SCE asks CPUC to authorize base revenue requirement

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Southern California Edison, in a Sept. 1 application filed with the California Public Utilities Commission, asked that the CPUC authorize a base revenue requirement of about $5.9 billion to become effective on Jan. 1, 2018, and to reflect the ABRR in distribution, generation and new system generation (peakers) rates.

Including sales reductions and $48 million in other one-time balancing and memorandum account recoveries, the company said that its request represents a $313 million, or 5.5 percent, increase over currently authorized base rates.

The company said that its infrastructure continues to age and deteriorate. Noting that equipment failures pose serious safety and reliability risks, SCE said that it continues to work proactively to mitigate those risks.

SCE said that while it appreciates that the CPUC has authorized funding to pursue several infrastructure replacement programs with increasing scope, the company has not arrived at a steady state of maintenance where grid performance is no longer eroding.

SCE said it must also leverage its infrastructure replacement programs to implement solutions that improve safety and reliability by updating decades-old grid design and engineering standards. As customers use the grid differently by adding distributed resources, feeding excess generation back to the grid, or changing load patterns by charging electric vehicles at night, SCE said that it must make the necessary modifications to keep up with those changes.

The company noted that California, led by the CPUC, is spearheading a transformative energy policy to assure the widespread deployment of distributed energy resources (DERs) and the innovative use of those resources to provide services and benefits to the grid. SCE further noted that California lawmakers recently passed Assembly Bill 327, which requires that utilities develop distribution resource plans to integrate DERs and recognizes the need to consider “investments in distribution infrastructure” to achieve that.

In response, the CPUC opened the Distribution Resources Plan (DRP) proceeding to undertake the process of “moving the IOUs towards a more full integration of DERs into their distribution system planning, operations, and investment,” the company said.

Discussing transmission construction and maintenance, the company said that it requests $41 million in O&M expenses for the 2018 Test Year and $313 million in CPUC jurisdictional capital expenditures from 2016-2020. Transmission maintenance activities include transmission line maintenance, insulator washing and road and right of way (ROW) maintenance, the company said.

Discussing grid modernization, SCE said that it is requesting $4.6 million in O&M expenses in 2018. In addition to accelerated growth in distributed solar, the grid is also seeing dramatic growth in distributed storage, the company said. Through its local capacity resources (LCR) solicitation, its first stand-alone storage solicitation and previous solicitations, SCE said that it has procured more than 200 MW of distribution and customer-connected storage with forecast deployment of 50 MW of customer-connected storage through customer-incentive programs. The company also noted that it has more than 70,000 electric vehicles in its service territory, and forecasts that that number will increase to more than 197,000 by 2018.

SCE said that its distribution grid is aging and facing new strains in the form of greater cybersecurity risks, nearing capacity limits on certain circuits and telecommunications wires, and technology obsolescence. The company said that its grid modernization plan includes acceleration and widespread installation of modern automation and control capabilities on distribution circuits and substations.

Among other things, SCE discussed grid technology, noting that it is requesting $16.5 million in O&M expenses for Test Year 2018 and $179 million in capital expenditures for years 2016-2020. Grid technology activities include using technology to perform advanced systems studies and develop models to better understand grid operations in an ever-changing environment; operating an integrated set of laboratory capabilities to develop operational and technology solutions, and safely test and evaluate those solutions prior to deploying them in the field; supporting the development of industry standards that promote equipment interoperability, vendor diversity, and prudent long-term asset deployment strategies; and supporting the DRP.

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