) 14

The Resource Planning and Performance Management group provides focus on 15

inspection and maintenance policies and procedures. They track and monitor inspection and 16

maintenance work. RPPM group is also responsible for the development and implementation of a 17

workforce planning processes for the C&M organization. This group consists of 331 employees. 18

a) Performance Management & Analysis Organization (PM&A) 19

The Southeast and Northwest Division Administrative and Analysis Groups 20

(“A&A”) are two parallel groups that issue, track, and reconcile all maintenance and inspection records 21

for the eight C&M Regions and CCM organizations. These groups perform analysis on outstanding 22

inspections and maintenance items to ensure Regional compliance with Company policies, for their 23

respective Divisions. These groups are also responsible for the analysis and development of 24

performance metrics needed to manage the business. The Division’s A&A groups are comprised of 39 25

employees. 26

21

b) Maintenance and Inspection 1

The Maintenance and Inspection organization is comprised of four groups totaling 2

13 employees: Transmission/Substation ISO Compliance group, Distribution CPUC Compliance group, 3

Intrusive Inspection group, and Deteriorated Pole Replacement Program. 4

(1) Transmission/Substation ISO Compliance 5

The Transmission/Substation ISO Compliance group, consisting of two 6

employees, provides technical interpretations, procedures, training, and direction to field personnel with 7

respect to GO 95, GO 128, GO 165, and the California Independent System Operator’s (ISO) and 8

Western Electrical Coordinating Council’s (WECC) inspection and maintenance standards. This group 9

is responsible for inspection and maintenance schedules, content, and program compliance for both the 10

California Public Utilities Commission and the ISO. In addition to the General Order and ISO-11

mandated inspections, this group determines, with Network Engineering input, additional inspection 12

requirements to ensure public and employee safety. 13

(2) Distribution CPUC Compliance 14

The Distribution CPUC Compliance group, consisting of two employees, 15

focuses on creating and maintaining TDBU maintenance and inspection standards and policy to insure 16

regulatory compliance. This group evaluates standards and policy training needs, oversees the 17

development of training, and assures that training is delivered. In addition, the Maintenance Standards 18

group is responsible for managing projects that are directly related to TDBU regulatory inspection and 19

maintenance compliance. 20

(3) Intrusive Inspections Group 21

The Intrusive Inspection group, consisting of six employees, is directly 22

responsible for the completion of all intrusive pole inspections required under GO 165. 23

(4) Deteriorated Pole Replacement Program 24

The Deteriorated Pole Replacement Program group, consisting of two 25

employees, is directly focused on the management and completion of all deteriorated pole replacements 26

as required under GO 165. 27

22

c) C&M Resource Planning Group 1

The C&M Resource Planning Group is responsible for creating and implementing 2

strategies, policies, and metrics that productively utilize and measure transmission and distribution 3

construction and maintenance crew activities. The emphasis of the Resource Planning group is to 4

develop and implement C&M resource strategies and plans; specifically a C&M Annual Resource Plan 5

that is used for managing the growing work loads in the transmission and distribution areas. The C&M 6

Resource Planning Group consists of two employees. 7

The C&M organization conducts resource scheduling on a regional and work 8

location level. It also ensures that resources are shared across AOR’s to meet emerging workloads via a 9

three-week advance scheduling process. The Resource Planning group, along with C&M Divisions, 10

creates a resource plan for C&M from a business line perspective. The current business-wide resource 11

planning process consists of a rolling 18-month forecast and a high level 10-year resource plan. The 12

resource planning strategy seeks to ensure the best utilization of scarce resources, so that the C&M 13

organization is able to meet its customer and compliance requirements. The process is driving an ever-14

greater focus on resource planning within the C&M organization, and has implemented various metrics 15

and performance management strategies. 16

d) Construction Methods 17

The Construction Methods group consists of seven employees. This group 18

develops, implements and maintains construction methods for the transmission and distribution 19

electrical systems. The Construction Methods group also develops and implements vehicle strategies 20

and policies for PWRD/TDBU. The group is the process owner and project/product facilitator of 21

specific tool and vehicle committees and tool rotation programs for T&D. They provide subject matter 22

expertise for SC&M, Engineering, Chino Training, SSID and a variety of corporate entities such as Law, 23

Safety, etc. Construction Methods also takes the lead on processes focusing on government regulations 24

such as USA (Underground Service Alert – underground cable locating) and NEC (National Electric 25

Code) as such regulations relate to CPUC-regulated electrical service requirements. 26

23

e) Field Accounting Organization 1

The Field Accounting Organization (FAO) provides accounting and 2

administrative support to the Transmission and Distribution Business Unit (TDBU). It is comprised of 3

approximately 270 employees located in 34 Work Locations, 8 Regional Offices, 3 Regional Prefab 4

Centers, and 8 Contractor Stores spread throughout SCE's service territory. 5

FAO is responsible for accurately processing and closing capital work orders. 6

These work orders are directly linked to SCE’s rate base and depreciation deductions. Their primary 7

clients are Grid Operations, Substation Construction & Maintenance, and Transmission & Distribution 8

Construction and Maintenance. 9

The FAO performs the following functions: 10

(1) Work Order Administration 11

This work includes: 12

• Preparation and on-line processing of storm, claim and non-claim 13

capital work orders. 14

• Providing tracking of plant and O&M expenses. 15

• Making accounting adjustments. 16

• Updating and approving work order progress reports. 17

• Preparing transfer vouchers for deeded facilities. 18

• Maintaining and updating inventory maps. 19

• Updating Work Management System (WMS)records. 20

• Balancing and timely closing of capital work orders. 21

(2) Equipment and Material Management and Support 22


• Ordering and tracking material, transformers, and equipment to 24

support line crews. 25

• Handling meter salvage activities and meter acquisitions for new 26

sets, re-wires, and replacements supporting Shop Services and 27

24

Instrumentation Division (SSID), Field Services and Meter 1

Reading Organization (within CSBU), Grid Operations, and 2

Construction and Maintenance. 3

• Maintaining yard and salvage bins. 4

• Handling transformer sales for applicant install work orders. 5

• Conducting regular inventory and reconciliation of stock. 6

• Requesting and facilitating tool repairs. 7

(3) Miscellaneous Accounting and Administrative Support 8


• Authorizing payment of material/equipment, utility bills, and 10

various invoices. 11

• Processing credit card transactions. 12

• Processing crew timesheets and travel expenses. 13

• Reconciling meter orders. 14

• Correcting data records. 15

• Maintaining DMV files and scheduling corresponding tests. 16

• Updating vehicle information and exceptional mileage reports. 17

• Filing Industrial Accident reports and OSHA logs. 18

4. Central Distribution Design Organization 19

The Central Distribution Design Organization consists of approximately 322 employees 20

reporting to the Director of Central Distribution Design. This organization performs distribution design 21

as part of the Power Delivery Business Line, including design work due to customer growth, load 22

growth, maintenance, conversions, relocations and infrastructure replacement. The group is responsible, 23

through the Design Support organization, for process ownership of the various design activities. The 24

organization is also responsible for certain project management activities as detailed below. 25

25

The Organization consists of three major groups, Technical Design & Resource Planning, 1

New Development Planning, and Design Support. Activities associated with each group are described 2

as follows: 3

a) New Development Planning 4

The New Development Planning group manages relationships with broad-based 5

and specialized customers such as large residential developers. The 178 employees in this group 6

identify future design and construction needs for these customers, manage the fulfillment of those needs 7

through the Design and Construction organizations, and -- in most cases -- produce the design for the 8

resulting projects. The New Development Planning group accomplishes this work through two of its 9

sub-groups, New Development Project Planning and New Development Project Design, which 10

respectively provide project management and design production. In addition, New Development 11

Planning provides facility inventory mapping services for the SCE organization. 12

(1) New Development Project Planning 13

The New Development Project Planning subgroup consists of 24 14

employees, who oversee the completion of all aspects of design and construction projects for large and 15

specialized accounts. Each of the project managers ensures that adequate design support for the 16

customer is obtained from either New Development Project Design or Technical Planning, depending 17

upon the complexity of the project, and that each project receives appropriate attention for scheduling 18

and construction within the Construction and Maintenance organization. 19

(2) New Development Project Design 20

The New Development Project Design subgroup is accountable for the 21

quality, quantity, and costs of all residential tract work performed at SCE and some of the commercial 22

designs performed by SCE. It is responsible for the timely delivery of each design, along with 23

adherence to project specifications, and other client expectations. The subgroup of 91 employees is 24

composed of a Manager, Supervisors, Planners, Designers, and support personnel. The team provides 25

designs, completed work order drawings, and all associated activities required to produce a complete 26

work order package. 27

26

(3) Facilities Inventory Mapping 1

Facilities Inventory Mapping (FIM) group consists of 52 employees who 2

maintain a series of maps depicting the location and description of our electrical and telecommunication 3

facilities. The primary sources of map changes are completed new business and maintenance work 4

order maps. The mapping predominately takes place at the end of the work order process flow. This 5

process generally begins with a customer request, which is then planned, constructed, and inspected. 6

Ultimately, map revisions known as “as built” maps are sent to the FIM group for inclusion on the 7

inventory map(s). 8

Many SCE personnel utilize the inventory maps on a daily basis. The FIM 9

group distributes map changes through the FIM intranet website, which experiences roughly 135,000 10

inquiries per month. The primary SCE users of the inventory maps include personnel from: 11

• Power Delivery – To determine existing and plan new facilities. 12

• Real Estate Operations – For research on condemnations, 13

relocations, titles searches. 14

• Valuation Services/Financial Accounting – For research on ad 15

valorem/franchise tax matters. 16

The inventory maps are also utilized by SCE’s Underground Service Alert 17

(USA) contractor, UtiliQuest, to locate underground electrical facilities in the field. Currently, SCE has 18

approximately 145,000 inventory maps. These maps cover our 50,000 square mile territory, but are 19

limited to the areas where we actually have facilities. These maps depict land base features such as 20

property lines, rights of ways, and political boundaries including ad valorem and franchise tax rate areas. 21

These inventory maps are the source of calculation for SCE’s franchise payments, statistical, and ad 22

valorem database. The technicians within the group update the database based on changes from the 23

work order maps described previously. 24

(4) Installation Management Services 25

The Installation Management Services subgroup is comprised of a 26

manager and 11 employees. The employees consist of project managers, designers, technical specialists, 27

27

and administrative aides. The group oversees the completion of all aspects of design and construction 1

projects that are primarily contoured for customers in the communication industry. Such customers 2

include wireless carriers, cable service providers, and telephone companies. Each of the project 3

managers ensures that adequate design support for the customer is obtained from Technical Planning 4

resources and that each project receives appropriate attention for scheduling and construction within the 5

Construction and Maintenance organization. In addition, through the use of contracted resource support, 6

the group provides non-tariff services such as feasibility studies and civil construction management. 7

b) Technical Design & Resource Planning 8

(1) Technical Design 9

Technical Design has responsibility for consultation and production of 10

designs in the highly complex areas of Distribution Major Relocations, Rule 20’s,6 Distribution 11

Substation Projects (DSP), Added Facilities & Interconnection Facilities, and infrastructure replacement. 12

This organization designs projects that are highly technical, time critical, and engineering-intensive. 13

Thus, the area requires Power Delivery’s most skilled and experienced planners. 14

In addition, the 65 employees of the Technical Design group support the 15

shaping of our future electrical system strategy, from the addition of new circuits to the effective 16

redesign of necessary changes identified through our infrastructure replacement program. Such work 17

may include the creation of design strategies for long range improvement in circuit loading, reliability 18

and performance, the development of long range Rule 20 strategy and the integration of Rule 20, 19

Distribution Substation Planning (DSP), and infrastructure efforts. The work aims to maximize system 20

improvements while minimizing capital costs. 21

(2) Design Resource Planning and Performance Management 22

The Design Resource Planning and Performance Management 23

organization, consisting of six employees, assures effective allocation of the financial and manpower 24

resources required for all distribution Design activities on all SCE projects across Power Delivery. 25

6 Rule 20’s are construction projects that convert overhead systems to underground systems.

28

The organization is the central custodian for all service planning 1

resources, ensuring that managers and supervisors (central and regional) implement and meet all Power 2

Delivery resource planning and performance management strategies and policies. Through our Design 3

resource strategy, service planning employees are hired, the staffing levels for each design classification 4

are determined, and the activities performed by design resources are undertaken. 5

The organization develops and publishes all of the pertinent business 6

metrics applicable to the distribution design business. Their role includes developing and refining the 7

metrics, and the incorporating them into the performance review system. 8

(3) Distribution Project Management Office 9

SCE formed the Distribution Project Management Office (DPMO) in 2005 10

to engage in precise project management of SCE’s expanding distribution infrastructure replacement 11

work, as well as several other large capital investment projects. In the past, much of this work was 12

handled in a de-centralized manner. The scope and volume of these projects have expanded to the point 13

that a centralized project management approach is necessary. The equipment types and projects 14

managed by the group include switch replacements, capacitor replacements, switch automation, cable 15

replacement, worst circuit rehabilitation,7 underground structure replacement, and new capacitors. The 16

group is responsible for shepherding these projects through scoping, development, design, construction, 17

and closing. This group consists of six employees. 18

(4) Rule 20 Project Management Organization 19

This organization of six employees is a longstanding one, but it has been 20

reconfigured during several department restructures. The organization is responsible for project 21

management of SCE’s Rule 20A overhead to underground conversion program. Today, the group also 22

handles project management of Rule 20B Assessment Districts, since the processes closely parallel Rule 23

7 Worst circuit rehabilitation projects are intended to take our least reliable circuits and address the significant

maintenance issues on these circuits in order to improve their performance. See Witness Lee’s testimony, SCE-3, Volume 3, Part 3.

29

20A projects. The group works with SCE’s Public Affairs organization to assist the various cities in the 1

development of their Rule 20A projects. 2

c) Design Support Group (DSG) 3

The Design Support Group (DSG) is a 61 employee support organization made up 4

of four separate work areas. It includes technical, administrative, and staff support functions. The 5

majority of the work performed by the organization involves providing direct support to SCE’s 6

distribution design and planning functions. 7

DSG is made up of the Joint Pole, Quality Assurance, and Projects and Programs 8

organizations, and includes an Added Facilities oversight function. The Added Facilities function 9

provides overall support for the processes related to distribution-added facilities. 10

The organization serves as a centralized point, internally and externally, for 11

information and direction concerning distribution planning. It provides short- and long-term strategic 12

direction on a wide range of issues affecting the planning function within SCE. DSG also provides 13

technical expertise and consultation to other utilities inside and outside of California, and serves as a 14

subject matter expert for design and service planning issues that arise with the CPUC. 15

(1) Quality Assurance 16

One of Design Support’s key responsibilities lies in technical support and 17

related issues. This group of 12 employees provides policy and procedural information on planning-18

related activities. The group interfaces with internal and external personnel on a wide range of issues. 19

This includes design issues, work order reviews, system input and pricing issues, general work order 20

accounting issues, tariff interpretation and application (rules and rates), policy issues, procedural issues, 21

and process-related activities. Quality Assurance manages the Customer Call Back Program to ensure 22

that planning and construction personnel make accurate phone number entries into various SCE 23

customer-related systems. 24

Through the Process Validation function, Quality Assurance also reviews 25

planning personnel’s compliance with various critical policies and procedures. This group examines 26

selected activities to ensure employee actions are consistent with published policies and procedures. 27

30

Finally, the group identifies, reviews, updates, distributes, and/or monitors 1

issues for Design Support Updates, in order to ensure consistency throughout the service territory. They 2

provide technical support and subject matter expertise to other groups within SCE. The group also 3

intercedes and responds to customer issues that go beyond regional management.8 4

(2) Joint Pole Organization (JPO) 5

JPO has 38 employees who maintain the policies, procedures, and records 6

that allow for joint pole ownership and cost sharing with other utilities. SCE is a member of the 7

Southern California Joint Pole Committee, and JPO represents SCE in matters concerning joint pole 8

policy and capital cost recovery. Currently, the organization manages 885,000 poles that are jointly 9

owned poles with 28 other utilities, primarily SBC-Pacific Bell and Verizon. The revenue recovered 10

from other utilities is credited to FERC Accounts 355, 364, and 397. 11

JPO processes, manages, and maintains rental applications for space on 12

structures belonging to SCE -- approximately 100 cable television companies have such rental 13

applications with SCE. JPO currently manages 249,000 cable television rental attachments, as well as 14

other third-party records. This revenue is typically recorded as Other Operating Revenues (OOR). 15

JPO also employs Surveillance Inspectors, who audit the structures for 16

authorized and unauthorized attachments to SCE-owned space. Joint Pole interfaces with all 17

Distribution and Transmission Design organizations, Edison Carrier Solutions, and the 18

Telecommunications department regarding upgrades to facilities, pole replacements, pole maintenance 19

programs, and new construction of plant. JPO also fulfills certain responsibilities associated with SCE’s 20

Aging Infrastructure/Deteriorated Pole Replacement program. 21

(3) Projects and Programs 22

Projects and Programs have 11 employees, who are responsible for 23

providing support and oversight to various program functions and ad-hoc activities for distribution 24

8 In some instances, the customer may disagree with a policy or rule interpretation such as line extension rules. The

various planning organizations look to the Quality Assurance group for technical and tariff assistance in those cases where the issues cannot be resolved at the local region management level.

