4. Summary of the Application

In this application, SoCalGas seeks authorization to deploy AMI and recover the associated costs from ratepayers through a balancing account mechanism. SoCalGas requests Commission approval to construct and operate a stand-alone gas AMI system at a cost of approximately $1.079 billion, including a 10% project contingency, and estimates that net present value benefits will exceed costs by approximately $27.3 million dollars, for a benefit cost ratio of approximately 1.03. SoCalGas expects to deploy approximately 6 million gas AMI meter modules, of which approximately 2.4 million would require new gas meters, whose costs would also be covered by this project. SoCalGas contends that this project will benefit ratepayers by reducing residential bills within two years of the completion of deployment. The SoCalGas estimate of benefits depends on several assumptions, including but not limited to estimates of conservation savings, and estimates of terminal value based on the continuing use and usefulness of a small portion of modules installed to replace failed meters and meet growth following the end of the AMI meter roll-out period.