Customer Care Services · 3 A. Overview 4 Customer Care Services activities include managing SCE programs to ensure customers have the 5 information and tools they need to manage

Application No.: A.19-08- Exhibit No.: SCE-03, Vol. 5 Witnesses: K. Garcia

J. Lim C. Prescott

(U 338-E)

2021 General Rate Case

Customer Care Services

Before the

Public Utilities Commission of the State of California

Rosemead, California August 30, 2019

SCE-03, Vol. 5: Customer Care Services

Table Of Contents

Section Page Witness

-i-

I. INTRODUCTION .............................................................................................1 J. Lim

A. Content and Organization of Volume ....................................................1

B. Summary of O&M Request ...................................................................1

II. CUSTOMER CARE SERVICES ......................................................................3

A. Overview ................................................................................................3

1. Customer Experience Management ...........................................3

2. Business Account Management Services ..................................3

3. Customer Programs Management ..............................................3

4. Transportation Electrification ....................................................4

5. Regulatory Policies Driving SCE’s Customer Care Services Request ........................................................................4

6. Regulatory Compliance Requirements for Customer Care Services .............................................................................4

B. 2018 Decision ........................................................................................5

1. Comparison of Authorized 2018 to Recorded for Customer Care Services .............................................................5

C. O&M Forecast .......................................................................................6

1. Customer Experience Management ...........................................7

a) Work Description and Need for Activity .......................7

b) Comparison of Authorized 2018 to Recorded ........................................................................9

c) Scope and Forecast Analysis .......................................10

Historical Variance Analysis ...........................11

Forecast ............................................................12

d) Basis for O&M Cost Forecast Method ........................14


Table Of Contents (Continued)


-ii-

2. Business Account Management Services ................................15 K. Garcia

a) Work Description and Need for Activity .....................15

Community Choice Aggregation and Direct Access ...................................................15

Economic Development Services ....................18

Hydraulic Services ...........................................20

Energy Related Services ..................................22

b) Comparison of Authorized 2018 to Recorded ......................................................................22



Forecast ............................................................25


3. Customer Programs Management ............................................30 J. Lim

a) Work Description and Need for Activities ..................30

DER Program Management .............................32

Building Electrification ....................................32

Cool Centers.....................................................35

b) Comparison of Authorized 2018 to Recorded ......................................................................36



Forecast ............................................................39


4. Transportation Electrification ..................................................45 C. Prescott


Table Of Contents (Continued)


-iii-

a) Work Description .........................................................45

Strategy and New Program Development ....................................................46

Business Development and Partnerships ......................................................46

Transportation Electrification Operations ........................................................47

b) Need for Activity .........................................................48

c) Comparison of Authorized 2018 to Recorded ......................................................................49

d) Scope and Forecast Analysis .......................................49


Forecast ............................................................50

e) Basis for O&M Cost Forecast Method ........................51

D. Capital Expenditures for Customer Care Services ...............................51 K. Garcia

1. Project Descriptions and Need for Activity .............................53

a) Specialized Tools and Equipment – Technical Services .......................................................53

b) Specialized Tools and Equipment – Hydraulic Services .......................................................53

2. Comparison of Authorized 2018 to Recorded Capital Expenses for Customer Care Services.........................54

3. Basis for Capital Expenditure Forecast ....................................54

E. SBUA Compliance ...............................................................................54

1

I. 1

INTRODUCTION 2

A. Content and Organization of Volume 3

This volume presents Southern California Edison’s (SCE) Test Year 2021 forecast of Operations 4

and Maintenance (O&M) expenses and 2019-2023 capital expenditures forecast for Customer Care 5

Services Business Planning Element (BPE). The activities for this BPE as detailed in this volume are 6

associated with Customer Experience Management, Business Account Management Services, Customer 7

Programs Management, and Transportation Electrification Management, and are primarily managed in 8

SCE’s Business Customer Division (BCD) and Customer Program and Service (CP&S) organizations. 9

The funding request presented in this volume will allow SCE to continue its efforts to: (1) measure, 10

identify and prioritize customer service improvement opportunities to meet customer needs and evolving 11

customer expectations, (2) develop, manage and deliver SCE’s portfolio of customer programs and 12

services, (3) provide specialized account management activities, such as those to support Community 13

Choice Aggregation, and (4) lead SCE’s transportation electrification (TE) initiatives.1 This volume 14

summarizes the scope of work, key drivers for the work, and regulatory mandates that impact the level 15

of O&M and capital requested for Customer Care Services activities. 16

The volume also includes analysis of (1) O&M and capital funding authorized in the 2018 17

General Rate Case (GRC) compared to recorded amounts in 2018, (2) the 2021 Test Year O&M labor 18

and non-labor forecast relative to historical spending, and (3) SCE’s testimony detailing its compliance 19

with the SCE-SBUA 2018 GRC settlement. The discussion and analysis of capital activities are 20

presented in Section II.D. 21

B. Summary of O&M Request 22

This volume presents SCE’s request for $30 million (constant 2018 dollars) in O&M expense for 23

the 2021 Test Year to effectively perform the Customer Care Services activities presented in this 24

volume. Figure I-1 below illustrates the Customer Care Services share of SCE’s Customer Interactions 25

Business Planning Group (BPG) total O&M expenses, or approximately 16 percent of the total for the 26

1 SCE’s TE activities are primarily funded through separate proposed and Commission-approved programs. See

D.16-01-023, D.18-01-024, D.18-05-040, and D.18-12-006 for more information on SCE’s Commission-approved TE programs. See A.18-06-015 and A.18-07-022 for information on SCE’s proposed TE programs that are pending Commission approval. As described in this testimony, SCE’s 2021 GRC forecast of TE costs includes O&M for SCE’s newly formed Transportation Electrification organization to conduct activities not separately funded through specific Commission-approved programs.

2

BPG. Table I-I below presents Customer Care Services’ O&M expenses that were recorded for 2014-1

2018 and forecast for 2019-2021 by each of the work activities that are discussed in this testimony. 2

Figure I-1 Customer Care Services O&M Expenses

(Constant 2018 $Millions)

Table I-I Customer Care Services

Recorded 2014-2018 and Forecast 2019-2021 (Constant 2018 $000)

3

II. 1

CUSTOMER CARE SERVICES 2

A. Overview 3

Customer Care Services activities include managing SCE programs to ensure customers have the 4

information and tools they need to manage their energy needs. This includes utilizing customer feedback 5

to improve how we deliver our services and create new programs. An overview of each area is provided 6

below. 7

1. Customer Experience Management 8

SCE’s Customer Experience Management (CEM) work activities include benchmarking 9

studies, customized research, and collection and analysis of customer feedback, secondary research, data 10

analytics, and post-launch product/program evaluations to provide insights into the needs and 11

expectations of SCE’s customers. CEM also implements, manages, and monitors a variety of customer 12

improvement efforts, privacy, third-party data sharing, data governance, and record management 13

initiatives and programs, and is responsible for developing and operationalizing business processes that 14

support SCE’s compliance with privacy-related laws, as well as regulations from federal and state 15

agencies, including the Commission. See testimony below for more information about these activities. 16

2. Business Account Management Services 17

The Business Account Management Services work activity is managed in the BCD 18

organization, and includes program and service delivery, as well as specialized account management 19

activities for Community Choice Aggregation and Direct Access, Economic Development Services, 20

Hydraulic Services, and Energy Related Services. See the testimony below for more information about 21

these activities. 22

3. Customer Programs Management 23

Customer Programs Management is managed in SCE’s CP&S organization, and includes 24

the planning, implementation, and management of customer programs in the areas of program 25

innovation and pilots, energy management tools, rate-based solutions, pricing, building electrification, 26

and distributed energy resources (DER) programs. DER programs managed by this group include 27

behind-the-meter (BTM) energy procurement for reliability through requests for offers (RFOs) with 28

contract origination and management, as well as the management of renewable tariffs and customer 29

interconnections to the grid. See testimony below for more information about these activities. 30

4

4. Transportation Electrification 1

The Transportation Electrification group manages the activities to drive increases in 2

electric vehicle (EV) adoption across all vehicle segments. The Transportation Electrification group is 3

organized into three key areas: Strategy and Program Development, External Engagement, and 4

Operations. These groups: (1) lead the company’s TE efforts in conducting market research and 5

developing market solutions that advance the awareness, availability and affordability of all types of 6

EVs, (2) act as a single source of TE policy, develop marketing and advocacy material, and explore 7

relationships with other parties to meet TE goals and objectives, and (3) coordinate TE infrastructure 8

deployment across other organizations within SCE. 9

5. Regulatory Policies Driving SCE’s Customer Care Services Request 10

In December 2018, the Commission issued Rulemaking R.18-12-006 to develop policies, 11

guidelines, rates, and implementation strategies to accelerate widespread adoption of transportation 12

electrification. SCE expects that the Transportation Electrification activities described in this volume 13

will support the outcomes of this rulemaking in the test year. In addition, in March 2019, the 14

Commission issued R.19-03-009 to implement a limited increase for Direct Access (DA) participation 15

and to explore the potential for further expansion of the DA market. SCE expects that expanding DA 16

may affect its costs in the Business Account Management function but has not forecast a specific test 17

year adjustment as the cost impacts are not yet known. 18

6. Regulatory Compliance Requirements for Customer Care Services 19

The functions discussed above in the Customer Care Services BPE have several 20

regulatory compliance requirements reflected in this Volume. First, in D.19-05-020 issued in SCE’s 21

2018 GRC, the Commission adopted an agreement between SCE and the Small Business Utility 22

Advocates (SBUA) that commits SCE to deliver certain customer care and customer contact services for 23

its small business customers. The agreement with SBUA as adopted in D.19-05-020 sets forth specific 24

deliverables including but not limited to: (1) providing assistance to small business customers on SCE’s 25

portfolio of services and program offerings, (2) enhancing call center and account management 26

representative training to facilitate these interactions, (3) expanding online tools available and targeted 27

to small business customers, and (4) implementing outreach and education events. A detailed discussion 28

of SCE’s compliance with these requirements is provided in Section II.E of this volume. Next, SCE 29

must comply with the appropriate customer data privacy requirements regarding customer energy usage 30

data and energy usage data sharing, such as those established in D.11-07-056, D.14-05-016, 31

5

D.16-06-008 and SCE’s Commission-approved Rule 24. In addition, SCE must comply with the recently 1

enacted California Consumer Protection Act (CCPA) from AB 375 that establishes new requirements 2

regarding access to customer data. SCE is participating in an ongoing proceeding (A. 19-03-025) that 3

will establish a cost recovery mechanism outside of the GRC for costs to comply with the CCPA 4

requirements. SCE expects that additional regulatory proceedings may be implemented to determine the 5

specific long-term rules to meet the CCPA requirements. Next, as described earlier, SCE’s Business 6

Account Management function provides specialized account management activities for Community 7

Choice Aggregation and Direct Access. These CCA support activities as described further in Section 8

II.C.2 are delivered in compliance with the applicable Commission decisions (D.04-12-046, 9

D.05-12-041, D.12-12-036) and SCE’s Commission-approved Rules 23 and 23.1. Finally, in Decision 10

D.16-11-022, the Commission directed SCE to request future cool center funding through its General 11

Rate Case. SCE’s cool center activities are described further in Section II.C.3.a.3. 12

B. 2018 Decision 13

1. Comparison of Authorized 2018 to Recorded for Customer Care Services 2 14

On May 24, 2019, the Commission issued D.19-05-020, which authorized SCE’s O&M 15

Forecast for the test year 2018 (“2018 GRC”). Figure II-2 below compares the requested and authorized 16

O&M expenses from SCE’s 2018 GRC with the recorded expenses for the Customer Care Services BPE 17

in compliance with D.15-11-021. As shown in Figure II-2, SCE’s recorded expenses in 2018 for the 18

Customer Care Services BPE were less than authorized by approximately $2.3 million, a variance of 19

approximately 9 percent, which is within normal operating expectations. A discussion of the authorized 20

versus recorded amounts for 2018 for Customer Care Services activities is provided below. 21

2 Refer to WP SCE-07, Vol. 01 – Authorized to recorded.

6

Figure II-2 Customer Care Services

Comparison of 2018 GRC Authorized versus Recorded (Constant 2018 $000)

C. O&M Forecast 1

Figure II-3 below presents the Customer Care Services O&M expenses that were recorded for 2

2014-2018 and forecast for 2019-2021. 3

7

Figure II-3 Customer Care Services


1. Customer Experience Management 1

a) Work Description and Need for Activity 2

The Customer Experience Management (CEM) function plays a critical role in 3

monitoring and measuring customer satisfaction. SCE uses Net Score3 as a data-driven measurement 4

method to determine customer satisfaction on completed transactions with SCE related to outages, 5

billing and payment, and ease of transactions. CEM captures “Voice of the Customer”4 (VOC) feedback 6

3 Net Score is based on the Net Promoter Score calculation measuring the difference between the percentage of

customers [survey respondents who had a recent transaction] who gave a 9 or 10 rating (on a 10-point rating scale for either Satisfaction or Ease) minus the percentage of customers who gave a rating of 1 through 6. Those who gave a 7 or 8 rating are excluded from the Net Score calculation.