31

planning and related areas. The group manages various permit-related activities, utility notices, fringe 1

account issues, and utility user tax identification inputs. The group also manages numerous ad-hoc 2

analytical requests. The group researches policy adjustment requests, manages planning system change 3

requests, performs system maintenance activities, and provides end-user support for various on-line 4

systems used by Planning and other arms of TDBU. The group also manages website activities for the 5

Director of Central Distribution Design and his staff, and develops and implements various technology-6

related tools for Planning. 7

5. Business Process and Technology Integration (BP&TI) 8

BP&TI is a department within Power Delivery made up of approximately 82 Managerial 9

and Administrative employees. BP&TI focuses on business process and technology development, 10

integration, and deployment. BP&TI’s primary purpose is to identify business process and related 11

technology solutions, and ensure that such modified processes and technologies are seamlessly 12

integrated into the business unit’s operations. These critical activities include modeling business 13

processes, and carefully identifying the specific future conditions and states that will be enabled with 14

improved processes and technology. The department also develops new and/or modified procedures and 15

manuals, prepares training materials, and conducts necessary training throughout the SCE service 16

territory. Moreover, the department provides necessary helpdesk and ongoing support to assist in 17

improving operations within the business. 18

BP&TI develops and maintains models for evaluating our business processes, and for 19

prioritizing our tasks. The group is called upon by TDBU management to serve as business-side 20

representatives, and subject matter experts, in developing and managing process improvements for 21

everything from the handling of work orders to the implementation of technological solutions. They 22

develop and maintain a catalog of business processes and systems employed in TDBU. Working from 23

this catalog, they develop plans for, and manage, projects that are designed to re-engineer the business 24

processes of TDBU. In support of this effort, they provide industrial engineering experts. They also 25

serve as the Business Unit Operations Center for reviewing, logging, and coordinating IT service 26

requests. BP&TI develops and implements a common methodology for analyzing and standardizing 27

32

business processes. From this common methodology, BP&TI develops a set of desktop procedural 1

publications (e.g., Enterprise Portfolio Management and DC&M Scheduling Procedure). 2

Moreover, BP&TI administers operating systems utilized by TDBU for defect/error 3

corrections, data management, data integrity issues and improvements, system user interface, and 4

coordination of system administration with the Information Technology (IT) Department. BP&TI also 5

serves as the coordination and control point for cataloging IT requirements, and issuing and updating 6

hardware and software throughout TDBU (e.g., the Business Operations Center, the Portfolio 7

Management Team, and the Sub-Portfolio Management Team). 8

BP&TI also serves as a liaison between TDBU and other business units, including CSBU 9

and PAMM, for purposes of developing and translating business requirements to the appropriate 10

technical solutions. Additionally, BP&TI provides governance and oversight to ensure that only the 11

highest priority business process and systems are modified or replaced. 12

D. Engineering & Technical Services 13

E&TS provides essential engineering and technical services that help maintain a reliable and safe 14

electric system for the general public and our employees. E&TS is responsible for planning, 15

engineering, and designing nearly 100,000 miles of transmission and distribution lines, and more than 16

900 substations. In addition, E&TS is responsible for providing effective safety and environmental 17

services, and for training our employees to protect their health and safety and to protect the environment 18

of the communities in which we operate. E&TS has 533 employees, and is organized under three broad 19

operating areas: Engineering, Technical Services, and Oversight & Quality Assurance. 20

Engineering has 392 employees and is organized into four groups: Electric System Planning, 21

Engineering, Engineering Advancement, and the Project Management Office. These groups are 22

responsible for planning, engineering, designing, and managing transmission, substation and distribution 23

systems on SCE’s network. Engineering also provides all system planning, network engineering 24

specifications, new equipment and apparatus evaluations and standards. 25

Technical Services has 133 employees and is organized into three groups: Environmental, 26

Health and Safety, TDBU Training, and Technical Services Support. 27

33

Oversight and Quality Assurance has 28 employees and is organized into three groups: Quality 1

Control, Internal Controls, and Event Notification, Evaluation and Reporting. 2

1. Engineering 3

Engineering, consisting of 392 employees, provides essential engineering and technical 4

services that help maintain a reliable and safe electric system for the general public and our employees. 5

It also contains the Project Management Office (PMO) which manages the execution of all large 6

projects. 7

a) Electric System Planning (ESP) 8

(1) Transmission & Interconnection Planning 9

Transmission and Interconnection Planning is responsible for the planning 10

of additions and modifications to the Independent System Operator (ISO) controlled bulk power grid, 11

and for the reliability management of the Edison portion of this grid through coordination with external 12

agencies. This group has 26 employees. 13

(2) Distribution Engineering 14

Distribution Engineering, consisting of 87 employees, is responsible for 15

the system level planning of the CPUC jurisdictional distribution and sub-transmission systems. This 16

group also serves as the technical interface with customers, and provides technical staff and field support 17

to various SCE organizations. The group identifies the need for future additions, upgrades, and 18

modifications to the distribution and sub-transmission systems. Moreover, Distribution Engineering 19

coordinates and performs detailed studies related to new connections for cogeneration projects, large 20

customer load additions, and the resolution of system problems. Distribution Engineering also provides 21

technical support to special projects, such as, military base privatization and major rebuild projects. In 22

handling its responsibilities, Distribution Engineering interacts on a daily basis with SCE field personnel 23

that are involved with design, construction, and operation of the distribution system, as well as personnel 24

dealing with customers and municipal jurisdictions. 25

The Power Quality Group within Distribution Engineering assists SCE 26

customers in identifying power quality issues, such as voltage sags, transients, imbalance, harmonics, 27

34

and grounding problems. A report is provided to each customer detailing the investigation, and 1

recommending mitigation techniques and products. The Radio, Television Interference (RTVI) Group 2

within Distribution Engineering assists SCE customers in identifying and mitigating those electrical 3

signals that are capable of being propagated into, and interfering with, the proper operation of electrical 4

and electronic equipment. The RTVI Inspector assists the customer in finding the cause of the 5

interference, and initiates corrective work for SCE sources. 6

Distribution Engineering also determines and reports system reliability 7

statistics such as SAIDI, SAIFI, and MAIFI, and sponsors distribution infrastructure replacement 8

projects to maintain reliability. 9

(3) Plan Integration 10

Plan Integration receives projects from the sponsoring organizations 11

including TIP, Distribution Engineering, and others, and manages an ongoing, prioritized Integrated 12

Work List (IWP). The IWP facilitates assessment of budget needs, resource impacts, and control of 13

emerging work. This group consists of four employees. 14

b) Engineering 15

The employees of Engineering are responsible for: 16

• The engineering design of all electrical facilities. 17

• Transmission and substation engineering projects. 18

• Civil/structural engineering. 19

• Development of design standards and criteria. 20

• Equipment specifications, testing and acceptance. 21

• Monitoring of the performance of equipment in service. 22

Engineering also provides Project Engineers to support Project Management on 23

large projects. 24

(1) Substation Engineering Projects 25

Substation Engineering Projects is responsible for all capital substation 26

upgrades and additions, such as system growth and reactive compensation. This group of 76 employees 27

35

is responsible for all engineering aspects of the project, and coordinates its efforts with construction 1

maintenance and operations personnel. 2

(2) Transmission and Civil/Structural 3

Transmission Engineering is responsible for overhead and underground 4

transmission engineering, transmission field and emergency transmission line support, cellular antenna 5

and fiber optics of transmission lines, towers, and steel poles, tower relocation and foundation design, 6

and sag/tension calculations. 7

Civil/Structural Engineering is also responsible for civil engineering site 8

investigation, grading and drainage design, roads, walls and fences, hydraulic studies, spill prevention 9

containment and countermeasures, structural engineering, seismic analysis, damage assessment and 10

building design. This group has 52 employees. 11

(3) Standards and Publications 12

The Standards and Publications group is responsible for providing 13

employees throughout TDBU with current standards and procedures to enable them to safely and 14

efficiently manage their work. The group of 36 employees develops and publishes standards in both 15

print and electronic formats. 16

(4) Transmission and Distribution Apparatus 17

The 41 employees of Transmission and Distribution Apparatus are 18

responsible for equipment and apparatus support, technical specifications, and major equipment ordering 19

services for transmission and distribution class voltages. 20

(a) Protection 21

Protection engineering designs the relay protection schemes for the 22

entire T&D system from fuse sizing and relay settings to the design of wide-area Special Protection 23

Schemes (SPS). 24

(b) Substation Automation 25

A specialized substation automation group designs and oversees 26

the implementation of SCE’s substation automation system. This system has grown to automate about 27

36

two-thirds of the SCE system, substantially reducing the need for staffed substations while improving 1

operations. 2

c) Engineering Advancement 3

The Engineering Advancement group, consisting of 36 employees, is responsible 4

for managing advanced transmission and distribution technology projects. This work includes 5

identifying, evaluating, and integrating advanced technology into the design, construction, operations 6

and maintenance aspects of our transmission and distribution system. Through Engineering 7

Advancement’s work, we attempt to optimize benefits in the areas of safety, efficiency, reliability, 8

quality, environmental impacts, and community relations. This group also sponsors distribution system 9

automation projects and oversees distributed energy resource issues. 10

d) Project Management Office 11

Within the Engineering and Technical Services Organization, overall 12

responsibility for project management belongs to a Director. The Director in turn assigns project 13

execution and cost management responsibility to individual project managers. The Project Management 14

Director reports to the Vice President of the Engineering and Technical Services Division of TDBU. 15

The individual project managers are accountable for all of the various projects 16

within general categories of Transmission and Substation work, including the following: 17

• Customer/Cogeneration Projects. 18

• Distribution Substation Planning (DSP) Projects 19

• Substation Infrastructure Replacement Programs. 20

• Reliability Must Run (RMR) Projects. 21

• Grid Planning Committee (GPC) Projects. 22

Through matrix management9 and the use of contracted and cross-organizational 23

resources, we assemble teams of support personnel as needed to address engineering, budget and work 24

9 Matrix management is a type of organizational management in which people with similar skills are pooled for work

assignments. They may report to one manager, but are assigned to different teams in which they take direction from another manager and/or project manager.

37

order administration, material management, project logistics, construction management, cost and 1

schedule, quality control, licensing requirements, permitting, governmental and/or regulatory issues, 2

environmental concerns and other work elements identified as necessary components of each project. 3

The scope of each project is further developed by the responsible technical 4

organization in sufficient detail to prepare initial budgetary and material estimates based upon historical 5

cost data. The costs included in the original estimate are used as an estimating tool to allow the 6

individual projects to be scheduled within organizational and corporate fiduciary guidelines. Once the 7

projects have been estimated, reviewed, prioritized and approved, detailed work order planning efforts 8

are initiated. These efforts include job walks at the project site involving engineering, field operations, 9

construction, planning, equipment/material procurement personnel, and other project participants. The 10

job walks are scheduled to ensure that the project scope is accurate and inclusive. Following the site 11

meeting(s), we prepare a complete work order package, which contains working drawings for 12

construction, a complete list of material and equipment, definitive cost information, and a project 13

schedule. 14

The final step in the cost allocation process, in the event that cross-organizational 15

resources are not available to meet the project schedule, consists of reconciling the approved budget 16

against contractor pricing provided by the Substation Construction & Maintenance Organization through 17

a competitive bidding process. 18

The project manager provides oversight to the project from preliminary 19

engineering through project completion, and actively participates in all related phases of the work 20

including: preliminary engineering, material procurement, bidding processes and contractor awards, 21

field construction, and project completion. Schedules are developed at the direction of the project 22

manager for each project, with key milestones established to monitor project status. At the request of 23

the project manager or project engineer, design review meetings are held with stakeholder organizations 24

to ensure that scope elements adhere to established program standards, schedules and project definitions. 25

Some major materials are obtained through competitively established supplier 26

alliances to ensure the lowest overall cost to the project. Other material and construction services 27

38

suppliers are selected through a competitive bidding process (administered through the Supply Chain 1

Management) to ensure that quality and cost issues meet project criteria. 2

The Field Construction Manager, working in concert with the project manager, is 3

responsible for coordinating contractor resources, material availability and delivery, outage scheduling, 4

customer/client interface, onsite project safety, schedule adherence, test resources, contract management 5

and quality control. 6

Project scheduling and cost controls are important tools in the overall 7

management of a project. We manage projects through the use of schedules, progress and cost reports 8

developed for each project. As a project moves towards implementation and completion, we collect and 9

review actual expenditures on a monthly basis. 10

All project schedules and cost reports are updated and published on a monthly 11

basis. We distribute monthly cost and schedule reports as appropriate for management review and 12

oversight of status, operating date compliance and action. The monthly project status meetings are led 13

by the project manager and attended by key team personnel. 14

Our online software programming includes a complete resource analysis that 15

allows each project element (i.e., engineering, material and equipment support, field construction, 16

construction management and contract management) to be estimated and identified by major task and 17

associated cost code. The anticipated resources, including manpower, are assigned to each project and 18

then overlaid with all other schedule-driven projects to determine the total resource requirement for the 19

entire project. We evaluate available resources against scheduled requirements and, where impacts are 20

identified, prioritize individual projects and adjust project scheduling to alleviate negative impacts. We 21

update resource analyses every month, and maintain a one-year window for future evaluation of 22

resource requirements. The Project Management Office consists of 34 employees. 23

2. Technical Services 24

Technical Services (TS) is comprised of 133 SCE employees who are responsible for 25

providing a safe, healthful, and sustainable environment for our employees and communities, providing 26

all training services in support of business unit goals as well as employee development goals and 27

39

objectives. In addition, TS employees provide finance, business and technical support to others within 1

the Business Unit with the goal of maximizing shareholder and customer value. Technical Services is 2

organized into five groups: TDBU Safety and Environmental Services; TDBU Training; and Technical 3

Services Support for Business and Finance, Engineering Projects, and Regulatory Projects. 4

a) TDBU Safety and Environmental Services (SES) 5

TDBU SES, consisting of 35 employees, is comprised of three organizations: 6

TDBU Safety, Environmental Services, and Programs & Services. The TDBU SES function is focused 7

on: (1) comprehensively improving the safety for our employees; (2) complying with environmental 8

regulations, thereby providing a clean, healthful and sustainable environment for our employees and 9

communities; and (3) undertaking its functions while improving the reliability and safety of electric 10

service for our customers. TDBU SES partners with Corporate Environmental Health and Safety 11

(EH&S) to achieve these objectives. This organization is responsible for the development, 12

implementation, and execution of policies, procedures, and practices that fall within TDBU areas of 13

responsibility. Corporate EH&S provides oversight and direction in support of TDBU and other 14

business lines. 15

(1) Transmission and Distribution Safety 16

The Transmission and Distribution Safety group is chartered with 17

increasing overall employee awareness of safety and helping to create a safe work environment for our 18

employees. The group promotes a 24-hour-a-day safety culture where safety is embedded in every 19

aspect of the work. 20

The Transmission and Distribution Safety group anticipates future needs; 21

develops and monitors safety performance goals; develops and conducts safety meetings; leads safety 22

teams; conducts investigations; performs crew reviews; develops and implements safety awareness 23

programs; processes safety rule changes; answers field inquiries; provides and directly facilitates safety 24

training; coaches supervisors; and provides trends and reports on safety performance. 25

40

(2) Environmental Services 1

The Environmental Services group provides day-to-day field operations 2

guidance on a wide range of environmental issues. For example, the team is available 24 hours a day to 3

provide environmental expertise and oversight to ensure the proper handling of mineral oil spills 4

throughout our service territory. The team develops policies and procedures for TDBU, conducts 5

general environmental awareness training, creates resources to streamline activities, and ensures the 6

company remains in compliance with laws and regulations. 7

Environmental Services is responsible for: 8

• Performing environmental facility assessments. 9

• Environmental crew/job site compliance observations. 10

• Consulting and/or overseeing release incidents. 11

• Providing coaching and mentoring to field personnel. 12

• Providing or supporting environmental training. 13

• Completing Business Plans and Contingency Plans. 14

• Training, monitoring, and consulting with contractors. 15

• Ensuring proper endangered species reporting. 16

• Overseeing air quality, waste, and water quality issue resolution. 17

• Developing improved procedures and processes within TDBU. 18

• Overseeing Environmental, Health & Safety (EH&S) audit 19

activity and Corrective Action Plan (CAP) closure. 20

• Overseeing TDBU contractor processes for compliance. 21

• Interfacing with SCE’s Corporate Center (Environmental, Health 22

& Safety, Law, Audit Services) on environmental issues. 23

(3) Programs & Services 24

The Programs & Services group is responsible for SES performance 25

tracking, analysis, and reporting. They provide facility compliance support by helping to keep the 26

environmental, health and safety programs and plans in the compliance files current, and by tracking 27

41

concerns identified in facility assessments and audits to ensure full compliance. They assist in 1

developing programs aimed at preventing injuries, and protecting the environment and natural resources. 2

Additionally, in collaboration with TDBU Safety, Environmental Services, and its various partners 3

throughout the Company, the group develops and distributes safety and environmental communications 4

that address issues affecting TDBU employees. 5

b) TDBU Training 6

The TDBU Training group implements training through a two-school system and 7

an on-the-job training program. The schools provide apprentice training, new technology training, 8

refresher training to experienced personnel, safety/environmental compliance training, and all other 9

training services in support of the business unit’s employee development goals and objectives. Training 10

is developed and delivered to classifications such as linemen, electricians, operators, test technicians, 11

and planners. The schools also provide technical and specialized training to foremen, supervisors, and 12

managers. The training group develops customized curriculum, provides trainee assessment/selection, 13

develops technical manuals, utilizes advanced simulation technology, and conducts formalized on-the-14

job instruction. In addition, TDBU Training conducts internal quality assessments and program 15

evaluations to improve operating efficiency and client satisfaction. This group has 78 employees. 16

c) Technical Services Support 17

(1) Business and Finance 18

The Business and Finance group provides financial and business support 19

to other Technical Services and TDBU organizations. 20

The group of two employees provides oversight of TDBU Other Operating 21

Revenues (OOR), and monitors performance of the delivery organizations on a monthly basis. In 22

addition, the group reports OOR performance to company senior management at the Quarterly Business 23

Review (QBR), and provides explanations to recorded variances. Using economic and other data points 24

as parameters, the group also prepares and continuously updates year-end OOR forecasts as well as five- 25

and ten-year forecasts. 26

42

The group also provides Overhead and O&M budgeting services for 1

Technical Services, and monitors performance against the approved budget on a monthly basis. In 2

addition, the group provides accounting services to Technical Services managers, monitors correct 3

expense accounting by their employees, and assists the managers in staying within their approved 4

budgets. 5

The group assists other Technical Services groups in creating and 6

managing purchase orders. This assistance includes initiating and obtaining approvals for purchase 7

orders and change orders, and then monitoring and processing invoices for these purchase orders. 8

The group also prepares testimony and work papers for CPUC and FERC 9

General Rate Cases, and prepares responses to regulatory data requests and other regulatory filings as 10

determined by RP&A, including the annual Non-Tariff Products and Services (NTPS) and ISO/Non-ISO 11

filings. 12

(2) Engineering Projects 13

The Engineering Projects Group, consisting of ten employees, 14

incorporates new processes and technologies to improve overall effectiveness of the engineering 15

organization (E&TS). Current efforts include assisting the Business Process Integration and Enterprise 16

Resource Planning (ERP) initiatives to incorporate the engineering needs of the TDBU. This group also 17

leads the efforts to identify and recommend Geographical Information System (GIS) strategic 18

approaches for both TDBU and SCE. Testimony regarding implementation of the GIS effort is 19

contained in SCE-5, Volume 3, Part 6/IT - Capitalized Software. In addition, the group is leading a 20

long-range planning effort using GIS information and other engineering tools to better identify SCE’s 21

T&D electric system needs in the next 10-20 year timeframe. 22

(3) Regulatory Projects 23

The Regulatory Projects group is responsible for helping develop and 24

implement the Distribution Inspection and Maintenance Program (DIMP). The DIMP is aimed at 25

ensuring compliance with the principles established in the CPUC – SCE Line Maintenance OII Decision 26

Memorandum of Understanding (signed in August 2005). DIMP will refine SCE’s current distribution 27

