OIR ON THE COMMISSION’S OWN MOTION TO ADOPT NEW SAFETY AND
RELIABILITY REGULATIONS FOR NATURAL GAS TRANSMISSION AND
DISTRIBUTION PIPELINES AND RELATED RATEMAKING MECHANISMS
(R.11-02-019/A.11-11-002)
(DATA REQUEST SCIP-WATSON-TCAP-PSEP-04)
______________________________________________________________________
QUESTION SCIP-WATSON-TCAP-PSEP-04-01:
This question follows-up the SCG-SDG&E response to Q4 of SCIP-Watson’s First Data
Request to SCG-SDG&E in R. 11-02-019. This question asked SoCalGas and SDG&E
to describe the capital projects included in their currently-authorized capital spending for
gas transmission pipeline safety. The response received did not include a specific
description or details on each transmission pipeline testing, replacement, or
modification project that is included in the existing SoCalGas – SDG&E Transmission
Integrity Management Programs (TIMP) whose costs are now included in rates. SCGSDG&E’s response appears to have aggregated such projects into just two or three
“Budget Codes,” without explanation of what such codes mean. Please provide this
data in more disaggregated form, so that SCIP-Watson can see, for each individual
TIMP capital project, the numbered line involved in each project, the number of miles for
each project, the project cost by year, the scope of the project, reason that the project is
included in the TIMP, and the expected date of completion for the project. The purpose
of this request is to allow SCIP-Watson to ensure that capital projects included in the
authorized TIMP for SCG and SDG&E, and now included in rates, do not duplicate
capital projects included in the PSEP. We attach lists of capital projects that NCIP
obtained in discovery from PG&E in R. 11-02-019 and A. 09-09-013 (the PG&E Gas
Accord V rate case), which NCIP used to determine that there was no significant
overlap between the capital projects for PG&E’s PSEP and those for the PG&E pipeline
integrity management program funded under existing PG&E Gas Accord V rates. SCIPWatson seek data in a similar format for the SCG-SDG&E TIMP, so that we are able to
undertake the same analysis for SCG and SDG&E. Without the data to make this
determination, SCIP-Watson may propose that the capital budget for the PSEP should
be reduced by the amount of TIMP capital expenses.
1
OIR ON THE COMMISSION’S OWN MOTION TO ADOPT NEW SAFETY AND
RELIABILITY REGULATIONS FOR NATURAL GAS TRANSMISSION AND
DISTRIBUTION PIPELINES AND RELATED RATEMAKING MECHANISMS
(R.11-02-019/A.11-11-002)
(DATA REQUEST SCIP-WATSON-TCAP-PSEP-04)
______________________________________________________________________
RESPONSE SCIP-WATSON-TCAP-PSEP-04-01:
The original data request –Watson 1, Q4 - asked for a description of the existing gas
transmission safety projects that are included in SCG and SDG&E rates today. The
table provided in the response included reference to Budget Codes 276, 312, and 412
in effort to describe the work efforts.
As more background, for budget planning and cost reporting SCG and SDG&E use
“Budget Codes” to represent a collection or grouping of similar work activities. As
described in testimonies, SCG Budget Codes 276 and 312 (Exhibit SCG-05 A.06-12010, beginning at page JMR-43) and SDG&E Budget Code 412 (Exhibit SDGE-06,
A.06-12-009, beginning at page JMR-26) include the following TIMP elements (abridged
from Testimony).
SCG Budget Code 276
As shown in this Data Response, Budget Code 276 captures the investments
made to the distribution plant to comply with the transmission pipeline integrity
rule.
Per SoCalGas policy, when facilities meet capitalization requirements and are to
be installed on distribution plant assets to allow the in-line inspection, these
additions are recorded to Budget Code 276. The forecast of these downstream
impact additions are based upon the recorded history of 2003 through 2005 (this
activity did not exist prior to 2003). Since each pipeline may have vastly different
impacts to customers and service levels, an average cost per HCA mile internally
inspected during the period of 2003 through 2005 was calculated and applied to
each year’s forecast of HCA mileage per the baseline assessment plan.
The mileages involved in making these calculations, and the calculations
themselves, are discussed in detail in the work papers made a part of this filing.
