2021 General Rate Case Rebuttal Testimony...9 Substation Tools and Work 7,120 5,598 6,522 6,159...

Application No.: A.19-08-013 Exhibit No.: SCE-13 Vol. 03 Witnesses: J. Janney

V. Trehan

(U 338-E)

2021 General Rate Case Rebuttal Testimony

Substation

Before the

Public Utilities Commission of the State of California

Rosemead, California June 12, 2020

SCE-13 Vol. 03: Substation

Table Of Contents

Section Page Witness

-i-

I. INTRODUCTION .............................................................................................1 V. Trehan

A. Summary of Rebuttal Position ...............................................................1

1. O&M Forecast Summary ...........................................................2

2. Capital Expenditure Summary ...................................................3

II. MONITORING BULK POWER SYSTEMS ....................................................5

A. O&M Expenses ......................................................................................5

1. Monitoring Bulk Power Systems ...............................................5

a) SCE Application ............................................................5

b) Monitoring Bulk Power System – Grid Control Center (GCC) ....................................................5

(1) Cal Advocates’ Position .....................................6

(2) SCE’s Rebuttal to Cal Advocates’ Position ..............................................................6

c) Monitoring Bulk Power System – Grid Network Solutions .........................................................8 J. Janney

(1) Cal Advocates Position ......................................9

(2) SCE’s Rebuttal to Cal Advocates’ Position ............................................................10

2. Conclusion ...............................................................................12

Appendix A

1

I. 1

INTRODUCTION 2

In this volume, Southern California Edison Company (SCE) addresses its Test Year 2021 3

forecast of operations and maintenance (O&M) expenses and 2019-2021 capital expenditures forecast 4

for the Grid Monitoring and Operability activity within the Substation Business Planning Group.1 If 5

approved, this funding request will allow SCE to continue its efforts to support monitoring and operating 6

SCE’s power system, maintain substation equipment and infrastructure and perform other related 7

activities. 8

This rebuttal testimony addresses the recommendations raised by Cal Advocates regarding 9

SCE’s Substation Business Planning Group’s (Substation) O&M forecasts for the 2021 Test Year. Cal 10

Advocates did not oppose SCE’s Capital forecasts. In addition, the Substation forecast request was 11

unopposed by all other intervenors with respect to both O&M and Capital expenditures. 12

A. Summary of Rebuttal Position 13

Table I-1 provides a summary of the 2021 O&M expense forecast for SCE and Cal Advocates 14

and the respective variances. Cal Advocates only opposed SCE’s O&M request for Monitoring Bulk 15

Power Systems. Cal Advocates contests SCE’s use of last year recorded labor figures and use of 16

normalization in the Monitoring Bulk Power Systems sub-activity forecasts. This rebuttal demonstrates 17

that SCE’s forecasts are reasonable and should be adopted, as, among other reasons, the use of last year 18

recorded for a “stable trend” is in keeping with Commission guidance, and normalization is a well-19

established method that has been repeatedly accepted by the Commission. The remaining O&M business 20

planning elements were unopposed by all other intervenors. 21

Table I-2 provides a summary of SCE’s 2021 Test Year Capital expenditure request, which was 22

unopposed by all intervenors. 23

1 Exhibit SCE-02, Vol. 3, p. 1, lines 4-7.

2

Table I-1 Substation 2021 O&M Forecast

Summary of SCE and Cal Advocates Position (2018 Constant $000)

Table I-2

Substation 2021 Capital Forecast Summary of SCE Position

(Nominal $000)

1. O&M Forecast Summary 1

Table I-3 provides the recorded amounts for 2014-2018 and the forecast for 2021 for SCE 2

and Cal Advocates. For the Substation O&M forecast, Cal Advocates proposed changes to only two 3

activities within SCE’s forecast for Monitoring Bulk Power System. SCE will address the issues raised 4

by Cal Advocates related to SCE’s 2021 O&M forecast in the below corresponding sections. The 5

remaining activities were unopposed by Cal Advocates and no other parties opposed any O&M 6

activities. 7

Variance from SCE

SCECal

AdvocatesCal

Advocates1 Grid Monitoring and Operability 96,516 86,705 (9,811) 96,516 2 Inspections and Maintenance 18,448 18,448 - 18,448

3 Capital-Related Expense & Other 6,575 6,575 - 6,575 4 Total 121,539 111,728 (9,811) 121,538

SCE Rebuttal Position

Line No.

