2018 General Rate Case - sce.com · General Orders 95, 128, and 165. Principles of this “Common...

Application No.: A.16-09- Exhibit No.: SCE-02, Vol. 4 Witnesses: M. Stark

(U 338-E)

2018 General Rate Case

Transmission & Distribution (T&D) Volume 4 - Distribution Maintenance and Inspection

Before the

Public Utilities Commission of the State of California

Rosemead, CaliforniaSeptember 1, 2016

SUMMARY

This chapter describes SCE’s inspection and maintenance activities associated with the

distribution grid, including planned and unplanned work. Most of the planned work is performed to

satisfy various requirements placed upon SCE by the California Public Utilities Commission (CPUC),

and various city and county agencies. SCE is requesting $160 million in 2018 test year O&M expenses

and $1.377 billion in CPUC Jurisdictional 2016-2020 capital expenditures in these categories.

Distribution Maintenance and Inspection O&M Expenses 2018 Forecast

(Total Company – Constant 2015 $Millions)

SCE-02: Transmission and Distribution (T&D) Volume 04 – Distribution Maintenance and Inspection

Table Of Contents

Section Page Witness

-i-

SUMMARY ...................................................................................................................1

I. DISTRIBUTION MAINTENANCE & INSPECTION .....................................1 M. Stark

A. Content and Organization ......................................................................1

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

C. Regulatory Background/Policies Driving SCE’s Request .....................2

D. 2015 Decision ........................................................................................3

1. Comparison of 2015 Authorized to Recorded ...........................3

E. Work Activities ......................................................................................5

1. Distribution Equipment Inspection Expenses ............................5

a) Distribution Overhead Inspections, Portion of GRC Account 583.120 ..............................................6

(1) Cost Forecast ......................................................7

b) Underground Detailed Inspections (UDI), Portion of GRC Account 583.120 ..................................9

(1) Cost Forecast ......................................................9

c) Apparatus Inspection and Maintenance Program, Portion of GRC Account 593.120 ................10

(1) Cost Forecast ....................................................11

2. Distribution Maintenance.........................................................12

a) Cost Forecast – Distribution Maintenance Capital Expenditures ....................................................13

b) Cost Forecast – Distribution Maintenance Expense (O&M), Portions of GRC Accounts 593.120 and 594.120 ....................................................14

3. Removal of Idle Facilities Capital Expenditures .....................15

SCE-02: Transmission and Distribution (T&D) Volume 04 – Distribution Maintenance and Inspection

Table Of Contents (Continued)

Section Page Witness

-ii-

a) Cost Forecast ................................................................16

4. Vegetation Management ..........................................................16

a) Cost Forecast for Routine Vegetation Management .................................................................18

F. Summary of GRC Accounts ................................................................19

1. GRC Account 583.120 .............................................................19

2. GRC Account 593.120 .............................................................20

3. GRC Account 594.120 .............................................................21

1

I. 1

DISTRIBUTION MAINTENANCE & INSPECTION 2

A. Content and Organization 3

The electrical equipment and structures that make up SCE’s distribution grid undergo planned 4

and unplanned inspection and maintenance. Required maintenance is identified through the following 5

sources: 6

o Scheduled inspections driven by specific regulatory requirements; 7

o Field inspections by personnel while performing other work; 8

o Inspections after emergencies or in-service failures of equipment; and 9

o Initiation of new programs (e.g. pole loading, infra-red surveying, structural assessments) 10

to target issues, or to respond to particular regulatory requirements. 11

These inspections drive three categories of maintenance – repairs made by inspectors, and repairs 12

or replacements made by maintenance and construction crews. 13

This volume will cover SCE’s proposal for Distribution Maintenance and Inspection (M&I) 14

related activities. This includes summarizing how the O&M and capital activities address risks related to 15

operating a distribution system and a summary of regulatory background and polices that influence how 16

we maintain our system. 17

I will discuss the new requirements identified in the 2015 GRC decision that impact our 2018 18

GRC. This volume will also discuss the necessity of Distribution M&I O&M activities as show in Table 19

I-1 and the necessity of the Distribution M&I capital activities as show in Table I-2. 20

B. Summary of O&M and Capital Request 21

Table I-1 and Table I-2 summarize the O&M and capital activities discussed and associated 22

costs. 23

2

Table I-1 Distribution M&I O&M Activities

(Total Company – Constant 2015 $000)

Table I-2 Distribution M&I Capital Activities

(CPUC-Jurisdictional – Nominal $000)

C. Regulatory Background/Policies Driving SCE’s Request 1

Many regulatory requirements drive our distribution inspection and maintenance requests. SCE’s 2

Distribution Inspection and Maintenance Program (DIMP) addresses these various requirements and 3

SCE’s internal standards that supplement or exceed minimum regulatory requirements. The goal of 4