43

inspection and maintenance work prioritization scheme with a focus on safety and reliability. DIMP is 1

the product of SCE’s work with the CPUC’s Consumer Protection and Safety Division (CPSD), PG&E, 2

and SDG&E to establish a “common platform” for distribution inspection and maintenance. This group 3

has eight employees. 4

3. Oversight & Quality Assurance 5

Oversight and Quality Assurance, consisting of 28 employees, provides quality control, 6

quality assurance, risk management, root cause, and process oversight services to TDBU. This work is 7

targeted to promote compliance and continuous improvement. 8

a) Internal Controls 9

Internal Controls evaluates the adequacy and effectiveness of internal controls 10

within TDBU, assists in interpreting and communicating policies and regulatory requirements, and acts 11

as consultants on procedural, financial and accounting issues. Internal Controls conducts independent 12

assessments, and administers TDBU’s risk management program and Sarbanes-Oxley control programs. 13

b) Quality Control 14

The Quality Control group performs inspection activities and measures completed 15

work against standards, policies, and procedures. Inspection data is collected, analyzed, and reports are 16

developed to provide feedback on the completed work and inspection activities. The QC group also 17

provides assistance in the development and interpretation of construction and maintenance standards. 18

c) Event Notification, Evaluation, and Reporting 19

Oversight and Quality Assurance provides the structure for TDBU to identify and 20

investigate incidents such as Switching Events, Equipment Failures and Human Performance Errors. 21

The processes will identify Root Causes, Apparent Causes, and Common Causes for these incidents and 22

promote measures to avoid repeating similar incidents. The fundamental purpose of this process is to 23

learn from each event and then build on the experience to prevent similar errors and events in the future. 24

E. Business Planning and Financial Management 25

The Business Planning and Financial Management (BP&FM) is an organization of 149 26

employees who perform central support functions for TDBU as outlined below. This organization 27

44

performs those functions which can be accomplished more efficiently and cost effectively in a 1

centralized manner. 2

1. Cost Management 3

The Cost Management Group in BP&FM maintains primary oversight of capital, function 4

and IMM budgets for the entire Business Unit. The group coordinates and develops annual and multi-5

year budgets in support of Corporate Budgets requirements and rate case filings. 6

The Cost Management and Regulatory Support group provides roll-up and analytical 7

support to TDBU management. It works in partnership with TDBU's budget managers to ensure 8

successful coordination and management of budgets. Typical responsibilities include timely and 9

accurate input of TDBU budget to the Corporate Accounting and Reporting System (CARS), monthly 10

preparation of budget status reports, analytics, forecasts, research, and in-depth analysis of the various 11

segments within TDBU's budgets. This group acts as a liaison for appropriate internal controls for the 12

Business Unit and controller function for accounting. 13

The Cost Estimation group provides estimating support for major capital projects for 14

transmission lines and substations. The types of estimates provided include conceptual through 15

definitive estimates, which are included in the current year and 5-year capital budget. 16

The Power Delivery Capital and Function Budget group provides budget, cost and work 17

plan support to the Power Delivery Business Line. This includes developing the Capital and O&M 18

budget, ensuring alignment with projected work, tracking projects each month, generating status reports, 19

and providing cost controls (including commitments, trends and recommendations for spend trade-offs). 20

The Cost Engineering group provides financial monitoring and control support to the 21

Project Management Organization for programs such as: (a) load growth-related substation projects; 22

(b) transmission line projects; (c) substation infrastructure replacement program; and (d) customer and 23

SCE-funded third party projects such as added facilities and generation interconnections. 24

45

2. Payroll, Facilities, and Administrative Services 1

Payroll and Administrative Services ensures consistent application of, and provides 2

expert consultation regarding, policies and procedures, business practices, and programs that provide 3

benefit to all TDBU clients in the areas of payroll and administration. 4

Facilities Management provides centralized support to Business Unit clients to manage 5

relocations, furniture and equipment (F&E) requests, and related F&E budget oversight. The group also 6

expedites modifications for proposed ergonomic issues, and acts as our liaison with the Corporate Real 7

Estate Department. 8

3. Financial Information Systems 9

TDBU Financial Information Systems is a business analytics, systems support, and 10

project management group. The group has in-depth knowledge of TDBU financial data, processes, and 11

systems. It partners with TDBU clients to provide analytical solutions and implement system 12

improvements. For example, this group has developed an automated software tool to pull down and 13

consolidate management reports for our preventative maintenance budget in distribution. In addition, 14

this group acts as the liaison between the Information Technology Department and the Business Unit to 15

provide assistance in the areas of business requirements, user acceptance testing, user manuals, 16

application training, and data dictionary documentation for data warehousing solutions, business 17

intelligence and decision support services. 18

4. Billing and Contract Management 19

Billing Management’s responsibilities include managing the Contract Administration 20

group, Ledgers Accounting group, and providing billing and accounting oversight and governance for 21

all groups within TDBU. 22

The Contract Administration group provides governance and oversight over all TDBU 23

contract administration functions with respect to contracts providing goods and services to SCE. This 24

group also provides administrative responsibilities for Power Delivery contracts, including obtaining 25

approval for services delivered, notice of receipts, invoice tracers, requisition processing for purchase 26

46

orders (POs) and change orders (COs), and coordination with Construction Management (CM) for 1

releases against POs. 2

The Ledgers group manages Distribution Line extension contracts that call for SCE to 3

determine eligibility of refunds pursuant to applicable CPUC tariff requirements. The group administers 4

refunds and, if necessary, issues billings as stipulated within the individual Developers’ contracts and 5

the tariff rules. This group also oversees Non-Refundable payment activity to ensure accurate and 6

timely reporting. 7

5. Business Planning and Financial Analysis 8

Business Planning and Financial Analysis supports TDBU and SCE senior management 9

in performance management and decision-making through appropriate goal setting, reporting and 10

analysis. This group performs the following three major functions: 11

Goal Setting: this function includes developing TDBU yearly goals, ensuring 12

coordination and alignment between TDBU goals and SCE’s companywide goals, implementing goals 13

down through the business lines within TDBU, and defining operational and financial metrics and key 14

performance indicators to be monitored throughout the year. 15

Monitoring and Reporting: this function includes: (1) compiling data and information 16

regarding goals, key performance indicators, and targets from work groups within the Business Unit; 17

and (2) monitoring goals and providing business performance/major project updates to management and 18

the organization. In addition, part of this function includes monitoring and compiling industry surveys 19

and information from other external sources to identify issues/opportunities that may impact the 20

Business Unit. This function also includes data reconciliation with other corporate departments. 21

Operational and Financial Analysis: this function includes TDBU-level financial 22

planning for corporate planning and investor relations purposes. It also includes performing the 23

necessary analyses and providing recommendations to support Business Unit-level financial forecasting, 24

business case development, project justifications and other high-level financial decision-making. 25

Operational analysis performs a critical role in operational performance management by: (a) identifying 26

existing and emergent issues in areas such as reliability, safety and workforce planning; (b) performing 27

47

necessary in-depth analysis; (c) highlighting findings; (d) developing solutions; and (e) implementing 1

process/systems changes as necessary. 2

F. Regulatory Policy & Contracts (RP&C) 3

The Regulatory Policy and Contracts group monitors state and federal legislation, Federal 4

Energy Regulatory Commission (FERC) regulations, as well as national and regional industry activities 5

related to transmission and distribution. RP&C’s 36 employees also develop and administer grid 6

contracts, manage requests for new interconnects to the grid, and coordinate SCE’s interface with the 7

California Independent System Operator. They also prepare business unit aspects of regulatory filings, 8

and ensure regulatory compliance and proper implementation of CPUC rules and tariffs.10 9

1. Grid Contracts Group 10

Grid Contracts (GC) is part of the RP&C Business Line. GC is responsible for the 11

development of new grid interconnection agreements, management of existing grid contracts, and day-12

to-day administration of transmission and grid interconnection-related tariffs and contracts. GC also 13

possesses responsibility for supporting new transmission project development. GC has overall project 14

management for interconnection requests, from receipt of an application through the execution and 15

maintenance of an agreement. They ensure compliance with new regulations issued by regulatory 16

bodies such as FERC, CAISO, and CPUC, and have administration and oversight on the executed 17

portfolio of grid contracts and agreements. 18

RP&C time is charged to FERC Account 566. 19

2. Transmission Regulatory Group 20

The Transmission Regulatory Group is responsible for developing transmission 21

regulatory policy for TDBU. This includes managing TDBU activities related to the Federal Energy 22

Regulatory Commission (FERC), Western Electricity Coordinating Council (WECC), North American 23

Electric Reliability Council (NERC), North American Energy Standards Board (NAESB), and other 24

10 RP&C partners with the Regulatory Policy and Affairs organization on regulatory filings to ensure consistency with FERC and CPUC

tariffs and rules.

48

regional transmission coordination and planning forums. The Transmission Regulatory Group also 1

serves as the TDBU interface with the California Independent System Operator. 2

3. Reliability Group 3

The Reliability Group, a new unit being formed, will be responsible for managing SCE 4

efforts with regard to reliability standards development and compliance. This includes managing SCE 5

participation in NERC and WECC standards development, as well as participation in various industry 6

forums related to reliability standards development and compliance. It also includes establishing and 7

maintaining an internal compliance program that: (1) comports with FERC’s policy on enforcement; 8

and (2) passes FERC, NERC, and WECC compliance audits. 9

4. Licensing 10

Licensing is responsible for case management of all transmission licensing proceedings 11

before the CPUC. This includes managing applications for Certificates of Public Convenience and 12

Necessity and applications for permits to construct, as well as managing the resolution of various issues 13

related to the licensing of specific projects. 14

5. Distribution Regulatory Group 15

The Distribution Regulatory Group (DRG) focuses on regulatory issues for the CPUC-16

regulated portion of the TDBU organization. This group has responsibility for preparing TDBU-specific 17

portions of regulatory filings, and ensuring that all TDBU operations comply with regulatory and 18

legislative mandates, rules, and standards. The DRG is also responsible for ensuring that appropriate 19

processes and procedures are in place to meet Commission tracking and reporting requirements. The 20

DRG works with the operations personnel to ensure that proper data collection processes are established, 21

so that TDBU’s performance on these metrics is accurately reported to the CPUC. In addition, the DRG 22

is responsible for the coordination of all FERC GRC filings. 23

G. Shop Services & Instrumentation Division 24

Shop Services and Instrumentation Division (SSID) is an organization within TDBU that 25

provides a variety of maintenance and repair services in support of SCE’s distribution, transmission and 26

generation operations. SSID provides cost competitive, responsive, and reliable services that include: 27

49

repair, maintenance, testing, inspection, engineering, calibration, and chemical analysis. More 1

specifically, these services include: 2

• Acceptance testing and inspection of new transformers, meters, metering equipment (e.g., 3

recorders, current and potential transformers, load control devices, and transducers), 4

switches, relays, circuit breakers, electrical apparatus, tools and instrumentation. 5

• Shop and field repair services for large electrical and mechanical apparatus (e.g., turbines, 6

transformers, generators, motors, pumps, gearboxes and valves), smaller equipment (e.g., 7

electronic devices, printed circuit cards, relays), and tools (e.g., hydraulic crimpers, engine 8

generator sets). 9

• Calibration services for test and measurement equipment (e.g., voltmeters, multimeters, 10

relays, circuit fault indicators, meggers, load cells, load busters, micrometers, oxygen 11

analyzers, and gas monitors) performed in accordance with regulatory agencies and traceable 12

to the National Institute of Standards and Technology. Also, engineering and technical 13

services for calibration standards, measurement uncertainty analysis, and statistical process 14

controls. 15

• Machine shop services including boring, milling, grinding, polishing, welding and other 16

processes associated with the fabrication and repair of parts and components. 17

• Engineering and technical support for repairs, modifications, and new designs of revenue 18

metering, including: standards and specifications, and assessment and testing of new 19

metering products. 20

• Engineering and technical services for repairs, modifications, and new designs of utility 21

equipment, including drawings and fabrication specifications, design upgrades, repair 22

procedures, assessments and testing of new products, and field project management. 23

• Chemical testing in connection with analyzing PCB content of existing equipment, and 24

analysis of the insulating qualities of oil for new and existing transformers and switches. 25

• Inspection services including acceptance measurements of new parts, and reverse 26

engineering of equipment that needs to be replaced or significantly modified. 27

50

SSID is an integrated set of shop & lab facilities located in Westminster, California and include 1

the following shops: Distribution Apparatus Repair Shop, Large Apparatus Repair Shop, Mechanical 2

Services Shop, Motor/Generator/Tool/Circuit Breaker Shops, Metrology/Standards Lab and 3

Administration Building, and a small Oil Tank Farm. 4

SSID has 232 represented (IBEW & UWUA) and non-represented employees who are located 5

both at the SSID Westminster facility and throughout SCE’s service territory. These employees include 6

skilled crafts persons, technicians, engineers, and other support personnel. SSID’s costs are recorded in 7

various O&M accounts and capital work orders. 8

The SSID facility and staff are qualified and licensed to handle work with the following special 9

requirements: 10

• Radiological controlled work processes. 11

• Nuclear qualified workers. 12

• ISO (International Organization for Standardization) 9000 level measurements and 13

inspections. 14

• Quality Assurance programs and procedures to support San Onofre Nuclear Generating 15

Station work activities. 16

• Dielectric testing of lineman hand tools. 17

• Full-voltage motor test and balancing test stands. 18

• Epoxy vacuum-pressure-impregnation insulation equipment. 19

• Specialty welding. 20

• Large rotating equipment balancing. 21

• Specialty machining of very large components. 22

• Reverse engineering. 23

• Steam path audits and steam turbine consulting services. 24

SSID also provides, on an “as available basis,” repair services to third parties, including other 25

utilities, independent power producers, co-generators, oil refineries, and other industrial customers and 26

governmental agencies. SCE has provided third-party generation, transmission and distribution repair 27

51

services through its wholly-owned subsidiary, Edison ESI, for over 30 years. Edison ESI markets the 1

temporarily available capacity at SSID to third parties. The revenues generated by Edison ESI are 2

shared with customers pursuant to the Gross Revenue Sharing Mechanism adopted in Decision 99-09-3

070. 4

52

III. 1

SUMMARY & OVERVIEW OF O&M REQUEST 2

Table III-2 displays a summary by FERC account of our Test Year 2009 funding request for 3

O&M. The details of each FERC account including descriptions, examples, history, and forecasts are 4

discussed in Chapters VIII through XI of this Volume. 5

Table III-2 Summary Of O&M Request

2006 To Test Year 2009 (Constant 2006 $000)

FERC FERC NAME 2006 2007 2008 2009560 Operation Supervision and Engineering 14,058 12,231 12,815 16,735 561 Load Dispatching 8,400 9,237 7,466 9,573 562 Station Expenses 14,712 15,112 15,352 16,321 563 Overhead Line Expenses 5,485 5,232 6,445 16,795 564 Underground Line Expenses 680 679 722 781 565 Transmission of Electricity by Others 3,704 3,704 3,704 3,704 566 Miscellaneous Transmission Expenses 21,082 26,631 30,932 36,616 567 Rents 2,896 4,355 4,355 4,355 568 Maintenance Supervision and Engineering 5,987 6,410 6,229 7,285 569 Maintenance of Structures 1,481 1,486 1,731 1,734 570 Maintenance of Station Equipment 8,748 7,856 8,005 11,842 571 Maintenance of Overhead Lines 20,684 20,336 20,733 39,376 572 Maintenance of Underground Lines 3,505 856 863 878 573 Maintenance of Miscellaneous Transmission Plant 6,937 3,765 3,765 3,765 575 GMC-Day Ahead & Real Time Market Admin - - - - 580 Operation Supervision and Engineering 36,016 35,288 37,125 49,124 582 Station Expenses 16,269 16,754 16,945 17,578 583 Overhead Line Expenses 21,501 18,165 19,411 33,752 584 Underground Line Expenses 3,790 4,294 4,814 6,138 585 Street Lighting and Signal System Expenses 1,598 996 1,081 1,117 586 Meter Expenses 2,234 1,747 1,794 1,764 587 Customer Installations Expenses 8,239 8,244 8,750 9,094 588 Miscellaneous Distribution Expenses 65,112 66,761 71,045 82,735 589 Rents 617 617 617 637 590 Maintenance Supervision and Engineering 15,408 16,390 15,598 18,700 591 Maintenance of Structures 931 589 601 625 592 Maintenance of Station Equipment 8,678 8,580 8,773 13,038 593 Maintenance of Overhead Lines 74,842 72,606 77,279 93,243 594 Maintenance of Underground Lines 14,438 14,823 15,365 18,456 595 Maintenance of Line Transformers 1,681 1,691 1,695 1,703 596 Maintenance of Street Lighting and Signal Systems 5,947 7,031 7,672 8,137 598 Maintenance of Miscellaneous Distribution Plant 28,413 22,808 22,808 22,808 903 Customer Records and Collection Expenses 4,726 4,992 5,304 5,622

Total Labor/Non Labor 428,799 420,268 439,796 554,034Less 580.500 (2,229) (1,775) (1,683) (5,830)

Total Adj Labor/Non Labor 426,570 418,493 438,113 548,204

53

Figure III-4 shows our historical and forecast O&M costs, with and without Research, 1

Development and Demonstration (RD&D) expenses. These figures illustrate our historical and forecast 2

O&M costs on a comparable basis. Our forecast is largely predicated upon these forecasts of future 3

work. 4

Figure III-4 Summary Of Adjusted O&M

Recorded And Adjusted 2002-2006/Forecast 2007-2009 (Constant 2006 $000)

2002 2003 2004 2005 2006 2007 2008 2009Total O&M 351,091 350,803 378,021 378,792 428,799 420,268 439,796 554,034Total 580.500 (RD&D) 2,290 1,366 1,582 2,043 2,229 1,775 1,683 5,830Total O&M Less RD&D 348,801 349,437 376,439 376,749 426,570 418,493 438,113 548,204

Forecast

0

100,000

200,000

300,000

400,000

500,000

600,000

2002 2003 2004 2005 2006 2007 2008 2009

Total O&M Total 580.500 (RD&D)

54

IV. 1

ESTIMATING METHODOLOGY 2

A. Introduction 3

In this Chapter I explain our rationale for aggregating costs by functional groups and for making 4

adjustments to our historical data, describe the various estimating methods we used, and describe future 5

period adjustments used to determine our 2009 Test Year request. In Chapter II of this Volume, I 6

provide an overview of our distribution operations and maintenance (“O&M”) activities. O&M 7

expenses related to these activities are generally recorded in FERC Accounts 560 through 598, either 8

directly or through Clearing Accounts. 9

In the sections below, we provide a detailed description of the methodology we use to develop 10

expense estimates for functional subaccounts within each FERC account. In addition to the descriptions 11

contained in these chapters, detailed support is included in our workpapers. 12

Within each FERC account and subaccount, we identify cost savings that affect O&M expenses, 13

and how these savings factor into our Test Year forecast. 14

B. Description of Estimating Methods 15

The approach used to estimate future O&M funding levels for a given activity is a structured and 16

systematic process. It does, however, leave room for judgment to be used. Many internal and external 17

factors influence expense levels in any one group of accounts or subaccounts. Therefore, it is essential 18

that the analysis provide a certain amount of flexibility to allow judgment and good business sense to 19

drive decisions. 20

1. Description of Functional Subaccounts 21

The Federal Energy Regulatory Commission has established fundamental descriptions of 22

cost elements making up each FERC Account. The FERC Uniform System of Accounts is very specific 23

in some instances, such as Account 561 “Load Dispatching,” and Account 585 “Street Lighting and 24

Signal System Expense.” However, Account 593 “Maintenance of Overhead Lines,” and Account 570 25

“Maintenance of Station Equipment” are very broad and require further definition. The first step in the 26

55

estimation process is to clearly define and understand the individual cost elements making up each 1

account. 2

To facilitate the estimation process, most of our O&M accounts were disaggregated into 3

subaccounts which reflect groupings of related activities within each FERC account. Separation into 4

subaccounts allows us to isolate the cause of certain variations in historical data, and helps to establish a 5

basis for the estimating method to be applied. For example, it is easier to understand and explain 6

expense trends for a group of related functions when they are gathered into activity-based subaccounts, 7

such as tree trimming, apparatus maintenance, or line maintenance. At the same time, grouping 8

functions aggregates the relatively insignificant data found at the function level and serves to smooth or 9

average variations across related functions. 10

The subaccounts were formed after reviewing individual accounting functions and Areas 11

of Responsibility (AOR) that charge to each account. For example, accounting function 5040 (Training) 12

is used to record training expenses for different AORs, such as our Service Planners or our Field Service 13

Representatives. By using the combination of the accounting function and AOR, we can properly group 14

expenses within each of these functional areas.11 15

FERC Accounts 560, 568, 580, and 590 each have a subaccount designated with the 16

suffix “.980 - Division Overhead.” This subaccount contains overhead expenses that are general in 17

nature, such as management and supervision overheads and supply and tool expenses. These overhead 18

expenses have been allocated to that particular FERC account through the Clearing Account process 19

described in SCE-3, Volume 2, Part 4, Chapter X. 20

2. Analysis and Adjustments of Historical Data 21

The second step of the estimation process includes thoroughly reviewing historical 22

recorded labor and non-labor expenses, and adjusting those expenses as appropriate to reflect a 23

consistent record of normal, ongoing operations for each functional area. This review requires that 24

11 A description of the functional makeup of each subaccount is provided with the account-by-account estimates.

Definitions for each function are provided in the workpapers.

