2018 General Rate Case - sce.com · 20 This volume presents SCE’s $162.4 million request for...

Application No.: A.16-09- Exhibit No.: SCE-07, Vol. 1 Witnesses: D. Daigler

(U 338-E)

2018 General Rate Case

Operational Services (OS) Volume 1 – Business Resiliency

Before the

Public Utilities Commission of the State of California

Rosemead, CaliforniaSeptember 1, 2016

SUMMARY

This volume presents the O&M expenses and capital expenditures for the Business Resiliency

Department to fund SCE’s business continuity and disaster recovery programs, seismic assessment and

mitigation program, and emergency planning and response.

SCE forecasts $8 million in O&M expenses in Test Year 2018 to develop and manage projects,

plans, and programs supporting emergency preparedness, response, and recovery.

SCE forecasts $118 million in CPUC-jurisdiction capital expenditures in years 2016-2020 to

perform detailed site assessments and high-priority seismic mitigation work on certain electric and

generation infrastructure and non-electric facilities.

Business Resiliency O&M Expenses 2018 Forecast

(Total Company Constant $Million)

Business Resiliency Capital Expenditures 2016-2020 Forecast

CPUC-Jurisdictional Only (Nominal $Million)

SCE-07: Operational Services Volume 1 – Business Resiliency

Table Of Contents

Section Page Witness

-i-

I. INTRODUCTION .............................................................................................1 D. Daigler

A. Content and Organization of Testimony ................................................1

B. O&M and Capital Request and History .................................................1

C. Overview ................................................................................................1

1. Risk Factors, Safety, Reliability ................................................2

2. Regulatory Background/Policies Driving SCE’s Request .......................................................................................3

3. Productivity, Cost Control Measures and Benchmarking ............................................................................4

II. 2015 DECISION ................................................................................................6

A. Comparison of Authorized 2015 to Recorded .......................................6

III. DESCRIPTION OF ORGANIZATION ............................................................7

A. Overview of Activities ...........................................................................7

1. Description of Business Resiliency Sub-Groups .......................7

a) Plans and Programs ........................................................7

(1) Standardize and Strengthen Planning ................8

(2) All Hazards Assessment and Mitigation Program ............................................8

b) Emergency Management Operations .............................9

c) Governance and Analytics ...........................................10

IV. O&M ................................................................................................................11

A. Business Resiliency Administrative and General (FERC Accounts 920/921) ...............................................................................11

1. Activity Description .................................................................11


Table Of Contents (Continued)


-ii-

2. Need for Activity .....................................................................12

3. Scope and Forecast ..................................................................13

a) Historical Variance Analysis .......................................13

(1) Labor ................................................................13

(2) Non-Labor ........................................................13

b) Forecast ........................................................................14

(1) Labor ................................................................14

(2) Non-Labor ........................................................14

B. Seismic Mitigation (FERC Account 935) ............................................15

1. Activity Description .................................................................15

2. Need for Activity .....................................................................15

3. Scope and Forecast ..................................................................17

a) Historical Variance Analysis .......................................17

(1) Labor ................................................................17

(2) Non-Labor ........................................................17

b) Forecast ........................................................................17

(1) Labor ................................................................17

(2) Non-Labor ........................................................18

V. CAPITAL .........................................................................................................19

A. Seismic Assessment and Mitigation Program ......................................19

1. WBS Indicator of Project and Capital Forecast .......................19

2. Program Description ................................................................20

a) Governance, Oversight, Project Management .................................................................21




-iii-

(1) Governance and Oversight ...............................22

(2) Prioritization of Work and Project Management .....................................................22

b) Program Development and Implementation ................22

(1) Phase I: Macro-Level Assessment ..................23

(2) Phase II: Detailed Assessments ......................24

(3) Phase III: Implement Mitigation Activities ..........................................................24

3. Need for Project .......................................................................24

a) Impacts to safety ..........................................................24

b) Impacts to service reliability ........................................25

c) Impacts to the community ............................................26

4. Scope and Cost Forecast ..........................................................26

a) Electric Infrastructure Assessment and Mitigation .....................................................................27

(1) Transmission Towers and Line/Corridor Assessments ..............................27

(2) Transmission Towers and Line/Corridors Mitigation ................................28

(3) Transmission Substation Assessment ..............28

(4) Transmission Substation Mitigation ................29

(5) Distribution System/Substation Assessment .......................................................29

(6) Distribution System/Substation Mitigation .........................................................30

b) Non-Electric Assessment and Mitigation ....................30




-iv-

(1) Non-Electric Facilities Assessment .................31

(2) Non-Electric Facilities Structural Mitigations .......................................................31

(3) Non-Electric Facilities Non-Structural Mitigations ......................................32

c) Generation Infrastructure Assessment and Mitigation .....................................................................32

(1) Large High-Hazard Dam Assessments .....................................................33

(2) Powerhouse Assessments.................................34

(3) Peakers Assessments ........................................34

(4) Mountainview Generating Station Assessments .....................................................35

(5) Bishop Creek Intake 2 Retrofit ........................35

1

I. 1

INTRODUCTION 2

A. Content and Organization of Testimony 3

This testimony describes the costs to operate SCE’s Business Resiliency Department (Business 4

Resiliency). Business Resiliency’s Operations & Maintenance (O&M) expenses and capital 5

expenditures are for: 6

• Assessing and supporting the continuity of SCE’s critical internal business processes, 7

applications and systems, 8

• Overseeing the All Hazard Assessment and Mitigation Program, which includes the 9

Seismic Assessment and Mitigation Program, and 10

• Safely managing SCE’s emergency planning and response operations to minimize service 11

disruptions and mitigate harm to individuals and damage to company assets. 12

This testimony discusses regulatory policies driving Business Resiliency’s programs and 13

activities that manage or mitigate the risks faced by SCE and the customers we serve. 14

B. O&M and Capital Request and History 15

This volume presents SCE’s $8.0 million request for Business Resiliency’s O&M expenses for 16

Test Year 2018. This is a $1.8 million increase over 2015 recorded expenses of $6.2 million. The 17

increase in the 2018 Test Year forecast over 2015 is primarily due to $1.5 million in new expenses 18

associated with the Seismic Assessment and Mitigation Program. 19

This volume presents SCE’s $162.4 million request for Business Resiliency’s capital forecast for 20

2016 through 2020. This request funds the Seismic Assessment and Mitigation Program, including (1) 21

$101.4 million for Electric Infrastructure, (2) $52.3 million for Non-Electric Facilities, and (3) $8.6 22

million for Generation Infrastructure.1 There are no historical expenditures for this program launched in 23

2016. 24

C. Overview 25

Business Resiliency provides company-wide governance and program management for SCE’s 26

business continuity and disaster recovery programs, assessment and mitigation programs and emergency 27

1 Due to rounding, subtotals may not sum to the total.

2

planning and response. Business Resiliency’s Plans and Programs, Emergency Management Operations, 1

and Governance and Analytics groups establish and manage those programs. 2

1. Risk Factors, Safety, Reliability 3

Electricity is essential to every aspect of life today, and the federal government considers 4

the electric utility a critical segment of the national infrastructure with immense homeland security and 5

economic implications. In 2011, Presidential Policy Directive/PPD-8: National Preparedness2 was 6

signed and defined how the nation should prepare for and respond to a wide range of natural hazards 7

such as earthquakes, wildfires, severe weather conditions, environmental changes and man-made or 8

technical hazards, such as physical intrusions, cyber-attacks, and sabotage. Business Resiliency manages 9

the plans, equipment, training, and exercise programs required to build and sustain the capabilities 10

outlined in this directive’s National Planning Framework.3 11

SCE’s All Hazards Assessment and Mitigation Program is a company-wide effort led by 12

Business Resiliency. The program assesses and prioritizes mitigation projects to address threats and 13

hazards posing the greatest risk to SCE’s critical infrastructure and business functions. This includes 14

evaluating scenarios that could negatively affect SCE’s ability to provide safe and reliable electricity to 15

its customers and the communities we serve. 16

Since SCE operates in one of the most seismically active regions of the United States, the 17

company added the Seismic Assessment and Mitigation Program to its All Hazards Assessment and 18