DIMP is to meet the requirements of General Orders (GO or GOs) 95, 128, and 165 in a way that: (1) 5

follows sound maintenance practices; (2) enhances public and worker safety and maintains system 6

reliability; and (3) delivers overall greater safety value for each dollar spent by allowing SCE to focus its 7

limited resources on higher priority tasks. 8

DIMP enables the prioritization of work based on the condition of each facility or piece of 9

equipment and its potential for impact on safety and reliability, considering various factors. These 10

factors may include such things as the facility or equipment, loading, location, accessibility, climate, and 11

direct or potential impact on safety or reliability. DIMP enables SCE to prioritize resource allocation to 12

higher value activities, and deploy its limited resources more effectively and efficiently to remediate 13

conditions that potentially pose higher risks. This approach follows the Commission’s direction under 14

Activity 2018 ForecastDistribution Overhead Inspections $7,159Underground Detailed Inspections $4,155Distribution Apparatus Inspection and Maintenance $4,580Breakdown & Preventive $80,239Vegetation Management - Distribution $63,834

Total $159,968

Description 2016 2017 2018 2019 2020Distribution Capital Maintenance 254,279 259,566 266,103 274,451 283,178 Remove Idle Facilities 7,504 7,660 7,852 8,099 8,356

$261,782 $267,225 $273,955 $282,549 $291,534Total

3

GO 95 and a memorandum of understanding between SCE and the CPUC’s Safety and Enforcement 1

Division.1 2

DIMP has three maintenance priority levels. During inspections, SCE inspectors identify and rate 3

conditions observed considering the factors discussed previously. Highest priority items requiring 4

immediate action are assigned Priority 1. Priority 2 items do not require immediate action, but require 5

corrective action within a specified time period. Priority 1 and Priority 2 items may be fully repaired or 6

temporarily repaired and reclassified as a lower priority item. Priority 3 items are lower priority items 7

that involve little or no safety or reliability risk. SCE responds to Priority 3 conditions by taking action 8

at or before the next detailed inspection, which may include re-inspection, reassessment, or repair. These 9

maintenance priorities are also utilized by Troublemen when responding to trouble calls and emergency 10

situations. 11

In the spirit of continuous improvement, SCE refines and enhances its inspection and 12

maintenance program periodically. In 2016, SCE initiated a pilot using infrared technology to assess and 13

identify potential overhead conductor, connector, and splice conditions. SCE is evaluating this thermal 14

technology for primary conductor assessment on the distribution system as a means to proactively 15

identify hot connections, or other conditions, that might lead to failure. This technology can be used 16

proactively, with routine inspections, and by assessing facilities after a failure to identify other potential 17

conditions that may exist to further aid in the prevention of repeated circuit disruptions. 18

D. 2015 Decision 19

1. Comparison of 2015 Authorized to Recorded 20

Figure I-1 summarizes our 2015 O&M request, the authorized amounts, and our 2015 21

recorded costs compared to authorized amounts. SCE spent approximately $11 million less than 22

authorized for these GRC activities, primarily driven by decreases in maintenance expenses. 23

1 On April 22, 2004, the Commission issued D.04-04-065 in I.01-08-029 (Maintenance OII). In the Decision, the Commission, among other things, directed that SCE, in consultation with SED (formerly known as CPSD), refine its distribution maintenance program. On August 13, 2005, SED and SCE signed a MOU that memorialized the agreed-upon principles between SCE and CPSD relating to the development of SCE’s new distribution maintenance and inspection program. During this process SCE and SED also solicited input and participation from PG&E and SDG&E to develop a three-level maintenance and inspection “Common Platform” in the hopes of ultimately developing a model that could be applied to all electric utilities subject to General Orders 95, 128, and 165. Principles of this “Common Platform”, which was the foundation for SCE’s DIMP program, were adopted in R.08-11-005 and added to General Order 95, Rule 18A. DIMP was discussed in Vol. 2, Part 4, Chapter XIII of SCE’s 2009 GRC.

4

Figure I-1 Distribution Maintenance and Inspection

2015 GRC Authorized Variance Summary2 2015 O&M (Total Company – Constant 2015 $Millions)

Figure I-2 summarizes our 2015 GRC capital request for 2015, the 2015 GRC authorized 1

amounts, and our 2015 recorded costs compared to authorized amounts. The 2015 recorded expenditures 2

were near authorized amounts (approximately two percent lower than authorized). 3

2 Refer to SCE-02, Vol. 4 pp. 63-64.

5

Figure I-2 Distribution Maintenance and Inspection

2015 GRC Authorized Variance Summary 2015 Capital3 (CPUC-Jurisdictional – Nominal $Millions)

E. Work Activities 1

1. Distribution Equipment Inspection Expenses 2

This section describes the distribution system inspection programs that incur O&M 3

expenses, and the associated costs. These inspections meet the regulatory requirements established in 4

