Company: Southern California Gas Company (U904G) Proceeding: 2016 General Rate Case Application: A.14-11-004 Exhibit: SCG-239-Garcia

SOCALGAS

REBUTTAL TESTIMONY OF RENE F. GARCIA

(ADVANCED METERING INFRASTRUCTURE POLICY)

June 2015

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Doc# 297610

TABLE OF CONTENTS

I. INTRODUCTION................................................................................................................ 1 II. REBUTTAL TO PARTIES’ O&M PROPOSALS ........................................................... 2

A. SoCalGas proposes to file a Tier 2 advice letter in lieu of a Tier 3 advice letter shall the need to revise the per meter benefit arise. .................................................... 2

B. ORA mistakenly claims that SoCalGas can reallocate meter reading funding for MSA inspections; AMI-related meter reading savings are already accounted for in customer rates. ............................................................................................................... 3

III. REBUTTAL TO PARTIES’ CAPITAL PROPOSALS ................................................... 4 A. SoCalGas’ size 1-3 replacement meter purchases for 2014-2016 should be

authorized as requested since ORA ignored the impacts of AMI during Base Year (“BY”) 2013. ................................................................................................................... 4

IV. CONCLUSION .................................................................................................................... 7 APPENDIX A ............................................................................................................................ A-1

i Doc# 297610

SOCALGAS REBUTTAL TESTIMONY OF RENE F. GARCIA 1

(ADVANCED METERING INFRASTRUCTURE POLICY) 2

SoCalGas and Party Comparison 3

I. INTRODUCTION 4

Office of Ratepayer Advocates (“ORA”) issued its revised report on SoCalGas Advanced 5

Metering Infrastructure (“AMI”) Policy on May 11, 2015.1 The following is a summary of 6

ORA’s position(s): 7

• ORA agrees with SoCalGas’ request to “extend the Advanced Metering Infrastructure 8 Balancing Account (“AMIBA”) beyond project completion through 2018 or until the 9 full AMI costs and benefits can be reflected in a subsequent GRC”;2 and 10

• ORA recommends that the California Public Utilities Commission (“Commission”) 11 require SoCalGas to file a Tier 3 advice letter in the unlikely event the Commission 12 adopts Test Year (“TY”) 2016 General Rate Case (“GRC”) operating and 13 maintenance (“O&M”) expense levels that reflect AMI benefits already included in 14 the AMI revenue requirement.3 15

ORA also issued its report on SoCalGas’ Customer Services and Gas Distribution on April 24, 16

2015.4, 5 Though these reports do not explicitly discuss AMI, the following is a summary of 17

ORA’s positions as it relates to SoCalGas’ AMI Policy. 18

• ORA claims that SoCalGas should “incorporate/reallocate” meter reading savings in 19 order to fund Department of Transportation (“DOT”) mandated meter set assembly 20 (“MSA”) inspections and associated call volume increases in the TY 2016;6 and 21

• ORA claims that SoCalGas’ capital expenditure forecast request for meter 22 replacements is “excessive and inadequately supported.”7 23

24

1 Exhibit ORA-23-A Post-Test Year Ratemaking (“PTYR”) and SCG AMI, (“ORA-23-A”). 2 Exhibit ORA-23-A, at p.23, lines 5-7. 3 Exhibit ORA-23-A, at pp.24-25, lines 23,1-2. 4 Exhibit ORA-13 Customer Services (“ORA-13”). 5 Exhibit ORA-10 SoCalGas Gas Distribution (“ORA-10”). 6 Exhibit ORA-13, at p.60, lines 14-17 “SCG’s testimony does not discuss why it is not able to incorporate/reallocate embedded costs associated with activities performed by its meter reader positions (that will be phased out and have historically performed DOT MSA inspections) to fund its FSAs that will take over the compliance work.” and Exhibit ORA-13, at p. 77, lines 5-16. 7 Exhibit ORA-10, at p.62, lines 4-5.

RFG-1 Doc#

II. REBUTTAL TO PARTIES’ O&M PROPOSALS 1

A. SoCalGas proposes to file a Tier 2 advice letter in lieu of a Tier 3 advice 2 letter shall the need to revise the per meter benefit arise. 3

ORA agreed with SoCalGas’ request to extend the AMIBA beyond project completion 4

through 2018 or until the full AMI costs and benefits can be reflected in a subsequent GRC.8 5

ORA also agrees with SoCalGas’ proposal to file an advice letter seeking to revise the per meter 6

benefit used to calculate AMI benefits “in the unlikely event the Commission adopts TY 2016 7

O&M expense levels that reflect AMI benefits already included in the AMI revenue 8

requirement.” 9 9

However, ORA recommends that the Commission require SoCalGas to file a Tier 3 10

advice letter if the situation were to arise.10 SoCalGas disagrees with ORA’s recommendation to 11

file a Tier 3 advice letter and requests that the Commission allow SoCalGas to file a Tier 2 12

advice letter instead. Advice Letter (“AL”) 4110,11 a Tier 1 advice letter, established the 13

AMIBA, updated the revenue requirement and modified existing tariffs to implement Decision 14

(“D”) 10-04-027 per Ordering Paragraph (“OP”) 7. AL 4110 was filed after an extensive AMI 15

business case proceeding which entailed thorough Commission review and an intervening 16

process including discovery, data requests and hearings prior to being authorized in D.10-04-17

