The regulatory process for how Southern California Edison (SCE) funds its day-to-day operations runs on a three-year cycle, and it kicked off on July 15 when the company delivered a notice for its rate case to the customer advocates arm of the California Public Utilities Commission.
Through the General Rate Case, the commission will review and authorize how much SCE will be able to collect from customers for 2015-2017 to continue safely providing reliable service to customers.
SCE’s proposed plan would allow the utility to make the necessary investments to enhance the future reliability, security and safety of the region’s power delivery infrastructure. SCE has more than 90,000 miles of distribution lines — that’s long enough to wrap around the earth almost four times. SCE also has more than 1.4 million power poles and more than 700,000 transformers across its 50,000-square-mile service territory.
“This request represents the need for continued investment in the electric infrastructure to meet new demands driven by state energy and environmental policy objectives as well as updating SCE’s aging infrastructure,” said Mike Marelli, director of SCE’s General Rate Case.
Over the next five years, SCE plans to invest more than $20 billion in infrastructure and related activities. More than 80 percent of this investment is for projects under the California Public Utilities Commission’s jurisdiction. (The rest is under the jurisdiction of the Federal Energy Regulatory Commission.)
This money will fund replacing aging infrastructure and equipment, such as power poles, underground cables and underground structures. It also will fund new construction like substations and circuits, as well as upgrading equipment like substation transformers, to meet customer demand.
If the commission approves SCE’s full request, the average residential customer’s bill would increase less than $2 a month.
The commission has a rigorous review process, which includes public participation hearings that will be held next year scattered throughout SCE’s 50,000-square-mile service territory. The final commission decision is expected in late 2014.
The General Rate Case makes up about half of customer rates. Another one-third comes from the cost of energy itself — the cost of fuel and purchased power used to generate electricity. These costs, passed on to customers “at cost” without a markup, vary from year to year and are as unpredictable as prices at your local gas station.
The remaining costs incurred are from a variety of other factors, such as large transmission projects regulated under the Federal Energy Regulatory Commission, special projects like the smart meter implementation and programs benefiting the public such as ones for energy efficiency and low-income customers.