2021 General Rate Case - New Service Connections and Customer Requested System Modifications

 
2021 General Rate Case - New Service Connections and Customer Requested System Modifications
Application No.:     A.19-08-
Exhibit No.:         SCE-02, Vol. 4, Part 3
Witnesses:           D. Cabbell
                     P. Joseph

                                       (U 338-E)

                         2021 General Rate Case

                    New Service Connections and Customer Requested
                    System Modifications

                   Before the
                   Public Utilities Commission of the State of California

                                                                     Rosemead, California
                                                                         August 30, 2019
2021 General Rate Case - New Service Connections and Customer Requested System Modifications
SCE-02, Vol. 4, Part 3: New Service Connections and
                          Customer Requested System Modifications
                                                      Table Of Contents

                                               Section                                                               Page         Witness

I.    INTRODUCTION .............................................................................................1             P. Joseph

      A.        Content and Organization of Volume ....................................................1

      B.        Summary of Capital Request .................................................................1

II.   NEW SERVICE CONNECTIONS....................................................................3

      A.        Overview ................................................................................................3

                1.         Regulatory Background/Policies Driving SCE’s
                           Request .......................................................................................6

      B.        2018 Decision ........................................................................................6

                1.         Comparison of Authorized 2018 to Recorded ...........................6

      C.        Capital Expenditures for New Service Connections ..............................8

                1.         Residential New Service Connections .......................................8

                           a)         Need for Capital Program ..............................................8

                           b)         Residential Service Connections....................................8

                                      (1)        Program Description ..........................................9

                                      (2)        Basis for Capital Expenditure
                                                 Forecast ............................................................10

                           c)         Residential Line Extensions .........................................12

                                      (1)        Program Description ........................................12

                                      (2)        Residential Backbone Development ................13

                                      (3)        Residential Tract Line Extension
                                                 Development ....................................................16

                                      (4)        Residential Line Extensions .............................21

                2.         Commercial New Service Connections ...................................24

                           a)         Need for Capital Program ............................................24

                                                                      -i-
2021 General Rate Case - New Service Connections and Customer Requested System Modifications
SCE-02, Vol. 4, Part 3: New Service Connections and
         Customer Requested System Modifications
                     Table Of Contents (Continued)

                       Section                                                           Page     Witness

       b)      Commercial Service Connections ................................24

               (1)      Program Description ........................................25

               (2)      Basis for Capital Expenditure
                        Forecast ............................................................26

       c)      Commercial Line Extensions .......................................27

               (1)      Program Description ........................................27

               (2)      Commercial Tract Line Extension
                        Development ....................................................28

               (3)      Commercial Line Extensions ...........................31

3.     Agricultural New Service Connections ...................................34

       a)      Need for Capital Program ............................................34

       b)      Agricultural Service Connections ................................35

               (1)      Program Description ........................................35

               (2)      Basis for Capital Expenditure
                        Forecast ............................................................36

       c)      Agricultural Line Extensions .......................................37

               (1)      Program Description ........................................38

               (2)      Basis for Capital Expenditure
                        Forecast ............................................................39

4.     Streetlight New Service Connections ......................................41

       a)      Program Description ....................................................41

       b)      Need for Capital Program ............................................42

       c)      Basis for Capital Expenditure Forecast........................42

               (1)      Unit of Work Definition...................................42

                                           -ii-
SCE-02, Vol. 4, Part 3: New Service Connections and
                       Customer Requested System Modifications
                                         Table Of Contents (Continued)

                                            Section                                                              Page     Witness

                                   (2)        Unit Cost Analysis, Work Volume
                                              and Cost Forecast .............................................43

III.   CUSTOMER REQUESTED SYSTEM MODIFICATIONS ..........................45

       A.    Overview ..............................................................................................45

             1.         Regulatory Background/Policies Driving SCE’s
                        Request .....................................................................................46

       B.    2018 Decision ......................................................................................46

             1.         Comparison of Authorized 2018 to Recorded .........................46

       C.    Capital Expenditures for Customer Requested System
             Modifications .......................................................................................48

             1.         Relocations ...............................................................................48

                        a)         Program Description ....................................................48

                        b)         Need for Capital Program ............................................48

                        c)         Distribution Relocations ..............................................48

                                   (1)        Basis for Capital Expenditure
                                              Forecast ............................................................49

                        d)         Transmission Relocations ............................................49

                                   (1)        Basis for Capital Expenditure
                                              Forecast ............................................................50

             2.         Rule 20 Conversions ................................................................50

                        a)         Program Description ....................................................50

                        b)         Need for Capital Program ............................................51

                        c)         Rule 20A Conversions .................................................51

                                   (1)        Program Description ........................................53

                                   (2)        Basis for Capital Expenditure
                                              Forecast ............................................................54

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SCE-02, Vol. 4, Part 3: New Service Connections and
         Customer Requested System Modifications
                      Table Of Contents (Continued)

                        Section                                                               Page         Witness

       d)       Rule 20 B/C Conversions.............................................54

                (1)        Program Description ........................................54

                (2)        Distribution Rule 20B and Rule 20C
                           Conversions......................................................55

                (3)        Transmission Rule 20B and Rule20C ..............58

3.     Distribution Added Facilities ...................................................61

       a)       Program Description ....................................................62

       b)       Need for Capital Program ............................................62

       c)       Basis for Capital Expenditure Forecast........................62

4.     Transmission / Substation Added Facilities.............................62                       D. Cabbell

       a)       Transmission / Substation Added Facilities
                Description ...................................................................63

       b)       Need for Transmission/Substation Added
                Facilities .......................................................................64

       c)       Basis for Capital Expenditure Forecast........................64

5.     WDAT/TO/Gen-Tie.................................................................64

       a)       WDAT/TO/Gen-Tie Description .................................65

       b)       Need for WDAT/TO/Gen-Tie......................................66

       c)       Basis for Capital Expenditure Forecast........................66

                                               -iv-
1                                                        I.
 2                                               INTRODUCTION
 3   A.      Content and Organization of Volume
 4           This volume is Part 3 of the System Augmentation Volume and includes the capital expenditures
 5   that SCE incurs in responding to requests from customers and specifically focuses on the funding for:
 6   (a) connecting new residential, commercial, and agricultural customers to SCE’s system; (b) meeting
 7   customer requests under Rule 20 to underground certain overhead facilities; (c) relocating existing SCE
 8   facilities to meet customer needs; and (d) providing customers with added facilities under Rule 2.
 9           This testimony is comprised of the following Business Planning Elements (BPEs):
10           •   New Service Connections
11           •   Customer Requested System Modifications
12           Each chapter in this volume includes analyses of: (1) regulatory and compliance requirements,
13   (2) capital funding authorized in the 2018 General Rate Case (GRC) compared to recorded amounts in
14   2018, and (3) the 2019 – 2023 capital expenditure forecast.
15   B.      Summary of Capital Request
16           This volume1 presents SCE’s request for $2.418 billion in capital expenditures for 2019-2023 for
17   New Service Connections and Customer Requested System Modification GRC activities. SCE’s total
18   request for the System Augmentation BPG are presented in Figure I-1 for Part 3.