56

recorded labor and non-labor expenses for the period 2002 through 2006 be escalated to constant 2006 1

dollars to facilitate year-to-year comparisons. 2

Often, there is no clear pattern established in the historical record due to year-to-year 3

variations. There may be many reasons for variations in historical data for a given function or group of 4

functions. These variations are sometimes explainable as one-time, non-recurring operational events, 5

which have no bearing on future-year expenditures. The majority of our adjustments are “accounting 6

adjustments” which simply move recorded expenses from one subaccount to another. This is usually 7

done to correct inconsistencies, or errors in charging that occurred as a result of extensive organizational 8

restructuring that took place between 2002 and 2006. 9

The process of adjusting recorded costs helps to establish an appropriate level for the 10

2006 Base Year and provides a consistent record from which to establish trends or averages for 11

forecasting purposes. Our adjustments are discussed in the functional subaccounts within each FERC 12

account and we describe these adjustments in detail in our workpapers. 13

3. Estimating Test Year Expenses 14

After we adjust the historical data to reflect a consistent record of ongoing operations for 15

each functional area, the data can be used to make initial estimates of our Test Year forecast. As in 16

previous GRC proceedings, several different methods are used to develop Test Year estimates of labor 17

and non-labor expenses within each subaccount. These methods include: 18

• Linear Trending: In which 3, 4, and 5 previous years (2002 – 2006) of 19

recorded/adjusted O&M expenses are trended using standard regression analysis. 20

Regression results with an absolute R-squared value equal to or less than 0.5 were 21

rejected as being statistically unreliable for forecasting purposes. 22

• Averaging: In which 3, 4, and 5 previous years (2002 – 2006) of recorded/adjusted 23

O&M expenses are arithmetically averaged. Averages having standard deviations 24

equal to or greater than ½ of the average value were rejected as being statistically 25

unreliable for forecasting purposes. 26

57

• Last Recorded Year: In which the Test Year estimate is equivalent to the last year 1

(e.g., 2006 Base Year) of recorded/adjusted O&M expenses. 2

• Last Recorded Year Plus Adjustments: In which the Test Year estimate is 3

equivalent to the last year recorded costs (e.g., 2006 Base Year), plus or minus a 4

number of identifiable changes. Base Year costs will reflect activities ongoing during 5

the Test Year and rate case cycle. 6

• Budget-Based: In which we base the Test Year estimate on a detailed analysis of the 7

activities that we expect to perform and the expenses we expect to incur in the Test 8

Year relative to the 2006 Base Year. 9

Ultimately, selecting the method used to forecast Test Year expenses is a matter of 10

judgment. Often, year-to-year changes in recorded data are a complex mix of events that cannot be fully 11

explained, or they are explained as natural or cyclical events, which may recur one, or more times over 12

the five-year recorded history. This could be due to weather conditions, or may be due to a business or 13

economic cycle that is longer than one year in duration. We believe that this kind of variation in 14

recorded data should not be adjusted, but should be taken into consideration when deciding the 15

estimating method to be used for that particular functional subaccount. In such instances, an historical 16

average may be more appropriate than a trend. As year-to-year variations are explained, it becomes 17

easier to see whether an historical average or trend is appropriate, or whether the 2006 recorded level or 18

a budget-based approach should be used as the basis for estimating future costs. 19

Not all functional subaccounts lend themselves to a mathematical estimating method 20

based on historical data. Wide variations in cost levels would tend to reduce the use of the trending and 21

averaging methods as accurate predictors of Test Year expenses. Some expenses, such as Storm 22

Maintenance, are subject to external factors that simply cannot be predicted with accuracy based on 23

what happened in the past. Other functions may be estimated in a more useful fashion by using a special 24

study approach, a “bottoms-up” calculation of resources required, or by adding or subtracting some 25

incremental cost to a base level of expense (with the addition or subtraction founded upon some 26

expected future change in workload or scope of activity). 27

58

V. 1

WORKFORCE PLAN 2

SUMMARY

• One of the most significant issues currently facing TDBU is the development and retention of a qualified workforce to meet the increased work requirements brought about by high levels of customer and load growth, and the need to responsibly address an aging infrastructure.

• These increasing work loads, existing workforce demographics, limited availability of fully trained and qualified skilled workers, and the significant time required to hire and fully train employees in specific highly technical and specialized areas dictate that we continue our workforce acquisition, training, and development strategy into the foreseeable future.

• SCE has implemented formal workforce planning and training processes to provide greater focus on immediate and future workforce needs.

• Management personnel are in demand as well. It is very difficult to hire knowledgeable leadership externally because of the technical, regulatory, safety and work rules-related issues they must be familiar with and address on a daily basis.

59

A. INTRODUCTION 1

The Transmission and Distribution Business Unit (TDBU) manages Southern California 2

Edison’s (SCE) Transmission and Distribution (T&D) facilities. As of year-end 2006, TDBU had 3

approximately 5,400 employees responsible for planning, engineering, constructing, operating, and 4

maintaining T&D facilities used to deliver electricity to SCE’s 4.8 million customers throughout its 5

50,000 square mile service territory. 6

As discussed in Witness Litzinger’s testimony (SCE-3, Volume 1), a significant issue currently 7

facing TDBU is the development and retention of a qualified workforce to meet the growth and 8

infrastructure replacement related work. As a result of this work, we must increase the size of our 9

skilled employee and contractor workforce. However, this is no easy task. As discussed throughout 10

mine and others’ testimonies, increasing work loads, existing workforce demographics, limited 11

availability of fully trained and qualified skilled workers, and the significant time required for hiring, 12

training, and absorbing new employees in specific highly technical and specialized areas dictate that we 13

continue our workforce acquisition, training, and development strategy into the foreseeable future. That 14

strategy, which began in some key job classifications as early as 2000, but was scaled back during the 15

financial crisis, and was reinstituted as soon as the company’s financial condition stabilized and the 16

impacts of other factors – such as compliance driven inspection and maintenance requirements and 17

increased customer and load growth – became more clear. In the meantime, the increasing work loads 18

in our resource-challenged environment will cause: (1) continued high overtime rates which are not 19

sustainable in the long term, (2) stress on systems and people who schedule and manage the work load, 20

and (3) limited ability by contractors to provide additional resources to fill the void and manage 21

additional work to meet projected work loads. The purpose of this testimony is to present TDBU’s 22

strategy for acquiring, training and retaining its employee and contractor workforce to effectively 23

manage the work load demands. 24

1. Increasing Work Loads 25

TDBU is facing increasing work loads mainly in capital and but also in O&M activities 26

due to numerous factors identified throughout TDBU’s testimony. This increasing work load requires 27

60

an increase in the number of personnel in key functions so we can successfully accomplish these 1

increased requirements. 2

2. Capital 3

For capital projects, TDBU is facing two distinct challenges: (1) an aging infrastructure 4

that is requiring increased asset replacements; and (2) continued load growth. To address SCE’s aging 5

infrastructure, TDBU must replace more equipment. For instance, in 2009 TDBU is planning to replace: 6

(1) 200 conductor miles of underground cable; (2) 300 underground switches; and (3) 440 capacitor 7

banks. In addition, we plan to rehabilitate 40 circuits. 8

In the load growth category, residential and commercial new construction grew at rates 9

above previous forecasts, resulting in higher levels of customer and load growth projects.12 Gross meter 10

sets have steadily grown since the late 1990s: from 56,942 in 1999 to 87,708 by 2006 – a 54 percent 11

increase. With these high levels of new construction activity is a corresponding increase in load growth 12

that requires new circuitry and substation facilities. To serve this increased load, in 2009 TDBU is 13

planning to add 71 new distribution circuits – 20 more than in 2006 and install 778 megavolt amperes of 14

additional transformation capacity through substation transformer upgrades. To accomplish the other 15

capital work, TDBU has forecast a distribution line-worker resource requirement rising from 16

approximately 1,840 personnel in 2006 to 1,920 by Test Year 2009. Likewise, the engineering and 17

service planning functions supporting this capital work load requires trained and skilled personnel. 18

3. O&M 19

In the category of O&M spending, TDBU’s major work-load challenges are completing 20

inspection-driven maintenance. General Order (GO) 165 contains significant line inspection and 21

maintenance requirements that have high levels of O&M work. In early 1999, SCE fully implemented 22

GO 165 and began detailed inspections. Since that time, inspection-driven maintenance work has 23

increased, even with the proposed new maintenance and inspection program outlined in Witness Stark’s 24

testimony (SCE-3, Volume 2, Part 5). 25

12 This is further explained in Exhibit SCE 3, Volume 1, Part 1.

61

B. TDBU’s Work Force Plans 1

In my 2006 GRC testimony, I focused on the impact of the increasing work load and 2

demographics of the TDBU work force, specifically focusing on key skill areas.13 TDBU has, and 3

expects to continue to have, constraints on its ability to fully staff key skill areas of the Company – 4

Service Planners, Engineers, Linemen, System and Substation Operators, Maintenance Electricians, and 5

Test Technicians – all key positions that are directly required for meeting TDBU’s work load and 6

operating the electrical system. These constraints are primarily due to five factors: 7

1. Increasing number of retirement eligible employees. 8

2. The need to properly train and season new employees as they are hired into technical and 9

trade positions. 10

3. A general shortage of specific skilled workers here in Southern California and throughout 11

the nation. 12

4. Contract resources experiencing the same workforce constraints that we’re experiencing. 13

5. More work. 14

There are no short-term solutions to these problems. These dynamics are illustrated in Figure V-5. 15

13 A.04-12-014, Exhibit SCE-3, Volume 1, Part 2.

62

Figure V-5 Major Drivers Affecting Workforce Requirements

New Business

Load Growth

InfrastructureReplacement

Work Requirements

WorkforceDemographics

Training of New Employees

Availability of Skilled

Resources

Workforce Constraints

Workforce

Needs

New Business

Load Growth

InfrastructureReplacement

Work Requirements

WorkforceDemographics

Training of New Employees

Availability of Skilled

Resources

Workforce Constraints

Workforce

Needs

Regarding workforce demographics, we are (and expect to continue) experiencing high levels of 1

attrition throughout TDBU, but this is especially acute in some critical job classifications. In the 2006 2

GRC, I discussed the fact that Linemen provide a pool for promotion to various supervisory and manage 3

level positions.14 I also discussed the need to continue our strategy for growing the ranks of this 4

classification. Even though TDBU has been hiring linemen and apprentice linemen, we have actually 5

experienced a net reduction in the linemen classification because this classification is a feeder pool for 6

other positions (see Figure V-6). In addition, it is also a key critical resource for constructing, operating, 7

and maintaining the electrical system. 8

14 A.04-12-014, Exhibit SCE-3, Volume 1, Part 2.

63

Figure V-6 Number of Linemen (2002-2006)

2002 2003 2004 2005 2006508 468 469 488 47838 54 95 78 6778 53 76 88 106468 469 488 478 439

Beginning of YearAdditionsAttritionEnd of Year

410

420

430

440

450

460

470

480

490

500

2002 2003 2004 2005 2006

Figure V-7 below identifies TDBU employees who retired or terminated in the years 2002 to 1

2006. This chart demonstrates that even though we have been actively building our workforce to meet 2

customer growth, load growth, and infrastructure replacement, retirements and other attrition continues 3

to increase. 4

64

Figure V-7 TDBU Retirements and Attrition

2002 2003 2004 2005 2006Retirements 44 56 53 108 187Termination/Other 134 148 181 202 201Total 178 204 234 310 388

0

50

100

150

200

250

300

350

400

450

2002 2003 2004 2005 2006

Retirements Termination/Other

Additionally, key age segments of TDBU’s work force continue to increase, creating a wave 1

affect: more employees are becoming retirement eligible and thus increasing TBDU’s risk of losing 2

experienced and highly skilled employees. In the 2006 GRC, the age distribution of TDBU’s workforce 3

was presented in the Figure V-8. 4

65

Figure V-8 Age Distribution of TDBU Workforce

(as of Year-end 2003)

Under 20 20-29 30-39 40-49 50-59 60+ TotalAdministration/Professional 33 126 382 775 574 55 1945Trades 19 283 521 966 609 57 2455Total 52 409 903 1741 1183 112 4400

0200400600800

100012001400160018002000

Under 20 20-29 30-39 40-49 50-59 60+

Administration/Professional Trades

At the end of 2003, the number of employees in the 50 plus age range totaled 1,295 or 29 percent 1

of TDBU’s work force. Figure V-9 presents the current age distribution of the TDBU workforce as of 2

the end of 2006. 3

66

Figure V-9 Age Distribution of TDBU Workforce

(as of Year-end 2006)

Under 20 20-29 30-39 40-49 50-59 60+ TotalAdministration/Professional 29 287 442 902 726 115 2501Trades 27 463 730 879 670 97 2866Total 56 750 1172 1781 1396 212 5367

0200400600800

100012001400160018002000

Under 20 20-29 30-39 40-49 50-59 60+

Administration/Professional Trades

The number of employees in the 50-plus age range now totals 1,608, or 30 percent of TDBU’s 1

work force. The growth of this age segment (313 individuals, or 24 percent) is alarming, since TDBU’s 2

overall workforce has increased by 967 employees, or 22 percent. 3

Historical average rates of retirements cannot be used for forecasting the number of retirements 4

in TDBU. From a 2006 GRC perspective, the historical 5-year average number of retirements would 5

have been calculated at 60 per year. The actual average number of retirements over the 2006 GRC cycle 6

amounted to 116, or over 90 percent higher. In the 2006 GRC, TDBU did not forecast retirements, just 7

the number of employees eligible for retirement. For this GRC, TDBU has conducted both analyses: 8

(1) number of employees eligible for retirement; and, (2) forecasted number of retirements. Table V-3, 9

below, provides the number of employees eligible for retirement (55 years of age with 10 years of 10

service) and the number of forecasted retirements. 11

67

Table V-3 TDBU Employees Eligible to Retire and Forecasted to Retire

Year

Employees Eligible to

RetireForecasted Retirement

2007 806 2392008 719 1952009 707 189

Given the forecast number of retirements, the average number of retirements per year during the 1

forecast period can be calculated at 208 employees. This is 231 percent higher than the using the 5 year 2

historical average of 90 employees. 3

The issue of work force demographics and the potential impacts on the construction, operation, 4

and maintenance of the electric system is not just limited to SCE, but inherent to the electric utility 5

industry. In an August 2006 report by the United States Department of Energy (USDOE) titled 6

“Workforce Trends in the Electric Utility Industry” a key finding was: 7

“For electric utilities, whose service quality and reliability depends on maintaining an 8

adequate, knowledgeable workforce, managing the upcoming retirement transition is a 9

particular challenge.”15 10

As stated in the 2006 GRC, in the coming years TDBU is facing an increasing number of 11

retirement-eligible employees, who are highly experienced and skilled. If hiring and training programs 12

requested in this GRC are not approved and fully funded, TDBU will not be able to engineer, design, 13

construct, operate, and maintain the electrical system. 14

Work Force Strategy 15

To address these workforce issues and meet the challenges of continued high levels of work and 16

overtime, SCE has implemented a formal workforce planning process to provide greater focus on 17

workforce needs and costs associated with TDBU’s construction and maintenance work activities. 18

Figure V-10, below, summarizes historical and projected workforce requirements for the six key job 19 15 United States Department of Energy report “Workforce Trends in the Electric Utility Industry” A Report to the United

States Congress Pursuant to Section 1101 of the Energy Policy Act of 2005, pp. xi

68

classifications listed earlier. Specific factors affecting the resource planning process for each of these 1

classifications are discussed in Section C of this chapter. 2

Figure V-10 Manpower Needs For Major Job Classifications

2002-2006 Historic, 2007-2009 Forecast (Excludes Contract Labor)

2002 2003 2004 2005 2006 2007 2008 2009Service Planners 208 276 282 292 338 352 387 453Engineering 130 160 188 223 238 243 263 288Linemen 619 647 702 826 820 785 757 803System/Substation Operators 209 201 195 202 210 229 229 229Maintenance Electricians 149 157 159 164 158 163 170 170Test Technicians 89 88 93 87 99 104 108 108Total 1,404 1,529 1,619 1,794 1,863 1,876 1,914 2,051

0

500

1000

1500

2000

2500

2002 2003 2004 2005 2006 2007 2008 2009Service Planners Engineering LinemenSystem/Substation Operators Maintenance Electricians Test Technicians

Forecast

To meet projected manpower requirements and mitigate high overtime rates, TDBU has training 3

and recruitment programs in place for the trades classifications.16 These programs generally focus on 4

hiring personnel for apprentice training programs, which can vary in size based on limitations of our 5

classroom facilities and the ability of the field construction forces to effectively and safely absorb new 6

personnel. The field aspect of apprentice training is conducted by construction employees during the 7

performance of routine construction and maintenance work. 8

Current and projected manpower shortfalls cannot be adequately addressed solely through 9

internal training and development programs. Apprenticeship programs do not address immediate work 10

load imbalances and apprentices are limited by work rules and safety restrictions as to the types of work 11

16 “Trades” refers to the classifications of Lineman, System & Substation Operator, Maintenance Electrician, and Test

Technician.

