Administrative & General (A&G) Volume 1 – Regulatory ......1 basis to capture a fully-annualized...

Application No.: A.16-09-001 Exhibit No.: SCE-24, Vol. 01 Witnesses: Z. Armenian

J. Pespisa J. Shotwell D. Tasaka R. Worden

(U 338-E)

2018 General Rate Case Rebuttal Testimony

Administrative & General (A&G) Volume 1 – Regulatory Affairs, Corporate Communications & Local Public Affairs,and Ethics & Compliance

Before the

Public Utilities Commission of the State of California

Rosemead, CaliforniaJune 16, 2017

SCE-24: Administrative & General (A&G)Volume 1 – Regulatory Affairs, Corporate Communications & Local

Public Affairs, and Ethics & ComplianceTable Of Contents

Section Page Witness

-i-

I. REGULATORY AFFAIRS - REBUTTAL .......................................................1 R. Worden

A. O&M Expenses ......................................................................................1

1. Regulatory Affairs: FERC Account 920/921 .............................1

a) ORA ...............................................................................2

ORA Position .....................................................2

b) TURN .............................................................................2

TURN Position ..................................................2

SCE Rebuttal ......................................................2

2. Regulatory Affairs – Integrated Planning Power Procurement: FERC Account 557 .............................................7

a) ORA ...............................................................................7

ORA Position .....................................................7

b) TURN .............................................................................7

TURN Position ..................................................7

SCE Rebuttal ......................................................8

II. CORPORATE COMMUNICATIONS ..............................................................9 D. Tasaka

A. Content and organization of testimony ..................................................9

B. Expenses and Accounts ..........................................................................9

1. FERC Account 920/921—Corporate Communications Operations ....................................................10

a) SCE’s Application .......................................................10

b) ORA’s Position ............................................................10

SCE-24: Administrative & General (A&G) Volume 1 – Regulatory Affairs, Corporate Communications & Local Public Affairs, and Ethics

& ComplianceTable Of Contents (Continued)


-ii-

c) TURN’s Position ..........................................................10

d) SCE’s Rebuttal to TURN .............................................11

SCE’s Labor Forecast is Based on Actual Recorded Expense Further Reduced by a Test-Year Downward Adjustment .......................................................11

TURN’s Recommendation for Labor Reduction is Based on an Erroneous Conclusion .......................................................11

SCE’s Labor Forecast is Correct......................11

Conclusion .......................................................12

2. FERC Account 923—Outside Services ...................................12

a) ORA’s Position ............................................................13

b) TURN’s Position ..........................................................13

c) SCE’s Rebuttal .............................................................13

TURN’s Assumption That All Costs in FERC 923 are Associated with Affiliate Transaction Rules is Incorrect and Should be Rejected ....................13

TURN Has Inaccurately Described SCE’s Quality Assurance Program ..................15

The Quality Assurance Program Includes Ethnic Outreach Costs of the Type the Commission has Approved in Prior Rate Cases ..........................16

Conclusion .......................................................17

III. LOCAL PUBLIC AFFAIRS – REBUTTAL ...................................................18 Z. Armenian

A. Introduction ..........................................................................................18

SCE-24: Administrative & General (A&G) Volume 1 – Regulatory Affairs, Corporate Communications & Local Public Affairs, and Ethics

& Compliance Table Of Contents (Continued)


-iii-

B. O&M Expenses ....................................................................................18

1. Local Public Affairs: FERC Account 920/921 ........................19

a) ORA .............................................................................19

ORA Position ...................................................19

b) TURN ...........................................................................19

TURN Position ................................................19

c) NDC .............................................................................19

NDC Position ...................................................19

SCE Rebuttal to NDC ......................................19

2. Corp Membership Dues and Fees: FERC Account 930............................................................................................20

a) ORA .............................................................................20

ORA Position ...................................................20

TURN Position ................................................20

SCE Rebuttal to ORA and TURN ...................21

Conclusion .......................................................26

IV. ETHICS AND COMPLIANCE .......................................................................27 J. Shotwell / .............................................................................................................................. J. Pepsia

Appendix A SCE’s Response to TURN-SCE-079, Question 2 ....................................... R. Worden

Appendix B Regulatory Affairs Test Year Operational Excellence O&M Forecast Adjustment ............................................................................................ R. Worden

Appendix C SCE’s Response to TURN-SCE-074, Question 06 Revised ....................... D. Tasaka

Appendix D SCE’s Response to TURN-115, Question 03 .............................................. D. Tasaka

Appendix E SCE’s Response to TURN-SCE-010 Question 01.a-c Revised .................. Z. Armenian

1

I.1

REGULATORY AFFAIRS - REBUTTAL 2

The TURN testimony, Exhibit TURN-7, sponsored by Helmuth W. Schultz, III and John 3

Defever addressing the forecast for Regulatory Affairs, contains a number of analytical errors. Most of 4

these errors could have been avoided by more carefully reviewing SCE’s testimony and responses to 5

data requests. 6

A. O&M Expenses 7

Regulatory Affairs O&M expenses are recorded and forecast in FERC Accounts shown in Table 8

I-1 below. The table provides the recorded amounts for 2011-2015 and the forecast for SCE, ORA and 9

TURN. SCE addresses each of TURN’s recommended adjustments to SCE’s O&M forecast. 10

Table I-1 Regulatory Affairs

O&M Forecast By FERC Account 2011 – 2015 Recorded and 2018 Forecast

Summary of SCE, ORA, and TURN Positions (Constant 2015 $000)

1. Regulatory Affairs: FERC Account 920/921 11

Table I-2 provides the labor, non-labor, and total recorded amounts for 2011-2015 and 12

the forecast for SCE, ORA and TURN for Regulatory Affairs FERC Account 920/921. 13

Table I-2 Regulatory Affairs - FERC Account 920/921

Recorded 2011-2015 / 2018 Forecast Summary of SCE, ORA, and TURN Positions

(Constant 2015 $000)

SCE ORA TURN2011 2012 2013 2014 2015

1 557 Integrated Planning and Analysis 12,295 10,863 11,048 11,372 10,455 10,000 not contested 7,8332 920-921 Regulatory Affairs 24,401 20,267 22,469 19,801 16,095 15,214 not contested 13,6243 Total 36,696 31,130 33,517 31,173 26,550 25,214 not contested 21,457

Line No. FERC Accont

Recorded2018 ForecastDescription

SCE ORA TURN ORA TURN1 Labor 16,434 16,078 17,626 15,891 13,567 12,686 not contested 10,519 not contested (2,167) 2 Non-Labor 7,967 4,189 4,843 3,910 2,528 2,528 not contested 2,528 not contested - 3 Total 24,401 20,267 22,469 19,801 16,095 15,214 not contested 13,047 not contested (2,167)

2015 2018 Forecast Variance From SCELine No. Description 2011 2012 2013 2014

2

a) ORA1

ORA Position 2

ORA did not contest SCE’s request. 3

b) TURN4

TURN Position 5

TURN recommends a reduction of $2.167 million to Regulatory Affairs 6

Labor Account 920-921. TURN claims that SCE has included employee vacancies in its test-year 7

forecast requests. TURN multiplies 18 alleged vacancies by an average annual salary of $120,396 to 8

arrive at its recommended labor disallowance of $2.167 million. 9

SCE Rebuttal 10

TURN incorrectly deduces that a vacancy is equal to collecting revenues 11

through customer rates with no matching expenses. In addition, the TURN testimony provided only part 12

of the information SCE produced in response to a data request; TURN truncated a table prepared by 13

