2015 General Rate Case. Generation Volume 7, Part 2 Hydro Capital

Transcription

1 Application No.: Exhibit No.: SCE-0, Vol. 0, Pt. Witnesses: T. Condit (U -E) 01 General Rate Case Generation Volume, Part Hydro Capital Before the Public Utilities Commission of the State of California Rosemead, California November 01

2 SUMMARY This volume describes the SCE Hydro capital forecast of $. million for years The capital is divided into main categories: FERC Relicensing Electrical Equipment transformers, circuit breakers, switchgear Prime Movers water driven turbines and generators Dams and Waterways reservoirs, tunnels, flumes, pipelines, valves Structures and Grounds powerhouse structures, support buildings, roads Furniture, Tools and Equipment shorter life equipment such as furniture and tools Decommissioning removal of out of service Hydro projects The capital forecast for the Hydro categories is as follows for 01-01: FERC Relicensing - $0. million Electrical Equipment $1. million Prime Movers $.0 million Dams and Waterways $1.0 million Structures and Grounds $1. million Furniture, Tools and Equipment $1. million Decommissioning $.1 million

3 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents Section Page Witness I. HYDRO GENERATION CAPITAL EXPENDITURES PLAN DEVELOPMENT...1 T. Condit A. Categories of SCE Hydro Capital...1 B Hydro Capital Expenditure Estimate...1 C. Recorded Capital Expenditures Compared To Previous GRC Authorized... D. Hydro Capital Project Categories... E. Creation of the GRC Capital Forecast Planning for Capital Expenditures.... Capital Estimating Process... II. FERC LICENSING PROJECTS... A. FERC Relicensing Process Alternative Licensing Process (ALP).... Traditional Licensing Process (TLP)... B. Big Creek Relicensing Projects Background... a) Big Creek ALP Projects Relicensing... b) Portal Hydroelectric Project Relicensing...1 c) Vermilion Valley Hydroelectric Project Relicensing...1 d) Licensed Big Creek Project...1. Delay of License Issuance...1 C. Relicensing Cost Forecast Big Creek Alternative Licensing Procedure...1 -i-

4 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness a) Implementation of New License Order Terms and Conditions...1 b) Aquatic Resources...1 c) Recreational Resources...1 d) Terrestrial Resources Measures...1 e) Land Management...1 f) Cultural Resources...1. Vermilion Valley Relicensing...1. Big Creek No. Relicensing...0. Portal Relicensing...1 III. ELECTRICAL EQUIPMENT... A. Infrastructure Replacements Eastern Hydro Substation Infrastructure Projects... a) Background... b) Projects Scope... c) Projects Justification and Benefit.... Northern Hydro Substation Infrastructure Projects... a) Background... b) Projects Scope... c) Project Justification and Benefit... B. Region Automation Projects Background.... Projects Scope... -ii-

5 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness. Project Justification and Benefit... C. Transformer Replacements Background.... Projects Scope...0. Project Justification and Benefit...0 D. Branch Circuit, Control, and Relay Panels Background...1. Projects Scope.... Project Justification and Benefit... E. Circuit Protection Equipment Background.... Projects Scope.... Project Justification and Benefit... F. Major Electrical Projects Background.... Projects Scope.... Projects Justification and Benefit... G. Electrical Equipment Miscellaneous Projects Background.... Project Scope.... Projects Justification and Benefit... IV. PRIME MOVERS... A. Turbine Wicket Gates, Runners, and Repowers... -iii-

6 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness 1. Background...0. Project Scope...0. Projects Justification and Benefit...1 B. Generator Coils and Rewinds Background...1. Project Scope.... Projects Justification and Benefit... C. Generator Excitation Projects Background.... Projects Scope.... Project Justification and Benefit... D. Turbine Valves and High Pressure Piping Background.... Project Scope.... Projects Justification and Benefit... E. Prime Mover Replacements Background.... Project Scope.... Project Justification and Benefit... F. Prime Movers Miscellaneous Projects Background.... Project Scope.... Projects Justification and Benefit... -iv-

7 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness V. DAMS AND WATERWAYS...0 A. Gates and Valves Projects Background...1. Projects Scope.... Projects Justification and Benefit... B. Structures Improvements Background.... Projects Scope.... Projects Justification and Benefit... C. Dam Surface Protection and Seismic Refurbishment Background.... Projects Scope.... Projects Justification and Benefit... D. Flowline Replacement Background.... Projects Scope.... Projects Justification and Benefit... E. Major Dams and Waterways Projects Kaweah 1 - Flowline Rehabilitation... a) Background... b) Projects Scope... c) Projects Justification and Benefit.... Kern River Rebuild Tunnel...0 -v-

8 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness a) Background...0 b) Projects Scope...0 c) Projects Justification and Benefit...0. Borel - Rebuild Canal and Tunnels...0 a) Background...0 b) Projects Scope...1 c) Projects Justification and Benefit...1. Bishop Replace Flowline/Install AVM...1 a) Background...1 b) Projects Scope... c) Projects Justification and Benefit.... Mammoth Pool Reservoir HB Valve Replacement... a) Background... b) Projects Scope... c) Projects Justification and Benefit.... Northern Hydro Dams Structure and Seismic Retrofit Projects... a) Background... b) Projects Scope... c) Projects Justification and Benefit... F. Dams and Waterways Miscellaneous Background.... Projects Scope... -vi-