4 “Voice of the Customer” is a program that collects customer feedback about their experiences with and expectations of SCE services and performance. It is used by operational and program teams to identify improvement opportunities that drive easier and more satisfying customer experiences. Feedback is gathered through transactional surveys after a customer interacts with SCE through one of several channels (e.g., live agent interaction, website login, interactive voice response (IVR)).

8

leveraging Net Score survey results and merges this survey data with operational data (e.g., wait time on 1

the phone to speak to a live SCE agent, delayed bills, etc.) to monitor and diagnose what drives a 2

satisfying or dissatisfying customer experience, address customer pain points, and improve operational 3

efficiencies. SCE will continue to track J.D. Power Electric Utility Satisfaction Study as a benchmark 4

against other large utilities.5 SCE has been evaluating both the J.D. Power Residential and Business 5

Electric Utility Customer Satisfaction studies since their inception in 1999 and 2000, respectively. 6

CEM also conducts post-program measurement and evaluation, custom research studies, and customer 7

segmentation and propensity modeling6 activities to better understand customer information (e.g., 8

demographics and energy usage data), as well as to help enable SCE to predict which customers are 9

more likely to benefit from particular information and programs. 10

As an example of CEM’s work activity to improve customer satisfaction, CEM’s 11

benchmarking across other utilities has shown that one of the principal drivers of customer 12

dissatisfaction related to power outages is incorrect estimated restoration time (ERT) communicated to 13

customers. In 2018 and 2019, SCE used analytics to improve ERTs communicated to customers. 14

SCE observed a reduction of approximately 9 points in customer satisfaction for customers who 15

experienced an outage that ended at least 30 minutes after the communicated ERT. Therefore, the CEM 16

team identified this as an improvement opportunity and worked with internal operational teams to 17

develop a solution. As a result, the Customer Crew Connect (C3 App) was developed and 18

launched. SCE employees and contractors use the app to push real-time ERT updates, which are 19

communicated to the customer through SCE.com. Analysis from the pilot shows improvement in 20

customer satisfaction, as measured through Net Score surveys, when the app is used by SCE and 21

contractor crews versus when it is not used. In aggregate across all districts, customer satisfaction is 22

12 points higher when the C3 App is used versus when it is not used; additionally, when comparing 23

customer satisfaction within individual districts, 9 of 10 districts have higher customer satisfaction when 24

the app was used, compared to when it wasn’t used. 25

5 J.D. Power produces syndicated customer satisfaction studies for the electric utility industry and other

industries.

6 Propensity modeling is a statistical approach used to predict the probability of an outcome based on customer demographic and behavioral data.

9

CEM also manages programs that help SCE comply with privacy-related laws and 1

regulations from federal and state agencies, including the Commission.7 Customers expect SCE to 2

protect their data, which includes name, address, energy usage, and other personally identifiable 3

information. SCE protects customer data to prevent unauthorized use and access. This includes 4

investigating fraud schemes that impact customers and identifying ways to prevent future occurrences, 5

as well as developing controls for compliance and operational processes to satisfy regulatory 6

requirements when SCE is required to share customer data with third parties. CEM manages programs 7

and projects that transfer customer-authorized information to third-party providers such as SCE’s Green 8

Button Connect tool (also known as Energy Service Provider Interface (ESPI)) and the Rule 24 Click 9

Through tool.8 CEM also implements policies and processes to govern the appropriate collection and use 10

of data throughout Customer Service, including maintaining and improving data quality, increasing data 11

governance maturity, and applying standard practices in data management. 12

b) Comparison of Authorized 2018 to Recorded 9 13

Figure II-4 below compares the requested and authorized O&M expenses from 14

SCE’s 2018 GRC with the 2018 recorded expenses in the Customer Experience Management GRC 15

Activity, in compliance with D.15-11-021. As shown in Figure II-4, SCE’s recorded expenses for 2018 16

in Customer Experience Management were less than the authorized amount by $0.599 million, an 8 17

percent variance, which is within normal operating expectations. 18

7 In June 2018, California enacted AB 375, commonly known as the California Consumer Privacy Act (CCPA).

Since then, CEM has been developing business requirements to implement a manual solution to comply with CCPA, which goes into effect on January 1, 2020. Depending on the number and complexity of consumer requests pursuant to CCPA, the group will evaluate automated solutions in 2020 while maintaining and supporting the manual solution until 2023.

8 For third-party registration, refer to https://www.sce.com/partners/partnerships/thirdpartylandingpage. For customer-initiated requests, refer to https://www.sce.com/residential/rebates-savings/budget-assistant-and-you/Share-My-Data.


10

Figure II-4 Customer Experience Management


c) Scope and Forecast Analysis 1

This section provides an analysis of historical variances and an explanation for 2

material year-to-year variations in labor and non-labor O&M expenses for the Customer Experience 3

Management work activity between 2014 and 2018. Then, SCE presents the forecasted O&M labor and 4

non-labor expenses for 2019 through 2021, along with a discussion of the reasons for the requested 5

increase in funding for the Test Year 2021. Figure II-5 provides a summarized view of historical and 6

forecasted labor and non-labor O&M for Customer Experience Management activities. 7

11



(1) Historical Variance Analysis 1

(a) Labor 2

Recorded labor expense increased by $1.33 million between 2015 3

and 2018 because, as part of a corporate reorganization beginning in 2015, CEM was allocated 4

additional resources to focus on improving the customer experience. Part of the increase in labor costs 5

was due to shifting work that had previously been performed by consultants to new internal CEM 6

resources based on the necessity and ongoing nature of the work. 7

(b) Non-Labor 8

Recorded non-labor expenses increased by $1.201 million between 9

2014 and 2017 due to increased consultant costs to assist with (1) the development of a new customer 10

experience strategy, (2) the evaluation and optimization of SCE’s portfolio of billing, payment, and 11

energy management products and services, and (3) the review and validation of customer contact 12

10 Refer to WP SCE-03, Vol. 5, pp. 2-6, for Customer Experience Management recorded and forecast financial

information.

12

information. The decrease in non-labor expenses of $3.276 million between 2017 and 2018 was due to 1

reduced consultant fees associated with work that shifted to CEM staff as discussed above. 2

(2) Forecast 3

(a) Labor 4

For Test Year 2021, SCE forecasts labor expenses of $4.553 5

million, which represents an increase of $283,000 over Base Year 2018 recorded costs of $4.270 6

million. The details and justification for this increase are discussed in the Test Year Adjustments section 7

below. 8

(b) Non-Labor 9

For the Test Year 2021, SCE forecasts non-labor O&M expenses 10

of $2.845 million for these activities, which represents an increase of $376,000 over Base Year 2018 11

recorded costs of $2.469 million. The details and justification for this increase are discussed in the Test 12

Year Adjustments section below. 13

(c) Test Year Adjustments 14

SCE’s forecast of Test Year O&M expenses for CEM reflects a 15

total increase of $659,000 over the Base Year 2018 recorded costs of $6.738 million in labor and non-16

labor expenses as a result of program changes and customer interaction improvement activity as further 17

described below. These adjustments are shown in Table II-2 and discussed below. 18

Table II-2 Customer Experience Management 2021 Test Year O&M Adjustments

(Constant 2018 $000)

(i) Customer Experience Improvement 19

The forecast test year increase of $283,000 in labor costs 20

for the CEM activity is driven by approximately two FTE resources needed to manage a new “Close the 21

Loop” customer feedback program that involves directly following up with customers who have 22

expressed dissatisfaction or frustration with SCE’s service. This real-time customer feedback is obtained 23

through a cloud-based, digital customer feedback and survey platform (Medallia) that SCE implemented 24

13

in 2016. This Close the Loop program will enable SCE to directly communicate to customers to 1

acknowledge their feedback has been received and use this customer feedback to inform program 2

improvements. Close the Loop entails two work streams: (1) SCE operational teams (e.g., the Contact 3

Center) will follow up with customers to resolve issues based on survey responses, including verbatim 4

customer comments that go beyond the pre-set answer options from Medallia, and (2) the Close the 5

Loop Project Manager identified in this testimony will aggregate customer feedback to create systemic 6

fixes and operational improvements for recurring problems. For the remaining increase, CEM had one 7

vacancy in 2018 that will be filled in 2019 and is expected to continue through 2021 and beyond to 8

support Close the Loop activities and various customer experience improvement projects. This position 9

was not filled pending a Final Decision on SCE’s 2018 GRC proceeding.11 10

The increase of $376,000 in non-labor O&M is driven by 11

funding to support data analysis and research to improve core customer experiences (e.g., billing, net 12

energy metering, etc.).12 The funding requested will provide CEM the resources to perform additional 13

analysis and research to broadly evaluate ways to improve core customer services noted above (e.g., 14

improved billing experience, etc.). The funding will support three new work streams: 15

1. Updating and improving data quality: 16

Requires purchase of new external data and vendor 17

staffing for data aggregation 18

2. Market research for potential new rate structures 19

and to facilitate the adoption of new energy 20

management programs and tools: 21

Requires purchase of secondary literature (e.g., 22

journals, reports, etc.), design and administration of 23

focus groups, and vendor staffing to identify 24

customer pain points and improvement 25

opportunities 26

3. Test the effectiveness of pilots based on customers’ 27

experiences: 28

11 Refer to WP SCE-03 Vol. 5, p. 7 – Customer Experience Management Increase for additional details.

12 Id.

14

Requires vendor staffing for the design of pilot 1

evaluations and analyst support to measure pilot 2

successes 3

(d) Summary of Request 4

As shown below in Figure II-6 the 2021 Test Year, SCE forecasts 5

$7.398 million in O&M expenses for Customer Experience Management, an increase of $659,000, or 10 6

percent, compared to the 2018 Base Year O&M expenses of $6.738 million. 7


Comparison of 2018 Base Year to 2021 Test Year (Constant 2018 $000)

d) Basis for O&M Cost Forecast Method 8

The 2018 Base Year activities for Customer Experience Management are 9

described earlier in this chapter. The Last Recorded Year accurately reflects the expense level associated 10

with Base Year activity levels that are planned to continue through the Test Year, plus the adjustments 11

15

proposed above. For these reasons, the Last Recorded Year is the appropriate basis for forecasting Test 1

Year non-labor expenses.13 2

2. Business Account Management Services 3

Business Account Management Services is managed in SCE’s BCD organization, and is 4

responsible for program and service delivery, as well as specialized account management activities for 5

Community Choice Aggregation, Direct Access, Economic Development Services, Hydraulic Services, 6

and Energy Related Services. Business Account Management Services also provides customers with a 7

knowledgeable and trusted source of information to help them make smart energy choices to use 8

electricity efficiently and safely, inform customers of relevant products and services, and resolve any 9

challenges to using SCE products and services. 10

a) Work Description and Need for Activity 11

(1) Community Choice Aggregation and Direct Access 12

The Customer Choice Services (CCS) group facilitates Energy Service 13

Provider (ESP) and Community Choice Aggregator (CCA)14 participation in the Direct Access (DA)15 14

and Community Choice Aggregation markets in SCE’s service territory and supports ESPs’ and CCAs’ 15

day-to-day interactions with SCE. ESPs and CCAs are primarily responsible for procuring and providing 16

for the electric power needs of their customers, helping ensure that resource adequacy and Renewable 17

Portfolio Standard requirements are met for those customers, and scheduling and settling with the 18

California Independent System Operator (CAISO). SCE provides specialized and dedicated services to 19

the unique and complex CCA and DA customer segments. 20

13 The decision to use Last Recorded Year as the basis for the Test Year O&M expense forecast for Customer

Experience Management is consistent with the direction provided in D.04-07-022 and D.89-12-057, wherein the CPUC stated that if costs have shown a trend in a certain direction over three or more years, the Last Recorded Year is the appropriate basis for estimating Test Year expenses. Although there have been variations year-to-year, with a reduction in the last two years as a result of significantly reduced vendor costs to carry out CEM work, SCE expects that O&M expenses for these activities to remain stable through this GRC period.

