Amended Testimony on Transmission Grid...11 play an important role in maintaining a safe and...

Application No.: A.19-08-013Exhibit No.: SCE-02, Vol. 2A Witnesses: G. Trumbo

(U 338-E)

2021 General Rate Case

Amended Testimony on

Transmission Grid

Before the

Public Utilities Commission of the State of California

Rosemead, California November 22, 2019

SCE-02, Vol. 2A: Amended Testimony on Transmission Grid

Table Of Contents

Section Page Witness

-i-

I. INTRODUCTION .............................................................................................1 G. Trumbo

A. Content and Organization of Volume ....................................................1

B. Summary of O&M and Capital Request ................................................1

C. Risk Factors, Safety, Reliability and Connection withRAMP ....................................................................................................4

1. Safety Enforcement Division (SED) CommentsApplicable to this Testimony .....................................................4

D. Regulatory Background/Policies Driving SCE’s Request .....................5

E. 2018 Decision ........................................................................................6

1. Comparison of Authorized 2018 to Recorded ...........................6

II. INSPECTIONS AND MAINTENANCE ..........................................................8

A. Overview ................................................................................................8

B. O&M Forecast – Inspections & Maintenance .......................................8

1. Transmission Inspections ...........................................................9

a) Transmission Line Patrols..............................................9

(1) Work Description and Need...............................9

(2) Scope and Forecast Analysis ...........................11

b) Transmission Underground StructureInspections ...................................................................12

(1) Work Description and Need.............................12


2. Transmission Maintenance ......................................................15

a) Transmission O&M Maintenance ................................15




Table Of Contents (Continued)


-ii-

b) Insulator Washing ........................................................20



c) Roads and Rights-of-Way ............................................22



3. Telecommunication Inspections and Maintenance ..................24

a) Work Description and Need.........................................24

b) Scope and Forecast Analysis .......................................24

(1) Historical Variance Analysis ...........................25

(2) Forecast ............................................................25

C. Capital Expenditures – Inspection & Maintenance .............................27

1. Transmission Capital Maintenance ..........................................27

a) On-Going Maintenance Work ......................................27


(2) Basis for Capital ExpenditureForecast ............................................................28

b) Tower Corrosion Program ...........................................30


(2) Basis for Capital ExpenditureForecast ............................................................31

2. Telecommunication Capital Maintenance ...............................32


b) Basis for Capital Expenditure Forecast ........................33

3. Transmission Claims ................................................................34


Table Of Contents (Continued)


-iii-



D. O&M and Capital Expenditures -- Transmission LineRating Remediation (TLRR) Program .................................................36

1. Work Description and Need.....................................................36

2. Basis for O&M Forecast ..........................................................37

3. Basis for Capital Expenditure Forecast ....................................38

III. CAPITAL-RELATED EXPENSE & OTHER ................................................40

A. Overview ..............................................................................................40

B. O&M Forecast – Capital-Related Expense & Other ............................40

1. Transmission Support Activities ..............................................40


b) Scope and Forecast Analysis .......................................41

(1) Historical Variance Analysis ...........................41

(2) Forecast ............................................................42

C. Capital Expenditures – Capital Related Expense & Other ..................42

1. Emergency Equipment .............................................................42



2. Tools and Work Equipment .....................................................43



1

I. 1

INTRODUCTION 2

A. Content and Organization of Volume 3

In this volume, Southern California Edison (SCE) presents its Test Year 2021 operations and 4

maintenance (O&M) expenses and 2019-2023 capital expenditures forecast for the Transmission Grid 5

Business Planning Group (BPG). This BPG includes the activities SCE performs to inspect and maintain 6

its transmission grid and telecommunication network. The Transmission Grid BPG is comprised of two 7

Business Planning Elements (BPEs): (1) Transmission Inspections & Maintenance and (2) Capital 8

Related Expense & Other. 9

The testimony in this volume explains the scope of planned work activities in both BPEs which 10

play an important role in maintaining a safe and reliable transmission system and telecommunication 11

network for the benefit of customers. The testimony identifies key regulatory requirements and other 12

drivers for the work and summarizes how these activities address operational risks and support the 13

operation of SCE’s grid. Also, included in the testimony are analyses of: (1) O&M and capital funding 14

authorized in the 2018 General Rate Case (GRC) compared to recorded amounts in 2018, and (2) the 15

2019-2021 O&M labor and non-labor forecasts and 2019-2023 capital forecasts relative to recorded 16

costs. The volume is structured as follows: 17

Section I: Introduction - summarizes the O&M and capital requests for the Transmission 18

Grid BPG; 19

Section II: Transmission Inspections & Maintenance BPE - describes the inspections and 20

maintenance activities supporting the transmission grid and telecommunications network; 21

and 22

Section III: Capital Related Expense & Other BPE - describes transmission support activities, 23

utility expenses, emergency equipment and tools and work equipment incurred in support of 24

SCE’s transmission grid. 25

The forecast presented in this volume will allow SCE to provide safe, reliable, affordable, and 26

clean power to customers in compliance with state and federal regulatory requirements. 27

B. Summary of O&M and Capital Request 28

The testimony included in this volume presents SCE’s request for $43 million (in 2018 constant 29

dollars) in O&M expenses for the 2021 Test Year and $1,153 million (in nominal dollars) in capital 30

2

expenditures for 2021-2023 to construct, operate, inspect, and maintain the transmission grid and 1

telecommunication network. See Figure I-1 for O&M details and Figure I-2 for details. 2

Figure I-1 Transmission Grid O&M Expense

Recorded 2014-2018/Forecast 2019-2021 (Constant 2018 $Million)

3

Figure I-2 Transmission Grid Capital Expenditures Recorded 2014-2018/Forecast 2019-2023

(Total Company – Nominal $Million)

4

C. Risk Factors, Safety, Reliability and Connection with RAMP1

In Appendix B of SCE’s 2018 Risk Assessment and Mitigation Phase (RAMP) report, SCE2

provided an evaluation of the direct safety risks associated with SCE’s transmission infrastructure. 3

These risks were generally associated with transmission line clearances, transmission conductor and/or 4

conductor attachment failure, and transmission line structure failure. SCE also provided examples of 5

safety risks that can result from contact with energized equipment or equipment/structure failure, in the 6

context of transmission, sub-transmission, and substation assets. SCE further summarized at a high level 7

the existing controls and mitigations to manage these risks. 8

As transmission and sub-transmission conductors, splices, insulators and associated hardware 9

age, they have an increased risk of failing. These risks grow further from stresses caused by historical 10

circuit faults and other environmental factors. Impacts from these failures include conductors falling to 11

the ground, leading to potential wildfires, personal property damage, or injury to the public. Equipment 12

failures will also impact the integrity of the bulk electrical system (BES),1 and the corresponding 13

reliability of service to our customers. SCE mitigates these risks through routine inspections of the 14

system, followed by necessary maintenance to mitigate identified issues. The costs of these mitigations 15

are forecast throughout this testimony. 16

1. Safety Enforcement Division (SED) Comments Applicable to this Testimony17

In its evaluation of SCE’s RAMP report, SED suggested that SCE did not identify all18

public safety risks in SCE’s jurisdiction. SCE addressed this general concern within its comments to 19

SED’s report. Of particular relevance to this testimony is SED’s identification that there are a number of 20

CPUC-reportable safety incidents related to aircraft making contact with SCE power lines.2 SCE 21

appreciates this comment and notes, consistent with its comments to SED’s report, that SCE does not 22

have the ability to influence the capabilities and expertise of aircraft pilots, or the mechanical integrity 23

of the aircraft itself. Inadequacies in any of these areas can cause the aircraft to come into contact with 24

power lines. It should be noted that SCE did not analyze aircraft incidents as CPUC-reportable because 25

the power lines were not necessarily the cause of the incident. For example, in some cases the power 26

lines were contacted by aircraft during uncontrolled descent. While SCE did not include this particular 27

1 SCE’s bulk electrical system (BES) is comprised of all circuits operating at 161kV or higher. 2 I.18-11-006. Regulatory Review of SCE’s Risk Assessment Mitigation Phase Report for the Test Case 2021

General Rate Case, p. 46.