027. The Commission determined that AL 4110 was appropriate for Tier 1 advice letter filing 18

and any advice letter submitted for purposes to revise the per meter benefit would simply be a 19

modification of what was already submitted and approved in 2010. Use of a Tier 2 advice letter 20

to extend the AMIBA is appropriate because revising the AMIBA would not result in a rate 21

increase but would instead offset costs not authorized in the TY 2016 GRC decision that would 22

be associated to AMI benefits.12 23

8 Exhibit ORA-23-A PTYR and SCG AMI Policy, at p.5, lines 15-17. 9 Exhibit ORA-23-A, at p. 24, lines 19-23. 10 Exhibit ORA-23-A, at pp.24-25, lines 23, 1-2. 11 AL 4110, U 904 G, effective April 8, 2010. AL 4110 was approved by letter dated August 4, 2010. 12 SoCalGas assumes that ORA recommends filing a Tier 3 advice letter under the rules established in GO 96-B 5.3 (4) where the change would result in an increase to rates. Except for a change that may be submitted by advice letter pursuant to Industry Rules 5.1(1), 5.1(3), 5.1(7), 5.2(1), or 5.2(2), a change that would result in an increase to a rate or charge or a more restrictive term or condition, which change has been authorized by statute or by other Commission order to be requested by advice letter.

RFG-2 Doc#

B. ORA mistakenly claims that SoCalGas can reallocate meter reading funding 1 for MSA inspections; AMI-related meter reading savings are already 2 accounted for in customer rates.13 3

Once AMI deployment is completed, the meter reading function will be all but 4

eliminated.14 During deployment, costs that are “phased out” that are associated to the attrition 5

of the meter reading workforce are tracked as benefits in the AMIBA.15 ORA claims that 6

SoCalGas should reallocate meter reading savings in order to fund DOT MSA inspections in the 7

TY 2016, stating: 8

SCG’s testimony does not discuss why it is not able to incorporate/reallocate 9 embedded costs associated with activities performed by its meter reader positions 10 (that will be phased out and have historically performed DOT MSA inspections) 11 to fund its FSAs that will take over the compliance work.16 12

ORA also states that meter reading funding can be re-allocated to SoCalGas’ CCC – Operations 13

to cover costs of incremental calls resulting from the MSA inspection program, stating: 14

Additional funding over 2013 expense levels is not required for this activity. 15 SCG’s Meter Reading Department currently handles DOT MSA inspection 16 activity. SCG plans to eliminate its Meter Reading department, and the ratepayer 17 funding currently used by this department can be reallocated to SCG’s CCC – 18 Operations when the work is transferred to CCC – Operations.17 19

As AMI benefits associated with the meter reading function are already accounted for in 20

customer rates, meter reading funding is not available for SoCalGas to reallocate to MSA 21

inspections. ORA’s recommendation to reallocate meter reading funding that is already 22

accounted for as benefits in customer rates would essentially “double count” those savings. In 23

D.13-05-010, the Commission concluded that adopting certain O&M forecasts which already 24

incorporate AMI operating benefits would “result in a double reduction to SoCalGas’ revenue 25

requirement.”18 In addition, ORA’s recommendation contradicts Witness C. Tang’s position in 26

Exhibit ORA–23-A where it was acknowledged that it would be “unlikely” that the Commission 27

13 As a result of D.10-04-027, authorized project costs of $1.05 billion and O&M benefits of $184.8 million are currently being collected in rates, while actual costs and benefits are recorded in the AMIBA. 14 By 2018, SoCalGas customers, except those customers enrolled in the Opt-Out Program, will receive monthly bills based on AMI’s automated meter reads and no longer require a manual read done by a meter reader. 15 Exhibit ORA-13, at p. 60, line 16. 16 Exhibit ORA-13, at p. 60, lines 14-17. 17 Exhibit ORA-13, at p. 77, lines 9-14. 18 D.13-05-010, at p. 508.

RFG-3 Doc#

would adopt TY 2016 O&M expense levels that reflect AMI benefits already included in the 1

AMI revenue requirement.19 Hence, benefits associated with AMI, including meter reading 2

benefits, are already embedded in rates and therefore cannot be considered available funding in 3

TY 2016 GRC. To further clarify, the MSA inspection related costs forecasted by Witness Sara 4

Franke in Exhibit SCG-10 and by Witness Evan Goldman in Exhibit SCG-11 are incremental to 5

costs already authorized in D.10-04-027. As stated by Witness Franke, the “additional costs are 6

associated with performing required MSA inspections, post-AMI implementation.”20 7

III. REBUTTAL TO PARTIES’ CAPITAL PROPOSALS 8

A. SoCalGas’ size 1-3 replacement meter purchases for 2014-2016 should be 9 authorized as requested since ORA ignored the impacts of AMI during Base 10 Year (“BY”) 2013. 11

In D.10-04-027, AMI was authorized funding to replace 650,000 “accelerated” PMCs 12

during the project deployment period, through 2017. Accelerated PMCs are meters that would 13

normally have been replaced in the five-year period after AMI deployment (2018 through 2022). 14