SCE but implied it was the complete data set provided in the data request response. Finally, TURN’s 14

recommended reductions are not based on the evidence SCE has submitted. I discuss each of these 15

points below. 16

(a) The TURN Testimony Makes Erroneous Conclusions About 17

Employee Vacancies 18

The TURN testimony states, “This is not the only account in which 19

SCE has been overly ambitious with its labor forecasts. As will be discussed for other departments, the 20

Company has consistently erred on the side of overstating employee headcounts. Ratepayers should only 21

be responsible for the costs for actual employees, not for ‘phantom employees’ that provide no 22

service.”1 TURN’s conclusion here ignores fundamental ratemaking principles. SCE’s forecast is based 23

upon last recorded year expenses. These recorded expenses are the product of employees performing 24

their work, recording their hours in a timesheet, being paid for their work, and the expense recording to 25

SCE’s general ledger as Labor O&M expense. The recorded expenses are taken directly from the 26

general ledger, and tie to SCE’s FERC Form 1 for the base year 2015. Because my department made 27

further headcount reductions in the fourth quarter of 2015, I made an additional reduction on a forecast 28

1 Exhibit TURN-07, page 5.

3

basis to capture a fully-annualized headcount and expense reduction for the test year. The headcount ties 1

directly to the expenses recorded in 2015 and projected to the test year. 2

I agree with the TURN witnesses to the extent their testimony 3

states, “ratepayers should only be responsible for the costs of actual employees.” In the case of SCE, that 4

is precisely what has occurred and what our customers will experience in 2018 if the Commission adopts 5

our forecast. There is no factual basis for the TURN consultants to refer to “phantom employees,” who 6

would not fill out timesheets, occupy a desk, or receive a pay check. If no expenses record, then there is 7

no cost in the base year or the test year forecast. 8

(b) TURN’s Calculation of “Vacancies” Appears to be Based on 9

Incomplete Information. 10

In determining how many “vacancies” Regulatory Affairs has, 11

TURN testimony states: 12

“The chart below, based on information from TURN-SCE-079, 13

Question 2 shows the number of vacancies the Company has carried for the years 2012 through 2016 for 14

A&G as a whole. 15

Table I-3 Chart from TURN-SCE-079, Question 2 of A&G Job Vacancies from

2012 thrugh 2016

As can be seen, the Company has consistently had numerous 16

vacancies for each of the years, averaging over 320 vacancies per year. Forecasting costs for employees 17

who, based on past history, are unlikely to exist places an inappropriate burden on ratepayers.”218

A closer examination of the TURN table and a review of SCE’s 19

actual, complete data request response reveals that the TURN-authored table excludes the 2011 and 20

2017 year-to-date data that identifies vacancies. SCE has included the complete, unedited response in 21

Appendix A attached to this volume of testimony. SCE’s complete response shows that the SCE 22

2 Exhibit TURN-07, page 4, lines 7 – 13.

4

application that tracks vacancies is not a budget tool or an indication of revenue being received from 1

customers through current rate levels. Rather, it’s an internal tool to begin the requisition process for 2

personnel, which can take months and does not necessarily result in hiring a new employee or replacing 3

one who has departed. I know from my own experience that having a “vacancy” in the Human 4

Resources application is not permission to fill the vacancy, and such vacancies can be carried in the 5

application for many months crossing from one year to the next, and not immediately removed from the 6

data base if a vacancy will be unfilled. 7

SCE’s data request response states, “A vacancy occurs when a job 8

requisition is opened or created in the calendar year. Hiring managers or supervisors initiate the job 9

requisition process in anticipation of either filling new positions or making replacements when 10

employees vacate existing positions.”3 This data request response does not state or imply that a vacancy 11

is tied to revenues collected through customer rates or actual operating budgets. 12

Additionally, during the OpX cost-cutting process described in my 13

opening testimony, not only were there force reductions with severing of employees, but there were also 14

concentrated efforts by company management to require departments to surrender vacancies, thus 15

forestalling any potential opportunity to add personnel at a future date. The comprehensive elimination 16

of vacancies can be seen in the “2017 YTD” cell, which shows only 16 vacancies in the A&G 17

departments early in the year. Even if the YTD amount was carried forward at that monthly pace, it 18

would leave an annual amount well below TURN’s outdated table. TURN’s characterization of 19

vacancies being equivalent to revenues should be dismissed. 20

The TURN testimony states, “Focusing on vacancies for 21

Regulatory Affairs, the Company's response to MDR-07 17 VII.13 shows 163, 161, and 159 employees 22

forecasted for each of the years 2016, 2017, and 2018, respectively. However, the response to TURN-23

SCE-079 Question 1 shows only 140 and 141 actual employees for 2016 and 2017, respectively, a 24

difference of 23 in 2016 and 20 in 2017….”4 As I have observed previously in this testimony, these 25

hypothetical unfilled vacancies do not exist — certainly not in 2017. And even if they did, such 26

vacancies do not equate to an overcollection of revenues through customer rates, with the attendant 27

burden on our customers. 28

3 SCE Response to Data Request TURN-SCE-079, Q. 02 (Attached as Appendix A). 4 Exhibit TURN-07, page 4, lines 16 – 20.

5

The TURN testimony begins its analysis of Regulatory Affairs by 1

citing SCE’s response to Master Data Request-07, in which SCE identifies a headcount by year, with 2

recorded counts beginning in 2011 with a projection to 2018. A table identifying “headcount” is actual 3

SCE employees at work in a given year, while a “vacancy” is the beginning of a requisition process. In 4

this MDR response — which is dated February 22, 2016 — there is a headcount projection to 2018 of 5

159 SCE employees in Regulatory Affairs. The TURN testimony then proceeds to cite SCE’s response 6

to data request TURN-SCE-079, which updated the headcount for 2016 and 2017 recorded figures, 7

displaying a 2017 headcount of 141. The SCE response to the data request is dated March 14, 2017 – a 8

span of nearly 13 months since the MDR response was prepared. This passage of time is important, 9

(though excluded from TURN’s testimony) because SCE’s March 2017 response to TURN’s data 10

request correctly incorporated Regulatory Affair’s OpX reductions (whereas SCE’s February 2016 11

MDR response did not). The TURN testimony leaves out significant factual evidence to arrive at an 12

incorrect conclusion. 13

(c) TURN’s Recommendations to Cut Personnel From the Test Year 14

Forecast Ignores Factual Data Provided By SCE 15

TURN claims that its recommended forecast for Regulatory 16

Affairs is based on removing “unsubstantiated future employees” from SCE’s forecast. The TURN 17

testimony states: 18

“TURN's adjustment is to remove any employees above the actual 192017 amounts. These are the most recent known and measurable amounts. Despite the 20Company's projections, these are the number of employees the Company actually has providing 21service. The recommended reduction is calculated by subtracting the number of actual 22employees as of 2017, 141, from the projected amount for 2018, 159. The result is 18, which 23represents the amount of unsubstantiated future employees. Based on the Company's labor 24request of $19.143 million, the average projected wage for the 159 budgeted employees is 25$120,396. The 18 vacancies are then multiplied by the cost per employee, $120,396, to arrive at 26TURN'S adjustment. The resulting adjustment for Regulatory Affairs is a decrease for labor of 27$2,167,128 (18 x $120,396).”528

To reach its conclusion that 18 employees should be removed from 29

SCE’s forecast, TURN can only subtract these imaginary future employees by ignoring SCE’s direct 30

testimony and recorded dollar values contained therein. To begin, the 141 employees in 2017 is accurate 31

