BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for a Commission Finding that its Procurement-Related and Other Operations for the Record Period January 1 Through December 31, 2015 Complied with its Adopted Procurement Plan; for Verification of its Entries in the Energy Resource Recovery Account and Other Regulatory Accounts; and for Refund of $0.082 Million Recorded in Two Memorandum Accounts. Application No (Filed April 1, 2016) SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E) REPLY COMMENTS ON THE PROPOSED DECISION FADIA R. KHOURY RUSSELL A. ARCHER Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) Russell.Archer@sce.com Dated: March 25, 2019

2 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for a Commission Finding that its Procurement-Related and Other Operations for the Record Period January 1 Through December 31, 2015 Complied with its Adopted Procurement Plan; for Verification of its Entries in the Energy Resource Recovery Account and Other Regulatory Accounts; and for Refund of $0.082 Million Recorded in Two Memorandum Accounts. Application No (Filed April 1, 2016) SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E) REPLY COMMENTS ON THE PROPOSED DECISION Pursuant to California Public Utilities Commission (Commission) Rule of Practice and Procedure 14.3(d), Southern California Edison Company (SCE) respectfully submits these Reply Comments on the February 26, 2019, Proposed Decision of Administrative Law Judge (ALJ) Tsen (Proposed Decision) regarding a brief forced outage at SCE s Mountainview Generating Station during As set forth in its Opening Comments, SCE supports the Proposed Decision s correct conclusion that no disallowance associated with that outage is warranted, but the PD s discussion of the prudent manager standard as applied to the particular facts of this proceeding should be eliminated. In these Reply Comments, SCE responds to the erroneous and unsound arguments set forth by the Public Advocates Office (Cal Advocates) in its March 18, 2019 Opening Comments. I. NO DISSALLOWANCE IS WARRANTED Cal Advocates asserts that [t]he fact that a recommended disallowance involves a relatively modest amount of money is not the test of whether a disallowance is appropriate. The 1

3 question is whether the actions that produced the error represent utility oversight that does not meet the reasonable manager standard. 1 While that argument has some surface appeal, as applied to the particular facts of this proceeding it is unpersuasive. First, as previewed in its Opening Comments, Phase 2 in this proceeding did not meaningfully examine the connection between SCE s utility oversight and the outage, and did not contemplate SCE provid[ing] evidentiary support for its decision not to require the alternative testing procedure. 2 The procedural order setting the parameters of what was actually considered in Phase 2 did not facilitate development of an evidentiary record sufficient to enable the Commission to determine whether an alternative testing procedure would have been prudent. Phase 2 was not subject to a prehearing conference, nor was a scoping memo issued. It was opened to address an issue raised for the first time in Cal Advocates Phase 1 opening brief, but the assigned ALJ s Phase 2 procedural order required SCE to provide only three specificallyenumerated categories of historical information, which, while responsive to the ALJ s order, were insufficient by themselves to enable the Commission to now reach a conclusion that SCE acted imprudently. Cal Advocates did not propound discovery during Phase 2, nor did the Commission hold evidentiary hearings for Phase 2. Second, the entire premise of a better valve testing procedure [being] available at the time of the outage 3 is counterfactual and turns the reasonable manager standard on its head. Although the Root Cause Evaluation (RCE) reports that SCE s contractor instituted an alternative testing procedure after the outage, the reasonable manager standard evaluates what the utility knew or reasonably should have known at the time. 4 The PD itself acknowledges that 1 Cal Advocates Opening Comments at p Cal Advocates Opening Comments at p. 1 (quoting the Proposed Decision). 3 PD at p See, e.g., D at p. 11, FN 2. 2

4 [t]he contractor changed its valve testing procedure following the outage. 5 The PD errs in ascribing a finding of imprudence to SCE on this basis. Third, any disallowance evaluation should take into account all of the relevant circumstances, including the de minimis amount of customer harm at issue here. 6 The PD correctly takes that factor into account. It is also important to note that record evidence demonstrates SCE held its contractor to account to immediately resolve the problem at no additional cost to SCE or its customers, and performed a RCE to avoid similar issues in the future. 7 The reasonable manager inquiry is not a perfection standard. II. CAL ADVOCATES ATTEMPT TO INVOKE THE SNYDER DOCTRINE IS UNAVAILING Contrary to the contentions set forth in Cal Advocates Opening Comments, the PD did not erroneously fail[] to conclude that SCE should be found in violation of Commission safety rules and regulations by failing to act as a prudent manager. 8 Cal Advocates does not identify any such safety rules and regulations that SCE allegedly violated, and there is no record evidence to support such a conclusion. In 1955, the California Supreme Court issued the Snyder decision, which determined that a utility cannot insulate itself from legal liability for safety-related obligations to the public that are non-delegable by simply hiring contractors to perform the work associated with those underlying obligations. Cal Advocates attempt to invoke the Snyder doctrine by asserting that the potential consequences implicitly, of the repair work, are indeed serious and safety related 9 should be disregarded. While it is true that the RCE concluded that injury was a potential hypothetical consequence of the outage (but not directly 5 PD at Finding of Fact 3 (emphasis added). 6 The $107,108 in replacement power costs at issue here represents less than % of SCE s 2015 fuel and purchased power spend of more than $4.25 billion. 7 See Exhibit SCE-07 at p Cal Advocates Opening Comments at p Cal Advocates Opening Comments at p. 4. 3