69

they can perform. Consequently, we also seek to hire journeyman personnel in particular job 1

classifications – for example, linemen. Job advertisements are placed in trade journals and newspapers 2

nationwide seeking qualified candidates. All new hires must complete orientation and training to insure 3

they understand and follow SCE safety practices, as well as, work practices and standards. 4

Trades classifications are also a source of manpower that is used to fill vacancies, often created 5

by retirements, in more skilled positions. For example, Linemen may move into a Foreman, Supervisor, 6

Distribution Service Planner, and Transmission Planner positions. Electricians and Test Technicians fill 7

vacancies in supervisory positions such as Foreman, Station Operations Supervisor, Test Supervisor and 8

other classifications. We will need to continue the hiring and training programs as personnel move to 9

positions of greater responsibility or expand their skills by moving into different areas. 10

Management and technically skilled workers are in demand as well. These include Planners, 11

Field Supervisors, Engineers, and Managers. As with the Trades classification, TDBU has ongoing 12

training programs that are intended to address this need as well. 13

At the end of 2006, 44 percent of TDBU executive management was over age 55. Further, 26 14

percent of all managers and 21 percent of all supervisors were retirement eligible. It is very difficult to 15

hire knowledgeable leadership externally because of the technical, regulatory, safety and work rules-16

related issues they must be familiar with and address on a daily basis. To insure a continuous flow of 17

leadership talent, TDBU must “seed” the organization with new positions well in advance as part of the 18

workforce planning effort. 19

Some level of contract labor has always been used as a management tool to balance the workload 20

and avoid over-hiring. This practice is expected to continue through the 2009 GRC cycle. SCE utilizes 21

contractors to perform a wide range of functions including electrical construction, maintenance, 22

inspections, planning, and engineering. Figure V- 11, below, outlines the increase in the number of 23

contract crews deployed to perform distribution construction and maintenance functions. 24

70

Figure V- 11 Number of Distribution Electrical Contract Crews

(2002-2006)

2002 2003 2004 2005 2006Contract Crew 125 134 153 181 182

0

20

40

60

80

100

120

140

160

180

200

2002 2003 2004 2005 2006

Similarly, in 1999 about 50 contract planners were being used. By 2003, the number had grown 1

to over 60 and by 2006 the number had increased to 141. As well as reflecting the increase in total costs 2

we are incurring to meet the increasing work load, the use of contractors reflects a shift between labor 3

and non-labor in O&M account expenses, both historical and forecast. 4

C. Workforce Development Within Critical Job Classifications 5

1. Overview 6

In response to the workforce constraints associated with our aging infrastructure, 7

continued increases in customer and load growth, and an aging workforce, TDBU has been proactively 8

working to strengthen the competency and size of its workforce engaged in the construction, operation, 9

and maintenance of the electrical grid. In addition, programs and processes have been implemented to 10

more effectively utilize these limited resources. While the aging infrastructure and aging workforce 11

were anticipated, the extent of the impact of other major events on the workforce – such as the continued 12

high customer and load growth were not anticipated. Simply put, solving the resource constraint will 13

take many years and is a high priority. This TDBU funding request must be evaluated in the context of 14

all of those factors. I will now discuss six major job classifications (Service Planners, Engineers, 15

71

Linemen, System & Substation Operators, Maintenance Electricians, and Test Technicians) and the 1

programs we have in place to address them. 2

2. Service Planners 3

The design organization performs the design and planning of the distribution electric 4

systems throughout SCE’s service territory. At the end of 2006, this work was being done with 5

approximately 340 employees plus contract personnel. The design organization’s workload is driven by 6

customer growth, customer requests, maintenance, and overhead to underground conversions, as 7

discussed by Witnesses Deatherage (SCE-3, Volume 3, Part 1) and Lee (SCE-3, Volume 3, Part 3). 8

Service planning costs are charged to clearing accounts and are therefore discussed by Witness Fiske-9

Phillips (SCE-3, Volume 2, Part 4). 10

Due to the technical nature of this work, it takes three-to-five years for an individual to 11

become a seasoned Service Planner. The Service Planner Development Program (SPDP) was designed 12

to attract and replenish the much needed talent in the Service Planner classification and create a talent 13

pool to replenish the design organization while managing workforce attrition. Additionally, to further 14

supplement the Service Planner ranks and meet location specific requirements not covered by the SPDP, 15

an Alternate Paths program was created whereby typically field construction personnel are hired directly 16

into the planner position and trained locally. Also, to further allow for job-related experience growth of 17

planners and meet the increasing workload, the Central Design Group continues to supplement their 18

planning workforce with contract planners, many of whom are retired SCE Service Planners. Despite 19

the successful attraction of more employees through the SPDP and Alternate Paths programs, we need to 20

continue to increase the experience level of planners. 21

Much of TDBU’s infrastructure replacement and load growth related work requires 22

highly skilled and experienced planners, known as a Service Planner 3. The progression path of a 23

Service Planner is from a Service Planner 1 (“P1”) to a Service Planner 2 (“P2”) to a Service Planner 3 24

(“P3”). The typical time line is approximately two-to-three years as a P1 and five plus years as a P2, 25

before possible progression to a P3, which is the most skilled and knowledgeable position on 26

distribution electrical system design principles and practices. 27

72

TDBU’s strategy is to increase the current levels of P1 and P2 planners, to (1) provide a 1

pool of qualified P3s, allowing TDBU to increase the number of P3s, and (2) increase the overall 2

number of service planners to address the large growth of work over the 2009 GRC cycle. For example, 3

on the P3 growth strategy, in 2005, 91 percent of the P3 type work was accomplished by contractors. In 4

2006, this percentage decreased to 77 percent. TDBU’s goal is to obtain a 60:40 split of P3 work, SCE 5

to contractor. Overall, TDBU’s service planner strategy will result in an overall increase in the number 6

of planners to meet projected work loads and reduce SCE’s reliance on contractors. 7

Based on the expected work load, attrition levels, and achievement of the P3 strategy, the 8

Design organization forecasts the need to attract and retain an additional 80 planners in 2007, followed 9

by 80 in 2008. SCE intends to continue the SPDP and Alternate Paths programs to replenish these 10

technical positions. Annual Service Planner workforce needs are illustrated in Figure V-12. 11

Figure V-12 Service Planner Workforce Needs

2002-2006 Historic, 2007-2009 Forecast

2002 2003 2004 2005 2006 2007 2008 2009108 116 98 109 149 156 166 20386 143 167 168 176 177 195 21414 17 17 15 13 19 26 36

208 276 282 292 338 352 387 453

Planner 1Planner 2Planner 3Total

050

100150200250300350400450500

2002 2003 2004 2005 2006 2007 2008 2009

Planner 1 Planner 2 Planner 3

Forecast

3. Engineers 12

The engineering organization performs analysis, long-term planning, engineering studies, 13

and designs of SCE’s substation, transmission and distribution electric systems with an approximate 14

work force of 240 employees. Engineering’s role in the distribution system is to plan facilities for load 15

73

growth, perform load flow and short-circuit duty studies, develop equipment and line replacement 1

strategies as a result of these studies, develop operational procedures, and approve designs and apparatus 2

installed on the system. The work load in these areas continues to grow as a result of load growth and 3

infrastructure replacement activities. Distribution engineering work is included in activities discussed 4

by Witness Deatherage (SCE-3, Volume 3, Part 1), Witness Lopez (SCE-3, Volume 3, Part 2), and 5

Witness Lee (SCE-3, Volume 3, Part 3). Some of the engineering costs are charged to clearing 6

accounts, and are therefore, discussed by Witness Fiske-Phillips (SCE-3, Volume 2, Part 4). 7

Unlike the design group, the engineering organization generally recruits and hires 8

Engineers from engineering schools and other entities outside SCE. As noted in the U.S. Department of 9

Energy’s report to Congress on “Workforce Trends in the Electric Utility Industry,” university-based 10

power engineering programs has declined, resulting in fewer qualified power engineering candidates. In 11

response, new hires are rotated within various engineering functions which allow them to grow their 12

skills and knowledge of SCE’s electrical system. Within the various engineering disciplines, there are 13

specific skill sets that can only be obtained through mentoring and on-the-job experience. 14

Currently, Engineers with experience and/or training in power systems are in relatively 15

short supply. At the end of 2006, 17 percent of the engineers were aged 55 or older. Additionally, we 16

rely on contractors to do approximately 50 to 70 percent of our engineering work, depending on work 17

loads. Annual engineering workforce needs are illustrated in Figure V-13. 18

74

Figure V-13 Engineer Workforce Needs


2003 2004 2005 2006 2007 2008 2009 2007 2008 2009Engineers 106 137 152 180 198 198 218 243TSPs 24 23 36 43 40 45 45 45Total 130 160 188 223 238 243 263 288

0

50

100

150

200

250

300

350

2002 2003 2004 2005 2006 2007 2008 2009

Engineers TSPs

Forecast

4. Linemen 1

The Linemen classification is one of the core positions within SCE, performing 2

construction, maintenance, and operation of the transmission and distribution electric systems. They 3

represent a critical resource needed for meeting the maintenance and construction demands brought 4

about by GO 165, infrastructure replacement programs, and system expansion in response to customer 5

and load growth. Linemen perform underground detailed inspections, replace and/or add poles, lines, 6

cables, switches and transformers as needed, install new circuits and equipment, and connect new 7

services to the SCE system - thus keeping the energy flowing to our customers. They repair failed 8

equipment and work extended shifts in adverse conditions until service is restored during storms or other 9

events. Linemen are an integral component of work as discussed by Witness Deatherage (SCE-3, 10

Volume 3, Part 1), Witness Lopez (SCE-3, Volume 3, Part 2), Witness Lee (SCE-3, Volume 3, Part 3), 11

Witness Young (SCE-3, Volume 2, Part 2), and Witness Stark (SCE-3, Volume 2, Part 4). 12

Maintaining an adequate number of Lineman, amongst both SCE and contract crews, is 13

critical. In the U.S. Department of Energy’s report to Congress on “Workforce Trends in the Electric 14

Utility Industry,” a key finding on Linemen is: 15

75

“The percentage of lineworker workforce expected to retire within the next five to ten 1

years could approach 50 percent in some organizations. The loss of institutional knowledge is a critical 2

concern, especially for a profession heavily dependent on mentoring and on the job training. Although 3

the number of lineworker training institutions has grown considerably, analysis indicates a significant 4

forecasted shortage in the availability of qualified candidates by as many as 10,000 lineworkers, or 5

nearly 20 percent of the current workforce. This could eventually limit the nation’s ability to maintain 6

and/or increase electricity supply, potentially impacting the economic and national security of the 7

United States.”17 8

Within SCE, Linemen are one of the most key classifications within its workforce. These 9

Linemen represent a highly trained workforce that deals with energized high-voltage equipment on a 10

daily basis. Additionally, SCE Linemen provide a pool for promotion to various supervisory and 11

management level positions within TDBU. But most importantly, SCE needs Linemen with the skills 12

necessary to handle our growing complexity and volume of work, a high appreciation for safety and 13

environmental precautions, and an increased awareness and application of regulations and work 14

practices required by the current work environment. 15

TDBU’s current Lineman workforce is understaffed for meeting the immediate and 16

projected work load. From 1999 – 2002, the number of SCE Linemen (journeymen and apprentices) 17

had decreased from 649 to 619 due to normal attrition and because recruiting was reduced significantly 18

due to the financial crisis. However, since that time the volume of work has increased. Although SCE 19

has always employed an apprentice program for linemen, TDBU has been engaged in an accelerated 20

hiring program to achieve the workforce levels necessary for the increasing work load and projected 21

attrition. At the end of 2003, TDBU had 469 journeyman and 178 apprentice linemen. At the end of 22

2006, SCE had 439 journeyman and 381 apprentice linemen. The large increase in the number of 23

apprentice linemen is a result of TDBU’s strategy to grow the ranks of its Linemen work force which 24

has resulted in 150 new apprentices per year. Based on current budget priorities and the ability of the 25 17 United States Department of Energy report “Workforce Trends in the Electric Utility Industry” A Report to the United

States Congress Pursuant to Section 1101 of the Energy Policy Act of 2005, pp. xi.

76

field organizations to absorb so many new apprentices, TDBU will only add 75 new apprentices in 2007 1

and 2008. To help mitigate the lower number of new apprentices for the next two years, TDBU is 2

actively recruiting for 130 journey linemen positions. The apprentice strategy for the 2009 GRC cycle is 3

to increase hiring of new apprentice linemen to 170 per year.18 Annual Lineman workforce needs are 4

illustrated in Figure V-14. 5

Figure V-14 Lineman Workforce Needs


2002 2003 2004 2005 2006 2007 2008 2009Journeymen 466 469 448 478 439 485 531 568Apprentice 153 178 254 348 381 300 226 235Total 619 647 702 826 820 785 757 803

0

100

200

300

400

500

600

700

800

900

2002 2003 2004 2005 2006 2007 2008 2009

Journeymen Apprentice

Forecast

5. System & Substation Operators 6

The Grid Operations organization is responsible for operating SCE’s electrical system on 7

a 24 hours a day, 7 days a week basis. Within the Grid Operations organization are the System and 8

Substation Operator job classifications that are responsible for the monitoring, control, and operation of 9

SCE’s transmission, distribution, and substation systems. The activities performed by our System 10

Operators and Substation Operators are critical to the operation of the electric system, both during 11

normal conditions and while restoring service to our customers during a storm or any other type of 12

interruption. These personnel coordinate the activities of the field crews responding to circuit 13

18 The Reliability Investment Incentive Mechanism (RIIM) goal of 200 new hires per year includes groundmen, as well as

apprentice linemen.

77

interruptions, isolating trouble, and switching circuits to restore service. They also direct switching 1

activities for routine maintenance and construction of lines and equipment. System and Substation 2

Operators’ costs are included in the various work activities discussed by Witnesses Salinas (SCE-3, 3

Volume 2, Part 3 and SCE-3, Volume 3, Part 4), and Edeson (SCE-3, Volume 2, Part 1). 4

Within this job group, the System Operator is the most critical and requires the most 5

training. At the end of 2003, SCE had 103 System Operators. But by the end of 2006, we had only 94. 6

As with many other technical positions, a three-year apprentice program is required for a System 7

Operator to obtain the required skills to become a Journeyman. In addition, because of the highly 8

technical nature of this position, most candidates are hired into the System Operator Apprentice Program 9

with prior substation operator experience (i.e., at least 6 months substation switching experience as a 10

Substation Operator Trainee, Substation Operator, or Maintenance Electrician). Despite ongoing efforts, 11

the system operator classification remains understaffed. As of the end of 2006, there were 12 System 12

Operators over the age of 55, by the end of Test Year 2009, 19 of the current 94 System Operators, or 20 13

percent, will be eligible for retirement. 14

To stay adequately staffed in this area over the 2009 GRC cycle, SCE will need to 15

increase by approximately 20 System and Substation Operators, as shown in Figure V-15, to meet 16

projected increased workload. 17

78

Figure V-15 System & Substation Operator Workforce Needs


2002 2003 2004 2005 2006 2007 2008 2009System Operators/ASO 105 103 102 97 94 112 112 112Substation Ops./Trainee 104 98 93 105 116 117 117 117Total 209 201 195 202 210 229 229 229

0

50

100

150

200

250

2002 2003 2004 2005 2006 2007 2008 2009

System Operators/ASO Substation Ops./Trainee

Forecast

6. Maintenance Electricians 1

The Substation Maintenance Electrician and the Test Technician (discussed in the 2

following section) positions are closely related in that they represent the two job classifications 3

responsible for most of the construction and maintenance-related work “inside the substation fence” and 4

because the Test Technician classification obtains most of its apprentice candidates from the 5

maintenance electrician group. 6

The Substation Maintenance Electricians are responsible for maintaining approximately 7

11,000 circuit breakers and 3,500 transformers as well as various other types of equipment inside of 8

substations. This includes preventative and predictive maintenance activities in addition to emergency 9

repairs and system restoration. Also, approximately 30 percent of this workforce is utilized to install 10

and commission new equipment. Maintenance Electrician’s costs are included in FERC accounts 11

discussed by Witness Salinas (SCE-3, Volume 2, Part 3 and SCE-3, Volume 3, Part 5) and Witness 12

Lopez (SCE-3, Volume 3, Part 2). 13

Currently 48, or 47 percent, of the 102 Journeymen Maintenance Electricians (2006) are 14

age 50 or older and 22, or 21 percent, are age 55 or older and thus eligible for retirement today. 15

79

Including the 63 Apprentice Maintenance Electricians, the average age of this job classification group is 1

43.5, which is a decrease of only three percent since the 2006 GRC. This decrease is low given that so 2

many younger apprentices have been added to the employee mix. The demographic issue is further 3

compounded by the fact that typical qualified candidates for Test Technician openings (as discussed in 4

the next section) come from the maintenance electrician classification, and, with a significant number of 5

them eligible for retirement, there will be fewer candidates for Test Technician positions. 6

Further compounding the problem of high attrition rates is the potential retirement of a 7

significant number of Substation Maintenance Foremen. Substation Maintenance Foremen plan and 8

supervise the work of the Maintenance Electricians. Thus, the typical pool of candidates for a 9

Substation Maintenance Foreman position is Maintenance Electricians. SCE has 22 Substation 10

Maintenance Foremen of which 5 are age 55 or older and thus eligible for retirement, a decrease of one 11

since the 2006 GRC. 12

Historically, Apprentice Maintenance Electricians came from within SCE. Similar to the 13

system operator classification, the typical career progression for Maintenance Electricians was from 14

Substation Operator Trainee, to Substation Operator, and then on to substation Apprentice Maintenance 15

