Docket Exhibit Number Commissioner ALJ Witness

: : : : :

A.19-08-013 PAO-09 _______ Shiroma Wildgrube/Seybert Logan

PUBLIC ADVOCATES OFFICE CALIFORNIA PUBLIC UTILITIES COMMISSION

Report on the Results of Operations for

Southern California Edison Company General Rate Case

Test Year 2021

Generation, Energy Procurement & Wildfire Management Capital

San Francisco, California April 10, 2020

i

TABLE OF CONTENTS

I. INTRODUCTION ............................................................................................... 1

II. SUMMARY OF RECOMMENDATIONS .......................................................... 2

III. DISCUSSION / ANALYSIS OF GENERATION COSTS (SCE-5, VOL. 1) ................................................................................................................. 6

A. Overview of SCE’s Request ............................................................................. 6

B. Generation O&M Expenses .............................................................................. 7

1. Five-Year Recorded Generation O&M Data ........................................... 7

2. Base Year Recorded Data ........................................................................ 7

C. Generation Capital Expenditures ...................................................................... 8

1. Recorded and Forecast Generation Capital Data ..................................... 8

2. Catalina Repower Project ........................................................................ 9

IV. DISCUSSION / ANALYSIS OF ENERGY PROCUREMENT COSTS (SCE-5, VOL. 2) .................................................................................... 10

A. Overview of SCE’s Request ........................................................................... 10

B. Energy Procurement O&M Expenses ............................................................. 10

1. Recorded and Forecast Energy Procurement O&M Data ...................... 11

2. The Last Recorded Year Energy Procurement O&M ............................ 11

C. Energy Procurement Capital Expenditures ..................................................... 11

1. Energy Procurement Capital Expenditures ............................................ 11

2. Communications Upgrades .................................................................... 12

V. DISCUSSION / ANALYSIS OF WINLDFIRE MANAGEMENT CAPITAL EXPENDITURES (SCE-4, VOL. 5) ................................................. 12

A. Overview of SCE’s Request ........................................................................... 12

B. Wildfire Management Capital Expenditures .................................................. 13

1. The 2019 Wildfire Management Recorded Capital Data....................... 13

2. The 2019 Wildfire Management Capital Forecast ................................. 14

3. The 2020 Wildfire Management Capital Forecast ................................. 14

4. The 2021 Wildfire Management Capital Forecast ................................. 14

VI. WITNESS QUALIFICATIONS ........................................................................ 16

1

GENERATION, ENERGY PROCUREMENT & 1 WILDFIRE MANAGEMENT CAPITAL 2

I. INTRODUCTION 3

This exhibit presents the analyses and recommendations of the Public 4

Advocates Office regarding Southern California Edison Company’s (SCE or Edison) 5

forecasts of Generation and Energy Procurement Operation and Maintenance (O&M) 6

expenses for Test Year (TY) 2021, and capital expenditures for 2019 through 2021 for 7

Generation, Energy Procurement and Wildfire Management. 8

This exhibit covers SCE exhibits SCE 4, Vol. 5 and SCE-5, Vols. 1 and 2. 9

SCE-4, Vol. 5 covers Wildfire Management, i.e., the programs and activities related 10

to wildfire-mitigation, which have ramped up considerably in recent years in response 11

to the devastating wildfires in SCE’s service territory. As discussed below, SCE’s 12

proposed wildfire-mitigation programs it proposed in this proceeding were developed 13

as a traditional General Rate Case (GRC) forecast. 14

Exhibits SCE-5, Vols. 1 and 2 cover Generation and Energy Procurement, 15

respectively. SCE’s Generation request covers the costs and activities related to 16

SCE’s Hydro, Fossil Fuel, and Solar generating assets, as well as its share of costs 17

associated with the Palo Verde Nuclear Generating Station (PVNGS) located in 18

Arizona and operated by Arizona Public Service (APS). 19

The Energy Procurement request relates to the costs associated with SCE’s 20

Energy Procurement and Management (EPM) organization. EPM conducts long-term 21

procurement planning, manages all supply contracts with generators and other market 22

participants, and schedules SCE’s daily transactions (buying and selling) with the 23

California Independent System Operator (CAISO), among other activities. 24

The following section of this exhibit provides the summary of 25

recommendations. Subsequent sections address Generation, Energy Procurement and 26