Substation O&M 2021 Forecast

Variance from SCE

SCECal

AdvocatesCal

Advocates1 Grid Monitoring and Operability 72,622 72,622 - 72,622 2 Inspections and Maintenance 60,691 58,960 (1,731) 60,691 3 Infrastructure Replacement 280,057 280,057 280,057 4 Capital-Related Expense & Other 32,079 31,804 (275) 32,079 5 Total 445,449 443,443 (2,006) 445,449

SCE Rebuttal Position

Line No.

Substation O&M 2021 Forecast

3

Table I-3 Substation O&M Expenses

2014-2018 Recorded/2021 Forecast Summary of SCE and Cal Advocates Position

(2018 Constant $000)

2. Capital Expenditure Summary 1

Table I-4 provides the recorded amounts for 2014-2018 and the forecast for 2019-2021 2

for SCE. As discussed in SCE-12, Volume 1, SCE proposes the Commission adopt SCE’s 2019 3

recorded capital expenditures2 versus SCE’s 2019 forecast capital expenditures at the time of SCE’s 4

original Application. As such, SCE’s Rebuttal Position in Table I-4 reflects the updated values for 2019 5

recorded expenditures, compared to SCE’s 2019 forecast as filed in SCE’s GRC Application. Activities 6

such as preventative maintenance and substation capital breakdown saw an increase in spend in 2019 7

over the forecast due to the occurrence of new emergent projects and widening scope. SCE also incurred 8

higher than anticipated monitoring and bulk power expenditures for increased wireless LAN, which was 9

required to enable uninterrupted communication as SCE transitioned from hard wired phones to wireless 10

soft phone audio (i.e., Skype). Concurrently, SCE saw a decrease in 2019 recorded capital expenditures 11

from the forecast for transmission network & facilities telecommunications, substation transformer bank 12

2 Refer to Exhibit SCE 12, Vol. 1, Section V.

Variance from SCE

2014 2015 2016 2017 2018 SCECal

AdvocatesCal

Advocates1 Monitoring Bulk Power System 40,859 32,020 45,528 46,621 46,457 54,918 45,106 9,812 54,918

2Monitoring and Operating Substations 49,925 53,497 51,302 44,659 41,888 41,598 41,598 - 41,598

3Circuit Breaker Inspection and Maintenance 5,605 5,729 6,522 5,962 4,803 4,803 4,803 - 4,803

4Transformer Inspection and Maintenance 2,159 1,433 1,193 1,406 1,048 1,270 1,270 - 1,270

5Relay Inspection and Maintenance 2,590 2,711 3,053 4,096 3,723 3,060 3,060 - 3,060

6Misc. Substation Equipment Inspection and Maintenance 3,620 3,690 3,619 3,091 3,094 3,094 3,094 - 3,094

7 Equipment Washing 1,554 1,263 1,207 1,355 1,100 1,296 1,296 - 1,296 8 O&M Breakdown Maintenance 1,963 2,198 2,693 2,777 2,525 2,431 2,431 - 2,431

9Substation -Inspections and Maintenance (Hydro) 1,470 2,069 1,490 1,153 1,264 1,228 1,228 - 1,228

10Substation Maintenance Oversight 5,600 4,680 4,751 5,082 5,302 5,302 5,302 - 5,302

11Other Substation Equipment Inspection and Maintenance 2,098 2,826 2,064 2,370 1,316 1,266 1,266 - 1,266

12 Informational Meetings 1,283 1,472 1,232 1,475 1,272 1,272 1,272 - 1,272 13 Total 118,726 113,588 124,654 120,047 113,792 121,538 111,726 9,812 121,538

SCE

Rebuttal

Position

2021 ForecastLine No.

GRC ActivitySCE Recorded

4

replacement and switchrack rebuild due to projects re-allocating resources to those other activities with 1

increases. 2

SCE’s 2020-2021 capital expenditures requests for all activities were unopposed by all 3

intervenors. 4

Table I-4 Substation Capital Expenditures

2014-2019 Recorded/2020-2021 Forecast Summary of SCE Position

(Nominal $000)