14 Community Choice Aggregation was enabled by AB 117, which was signed into law in September 2002, allowing cities, counties, and Joint Powers Agencies (JPAs) whose governing boards have elected to act as CCAs to purchase and sell electricity on behalf of utility customers within their service areas.

15 Although the Commission suspended DA for new customer enrollment in September 2001, SB 695 partially re-opened DA in 2009 on a limited basis to retail non-residential customers, and the most recent legislation, SB 237, further expanded the current DA load cap.

16

In 2018, six operational CCAs provided service in SCE’s service territory. 1

These CCAs provided energy procurement for approximately 150,000 residential and non-residential 2

service accounts. By 2021, SCE forecasts 26 operational CCAs, serving over 1.5 million service 3

accounts.16 CCA implementations of this magnitude will require significant upfront implementation 4

planning, validation of eligible customers, information technology system set-up, customer 5

communications, multiple customer mass enrollment phases, and exception processing and handling. 6

Table II-3 below provides a summary of the number of CCAs and Service Accounts in 2018, and a 7

forecast of both CCAs and Service Accounts in 2021. 8

Table II-3 CCA Forecasted Growth

Additionally, SCE forecasts a slight increase in work activities to 9

implement and support the limited expansion of the current DA load cap authorized by SB 237. 10

The CCS group performs three key functions to support CCA and DA 11

customers: (1) account management, (2) implementation, reporting and process improvement activities, 12

and (3) exception management. This work is performed by a dedicated team of professionals focused on 13

the successful launch, implementation, and ongoing operations of CCA and DA activities within SCE’s 14

service territory. These activities are described further below. 15

(a) Account Management 16

CCS account advisors serve as the primary point of contact 17

between SCE and CCA and ESP staff providing customer care, education, issue resolution, and 18

coordination to support the CCA and DA customers. Their primary area of focus is building and 19

managing the relationships with: (1) local governments exploring CCA formation; (2) leadership of 20

operational CCAs; and (3) third-party billing agents. Account advisors facilitate quarterly meetings with 21

CCA and SCE management to discuss opportunities for improvement and to address policy and 22

16 By 2021, SCE anticipates that there will be approximately 1.6 million service accounts in CCA territories

with approximately six percent of customers electing to opt out of CCA service. This will leave approximately 1.5 million CCA service accounts to be managed by SCE’s CCS group.

17

operational issues impacting customer service. Account advisors also coordinate with CCAs to enable 1

CCA service consistent with SCE’s tariffs in a way that benefits the CCA and ultimately the shared 2

customers with SCE. Account advisors, with senior analyst support, are responsible for coordinating the 3

annual and interim Joint Rate Comparison (JRC) process.17 This responsibility requires a significant 4

level of coordination internally and with the CCAs. This process is conducted multiple times per year, 5

because SCE is required to provide an annual JRC as well as a new JRC for any SCE or CCA rate 6

change. This process is labor intensive, as SCE must conduct JRCs for all CCAs in its service territory. 7

Increasing from six to 26 operational CCAs in SCE’s service territory will drastically increase the 8

number of JRCs that SCE must conduct. 9

Account advisors also provide many of these same types of support 10

for ESPs serving customers under Direct Access. For example, account advisors identify gaps that may 11

affect ESP coordination with SCE to result in a positive experience for the shared DA customers. 12

(b) Implementation, Reporting and Process Improvement 13

CCA implementation is complex and requires focused attention 14

and quality control to result in a positive and efficient customer experience as residential and non-15

residential customers are transitioned to their new load serving entity. CCA implementations are often 16

performed in multiple phases, requiring dedicated CSS staff support to manage the entire 17

implementation process.18 Prior to mass enrollment, customer eligibility must be confirmed, customer 18

usage data transfer capabilities established and tested for accuracy, customer communications created 19

and delivered, and customer opt outs communicated and tracked. These activities require daily 20

interactions with key CCA stakeholder groups. 21

CCAs rely on the CCS team to provide essential data and reporting 22

for resource adequacy forecasting and ongoing operations. This includes hourly historical usage data, 23

interval data, jurisdictional customer data, and mass enrollment metrics. The CCS team supports the 24

generation, quality assurance, and timely delivery of these reports. Additionally, the CCS team identifies 25

and implements opportunities for improvements to refine and streamline implementation and operational 26

17 Per Decision 12-12-036, SCE must produce and distribute a neutral, complete, and accurate written

comparison of average tariffs for each customer class, sample bills for a mutually agreed amount of usage under residential tariffs, and generation portfolio contents by July 1 of each year. D.12-12-036 (Attachment 1, Section 8.1.3).

18 As of year-end 2018, 50 percent of CCAs in SCE’s territory have elected to implement through multiple phases.

18

processes. For example, CCS implemented a system enhancement to streamline the enrollment process 1

of CCA customers on special programs and rates.19 This enhancement reduced the time to complete the 2

account enrollment from two weeks to three days. 3

(c) Exception Management 4

The exception management process consists of the following work: 5

analyze exceptions, determine corrective action, and process to resolution. Specifically, SCE and CCAs 6

transmit daily service account usage and calculations for customer billing and payment. This process is 7

critical to enable timely and accurate billing of and payment by residential and non-residential 8

customers. CCS analysts monitor daily these cross-functional processes, identify exceptions, and resolve 9

exceptions so that billing and payment processes may continue. Additionally, CCA third-party billing 10

agents contact CCS analysts daily requesting guidance and assistance with exceptions they cannot 11

resolve on their own. For example, it is not uncommon for a CCA to submit one inquiry that contains 12

100 or more unique exceptions to be investigated and resolved. In 2018, CSS processed approximately 13

4,000 exceptions and SCE estimates 41,000 exceptions will need to be processed in 2021 for all CCA 14

and DA service accounts in SCE territory. 15

(2) Economic Development Services 16

BCD’s Economic Development Services (EDS) team works with BCD 17

Business Account Management,20 as well as with local, regional, and state representatives, to identify 18

and assist in retaining, expanding, and attracting businesses that have viable relocation opportunities 19

outside California, or that are facing potential closure. Economic development activities include the 20

following: (1) community marketing and development, (2) market research, (3) site selection assistance, 21

(4) industrial and commercial expansion and relocation assistance, (5) business retention and 22

recruitment, and (6) project management assistance. 23

One of the primary responsibilities of EDS is to assist eligible customers 24

enrolling in SCE’s Economic Development Rates (EDRs). The EDRs are designed to provide reduced 25

electricity costs when a customer can successfully demonstrate that, if not for the EDR, either alone or 26

in combination with other incentives, the customer would not expand operations, would not establish 27

19 Special programs are programs available to bundled service customers only, such as Peak Time Rebate

(PTR), Critical Peak Pricing (CPP), etc.

20 See SCE-03, Vol. 4, Customer Contacts for more information about SCE Business Account Management.

19

operations in SCE territory, would close its business, or would relocate outside of California.21 The 1

previous EDR program was implemented as a result of SCE’s Application A.14-03-013,22 and had 35 2

signed contracts with 22 customers. BCD’s EDS team recently implemented a new EDR program with 3

important changes, effective March 2019, as a result of the 2018 GRC Phase 2 decision.23 In this 4

updated EDR program, the existing 200 MW program cap and 12 percent standard discount will remain 5

in effect, however, the enhanced discount will no longer be offered.24 The customer eligibility threshold 6

has been reduced from 200 kW to 150 kW and will allow a single customer with multiple accounts at 7

the same facility to aggregate its load to satisfy the minimum 150 kW requirement. Also, to support 8

struggling small businesses, a maximum of 20 customers with loads of less than 150 kW are eligible to 9

participate in the new EDR program. 10

Since 1992, as demonstrated through the application of the Ratepayer 11

Impact Mechanism (RIM) test, EDS has directly benefitted all SCE customers by placing downward 12

pressure on rates by minimizing stranded investment in assets and increasing recovery of fixed revenue 13

requirements. A RIM test yielding a positive net present value and a benefit-to-cost ratio greater than 1.0 14

indicates the program is beneficial and cost-effective to all ratepayers by providing downward pressure 15

on rates. Based on the methods and assumptions set forth in the CPUC’s Demand Side Management 16

Standard Practice Manual25 and related approaches noted above, EDS’s 2018 Adjusted Base Year 17

21 EDR program discounts are available to SCE Bundled Service, Direct Access, and Community Choice

Aggregation business customers. Eligible business customers may benefit from five-year discount options that are applied to their electric bills. See Schedule EDR-A: Economic Development Rate-Attraction, Schedule EDR-E: Economic Development Rate-Expansion, Schedule EDR-R: Economic Development Rate-Retention for more information.

22 See D.15-04-006.

23 See D.18-11-027.

24 The enhanced discount option provided a 30 percent discount to customers located in, or considering locating their prospective business in, a city or county with an unemployment rate of 125 percent of the prior year’s statewide average. The contribution to margin of the enhanced discount did not support the enhanced discount level (30 percent). To reduce the overall cost of the program and based on feedback from Settling Parties, SCE decided not to continue offering the enhanced discount. See A.17-06-030, Motion of Southern California Edison Company (U 338-E) and Settling Parties for Adoption of Economic Development Rate Settlement Agreement.

25 https://www.cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/Utilities_and_Industries/Energy_-_Electricity_and_Natural_Gas/CPUC_STANDARD_PRACTICE_MANUAL.pdf.

20

program yields a net present value of $4.9 million and a benefit-to-cost ratio of 1.21, demonstrating the 1

EDS program is beneficial and cost-effective for all ratepayers.26 2

SCE’s EDS activities benefit local communities and the overall California 3

economy by identifying and assisting in the retention, expansion, and attraction of at-risk businesses. 4

For example, an Economic Impact Analysis model was used to determine the cumulative direct, indirect, 5

and induced economic impacts of EDS activities in 2018. The 2018 operations retained and created over 6

22,000 jobs in California and associated economic output of over $5 billion.27 Additionally, the 7

incremental taxes, fees, and licenses collected at the state, county, and city levels exceeded $140 million 8

in cumulative fiscal impact.28 9

(3) Hydraulic Services 10

SCE’s Hydraulic Services group is comprised of technical specialists who 11

are specifically trained in comprehensive testing and analysis of water and fluid pumping operations. 12

Table II-4 below details hydraulic services activities SCE provides to its agriculture, water 13

supply/irrigation, and commercial and industrial customer segments. As shown in Table II-4, over 60 14

percent of tests are performed in the Water Supply and Irrigation customer segment with typical end-use 15

customers being various water agencies, water districts, and irrigation districts as well as investor-owned 16

water companies. These hydraulic services are similar to other technical services (e.g., power quality 17

research, distributed energy resource consultation, rate option assistance) that SCE provides on a routine 18

basis to its non-residential customers to support efficient customer operations. The key hydraulic service 19

SCE provides is the pump test, which measures various aspects of the pumping plant’s operation, 20

including flow, discharge pressure, well lift, well pumping level, and power use (i.e., the cost of 21

pumping). In general, SCE performs the pump test service for all non-residential customers with eligible 22

pumping plants by testing pumps that are driven by motors equal to or greater than 25 Horsepower. The 23

pump test service is combined with expert consultation services from SCE’s technical specialists, who 24

interpret the pump test results and make energy-related recommendations for the customer to implement. 25

26 Refer to WP SCE-03 Vol. 5, pp. 14-26 – Ratepayer Impact Measure (RIM) Test for additional details.

27 Refer to WP SCE-03 Vol. 5, p. 27 – Economic Development Services Program Impact Analysis for additional details.

28 Id.

21

Table II-4 Hydraulic Service Activities by Customer Segment

The pump test data, in combination with technical consultation, informs 1

both long- and short-term energy-related recommendations for pumping operations, pumping costs, 2

time-of-use (TOU) options, rate options, electrical safety, electrical reliability and greenhouse gas 3

(GHG) reduction (i.e. greenhouse gas emissions resulting from pumping activity). Hydraulic services 4

are provided both at the micro (pumping plant) and macro (pumping system) levels to provide a 5

complete view of the customer’s overall pumping system. SCE performs approximately 3,600 pump 6

tests annually, which create validated energy savings and greenhouse gas reductions of approximately 7