9 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness. Projects Justification and Benefit... VI. STRUCTURES AND GROUNDS... A. Building Improvement Projects Background.... Project Scope.... Projects Justification and Benefit... B. Road Improvement and Repaving Background.... Projects Scope.... Projects Justification and Benefit... C. Major Structures and Grounds Projects Bishop Water System/Install Domestic Well... a) Background... b) Projects Scope... c) Projects Justification and Benefit.... Rush Creek Rebuild Tram Track & Replace Tram Car...0 a) Background...0 b) Projects Scope...0 c) Projects Justification and Benefit...0. Big Creek 1 Camp Cottage Renovations...0 a) Background...0 b) Projects Scope...1 -vii-

10 SCE-0: Generation Volume, Part - Hydro Capital Table Of Contents (Continued) Section Page Witness c) Projects Justification and Benefit...1. Big Creek 1 Construct Administration and Dispatch Office...1 a) Background...1 b) Projects Scope...1 c) Projects Justification and Benefit... D. Structures and Grounds Miscellaneous Projects Background.... Projects Scope.... Projects Justification and Benefit... VII. FURNITURE, TOOLS AND EQUIPMENT... A. Furniture and Office Equipment... B. Portable Tools and Equipment... C. Laboratory, Testing and Technical Equipment... D. Miscellaneous Work Equipment and Spare Parts... E. Power Production Division (PDD) Home Office... VIII. DECOMMISSIONING - SAN GORGONIO... A. San Gorgonio Hydro Project Background.... Projects Scope.... Projects Justification and Benefit... Appendix A Witness Qualifications Appendix B SCE Hydro Capital Projects For (Nominal Values are in $00 s) -viii-

11 SCE-0: Generation Volume, Part - Hydro Capital List Of Figures Figure Page Figure I-1 Hydro Recorded, Authorized, and Forecast Capital Expenditures (Nominal $)... Figure I- SCE Hydro Capital Project Categories for (Nominal $millions)... -ix-

12 SCE-0: Generation Volume, Part - Hydro Capital List Of Tables Table Page Table I-1 SCE Hydro Capital Categories...1 Table II- SCE Hydro FERC Licenses... Table II- SCE Hydro FERC Relicensing Projects (Nominal $)...1 Table III- Electrical Equipment Programs & Projects (Nominal $)... Table III- Infrastructure Projects (Nominal $)... Table III- Region Automation Projects (Nominal $)... Table III- Transformer Replacements (Nominal $)... Table III- Branch Circuit, Control and Relay Panels (Nominal $)...1 Table III- Circuit Protection Equipment (Nominal $)... Table III- Major Electrical Projects (Nominal $)... Table III- Electrical Equipment Miscellaneous Projects (Nominal $)... Table IV-1 Prime Mover Major Programs & Projects (Nominal $)... Table IV-1 Turbine Wicket Gates, Runners, and Repowers (Nominal $)...0 Table IV-1 Generator Coils and Rewinds (Nominal $)...1 Table IV-1 Generator Excitation Projects (Nominal $)... Table IV-1 Turbine Valves and High Pressure Piping Systems (Nominal $)... Table IV-1 Prime Mover Replacements (Nominal $)... Table IV-1 Prime Mover Miscellaneous (Nominal $)... Table V-1 Dams and Waterways Major Programs & Projects (Nominal $)...0 Table V-0 Gates and Valves (Nominal $)...1 Table V-1 Structures Improvement (Nominal $)... Table V- Dam Surface Protection (Nominal $)... Table V- Flowline Replacement (Nominal $)... Table V- Major Dams and Waterways (Nominal $)... Table V- Dams and Waterways Miscellaneous Projects (Nominal $)... Table VI- Structures and Grounds Major Programs & Projects (Nominal $)... Table VI- Hydro Building Improvement Projects (Nominal $)... Table VI- Hydro Road Improvement and Paving (Nominal $)... -x-

13 SCE-0: Generation Volume, Part - Hydro Capital List Of Tables (Continued) Table Page Table VI- Major Structures and Grounds (Nominal $)... Table VI-0 Structures and Grounds Miscellaneous (Nominal $)... Table VII-1 Furniture, Tools and Equipment (Nominal $)... Table VIII- Decommissioning (Nominal $)... -xi-