     1    Volume refers to SCE-02 Vol. 04 - System Augmentation Part 3.

                                                           1
Figure I-1
                    System Augmentation Part 3 Capital Expenditures 2019 – 2023
                               (Total Company Nominal $Millions)

1          A breakdown of the capital expenditures for 2019-2023 for System Augmentation work activities
2   by Chapter for SCE-2 Volume 4 Part 3 are shown below in Table I-1.

                                            Table I-1
              System Augmentation Part 3 Capital Expenditures 2019 – 2023 by Chapter
                                (Total Company Nominal $Million)

                                                     2
1                                                          II.
 2                                        NEW SERVICE CONNECTIONS
 3   A.       Overview
 4            New Service Connections are largely driven by SCE's obligation to serve and are subject to
 5   SCE’s Line Extension Tariff Rule 15,2 Service Extension Rule 16,3 and LS-1, LS-2, LS-3, OL-1, AL-2,
 6   DSL, and TC-1 Street and Area Lighting/Traffic Control Rates.4 Customer growth, defined as existing
 7   customers increasing their service requirements or the addition of new customers altogether, typically
 8   results in a meter installation. Examples of customer growth include the installation of a new meter in a
 9   new home or business, upgrading a meter due to increased load, extending electrical facilities to new
10   communities where new meters must be set, or installing streetlighting to serve the new or expanded
11   communities where new meters must be set. New service connection work is further delineated by the
12   type of customer load being served and the scope of the work necessary to serve the load. Load types are
13   either Residential, Commercial, Agricultural or Streetlight, based on the rate schedule the customer will
14   ultimately be billed under.
15            Scope of work is used to differentiate between service extensions and line extensions as well as
16   large tracts and backbones. Electric facilities installed to serve only the requesting customer are defined
17   as service connections. Facilities installed to serve more than one customer are defined as a line
18   extension. Facilities installed to serve a block of residential and commercial customers are defined as a
19   tract line extension. Facilities installed to bridge the location of existing electrical facilities to these new
20   tracts are defined as backbones.
21            Combining load type (e.g., Residential) with scope (e.g., Tract Line Extension) defines the title
22   of each New Service Connection Program (e.g., Residential Tract Line Extension program). This section
23   will cover the following kinds of New Service Connections:
24            1. Residential New Service Connections
25                a. Residential Service Connections

     2    SCE’s Tariff Rule 15 is available online, available at https://library.sce.com/content/dam/sce-
          doclib/public/regulatory/tariff/electric/rules/ELECTRIC_RULES_15.pdf , as of August 14 2019.
     3    SCE’s Tariff Rule 16 is available online at https://library.sce.com/content/dam/sce-
          doclib/public/regulatory/tariff/electric/rules/ELECTRIC_RULES_16.pdf, as of August 14 2019.
     4    SCE’s Street and Area Lighting/Traffic Control Rates are available online at
          https://www.sce.com/regulatory/tariff-books/rates-pricing-choices/street-outdoor-rates as of August 14 2019.

                                                              3
1               b. Residential Backbone5 Development
 2               c. Residential Tract Line Extension Development
 3               d. Residential Line Extensions
 4           2. Commercial New Service Connections
 5               a. Commercial Service Connections
 6               b. Commercial Tract Line Extension Development
 7               c. Commercial Line Extensions
 8           3. Agricultural New Service Connections
 9               a. Agricultural Service Connections
10               b. Agricultural Line Extensions
11           4. Streetlight New Service Connections
12           SCE uses the gross meter sets from the retail sales forecast presented in SCE-07 Vol. 016 as the
13   basis for developing its capital expenditure forecasts for each new service connection work activity.
14   Table II-2 shows the actual gross meter sets for 2009 to 2018 and the gross meter set forecast for 2019 to
15   2023, separated by customer class.

                                                   Table II-2
                                                Gross Meter Sets
                                      Actual 2009-2018 / Forecast 2019-2023

16           To forecast capital expenditures for new service connection work activities, SCE continues to
17   use the same methodology, or approach, used in its 2018 GRC proceeding.7 This approach translates the
18   gross meter set forecast to the required work that Transmission & Distribution (T&D) personnel must
19   perform to meet customer requests. This approach incorporates the natural time lags that occur between

     5   The “backbone” system generally refers to sections of distribution line on major thoroughfares that connect
         multiple tracts and commercial/industrial projects together.
     6   Refer to SCE-07 Vol. 01, Ch. VI. – Section B – Customer and New Meter Connections Forecasts - for
         Ms. Sheng’s testimony supporting SCE’s 2019 – 2023 gross meter set forecast.
     7   Refer to A.16-09-001, 2018 GRC, SCE-02 T&D-Vol.02 Customer Driven Programs, pp. 4-5.

                                                             4
1   construction of the facilities needed to support the meter set and the time the meter is installed or "set" at
 2   the customer’s home or business. This approach also accounts for the total inventory of electrical
 3   facilities available in the system, to incorporate the effects of past over- or under-installation of
 4   backbone facilities (as described below).
 5          SCE must respond to customer requests for backbone and tract new construction based on the
 6   Commission’s approved tariff rules. Forecasts from developers can lead to either excess inventory or
 7   depleted infrastructure capacity as the volume of work actually performed is primarily driven by
 8   requests from developers prior to actually constructing homes or businesses. That is, if developers over-
 9   estimate construction scale or progress, installation of electrical infrastructure will outpace new
10   construction. Conversely, if developers underestimate, it will result in depletion of existing
11   infrastructure capacity and will cause increased infrastructure spending in subsequent years.
12          In addition, changing economic conditions can result in fluctuations among the various new
13   service connection categories. For example, during periods of lower customer growth, the majority of
14   new meter sets occur as a result of replacement of a single residential unit with multiple units or because
15   a few homes were added to an existing developed area. This results in an increased activity within the
16   residential line extension work category.
17          During periods of higher customer growth, a significantly smaller proportion of the total meters
18   are driven by builders replacing single family units with multi-meter condominiums, apartments,
19   townhouses, and similar structures. Instead, most of the new meter set growth is driven by new
20   residential developments that require tract and backbone facilities to serve them. This results in
21   decreased activity within the residential line extension work category and increased activity within
22   residential tract and backbone work categories.
23          SCE accounts for all these inevitable forecast variances in the development of the forecasts for
24   capital expenditures.
25          The New Service Connections expenditure summary for the capital activities requested in this
26   section are shown in Table II-3.