Management, and Wildfire Management, respectively. 27

2

II. SUMMARY OF RECOMMENDATIONS 1

The following summarizes the Public Advocates Office’s recommendations 2

associated with generation-related O&M expenses for 2021 and capital expenditures 3

for 2019 through 2021: 4

• The Public Advocates Office recommends that SCE’s forecast of 5 generation-related O&M expenses for 2021 be adopted. 6

• The Public Advocates Office recommends that SCE’s forecast of 7 generation-related capital expenditures for 2019 be adopted. 8

• The Public Advocates Office recommends that SCE’s forecast of 9 generation-related capital expenditures for 2020 be reduced by $10.4 10 million. The $10.4 million adjustment removes SCE’s planned diesel 11 generator installations at Catalina Island in 2020 from SCE’s forecast. 12

• The Public Advocates Office recommends that SCE’s forecast of 13 generation-related capital expenditures for 2021 be reduced by $6.0 million. 14 The $6.0 million adjustment removes SCE’s planned diesel generator 15 installations at Catalina Island in 2021 from SCE’s forecast. 16

The following summarizes the Public Advocates Office’s recommendations 17

associated with energy procurement-related O&M expenses for 2021 and capital 18

expenditures for 2019 through 2021: 19

• The Public Advocates Office recommends that SCE’s forecast of energy 20 procurement-related O&M expenses for 2021 be adopted. 21

• The Public Advocates Office recommends that SCE’s forecast of energy 22 procurement-related capital expenditures for 2019 through 2021 be 23 adopted. 24

The following summarizes the Public Advocates Office’s recommendations 25

associated with wildfire management-related capital expenditures for 2019 through 26

2021: 27

• The Public Advocates Office recommends that SCE’s forecast of wildfire 28 management-related capital expenditures for 2019 be adopted. 29

• The Public Advocates Office recommends that SCE’s forecast of wildfire 30 management-related capital expenditures for 2020 be adopted. 31

3

• The Public Advocates Office recommends that SCE’s forecast of wildfire 1 management-related capital expenditures for 2021 be reduced by $237.3 2 million. The $237.3 million adjustment reduces SCE’s forecast of $771.1 3 million for the Wildfire Covered Conductor program to $533.8 million. 4 Overall, wildfire management-related capital is reduced from $863.1 5 million to $625.8 million for 2021. 6

Table 9-1 compares the Public Advocates Office’s and SCE’s TY 2021 7

forecasts of generation expenses. 8

Table 9-1 9 Generation Expenses for TY 2021 10

(In 2018 $000’s) 11

Description (a)

Public Advocates

Office Recommended

(b)

SCE Proposed1 (c)

Amount SCE>Public Advocates

Office (d=c-b)

Percentage SCE>Public Advocates

Office (e=d/b)

Hydro $42,028 $42,028 $0 0% Fossil Fuel 43,005 43,005 0 0% Solar 3,755 3,755 0 0% Nuclear 78,904 78,904 0 0%

Total $167,692 $167,692 $0 0%

Table 9-2 compares the Public Advocates Office and SCE’s 2019-2021 12

forecasts of generation capital expenditures. 13

Table 9-2 14 Generation Capital Expenditures for 2019-2021 15

(In Nominal 000’s) 16

Description Public Advocates Office Recommended

SCE Proposed2

2019 2020 2021 2019 2020 2021 Hydro $4,642 $40,680 $45,841 $44,642 $40,680 $45,841 Fossil Fuel 5,388 19,663 49,894 5,388 30,550 55,940 Solar 100 100 100 100 100 100 Nuclear 37,920 36,814 36,340 37,920 36,814 36,340

Total $88,050 $97,757

$132,175

$88,050

$108,144

$138,221

1 Ex. SCE-5, Vol. 1, p. 3, Table I-1. 2 SCE response to Public Advocates Office data request PubAdv-SCE-087-SJL, Q.1.

4

Table 9-3 compares the Public Advocates Office’s and SCE’s TY 2021 1

forecasts of energy procurement expenses. 2

Table 9-3 3 Energy Procurement Operation & Maintenance Expenses for TY 2021 4

(In 2018 $000’s) 5

Description (a)

Public Advocates

Office Recommended

(b)

SCE Proposed3 (c)

Amount SCE>Public Advocates

Office (d=c-b)

Percentage SCE>Public Advocates

Office (e=d/b)