Mitigation Program. This program consolidates SCE’s ongoing earthquake preparedness efforts with 19

high-priority infrastructure and facility assessments and mitigation projects. The centralized approach 20

improves the company’s ability to safely complete seismic mitigation work while minimizing impact to 21

company-wide operations and system reliability. 22

As discussed in SCE-01, SCE is transitioning to a quantitative risk-informed decision 23

making and funding allocation framework. To develop our internal capability, the Seismic Assessment 24

and Mitigation Program was evaluated using the detailed risk analysis methodology and tools described 25

by Enterprise Risk Management in SCE-08, Volume 3. SCE performed the detailed risk analyses after 26

2 Refer to WP SCE-07, Vol. 01, pp. 1-5.


3

the scope of the projects was developed and selected. The purpose of this risk analysis is to continue 1

developing SCE’s risk analysis capability across the organization. Due to the sensitive and confidential 2

nature of these seismic projects, SCE cannot provide additional details in writing beyond what is 3

supplied in testimony and workpapers. However, SCE is amenable to providing further details and 4

answering any questions that interested parties have on this project, in a confidential, in-person setting. 5

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

Business Resiliency complies with regulatory policy and standards pertaining to disaster 7

preparedness, response, and recovery activities. 8

The California Public Utilities Commission’s General Order 166, Standards for 9

Operation, Reliability and Safety during Emergencies and Disasters,4 establishes standards that electric 10

utilities must follow when they prepare for emergencies and disasters. The goal is to minimize the 11

damages and impacts to the public resulting from electric system failures, major outages due to storms, 12

and hazards posed by compromised electric distribution facilities. 13

California Public Utility Code §768.65 sets standards for developing disaster and 14

emergency preparedness plans and programs, establishing points-of-contact with public representatives 15

from cities and counties within SCE’s service territory, and obtaining the input of these representatives 16

to those plans and programs. 17

Business Resiliency supports these regulatory requirements by creating and managing 18

programs to prepare for and respond to emergencies. Its work is also governed by the North American 19

Electric Reliability Corporation’s Critical Infrastructure Protection (NERC-CIP) standards for 20

cybersecurity threats, California’s strict seismic regulations and codes for infrastructure and facilities, 21

and California Independent System Operator (ISO), Federal Energy Regulatory Commission (FERC), 22

and Western Electricity Coordinating Council (WECC) standards for keeping the grid resilient and 23

avoiding service disruptions. 24

4 Refer to WP SCE-07, Vol. 01, p. 18.


4

3. Productivity, Cost Control Measures and Benchmarking 1

SCE carefully reviews and analyzes our response to emergencies and benchmarks 2

industry best practices for emergency management. SCE also retains the expertise of outside consultants 3

to assess opportunities to improve productivity and efficiency. 4

Incidents that threaten continuity of business operations at a utility with SCE’s vast and 5

varied service territory, large number of facilities and employees, and complex organizational structure, 6

require a well-coordinated response and recovery program. An external evaluation of SCE’s response to 7

the November 30, 2011 windstorm in Southern California led to the company’s implementation of a 8

standardized planning process as outlined in Federal Emergency Management Agency’s (FEMA) 9

Comprehensive Preparedness Guide (CPG 101).6 Business Resiliency adopted the Incident Command 10

System (ICS)7 to better serve SCE’s goals for delivering safe and reliable electricity to its customers, 11

even under extreme conditions. ICS allows SCE’s emergency response teams to (1) communicate and 12

collaborate better with internal Operational Units (OUs) and external stakeholders spanning multiple 13

jurisdictions, geographic regions and compliance authorities; (2) respond to widespread incidents that 14

have the potential to escalate and require multiple teams; and (3) prioritize shared objectives, reduce 15

redundancies, allocate resources and systems, and minimize costs. 16

Business Resiliency developed integrated training and exercise programs consistent with 17

ICS to support rapid activation and response to emergencies. These company programs increase 18

awareness, promote preparedness, and help individuals to build the muscle memory for the successful 19

emergency response to and recovery from a variety of incidents. 20

In July 2015, the City of Long Beach experienced outages due to equipment failures in 21

the underground network system. SCE commissioned an independent study of the company’s response 22

to this incident to identify areas for improvement by (1) determining the root causes of the network 23

failures and (2) analyzing key aspects of the subsequent response efforts, such as activation, 24

mobilization, escalation protocols, situational awareness, communications, logistics, and restoration 25


7 For more information on ICS, refer to the Federal Emergency Management Agency’s (FEMA’s) “Incident Command System Resources” web page, available at https://www.fema.gov/incident-command-system-resources [as of August 17, 2016].

5

strategies.8 As a result of this study, Business Resiliency tracks and implements corrective actions and 1

recommendations to promote continuous process improvements, including the implementation of new 2

standard operating procedures and training for operations personnel on the underground network system. 3


6

II. 1

2015 DECISION 2

A. Comparison of Authorized 2015 to Recorded9 3

Business Resiliency was authorized $4.0 million and recorded $6.2 million in O&M for 2015 as 4

shown in Figure II-1. The $2.2 million variance is primarily due to the expansion of incident response 5

teams to provide sufficient coverage during multiple operational periods during an emergency. The 6

Training and Exercise Program was broadened to prepare additional teams for activation. Non-labor 7

costs increased by $1.7 million based on additional contracts with ICS certified instructors, designers, 8

facilitators and evaluators to support the program. In addition to the expansion of incident response 9

teams, we implemented a 24/7 Watch Office to provide situational awareness and increased the staffing 10

plan to include one manager and six Watch Office staff members to be the points of contact for reporting 11

incidents and coordinating responses at SCE. This resulted in approximately $500,000 in incremental 12

expenses. 13

Figure II-1 Business Resiliency

Summary of 2015 O&M Request, Authorized, and Recorded ($000)


7

III. 1

DESCRIPTION OF ORGANIZATION 2

A. Overview of Activities 3

SCE is committed to building and improving its business resiliency and emergency response 4

capabilities. Business Resiliency establishes and manages company-wide protocols and maintains 5

consistency with national standards and industry best practices. 6

Business Resiliency provides the direction and oversight needed for SCE to meet applicable 7

regulatory mandates and standards, including Presidential Policy Directive/PPD-8: National 8

Preparedness. The National Planning Framework in the Presidential Policy Directive is used by SCE to 9

enhance its prevention, protection, mitigation, response, and recovery capabilities. In a region as diverse 10

as SCE’s service territory, we need to prepare for any incident, including natural disasters, 11

environmental changes, acts of terrorism, other manmade disasters including cyber or physical security-12

related threats, and smaller scale, but complex business disruptions. 13

SCE adopted an all-hazards approach to emergency management that aligns with the National 14

Incident Management System10 and ICS used by public sector agencies. These frameworks bring 15

consistency to the approach SCE uses to develop and implement business continuity plans and incident 16

response and recovery strategies. Business Resiliency manages the company’s emergency response 17

training and exercise programs, and coordinates these activities with other utilities and local, county, 18

state, and federal agencies. 19

1. Description of Business Resiliency Sub-Groups 20

Business Resiliency’s Plans and Programs, Emergency Management Operations, and 21

Governance and Analytics teams implement multiple projects, plans and programs, and educate and 22

engage personnel throughout SCE about emergency preparedness, response and recovery. 23

a) Plans and Programs 24

This group establishes and manages the development of plans and programs for 25

incident response, business continuity, disaster recovery, and all hazards assessment, mitigation, and 26


8

preparedness. The primary objectives of Plans and Programs are to: (1) standardize the development of 1

new and existing plans and (2) manage SCE’s All Hazards Assessment and Mitigation Program. 2

(1) Standardize and Strengthen Planning 3

Business continuity and disaster recovery planning includes conducting 4

annual Business Impact Analyses (BIAs) to identify and prioritize the criticality of each process, 5

application, and system supporting SCE’s electrical service and assess the impacts if that process is 6

disrupted. The associated response plans (e.g., the Cyber/Physical Security Plan, Storm Plan, and El 7

