SDG&E and SoCalGas
Pipeline Safety Implementation Costs

 

Background

In December 2014, SDG&E and SoCalGas submitted an application to the CPUC requesting recovery of costs incurred from work undertaken to improve the safety and reliability of their gas system, as required by the CPUC’s 2014 Decision. The purpose of this proceeding is for the CPUC to determine the reasonableness of those expenditures. 

In July 2015, SDG&E and SoCalGas submitted an Amended Application, which reduced project costs due to locating additional pipeline records, and requested approximately $35.7 million for completed projects in the areas of:  

  • Pipeline Replacement 
  • Hydrotesting 
  • Project Analysis   
  • Other Associated Activities 

The utilities will seek cost recovery in a future proceeding for 12 unfinished projects, once they are complete. 

SDG&E and SoCalGas estimate that CPUC approval of their Application would increase the average household monthly customer bill by: 

  • SDG&E:      $0.13 (0.4%)  
  • SoCalGas:  $0.23 (0.4%)  

The CPUC will hold evidentiary hearings on the utilities' request in San Francisco from October 19 – 22, 2015. 

 

ORA Position

ORA supports important upgrades to SDG&E’s and SoCalGas’ natural gas pipelines to ensure public safety. Through its analysis, ORA seeks determine whether utility costs were reasonably incurred and consistent with CPUC requirements and state and federal laws. 

ORA has performed an in-depth review of SDG&E and SoCalGas’ Application and issued a full Report of its analysis on August 7, 2015. 

ORA recommends cost recovery of approximately $14 million for the utilities’ pipeline safety related expenditures:  

  • $13.3 million for Line 2000A, which runs from Banning to Corona, California:
    ORA would reduce the utilities’ $24.6 million request due to insufficient detail in recordkeeping, so that they are unable to be compared to original estimates or similar projects. In particular, the per-mile cost increased by 103.4% yet the scope only increased by about 1.8%.
       
  • $0.68 million for hydrotesting of the Playa del Rey storage field:
    ORA finds the actions taken for this project are prudent due to the unique circumstances, despite cost recordkeeping deficiencies.
     

However, ORA recommends that SDG&E and SoCalGas should not receive recovery of:   

  • $0.91 million for Lines 42-66-1 and 42-66-2, located in La Habra:
    The utilities have not demonstrated that the costs incurred for this project are reasonable.
     

Additionally, the CPUC should not approve cost recovery on projects for which the utilities changed the scope from their original proposal, unless SDG&E and SoCalGas can demonstrate that the costs were incurred for pipelines installed prior to 1961, when the CPUC established pressure testing and other requirements under General Order 112, as required by the CPUC’s 2014 Decision for SDG&E and SoCalGas 

See ORA’s August 7, 2015 Report via its Testimony. 

See ORA’s January 21, 2015 Protest to the utilities’ Application. 

 

Proceeding Docket  

See the CPUC’s Proceeding docket for a record of the proceeding.  

Visit the docket to subscribe to updates to this proceeding.  

 

 

Other Resources

SDG&E and SoCalGas Testimony and Workpapers