Electrician. Each progression built on the previous job knowledge skills in addition to greater 16

compensation for their contributions. At the end of 2006, there were 58 apprentices in the maintenance 17

electrician program, an increase of six since the 2006 GRC. As shown in Figure V-16, our strategy is to 18

have 163 substation maintenance personnel (journeymen and apprentices) in 2007, then increase to 170 19

in 2008 and throughout the 2009 GRC cycle. 20

80

Figure V-16 Maintenance Electricians Workforce Needs


2002 2003 2004 2005 2006 2007 2008 2009Journeymen 113 116 107 104 100 103 101 117Apprentice 36 41 52 60 58 60 69 53Total 149 157 159 164 158 163 170 170

0

20

40

60

80

100

120

140

160

180

2002 2003 2004 2005 2006 2007 2008 2009

Journeymen Apprentice

Forecast

7. Test Technicians 1

Substation Test Technicians are responsible for maintaining approximately 36,000 relays 2

and other various types of substation meters and electronic equipment. They perform initial testing and 3

commissioning of new apparatus such as transformers, protective relays and control system automation, 4

as well as periodic routine testing of that same equipment. They also perform system restoration 5

activities subsequent to outages or emergencies. Test Technician’s costs are included in FERC accounts 6

discussed by Witness Salinas (SCE-3, Volume 2, Part 3 and SCE-3, Volume 3, Part 4) and Witness 7

Lopez (SCE-3, Volume 3, Part 2). 8

Amongst the major job categories of craft personnel in the substation group, the Test 9

Technician job classification requires the highest level of analytical thinking and electrical problem 10

solving competencies. In addition, work performed by Test Technicians requires a thorough 11

understanding of complex work processes and procedures that are unique to each utility company. 12

These activities require a high level of precision in their execution and have low tolerance for 13

performance errors given the potentially significant impact on system reliability that is at stake. 14

Additionally, with the advent of computer relays versus electro-mechanical devices, the complexity of 15

81

the equipment has increased, coupled with a swift and constant change of the technology, has increased 1

the required level of training for new and existing Test Technicians. 2

An evaluation of the number of potential future openings in the combined Maintenance 3

Electrician/Test Technician classification shows how serious the workforce situation is in this area. Out 4

of a year-end 2006 workforce of 92 Test Technicians, 20 percent, or 18 employees, were age 55 or older 5

and therefore currently eligible for retirement. Moreover, 7 of the 18 retirement age employees are 59 6

or older. If all those that can retire were to do so in the next three years and all their replacements came 7

from the maintenance electrician classification, there would be 34 openings created in a work force that 8

currently has 260 employees. This would be a 13 percent attrition rate. In an attempt to overcome 9

attrition in the Test Technician job classification in addition to the electrician attrition, we plan to add 20 10

new Test Technician apprentices in 2007, 21 in 2008 and 10 in 2009. Annual Test Technician 11

workforce needs are illustrated in Figure V-17. 12

As is the case with the other technical positions, the challenge in building the Test 13

Technician workforce involves a lengthy process of training due to the advanced knowledge and skills 14

that are required for the job. The Electrical Test group normally draws from the pool of Journeymen 15

Maintenance Electricians to fill vacancies. Qualified candidates with prior operation and maintenance 16

experience will require an additional two to three years of intensive training before gaining the 17

necessary job knowledge to execute daily tasks in an independent and productive manner. As a 18

condition of our current labor contract, external candidates are only considered when there are no 19

bidders from the internal maintenance electrician pool. Candidates with no prior utility experience such 20

as those graduating students from a technical trade school or community college with technical degrees 21

will take at least four years of formal class-room training combined with on-the-job experience to gain 22

the necessary job skills. A typical Test Technician having completed the formal training will still need 23

the continual support of SCE technical specialists throughout their career due to the rapid changes in 24

technologies and the technological obsolescence of intelligence electronic devices utilized in controls 25

and system protection. 26

82

Figure V-17 Test Technicians Workforce Needs


2002 2003 2004 2005 2006 2007 2008 2009Working Supervisor 47 49 46 43 45 49 54 54Test Technician 42 39 47 44 54 55 54 54Total 89 88 93 87 99 104 108 108

0

20

40

60

80

100

120

2002 2003 2004 2005 2006 2007 2008 2009

Working Supervisor Test Technician

Forecast

83

VI. 1

WORKFORCE TRAINING 2

3

SUMMARY

• The total request for training is $45.012 million, which includes delivery costs and seat time costs.

• One of the most significant issues currently facing TDBU is the development of a qualified workforce to meet the increased work requirements brought about by high levels of customer and load growth, and infrastructure replacement.

• TDBU must also continue to upgrade the skills of the workforce to keep up with technological advances in tools, equipment and systems to ensure a safe work environment and reliable service.

• The increased work requirements have also led to higher contracting and overtime spending. For specific critical job classifications, there is a push to increase the SCE employee to contractor ratio, although SCE will continue to use contractors to perform core work. There is also a need to bring overtime expenses to reasonable levels. These shifts will result in increased hiring in some classifications, which will lead to increased training requirements.

• Increasing workloads have also resulted in high overtime expenses for critical classifications. We will need additional resources to return to reasonable overtime levels, which will lead to increased training requirements.

• There is continued pressure to maintain compliance with an increasing number of Environmental, Health and Safety (EH&S), federal and state mandated regulations and laws.

• As experienced technical employees become retirement eligible, we face added pressure to ensure that the workforce pipeline has employees that are sufficiently prepared to fulfill the job requirements of the retiring employees. Our responsibilities include ensuring there are qualified employees to assume supervisory and managerial responsibilities.

84

A. Introduction 1

The Transmission and Distribution Business Unit (TDBU) Training Department develops and 2

conducts training programs for approximately 5,500 TDBU employees. These employees are 3

responsible for planning, engineering, constructing, operating and maintaining the T&D facilities used 4

to deliver electricity to SCE’s 4.8 million customers throughout its 50,000 square mile service territory. 5

In alignment with the TDBU management priorities discussed in Witness Litzinger’s testimony 6

(SCE-3, Volume 1), TDBU Training is responsible for providing training to: (1) prepare employees to 7

perform their jobs in a manner that preserves their safety, as well as the safety of the public; (2) ensure 8

that employees are aware of, and in compliance with, regulatory requirements and laws; (3) fulfill 9

developmental requirements as part of union bargaining agreements; (4) ensure that TDBU’s workforce 10

is sufficiently trained to complete the increasing workload; and (5) meet corporate training requirements. 11

All employees in TDBU receive some form of training to ensure compliance with federal, state 12

or corporate training requirements. However, the bulk of training is focused on those key positions that 13

are directly required to meet TDBU’s workload and operate the electrical system. These positions 14

include Service Planners, Linemen, System and Substation Operators, Maintenance Electricians, Test 15

Technicians, and Engineers. TDBU Training must also ensure that employees in positions that normally 16

feed into the key positions, such as the Groundman A position into the Lineman position, obtain 17

appropriate training. Key support positions like Field Accountants must also be trained to ensure that 18

work orders are processed and closed in an appropriate and timely manner. 19

For the past several years, TDBU Training has strained to keep up with increased training needs 20

as a result of increased hiring. The overall number of TDBU employees has grown from approximately 21

4,000 in 2002 to approximately 5,500 at the conclusion of 2006. From 2004 through 2006, the number 22

of new Apprentice Linemen increased more than two-fold, which required a surge in both Groundman 23

and Apprentice Lineman training programs to meet the training demands. Similar increases have 24

resulted in comparable training surges elsewhere in TDBU. The Service Planner classification serves as 25

another example of how increased hiring has increased the training burden. From 2002 to the end of 26

2006, the number of Service Planners has increased by 58 percent, from 208 to 338. The Service 27

85

Planner Development Program (SPDP), developed in 2001, has provided employees in Service Planner 1

1 positions with the knowledge and skills necessary to perform their duties. 2

There is also an increased need to ensure that employees in journeyman positions19 increase their 3

knowledge and skills at the same rate that technological changes impact the equipment installed and 4

maintained on the SCE system. For example, analog relay equipment is being replaced by relays with 5

digital capability. This means that Test Technicians are now required to learn how to implement 6

settings and maintain both digital and analog equipment, using different testing technology. 7

B. The TDBU Training Organization 8

In order to provide training to the various TDBU employees, TDBU Training follows a 9

structured approach to identify training needs, design and develop training programs, and implement and 10

evaluate programs to ensure training effectiveness. This process, called ADDIE (Analyze, Design, 11

Develop, Implement and Evaluate), is standard throughout the training industry. In this testimony, we 12

will present TDBU’s strategy for ensuring that employees in the TDBU workforce are adequately 13

prepared to perform their jobs safely and effectively. 14

TDBU Training consists of the following training groups: (1) Powerline Trades Training, for 15

Transmission and Distribution line workers, (2) Substation Training, (3) Service Planner Training, 16

(4) Field Accounting Training, (5) Environmental Health and Safety (EH&S) Compliance Training, 17

(6) General Employee Corporate Required Training, (7) System Deployment Training, (8) Engineering 18

Training, (9) Supervisory/Management Training, and (10) Training Evaluation (Figure VI-18). 19

19 The term “journeyman positions” refers to craft employees who, by virtue of formal training and experience, possess the

knowledge and skills to safely and effectively perform the work.

86

Figure VI-18 TDBU Training Groups

TDBU TRAINING

EH&S ComplianceTraining

Substation Training

Field Accounting TrainingService Planner Training

Powerline Trades TrainingDistribution / Transmission

General Employee Corporate Required Training

Supervisory / Management Training Training Evaluation

System Deployment Training Engineering Training

TDBU TRAINING

EH&S ComplianceTraining

Substation Training

Field Accounting TrainingService Planner Training

Powerline Trades TrainingDistribution / Transmission

General Employee Corporate Required Training

Supervisory / Management Training Training Evaluation

System Deployment Training Engineering Training

1. Powerline Trades Training 1

Powerline Trades Training is responsible for providing training to craft personnel that 2

perform high voltage construction, maintenance, and operational duties. These positions include 3

Distribution and Transmission Linemen, Groundmen, E-crew Foremen, Construction Material 4

Coordinators (CCMs) and Troublemen. 5

A major focus for Powerline Trades Training over the last several years has been the 6

training of Apprentice Linemen in preparation for promotion to Journeyman Lineman. Apprentice 7

Linemen are trained using a three-year training program that combines classroom work, training crew 8

time and on-the-job field experience. The program is comprehensive and is certified by the National 9

Joint Apprentice Training Committee (NJATC). Additionally, Apprentice Linemen undergo a four-day 10

High Voltage Rubber Glove training program, a requirement springing from a Paragraph M bargaining 11

87

agreement.20 The Rubber Glove Training Program is also a condition of the SCE rubber gloving 1

variance in the state of California. 2

As discussed in Witness Kludjian’s testimony (SCE-3, Volume 2, Part 1), there has been 3

a large increase in the number of Apprentice Linemen, from 178 to 381 over the last three years. In 4

2007 and 2008, TDBU will add 75 more Apprentice Linemen each year, which will enable SCE to meet 5

the Reliability Investment Incentive Mechanism (RIIM) requirement.21 TDBU also plans to recruit 130 6

Journeyman Linemen positions in 2009 to mitigate the lower number of new apprentices in 2007 and 7

2008. These new Linemen employees will come in at the first step journeyman position, and typically 8

require three weeks of training to become familiar with SCE’s practices and policies. 9

In the 2009 rate case cycle, TDBU expects to add 170 Apprentice Linemen each year. 10

The pipeline for Apprentice Linemen candidates comes from SCE’s employee pool of Groundman A’s, 11

a practice that is in accordance with the collective bargaining agreement. There are also permanent 12

Groundmen who perform other construction tasks, but are not identified as future Apprentice Linemen. 13

In order to maintain the planned Apprentice Linemen pipeline, SCE will need to hire and train more than 14

200 new Groundman A’s each year. 15

The Groundmen curriculum consists of a four-week training program, which includes one 16

week of introductory climbing training. SCE currently has 197 Groundmen and 126 Groundmen A 17

employees.22 In 2007 and 2008, we will be hiring 85 Groundmen per year to meet RIIM requirements. 18

We expect to develop additional training in 2008 and 2009 to address the evolving needs 19

of Journeyman Linemen and Troublemen. Due to significant workload increases in the past several 20

years, these employees have been underserved in the area of skills maintenance training. Because SCE 21

has had to rely on significant numbers of contract employees, the diversity of work available to the core 22

workforce has been limited. Therefore, the work opportunities for Linemen to maintain or develop 23

20 See workpaper #1, Rubber Gloving Bargaining Agreement. 21 See Witness Neal’s testimony, SCE-3. Volume 3, Part 3, T&D – Capital, RIIM. 22 Groundmen assist line crews in overhead and underground construction and maintenance. Groundmen A’s perform the

same duties as Groundmen, but have completed pre-requisites that qualify them to become Apprentice Linemen.

88

required skills are, in turn, limited. This poses potential safety risks, and we must address this issue in 1

the near future. 2

2. Transmission Training 3

The Transmission Training group is part of the Powerline Trades Training organization. 4

The group was recently separated into a stand-alone training organization to enhance alignment with its 5

client, the Transmission Department, and increase recognition of the imminent increase in transmission 6

construction. This group is responsible for training Transmission Linemen once they have completed 7

the Apprentice Linemen training program, and handles the training of Senior Patrolmen and Line Crew 8

Foremen. 9

The Transmission Department was reorganized in the past 18 months to provide renewed 10

focus on Transmission construction and maintenance in light of the expected workload increase. This 11

department has many employees who require significant foundational construction training to be 12

considered safe and proficient in all aspects of Transmission line construction. The Transmission 13

workforce remains relatively inexperienced since newly designated Journeyman Linemen often transfer 14

to the Distribution Department for a variety of reasons. These twin factors -- a significant increase in 15

transmission construction rather than maintenance, and a continued high transfer rate -- necessitate a 16

tighter focus, and a dedicated training staff to match existing development requirements. 17

Currently, a select group of Transmission employees are receiving transmission-specific 18

training to ensure adequate safety and performance. This “specialist” approach is necessary due to 19

limited training resources in 2007 and 2008. This approach ensures an adequate level of construction 20

expertise within each Transmission work area. Courses include “Ropes that Rescue,” crane training, 21

underground training, helicopter training, Lindsey Tower23 training, and other critical areas. During the 22

2009 GRC cycle, TDBU needs to train all of the 75 Linemen and 32 Senior Patrolmen in the areas 23

previously identified, and ensure that these employees complete other courses as well.24 TDBU plans to 24

23 A Lindsey Tower is a temporary overhead structure used to replace downed towers in an emergency situation. 24 See workpaper #2, 2009 Projected Training Program Descriptions.

89

increase the population of these classifications by 30-40 percent over the next five years to meet 1

workload requirements, which will again increase training requirements. 2

3. Substation Training 3

Substation Training is responsible for providing technical skills training to SCE craft 4

classifications and others that work in and around substations. These employees require training in 5

order to be: (a) competent in their respective trade; and/or (b) compliant with prevailing safety and/or 6

protocol requirements. 7

Substation Training’s primary audiences include Apprentices in the following craft 8

classifications: Maintenance Electricians, Test Technicians, Substation Operators, and System 9

Operators. These are all key positions in operating and maintaining the system. Additionally, 10

Substation Training provides substation-related training to non-craft classifications to ensure these 11

employees are adequately prepared to safely conduct themselves in and around substations. For 12

example, the Entering Substations program is required for business unit employees, such as Engineers 13

and Project Managers. The program is also mandated for contractors who need to enter substations to 14

perform their duties. 15

All substation craft employees attend Basic Operating Training when they first enter their 16

positions. This 18-week training program provides foundational knowledge and skills required to safely 17

operate and maintain substation equipment. This instructor-led program combines classroom training 18

(including hands-on experience with simulator equipment) and monitored field experiences. From 19

2004-2006, approximately 118 craft employees completed Basic Operating Training. This represents a 20

49 percent increase over 2001-2003, as the company’s financial condition stabilized and the needs of the 21

business became clearer. 22

Apprentice Maintenance Electricians and Test Technicians participate in formal 23

Apprenticeship programs. Each program is three years in length, with six step progressions. The 24

Maintenance Electrician Apprentice program requires either a two or three week instructor-led training 25

session twice each year, and formalized on-the-job training the remainder of the time. The Test 26

Technician Training program requires one month of instructor-led training sessions twice a year, and 27

90

formalized on-the-job training the remainder of the time. We expect that approximately 71 Apprentice 1

Electricians and 33 Test Technicians will participate in Apprenticeship programs in 2007. 2

Substation Training conducts a 13-week System Operator Training program for System 3

Operators, Substation Operators, and Apprentice System Operators to equip them with the foundational 4

knowledge and skills necessary to monitor and control the SCE electrical system. This instructor-led 5

program utilizes a fully modeled Operator Training Simulator (OTS) to enable the participants to engage 6

in hands-on activities and work through scenarios without the risk of negatively impacting the electrical 7

system. We developed this training to meet the contractual requirements of the System Operator 8

Paragraph M agreement25 with the International Brotherhood of Electrical Workers (IBEW) Union, 9

Local 47. Approximately 30 employees from the Substation trades are expected to participate in the 10

System Operator Training in 2007. 11

Under the terms of a collective bargaining agreement, System Operator incumbents are 12

also required to participate in 24 hours of continuing education on a biennial basis. The curriculum is 13

based on collaboration with the client to identify current areas of concern, and knowledge and skills 14

required for upcoming work. 15

Additionally, in the last five years, Substation Training has provided structured 16

Apprenticeship programs with formalized on-the-job training for Battery Electricians, Cable Crews, 17

Construction Field Electricians, and Apparatus Technicians. Each of these employee classifications is 18

facing an increasing workload and must utilize new and more complex technology. 19

As indicated in Witness Kludjian’s testimony,26 hiring will increase the Maintenance 20

Electrician and Apprentice Electrician total headcount to 163 in 2007, and 170 in 2008. We expect to 21

maintain that headcount through the 2009 GRC cycle. For Substation Operators and System Operators, 22

we will reach a headcount of 117 and 112, respectively, in 2007, and anticipate maintaining those 23

numbers through the 2009 GRC cycle. Twenty (20) Test Technician apprentices will be added in 2007, 24

21 in 2008, and 10 in 2009. 25 25 See workpaper #3, System Operator Paragraph M Agreement. 26 See SCE-3, Volume 2, Part 1.