5

risk in RAMP, it is important to note that SCE does install and maintain Federal Aviation 1

Administration (FAA) marking of the transmission system consistent with FAA guidelines. SCE’s 2

transmission maintenance program includes an expense forecast, described in the O&M maintenance 3

section below, for maintaining compliance with FAA requirements for transmission tower lighting and 4

transmission line marker balls used to increase visibility of aerial obstructions. These actions help 5

aircraft pilots avoid making contact with transmission lines and towers. 6

D. Regulatory Background/Policies Driving SCE’s Request 7

The Bulk Electrical System (BES) consists of electrical facilities, equipment, and control 8

systems necessary for operating an interconnected electrical transmission network. In general, SCE’s 9

portion of the BES includes all transmission lines operating at 161kV or higher. These facilities fall 10

under Federal Energy Regulatory Commission (FERC) jurisdiction, are subject to North American 11

Electricity Reliability Corporation (NERC) reliability standards and are under the operational control of 12

the California Independent System Operator (CAISO). 13

The system of facilities used in the local distribution of electrical energy are referred to as “local 14

distribution” facilities and are not part of the BES. In general, SCE’s local distribution facilities include 15

sub-transmission lines typically operating at 66kV or 115kV. SCE’s non-BES facilities are under 16

California Public Utilities Commission (CPUC) jurisdiction and SCE operational control. 17

Routine inspections and maintenance activities have compliance standards set by CPUC General 18

Orders (GO) 95, 128, and 165. Overhead line construction is governed by CPUC GO 95 and 19

underground construction is governed by CPUC GO 128. Inspection cycles for electric facilities are 20

governed by CPUC GO 165, and inspection cycles for communication lines are governed by CPUC GO 21

95. 22

In addition, SCE’s Transmission Line Rating Remediation (TLRR) program presented in Section 23

II.D is designed to comply with NERC’s recommendation in its May 11, 2011 “Assessment Plan 24

Review Criteria”3 and to meet commitments that SCE made to SED. The Telecommunication Inspection 25

Program discussed in Section II.B.3 is designed to meet the inspection requirements ordered by the 26

CPUC in Decision (D.) 17-12-024.4 27

3 https://www.nerc.com/pa/rrm/bpsa/Facility%20Ratings%20Alert%20DL/Assessment_Plan_Review_Criteria_20110511.pdf (July

24, 2019). 4 R.08-11-005 (Rulemaking to Consider and Adopt Regulations to Enhance Fire Safety in the High Fire Threat

District).

6

E. 2018 Decision1

1. Comparison of Authorized 2018 to Recorded2

Figure I-3 summarizes the Test Year 2018 GRC O&M authorized amounts and SCE’s3

2018 recorded costs compared to those amounts. 4

Figure I-3 Authorized vs. Recorded: Transmission O&M Expenses5

(Constant 2018 $000)

In 2018, SCE underspent authorized O&M expenses of $31.253 million by $9.359 5

million. These lower recorded costs are largely attributable to an underspend of $7.412 million in O&M 6

for the Transmission Line Rating Remediation (TLRR) program. This arose primarily because of a 7

reprioritization of resources and funds to other inspection and maintenance areas. Conversely, SCE 8

spent more than authorized on transmission underground inspections due to costs to inspect the Chino 9

Hills Underground (CHUG) circuit, and because of an uncontrollable increase in Underground Service 10

Alert (USA) locating requests. 11

Figure I-4 shows the Test Year 2018 GRC Capital authorized amounts and SCE’s 2018 12

recorded costs compared to those amounts. 13

5 Refer to WP SCE-07, Vol. 01- Authorized to Recorded.

7

Figure I-4 Authorized vs. Recorded: Transmission Capital Expenditures6

(Nominal $000)

With authorized capital expenditures of $210.874 million and recorded costs of $162.270 1

million, SCE recorded $48.604 million less than authorized. TLRR recorded expenditures were below 2

authorized levels due to delays from permitting, outage restrictions, and resource constraints that limited 3

SCE’s ability to complete the work originally forecasted. In addition, SCE anticipated shorter agency 4

review and approval of projects than was actually experienced. This changed the timing of both material 5

procurement and project construction relative to what was originally forecast in the 2018 GRC 6

submission and accounted for nearly $46 million of the roughly $50 million lower recorded costs. 7

6 Refer to WP SCE-07, Vol. 01- Authorized to Recorded.

8

II. 1

INSPECTIONS AND MAINTENANCE 2

A. Overview3

SCE transmission system comprises over 13,000 miles of transmission lines that operate at4

voltage levels of 500 kV, 220 kV, 161 kV, 115 kV, 66 kV, 55 kV, and 33 kV. The CAISO-controlled 5

facilities, which are under FERC jurisdiction, include all line positions of 500 kV and 161kV, most 220 6

kV lines, and certain 115 kV, 66 kV and 55kV lines. 7

SCE performs routine and reactive inspections of the transmission system to maintain a safe and 8

reliable system, and as required by various regulatory requirements. Transmission inspection activities 9

include routine annual patrols and inspections of SCE’s overhead and underground transmission lines, 10

and reactive inspections during and after extreme weather events or other emergencies. In 2018, SCE 11

also started performing enhanced overhead inspections (EOI) on overhead assets in high-fire areas.7 12

SCE performs a variety of proactive and reactive maintenance activities. Transmission 13

maintenance activities include O&M and capital transmission line maintenance, insulator washing, and 14

road and rights-of-way maintenance. In addition, this testimony explains the remediation activities 15

resulting from SCE’s transmission line rating study, transmission tower lead paint program, and tower 16

corrosion program. 17

SCE operates and maintains a communications network that includes over 5,000 miles of fiber-18

optic cable. This network is used to dispatch personnel for the following activities: (1) restoration of 19

electric service, (2) new service activation, (3) support of operations and maintenance of the electric 20

grid, and (4) interaction with customers and vendors. This network also enables communication between 21

relays and other equipment installed to protect electrical equipment, such as circuit breakers and 22

substation transformers. 23

This section of testimony will describe these activities and the importance of maintaining a safe 24

and reliable transmission system and communication network. 25

B. O&M Forecast – Inspections & Maintenance26

This section includes the details of SCE’s O&M forecast for the inspection and maintenance27

activities on its transmission system. Table II-1 provides an overview of 2014-2018 recorded costs and 28

2019-2021 forecast O&M costs. 29

7 Refer to SCE-04, Vol. 05A, Wildfire Management for work and costs associated with EOI.

9

Table II-1 Overall Inspections and Maintenance O&M Expenses


1. Transmission Inspections1

a) Transmission Line Patrols2

(1) Work Description and Need3

SCE’s overhead transmission lines, along with the structures supporting4

the lines, must be routinely patrolled and inspected to detect any problems that may compromise the 5

integrity of the structures or impede the transmission of electricity. These activities are performed on a 6

predetermined schedule to comply with the requirements of CPUC GO 165. The patrols and inspections 7

occur annually and involve inspecting every structure and its related components, the lines in between 8

the structures, and the rights-of-way. Lines that run through densely populated urban areas or rugged 9

rural areas facing severe weather or environmental conditions (e.g., high winds, coastal areas exposed to 10

salt, etc.) are typically inspected more frequently. Inspections are also performed after unplanned events, 11

such as extreme weather, fires, and equipment malfunctions. 12

Inspectors document any discrepancies found during the inspections, 13

determine their priority levels, and assign a timeframe for corrective actions based on construction and 14

compliance standards. SCE follows a three-priority rating system that is compliant with the requirements 15

outlined in Rule 18 of GO95: 16

A priority 1 discrepancy is an immediate public safety/system17

reliability hazard that is required to be made safe within twenty-four18

hours and remedied within seventy-two hours;19

A priority 2 discrepancy is one that is required to be addressed within20

six months to three years, depending on the high-fire tier designation21

of the asset. If the asset is located within high-fire tier 3 then it will be22

TOTAL CONSTANT AMOUNT2014 2015 2016 2017 2018 2019 2020 2021

Insulator Washing $5,223 $488 $797 $823 $664 $761 $761 $761Roads and Rights of Way $7,075 $3,852 $4,004 $5,189 $4,665 $4,665 $4,665 $4,665Telecommunication Inspection and Maintenance $3,995 $2,959 $3,480 $2,044 $2,419 $2,862 $4,881 $4,874Transmission Line Patrols $4,355 $5,414 $6,385 $4,338 $4,378 $4,378 $4,378 $7,233Transmission Line Rating Remediation (TLRR) $1,025 $40 $1,745 $1,513 $471 $116 $114 $1,790Transmission O&M Maintenance $15,066 $8,743 $8,314 $7,801 $7,358 $7,946 $7,940 $21,064Transmission Underground Structure Inspection $1,103 $1,295 $1,288 $1,435 $1,943 $1,943 $1,943 $1,943Totals $37,842 $22,792 $26,013 $23,143 $21,898 $22,671 $24,683 $42,330