10 GWh and 96 tons, respectively. Along with these core hydraulic services, the group assists in 8

outreach on important SCE and statewide programs and key initiatives to agriculture and water 9

customers. 10

These consultative services are necessary to support the non-residential 11

customer segments shown in Table II-4 above. In addition, SCE’s hydraulic services support several of 12

California’s energy and environmental goals such as improving local reliability, reducing GHG 13

emissions by 40 percent from 1990 levels by 2030 and 80 percent by 2050, as well as ground water 14

pumping and water infrastructure requirements. By delivering hydraulic services to these customer 15

segments, SCE’s customers can keep their energy costs low, improve local reliability, and support the 16

state’s energy and environmental policies. 17

22

(4) Energy Related Services 1

Energy Related Services (ERS) is a tariffed product created through Advice 2

Letter 1358-E and offered to SCE’s federal customers under a General Services Administration 3

Areawide Public Utility Contract and Basic Ordering Agreements, which allows SCE to provide project 4

management services from development to installation of energy efficiency and renewable energy 5

projects. Under the ERS program, federal customers can use SCE’s energy efficiency and project 6

management expertise to identify, design, finance, and manage the construction of energy efficiency or 7

renewable energy projects. 8

Since 2014, the ERS program has seen a steady decline in project requests 9

due to changes in federal agency focus from energy efficiency to resiliency efforts, the change from 10

localized site approvals to project prioritization and approvals by centralized oversight authorities (i.e., 11

Air Force Civil Engineer Center, Naval Facilities Engineering Command), reduction in federal 12

personnel able to work on these projects, and limited financial resources. As such, SCE currently has 13

two contracts in development that may create projects that would be completed by the end of 2020. SCE 14

has not signed a new service contract with a federal ordering agency since 2017 and, as such, has chosen 15

to phase out this program offering by the end of 2020. SCE, therefore, is not requesting ERS funding in 16

this proceeding. 17

b) Comparison of Authorized 2018 to Recorded 29 18

Figure II-7 below compares the requested and authorized O&M expenses from 19

SCE’s 2018 GRC with the recorded expenses for Business Account Management Services GRC 20

Activity, in compliance with D.15-11-021. As shown in Figure II-7, SCE’s recorded expenses in 2018 21

for Business Account Management Services were less than the authorized amount by $0.916 million, a 22

24 percent reduction. This variance is driven primarily by SCE filling fewer staff vacancies than 23

anticipated for Business Account Management Services activities in 2018, which also resulted in less 24

employee training expenses than originally expected. In addition, this variance reflects a reduction in 25

O&M expenditures associated with phasing out Energy Related Services work as discussed above. 26


23

Figure II-7 Business Account Management Services




material year-to-year variations in labor and non-labor O&M expenses for the Business Account 3

Management Services work activity between 2014 and 2018. Then, SCE presents the forecasted O&M 4

labor and non-labor expenses for 2019 through 2021, along with a discussion of the reasons for the 5

requested increase in funding for the Test Year 2021. Figure II-8 provides a summarized view of 6

historical and forecasted labor and non-labor O&M for Business Account Management Services 7

activities. 8

24




(a) Labor 2

Recorded labor costs for this GRC Activity have remained stable 3

between 2014 and 2018. 4

(b) Non-Labor 5

Recorded non-labor costs remained relatively unchanged between 6

2014 and 2016 for this GRC Activity. The decrease in recorded non-labor expenditures between 2016 7

and 2018 of $410,000 was primarily driven by ongoing reductions in employee expenses related to 8

Operational Excellence initiatives. 9

30 Refer to WP SCE-03, Vol. 5, pp. 9-13, for Business Account Management recorded and forecast financial

information.

25

(2) Forecast 1

(a) Labor 2

For the Test Year 2021, SCE forecasts labor expenses of $4.049 3

million, which represents an increase of $1.404 million over Base Year 2018 recorded costs of $2.645 4

million. This increase in O&M labor is driven primarily by increases in CCA implementations across 5

SCE’s service territory and the services provided by BCD’s Pump Test and Hydraulic Services that were 6

previously charged to the energy efficiency balancing account. Details of these requests are discussed 7

later in this section. 8

(b) Non-Labor 9


of $960,000 for these activities, which represents an increase of $774,000 over Base Year 2018 recorded 11

costs of $186,000. This increase in non-labor O&M is driven primarily by the cost to implement system 12

improvements and additional vendor resources needed to support the increase in CCA implementation 13

during the GRC period. Details of these initiatives are discussed later in this section. 14


SCE’s forecast of Test Year O&M expenses for Business Account 16

Management Services reflects a total increase of $2.178 million over the Base Year 2018 recorded costs 17

of $2.831 million in labor and non-labor expenses due to program changes summarized above. These 18

adjustments are described in detail and shown in Table II-5 below. 19

Table II-5 Business Account Management Services

2021 Test Year O&M Adjustments (Constant 2018 $000)

(i) Increased CCA/DA Implementation and Management 20

As shown above in Table II-3 CCA Forecasted Growth, 21

SCE forecasts an increase of 20 operational CCAs in the test year (from six to 26 CCAs in SCE’s 22

service territory). Supporting 26 CCAs will require eight additional CCS positions to provide account 23

26

management, implementation, reporting, process improvement activities, and exception management 1

functions necessary for successful CCA implementations and ongoing support. 2

a. Account Management 3

Currently, CCS has one advisor supporting six 4

active CCAs. With the addition of 20 more CCAs, SCE needs three additional advisors to effectively 5

and efficiently support the needs of these new CCAs, from planning to implementation to ongoing 6

maintenance support. Advisors play a critical role in the successful start-up and ongoing operation of a 7

CCA. During the implementation phase, advisors provide consultation and education on SCE processes; 8

assist in customer identification, eligibility and enrollment; coordinate and facilitate routine meetings 9

with the implementing CCA, its vendors, and appropriate SCE organizations; monitor implementation 10

progress; and lead issue resolution. 11

Once a CCA is operational, SCE’s advisors act as 12

the CCA’s primary point of contact for all customer care issues. In this role, advisors respond to CCA 13

billing and credit-related inquiries, support customer switching activities, respond to requests for data, 14

and coordinate a Joint Rate Comparison (JRC) process annually and for each interim SCE and CCA rate 15

change. To maintain relationships and open communication, advisors facilitate quarterly meetings with 16

CCA and SCE management to address policy updates, opportunities for improvement, and operational 17

issues. Each CCA is unique and complex with its own procurement objectives, jurisdictional boundaries, 18

and operating principals. This reinforces the need for focused and dedicated customer care support as 19

part of our mutual commitment to serve our shared customers in the best manner possible. 20

b. Implementation, Exception Management and 21

Reporting 22

In 2018, CCS supported the implementation of four 23

CCAs with six mass enrollment phases. In 2019, SCE expects to implement two mass enrollment 24

phases. With the forecasted growth in CCAs and associated service accounts transitioning as shown in 25

Table II-3 above, SCE forecasts implementing 14 mass enrollment phases in 2020 and ten mass 26

enrollment phases in 2021. Mass enrollment activities include planning meetings to help CCAs prepare 27

for implementation, discussing the various technical requirements and procedures needed to ensure a 28

successful implementation of the CCA’s service, and reviewing and validating required reports. Weekly 29

meetings are led by CCS staff and supported by analysts responsible for meeting coordination among 30

27

the various SCE, CCA, and CCA back-office agent participants, taking meeting minutes, and recording 1

and follow up on identified action items, issues, and decisions. 2

In addition to supporting implementation efforts, 3

analysts are necessary to support the increased activities associated with CCA growth. Analysts will be 4

primarily dedicated to exception management activities in which they will analyze exceptions, 5

determine corrective actions needed, and process towards resolution. In addition, they will resolve 6

operational issues related to enrollments, implement customer switching activities, address policy and 7

process issues raised by CCAs, operationalize regulatory decisions, and generate weekly and monthly 8

reports. The analysts will provide oversight and management of escalated issues, continuous 9

improvement efforts, and analytical support for the Joint Rate Comparisons (JRC). Additionally, 10

analysts will provide analytical support and engage with CCAs and third-party billing agents to resolve 11

issues and prepare status updates. 12

Thus, given the significant increase in CCAs 13

expected in the test year, an additional eight FTEs (three advisors and five analysts) are necessary to 14

support the increased customer care activities required to plan and execute CCA implementations, 15

resolve operational issues related to enrollments, implement customer switching activities, resolve 16

billing issues, address policy and process issues raised by CCAs, operationalize regulatory decisions, 17

generate weekly and monthly reports for CCAs, facilitate the Joint Rate Comparison (JRC) processes, 18

and manage the relationships with CCA leaders and their operational support teams.31 Therefore, SCE 19

forecasts an additional $757,000 in Test Year O&M labor expenses to support the growth in CCA 20

activity as described above.32 SCE also forecasts an additional $537,000 in Test Year O&M non-labor 21

expenses for postage, graphics design, and printing costs associated with the JRC mailers described 22

above, as well as additional employee expenses.33 23

(ii) Hydraulic Services 24

Hydraulic services allow customers in large commercial, 25

agricultural, and industrial segments make informed energy-related decisions regarding their pumping 26

31 Refer to WP SCE-03 Vol. 5, p. 28 – CCA/DA Implementation & Management for additional details.

32 Additional resources are not being requested to support the predicted growth in Direct Access customers and SCE will absorb these activities within existing functions described above.

33 This represents SCE’s shared cost for the Joint Rate Comparison mailer required to comply with D.12-12-036.

28

system operations. Several customers have utilized these services for several decades and continue to 1

express high levels of satisfaction based on the operational benefits they received from these services. 2

SCE has delivered hydraulic services to its non-residential 3

customers for over 100 years. For approximately the last 35 years, the pump test service has been 4

primarily funded through SCE’s energy efficiency program portfolio because energy savings were the 5

primary benefit derived from the pump test service. Since 2015, and consistent with customer needs, the 6

hydraulic services transitioned from an energy efficiency focus to a focus on customer safety and 7

operational efficiency and SCE system reliability. In fact, from 2015 through 2018, the number of pump 8

tests that used energy efficiency incentives has steadily declined.34 As such, the pump test in terms of 9

costs and benefits derived is now similar to other energy-related services SCE currently provides to non-10

residential customers, such as power quality research and engineering consultations. SCE therefore 11

forecasts a test year increase of $1.151 million in this GRC to reflect the labor and non-labor costs 12

associated with funding hydraulic services similar to other energy-related services that have historically 13

been included in GRC funding.35 14

(iii) Energy Related Services 15

As described earlier, the ERS project requests have steadily 16

declined due to changes in federal agency focus from energy efficiency to resiliency efforts, the change 17

from localized site approvals to project prioritization and approvals by centralized oversight authorities, 18

reduction in federal personnel able to work on these projects and limited financial resources. SCE 19

currently has only two contracts in development that may create projects that would be completed by the 20

end of 2020. SCE has not signed a new service contract with a federal ordering agency since 2017 and, 21

as such, will phase out this program by the end of 2020. SCE, therefore, is not forecasting ERS funding 22

in this proceeding. 23


As shown below in Figure II-9, for the 2021 Test Year, SCE 25

forecasts $5.009 million in O&M expenses for Business Account Management Services, an increase of 26

$2.178 million compared to the 2018 Base Year O&M expenses of $2.831 million. 27

34 SCE expects that in 2021 energy efficiency portfolio funding previously allocated to the pump test hydraulic

service will be reduced by $1.4 million. SCE will seek that reduction as part of the required energy efficiency Annual Budget Advice Letter (ABAL) process.

35 Refer to WP SCE-03 Vol. 5, p. 29 – Hydraulic Services for additional details.

29




The 2018 Base Year activities for Business Account Management Services are 2

described earlier in this chapter. The Last Recorded Year accurately reflects the expense level associated 3

with Base Year activity levels that are planned to continue through the Test Year, plus the adjustments 4



36 The decision to use Last Recorded Year as the basis for the Test Year O&M forecast for Business Account

Management Services is consistent with the direction provided in D.04-07-022 and D.89-12-057, wherein the CPUC stated that if costs have been relatively stable for three or more years, the Last Recorded Year is the appropriate basis for estimating Test Year expenses. For Business Account Management Services, O&M expenses have been relatively stable for the period 2014 through 2018.