14 I. HYDRO GENERATION CAPITAL EXPENDITURES PLAN DEVELOPMENT SCE s planned capital expenditures for its Hydroelectric (Hydro) generating facilities are necessary to provide reliable service at low cost while complying with applicable laws and regulations, and maintaining safe operations for employees and the public. This volume describes the Hydro capital forecast for years It describes the categories of expenditures, the driving forces behind increasing capital costs, the need for these expenditures, and major capital projects. A. Categories of SCE Hydro Capital SCE determines the category for each SCE Hydro capital project by the type of capital asset involved. Table I-1 below shows these categories. Table I-1 SCE Hydro Capital Categories Category Description of Major Items Federal Energy Commission (FERC) Relicensing FERC Relicensing, including mitigation costs Decommissioning Removal of significant assets from service Electrical Equipment Control systems, switchgear, transformers Prime Movers Turbines, generators & associated equipment Dams & Waterways Reservoirs, tunnels, flumes, penstocks, canals Structures & Grounds Powerhouses, buildings, roads, bridges, wastewater Furniture, Tools & Equipment Furniture, tools, spare parts, test equipment B Hydro Capital Expenditure Estimate SCE Hydro Division capital investments support is needed for infrastructure and equipment replacement and our ongoing efforts to renew the Federal Energy Regulatory Commission (FERC) licenses for many of our facilities. Infrastructure work generally includes projects such as dam improvements that are needed to address areas of concern, flowline refurbishment, substation refurbishment, powerline replacements, building refurbishment, and road improvements. Equipment replacement work generally include projects such as transformers, automation, switchgear, hydro turbine repowers, generator rewinds, and small generator replacements. The total Hydro capital expenditure forecast is $. million for in nominal dollar and is shown by year in Figure I-1 below. 01 and 01 expenditures show an increase as compared historical spending levels. This increase is due to large projects, some of which are required by FERC relicensing and are include within the Prime Movers, Dam Surface Protection, and Substation categories 1

15 that will occur during this period. Prior to 01 and after 01 expenditures will remain at levels that are consistent with historical levels. Appendix B contains a summary listing of the SCE Hydro five-year capital estimate for The listing reflects the capital programs and projects discussed in the following testimony and are divided into the appropriate sections. Figure I-1 Hydro Recorded, Authorized, and Forecast Capital Expenditures (Nominal $) C. Recorded Capital Expenditures Compared To Previous GRC Authorized In the approved 01 GRC (D.1--01), SCE was authorized by the Commission to spend $.1 million in 00, and $. million in 01, on capital projects. SCE recorded higher expenditures than authorized in 01, mainly due to additional funding that was required for both Prime Movers and Structures and Grounds projects.

16 D. Hydro Capital Project Categories Figure I-. Chapters II through VIII describe each category of capital expenditures identified below in Figure I- SCE Hydro Capital Project Categories for (Nominal $millions) Electrical Equipment, $1. Decommissioning, $.1 Furniture, Tools & Equipment, $1. FERC Relicensing, $0. Structures & Grounds, $1. Dams & Waterways, $1.0 Prime Movers, $ Expenditures for Dams & Waterway projects account for almost one-third of the capital forecast, or $1.0 million in Major projects in Dams & Waterways include: Applying geomembrane liners to dams to eliminate leakage. Structural or seismic stability improvements to dams. Dam spillway or instream water release improvements. Tunnel flowline rehabilitation to restore flow and reliability. Aging flowline replacement. Flowline replacement due to wildfire damage. The second largest category of capital expenditure is Electrical Equipment with $1. million in Major Electrical Equipment projects include: Hydro managed substation infrastructure replacements.

17 Automation upgrades to control systems. Powerhouse transformer replacements. Powerline replacements for power and control circuits to reservoirs. The next largest category of capital expenditure is Prime Movers with $.0 million in Major Prime Mover projects include: Turbine refurbishment projects to replace waterwheels or runners with associated equipment. Generator rewinds for stators or rotors. Replacement of aged small hydro generators used at instream releases. The next largest category of capital expenditure (excluding FERC relicensing) is Structures & Grounds with $1. million in Structures & Grounds projects include: Building improvements for powerhouses and field structures. Building improvements for shops and offices. Employee housing refurbishment and replacement. Road improvements and paving. Hydro relicensing continues as a significant category of capital expenditure and will require $0. million in Significant expenditures for relicensing will continue through 01 before decreasing significantly. SCE must sustain these capital expenditure levels through 01 for FERC relicensing, dam and waterway work, and equipment replacement. Both testimony and workpapers include project descriptions and justifications for capital projects forecasted for E. Creation of the GRC Capital Forecast This GRC capital expenditure forecast consists of over 0 individual capital projects that have been combined into a five-year forecast. The projects included have been selected by criteria mentioned below and approved by SCE senior management for inclusion in this GRC. The capital projects identified for vary in the amount, definition, and knowledge available at the time that this forecast is done. Projects planned for 01 and 01 will have more planning and engineering done at this time than projects further out on the horizon in 01 to 01. As additional work is done on those future projects, priorities and costs are subject to change. Nonetheless, we strive to assemble as accurate a forecast as possible for review at this time.