Niño Plan) specifically address how SCE will organize and respond to each type of incident. 8

The Plans and Programs group regularly meets with external stakeholders 9

and agencies as outlined in Cal. Pub. Util. Code §768.611. The team develops emergency response and 10

mitigation plans. The group researches and recommends tools and technologies to improve situational 11

awareness and communications during an incident. This group also manages SCE’s mutual assistance 12

program (sharing resources with other utilities during an emergency). 13

(2) All Hazards Assessment and Mitigation Program 14

SCE’s All Hazard Assessment and Mitigation Program conducts 15

assessments and develops mitigation strategies for a wide range of catastrophic disasters, natural or 16

manmade, that could have widespread impact on the continuity of business operations and customer 17

service. 18

In 2016, Business Resiliency launched the company-wide Seismic 19

Assessment and Mitigation Program to centralize and coordinate the company’s ongoing seismic 20

improvement projects for its infrastructure (electric and generation) and facilities (occupied and 21

operational). This centralized approach supports consistent application of best practices when gathering 22

and analyzing data gathering and analysis, performing on-site assessments, identifying the technical and 23

scientific subject experts, contracting with vendors, and compiling reports for the assessment and 24

mitigation projects. Seismic mitigations are prioritized with a focus on keeping people safe and 25

minimizing interruptions in electric service. Projects are executed by OUs with Business Resiliency’s 26

oversight. 27


9

Seismic Assessment and Mitigation Program activities planned for 2016–1

2020 will establish resiliency standards for SCE’s infrastructure (varying by type and criticality) and 2

portfolio of facilities and provide a baseline for conducting other hazard and impact assessments. 3

b) Emergency Management Operations 4

Emergency Management Operations provides expertise and direct support for 5

SCE’s emergency management preparedness, response, and recovery operations. The group’s personnel 6

build relationships with SCE’s external emergency response partners, such as law enforcement, first 7

responders, other utilities, and city, county, state, and federal government agencies to enhance training 8

and exercise effectiveness and collaboration during actual incidents. 9

Emergency Management Operations directs, coaches and supports incident 10

response teams throughout an incident’s activation, escalation, deployment, and demobilization. This 11

includes managing duty rosters for SCE’s incident management teams. 12

The hub of the Emergency Management Operations group is the 24/7 Watch 13

Office. The Watch Office is the primary point of contact for SCE’s various control centers (e.g., grid 14

control, distribution operations control, telecommunications control, generation operations center, and 15

security operations). It provides company-wide situational awareness, reports on critical incidents, 16

executes notifications, and manages team activations. The Watch Office staff oversees two critical 17

response and recovery command locations, the Emergency Operations Center (EOC) and Mobile 18

Command Center (MCC). 19

The Emergency Management Operations group also oversees SCE’s emergency 20

response training and exercise programs. The training team evaluates and develops course materials and 21

conducts more than 50 classes per year. This group tracks ICS certifications, qualifications, and annual 22

requalification. The exercise team runs drills and exercises for the company’s Crisis Management 23

Council, Incident Support Teams (IST), and Incident Management Teams (IMT), and the annual 24

company-wide full-scale exercise.12 The full-scale exercise includes IST/IMT members, external 25

evaluators and emergency management personnel from other utilities, local, county, state and federal 26

agencies. Responsibilities include managing pre- and post-exercise activities such as coordinating 27


10

external observers and advisors; developing scenarios and injects (scripts meant to test participant 1

actions), simulations, exercise materials, facilitating lessons learned, and evaluations to include 2

corrective and after-action reporting. 3

Emergency Management Operations supervises SCE’s Fire Management team 4

who directly engage with first responder agencies throughout 13 California counties over a 50,000-mile 5

territory. They report on and respond to wildfires that threaten or affect SCE’s infrastructure, facilities 6

and the Bulk Electric System. 7

c) Governance and Analytics 8

The Governance and Analytics group is primarily responsible for Business 9

Resiliency’s overall governance and project management, including defining, implementing, and 10

managing policy, framework, and strategy through a unique collaborative governance model that 11

includes delegates from each OU. The group conducts regular assessments of SCE’s preparedness, 12

tracks and monitors lessons-learned and develops metrics that track SCE’s ability to respond to and 13

recover from emergencies. The Governance and Analytics team also develops and maintains policies, 14

repeatable processes and procedures, templates, job aids, training materials, checklists, and handbooks 15

to support Plans and Programs and Emergency Operations teams. 16

11

IV. 1

O&M 2

A. Business Resiliency Administrative and General (FERC Accounts 920/921)13 3

Business Resiliency’s administrative and general (A&G) expenses are recorded in FERC 4

Accounts 920/921. SCE’s 2018 Test Year forecast for the Business Resiliency’s A&G activity is $6.4 5

million as shown in Figure IV-2 under Scope and Forecast. Of the $6.4 million, labor costs account for 6

$3.7 million and non-labor costs account for $2.7 million. 7

1. Activity Description 8

Business Resiliency’s O&M request is driven by strategic improvements to SCE’s 9

business resiliency planning, training and exercise program and emergency response and assessment 10

capabilities, including the operation of the 24/7 Watch Office. 11

The Incident Support (IST) and Incident Management Teams (IMT) Program has 12

enhanced SCE’s restoration capabilities and ability to interface with other utilities; local, county, state, 13

and federal agencies; and emergency personnel during incidents. Given its expansive and diverse service 14

territory, SCE requires ample resources to support incident response around the clock; therefore, this 15

O&M request includes funding to train more SCE personnel in the ICS. 16

From 2013-2016, SCE expanded its emergency response program by doubling the 17

number of personnel that make up the IST and IMT to provide 24/7 coverage over multiple operational 18

periods. Increasing the number of qualified personnel to respond during incidents is key to an effective 19

emergency response. The O&M expenses cover expanding and improving the training, qualification and 20

re-qualification requirements for team members, adding new curriculum to the training program, and 21

escalating the complexity of exercises conducted. The expanded scope of the program supports the 22

integration of business continuity and disaster recovery plans, the external evaluation of drills and 23

exercises, and our engagement with the public sector agencies and other external entities. 24

Business Resiliency employs external professional services to deliver ICS training, 25

develop emergency scenarios, and conduct exercises and practical application workshops. Access to 26


12

external ICS expertise greatly enhances SCE’s ongoing efforts to improve its ability to respond to 1

emergencies. 2

2. Need for Activity 3

SCE’s ability to maintain continuity of business operations and successfully respond to 4

and recover from incidents is critical to grid reliability. The lack of a well-structured and appropriately 5

resourced business resiliency function could cause extended outages and other operational disruptions 6

that could have negative impacts on the customers we serve. 7

Emergency management capability allows the company to address disruptions with a 8

coordinated and organized response by: 9

• Engaging and communicating with internal and external stakeholders 10

• Collaboratively managing shared resources 11

• Prioritizing mitigation and response efforts, particularly for our most vulnerable 12

customers 13

Training and exercising SCE incident response management teams and integrating 14

lessons learned from exercises and actual incidents supports a workforce well equipped to serve our 15

customers following crises. 16

13

3. Scope and Forecast 1

Figure IV-2 Business Resiliency A&G (FERC Accounts 920/921)

Recorded and Adjusted 2011-2015/Forecast 2016-2018 (Constant 2015 $000)

a) Historical Variance Analysis 2

(1) Labor 3

Labor costs for Business Resiliency A&G remained relatively flat from 4

2011-2012. In 2013, labor costs increased by $267,000 when SCE selected a director to lead the newly 5

formed and reorganized Business Resiliency Department. Based on discussions with external 6

consultants and counterparts at other utilities regarding effective organizational structure, SCE recruited 7

and hired ten experienced, professional emergency management personnel from FEMA and law 8

enforcement. This increased 2014 labor costs by $1.236 million. Labor increased again in 2015 by 9

