SCE 2018 GRC – Deep Dive on SCE Testimony on PolesNovember 2, 2016

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Summary Pole inspection, assessment, maintenance, and replacement continue to be a major

focus for SCE given: Their impact on public and worker safety

Their essential role in service reliability for customers

The amount of resources needed to maintain the asset base while meeting compliance

The operational complexities associated with Assets distributed across the territory with regional environmental impacts

Joint ownership

SCE evaluates its existing programs regularly to improve efficiency and effectiveness including, but not limited to: Inspection criteria and schedule

Replacement standards

Technology improvements

Risk analysis using probabilistic methods

SCE has actively pursued the directives from the 2015 GRC in conjunction with the self-identified improvements.

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Agenda

• Review of Deteriorated Pole Program

• Review of Pole Loading Program (PLP)

• Pole Replacement Unit Cost

• Compliance with Commission Requirements

• Questions

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Regulatory Background on Poles

• GO 165 Inspection Cycles for Distribution Facilities

– Beginning in 1998, required all poles over 15 years old be intrusively inspected within 10 years, and then at least once every 20 years

– SCE completed initial inspections of all poles in 2007

– Poles requiring replacement are replaced through SCE’s Deteriorated Pole Replacement Program

• GO 95 Design, Construction and Maintenance of Overhead Lines

– Sets pole design safety factor of 4.0 for new grade A wood poles

– Sets pole design safety factor minimum of 2.67 at 6 or 8 lbs for in-service grade A wood poles

– Requires a ‘pole loading’ calculation to evaluate safety factor

– Requires retention of pole loading records for life of the pole (added to G.O. 95 by D.12-01-032)

– GO 95 safety factor compliance drives SCE’s Pole Loading Program

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Deteriorated Pole Replacement Program

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Intrusive Pole Inspection (IPI) ProcessProcess Overview:

– Drill into pole’s interior in order to identify and measure extent of internal decay

– Involves digging, boring, and sounding depending on type of pole and its setting

– Visually inspect poles as appropriate for signs of external damage (e.g. vehicle, woodpeckers, etc.)

• Younger than 10 years old • Inspected intrusively under

current Cycle (2007-current)

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Intrusive Pole Inspection (IPI) Cycle• Implemented a 10-year, grid-based system of inspection in 2009

– What: • Poles were segmented into geographic grids; grids assigned over multi-year inspection cycle• 10-year inspection cycle

– Why:• Inspection interval consistent with industry best practices• Consistent with expected efficacy of wood treatment applied to poles during inspections

– Current status:• Transition as poles previously not inspected became due, e.g. annual intrusive inspections were combination of grid

inspections and compliance poles• Transition will be complete in early 2018; after that, virtually all poles will be inspected on a grid basis• Has lowered unit cost per pole of inspections

• Overall lower failure rates from Intrusive Inspections with initial GO 165 cycle completed (Table III – 10)

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Inspection Year Aggregate Failure Rate(Distribution and Transmission)

2013‐2015 8%

2008‐2012 7%

2001‐2007 17%

Remediation Timeframes

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Remediation Timeframes – Deteriorated Pole Program

*Not to exceed time frames, poles may be replaced earlier due to operational circumstances, environmental clearances, or opportunities to reduce customer impact.

Determinants of Priority SCE‐Driven Remediation Timeframe*

Remaining Section Modulus (RSM), other visible damage, location, size, etc.

72 hrs / 45 days

1 Year

2 Years

3 Years

Intrusive Pole Inspection (IPI) ChangesProgram Changes:

– Adjusted replacement criteria for when void is found (effective April 2016)• Benchmarking identified areas for

better alignment with peer companies• Team utilized risk-based model to

assess impact of changes and identify new criterion

– New specification will reduce the number of poles requiring replacement• Poles with higher RSM values will not

require replacement• The use of steel stubbing to restore

versus replace poles

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Utility RSM pass with no action

RSM failure & become restoration 

candidate

RSM failure & become 

replacement candidate

SCE 100% N/A N/A

1 70% 69.90% 40%

2 100% N/A N/A

3 >67% <67% <67%

4 66% 66% 66%

5 100% 99% 99%

6 80% 67‐80% 67%

7 71% 41‐70% 70%

8 67% 66% 50%

9 66% 66% 66%

10 >67% <67% <67%

11 >67% <33% <33%

12 67% 14‐67% 0‐13%

13 >88% 34‐87% <33%

14 >81% 34‐80% <33%

Intrusive Pole Inspection (IPI) Changes Cont.Program Changes:

– 2018 GRC forecast reflects the changes

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Dates RemediationAnticipated Failure Rates

Transmission Distribution2015 Reject Rate 

(Before SPEC Change) Pole Replacement 12.50% 7.63%

Estimated 2016 Reject Rate (After SPEC Change)

Restoration 2% 2%

Pole Replacement 4.23% 3.75%

Pole Volume Forecast Compared to Recorded

Total recorded pole replacements were consistent with the forecast, but there were variances at the program level (Table I-1)