By accelerating PMCs into the deployment period, SoCalGas avoids additional costs related to 15

revisiting the retrofitted meter (i.e. the existing meter in the field with a gas meter module 16

installed on it during deployment) to install a replacement meter (with a module married to it) 17

within five years after the AMI deployment period. 18

During the AMI deployment period Gas Distribution must also purchase 650,000 meters 19

for PMCs, as requested in TY 2012 GRC and as is being requested in TY 2016 GRC, i.e. 20

“business as usual” meters. Since funding for "business as usual" meter installations and 21

replacements is forecasted in a GRC, these meters would have been installed or replaced absent 22

AMI deployment. Since the two GRC periods overlap with the AMI deployment period, the 23

650,000 PMC meters equate to 130,000 meters per year as requested in TY 2012 GRC and 24

authorized in D.13-05-010 as well as 130,000 meters per year as requested in TY 2016 GRC. In 25

addition, RMCs continue to be worked by SoCalGas’ Customer Services Field and funded by 26

Gas Distribution. RMC purchases, as authorized in D.13-05-010, and as requested in TY 2016 27

GRC equate to a total of 250,000 meters or 50,000 meters per year for the five-year deployment 28

period. 29

19 Exhibit ORA-23-A, at p. 24, lines 19-23. 20 SCG-10, at SAF-10, lines 23-26.

RFG-4 Doc#

In Exhibit ORA-10, ORA takes issue with SoCalGas’ capital forecast for meter purchases 1

due to relatively low activity in BY 2013. ORA claims that SoCalGas’ proposal, which is “84% 2

above the 2013 recorded level, is excessive and inadequately supported.”21 ORA states: 3

In the base year of 2013, SoCalGas replaced less than 100,000 meters from both 4 the PMC and RMC programs, yet for the test year period SoCalGas proposes to 5 purchase almost 200,000 meters, close to twice the number of meters replaced in 6 2013.22 7

SoCalGas disagrees with ORA’s position. Compared to prior GRC periods, annual meter 8

purchases are lower for regular operations in 2013. However, 2013 represents the first full year 9

of the AMI deployment. In addition, in previous data request responses to ORA, SoCalGas 10

explained the relationship between SoCalGas’ AMI and GRC funded meter purchases23 where 11

size 1-3 meter purchases and replacement timelines for regular operations are affected by the 12

AMI project deployment.24 13

For example, as explained in response to ORA-SCG-DR-12-DAO, Question 5.a,25 the 14

majority of the small meters that were purchased in 2013 were funded by AMI. While AMI 15

funded more meters in 2013 and the GRC funded fewer meters in 2013, purchase quantities will 16

ultimately balance out during the full AMI deployment period (2013-2017). The response to 17

Question 4.a in ORA-SCG-DR-12-DAO further explains the reason as to why there were fewer 18

GRC funded meters in 2013, as stated: 19

Note, in addition to CSF-completed small meter replacements, the Advanced 20 Metering Infrastructure (AMI) project team has also been performing small meter 21 replacements in order to fully integrate with the scheduling and routing of AMI 22 deployment. The number of small meter changes completed by CSF in 2013 23 excludes a total of 241,041 small meter changes that were completed as part of 24 SoCalGas’ Advanced Metering Infrastructure (AMI) implementation. 25

In order to adhere to the AMI implementation schedule, beginning in 2013, the 26 AMI project assumed responsibility for above-ground PMCs, including both 27 planned and accelerated meter changes, and Customer Service Field (“CSF”) 28 shifted its focus to curb meter changes. This trade-off (i.e., the AMI project team 29 focusing on above-ground meters and CSF focusing on curb meters) enabled a 30

21 Exhibit ORA-10, at p. 62, lines 3-4. 22 ORA-10, p. 60, lines 12-15. 23 See SoCalGas’ response to ORA-SCG-DR-064-DAO, Question 29 in Appendix A, Attachment A1 and ORA-SCG-DR-064-DAO, Question 42 in Appendix A, Attachment A2. 24 Size 1-3 meters include planned meter changes (“PMCs”) and routine meter changes (“RMCs”). 25 See SoCalGas’ response to ORA-SCG-DR-012-DAO, Question 5.a in Appendix A, Attachment A3.

RFG-5 Doc#

better match between the work and employee skill sets. Over the course of the 1 AMI deployment period (2013-2017), all GRC- and AMI-funded PMCs will be 2 completed.26 3

Although AMI purchased the majority of the size 1-3 meters in 2013, AMI will fund no 4

more than the 650,000 meters for accelerated PMCs as authorized in D.10-04-027 and the GRC 5

will fund the purchase of 650,000 “current” year PMCs over the five-year deployment period. 6

Table 1 below, as provided in the response to ORA-SCG-DR-012-DAO, Question 5.a, illustrates 7

the authorized or forecasted small meter replacements by year. 27 8

Table RFG-1 9

Authorized or Forecasted Small Meter Replacements 10 11

2013 2014 2015 2016 2017 Total GRC- PMCs 130,000 130,000 130,000 130,000 130,000 650,000 GRC-RMCs 50,000 50,000 50,000 50,000 50,000 250,000 GRC Total 180,000 180,000 180,000 180,000 180,000 900,000 AMI-Accelerated PMCs (2018-2022) 130,000 130,000 130,000 130,000 130,000 650,000