Expenditures associated with retrofitting and inspecting pipelines in HCAs as
defined by the new Pipeline Integrity rules are included in Budget Code 276
when they are defined as Distribution plant. The schedule of these retrofit and
inspections is determined by the baseline assessment plan. Refer to 49 CFR,
Part 192, Subpart O and the individual work papers prepared as part of this filing
for project cost determination.
2
OIR ON THE COMMISSION’S OWN MOTION TO ADOPT NEW SAFETY AND
RELIABILITY REGULATIONS FOR NATURAL GAS TRANSMISSION AND
DISTRIBUTION PIPELINES AND RELATED RATEMAKING MECHANISMS
(R.11-02-019/A.11-11-002)
(DATA REQUEST SCIP-WATSON-TCAP-PSEP-04)
______________________________________________________________________
SCG Budget Code 312 for Transmission Integrity
Expenditure associated with retrofitting and inspecting transmission pipelines in
HCAs as defined by the new Pipeline Integrity Rules are included in Budget
Code 312. Approximately 100 such projects, through 2008, are discussed
individually in detail in work papers made as part of this filing. Capital costs in
Budget Code 312 are lower in 2008 in – part due to federally-mandated changes
in the method of accounting for integrity inspections, specifically, that initial
inspections must be expensed beginning January 1, 2008.
Also, as explained in FERC Accounts 863.7 and 887.7, the Baseline Assessment
Plan (BAP) was used to forecast the expenditures for completing assessments.
The assessment method used to perform the assessment is selected based
upon many factors including the unique characteristics of the pipeline, schedule,
and cost. The use of in-line inspection is often not practical on lower pressure
smaller diameter pipelines. These pipelines become increasingly prevalent as
the program progresses and are typically scheduled using ECDA. As a result,
the capital requirement to retrofit pipelines in order to accommodate in-line
inspection tapers off while the expense associated with ECDA increases. Refer
to 49 CFR, Part 192, Subpart O. and the individual work papers prepared as part
of this filing for project cost determination.
SDG&E Budget Code 412 – Transmission Integrity
This account contains the labor and non-labor capital required to comply with
SDG&E’s Pipeline Integrity mandate from the Department of Transportation.
This account includes the costs of repairing deficiencies discovered through the
inspection process that would require replacement of pipeline segments and/or
lowering of pressure with the associated installation of alternate feeder lines and
regulator stations. This forecast includes the replacement of approximately
1,276 feet of 16 inch diameter pipe in city streets. The actual number of feet will
not be known until pipeline integrity inspections are performed, and could be
higher than the estimate.
The estimated feet of pipeline replacement required in SDG&E is based on
Pipeline Integrity pipeline replacements experienced by SoCalGas, specifically,
recent recorded costs of transmission line replacement in city streets recorded at
$2.6 million (direct) dollars per mile for 12 inch pipe. Sixteen (16) inch diameter
transmission main in the urban streets of San Diego area could exceed $3 million
per mile, or $568 per foot. Based on recent results in the SoCalGas transmission
system, ¼ mile per year is the least amount appropriately forecast.
3
OIR ON THE COMMISSION’S OWN MOTION TO ADOPT NEW SAFETY AND
RELIABILITY REGULATIONS FOR NATURAL GAS TRANSMISSION AND
DISTRIBUTION PIPELINES AND RELATED RATEMAKING MECHANISMS
(R.11-02-019/A.11-11-002)
(DATA REQUEST SCIP-WATSON-TCAP-PSEP-04)
______________________________________________________________________
The second part of the original question asked for the amounts SCG and SDG&E are
authorized to spend on each project. In their TY2008 General Rate Case proceedings
SCG and SDGE sought funding consistent with efforts of their Transmission Pipeline
Integrity Program. In its revised response, SDG&E and SCG provided 2008 authorized
costs from their respective 2008 GRC decisions because discreet costs for any attrition
year (years between GRC decision, including 2011) were not contemplated and
addressed by the Commission.