Recorded Forecast

10

required to be addressed within six months. If the asset is located 1

within high-fire tier 2 then it will be required to be addressed within 2

twelve months. Non high-fire findings are required to be addressed 3

within three years; and 4

A priority 3 discrepancy is addressed as opportunity maintenance that5

is performed when other work is done on or near that particular asset.6

As a result of an update to Rule 18 of GO95, overhead Priority 37

discrepancies found after June 2019 will be required to be addressed8

within five years.9

Starting in 2021, SCE will perform aerial inspections of all assets 10

(including infrared, corona, and high-definition imaging) not in High-Fire Risk Areas (HFRA) to 11

proactively identify issues that are not visible to the unaided eye. California’s “new normal” of more 12

prevalent fire danger year-round means that SCE must undertake more intensive and technologically 13

advanced inspections to identify system issues that could manifest as potential ignition sources and 14

cause danger to the public and the grid. 15

Corona scanning was introduced during SCE’s wildfire mitigation efforts 16

to offer a new perspective on how we identify anomalies on our system. Corona is a gathering or focal 17

point of an electric field. It typically occurs at sharp edges or points of energized equipment, and the 18

electrical loss can damage materials over time. Corona detection is accomplished by identifying 19

ultraviolet energy generated by leaking high voltage current. High readings indicate an asset that is in 20

need of a replacement. Infrared imaging will also be performed and will give an early indication of 21

failing components by identifying increased thermal activity on the component. Higher thermal activity 22

indicates higher stress on a particular component, which can be a good indicator that failure is likely. 23

Lastly, high definition aerial imaging will allow for assets to be accurately geo-located, improving SCE 24

data. More importantly, this imaging also allows qualified reviewers (like patrolmen and engineers) 25

another avenue and vantage point to identify issues that need correction. SCE will use these inspection 26

methods on overhead conductors, insulators and hardware in its transmission system to detect 27

maintenance issues that are not normally visible before they become failures. These three inspection 28

methods are performed at the same time from the same airship. 29

11

1

2

Note, while the costs for aerial inspections outside of HFRA reside in this

section, the costs for aerial inspection in HFRA are presented in SCE-04 Volume 5A - Wildfire

Management. 3

(2) Scope and Forecast Analysis4

Figure II-5 provides the recorded (2014-2018) and the forecast (2019-5

2021) costs for the transmission line patrols program. 6

Figure II-5 Transmission Line Patrols8

Recorded 2014-2018/Forecast 2019-2021 (Constant 2018 $000)

(a) Historical Variance Analysis7

The labor expenses in this account are for SCE crews and other8

personnel performing inspections. The non-labor expenses are primarily related to vehicle expenses and 9

other allocated overheads. Line patrols include both routine patrols as well as additional patrols of 10

affected facilities following severe weather, unexpected outages, and other conditions. As such, costs for 11

line patrols have remained relatively stable except for 2015 and 2016. In these years, aircraft operations 12

8 Refer to WP SCE-02, Vol. 02A, WP, pp. 3-9 – O&M Detail for Transmission Line Patrols.

2014 2015 2016 2017 2018 2019 2020 2021Labor $3,511 $3,589 $3,723 $4,008 $3,306 $3,303 $3,303 $5,457

Non-Labor $843 $1,825 $2,661 $331 $1,072 $1,075 $1,075 $1,776Other

Total Expenses $4,355 $5,414 $6,385 $4,338 $4,378 $4,378 $4,378 $7,233

Ratio of Labor to Total 81% 66% 58% 92% 76% 75% 75% 75%

Recorded Forecast

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2014 2015 2016 2017 2018 2019 2020 2021Labor Non-Labor Other

12

allocations were charged only to this account, rather than across all transmission projects that require air 1

support, as they are now. 2

(b) Forecast3

The level of work performed in 2018 serves as an appropriate basis4

by which to forecast work in the Test Year. To this base forecast, SCE adds incremental expenses to 5

support the emergent aerial inspection program described above. SCE developed the cost forecast for 6

this incremental inspection work based on an estimated costs per mile scanned, the costs of a camera 7

sensor operator, and the costs for processing and reviewing aerial inspection results.9 These non-HFRA 8

aerial inspections will start in 2021 and be performed on one-third of SCE’s non-HFRA assets every 9

year, such that every asset is inspected once every three years. 10

Table II-2 summarizes the components of the Test Year forecast 11

for this activity, which includes both the continuation of SCE’s ongoing Line Patrols program and the 12

incremental costs for the new aerial inspection program. Aerial inspections will enhance SCE’s 13

inspection program, allowing SCE to identify issues sooner and more accurately so that field crews can 14

correct conditions before they lead to failure. 15

Table II-2 Foreceast Transmission Inspection Costs O&M


b) Transmission Underground Structure Inspections16


Like overhead assets, SCE’s underground lines and vaults require routine18

inspections to detect and remedy any degradation that may lead to safety hazards or system reliability 19

issues. Inspections of the underground components, which include vaults, cable, splices, and shield 20

arrestors, are performed at least once every three years in compliance with CPUC GO 165. Similar to 21

9 Refer to WP SCE-02, Vol. 02A, pp. 10-11 – “Aerial Patrol Inspection Costs” for a detailed cost breakdown of the Non-HFRA aerial inspection program.

Sub Activity Methodology 2019 2020 2021

Line Patrols Last Year Recorded $4,378 $4,378 $4,378Aerial Inspection Adder Unit Based $0 $0 $2,855

Total $4,378 $4,378 $7,233

13

overhead inspections, emergent inspections to assess component or structural damage are performed 1

after unplanned events, such as severe weather, lightning, fires, equipment malfunction, and other 2

incidents that may have caused circuit interruption or damage. 3

Also included in this activity are SCE’s Underground Service Alert (USA) 4

location requests. California state law requires excavators to contact DigAlert10 prior to breaking 5

ground. Both excavators and utilities have responsibilities pursuant to this law. Excavators must 6

delineate or pre-mark their work area and contact the utility within two working days prior to 7

excavating. Utilities must mark or locate their lines onsite within two working days of notification. 8



2021) costs for the transmission underground inspection program. 11

10 DigAlert is another name for Underground Service Alert of Southern California (USA/SC), a non-profit mutual benefit organization formed in 1976. It operates the 811 number that excavators call prior to breaking ground. https://www.digalert.org/.

14

Figure II-6 Transmission Underground Inspections11 Recorded 2014-2018/Forecast 2019-2021



Labor expenses for this activity are for SCE personnel performing2

inspections. Non-labor expenses are primarily related to vehicle expenses and other allocated overheads. 3

Third-party construction activity is the primary driver of recorded 4

cost variance, largely due to an increase in the number of USA location requests that SCE receives prior 5

to construction breaking ground. There was an increase in residential housing and commercial building 6

construction activities within SCE service area over the historical period. Accordingly, there was a 44% 7

increase in DigAlert requests from 2014-2018.12 The Chino Hills Underground 500kV circuit also led to 8

an increase in 2018, as this was the first year SCE incurred costs for the specialized inspection of that 9

line. 10

11 Refer to WP SCE-02, Vol. 02A, pp. 12-18 – O&M Detail for Transmission Underground Inspections. 12 Refer to WP SCE-02, Vol. 02A, WP, pp. 19-20 – Underground Service Alert (USA) South DigAlert

Requests.

15

(b) Forecast 1

SCE expects this work to continue at levels consistent with those 2

experienced in 2018. As such, SCE uses the last year’s recorded costs as the basis of the 2021 Test Year 3

forecast. In D.89-12-057, and subsequently in D.04-07-022, the CPUC stated that if recorded expenses 4

have shown a trend in a certain direction over three or more years, the last recorded year is an 5

appropriate base estimate. This methodology was also proposed in the 2018 GRC filing, which was 6

uncontested, and the full request was authorized.13 7

2. Transmission Maintenance 8

Transmission maintenance is necessary to maintain a safe and reliable system. SCE 9

performs both proactive and reactive maintenance and repairs on the transmission system based on 10

inspection findings and system conditions. 11

a) Transmission O&M Maintenance 12

(1) Work Description and Need 13

This activity includes performing repairs on transmission line equipment 14

and structures, such as poles, towers, conductors, and their components, including FAA tower lighting 15

and marker balls. Maintenance work on the transmission system can be both proactive maintenance 16

identified during regular inspections or reactive maintenance due to unplanned events. 17