Labor $22,108 $22,108 $0 0% Non-Labor 2,460 2,460 0 0%

Total $24,568 $24,568 $0 0% 6

Table 9-4 compares the Public Advocates Office’s and SCE’s 2019-2021 7

forecasts of energy procurement capital expenditures. 8

Table 9-4 9 Energy Procurement Capital Expenditures for 2019-2021 10

(In Nominal $000’) 11

12

13

Table 9-5 compares the Public Advocates Office’s and SCE’s 2019-2021 14

forecasts of wildfire management capital expenditures. 15

16

3 Ex. SCE-5, Vol. 2, p. 15, Figure II-5. 4 Ex. SCE-5, Vol. 2, p. 22, Figure II-7.

Description Public Advocates Office Recommended SCE Proposed4 2019 2020 2021 2019 2020 2021

Total $965 $965 $1,365 $965 $965 $1,365

5

Table 9-5 1 Wildfire Management Capital Expenditures for 2019-2021 2

(In Nominal $000’s) 3

Description Public Advocates Office Recommended

SCE Proposed5

2019 2020 2021 2019 2020 2021 Distribution Fault Automation $2,340 $0 $6,270 $2,340 $0 $6,270 Enhanced Overhead Inspections and Remediations 152,331 155,741 56,174 152,331 155,741 56,174 Enhanced Situational Awareness 6,364 4,159 0 6,364 4,159 0 Fire Science and Advanced Modeling 12,953 5,685 1,102 12,953 5,685 1,102 Fusion Mitigation 50,173 11,885 0 50,173 11,885 0 HFRA Sectionalizing Devices 6,292 28,452 5,209 6,292 28,452 5,209 PSPS Execution 180 1,212 738 180 1,212 738 Undergrounding 0 0 22,507 0 0 22,507 Wildfire Covered Conductor Program 156,337 533,803 533,803 156,337 533,803 771,099

Total $386,970 $740,937 $625,803 $386,970 $740,937 $863,099

4

5

5 Ex. SCE-4, Vol. 5, p. 5, Figure II-2.

6

III. DISCUSSION/ANALYSIS OF GENERATION COSTS (SCE-5, Vol. 1) 1

SCE states that it “owns and operates approximately 2,600 MW of generating 2

facilities composed of 33 hydroelectric plants (Hydro); five gas-fired peaking units, of 3

which two are Hybrid Enhanced Gas Turbine (EGT); two Battery Energy Storage 4

Systems (BESS); one-combined cycle gas plant with two generating units 5

(Mountainview); a largely diesel-driven generating plant (Catalina Pebbly Beach); 6

twenty-four rooftop solar photovoltaic (SPV) plants; and one ground-based SPV 7

plant. SCE also has a 15.8 percent interest (approximately 591 MW) in Palo Verde 8

Nuclear Generating Station Units 1, 2, and 3 (Palo Verde) located in Arizona and 9

operated by Arizona Public Service.”6 This section addresses the costs to own and 10

operate these facilities. 11

A. Overview of SCE’s Request 12 SCE’s request in this GRC for funding generation-related O&M activities 13

largely follows the recorded costs from recent years, as shown in Table 9-6 below. 14

The capital request is more project-specific and tends to vary year-by-year. Table 9-7 15

shows the five-year recorded data and the five-year forecast data for generation-16

related capital. Overall, the 2019-2023 capital forecast period represents an 17

approximately 8 percent decrease from the recorded capital costs for the 2014-2018 18

period.7 19

20

6 Ex. SCE-5, Vol. 1, p. 1. 7 Ex. SCE-5, Vol. 1, p. 4, Table I-2.

7

B. Generation O&M Expenses 1 Table 9-6 shows the generation-related O&M recorded and forecast expenses. 2

Table 9-6 3 Generation Operation & Maintenance 4

2014-2018 Recorded and 2019-2021 Forecast Expenses 5 (In 2018 $000’s) 6

Generation Rec. Avg. For. Avg.BPE/Year 2014 2015 2016 2017 2018 2019 2020 2021 2014-18 2019-21

Hydro 43,501 45,160 43,158 43,512 44,347 38,641 40,881 42,028 43,936 40,517 Fossil Fuel 41,491 36,445 41,198 45,432 38,367 36,234 39,354 43,005 40,587 39,531 Solar 4,563 4,381 4,379 3,974 3,968 3,795 3,635 3,755 4,253 3,729 Nuclear 79,044 84,798 86,136 83,054 77,619 78,916 78,904 78,904 82,130 78,908

