Post on 29-Apr-2018
Agenda
1
- Introductions
- Safety
- Announcements
- Overview of SCE’s 2018 GRC and Strategic Objectives
- Organization of Testimony Exhibits
- Risk-Informed Planning
- 2018 Revenue Requirement and Comparison to 2015
- Overview of Request by Exhibit
- Q&A
3
Halloween Electrical Safety
Consider using battery powered or electric lights
instead of candles for decorations
Keep electric cords out of high traffic areas to avoid
tripping hazards for trick or treaters
Plug outdoor decorations to circuits protected by Ground Fault Circuit
Interrupters to prevent electric shock
Do not overload outlets
GRC Workshop Schedule
4
Date Time Topic Presenter
October 24 10-12pm General Rate Case Overview Shinjini Menon
October 24 1- 4:30pmGrid Reinforcement/ Grid Modernization
Erik TakayesuRussell Ragsdale
November 2 10am-12pm Safety/Risk-Informed PlanningPaul JeskeAmir AnghaRobert Woods
November 21:15-2:15pm
CS Re-PlatformThomas WalkerLorene Miller
November 22:30-4:15pm
Poles Christine Fanous
November 3 10am-12pmPost Test-Year Ratemaking/ Depreciation
Paul HuntAlan Varvis
November 3 1-3 pmRO Model Updates/ Scenarios/ Ratebase
Douglas TesslerDavid Gunn
November 33:15-4:30pm
Taxes Mark Childs
OUR STRATEGIC OBJECTIVES SUPPORT CALIFORNIA’S PUBLIC POLICIES AND WILL BUILD A BETTER GRID FOR ALL OF OUR CUSTOMERS. keep our customers safe, provide them reliable service, give them more energy choices, communicate quickly and effectively with them, and prudently spend the money they pay in rates
5
Be Safe In All We Do
Reinforce Grid Reliability And Resiliency
Accelerate integration DERs without Compromising Safety and Reliability
Improve Service and Choices to Meet Evolving Customer Needs
Enhance Operational Efficiency and Effectiveness
SCE’s request takes a balanced approach to continuing to safely and reliably serve
our customers clean energy at reasonable rates, while meeting, or preparing to
meet, the more advanced and complex requirements of tomorrow.
Significant safety and risk-informed decision making discussion in testimony and
work-papers including mapping risk impacts to enterprise risks and GRC request.
SCE 2018 GRC Exhibit Organization
6
SCE-01 Policy Overview of SCE’s GRC
SCE-02 Transmission
& Distribution (T&D)
Vol. 1: Operational Overview and Risk
Vol. 2: Customer Driven Programs
Vol. 3: System Planning
Vol. 4: Distribution Maintenance & Inspection
Vol. 5: Distribution Construction & Maintenance
Vol. 6: Substation Construction & Maintenance
Vol. 7: Transmission Construction & Mtce
Vol. 8: Infrastructure Replacement
Vol. 9: Poles
Vol. 10: Grid Modernization
Vol. 11: Grid Technology
Vol. 12: Training & Safety
Vol. 13: Other Costs & OORs
SCE-03
Customer Service (CS)CS O&M, Capital, and OORs
SCE-04 Information
Technology (IT)
Vol. 1: IT O&M and Hardware
Vol. 2: OU Capital Software Projects
Vol. 3: CS Re-Platform
SCE-05
Power Supply (PS)
Vol. 1: Palo Verde
Vol. 2: Energy Procurement
Vol. 3: Hydro
Vol. 4: Mountainview, Peakers, Mohave Closure
Vol. 5: Solar Photovaltaic and Fuel Cell
Programs
SCE-06- Human
Resources (HR)
Vol. 1: HR O&M
Vol. 2: Benefits and Other Compensation
Vol. 3: Total Compensation Study
SCE-07 Operational
Services
Vol. 1: Business Resiliency
Vol. 2: Corporate Environmental
Vol. 3: Corporate Real Estate
Vol. 4: Corporate Safety
Vol. 5: Corporate Security
Vol. 6: Supply Mgmt and Supplier Diversity
SCE-08
Administrative &
General (A&G)
Vol. 1: Ethics and Compliance
Vol. 2: Corp Communications, Regulatory
Affairs, Local Public Affairs
Vol. 3: Financial Services, Audit Services,
and Enterprise Risk Management
Vol. 4: Law, Claims, and Workers Comp
Vol. 5: Property & Liability Insurance
SCE-09 Results of
Operations
Vol. 1: Revenue Requirements, Ratemaking,
Sales, OOR, Escalation, Post TY Ratemaking
Vol. 2: Plant, Taxes, Depreciation, Rate Base,
Customer Deposits
Vol. 3: Depreciation Study
SCE-10
Compliance
Compliance Requirements from 2015 GRC
and Other Proceedings
SCE-11 C For ATJoint Center for Accessible Technology
Testimony
SCE- 12 CEMARecovery of Bark Beetle-related costs for
2012-2014 CEMA
Risk-Informed Decision-Making Discussion in SCE 2018 GRC
August 12, 2016 7
Topic GRC Volume
SCE’s vision for risk-informed
decision-makingPolicy Volume (SCE-01)
Risk-Informed Decision-Making
framework Enterprise Risk Management Program – Finance Volume (SCE-08, Vol. 03)
Demonstration of risk-informed
decision-making pilot for T&D
operational risks
T&D Volume (SCE-02, Vol. 01)
Demonstration of risk-informed
decision-making for Non-T&D
pilots
(in order of exhibits)
Customer Service – Implementation of a new customer relationship &
billing system re-platform (SCE-04 – Vol. 03)
Power Supply Hydro – Dam safety (SCE-05, Vol. 03)
Business Resiliency – Seismic evaluation & retrofit (SCE-07, Vol. 01)
Corporate Real Estate – Facilities upgrades (SCE-07, Vol. 03)
Corporate Security – Physical security of critical infrastructure (SCE-07, Vol.