GOs 95, 128, and 165, and the requirements of SCE’s DIMP program. This section does not include 5

expenses associated with other inspection programs, such as pole loading assessments, which are 6

contained in SCE-02, Volume 9. 7

3 Refer to SCE-02 Vol. 4 pp. 65-66.

6

a) Distribution Overhead Inspections, Portion of GRC Account 583.120 1

This program involves activities for inspecting SCE’s overhead distribution 2

electrical system under GO 165 and DIMP. As required by GO 165, inspections of the overhead 3

distribution system include annual patrols and overhead detailed inspections. These inspections are 4

performed by SCE’s Electrical System Inspectors (ESIs) and contract inspectors. Under SCE’s DIMP 5

program, approximately 80% of the overhead distribution system is patrolled, and 20% undergo detailed 6

inspections, in any year. 7

Annual patrols and overhead detailed inspections are performed across SCE’s 8

distribution system using a geographical grid based approach. Our service territory is segmented into 9

geographical areas, or grids, which contain overhead and underground facilities on SCE’s distribution 10

electrical system. The number of grids change over time as electrical facilities are added or removed 11

from the system. 12

Annual patrols are visual inspections conducted to detect obvious safety and 13

reliability conditions and are performed primarily from vehicles, but can also be performed by foot or by 14

aircraft. When conducting annual patrols, the inspectors also assess visible portions of distribution 15

underground systems, including pad-mounted transformers, BURD4 enclosures, vault lids, and vent 16

pipes. 17

The purpose of the Overhead Detailed Inspection (ODI) program is to perform a 18

close proximity, in-depth evaluation of SCE’s overhead electrical facilities such as poles, capacitors, 19

switches, transformers, conductors, guy wires, and risers to: 20

• Identify hazardous conditions, or non-conformances with GO 95 that require 21

corrective action. Examples could include leaking transformers, broken or 22

damaged equipment, encroachment of line clearances, deteriorated cross arms, 23

missing or damaged high voltage signs, etc.; 24

• Determine what corrective action is required and prioritize follow up 25

corrective actions under DIMP; 26

• Perform minor repairs at the public level while at the location. Inspectors 27

commonly perform repairs such as replacing damaged ground molding at the 28

4 Buried Underground Residential Distribution.

7

public level, installing guy guards, removing unauthorized attachments (if 1

appropriate), installing pole tags, etc.; 2

• Document inspection findings, including pending and completed repairs; 3

• Validate equipment records and identify corrections as needed. 4

GO 165 requires detailed inspection of overhead distribution equipment every 5

five years. 6

Identified maintenance items discovered during annual patrols or ODI inspections 7

are repaired by the inspector at the time of the inspection, or prioritized for follow up corrective action 8

under SCE’s DIMP program. The expenses incurred by these programs are recorded in GRC Account 9

583.120. 10

(1) Cost Forecast 11

Table I-3 Distribution Overhead Inspections5 Portion of GRC Account 583.120

Recorded and Adjusted 2011-2015/Forecast 2016-2018 (Constant 2015 $000)

Labor expenses in Table I-3 are the costs incurred by SCE inspectors 12

performing the annual patrols and detailed inspections. Non-labor expenses include contract inspector 13

labor costs, materials, vehicles, and other allocated charges. Table I-3 shows the historical recorded 14

costs for 2011-2015 along with the number of grids inspected, and the corresponding cost per grid 15

5 Refer to WP SCE-02, Vol. 04, pp.1-57.

2011 2012 2013 2014 2015 2016 2017 2018Labor $3,523 $3,785 $4,084 $4,102 $4,201 $4,189 $4,189 $4,189Non-Labor $1,826 $2,722 $2,395 $2,572 $2,978 $2,970 $2,970 $2,970 Total $5,349 $6,507 $6,479 $6,674 $7,179 $7,159 $7,159 $7,159

Grids 17,670 17,560 17,538 17,524 17,561 17,513 17,513 17,513 Cost per Grid $303 $371 $369 $381 $409 $409 $409 $409

Ratio of Labor to Total 66% 58% 63% 61% 59% 59% 59% 59%

Basis of Forecast: Itemized Forecast (Last Year Recorded Cost Per x Forecast Grids)Basis of Labor/Non-Labor Split: Last Year Recorded Labor/Non-Labor Ratio

Recorded Forecast

8

(recorded cost divided by grid count). In 2012, the cost per inspection increased due to changes in work 1

methods and accounting practices. Prior to 2012, the ODI supervisors’ labor and vehicle costs were 2

recorded in an account allocated to various activities. Starting in 2012, these costs were charged directly 3

to the distribution overhead inspection account. Unit costs have been relatively stable from 2012 to 4