                                                            5
Table II-3
                           New Service Connections Capital Expenditure Summary
                                 Recorded 2014-2018 / Forecast 2019-2023
                                      (Total Company - Nominal $000)

 1           The following sections will provide specific details on the methods SCE used to forecast capital
 2   expenditures for the activities listed in Table II-3.
 3           1.      Regulatory Background/Policies Driving SCE’s Request
 4                   New Service Connections programs are largely driven by SCE’s obligation to serve and
 5   are codified in SCE’s Line Extension Tariff Rule 15 and Service Extension Rule 16. Street and Area
 6   Lighting/Traffic Control are installed in accordance with Commission-approved Rate Schedules LS-1,
 7   LS-2, LS-3, OL-1, AL-2, DWL, and TC-1. These rules and rate schedules, as adopted by the
 8   Commission, define SCE and our customers’ respective responsibilities as they pertain to specific types
 9   of new construction. For example, Tariff Rule 15 provides the definition of a line extension, the type of
10   construction that would be included, what customer credits are available, as well as the work that the
11   customer is responsible to perform and/or reimburse SCE. Similar requirements are captured within the
12   rules and schedules listed for service connections and streetlighting. The Commission-approved rules
13   ensure that SCE’s customers are not inappropriately subsidizing the costs to connect new load.
14   B.      2018 Decision
15           1.      Comparison of Authorized 2018 to Recorded
16                   The 2018 GRC Decision requires SCE to compare the 2018 authorized amounts to the
17   recorded amounts;8 Figure II-2 shows the amounts authorized by the Commission in the 2018 GRC to
18   the amounts recorded in 2018 and variance between recorded and authorized amounts for New Service
19   Connections. The 2018 recorded expenditures were approximately 16% lower than authorized amounts,
20   with Residential and Streetlight work activities are the largest contributors to the variance between

     8    D.19-05-020, Ordering Paragraph 22, pgs. 441-442.

                                                              6
1   authorized and recorded. This is primarily due to a combination of fewer residential meter sets than were
2   forecast and fewer quantities of cable miles installed in both residential line extensions and residential
3   tract line extension development than were forecast. Moreover, as Streetlight systems are typically
4   installed in conjunction with the installation of residential meter sets, this activity was also impacted.
5   Customer demand and economic conditions, which are factors beyond SCE's control, ultimately drive
6   the work volume for New Service Connections.

                                             Figure II-2
                          2018 GRC Authorized to Recorded Variance Summary9
                                       New Service Connections
                                 (Total Company – Nominal $Millions)

    9   Refer to WP SCE-07, Vol. 01. – Capital Authorized to Recorded.

                                                          7
1   C.     Capital Expenditures for New Service Connections
 2          1.      Residential New Service Connections
 3                  a)      Need for Capital Program
 4                          Residential New Service Connections are necessary for new residential customers
 5   to receive electrical service from SCE. Pursuant to SCE’s Tariff Rule 15 Line Extensions, and Tariff
 6   Rule 16 Service Extensions, SCE provides new temporary and permanent residential service
 7   connections for customers in our service territory.
 8                          Extending service to new residential customers may entail the construction of new
 9   service connections, distribution line extensions, tract development and/or backbone development.
10   SCE has an obligation to serve customers within its service territory; this work is not discretionary.
11                  b)      Residential Service Connections
12                          Figure II-3 shows the Residential Service Connections recorded (2014-2018) and
13   forecast (2019-2023) capital expenditure summary in both nominal and constant 2018 dollars.

                                                           8
Figure II-3
                       Residential Service Connection Capital Expenditure Summary10
                                       WBS Element CET-PD-NS-RS
                                  Recorded 2014-2018/Forecast 2019-2023
                            (Total Company – Constant 2018 and Nominal $000)

 1                           (1)     Program Description
 2                                   The Residential Service Connections work category includes installing
 3   individual residential service extensions under SCE’s Tariff Rule 16 Service Extensions. SCE’s
 4   Residential Service Connections may consist of (a) primary or secondary underground or overhead
 5   service conductors, (b) poles to support overhead service conductors, (c) service transformers,
 6   (d) SCE-owned metering equipment, and (e) other SCE-owned service-related equipment.
 7                                   Examples of new residential services typically include:
 8                                   New Temporary Residential Service – All installations are site-specific
 9   and include all necessary construction (e.g., transformer, cable and/or meter) required to service
10   temporary customer loads anticipated to last more than one year.
11                                   New Permanent Residential Dwellings – SCE’s standard new service
12   installation consists of an underground service cable placed into customer owned conduit (which meets

     10   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 3-4 – Capital Detail by WBS Element for Residential New
          Service Connections.