2014 2015 2016 2017 20182019

Recorded2020

Forecast2021

ForecastTotal

2019-20211 Monitoring Bulk Power System 62,246 48,666 56,774 66,975 59,541 51,412 46,141 72,622 170,175 2 Preventive Maintenance 58,456 50,359 41,856 42,350 42,975 65,438 46,460 47,456 159,354 3 Substation Capital Breakdown 9,358 9,276 12,703 13,102 11,376 17,259 12,579 12,848 42,686 4 Substation Claim 850 312 73 116 295 (23) 379 387 743 5 Circuit Breaker Replacement 60,728 48,578 49,850 43,880 44,467 39,148 45,088 42,356 126,592 6 Substation Transformer Bank 70,271 74,596 105,030 90,727 84,588 39,442 61,635 85,658 186,735 7 Substation Switcrack Rebuild - 1,337 3,937 8,326 21,096 13,382 21,785 78,631 113,798 8 Relays, Protection, and Control 18,085 21,678 24,272 28,804 32,245 36,402 60,252 73,411 170,065 9 Substation Tools and Work 7,120 5,598 6,522 6,159 7,379 7,398 7,401 7,560 22,359 10 Oil Containment Diversion System 368 165 306 454 423 635 386 394 1,415 11 Substation Emergency Equipment 31,442 19,479 17,275 15,860 7,953 21,598 16,271 24,125 61,994 12 Total 318,924 280,044 318,598 316,753 312,338 292,091 318,377 445,448 1,055,916

Lin

e #

GRC Activity

SCE Rebuttal PositionSCE Recorded

5

II. 1

MONITORING BULK POWER SYSTEMS 2

SCE’s transmission, sub-transmission, and distribution grids require constant oversight and 3

control to provide safe, reliable, and continuous electrical service to customers. This is accomplished 4

through SCE’s Grid Monitoring and Operability programs. 5

A. O&M Expenses 6

Grid Monitoring & Operability’s O&M forecast is further comprised of two sub-activities called 7

(1) Monitoring and Operating Substations and (2) Monitoring Bulk Power Systems.3 Each activity has 8

its own supporting forecast methodology. 9

Cal Advocates only opposes SCE’s O&M request related to Monitoring Bulk Power Systems. 10

1. Monitoring Bulk Power Systems 11

a) SCE Application 12

The Monitoring Bulk and Power Systems program deals with assets under 13

California Independent System Operator (CAISO) control and involves two groups of personnel from 14

the System Operators in Grid Control Center (GCC) and Grid Network Solutions (GNS).4 The basis for 15

the costs associated with Monitoring Bulk and Power System is personnel count.5 16

b) Monitoring Bulk Power System – Grid Control Center (GCC) 17

With respect to the Grid Control Center, there is no expected change in staffing 18

levels for this activity through this GRC cycle, and therefore SCE’s 2021 labor and non-labor forecast of 19

$10.065 million is based on last year recorded for 2018.6 Table II-5 below compares SCE’s forecast with 20

the Cal Advocates’ counter-proposals. Additionally, SCE notes a minor errata in its labor to non-labor 21

ratio, which does not ultimately impact its total request for this particular activity. 22

3 See Table II-3 in Exhibit SCE-02, Vol. 3, p. 9.




6

Table II-5 Grid Control Center 2021 Test Year

Summary of SCE and Cal Advocates Position

(1) Cal Advocates’ Position 1

With respect to labor only, Cal Advocates disputes SCE’s adoption of last 2

year recorded for the GCC and instead proposes a three-year average of recorded expenses from 2016 to 3

2018.7 Cal Advocates believes that historical expenses from 2016 to 2018 “show a stable trend and 4

would be less likely to see an increase as opposed to SCE’s 2021 forecast of increasing labor by $0.818 5

million over recorded 2018.”8 Thus, Cal Advocates recommends $8.537 million for labor in the 2021 6

test year, which is $0.726 million less than SCE’s proposed $9.263 million for labor. Cal Advocates 7