18 Planning for Capital Expenditures Staffs from both Hydro regions, Northern and Eastern, meet on a monthly basis to determine the need for all capital projects and confirm or reassign capital project priorities based upon the needs of their region. In these meetings we investigate each project based upon the following aspects: Strategic, regulatory, environmental, or health and safety importance; Economic value based on generation and/or reliability; and Readiness of the project to proceed. Each Hydro region maintains a list of all capital projects sorted by decreasing priority. The categories of projects from highest to lowest priority are: (1) sustaining or improving safety where needed; () regulatory and environmental compliance; and () preserving electric reliability and minimizing the potential for lost generation. The capital budget for each year reflects the total expenditures for capital projects planned for that year. Inevitably, capital projects can change in scope, cost, and timing. The Hydro regions control these changes, while managing all necessary projects within the total capital budget. After Hydro management approval, the corporate Capital Review Team reviews large projects exceeding $ million.. Capital Estimating Process Capital project estimates are prepared by knowledgeable experts in the field and staff offices. Northern and Eastern Hydro both maintain a staff of mechanical, electrical, and civil engineers. In addition to the Hydro staff, the Engineering and Technical Services (E&TS) staff located in San Dimas also support this effort. E&TS employs engineers in the multiple disciplines of electrical, mechanical, civil, structural, and geotechnical engineering, as well as experts in control systems, transformers, switchyards, performance engineering, technical inspections, cost engineering, and construction management. Capital projects are typically proposed with conceptual estimates to determine feasibility and timing of the project. 1 Often, prior similar projects provide a solid basis for cost estimates. As the project approaches initiation, a preliminary estimate is performed in order to better quantify the project 1 A conceptual estimate according to Association for Advancement of Cost Engineering International (AACEI) is an estimate made without the benefit of detailed engineering data. It is in the same category as their Class estimate which is generally prepared based on limited information and subsequently has fairly wide accuracy ranges. They are typically used for project screening, determination of feasibility, concept evaluation, and preliminary budget approval.

19 cost and determine lead times for critical equipment. Typically, final engineering is performed prior to project initiation. Certain projects may require that final engineering is done concurrently with the work. Project costs are often calculated by our expert staff at the field or home office locations. When appropriate, vendor quotes are utilized to substantiate costs. For projects that are already in progress, our estimates are based on expenditures recorded to date and the amount of remaining work to be completed. This often incorporates purchase orders and other contracted dollar amounts.

20 II. FERC LICENSING PROJECTS Thirty of SCE Hydro s powerhouses are subject to federal regulations requiring the Federal Energy Regulatory Commission (FERC) licenses to operate. Twenty FERC licenses govern operation of these 0 powerhouses. These 0 powerhouses account for 1, MW of our total Hydro nameplate capacity of 1,1 MW. FERC includes operating requirements that SCE must meet as conditions of these licenses. These requirements typically include maintaining minimum stream flows and reservoir levels, conducting periodic assessments of our operations impact on environmental and cultural resources, constructing and maintaining nearby recreational facilities, and submitting periodic reports. FERC grants each license for a defined period. SCE must renew the license upon expiration to continue project operation. SCE s original licenses were for a 0-year term, and most renewed licenses now have a 0-year to 0-year term. FERC relicensing is time-consuming and costly. SCE must prepare voluminous reports and perform numerous studies. Once a new license is granted, we typically incur mitigation costs and restrictions on our operations that are greater than those required by the previous license. These mitigation costs may include a reduction in our electrical generation output because of requirements to divert less water away from the streambed for power generation. They may also include increased studies of the environmental impact of our operations and additional recreational studies and improvements. Despite the significant cost of FERC relicensing, these facilities provide substantial benefits to customers over the license period. To provide intergenerational equity, SCE capitalizes FERC relicensing costs rather than expensing them as incurred. This practice is consistent with Generally Accepted Accounting Principles (GAAP) and is accepted utility practice. SCE is in the relicensing process for six of the 0 FERC licenses it holds. These six licenses are for Big Creek projects that account for approximately 1 MW of nameplate capacity, or approximately. percent of SCE's total hydro capacity of 1,1 MW. SCE has also received additional FERC licenses within the last 1 years. Five of these licenses require continued capital expenditures for studies or mitigation costs as a license condition. Combined, the six licenses that are in process of relicensing, and the five previously awarded licenses, will require capital expenditures of $0.0 million during 01-01, or 1 percent of the total five-year forecast expenditures for all Hydro capital projects. The sites governed by these licenses account for approximately 1,0 MW of our total Hydro capacity of 1,1 MW, or 0 percent.

21 Table II- summarizes the relicensing status for each of our generating plants. A discussion of the FERC relicensing process and SCE's relicensing cost estimate follows Table II-. This testimony then addresses each FERC relicensing action requiring capital expenditures during Table II- SCE Hydro FERC Licenses Relicense Status FERC Project License Expiration Nameplate Capacity MW Notes Northern Hydro Region Big Creek Nos. 1 & Ongoing 1 //00 (c)(d)(e) 1. Big Creek Nos. A, & Ongoing //00 (c)(d)(e).0 John S. Eastwood Big Creek No. Ongoing //00 (c)(d)(e) 1. Big Creek No. Recent 01 /0/ Portal Ongoing 1 /1/00 (c)(e).0 Mammoth Pool Ongoing 0 /0/00 (c)(e)(d).00 Vermilion Valley Ongoing 0 /1/00 (b)(c)(e) - Sub-Total Northern 1,01.0 Eastern Hydro Region Kern River No. 1 Recent /1/0. Kern River No. Complete 0 /0/0 0.1 Borel Recent /1/ Lytle Creek Complete 1 /1/0 0.0 Santa Ana Nos. 1 & Complete 1 /0/0.0 Mill Creek No. Recent 1 /0/0.00 San Gorgonio Nos. 1 & None //00 (a) - Bishop Creek,,, & Complete 1 /0/0. Lee Vining Creek (Poole) Complete 1 1/1/0. Rush Creek Complete 1 1/1/ Mill Creek (Lundy) Recent //0.00 Kaweah Nos. 1, & Complete 1/1/01. Lower Tule River Recent /1/0. Sub-Total Eastern 1.1 Total FERC Licensed Plants Capacity of Hydro plants without FERC licenses Total Hydro capacity 1,.0.1 1,1.1 Notes: a) Planned for decommissioning and will not be relicensed. b) Storage only. c) Application for new license filed with the FERC. d) Will be relicensed under the Alternative Licensing Process e) Operating under an annually renewable license pending issuance of new term license.

