SDG&E and SoCalGas
Pipeline Safety Implementation Costs (A.16-09-005)

Background

In September 2016, 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.

The application requested approximately $134 million in capital and $61 million in operations and maintenance expenditures, for the completed projects in the areas of: 

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

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

  • SDG&E:      $0.16 (0.5%) 
  • SoCalGas:  $0.22 (0.5%) 

 

ORA Position

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

ORA has performed an in-depth review of certain aspects of SDG&E and SoCalGas’ Application and filed its testimony on September 15, 2017.

ORA recommends a disallowance of $8.065 million in post-1955 PSEP costs related to work performed on eighteen projects in the Application. Including disallowances from searching records and undepreciated book balances, ORA’s total recommend disallowance amounts to $8.47 million. This recommendation is based upon the analysis of each individual project, installation date of pipe segments, and the costs associated with hydrotesting and operations and maintenance work (O&M).

Additionally, ORA recommends increasing the Applicants’ proposed disallowance of $1.7 million per mile of system-wide average hydrotesting costs to $1.858 million per mile in order to better reflect the actual cost of such testing. The proposed increase reflects ORA’s more detailed analysis and inclusion of a larger profile of completed, strictly hydrotesting projects to calculate a per-mile cost.

ORA has not examined the reasonableness of specific costs associated with the projects nor the reasonableness of the decisions leading to project work.

See ORA’s Testimony filed on September 15, 2017. ORA’s testimony consists of the following five volumes:

  • ORA-01 (testimony regarding cost allocation)
  • ORA-02 (testimony regarding hydrotesting costs)
  • ORA-03-C (confidential workpapers; this testimony is not publically available)
  • ORA-04 (public supporting attachments)
  • ORA-05-C (confidential supporting attachments; this testimony is not publically available)

 See ORA’s October 10, 2016 Protest to the utilities’ Application.

 

Schedule

Event

Date

Intervenor Opening Testimony

September 15, 2017

Concurrent Rebuttal Testimony and Opening Comments on Pipeline Maintenance Projects to be Deferred

 

 October 20, 2017

Reply Comments on Pipeline Maintenance Projects to be Deferred

November 1, 2017

Evidentiary Hearings

December 4 - 8, 2017 in San Francisco

Opening Briefs

January 19, 2018

Reply Briefs

February 16, 2018

 

 

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