“does not oppose [SCE’s] non-labor forecast of $.801 million”9 for the Test Year, which is based on a 8

different methodology, specifically 2018 recorded. 9

(2) SCE’s Rebuttal to Cal Advocates’ Position 10

(a) SCE’s Forecast Methodology for Monitoring Bulk Power 11

System-Grid Control Center is Justified. 12

In reviewing the accompanying Figure for Monitoring Bulk Power 13

System-Grid Control Center in SCE’s testimony, SCE acknowledges there is a minor error in the labor 14

to non-labor ratio as shown in years 2019 to 2021.10 This error did not impact SCE’s total request of 15

$10.065 million for 2019, 2020, and 2021. As shown in Figure II-1, the Labor and Non-Labor forecast 16

7 Exhibit PAO-07, p. 7, lines 1-5.



10 Exhibit SCE-02, Vol. 3E2, p. 11 or Appendix A, p. A-3. Since staffing levels in 2021 are expected to be the same as 2018, the “Total Expense” in Figure II-5 on page 11 for 2021 and 2018 is $10.065 million. However, in SCE’s 2019-2021 forecast in Figure II-5, SCE inadvertently indicated a 92% labor to non-labor ratio, instead of 84% which is the 2018 labor to non-labor ratio.

Variance from SCE

SCE Application

SCE Adjustment

SCE Revised Forecast

Cal Advocates

Cal Advocates

1 Labor 9,263$ (818)$ 8,445$ 8,537$ 92$ $8,4452 Non-Labor 801$ 818$ 1,619$ 801$ (818)$ $1,6193 Other -$ -$ -$ 4 Total 10,065$ -$ 10,065$ 9,338$ (726)$ $10,065

Line No.

Monitoring Bulk Power System - Grid Control Center

2021 Forecast

SCE Rebuttal

Position

7

should have both been equal to the 2018 recorded amount for the period of 2019-2021 as shown in the 1

corrected table below.11 2

Figure II-1 Monitoring Bulk Power System – Grid Control Center

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

As stated by SCE witness Mr. Trehan in his direct testimony, 3

personnel count for the GCC is the basis for our costs for this particular activity.12 Furthermore, “SCE is 4

forecasting 2021 O&M for this activity at levels consistent with 2018 recorded expense.”13 There will be 5

no anticipated changes to staffing levels.14 The historical variances from 2014 to 2017 were caused by 6

division overhead accounting changes or employee incentivized certification programs – neither of 7

11 Please see SCE’s concurrently filed errata for an updated figure related to the Grid Control Center in Exhibit

SCE-02, Vol. 3E2, p. 11 or Appendix A, p. A-3.



14 Id.

8

which continued into 2018.15 Therefore, our request for last year recorded for labor, at $8.445 million, 1

and non-labor, at $1.619 million, is reasonable. 2

SCE’s approach of utilizing last year recorded for this activity 3

adheres to the Commission’s guidance in D. 89-12-057 and D. 04-07-022. To use Cal Advocate’s own 4

characterization, SCE’s expenses for labor in this activity show a “stable trend.”16 Per the Commission’s 5

guidelines, “If recorded expenses in an account have been relatively stable (emphasis added) for three or 6

more years, the [last year recorded] expense is an appropriate base estimate for [the Test Year].”17 As 7

referenced in Figure II-1, updated above, the labor expenses from 2016-2018 for this activity were 8

$8.765 million, $8.402 million and $8.445 million, respectively.18 This stable trend in spending supports 9

the use of 2018’s last year recorded expenses. 10

Cal Advocates’ proposal ignores both the Commission’s guidelines 11

on stable trends, and SCE’s expected static personnel and related costs. Cal Advocates also fails to 12

substantiate why a three-year average is more reasonable than using the 2018 recorded to forecast SCE’s 13

labor request as SCE has done. Thus, SCE reiterates its request for $10.065 million for 2019, 2020, and 14

2021 for labor and non-labor for the GCC.19 15

c) Monitoring Bulk Power System – Grid Network Solutions 16

With respect to the Grid Network Solutions, SCE’s 2021 forecast is $44.853 17

million, which is $7.921 million over SCE’s last year recorded for 2018.20 Specifically, SCE’s 2021 18

labor forecast is $29.849 million, which is a $6.862 million increase over 2018 primarily due to staffing 19

increases required to support ongoing maintenance for Grid Modernization workstreams.21 SCE’s 2021 20



17 D. 04-07-022, page 2.

18 See SCE’s concurrently filed Errata which includes an updated to Figure II-5 in Exhibit SCE-02, Vol. 3E2, p. 11 or Appendix A, p. A-3.