                                                            9
1   SCE’s material standards, or in compliance with adopted local codes and ordinances, whichever is the
 2   stricter standard) served from a transformer or distribution point, and one meter (per single family
 3   residence). Per SCE's Tariff Rule 16, in a building with two or more tenants, electric service will be
 4   individually metered to every residential unit such as, but not limited to, apartment buildings, mobile
 5   home parks, etc.11
 6                                     Permanent Residential Electrical Load Increases – When existing
 7   residential customer load increases (e.g., from the installation of new centralized air conditioning, a new
 8   swimming pool, or upgraded home appliances) beyond the current service equipment capacity, the
 9   customer may request and/or be required to upgrade both their existing panel (i.e., replace an older
10   125-amp rated panel with a 200-amp rated panel) and the existing electrical facilities. Though SCE’s
11   standard new service installation is an underground service cable, in some cases local ordinances may
12   allow customers to upgrade their existing overhead-served panels with a new overhead-served panel.
13                                     The governmental authority having jurisdiction will determine whether an
14   overhead or underground service installation is required. Based upon current electrical service
15   requirements,12 SCE will determine if a new approved meter location is required.
16                                     SCE will furnish, install, own, and maintain electrical service facilities,
17   which include service conductors (overhead or underground) to supply permanent service from the
18   distribution line source to the service delivery point, riser materials, metering and transformation.
19                            (2)      Basis for Capital Expenditure Forecast
20                                     (a)     Unit of Work Definition
21                                             For this work category, the unit of measure is a residential meter
22   set.13 Recorded data from 2014 to 2018 shows a very strong correlation14 between the number of

     11   Rule 16 Section B.2. states that ‘Normally only one meter will be installed for a single-family residence or a
          single non-residential enterprise on a single Premises, except: (a) When otherwise required or allowed under
          SCE’s tariff schedules; (b) At the option of and as determined by SCE, for its operating convenience,
          consistent with its engineering design; (c) When required by law or local ordinance; or (d) When additional
          services are granted by SCE.”
     12   Meter location requirements and prohibited meter locations are described in Section 6 of the Electrical
          Service Requirements (ESR) manual available at;
          https://www1.sce.com/nrc/AboutSCE/regulatory/DistributionManuals/ESR.pdf, as of August 14 2019.
     13   SCE’s Tariff Rule 1 defines a service extension as follows: The overhead and underground primary or
          secondary facilities (including, but not limited to SCE-owned Service Facilities and Applicant-owned service
          facilities) extending from the point of connection at the Distribution Line to the Service Delivery Point. When
                                                                                                               (Continued)

                                                              10
1   residential gross meter sets in a given year and the capital expenditure in the same year, as illustrated in
2   Figure II-4. Each data point corresponds to a particular year’s data. SCE used these correlated regression
3   coefficients to translate the annual residential gross meter set forecast into annual forecasts of the
4   expenditure for each meter set.

                                                     Figure II-4
                                           Residential Service Connections
                            Total Capital Expenditures versus Residential Gross Meter Sets
                                      Recorded 2014-2018 / Forecast 2019-2023

5                                      (b)   Unit Costs Analysis, Work Volume and Cost Forecast
6                                            The costs associated with this work category include the material
7   and labor for installing overhead and underground cable, the associated cable material, and any other
8   miscellaneous material costs, such as incidental wiring and splices. Additionally, the costs include the
9   transportation, planning, and other allocated charges associated with the work.

    Continued from the previous page

         an underground Service Extension is supplied from an SCE-designated overhead pole, the beginning point of
         connection to SCE’s Distribution Line shall be where the Service Extension is connected to SCE’s overhead
         Distribution Line conductors.
    14   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II, pp. 5-7 – Residential Service Connections.

                                                            11
1                                           Table II-4 shows the recorded cost, gross meter sets, and meter set
 2   unit cost for residential service connections between 2014 and 2018. The meter set unit costs have
 3   varied between $631 and $840 from 2014-2018. Using a five-year regression of expenditure-to-meter
 4   sets from 2014-2018, SCE calculates a forecast unit cost of $685 for each meter set. SCE uses this figure
 5   as the basis to forecast 2019-2023 costs for residential service connections.

                                                  Table II-4
                         Meter Set Unit Cost Analysis - Residential Service Connections
                                              Recorded 2014-2018
                                    (Total Company - Constant 2018 $000)

 6                                           SCE calculated the forecast capital expenditure in this category by
 7   multiplying the forecast residential meter set unit cost by the number of residential gross meter sets SCE
 8   forecasts to install from 2019-2023. Table II-5 displays the 2019-2023 capital expenditure forecast for
 9   residential service connections.

                                                     Table II-5
                                   Residential Service Connections Expenditure
                                                Forecast 2019-2023
                                      (Total Company - Constant 2018 $000)

10                  c)       Residential Line Extensions
11                           (1)      Program Description
12                                    Line Extensions refer to the extension of distribution facilities necessary to
13   furnish permanent electric service to customers. Whereas service connections serve a single customer,
14   line extensions serve (or may serve) multiple customers. Line extensions are further delineated between

                                                            12
1   tracts and backbones. These categories, as well as all other line extensions, will be covered in the
 2   sections to follow.
 3                                     For all Line Extensions, SCE is responsible for installing or replacing
 4   primary and secondary systems required to support new or increased loads. This can include installation
 5   of distribution transformers, switching equipment and conductor (primary or secondary). Upon
 6   energizing SCE will own, operate and maintain the new Line Extensions (as well as the other associated
 7   distribution facilities).
 8                               (2)   Residential Backbone Development
 9                                     Figure II-5 shows the Residential Backbone Development recorded (2014-
10   2018) and forecast (2019-2023) capital expenditure summary in both nominal and constant 2018 dollars.

                                               Figure II-5
                     Residential Backbone Development Capital Expenditure Summary15
                                      WBS Element CET-PD-NS-RS
                                  Recorded 2014-2018/Forecast 2019-2023
                            (Total Company – Constant 2018 and Nominal $000)

     15   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 3-4 – Capital Detail by WBS Element for Residential New
          Service Connections.

                                                            13
1                                   (a)    Program Description
 2                                          Residential Backbone Development work includes main line
 3   feeder-system installations (commonly referred to as the “Backbone System”) to serve residential line
 4   extension and residential tract developments on main arterial thoroughfares. In addition, residential
 5   backbone system facilities serve smaller, non-residential customers located in a residential area, such as
 6   gas stations, restaurants and retail stores. Residential backbone systems also support streetlights along
 7   the major arterial thoroughfares, as well as the public safety lights, and the power required for landscape
 8   irrigation systems and public sanitation lift-stations. As the feeder to residential line extensions and
 9   residential tract developments, residential backbones typically include larger conductors, as well as
10   equipment for switching and protection.
11                                   (b)    Basis for Capital Expenditure Forecast
12                                          (i)     Unit of Work Definition
13                                                  For this work category, the unit of measure is a mile of
14   underground backbone development cable installed. In the 2018 GRC, to calculate the backbone
15   development expenditure forecast, SCE correlated the cumulative miles of backbone system installed
16   since 2006 with the cumulative number of gross meter sets since 2007. SCE did this to account for the
17   economic downturn that occurred in 2007 where the anticipated demand for new housing did not
18   materialize in that year through 2009. As a result, SCE saw an excess inventory of backbone build up in
19   the system and backbone installation slowed down significantly between 2008 and 2010. As SCE stated
20   in testimony in the 2018 GRC,16 improved economic conditions in the housing market (i.e. continued
21   growth of new meter sets) has reduced the excess capacity in the backbone system. Considering that the
22   issue of excess backbone cable has diminished, SCE now correlates the miles of backbone cable by
23   forecasting the number of meter sets on Year N+1 to forecast the amount of backbone cable installed in
24   Year N.
25                                                  Analysis of the historical data17 shows the following:
26                                                     For new residential developments, SCE must install the
27                                                      backbone electrical infrastructure before housing
28                                                      construction can begin, which results in the average

     16   Refer to A.16-09-001, SCE-02, Vol. 02 Customer Driven Programs, pp. 21.
     17   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 8-10 – Residential Backbone Development.

