question 1:€¦ · web viewquestion 1: socalgas has indicated in testimony and in previous data...

SOUTHERN CALIFORNIA GAS COMPANYBIOGAS CONDITIONING & UPGRADING TARIFF (A.12-04-024)

(DATA REQUEST DRA-A1204024-SCG-MK3-3)______________________________________________________________________

QUESTION 1:

SoCalGas has indicated in testimony and in previous data request responses that embedded resources in the form of staff would be used in the provision of the proposed tariff service. Please indicate which current staff group, employee classifications, and numbers of employees these embedded resources would be drawn from.

RESPONSE 1:

Response 1 is considered confidential and is being submitted under the confidentiality provisions of General Order 66-C and section 583 of the Public Utilities Code and provided only to the DRA.

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QUESTION 2:

Has SoCalGas, or any agents of its agents, performed or reviewed any market analysisspecific to conditioning and/or upgrading of biogas? Please provide any such analysis.

RESPONSE 2:

Please see response to Data Request DRA-A1204024-SCG-MK3-1, Question 7.

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QUESTION 3:

In Opening Testimony, SoCalGas claims that there would be roughly 20 projects built under the proposed tariff in the next 5-10 years. Specify all facts on which you base this claim and provide any supporting documentation or workpapers not previously included in Data Request Responses 1 or 2 related to this assertion.

RESPONSE 3:

On Page 12, lines 1-5 of Witness Goodman’s testimony, it states the following:

In speaking with customers across the waste hauling, livestock, and wastewater treatment plant industries, SoCalGas believes there will be roughly 20 projects in SoCalGas’ service territory over the next 5-10 years that will likely provide enough feedstock to justify an economical project without incentives

The above does not state that roughly 20 projects will be built under the proposed biogas conditioning/upgrading tariff. It does state SoCalGas believes there will likely be enough feedstock to economically justify roughly 20 projects. These roughly 20 projects could be built under the proposed tariff or could be built by other entities.

Also, please see Workpapers #6, 7 and 8 at the link below. The total biogas production potential for wastewater treatment facilities, animal feeding operations, landfill diverted food/green waste is approximately 150 MMscfd. If 20 projects were built producing 1.5 MMscfd of biogas per project, it would result in 20% of the biogas production potential being productively used over the next 5-10 years.

http://socalgas.com/regulatory/documents/a-12-04-024/BiogasApplicationWorkpapers-Chapters_I_and_II_REVISED.pdf

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QUESTION 4:

How will customers of the proposed tariff be billed for the service?

a. Will the tariff appear on a customer’s existing bill?

b. Does SoCalGas intend to use bill inserts in the existing bill to advertise the proposed Tariff?

RESPONSE 4:

SoCalGas plans on using our Sundry Billing Service which performs non-commodity billing for miscellaneous revenue of tariffed and non-tariffed product and service type activities in accordance with contract terms.

a. No, the tariff will not appear on the tariff service customer’s existing bill.

b. No, SoCalGas does not intend to use bill inserts in the existing bill to advertise the proposed Tariff.

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QUESTION 5:

Please detail each method by which SoCalGas intends to advertise the proposed program.

RESPONSE 5:

The primary methods SoCalGas plans to educate and outreach to customers for the biogas conditioning/upgrading services tariff are as follows:

1) Currently, SoCalGas Account Executives routinely meet with their customers and for those customers seeking ways to make beneficial use of their biogas and/or organic waste, the Account Executive may leave the customer with SoCalGas’ ‘Biomethane” and/or “Biogas Interconnection” documents (see attached). Upon approval of the biogas conditioning/upgrading services tariff, SoCalGas would create a similar type of document for the tariff and the Account Executives may leave this with interested customers as well.

2) SoCalGas currently has a webpage titled “Biogas and Biomethane” (see link below) which provides customers with general information on the biogas and biomethane industry. SoCalGas would include some information on this webpage describing the biogas conditioning/upgrading services tariff.http://www.socalgas.com/innovation/power-generation/green-technologies/biogas/

3) SoCalGas is periodically asked to give presentations at organic waste types of conferences to educate the attendee’s on the environmental and economic benefits of capturing and productively using biogas in support of California’s environmental goals. During these presentations, SoCalGas would provide a brief overview of the biogas conditioning/upgrading services tariff.

4) The biogas and organic waste industry is relatively a small group of individuals/companies/organizations. Interested owners of organic waste/biogas will likely hear about SoCalGas’ biogas conditioning/upgrading services tariff by “word of mouth”.

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http://www.socalgas.com/innovation/power-generation/green-technologies/biogas/

http://www.socalgas.com/innovation/power-generation/green-technologies/biogas/



QUESTION 6:

SoCalGas previously requested in the related AL 4172 that the investment requested therein be considered “below the line.” Why did SoCalGas remove the request for below the line treatment in the formulating the proposed tariff in A.12-04-024?