Proactive maintenance is performed based on inspection results and 18

analysis of issues found in the field and is executed based on SCE’s three priority rating system, which 19

was described in the Transmission Inspections section above. These types of proactive activities help 20

maintain transmission equipment, reduce outages caused by failed equipment, and allow for the more 21

efficient planning of work. Reactive maintenance is performed when equipment fails in service either 22

due to equipment degradation, weather, animal intrusion, third-party damage, and/or after extreme 23

weather. 24

(2) Scope and Forecast Analysis 25


2021) costs for the transmission O&M maintenance program. 27

13 D.19-05-027, p. 72.

16

Figure II-7 Transmission O&M Maintenance14



In 2014, SCE experienced significant programmatic maintenance2

activities, making this year relatively anomalous compared to the other recorded years. The recorded 3

costs in that year included over $7 million of activities related to tower painting and torqueing. This 4

project included contract labor to paint towers, re-step tower structures and repair footings. Overall, 5

recorded costs in this activity fluctuate due to the varying inspection cycle of equipment and 6

maintenance requirement of the composition of equipment from year-to-year. 7

(b) Forecast8

SCE’s costs for transmission capital maintenance were derived9

using specific forecasts for each sub-activity included in this section. The methodologies and amounts 10

for each sub-activity are shown below in Table II-3 and then described further. 11

14 Refer to WP SCE-02, Vol. 02A, WP, pp. 21-27 – O&M Detail for Transmission Maintenance.

17

Table II-3 2021 Transmission O&M Maintenance Forecast Components


(i) Transmission O&M Maintenance 1

The aforementioned tower painting and torqueing activities 2

in 2014 mean that this year is not representative of an average year for O&M maintenance and it has 3

been excluded by SCE through the use of a four-year historical average. In D.89-12-057, and 4

subsequently in D.04-07-022, the CPUC stated that for those accounts which have significant 5

fluctuations in recorded expenses from year-to-year, an average of recorded expenses is appropriate. The 6

use of the four-year average is appropriate as a forecast basis because costs can fluctuate due to the level 7

of required maintenance from year-to-year. See below for O&M maintenance historical costs. 8

Table II-4 Transmission O&M Maintenance Historical Costs (2014-2018)


(ii) Transmission O&M Breakdown Maintenance 9

Breakdown maintenance costs have steadily increased from 10

2014-2018, leading to a near doubling of expenses. In D.89-12-057, and subsequently in D.04.07-022, 11

the CPUC stated that if recorded expenses have shown a trend in a certain direction over three or more 12

years, the last recorded year is an appropriate base estimate. As such, SCE forecasts O&M breakdown 13

costs using last year recorded expenses. See below for O&M breakdown historical costs. 14

Sub‐Activity Methodology 2021

Transmission O&M Maintenance 4‐Year Average $5,189

Transmission O&M Breakdown Last Year Recorded $1,158

Transmission O&M Encroachments Last Year Recorded $1,691

Aerial Inspection Prgm ‐ O&M Maintenance Unit Cost $11,894

Maintenance for FAA Lighting Unit Cost $886

2014 2015 2016 2017 2018

Transmission O&M Maintenance 13,289$ 6,343$ 5,124$ 4,781$ 4,508$

18

Table II-5 Transmission O&M Breakdown Historical Costs (2014-2018)


(iii) Transmission O&M Encroachments1

The other reactive maintenance sub-activity is O&M2

encroachments. Encroachment work is affected by various economic forces, such as illegal dumping, 3

increases in urbanization, homeless populations, and the amount of response needed by SCE. Looking at 4

recorded costs, these activities increased heavily through 2016 and then began to level off and stabilize 5

in 2017 and 2018. As such, SCE forecasts O&M encroachment costs using the last year recorded 6

expenses, which also matches the capital encroachment methodology discussed in II.C.1. See below for 7

O&M encroachment historical costs. 8

Table II-6 Transmission O&M Encroachments Historical Costs (2014-2018)


(iv) Aerial Inspection Program – O&M Maintenance9

SCE’s aerial inspection program, which will inspect over10

32,000 transmission assets per year, is expected to generate additional maintenance work that will record 11

to this account. SCE estimated the volume and type of repairs based on anticipated find rates for 12

common maintenance notification types and the five-year average costs of those notification types. 13

Notification find rates were based on recorded find rates of 25% from SCE’s Enhanced Overhead 14

Inspection (EOI) program in 2018 and 2019.15 Table II-7 shows the estimated frequency and cost of 15

each notification type. 16

15 Please see SCE-04, Vol. 05A, for further discussion on SCE’s EOI program.

2014 2015 2016 2017 2018

Transmission O&M Breakdown 745$ 959$ 960$ 1,234$ 1,158$

2014 2015 2016 2017 2018

Transmission O&M Encroachments 1,032$ 1,440$ 2,230$ 1,786$ 1,691$

19

Table II-7 Forecast Aerial Inspection Maintenance Notifications16


For example, when inspecting approximately 32,175 non-1

HFRA assets, SCE expects to find maintenance items on 25% of these assets, leading to 8,044 2

notifications per year. SCE anticipates that 15% (or 1,207) of these notifications will be for conductor 3

repair. By taking the five-year average cost of conductor repair work orders ($2,469 per maintenance 4

repair) and multiplying it by the expected number of conductor repair notifications (1,207 * $2,469) 5

SCE arrived at a forecast of $2.98 million for conductor repairs arising from aerial inspections.17 This 6

type of estimate is developed for each notification type identified in Table II-7. Note, costs for pole 7

replacements are capital maintenance items and included in the transmission capital maintenance section 8

(II.C.1). 9

(v) Maintenance for FAA Lighting10

In 2019, SCE began a program for FAA aerial obstruction11

lighting on structures two-hundred feet or taller, throughout the service territory. All such structures 12

were evaluated by SCE transmission, engineering, and air operations teams, as well as by an FAA 13

compliance team. Through this evaluation, 189 structures were identified as high risk for airship 14

collision and subsequently marked to increase visibility. 15

As these assets were recently installed, costs for planned 16

maintenance cycles for lighting are not represented in recorded expenses. Accordingly, SCE has 17

developed a forecast of maintenance expenses for this activity going forward, incremental to recorded 18

expenses. To develop this forecast, SCE estimated the costs for its 189 lighting sites. Photocells must be 19

replaced every two years and batteries must be replaced every four years. These unit costs plus the 20

16 Refer to WP SCE-02, Vol. 02A, pp. 28-29 – Non-HFRA Aerial Inspection Maintenance Costs. 17 Find rates were developed by internal subject matter experts with input from consultants. The first cycle of

aerial find rates matched the find rates of SCE’s first cycle of EOI findings at the time of development.

(A) (B) (C) (D) (E) (F) (G) (H) (I)

Notification Problem Statement Total Notification Count Frequency Expected Notifications Adjusted Notifications Avg Cost/Notification Expected Cost Capital Costs/Year O&M Costs/Year

Pole Replacement 0.15 1207 845 30$ 25,339$ x

Pole Repair 0.3 2413 N/A 1.476$ 3,562$ x

Tower Repair 0.05 402 N/A 5.606$ 2,255$ x

Veg Mgmt 0.3 2413 N/A 1.193$ 2,879$ x

Conductor Repair 0.15 1207 N/A 2.469$ 2,979$ x

Other O&M 0.05 402 N/A 0.546$ 220$ x

Total 37,233$ 25,339$ 11,894$

8,044

20

contract labor to change out the lighting accessories comprise SCE’s forecast for its FAA maintenance 1

plan.18 For ratemaking purposes, SCE has normalized this forecast over the 2021-2023 period, as shown 2

in Table II-8.19 3

Table II-8 Forecast FAA Lighting O&M Maintenance Costs


b) Insulator Washing4


This program requires a visual inspection of a circuit for contamination,6

often indicated by arcing or buzzing. If no or minimal contamination is present, the circuit will continue 7

to be monitored. If excessive contamination is present, the circuit must be washed. Excessive 8

contamination on an insulator reduces its ability to insulate the energized line from the grounded support 9

structure and can cause lines to short circuit, resulting in a fault. Typically, beach areas with high salt 10

levels and high traffic volume require more frequent washing than a desert area with drier air and less 11

exhaust from traffic. 12

Insulator washing is performed by spraying high-pressure water onto 13

insulators to remove contaminants such as salt, dirt, or automobile exhaust. The term “hot-washing” 14

refers to the washing of energized lines, while “cold-washing” refers to the washing of de-energized 15

lines. Hot-washing is the preferred and most commonly used practice as it does not require the lines to 16

be taken out of operation. When practical, SCE uses specially-equipped water trucks with a derrick and 17

water nozzle to direct a high-pressure stream of water onto the insulators while the line remains in 18

18 SCE derived this cost estimate from 2018 purchase orders. 19 Refer to WP SCE-02, Vol. 02A, pp. 30-31 – Federal Aviation Administration (FAA) Lighting Maintenance

O&M Forecast.