5 of the repair work), that does not mean that SCE s delegation of routine, non safety related maintenance work to an experienced contractor was imprudent, or that SCE s actions under these circumstances warrant review under the Snyder doctrine. The RCE s language is a description of why SCE took immediate action to investigate the cause of the event, because some kinds of steam leaks could contribute to an increased rupture risk. The RCE concluded that the cause of the event was a misplaced gasket retainer ring, which will not in and of itself increase the risk of a hypothetical catastrophic rupture that could pose a theoretical safety risk. In the end, SCE delegated routine maintenance work (that is done twice a year) to an experienced contractor; while the equipment was de energized; with no safety risks to the public (who do not have access to Mountainview, which is a secure facility) or to workers; and a minor steam leak developed leading to a less than two day outage. 10 That is completely different than the facts in Snyder, which involved independent contractors of a utility installing replacement poles on a 16,000 volt distribution line, presumably in the public right of way, causing injuries, and in violation of the standards set forth in Commission safety regulation G.O III. CONCLUSION For the reasons stated herein and in SCE s Opening Comments, the PD should be affirmed regarding its conclusion that no disallowance is warranted, and modified to eliminate any conclusion regarding SCE s actions as a reasonable manager, as it is not supported by the 10 Cf. Snyder v. S. Cal. Edison Co. ( Where an activity involving possible danger to the public is carried on under public franchise or authority the one engaging in the activity may not delegate to an independent contractor the duties or liabilities imposed on him by the public authority. ) 44 Cal.2d 793, 799 (Cal. 1955). 11 Snyder also held that whether the utility did everything necessary and proper to ensure compliance by its contractors with the relevant safety rules was a factual question for the jury. Id. at As mentioned above and more fully set forth in SCE s Opening Comments, there was no fact finding weighing evidence on this subject. 4

6 record. 12 Moreover, the PD should not be modified to include Cal Advocates new proposed language regarding the Snyder doctrine, as it is not consistent with the record and legal precedent. Respectfully submitted, FADIA R. KHOURY RUSSELL A. ARCHER Dated: March 25, 2019 /s/ Russell A. Archer By: Russell A. Archer Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California Telephone: (626) See Appendix A for SCE s proposed change to the Conclusions of Law. 5

7 Appendix A Proposed Change to Conclusions of Law 1. SCE has not provided sufficient evidence to establish that it acted as a prudent manager in connection with the unplanned outage at Mountain View Generating Station Unit 3. A-1

8 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of Southern California Edison Company (U 338-E) for a Commission Finding that its Procurement-Related and Other Operations for the Record Period January 1 Through December 31, 2015 Complied with its Adopted Procurement Plan; for Verification of its Entries in the Energy Resource Recovery Account and Other Regulatory Accounts; and for Refund of $0.082 Million Recorded in Two Memorandum Accounts. Application No (Filed April 1, 2016) CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of SOUTHERN CALIFORNIA EDISON COMPANY S (U 338-E) REPLY COMMENTS ON THE PROPOSED DECISION on all parties identified on the attached service list(s) A Service was effected by one or more means indicated below: Transmitting the copies via to specified parties who have provided an e- mail address. Placing the copies in properly addressed sealed envelopes and depositing such copies in the United States mail with first-class postage prepaid to the offices of the Commissioner(s) or other addressee(s). ALJ S. Pat Tsen ALJ Regina DeAngelis CPUC, Div. of ALJs 505 Van Ness Avenue San Francisco, CA Executed on March 25, 2019, at Rosemead, California. /s/ Edith Leon Edith Leon Legal Administrative Assistant SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

