1. Summary

In this proceeding, Southern California Gas Company (SoCalGas) requests authority to develop and deploy a gas-only advanced metering infrastructure (AMI) system throughout its service territory. SoCalGas estimates that this new metering and communications system would cost, in present value terms, approximately $1.0396 billion to implement and maintain over the life of the system, and would provide total benefits of $1.0669 billion, resulting in a project benefit-to-cost ratio of 1.03 and a margin of net benefits of $27 million.

We find that extending AMI functionality to SoCalGas' service territory is consistent with several of the state's energy objectives. Furthermore, we find that the business case presented in favor of the SoCalGas AMI proposal provides reasonable assurance that the project can be cost-effective given adequate safeguards. We approve this application, with certain modifications in order to offer greater security to ratepayers and SoCalGas' current meter-reading workforce. In particular, we authorize contingency funding at 7%, consistent with past AMI projects approved by this Commission, and modify the risk sharing mechanism for cost-overruns. Additionally, we direct SoCalGas to develop and present in a public workshop a dedicated plan for AMI outreach and conservation support, along with semiannual reporting on the gas conservation impacts of this project.

Finally, the decision recognizes that SoCalGas' AMI project will, over time, eliminate full-time and part-time meter reading positions. We are concerned with the impacts of the project on SoCalGas employees, especially in the current challenging economic climate. To assist SoCalGas employees displaced by the project, we direct SoCalGas to increase funding allocated for employee retention and retraining by $1 million. This transition fund should be utilized to extend severance, vocational training, and other transitional opportunities to affected meter reading employees.

With these modifications, we authorize funding for SoCalGas' AMI proposal at $1.0507 billion. This proceeding is closed.