19 SCE asserts that should the Commission adopt Cal Advocate’s proposed three-year average to get the recommended test year amount of $8.537 million for labor, then this methodology must be applied fairly and uniformly to non-labor. Cal Advocates provides no rationale for why it would only suggest the three-year average for labor as opposed to non-labor, except for the fact that this would ultimately result in a higher non-labor figure. SCE calculates the three-year average for non-labor from 2016 to 2018 is $1.861 million, which is higher than SCE’s request of $1.619 million.

20 Figure II-6 in Exhibit SCE-02, Vol. 3, p. 14.

21 Exhibit SCE-02, Vol. 3, p. 16.

9

non-labor forecast is $12.949 million, which is a $1.246 million increase over 2018, primarily due to 1

continued hardware maintenance coverage on an increasing number of data networking equipment.22 2

And, finally, SCE’s “other” 2021 forecast is $2.056 million (for leased circuits), which is a $0.353 3

million increase over 2018.23 For ratemaking purposes, SCE normalized the three-year forecast for years 4

2021-2023 and is using the normalized amount for the 2021 forecast.24 5

Table II-6 Grid Network Solutions

2021 Test Year Summary of SCE and Cal Advocates Position

(1) Cal Advocates Position 6

With respect to labor, Cal Advocates opposes SCE’s use of normalization 7

for Monitoring Bulk Power System – Grid Network Solutions and instead proposes a three-year average 8

of recorded expenses from 2016-2018.25 Cal Advocates believes that historicals from 2016 to 2018 show 9

a “stable trend” as opposed to using a normalized amount which includes two additional years of 10

forecasted data.26 Thus, Cal Advocates recommends $22.606 million for Labor in the 2021 test year, 11

which is $7.243 million less than SCE’s proposed $29.849 million.27 12

With respect to non-labor, Cal Advocates also recommends a three-year 13

average of recorded expenses from 2016-2018. Cal Advocates recommends $11.106 million for non-14

22 Exhibit SCE-02, Vol. 3, pp. 17-18.


24 Exhibit SCE-02, Vol. 3, p. 16, footnote 14.

25 Exhibit PAO-07, pp. 8-9.

26 Exhibit PAO-07, p. 9, line 2.

27 Table 7-4c in Exhibit PAO-07, p. 9.

10

labor in the 2021 test year, which is $1.843 million less than SCE’s proposed $12.949 million.28 Cal 1

Advocates does not oppose the “other” recommendation of $2.056 million for the test year.29 2

(2) SCE’s Rebuttal to Cal Advocates’ Position 3

(a) Normalization is a Standard Practice that has Been Approved 4

by the Commission in the Past 5

As indicated earlier, for ratemaking purposes, SCE normalized the 6

three-year forecast for years 2021-2023 and is using the normalized amount for the 2021 forecast.30 Cal 7

Advocates rejects SCE’s use of normalization to calculate the labor forecast for 2021 because SCE 8

includes two additional years (2022 and 2023) of forecasted data in the calculation.31 However, the 9

Commission has accepted the use of normalization on numerous occasions.32 “Normalization of costs is 10

a well-established rate making principle.”33 11

Normalization deals with a distinction between a calendar year 12

forecast and a test year forecast. Test year is the expenses that are representative of costs that would be 13

incurred over the course of a rate case cycle. If expenses vary a great deal from one calendar year to the 14

next calendar year during a rate case cycle, averaging those expenses for test year purposes is a standard 15

methodology. If expenses are not normalized, there would be no mechanism for SCE to recover them in 16

our current regulatory context. 17

(b) Cal Advocates Does Not Dispute the Need for the Incremental 18

Increase SCE has Requested for the Support of Grid Mod in 19

the Test Year 2021 in Regard to Labor Forecast 20

SCE forecasts cost increases in 2021-2023 labor forecast as a result 21

of a substantial increase in the number of technology assets put into service in support of the 22

28 Table 7-4c in Exhibit PAO-07, p. 9.


30 Exhibit SCE-02, Vol. 3, p. 16, footnote 14.

31 Exhibit PAO-07, p. 8, line 21 through p. 9, line 3.

32 D.06-05-016, pp. 29, 39, 81, 176, 234. See also D.09-03-025, pp. 14, 38, 269. See also D.12-11-051, pp. 70, 264-265,390. See also D.15-11-021 p. 22. These are examples where the Commission has explicitly adopted a multi-year normalization methodology in a rate case.