Component 2019 2020 2021 2022 2023

Estimated Cost for Contract Labor per site (189 total) $1,181 $1,181 $1,181

Estimated Cost for Lighting Kit $992

Estimated Cost for Photo Cell (to be replaced every two years) $8 $8

Estimated Cost for 6 Batteries (to be replaced every four years) $281

Total $2,173 $1,189 $1,470

Normalized GRC Spend for Test Years $886 $886 $886

21

service. Where this is not practical, structures must be climbed by a lineman and the insulators are then 1

washed by a portable wash gun connected by a high-pressure hose to a water truck below. 2



2021) costs for the transmission insulator washing program. 5

Figure II-8 Transmission Insulator Washing20



Labor costs in this activity are for SCE field personnel performing7

insulator washing. Non-labor costs include vehicles and other division overhead costs allocated to this 8

activity. 9

After 2014, SCE shifted from a calendar-based wash approach to a 10

condition-based approach to achieve cost savings for the benefit of customers. As a result, SCE has seen 11

20 Refer to WP SCE-02, Vol. 02A, pp. 32-38 – O&M Detail for Insulator Washing.

22

a significant reduction in recorded costs from 2015-2018. Despite the consistently lowered costs during 1

this time period, there is still variation from year-to-year. This is because wash cycles are greatly 2

influenced by weather patterns. A drier year means that contamination on assets builds up, while a year 3

with more rain will have some of this cleaning taken care of naturally. 4

(b) Forecast 5

Because the factors that impact the need to wash insulators are 6

beyond SCE’s control, SCE applies a historical average to its forecast. This methodology is supported 7

by D.89-12-057, and subsequently in D.04-07-022, where the CPUC stated that if recorded expenses 8

have significant fluctuations from year to year, or expenses are influenced by external forces beyond the 9

utility’s control, an average of recorded expenses is appropriate. Moreover, because 2014 recorded costs 10

were based on a calendar-based wash approach, and because 2015 was a transition year for the program 11

approach, SCE’s 2021 Test Year forecast is based on the three-year historical average costs from 2016-12

2018. 13

c) Roads and Rights-of-Way 14

(1) Work Description and Need 15

Roads and rights-of-way maintenance is required to provide field crews 16

with safe access to SCE facilities in order to complete required inspection, maintenance, and vegetation 17

management activities. SCE’s roads and rights-of-way are also used by public agencies such as CAL 18

FIRE as fire breaks to reduce fire risks, and for access during other emergencies. 19

Maintenance activities include grading, repairs of damaged storm drains, 20

repairs of access roads, and annual brush clearing along access roads to allow safe passage of vehicles 21

and equipment. Transmission right-of-way clearing also includes weed abatement on parcels of property 22

owned by SCE along transmission rights-of-way, as required by city or county fire codes. Occasionally, 23

this work is performed during emergencies when roads must be cleared to allow crew access to 24

facilities. 25

(2) Scope and Forecast Analysis 26


2021) costs for the transmission roads and rights-of-way program. 28

23

Figure II-9 Transmission Roads and Rights-of-Way21 Recorded 2014-2018/Forecast 2019-2021



Labor expenses for this activity are for the SCE rights-of-way2

crews and their supervisors. Non-labor expenses are primarily contract labor and other organizational 3

overhead allocations. 4

The relatively high recorded non-labor costs in 2014 is primarily 5

due to vehicles being directly charged to this activity. Beginning in 2015, the roads and rights-of-way 6

vehicles are charged to overheads, just as all other vehicles are. From 2015-2018, costs vary from year-7

to-year based on a variety of factors, including changing precipitation and fire conditions that contribute 8

to the variability of annual clearing requirements, access issues driven by external agencies, and timing 9

of work to meet compliance deadlines and other requirements. 10

21 Refer to WP SCE-02, Vol. 02A, pp. 39-45 – O&M Detail for Roads and Rights-of-Way.

24

(b) Forecast 1

SCE expects the work required for this activity in Test Year 2021 2

to remain generally consistent with the last recorded year. Accordingly, SCE uses the last year’s 3

recorded costs as the basis of the 2021 Test Year forecast. Because new licensed projects continue to 4

add roads and rights-of-way, and will increase SCE’s scope of work, 2018’s maintenance levels most 5

accurately represent the level of activity that will continue into the Test Year. Indeed, this estimate is 6

likely to be on the conservative side. In 2018, SCE received a Master Special Use Permit (MSUP) from 7

the United States Forest Service, which requires level 2 maintenance standards be maintained for over 8

753 miles of forest roads. SCE has five years to achieve compliance and then must maintain that 9

condition going forward. 10

3. Telecommunication Inspections and Maintenance 11

a) Work Description and Need 12

SCE began large-scale installation of fiber-optic cable in the mid-1990s. SCE’s 13

telecommunication (telecom) network provides critical communications connections to substations, 14

customer call centers, data centers, and office facilities. Maintaining a reliable telecommunication 15

network is crucial to safe operations of SCE’s electrical systems. 16

Similar to transmission lines, inspections are necessary on underground and 17

overhead telecom lines. SCE is developing a program to patrol telecommunication lines in accordance 18

with best practices from GO 95 guidelines. SCE currently inspects cables in HFRA annually and intends 19

to inspect all cables in non-HFRA on a five-year cycle. Telecommunication lines will also be inspected 20

following adverse conditions that could negatively affect the communications network. This program 21

will start in 2020. 22

This activity also covers the breakdown and planned maintenance of all SCE 23

telecom assets. By 2020, SCE’s telecom cables will be over twenty-five years old. As telecom cables 24

age, they become more likely to fail due to wear, weather, and other factors. Telecom maintenance work 25

is prioritized based on SCE’s three-tiered priority rating system, as used in the transmission inspection 26

and maintenance program discussed earlier in this testimony. This work includes replacement of fiber-27

optic cables, towers, copper wire cables, and microwave systems. 28

b) Scope and Forecast Analysis 29

Figure II-10 provides the recorded (2014-2018) and the forecast (2019-2021) 30

costs for the telecommunication O&M inspection and maintenance program. 31

25

Figure II-10 Telecommunication Inspection and Maintenance22


(1) Historical Variance Analysis1

The telecommunications costs vary over the recorded period based on the2

type and volume of work required in each year. Additionally, telecom accounting changed in 2018 to 3

improve internal tracking at a more detailed level and to match practices with the rest of SCE’s 4

transmission organization. As such, recorded expenses for years prior to 2018 are not comparable and 5

should not be considered when forecasting future expenses. 6

(2) Forecast7

SCE expects the level of work performed in 2018 to continue into 2021.8

Accordingly, SCE uses 2018 recorded costs as the basis for the 2021 Test Year forecast. However, SCE 9

22 Refer to WP SCE-02, Vol. 02A, pp. 46-52 – O&M Detail for Telecommunication Inspection and Maintenance.

26

anticipates incremental work required in the Test Year to support the new telecommunications 1

inspection and maintenance practices discussed previously and detailed further below. Accordingly, 2

SCE adds incremental amounts to its 2018 recorded cost basis, to arrive at the total Test Year 2021 3

forecast. The costs for these activities are summarized in Table II-9 and described in more detail 4

thereafter. 5

Table II-9 Telecommunications O&M Inspections and Maintenance Forecast Components


SCE has identified best practices in its transmission, distribution, and 6

substation inspection programs that are prudent to apply to SCE’s aging telecom assets. The incremental 7

costs associated with this GRC activity reflect these practices. This work will include developing a 8

thorough and robust maintenance and inspection program for telecom that includes regular inspection 9

schedules, maintenance practices, and documentation procedures. This new program will inspect all 10

SCE telecom cable within HFRA annually, and all SCE telecom cable outside of HFRA on a five-year 11

cycle. 12

To implement this new program SCE will hire twenty-four new 13

represented telecommunication employees – 12 inspectors and 12 maintenance workers. The 14

incremental labor estimate was developed by analyzing the average man-hours per inspection of HFRA 15

circuits currently being patrolled and applying those man-hours across the scope of non-HFRA circuits 16

that are being added. In addition to SCE experience with HFRA, SCE’s forecast for inspectors is 17

informed by the geographic size of SCE territory, the number of telecom assets, and expected 18

requirements of the new patrol program. Inspectors will be responsible for performing inspections on all 19

telecom assets, as well as documenting completed inspections and initiating notifications for needed 20

repairs. Inspectors will also perform some maintenance repairs. Based on these inputs, SCE forecasts 21

costs for six additional two-person inspection crews. 22

Maintenance costs will also increase, as SCE expects to find more items 23

that need to be addressed. Applying a historical O&M maintenance find rate, SCE projects that two six-24

