BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA SOUTHERN CALIFORNIA EDISON COMPANY'S (U 338-E) REPLY TO PROTESTS

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for Authority to, Among Other Things, Increase its Authorized Revenues for Electric Service in 2015, and to Reflect That Increase in Rates. A SOUTHERN CALIFORNIA EDISON COMPANY'S (U 338-E) REPLY TO PROTESTS KRIS G. VYAS JANE LEE COLE Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626) Dated: December 26, 2013

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for Authority to, Among Other Things, Increase its Authorized Revenues for Electric Service in 2015, and to Reflect That Increase in Rates. A SOUTHERN CALIFORNIA EDISON COMPANY'S (U 338-E) REPLY TO PROTESTS I. INTRODUCTION Southern California Edison Company (SCE) respectfully submits this reply to protests received in SCE s Test Year 2015 General Rate Case (GRC). On November 12, 2013, SCE filed its GRC application. This application appeared on the California Public Utilities Commission s (Commission s) Daily Calendar on November 14, Pursuant to Rule 2.6 of the Commission s Rules of Practice and Procedure, protests or responses were due 30 days later. SCE timely received protests submitted by the Office of Ratepayer Advocates (ORA), The Utility Reform Network (TURN), the National Consumer Law Center, the Coalition for Affordable Street Lights, the Greenlining Institute, and the Alliance for Retail Energy Markets and Direct Access Customer Coalition. Although the protests lead SCE to believe that evidentiary hearings will be necessary, SCE remains open to exploring alternatives to litigation as a means of resolving any issues raised by SCE s application. Based on the protests referenced above, SCE expects that hearings will be needed, and that at a minimum, the parties referenced above will submit testimony or otherwise participate in hearings. Those parties identified at least a partial list of issues they intend to raise in 1

3 this proceeding. Rather than address them here, to the extent parties raise substantive issues in written testimony or briefs that are within the scope of this case, SCE will similarly address them in detail in testimony or briefs. SCE respectfully disagrees with certain assertions and factual contentions made in the protests, and will respond to them at the appropriate juncture. SCE s reply to protests is limited to: (a) addressing the procedural schedule; and (b) addressing TURN s attempt to exclude certain issues from the case at the protest stage. 1 II. GRC SCHEDULE ORA and TURN have proposed a similar procedural schedule (proposed schedule). SCE will provide a more detailed discussion of schedule issues in SCE s prehearing conference statement. For now, SCE simply notes that the schedule offered by ORA/TURN does not include or even appear to consider key milestones that must be calendared before a GRC can be processed to a timely conclusion by year-end For example, the proposed schedule does not address public participation hearings, update hearings, or oral argument. It is also worth noting that SCE has the burden of proof in this case, but the proposed schedule would give ORA approximately nine months to review and analyze SCE s showing. That is a longer period of time than SCE spent preparing the direct testimony and workpapers. The proposed schedule would give TURN and other intervenors nearly six months to review and analyze SCE s showing. 2 In sharp contrast to the lengthy time period ORA and TURN provide themselves to examine SCE s showing, the proposed schedule gives SCE (the party with the burden of proof) 1 SCE also wishes to clarify a dollars item. In their protests, ORA and TURN mention that SCE is seeking a revenue requirement increase of $368 million in year 2016 and $331 million in SCE is actually seeking an increase of $318 million in 2016 and $317 million in The lower, updated figures were included in SCE s application tables and policy testimony, but the higher figures were inadvertently included in the text of SCE s application document. SCE apologizes for any inconvenience, and will correct the text reference in errata. 2 In fact, TURN has had SCE s testimony and workpapers in hand for nearly as long as ORA has. On September 9, 2013, TURN asked for and was sent copies of SCE s entire Notice of Intent showing. 2

4 just two weeks to respond to ORA s prepared testimony, and then two weeks to respond to all of the intervenors prepared testimony. The schedule proposed by SCE tracks the Rate Case Plan timeline; the schedule offered by ORA and TURN does not appear to do so. SCE and ORA/TURN have conferred to see if common ground can be reached on a mutually acceptable joint proposed schedule. SCE intends to continue those discussions, and will address scheduling issues in greater detail in our prehearing conference statement. III. PREVIOUSLY LITIGATED ISSUES ON WHICH THE COMMISSION HAS TAKEN A POSITION In its protest, TURN expresses concern about SCE including in its Application certain issues on which the Commission has taken a position. 3 Such issues include customer deposits, long-term incentives, executive short-term incentives and executive benefits, and compensation for nonemployee directors. TURN also argues that SCE s proposed post-test year ratemaking (PTYR) and employee stock option plan (ESOP) belong in this category of issues that have been litigated; TURN asks the Commission to exclude these issues from further consideration in the scope of this proceeding. 4 First, SCE respectfully disagrees with TURN s suggestion that the direct testimony relating to the above-referenced issues essentially represent a word-for-word repeat of our last GRC testimony. 5 Second, contrary to TURN s argument that SCE must present its case in direct showing for the previously litigated issues, the Commission s Rate Case Plan specifically allows SCE to include 3 TURN Protest at p TURN Protest at pp Many of TURN s (and any other intervenor s) arguments relating to this topic will be addressed in detail in SCE s rebuttal testimony, hearing testimony, and/or briefs. 3