33 D.09-03-025, p. 269. and SCE-17, Volume 1 for additional Rebuttal Testimony on the appropriateness of normalizing the Test Year forecast when costs vary over calendar years.

11

implementation of the Grid Modernization program.34 These assets include but are not limited to 1

thousands of new server instances, end point devices and networking components spread across data 2

centers, substations and telecommunication sites throughout SCE’s 50,000-mile service territory. In 3

addition, we are implementing several new applications including the Grid Management system which 4

will require appropriate maintenance support. As stated in SCE’s response to Data Request PubAdv-5

SCE-063-MW5 Question 02.a-b,35 SCE’s proposed $6.862 million increase from 2018 recorded to 2021 6

forecast is representative of “the same type of labor duties that are being performed today, just at a 7

higher volume. The increased volume is driven by incremental assets and systems that are being added 8

to the environment because of the implementation of Grid Modernization.” In the same response, SCE 9

explained that an additional 44 employees are needed over the 2021-2023 time period. SCE has 10

estimated that the $6.882 million is necessary to fund the incremental application, data center and 11

networking personnel required to maintain the new technologies. The estimate was based on an 12

assessment of the following: 13

Asset types (application, data center, networking, etc.) 14

Asset quantities 15

Physical location (Data Center, Substation, Remote Sites) 16

Reliability requirements (Grid Assets = High Reliability 17

Requirements) 18

Maintenance Activities (Break/Fix, Enhancements, etc.) 19

Cyber Security (Vulnerability Scanning, Patching) 20

NERC CIP Compliance (Where Applicable) 21

In addition, Cal Advocates does not dispute the necessity or 22

reasonableness of the costs included in SCE’s forecast 2021-2023. Instead, Cal Advocates simply rejects 23

the use of normalization and provides an alternative of using a three-year average from 2016-2018 to 24

forecast.36 This methodology would be inadequate to support SCE’s need that we are requesting because 25

we would not be able to support the incremental addition of assets and systems mentioned above. The 26

assets and systems being put into production for Grid Modernization were not present in the 2016-2018 27

34 Refer to SCE-02, Volume 4, Pt. 1, Chapter II.

35 Appendix, p. A-4.

36 Exhibit PAO-07, p. 8, line 21 through p. 9, line 3.

12

window, therefore, it would be an incorrect comparison of the level of support required in 2016-2018 1

and the level of support required in 2021. As such, Cal Advocates’ $7.243 million proposed reduction 2

should be rejected. 3

(c) Cal Advocates Does Not Dispute the Need for Additional 4

Support for Hardware Maintenance in Regard to Non-Labor 5

Forecast 6

As stated in SCE’s response to PubAdv-SCE-011-MW5 Q.01b,37 7

SCE’s request to increase $1.246 million from 2018 recorded to 2021 forecast is due to hardware 8

maintenance costs to cover incremental data networking equipment added by SCE’s Grid Modernization 9

program, as well as increased hardware maintenance costs for data networking equipment associated 10

with the growing number of devices offset by one time consulting charges in 2018.38 As a follow up, an 11

itemized list of vendor contract costs that make up the largest increase in existing Hardware 12

Maintenance Portfolio in non-labor costs was provided in SCE’s response to PubAdv-SCE-MW5-019 13

Q.01b. Cal Advocates does not dispute the need for the additional support for hardware maintenance. 14

Instead, Cal Advocates recommends the use of a three-year average of recorded 2016-2018 data to 15

determine the forecast for 2021.39 This methodology would be inadequate to support SCE’s need that is 16

being requested because we would not be able to support the incremental hardware maintenance costs as 17

a result of the increased assets being put into production. The assets being put into production for Grid 18

Modernization were not present in the 2016-2018 window, therefore, it would be an incorrect 19

comparison of the level of support required in 2016-2018 and the level of support required in 2021. As 20

such, Cal Advocates’ proposed $1.843 million reduction should be rejected. 21

2. Conclusion 22

As shown in this testimony, SCE’s forecasting methodologies for the Monitoring Bulk 23