2013. Unit costs increased slightly in 2014 as the backyard inspection program was implemented, and 5

unit costs in 2015 reflect the first full year of the new backyard inspection program, as described below. 6

In the 2015 GRC, additional funding was authorized for an ODI program 7

enhancement requiring inspectors to gain access to obstructed or historically difficult to access 8

structures in customer backyards.6 The program required changes to the work management systems our 9

ESIs use to record, track, and monitor inspection results. We encountered some delays in getting the 10

program and device changes implemented, resulting in a delayed start to the new inspection protocol. 11

Despite these delays, SCE continued to refine the program, and in August 2014 implemented a modified 12

backyard inspection program that allows the inspectors to inspect poles with limited access. Where the 13

inspector has limited access to the pole, but can still perform the inspection, the inspector can complete 14

the inspection with a limited inspection designation. Unlike before, this modified process only requires 15

follow-up contact with property owners when the inspection cannot be completed, not repeated revisits 16

to the property owner as previously contemplated. This modified approach results in less time and 17

expense than originally forecast in SCE’s 2015 GRC, and SCE has controlled recorded costs at levels 18

lower than previously forecast. Going forward, we expect both the annual patrol and ODI programs to 19

remain the same as no changes are being contemplated for these programs. 20

The inspection count forecast for 2016-2020 is derived from the number 21

of grids inspected each year, as required by GO 165 and SCE’s DIMP.7 The total forecast for this 22

activity in 2016-2020 is calculated by multiplying the forecast unit cost per grid (equal to the 2015 23

recorded unit cost per grid) by the forecast number of grid inspections. The labor and non-labor costs 24

were forecast using the 2015 labor to non-labor ratio. The summary of the forecasts are also included in 25

Table I-3. 26

6 See D.15-11-021 pp. 99-100. 7 Refer to WP SCE-02 T&D-Vol. 04 pp. 67-68 (Distribution Overhead Inspections).

9

b) Underground Detailed Inspections (UDI), Portion of GRC Account 583.120 1

This program involves activities for inspecting SCE’s underground distribution 2

electrical system under GO 165 and DIMP. UDI provides close proximity examination of underground 3

and pad mounted distribution equipment. Inspectors assess subsurface and pad mounted equipment 4

including structures, switches, transformers, visible cables, and associated components to identify safety 5

hazards and non-conformances with GO 128. Vaults and manholes without equipment are also 6

inspected. Similar to the ODI program, the UDI inspectors document safety and reliability hazards and 7

prioritize corrective actions under SCE’s DIMP. When possible, they perform routine maintenance or 8

make repairs during the inspection. UDI activities are performed by a crew comprising a lineman and a 9

groundman, who have received specialized training to work in underground vaults and in proximity to 10

energized high voltage equipment. 11

(1) Cost Forecast 12

Table I-4 Underground Detailed Inspections8 Portion of GRC Account 583.120

Recorded and Adjusted 2011-2015/Forecast 2016-2018 (Constant 2015 $000)

Labor expenses in this work category are driven by the inspectors 13

performing the underground detail inspections. Non-labor expenses include materials, vehicle costs, and 14

8 Refer to WP SCE-02, Vol. 04, pp. 1-57.

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Labor $3,653 $4,712 $3,689 $3,754 $3,072 $3,518 $3,565 $3,297 $3,310 $3,574Non-Labor $2,291 $1,054 $1,250 $540 $690 $790 $801 $740 $743 $803 Total $5,944 $5,766 $4,938 $4,294 $3,762 $4,308 $4,365 $4,037 $4,053 $4,376

Inspections 184,387 174,424 168,436 171,699 150,090 171,867 174,168 161,083 161,693 174,595 Cost per Inspection ($) $32 $33 $29 $25 $25 $25 $25 $25 $25 $25

Ratio of Labor to Total 61% 82% 75% 87% 82% 82% 82% 82% 82% 82%

2018Labor $3,393

Non-Labor $762Total $4,155

Basis of Forecast: Itemized Forecast (Last Year Recorded Cost per x Forecast Units and Normalized by using 2018-2020 Average Total Cost)Basis of Labor/Non-Labor Split: Last Year Recorded Labor/Non-Labor Ratio