05)
Mapping of important risk
outcomes to the GRC requestsPolicy Volume (SCE-01)
Mapping of important risk
outcomes to enterprise level risksEnterprise Risk Management Program – Finance Volume (SCE-08, Vol. 03)
GRC Revenue Requirement Forecast ($ millions)
8
*One-time recovery of pre-2018 costs related to Residential Rate Reform, SmartConnect® Opt-Out and 2012-2014 Bark Beetle-related costs.** Excludes One-time recovery in 2018
2018 Revenue Requirement represents a 2.7 percent increase over presently authorized total rates
or 5.5 percent over presently authorized GRC base rates (net of estimated kWh sales reductions)
Significant Highlights of our Request
• Continued focus on infrastructure maintenance and replacement including
– Overhead conductor program to address downed wire risk
– Pole replacements and strengthening based on intrusive inspections and pole loading assessments
– Mainline and CIC underground cable replacement
• Upgrading system capacity and capability to improve safety and reliability and enable DER
integration
– Updating infrastructure, such as 4kV circuits and substations to increase capacity, improve reliability, and address
technology obsolescence
– Implementing additional capabilities, such as increased distribution and substation automation to monitor and control grid
equipment in real-time
– Installing communication networks, such as expanding the fiber optic and field area networks for real-time data transfer to
support grid automation
– Developing technology platforms that will be the foundational tools for forecasting grid performance, handling grid
planning, and managing outages and operating the distribution grid
• Customer Service Re-platform
– Replace disparate, obsolete and aged applications and integrate customer data from various sources
– Mitigate the risk of system failure and inability to recover in a timely manner to provide continuity to customer interactions
and many other critical operations such as billing and outage communication that depend on the customer information
system.
• 2018 TY forecast includes over $85 million in O&M savings and approximately $200 million of
capital expenditure savings to be achieved from operational efficiency and productivity
improvement initiatives
9
Results of Operations Highlights
• Depreciation
– Addressed Commission directives from 2015 GRC Decision
– Incorporates “gradualism” principle to reduce incremental net salvage-related depreciation
expense compared to what SCE’s depreciation study revealed to moderate the rate impact
• Taxes
– Repair Deductions and Bonus Depreciation continue to be significant drivers
– Proposal to extend the two-way Tax Accounting Memorandum Account (TAMA)
• Post-Test Year Mechanisms
– Option 1: Use specific capital expenditure forecast for 2018, 2019 and 2020
– Option 2: Escalate 2018 capital additions by 5% per year for 2019 and 2020, with one-time
adjustment for CS Re-platform project closing in 2020.
• Memorandum and Balancing Accounts changes including:
– Modification of the Pole Loading and Deteriorated Pole Programs Balancing Account (PLDPBA)
– Modification of the Residential Rate Implementation Memorandum Account (RRIMA) and
Recovery of Residential Implementation Recorded Costs
– Modification of the Safety and Reliability Investment Incentive Mechanism (SRIIM)
– Establishment of the DER Deferred Project Memorandum Account (DERCPMA)
10
CPUC Jurisdictional Capital Expenditures** (Nominal $ Millions)
11
O&M Expenses*(2015 Constant $ Millions)
SCE Test-Year 2018 O&M and Capital Forecast by Exhibit
Total:$2,395 Million
*O&M Data excludes Uncollectible and Songs Decommissioning Credits; includes Capitalized A&G, Capitalized P&B and Franchise Fees** Capitalized Data excludes capitalized A&G, includes customer contributions
Total:$3,965 Million
2015 Recorded Compared to 2018 Forecast – O&M2015 Constant $Millions
12
Note: O&M Data excludes Uncollectible and Songs Decommissioning Credits and includes Franchise Fees, Capitalized A&G, and Capitalized P&B.