5 Exhibit TURN-07, page 5, lines 12 – 21.

6

but it is the result of SCE already having made the force reductions, a fact documented in my testimony 1

and itemized in an accompanying workpaper, now identified as Appendix B attached to this volume of 2

testimony. In the workpaper, the actual reductions of 16 employees, and their accompanying salaries, are 3

removed from SCE’s test year 2018 forecast. From the Base Year 2015 recorded expense of $26.550 4

million SCE removed an additional $1.336 million to arrive at a 2018 Forecast Test Year estimate of 5

$25.214 million.6 This spreadsheet also itemizes, by job title and salary, the force reductions that carry 6

forward to the test year. 7

Adopting TURN’s method would imply that my department would 8

have funded 141 SCE employees in 2017 with $19.143 million of Labor O&M expense, and would plan 9

to “add” 18 employees in Test Year 2018, while keeping the Labor O&M expense the same — $19.143 10

million. I can only conclude that the TURN consultants calculated that these employees would either 11

work for free or that the incumbent employees would surrender a portion of their salaries to pay the 12

newly-hired employees. 13

What TURN is actually proposing is to start at the 141 headcount 14

(which is a count of actual personnel who are working), subtract 18 fictional employees, leaving a 15

headcount of 123 employees, a figure that would cripple our functions. But, as I have explained, 16

TURN’s conclusion relies on a projection of test year vacancies that was prepared prior to the company-17

wide OpX cost-cutting initiative, is not indicative of actual employee count, and ignores the authentic 18

headcount itemization contained in my direct testimony and accompanying workpaper. 19

(d) Conclusion20

SCE is continuously looking to achieve efficiencies, optimize 21

spending, and reduce costs. As such, Regulatory Affairs underwent a headcount reduction in the fall of 22

2015. The resulting savings have already been incorporated in the test-year forecast and will be result in 23

lower costs with the benefit passed on to ratepayers through this GRC Application. SCE has projected 24

the annual savings of the 2015 cost reductions for test year 2018. SCE respectfully asks the Commission 25

to adopt its full Regulatory Affairs forecast for test-year 2018. 26

6 Exhibit SCE-08, Volume 2, Chapter I, page 21, Figure I-3.

7

2. Regulatory Affairs – Integrated Planning Power Procurement: FERC Account 557 1

Integrated Planning Power Procurement forecasts $10.0 million of labor and non-labor 2

expenses for TY 2018. Integrated Planning Power Procurement used the Last Recorded Year as the 3

forecast method for labor and non-labor expenses.7 The Table I-4 below provides the recorded O&M 4

from 2011-2015 and the 2018 forecast by labor and non-labor components for SCE, ORA and TURN. 5

Table I-4 Regulatory Affairs - FERC Account 557



a) ORA6

ORA Position 7


b) TURN9

TURN Position 10

TURN recommends a reduction of $1.590 million to Regulatory Affairs 11

FERC Account 557 because the PDD Program has been discontinued. “The Company stated in response 12

to TURN-SCE-074 Question 17.b that it is not requesting continued funding for the PDD in the 2018 13

GRC Application. However, by transferring $1.483 million of the 2015 level of costs from Account 549 14

to Account 557 (Organizational Unit Adjustment 4) and using the 2015 Recorded Year in the forecast 15

for the 2018 TY level, that level of costs for 2015 remains in the Test Year forecast. Clearly, ratepayers 16

should not be responsible for costs related to discontinued projects. As there will not be any costs further 17

generated from this project, the PDD costs from Account 549 should not be included in the test year or 18

any future rate years. Additionally, Organizational Unit Adjustment 1 to account 557 represents 19

7 See Exhibit SCE-08, Vol.2, pp. 21-23.

SCE ORA TURN ORA TURN1 Labor 9,117 8,596 7,964 8,288 6,912 6,457 not contested 4,867 not contested (1,590)2 Non-Labor 3,178 2,267 3,084 3,084 3,543 3,543 not contested 3,543 not contested -3 Total 12,295 10,863 11,048 11,372 10,455 10,000 not contested 8,410 not contested (1,590)

2015 2018 Forecast Variance From SCELine No. Description 2011 2012 2013 2014

8

$107,000 of PDD costs previously recorded and reflected in Accounts 923 and 930. The result is the 1

Company’s workpapers show $1.590 million in non-labor costs related to the discontinued PDD.”82

SCE Rebuttal 3

TURN’s recommendation ignores the qualitative nature of expenses 4

recorded and transferred from one account to the other — a routine practice that occurs hundreds of 5

times to the five-years recorded expenses in GRC workpapers. SCE explained in its testimony and in 6

responses to data requests that the “function,” or the qualitative nature of the work previously performed 7

by the Generation Planning Division was ending, with cost recovery through 2017 being requested in the 8

ERRA Application because Non-Labor expenses record in a memorandum account. By their testimony, 9

the TURN witnesses imply that the Non-Labor expense transferred to FERC Account 557 would 10

somehow perpetuate the same qualitative work previously performed by Generation Planning employees 11

in the 2018 test year. TURN’s speculative conclusion should be rejected. 12

In the specific instance of the $1.590 million at issue here, the majority of 13

the costs relate to memberships and consulting expenses that relate to electric system modeling. And 14

although the PDD Program has ended, these expenses are needed to continue to support utility long-term 15

system planning. While in the past these membership dues and consulting funds may have been used to 16

examine future sites for Peakers or utility-scale solar sites, they are no longer performing such work. 17

The employees who were previously in Generation Planning who transferred to Resource Planning 18

functions are now conducting system-wide analysis for increased Renewable Portfolio Standard (RPS) 19

requirements, with the aid of consultants. In addition to the costs related to memberships and consulting 20

expenses, there are non-labor expenses related to employee labor. In almost every instance a Labor 21

O&M expense will carry with it a certain amount of Non-Labor expense for such costs as travel, meals, 22

etc. This modest Non-Labor funding is necessary and in alignment with California’s Resource Planning 23

goals. Therefore, the TURN recommended adjustment should be rejected by the Commission. SCE 24

respectfully asks the Commission to adopt its full Regulatory Affairs non-labor forecast for test-year 25

2018. 26

8 Exhibit TURN-07, pages 7-8.

9

II.1

CORPORATE COMMUNICATIONS 2

A. Content and organization of testimony 3

This section provides a review of the products and services provided by Corporate 4

Communications. In our era of 24-hour news coverage, Corporate Communications provides 5

information to a range of audiences to help them be well-informed about and stay safe around 6

electricity. These audiences include customers, the media, public officials, policymakers, SCE’s 7

business suppliers, community organizations, shareholders, employees and the general public. 8

B. Expenses and Accounts 9

This rebuttal covers two Corporate Communications accounts for which TURN provided 10

Testimony—FERC 920/921 (Communications Operations), which includes labor and non-labor 11

expenses; and FERC 923 (Outside Services), which includes ethnic public relations, communications 12

measurement, translation services and a communication quality assurance program. TURN did not 13

contest SCE’s forecast for FERC 930—Communications Products. ORA did not contest any of 14

Corporate Communications test year account forecasts. 15

Table II-5 Corporate Communications



SCE ORA TURN

2011 2012 2013 2014 2015

1 920/921 Communications Operations 13,937$ 10,073$ 10,327$ 9,056$ 7,755$ 5,071$ not contested 4,722$

2 923 Outside Services 961$ 1,180$ 1,093$ 2,963$ 2,823$ 1,689$ not contested $0

3 930 Communications Products 6,384$ 7,574$ 6,564$ 6,201$ 7,133$ 5,858$ not contested

not contested

2018 Forecast

RecordedFERC

Account DescriptionLine No.