5 previously litigated issues, on which the Commission has taken a position, at the end of the hearings: The NOI may contain material such as previously litigated issues on which the Commission has taken a position. This material must be clearly identified and contain a complete justification for any policy change. Showings on such material will be presented at the end of the hearing schedule, unless otherwise scheduled by the ALJ with the advice and consent of the assigned Commissioner. 6 Finally, SCE respectfully disagrees with TURN s interpretation of the Rate Case Plan -- that in order to meet its burden of proof 7 on previously litigated issues, the utility must present evidence that is materially different than that which the utility had presented on the issue in the previous GRC. 8 Whether SCE has met its burden of proof to show that its GRC request is reasonable is the entire purpose of this proceeding. 9 TURN appears to be attempting a procedural end around by asking that the Commission exclude issues during the protest stage on the grounds that SCE has not met its burden of proof. Moreover, while TURN has implied 10 a burden of proof standard on previously litigated issues, it cites no support for its understanding, and there is none to be found in the Rate Case Plan. As cited above, the Rate Case Plan states the party must include a complete justification for any policy change. 11 SCE has done that. For example, in the area of incentive and executive compensation, the Commission has not taken a consistent position on whether these items are an appropriate part of the total cash compensation, and has shifted its policy in the course of various GRCs. 12 These varied results are not due to different facts, since the underlying compensation 6 Order Instituting Rulemaking To Revise The Time Schedule For The Rate Case Plan, D , Appendix B, p. B-9 (emphasis added); D , Appendix A, p. A TURN Protest at p TURN Protest at pp See D at p. 7 ( The purpose of a general rate case is to develop and adopt sound, informed estimates of the reasonable costs to be incurred in the test year. ); D at p TURN Protest at p Order Instituting Rulemaking To Revise The Time Schedule For The Rate Case Plan, D , Appendix B, p. B-9; D , Appendix A, p. A See Exhibit SCE-06, Vol. 2, Pt. 1, pp

6 programs were essentially the same. The explanation may simply be due to different panels of Commissioners or a different Assigned Administrative Law Judge considering the issues, or perhaps a desire to achieve an overall revenue requirement by cutting a particular cost category. 13 SCE is requesting that the Commission once again change its policy, as it did in SCE s 2003 GRC. This is the only outcome that is consistent with cost-of-service principles. So long as the total compensation offered by the utility is reasonable, the Commission and SCE s customers should be indifferent to utility management decisions concerning how to provide an optimal mix of the various available forms of compensation to attract and retain qualified utility personnel. IV. CONCLUSION SCE looks forward to working with the Commission, the protesting parties, and other stakeholders to litigate and process this GRC to a timely conclusion. Respectfully submitted, KRIS G. VYAS JANE LEE COLE December 26, 2013 /s/ Kris G. Vyas By: Kris G. Vyas Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Facsimile: (626) kris.vyas@sce.com 13 SCE s Application includes other examples where the Commission does not appear to have taken a consistent position. In the area of customer deposits, the Commission s ratemaking policy for SCE differs from what the Commission has mandated for SD&E and PG&E. See Exhibit SCE-10, Vol. 2, pp ; SCE Application, p. 5. 5

7 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of SOUTHERN CALIFORNIA EDISON COMPANY'S (U 338-E) REPLY TO PROTESTS on all parties identified on the attached service list(s) A Service was effected by one or more means indicated below: [X] [X] Transmitting the copies via to all parties who have provided an address. Placing the copies in sealed envelopes and causing such envelopes to be delivered by hand or by overnight courier to the offices of the Commissioner(s) or other addressee(s). Comm. Michael R. Peevey CPUC 505 Van Ness Avenue San Francisco, CA ALJ Kevin R. Dudney CPUC 505 Van Ness Avenue San Francisco, CA [ ] Placing copies in properly addressed sealed envelopes and depositing such copies in the United States mail with first-class postage prepaid to all parties for those listed on the attached non- list. [ ] Directing Prographics to place the copies in properly addressed sealed envelopes and to deposit such envelopes in the United States mail with first-class postage prepaid to all parties. Executed this Thursday, December 26, 2013, at Rosemead, CA. /s/ Alejandra Arzola Alejandra Arzola Project Analyst SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