                                                           14
1                                                     lead-time between backbone and meter installations of
 2                                                     approximately one year.
 3                                                    There is a strong correlation between the miles of
 4                                                     backbone installed in a given year and the number of
 5                                                     meter sets in the following year.
 6                                                 We used this mathematical correlation to translate recorded
 7   gross meter set data and the forecast gross meter set data to forecast miles of residential backbone cable
 8   installed.
 9                                         (ii)    Unit Cost Analysis, Work Volume and Cost Forecast
10                                                 The unit cost for residential backbone includes the labor
11   and material to install not only the cable, but also any other associated assets, such as transformers,
12   switches, conduits, and underground structures. Additionally, the costs include transportation, planning,
13   and overhead charges. As shown in Table II-6, the unit cost has varied from $151,000 to $227,000 for
14   each mile over the 2014 – 2018 time period. Therefore, SCE used a five-year weighted average unit cost
15   of $197,000 for each mile of cable as the basis to forecast 2019-2023 costs for residential backbone
16   development.

                                               Table II-6
                    Cable Mile Unit Cost Analysis - Residential Backbone Development
                                          Recorded 2014-2018
                                 (Total Company - Constant 2018 $000)

17                                                 SCE developed its capital expenditure forecast in this
18   category by multiplying the forecast cable mile unit cost by the miles of residential underground
19   backbone development cable that SCE forecasts to install from 2019-2023. Table II-7 displays the 2019-
20   2023 capital expenditure forecast for residential backbone development.

                                                          15
Table II-7
                                   Residential Backbone Development Expenditure
                                                 Forecast 2019-2023
                                        (Total Company - Constant 2018 $000)

1                            (3)      Residential Tract Line Extension Development
2                                     Figure II-6 shows the Residential Tract Line Extension Development
3   recorded (2014-2018) and forecast (2019-2023) capital expenditure summary in both nominal and
4   constant 2018 dollars.

                                                          16
Figure II-6
              Residential Tract Line Extension Development Capital Expenditure Summary18
                                      WBS Element CET-PD-NS-RS
                                 Recorded 2014-2018/Forecast 2019-2023
                            (Total Company – Constant 2018 and Nominal $000)

 1                                   (a)     Program Description
 2                                           The Residential Tract Line Extension work category is for
 3   installing distribution systems within residential developments. Residential developments are defined as
 4   five or more dwelling units in two or more buildings located on a single parcel of land. SCE is
 5   responsible for furnishing and installing cables, switches, transformers, and other distribution facilities
 6   required to complete the residential tract line extension development.
 7                                           Figure II-7 is an example of a single line diagram showing a radial
 8   configuration for a distribution system. A tract connection generally refers to the section of distribution
 9   line that starts from a feed point within the backbone system and connects one or more distribution
10   transformers to a switch position on a backbone (i.e., Backbone Switch #1).

     18   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 3-4 – Capital Detail by WBS Element for Residential New
          Service Connections.

                                                           17
Figure II-7
                                        Tract vs. Backbone Connections

 1                                         The backbone system generally refers to sections of distribution
 2   line on major thoroughfares that connect multiple tracts and commercial/industrial projects together.
 3   The distribution radial connects to the backbone system through conduits and vaults with cable
 4   connections at the switch positions. For example, in Figure II-7, the backbone system includes the pad
 5   mounted switch identified as Switch #2 located in the southeast corner of the map, to switch identified
 6   as Switch #1 located in the center and extends further into the circuit.
 7                                         New residential tracts extend service to housing developments
 8   where no electrical infrastructure currently exists. This work is performed after backbone installation for
 9   new developments, and precedes service and meter installations. Developers request tract development
10   in anticipation of home sales. Thus, capital expenditures in this category are influenced by the accuracy
11   of the developers’ forecasts. Pursuant to tariff rules, SCE must meet the developers’ requests, regardless
12   and is not responsible for the accuracy of their forecasting.

                                                          18
1                                   (b)     Basis for Capital Expenditure Forecast
 2                                           (i)     Unit of Work Definition
 3                                                   For this category, the unit of measure we selected is a mile
 4   of tract line extension development cable installed. In the 2018 GRC, in developing the forecast, SCE
 5   included the cumulative length of tract cable installed since 2006 to incorporate the excess tract capacity
 6   built into the system. We then compared the cumulative miles of tract cable installed to the cumulative
 7   number of gross meter sets since 2006 to factor in the lead-time in tract development. Beginning in
 8   2006, SCE installed significantly more tract cable miles than initially estimated. This variance reflected
 9   developer requests based on their anticipated expectations of home sales that did not materialize. Since
10   this level of customer growth did not materialize in 2007 through 2009, there was an accumulation of
11   excess tract cable installed. However, in 2010 and 2011, the housing market stabilize and, beginning in
12   2012, the housing market resumed its upward trend in growth. As SCE stated in its 2018 GRC,19 the
13   inventory of excess tract cable has been reduced. Considering that the issue of excess tract cable has
14   diminished, SCE now correlates the miles of tract cable by forecasting the number of meter sets on Year
15   N+1 to forecast the amount of backbone cable installed in Year N.
16                                                   The analysis of the historical data20 shows trends similar to
17   that of residential backbone development:
18                                                      The average lead-time between tract development and
19                                                       meter installations is approximately one year.
20                                                      There is a strong correlation between the miles of tract
21                                                       cable installed in a given year and the number of meter
22                                                       sets in the next year, as the tract cable is necessary to
23                                                       complete service installations of new developments in
24                                                       the following year.
25                                                   We used this statistical correlation to translate recorded
26   gross meter set data and the forecast gross meter set data to forecast miles of residential tract cable to be
27   installed.