10

1. FERC Account 920/921—Corporate Communications Operations 1

a) SCE’s Application 2

SCE is forecasting a total of $5.071 million for the Test Year for FERC 3

920/921—labor is forecast at $4.014 million and non-labor is $1.057 million. This forecast includes 4

savings from OpX initiatives of $2.684 million as shown in Testimony.9 SCE’s forecast request for test-5

year 2018 is $2.684 million less than the last recorded base-year 2015 expense of $7.755 million. 6

Table II-6 Corporate Communications - FERC Account 920/921



b) ORA’s Position 7

ORA did not contest SCE’s request in Corporate Communications Account 920-8

921.9

c) TURN’s Position 10

TURN recommends a reduction of $0.349 million to Corporate Communications 11

920-921 labor expense forecast, claiming that SCE has included vacancies in its test-year forecast. 12

TURN multiplies 4 alleged vacancies by an average annual salary of $87,261 to arrive at its 13

recommended labor disallowance of $0.349 million. For a discussion on TURN’s misunderstanding of 14

vacancies and their impact on test-year expense forecasts, please refer to SCE’s rebuttal starting on page 15

2 of this volume under Regulatory Affairs 920-921 “TURN Position.” 16

9 Testimony, SCE-08, Vol. 2, Ch. II, p. 36 for labor and p. 38 for non-labor.

11

d) SCE’s Rebuttal to TURN 1

SCE’s Labor Forecast is Based on Actual Recorded Expense Further 2

Reduced by a Test-Year Downward Adjustment 3

The labor forecast for Corporate Communications 920-921 is based on 4

2015 last year recorded actual costs less an OpX reduction, which is explained in detail in SCE’s 5

testimony on pages 36-37 of SCE-08, Volume 02, Chapter II, Corporate Communications. The 2015 6

actual recorded labor dollars are contained in SCE’s general ledger and paid out in salaries during 7

calendar year 2015. SCE incorporated its OpX labor savings achieved in April 2016 as a forecast 8

downward adjustment reducing its test-year labor forecast for Account 920-921 by an additional $2.44 9

million below the 2015 recorded expense amount.1010

TURN’s Recommendation for Labor Reduction is Based on an Erroneous 11

Conclusion 12

TURN refers to SCE’s response to MDR-07 VII.13 Question 1, which 13

shows actual headcount for Corporate Communications of 69 in 2015 and forecast estimate of 46 in the 14

forecast period 2016-2018. It is important to note that this estimate was provided in advance of the 15

reorganization plan being finalized. TURN then cites actual headcount through February 2017 provided 16

in response to TURN-SCE-079 Question 1 at 42 in 2016 and 2017 for Corporate Communications and 17

accuses SCE of requesting funding for 4 vacancies in its forecast. 18

TURN erroneously concludes that the labor test-year forecast includes 19

vacancies and bases its recommended labor cost reduction on that conclusion. This is simply not true. 20

SCE did not use the cited headcount forecast to derive its Corporate Communications labor forecast at 21

all. TURN fails to realize that SCE’s projection for its test-year labor expense is not based on a 22

budgetary forecast approach; rather, it is based on actual recorded labor dollars less OpX savings. 23

SCE’s Labor Forecast is Correct 24

The headcount forecast at the end of calendar year 2015, cited by TURN 25

as evidence for their recommended disallowance, is 69 employees. Reducing this figure by SCE’s labor 26

OpX forecast reduction of 27 employees, or 69 minus 27, results in a net of 42 active employees in test-27

year 2018 as cited by TURN. What TURN missed is that the OpX labor reduction has already been 28

10 Please refer to Table II-7 on page 36 of Testimony, SCE-08, Vol. 2, Ch. II.

12

taken out of SCE’s test-year forecast in its forecast adjustment of $2.44 million based on the reduction 1

of 27 employees. 2

Conclusion3

SCE has already incorporated the headcount labor reduction achieved 4

through the department reorganization in April of 2016. These savings have been passed on to customers 5

through a test-year forecast expense reduction of $2.44 million. Indeed, SCE is continuously looking for 6

ways to optimize efficiencies and improve productivity. However, SCE cautions that any further 7

disallowance to its already reduced test-year labor forecast for Corporate Communications will impede 8

the important work performed by the department and will have adverse effects on internal and external 9

communications performed. Therefore, SCE respectfully asks the Commission to adopt its full test-year 10

labor forecast for Account 920-921 of $4.014 million. 11

2. FERC Account 923—Outside Services 12

FERC 923 contains costs for Outside Services. These expenses fall into three functional 13

areas: 1) ethnic public relations agencies which provide support services for in-language newspapers, 14

broadcast outlets, and digital/social media in Spanish and multiple Asian languages; 2) communications 15

measurement which includes message effectiveness and customer awareness tracking surveys, 16

communications benchmarking and traditional and social media monitors; and 3) communications 17

quality assurance which includes translations and creates a unified process and internal controls to 18

comply with company policy and guidelines.1119

11 Testimony, SCE-08, Vol. 2, Ch. II. pp. 39-40.

13

Table II-7 Corporate Communications - FERC Account 923



SCE forecasts $1.689 million for this account, which was reached by using last recorded 1

year of $2.823 million and subtracting an OpX adjustment of $1.134 million.122

a) ORA’s Position 3

ORA did not contest SCE’s forecast. 4

b) TURN’s Position 5

TURN disagreed with SCE’s forecast due to the Quality Assurance program 6

costs, which they claimed included compliance with Affiliate Transaction Rules.13 TURN recommends 7

no funding for Corporate Communications FERC 923 because SCE was unable to isolate costs 8

associated with Affiliate Transaction Rules compliance.149

c) SCE’s Rebuttal 10

TURN’s Assumption That All Costs in FERC 923 are Associated with 11

Affiliate Transaction Rules is Incorrect and Should be Rejected 12

There are three categories of expenses in Corporate Communications 13

FERC 923—as explained in SCE’s Opening Testimony.15 These are: ethnic public relations agencies, 14

communication measurement, and the quality assurance program, which includes translations. The 15

amount of expenses for each category is shown below. 16

12 Testimony, SCE-08, Vol. 2, Ch. II, p. 44. 13 Testimony, TURN-07, p. 11. 14 Testimony, TURN-07, p. 12. 15 Testimony, SCE-08, Vol. 2, Ch. II, p. 39.

14

Table II-8 Corporate Communications FERC 923 2015 Recorded Expenses by Cost Center

As shown in Table II-4, the first two cost centers contain expenses for 1

communications measurement and ethnic public relations agencies. In SCE’s 2015 GRC Decision, 2

D.15-11-021, the Commission found that SCE’s forecast for communication measurement and ethnic 3

media services in FERC 923 was “uncontested, reasonable, and approved.” In the 2012 GRC decision, 4

D.12-11-051, the Commission encouraged these activities, saying “ethnic advertising and public 5

relations agencies to reach culturally diverse customers and for communication measurement … are 6

important activities.”167

The Commission has supported these functions in the past and SCE 8

respectfully requests the Commission adopt SCE’s test-year forecast for Corporate Communications 9

923.10

16 2012 GRC Decision D.12-11-051.