TOTAL 168,599 170,784 174,872 175,972 164,302 157,586 162,775 167,692 170,906 162,684

Recorded Forecast

7 Source: All recorded and forecast data from Ex. SCE-5, Vol. 1, p. 3, Table I-1. 8

1. Five-Year Recorded Generation O&M Data 9 SCE’s TY 2021 request of $167.7 million is about 2 percent below the five-10

year annual average recorded generation-related O&M expense of $170.9 million. 11

The TY request reflects the efficiency improvements SCE has instituted since 2016. 12

These improvements include several Generation Department units being reorganized, 13

increased outsourcing of capital project design and construction work, and improved 14

asset management.8 15

2. Base Year Recorded Data 16 SCE’s TY request is about 2 percent higher than the 2018 base year recorded 17

generation-related O&M expense. Table 9-6 above shows that 2018 was the lowest 18

annual expense during the recorded data period. The main driver of the lower 19

expense during 2018 is the lower nuclear expense for the Palos Verde Nuclear 20

Generating Station, which is operated by Arizona Public Service, not SCE. 21

The five-year recorded data provides a reasonable basis to evaluate the TY 22

2021 generation-related O&M expense. Based on this, and the Public Advocates 23

8 Ex. SCE-5, Vol. 1, p. 13.

8

Office review of SCE’s testimony, workpapers, and data responses, SCE’s request of 1

$167.7 million should be adopted. 2

C. Generation Capital Expenditures 3 Table 9-6 shows the generation-related capital recorded and forecast 4

expenditures. 5

Table 9-7 6 Generation Capital 7

2014-2018 Recorded and 2019-2023 Forecast Expenditures 8 (In Nominal $000’s) 9

10 GenerationBPE/Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Hydro 53,770 27,174 28,822 38,441 39,169 44,642 40,680 45,841 55,085 56,999 Fossil Fuel 7,488 80,711 73,973 31,139 24,382 5,388 30,550 55,940 11,200 8,600 Solar 933 627 67 (7) - 100 100 100 100 100 Nuclear 36,900 36,536 36,116 34,857 37,824 37,920 36,814 36,340 36,340 35,550

TOTAL 99,091 145,047 138,978 104,431 101,376 88,050 108,144 138,221 102,725 101,249

Recorded Forecast

11 Source: SCE response to Public Advocates Office data request PubAdv-SCE-087-SJL, Q.1. 12 13

1. Recorded and Forecast Generation Capital Data 14 As shown in Table 9-7, SCE’s five-year forecast total is about 8 percent below 15

the recorded 2014-2018 generation-related capital expenditures. Most of the Business 16

Planning Elements (BPE) are relatively stable over time. The exception is the Fossil 17

Fuel BPE. For the recorded period, the capital expenditures ranged from $7.5 million 18

in 2014 to $80.8 million in 2015. For the forecast period 2019-2021, the Fossil Fuel 19

category ranges from $5.4 million in 2019 to $55.9 million in 2021.9 The main 20

drivers of the Fossil Fuel 2020-2021 capital budgets are (1) the Mountainview Rotor 21

Replacements ($54 million), and (2) the Catalina Repower project ($16.8 million). 22

SCE’s showing sufficiently justifies the Mountainview Rotor Replacements.10 The 23

Public Advocates Office discusses the Catalina Repower project below. 24

9 Forecast Years 2022-2023 are not addressed in this exhibit. 10 Ex. SCE-5, Vol. 1, pp. 140-141.

9

2. Catalina Repower Project 1 SCE forecasts the Catalina Repower project to be $34.3 million in capital 2

expenditures from 2019 through 2023.11 The project would replace the existing six 3

diesel generators (average age of 45 years) at Catalina Pebbly Peach Generating 4