Recorded Forecast

Normalized Test Year Forecast

10

other allocated charges. Table I-4 shows the recorded expenses and inspection counts from 2011-2015, 1

with the corresponding cost per inspection (annual recorded cost divided by inspection count). The cost 2

per inspection remained relatively stable through the 2011 to 2013 period. From 2013 to 2014 the cost 3

per inspection decreased due to a reduction in non-labor resulting from a change in division overhead 4

methodology. The cost per inspection remained unchanged from 2014 to 2015. The 2018 inspection 5

forecast is based on the 2015 recorded unit cost per inspection as no changes are being contemplated for 6

this program. 7

The inspection count forecast for 2016-2020 is derived from the number 8

of inspections due each year, as required by GO 165 and SCE’s DIMP.9 The total forecasts for this 9

activity in 2016-2020 are calculated by multiplying the forecast unit cost per inspection by the number 10

of inspections required to be performed. The labor and non-labor costs were forecast based on the 11

recorded 2015 labor to non-labor ratio. Since the number of inspections vary from year-to-year, the 2018 12

forecast expense is normalized by using the average of forecast expense for 2018-2020. This method of 13

normalizing the Test Year request when post Test Year forecasts vary has been adopted by the 14

Commission in previous GRC Decisions, including SCE’s 2015 GRC Final Decision for UDI.10 The 15

summary of the forecasts are also included in Table I-4. 16

c) Apparatus Inspection and Maintenance Program, Portion of GRC Account 17

593.120 18

This activity includes the costs associated with the inspection and testing of all 19

overhead and underground distribution apparatus specialized equipment for things such as remote 20

monitoring and control. Some examples are fixed and automatic capacitors, regulators, network 21

protectors, fault interrupters, and automatic re-closing switches used for line protection and 22

sectionalizing. The resulting maintenance performed by the apparatus crews are also recorded to this 23

account. 24

Two- and three-person apparatus crews with specialized training perform these 25

inspections, including the technical diagnostic testing to ensure proper functioning of the equipment. 26

From year-to-year the cost of repairs can vary based on the type and frequency of work performed. The 27

9 Refer to WP SCE-02 T&D-Vol. 04 pp. 69-70 (Underground Detailed Inspections). 10 D.15-11-021 page 97 authorized ODI as requested and A.13-11-003 Exhibit SCE-03, Vol. 6, Part 1 pages 13-

14 describe using a 3-year average for UDI forecast.

11

workload for apparatus inspectors continues to increase as more automated equipment is added to the 1

distribution system. In 2014 SCE added three additional apparatus crews to handle the increasing 2

workload. 3

(1) Cost Forecast 4

Table I-5 Apparatus Inspection and Maintenance11

Portion of GRC Account 593.120 Recorded and Adjusted 2011-2015/Forecast 2016-2018

(Constant 2015 $000)

Labor expenses in this category include the costs incurred by SCE for the 5

distribution apparatus management, supervisors, and the apparatus crews. Non-labor expenses include 6

material costs, vehicle costs, and other allocated costs. 7

As shown in Table I-5, the total cost for distribution apparatus inspection 8

expenses have remained relatively stable from 2011 to 2014, with a slight increase in 2015, and 9

maintenance expenses have varied slightly from year-to-year depending upon the type and frequency of 10

repairs being performed. From 2013 to 2014 labor costs increased slightly due to the addition of three 11

additional apparatus crews in 2014. From 2014 to 2015 labor costs continued to increase as 2015 reflects 12

the first full year of expenses associated with the additional crews. 13

During this rate case cycle, apparatus inspection and maintenance 14

activities and staffing are expected to remain the same as no changes are being contemplated for this 15

program. SCE forecasts 2018 test year expenses to be equal to 2015 recorded costs. For the test year 16


2011 2012 2013 2014 2015 2016 2017 2018Labor $3,161 $3,449 $3,181 $3,459 $3,623 $3,623 $3,623 $3,623Non-Labor $1,314 $766 $815 $696 $957 $957 $957 $957 Total $4,475 $4,214 $3,997 $4,155 $4,580 $4,580 $4,580 $4,580


Basis of Forecast: Last Year RecordedBasis of Labor/Non-Labor Split: Last Year Recorded Labor/Non-Labor Ratio

Recorded Forecast

12

forecast SCE utilized the 2015 ratio of recorded labor and non-labor costs for the forecast of distribution 1

apparatus maintenance in Table I-5. 2

2. Distribution Maintenance 3

Distribution maintenance is necessary to maintain a safe and reliable distribution system. 4

Distribution maintenance is done on a planned basis or an unplanned basis. 5

Planned maintenance work comprises repairs or replacements of SCE equipment and 6

structures recorded as Priority 2 items, primarily driven from inspection activities. Repair work is 7

recorded to expense work orders while replacements are charged to capital work orders. Planners 8

develop detailed work orders based on design standards, facility inventory and circuit maps, and site 9

visits. Both SCE and contract field crews perform planned maintenance work. 10

Unplanned activities, such as breakdown maintenance, include the repair and replacement 11

of SCE equipment and structures that are damaged or fail in service. These items are typically identified 12

as Priority 1 conditions under SCE’s DIMP. Breakdown maintenance is typically performed in response 13

to damage caused by equipment failures, degradation, Mylar balloons, rodents, birds, or other means. 14