Cost Center Number Label Description Expenses in 2015 in 2015 $000

F100073Corporate Communications –Media

Communications Measurement $ 0.163

F516557

Corporate Communications Public Education

Ethnic PR Agencies and Communications Measurement

$ 1.162

Translations $ 1.406

Communications Quality Assurance Program 0.092$

Total 2.823$

F529445CorpComm Quality Assurance

15

TURN Has Inaccurately Described SCE’s Quality Assurance Program 1

SCE’s Quality Assurance Program provides internal controls to ensure 2

that external communications comply with company policy and guidelines. The Quality Assurance 3

program includes: 4

In-language glossaries to ensure that electrical terms are consistently 5

translated; 6

Translation services for externally published content including public 7

safety ads and sce.com; 8

SCE’s graphic identity and editorial guidelines for ethnic audiences 9

and for social media; 10

Web Accessibility audits and remediation; and 11

A checklist to ensure accuracy, consistency and compliance with 12

communication policies including trademark protection. 13

TURN erroneously asserts that the Quality Assurance program is made up 14

entirely of costs for compliance with Affiliate Transaction Rules. Expenses in the Quality Assurance 15

Program are composed mostly of translation services. In fact, more than 90% of expenses in cost center 16

529445 are costs for translation services. Although Affiliate Transaction Rules are part of a quality 17

control checklist,17 there are no expenses associated with that checklist that record to Corporate 18

Communications FERC 923 and that are included in the forecast for Affiliate Transaction Rules 19

compliance.18 SCE provided details on the checklist in a response to a data request.1920

“Corporate Communications has multiple questions in the checklist that must be completed 21by all staff creating external communications prior to distribution. One question asks whether 22a Class A affiliate is mentioned. If yes, the communication must be routed to the Affiliate 23Compliance Office … There is no cost associated with the One Voice checklist as the 24checklist was created internally using existing staff and software.”2025

17 Workpapers, SCE-08, Vol. 2, Ch II, pp. 140-141. 18 See SCE’s revised answer to TURN-SCE-074, Q 6, (attached as Appendix C), as our first answer was

unclear.19 SCE Response to TURN-SCE-115, Q 3, (attached as Appendix D) 20 Id.

16

This checklist was included in original workpapers SCE-08, Vol. 02, Ch. 1

II, pp. 140-141. 2

In 2014, there were costs for training for the Quality Assurance program, 3

which was introduced to let employees know about the new checklist. These costs have been removed 4

from SCE’s GRC request. SCE removed this as a one-time cost in Corporate Communications FERC 5

920, Organizational Adjustment 21.21 There are no projected costs for Quality Assurance training 6

included in the forecast for Test Year 201822 in any Corporate Communications GRC activities. 7

Further, SCE illustrated its compliance with Commission direction not to 8

include Affiliate Transaction Rules compliance in the original testimony submitted by Ethics and 9

Compliance in SCE-08, Volume 1. This testimony and workpapers23 stated that “SCE is not seeking 10

recovery of the Affiliate Compliance Office costs related to compliance with the ATRs, and we have 11

adjusted the costs out of the Regulatory Compliance Department’s recorded costs.” TURN’s conclusion 12

ignored the fact that these costs were excluded in our forecast. In addition, SCE explained in response to 13

a TURN data request that Affiliate Transaction Rule costs were removed from SCE's general rate case 14

pursuant to previous CPUC decisions.2415

The Quality Assurance Program Includes Ethnic Outreach Costs of the 16

Type the Commission has Approved in Prior Rate Cases 17

Cost center F529445, shown in Table II-4, contains expenses for ethnic 18

outreach translations, ethnic outreach safety ads, and ethnic outreach guides and glossaries to ensure that 19

the language used in translations is consistent, accurate and culturally appropriate. SCE works with ad 20

agencies and translation companies to translate SCE’s customer-related messaging to audiences whose 21

primary language is not English. A sample of these glossaries—translated into Spanish, Chinese, 22

Vietnamese, Korean, and Khmer—was included in Workpapers, SCE-08, Vol. 2, Ch. II, pp. 143-146. 23

The glossaries have been created to ensure consistent application of certain phrases to electricity terms. 24

These guides and glossaries are essential to SCE’s in-language outreach to ethnic audiences.2525

21 Workpapers, SCE-08, Vol. 2, Ch. II, p. 21. 22 TURN-SCE-115, Q 3 (attached as Appendix D). 23 Testimony SCE-08, Vol. 01, page 24 and Workpapers SCE-08, Vol. 01, Book A, pp. 238-239. 24 TURN-SCE-115, Q 3 (attached as Appendix D). 25 Testimony, SCE-08, Vol. 2, Ch. II, p. 26, lines 11-14.

17

Translations are done on a variety of customer-facing channels including 1

sce.com and advertising and are performed in 4 to 9 languages, depending on the content. Examples 2

include safety messages, information on outages, and billing and payment. For effective communication 3

purposes, it is important to translate these messages into Spanish, Chinese (Mandarin and Cantonese), 4

Korean, Vietnamese, Tagalog, Khmer, and Thai. Given that more than 40% of SCE’s customers do not 5

speak English as a first language, it is critical to produce translations of customer messages for these 6

audiences.267

SCE has worked to make sure outside services costs are reasonable and to 8

maximize efficiencies. In order to achieve the OpX savings for FERC 923, Corporate Communications 9

renegotiated the contracts with ethnic public relations agencies and communication measurement 10

vendors to save $839,000, which is included in the test-year forecast.27 Corporate Communications also 11

achieved savings from vendor reassignments and eliminated other services to reach a total OpX savings 12

of $1.134 million for FERC 923.2813

If the Commission disallows SCE’s test-year forecast request for FERC 14

923, SCE would be unable to continue its current program of communicating with ethnic customers in 15

their own native language. Translations are currently done on critical customer information such as 16

safety, reliability and outages. Especially important are the translations on the subject of bill scams. 17

Ethnic audiences are disproportionally targeted in these scams and they rely on SCE for translations of 18

accurate information to protect themselves from potentially fraudulent activities and communications. 19

To conclude, our current translation program provides important customer information in a timely 20

manner, and protects customers from mis-information. 21

Conclusion22

The Commission has supported the work done in Corporate 23

Communications FERC 923 in past decisions, and we respectfully ask that the Commission adopt SCE’s 24

full forecast of $1.689 million. 25

26 Ibid. 27 Testimony, SCE-08, Vol. 2, Ch. II, p. 44. 28 Testimony, SCE-08, Vol. 2, Ch. II, p. 26, lines 11-14.

18

III. 1

LOCAL PUBLIC AFFAIRS – REBUTTAL 2

A. Introduction 3

SCE’s Local Public Affairs (LPA) organization is responsible for engagement with government 4

officials to support electric safety education, emergency response communications, grid modernization, 5

operations with community impact, local reliability, and education on state-mandated policy initiatives 6

such as energy efficiency, renewables, and distributed generation. LPA achieves this through 7

community outreach via local governments, non-profit organizations, neighborhood groups, government 8

associations, and chambers of commerce. LPA also works with local and regional governments in their 9

capacity as regulators of SCE's operations, as intermediaries between SCE and end-use customers, and 10

as customers in their own right. LPA supports the utility’s operations by working directly with 206 11

franchises and the governments of 186 cities, 15 counties, 14 cities with municipal utilities, and 15 12

Native American tribes (13 federally recognized and two state recognized tribes).2913

B. O&M Expenses 14

Local Public Affairs O&M expenses are recorded and forecast in two FERC Accounts shown in 15

Table I-1 below. The table provides the recorded amounts for 2011-2015 and the forecast for SCE, ORA 16

and TURN. SCE addresses each of ORA’s and TURN’s recommended adjustments to SCE’s O&M 17

forecast in its rebuttal position. 18

Table III-9 Local Public Affairs



29 See Exhibit SCE-08, p. 56, lines 8-17.

19

1. Local Public Affairs: FERC Account 920/921 1

LPA forecasts $7.904 million of labor and non-labor expenses for TY 2018. The labor 2

forecast reflects an amount reduced for the portion to be funded by shareholders according to LPA’s 3

