Dive Brief:
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Southern California Edison (SCE) has filed a rate case that seeks California Public Utilities Commission (PUC) approval for $23.3 billion in capital spending from 2016 through 2020.
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The capex request, which applies to both ratebase and non-ratebase items, includes $2.1 billion in grid modernization expenditures between 2018 and 2020 to improve safety and reliability, facilitate distributed energy resource (DER) adoption and enable DERs to provide grid services.
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SCE did not provide forecast ranges for total capital expenditures or authorized rate base, cautioning it has no prior experience obtaining regulatory approval for capital expenditure requests pertaining to DER adoption and integration.
Dive Insight:
SCE has made significant steps in engaging DERs, such as a contract it signed in August for a 20 MW storage project at its Pomona facility in the east Los Angeles Basin.
To accommodate DERs, SCE, as well as California’s two other investor owned utilities, have been tasked with conducting an integrated capacity analysis. On direction from regulators, those studies will seek the full locational value of DERs and propose demonstration projects to prove their conclusions.
SCE is now looking at spending capital to facilitate DER integration. Specifically, the utility is seeking regulatory approval on funding for updating automation systems on the worst performing distribution circuits, providing adequate communications equipment to support these automation upgrades, and deploying analytics tools to advance system planning and grid operations.
Because it has no past experience with DER capex requests, SCE did not provide a forecast range for total capital expenditures or authorized rate base. Past rate cases, the company wrote, "may not be predictive for grid modernization capital expenditures."
Overall, for its 2018 test year SCE is requesting revenue requirement authorization of $5.885 billion, a $222 million increase from 2017, which represents a 2.7% increase over current authorized total rates.