Unplanned maintenance does not include costs related to failures that occur during a storm or from a 15

claim, such as a vehicle damaging SCE poles. 16

Under DIMP, inspectors identify and prioritize deteriorated components or conditions 17

found during inspections for follow up repair or replacement. Every item is evaluated based on the 18

specifics for that condition, considering several factors, such as the facility or equipment, loading, 19

location, accessibility, climate, and direct or potential impact on safety or reliability. Inspection 20

programs driving these activities include overhead detail inspections, underground detail inspections, 21

apparatus inspections, and annual patrols described above. In addition, when field crews observe 22

problems while performing other work or responding to trouble calls, they perform additional 23

maintenance activities that record to these accounts. 24

Maintenance activities can include the repair, replacement, or relocation of facilities; 25

replacement of signs and cross-arms; repair or relocation of conduit; repair or replacement of conductor 26

or cable, equipment, or pole fixtures; re-fusing line cutouts; repairing grounds; and replacing 27

transformers. These maintenance activities are performed by electrical crew foremen, linemen, 28

groundmen, and contractor crews who work for SCE’s Distribution Construction and Maintenance 29

organization. Post-construction, SCE performs quality control inspections to validate that the work 30

13

meets SCE standards for construction and quality. Finally, field accountants record all the material and 1

cost information, and record the costs as either O&M expenses or capital expenditures. 2

a) Cost Forecast – Distribution Maintenance Capital Expenditures 3

Figure I-3 Distribution Maintenance Capital Expenditures12

Multiple WBSs13 Recorded 2011-2015/Forecast 2016-2020

(CPUC-Jurisdictional – Constant 2015 and Nominal $000)

The costs recorded in this account are driven by the work performed by SCE field 4

personnel and contract crews, materials, equipment, vehicles costs, and other allocated costs. As with 5

maintenance repairs, both preventive and breakdown maintenance are driven by the age and condition of 6

the distribution electrical system, can be similar, and are completed by the same personnel. Therefore, 7

SCE forecasts these two capital expenditure categories together. The historical expenditures in this 8

activity are shown in Figure I-3. 9

The total costs recorded in this category remained relatively stable from 2011 to 10

2013. From 2013 to 2014 total costs decreased due to a reduction in work associated with preventive 11

12 Refer to WP SCE-02, Vol. 04, pp. 58-62. 13 This activity includes the following WBS Elements: CET-PD-IR-EP, CET-PD-IR-NP, CET-PD-IR-PM,

CET-PD-BM-BD, CET-PD-BM-EP.

14

maintenance. In 2015, total costs increased due to increases in work associated with both breakdown and 1

preventive maintenance. The annual costs vary from year-to-year based on the volume of breakdowns 2

and maintenance items found during inspections. Since SCE cannot control the annual number or type of 3

maintenance items, SCE proposes to use a five year average of recorded capital expenditures in constant 4

2015 dollars. 5

b) Cost Forecast – Distribution Maintenance Expense (O&M), Portions of GRC 6

Accounts 593.120 and 594.120 7

Table I-6 Distribution Maintenance Expenses14

Portions of GRC Accounts 593.120 and 594.120 Recorded and Adjusted 2011-2015/Forecast 2016-2018


Labor costs are driven by the work performed by SCE field personnel in this work 8

activity. Non-labor costs are driven by the contract crew charges, materials, vehicles costs, and other 9

allocated costs. Preventive maintenance expenses for distribution assets driven by inspections or field 10

observations are recorded in GRC Account 593.120; breakdown maintenance expenses are recorded in 11

GRC Account 594.120. Both preventive and breakdown maintenance are influenced by the age and 12


2011 2012 2013 2014 2015 2016 2017 2018593.120

Labor $23,001 $23,973 $20,263 $18,943 $19,539 $21,144 $21,144 $21,144Non-Labor $33,778 $30,760 $30,937 $35,170 $36,990 $33,527 $33,527 $33,527 Subtotal 593.120 $56,778 $54,733 $51,199 $54,113 $56,529 $54,671 $54,671 $54,671

594.120Labor $12,060 $14,844 $12,980 $13,288 $13,462 $13,327 $13,327 $13,327Non-Labor $11,969 $13,596 $11,390 $12,106 $12,143 $12,241 $12,241 $12,241 Subtotal 594.120 $24,030 $28,440 $24,370 $25,394 $25,606 $25,568 $25,568 $25,568

Total $80,808 $83,173 $75,570 $79,507 $82,135 $80,239 $80,239 $80,239

Labor $35,061 $38,817 $33,243 $32,231 $33,001 $34,471 $34,471 $34,471Non-Labor $45,747 $44,356 $42,326 $47,276 $49,134 $45,768 $45,768 $45,768


Basis of Forecast: 5 Year AverageBasis of Labor/Non-Labor Split: 5 Year Weighted Average Labor/Non-Labor Ratio