2016 time-tracking study (20.4 percent of employees’ time is charged to shareholders from 2016 to 2018 4

and the remaining 79.6 percent is included in rates).305

Table III-10 Local Public Affairs - FERC Account 920/921



a) ORA6

ORA Position 7


b) TURN9

TURN Position 10

TURN did not contest SCE’s request. 11

c) NDC 12

NDC Position 13

NDC urges the Commission to require SCE to host at least five capacity 14

building workshops per year for community-based organizations (CBOs). NDC states that there is a 15

strong interest for the workshops and that incremental cost would be minimal. 16

SCE Rebuttal to NDC 17

Local Public Affairs went through a reorganization in late 2015 and 18

determined that Capacity Building Workshops are not core to LPA’s function in the company. As a 19

30 See Exhibit SCE-08, Vol 2, Chapter III, pp. 105-106.

20

result, the LPA-led Capacity Building Workshops were discontinued as of June 2015. SCE has no plans 1

to resume the capacity building workshops in the foreseeable future. 2

2. Corp Membership Dues and Fees: FERC Account 930 3

The expenses recorded in FERC Account 930 are for the ratepayer funded portion of dues 4

and memberships costs. Dues and memberships help SCE stay current on industry trends and best 5

practices. 6

Table III-11 Corp Membership Dues and Fees - FERC Account 930



a) ORA7

ORA Position 8

ORA recommends ratepayer funding of $1.177 million in TY 2018, a 40% 9

reduction from SCE’s request. ORA states that the number of organizations have decreased since the last 10

rate case. Therefore, ORA recommends the same funding level as in the last rate case. This results in a 11

reduction of $796,000. 12

TURN Position 13

TURN proposes an aggregate $1.804 million reduction to FERC Account 14

930 based on the following: (1) TURN asserts that all EEI dues should be disallowed because SCE 15

failed to address the NARUC categories for exclusion from ratepayer funding, which include Legislative 16

Advocacy, Legislative Policy Research, Regulatory Advocacy, Advertising, Marketing and Public 17

Relations; (2) TURN believes all expenses for California Taxpayer Association should be disallowed 18

because the Commission, in the 2012 GRC, disallowed these costs, as tax policy is inherently political;3119

31 TURN is relying on an outdated data request response. SCE is not seeking funds for California Taxpayer Association. See revised data request response TURN-SCE-010, question 1 a-c. Please refer to Appendix E reflecting SCE’s revised response.

21

(3) TURN proposes all expenses for the Business Roundtable be disallowed because they are political in 1

nature and SCE did not include these costs in its 2015 GRC request; (4) TURN claims that the 2

California Small Business Association is a political organization that should not be funded by 3

ratepayers; (5) Finally, TURN states that the California Small Business Roundtable is an offshoot of the 4

California Small Business Association who focuses on political impact and that ratepayer should not pay 5

dues for a political organization. 6

SCE Rebuttal to ORA and TURN 7

(a) Concessions8

SCE respectfully disagrees with ORA’s and TURN’s arguments 9

for the proposed reductions. However, in the interest of courtesy and cooperation SCE concedes not to 10

request ratepayer recovery for three organizations’ fees and memberships and thereby narrow the issues 11

that must be litigated to conclusion in this case; these are: 12

CA Foundation on the Environment & Economy $27,595; 13

CA Small Business Association $15,000; and 14

Committee Encouraging Corporate Philanthropy $10,000. 15

SCE’s revised request for GRC Activity 930 Corporate 16

Membership Dues and Fees is lowered by a total of $52,595, which results in a revised forecast of 17

$1.920 million for TY 2018. 18

(b) EEI Invoices 19

The EEI invoices identify the portions of the fees that are 20

attributable to activities that should be borne by shareholders. SCE adopted a more conservative 21

approach by allocating more costs to shareholders than recommended in EEI’s invoice. The table below 22

shows the percentage allocation of EEI’s expense to shareholders and ratepayers. Columns C-E 23

represent the allocation based on EEI’s invoice. Columns F-H represent the allocation of costs included 24

in SCE’s 2018 GRC request. In the category “Industry Issues,” SCE adopted a more conservative 25

approach in this category by more than doubling EEI’s recommended exclusion. 26

22

Table III-12 Corp Membership Dues and Fees - FERC Account 930

EEI Invoice Ratepayer vs Shareholder Costs (Constant 2015 $000)

(a) EEI Ratepayer Benefits 1

EEI brings SCE employees together with peers and colleagues 2

from other companies in the industry to perform collective activities that are not regularly performed by 3

the individual companies on a full-time basis, such as benchmarking studies, industry surveys, and 4

sharing best practices. This collaborative approach reduces the need for expensive customized research 5

and studies, consultants and experts, database development and maintenance, publication development, 6

and specialized training. Examples of these benefits include: 7

National Response Event (NRE) - SCE participates in the EEI 8

sponsored NRE process, which facilitates the coordination of mutual assistance among electric investor 9

owned utilities in the United States & Canada. SCE took part in developing exercise scenarios, such as a 10

major earthquake, to test the NRE process. One of the benefits to SCE customers is that utilities outside 11

of California better understand the complexities west coast utilities, such as SCE, will face in the 12

aftermath of a major earthquake. 13

Cyber Mutual Assistance (CMA) - EEI also manages the CMA 14

program that helps utilities in dealing with a cyberattack by establishing a mechanism to request 15

assistance from other utilities. As part of the CMA program, a pool of industry experts with cyber skills 16

and experience are identified. These individuals can provide assistance on a voluntary basis to other 17

participating entities in advance, or in the event of, a disruption of electric service, systems and/or IT 18

infrastructure due to a cyber emergency. 19

23

Spare Transformer Equipment Program (STEP) - The STEP 1

represents a coordinated approach to increasing the electric power industry's inventory of spare 2

transformers and streamlining the process of transferring those transformers to affected companies in the 3

event of a transmission outage caused by a terrorist attack. Under the program, each participating energy 4

company is required to maintain and, if necessary, acquire a specific number of transformers. STEP 5

requires each participating company to sell its spare transformers to any other participating company 6

that suffers a "triggering event," defined as an act of terrorism that destroys or disables one or more 7

substations and results in the declared state of emergency by the President of the United States. 8

SpareConnect - The SpareConnect program establishes a 9

confidential, unified platform for the entire electric industry to communicate equipment needs in the 10

event of an emergency or other non-routine failure. By establishing an additional, trusted network of 11

participants who are uniquely capable of providing assistance concerning equipment availability and 12

technical resources. SpareConnect provides decentralized access to points of contact at power 13

companies so that, in the event of an emergency, SpareConnect participants are able to connect quickly 14

with other participants in affected voltage classes. 15

Transportation - Utilities are continually sharing innovations, 16

designs, and process improvements across the utility fleet industry. As a result, about a third of SCE 17

vehicle fleet policies were modeled after those of other EEI companies. Additionally, by working with 18

other utilities through EEI, SCE has been able to compel manufacturers to improve their vehicle designs 19

for safety and productivity improvements. This has led to truck and work practice design evolutions, 20

safety standards, and policy consistency. 21

Security - Geomagnetic Disturbance (GMD) and 22

Electromagnetic Pulse (EMP): As results of SCE’s active participation in EEI, it has developed risk 23

assessments and operationalizing plans to mitigate GMD and EMP. SCE has a program assessment, 24

Grid Ops procedures for GMD and substation control room design for EMP. 25

(b) Other Organizations and Their Ratepayer Benefits 26

As explained below, the remaining organizations for which SCE is 27

requesting funding provide benefits to SCE’s customers. ORA does not take issue with any particular 28

organization to which SCE belongs; rather, ORA simply recommends reverting to the same level of 29

funding that the Commission authorized in 2015. SCE’s forecast, however, took into account the actual 30

anticipated fees that are required for SCE to belong to these organizations. Thus, ORA’s 31