Station with six new (best available control technology, or BACT) diesel units. 12 The 5

existing system totals 9.4 MW and the new system would total 9.9 MW. SCE states 6

that the new system is necessary in order to meet the South Coast Air Quality 7

Management District (SACAQMD) requirements by December 31, 2023.13 8

SCE also states that it “is currently studying options for new and cleaner 9

generation capacity to support Catalina Island.” 14 The Public Advocates Office data 10

requested SCE to understand the status of such a study and SCE responded that it is 11

not expected to be completed until early in the second quarter of 2020. 15 SCE did 12

state that in addition to studying replacement of the existing diesel generators with 13

compliant generators, it is studying: 1) an undersea cable interconnection to the 14

mainland; 2) installing solar photovoltaic, wind turbines, and/or battery energy 15

storage systems; and 3) some combination of all options. 16 16

Based on SCE’s response and the implication that the long-term energy supply 17

solution for Catalina Island is currently uncertain, the Public Advocates Office 18

recommends that Catalina Repower project not be approved at this time. If SCE does 19

complete the project, it may file a separate application to seek cost recovery. For the 20

purposes of this GRC, Catalina Repower should be removed from the forecast. 21

The forecast years at issue are 2020 and 2021. As shown in Table 9-2 above, 22

the Public Advocates Office forecast for 2020 and 2021 for generation-related capital 23

11 Ex. SCE-5, Vol. 1, p. 157. 12 Ex. SCE-5, Vol. 1, p. 159. 13 Ex. SCE-5, Vol. 1, pp. 158-159. 14 Ex. SCE-5, Vol. 1, p. 18. 15 SCE response to Public Advocates Office data request PubAdv-SCE-088-SJL, Q.2. 16 SCE response to Public Advocates Office data request PubAdv-SCE-088-SJL, Q.2.

10

expenditures are lower that SCE’s forecast. For 2020, the Fossil Fuel adjustment is 1

$10.4 million, resulting in a total capital forecast of $97.8 million, compared to SCE’s 2

forecast of $108.1 million. For 2021, the Public Advocates Fossil Fuel adjustment is 3

$6.0 million, resulting in a total capital forecast of $132.2 million, compared to SCE’s 4

forecast of $138.2 million. The Public Advocates Office recommends that its 5

forecasts for 2020 and 2021 be adopted. The Public Advocates Office accepts SCE’s 6

forecast for 2019 and asserts it should be adopted. 7

IV. DISCUSSION / ANALYSIS OF ENERGY PROCUREMENT COSTS 8 (SCE-5, Vol. 2) 9

A. Overview of SCE’s Request 10 SCE states that the Energy Procurement and Management (EPM) organization 11

“procures and schedules electricity form independent power producers and suppliers 12

to supplement our utility-owned generation.”17 Most of the EPM-related O&M 13

expenses are labor-related. Most of the EPM-related capital expenditures are 14

communications- (services and equipment) related. 15

B. Energy Procurement O&M Expenses 16 Table 9-8 shows the energy procurement-related O&M expenses for the 2014 17

recorded period and the 2019-2021 forecast period. 18

Table 9-8 19 Energy Procurement Operation & Maintenance 20

2014-2018 Recorded and 2019-2021 Forecast Expenses 21 (In 2018 $000’s) 22

EP&M Rec. Avg. For. Avg.2014 2015 2016 2017 2018 2019 2020 2021 2014-18 2019-21

Labor 28,761 28,167 26,717 23,250 22,108 22,201 22,144 22,108 25,801 24,489 Non-Labor 4,460 3,951 3,408 2,832 2,364 2,460 2,460 2,460 3,403 3,003

TOTAL 33,221 32,118 30,125 26,082 24,472 24,661 24,604 24,568 29,204 24,611

Recorded Forecast

23 Source: Ex. SCE-5, Vol. 2, p. 15, Figure II-5. 24

17 Ex. SCE-5, Vol 2., p. 2.

11

1. Recorded and Forecast Energy Procurement O&M 1 Data 2

As seen in Table 9-8 the expenses associated with energy procurement are 3

decreasing between 2014 and 2018. SCE reports that staffing levels decreased by 35 4

percent over this time period.18 SCE’s TY 2021 forecast is similar to the 2018 5

recorded expense. 6

2. The Last Recorded Year Energy Procurement 7 O&M 8

Based on the staffing level trends, and other adjustments, SCE used the last 9

recorded year method to forecast its energy procurement-related O&M expense.19 10

The Public Advocates Office agrees with this forecast method, and recommends that 11

SCE’s TY 2021 forecast of $24.6 million be adopted for energy procurement-related 12

