Icomp Claim Form s3
A.15-05-002, et al. COM/MP6/dc3 PROPOSED DECISION
COM/MP6/dc3 PROPOSED DECISION Agenda ID #15362
Quasi-Legislative
Decision
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of San Diego Gas & Electric Company (U902M) for Review of its Safety Model Assessment Proceeding Pursuant to Decision 14-12-025. / Application 15-05-002(Filed May 1, 2015)
And Related Matters. / Application 15-05-003
Application 15-05-004
Application 15-05-005
DECISION GRANTING COMPENSATION TO MUSSEY GRADE ROAD ALLIANCE FOR CONTRIBUTION TO DECISION 16-08-018
Intervenor: Mussey Grade Road Alliance / For contribution to Decision (D.) 16-08-018Claimed: $47,583.82 / Awarded: $46,473.17
Assigned Commissioner: Michael Picker / Assigned ALJ: Colette Kersten
PART I: PROCEDURAL ISSUES
A. Brief description of Decision: / Interim decision adopting the multi-attribute approach (or utility equivalent features) and directing utilities to take steps toward a more uniform risk management framework.B. Intervenor must satisfy intervenor compensation requirements set forth in Pub. Util. Code §§ 1801-1812:
Intervenor / CPUC VerifiedTimely filing of notice of intent to claim compensation (NOI) (§ 1804(a)):
1. Date of Prehearing Conference (PHC): / 7/27/2015 / Verified
2. Other specified date for NOI:
3. Date NOI filed: / 8/21/2015 / Verified
4. Was the NOI timely filed? / Yes
Showing of customer or customer-related status (§ 1802(b)):
5. Based on ALJ ruling issued in proceeding number: / R.13-11-006 / Verified
6. Date of ALJ ruling: / 7/24/2014 / 07/21/14
7. Based on another CPUC determination (specify):
8. Has the Intervenor demonstrated customer or customer-related status? / Yes
Showing of “significant financial hardship” (§ 1802(g)):
9. Based on ALJ ruling issued in proceeding number: / R.13-11-006 / Verified
10. Date of ALJ ruling: / 7/24/2014 / 07/21/14
11. Based on another CPUC determination (specify):
12. 12. Has the Intervenor demonstrated significant financial hardship? / Yes
Timely request for compensation (§ 1804(c)):
13. Identify Final Decision: / D. 16-08-018 / Verified
14. Date of issuance of Final Order or Decision: / 8/29/2016 / Verified
15. File date of compensation request: / 10/3/2016 / Verified
16. Was the request for compensation timely? / Yes
PART II: SUBSTANTIAL CONTRIBUTION
A. Did the Intervenor substantially contribute to the final decision (see § 1802(i), § 1803(a), and D.98-04-059).
Intervenor’s Claimed Contribution(s) / Specific References to Intervenor’s Claimed Contribution(s) / CPUC Discussion /Note: For definition of contribution types, see Comment 2 in Section C.
For definition of issue, see Comment 1 in Section C.
For reference abbreviations, see Comment 3 in Section C
1. MGRA along with other parties has argued for a common framework for utility risk management that enables the Commission to ensure that a common set of standards are applied across all of California.
MGRA was the first to argue that wildfire risk profiles should be based on common assets and landscapes that span utility boundaries.
Type: Contributor
Issue: Uni / MGRA-Prt, p. 3: “While each utility may be different in the specifics of its customer base, assets, and environments, California utilities may share common characteristics: gas pipelines, electrical transmission and distribution lines in fireprone areas, etc. It is our hope that best practices can be developed for each of these domains.”
MGRA presentation at 1/25/2016 workshop.
MGRA-SED-Rpl, p. 10: “While utilities may have unique collections of assets and service area types, the specific assets and service area types may be
common between utilities, and share common risks. For instance, in the case of wildfire, the service areas of SCE and SDG&E show many common characteristics.”
Decision, p. 58 – “For example, SED Staff and parties make a convincing argument that specific risk profiles for wildfire should be based on common assets and environments rather than utility location…
We agree with parties that adopting a common framework will ultimately streamline proceedings, minimize the amount of resources and time devoted to understanding the intricacies of various models and provide useful comparisons” / Verified
2. MGRA was the first to mention the concept of “test drives” that utilities should use to evaluate the Joint Intervenor approach to risk analysis, and that the decision to fully adopt the Joint Intervenor or any other method should dependent on the outcome.
Type: Initiator
Issue: Uni / MGRA-ISWP-Rpl, p. 6 – “In order to fully understand the differences between proposed models, we’d suggest that the
Commission ‘test drive’ any candidate models prior to approving them for adoption as the ‘common’ probabilistic risk analysis model. Specifically, a small set of detailed problems should be
posed which are common across more than one utility.”
Decision, p.114 – “We agree with Joint Intervenors, ORA, UCAN, SCE, and MGRA that ‘test drives’ of the approach, using a small set of detailed test problems (at least five), constitute a good approach to evaluate Joint Intervenor probabilistic modeling of safety risks.”