24

recommendation to cut SCE’s request for this account would unduly limit SCE’s involvement in the 1

following beneficial organizations: 2

California Small Business Roundtable (CSBR). SCE 3

engages with the CSBR to educate influential leaders from the small business community about rates 4

and programs that impact small business customers, in efforts to expand the reach and understanding of 5

such programs to SCE’s small business customers. In addition, the CSBR provides SCE feedback about 6

implementation and marketing strategies to educate customers. For example, during the implementation 7

of mandatory dynamic pricing rates for small commercial accounts (<200 kW) in 2014 and 2015, CSBR 8

engaged in discussions with SCE about outreach and marketing for non-residential customers and efforts 9

to minimize negative impacts to small business customers. The organization will play a similar role as 10

SCE prepares for the roll-out of default critical peak pricing rates for small non-residential accounts and 11

a shift in time-of-use hours in 2018. The CSBR is also a participant on SCE’s small business advisory 12

panel, in which SCE senior level management dialogue with non-residential customers regarding 13

benefits and impacts of proposed and existing integrated demand side management, supplier diversity, 14

economic development programs, reliability, rates and other services. Customers benefit by having this 15

representative voice looking out for their interests. 16

California Utilities Emergency Association (CUEA). The 17

CUEA was created in 1952 as a part of California’s Civil Defense Plan. The CUEA provides structure 18

for efficient communications and coordination among government agencies and public and private 19

utilities throughout the state. Their mission is to provide emergency operations support for gas, electric, 20

water/wastewater, telecommunications (including wireless), and petroleum pipeline utilities. This 21

support is to ensure the preservation of lives and property, as well as the protection of California’s 22

economic infrastructure. Membership in this organization provides SCE with support during 23

emergencies as well as providing SCE with compliance with the CPUC General Order No. 166: 24

Standards for Operations, Reliability and Safety as it relates to entering into mutual assistance 25

agreements with other utilities: “The utility shall enter into mutual assistance agreement(s) such as those 26

facilitated by the California Utilities Emergency Association, to the extent that such agreements are 27

practical and would improve emergency response. The utility shall submit the agreements annually to 28

the CPUC designated staff as part of the report required by Standard 11.” CUEA also staffs and operates 29

the Utility Operations Center (UOC), wholly contained in the State Operations Center (SOC), as the 30

25

single point of utility contact for Cal EMA and all state and federal agencies through an MOU with Cal 1

EMA and the Governor’s office. 2

Center for Energy Workforce Development (CEWD).3

CEWD is an organization whose purpose is to help develop and implement workforce solutions and 4

tools to address the need for a qualified and diverse workforce. CEWD also facilitates a consortium of 5

partnerships between energy companies, their associations, contractors, and unions to help focus on 6

building a skilled workforce pipeline that will meet current and future industry needs. SCE is one of the 7

utilities that is a member of the CEWD and leverages the resources, partnerships, processes, and tools 8

offered through CEWD to help attract, hire, and plan for the changing workforce needs. 9

The Business Roundtable. This organization applies the 10

expertise and experience of its members to the major issues facing the nation. It focuses on policies that 11

lead to job creation and economic growth domestically in the U.S., including federal support for 12

education and job training; construction and build out of core infrastructure in the United States (water, 13

rail, ports, airports, etc.); and more economical tax policies to keep U.S. companies competitive, with 14

robust employment. SCE customers benefit from the Business Roundtable’s work on federal proposals 15

on topics like infrastructure modernization, cybersecurity, physical security of critical infrastructure 16

(including electric utility facilities), roads and highway improvements, and port enhancements (e.g., 17

electrification). This allows SCE to benefit from the organization’s policy engagement without having to 18

dedicate considerable utility resources of its own. 19

The Center for Economic Development/Southern 20

California Leadership Council. Participation in this organization enables SCE to be informed of local 21

issues within Southern California that affect communities including Energy Solutions, Workforce 22

Development, State and Local Climate Change Policy, Goods Movement/Transportation Solutions and 23

Southern California Air Quality Management Planning. SCLC convenes prominent leaders from 24

throughout Southern California on a quarterly basis to discuss state policies and their impact to local 25

communities. The forum also provides an opportunity for SCE to educate and inform local leaders about 26

energy, climate and transportation issues that SCE is working on and the impacts to communities. 27

The Conference Board. This organization provides an array 28

of services to SCE and is dedicated to helping companies achieve best practices and strategies in areas 29

such as human capital, high-performing organizations, corporate governance, and 30

information/knowledge architecture. The organization offers primary and secondary research, along with 31

26

conferences and seminars that Conference Board members, such as SCE, attend to obtain information 1

and knowledge designed to enhance corporate performance. SCE participates on numerous committees 2

such as: Corporate Governance Council, Supplier Diversity Council and Sustainability Council. 3

Western Energy Institute (WEI). WEI is an association that 4

facilitates meaningful information sharing for electric and natural gas companies by directly connecting 5

utility professionals with counterparts in the electric and natural gas industry. Employees of member 6

companies are able to connect with peers in the industry who are capable of troubleshooting, 7

collaborating and discussing issues central to their specific positions. WEI facilitates valuable, direct 8

connections between electric and natural gas industry professionals by laying the groundwork and 9

scheduling discussions to enable collaboration and foster dialogues between well-defined professional 10

roles. The WEI empowers like-minded professionals to connect regularly with their counterparts at other 11

companies handling similar on-the-job issues. Through committees, member-driven programs, forums, 12

and customer-focused symposiums, members receive a wide range of access not only to valuable best 13

practices information, but also to education, collaboration, and training opportunities. The WEI helps 14

utilities develop effective leaders and ensure that employees are well trained and informed for the 15

benefit of their customers. The WEI is focused on helping its members achieve solutions vital to 16

successfully implementing customer programs and services by seeking to anticipate industry trends and 17

integrate them quickly into member services, creating value through innovative solutions to best serve 18

members’ customers. The WEI’s culture stresses honest and ethical behavior among its member 19

companies. 20

Conclusion21

SCE believes both ORA’s and TURN’s recommended reductions to 22

Activity 930 - Corporate Membership Dues & Fees of $0.796 million and 1.804 million, respectively, 23

are unreasonable. SCE has provided testimony on how activities and memberships benefit ratepayers as 24

well as documentation supporting the appropriate ratepayer versus shareholder splits for EEI. In the 25

interest of narrowing the issues that must be litigated to conclusion, SCE amends its TY 2018 forecast 26

for FERC Account 930 to $1.920 million, to remove membership costs for three organizations: CA 27

Foundation on the Environment & Economy ($0.028 million), CA Small Business Association ($0.015 28

million), and Committee Encouraging Corporate Philanthropy ($0.010 million). SCE respectfully 29

requests the Commission to adopt its amended test year request for Account 930 – Corporate 30

Memberships Dues and Fees. 31

27

IV.1

ETHICS AND COMPLIANCE 2

SCE is committed to strictly and carefully complying with federal, state, and local laws and 3

regulations. The U.S. Federal Sentencing Guidelines also provide that SCE should establish and 4

maintain an effective Ethics and Compliance Program, one that promotes a culture that encourages 5

ethical conduct and a commitment to compliance with the law. The Ethics and Compliance Operating 6

Unit helps assure that SCE is meeting these expectations under the overall direction and oversight of the 7

Edison International/SCE’s Chief Ethics and Compliance Officer.32 In the 2015 General Rate Case, the 8

Commission adopted the Ethics and Compliance O&M forecast, and found that “[r]atepayers benefit 9

from a strong culture of ethics and compliance, and SCE has demonstrated success in making 10

improvements in the department.”3311

Table IV-13 below provides a summary of SCE’s Ethics and Compliance 2018 O&M Forecast. 12