Recorded Forecast

15

condition of the distribution electrical system, can be similar, and are completed by the same personnel. 1

Hence, they are being forecast together. The historical expenses in this activity are shown in Table I-6. 2

The total costs recorded in this category have fluctuated from 2011 to 2013 due to 3

changes in both planned and emergency maintenance activity. Since 2013, the costs in this activity have 4

continued to increase each year, primarily due to increases in planned maintenance work. The annual 5

costs vary from year-to-year based on the volume of breakdowns and maintenance items found during 6

inspections. Since SCE cannot control the annual number or type of maintenance items, SCE proposes 7

to use a five year average of recorded expenses in constant 2015 dollars. 8

Since work levels, contractor utilization, and other charges are also expected to 9

follow the same trends as in 2015, SCE has estimated the labor and non-labor expenses in 2016 to 2018 10

using the five year weighted average of labor to non-labor ratio. The forecasts are also summarized in 11

Table I-6. 12

3. Removal of Idle Facilities Capital Expenditures 13

SCE removes idle assets that are no longer “used or useful,” typically because a customer 14

has left a facility that therefore no longer requires electrical service, and for public safety reasons. SCE 15

dismantles these assets and removes them from rate base. Figure I-4 shows 2011-2015 recorded and 16

2016-2020 forecast expenditures for the removal of idle facilities. 17

16

a) Cost Forecast 1

Figure I-4 Removal of Idle Facilities15

WBS Element CET-PD-CR-IF Recorded 2011-2015/Forecast 2016-2020

(CPUC-Jurisdictional – Constant 2015 and Nominal $000)

Expenditures in this activity remained relatively stable from 2011 to 2012, 2

increased in 2013, and decreased in 2014 before going back up in 2015. The work to be performed in 3

this category is influenced by external factors such as customers leaving facilities, freeway widening 4

projects, or other redevelopment work. Going forward the volume of work and associated costs is this 5

account are expected to continue to fluctuate from year-to-year driven by factors outside SCE’s control, 6

as seen in the 5-year historical recorded costs. Therefore, under Commission guidance in D.89-12-057, a 7

five-year average is deemed to be a reasonable forecast for costs related to removing idle facilities. SCE 8

utilized the five year average of expenditures as the basis for its 2016-2020 forecasts. 9

4. Vegetation Management 10

Vegetation management includes all of the expenses associated with tree trimming and 11

tree removal in proximity to transmission and distribution high voltage lines, and weed abatement 12


17

around overhead structures in high fire designated areas. It also includes costs to plant different species 1

of trees as replacements and in handling preventive soil treatment. The majority of the work is 2

performed under a fixed price contract with SCE’s tree trimming contractors, which requires them to 3

maintain compliance for the approximately 1.5 million trees that exist in proximity to energized 4

conductors throughout SCE’s territory. 5

SCE must comply with many vegetation regulations including GO 95 Rules 35 and 37, 6

Public Resources Code Sections 4292 and 4293, and FERC FAC-003-2, which require SCE to manage 7

vegetation near its wires. SCE engages a contractor to trim and remove trees and weeds, and other 8

activities, to comply with these requirements. All of the trees in inventory are inspected annually. 9

During these inspections, any trees or vegetation that require trimming to maintain the required 10

distances from high voltage lines are scheduled for trimming or removal. In addition, hazard trees, such 11

as overhangs in high fire areas, and damaged or diseased trees are also identified for trimming or 12

removal. Sometimes it is necessary to trim trees more frequently to continue to meet the Commission’s 13

requirements for tree to line clearances between annual trim cycles. Fast-growing species, or trees in 14

areas designated as high risk for wild fires, may need more frequent trimming to meet the Commission 15

standards. 16

Vegetation management work activities are the same for both distribution and 17

transmission assets, but costs record to both distribution and transmission FERC accounts based on 18

FERC accounting guidelines. The vegetation management expenses related to distribution assets are 19

forecast below. The vegetation management expenses related to transmission assets are forecast in SCE-20

02, Volume 9, Transmission Construction and Maintenance. 21

In addition to routine vegetation management expenses, SCE incurs expenses for tree 22

removals related to bark beetle infestations and State mandated drought related vegetation management 23

activities. SCE is experiencing significant increases in O&M expenses associated with the inspection 24

and removal of dead, dying, or diseased trees that may fall or contact SCE’s electrical facilities because 25

of the bark beetle and drought emergency. Unlike trees near power lines that must be trimmed to prevent 26

encroachment, large dead or dying trees can be located outside of the right of way and fall into power 27

lines, which increases the number of trees that can pose a hazard. 28

Although SCE included expenses for bark beetle related tree removal in its 2015 GRC, 29