30

3. Customer Programs Management 1

a) Work Description and Need for Activities 2

Customer Programs Management is managed by the CP&S organization and 3

includes the planning, implementation, and management of customer programs in the areas of program 4

innovation and pilots, energy management tools, rate-based solutions, pricing, building electrification, 5

and distributed energy resources (DER) programs. DER programs managed by this group include 6

behind-the-meter (BTM) energy procurement for reliability through requests for offers (RFOs) with 7

contract origination and management, as well as the management of renewable tariffs and customer 8

interconnections to the grid. 9

SCE’s innovation and pilot activities have enabled the development of energy-10

related programs such as providing Time-Of-Use (TOU) peak period alerts to customers, services such 11

as an Appliance Energy Use Cost Estimator on SCE.com to provide customers with education on the 12

potential benefits of shifting appliance usage to off-peak and super-off-peak periods, and support 13

developing pilots and programs, such as the San Joaquin Valley electrification pilot to help customers 14

overcome the high cost and negative health impacts of utilizing propane and wood as an energy 15

source.37 These examples add to the existing portfolio of services and energy management tools that this 16

group manages, such as Budget Assistant,38 the Rate Plan Comparison Tool,39 Choose Your Due Date 17

(CDD),40 and SCE EnergyManager.41 Energy management tools provide services to customers to help 18

monitor and manage energy costs and energy usage. In addition, many energy management tools (such 19

37 See D.18-12-015 Decision Approving San Joaquin Valley Disadvantaged Communities Pilot Projects.

38 Budget Assistant is a cost management tool for residential and small business customers. The tool provides “projected next bill” information, giving customers advance notification of their projected energy costs and enabling customers to align with an established spending target. In 2018, over 10.1 million Budget Assistant alerts were sent via e-mail, text, and phone to over 725,000 subscribed residential and non-residential customers.

39 The Rate Plan Comparison Tool provides customers with an analysis of potential bill amounts on different rate plans, enabling customers to change to another rate plan. The Rate Plan Comparison Tool had 92,000 unique visitors in 2018, up 217% from 29,000 in 2017, and volumes continue to grow, as the tool was expanded in 2019 to include non-residential customers as well. The Rate Plan Comparison Tool currently models 30 rates or rate components across multiple customer types.

40 CDD allows both residential and non-residential customers to choose the time of the month that their bill is due. Customers can choose the beginning, middle, or end of the month.

41 See https://www.sce.com/business/tools/energy-manager for more information about EnergyManager.

31

as projected bill information on SCE.com and the Rate Plan Comparison Tool) are required by the 1

CPUC.42 2

SCE’s Customer Programs Management manages Commission-required programs 3

such as Critical Peak Pricing (CPP) for business customers.43 In D.16-03-030, the Commission required 4

SCE to enable default CPP for business customer service accounts on eligible rate options with energy 5

demands less than 200 kW and agricultural and pumping service accounts over 200 kW. On March 1, 6

2019, SCE began implementing default CPP for these customer segments.44 CPP enrollments increased 7

from approximately 3,000 service accounts to approximately 280,000 service accounts. SCE will 8

continue to default eligible service accounts to CPP on October 1 of each year. The annual default 9

population is forecasted to grow by approximately 10 percent annually through 2023. Pricing-related 10

initiatives implemented and managed by this team include Residential Rate Reform,45 transitioning non-11

residential customers to new TOU periods effective March 1, 2019,46 and designing and planning 12

renewable energy rates and programs. For example, SCE will offer renewable energy rates and programs 13

for customers in disadvantaged communities (DAC), such as the DAC-Green and DAC-Community 14

Solar Green Tariff (CSGT) programs.47 15

42 See D.11-07-056 (projected bill information requirement); D.15-07-001 (Rate Plan Comparison Tool).

43 CPP provides participants a credit on their monthly on-peak demand or energy charges during the summer months and an energy charge when a CPP event is called. Key activities in 2018 included management of the program for current customers (including event dispatch and event messaging to customers), as well as project management to prepare to transition approximately 280,000 customers onto the program (such as the creation and testing of program updates in the billing system, development of training materials, and other organizational readiness activities for impacted employees).

44 See D.18-07-006, p. 6.

45 Activities regarding Residential Rate Reform included the launch of a TOU Residential Default Pilot with 400,000 customers in March 2018, which included launching new rates, operational training, reviewing customer communications for accuracy, bill redesign, budget, and reporting. The project team also provided content and plans for the TOU Full Rollout to transition over 2 million customers beginning in October 2020. SCE recorded eligible incremental costs in the Residential Rate Implementation Memorandum Account (RRIMA) consistent with the operation of that memorandum account as shown in SCE’s Commission-approved Preliminary Statement in its Tariff Book.

46 This activity included finalizing business requirements and testing new rates, implementing customer bill changes to graphically reflect the new TOU periods, coordinating training materials, and reviewing customer communications for accuracy.

47 See Alternate Decision Adopting Alternatives to Promote Solar Distributed Generation in Disadvantaged Communities, D.18-06-027, June 21, 2018 (approving the DAC-Green Tariff and Community Solar Green Tariff programs, including appropriate cost recovery mechanisms).

32

(1) DER Program Management 1

The Customer Programs Management work activity manages DER energy 2

procurement for reliability through BTM requests for offers (RFOs) with contract origination and the 3

ongoing management of contracts. Currently, the group manages 57 contracts totaling 338 MW of 4

customer-side preferred resources (e.g., energy efficiency, demand response, distributed generation, and 5

energy storage) driven by Local Capacity Requirements, Preferred Resources Pilot, and Aliso Canyon 6

Energy Storage proceedings. 7

This team has specialized knowledge of customer-side DERs and is 8

responsible for negotiating and settling contracts, scheduling and enrolling customers for contracted 9

resources, and completing required regulatory reporting. These activities help SCE to maintain 10

compliance with the CPUC’s approved Long-Term Procurement Plan (LTPP), energy storage mandates, 11

and other regulatory requirements by participating in the procurement, negotiation and execution of 12

short-term, mid-term, and long-term Energy Savings Agreements (ESAs) for BTM DERs on behalf of 13

SCE's customers. Customer Programs Management also supports DER-related tariffs such as the Net-14

Energy-Metering (NEM) tariff, application, and interconnection process by managing the customer and 15

contractor process before, during, and after the interconnection, as well as Commission-mandated 16

reporting related to the NEM tariff. This process includes educating and training customers and 17

contractors using informational materials, hosting training classes for contractors, and interfacing with 18

contractors and customers to address complaints and to resolve any difficulties within the process, such 19

as billing and energy credits. From 2015 to 2018, SCE processed an average of 52,000 applications per 20

year. SCE expects the number of applications to increase over the next five years48 due to the 2019 21

Building Energy Efficiency Standards, which require the installation of solar photovoltaic systems for 22

new low-rise residential buildings effective January 1, 2020.49 23

(2) Building Electrification 24

In 2018, SCE began implementing its Building Electrification (BE) 25

initiative. These initial efforts focused primarily on establishing SCE’s BE project team, developing a 26

program charter, identifying goals and objectives, and initiating a working group to identify multiple 27

48 Refer to WP SCE-03 Vol. 5, p. 53 – NEM Interconnection Application Processing Labor for additional

details.

49 A “Low-Rise Residential Building” is defined as a building that is multi-family with three stories or less, or a single-family residence building located on a residential site.

33

areas of focus. SCE’s BE project team primarily focuses on research, analysis, and program 1

development to support California’s ambitious climate goals by electrifying building equipment. SCE is 2

developing programs to transform the market for end-use equipment in buildings to shift from on-site 3

combustion of fuels to clean electricity. BE activities include conducting analyses and research to 4

support building electrification policies and strategies, supporting the California Energy Commission 5

(CEC) on the Residential and Commercial Building Efficiency and Appliance Standards (Title 24 and 6

Title 20, respectively), developing programs and incentives to drive building electrification, and, as 7

appropriate, developing or modifying customer rate options to facilitate adoption of technologies to 8

electrify buildings. 9

California is committed to substantial GHG emission reductions by the 10

middle of this century50 and building electrification is an important element of meeting California’s 11

GHG reduction goals. As outlined in SCE’s Clean Power and Electrification Pathway,51 electrifying up 12

to a third of building space and water heating is a cost-effective component of an economy-wide 13

portfolio of solutions to help achieve California's GHG emission reduction goals. Reducing GHG 14

emissions from the building sector through building electrification is a key strategy to meet the State’s 15

carbon reduction goals as recognized in the California Air Resources Board’s (CARB) Scoping Plan and 16

recently adopted legislation.52 In 2018, 26 percent of California’s GHG emissions came from the 17

residential and commercial building sectors.53 The California Energy Commission’s (CEC’s) 2018 18

Integrated Energy Policy Report (IEPR) Update notes that “Electrification of space and water heating 19

using highly efficient technologies is a key strategy to reduce or eliminate GHG emissions from 20

buildings.”54 The BUILD and TECH pilot programs directed by SB 147755 will be important to prepare 21

50 For example, AB 32 established targets to reduce GHG emissions to 1990 levels by 2020, a target that was

later increased to 40 percent below 1990 levels by 2030 in CA Senate Bill (SB) 32 (Pavley, 2016). SB 100 (DeLeón, 2018) mandates that the state’s electricity demand be served by carbon-free resources by 2045. In 2018, Governor Brown established a new goal of achieving statewide carbon neutrality by 2045 and maintaining negative emissions thereafter.

51 See https://www.edison.com/content/dam/eix/documents/our-perspective/g17-pathway-to-2030-white-paper.pdf.

52 See Senate Bill (SB) 1477 (Stern, 2018) and Assembly Bill (AB) 3232 (Freidman, 2018).

53 Final 2018 Integrated Energy Policy Report Update, Volume II. p. 19, available at https://efiling.energy.ca.gov/getdocument.aspx?tn=226391.

54 Id., p. 9.

55 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB1477.

34

California to deploy BE technologies at the necessary scale and transform the market to achieve the 1

State’s policy goals, which will require programs significantly larger than these initial pilots. 2

The California Energy Commission’s 2009 Residential Appliance 3

Saturation Survey (RASS) estimated that electric heat pump space heating accounted for only one 4

percent of California households in 2010,56 and current evidence suggests that heat pump sales account 5

for less than 10 percent of the market for space and water heating equipment in California.57 Increasing 6

heat pump space and water heating equipment market share to 50 percent of sales by 2030 will require 7

rapid transformation of the market for new space and water heating equipment. Due to the long lives of 8

these appliances (11 to 20 years),58 achieving the State’s GHG emission reduction goals require 9

significant effort in the next three to five years developing and implementing programs to spur this 10

market transformation. 11

This transition to efficient electric heating technologies will provide 12

economic benefits for customers. A recent study by Energy and Environmental Economics, Inc. showed 13

electrification retrofits of space and water heating to reduce lifecycle costs when compared to a mixed-14

fuel (electric and natural gas) alternative59 in existing single-family dwellings in climate zones requiring 15

cooling.60 The study also predicts bill savings in most existing low-rise, multi-family homes replacing 16

gas space and water heating with electric heat pump space and water heating. Achieving lifecycle cost 17

savings in this existing multi-family segment is still a challenge due to higher upfront costs. All-electric 18

single-family and multi-family new construction also shows cost savings across the lifecycle relative to 19

mixed-fuel homes with air conditioning. However, despite the positive economic results for many 20

homes, current heat pump market penetrations remain lower than the economic potential. Therefore, 21

56 https://ww2.energy.ca.gov/2010publications/CEC-200-2010-004/CEC-200-2010-004-ES.pdf, p. 5.

57 See California Energy Commission’s Deep Decarbonization in a High Renewables Future, p. 32, where data shows the majority of residential space and water heating equipment sales are natural gas, liquid propane, and electric resistance units. https://www.ethree.com/wp-content/uploads/2018/06/Deep_Decarbonization_in_a_High_Renewables_Future_CEC-500-2018-012-1.pdf.

58 Refer to WP SCE-03 Vol. 5, p. 54 – Estimated Useful Life of Space and Water Heating Equipment for additional details.

59 “Lifecycle cost” represents the sum of capital cost (i.e., water heater) and operating cost (i.e., energy bill).

60 https://www.ethree.com/wp-content/uploads/2019/04/E3_Residential_Building_Electrification_in_California_April_2019.pdf.