22 A. FERC Relicensing Process FERC divides the licensing process into two phases: (1) a pre-application consultation phase; and () a post-application analysis phase. During the pre-application consultation phase, the licensee files a Notice of Intent (NOI) to seek an original, new, or subsequent license and enters into consultation with resource agencies, stakeholders, and the public regarding the project. The post-application analysis phase begins when the licensee files a formal application to obtain a new license. The application must be filed no later than two years before the existing license expires. The application is a comprehensive, detailed document specifying the project s proposed operations, its anticipated impact on resources and other land uses, and proposed actions to mitigate adverse effects. FERC reviews the application to ensure that it meets all requirements and then asks relevant federal and state land and resource agencies to formally comment. Once FERC has determined that the application meets all of the filing requirements, the studies have been completed, any deficiencies have been resolved, and no additional information is required, FERC will issue the notice of acceptance and ready for environmental analysis (REA). The REA notice triggers a deadline for comments, recommendations, and mandatory conditions or prescriptions. When these filings are complete, FERC has all the information needed to prepare the National Environmental Protection Act (NEPA) document. An Environmental Assessment (EA) or Environmental Impact Statement (EIS) will typically be the NEPA document prepared for a license application. The licensing process concludes with the issuance of a licensing order. FERC has completed the relicensing process steps for all six Big Creek projects, with the exception of the issuance of a new license order. The Federal Power Act (FPA) provides for subsequent administrative and judicial reviews of a FERC license decision. If a license expires while a project is undergoing relicensing, FERC issues an annual license, allowing a project to continue to operate under the conditions found in the original license until the relicensing process is complete. All six Big Creek projects that are still undergoing the relicensing process are currently operating under annual license renewals. Table II- above identifies SCE s FERC project license numbers and the associated expiration date for each license. FERC regulations governing the relicensing of an existing hydroelectric project allow the licensee to use the Alternative Licensing Process (ALP), Traditional Licensing Process (TLP), or the Integrated Licensing Process (ILP) to prepare, file, and process a new license application. In the Big In July 00, FERC added a third relicensing process called the Integrated Licensing Process; however, this was not available in time for any of the SCE relicensing projects discussed herein.

23 Creek System, SCE is utilizing both the TLP and the ALP to relicense six of the seven FERC Licensed Projects. The two projects being relicensed using the TLP are the Vermilion Valley Hydroelectric Project (FERC No. 0) and the Portal Hydroelectric Project (FERC No. 1). The four FERC projects being relicensed using the ALP are the Mammoth Pool Project (FERC No. 0); Big Creek Nos. 1 and Project (FERC No. 1); Big Creek Nos. A, and Eastwood Project (FERC No. ); and Big Creek No. Project (FERC No. ). 1. Alternative Licensing Process (ALP) The ALP is a multi-year collaborative process that allows the consultation and environmental review phases of relicensing to be combined into a single process. Under this process the applicant conducts a preliminary NEPA analysis during the pre-application phase rather than having FERC begin the NEPA analysis during the post-application phase. Also, the applicant prepares a preliminary draft environmental assessment (PDEA) that is filed with the application for new license. The ALP seeks to improve communication and collaboration among the applicant and stakeholders during the process and often results in a settlement agreement at the end of the pre-application phase. This settlement agreement, signed by all the participants in the process, includes the conditions to protect and enhance resources and, if reached, is filed with the application for new license.. Traditional Licensing Process (TLP) The TLP consists of a three-stage consultation process for the preparation and filing of a new license application for an existing hydroelectric project. Under this process, the applicant prepares and submits a license application to the FERC presenting information about the project, the resources in the project area, and the licensee s protection, mitigation and enhancement (PM&E) proposals along with those measures proposed by other parties, but not adopted by the licensee. The FERC conducts an independent environmental review of the project, and during this time resource agencies, Native American tribes, the public, and the applicant can provide comments. The FERC will issue a new license order with terms and conditions based on the PM&E measures proposed in the license application and on stakeholder comments received during the review period. The TLP was previously the only process available to a licensee. B. Big Creek Relicensing Projects 1. Background Six of Big Creek s seven FERC project licenses are in the midst of relicensing activity as mentioned above. The Big Creek No. Project (FERC No. 01) has already completed its relicensing