No party contested SCE’s Ethics and Compliance O&M forecast.3413

Table IV-13 Ethics and Compliance

2018 O&M Forecast by FERC Account Summary of SCE, ORA, and TURN Positions


32 See SCE-08, Vol. 01. 33 D.15-11-021, p. 279. 34 See, e.g., ORA-17, p. 1.

SCEApplication ORA TURN ORA TURN

1 Compliance, Policies & Information Governance FERC 920/921 3.911$ 3.911$ 3.911$ NC NC 3.911$ 2 Compliance, Policies & Information Governance FERC 923 4.985$ 4.985$ 4.985$ NC NC 4.985$ 3 Regulatory Compliance FERC 920/921 1.891$ 1.891$ 1.891$ NC NC 1.891$ 4 NERC Compliance Program FERC 920/921 3.176$ 3.176$ 3.176$ NC NC 3.176$ 5 Compliance Operational Excellence FERC 920/921 (4.100)$ (4.100)$ (4.100)$ NC NC (4.100)$ 6 Total 9.863$ 9.863$ 9.863$ NC NC 9.863$

* Due to rounding, subtotals may not sum to the totals. "NC" indicates that the activity was not contested.

SCE Rebuttal Position

Line No. Description

2018 Forecast Variance From SCE Forecast

Appendix A

SCE’s Response to TURN-SCE-079, Question 2

Southern California Edison2018 GRC A.16-09-001

DATA REQUEST SET TURN-SCE-079

To: TURNPrepared by: Michelle Ricard

Title: Project ManagerDated: 03/14/2017

Received Date: 03/10/2017

Question 02:

2. Vacancies. Refer to the response dated 2/22/16 to MDR-07 VII.14. Provide the 2016 and 2017 actual vacancies in a similar format.

Response to Question 02:

Actual vacancies in the A&G area for 2016 and 2017 year-to-date (as of February 28, 2017) have been added to the table below.

Note: A vacancy occurs when a job requisition is opened or created in the calendar year. Hiring managers or supervisors initiate the job requisition process in anticipation of either filling new positions or making replacements when employees vacate existing positions.

Public Affairs (Sacramento) and Community Involvement are excluded.

A-1

Appendix B

Regulatory Affairs Test Year Operational Excellence O&M Forecast Adjustment

Workpaper – Southern California Edison / 2018 GRC

Exhibit No. SCE-08 / Vol. 02 / Chapter I Witness: R. Worden

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B-1

Appendix C

SCE’s Response to TURN-SCE-074, Question 06 Revised



To: TURNPrepared by: Diane Tasaka

Title: Principal ManagerDated: 03/08/2017


Question 06 Revised:

6. Corporate Communications. Refer to the testimony Exhibit No. SCE-08, Vol. 2, Chapter II, page 27, lines 1-3. Identify the total amount of costs associated with compliance with the affiliate transaction rules in each year 2011, 2012, 2013, 2014, 2015 and 2016 (actual) and forecasted for 2016, 2017 and 2018 with respect to Corporate Communications. Also identify the pages of the workpapers where these amounts are reflected.

Response to Question 06 Revised:

SCE is submitting a revised answer to data request TURN-SCE-074 Question 6 herein.

In the original answer SCE stated that “ … we are unable to specify and isolate costs within the program solely associated with affiliate transaction rules compliance.”

SCE would like to clarify that there are two categories of costs for the QA program—(a) start-up costs (which were removed from the GRC forecast in Work papers, SCE-08, Vol.2, Ch. II, p. 21, Organization Unit Adjustment 21) and (b) continuing implementation costs.

To start up the QA program, there was one item related to ATR—a question on a checklist. To write one item on the checklist and to automate that link took a very small amount of staff time—less than 15 minutes. The costs related to ATR were one time and very small. While it is true that it is difficult to quantify and differentiate the staff time needed for this task, SCE adopted a conservative approach and simply adjusted all of these costs out of the GRC request. Therefore, these costs are irrelevant since they have already been removed from Corporate Communication’s GRC forecast.

There are no ongoing costs in the QA program in terms of ATR because the checklist is automated and hasn’t changed since its original design. Therefore, SCE’s forecast does not include any ATR costs at all.

SCE did provide an updated answer on this topic in TURN-115, Q. 3, in which we stated “there

C-1

is no cost associated with the One Voice checklist."

C-2

Appendix D

SCE’s Response to TURN-115, Question 03



To: TURNPrepared by: Diane Tasaka

Title: Principal ManagerDated: 04/05/2017


Question 03:

3. Corporate Communications. Refer to the responses to TURN-SCE-74 Q. 06 and TURN- SCE-75 Q. 14. Confirm that costs associated with ATR compliance are included in both the QA program as part of Corporate Communications and the Ethics and Compliance Category. If not, identify the company organization(s) and the amounts of ATR costs that are included in the 2015 recorded year and 2018 TY.

Response to Question 03:

There are no specific costs associated with affiliate transaction rule (ATR) compliance in the Communications Quality Assurance program.

Corporate Communications has multiple questions in the checklist that must be completed by all staff creating external facing communications prior to distribution. One question asks whether a Class A affiliate is mentioned. If yes, the communication must be routed to the Affiliate Compliance Office and approval for distribution received before the communication is finalized. There is no cost associated with the One Voice checklist (See Workpapers, SCE-08, Vol. 02, Chapter II, pgs. 140-1) as the checklist was created internally using existing staff and software.

Similarly, compliance with affiliate transaction rules was incorporated into the One Voice External Compliance Communications Training (See Workpapers, SCE-08, Vol. 02, Chapter II, pgs. 111-139). The training also covers other material including web accessibility compliance, translations, logo requests from third parties and style guidelines. There are no specific costs associated only with ATR compliance in the training. Instead, 2015 training costs covered meals, materials, facility, audiovisual services and event logistics. There are no costs for training in 2018 TY as the tools are already available.

The expenses in the Communications Quality Assurance program are largely devoted to translations, creation of tools and resources (e.g. style guides, videos), and web accessibility compliance. The costs are in Corporate Communications F529445.

D-1

Affiliate Transaction Rule costs are removed from SCE's general rate case pursuant to previous CPUC decisions. Please refer to the testimony for Ethics and Compliance in Exhibit SCE-08, Volume 1, page 24.

D-2

Appendix E

SCE’s Response to TURN-SCE-010 Question 01.a-c Revised



To: TURNPrepared by: Sylvia Hernandez

Title: AnalystDated: 11/07/2016


Question 01.a-c Revised:

1. Regarding “Corporate Membership Dues and Fees” beginning on p. 11 of the workpapers to SCE-08, Vol. 2, Chapter III,

a. Please identify all organizations for which SCE recorded dues or fees in excess of $2,500 in base year 2015 and, for each organization, the amount of dues or fees SCE paid to the organization in 2015.

b. For each such organization, please indicate whether SCE adjusted or removed any portion of the 2015 recorded dues or fees for purposes of the development of the forecast for 2018.

c. For each organization, please state the forecast amount of dues SCE would pay in 2018.

Response to Question 01.a-c Revised:

SCE is submitting a revised response to this data request in order to correct its response previously submitted to TURN-SCE-010. Please refer to the revised table provided below. The first column identifies all organizations for which SCE recorded dues or fees in excess of $2,500 in the base year 2015, the second column lists the amount of dues or fees SCE paid to each organization, the third column shows the exclusions applied to the 2015 costs for the purpose of developing the forecast, and the fourth column shows the final amount used to develop the 2018 forecast. The forecast is based on recorded 2015 expenses and indicates the future need, therefore no exclusions were applied. Please see SCE-08, Volume 02, Chapter III page 69 for a discussion of the forecast methodology.

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