QUESTION 1: - SoCalGas



QUESTION 1:

In Tab “Storage Func Fctr” of the EC Model, SoCalGas indicates 3 hard-coded numbers for its storage cost analysis by storage products, namely: 35.29% for inventory, 28.916% for injection, and 35.794% for withdrawal. Please provide the data reference and formula to verify the basis of how SoCalGas arrived at these values and conclude on the reasonableness of these numbers for purposes of the storage functionalization factors.

RESPONSE 1:

The calculation of the numbers is in Emmrich WP-48 attached below. The inputs were developed by storage staff experts and are reasonable based on their expertise and experience.

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QUESTION 2:

In Tab “Dist O&M Func Factrs” of the EC Model, SoCalGas provides a hard-coded value of 67.2% as the DIR portion of total customer-related. Further, there are other cells in the Tab that are hard-coded, including cells G16, G23, G30, G37, G44, and G51. Please provide the data reference and formula to verify the basis and reasonableness of these hard-coded number values for purposes of the allocation of distribution O&M accounts customer-related functional factors. Please explain why these values are directly assigned to the customer-related function.

RESPONSE 2:

Attached is the EC Model as updated with FERC Form 2 2007 data showing the calculation of the previously hard coded numbers. The allocation of Customer-related costs was provided by Distribution staff as shown in Work paper Table A-1 shown in the “Dist O&M Func Factrs” tab beginning in cell V8. As shown in the Distribution staff work paper only the customer-related costs are directly allocated to the customer-related function.

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QUESTION 3:

In Tab “Labor Factor” of the EC Model, the Labor % in cells F51 and F52 are based on formulas that use the hard-coded number in cells G51 and G52 DRA notes that the sum of the cells G34 through G43 do not match the number value in cell G51. Also, the sum of the cells G44 through G49 do not match the number value in cell G52. Please provide the data reference and formula to verify the basis and reasonableness of the hard-coded number values in cells G51 and G52 for purposes of the deriving the transmission-related portion of the Labor factor.

RESPONSE 3:

Please look at cell G8 of the “Labor Factor” tab which indicates that the labor numbers are the Labor Portion of O&M as shown in FERC Form 2 p.354. SoCalGas does not have detailed labor data by FERC account. SoCalGas tracks the overall labor portion by functional category; such as: storage, transmission, distribution; therefore, the percentages used to allocate dollars by FERC account are based on the overall percent of labor dollars compared to total O&M. The transmission allocation has been corrected to match the operations and maintenance percentages in transmission in cells G34 through G43 and G44 through G49. The updated EC model is attached in response 4. This is a reasonable approximation of transmission labor versus non-labor O&M costs. The storage and transmission labor costs are directly allocated to the storage and transmission functions respectively. No transmission or storage costs are allocated to the customer-related, high pressure or medium pressure distribution function.

QUESTION 4:

In Tab “Labor Factor” of the EC Model, the sum total of the Labor Portion in cells I87 through V87 include the cells from Row 29 (functionalized Account 837) instead of those cells from Row 30 (the sum total of the Labor Portion of functionalized Storage accounts). Please confirm whether the spreadsheet formula is in error and those cells from Row 30 should instead be included in cells I87 through V87.

RESPONSE 4:

Attached is WP-1 adjusted to reflect DRA’s allocation formula using Row 30 as the allocator for the labor portion of storage. Using Row 30 as the allocator would result in the Storage function being allocated 5.5% of A&G costs which is unreasonably high considering that Storage-related labor costs make up only 4.2% of overall labor costs and.

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QUESTION 5:

If it is correct that Row 30 cells should instead be included in cells I87 through V87, please provide DRA with the necessary correction to the A&G Labor Factors, in both e-copy and hard copy of the spreadsheet.

RESPONSE 5:

Please see response 4.

QUESTION 6:

Based on your response from the previous questions PZS9-4 and PZS9-5, please state whether the foregoing error also impacts the A&G multi factor, and if so, please provide DRA with the necessary correction to the A&G multi factors, in both e-copy and hard copy of the spreadsheet

RESPONSE 6:

Changing the labor factor also changes the Multi factor since the Multi Factor is the simple average of the Labot, Net Plant and O&M factors. WP-1 in response 4 shows the adjusted Multi factor allocator in the A&G Functions Factor tab.

QUESTION 7:

In Tab “Net Plant Factor” of the EC Model, SoCalGas indicates that the net plant factors (NPFs) used for purposes of the A&G expense factors are found starting in cell F60 through R60. Cell A60 is captioned “Net Plant Factor Excluding Storage and General Plant.” If cell A60 is correctly captioned and SoCalGas really intented to exclude Storage Plant, then please explain why it would be correct to include the values in Row 23 (which is the sum of storage plant) for purposes of the calculation of values in cells F60 through R60. Please confirm whether the inclusion of values in Row 23 for the calculation of F60 through R60 NPF values are in error. If so, please provide DRA with the necessary correction to the NPFs, in both e-copy and hard copy of the spreadsheet.

RESPONSE 7:

The caption is incorrect and has been corrected in the attached EC Model in response 4. The Net Plant factor used in the EC el includes storage, transmission and distribution.

QUESTION 8:

Based on your response from the previous question PZS9-7, please state whether the foregoing error also impacts the A&G multi-factor, and if so, please provide DRA with the necessary correction to the A&G multi factors, in both e-copy and hard-copy of the spreadsheet.

RESPONSE 8:

N/A.

QUESTION 9:

In Tab “Net Plant Factor” of the EC Model, SoCalGas uses the data on Adjusted Recorded NBV values yearend 2002 to derive the NPFs. Please explain why it would be appropriate to use the yearend 2002 NBV values for purposes of the NPF calculations and whether there are no available data or more recent updated information on NBV values. If otherwise, please provide DRA with the more recent updated information on NBV values and recalculate the NPFs accordingly.

RESPONSE 9:

The label was not updated it should state 2007.

QUESTION 10:

In Table 22 of Mr. Emmrich’s EC Testimony, SoCalGas presents the footage of service lines and distribution mains as of the date 1/1/2002. Please explain why it would be appropriate to use the footage data as of this 1/1/2002 and state whether SoCalGas has not installed additional service lines and distribution mains since the 1/1/2002 date. Otherwise, please provide DRA with the updated information on the footage of service lines and distribution mains, including an updated calculation of the percent of service line footage and distribution mains footage that are shown as 49.6% and 50.4%, respectively, as well as the distribution main footage that are shown as 7.9% and 92.1% for HPD and MDP, respectively, in Table 22. Please provide the updated information in both e-copy and hard copy of the spreadsheet for Table 22.

RESPONSE 10:

The footage study took several months to accomplish by calculating footage from system maps. The study has not been redone and the ratios are still a good representation of the percentage of mains and services and MP and HP distribution because they tend to increase in step by the rate of customer grow or by about 1.3% per year from 2002 to 2006 and only 1% in 2007 and 2008.

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