Sub‐Activity Methodology 2021

Telecom I&M Last Year Recorded $2,419

New I&M Practices Unit Cost $2,455

Total $4,874

27

person maintenance crews will be necessary to complete emergent maintenance work from non-HFRA 1

circuits. Detailed assumptions and calculations for telecommunication inspection and maintenance 2

incremental costs can be found in work papers.23 3

C. Capital Expenditures – Inspection & Maintenance4

1. Transmission Capital Maintenance5

Transmission Capital Maintenance includes the costs to remove, replace, and retire assets6

on a planned or reactive basis. SCE categorizes this activity into two parts: (1) On-going Maintenance 7

Work, and (2) Tower Corrosion Program. 8

a) On-Going Maintenance Work9


Planned transmission capital maintenance is driven by regular equipment11

maintenance cycles; maintenance work identified and prioritized through overhead and underground 12

inspection programs; and maintenance identified through observations by field personnel and other 13

activities. These activities are commonly referred to as grid capital maintenance and small civil work. 14

Some activities can result in projects or programs to proactively replace 15

obsolete or aging equipment and structures to address emergent issues and maintain safety and reliability 16

of the grid. These larger, bundled programs are managed under SCE’s infrastructure replacement 17

program, which is part of this work area. One of the newer items in this activity is SCE’s remediation of 18

lead-based paint (LBP) towers. SCE identified a potential issue with LBP based on benchmarking with 19

Pacific Gas & Electric (PG&E) and initiated a system-wide assessment of 26,694 towers. Lead levels in 20

tower paint and surrounding soil can exceed allowable thresholds for public exposure, meaning that SCE 21

must mitigate potential contaminations. Approximately 1,400 painted towers were identified, and 515 of 22

these were found to have LBP. 23

Reactive (i.e., breakdown) replacements are initiated when equipment fails 24

in-service, equipment failure is imminent, or possible safety issues are identified. Equipment identified 25

as requiring replacement must be replaced in a timely manner because transmission equipment failures 26

may lead to prolonged outages or unsafe operating conditions. Also included in reactive maintenance is 27

the cost to address encroachment violations and fencing. 28

23 Refer to WP SCE-02, Vol. 02A, pp. 53-54 – Telecommunication New Inspections & Maintenance Practices Forecast.

28

(2) Basis for Capital Expenditure Forecast1


2023) costs for the ongoing transmission capital maintenance program. 3

Figure II-11 Transmission Capital Maintenance24

Multiple WBS Elements excluding Tower Corrosion25 Recorded 2014-2018/Forecast 2019-2023

(Total Company – Nominal $000)

SCE’s costs for transmission capital maintenance were derived using 4

varying forecast methods for each sub-activity included in this section. The methodologies and amounts 5

for each sub-activity are shown below in Table II-10 and described in more detail thereafter. 6

24 Refer to WP SCE-02, Vol. 02A, pp. 55-62 – Capital Detail by WBS for Transmission Maintenance. 25 WBS Elements Include: CET-PD-IR-TC, CET-PD-IR-TG, CET-PD-IR-TP, CET-PD-IR-TS, CET-PD-BM-

TU, CET-RP-OT-CF. Corrosion costs are witheld from this chart and are presented in a separate chart, Figure II-12, below.

29

Table II-10 Capital Maintenance Forecast Costs and Methodologies26

(Nominal $000)

(a) Ongoing Maintenance1

Ongoing maintenance is driven by the condition of assets in the2

field and findings from inspections. Because of the inherent variability of asset deterioration and the 3

variability of recorded costs, SCE forecasts this sub-activity using the four-year average. In D.89-12-4

057, and subsequently in D.04-07-022, the CPUC stated that if recorded expenses have significant 5

fluctuations from year to year, or expenses are influenced by external forces beyond the utility’s control, 6

an average of recorded expenses is appropriate. The four-year average was chosen to omit 2014, as SCE 7

experienced uncharacteristically higher EMT (heavy-duty) tower retrofits and associated costs in that 8

year. 9

(b) Aerial Inspection Program - Maintenance10

The addition of SCE’s new aerial inspection program will drive11

incremental capital maintenance above historical levels. This program, as described in Section II.B.2, 12

will invariably find transmission poles in need of replacement. Costs for those replacements will record 13

to this account. When inspecting approximately 34,472 non-HFRA assets, SCE expects to find 14

maintenance items on 25% of these assets, leading to 8,618 notifications per year. SCE anticipates that 15

15% (or 1,293) of these notifications will be for pole replacements. To avoid duplication and account for 16

notifications that may be identified to be replaced by SCE’s pole program, 30% of these expected 17

notifications are removed. As a result, SCE adjusts its forecast to 905 notifications. By taking the cost of 18

pole replacements ($30,000) and multiplying it by the adjusted number of pole replacement notifications 19

26 Refer to WP SCE-02, Vol. 02A, pp. 63-64 – Capital Maintenance Activities Details.

Sub Activity Methodology 2019 2020 2021 2022 2023Ongoing Maintenance 4-Year Average $31,549 $32,421 $33,125 $33,745 $34,521Aerial Inspection Unit Cost $0 $0 $29,274 $29,832 $30,515Breakdown Last Year Recorded $2,920 $3,000 $3,065 $3,124 $3,195Enchroachments Last Year Recorded $1,057 $1,085 $1,109 $1,130 $1,156

Total $35,526 $36,506 $66,573 $67,831 $69,387

30

(905 * $30,000) SCE arrived at a forecast of $27.15 million for pole replacements arising from aerial 1

inspections.27 2

(c) Capital Breakdown Maintenance3

Transmission asset breakdowns are unpredictable and outside of4

SCE’s control. While this would typically warrant a historical average to account for variability, 5

recorded costs in 2015-2017 should not be used due to accounting practices that do not reflect costs of 6

this activity going forward. These practices do not affect 2018 recorded costs, which more accurately 7

represent the cost of this activity going forward. As such, SCE forecasts capital breakdown costs using 8

last year recorded expenses. 9

(d) Capital Encroachments10

Encroachment costs are driven primarily by capital fencing needs,11

which are in response to homeless encampments and other similar situations near SCE circuits. These 12

types of encampments have vastly increased in the past five years, as has SCE’s enforcement of 13

encroachments. This activity is also commodity-based in that fencing costs are tied to the cost of steel, 14

which is currently higher than previous years. Both factors have contributed to a steady increase in 15

recorded costs over the last five years. In D.89-12-057, and subsequently in D.04.07-022, the CPUC 16

stated that if recorded expenses have shown a trend in a certain direction over three or more years, the 17

last recorded year is an appropriate base estimate. Following this methodology, SCE forecasts 18

encroachment costs using last year recorded expenses. 19

b) Tower Corrosion Program20


Transmission towers are among SCE’s largest and most important assets.22

SCE has approximately 27,000 towers across SCE’s service territory including out-of-state inter-ties. 23

These structures and lattice towers are mostly comprised of galvanized, painted steel and typically range 24

from 50 to 300 feet in height. Many of these structures were built between 1950 and 1990, while others 25

in the system even predate 1950. In 2020, 93% of SCE’s tower portfolio will be 30 years or older and 26

subject to some level of corrosion. Corrosion has been observed particularly in towers where the 27

protective paint coating has deteriorated. Once a galvanized tower begins to corrode, the corrosion 28

advances more quickly. 29

27 Refer to WP SCE-02, Vol. 02A, pp. 28-29 – Non-HFRA Aerial Inspection Maintenance Costs.

31

While some towers are identified for remediation, an assessment and 1

testing program will be implemented annually to identify the total scope of remediation work. These 2

assessments and tests will be above and below ground. Without mitigation, especially in more extreme 3

weather areas, SCE’s lattice towers will continue to corrode. As shown in SCE’s 2018 RAMP Report, 4

Appendix B, tower failure presents a public safety and reliability risk. 5

(2) Basis for Capital Expenditure Forecast6

Because remediation activities for tower corrosion can lead to an7

immediate life extension for up to 25 years for a failing asset, assessment and remediation costs are 8

treated as capital. Figure II-12 provides the recorded (2014-2018) and the forecast (2019-2023) costs for 9

the transmission tower corrosion program. 10

Figure II-12 Transmission Tower Corrosion

CET-PD-IR-TS Recorded 2014-2018/Forecast 2019-2023


SCE’s forecast for this activity is based on unit costs and scope estimates 11

from SCE engineering and an internal pilot program, both for assessments and for remediation.28 12