O&M expense. 13

C. Energy Procurement Capital Expenditures 14 Table 9-9 shows the recorded and forecast data for energy procurement-related 15

capital expenditures. 16

Table 9-9 17 Energy Procurement Capital 18

2014-2018 Recorded and 2019-2023 Forecast Expenditures 19 (In Nominal $000’s) 20

EP&M2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

TOTAL 865 745 781 542 691 965 965 1,365 1,365 1,365

Recorded Forecast

21 Source: Ex. SCE-5, Vol. 2, p. 22, Figure II-7. 22

1. Energy Procurement Capital Expenditures 23 SCE’s recorded and forecast data for energy procurement-related capital 24

expenditures are relatively steady. The costs are associated with communication 25

18 Ex. SCE-5, Vol. 2, p. 16. 19 Ex. SCE-5, Vol. 2, p. 21.

12

services and equipment, and labor. Beginning in 2021, SCE forecasts additional costs 1

due to the need to upgrade servers and other equipment reaching the end of its useful 2

life.20 3

2. Communications Upgrades 4 SCE forecasts an additional $.400 million to its base budget of $1.0 million for 5

energy procurement-related capital expenditures. For 2019 and 2021, SCE forecasts 6

$1.0 million, and for 2021, the forecast is $1.4 million.21 These reflect the need to 7

replace equipment reaching the end of its useful life. The Public Advocates Office 8

does not oppose SCE’s forecasts for 2019, 2021, and 2022 energy procurement-9

related capital expenditures. 10

V. DISCUSSION / ANALYSIS OF WINLDFIRE MANAGEMENT 11 CAPITAL EXPENDITURES (SCE-4, Vol. 5) 12

The section addresses SCE’s wildfire management-related capital expenditure 13

forecast. 14

A. Overview of SCE’s Request 15 SCE requests wildfire management-related capital expenditures in this GRC on 16

a traditional, forecast basis.22 Since most of these programs and activities are new, 17

there is little or no recorded data to review and analyze in the context of SCE’s 18

request. Additionally, these programs are expanding, and the costs are significant. 19

SCE’s TY 2021 request is for total wildfire management-related capital budget of 20

$863.1 million. Almost 90 percent of the 2021 forecast is for the Wildfire Covered 21

Conductor program, at $771.1 million. Accordingly, this exhibit will focus on the 22

Wildfire Covered Conductor (WCC) program forecast. 23

20 Ex. SCE-5, Vol. 2, p. 23. 21 Ex. SCE-5, Vol. 2, p. 23-24, 22 Ex. SCE-4, Vol. 5, p. 1.

13

B. Wildfire Management Capital Expenditures 1 Table 9-10 shows the recorded and forecast wildfire management-related 2

capital expenditures. 3

Table 9-10 4 Wildfire Capital 5

2019 Recorded and 2019-2023 Forecast Expenditures 6 (In Nominal $000’s) 7

RecordedGRC Activity 2019 2019 2020 2021 2022 2023 5 yr TotalDistribution Fault Anticipation 3,445 2,340 0 6,270 12,903 13,274 34,786Enhanced Overhead Inspections and Remediations 300,592 152,331 155,741 56,174 49,823 46,276 460,345Enhanced Situational Awareness 5,252 6,364 4,159 0 0 0 10,523Fire Science and Advanced Modeling 6,487 12,953 5,685 1,102 0 0 19,741Fusing Mitigation 70,298 50,173 11,885 0 0 0 62,058HFRA Sectionalizing Devices 11,951 6,292 28,452 5,209 5,360 0 45,314PSPS Execution 1,766 180 1,212 738 0 0 2,130Undergrounding 0 0 0 22,507 42,457 43,678 108,643Wildfire Covered Conductor Program 249,288 156,337 533,803 771,099 906,746 1,107,732 3,475,717GRC Total 649,079 386,970 740,937 863,099 1,017,289 1,210,960 4,219,257

Forecast

8 Source: Forecast data from Ex. SCE-4, Vol. 5, p. 5, Table I-2; recorded 2019 data from SCE response 9

to Public Advocates Office data request PubAdv-SCE-056-TXB, Q.2 Supplemental. 10

1. The 2019 Wildfire Management Recorded Capital 11 Data 12

SCE provided the 2019 recorded data only recently to the Public Advocates 13

Office and thus is not verified.23 This is significant because later phases of this GRC 14

are scheduled to review the wildfire management costs incurred during 2018-2020 15

and booked into various memorandum accounts. 24 At this time, the Public Advocates 16

Office cannot accept the submitted 2019 recorded data as the basis for the GRC 17

forecast. The Commission should use the later phases of this proceeding to verify the 18

appropriate treatment of these costs in conjunction with the memorandum account 19

reviews. 20

23 SCE response to Public Advocates Office data request PubAdv-SCE-056-TXB, Q.2 Supplemental. 24 A.19-08-013 Assigned Commissioner’s Ruling and Scoping Memo, Nov. 25, 2019, pp. 9-10.