91

In the 2009 rate case cycle, increased attention will be given to the underserved 1

journeyman classifications, as the Infrastructure Replacement (IR) Program will require employees 2

trained to meet the demands of technology upgrades (e.g., the installation and maintenance of digital 3

relays and other equipment that utilize current technology). 4

4. Service Planning 5

The Service Planning Training School prepares employees who are new to Service 6

Planning. The Service Planner Development Program (SPDP) is a 12-month program, with eight 7

months of instructor-led training and four months of on-the-job training designed to provide Service 8

Planner 1 skills and knowledge. Over the past several years, there has been a large increase in the 9

number of new Service Planners. Since 2002, one hundred sixty-four (164) Service Planners were hired 10

and have attended SPDP training. 11

As indicated in Witness Kludjian’s testimony,27 TDBU’s goal is to increase the SCE 12

employee-to-contractor ratio to a 60:40 split, requiring training for additional Service Planners. We will 13

also need to recruit and train new Service Planners, because employees in the Service Planner 1 14

classification will progress to Service Planner 2 and 3 classifications as their skills and experience levels 15

increase. In 2007, TDBU Training is planning to provide SPDP training for 50 new Planners, followed 16

by training for 75 new Planners in both 2008 and 2009. 17

Training efforts for the 2009-2011 rate case cycle are focused on building the Planner 18

pipeline and the skills of Planning Supervisors. In addition to the increase in SPDP classes, employees 19

in the Planner 2 job category who are interested in progressing into Planner 3 positions will attend 10 20

days of training in technical and advanced design. New and existing Planning Supervisors will be 21

provided with training to improve their skills in managing the work order review process and managing 22

design work. These skills will be critical given the increase in new Planners and projected workload. 23

27 Id.

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5. Field Accounting Training 1

Field Accounting Training utilizes a combination of initial training and continuing 2

education programs. Field Accounting employees have a varied list of job responsibilities. They are 3

primarily responsible for accurately processing and closing capital work orders. They are also 4

responsible for ordering and tracking materials used to support line crews, for conducting regular 5

inventory and reconciliation of stock, and for processing invoices, bills, employee expense reports, etc. 6

New employees in the Construction & Maintenance Accountant (CMA) and Clerk positions participate 7

in an intensive two-week “Boot Camp” that teaches them to perform the basic tasks this position 8

requires. Continuing education programs are customized to the type of work the Clerk or Accountant 9

performs (e.g., Transmission or Distribution work orders). There are currently 131 CMA’s and 66 CM 10

Clerks. We also plan to add 20 crew-based CMA’s in 2009 to support the field implementation of 11

system and process improvements. 12

6. Environmental Health & Safety (EH&S) Compliance Training 13

Working in conjunction with the TDBU Safety and Environmental groups, the 14

Compliance Training group is responsible for developing, delivering and tracking training mandated by 15

the California Code of Regulations, Title 8, (CAL OSHA) Industrial Relations, as well as training 16

required by SCE. 17

The scope and content of training varies by job classification, job description and 18

location. For example, rural and coastal areas may have distinct Environmental Protection Agency 19

(EPA) requirements. 20

All TDBU employees receive some form of EH&S compliance training each year. An 21

estimated 2,700 craft employees attend Compliance Training in the Chino training facility for up to three 22

days per year, depending on their job requirements. The remaining professional and administrative 23

employees are required to complete computer-based training (CBT) training programs or view videos to 24

fulfill their compliance training requirements. 25

Site-specific EH&S training commenced in 2006 and will continue in future years. All 26

TDBU employees will be impacted by the site-specific training requirement on an annual basis, with up 27

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to three hours of initial training for those new employees who perform duties related to Hot Work, 1

Lockout-Tagout or Confined Space. 2

7. General Employee Training – Corporate Required Programs 3

TDBU Training also supports the implementation of mandated corporate training 4

programs that deal with subjects other than basic employee health and safety. TDBU Training’s duties 5

include the communication, coordination, enrollment, participant tracking, and reporting of programs 6

such as: 7

• FERC Standards of Conduct. 8

• Sexual Harassment Prevention. 9

• Diversity. 10

• Ethics & Integrity. 11

Where appropriate, TDBU Training consults with its business unit clients to identify the 12

relevant audiences. For example, in connection with the California State mandated Sexual Harassment 13

Prevention Training, care is taken to identify and include those employees who may have “supervisory 14

influence” but who do not necessarily have job titles usually associated with supervision. Depending on 15

the mandate, the audiences for this training can consist of all TDBU employees, or various subsets such 16

as management and supervisory employees. 17

8. System Deployment Training 18

The System Deployment Training group is a key resource for technology deployment in 19

TDBU. This group works closely with TDBU’s Business Process and Technology Integration (BPTI) 20

Department to ensure system technology deployment projects have the appropriate training support --21

this support includes designing, developing, and delivering appropriate training. For example, in late 22

2006 and early 2007, 1,565 employees received training on how to use the new Distribution Service 23

Request & Pricing tool. Support is also provided to monitor and ensure the transfer of learning after the 24

delivery of training. 25

94

9. Engineering Training 1

As discussed in Witness Kludjian’s testimony,28 the Engineering organization utilized a 2

rotation program, on-the-job training, and mentoring to develop new Engineers. However, since 2002, 3

the number of Engineers in TDBU has increased by more than 85 percent, from 106 in 2002 to 198 at 4

the end of 2006. This large influx of relatively inexperienced Engineers, and the increasing workload, 5

has put a strain on many of the experienced Engineers to provide mentoring and on-the-job training 6

while ensuring that the work is completed. In the last two years, TDBU Training has increased its 7

efforts to provide more formalized training for new Engineers. 8

In the Distribution Engineering group, this formalized training has enabled a larger 9

number of new Engineers to assimilate more rapidly into their jobs. In 2005, we implemented a 9-10

month program for 27 new Distribution Engineers. This program incorporated a series of one-day 11

training programs, supported by structured on-the-job work assignments to reinforce the information 12

from the one-day sessions. We also developed job aids to further facilitate the development of new 13

Engineers. These job aids are also used by the more experienced Engineers to coach and mentor the 14

new Engineers. 15

TDBU Training is working with other Engineering departments within TDBU to identify 16

and develop training interventions that will help them assimilate new Engineers more quickly, develop 17

their existing Engineers, and identify practices and tools to capture and transfer critical knowledge. 18

These actions will help us address the expected attrition due to retirements. 19

As this effort evolves, we intend to identify common training needs and implement 20

training programs and strategies that can be leveraged across the entire Engineering organization. We 21

are also exploring partnerships with universities to develop programs that are specific to power systems. 22

In addition, we are considering opportunities to leverage learning technologies (i.e., computer-based 23

training programs, online forums, online classrooms, etc.), since our audience for this training is 24

computer-literate. 25

28 SCE-3, Volume 2, Part 1.

95

10. Supervisory Training 1

As discussed in Witness Kludjian’s testimony,29 management and supervisory employees 2

are in demand. TDBU Training’s planned Supervisory Training curriculum is geared toward providing 3

new and existing supervisors with the basic skills of supervision. TDBU Training develops new 4

programs, or revises existing ones, to provide supervisory programs that are relevant to specific 5

audiences in TDBU.30 There are four major areas of the curriculum: (1) Leading & Directing People; 6

(2) Job Specific Responsibilities (e.g., Labor Relations, Safety Leadership, Resource Planning, 7

Budgets/Accounting, EH&S, etc.); (3) Technical Competence; and (4) The Supervisor’s Role in Helping 8

SCE Achieve its Goals and Objectives. 9

In 2006-2007, we rolled out the first module under the area of Leading and Directing 10

People. This module, entitled “Performance Discussion Workshop,” was conducted for all first-line 11

Supervisors in the Distribution Construction and Maintenance organization, approximately 400 12

represented and non-represented supervisory employees. This program aims to build performance 13

management and coaching skills of first-line Supervisors. Other areas covered in the training are change 14

management and conflict management. Appropriate business unit work scenarios are utilized to 15

facilitate the application of problem-solving skills on the job. We have found that this approach is very 16

effective for Supervisors who come from union represented positions. 17

The remaining modules are pending development. Needs analyses are currently being 18

conducted for other organizations within TDBU. There are approximately 1,200 represented and non-19

represented supervisory and management employees in TDBU that are being considered for 20

supervisory/management training. 21

11. Training Evaluation Group 22

As part of TDBU Training’s commitment to ensuring that its programs are relevant, 23

effective, and cost efficient, the Training Evaluation group is responsible for evaluating the effectiveness 24

29 SCE-3, Volume 2, Part 1. 30 TDBU Training works in concert with the Corporate Learning and Development organization to ensure consistency.

96

of all TDBU Training programs to determine the effectiveness and on-the-job applicability of the 1

training, and evaluate the degree to which the training addresses the learning objectives that were 2

identified during the needs assessment process. The Training Evaluation group also tracks expenses 3

associated with training delivery and seat time to ensure budget goals are met. 4

Future functions of the Training Evaluation group will include: (1) analysis of safety and 5

incident reports to identify trends related to training needs; and (2) needs assessments of audiences in 6

TDBU who are facing evolving and increasing business challenges. 7

C. Facilities Overview 8

TDBU Training maintains two primary training facilities for technical training purposes. One is 9

located in Chino, CA and the other is located in Alhambra, CA. In addition, we are currently in the 10

design stage of developing slightly smaller Regional Training Centers that will be co-located in four or 11

five existing district facilities to supplement the existing training facilities. 12

1. Chino 13

The Chino facility houses the following TDBU Training groups: Powerline Trades 14

Training, Service Planner Training, Field Accounting Training, EH&S Compliance Training, and 15

System Deployment Training. 16

The Chino facility has 13 classrooms and a substantial pole yard. These classrooms are 17

used primarily for recurring training programs such as Apprentice Lineman, EH&S Compliance, and 18

SPDP. System Deployment and Transmission training programs also use the classroom facilities, based 19

on availability. 20

The Chino pole yard was designed to provide multiple levels of training to Groundmen 21

and Apprentice and Journeyman Linemen, in both Distribution and Transmission environments. 22

Currently, there are 161 poles at the Chino training facility that are used to conduct Apprentice Linemen, 23

rubber glove, apparatus, transmission, hot stick,31 transformer bank/capacitor, and pole safety training. 24

31 A hot stick is an insulated tool used for making contact with energized high voltage conductors.

97

TDBU Training uses the pole yard extensively to give line trade employees the opportunity to practice 1

pole work and climbing skills in a controlled environment, promoting safety in the field. 2

Further, as stated in Witness Young’s testimony (SCE-3, Volume 2, Part 2), SCE will be 3

responsible for the project management of several large Transmission construction projects, as well as 4

actually constructing partial line segments to maintain an adequate SCE line construction skill base. It is 5

necessary to upgrade the pole yard to allow the construction of actual transmission towers. The towers 6

will be erected, dismantled, and then re-erected as many times as necessary to develop construction 7

proficiency (we anticipate at least once for each class session). These actual transmission towers permit 8

hot stick practice (the use of hot sticks at realistic distances in a real work environment). 9

Moreover, changes in transmission construction methods also drive the expansion and 10

improvement of the overall Chino training facility. Such changes include the refinements necessary for 11

improved aircraft operations and support, and the use of temporary Lindsey Towers. Lastly, enhanced 12

transmission classroom training will require additional classroom space, so that we have sufficient space 13

to display and utilize training tools, such as tower models, equipment cut-outs, and sample splices at 14

various voltages. 15

In Witness Schurr’s testimony (SCE-10, Operations Support), we are asking for resources 16

to remodel and expand the Chino Training Center. We make this request to ensure that we have 17

adequate classroom and transmission tower and pole yard facilities to meet the increasing Transmission 18

training requirements (as described above). The request is also based on the needs of Service Planner, 19

System Deployment and EH&S Compliance Training. Service Planner Training and EH&S Compliance 20

Training will need additional classroom space to meet the needs of increased hiring for replacement and 21

growth. The need for training associated with system deployments is estimated to increase as system 22

and process enhancements are identified and implemented as part of the operational technology capital 23

projects described in Witnesses Haralson’s, Arons’, and Antillion’s testimony.32 The remodel will also 24

ensure that classrooms are appropriately networked to allow flexibility in scheduling classes that require 25 32 The testimony of these three witnesses can be found at Exhibit SCE-3, Volume 3, Parts 5 and 6/T&D Capital –

Operational Technology.

98

computer connections. This type of computer-based class is growing as more resources are placed 1

online to facilitate access to up-to-date information. 2

2. Alhambra 3

The Substation Training group, located in Alhambra, primarily provides training for 4

System Operators, Substation Operators, and Substation Construction & Maintenance trades. 5

The Alhambra facility contains five classrooms, two equipment laboratories, and three 6

simulators. As the volume of trainees has increased in the past several years, satellite assembly rooms in 7

three field locations are being used to accommodate the overflow. Students are brought in to Alhambra 8

on an as-needed basis to use the various simulators and labs. 9

We utilize simulators at the Alhambra facility to provide Substation Training students 10

with opportunities to learn and develop skills in a controlled environment without risking injury or 11

service interruption. 12

The Operator Training Simulator (OTS) is used for System Operator Training. The OTS 13

replicates the behavior of the SCE power system as it responds to changes in operating conditions or 14

system events. When the trainee responds to an event or system condition by closing a breaker, moving 15

taps, etc., the simulator behaves in the same way as the actual power system. Using the OTS, instructors 16

initiate individual events or sequences of events (scenarios) to give the trainee hands-on experience in 17

responding to a range of normal and emergency system events. 18

The Bird Dog Simulator is used in Basic Operating Training for all substation crafts. It is 19

composed of conventional control boards like those in traditional substations, with all of the 20

conventional operating components. This simulator allows trainees to experience hands-on switching 21

routines, and obtain training in power flow, rack33 structures, basic protection and many other subjects 22

critical to the safe operation of substation equipment. 23

Performance Substation is a replica of a Substation Automation System-controlled 24

substation. It has 4kV, 12kV and 66kV equipment for students to operate, along with actual disconnect 25 33 The rack houses all of the substation electrical equipment, such as circuit breakers, voltage regulators, disconnects and

buses in a substation.

99

equipment that students will encounter in the field. Performance Substation is used by numerous 1

substation crafts for many types of hands-on training, including routine and emergency switching, 2

troubleshooting, and repair. We also use Performance Substation to assess the skills of employees 3

following performance errors. System Operators, Substation Operators, Planners, Linemen, 4

Troublemen, Maintenance Electricians, Test Technicians, Apparatus Test Technicians and Construction 5

Field Supervisors have all participated in training using the Performance Substation training aid. 6

Equipment labs are an important part of Substation Training’s ability to provide hands-on 7

learning experiences. As analog field equipment is replaced by digital equipment and other new 8

technology, it is critical that substation craft employees expand their capabilities, so that the employees 9

are able to both maintain the old equipment, and install, set, test and maintain new equipment as well. 10

3. Regional Training Centers 11

TDBU Training currently employs a mostly centralized approach to craft training (Chino 12

and Alhambra). In an effort to more efficiently meet the increasing training requirements described in 13

this testimony, TDBU’s Power Delivery Business Line is currently developing a plan to implement four 14

to five regional training centers. These centers will be designed to increase overall training capacity and 15

to improve training efficiency and effectiveness for all crafts. 16

TDBU Training relies on seasoned craft employees to conduct a large amount of 17

technical training. This practice ensures that employees possess current skills and knowledge, facilitates 18

professional development opportunities, and gives TDBU Training and its internal clients the flexibility 19

to adjust the instructor staff as required by business needs. Regional training facilities will allow these 20

adjunct instructors to be located at or near actual work locations, giving participants the opportunity to 21

practice and become familiar with equipment in their areas of responsibility. These regional training 22

centers will be managed by TDBU Training staff. 23

D. Analysis of Training O&M Expenses by FERC Subaccounts 24

Training expenses are recorded to FERC subaccounts 566.700 for Transmission expenses and 25

588.700 for Distribution expenses. The recorded and forecast costs for subaccount 566.700 are 26

100

discussed in Exhibit SCE-3, Volume 2, Part 2. The recorded and forecast costs for subaccount 588.700 1

are discussed in Exhibit SCE-3, Volume 2, Part 3. 2

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VII. 1

VEHICLE, EQUIPMENT, AND AIRCRAFT FLEET 2

A. INTRODUCTION 3

In order to provide service to customers, the Transmission and Distribution Business Unit 4

(TDBU) operates a vehicle and equipment fleet consisting of passenger cars, vans, pick-up 5

trucks, forklifts, trucks with aerial equipment (buckets and cranes), loaders, tractors, stringing 6

equipment, trailers, and other vehicles. TDBU utilizes the fleet to operate and maintain SCE’s 7

transmission and distribution facilities, while our Transportation Services Department (TSD) 8

acquires, maintains, and repairs the fleet. As shown in Table VII-4, below, TDBU recorded 9

$56.584 million for the vehicle and equipment fleet in 2006. For Test Year 2009, we forecast 10

$90.779 million for the fleet (a $34.195 million increase). 11

Table VII-4 TDBU Vehicle Costs

(Constant 2006 $000)

Recorded and Adjusted Forecast2002 2003 2004 2005 2006 2007 2008 2009

Vehicles 44,828 41,342 44,490 50,656 56,584 66,086 78,531 90,779Total 44,828 41,342 44,490 50,656 56,584 66,086 78,531 90,779

0

20,000

40,000

60,000

80,000

100,000

120,000

2002 2003 2004 2005 2006 2007 2008 2009

Vehicles

TSD also provides TDBU with Heavy Equipment, Rental, and Crane services (HERC), 12

and helicopter services (Aircraft Operations). As shown in Table VII-5, below, TDBU recorded 13

102

$1.456 million for Aircraft Operations, and $586,000 for HERC. For Test Year 2009, the 1

forecast expense for HERC is $1.602 million (a $1.016 million increase), and for Aircraft 2

Operations the forecast expense is $3.573 million (a $2.117 million increase). 3

Table VII-5 TDBU Aircraft and HERC Costs


Recorded and Adjusted Forecast2002 2003 2004 2005 2006 2007 2008 2009

Aircraft 1,286 1,041 1,114 1,624 1,456 2,743 3,211 3,573HERC 513 439 487 522 586 1,359 1,529 1,602

Total 1,799 1,480 1,601 2,146 2,042 4,102 4,740 5,175

0

1,000

2,000

3,000

4,000

5,000

6,000

2002 2003 2004 2005 2006 2007 2008 2009

Aircraft HERC

For Test Year 2009, the total forecast for the fleet, HERC, and Aircraft is $95.954 4

million, an increase of $37.328 million over year 2006. The last recorded year, 2006, is a 5

reasonable starting point for developing our 2009 forecast. The years prior to 2006 reflect the 6

operation of an aged fleet, and we had only begun to replace the smaller, less expensive, 7

vehicles. In 2009, TSD will continue to perform all the activities associated with the cost of 8

operating the TDBU fleet, and TDBU will continue receiving HERC and Aircraft services 9

reflected in the 2006 expenses. 10

The $37.329 million increase over 2006 recorded is based on the following factors, each 11

of which is discussed further below: (1) vehicle and equipment replacements; (2) vehicle and 12

103

equipment additions; (3) TSD base operations related to the current TDBU fleet; (4) CARB 1

requirements; (5) fuel and fueling; (6) heavy equipment rental and crane services (HERC);34 and 2

(7) aircraft operations. Table VII-6 provides further detail of costs according to the categories 3

outlined above. 4

Table VII-6 TDBU GRC Transportation Forecast


BASE

2006 2007 2008 2009 2010 2011

Vehicles

-Replacements 19,698 25,527 33,463 41,048 43,375 45,207

-Additions 1,684 3,486 6,017 9,815 12,725

-Base 25,149 27,330 29,513 30,595 31,581 32,306

-CARB 2,160

-Fuel/Fueling 11,737 11,545 12,070 10,959 10,701 10,519

Vehicles 56,584 66,086 78,532 90,779 95,472 100,757

Helicopters 1,456 2,743 3,211 3,573 3,605 3,736

HERC 586 1,359 1,529 1,602 1,650 1,712

58,626 70,188 83,272 95,954 100,727 106,205

B. Vehicle Replacements 5

Our Test Year cost of vehicle replacements is $41.048 million, an increase of $21.350 6

million over 2006. Our cost of vehicle replacement increases to $43.375 million in 2010 and 7

$45.207 million in 2011. 8

34 We utilize HERC equipment for setting transformers and other distribution equipment considered too heavy for

fleet vehicles. HERC is also used to erect steel towers and structures, and large portable generators to provide temporary power to customer load during outages due to storms or infrastructure replacement projects. HERC is also utilized to coordinate rentals of construction and maintenance equipment, and transportation of “Heavy Load” equipment.