28 Refer to WP SCE-02, Vol. 02A, pp. 65-66 – Tower Corrosion Program Forecast.

32

Assessment and testing practices will take place on all of SCE’s towers to identify further remediation 1

needs. Assessment costs are for bore scope, ultrasonic, and engineering assessments. Bore scope and 2

engineering assessments are performed on transmission towers, while ultrasonic testing is used for 3

tubular steel poles (TSPs). Using 2018 pilot costs for unit costs estimates, SCE forecasts $2.800 million 4

and $2.779 million for bore scope/ultrasonic tests and engineering assessments, respectively. This is 5

illustrated in Table II-11 below, which shows the costs for 2021. 6

For remediations, SCE has known project scope and anticipated scope29 7

that will arise from forthcoming assessments and testing. Combining some towers and 15% of 2021 8

assessments scope, SCE forecasts 130 footing repairs and 75 tower coating repairs for Test Year 2021. 9

To forecast 2021 Test Year expenses, SCE applied unit costs developed from vendor information and 10

historical costs to the number of forecast repairs. This is illustrated in Table II-11 below, which shows 11

the costs for 2021. This is illustrated in Table II-11 below. 12

Table II-11 Tower Corrosion Unit-Based 2021 Forecast

(Nominal $000)

While SCE acknowledges the significance of this forecast, SCE is 13

appropriately focusing on remediation efforts in order to avoid the substantial cost impacts of a complete 14

tower replacement program. 15

2. Telecommunication Capital Maintenance 16


Similar to telecom O&M maintenance, telecom capital maintenance includes the 18

costs to remove, replace, and retire aging telecom assets. This capital maintenance is driven by 19

conditions observed in the field. Breakdown replacements are initiated when equipment fails in-service, 20

29 Based on a 15% find rate for assessments that will be completed. See work papers for details. Towers that

will be replaced or remediated through other programs are not considered in this scope.

Activity Cost Per 2021 Scope 2021 Forecast

Bore Scope and UT Test 7$ 400 2,800$

Testing and Engineering 3$ 926 2,779$

Grillage Footings 142$ 130 18,460$

Tower Coatings 80$ 75 6,000$

30,039$ Total 2021 Forecast

33

equipment failure is imminent, or possible safety issues are identified. If aging telecom assets are left to 1

operate until failure, repairs are often more costly and disruptive to service. Telecommunication capital 2

maintenance includes telecom claim and storm activities. 3

b) Basis for Capital Expenditure Forecast4

Figure II-13 provides the recorded (2014-2018) and the forecast (2019-2023)5

costs for the telecommunication capital maintenance program. 6

Figure II-13 Telecommunication Capital Maintenance30

Multiple WBS Elements31 Recorded 2014-2018/Forecast 2019-2023


SCE expects that the level of work performed in 2018 to be indicative of the work 7

to be performed in the 2019-2023 period. In addition, because of the accounting changes previously 8

discussed in Section II.B.3, recorded costs for 2014-2017 should not be used to inform the forecast for 9

this activity. As a result, SCE uses 2018 recorded costs as the basis of the 2019-2023 forecast. 10

30 Refer to WP SCE-02, Vol. 02A, pp. 67-68 – Capital Detail by WBS for Telecommunication Maintenance. 31 WBS Elements Include: CET-PD-CL-TC, CET-PD-ST-TS, CET-PD-IR-TG, CET-PD-BM-TU, CET-PD-

CR-TR.

34

3. Transmission Claims 1


Transmission Claims captures the expenditures associated with casualty damage 3

to Transmission facilities, such as cars hitting and damaging poles. Claim damage events are random 4

and are beyond SCE’s control. Claims work is performed to repair or replace damaged facilities, restore 5

service, and return the system to normal operating conditions. The costs recorded to this activity are 6

almost entirely in response to pole and tower damage, or wire down events caused by third parties. 7

These are emergency situations that must be addressed to mitigate public safety issues and to restore 8

power. 9

b) Basis for Capital Expenditure Forecast 10

Figure II-14 provides the recorded (2014-2018) and the forecast (2019-2023) 11

costs for transmission claims. 12

35

Figure II-14 Transmission Claims32

CET-PD-CL-TC Recorded 2014-2018/Forecast 2019-2023


Because claim expenditures are outside of SCE’s control and vary significantly 1

from year-to-year, SCE uses a five-year average to forecast these expenditures for 2019-2023. 2

According to D.89-12-057 and D.04-07-022, the CPUC stated that for those activities which have 3

significant fluctuations in recorded expenses from year-to to-year, or expenses that are influenced by 4

external forces beyond SCE’s control, a five-year average of recorded expenses is appropriate as a 5

forecast basis. 6

32 Refer to WP SCE-02, Vol. 02A, pp. 69-70 – Capital Detail by WBS for Transmission Claims.

36

D. O&M and Capital Expenditures -- Transmission Line Rating Remediation (TLRR) 1

Program 2

1. Work Description and Need 3

SCE conducted a Light Detection and Ranging (LiDAR) study to identify transmission 4

lines potentially in violation of GO 95 Table 1.33 This study was launched in 2006 and initial results 5

were provided to the North American Electric Reliability Corporation (NERC) in 2011. NERC and the 6

Western Electricity Coordinating Council (WECC) then requested SCE to add 115kV radial data to its 7

LiDAR analysis. The studies of the radial lines were completed and conveyed to NERC in 2013. 8

As part of the study, SCE completed its initial survey of all its CAISO-controlled 9

transmission lines built before 2005. Based on the results of the survey, SCE prioritized the transmission 10

line discrepancies that require line clearance remediation. A discrepancy is any condition found in the 11

field requiring remediation to meet GO 95 requirements during peak loading conditions. Discrepancies 12

have been prioritized based on criteria such as line sag when operating at or below 130 degrees 13

Fahrenheit, and potential risk to public safety and system reliability based on the location of the span, 14

terrain, encroachment type, and extent of deviation from standards. The study prioritized the 15

discrepancies within a span into six levels, with A1 being the highest priority, followed by A2, A3, B1, 16

B2, and B3. 17

Radial line discrepancies increased SCE’s total number of discrepancies to 11,783. As 18

agreed to by SCE and NERC/WECC, Bulk Electric System (BES) discrepancies are to be remediated by 19

2025 and all radial facilities are to be remediated by 2030. Through the first quarter of 2019, the TLRR 20

program has remediated 1,762 discrepancies, cleared 1,060 as no violation by SCE engineering 21

(meaning reassessment determined there was no actual violation), and had 634 cleared by other 22

programs or projects. This leaves 8,327 of the 11,783 discrepancies to be remediated. Initially, the study 23

prioritized the discrepancies into six levels and the focus was to remediate in order of highest priority. 24

Currently, all discrepancies are evaluated on an entire circuit basis, to allow for a holistic and effective 25

remediation strategy. 26

As discrepancies are reviewed for scoping, remediation work is classified as an O&M or 27

capital project based on established capitalization rules. Typically, O&M remediation work includes 28

33 GO 95 Table 1, “Basic Minimum Allowable Vertical Clearance of Wires above Railroads, Thoroughfares,

Ground or Water Surfaces; Also Clearances from Poles, Buildings, Structures or Other Objects.”

37

such things as re-tensioning circuits, re-framing towers, and grading the land under a transmission line. 1

Capital remediation work includes such things as replacing towers and poles, raising existing towers and 2

points of connection, and re-conductoring existing conductors. 3

2. Basis for O&M Forecast4

Figure II-15 provides the recorded (2014-2018) and the forecast (2019-2021) O&M costs5

for the TLRR program. 6

Figure II-15 Transmission Line Rating Remediation O&M Expense34


Variances in historical O&M costs are due to the project-based nature of the TLRR 7

program. Some years have more projects approved and completed than other years. In order to meet 8

compliance dates, SCE is planning to increase TLRR O&M work during this GRC cycle. SCE has 9

prioritized O&M TLRR remediations on a project basis and used engineering and program management 10

34 Refer to WP SCE-02, Vol. 02A, pp. 71-77 – O&M Detail for Transmission Line Rating Remediation (TLRR).

38

estimates to develop forecast costs for Test Year 2021.35 Because the TLRR O&M forecast is based on 1

known project scope, recorded costs are not an appropriate basis for SCE’s forecast. 2

3. Basis for Capital Expenditure Forecast3

Figure II-16 provides the recorded (2014-2018) and the forecast (2019-2023) capital4

costs for the TLRR program. 5

Figure II-16 Transmission Capital Line Rating Remediation36

CET-PD-OT-PJ Recorded 2014-2018/Forecast 2019-2023


Most projects and associated costs are FERC jurisdictional. Each project in the 6

remediation plan is reviewed under CPUC General Order No. 131-D (GO131D), which defines the rules 7

relating to the planning and construction of electric facilities. Some projects fall under the exemptions 8

listed in GO131D Section III.B.1 while others will require full permitting and become licensing projects. 9

35 Refer to WP SCE-02, Vol. 02A, WP, pp. 78-79 – Transmission Line Rating Remediation (TLRR) O&M Project Forecast.

36 Refer to WP SCE-02, Vol. 02A, pp. 80-103 – Capital Detail by WBS for Transmission Capital Line Rating Remediation (TLRR).