$545,000 when SCE created, staffed, and trained six new positions for the launch of the 24/7 Watch 10

Office. 11

(2) Non-Labor 12

In 2011, Business Resiliency department built for the ICS program and 13

established the business impact analysis and business continuity programs. This formative work required 14

enlisting the services of external vendors at a cost of $1.160 million. By using current staff to implement 15

these programs, our non-labor expenses decreased in 2012 by $688,000. In 2013, expenses increased by 16

14

$358,000 to implement the technology needed for our planning and emergency response activities. In 1

2014, expenses increased by $1.533 million due to the expansion of SCE’s ICS structure by adding 2

IST/IMT members to our roster. The additional IST/IMT members had to be trained, certified and 3

exercised to meet our rigorous qualification requirements. These non-labor costs included enlisting the 4

services of six consulting firms and 15 ICS certified consultants to conduct training and to design, 5

facilitate and evaluate our training and exercise programs. The consultants continued to be utilized 6

resulting in a $357,000 increase in our costs between 2014 and 2015. From 2015 to 2016 our A&G costs 7

were relatively flat and are forecast to remain that way through 2018. 8

b) Forecast 9

Enhancements to Business Resiliency activities over the last few years has 10

achieved steady-state operations for the department and laid the foundation for the major components of 11

planning, assessing, mitigating and responding to emergency situations. The 2015 recorded expenses are 12

a representative base for what we expect to incur in 2018. 13

(1) Labor 14

For Test Year 2018, Business Resiliency forecasts labor expenses of 15

$3.711 million. In D.89-12-057, and subsequently in D.04-07-022, the CPUC stated that if costs show a 16

trend of change in direction over three or more years, the last recorded year is an appropriate base 17

estimate. For this account, costs exhibited an upward trend between 2011 and 2015. For that reason, the 18

Last Recorded Year is an appropriate base estimate. To that base, the labor forecast has been adjusted up 19

by $201,000 (Constant 2015 $000) for the addition of an analyst to support Emergency Management 20

Operations training and exercises and a project manager to support the Seismic Assessment and 21

Mitigation Program. 22

(2) Non-Labor 23

For Test Year 2018, Business Resiliency forecasts non-labor expenses of 24

$2.720 million, primarily for training, drills, and exercises to prepare the IST/IMT membership and 25

provide greater coverage for large-scale incidents that could extend over multiple operational periods. 26

The costs include engaging qualified consultants to design and implement ICS training and exercises to 27

support activations for catastrophic disasters. 28

In D.89-12-057, and subsequently in D.04-07-022, the CPUC stated that if 29

costs show a trend of change in direction over three or more years, the last recorded year is an 30

15

appropriate base estimate. For this account, costs demonstrate an upward trend from 2012-2015. Test 1

Year 2018 expenses are forecast to align with 2015 expenses. For that reason, Last Recorded Year is the 2

appropriate forecasting method. 3

B. Seismic Mitigation (FERC Account 935)14 4

O&M expenses associated with seismic mitigation are recorded in FERC Account 935. SCE’s 5

2018 Test Year forecast for this activity is $1.5 million as shown in Figure IV-3. This amount represents 6

the non-labor costs related to seismic mitigation projects. There are no labor expenses as part of this 7

activity. 8

1. Activity Description 9

The Seismic Assessment and Mitigation Program has a broad scope, most of which is 10

capital and covered in the Capital section of this testimony; however, there is a need for O&M expenses 11

associated with the program. 12

Seismic Mitigation O&M expenses will fund the additional bracing of relay racks that 13

reside inside equipment rooms at transmission substations. This retrofit mitigates movement during an 14

earthquake according to current industry best practices. This will allow the system to continue operating 15

and protect and monitor transmission lines for abnormal operating conditions. Seismic shake table 16

testing on relay racks using existing and new improved design specifications will be performed prior to 17

installation of additional bracing. 18

O&M expenses will fund other necessary activities such as: (1) bracing furniture and 19

storage racks to prevent injuries and egress issues; (2) anchoring mechanical, electrical, and plumbing 20

equipment and suspended ceilings and entry canopies (in SCE occupied buildings); and (3) temporarily 21

relocating employees during construction for seismic retrofitting as outlined in the Capital section. 22

2. Need for Activity 23

The additional bracing of relay racks inside mechanical electrical equipment rooms will 24

better prevent racks from moving and increase their stability to sustain operation during and after an 25

earthquake. This will allow the system to continue operating to protect and monitor transmission lines 26

for abnormal operating conditions. 27


16

SCE will make the non-structural improvements to the interior of the buildings identified 1

as needing seismic mitigation. Table IV-1 below provides the unit costs for mitigation work planned in 2

2018. The cost of temporarily relocating employees while seismic related work is being completed is 3

also included in the request. 4

Seismic non-structural improvements help prevent large objects, such as storage racks 5

and cabinets, from falling and becoming safety hazards during seismic events. Equipment and 6

furnishings secured with straps, bolted down, or otherwise reinforced, pose less of a safety hazard and 7

do not impede personnel evacuations during and after earthquakes and aftershocks. These improvements 8

also faster restoration of operations which is especially critical following an earthquake. When buildings 9

and facilities are secure, and internal processes and equipment are functioning, SCE can focus its 10

resources on restoring services to customers. 11

17

3. Scope and Forecast 1

Figure IV-3 Seismic Mitigation (FERC Account 935)

Recorded and Adjusted 2011-2015/Forecast 2016-2018 (Constant 2015 $000)

a) Historical Variance Analysis 2

(1) Labor 3

There are no historical expenses for this activity. 4

(2) Non-Labor 5

There are no historical expenses for this activity. 6

b) Forecast 7

(1) Labor 8

There is no labor forecast for this activity.15 9

15 To execute the work in this activity, SCE has no plans to add incremental labor. Instead, SCE will leverage

existing Transmission & Distribution, Corporate Real Estate, and Power Supply personnel to manage the vendors that execute the work.

18

(2) Non-Labor 1

For Test Year 2018, Business Resiliency forecasts non-labor expenses of 2

$1.533 million for vendors to perform the work described. We estimated the costs for seismic 3

retrofitting by categorizing the work into several sub-activities, and forecasting the volume of work in 4

units and unit costs as shown in Table IV-1. The costs for each sub-activity were calculated as a product 5

of the forecast unit and unit cost. 6

Table IV-1 Seismic Mitigation FERC Account 935

Itemized Non-Labor 2018 Forecast (Constant 2015 $000)

Mitigation for 2018 # Count Unit Cost

($)

Scope and Cost Range ($000)

Electric Infrastructure

Additional Bracing for all relay racks inside Mechanical Electrical Equipment Room (MEER) of Transmission Substations

111 sets of 6 racks 3.00 per set 333

Non-Electric Infrastructure

Anchoring heavy storage racks 40 racks 2.10 per rack 84

Adding support to flexible entry canopies where they connect to the building

6 canopies11.20 per

canopy 67

Securing tall slender furnishings along egress routes

432,000 sq. ft. identified

0.50 sq. ft. 216

Anchoring Mechanical Electrical Plumbing (MEP) equipment and adding snubbers to vibration isolators lacking them

33 pieces of equipment across all

critical /essential facilities

15.15 per piece of

equipment 500

Adding compression posts and splay wired to older suspended

100,000 sq. ft. 3.00 sq. ft. 300

CRE Non-Electric Facilities Temporary Relocation

33 employees1,000.00 per

employee 33

Total Non-Structural 1,533* Due to rounding, subtotals may not sum to the totals

19

V. 1

CAPITAL 2

A. Seismic Assessment and Mitigation Program 3

Operating in one of the most seismically active areas in the United States, a major earthquake is 4

one of the most catastrophic incidents SCE plans for; therefore, it serves as the basis for the company’s 5

All Hazard Assessment and Mitigation Program and associated exercises. In a 2015 report, the United 6

States Geological Survey (USGS) introduced its latest earthquake model, the third Uniform California 7