As provided in ORA-SCG-DR-012-DAO, Question 5.a, Table 2 below illustrates the actual and 12

estimated distribution of meter purchases during the AMI deployment period. SoCalGas would 13

like to clarify that the 91,107 GRC funded meters in 2013 as provided in ORA-SCG-DR-012-14

DAO, Question 5.a represents size 1-3 RMCs and PMCs as well as size 4+ PMCs. In Exhibit 15

ORA-10, Table 10-35, the 91,107 meters for 2013 suggests that it only includes size 1-3 meters 16

and excludes size 4+ PMCs. 17

Table RFG-2 18

Actual or Estimated Small Meter Purchases for Meter Replacements, by Year 19 20

Actual 2013

Estimated 2014 2015 2016 2017 Total

GRC Funded 91,107 160,000 216,298 216,298 216,298 900,000 AMI Funded 288,232 195,000 166,768 - - 650,000 *GRC meters purchased in 2013 include size 4 meters which are typically purchased in small volumes

26 See SoCalGas response to ORA-SCG-DR-012-DAO, Question 4.a in Appendix A, Attachment A4. 27 See SoCalGas’ response to ORA-SCG-DR-012-DAO, Question 5.a in Appendix A, Attachment A3.

RFG-6 Doc#

Subsequently, ORA-SCG-DR-064-DAO was issued requesting 2014 meter purchases; SoCalGas 1

provided actual purchases at that time. Table 3 below is consistent with what was provided in 2

the response to ORA-SCG-DR-064-DAO, Question 29.28 3

Table RFG-3 4

Meter Purchases in 2014 5 6

Provided in the table in the response to ORA-SCG-DR-064-DAO, Question 29

GRC Funded-

New Business

Meter Sets

GRC Funded- Historical PMCs

and RMCs (Meters Purchased in 2014 Less New

Meter Sets)

GRC Funded Total Meters

Purchased

Size 1 - 3 Meters 29,934 191,945 221,879 Size 4+ Meters 2,524 7,376 9,900 Total 32,458 199,321 231,779

As illustrated in Table 3, GRC-funded size 1 through 3 meter purchases for PMCs and RMCs in 7

2014 exceed the GRC forecast of 180,000 annual meter purchases which is consistent with 8

SoCalGas’ response to ORA-SCG-DR-012-DAO, Questions 4.a. and 5.a.29 SoCalGas is also on 9

track to purchase the amount of meters authorized in D.10-04-027 for AMI. Ultimately, AMI 10

and GRC meter purchases will balance out by the end of the full AMI deployment period (2013-11

2017). Meaning, by the end of the AMI deployment, AMI will purchase 650,000 meters for the 12

“accelerated” PMCs and regular operations will purchase 650,000 meters for the “current year” 13

PMCs and 250,000 meters for RMCs. Therefore, the size 1 through 3 replacement meter 14

purchases requested by Witness Frank B. Ayala, Exhibit SCG-04, are consistent with planned 15

forecasts and ORA’s proposed disallowance should be rejected. 16

IV. CONCLUSION 17

SoCalGas appreciates ORA’s acceptance of the AMI Policy proposals. In the unlikely 18

event the Commission adopts TY 2016 O&M expense levels that reflect AMI benefits already 19

included in the AMI revenue requirement, SoCalGas requests authorization to file a Tier 2 20

Advice Letter. In addition, SoCalGas disagrees with ORAs recommendation in the Customer 21

28See SoCalGas response to ORA-SCG-DR-064-DAO, Question 29 in Appendix A, Attachment A1. 29 See Appendix A, Attachment A3 and Attachment A2.

RFG-7 Doc#

Services area, represented by Witness Sara Franke (Exhibit SCG-10) and by Witness Evan 1

Goldman (Exhibit SCG-11), to reallocate avoided meter reading funds to the proposed MSA 2

inspection program as meter reading benefits are already in rates and are not available for 3

reallocation. Moreover, doing so would result in a double counting of benefits and would 4

require an adjustment to the current AMIBA and benefits per meter calculation via advice letter. 5

Finally, SoCalGas rejects the suggested decrease in capital funding in the Gas Distribution area 6

for small meter replacements (sizes 1-3) since ORA ignored relevant and supporting facts 7

provided to them in Data Requests. As such, SoCalGas requests authorization of capital funding 8

for small replacement meters as presented in the Gas Distribution Testimony of Witness Frank 9

Ayala (Exhibit SCG-04). 10

This concludes my prepared rebuttal testimony. 11

RFG-8 Doc#

APPENDIX

TO

REBUTTAL TESTIMONY

OF RENE F. GARCIA

ON BEHALF OF SOCALGAS

ADVANCED METERING INFRASTRUCTURE POLICY

RFG-A-1

APPENDIX ATTACHMENTS

A. Responses to Data Requests

1. ORA-SCG-DR-064-DAO, Question 29

2. ORA-SCG-DR-064-DAO, Question 42

3. ORA-SCG-DR-012-DAO, Question 5.a

4. ORA-SCG-DR-012-DAO, Question 4.a

RFG-A-2

Attachment A1

ORA-SCG-DR-064-DAO, Question 29

RFG-A-3

ORA DATA REQUEST

ORA-SCG-DR-064-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS FINAL RESPONSE

DATE RECEIVED: FEBRUARY 12, 2015

DATE RESPONDED: MARCH 18, 2015

29. Referring to page 163 of the workpapers, please provide the number of meters purchased by

size for (i) installation at new customers’ premises, (ii) replacements due to meter accuracy,

age or operation, (iii) replacements due to a pre-determined replacement cycle based on

meter capacity, size, and performance.