Decision, p. 118 – “MGRA makes a good point in its reply comments that we need to ask ourselves whether high-level theoretical discussions would further shed light on the pros and cons of the Joint Intervenor Approach or whether it would be more desirable to ―start defining solid, tangible risk problems that clearly illustrate the concerns that utilities and other parties raise.”
Decision, p. 173 – “Consistent with MGRA‘s suggestion, we also support the idea of learning how the approach is being used by other utilities around the country, including analysis of specific risks of interest to California utilities. This could also be one of the first steps in the evaluation of the Intervenor Model before potential full scale adoption at the end of the second phase of this proceeding.” / Verified
3. MGRA analyzed the issue of low-probability, high-impact events and their impact on risk scoring methods. Observations were offered both of utility methodologies, the Joint Intervenor approach, and SED’s analysis. An issue that may have adversely impacted safety for high-consequence events was identified in the Proposed Decision and the issue was corrected.
Type: Contributor
Issue: RA / MGRA-SWP-Rpl, p. 7 – “Their method of artificially amplifying consequence with respect to frequency is flawed. Instead, consequence scores should accurately reflect all impacts and not just obvious impacts.”
Decision, p. 23 – “MGRA argues that the utility assertion that many high-consequence events deserve high risk scores is valid… MGRA agrees with SED Staff that ―modifying the traditional risk formula (risk=fxC) in order to emphasize high consequence events undermines the whole notion of using risk formulas and risk scores to evaluate risks.”
Decision, p. 103 – “In comments, MGRA express concerns that high impact/low probability events need to be described in ―greater detail in order to clearly show how contributions from extreme events would be incorporated.”
Decision, p. 91 – “MGRA expressed concerns in comments on the original PD that limiting the consequence to 100% for the worst possible consequence would seriously compromise the risk scoring process if a new risk were discovered that exceeded the 100% value. MGRA proposed as a possible solution that for even more extreme risks than originally anticipated, the 100% could be exceeded. This proposal is in fact in agreement with the Commission‘s understanding of the Joint Intervenor model that the 100% is only a convenient mark on a yardstick, which could be exceeded for even more extreme events.”
Decision, p. 113 – “In response to the unsettling issues with the current 1 to 7 scales, SED Staff and parties, including Joint Intervenors, ORA, UCAN, and MGRA make a compelling case that 7x7 logarithm scale scores should ultimately be abandoned in favor of using continuous linear scales/scores.
For ease of computing, for LoF, probabilities should be computed on a scale from 0% to %100, and for CoF, attribute ranges can be created naturally as opposed to being constrained to fit a
modeling function.” / Verified
4. MGRA analyzed the Joint Intervenor approach, and the Commission adopted our list of advantages for it. This included the use of subject matter experts estimates while full data metrics necessary for accurate risk estimations are being developed.
Type: Contributor
Issue: RA / Decision, p. 115 – “In addition to the advantages cited in the introduction to this section, we agree with MGRA‘s list of advantages including that the Intervenor Approach: 1) is a superior mitigation strategy over simple ranking of projects by cost/benefit analysis; 2) uses subject matter experts as an interim measure to deal with lack of data; 3) is compatible with the ALARP approach which helps determine constraints or ―risk tolerance – that need to be managed; and 4) is able to incorporate exogenous impacts on asset conditions such as high winds.”
Decision, p. 127 – “As to next steps, MGRA recommends, ‘In the interim, leverage data that is currently being collected regarding weather, fire, outage rates, and inspections to obtain initial estimates of risk. In the longer term, determine what sort of data needs to be gathered in order to adequately quantify unknown risks.’”
Decision, p. 128 – “For asset based risks, in the absence of objective asset condition data, calibrated subject matter expertise is an essential component of developing the distributions used in risk analysis.” / Verified
5. MGRA joined with UCAN in supporting SED’s proposed ALARP framework and it’s approach to explicitly specifying risk tolerance, something that current utility risk models fail to do. MGRA also pointed out that ALARP is complimentary to the Joint Intervenor approach.
Type: Contributor
Issue: ALP
/ Decision, p. 75 – “MGRA and UCAN strongly support ALARP and ask the Commission to take the necessary steps to enable it to be used as a framework for utility risk management.”
Decision, p.76 – “MGRA and UCAN assert that ―utilities should not themselves be wholly responsible for establishing the risk tolerance level applicable to ratemaking.”
Decision, pp. 80-81 – “Therefore, the ALARP framework, or its equivalent, should be developed over time, not necessarily in this first S-MAP, but in parallel or following the development of probabilistic models of adverse events… we agree with SED Staff and parties that there is no specification of risk tolerance in current utility models. The Commission should adopt explicit risk standards over time” / Verified
6. MGRA argued along with other intervenors for the removal of shareholder financial risks from the utility risk assessments.
Type: Contributor
Issue: Fin / Decision, pp. 120-121 – “Accordingly, SED Staff recommends that the utilities should remove shareholders’ financial interests from consideration in their risk models and decision frameworks used to support rate case expenditure proposals… With the exception of Joint Utilities and CUE, Joint Intervenors, ORA, UCAN, and MGRA generally agree with this finding and recommendation with limited exceptions.”