Earthquake Rupture Forecast (UCERF3).16 The UCERF3 model shows a prediction rate for earthquakes 8

in Southern California with magnitudes between 5.0 and 8.0 greater than that in prior published 9

earthquake models. According to the USGS report, the increased threat is due to the many 10

interconnected faults in California. These interconnected faults can trigger seismic activities in one 11

another, increasing the probability of multi-fault ruptures. This probability is significant due to the 12

number of faults interconnected with San Andreas, the fault most likely to be the source of the most 13

catastrophic earthquakes in the state. The report also reveals that the number of known faults in 14

California is 250,000, not 10,000 as previously reported, and more faults are expected to be discovered. 15

The report supports recent predictions there is a 60 percent chance Southern California will experience a 16

magnitude 6.7 earthquake in the next 30 years and a 46 percent chance an even higher magnitude 17

earthquake will occur. These predictions drive SCE’s focus on preparing for and mitigating the potential 18

impacts of moderate to large-scale earthquakes. 19

1. WBS Indicator of Project and Capital Forecast17 20

Business Resiliency’s capital request for 2016 through 2020 includes $162.4 million for a 21

new seismic assessment and mitigation program involving detailed site assessments and prioritized 22

seismic mitigation work on (1) electric infrastructure ($101.4 million), (2) non-electric facilities ($52.3 23

million), and (3) generation infrastructure ($8.6 million), as shown in Table V-2. Detailed scope of work 24

breakdowns of the forecast are included below. 25



20

Table V-2 Summary of Seismic Assessment and Mitigation Program

Capital Expenditure Forecast Summary18 (Nominal $000)

2016 2017 2018 2019 2020 Total

Electric 436 1,182 25,115 33,996 40,700 101,430

Non-Electric 5,498 28,851 4,899 7,429 5,619 52,297

Generation 404 1,228 3,907 1,804 1,297 8,639

TOTAL 6,337 31,261 33,921 43,230 47,616 162,366 * Due to rounding, subtotals may not sum to the totals

2. Program Description 1

The Seismic Assessment and Mitigation Program centralizes and aligns all seismic 2

related work company-wide to provide consistency in approach, prioritization, and reporting. Business 3

Resiliency manages the program and works closely with the respective OUs executing projects across 4

three primary categories (1) Electric Infrastructure, (2) Non-Electric Facilities, and (3) Generation 5

Infrastructure. Electric Infrastructure covers electrical assets and equipment needed to support the 6

transmission and distribution of power, such as transmission towers and substations. Non-Electric 7

Facilities include populated buildings, data centers, administrative buildings, operational centers and 8

service centers. Generation Infrastructure encompasses assets and equipment needed to support the 9

generation of electricity, such as high-hazard dams, powerhouses, peakers and generating stations. For 10

further detail, please refer to Table V-3 below. Improvements to SCE infrastructure and facilities are 11

essential to provide for the safety of our workers, first responders and the public and to reinforce our 12

ability to perform critical operations and business functions during and following a major earthquake. 13

18 Each assessment and mitigation program is assigned to a WBS Indicator of Project COS-00-SP-BR-000000,

COS-00-SP-BR-000001, COS-00-SP-TD-000000, COS-00-SP-TD-000001, COS-00-SP-TD-000002, COS-00-SP-TD-000003, COS-00-SP-RE-000000, or COS-00-SP-PP-000000.

21

Table V-3 Seismic Assessment and Mitigation Program Infrastructure

Electric Infrastructure Non-Electric Facilities Generation Infrastructure

• Transmission lines/ towers • Transmission substations • Distribution substations • Distribution system

• Populated facilities (Employee/Public)

• Data centers • Administrative buildings • Operation/service centers

• High-hazard dams • Powerhouses • Peakers • Generating stations

The primary objectives of the Seismic Assessment and Mitigation Program are to: (1) 1

assess SCE’s electric infrastructure, non-electric facilities and generation infrastructure to identify what 2

seismic mitigations are needed, and (2) mitigate risks by making the necessary retrofits and 3

improvements. 4

SCE conducts hazard and vulnerability assessments on our infrastructure in order to (1) 5

understand the seismic exposure and impacts of seismic events, (2) assess the functionality and stability 6

of the infrastructure if a seismic event occurred19, and (3) identify design standards and codes. 7

Assessments utilize a combination of site surveys, seismic modeling, and geographic information 8

systems. 9

Business Resiliency oversees seismic assessments associated with this program and 10

prioritizes the mitigation work. Mitigation work varies depending on the type and status of the 11

infrastructure. Examples include bracing and anchoring electrical equipment in substations, structural 12

work to reinforce building wall to roofs connections, and replacing aged equipment with modern 13

equipment designed to withstand greater levels of seismic forces. The mitigations forecast for 2016-14

2020 are outlined later in this section. Once assessments are completed and mitigations are prioritizes, 15

the work is scheduled and executed. 16

a) Governance, Oversight, Project Management 17

Business Resiliency provides governance, oversight, and project management of 18

the Seismic Assessment and Mitigation Program. 19

19 SCE works with the scientific and academic communities to validate methodologies and contracts with

vendors who specialize in assessing the seismic vulnerability of infrastructure.

22

(1) Governance and Oversight 1

Business Resiliency develops consistent standards and processes followed 2

across the company. The department coordinates and oversees seismic assessment and mitigation work, 3

coordinates the use of experienced contractors for assessments, and oversees program budgets. 4

(2) Prioritization of Work and Project Management 5

Business Resiliency manages the program’s integrated work plans and 6

expenditures and oversees the work executed by the OU with primary responsibility for that 7

infrastructure (e.g. Electric Infrastructure – Transmission and Distribution; Non-Electric Facilities – 8

Corporate Real Estate; Generation Infrastructure – Power Supply). Business Resiliency undertakes a 9

company-wide approach to identify potential infrastructure impacts and interdependencies, and to 10

prioritize and monitor work execution. 11

Seismic mitigations are prioritized with a focus on keeping people safe 12

and minimizing interruptions in electric service. Projects with the highest safety, reliability, and 13

compliance impact will be executed first. This includes highly populated buildings and visitor centers, 14

then transmission, distribution and generation infrastructure critical to maintaining stability and 15

operational reliability. Projects for high hazards dams with pending FERC reviews will be prioritized 16

accordingly. Mitigation efforts for the highest priority projects are forecast to be completed from 2016-17

2020. The remaining mitigations will be addressed in future rate case cycles. Funding will be requested 18

in subsequent rate cases for continued seismic work and maintenance as earthquake-related regulatory 19

requirements evolve. 20

b) Program Development and Implementation 21

The Seismic Assessment and Mitigation Program applies a three-phase approach 22

as shown in Figure V-4. Phase I commences with a broad assessment of electric and non-electric 23

infrastructure using readily available data against two probabilistic scenarios provided by the U.S. 24

Geological Survey.20 In this first phase, completed in 2016, Business Resiliency identified areas 25

20 See the U.S. Geological Survey’s Earthquake Hazards Program maps: “Two-percent probability of

exceedance in 50 years map of peak ground acceleration,” available at http://earthquake.usgs.gov/hazards/products/conterminous/2014/2014pga2pct.pdf [as of August 17, 2016]; and “Two-percent probability of exceedance in 50 years map of peak ground acceleration,” available at http://earthquake.usgs.gov/hazards/products/conterminous/2014/2014pga10pct.pdf [as of August 17, 2016].