SoCalGas Response:

The number of meters purchased is not tracked by the type of installation. An estimated

breakdown of the meter purchases by installation type is shown in the table below. This is the

same estimation method that was used for the historical meters in Supplemental Workpaper

SCG-FBA-CAP-SUP-009 beginning at page 171 of the capital workpapers exhibit SCG-04-

CWP_GDIST.

Meter Size New

Business

Meter Sets

Historical PMCs and RMCs

(Meters Purchased in 2014

Less New Meter Sets)

Total

Meters

Purchased

Size 1 - 3 Meters 29,934 191,945 221,879

Size 4+ Meters 2,524 7,376 9,900

Total 32,458 199,321 231,779

The numbers presented in the above table are those that are funded in the GRC. In addition,

294,583 small meters (above- ground and curb) and 2,248 size 4+ meters were purchased in

2014 that were funded by SoCalGas AMI. Please refer to the response to ORA-SCG-DR-012-

DAO, Question 5.a., for discussion of how SoCalGas is managing the purchase of small meters

during the AMI deployment period (2013-2017).

RFG-A-4

Attachment A2

ORA-SCG-DR-064-DAO, Question 42

RFG-A-5

ORA DATA REQUEST

ORA-SCG-DR-064-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS FINAL RESPONSE

DATE RECEIVED: FEBRUARY 12, 2015

DATE RESPONDED: MARCH 18, 2015

42. Provide the total amount of funding SoCalGas receives for AMI deployment each year from

2013-2017. Of this total, provide the annual amount received for meters and for regulators

broken down by labor and non-labor elements.

SoCalGas Response:

Prepared by AMI Policy Witness Rene Garcia (Exhibit SCG-39)

See attachment “ORA-SCG-DR-064-DAO-Q.42 Attachment.xlsx” for:

1. A high-level summary of SoCalGas’ funding for AMI deployment between 2010-2017

(Refer to the tab titled: ORA-SCG-DR-064-DAO Q42 Attach A);

2. The detailed funding by year authorized in SoCalGas AMI D.10-04-027 (Refer to the tab

titled: ORA-SCG-DR-064-DAO Q42 Attach B); and

3. The amount funded for meters and regulators for years 2013-2017, broken down by labor

and non-labor (Refer to the tab titled: ORA-SCG-DR-064-DAO Q42 Attach C).

The table below is a high-level summary of SoCalGas’ funding and the associated projected unit

counts for AMI deployment.

AMI Deployment Plan by

Unit Type

AMI Funding by Unit

Type - In 2013 $000s 4

In 2013 Direct Dollars

(with Vacation & Sick)

Total Total

AMI Module Purchases & Module Installations

Module Purchases (for both Field & Factory retrofits) 6,047,397 $300,174

Module Installation - Field Retrofit 3,695,441 $83,026

Module Installation - Factory Retrofit 2,351,956 $11,153

Meter Replacements Due to AMI Deployment 1 1,052,092 $160,931

"Business As Usual" Meter Installations/Replacements 2 1,299,864 $ -

Regulator Replacements 233,502 $19,591

Other AMI Funding (Network, Information Technology,

etc.) N/A $364,119

Total 5

$938,994

1 AMI requested and was approved funding for the cost of meters being replaced as a result of AMI

deployment that would not have been replaced otherwise

2 Funding for "Business As Usual" meter installations and replacements is forecasted in a GRC; these

meters would have been installed or replaced absent AMI deployment; e.g., growth meters, PMCs,

RMCs. Only the cost of the modules and the factory retrofit (i.e., the marrying of the communications

module to the meter) associated with these meters are included in AMI funding.

RFG-A-6

ORA DATA REQUEST

ORA-SCG-DR-064-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS FINAL RESPONSE

DATE RECEIVED: FEBRUARY 12, 2015

DATE RESPONDED: MARCH 18, 2015

Response to Question 42 (Continued)

3 AMI requested and was approved funding for regulators associated with the meter replacements being

performed as a result of AMI deployment; regulator replacements performed as a normal course of

business regardless of AMI deployment are forecast in a GRC.

4 Although ORA did not request approved funding for 2011-2012, it is included in this response in order

to tie to total approved funding for SoCalGas AMI per Decision 10-04-027.

5 In order to be comparable to the TY 2016 GRC, the amounts provided are shown in 2013 direct dollars

with Vacation and Sick, excluding overheads; whereas, the authorized $1.05 billion is in nominal dollars

with all overheads.