39

Field visits and in-office analyses are completed for all line discrepancies to determine 1

remediation scoping at the circuit level. These projects are placed into a long-range plan, which 2

evaluates project impacts such as outage constraints, resource limitations, agency engagement, 3

permitting, and wildfire mitigation efforts. 4

Variances in historical capital costs are due to the project-based nature of the TLRR 5

program. Capital costs from 2014-2019 reflects the typical lifecycle of capital projects, which includes 6

identification and planning in earlier years and increased execution in later years. In order to meet 7

compliance dates, SCE is planning to increase TLRR capital work during this GRC cycle. SCE has 8

prioritized capital TLRR remediation on a project basis and used engineering and program management 9

estimates to develop forecast costs.37 10

37 Refer to WP SCE-02, Vol. 02A, pp. 104-106 – Transmission Line Rating Remediation (TLRR) Capital Project Forecast.

40

III. 1

CAPITAL-RELATED EXPENSE & OTHER 2

A. Overview3

This section describes O&M costs for transmission support activities and capital costs for4

emergency equipment and tools and work equipment incurred in support of SCE’s transmission grid. 5

Additional transmission capital-related expenses and other activities such as line rents, work order-6

related expenses, and write-offs are discussed in SCE-02, Vol. 7. 7

B. O&M Forecast – Capital-Related Expense & Other8

1. Transmission Support Activities9

a) Work Description and Need10

SCE performs several miscellaneous transmission-related work activities,11

including reviewing external party uses of transmission rights-of-way, maintaining record logs and 12

compiling statistical data for transmission’s maintenance and inspection program, and preparing detailed 13

maps. In addition to these activities, other utility expense activities include miscellaneous IT expenses, 14

database maintenance, and utility bills. This sections also includes forecasts for SCE’s informational 15

meetings, where transmission personnel such as patrolmen and linemen charge their time for attending 16

company live streams, grid-wide meetings, or other local meetings that require their attendance. 17

Encroachments are improper uses of transmission rights-of-way by a person or 18

entity not authorized to use the property. If not resolved, encroachments can cause potential safety 19

and/or reliability issues. To prevent encroachments, SCE reviews external proposals for uses of 20

transmission rights-of-way to confirm that any such uses do not result in safety, compliance, or asset 21

reliability risks. 22

SCE must record compliance-based activities and document the inspection and 23

repair of facilities. Detailed inspection and maintenance records are kept for each line and for each 24

structure on those lines. Records serve as both a compliance document and historical activity record, 25

documenting all work performed on each line. These logs also record conditions and activities within 26

SCE’s rights-of-way. 27

Statistical data is used to determine expected performance of components and 28

circuits based on uses and prevailing conditions under which the component, structure, or line is 29

installed. This data assists SCE in properly designing the transmission system to maximize performance 30

41

and reduce future maintenance expenses. Maps are prepared for many uses, such as to show the location 1

of electrical assets, and identify and determine right-of-way boundaries, encroachments, and infractions. 2

b) Scope and Forecast Analysis3

Figure III-17 provides the recorded (2014-2018) and the forecast (2019-2021)4

costs for the transmission O&M support activities. 5

Figure III-17 Transmission Support Activities38


(1) Historical Variance Analysis6

Accounting practices for transmission support activities have changed7

significantly over the past five years. Because of the “catch-all” nature of this activity, several different 8

sub-activities have been added and/or removed. As such, recorded expenses for years 2017 and 2018 9

most closely match current accounting practices, and a stabilized trend has emerged. 10

38 Refer to WP SCE-02, Vol. 02A, pp. 107-113 – O&M Detail for Transmission Support Activities.

42

(2) Forecast 1

SCE expects the needs driving this work area to continue at levels 2

consistent with those experienced in 2018. In D.89-12-057, and subsequently in D.04.07-022, the CPUC 3

stated if recorded expenses have shown a trend in a certain direction over three or more years, the last 4

recorded year is an appropriate baseline estimate. Accordingly, SCE uses 2018 recorded costs as the 5

basis for the 2021 Test Year forecast. 6

C. Capital Expenditures – Capital Related Expense & Other 7

1. Emergency Equipment 8


In this program, SCE identifies, purchases, and maintains emergency spare parts 10

for the transmission grid. Some of this equipment has long procurement lead times, so SCE maintains an 11

inventory on hand in order to avoid delays in responding to emergencies and outages. Examples of 12

equipment maintained in inventory include poles, steel bundles for towers, underground cable, and 13

overhead conductor. 14

b) Basis for Capital Expenditure Forecast 15

Figure III-18 provides the recorded (2014-2018) and the forecast (2019-2023) 16

costs for the transmission emergency equipment program. 17

43

Figure III-18 Transmission Emergency Equipment39

CET-PD-OT-TP Recorded 2014-2018/Forecast 2019-2023


Historical charges for this activity vary due to two reasons. In 2014, costs were 1

high because SCE was in the process of starting up the program and acquiring spare parts. Annual 2

negative amounts can occur, as in 2015, if spare parts are not replaced in the year that they are used. 3

SCE forecasts emergency equipment costs based on management judgment of the estimated incremental 4

costs to maintain inventory at current levels, which includes the rotation of inventory, such as cable, 5

with finite shelf-life. This approach was used in SCE’s 2018 GRC and the associated forecast was 6

authorized by the Commission.40 7

2. Tools and Work Equipment8

a) Work Description and Need9

This activity includes costs for acquiring and retiring portable tools and work10

equipment that cost a minimum of $1,000. SCE purchases new tools and equipment as older tools 11

39 Refer to WP SCE-02, Vol. 02A, pp. 114-115 – Capital Detail by WBS for Transmission Emergency Equipment.

40 See D.19-05-020, p. 69.

44

become obsolete or there are advancements in tool technologies. Examples of tools included in this 1

category are electric, pneumatic and hydraulic power tools, electric generators, cable pulling equipment, 2

portable water pumps, gas/oxygen monitors, air compressors, and compression tools used on high 3

voltage electrical connections. 4

b) Basis for Capital Expenditure Forecast5

Figure III-19 provides the recorded (2014-2018) and the forecast (2019-2023)6

costs for the transmission tools and work equipment program. 7

Figure III-19 Transmission Tools and Work Equipment41

CET-PD-OT-TT Recorded 2014-2018/Forecast 2019-2023


Overall, costs for transmission tools and work equipment vary by year depending 8

on the number of replacements needed due to retirements of broken or worn-out items. 2014 and 2015 9

had relatively high recorded costs because of infrequent, expensive tool purchases, namely cable pullers 10

and cable strippers. Those years also included the purchase of new tools and equipment for SCE’s new 11

41 Refer to WP SCE-02, Vol. 02A, pp. 116-117 – Capital Detail by WBS for Transmission Tools and Work Equipment.

45

Human External Cargo (HEC) program.42 Because this program was just getting underway, new tools 1

and equipment were required, like HEC safety helmets. 2

Changes to regulatory specifications can also drive costs, as was the case in 2015, 3

and to a lesser extent 2016, when SCE upgraded personal fall-restraint-related equipment for its lineman 4

in anticipation of the update to the OSHA Fall Protection Standard for General Industry Employers, 5

which was scheduled to be adopted in 2017.43 Because these regulatory changes are foreseeable and 6

SCE is not aware of any upcoming changes, and because of the unusual, one-time tool costs in 2014 and 7

2015, SCE forecasts tools and work equipment costs using a three-year historical average of 2016-2018. 8

42 SCE’s HEC program is a helicopter work method in which an HEC-trained QEW is flown (via a long line or

heli-seat) underneath an SCE helicopter in order to access or work on SCE assets. 43 Updates to Electric Safety Orders 2940.6 and 2320.7 that went into effect April 1, 2018.

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