23

requiring more detailed site assessments. Detailed assessments and mitigation identification are a Phase 1

II activity, and completing the mitigations shall be implemented in Phase III. Given the volume and 2

variety of infrastructure, various assets may be the subject of in Phase II assessments and Phase III 3

mitigation at any given time. 4

Figure V-4 Seismic Assessment and Mitigation Program:

Three-Phased Approach

(1) Phase I: Macro-Level Assessment 5

Phase I provided a high-level hazard and vulnerability analysis of SCE’s 6

electric, non-electric and generation infrastructure. This phase used infrastructure design and criticality 7

data overlaid with USGS probabilistic seismic maps to determine the general scope and impact seismic 8

events could have on the SCE infrastructure and subsequently on the communities it serves. Phase I 9

activities encompassed hiring third-party seismic engineering experts to conduct site investigations for a 10

sample of our electric and non-electric infrastructure. The findings from this sample were then 11

24

extrapolated to infrastructure sharing similar characteristics in the larger inventory to calculate the scope 1

and cost of the mitigations needed to make this infrastructure more resilient following a seismic event. 2

The results of Phase I analyses and interviews with internal and external subject experts provided 3

important information on where more detailed assessments are required. 4

(2) Phase II: Detailed Assessments 5

The results of Phase I provided SCE with a high-level view of the impacts 6

major seismic events could have on the infrastructure. Phase II will provide a greater level of detailed 7

site-specific information verified by onsite inspections that will directly inform the remediation and 8

mitigation work needed for that specific location. 9

Phase II focuses on conducting detailed assessments to create a greater 10

understanding of potential seismic-related risks and to identify mitigations required for SCE’s electric, 11

non-electric and generation infrastructure. Phase II assessments will focus first on occupied and public 12

facing buildings, the bulk transmission system and high hazards dams, followed by the distribution 13

system and additional generation infrastructure. 14

(3) Phase III: Implement Mitigation Activities 15

Phase III of the program is the implementation of retrofitting and 16

mitigation measures identified by Phase II assessments. Due to safety and reliability concerns – SCE 17

requests funding to complete mitigation activities outlined in this testimony through 2020 and 18

anticipates additional requests in future rate cases. 19

3. Need for Project 20

SCE’s infrastructure system is widely dispersed, complex and interdependent. The 21

impacts of a major earthquake go beyond physical damage to infrastructure and buildings. Those 22

impacts also affect the resiliency of the company as a whole by disrupting our workforce and the 23

infrastructure we rely on to delivery electricity to our customers. SCE has centralized seismic 24

assessments and mitigation planning to better understand these interdependencies and impacts across the 25

entire operational system covering electric, non-electric, and generation infrastructure. 26

a) Impacts to safety 27

A coordinated and company-wide seismic program is essential to reducing the 28

risk of a moderate or major earthquake causing substantial harm to workers, customers, and 29

communities. The 1994 Northridge earthquake was a significant milestone in the subsequent evolution 30

25

of earthquake codes and standards. Seventy-eight percent of SCE non-electric facilities (such as 1

occupied buildings and warehouses) were built prior to that earthquake. As part of Phase I, SCE hired a 2

third party to conduct an assessment on a representative sample of 15 SCE non-electric facilities 3

featuring older pre-cast concrete tilt up/reinforced masonry design and non-ductile concrete buildings. 4

These are construction types classified in Los Angeles’ Resilience by Design study21 as target building 5

types for mitigations. Detailed assessments of these types of facilities and subsequent mitigations are 6

needed to promote the safety and welfare of SCE workers and the public. 7

SCE owns and operates 22 high hazard dams – some dating back as far as the 8

early 1900’s. FERC requires inspections and dam safety reviews by an independent consultant every 9

five years so they pose no risk to public safety when subjected to extreme seismic loads. The funding 10

requested in this testimony support the continuation of those assessments and seismic retrofitting of one 11

of SCE’s high hazard dams. 12

b) Impacts to service reliability 13

A major seismic event can severely damage SCE’s infrastructure and its ability to 14

provide electric service. SCE’s electric infrastructure includes transmission lines, towers and substations 15

to distribution lines, poles and substations. Transmission lines and towers move high voltage electricity 16

from locales far from SCE’s service territory. They are typically built to withstand impacts from high-17

wind, ice-wind combinations, and unbalanced longitudinal wire loads. SCE needs to further understand 18

the effects a major earthquake would have on the transmission system – specifically, where towers and 19

lines would be affected by deep-seated landslides, liquefaction, lateral spreading and ground shifting 20

associated with earthquakes. There are two primary corridors in the system that the Phase I assessments 21

indicated may be susceptible to deep-seated landslides and liquefaction. SCE is requesting funds in this 22

testimony to further study and conduct field investigation in those areas and implement short term/non-23

license mitigations22. The inability of these corridors to function after a significant event, such as an 24

earthquake on the San Andreas Fault, would exponentially delay restoration of power to the area. As 25

21 See the Los Angeles Mayor’s Office web page, “Resilience By Design – Building a Stronger Los Angeles,”

March 9, 2016, available at http://www.lamayor.org/resilience-design-building-stronger-los-angeles [as of August 17, 2016].

22 Non-license mitigations refer to activities that may not require a permit.

26

part of the Phase I assessments, a third party was hired to assess 10 of our 70 transmission substations 1

and to identify the possible vulnerabilities and proposed mitigations to bulk power components – 2

transformers, switches, reactors and capacitors. Findings indicate that 20 percent of SCE equipment was 3

installed pre-2005 and these older components may require retrofitting or replacement to avoid 4

significant operational impacts, such as delays in restoring normal business operations and critical 5

services and in maintaining control of the grid. Assessments of all the transmission substations and 6

initial mitigations are outlined in this testimony. 7

Additionally, in a significant seismic event that causes a system-wide black out, 8

SCE’s generating capability will be needed to restart the grid. Due to the age of its generation 9

infrastructure (some dating as far back at the early 1900s), SCE plans to perform detailed assessments of 10

its gas-fired peakers, powerhouses, and Mountain View generating station to determine where 11

appropriate retrofits or mitigations will be needed. 12

c) Impacts to the community 13

Electricity is critical for earthquake response by law enforcement, first 14

responders, critical care providers, search and rescue teams, and relief organizations. SCE’s ability to 15

quickly restore power and continue operations following a major earthquake has a direct impact on how 16

the communities it serves recover. Power restoration following a disaster is a key indicator used by 17

emergency managers to gauge when communities transition from response to recovery efforts. 18

4. Scope and Cost Forecast 19

The Seismic Assessment and Mitigation Program will manage seismic work across three 20

SCE organizations: (1) Transmission and Distribution will assess and mitigate electric infrastructure, (2) 21

Corporate Real Estate will assess and mitigate non-electric facilities, and (3) Power Supply will assess 22

and mitigate generation systems. Table V-4 summarizes the assets within each organization targeted for 23

seismic mitigation based on their risk for earthquake damage, potential resulting danger to workers and 24

the public, and how critical a role they play in maintaining electric service and recovering operations. 25

SCE’s capital request for the Seismic Assessment and Mitigation Program from 2016-2020 26

is $162.4 million including (1) $101.4 million for Electric Infrastructure, (2) $52.3 million for Non-27

Electric Facilities, and (3) $8.6 million for Generation Infrastructure. The funds are requested to complete 28

detailed site assessments and mitigation work in each category. 29

27

a) Electric Infrastructure Assessment and Mitigation 1

SCE forecasts $101.430 million for electric infrastructure seismic assessment and 2

mitigation. Electric infrastructure in scope for assessment and mitigation 2016-2020 includes 3

transmission towers, lines, and corridors, transmission substations, and distribution substations and 4

distribution system related assets, such as older poles with overhead mounted equipment racks and some 5

on-grade mounted unrestrained transformers. The work will be performed by an external engineering 6

firm under the direction of SCE. An overview of the forecast expenditures for assessment and mitigation 7

by asset type are included in Table V-4. 8

Table V-4 Electric Infrastructure Assessment and Mitigation Forecast by WBS

(Nominal $000)

Project No. Description Capital Expenditures

2016 2017 2018 2019 2020 Total

COS-00-SP-BR-000000

Transmission Lines / Tower Assessment

253 259 512

COS-00-SP-TD-000002

Transmission Lines / Tower Mitigation

3,504 3,596 3,802 10,902

COS-00-SP-BR-000000

Transmission Substation Assessment

182 187 369

COS-00-SP-TD-000000

Transmission Substation Mitigation

13,117 15,146 15,542 43,805

COS-00-SP-TD-000001

Transmission Substation Mitigation

8,119 9,374 9,620 27,112

COS-00-SP-BR-000001

Distribution Substation Assessment

737 375 382 389 1,883

COS-00-SP-TD-000003

Distribution Substation Mitigation

5,499 11,347 16,845

Total 436 1,182 25,115 33,996 40,700 101,430

* Due to rounding, subtotals may not sum to the totals

(1) Transmission Towers and Line/Corridor Assessments 9

SCE forecasts $512,000 to conduct a transmission corridor assessment that 10

assesses impacts to system reliability resulting from deeply sourced landslides, liquefaction, lateral 11