14

2. The 2019 Wildfire Management Capital Forecast 1 SCE forecasts total wildfire management-related capital expenditures of $387 2

million for 2019. The Public Advocates Office recommends that this forecast should 3

be used until the 2019 recorded costs can be audited and reviewed with the wildfire 4

memorandum accounts in later phases of this GRC. 5

3. The 2020 Wildfire Management Capital Forecast 6 SCE forecasts total wildfire management-related capital expenditures of 7

$740.9 million for 2020. The Wildfire Covered Conductor (WCC) program accounts 8

for 72 percent of the budget, at $533.8 million. The 2019 WCC forecast is for $156.3 9

million in capital expenditures. The primary driver of the increase from 2019 to 2020 10

is the number of circuit miles of WCC installed. For 2019, SCE assumes 291 circuit 11

miles, and for 2020 it assumes 1,000 circuit miles.25 The Public Advocates Office 12

accepts SCE’s assumptions for the 2020 forecast, but disagrees with the forecast for 13

WCC in 2021, as discussed below. 14

The Commission should adopt a 2020 budget for wildfire management-related 15

capital expenditures of $740.9 million. 16

4. The 2021 Wildfire Management Capital Forecast 17 SCE forecasts total wildfire management-related capital expenditures of 18

$863.1 million for 2021. The Wildfire Covered Conductor (WCC) program accounts 19

for almost 90 percent of the budget, at $771.1 million. SCE assumes the number of 20

circuit miles grows to 1,400 in 2021 compared to 1,000 in 2020. Overall, SCE 21

forecasts almost 6,200 miles for the 2019-2023 period.26 22

The Public Advocates Office expects the rate of expansion of circuit miles 23

installed will be slower than SCE’s forecast. For the purposes of the 2021 forecast, 24

the Public Advocates Office recommends that the WCC forecast be the same as the 25

2020 forecast. This is a reasonable compromise between the three-year average for 26

25 Ex. SCE-4, Vol. 5, p. 28. 26 Ex. SCE-4, Vol. 5, p. 26.

15

2019-2021 of about 900 circuit miles per year versus the five-year average for 2019-1

2023 of about 1200 circuit miles per year. The 1,000 circuit miles assumption for the 2

2021 WCC program should be the basis of the 2021 capital forecast. 3

The Public Advocates Office recommends that the Commission adopt a 4

wildfire management-related capital expenditure budget of $625.8 million. This 5

represents a $237.3 million reduction from SCE’s forecast. 6

16

1

VI. WITNESS QUALIFICATIONS 2

My name is Scott J. Logan. My business address is 505 Van Ness Avenue, 3

San Francisco, California. I am employed by the Public Advocates Office as a Public 4

Utilities Regulatory Analyst V in the Energy Cost of Service and Natural Gas Branch. 5

I received a Bachelor of Arts degree in Economics from San Francisco State 6

University in 1985. 7

Since joining the Public Advocates Office in 1986, I have worked on 8

electricity and energy matters, including energy efficiency, resource planning, long-9

term procurement and planning (LTPP), transmission planning and Certificate of 10

Public Convenience and Necessity (CPCN) proceedings for major transmission 11

projects. I have testified in numerous Commission proceedings. Most recently, I 12

have testified in the San Onofre Nuclear Generating Station (SONGS) Investigation, 13

Southern California Edison Company’s (SCE) 2015 and 2018 General Rate Cases 14

(GRC’s), Pacific Gas and Electric Company’s (PG&E) 2014, 2017 and 2020 GRC’s, 15

and San Diego Gas & Electric Company’s (SDG&E) 2016 and 2019 GRC’s. I also 16

testified in the SCE Grid Safety and Resiliency Program (GSRP) Proceeding. This 17

completes my prepared testimony. 18