24 process and received a new FERC license in 00. Four Big Creek projects are being relicensed in a single ALP and two projects are being relicensed individually using the TLP. SCE elected to use the multi-year collaborative ALP for relicensing four of its Big Creek projects to address complex resource balancing issues within a single process. The Vermilion Valley and Portal projects were not incorporated into the ALP because earlier FERC License expiration dates required that their licensing process to begin sooner than the initiation of the ALP. a) Big Creek ALP Projects Relicensing The Big Creek ALP began in May 000 after receiving FERC approval to use the process. On October 0, 00 SCE filed its NOIs to file an application for the Mammoth Pool Project and on February, 00, SCE filed its NOI to file applications for the three remaining Big Creek ALP projects. FERC is processing all four projects simultaneously in a single ALP. By combining these four relicensing projects into a single ALP, SCE expects a better outcome compared to pursuing each relicensing individually. This process gives SCE greater input into the mitigation activities and costs resulting from relicensing actions. During the implementation of the ALP SCE: (1) developed, implemented and evaluated the results of technical resources studies designed to access the effects of project operations on environmental and cultural resources; () prepared the license applications and a preliminary draft environmental assessment (PDEA); and () negotiated a comprehensive settlement agreement with stakeholders that included the proposed terms and conditions for the projects over the terms of the new license orders which was filed with the applications for new license. The Settlement Agreement was signed by 1 signatories including the California Department of Fish and Game (CDFG), the U.S. Department of Agriculture-Forest Service (USDA-FS), the Fish and Wildlife Service (FWS), and the Friant Water Authority and included the support of the California State Water Resources Control Board (State Water Board). SCE anticipates that FERC will model the new license requirements on the Settlement Agreement without significant additional requirements. Since the filing of the license application for the ALP projects, FERC has completed their NEPA process with the issuance of a Final Environmental Impact Statement (FEIS) on March 1, 00. FERC has completed their relicensing process and is waiting for the State Water Board to issue a Water Quality Certification (WQC) for the projects in accordance with the requirements of the Clean Water Act before it can issue a new license order. The existing licenses for the Big Creek ALP Projects have expired. The licenses for the ALP projects have expired and FERC has issued Notice of

25 Authorization(s) for Continued Project Operation, which allows the projects to operate on annual renewals until new license orders are issued. b) Portal Hydroelectric Project Relicensing SCE initiated relicensing of the Portal Hydroelectric Project on March, 000 with the filing of its NOI to file an application for new license. SCE filed its application for new license on March, 00 and FERC prepared and issued a Final Environmental Assessment (FEA) on April, 00. As described for the ALP Projects above, FERC has completed their relicensing process and is waiting for the State Water Board to issue a WQC for the Project before it can issue a new license order. The current license expired on March 1, 00; however, FERC issued a Notice of Authorization for Continued Project Operation on September, 00, which automatically allows continued operation of the Project until issuance of a new license. c) Vermilion Valley Hydroelectric Project Relicensing SCE initiated relicensing of the Vermilion Valley Hydroelectric Project on August, 1 with the filing of its NOI to file an application for new license. SCE filed its application for new license on August, 001 and FERC prepared and issued an Environmental Assessment (EA) for the Project on May, 00. As described for the Big Creek ALP Projects above, FERC has completed their relicensing process and is waiting for the State Water Board to issue a WQC for the project before it can issue a new license order. The current license expired on August 1, 00; however, FERC issued a Notice of Authorization for Continued Project Operation on September, 00, which automatically allows continued operation of the Project until issuance of a new license. d) Licensed Big Creek Project On December, 00, FERC issued a new license for the Big Creek No. Project. Under the new license order SCE was required to prepare resource management plans that include PM&E measures designed to avoid and protect sensitive environmental and cultural resources. SCE is complying with all the conditions of the new license and the resource management plans that were approved by the resource agencies.. Delay of License Issuance The issuance of new license orders for the six Big Creek projects has been delayed because the FERC is waiting for a WQC from the State Water Board. FERC has completed their process to comply with the NEPA requirements for the issuance of all six Project licenses. However, 1

26 FERC must also comply with the California Water Quality Act, which requires the issuance of a WQC. The State Water Board is the lead agency responsible for issuance of the WQC. The State Water Board intends to issue a single WQC for all six projects. However, before the State Water Board can issue a WQC, it must evaluate the projects in accordance with the requirements of the California Environmental Quality Act (CEQA). To fulfill its obligation under CEQA, the State Water Board is using the March 0 FEIS for the Big Creek ALP Projects, along with the 00 and 00 FEAs for both the Vermilion Valley and Portal projects, to complete much of the environmental analysis required by CEQA. However, the State Water Board must also prepare a supplemental document to FERC s EIS that will address additional environmental analysis that is required under CEQA. At the request of the State Water Board, SCE has prepared and provided a draft supplemental document that addresses the additional CEQA environmental analysis. SCE provided the supplemental document to the State Water Board on November, 0. The State Water Board is preparing a draft WQC that will include mandatory conditions, which are anticipated to be consistent with the terms and conditions included with the ALP Settlement Agreement. The State Water Board will circulate the draft WQC and the CEQA Supplemental Document for public review and comment prior to issuing a final WQC for all sic Big Creek projects. C. Relicensing Cost Forecast SCE s cost forecast for the implementation of the new license orders for the six Big Creek projects is based on experience from the implementation of the new license order issued for the Big Creek No. Project in 00. Many of the activities completed to support the implementation of the Big Creek No. License are carried forward into the Big Creek ALP, Vermilion Valley, and Portal projects. The new license orders for the six Big Creek projects when issued will require the development of resource agency approved management and protection plans, implementation of adaptive management environmental resource studies over the term of the license, and preparation of license compliance tools as well as data management databases. These same activities were completed for the Big Creek No. Project. Therefore, based on this experience, SCE could subsequently quantify anticipated costs based on similar work completed for the Big Creek No. Project. The costs for are shown below on Table II- for individual Hydro projects. When FERC relicensing begins for a specific Hydro facility, SCE opens a capital work order. SCE records expenditures in this work order until the expiration date of the existing license, which also 1