28

spreading, and fault movement along the Cajon Pass and the Tejon Pass corridors – the two areas 1

identified as the most susceptible to landslides in the Phase I assessment. This forecast is based on a 2

high level cost estimate to conduct criteria analysis and field investigation23. The landslide assessment in 3

2016-2017 would assess how transmission towers, designed to withstand impacts from high wind, ice 4

wind combinations, and unbalanced longitudinal wire loads and ground shaking would be affected by 5

deep-seated landslides and ground shifting due to earthquakes. 6

This detailed landslide, liquefaction, and lateral spreading assessment 7

requires purchasing and developing updated computer models for identifying contingencies for seismic 8

threats on highly vulnerable segments of the SCE transmission corridor system. This assessment would 9

determine what the impacts of an earthquake-induced landslide, liquefaction and lateral spreading in 10

these areas would be on the critical transmission corridors, including multiple high-voltage transmission 11

lines and critical substations. If simultaneously affected, this could cause a wide-scale blackout. 12

Landslide, liquefaction, and lateral spreading vulnerability studies will also provide information to 13

improve the resiliency of new transmission towers and lines. 14

(2) Transmission Towers and Line/Corridors Mitigation 15

SCE forecasts $10.902 million to mitigate vulnerabilities to transmission 16

corridors. The forecast is based on the unit costs estimate from Phase I Assessments (including 17

interviews with subject experts and geographic information system analyses), which identified several 18

transmission towers and lines are in areas prone to landslides following earthquakes24. Mitigations, 19

prioritization of work, and costs will be adjusted following field investigation activities and detailed 20

assessments are performed on each asset and implemented in 2018-2020. This work includes (1) 21

relocation or replacement of structures, (2) the reinforcement of existing structures or hardware, and (3) 22

foundation modifications in identified areas prone to liquefaction and landslides. 23

(3) Transmission Substation Assessment 24

SCE forecasts $369,000 to conduct detailed assessments of 60 of its 70 25

transmission substations in 2016-2017. This cost is based on estimates using a third party to conduct this 26



29

work25. These assessments include site-specific impact analyses on transmission substations to 1

determine how well they will withstand seismic incidents and maintain system reliability. Continuing 2

this work is essential to SCE accurately identifying and mitigating known risks to major components of 3

our system. 4

(4) Transmission Substation Mitigation 5

SCE forecasts $70.917 million to retrofit and harden components in 6

structures built to older standards (pre-1992) and specifications that could lead to a loss of equipment 7

functionality. This cost is based on high level unit cost estimates provided by third party consultants and 8

internal estimates based on similar work26. SCE anticipates a steady pace of mitigation work from 2018-9

2020 with costs relatively stable over each year. The work includes (1) adjusting slack between 10

interconnected equipment, (2) retrofitting anchorage and bracing for electrical equipment, and (3) 11

replacing older equipment or components to comply with current seismic standards. Based on the scope 12

and costs to mitigate the 10 inspected transmission substations, we forecast expenditures of $70.917 13

million to perform corresponding mitigations for SCE’s remaining transmission substations. 14

(5) Distribution System/Substation Assessment 15

SCE forecasts $1.883 million for detailed assessments in 2017-2020 of the 16

SCE distribution system based on modeling a significant seismic event. This is a high level estimate 17

based on the cost of comparable assessments performed on distribution substations and related assets.27 18

The distribution system comprises a variety of electric infrastructure assets: distribution substations, 19

transformers, poles, lines, underground vaults, and sensors, circuits, switchracks, applications and other 20

network control and diagnostic systems. This system steps down electricity from the transmission 21

system for distribution to localized circuits and makes it usable to the customer. 22

SCE will perform detailed assessments on over 700 of its distribution 23

substations and related assets such as transformers, switchracks, etc. The approach used to assess 24

transmission substations will be used to assess distribution substations. However, these assessments will 25

25 Ten transmission substations were assessed as part of Phase I.

26 Refer to WP SCE-07, Vol. 01C, p. 1.


30

also include engineering evaluations for the distribution system and inspection and analysis of 1

distribution poles, lines, and transformers on individual community circuits. 2

(6) Distribution System/Substation Mitigation 3

SCE forecasts $16.845 million from 2019-2020 to commence mitigation 4

work on SCE’s distribution system. The work will include upgrading the distribution substations 5

switchracks built to older design standards (pre-1992) and retrofitting pole-mounted equipment racks 6

and transformer structures. The cost of mitigation is derived from historical cost to replace this type of 7

equipment.28 8

b) Non-Electric Assessment and Mitigation 9

SCE forecasts $52.297 million to assess and mitigate structural and non-structural 10

deficiencies at non-electric facilities in 2016-2020. This work includes seismic assessments of the over 11

300 non-electric buildings throughout our service territory that support administrative functions, 12

operational needs, and/or support substation functions. It also includes expenditures for mitigations and 13

retrofits needed for older buildings susceptible to earthquake damage such as older pre-cast concrete tilt 14

up/reinforced masonry design and non-ductile concrete buildings. Mitigation strategies will be 15

developed to facilitate the safety of non-electric facilities by improving building stability to withstand 16

earthquakes. Such improvements also better enable SCE to quickly resume normal operations and for its 17

customers to return to their normal lives. 18

SCE follows established building code requirements and is evaluating how its 19

older infrastructure compares to current building codes. Seventy-eight percent of SCE’s non-electric 20

facilities were built prior to the 1994 Northridge earthquake, 172 are occupied facilities such as the 21

general office buildings, call centers, specialty and training facilities. Three facilities are data centers, 43 22

operational centers, and 36 service centers; the remaining are a combination of vehicle maintenance 23

facilities, warehouses, and unoccupied substation buildings. The work will be performed by an external 24

engineering firm under the direction of SCE. An overview of the forecast expenditures for assessment 25

and mitigation by asset type are included in Figure V-4. 26


31

Table V-5 Non-Electric Facilities Scope and Cost Summary

(Nominal $000)


2016 2017 2018 2019 2020 Total

COS-00-SP-BR-000001

Facilities Assessment 454 460

914

COS-00-SP-RE-000000

Structural Mitigation 1,513 25,322 1,251 3,715 2,918 34,718

Non-structural Mitigation

3,531 3,069 3,648 3,715 2,701 16,665

Total 5,498 28,851 4,899 7,429 5,619 52,297 * Due to rounding, subtotals may not sum to the totals

(1) Non-Electric Facilities Assessment 1

SCE forecasts $914,000, based on proposal for work provided by a third 2

party consultant, for detailed reviews of facility drawings and in-person on-site inspections of SCE’s 3

non-electric facilities starting with older pre-cast concrete tilt-up, non-ductile concrete and reinforced 4

masonry buildings. Phase I assessments conducted by an independent third party identified SCE 5

buildings falling within these categories. SCE will perform detailed site assessments on the identified 6

buildings in 2016, which will include work to explore wall to roof connections. In 2017, SCE will assess 7

other buildings within its remaining inventory to determine if there are any specific structural or non-8

structural issues. The cost of the assessment to the older pre-cast concrete tilt-up, non-ductile concrete, 9

and reinforced masonry buildings is significantly more based on the type of investigation. The 10

remaining buildings will go through an on-site screening process first, which is less invasive and will 11

provide information on whether more investigation is needed. 12

(2) Non-Electric Facilities Structural Mitigations 13

SCE forecasts $34.718 million for structural mitigations needed for certain 14

non-electric facilities with pre-cast concrete tilt-up/reinforced masonry design or non-ductile concrete 15

design. The forecast is based on unit cost estimates provided through discussion with third party 16

consultants and contractors.29 Mitigations for facilities with the two non-ductile concrete designs will 17