RFG-A-7

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ts 2

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-$

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-

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Reg

ulat

or R

epla

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ents

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-$

3,58

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19

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Oth

er A

MI F

undi

ng (N

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Info

rmat

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Tec

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ogy,

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,472

$

58

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$

50

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$

52

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$

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$

66,1

13$

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119

$

24

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$

58

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$

14

9,70

8$

17

6,88

9$

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2,29

9$

184,

283

$

16

3,13

7$

93

8,99

4$

1 AM

I req

uest

ed a

nd w

as a

ppro

ved

fund

ing

for t

he c

osts

of m

eter

s bei

ng re

plac

ed a

s a re

sult

of A

MI d

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ymen

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ld n

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aced

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ise

4 Alth

ough

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r 201

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t is i

nclu

ded

in th

is re

spon

se in

ord

er to

tie

to to

tal a

ppro

ved

fund

ing

for S

oCal

Gas

AM

I per

Dec

isio

n 10

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5 In

ord

er to

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para

ble

to th

e TY

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am

ount

s pro

vide

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e sh

own

in 2

013

dire

ct d

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rs w

ith V

acat

ion

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Sick

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ludi

ng o

verh

eads

; whe

reas

, the

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horiz

ed $

1.05

bill

ion

is in

nom

inal

dol

lars

with

all

over

head

s.

AM

I Dep

loym

ent P

lan

by U

nit T

ype

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ding

for "

Bus

ines

s As U

sual

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eter

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alla

tions

and

repl

acem

ents

is fo

reca

sted

in a

GR

C; t

hese

met

ers w

ould

hav

e be

en in

stal

led

or re

plac

ed a

bsen

t AM

I dep

loym

ent;

e.g.

, gro

wth

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ers,

PMC

s, R

MC

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nly

the

cost

of

the

mod

ules

and

the

fact

ory

retro

fit (i

.e. t

he m

arry

ing

of th

e co

mm

unic

atio

ns m

odul

e to

the

met

er) a

ssoc

iate

d to

thes

e m

eter

s are

incl

uded

in th

e A

dvan

ced

Met

er B

usin

ess C

ase.

3 AM

I req

uest

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nd w

as a

ppro

ved

fund

ing

for r

egul

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ocia

ted

with

the

met

er re

plac

emen

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eing

per

form

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s a re

sult

of A

MI d

eplo

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gula

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form

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s a n

orm

al c

ours

e of

bus

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s reg

ardl

ess o

f A

MI d

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t are

fore

cast

in a

GR

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Met

er R

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ents

Due

to A

MI D

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Met

er R

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ents

Due

to A

MI D

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AM

I Fun

ding

by

Uni

t Typ

e - I

n 20

13 $

000s

4

In 2

013

Dir

ect D

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rs (w

ith V

acat

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& S

ick)

OR

A-S

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42 A

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ork

pap

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Att

achm

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- S

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as A

pp

roved

Fundin

g 2

01

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7

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20

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20

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01

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01

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01

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er C

ou

nt

per

AM

I B

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nes

s C

ase

1,0

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6

1,3

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1,3

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,11

4

99

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6,0

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7

AM

I M

od

ule

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rch

ase

s &

Mod

ule

In

sta

lla

tion

s

Module

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has

es (

for

both

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ld &

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cto

ry r

etro

fits

)1

,04

0,7

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1,3

22

,80

6

1,3

43

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0

1,3

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,11

4

99

3,1

19

6,0

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7

-$

-$

50

,21

1$

65

,55

2$

67

,02

6$

67

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9$

50

,15

5$

30

0,1

74

$

Module

Inst

alla

tion -

Fie

ld R

etro

fit

59

2,0

56

84

4,2

69

86

0,7

17

86

2,2

77

53

6,1

22

3,6

95

,44

1

-$

-$

13

,30

2$

18

,96

8$

19

,33

8$

19

,37

3$

12

,04

5$

83

,02

6$

Module

Inst

alla

tion -

Fa

cto

ry R

etro

fit

44

8,6

62

47

8,5

37

48

2,9

23

48

4,8

37

45

6,9

97

2,3

51

,95

6

-$

-$

2,1

27

$

2,2

70

$

2,2

91

$

2,3

00

$

2,1

66

$

11

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3$

Ga

s M

eter

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eter

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Curb

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ers

34

,68

3

44

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4

44

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8

44

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4

33

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1,5

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-$

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$

11

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11

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8,7

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53

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Ab

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AG

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eter

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as A

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module

)2

4,9

29

35

,54

8

36

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1

36

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6

22

,57

4

15

5,5

97

-$

-$

2,8

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$

4,0

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$

4,1

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$

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$

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$

17

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8$

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ium

and L

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Met

er R

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1,0

43

1,3

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1,3

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1,3

50

99

5

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-$

-$

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$

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$

3,1

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$

15

,51

0$

Met

ers

Dam

aged

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ng M

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Inst

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req

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eter

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ge)

6,2

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38

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-$

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0$

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8$

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1$

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$

5-Y

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Post

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18

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PM

Cs)