27 becomes the in-service date for the capital expenditures incurred up to that point in time. Expenditures recorded up to this date are then in-service and eligible for inclusion in rate base. Subsequent capital expenditures related to gaining the new license generally record to this existing work order, to be placed in service as the additional relicensing-related work proceeds. Capital projects relating to large FERC license-related mitigation projects receive separate work orders. SCE forecasts the capital necessary for FERC relicensing projects for five years ahead and updates this forecast on an annual basis. The Big Creek ALP FERC relicensing effort includes the first seven Hydro projects in Table II- below: Big Creek 1,,,, A, Eastwood, and Mammoth Pool. Our total relicensing expenditure forecast is $0.0 million for Table II- SCE Hydro FERC Relicensing Projects (Nominal $) FERC RELICENSING REF WBS Element FERC Relicensing TOTAL 1 CG0-00-PP-HN-0000 Big Creek 1 Relicensing,1 1,0 0 1,0, CG0-00-PP-HN-0000 Big Creek Relicensing,1 1,0 0 1,0, CG0-00-PP-HN-0000 Big Creek Relicensing, 1,0 1, 1,0, CG0-00-PP-HN Big Creek Relicensing 1 00,1 CG0-00-PP-HN Big Creek A Relicensing, 1,0 1, 1,0, CG0-00-PP-HN-0000 Mammoth Pool Relicensing 00 1, , CG0-00-PP-HN-0000 Eastwood Relicensing, 1,0 1, 1,0, CG0-00-PP-HN-0000 Vermillion Relicensing 1,,0, CG0-00-PP-HN-0000 Big Creek Relicensing ,0 CG0-00-PP-HN-0000 Portal Relicensing, 0, (Nominal Values are in $00's) Total,1 1,,0,,1 0, Big Creek Alternative Licensing Procedure The total capital expenditure forecast for Big Creek ALP is $. million (Ref. 1-). The Big Creek ALP activities can be divided into two main categories: (1) preparing for license issuance; and () permitting and planning activities associated with the implementation of new license terms. a) Implementation of New License Order Terms and Conditions As stated above, the issuance of the new ALP license is expected in late 01 or early 01. Prior to license issuance, a 01 WQC must be issued by the State Water Board. In preparation for the new license, several tools are also being developed to assist in the tracking and compliance of the new license order(s). These tools include License Implementation Tracking Tools Ref for projects listed in this testimony refers to corresponding references on related Tables. 1

28 and an Environmental Compliance Database (ECD). The License Implementation Tracking Tools include the development of management tools, which identify and cross reference consultation, implementation, monitoring, and reporting requirements. The tools consist of resource management plan summaries, reporting and consultation requirements, decision records, flow charts to track and monitor activities, and a project timeline and calendar. The ECD is a GIS based tool that identifies biological and cultural resources and associated PM&E measures associated with the operation and maintenance of the Big Creek ALP Projects. The major relicensing costs to SCE associated with future project operations are related to implementing the license order terms and conditions including the required resource management plans and license articles as set forth in the Settlement Agreement. There are five main resource areas (Aquatic Resources, Recreational Resources, Terrestrial Resources, Land Management, and Cultural Resources) that require additional studies, enhancements, or mitigation measures to comply with the terms of the Settlement Agreement. Each resource area is discussed below. b) Aquatic Resources Enhancements and mitigation measures that address aquatic resources were designed to mitigate project impacts identified in studies and enhance habitat conditions for aquatic life. The following describes the types of activities SCE will be required to complete including some of the associated monitoring or mitigation activities. Channel riparian maintenance (CRM) flows will be released along two selected reaches to provide enhanced habitat that will sustain aquatic and riparian ecosystems. Prior to the high flow releases on Mono Creek, baseline measurements of the current sediment and riparian conditions will be conducted within the first year following license issuance. Along the South Fork San Joaquin River below Florence Reservoir, a detailed topographic survey of the Jackass Meadow Complex will be performed prior to the CRM flow releases. Subsequent surveys will be conducted to determine the extent of inundation from the CRM flows. Riparian conditions along the stream corridor will also be conducted within the first year following license issuance. Four back country hydropower diversions and two domestic water diversions are to be decommissioned and the natural flows returned to the channel. All six diversions are proposed for removal within five years following license issuance. To complete the decommissioning at each location, applicable permits will be obtained and supporting documentation will be prepared in consultation with resource agencies. 1