RESPONSE 6:

Advice Letter (“AL”) 4172 was presented to the Commission as a Non-Tariffed Product and Service (“NTP&S”) offering with below the line ratemaking treatment. AL 4172 was rejected by the Commission.

In response to the Commission’s rejection of AL4172 SoCalGas proposed offering the Biogas Conditioning/Upgrading Services as a tariff, as further described in the instant application (A.12-04-024).

As a tariff offering, SoCalGas’ Biogas Conditioning/Upgrading Services provides for cost tracking and regulatory treatment consistent with traditional utility ratemaking.

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QUESTION 7:

What types of costs and expenses are typically treated as below the line costs?

RESPONSE 7:

In general, costs that are not currently, or possibly in the future, to be recovered by the general ratepayers are considered “below the line” for ratemaking purposes.

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QUESTION 8:

List and describe all programs, projects, accounts, activities, and expenses currently undertaken by SoCalGas and treated as below the line costs.

RESPONSE 8:

The below identifies cost currently undertaken by SoCalGas and treated as below the line. This list is not exhaustive.

Depreciation expense on non-utility assets Rental income on non-utility asset Mover services (An NTP&S). Ratepayers’ share of gross revenues (30%) is

moved above the line to offset rates via a balancing account.

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QUESTION 9:

Please provide all SoCalGas documents that describe how below the line costs are treated.

RESPONSE 9:

SoCalGas does not have any documents describing below the line treatment. Attached are some responses from SoCalGas’ 2012 GRC that relate to how below the line NTP&S activities are treated. Please see responses 21, 23, 24:

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QUESTION 10:

Would SoCalGas be willing to undertake the proposed tariff as a below the line project?

RESPONSE 10:

SoCalGas has proposed traditional utility ratemaking treatment in the instant application. SoCalGas is not willing to change the instant application and notes that responses to data requests are not the proper forum for settlement discussions.

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QUESTION 11:

If SoCalGas were required to undertake the proposed tariff as a below the line project how would the SoCalGas proposal have to be modified in order for SoCalGas to continue to pursue the tariff?

RESPONSE 11:

If SoCalGas were required to undertake the proposed tariff as a below the line project, SoCalGas would need to modify the proposed Cost Tracking and Regulatory Treatment.

As noted in SoCalGas’ response to Question 10, responses to data requests are not the proper forum for settlement discussions.

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QUESTION 12:

Would SoCalGas shareholders benefit more or less or remain neutral to having the A.12-04- 024 costs be treated below the line rather than as SoCalGas proposes in the Application and Testimony? Please explain.

RESPONSE 12:

SoCalGas has not performed this analysis.

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QUESTION 13:

Would SoCalGas ratepayers benefit more or less or remain neutral to having the A.12-04- 024 costs be treated below the line rather than as SoCalGas proposes in the Application and Testimony? Please explain.

RESPONSE 13:


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QUESTION 14:

If the A.12-04-024 costs were required to be treated below the line rather than as SoCalGas proposes in the Application and Testimony would Ratepayers face more risk or less risk or remain neutral than under SoCalGas’ proposed tariff? Please explain.

RESPONSE 14:


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QUESTION 15:

If the A.12-04-024 costs were required to be treated below the line rather than as SoCalGas proposes in the Application and Testimony would SoCalGas shareholders face more risk or less risk or remain neutral than under SoCalGas’ proposed tariff? Please explain.

RESPONSE 15:


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QUESTION 16:

Given the pending changes in state policy regarding landfill biogas, including but not limited to Assembly Bill (AB) 1900 (Gatto; Stats. 2012, Ch. 602), does SoCalGas anticipate upgrading or conditioning landfill gas for pipeline injection under the proposed tariff?

RESPONSE 16:

For those tariff service customers requesting/requiring SoCalGas to condition/upgrade their biogas to pipeline quality for pipeline injection, SoCalGas will design the biogas conditioning/upgrading facility to meet, at the minimum, the gas delivery specifications as required in SoCalGas’ Rule No. 30.

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QUESTION 17:

Is it the understanding of SoCalGas that approval of the proposed tariff would authorize the use of the tariff to upgrade or condition landfill gas for pipeline injection?

RESPONSE 17:

No entity can currently put upgraded/conditioned landfill gas into SoCalGas’ pipeline system. Injection of landfill gas would require modification of SoCalGas’ Rule 30.

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QUESTION 18:

How can SoCalGas assure that pipeline injection of treated biomethane will not result in the introduction of contaminants into the gas distribution system? Will the biogas stream be continuously monitored for contaminants? If not continuously, then how often would the biogas stream be monitored for contaminants?