13

0,0

00

13

0,0

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13

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13

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13

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65

0,0

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-$

-$

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14

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b-t

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96

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52

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-$

-$

29

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$

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In

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2

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62

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72

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73

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Oth

er A

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N/A

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24

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$

18

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$

93

8,9

94

$

1 A

MI

req

ues

ted a

nd w

as a

pp

roved

fundin

g f

or

the

cost

s of

met

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ng r

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ced a

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f A

MI

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ent

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hav

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ced o

ther

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e

3 A

MI

req

ues

ted a

nd w

as a

pp

roved

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g f

or

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tors

ass

oci

ated

wit

h t

he

met

er r

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ents

bei

ng p

erfo

rmed

as

a re

sult

of

AM

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loym

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reg

ula

tor

rep

lace

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ts p

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rmed

as

a norm

al c

ours

e of

busi

nes

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f A

MI

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ent

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20

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ponse

in o

rder

to t

ie t

o t

ota

l ap

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per

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5 In

ord

er t

o b

e co

mp

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o t

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TY

20

16

GR

C, th

e am

ounts

pro

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re s

how

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n 2

01

3 d

irec

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h V

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ion a

nd S

ick, ex

cludin

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s in

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n a

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nt

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nly

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e m

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ken

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013-

2017

2013

2014

2015

2016

2017

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as M

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RFG-A-10

Attachment A3

ORA-SCG-DR-012-DAO, Question 5.a

RFG-A-11

ORA DATA REQUEST

ORA-SCG-DR-012-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS RESPONSE

DATE RECEIVED: NOVEMBER 24, 2014

DATE RESPONDED: DECEMBER 15, 2014

5. Referring to page 171 of the workpapers, please provide the following:

a. An explanation for the significant increase from 91,107 meters SoCalGas replaced in

2013 and the utility’s forecast of 180,000 replacement each year from 2014-2016.

Please include any and all workpapers and/or calculations used to support SoCalGas’

forecasts.

b. Provide a breakdown of the 180,000 size 1-3 meter replacements planned for each

year from 2014-2016 for the (i) RMC and (ii) the PMC.

c. Did SoCalGas perform any replacement of size 4+ meters as part of its PMC

program? If yes, please provide the number of size 4+ meters replaced each year

from 2009-2014 YTD as part of the PMC program. If no, please explain why it has

not done so in previous years.

d. Did SoCalGas perform any replacement of size 1-3 meters as part of its PMC

program? If yes, please provide the number of size 1-3 meters replaced as part of its

PMC program. If no, please explain why it has not done so in previous years.

SoCalGas Response:

NOTE: This question raises issues that extend beyond the scope and subject matter expertise of

the Gas Distribution area. As stated on page FBA-125 of Exhibit SCG-04, “Field labor costs

associated with SoCalGas’ planned small meter replacement program are covered in the prepared

direct testimony of Sara Franke, Exhibit SCG-10.” As such, SoCalGas’ response has been

bifurcated as such:

response to 5a was prepared by the Customer Services Field and AMI Policy witnesses

(Sara Franke and Rene Garcia);

responses to 5b and 5d were prepared by Customer Services Field;

response to 5c was prepared by Gas Distribution.

Any further inquiries should therefore be addressed to the responsible witness areas.

RFG-A-12

ORA DATA REQUEST

ORA-SCG-DR-012-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS RESPONSE

DATE RECEIVED: NOVEMBER 24, 2014

DATE RESPONDED: DECEMBER 15, 2014

Response to Question 5.a.:

Prepared by Customer Services Field (SCG-10) and AMI Policy (SCG-39):

To clarify, the 91,107 meters shown in column [D] of Table 1 on page 171 of SCG-04-CWP

are the number of meters purchased in 2013 with GRC capital funding. This is different than

the number of small meters that were replaced in 2013. The number of meters replaced

varies from year to year but, on average, SoCalGas expects to incur the cost of replacing

approximately 180,000 meters per year, which consists of approximately 130,000 PMCs and

50,000 RMCs. The forecast is consistent with projected meter failure/replacement rates

adopted by the Commission in Decision 13-05-010.

As explained in response to question 4.a. above, the vast majority of small meters replaced in

2013 were performed by the AMI project team. In addition, the majority of the small meters

that were purchased in 2013 were funded by AMI. While AMI funded the purchase of more

meters in 2013 and the GRC funded fewer meters in 2013, the timing of the purchases will

ultimately balance out during the AMI deployment period (2013-2017) such that AMI will

fund only the AMI authorized 650,000 meter replacements (explained below) and GRC will

fund a comparable 650,000.

AMI was authorized funding to replace 650,000 “accelerated” PMCs in Decision (D.) 10-04-

027. These accelerated PMCs are meters that would normally have been replaced in the 5

year period following AMI deployment (2018 through 2022) or approximately 130,000

accelerated PMCs each year of deployment. In conjunction with this, SoCalGas was

authorized funding to replace 130,000 small meters (PMCs) annually in the 2012 GRC. In

2013, AMI purchased the majority of the meters, however, AMI will fund no more than the

650,000 meters that were authorized in D.10-04-027 and the GRC will fund the purchase of

650,000 “current” year PMCs over the 5-year deployment period (approximately 130,000

each year). The following tables provide an illustration of this.