SCE is not including these expenses in this GRC as Bark Beetle and Drought related tree removal 30

18

expenses will be included in a future CEMA filing.16 Since the time of SCE’s 2015 GRC, tree mortality 1

in California has increased to unprecedented levels because of four years of drought. 2

a) Cost Forecast for Routine Vegetation Management 3

Table I-7 Vegetation Management Expenses - Distribution17

Portion of GRC Account 593.120 Recorded and Adjusted 2011-2015/Forecast 2016-2018


Labor expenses in this category are driven by the work performed by SCE 4

arborists and employees that manage the vegetation management program. Non-labor costs include 5

contractor costs and other allocated charges associated with the vegetation management program. 6

Vegetation management costs remained relatively stable from 2011 to 2013. Costs increased in 2014 7

due to a change in contract terms, and have since stabilized. SCE expects to continue to perform the 8

same level of activities going forward. The forecast for these expenses is based upon 2015 expenses, the 9

last recorded year. See Table I-7 for distribution related vegetation management costs. 10

16 Recovery of Bark Beetle related costs for 2012 to 2014 are requested in this GRC at SCE-12. 17 Refer to WP SCE-02, Vol. 04, pp. 1-57.

2011 2012 2013 2014 2015 2016 2017 2018Labor $5,509 $4,752 $6,251 $7,551 $8,254 $8,254 $8,254 $8,254Non-Labor $55,706 $53,852 $52,687 $56,588 $55,580 $55,580 $55,580 $55,580 Total $61,215 $58,603 $58,938 $64,139 $63,834 $63,834 $63,834 $63,834


Basis of Forecast: Last Year RecordedBasis of Labor/Non-Labor Split: Last Year Recorded Labor/Non-Labor Ratio

Recorded Forecast

19

F. Summary of GRC Accounts 1

1. GRC Account 583.120 2

Figure I-5 Summary of GRC Account 583.12018

Recorded and Adjusted 2011-2015/Forecast 2016-2018 (Total Company – Constant 2015 $000)


2011 2012 2013 2014 2015 2016 2017 2018Distribution Overhead InspectionsLabor $3,523 $3,785 $4,084 $4,102 $4,201 $4,189 $4,189 $4,189Non-Labor $1,826 $2,722 $2,395 $2,572 $2,978 $2,970 $2,970 $2,970 Sub- Total $5,349 $6,507 $6,479 $6,674 $7,179 $7,159 $7,159 $7,159

Underground Detailed InspectionsLabor $3,653 $4,712 $3,689 $3,754 $3,072 $3,518 $3,565 $3,393Non-Labor $2,291 $1,054 $1,250 $540 $690 $790 $801 $762 Sub- Total $5,944 $5,766 $4,938 $4,294 $3,762 $4,308 $4,365 $4,155

Total 583.120Labor $7,176 $8,497 $7,773 $7,856 $7,273 $7,707 $7,754 $7,583Non-Labor $4,116 $3,776 $3,645 $3,112 $3,668 $3,760 $3,771 $3,732 Total Expenses $11,293 $12,273 $11,418 $10,968 $10,941 $11,467 $11,525 $11,315

Recorded Forecast

$

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

20





2011 2012 2013 2014 2015 2016 2017 2018Distribution Preventive MaintenanceLabor $23,001 $23,973 $20,263 $18,943 $19,539 $21,144 $21,144 $21,144Non-Labor $33,778 $30,760 $30,937 $35,170 $36,990 $33,527 $33,527 $33,527 Sub- Total $56,778 $54,733 $51,199 $54,113 $56,529 $54,671 $54,671 $54,671

Vegetation Management - DistributionLabor $5,509 $4,752 $6,251 $7,551 $8,254 $8,254 $8,254 $8,254Non-Labor $55,706 $53,852 $52,687 $56,588 $55,580 $55,580 $55,580 $55,580 Sub- Total $61,215 $58,603 $58,938 $64,139 $63,834 $63,834 $63,834 $63,834

Distribution Apparatus Inspection & Maintenance ExpenseLabor $3,161 $3,449 $3,181 $3,459 $3,623 $3,623 $3,623 $3,623Non-Labor $1,314 $766 $815 $696 $957 $957 $957 $957 Sub- Total $4,475 $4,214 $3,997 $4,155 $4,580 $4,580 $4,580 $4,580


Recorded Forecast

$

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

21





2011 2012 2013 2014 2015 2016 2017 2018Distribution Breakdown MaintenanceLabor $12,060 $14,844 $12,980 $13,288 $13,462 $13,327 $13,327 $13,327

Non-Labor $11,969 $13,596 $11,390 $12,106 $12,143 $12,241 $12,241 $12,241 Sub- Total $24,030 $28,440 $24,370 $25,394 $25,606 $25,568 $25,568 $25,568


Recorded Forecast

$

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

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