13
2015 Recorded Compared to 2018 Forecast – CapitalNominal $Millions
Note- Includes customer contributions of approximately $240 million in 2015 and $290 million in 2018
CPUC Capital Expenditures 2016-2020 Nominal ($Millions)
14
*Capitalized Data excludes capitalized A&G and P&B
Organizational Unit 2016 2017 2018 2019 2020
Customer Service 23 28 39 40 45
Information Technology 232 377 368 309 205
Operational Services 156 209 263 259 238
Power Supply 141 107 103 89 85
Transmission & Distribution 2,508 2,576 3,192 3,240 3,136
Total: 3,060 3,297 3,964 3,937 3,709
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2018 Request: $612 million
Key Activities
o Inspection and maintenance programs
o Vegetation Management
o Grid Operations
o Outage response and Reactive
Maintenance
o Employee Training
Significant Changes
o Increased pole loading assessments and
repairs
o Increased activity in remediating
transmission line clearance issues to
comply with G.O. 95.
SCE-02: Transmission & Distribution (T&D) - O&MTotal Company 2015 constant $ millions
2015 Recorded 2018 Request
System
Planning
Distribution
Maintenance &
Distribution
Construction &
Maintenance
Transmission
Construction &
Maintenance
$78
Transmission
Construction
&Maintenance
$41
Poles
$44 Grid
Modernizatio Grid
Technology
Safety and
Training
Other Costs
$121
16
2016-2020 Request: $14,652 million
Key Activities
o Customer driven work
o Load Growth and Grid Reinforcement
o Preventive and breakdown maintenance
o Infrastructure repl. of major assets including:
• Poles
• Underground Cables
• Overhead conductors
• Underground structures
• Circuit Breakers
• Substation Transformers
o Grid modernization
• Automation
• Telecommunication
• Technology platforms
Significant Changes
o Pole Programs
o Grid Reinforcement & Grid Modernization
SCE-02: Transmission & Distribution (T&D) – Capital CPUC Jurisdictional nominal $ millions
$2,508 $2,576
$3,192 $3,240 $3,136
2016 2017 2018 2019 2020
Customer Driven
$2,663
System Planning
$2,621
Distribution
Maintenance &
Inspections
$1,377
Distribution
Construction &
Maintenance
Substation Construction &
Maintenance
$590
Transmission
Construction &
Maintenance
$313Infrastructure
Replacement
$2,418
Poles
$1,667
Grid
Modernization
$1,875
Grid Technology
$179
17
CS Operations
Division $149
OU Mgmt. & Support
$8
Customer
Programs &
Services $24
Business
Customer
Division
$19
2018 Request: $200 million
Key Activitieso Meter reading, inspection and maintenance, and
meter installation/removals
o Customer Contact Center services
o Billing, Credit, Payments & Uncollectible Expense
o Customer programs and information delivery
o Business customer account management and
technical services
Significant Changes
o CS Re-Platform
o Bi-monthly Edison SmartConnect Opt-Out meter
reading
o CCA Program Support
o Net Energy Metering
o TOU Period Adjustment and Default Critical Peak
Pricing
o Operational efficiencies
SCE-03: Customer Service - O&MTotal Company 2015 constant $ millions
208200
(8)
2015 Recorded 2018 Request
18
2016-2020 Request: $174 million
Key Activities
o Meter forecast (maintenance, replacements,
customer growth)
o Meter diagnostic devices and technician
tool kits
o Meter Shop
o Energy Centers
Significant Changes
o AMI Cell Relay Replacement Program
o AMI meter warranty reduction
SCE-03: Customer Service – Capital CPUC Jurisdictional nominal $ millions
Specialized
Equipment
$3 Structures and
Improvements
$8
Meters
$163
19
Enterprise Architecture, $12Cybersecurity &
Compliance, $18
Grid
Services &
Rents, $48
Business
Integration &
Delivery, $47
Service Management
Office & Operations,
$87
Hardware/Software
License &
Maintenance, $71
OpX Savings,
-$152018 Request: $268 Million
Key Activities
o IT service desk
o Application development and maintenance
o Hardware and software licenses and
maintenance agreements
o Telecommunication network maintenance
o Cybersecurity
Significant Changes
o IT operating model
o CS Replatform
o Network and telecommunication
maintenance
o Growth in licenses and maintenance
agreements
SCE-04: Information Technology - O&MTotal Company 2015 constant $ millions
2015 Recorded 2018 Request
20
Operating Software,
$124Cybersecurity &
IT Compliance,
$309
OU & Corporate
Software, $376CS Replatform,
$209
Servers,
Storage,
Data
Center,
$200
Computing
and Data &
Voice
Networks,
$116
Grid Telecom, $158
$81 $105 $94 $97 $97
$152
$213 $203 $136 $105
$58 $71
$76
$3
2016 2017 2018 2019 2020
Hardware Capitalized Software CS Replatform