     19   Refer to A.16-09-001, SCE-02 Vol. 02 Customer Driven Programs, pp. 17.
     20   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 11-13 – Residential Tract Line Extension Development.

                                                            19
1                                         (ii)    Unit Cost Analysis, Work Volume and Cost Forecast
 2                                                 The unit cost for tract cable includes the labor and material
 3   to install not only the cable, but also any other associated assets such as transformers, switches, conduits,
 4   and underground structures. Additionally, the costs include transportation, planning and other allocated
 5   charges.
 6                                                 Table II-8 shows annual recorded costs, miles of tract line
 7   extension development cable installed, and cable mile unit cost between 2014 and 2018. As shown in the
 8   table, the unit cost has varied from $108,000 to $171,000 for each mile. To account for the variability,
 9   we used a five-year weighted average unit cost of $134,000 for each cable mile as the basis to forecast
10   2019-2023 costs for residential tract development.

                                                  Table II-8
                Cable Mile Unit Cost Analysis - Residential Tract Line Extension Development
                                            Recorded 2014-2018
                                   (Total Company - Constant 2018 $000)

11                                                 SCE developed its capital expenditure forecast in this
12   category by multiplying the forecast cable mile unit cost by the miles of residential tract line extension
13   cable SCE forecasts to install from 2019-2023. Table II-9 displays the 2019-2023 capital expenditure
14   forecast for residential tract development.

                                                 Table II-9
                         Residential Tract Line Extension Development Expenditure
                                             Forecast 2019-2023
                                   (Total Company - Constant 2018 $000)

                                                          20
1                           (4)     Residential Line Extensions
2                                   Figure II-8 shows the Residential Line Extensions recorded (2014-2018)
3   and forecast (2019-2023) capital expenditure summary in both nominal and constant 2018 dollars.

                                                 Figure II-8
                         Residential Line Extension Capital Expenditure Summary21
                                       WBS Element CET-PD-NS-RS
                                  Recorded 2014-2018/Forecast 2019-2023
                            (Total Company – Constant 2018 and Nominal $000)

4                                   (a)     Program Description
5                                           Residential Line Extensions typically serve an area of four or
6   fewer lots for residential dwelling units. This is identified by filed subdivision plans or an area in which
7   a group of dwellings may be constructed about the same time, either by a builder or several builders
8   working on a coordinated basis.

    21   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 3-4 – Capital Detail by WBS Element for Residential New
         Service Connections.

                                                          21
1                                  (b)     Basis for Capital Expenditure Forecast
 2                                          (i)    Unit of Work Definition
 3                                                 The historical data reveals a correlation between the
 4   number of gross meter sets in a given year and the miles of line extension cable installed in that same
 5   year as shown in Figure II-9. Each data point in this figure represents a single year of data.

                                             Figure II-9
                                     Residential Line Extensions
       Correlation of Miles of Line Extension Cable Installation to Residential Gross Meter Sets
                                         Recorded 2009-2018

 6                                                 Based on the correlation seen in Figure II-9, SCE uses the
 7   correlation between annual forecast number of new meters set and miles of cable for residential line
 8   extensions to develop the meter forecast to the number of miles of cable needed to support residential
 9   line extensions.
10                                          (ii)   Unit Cost Analysis, Work Volume, and Cost Forecast
11                                                 For this work category, the unit of measure we selected is a
12   mile of line extension cable. The types of costs associated with this work category include the material
13   and labor costs for installing overhead or underground extensions, the associated cable material,
14   trenching, or pole installation costs, and related material costs such as incidental wiring and splicing.
15   Additionally, the costs include transportation, planning and other allocated charges.

                                                          22
1                                                    Table II-10 summarizes the recorded expenditures, cable
 2   miles installed, and cable mile unit cost between 2014 and 2018. For 2014-2018, the unit costs have
 3   varied between $139,000 and $262,000 for each mile of cable. This range in unit costs is due to the
 4   range in scope that this work activity contains. For example, a line extension to three homes within a
 5   residential subdivision may only require a couple hundred feet of primary conductor. Some smaller line
 6   extensions may only require secondary conductor to be installed. On the other hand, extending service to
 7   three lots with a more rural or canyon community may require several thousand feet of primary
 8   conductor based on lot size and/or geographic conditions. In this example, the unit meter cost for each
 9   mile of conductor would be greater than two prior examples. To account for this variability, SCE used a
10   five-year weighted average unit cost of $173,000 for each mile of cable as the basis to forecast 2019-
11   2023 costs for residential line extensions.

                                                 Table II-10
                          Cable Mile Unit Cost Analysis - Residential Line Extensions
                                             Recorded 2014-2018
                                    (Total Company - Constant 2018 $000)

12                                                    SCE developed its capital expenditure forecast in this
13   category by multiplying the forecast cable mile unit cost by the miles of residential line extension cable
14   SCE forecasts to install from 2019-2023 based on the correlation between forecast new residential gross
15   meter sets and forecast miles of line extension installed.22 Table II-11 displays the 2019-2023 capital
16   expenditure forecast for residential line extensions.

     22   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 14-16 – Residential Line Extensions. Although Residential
          Line Extensions cable miles forecast looks steady compared to the variability seen with the Residential Meter
          Set Forecast, a 10 year regression was used to forecast cable miles. Thus, smoothing out the variability and
          forecasting a steady amount of cable miles to be installed.

                                                             23
Table II-11
                                    Residential Line Extensions Expenditure
                                              Forecast 2019-2023
                                     (Total Company - Constant 2018 $000)

 1           2.      Commercial New Service Connections
 2                   a)      Need for Capital Program
 3                           Commercial New Service Connections are necessary for new commercial
 4   customers to receive temporary or permanent electrical service from SCE. Pursuant to SCE’s Tariff Rule
 5   15 Line Extensions and Tariff Rule 16 Service Extensions, SCE provides new commercial service
 6   connections to customers located within SCE service territory. Extending new service to new
 7   commercial customers may entail the construction of new service connections, distribution line
 8   extensions, and tract development. This work is not discretionary; rather, it is required by SCE’s
 9   obligation to serve all customers in its service territory.
10                   b)      Commercial Service Connections
11                           Figure II-10 shows the Commercial Service Connections recorded (2014-2018)
12   and forecast (2019-2023) capital expenditure summary in both nominal and constant 2018 dollars.