• PLP replacements lower than forecast due to fewer assessments than forecast and fewer one-year due poles

• Poles from non-programmatic pole replacement and PLC-driven replacements higher than forecast

• Clarification of visual reject specifications resulted in increased rejects under the Det Pole Program

• Change in one-year due pole replacement criteria and shift in scope from 2016 into 2015

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2013 2014 2015Total, 2013-

152015 GRC Forecast Replacements

PLP 3,000 25,000 28,000 Det Pole 7,500 7,600 8,102 23,202 Total, All Programs 7,500 10,600 33,102 51,202

Recorded ReplacementsPLP - 299 10,690 10,989 Det Pole 12,251 14,065 23,198 49,514 Total, All Programs 12,251 14,364 33,888 60,503

Forecast vs. Recorded VariancePLP - (2,701) (14,310) (17,011) Det Pole 4,751 6,465 15,096 26,312 Total Variance 4,751 3,764 786 9,301

Pole Loading Program (PLP)

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Pole Loading Program (PLP) ProcessProcess Overview:

– Experienced assessor accesses pole to gather information for pole loading calculation:• Pole class (size), length, wood species, and groundline circumference,• Height, size, number, type and span length of attached conductors, as well as the size and weight

of attached equipment,• Height, number, and lead of guys supporting the pole and its attachments

– Desktop analysis completed to integrate data from the field assessment, design standards, and other data associated with the pole

– Measurements are entered into the pole loading software (SPIDACalc), appropriate wind loading case is selected, and safety factors are calculated

– Poles that are not compliant with G.O. 95 safety factors or SCE internal standards are identified and the appropriate remediation is designed and implemented.

– Remediation requires replacement or repair of the pole, including removal and reinstallation of all attachments.

– SCE began systematic assessment, evaluation, and remediation of poles in 2014• 2015 GRC approved a 7-year assessment plan• Approximately 200,000 PLP assessments required to be completed each year

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Pole Replacement Process

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• Poles identified for repair or replacement, poles are grouped and work order number is assignedIdentified for Remediation

• Poles assigned to design resourceReleased for Design

•Work orders in approval process, design completed, Joint Pole Agreements initiated, environmental, rights checks/railroad request submitted

Design Approval

•Work orders approved and pending release to construction based on all constraints being cleared Pole Program Clearance

•Work scope is assigned to construction resources and in scheduling process for final executionReleased to Construction

• Pole is installed in field and considered “used and useful” Installation

Remediation Timeframes

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Remediation Timeframes – Pole Loading Program

*Not to exceed time frames, poles may be replaced earlier due to operational circumstances, environmental clearances, or opportunities to reduce customer impact.

Determinants of Priority SCE‐Driven Remediation Timeframe*

Safety factor, location in high fire zones, presence of internal / external damage, etc.

72 hrs / 45 days

150 days

1 year

59 months

Pole Loading Program ChangesProgram Changes:

– SCE implemented new wind ratings across the service territory based on REAX wind study and historical information

• Introduced a new 24 pound per square foot wind area and increased number of poles in 12 psf and 18 psf areas

• New wind ratings implemented March, 2014

– Enhancements to SpidaCalc Pole Loading Software• The software enhancements allow wire tensions to change as the pole deflects under

various loads. (See workpaper pages 120-122)• SCE initially estimated approximately 19% Failure Rate for Assessed Poles

• Based on 5,000 pole sample filed with the Commission in July 2013• Current forecast failure rate is 9%

– 2018 GRC forecast reflects the changes

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Enhancements to Pole Loading Software Tool

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Mid‐2014, review of field personnel feedback indicated concerns about size of replacement poles and wire tension

In Q4 of 2014, Engineering and Pole Program Management undertook verification of the pole loading methodology and root cause analyses

Subsequent technical evaluation determined a more robust ‘pole loading’ calculation method would more accurately calculate safety factors, and developed an updated methodology

During the remainder of 2015 and in 2016, SCE undertook the following:• Conduct a study to asses the impact on pole loading failure rates using the new methodology

• Working with the vendor to incorporate the new calculations in their tool

• Testing the software and resolving computational performance issues

• Stopping pole loading related pole replacements and recalculating over 40,000 poles that were previously identified for replacement

• Rolling out new standards to affected personnel

Original failure rate of 19% forecast to drop to 9% as a result of pole loading software evolution

Original failure rate of 19% forecast to drop to 9% as a result of pole loading software evolution

Pole Replacement Unit Cost

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Pole Types

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Transmission “combo” pole Transmission only pole 

Distributiononly pole  

Transmission portion

Distribution underbuild

Pole Replacement Unit Cost (Distribution)Distribution Pole Unit Cost Variance Analysis (Table IV-21):

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Pole Replacement Unit Cost (Transmission)Transmission Pole Unit Cost Variance Analysis (Table IV-22):

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Row # Unit Cost Component 2012 Unit Cost (2015 $)

2015 Recorded (2015 $)

Variance in 2015 $

Variance as % of 2012 total unit

cost Summary of Drivers

(See following testimony for details)