SCE-04: Information Technology – Capital CPUC Jurisdictional nominal $ millions
2016-2020 Request: $1,491 million
Key Activities
o Hardware installation and maintenance
• Servers, storage and IT networks for business
computing needs
• Telecommunication to enable critical grid
operations and communications that are not
project specific
o Capitalized software
• Cybersecurity
• Support SCE core business processes
• Grid Planning & Analytics
o Customer Service Replatform
• New customer relationship and billing system to
perform critical customer service related functions
Significant Changes
o Cybersecurity for Grid Modernization
o CS Replatform
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2018 Request: $190 million
Key Activities
o Oversight costs for Palo Verde Units 1-3
o Energy procurement management activities
o Operations, maintenance, and support
activities for SCE-owned generating facilitieso Hydroelectric
o Mountainview (gas)
o Peakers (combustion turbines)
o Catalina
o Solar Photovoltaic and Fuel Cell Programs
Significant Changes
o Increased volume and complexity of
procurement activity
o New Contract Services Agreement (CSA) for
Mountainview
o Operational efficiencies
SCE-05: Power Supply - O&MTotal Company 2015 constant $ millions
192 190
(2)
2015 Recorded
Palo Verde
$77
Energy
Procurement
$32
Hydro O&M
$41
MountView
Peakers
&Mohave $31SPVP and Fuel Cells
$4
Catalina $4
22
2016-2020 Request: $523 million
Key Activities
o Generator Stator Rewind for Palo Verde Units
o Communication equipment related to
contracted generating resources
o Maintenance and replacement of equipment
for hydroelectric generating facilities
o Projects to comply with Safety &
Environmental objectives and station reliability
for Mountainview and Peaker plants
o Catalina Generation operations and Pebbly
Beach Generation Automation
Significant Changes
o Completed combustion turbine upgrade
projects driving reduced maintenance
overhauls and improved plant performance
Palo Verde
$188
Energy
Procurem
ent
$8
Hydro Capital
$227
Mountainview,
Peakers,
Mohave
Closure
$80
SPVP and
Fuel Cells …
Catalina
$19
SCE-05: Power Supply – Capital CPUC Jurisdictional nominal $ millions
23
2018 Forecast: $583 Million
Key Activities
o HR Operations
o Pensions and Benefits
o Variable compensation
Significant Changes
o Pension & benefit changes
o Increase in Medical program costs
o Operational efficiencies
SCE-06: Human Resources - O&MTotal Company 2015 constant $ millions
HR O&M
$65
Benefits and
Other
Compensation
$518
24
SCE-07: Operational Services - O&MTotal Company 2015 constant $ millions
2018 Forecast: $113 Million
Key Activities
o Business resiliency and emergency
management
o Facility maintenance and leases
o Safety and environmental services
o Corporate security services
o Supply management and supplier diversity
Significant Changes
o New Seismic Assessment and Mitigation
program
o Building lease exits ($14M savings)
o Transition to service provider model for real
estate maintenance and project management
127
113
(14)
Business
Resiliency
$8
Corporate
Environmental
Services $12
Corporate Real
Estate
$51
Corporate
Heath and
Safety $6
Corporate
Security
$27
Supply Mgmt
& Supplier
Diversity $9
25
SCE-07: Operational Services – Capital CPUC Jurisdictional nominal $ millions
2016-2020 Forecast: $1,126 Million
Key Activities
o Seismic Assessment and Mitigation
o Corporate Real Estate projects, including:
o Service center modernization
o Substation maintenance and test building
improvements
o Facility repurpose projects
o Capital maintenance
o NERC-CIP compliance*
o Physical security systems
o Vehicle and helicopter maintenance, upgrades
and lease buy-outs
Significant Changes
o New Seismic Assessment & Mitigation Program
o Facility upgrades and maintenance
*Costs to comply with NERC CIP requirements are also forecast within T&D and IT
$156
$209
$263 $259 $238
2016 2017 2018 2019 2020
Business
Resiliency …
Corporate
Environmental
Services $3
Corporate Real Estate
$870
Corporate
Security
$105
Supply Mgmt &
Supplier
Diversity $2Transportation
Services $28
26
2018 Forecast: $429
Key Activities
o Ethics and compliance
o Local public affairs, corporate
communications, regulatory
affairs
o Finance, audit services &
Enterprise Risk Management
o Law, claims, worker’s
compensations and disability
o Corporate property & liability
insurance
Significant Changes
o Operational Excellence
o Capitalized A&G and P&B
expenses
o Liability insurance
SCE-08: Administrative & General (A&G) – O&MTotal Company 2015 constant $ millions
$429$415