                                                           24
Figure II-10
                      Commercial Service Connection Capital Expenditure Summary23
                                     WBS Element CET-PD-NS-CL
                                Recorded 2014-2018/Forecast 2019-2023
                          (Total Company – Constant 2018 and Nominal $000)

 1                           (1)     Program Description
 2                                   The Commercial Service Connections work category includes installing
 3   individual temporary and permanent commercial service connections, under SCE’s Tariff Rule 16
 4   Service Extensions. SCE’s Commercial Service Connections may consist of (a) primary or secondary
 5   underground or overhead service conductors, (b) poles to support overhead service conductors,
 6   (c) service transformers, (d) SCE-owned metering equipment, and (e) other SCE-owned service-related
 7   equipment.
 8                                   Examples of new commercial services typically can include:
 9                                   New Temporary Commercial Services – All installations are site-specific
10   and include all necessary construction required to service temporary customer loads anticipated to last
11   more than one year.

     23   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 17-18 – Capital Detail by WBS Element for Commercial
          New Service Connections.

                                                           25
1                                   New Permanent Commercial Customers – SCE’s standard installation
 2   consists of one meter per commercial customer. In a building with two or more tenants, electric service
 3   will be individually metered to every commercial unit such as, but not limited to, office buildings, retail
 4   buildings, warehouses, etc.
 5                                   Permanent Commercial Electrical Load Increases – When existing
 6   commercial customer load increases beyond the current service equipment capacity, the customer may
 7   request and/or be required to upgrade the existing facilities.
 8                                   The governmental authority having jurisdiction will determine whether an
 9   overhead or underground service installation is required. Based upon current design standards, SCE will
10   determine if a new approved meter location is required.
11                                   SCE will furnish, install, own, and maintain electrical service facilities,
12   which could include service conductors (overhead or underground) to supply permanent service from
13   the distribution line source to the service delivery point, riser materials, metering and transformation.
14                           (2)     Basis for Capital Expenditure Forecast
15                                   (a)    Unit of Work Definition
16                                          SCE has chosen a commercial meter set to be the unit of measure
17   for this category, just as in the case of residential service connections.24
18                                   (b)    Unit Cost Analysis, Work Volume and Cost Forecast
19                                          The costs associated with this work category include the material
20   and labor for installing overhead and underground cable, the associated cable material, and any other
21   miscellaneous material costs, such as incidental wiring and splices. Additionally, the costs include the
22   transportation, planning, and other allocated charges associated with the work.
23                                          Table II-12 shows the recorded cost, gross meter sets, and meter
24   set unit cost for commercial service connections between 2014 and 2018. The meter set unit cost varies
25   year to year, with a high of $5,898 in 2017 and a low of $3,284 in 2014. SCE attributes this variation to
26   the type of businesses served and their geographic locations. For instance, the service requirements for a
27   small convenience store in a strip mall are very different from the requirements of a major department
28   store. However, both are included in this work category. SCE uses a five-year regression of expenditures
29   to meter sets from 2014-2018 to calculate an estimated unit cost of $4,754 for each meter set.

     24   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 19-21 – Commercial Service Connections.

                                                           26
Table II-12
                      Meter Set Unit Cost Analysis - Commercial Service Connections
                                           Recorded 2014-2018
                                  (Total Company - Constant 2018 $000)

 1                                         SCE developed the capital expenditures forecast in this category
 2   by multiply the forecast commercial meter set unit cost by the forecast number of commercial gross
 3   meter sets from 2019-2023. Table II-13 displays the 2019-2023 capital expenditure forecast for
 4   commercial service connections.

                                                 Table II-13
                                  Commercial Service Connections Expenditure
                                              Forecast 2019-2023
                                     (Total Company - Constant 2018 $000)

 5                  c)      Commercial Line Extensions
 6                          (1)     Program Description
 7                                  Line extensions refer to the extension of distribution facilities necessary to
 8   furnish permanent electric service to customers. Whereas new service connections serve a single
 9   customer, distribution line extensions serve (or may serve) multiple customers. Commercial line
10   extensions are delineated between tracts and all other line extensions. These two categories will be
11   covered in the sections to follow.
12                                  For all commercial line extensions, SCE is responsible for capital
13   expenditures for installing or replacing primary and secondary systems, such as installation of
14   distribution transformers, switching equipment and conductor (primary or secondary), required to

                                                          27
1   support new or increased loads. Upon energizing SCE will own, operate and maintain the new
 2   distribution facilities.
 3                              (2)   Commercial Tract Line Extension Development
 4                                    Figure II-11 shows the Commercial Tract Line Extension Development
 5   recorded (2014-2018) and forecast (2019-2023) capital expenditure summary in both nominal and
 6   constant 2018 dollars.

                                            Figure II-11
             Commercial Tract Line Extension Development Capital Expenditure Summary25
                                   WBS Element CET-PD-NS-CL
                               Recorded 2014-2018/Forecast 2019-2023
                         (Total Company – Constant 2018 and Nominal $000)

 7                                    (a)   Program Description
 8                                          The commercial tract development work category includes costs
 9   for installing primary and secondary distribution systems within commercial developments. Commercial
10   tract development line extensions are defined as requiring components of 600 amps or greater installed

     25   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 17-18 – Capital Detail by WBS Element for Commercial
          New Service Connections.

                                                           28
1   to serve commercial line extensions. In addition, commercial tract system facilities can serve as the feed
 2   point to residential and commercial service customers.
 3                                  (b)     Basis for Capital Expenditure Forecast
 4                                          (i)     Unit of Work Definition
 5                                                  The unit of measure selected for this category is a mile of
 6   underground cable installed.26 Just as in residential tract development, commercial tracts are typically
 7   installed prior to actual service installations. However, the lead-time is significantly shorter compared to
 8   residential tract development. Based on historical data, SCE calculated the number of cable feet installed
 9   for each meter set. This ratio can vary from year-to-year, as shown in Table II-14, based on variability in
10   geographical locations of and types of commercial developments. To smooth the variability in the ratio,
11   SCE used a ten-year weighted average ratio of 71 cable feet for each meter set to calculate the
12   commercial tract forecast in miles of cable. This forecast is shown in Table II-15.