1 Contractor $ 10,157 $ 11,970 $ 1,813 9%Increased work volume required increased utilization of

contractors and premium time2 Labor $ 2,837 $ 3,077 $ 240 1%

3 Material $ 4,000 $ 4,090 $ 90 0% Larger poles required by updated pole loading methodology

4 Other $ 1,008 $ 792 $ (216) -1%

5 Overhead $ 2,828 $ 2,137 $ (692) -3%Capital spending increased while total overhead remained

constant resulting in a lower allocation to pole spend

6 Totals $ 20,830 $ 22,065 $ 1,236 6%

7 Corporate Overhead $ 3,324 $ 3,726 $ 402

GRC Compliance with Commission Requirements

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Requirements for SCEs Pole TestimonySCE 2015 GRC Decision Identified Requirements for 2018 GRC filing:

1. SCE will provide a review of its efforts on recovery of costs from other companies that either jointly own or rent space on poles that must be replaced or repaired.

2. SCE will provide information on the number of jointly owned poles, the number of pole renters, and describe the arrangements for cost sharing with other parties.

3. SCE will provide additional analysis on options to remediate overloaded poles in ways other than repair or replace, and will specifically address the issues of removing attachments, strengthening poles, and increasing the recovery of costs from pole users.

4. SCE will address unauthorized attachments by providing quantitative information and describing their efforts to minimize their impact.

5. If SCE believes a Commission proceeding is needed to address issues raised by joint ownership and renters, SCE need not wait for its next GRC.

SCE will address (1)-(4) in detail in the following slides; (5) is addressed in testimony

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Requirement 1: Cost Sharing

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Requirement 1: Review of Efforts on Cost Recovery from Joint Owners and Renters

• Joint Owners– Each year, SCE submits pricing for the cost of pole installs to the

Southern California Joint Pole Committee– In the past, SCE submitted one pole material cost, regardless of the

class of the pole. (Class refers to the circumference of the pole.)– For 2016, SCE provided a separate set of costs for “H class” poles and

regular class poles since H class poles are larger and more expensive.– Every other year, SCE submits costs for pole related activities to the

Southern California Joint Pole Committee– These costs will be updated in 2017– SCE has proposed new cost categories for costs that were previously

reimbursed on a case by case basis

• Renters– SCE proposed charging market based rates to Commercial Mobile

Radio Service attachments, but the CPUC adopted the use of the statutory rates

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Requirement 1: Joint Pole Credits – Comparison of Forecast Methodologies

• 2015 GRC forecast methodology– “Top-down” approach relied on total capital credit dollars recorded– Divided total joint pole capital credit dollars recorded by poles replaced in all

programs and activities – Average for 2008-2012 was $840 per pole– 2015 total forecast was $34m (in 2015 $)

• 2018 GRC methodology– “Bottoms-up” approach focuses on joint pole billing data– 2015 programmatic pole replacement credits resulted in $2,216 per pole

replacement– 2018 total forecast is $57m (in 2015 $)– Total forecast based on

• programmatic replacements • non-programmatic replacements• new purchases of interest in poles• steel stubbing credit

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Requirement 2: Pole Occupancy & Ownership

SCE Pole Occupancy and Ownership(Table V‐26)

Ownership

Joint Sole Total

Renters Yes 11% 8% 19%

No 52% 29% 81%

Total 63% 37% 100%

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Requirement 3: Options to Remediate Poles• Steel Stubbing

– Steel stubbing restores strength to decayed poles; reduces replacement costs

– Extends life of a pole by at least 15 years, and most likely over 30 years

– Revised IPI inspection criteria in April 2016 for steel stub

– Installations expected to begin in 2017

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Steel Stub Installs & Expenditures 2017 – 2020 (Tables III – 12 and III – 13)

2017 2018 2019 2020

Count 720  1,608  2,472  2,547 

Total Cost(Constant 2015 $000) $  1,698  $  3,771  $  5,821  $  5,983 

Requirement 3: Options to Remediate Poles• Extended Truss

– An extended truss is similar to a steel stub, but extends further up the pole

– SCE is evaluating the use of an Extended Truss to remediate pole overloading

– Any decision on extended trussing will likely occur after the full implementation of steel stubs

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Requirement 3: Options to Remediate Poles• Use of Composite Sectional Poles

– Typically installed in forest areas to prevent damage from woodpeckers and bears

– No crane or specialized equipment needed

– Possible less costly solution for rear property line replacements

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Requirement 4: Unauthorized Attachments

• Credits Received for Penalty Payments– Joint owner must pay penalty and purchase ownership interest in pole– Renters must pay penalty ($500) which is reflected in Other Operating

Revenue

• Quantitative Information– SCE has found approximately 2.8% of its poles contain unauthorized

attachments– Existence of an unauthorized attachment does not necessarily result in

pole being overloaded

• SCE Efforts to Minimize Impact of Unauthorized Attachments– Additional inspector added– New unauthorized attachment process developed for renters

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Questions?

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