Power Systems sub-activity are reasonable and in accordance with prior Commission guidance. Cal 24

Advocates’ proposal disregards Commission guidance on using last year recorded for a “stable trend” 25

and makes unsupported arguments against the use of normalizing forecasts while not addressing the 26

37 Appendix, pp. A5-9.

38 Exhibit SCE-02, V.03, p. 17, lines 13-16.


13

underlying business need that SCE presented. For the reasons discussed in this testimony SCE 1

respectfully requests the Commission fully adopt SCE’s forecast.2

Appendix A

SCE-13 Vol. 3: Rebuttal Testimony on Substation Appendix A Index of Supporting Documentation

A1

TABLE OF CONTENTS PAGE(S)

SCE-02-Volume 3E2 A2

PubAdv-SCE-063-MW5 Question 02.a-b A3

PubAdv-SCE-011-MW5 Q.01b A4-A8

Figure II-5 Monitoring Bulk Power System-Grid Control Center

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

See

A2

Labor: $8445 $8445 $8445Non-Labor: $1,619 $1,619 $1,619

Southern California Edison A.19-08-013 – SCE 2021 General Rate Case

DATA REQUEST SET P u b A d v - S C E - 0 6 3 - M W 5

To: Public Advocates Office

Prepared by: Michael Do Job Title: Advisor

Received Date: 1/6/2019

Response Date: 1/21/2020

Question 02.a-b: Regarding data request PubAdv-SCE-011-MW5, Q.01.a-c Response Support: Regarding Question 01.a tab: a. Please explain how the forecast adjustment 1-4 is different from everyday activities that are already being performed as part of labor duties. b. Please provide the number, if any, of additional employees’ SCE is requesting regarding the forecast adjustments 1-4 for TY 2021 from 2018. (Without using the normalized 3-year forecast of 2021-2023 for TY 2021.) Response to Question 02.a-b:

a. The forecast adjustments 1-4 represent the same type of labor duties that are being performed today, just at a higher volume. The increased volume is driven by incremental assets and systems that are being added to the environment because of the implementation of Grid Modernization.

b. Please see below the number of additional employees being requested regarding forecast adjustments 1-4 Forecast Adjustment 1 – 17 Forecast Adjustment 2 – 12 Forecast Adjustment 3 – 10 Forecast Adjustment 4 – 5

A3

Southern California Edison A.19-08-013 – SCE 2021 GRC

DATA REQUEST SET P u b A d v - S C E - 0 1 1 - M W 5

To: Public Advocates Office

Prepared by: Michael Do Job Title: Senior Advisor Received Date: 10/22/2019

Response Date: 11/6/2019

Question 01.a-c: Regarding Ex. SCE-02, Vol.3, p. 14: a. Please provide all supporting documentation for the $29,849 (in 000’s) for labor for TY 2021. b. Please provide all supporting documentation for the $12,949 (in 000’s) for non-labor for TY 2021. c. Please provide all supporting documentation for the $3,881 (in 000’s) for other for recorded 2015. Response to Question 01.a-c:

a. As stated in SCE-02, Volume 3, Grid Network Solutions is responsible for operating and maintaining the company’s Supervisory Control and Data Acquisition (SCADA) systems such as Energy Management System (EMS), Phasor, Centralized Remedial Action Scheme (CRAS), Grid Management System (GMS), Distribution Management System (DMS), Outage Management System (OMS) and critical Power Production Applications (PPD) for Peaker plants, Eastern Hydro generation station and Norther Hydro generation station. Additionally, Grid Network Solutions is also responsible for operating and maintaining the voice, data, and telecommunications networks on which the SCADA systems above operate. Used in conjunction, the SCADA systems and network infrastructure are the systems used to monitor and control SCE’s bulk power system. This category of costs is primarily labor associated with individuals responsible for the activities mentioned above as well as the non-labor expenses such as hardware maintenance and minor employee-related employee expenses.

As described in testimony, SCE’s 2021 Test Year Labor forecast is based on SCE’s 2018 Recorded base that is comprised of the activities above, plus a need for incremental staffing that is primarily driven by the implementation of new monitoring and controls capabilities to support distributed energy resources, increased distribution automation and cyber security technologies that are required to modernize the Grid.

