SCE lobbies for early OK on recovering costs of evaluating underground option

Officials with Southern California Edison (SCE) met with advisors to two members of the California Public Utilities Commission (CPUC) to discuss the utility’s contracting report and its request that it be allowed to recover costs incurred in evaluating a possible underground alignment of the Tehachapi Renewable Transmission Project (TRTP) (Docket. No. A07-06-031).

The utility’s director of regulatory affairs and its principle manager of major projects met with two advisors to CPUC President Michael Peevey on Jan. 22 and with two advisors to Commissioner Carla Peterman on Jan. 23. According to notices of ex parte communication filed with the CPUC, each meeting last approximately 30 minutes.

During the meetings, SCE representatives discussed the utility’s contracting report, which it filed with the commission on Jan. 17, detailing actions necessary to evaluate the feasibility and cost of undergrounding the portion of Segment 8A that passes through the city of Chino Hills, Calif. In that report, SCE identified up to $33m in costs for which it is seeking cost recovery assurance, including up to $28m for contract termination penalties related to cable procurement contracts.

Absent such assurances, SCE has indicated an unwillingness to move forward before the full commission makes a final decision on undergrounding the Chino Hills portion of the project.

Utility representatives asked that the commission, “[F]ind that undertaking the activities prior to a final decision on undergrounding is critically necessary, prudent, and in the public interest regardless of the final decision,” according to the notices. SCE officials added that an interim order directing SCE to take the actions is necessary if the CPUC “would like to try to maintain” the project’s schedule. The final decision on the request to order Segment 8A placed underground is not expected until summer 2013 at the earliest.

The utility’s request for early approval of cost recovery has drawn mixed reaction.

The city of Chino Hills went on record on Jan. 22, stating it had changed its earlier position opposing such recovery and now supported recovery of certain cost categories, including engineering/costing efforts on underground designs and costs incurred to refine cost estimates.

The California Division of Ratepayer Advocates took the opposite position, called SCE’s contracting report “insufficient” and said it would be unreasonable for the commission to authorize SCE to incur contracting costs for a project that the commission has not yet authorized.

The 250-mile, $2.2bn, 500-kV project will be capable of moving up to 4,500 MW of renewable energy from the Tehachapi, Calif., area to population centers in Los Angeles and San Bernardino counties in California.

SCE has called the Tehachapi project “a critically important, high-voltage transmission line, the timely completion of which is essential for California’s progress toward its aggressive renewable energy goals.” California’s renewable portfolio standard calls for 33% renewable energy by 2020.

SCE is a subsidiary of Edison International (NYSE:EIX).