104

The TDBU fleet is a combination of transmission, distribution, substation, construction, 1

maintenance, and grid operations vehicles comprised of approximately of 3,400 individual units. 2

The fleet age ranges from vintage 1941 to present, as shown in Table VII-7 below. 3

Table VII-7 TDBU Fleet as of February 28, 2007

Vehicle Picture Vehicle Type Vehicle Operator

Avg. Age Optimum

Age

1954 or Older

1955-1964

1965-1974

1975-1984

1985-1994

1995-1999 2000 2001 2002 2003 2004 2005 2006 Total

Passenger Cars, Vans, Pickups

Planner, Supervisor

5.02 3.0 49 207 70 91 2 159 124 118 243 1063

Trucks w/Fabricated Body (non-aerial)

Transmission Patrol, E-Crew Foreman

8.12 5.0 6 117 183 117 57 1 105 27 11 72 696

Yard & W arehouse (e.g. Forklift)

W arehouse W orker, Distribution Pre-Fab W orker

15.43 9.0 1 11 32 125 27 9 11 3 8 11 14 252

Trucks w/Manlifts (e.g. Buckets)

T&D Lineman, Troubleman,

5.79 4.0 7 129 48 85 18 6 6 62 74 435

Line Trucks and Trucks with Material Handling Booms/Cranes

Distribution Pre-Fab, Jobsite Delivery, TDBU Crews

13.24 7.0 20 58 36 23 10 1 1 4 1 6 160

Construction Equipment(e.g., Loaders, Tractors)

Lineman, Equipment Operator

17.18 8.0 1 3 12 26 3 1 1 5 2 4 58

Insulator W ashers & Pumpers

Transmission & Substation Lineman

17.83 7.0 2 7 5 35 6 6 4 65

Stringing Equipment

Transmission Lineman during conductor construction

20.33 15.0 3 4 2 9

Trailers Pre-Fab, Lineman 25.82 15.0 45 136 102 37 178 53 12 10 9 49 7 10 25 673

Total 46 139 126 112 599 638 285 254 49 328 178 215 442 3,411

Table VII-7 details the age of the TDBU fleet by major categories of vehicles and 4

equipment. This table shows that a significant portion of the TDBU fleet is more than 10 years 5

old, and some vehicle types (e.g. insulator washers) are significantly more than 10 years old. For 6

instance, some parts for insulator washers no longer exist and have to be manufactured by TSD. 7

Many of TDBU’s heavier vehicles were scheduled for replacement in the period 1998 8

through 2003. However, impending deregulation and the energy/financial crisis in 2001-2003 9

delayed and forced reevaluation of our vehicle replacement plan. Initiation of vehicle 10

acquisitions involves significant start-up activities, such as gaining knowledge of new work 11

practices, melding work practices with new vehicle technologies, establishing work teams 12

consisting of TDBU personnel and the engineering expertise of suppliers and TSD, and 13

105

developing the eventual specification and identifying the most appropriate supplier. The lead 1

time for the development of specifications and manufacturing of some large or specialized 2

TDBU equipment can be as long as 18 months. As a result, some larger vehicles were delivered 3

in 2005, but the large influx of new larger vehicles began in mid-2006. By this time, the need for 4

replacement vehicles had become urgent. 5

To smooth our acquisition expenditures, TSD utilizes the industry standard of average 6

age as the foundation for our vehicle replacement strategy. We have developed average age 7

targets (optimum age) for planning purposes (see Table VII-7). Optimum age targets are a result 8

of determining the life of a TDBU vehicle based on the multitude of operating conditions within 9

the SCE service territory. By the end of 2009, we anticipate meeting our overall optimum age 10

target for all types of TDBU vehicles. However, some vehicle types will exceed the optimum 11

target because these vehicles cannot be economically acquired on a levelized basis (e.g., one 12

vehicle per year). The quality and price of these vehicles is best served by acquisition on a “one-13

time” basis. Replacing an entire type of vehicle in bulk (all of the vehicles are replaced over a 14

short period of time) will cause our optimum target to be temporarily exceeded. 15

Although our average age analysis will serve as the basis of the TSD vehicle replacement 16

strategy, it will not be the sole factor. SCE operates in a vast 50,000 square mile service territory 17

with significant variances in terrain, altitude, and temperature. These environmental differences 18

have a direct impact on the condition of our fleet and impact their useful life. Consequently, we 19

will also continue our practice of vehicle assessments to validate the replacement decisions based 20

upon average age analysis. 21

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Table VII-8 TDBU Vehicle Replacement Plan

Vehicle Picture

Vehicle Type Vehicle Operator

Count $ (mil) Count $ (mil) Count $ (mil) Count $ (mil) Count $ (mil) Count $ (mil)

Passenger Cars, Vans, Pickups

Planner, Supervisor 158 $3.9 189 $4.5 222 $5.2 223 $5.2 225 $5.2 1017 $24.0

Vehicles w/Fabricated Bodies (non-aerial)

Transmission Patrol, E-Crew Foreman

169 $10.1 170 $11.6 130 $7.6 83 $4.7 73 $4.3 625 $38.3

Yard & Warehouse(e.g., Forklifts)

Warehouse Worker, Distribution Pre-Fab

Worker48 $2.5 76 $4.7 50 $1.9 31 $1.2 18 $0.2 223 $10.5

Trucks with Manlifts(e.g., Bucket Trucks)

T&D Lineman, Troubleman,

88 $15.2 93 $13.3 80 $13.8 49 $6.9 49 $6.9 359 $56.1

Line Trucks and Trucks with Material

Handling Booms/Cranes

Distribution Pre-Fab, Jobsite Delivery,

TDBU Crews62 $17.4 43 $11.3 14 $4.3 12 $3.6 12 $3.6 143 $40.2

Construction Equipment

(e.g., Loaders, Tractors)

Lineman, Equipment Operator

3 $0.3 21 $2.2 7 $0.7 5 $0.6 1 $0.1 37 $3.9

Insulator Washers & Pumpers

Transmission & Substation Lineman

38 $21.3 8 $4.5 16 $6.0 3 $1.6 4 $1.9 69 $35.3

Stringing Equipment

Transmission Lineman during

conductor construction

0 1 $0.1 4 $2.3 4 $2.6 0 $0.0 9 $5.0

Trailers Pre-Fab, Lineman 90 $0.9 59 $2.2 119 $4.9 100 $3.9 66 $2.6 434 $14.5

Total 656 $71.6 660 $54.4 642 $46.7 510 $30.3 448 $24.8 2,916 $227.8

(Constant 2006 $millions)

Total2007 2008 2009 2010 2011

Table VII-8 details the TDBU vehicle replacement plan. This table shows the number 1

and type of vehicles to be acquired and the acquisition price for the period 2007 through 2011. 2

The dollars shown are vehicle acquisition prices, as if the vehicles were to be purchased, even 3

though the TDBU fleet is leased. 4

C. Vehicle Additions 5

Our Test Year cost of vehicle additions is $6.017 million, increasing to $9.815 million in 6

2010, and $12.725 million for 2011. Table VII-9 details the TDBU plan for adding vehicles and 7

equipment to the fleet. 8

107

Table VII-9 TDBU Vehicle Addition Plan

Vehicle Picture

Vehicle Type Vehicle Operator

Count $ (mil) Count $ (mil) Count $ (mil) Count $ (mil) Count $ (mil) Count $ (mil)

Passenger Cars, Vans, Pickups Planner, Supervisor 31 $0.7 0 $0.0 12 $0.3 13 $0.4 12 $0.3 68 $1.7

Vehicles w/Fabricated Bodies (non-aerial)

Transmission Patrol, E-Crew Foreman 57 $4.2 8 $0.4 57 $3.5 63 $3.8 62 $3.8 247 $15.7

Yard & Warehouse(e.g., Forklifts)

Warehouse Worker, Distribution Pre-Fab Worker 4 $0.1 0 $0.0 0 $0.0 0 $0.0 0 $0.0 4 $0.1

Trucks with Manlifts(e.g., Bucket Trucks) T&D Lineman, Troubleman, 24 $3.9 6 $1.4 12 $3.5 12 $3.5 11 $2.7 65 $15.0

Line Trucks and Trucks with Material Handling Booms/Cranes

Distribution Pre-Fab, Jobsite Delivery, TDBU Crews 8 $2.5 4 $1.2 21 $6.1 26 $7.6 25 $7.4 84 $24.8

Construction Equipment(e.g., Loaders, Tractors)

Lineman, Equipment Operator 0 $0.0 0 $0.0 0 $0.0 0 $0.0 0 $0.0 0 $0.0

Insulator Washers & Pumpers Transmission & Substation Lineman 0 $0.0 0 $0.0 3 $1.9 3 $1.9 3 $1.9 9 $5.7

Stringing EquipmentTransmission Lineman

during conductor construction

0 $0.0 0 $0.0 0 $0.0 0 $0.0 0 $0.0 0 $0.0

Trailers Pre-Fab, Lineman 15 $0.2 2 $0.0 7 $0.1 8 $0.1 8 $0.1 40 $0.5

Total 139 $11.6 20 $3.0 112 $15.4 125 $17.3 121 $16.2 517 $63.5

2007 2008 2009 2010 2011

(Constant 2006 $millions)

Total

Table VII-10 TSD Projected Cost of Vehicle Additions

(Constant 2006 $000) Estimated Estimated Estimated Estimated Estimated

2007 2008 2009 2010 2011TDBU Costs of Vehicle AdditionsConstant 2006 $000)Amortization 615 1,387 2,362 4,093 5,868Interest 315 657 1,083 1,820 2,494Licenses (2% of Acq. Cost - 1 year delay) 0 225 231 530 647Additional Mechanics trucks 0 414 414 414 414Estimated increase in Garage Ops 212 456 667 1,045 1,435Estimated increase in Fuel/Fueling 543 346 1,260 1,913 1,866

Total Cost of Vehicle Additions 1,684 3,486 6,017 9,815 12,725

These additions are driven by workload increases due to infrastructure replacement and 1

load growth. During this rate case cycle, TDBU is adding 139 vehicles in 2007 and 21 vehicles 2

in 2008 for current workload and load growth. From 2009 through 2011, TDBU plans to add 47 3

Overhead Distribution crews, 23 General Underground Foremen with varying numbers of crews, 4

108

and 6 transmission crews. TDBU also plans to add distribution line trucks, companion vehicles, 1

and transmission patrol vehicles over the same time period. This is a total of 517 TDBU 2

requested vehicles for the period 2007 through 2011. 3

As a result of the increased workload in TDBU, increases in TSD vehicles should also be 4

included in the TDBU request. TSD plans to acquire additional Mechanic trucks. These trucks 5

are either located at TDBU districts as a mobile repair station and for emergency “call-outs.” 6

There are also mechanics trucks for Technicians that constantly travel throughout the SCE 7

service territory. The new trucks will be significant upgrades from the current group of traveling 8

mechanic vehicles. Lastly, TSD has 38 fuel trucks that are very old. Mobile fuel trucks dispense 9

85 percent of the fuel consumed by the TDBU fleet. These trucks are used to fuel all vehicles at 10

a location. The fuel truck avoids having to move each vehicle to a conventional fuel pump. 11

TDBU vehicles (particularly large vehicles with booms/cranes) do not routinely enter 12

commercial fueling outlets (saving time and enhancing safety), and fuel trucks are invaluable 13

during storms and emergencies. All of these trucks (except one) are at least 18 years old. The 14

replacement of these trucks is included in the fuel and fueling costs shown above in Table VII-15

10. 16

D. TSD Base Operations 17

TSD provides overall fleet services to TDBU. This includes expenses related to overall 18

fleet management and engineering, and operation of 40-plus garages throughout the TDBU 19

service territory. Also included are other support functions, such as regulatory/environmental, 20

training (technical and vehicle operation), safety programs, performance and project 21

management, financial/accounting, and information systems support. These functions are the 22

base support for fleet services. 23

For 2006, TSD base operations costs were $25.149 million. For Test Year 2009, costs 24

are estimated to be $30.595 million, a $5.446 million increase. The increase is related to a 3.5 25

percent increase in labor and parts/materials costs each year (approximately 50 percent of the 26

increase), plus an increase in personnel, such as garage technicians, supervision, project 27

109

specialists, and training specialists (the remaining 50 percent of the increase). These additional 1

employees are required due to increased workload and the addition of two new planned facilities 2

(Porterville and Wildomar) that must be staffed by TSD supervision and technicians. 3

E. CARB Requirements 4

Our Test Year increase includes $2.160 million for compliance with the California Air 5

Resources Board (CARB) rules on diesel vehicles over 14,000 gross vehicle weight (GVW). 6

CARB regulations require diesel particulate control measures using the best available technology 7

by 2011.35 Many smaller diesel vehicles will be replaced, as they will be near the end of their 8

TDBU life. We will replace these vehicles because it is less expensive to replace smaller 9

vehicles than to retrofit them. This will require selling viable vehicles before the end of their 10

TDBU useful life, and purchasing replacement vehicles with “CARB qualified” engines, as it is 11

necessary to comply with the applicable regulations. For larger diesel vehicles, the current plan 12

is to retrofit approximately 150 vehicles at a current estimated cost of $14,563 each. Decisions 13

as to the disposition of vehicles will be made near the required date. We will consider 14

(1) vehicle type; (2) delivery lead time required for a replacement vehicle; (3) availability of a 15

replacement vehicle; and (4) resale restrictions on the vehicle to be replaced. 16

F. Fuel & Fueling 17

TSD purchases and dispenses virtually all fuel for the TDBU fleet. Only five percent of 18

the fuel for the TDBU fleet is acquired at commercial outlets. Fuel costs have increased 19

dramatically over the past years. However, with respect to the cost of fuel and fueling in Test 20

Year 2009, fuel cost for the 2009 TDBU fleet is expected to be slightly less than 2006. A 21

decrease ($778,000) is estimated. We have relied upon June 2007 U.S. Department of Energy 22

estimates. (See workpapers). 23

35 See workpapers for California Code of Regulations §2022 and §2022.1.

110

G. HERC 1

Heavy Equipment, Rentals, and Cranes (HERC) is a TSD group providing crane, rental, 2

and heavy load transport services to TDBU. HERC expenses in 2006, on behalf of TDBU, were 3

$586,000. For Test Year 2009, TDBU is requesting $1.602 million, an increase of $1.016 4

million. In 2006, HERC consisted of two employees specializing in crane/equipment rentals and 5

heavy haul transport, two crane operators, two very aged cranes, and support assistance for 6

accounting. Workload has increased dramatically because of increased construction and 7

maintenance activity. As of 2009, the expectation is to have one new large 120-ton crane, 4 new 8

crane operators, and additional specialist assistance since the current personnel can qualify for 9

retirement. Most of the construction and maintenance crane and rental activity is provided by 10

contractors. However, the HERC group is the major coordinator of this activity and can perform 11

a portion of the work with their own operators using their own equipment or equipment rented 12

from suppliers. The existence of the HERC group allows expert coordination of suppliers, 13

provides specialist expertise for many TDBU projects, and has an impact on keeping contractor 14

prices reasonable. Moreover, having our own resources enhances our ability to respond during 15

critical times (earthquakes, storms, etc.). 16

H. Aircraft Operations 17

Our Test Year request for helicopter operations is $3.573 million. This is an increase of 18

$2.117 million over TDBU’s 2006 spending level ($1.456 million). 19

Aircraft Operations has operated helicopters for TDBU since 1959. Helicopters provide 20

patrolling, reconnaissance, aerial crane, crew support, and passenger service. The increase in 21

helicopter cost is a result of a plan to upgrade the helicopter fleet over a multi-year period. Also, 22

we need to increase the helicopter fleet from five helicopters to six as a result of increased 23

workload. Helicopter flight hours are estimated to increase from 1,400 flight hours in 2006 to 24

approximately 1,800 in 2009. 25

The current fleet of helicopters at the end of 2006 consisted of two MD-500 single-engine 26

helicopters (both model year 1981), two AStar single-engine helicopters (1992 and 2004 model 27

111

years), and another 2006 model year AStar single-engine we acquired in November 2006. The 1

full annual cost of the 2006 acquisition is not reflected in the 2006 expenses because of the 2

November delivery date. 3

We will make two helicopter replacements (one single-engine AStar and one twin-engine 4

EC-135) in 2007. This will be offset by the sale of two of the older helicopters. Two additional 5

helicopter acquisitions will be made in 2008 and 2009, respectively (two twin-engine EC-135s), 6

plus we will sell off one helicopter. The fleet will consist of six helicopters at the end of 2008. 7

These new helicopters will be leased (creating amortization and interest payments). 8

The helicopter replacement plan also includes the use of new technology and increased 9

capabilities coupled with increased safety. Aircraft Operations will use global positioning 10

system (GPS) in conjunction with high definition and infrared cameras for patrolling, and for 11

identification of potential and actual electric system problems in routine and emergency 12

applications. In addition, the new EC-135 helicopters are twin-engine, since TDBU is planning 13

to transport personnel under the helicopter (e.g., place Linemen on transmission towers). The 14

new helicopters will increase the safety of patrolling over rugged terrain, and provide the ability 15

to fly at night. Twin-engine helicopters can “fly-away” and land on one engine, whereas, single-16

engine helicopters must remove their load (external transport personnel) if the engine fails. 17

However, twin-engine helicopters are more expensive to acquire and operate. 18

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