9 CPUC - Service Lists - A Page 1 of 3 3/25/2019 CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A EDISON - FOR A FINDI FILER: SOUTHERN CALIFORNIA EDISON COMPANY LIST NAME: LIST LAST CHANGED: MARCH 18, 2019 Download the Comma-delimited File About Comma-delimited Files Back to Service Lists Index Parties RUSSELL A. ARCHER CHRISTOPHER CLAY SR. ATTORNEY SOUTHERN CALIFORNIA EDISON COMPANY LEGAL DIVISION 2244 WALNUT GROVE AVE. / PO BOX 800 ROOM 4300 ROSEMEAD, CA VAN NESS AVENUE FOR: SOUTHERN CALIFORNIA EDISON COMPANY SAN FRANCISCO, CA FOR: CAL PA (PUBLIC ADVOCATES OFFICE) FORMERLY THE OFFICE OF RATEPAYER ADVOCATES (ORA) Information Only CASE COORDINATION LEGAL DIVISION PACIFIC GAS AND ELECTRIC COMPANY CPUC ONLY ONLY ONLY, CA ONLY, CA MIKE CADE MRW & ASSOCIATES, LLC INDUSTRY SPECIALIST ONLY ALCANTAR & KAHL, LLP ONLY, CA ONLY ONLY, OR DANIEL DOUGLASS CASE ADMINISTRATION ATTORNEY SOUTHERN CALIFORNIA EDISON COMPANY DOUGLASS & LIDDELL 2244 WALNUT GROVE AVE. / PO BOX PARK GRANADA, SUITE 209 ROSEMEAD, CA 91770

10 CPUC - Service Lists - A Page 2 of 3 3/25/2019 CALABASAS, CA WENDY D. JOHNSON KELLEN C. GILL REGULATORY CASE MGR CALIFORNIA REGULATORY AFFAIRS SAN DIEGO GAS & ELECTRIC COMPANY SAN DIEGO GAS & ELECTRIC COMPANY 8330 CENTURY PARK COURT, CP32F 9305 LIGHTWAVE AVENUE SAN DIEGO, CA SAN DIEGO, CA REGINA DEANGELIS CHARLES R. MIDDLEKAUFF PACIFIC GAS AND ELECTRIC COMPANY ADMINISTRATIVE LAW JUDGE DIVISION 77 BEALE STREET, B30A / BOX 7442 ROOM 5105 SAN FRANCISCO, CA VAN NESS AVENUE SAN FRANCISCO, CA JENNIFER POST JULIA HANISH ATTORNEY AT LAW REGULATORY AFFAIRS PACIFIC GAS AND ELECTRIC PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, B30A 77 BEALE ST., MC B23A. RM 2364 SAN FRANCISCO, CA SAN FRANCISCO, CA LAUREN HUDSON LORENA OTERO PONCE CASE MGR. - REGULATORY AFFAIRS REGULATORY AFFAIRS - CASE MGR. PACIFIC GAS AND ELECTRIC COMPANY PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, B10A 77 BEALE STREET, MC B23A SAN FRANCISCO, CA SAN FRANCISCO, CA CAROLYN KEHREIN ENERGY MANAGEMENT SERVICES 2602 CELEBRATION WAY WOODLAND, CA State Service MARTHA GUZMAN ACEVES OFFICE OF COMMISSIONER GUZMAN ACEVES CPUC - EXEC. DIV. ONLY ONLY, CA BRIAN LUI ELECTRICITY PLANNING & POLICY BRANCH AREA 505 VAN NESS AVENUE SAN FRANCISCO, CA DAVID ZIZMOR MARYAM GHADESSI MARKET STRUCTURE, COSTS AND NATURAL GAS POLICY & PLANNING DIVISION AREA AREA 4-A 505 VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA MEA HALPERIN MITCHELL SHAPSON ELECTRICITY PLANNING & POLICY BRANCH LEGAL DIVISION AREA ROOM VAN NESS AVENUE 505 VAN NESS AVENUE

11 CPUC - Service Lists - A Page 3 of 3 3/25/2019 SAN FRANCISCO, CA SAN FRANCISCO, CA RADU CIUPAGEA ROSANNE O'HARA ELECTRICITY PLANNING & POLICY BRANCH LEGAL DIVISION ROOM 4104 ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA FOR: CAL PA (PUBLIC ADVOCATES OFFICE) FORMERLY THE OFFICE OF RATEPAYER ADVOCATES (ORA) S. PAT TSEN YULIYA SHMIDT ADMINISTRATIVE LAW JUDGE DIVISION COMMISSIONER RECHTSCHAFFEN ROOM 5106 ROOM VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA SAN FRANCISCO, CA TOP OF PAGE BACK TO INDEX OF SERVICE LISTS