35

without SCE’s BE initiative, consumers would be unlikely to take advantage of electrification to reduce 1

their carbon footprint and save on total energy bills. 2

Lastly, SCE is actively participating in the CPUC’s Building 3

Decarbonization rulemaking (R.19-01-011),61 and has provided substantial input including subject 4

matter expertise and analyses to inform this rulemaking, such as funding the Residential Building 5

Electrification in California study.62 SCE expects to continue engaging in activities to support the 6

Building Decarbonization rulemaking in 2021 even as the OIR-directed pilots (“BUILD” and “TECH”) 7

get underway. Although the BUILD and TECH pilots are funded from natural gas utilities’ Cap-and-8

Trade Program, other activities to support the remainder of the Rulemaking and begin the required 9

market transformation are currently not funded, nor are any longer-term programs supporting BE. 10

SCE, therefore, requests funding in this GRC to continue customer research and market education; 11

continue codes and standards support; continue advancing the BE technology roadmap through research, 12

testing, and manufacturer engagement; and develop initial program designs.63 13

(3) Cool Centers 14

SCE’s Cool Centers provide a safe, cool place for customers in extreme 15

climate areas, offering relief from summer heat conditions for customers who do not have cooling 16

devices in their homes or in lieu of running their own cooling devices. Cool Centers open solely based 17

on temperature and operate independently of outage events. The program operating model for SCE’s 18

Cool Centers supports the existing extreme heat Cool Center programs in Los Angeles, Riverside, 19

Tulare, Orange, and Kern counties.64 The county and city Cool Center administrators work with senior 20

centers, libraries, community centers, and youth centers within their territories to offer relief from 21

extreme heat. SCE’s Cool Center team directs program messaging to customers by partnering with 22

organizations such as 211.org and leverages co-marketing opportunities with other SCE programs where 23

61 http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M264/K629/264629773.pdf.

62 See https://www.ethree.com/wp-content/uploads/2019/04/E3_Residential_Building_Electrification_in_California_April_2019.pdf.

63 Details on the need for customer education and awareness for Building Electrification activities are discussed in SCE-3, Vol. 2 – Customer Communications, Education & Outreach.

64 SCE provides battery-operated personal fans, water and snacks, as well as informational materials about low-income programs such as the California Alternate Rates for Energy (CARE) program, the Energy Savings Assistance (ESA) program, Low Income Home Energy Assistance Program (LIHEAP), various energy efficiency programs, other community programs, and energy conservation practices at city and county cool centers.

36

feasible. SCE conducts outreach for the Cool Center program through press releases, customer contact 1

center staff training, social media, and bill onserts. 2

SCE previously funded its cool centers through its income-qualified 3

program applications. However, in D.16-11-022, the Commission directed SCE to request cool center 4

funding going forward through its GRC filing. In the extreme climate areas of SCE’s service territory, 5

finding relief from extreme heat has a major impact on comfort, health, and safety, particularly for 6

SCE’s low-income, elderly, and disabled customers. Without this program, these customers could be 7

dangerously exposed to heat-related health problems. 8

b) Comparison of Authorized 2018 to Recorded65 9

Figure II-10 compares the requested and authorized O&M expenses from SCE’s 10

2018 GRC with the 2018 recorded expenses in the Customer Programs Management GRC Activity, in 11

compliance with D.15-11-021. As shown in Figure II-10, SCE’s recorded expenses for 2018 in 12

Customer Programs Management were less than the authorized amount by $799,000. This six percent 13

variance is within normal operating expectations. 14


37

Figure II-10 Customer Programs Management




material year-to-year variations in labor and non-labor O&M expenses for the Customer Programs 3

Management work activity between 2014 and 2018. Then, SCE presents the forecasted O&M labor and 4

non-labor expenses for 2019 through 2021, along with a discussion of the reasons for the requested 5

increase in funding for the Test Year 2021. Figure II-11 provides a summarized view of historical and 6

forecasted labor and non-labor O&M for Customer Programs Management activities. 7

38




(a) Labor 2

Recorded labor costs increased $1.374 million between 2014 and 3

2015 due to increases in hiring to process NEM interconnection applications for residential and non-4

residential customers. Otherwise, recorded labor costs remained relatively unchanged between 2015 and 5

2018. 6

(b) Non-Labor 7

Recorded non-labor costs increased $3.057 million between 2014 8

and 2015 as a result of education and awareness building efforts tied to transitioning non-residential 9

customers to time-of-use rates. These efforts included educating customers about their upcoming 10

transition, providing rate information, and improving the Rate Analyzer tool on SCE.com, and educating 11

customers to understand the impact of rates on their bills. Another component of this cost increase 12

66 Refer to WP SCE-03, Vol. 5, pp. 48-52, for Customer Programs Management recorded and forecast financial

information.

39

included consultants to develop product strategy and a roadmap for billing/payment offerings. Non-labor 1

costs dropped by $2.756 million between 2015 and 2017 due to fewer consulting projects, before 2

increasing by $2.008 million between 2017 and 2018 due to customer education and awareness 3

regarding the CPP default, transition to new TOU periods for non-residential customers, as well as third-4

party technical reviews of LCR contracts. 5

(2) Forecast 6

(a) Labor 7

For the Test Year 2021, SCE forecasts labor expenses of $9.569 8

million, which represents an increase of $1.412 million over Base Year 2018 recorded costs of $8.157 9

million. The details and justification for this increase are discussed in the Test Year Adjustments section 10

below. 11

(b) Non-Labor 12


of $4.264 million for these activities, which represents a decrease of $778,000 over Base Year 2018 14

recorded costs of $5.042 million. The details and justification for this increase are discussed in the Test 15

Year Adjustments section below. 16


SCE’s forecast of Test Year O&M expenses for Customer Program 18

Management work activities reflects an increase of $634,000 over the Base Year 2018 recorded costs of 19

$13.199 million in labor and non-labor expenses. These adjustments are shown in Table II-6 and 20

discussed below. 21

Table II-6 Customer Programs Management 2021 Test Year O&M Adjustments


40

(i) DER Program Management 1

SCE expects DER energy procurement activities through 2

BTM requests for offers (RFOs) to increase in future years. These procurement activities will largely be 3

driven by reliability needs. The primary regulatory drivers include SCE’s Distribution Resource Plan 4

(DRP), Distribution Infrastructure Deferral Framework (DIDF), and the Integrated Resource Plan (IRP) 5

Procurements. D.18-02-004, in the Distribution Resource Plan (DRP) rulemaking,67 established the 6

DIDF as California’s first permanent marketplace for third-party-owned DERs to provide services to the 7

IOUs’ distribution grids.68 In D.18-02-004, the Commission required annual review of distribution 8

deferral projects to defer or avoid a traditional infrastructure process. Once distribution deferral projects 9

are identified, they go immediately out for solicitation via the Competitive Solicitation Framework 10

RFO.69 This will result in additional BTM DER contracts. Additionally, the recent Assigned 11

Commissioner Ruling (ACR) on June 20, 2019, formally initiated the “procurement track” consistent 12

with the IRP Decision (D.) 19-04-040, which identified a potential 2,000 MW of new statewide resource 13

adequacy capacity needed by August 1, 2021. 14

SCE forecasts procurement of an additional 192 MW, 15

which equates to approximately 32 contracts.70 As stated earlier, the BTM DER team currently manages 16

approximately 57 contracts associated with the Local Capacity Requirements, Preferred Resources Pilot, 17

and Aliso Canyon Energy Storage procurements for an average of six contracts per employee. These are 18

all long-term contracts that will extend to Test Year 2021 and beyond. With a potential increase of 19

another 32 contracts, it is anticipated that this team would need to manage 89 total contracts. BTM 20

contracts typically aggregate several projects from multiple locational sites to fulfill a single contract 21

depending on the size of the contract. A single 1 MW contract could create several hundred projects if 22

residential accounts are included in the scope of the contract. 23

The employee activities associated with the contracts 24

includes managing all phases of BTM DERs, including RFO development, offer reviews, negotiations, 25

offer selection, contract on-boarding, contract administration, vendor management, amendments 26

67 R.14-08-013.

68 D.18-02-004, OP 2, pp. 83-39. See also D.18-03-023, which establishes development of the Grid Modernization Plan (GMP) to integrate growing number of DERs.

69 D.18-02-004, OP 2.W, p. 87.

70 Refer to WP SCE-03 Vol. 5, p. 55 – DER Program Management - Contracts for additional details.

41

negotiations, billing and invoicing, regulatory reporting, customer enrollments review, and resolving 1

issues associated with customer concerns, interconnections, telemetry, metering, baseline, performance 2

metrics, and collaborations with vendors, customers, vendor and platform service providers. With the 3

knowledge and experience gained in this area, SCE expects each employee to be able to manage an 4

increased level of contracts per employee with approximately a 30 percent increase in productivity. 5

Therefore, SCE forecasts incremental O&M expenses of $528,000 of labor in the Test Year for the 6

management and support of additional BTM DER, which includes approximately two FTEs added in 7

2019 to support the technical reviews required for energy efficiency contracts, and approximately two 8

additional FTEs through 2021 to support the expected increase in total contracts resulting in a total of 9

approximately four additional FTEs by the 2021 Test Year.71 These positions were forecast in SCE’s 10

2018 GRC and were not filled pending a Final Decision on SCE’s 2018 GRC proceeding. 11

(ii) Building Electrification 12

The forecast increase of $984,000 for the 2021 Test Year is 13

to support BE activities to develop programs that will assist the state and SCE achieve ambitious clean 14

energy goals as well as support and inform the CPUC’s Building Decarbonization rulemaking.72 15

In 2018, in support of SCE’s Clean Power and Electrification Pathway, SCE began to implement its BE 16

initiative, which primarily developed a program charter, developed a working group with workstreams, 17

and identified goals and objectives.73 18

The forecast BE activities in the test year include: 19

(1) prepare for the CEC’s 2025 building energy code (Title 24) update through supporting policies and 20

activities for electrification, (2) continue technology roadmap development with lab and field testing and 21

manufacturer engagement, (3) continue customer research and expand customer and market education,74 22

(4) provide subject matter expertise and thought leadership to the Building Decarbonization Coalition, 23

and (5) develop initial program designs. By 2021, SCE expects to implement these activities to support 24

71 Refer to WP SCE-03 Vol. 5, p. 56 – DER Program Management - Labor for additional details.

72 Refer to WP SCE-03 Vol. 5, p. 57 – Building Electrification for additional details.

73 SCE’s BE group was organized in 2019. In the 2021 test year, SCE expects that the BE group funding will be comprised of GRC O&M, energy efficiency balancing account revenue, and GHG emission allowance revenue.

74 Market education funding for 2021 is requested in Vol. 2 Customer Communication Education & Outreach. For additional details, see SCE-03, Vol. 2, Section II.D.1.

42

the BE policy framework resulting from the Commission’s current Building Decarbonization proceeding 1

(R.19-01-011) and other current or new decarbonization regulatory proceedings through 2023.75 As 2

such, to accomplish these BE activities, SCE forecasts the need for three FTEs who will be focused on 3

conducting research and analysis needed to develop a full-scale BE program using the BE policy 4

framework approved by the Commission in R.19-01-011, developing effective BE programs and 5

strategies based on these analytical results, conducting lab and field testing to further BE technology 6

roadmap development, and performing management and program oversight. SCE will also continue its 7

membership in the Building Decarbonization Coalition to remain fully engaged with the latest 8

developments and leverage resources from this broad stakeholder group. Therefore, SCE forecasts a 9

need for $426,000 in labor for the three incremental FTEs consisting of a Principal Manager, Senior 10

Advisor, and a Senior Engineer and $558,000 in non-labor expenses for this new BE organization to 11

support the activities described above.76 12

(iii) Cool Centers 13

SCE forecasts an increase of $100,00077 in non-labor O&M 14

expenses to expand Cool Center locations and operating hours during days when extreme heat exists.78 15

SCE expects to coordinate with cities and counties in its warmest areas (primarily in Riverside, San 16

Bernardino and Kern counties) to increase the number of cool centers by 10 percent in 2020, 2021, and 17

2022. In addition, reference to Cool Centers is included in the Public Safety Power Shutoff (PSPS) 18

protocol. SCE expects that the number of visitors to the centers will continue to increase through the 19

2021 GRC period. 20

75 The remaining three items in the Building Decarbonization proceeding scope are: (1) potential pilot programs

to address new construction in areas damaged by wildfires, (2) coordinating CPUC policies regarding decarbonization in the Title 24 State Building Code, and (3) developing a long-term policy framework for building decarbonization. http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M264/K629/264629773.pdf.