29 Refer to WP SCE-07, Vol. 01C, p. 2.

32

require the construction of shear walls to reinforce non-ductile concrete structures and roof-to-wall 1

connections for buildings of older tilt up design. Mitigation at any of the occupied buildings involves 2

relocating personnel and operations to other locations. The cost of temporary relocation is identified in 3

FERC Account 935 under employee relocations and is estimated to cost $750,000. Table V-5 above 4

summarizes the estimated costs for non-electric facility assessment and mitigation projects. 5

(3) Non-Electric Facilities Non-Structural Mitigations 6

SCE forecasts $16.665 million for non-structural mitigations on non-7

electric facilities in 2016-2020 with $14.565 million of the forecast designated to secure overhead air 8

handling units. The cost is derived from unit cost estimates provided through discussion with third party 9

consultants and contractors. These units are typically on trapezes and although they meet building codes, 10

they may swing excessively during an earthquake. Expenditures to brace approximately 1,400 air 11

handling units across 300+ buildings are estimated at $10,000 per unit (2015 dollars before escalated to 12

nominal). 13

SCE forecasts $2.100 million for scheduled upgrades at General Office 14

facilities. The work includes additional assessments and seismic upgrades to the ceiling system, heating, 15

ventilating and air conditioning (HVAC) ductwork, plumbing, and cabling systems to improve employee 16

safety and the building’s ability to remain operational after a major earthquake. 17

c) Generation Infrastructure Assessment and Mitigation 18

SCE forecasts $8.639 million to assess and mitigate non-nuclear generation 19

infrastructure. SCE’s non-nuclear generation infrastructure includes 33 hydroelectric plants, five gas-20

fired peaker plants, one combined-cycle natural gas plant, and 25 solar photovoltaic installations. Non-21

nuclear generation sites provide a combined generating capacity of 3,139 megawatts (MW) to SCE 22

customers and important benefits such as load-balancing and black-start capability for the electrical grid. 23

These generation infrastructure projects for 2016-2020 include seismic assessments for 22 large high 24

hazard dams, 20 powerhouses, four gas-fired peakers, and one combined-cycle natural gas plant 25

generating station (Mountainview Generating Station) and retrofit mitigations for the Bishop Intake 2 26

Dam. The work will be performed by an external engineering firm under the direction of SCE. Table V-27

6 provides a scope and cost summary for generation infrastructure. 28

33

Table V-6 Generation Infrastructure Scope and Cost Summary

(Nominal $000)


2016 2017 2018 2019 2020 Total

COS-00-SP-BR-000001

Large High-Hazard Dam Assessments

404 512 521 531 540 2,507

Powerhouse Assessments 512 521 531 540 2,104

Peaker Assessments

205

208

212

216

841

Mountainview Generating Station Assessments

521 531 1,052

COS-00-SP-PP-000000

Generation Bishop Mitigation

2,135 2,135

Total 404 1,228 3,907 1,804 1,297 8,639 * Due to rounding, subtotals may not sum to the totals

(1) Large High-Hazard Dam Assessments 1

SCE forecasts $2.507 million from 2016-2020 to conduct seismic 2

assessments and mitigations for 22 dams classified as large high hazard by the FERC Division of Dam 3

Safety and Inspections (D2SI). This forecast was developed internally by an engineering team. These 4

dams must meet regulatory seismic requirements to continue operating. The FERC D2SI and the 5

California Department of Water Resources, and Division of Safety of Dams mandate precautions to 6

avoid undue risk to public safety when subjected to extreme seismic loads. SCE is performing seismic 7

stability evaluations on two to three dams per year at an annual cost of $500,000 per year (2015 dollars 8

before escalated to nominal). SCE utilizes external experts in the seismic consulting and research 9

community to assist with these highly specialized hydro system assessments and mitigation work. 10

FERC D2SI requested an evaluation of Bishop Creek Intake 2 to 11

determine its ability to withstand seismic loading and an uncontrolled rapid release of water. SCE’s Dam 12

and Public safety departments are working with third party consultants to perform this analysis in order 13

to determine the exact scope of work required to meet FERC requirements for the seismic retrofits. Such 14

work is projected to include installation of post-tensioned anchors in the main spillway of the dam and 15

buttressing the downstream slope of the embankment with compacted soil. The seismic cost associated 16

34

with the Bishop Creek Intake 2 project is included in this testimony, but the remaining scope of the 1

project is outlined in SCE-05, Vol. 3.30 2

(2) Powerhouse Assessments 3

SCE forecasts $2.104 million from 2016-2020 to assess how well SCE’s 4

powerhouses and hydro-generating equipment can withstand seismic loading and to identify potential 5

mitigations. This forecast was developed internally by an engineering team. SCE hydro generating units 6

are in 33 powerhouses throughout SCE’s service territory. The Northern Hydro Division operates nine 7

powerhouses with an aggregate generating capacity of 1,014 MW, most of which have operated since 8

the early- to mid-1900s. Eastern Hydro Division operates 24 powerhouses with an aggregate generating 9

capacity of 161 MW, most of which have operated since the late 1800s to early 1900s. Earthquake 10

damage to hydro buildings and equipment could cause lost generation and may affect SCE’s ability to 11

meet FERC license requirements. SCE will conduct five powerhouse assessments per year beginning in 12

2017 at an estimated cost of $100,000 each (2015 dollars before escalated to nominal). We will give 13

priority to those with the greatest generating capacity and deemed most critical to system reliability. 14

This assessment will allow SCE to determine the benefit of performing seismic improvements and 15

prioritize projects accordingly. 16

(3) Peakers Assessments 17

SCE is requesting $841,000 from 2016-2020 to re-evaluate seismic 18

loading and methods for four out of our five gas-fired peakers to determine whether they conform to 19

current building codes, identify potential vulnerabilities, and ascertain whether and what mitigation is 20

required. This forecast was developed internally by an engineering team. The fifth peaker will be 21

assessed in 2021 and will be requested in the next GRC. 22

The five gas-fired peaker power plants provide an aggregate of 245 MW. 23

SCE uses these plants to restart the utility’s main generators and rapidly ramp up the system to full load 24

(known as a black-start) if a wide-scale grid outage occurs. The design of these facilities satisfied mid-25

1990s seismic building regulations, but these codes are now outdated. The assessment of the peakers 26

30 Refer to SCE-05, Vol. 3, for further information regarding this project.

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will allow SCE to assess the benefits of conducting seismic improvements. SCE plans to assess one 1

peaker per year at a cost of $200,000 per site (2015 dollars before escalated to nominal). 2

(4) Mountainview Generating Station Assessments 3

SCE forecasts $1.052 million from 2016-2020 to assess SCE’s 4

Mountainview Generating Station, a combined-cycle gas plant, in Redlands, California. This forecast 5

was developed internally by an engineering team. The design of this facility satisfied the seismic 6

provisions of the 1998 California Building Code, but needs to be re-evaluated using seismic loads and 7

methods consistent with current building codes. The assessments are to identify potential vulnerabilities 8

and determine whether mitigation is required. Given its size (79.75 acres encompassing occupied and 9

unoccupied structures), the assessment of the site will take over two years. 10

(5) Bishop Creek Intake 2 Retrofit 11

SCE requests $2.135 million from 2018-2020 for seismic retrofitting of 12

SCE’s Bishop Creek Intake 2 Dam. This forecast was developed internally by an engineering team. The 13

41-foot-high earth fill dam is on Bishop Creek, a tributary of the Owens River, about 10 miles southwest 14

of Bishop, California. It was constructed in 1908 and is classified by FERC as a high hazard dam. 15

Retrofits include installation of post-tensioned anchors in the main spillway of the dam and buttressing 16

of the downstream slope of the embankment with compacted soil. This work will be performed in 2018 17

concurrently with other planned maintenance. 18

2018 General Rate Case - sce.com · 20 This volume presents SCE’s $162.4 million request for...

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