                                                Table II-14
                                Commercial Tract Line Extension Development
                                  Ratio Of Cable Feet For Each Meter Set

                                               Table II-15
                        Commercial Tract Line Extension Development Unit Forecast

     26   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 22-24 – Commercial Tract Line Extensions Development.

                                                           29
1                                          (ii)   Unit Cost Analysis, Work Volume and Cost Forecast
 2                                                 The costs associated in this work category includes the
 3   labor and material to install the cable and any other associated assets (e.g., transformers, conduits,
 4   underground structures, and poles). Additionally, the unit cost includes costs of transporting materials,
 5   transportation, planning, and other allocated charges. Table II-16 shows annual recorded cost, miles of
 6   cable installed, and cable mile unit cost between 2014 and 2018 for this work category.
 7                                                 As shown in Table II-16, from 2014-2018, the unit cost for
 8   each mile of cable installed for commercial tracts has varied from a low of $199,000 to a high of
 9   $399,000. This variability is due to the unpredictable types of business in any geographic location and
10   the customized tract development work associated with it. For example, strip mall tract development
11   requirements are substantially different from a large manufacturing or distribution facility.
12   To incorporate this variability, SCE used a five-year weighted average cable mile unit cost of $299,000
13   for each mile of cable as the basis to forecast 2019-2023 costs for commercial tract development.

                                              Table II-16
             Cable Mile Unit Cost Analysis - Commercial Tract Line Extension Development
                                          Recorded 2014-2018
                                 (Total Company - Constant 2018 $000)

14                                                 SCE developed the capital expenditure forecast in this
15   category by multiplying the forecast cable mile unit cost by the miles of commercial tract line extension
16   development cable SCE forecasts to install from 2019-2023. Table II-17 displays the 2019-2023 capital
17   expenditure forecast for commercial tract line extension development.

                                                          30
Table II-17
                        Commercial Tract Line Extension Development Expenditure
                                          Forecast 2019-2023
                                 (Total Company - Constant 2018 $000)

1                           (3)     Commercial Line Extensions
2                                   Figure II-12 shows the Commercial Line Extensions recorded (2014-2018)
3   and forecast (2019-2023) capital expenditure summary in both nominal and constant 2018 dollars.

                                             Figure II-12
                        Commercial Line Extension Capital Expenditure Summary27
                                     WBS Element CET-PD-NS-CL
                                Recorded 2014-2018/Forecast 2019-2023
                           (Total Company - Constant 2018 and Nominal $000)

    27   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 17-18 – Capital Detail by WBS Element for Commercial
         New Service Connections.

                                                          31
1                                   (a)     Program Description
 2                                           Commercial line extensions include all necessary construction
 3   required to serve new commercial or industrial loads. Typically, this request is for installing primary and
 4   secondary distribution systems within commercial developments such as shopping centers located on a
 5   single parcel of property or on two or more contiguous parcels of land. Commercial line extensions are
 6   defined as requiring components of less than 600 amps to be installed to serve commercial line
 7   extensions. In addition, commercial tract system facilities can serve as the feed point to residential and
 8   commercial service customers.
 9                                   (b)     Basis for Capital Expenditure Forecast
10                                           (i)    Unit of Work Definition
11                                                  SCE determined that the unit of measure for this work
12   category is a mile of overhead or underground cable installed.28
13                                                  The type of projects that SCE performs in this category
14   range from small retail store installations to large commercial buildings. Although both are included in
15   this work category, each will have substantially different electrical requirements. Based on historical
16   data, SCE calculated the number of cable feet installed for each meter by year. This ratio has fluctuated
17   from year to year, as shown in Table II-18. To smooth the variability in the ratio, SCE has used a
18   ten-year weighted average ratio of 171 cable feet for each meter set to translate the commercial meter
19   forecast to the commercial line extension forecast in miles of line extension as shown in Table II-19.

                                                   Table II-18
                                           Commercial Line Extensions
                                     Ratio Of Cable Feet For Each Meter Set

     28   Refer to WP SCE-02 Vol. 04, Part 03, Ch. II pp. 25-27 – Commercial Line Extensions.

                                                           32
Table II-19
                                  Commercial Line Extensions Unit Forecast

 1                                         (ii)    Unit Cost Analysis, Work Volume and Cost Forecast
 2                                                 The costs in this category includes the labor and material to
 3   install the cable and any other associated assets like transformers, underground structures and poles.
 4   Additionally, the costs include transporting materials, and transportation, planning, and other allocated
 5   charges. Table II-20 depicts commercial line extensions and summarizes the historical cable mile units
 6   and the cost per mile with this work category.
 7                                                 As shown in Table II-20, the unit cost of commercial line
 8   extension has fluctuated historically. This is largely due to the highly variable business customer needs
 9   varying from small retail store installations to large commercial buildings. For example, a small retail
10   store may require service from a standard distribution transformer while a large commercial building
11   may require a larger power transformer, a larger duct bank and possibly additional protection equipment.
12   Given the variable nature of the work, the size of a particular line extension in terms of sizing of
13   conductor, structures and electrical equipment can influence the cost per mile. Therefore, SCE used a
14   five-year weighted average unit cost of $245,000 for each mile of cable as the basis to forecast 2019-
15   2023 costs for commercial line extensions.

                                                          33
Table II-20
                         Cable Mile Unit Cost Analysis - Commercial Line Extension
                                            Recorded 2014-2018
                                   (Total Company - Constant 2018 $000)

 1                                                  SCE developed its capital expenditure forecast in this
 2   category by multiply the forecast cable mile unit cost by the miles of commercial line extension cable
 3   SCE forecasts to install from 2019-2023. Table II-21 displays the 2019-2023 capital expenditure
 4   forecast for commercial line extensions.

                                                Table II-21
                                   Commercial Line Extension Expenditure
                                             Forecast 2019-2023
                                    (Total Company - Constant 2018 $000)

 5          3.      Agricultural New Service Connections
 6                  a)      Need for Capital Program
 7                          Agricultural service connections are necessary for new agricultural customers to
 8   receive service from SCE. Pursuant to SCE’s Line Extension Tariff Rule 15 and Service Extension
 9   Tariff Rule 16, SCE provides service to agricultural customers within the SCE service territory.
10   Extending service to new agricultural customers may entail the construction of new service connections
11   or distribution line extensions. Each of these agricultural new service connection construction types will
12   be further described in the sections that follow. This work is not discretionary; rather, it is required by
13   SCE’s obligation to serve all customers in its service territory.

                                                           34
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