76 Refer to WP SCE-03 Vol. 5, p. 57 – Building Electrification for additional details.

77 Refer to WP SCE-03 Vol. 5, p. 58 – Cool Centers for additional details.

78 Each county’s Cool Center administrator will negotiate with the Cool Centers within that county to extend the hours on an as-needed basis on extremely hot days. Trigger temperatures for extreme heat vary by county (e.g., 100 degrees Fahrenheit in Los Angeles County, 108 degrees in Kern County).

43

(iv) NEM Interconnection Application Processing 1

SCE forecasts an increase of $458,00079 in labor O&M 2

expenses for approximately seven additional FTEs to support the increased NEM application volume 3

expected due to the 2019 Building Energy Efficiency Standards, which require the installation of solar 4

photovoltaic systems for new low-rise residential buildings effective January 1, 2020.80 While this 5

incremental forecast represents a 30 percent increase of labor within the NEM application processing 6

group, the expected NEM interconnection volume is expected to grow by 100 percent between the 2018 7

base year and the 2021 test year to about 87,000 interconnection applications annually.81 Through on-8

going process improvements and workload management, SCE will continue to explore ways to reduce 9

NEM application processing time. 10

(v) Market Education & Awareness One-Time Costs for CPP 11

Default and New TOU Periods 12

In D.16-03-030, the Commission required SCE to enable 13

default CPP for business customers with eligible rate options on service accounts with energy demands 14

less than 200 kW and agricultural and pumping service accounts over 200 kW.82 Prior to the 15

implementation of default CPP for these accounts on March 1, 2019, SCE conducted extensive 16

education and awareness campaigns to inform impacted customers of their upcoming transition to 17

CPP.83 Consistent with D.18-07-006, SCE also conducted additional education and outreach to prepare 18

non-residential customers for new TOU periods. The $1.4 million expense84 incurred in 2018 for mass 19

79 Refer to WP SCE-03 Vol. 5, p. 53 – NEM Interconnection Application Processing Labor for additional

details.

80 https://ww2.energy.ca.gov/title24/2019standards/documents/2018_Title_24_2019_Building_Standards_FAQ.pdf.

81 2018 total NEM applications were 46,773.

82 See D.18-07-006, p. 6.

83 CPP provides participants a credit on their monthly on-peak demand or energy charges during the summer months and an energy charge when a CPP event is called.

84 Refer to WP SCE-03 Vol. 5, p. 59 – Marketing Education & Awareness for CPP Default and New TOU Periods for additional details.

44

media messaging, customer mailers, and education material were one-time project costs associated with 1

preparation for the CPP default and new TOU periods and will not be required in the test year.85 2


As shown below in Figure II-12, for the 2021 Test Year, SCE 4

forecasts $13.832 million in O&M expenses for Customer Programs Management. This represents an 5

increase of $0.634 million, or five percent, compared to the Base Year O&M expenses of $13.199 6

million. 7



85 CPP enrollments have increased from approximately 3,000 service accounts to approximately 280,000 service

accounts to date and SCE will continue to default eligible customers to CPP on October 1 of each year. Ongoing education and communication required to default newly eligible customers and inform customers of CPP events is requested in SCE-3, Vol 2. Customer Communication, Education & Outreach.

45


The 2018 Base Year activities for Customer Programs Management are described 2

earlier in this chapter. The Last Recorded Year accurately reflects the expense level associated with 3

Base Year activity levels that are planned to continue through the Test Year, plus the adjustments 4



4. Transportation Electrification 7

a) Work Description 8

Transportation Electrification (TE) is a key component of SCE’s vision to help 9

California meet its 2030 and 2050 GHG reduction and air quality goals. Many TE-related challenges 10

facing the utility sector in the near- and long-term, such as DER integration, infrastructure growth, load 11

management, customer experience, and emissions reductions are addressed by different parts of the 12

company. As such, TE knowledge is dispersed throughout the company. The TE group serves as an 13

important bridge to coordinate and provide oversight of cross-functional processes, alignment of goals 14

and activities, and support for strategic direction for the company. 15

As the lead organization of SCE’s overall TE-related efforts, the TE group 16

(1) coordinates internal and cross-functional activities involving electric vehicles (EVs) and other forms 17

of electric transportation (including goods and people movement), (2) evaluates market conditions 18

through primary and secondary market research, (3) generates customer and market programs that 19

overcome barriers to adoption and optimize load, and (4) prepares approved programs for launch. 20

Through extensive coordination and research, the TE group: 21

Develops new programs that will address availability of charging 22

infrastructure and EVs, improve affordability of EVs and electricity, and 23

advance awareness of the benefits of electric fueling. 24

Builds on the robust lessons of its infrastructure programs to date (including 25

Charge Ready Pilot & Bridge, Charge Ready Transport, and Priority Review 26

86 The decision to use Last Recorded Year as the basis for the Test Year O&M expense forecast for Customer

Programs Management is consistent with the direction provided in D.04-07-022 and D.89-12-057, wherein the CPUC stated that if costs have shown a trend in a certain direction over three or more years, the Last Recorded Year is the appropriate basis for estimating Test Year expenses. Although there have been variations year-to-year, with an increase from 2014 to 2015 due to increased O&M labor costs associated with NEM application processing and non-labor O&M costs associated with non-residential TOU rate education, overall O&M expenses have generally remained stable over the period 2015-2018.

46

Projects) and may create additional infrastructure solutions to meet the needs 1

of its diverse customer segments. 2

Creates incentive programs to address driver and customer costs associated 3

with vehicle, infrastructure, and charging costs. 4

Creates special programs targeting specific customer groups like low-income 5

and disadvantaged communities or specific subject matters like vehicle-grid 6

integration or education programs. 7

Works with SCE’s regulatory affairs team to craft advice letters and 8

applications for funding at the CPUC and may represent SCE as witnesses in 9

regulatory filings, respond to data requests, and advocate externally on behalf 10

of SCE’s goals. 11

The TE group was newly formed in 2019 and plans to be fully staffed by 2021. 12

The staff consists of a Director with administrative support as well as Managers, Project Managers, 13

Advisors and Analysts.87 14

The TE group is made up of three teams: Strategy and New Program 15

Development, External Engagement, and Operations. 16

(1) Strategy and New Program Development 17

The Strategy and New Program Development (Strategy) team leads the 18

company’s TE efforts in conducting market research and developing market solutions that advance the 19

awareness, availability and affordability of all types of EVs. 20

The Strategy team also prepares any approved program for launch and 21

handover to the Transportation Electrification Operations team. Some portions of this activity are funded 22

through program budgets approved by the Commission in TE proceedings outside of SCE’s GRC. Those 23

FTEs and activities are not included in this GRC funding request. 24

(2) Business Development and Partnerships 25

The TE Business Development and Partnerships (Business Development) 26

team is the single source of TE policy and customer engagement and outreach efforts to meet TE goals 27

and objectives. Closely following customer needs and responses and using those insights to shape SCE’s 28

TE strategy is necessary to ensure ongoing customer participation and adoption of TE. 29

87 Refer to WP SCE-03 Vol. 5, p. 45 – Transportation Electrification – Calculation of FTE Cost for additional

details.

47

Through these internal and external engagement, planning and customer 1

support activities, the Business Development team serves as a critical resource to SCE customers and 2

customer-facing representatives by championing the voice of the customer throughout the planning, 3

development and execution of TE programs, policies and initiatives. Some portions of this activity are 4

funded through program budgets approved by the Commission in TE proceedings outside of SCE’s 5

GRC. Those FTEs and activities are not included in this GRC funding request. 6

(3) Transportation Electrification Operations 7

The TE Operations (Operations) team is responsible for operational 8

coordination, customer interface and infrastructure deployment that spans multiple SCE operating units 9

to increase efficiency and effectiveness. The Operations team provides departmental reporting such as 10

budget, forecast, key performance metrics for goals, and data modeling. Many program development 11

and pre-deployment activities also impact the Operations team prior to program funding being approved 12

by the CPUC. Operations leads or supports many pre-deployment activities, which include developing 13

and documenting end-to-end processes, developing and evaluating technology solutions (including IT 14

solutions), and engaging appropriate participants to develop internal statements of work or outsource to 15

external vendors. The Operations team works with SCE’s Procurement team to solicit contractors and 16

onboard external vendors that are selected prior to program implementation. In addition, the Operations 17

team evaluates the technical requirements of electric vehicle supply equipment, which, if approved, is 18

added to SCE’s Approved Product List. Operations develops and delivers program training, reports on 19

project status, works with Operational Finance to set up appropriate accounting structures, and ensures 20

back-office systems are capable of supporting CPUC program reporting requirements, which include 21

financial requirements and program metrics. 22

The majority of the cost of the Operations team activities is funded outside 23

of the GRC through other CPUC-authorized programs, such as Charge Ready Transport, Charge Ready 24

Pilot, and Charge Ready 2 (currently pending approval by the Commission). The forecast for the 25

Operations team included in the GRC is for non-program-specific TE infrastructure deployment and 26

management, overall TE reporting, marketing material development and support of TE-related functions 27

as described in this GRC. The forecast for the Operations also includes funding for resources that are 28

developing and pursing CPUC approval for programs. Similar to other work activities described above, 29

some portions are funded through program budgets approved by the Commission in TE proceedings 30

outside of SCE’s GRC. Those FTEs and activities are not included in this GRC funding request. For the 31

48

purposes of this testimony, we have combined Transportation Electrification Administration, which is 1

the overall leadership of the group, within the Operations team. 2

b) Need for Activity 3

TE is crucial to achieving California’s GHG goals. Climate change poses serious 4

threats, and climate change effects, such as sea level rise and longer, more intense heat waves, are 5

already escalating. California has taken ownership, within the context of the broader global community, 6

to align its GHG emissions reductions targets with the Paris Agreement to limit global warming to well 7

below 2 degrees. As shown below in Figure II-13, California’s GHG goals call for a 40 percent 8

reduction in GHG emissions from 1990 levels by 2030 and an 80 percent reduction by 2050. While 9

California reduced its GHG emissions ten percent from their peak in 2004, meeting 2030 requirements 10

and 2050 goals will require California to reduce emissions at more than three times the annual rate 11

achieved between 2004 and 2015. All feasible paths for California to meet its 2030, and ultimately 2050, 12

climate goals must significantly reduce emissions from the transportation sector. Meeting these goals 13

will require the newly formed Transportation Electrification group to develop new and improved 14

objectives and plans with inter-department management collaboration, which will have significant 15

impact to California and SCE. 16

49

Figure II-13 GHG Emissions Reduction Targets

(Million Metric Tonnes CO2 Equivalent)88

c) Comparison of Authorized 2018 to Recorded 89 1

As Transportation Electrification is a new group as of 2019, the Transportation 2

Electrification activity was not included in the 2018 GRC and there are no 2018 authorized or recorded 3

expenses. 4

d) Scope and Forecast Analysis 5

This section presents the forecasted O&M labor and non-labor expenses for 2019 6

through 2021, along with a discussion of the reasons for the requested increase in funding for the Test 7

Year 2021. Figure II-14 provides a summarized view of forecasted labor and non-labor O&M for 8

Transportation Electrification activities. 9

88 Carbon Dioxide Equivalent (CO2e): A metric used to compare emissions of various greenhouse gases. It is

the mass of carbon dioxide that would produce the same estimated radiative forcing as a given mass of another greenhouse gas. Carbon dioxide equivalents are computed by multiplying the mass of the gas emitted by its global warming potential. Definition from the CARB website (www.arb.ca.gov).


50

Figure II-14 Transportation Electrification



As the Transportation Electrification group is newly formed as of 2019, 2

there are no historical expenses from 2014 to 2018. 3

(2) Forecast 4

(a) Labor 5

For the Strategy team, in this proceeding we request $1.212 million 6

for approximately 10 FTEs consisting of a Sr. Manager, Project Managers, Advisors and Program 7

Analysts. For the Business Development team, in this proceeding we request $0.627 million for 8

approximately five FTEs consisting of a Sr. Manager, Project Managers, Advisors and Program 9

Analysts. For the Operations team, in this proceeding SCE requests $0.976 million for approximately 10

eight FTEs consisting of a Director, Managers, Sr. Project Managers, Project Managers, and Advisor, 11

90 Refer to WP SCE-03, Vol. 5, pp. 40-44, for Transportation Electrification recorded and forecast financial

information.