29 Stream and reservoir temperatures will be monitored during the first three to five years that instream flows are released under the new project licenses to demonstrate that temperature targets are consistently met. Installation and ongoing maintenance or calibration of the stream temperature recorders will occur throughout the monitoring period. An Interim Water Temperature Control Program will be prepared in consultation with resource agencies. The Interim Program will contain measures that may be feasibly implemented by SCE to maintain water temperature targets in project stream reaches. Additional water temperature studies and modeling will be included as a component of the Interim Program and the results will be integrated into the Long-Term Water Temperature Control Program. Fish populations will be monitored in selected stream reaches in order to assess the effects of the newly agreed upon stream flow releases on fish community composition and abundance. Night snorkeling surveys will also be conducted at several established sampling sites prior to the implementation of the new minimum instream flows. Sediment stored behind project dams and diversions will be reduced through the implementation of sediment management prescriptions that include sediment pass through or physical removal of sediment. Sediment management activities are required to maintain proper operation of the projects and protect facility reliability (low-level outlets and intake structures). Initial agency consultation and draft permit applications for the CDFG 0 Streambed Alteration Agreement and an Army Corp of Engineers (ACOE) Section 0 permit will be obtained prior to implementation of the sediment management prescriptions. Baseline studies to establish fine sediment in pools will also be conducted prior to implementing sediment management prescriptions. During the implementation SCE will monitor water quality and fine sediment conditions associated with the sediment pass through prescription. Instream flow release improvements include installation, modification, and maintenance of flow monitoring equipment and/or release structures at 1 stream gaging stations. At locations where infrastructure changes are proposed to comply with the new instream flow release requirements, preliminary engineering designs, permitting, and construction will occur. A gravel augmentation program is proposed below Mammoth Pool Dam to improve trout recruitment by providing additional spawning gravel to the reach. SCE will initiate agency consultation on the feasibility of adding gravel to the channel and will prepare necessary permits and supporting documents to implement the plan. 1

30 c) Recreational Resources Under the new license orders, SCE will be required to maintain and enhance recreational resources by operating and maintaining recreation facilities and through the rehabilitation, replacement, and improvement of recreation facilities in the vicinity of the ALP Projects. During the five years from 01 to 01, SCE will conduct major rehabilitation at five campgrounds and three day-use areas around two major SCE reservoirs. Major rehabilitation consists of conceptual planning, engineering design, permitting, and construction of the facility. In accordance with the terms of the Settlement Agreement, SCE initiated the recreation facility major rehabilitation program upon the signing of the ALP Settlement Agreement. SCE completed the rehabilitation of a 1-site campground in 01 and will complete the rehabilitation of two campgrounds and one day use area in 01. Between 01 and 01, SCE will complete the construction of two campgrounds, a day use area, a visitor s center and a boat ramp, as well as initiate the planning, design, and permitting for one campground, a boat ramp, and a day use area. Upon license issuance, three new recreation facility capital improvements (day use area, accessible boat landing facility and as accessible fishing platform) will be planned, designed and constructed in conjunction with the major rehabilitation activities described above. Additionally, several interpretative display exhibits (kiosks) will also be included with the major rehabilitation activities. SCE will support fish stocking in project reservoirs and bypass stream reaches below project diversions in order to enhance angling opportunities. Whitewater flow releases will be provided below various diversions and dams in Wet and Above Normal Water Years to enhance recreational opportunities. SCE will enhance recreation opportunities in the vicinity if the projects by providing funding to the USDA-FS to: (1) Repair and maintain recreational facilities around the project area; () Conduct minor rehabilitation of recreational facilities; and () Support Interpretive Programs. SCE will also fulfill financial obligations as outlined in the Non-FERC Settlement Agreement to other non-government groups. Examples include the Huntington Lake Association, Huntington Lake Big Creek Historical Conservancy, and the Shaver Crossing Railroad Station Group. d) Terrestrial Resources Measures Under the new license order, SCE will implement avoidance and protection measures for terrestrial resources potentially affected by project operations. Resource specific management plans were developed to address these areas and include the Bald Eagle Management Plan, An agreement to perform defined requirements entered into with non-governmental agencies. 1

31 Valley Elderberry Longhorn Beetle Plan, and Vegetation and Integrated Pest Management Plan. The following activities will be conducted as required by the plans: (1) wintering and nesting surveys to monitor the status of bald eagles in the vicinity of the Big Creek projects; () monitoring of the VELB mitigation site; () monitoring of special status plant species and Native American plant populations; () treatment and monitoring of noxious weed populations; and () conducting employee training on various resource topics. e) Land Management Under the new license orders, SCE will implement resource management plans for visual and transportation resources. The Visual Resource Plan will be implemented to addresses visual effects of project facilities on the surrounding landscapes and view shed in the USDA-FS. Several project facilities affecting visual resources will be repainted during their normal painting schedule with natural colors that blend in with the surrounding environments and are approved by the USDA-FS. The Transportation System Management Plan describes measures that SCE will implement to repair, minimize, or eliminate impacts associated with the maintenance and operation of the projects. SCE will coordinate with the USDA-FS to conduct initial road condition surveys of SCE maintained roads to identify and prioritize roads requiring rehabilitation. Any roads identified as requiring immediate rehabilitation will be documented in the Annual Plan of Operations and scheduled for repair the following year. SCE will also establish a transportation signage fund in coordination with the USDA-FS. This fund will allow the USDA-FS to purchase, repair, and maintain road and recreation use signs throughout the Big Creek project area. f) Cultural Resources Under the new license order SCE will implement the Historic Properties Management Plan (HPMP) prepared for the ALP projects. Activities associated with the implementation of the HPMP include: Establishing an advisory committee to periodically review and revise the HPMP that will meet twice a year during the first five years following license implementation. Completing historic preservation activities called for in the HPMP within two years following license issuance, including: (1) evaluation or determination 1