8 12/26/13 CPUC - Service Lists - A CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A APPLICATION OF SOUTH FILER: SOUTHERN CALIFORNIA EDISON COMPANY LIST NAME: LIST LAST CHANGED: DECEMBER 13, 2013 Download the Comma-delimited File About Comma-delimited Files Back to Service Lists Index Parties CHARLES HARAK KRIS G. VYAS NATIONAL CONSUMER LAW CENTER ATTORNEY 7 WINTHROP SQUARE, 4TH FLOOR SOUTHERN CALIFORNIA EDISON COMPANY BOSTON, MA WALNUT GROVE AVE./PO BOX 800 FOR: NATIONAL CONSUMER LAW CENTER ROSEMEAD, CA FOR: SOUTHERN CALIFORNIA EDISON COMPANY Information Only JAMIE L. MAULDIN LAUREN DUKE ADAMS BROADWELL JOSEPH & CARDOZO, PC DEUTSCHE BANK SECURITIES INC., CA 00000, NY MARC D. JOSEPH MATT FALLON ADAMS BROADWELL JOSEPH & CARDOZO TALON CAPITAL, CA 00000, CA MIKE CADE MRW & ASSOCIATES, LLC ALCANTAR & KAHL, CA 00000, CA DAVID MARCUS MATTHEW LIGAS ADAMS BROADWELL & JOSEPH TEILINGER CAPITAL 1270 AVENUE OF THE AMERICAS, STE. 1030, CA NEW YORK, NY JOHN APGAR, CFA CASE ADMINSTRATION 1/2

9 12/26/13 CPUC - Service Lists - A BANK OF AMERICA MERRILL LYNCH RESEARCH SOUTHERN CALIFORNIA EDISON COMPANY ONE BRYANT PARK, 15TH FL WALNUT GROVE AV. / PO BOX 800 NEW YORK, NY ROSEMEAD, CA FRANK A. MCNULTY JANE LEE COLE, ESQ. SOUTHERN CALIFORNIA EDISON COMPANY ATTORNEY 2244 WALNUT GROVE AVE. / PO BOX 800 SOUTHERN CALIFORNIA EDISON COMPANY ROSEMEAD, CA PO BOX 800 / 2244 WALNUT GROVE AVENUE ROSEMEAD, CA MIKE MARELLI SUE MARA DIRECTOR PRINCIPAL SOUTHERN CALIFORNIA EDISON COMPANY RTO ADVISORS, LLC 2244 WALNUT GROVE AVE./PO BOX SPRINGDALE WAY ROASEMEAD, CA REDWOOD CITY, CA ROBERT FINKELSTEIN CALIFORNIA ENERGY MARKETS GENERAL COUNSEL 425 DIVISADERO ST STE 303 THE UTILITY REFORM NETWORK SAN FRANCISCO, CA MARKET ST., STE SAN FRANCISCO, CA FOR: THE UTILITY REFORM NETWORK (TURN) CASE COORDINATION SCOTT BLAISING PACIFIC GAS AND ELECTRIC COMPANY ATTORNEY PO BOX ; MC B9A BRAUN BLAISING MCLAUGHLIN & SMITH, P.C. SAN FRANCISCO, CA L STREET, STE SACRAMENTO, CA ANDREW B. BROWN ELLISON SCHNEIDER & HARRIS L.L.P CAPITOL AVENUE, STE. 400 SACRAMENTO, CA State Service KE HAO OUYANG DONNA-FAY BOWER REGULATORY ANALYST - DRA CALIF PUBLIC UTILITIES COMMISSION CPUC ENERGY COST OF SERVICE & NATURAL GAS BRA ROOM 4205, CA VAN NESS AVENUE SAN FRANCISCO, CA KE HAO OUYANG KEVIN R. DUDNEY CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION UTILITY & PAYPHONE ENFORCEMENT BRANCH DIVISION OF ADMINISTRATIVE LAW JUDGES AREA 2-E ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA MELANIE DARLING CALIF PUBLIC UTILITIES COMMISSION DIVISION OF ADMINISTRATIVE LAW JUDGES ROOM VAN NESS AVENUE SAN FRANCISCO, CA TOP OF PAGE BACK TO INDEX OF SERVICE LISTS 2/2