RFG-A-13

ORA DATA REQUEST

ORA-SCG-DR-012-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS RESPONSE

DATE RECEIVED: NOVEMBER 24, 2014

DATE RESPONDED: DECEMBER 15, 2014

SoCalGas Response to Question 5.a., (Continued):

Prepared by Customer Services Field (SCG-10) and AMI Policy (SCG-39):

2013 2014 2015 2016 2017 Total

GRC- PMCs 130,000 130,000 130,000 130,000 130,000 650,000

GRC- RMCs 50,000 50,000 50,000 50,000 50,000 250,000

GRC Total 180,000 180,000 180,000 180,000 180,000 900,000

AMI- Accelerated PMCs

(2018-2022) 130,000 130,000 130,000 130,000 130,000 650,000

Authorized or Forecasted Small Meter Replacements

Actual

2013 2014 2015 2016 2017 Total

GRC Funded 91,107 160,000 216,298 216,298 216,298 900,000

AMI Funded 288,232 195,000 166,768 - - 650,000

* GRC meters purchased in 2013 include size 4 meters which are typically purchased in small volumes

Actual or Estimated Small Meter Purchases for Meter Replacements *

Note: Currently, AMI funded meters are used to replace current year PMCs and accelerated PMCs that are

completed by AMI. Once the AMI funding for the total number of accelerated PMC meters that was authorized in

SoCalGas' AMI D.10-04-027 is exhausted, GRC will fund the remaining small meter replacements (current year

PMCs and RMCs and the accelerated PMCs that have not been completed).

Estimated

RFG-A-14

Attachment A4

ORA-SCG-DR-012-DAO, Question 4.a

RFG-A-15

ORA DATA REQUEST

ORA-SCG-DR-012-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS RESPONSE

DATE RECEIVED: NOVEMBER 24, 2014

DATE RESPONDED: DECEMBER 15, 2014

4. Please respond to the following:

a. Provide the 2009-2014 YTD labor and non-labor expenses and the number of meters

replaced associated with SoCalGas’ planned small meter replacement program as

referenced on lines 23-24 of page FBA-125.

b. When did SoCalGas first begin to capture field labor expenses for the small meter

replacement program with Customer Services Field Department?

c. Is the small meter replacement program different and separate from the Planned

Meter Change-outs Program (PMC) or the Routine Meter Change-Outs Program

(RMC)? Please identify and explain why there is a separation between this program

and the PMC or RMC in SoCalGas forecasts.

SoCalGas Response:

NOTE: This question raises issues that extend beyond the scope and subject matter expertise of

the Gas Distribution area. As stated on page FBA-125 of Exhibit SCG-04, “Field labor costs

associated with SoCalGas’ planned small meter replacement program are covered in the prepared

direct testimony of Sara Franke, Exhibit SCG-10.” As such, SoCalGas’ response has been

bifurcated as such:

response to 4a was prepared by the Customer Services Field and AMI Policy witnesses

(Sara Franke and Rene Garcia);

response to 4b was prepared by Customer Services Field;

response to 4c was prepared by Gas Distribution.

Any further inquiries should therefore be addressed to the responsible witness areas.

RFG-A-16

ORA DATA REQUEST

ORA-SCG-DR-012-DAO

SOCALGAS 2016 GRC – A.14-11-004

SOCALGAS RESPONSE

DATE RECEIVED: NOVEMBER 24, 2014

DATE RESPONDED: DECEMBER 15, 2014

Response to Question 4.a.:

Prepared by Customer Services Field (SCG-10) and AMI Policy (SCG-39):

Customer Services Field (CSF) can provide the number of meter replacements for 2009-

2013, but does not track expenses at the level of detail requested. Notwithstanding, to

provide some estimate of associated labor expenses for those years, please see below.

Estimates of non-labor expenses are not available. 2014 data is not available.

Small Meter Replacements Completed by CSF

2009 2010 2011 2012 2013

Number of Small Meter Replacements* 160,715 163,639 137,864 116,196 77,899

Estimated CSF Labor Costs**

(Shown in Thousands of 2013 Dollars) $3,461 $3,612 $2,933 $2,475 $2,173

*Small meter replacements include planned meter changes (PMCs) and routine meter changes (RMCs).

** The estimated labor expenses for the small meter replacements completed by CSF are derived by using the

average recorded on premise time per small meter change and the average 2013 labor rate for CSF technicians

who perform small meter replacements. The costs exclude drive time and other ancillary costs not associated

with the time to perform the activity. In 2009-2012 all labor was charged to O&M. Beginning in 2013, for curb

meter replacements only, labor was split 50/50 between O&M and capital. Labor is charged 50/50

capital/O&M for curb meter replacements because the existing curb meters are incompatible with AMI

technology.

Note, in addition to CSF-completed small meter replacements, the Advanced Metering

Infrastructure (AMI) project team has also been performing small meter replacements in

order to fully integrate with the scheduling and routing of AMI deployment. The number of

small meter changes completed by CSF in 2013 excludes a total of 241,041 small meter

changes that were completed as part of SoCalGas’ Advanced Metering Infrastructure (AMI)

implementation.

In order to adhere to the AMI implementation schedule, beginning in 2013, the AMI project

assumed responsibility for above-ground PMCs, including both planned and accelerated

meter changes, and CSF shifted its focus to curb meter changes. This trade-off (i.e., the AMI

project team focusing on above-ground meters and CSF focusing on curb meters) enabled a

better match between the work and employee skill sets. Over the course of the AMI

deployment period (2013-2017), all GRC- and AMI-funded PMCs will be completed.

Please refer to the testimony and workpapers of witness Sara Franke, Ex. SCG-10 and SCG-

10-WP, CSF and Meter Reading, for additional information regarding forecasted CSF meter

changes (testimony pages SAF-9, SAF-11, and workpaper pages 52-54).

RFG-A-17