51

Project Analysts and Administrative support. For the purposes of this testimony, we have combined 1

Transportation Electrification Administration with the Operations team.91 2

(b) Non-Labor 3

The non-labor increase of $0.750 million is for the TE group to 4

attend and participate in TE-related conferences and external engagements (e.g., TE Expos, Energy 5

Policy and Sustainability Summits, Advanced Clean Transportation (ACT) expo). This non-labor 6

forecast also includes employee-related expenses for the incremental 23 forecasted FTEs within the 7

Transportation Electrification group described in this testimony.92 8

e) Basis for O&M Cost Forecast Method 9

Since this is a newly formed group, there is no 2018 historical recorded/adjusted 10

O&M to create a linear or averaging forecast method. Therefore, the basis for the O&M cost forecast is 11

itemized forecast. 12

D. Capital Expenditures for Customer Care Services 13

SCE must expend capital during this GRC period to support Customer Care Services activities. 14

SCE’s Engineering and Design Solutions, Hydraulic Services, and Technology Test Center groups must 15

replace aging tools, specialized testing equipment, and data acquisition systems in order to continue 16

providing key services to business and agricultural customers. These services include but are not limited 17

to: (1) evaluating energy consumption and performance of existing or new equipment being considered 18

by customers and (2) on-site testing and evaluation of customer equipment. Over the 2019 to 2023 GRC 19

period, SCE forecasts capital expenditures of $1.95 million for Customer Care Services activities. 20

This section provides an analysis of historical variances and an explanation for material year-to-21

year variations in capital expenses for Customer Care Services activities between 2014 and 2018. Then, 22

SCE presents the forecasted capital expenses for 2019 through 2023. Table II-7 below provides a 23

summarized view of historic recorded and forecast capital expenditures for Customer Care Services. 24

SCE notes that the recorded expenditures for “Other BCD Capital” from 2014 through 2018 in Table II-25

7 include a mixture of asset types (e.g., furniture and equipment, structures and improvements, and IT 26

capital software projects) that were previously recorded by BCD. Any GRC forecast capital 27

91 Refer to WP SCE-03 Vol. 5, p. 45 – Transportation Electrification – Calculation of FTE Cost for additional

details.

92 Refer to WP SCE-03 Vol. 5, p. 46 – Transportation Electrification – Non-Labor Expense Forecast for additional details.

52

expenditures for these asset types has been moved to other organizations and now discussed in SCE-06, 1

Vol. 5 – Enterprise Operations and SCE-06, Vol. 1, Part 2 – OU Capitalized Software. Therefore, these 2

capital expenditures will not be included or shown in the GRC period forecast for SCE-03 – Customer 3

Interactions. 4

Table II-7 Capital Expenditure for Customer Care Services93

Recorded 2014-2018 and Forecast 2019-2023 ($000s)

Figure II-15 below shows a comparison of the 2018 authorized and recorded capital expenditures 5

which are within expected normal operating levels. 6

Figure II-15 Capital Expenditure for Comparison of 2018 GRC Authorized versus Recorded


93 Refer to WP SCE-03 Vol. 5, pp. 61-64 – Customer Care Services Capital for additional details.

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1. Project Descriptions and Need for Activity 1

a) Specialized Tools and Equipment – Technical Services 2

The engineers and technical specialists within the Engineering and Design 3

Solutions team provide targeted technical consultation to SCE’s non-residential customers through on-4

site visits and evaluations at customer facilities. Engineers use specialized portable equipment to 5

measure and obtain data (e.g., equipment and/or production line-level energy usage, fluid flow, system 6

temperatures, and other metrics) necessary to evaluate end-use customer equipment or process changes 7

that may be appropriate for customers evaluating energy options critical to achieving their financial, 8

operational, and/or sustainability goals.94 Engineers within the Technology Test Centers also install 9

equipment in specialized testing labs that are used to measure energy consumption, temperatures, and 10

other data for verification of equipment performance. The portable metering and test equipment, as well 11

as the equipment installed in the testing labs discussed above, is necessary for engineers and technical 12

specialists to support customer evaluation of energy consumption and evaluate end-use customer 13

equipment to enable better energy management for SCE’s business customers. Therefore, SCE forecasts 14

capital expenditures of $1.395 million from 2019 through 2023 for engineering specialized equipment to 15

support these activities.95 16

b) Specialized Tools and Equipment – Hydraulic Services 17

SCE’s pump test and hydraulic services organization uses specialized equipment 18

to perform pump tests at the request of customers. This test equipment is used to gather various 19

measurements such as power, pressure, water levels, and flow of water and other fluids to determine the 20

overall efficiency of customers’ pumping facilities. This equipment enables the Hydraulic Services 21

group to provide expert and unbiased recommendations intended to provide customers with actionable 22

strategies that result in lower pumping (energy) costs. Customers use the test results to make informed 23

decisions regarding when and how to renovate or replace equipment to increase efficiency and reduce 24

energy consumption, demand, and annual operating costs. Without this equipment, SCE cannot perform 25

these pump testing activities or provide these valuable services to customers. Therefore, SCE forecasts 26

94 Examples of portable equipment include voltage/amperage meters, power loggers, and flow meters.

95 Refer to WP SCE-03 Vol. 5, p. 30 – Capital Expenditures for Technical Services for additional details.

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spending $555,000 from 2019 through 2023 for pump test specialized tools and equipment to support 1

these activities.96 2

2. Comparison of Authorized 2018 to Recorded Capital Expenses for Customer Care 3

Services 97 4

Figure II-15 above compares the requested and authorized capital expenditures from 5

SCE’s 2018 GRC with the 2018 recorded capital expenses for Specialized Tools and Equipment – 6

Technical and Hydraulic Services in the Customer Care Services GRC Activity, in compliance with 7

D.15-11-021. SCE’s recorded capital expenses for 2018 in Customer Care Services was less than the 8

authorized amount by $27,000. This variance is within normal operating expectations. 9

3. Basis for Capital Expenditure Forecast 10

SCE’s forecast for Customer Care Services specialized tools and equipment used by 11

engineers and pump test specialists is budget-based and considers the age and condition of the existing 12

equipment. The forecasts were developed by SCE engineers using a combination of vendor quotes and 13

engineering estimates. 14

E. SBUA Compliance 15

In its 2018 General Rate Case, SCE and SBUA agreed to a number of stipulations related to 16

SCE’s small business customers.98 The Commission found these stipulations reasonable and adopted 17

them in the final decision resolving SCE’s 2018 GRC.99 These stipulations set forth specific deliverables 18

including but not limited to: (1) providing assistance to small business customers on SCE’s portfolio of 19

services and program offerings, (2) enhancing call center and account management representative 20

training to facilitate these interactions, (3) expanding online tools available and targeted to small 21

business customers, and (4) implementing outreach and education events. One of the adopted 22

stipulations requires SCE to submit testimony in this GRC detailing its compliance with the SCE-SBUA 23

2018 GRC settlement. As such, this section discusses the compliance efforts undertaken by SCE 24

resulting from the stipulations agreed to with SBUA. 25

96 Refer to WP SCE-03 Vol. 5, p. 31 – Capital Expenditures for Hydraulic Services for additional details.


98 See D.19-05-020, Section 5.4, pp. 141-145; Refer to WP SCE-03 Vol. 5, pp. 32-38 – Small Business Utility Advocates Stipulations – SBUA-1/SBUA-2 for additional details.

99 See D.19-05-020, pp. 141-145, 376.

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SCE met the first set of stipulations under the “Services to Small Business Customers” section100 1

by merging the Business Outreach Team with Economic Development Services (EDS) in September 2

2018 and by expanding economic development-related support to small business customers located 3

throughout SCE’s service territory. This change did not result in incremental costs. Additionally, SCE 4

assigned the EDS manager with the responsibility of overseeing a team that serves small commercial 5

customers with programs and services. SCE continuously trains approximately 90 Energy Advisors in 6

SCE’s Customer Contact Center to properly support commercial and industrial customers and provided 7

in depth training at the end of 2018 to educate the Energy Advisors on the upcoming TOU, CPP, and 8

other rate changes that implemented in March 2019. They are trained to handle complex calls regarding 9

the various rates and programs, explain interval usage, identify usage patterns, and discuss energy 10

solutions and products. SCE also developed and launched a webpage specifically dedicated to small 11

businesses in September 2018.101 12

SCE met the stipulations under the “Economic Development” section102 by creating and hosting 13

an annual “Small Business Resource Summit” in conjunction with the Governor’s Office of Business & 14

Economic Development (GO-Biz), regional small business development centers, small business lenders 15

and financing companies, along with the SCE economic development and business outreach team. 16

SCE also created a strategic working relationship with the Office of Small Business Advocate to 17

develop and align outreach and education to small business customers within SCE’s service territory. 18

SCE also agreed to expand the EDR program to support struggling small businesses, allowing a 19

maximum of 20 customers with loads under 150 kW to be eligible to participate in the new EDR 20

Program. SCE’s EDR program continues to demonstrate it is beneficial and cost-effective for all 21

customers, yielding a net present value of $4.9 million and a benefit-to-cost ratio of 1.21, based on the 22

methods and assumptions set forth in the CPUC Standard Practice Manual. 23

100 Refer to WP SCE-03 Vol. 5, p. 33 – Small Business Utility Advocates Stipulations – SBUA-1 for additional

details.

101 https://www.sce.com/business/Small-Business-Resources.

102 Refer to WP SCE-03 Vol. 5, pp. 33-34 – Small Business Utility Advocates Stipulations – SBUA-1 for additional details.

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Regarding the stipulation under the “General Provisions” section,103 SCE agrees with the 1

description of “small businesses” and has provided the additional services and support mentioned in this 2

section to customers that are either on a GS-1 rate or a business with under 500 employees. 3

SCE met the second set of stipulations under the “Contract Initiatives for Small Business 4

Customers” section104 by sponsoring six events in 2018 to promote outreach to small businesses. 5

In addition, SCE participated in an additional nine events, year to date, in which information was 6

provided on the new EDR rate for small business. Supplier Diversity & Development sponsored or 7

attended multiple supplier outreach events that promoted outreach to small businesses and provided 8

SBUA with 30 or more days’ notification of six events, thus complying with the requirements.105 9

SCE also offers a wide variety of payment periods and discount options to help small business 10

customers overcome cashflow challenges. SCE also offers automated clearing house (ACH) and credit 11

card programs to expedite timing of SCE’s payments to small business suppliers. These electronic 12

payment methods accounted for 83 percent of SCE payments made to small businesses in 2018. SCE 13

evaluated potential modifications to its insurance requirements and determined that its contracts 14

sufficiently consider insurance requirements based on the scope of services being provided by a 15

supplier. When SCE negotiates a contract with a supplier, the insurance requirements are modified 16

accordingly and as appropriate to the scope of services provided. SCE’s small business page at SCE.com 17

provides a direct link to SCE's supplier webpage, where small business customers have access to a 18

variety of SCE's Supply Chain Management and Supplier Diversity resources that are specified in these 19

stipulations. 20

SCE met the stipulation under the “Outreach Initiatives for Small Business Customers”106 section 21

when we met and conferred with SBUA by email on August 15, 2018, after the Commission approved 22

103 Refer to WP SCE-03 Vol. 5, p. 34 – Small Business Utility Advocates Stipulations – SBUA-1 for additional

details.


105 The six events were: (1) National Asian American Coalition – 15th Annual Economic Development Conference, (2) Regional Hispanic Chamber of Commerce – Business Development Conference, (3) CPUC / Joint Utilities Small & Diverse Business Expo, (4) Veteran in Business – National Conference, (5) Cal Asian Chamber of Commerce – Procurement Conference, and (6) Orange County Black Chamber of Commerce – Business Development and Supplier Diversity Forum.


57

changes to SCE’s CPP and TOU programs and considered SBUA’s requests for revisions to CPP and 1

TOU early awareness communication materials. In addition, SCE met with SBUA on July 1, 2019, to 2

provide an update on CPP and TOU outreach and education efforts, which included results of our mass 3

media campaigns, communications reminding customers about TOU and CPP changes, communications 4

regarding analysis previously conducted on better rate options for customers after the rate changes were 5

implemented in March 2019, and outreach to customers that could see potential cost savings by moving 6

to another rate. Finally, in 2018, SCE spent over 50 percent ($1.14 million) of the authorized $1.98 7

million to develop and deploy mass media radio ads, print ads, banner display ads, social media, search 8

engine marketing, direct mail, and email campaigns for CPP and TOU initiatives primarily targeted to 9

small business (GS-1) customers. SCE plans to spend an additional $2.2 million on similar efforts in 10

2019. 11

Documents

Customer Care Services · 3 A. Overview 4 Customer Care Services activities include managing SCE programs to ensure customers have the 5 information and tools they need to manage