RESPONSE 18:

This question is out of scope for this proceeding as SoCalGas is seeking Commission approval to process the tariff service customer’s biogas and condition/upgrade it to the gas quality level(s) contractually specified by the tariff service customer in the Services Agreement. Should parties have questions and/or concerns pertaining to the monitoring of constituents under SoCalGas’ Rule 30 and 39, they can be addressed in the following:

1. Pursuant to AB 1900, CARB must identify reasonable and prudent monitoring, testing, reporting, and recordkeeping requirements, separately for each source of biogas, that are sufficient to ensure compliance with adopted health protective standards.

a. Per the “Update on Activities to Support Development of Biomethane Standards” issued in December of 2012 (see link below), both OEHHA and CARB ARB are seeking comments, suggestions or information that would help them complete the requirements specified in AB 1900.http://www.arb.ca.gov/energy/biogas/biogas_notice.pdf

2. Pursuant to the draft Order Instituting Rulemaking Into Biomethane Issues and Pipeline Open Access, the scope of the OIR is to adopt, amongst other items,

a. For biomethane that is to be injected for into a common carrier pipeline: i. Standards for health, safety, and facility integrity.

ii. Requirements for monitoring, testing, reporting, and recordkeeping.

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M040/K632/40632903.PDF

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http://www.arb.ca.gov/energy/biogas/biogas_notice.pdf



QUESTION 19:

Is SoCalGas aware of any previous incidents whereby contaminants were introduced into SoCalGas’ natural gas distribution system through pipeline injection of improperly treated gas? If so, list all such incidents including at least the date, location and incident report number [if any], and description of the incident and outcome.

RESPONSE 19:

See response to Question 18.

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QUESTION 20:

Does SoCalGas have any experience upgrading and processing biogas? Identify any efforts proposed or initiated by SoCalGas to upgrade or condition biogas, along with the following information:

a. What was the nature of the proposed or implemented program?

b. How much ratepayer funding was requested for each proposal?

c. How much ratepayer funding did each proposal ultimately receive?

d. What were the benefits to ratepayers of each proposal?

e. How long did each project continue?

f. If project has been discontinued, please indicate the reason SoCalGas chose to discontinue the program.

g. If the project has been discontinued, were there ratepayer costs associated with the discontinuation of the project? Please quantify those costs.

RESPONSE 20:

SoCalGas’ Experience Upgrading and Processing BiogasIn response to California’s environmental policies1 that support and promote the development of bioenergy resources, SoCalGas has developed a biogas upgrading demonstration project at a wastewater treatment plant. Initial work on this demonstration project began in 2009 and the Hale Avenue Resource Recovery Facility (HARRF), a wastewater treatment plant in Escondido, was selected as the site for the demonstration project. Plant design, construction and installation were completed in 2010.

The biogas upgrading plant has operated from February 2011 to the present. During this time the plant has consistently produced biomethane that meets SoCalGas’ Rule 30 gas quality specifications

1 Environmental policies as stated in Witness Snyder’s Testimony20



Proposed Program #1 – Biogas Conditioning and Production Facility Services (SoCalGas AL 4172)

a) See Witness Lucas’ Supplemental Testimony and SoCalGas AL 4172 below.

b) No ratepayer funding was requestedc) No ratepayer funding was receivedd) Please see response to question (a).e) Not applicablef) Not applicableg) Not applicable

Propose Program #2 – Sustainable SoCal Program (SoCalGas’ General Rate Case, A.10-12-006)

a) See link to Witness Wrights Testimony (below), starting on page GAW-89http://socalgas.com/regulatory/documents/a-10-12-006/Testimony/Exh%20SCG-09%20G_Wright_Cust_Serv_-_Info_.pdf

b) TY 2012 - $11.2 Capital, $606K O&Mc) As of the date of this data request response, a proposed decision for

SoCalGas’ 2012 GRC has not been issued.d) Please see response to question (a)e) Not applicablef) Not applicable

Proposed Demonstration Project – SoCalGas RD&D Biogas Upgrading Demonstration Project at the Hale Avenue Resource Recovery Facility (HARRF)

The contents of the following response are considered confidential and are being submitted under the confidentiality provisions of General Order 66-C and section 583 of the Public Utilities Code and provided only to the DRA.

Request for Proposal Response to City of Los Angeles, Department of Public Works, Bureau of Sanitation

a) In May of 2011, SoCalGas submitted a response to a request for proposal (RFP) issued by the City of Los Angeles, Department of Public Works, Bureau of Sanitation. The RFP was issued in January of 2011 and the city was seeking best use solutions for the digester gas produced at the Hyperion Treatment Plant.

b) Ratepayer funding was not requested for the proposal

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http://socalgas.com/regulatory/documents/a-10-12-006/Testimony/Exh%20SCG-09%20G_Wright_Cust_Serv_-_Info_.pdf

http://socalgas.com/regulatory/documents/a-10-12-006/Testimony/Exh%20SCG-09%20G_Wright_Cust_Serv_-_Info_.pdf



c) The project did not receive ratepayer fundingd) Please see ratepayer benefits as described in the attachments for “Proposed

Program 1”, Question (a).e) The proposal did not turn into a project.f) Not applicableg) Not applicable

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