Decision, p. 122 – “MGRA questions this logic since it implies that ‘what is good for the utility is good for ratepayers.’ ‘However the entire CPUC regulatory framework is premised on the assumption that utility interests are separate from ratepayer interests, and must be carefully regulated.’ With this line of thinking, any financial losses may be passed to ratepayers, but there are no assurances that financial gains will be passed on to ratepayers.”
Decision, p. 123 – “For now, we agree with SED staff‘s recommendation that the utilities should remove shareholders’ financial interests from consideration in their risk models and the decision frameworks used to support rate case expenditure proposals, especially at the operational level, unless the utility can make a good case for an exception in its RAMP filing.”
/ Verified
B. Duplication of Effort (§ 1801.3(f) and § 1802.5):
Intervenor’s Assertion / CPUC Discussiona. Was the Office of Ratepayer Advocates (ORA) a party to the proceeding? / Yes / Verified
b. Were there other parties to the proceeding with positions similar to yours? / Yes / Verified
c. If so, provide name of other parties:
TURN, UCAN, CUE, Indicated Shippers/Energy Producers and Users Coalition / Verified
d. Intervenor’s claim of non-duplication:
MGRA worked closely with other intervenors, particularly when our position was in close alignment with theirs. This led to joint filings with TURN and UCAN.
MGRA’s position on the Joint Intervenor proposal was more cautious than other non-utility intervenors. We provided a critique of the model’s handling of high-consequence low-probability events and we urged a full vetting process centered on practical “test drives” of the model. This position was ultimately adopted by the Commission. / Verified
C. Additional Comments on Part II:
# / Intervenor’s Comment / CPUC Discussion /1 / Contribution Types / There are various types and levels of contribution that the Alliance interventions provided. These are defined and explained below.
Primary / A Primary contribution is one in which the Alliance made a unique and definitive difference in supplying information not supplied by any other party. The Alliance can show that "but for" its intervention, the Decision would have likely reached a different conclusion.
Initiator / In instances where the Alliance was an "Initiator", it was the first to bring a particular issue or analysis to the Commission's attention. Other parties subsequently made additions or improvements that were accepted by the Commission.
Contributor / While not initiating an analysis or study, the Alliance made a significant contribution to it. Also, in decisions or conclusions which take into account many different factors, the Alliance's results contribute one or more of these factors.
Improvement / The Alliance commented on an existing process or measure and its suggestion was adopted in the final decision.
Complimentary / The Alliance chose a different method or analysis than that used in the Final Decision, but which is consistent with it and supports the same results.
Alternative / The Alliance reached a conclusion or presented an analysis at variance with the Decision or with the Final EIR/EIS, but which raised important points.
/ Verified
2 / Abbreviations for issues that MGRA was involved in:
Gen: General activities required for participation, including procedural activities, review of filings.
RA: Risk Analysis – Risk analysis methodologies, metrics, use of subject matter experts
Uni: Uniformity – Common methodology across utilities, “test-drive” of methods.
ALP: ALARP – ALARP proposal, cost/benefit, risk tolerance
Fin: Financial – Removing shareholder financial interests
3 / Abbreviation Document
MGRA-Prt / MUSSEY GRADE ROAD ALLIANCE SMAP PROTEST
MGRA-PHC-Smt / MUSSEY GRADE ROAD ALLIANCE PREHEARING CONFERENCE
STATEMENT
MGRA-Wkp1-Cmt / MUSSEY GRADE ROAD ALLIANCE PREHEARING CONFERENCE
STATEMENT
MGRA-SWP-Cmt / JOINT COMMENTS OF THE MUSSEY GRADE ROAD ALLIANCE (MGRA) AND THE UTILITY CONSUMERS’ ACTION NETWORK (UCAN) ON THE STAFF WHITE PAPER AND UTILITY UNIFORMITY REPORT
MGRA-ISWP-Cmt / COMMENTS OF THE MUSSEY GRADE ROAD ALLIANCE (MGRA) ON
THE INTERVENOR SMAP WHITE PAPER
MGRA-ISWP-Rpl / REPLY OF THE MUSSEY GRADE ROAD ALLIANCE (MGRA) TO PARTY
COMMENTS ON THE INTERVENOR SMAP WHITE PAPER
MGRA-SED-Cmt
/ MUSSEY GRADE ROAD ALLIANCE COMMENTS ON THE SAFETY AND
ENFORCEMENT DIVISION EVALUATION REPORT
MGRA-PD-Cmt / MUSSEY GRADE ROAD ALLIANCE COMMENTS
ON THE PROPOSED S-MAP DECISION
MGRA-PD-Rpl / MUSSEY GRADE ROAD ALLIANCE REPLY TO PARTY COMMENTS
ON THE PROPOSED S-MAP DECISION
PART III: REASONABLENESS OF REQUESTED COMPENSATION