These net new capabilities require incremental resources to support new technology tools, infrastructure, and applications that enable these capabilities. Please see attached Excel file “PubAdv-SCE-011-MW5 01.a-c Response Support.xlsx” TAB Question 01.a for additional

A4

PubAdv-SCE-011-MW5: 01.a-c Page 2 of 2

detail.

b. SCE’s 2021 Non-Labor Test Year forecast reflects an increase of $1.246 million above the 2018 Non-Labor expenses described in part (a) of this data request, which have been adjusted to remove one-time expenses that occurred in 2018. As testimony states, the remaining increase is due to hardware maintenance costs to cover incremental data networking equipment added by SCE’s Grid Mod program, as well as increased hardware maintenance costs for data networking equipment associated with the growing number of devices and change to purchasing and expensing one year of hardware maintenance coverage for equipment with expired maintenance.

Please see attached Excel file “PubAdv-SCE-011-MW5 01.a-c Response Support.xlsx” TAB Question 01.b for a breakdown of the 2021 Test Year forecast.

c. Please see attached Excel file “PubAdv-SCE-011-MW5 01.a-c Response Support.xlsx” TAB Question 01.c for additional information.

A5

Question 01a(in 000's)

2018 Base $ 22,987 2018 Recorded labor for Grid Network Solutions: operating and maintaining the company’s Supervisory Control and Data Acquisition (SCADA) systems such as Energy Management System (EMS), Phasor, Centralized Remedial Action Scheme (CRAS), Grid Management System (GMS), Distribution Management System (DMS), Outage Management System (OMS) and critical Power Production Applications (PPD) for Peaker plants, Eastern Hydro generation station and Norther Hydro generation station, operating/maintaining SCE's voice, data, and telecommunications networks on which the SCADA systems above operate.

Forecast Adj. 1 $ 3,400 This amount is for resources to identify failed equipment, resolve system issues, update firmware, deploy security patches, issue repair orders, repair failed equipment in the field, and optimize performance of the larger communication network.

Forecast Adj. 2 $ 1,462 This amount is for the incremental ongoing operation and maintenance of the data and telecommunications network resulting from modernizing the Grid, specifically Grid Mod Cyber Tools, Field Area Network (FAN -NETCOM), Common Substation Platform (CSP), Contraint Management System (CMS), Distribution Volt/VAR Control (DVVC) ,Tie Device Restoration Logic (TDRL)

Forecast Adj. 3 $ 1,200 This amount is for the ongoing operation and support of the SCADA systems used to monitor and operate the electric grid resulting from modernizing the Grid, specifically Grid Mod Cyber Tools, Field Area Network (FAN -NETCOM), Common Substation Platform (CSP), CMS, Distribution Volt/VAR Control (DVVC) ,TDRL

Forecast Adj. 4 $ 800 This amount is in support of the Cyber Security Grid Mod Ramp efforts2021 Forecast Labor $ 29,849

A6

Question 01b(in 000's)

2018 Base $ 11,703 2018 recorded: the 2018 NL recorded is primarily made up of Hardware maintenance, routine non-labor, and some one-time recorded costs. The Incremental $1.2M in 2021 is primarily made up of increased hardware maintenance costs for Grid Mod and growth of the existing hardware maintenance portfolio. The growth of the existing hardware maintenance portfolio is related to the trend of an increasing number of assets on the network and the recent accounting policy change of no longer capitalizing hardware maintenance.

Forecast Adj. 1 $ 1,405 Increased Grid Mod HW Maintenance costsForecast Adj. 2 $ 3,028 Growth of existing HW Maintenance portfolioForecast Adj. 3 $ 45 Routine Non-Labor Forecast Adj. 4 $ (705) One-time costs in 2018Forecast Adj. 5 $ (2,527) IT Consulting & Professional Services expenses in 20182021 Forecast Labor $ 12,949

A7

Question 01c

(in 000's)

GRC_Activity L_NL_DESC CE_Description AmountMonitoring Bulk Power System OTHER Labor to Other In $21Monitoring Bulk Power System OTHER Non-Labor to Other In $3,860Grand Total $3,881

A8

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2021 General Rate Case Rebuttal Testimony...9 Substation Tools and Work 7,120 5,598 6,522 6,159...

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