Absent detailed 2011 authorized capital expenditures from the Utilities Test Year 2008
GRC, SDG&E and SCG provide estimated capital expenditures for the years 2006,
2007 and 2008 as shown in the Applications. For SCG, Capital Work Papers, Exhibit
SCG-05-JMR-CWP filed in A. 06-12-010 discuss the type of project that could be
anticipated to be completed. Similarly, for SDGE a projection of work elements is
shown in Capital Work papers Exhibit SDGE-06-JMR-CWP in A. 06-12-009. Included
for your convenience are copies of these work papers and project summary listing,
which form the basis of the authorized level of expenditure.
TIMP Projects
TIMP Projects
TY2008 CWP
TY2008 Application SCG Capital
TY2008Rivera.pdf
Application SDGE Capital
summary.xlsx
Rivera.pdf
In addition, SDG&E and SCG are providing copies of capital work papers from their
respective TY2012 General Rate Case proceedings for rates effective January 1, 2012
(A. 10-12-005 and A.10-12-006, respectively). Also included for your convenience is a
project summary listing. As with the TY2008 showing, these filings include the Utilities
estimated capital expenditures for the years 2010, 2011, and 2012.
TIMP Projects
TIMP Projects from
TY2012 CWP
SCG-05-CWP-R Stanford_ZZ
SDG&E-04-CWP-R
REVISED July 2011.pdf
Stanford_ZZ
summary.xlsx
REVISED July 2011.pdf
4
OIR ON THE COMMISSION’S OWN MOTION TO ADOPT NEW SAFETY AND
RELIABILITY REGULATIONS FOR NATURAL GAS TRANSMISSION AND
DISTRIBUTION PIPELINES AND RELATED RATEMAKING MECHANISMS
(R.11-02-019/A.11-11-002)
(DATA REQUEST SCIP-WATSON-TCAP-PSEP-04)
______________________________________________________________________
QUESTION SCIP-WATSON-TCAP-PSEP-04-02:
The January 17, 2012, Technical Report of the CPUC’s Consumer Protection and
Safety Division (CPSD Report) recommends at pages 3 and 24 that, for 20 miles of
transmission pipe installed between 1961 and 1970, if SoCalGas – SDG&E lack
documentation for the pressure testing of these pipes in accordance with CPUC G.O.
112, utility shareholders should bear the costs for the pressure testing or replacement of
this pipe.

Have SCG-SDG&E verified that they lack pressure-test data in
accordance with CPUC G.O. 112 for these 20 miles of pipes?

Please provide data on the location of these 20 miles of pipeline
segments, as well as the costs (expenses and capital for each year from
2011-2015) that the SCG-SDG&E PSEP proposes to expend for the
strength testing or replacement of these 20 miles of transmission pipes, or
of any other pipe installed between 1961 and 1970 for which SoCalGas –
SDG&E lack documentation for pressure testing in accordance with CPUC
G.O. 112.
RESPONSE SCIP-WATSON-TCAP-PSEP-04-02:
a) SCG/SDG&E have currently identified approximately 12 miles of transmission
pipe located in Class 3 or 4 or High Consequence Areas that are labeled as
Category 4 and also do not have documentation in accordance with GO 112.
Associated with these segments are roughly an additional 12 miles of
transmission pipeline, also Category 4, that are located in Class 1 or 2 non-High
Consequence Areas.
b) The mileage that corresponds to the transmission pipe described above is, for
the most part, interspersed among other mileage of earlier vintage that will be
addressed in the PSEP.
The station start and stop for the segments identified in part (a) are as follows:
Station Start_Stop
A high level estimate of the portion of the total project cost contributed by these
segments, as calculated through a simple proration methodology, is as follows:
5
OIR ON THE COMMISSION’S OWN MOTION TO ADOPT NEW SAFETY AND
RELIABILITY REGULATIONS FOR NATURAL GAS TRANSMISSION AND
DISTRIBUTION PIPELINES AND RELATED RATEMAKING MECHANISMS
(R.11-02-019/A.11-11-002)
(DATA REQUEST SCIP-WATSON-TCAP-PSEP-04)
______________________________________________________________________
Estimated Cost
(proration)
In the PSEP filing, specific pipeline projects were not allocated to particular
years. Instead, the total pipe replacement and pressure testing estimated costs
were spread over Phase 1A (years 2012-2015) per the factors and assumptions
noted in the workpapers supporting Chapter IX of the testimony under the
heading “Schedule”.
6