7. URG - Coal Generation

SCE's current coal-fired generating resources consist of Four Corners Generating Station (Four Corners) Units 4 and 5, of which SCE has a 48% ownership interest. Arizona Public Service operates the Four Corners Plant. SCE provided information on Four Corners Coal costs and performance during the Record Period. These units produced over 11 million MWh of generation for SCE.

DRA originally recommended disallowances associated with three outages at the Four Corners Unit 4. DRA has dropped two of its recommendations, and now recommends a $50,000 disallowance associated with an outage beginning January 17, 2009 that occurred when a power feed circuit breaker to a motor control center failed and damaged the digital processor-based control system for coal conveyer equipment. DRA contends that the outage was due to SCE's imprudent maintenance and an unreasonable design failure in not having backup power, backup feed systems, and updated backup stocks of single-point-of-failure coal system controls.

Appendix J to Exhibit SCE-6 is an Improvement Opportunity Alert (Alert) titled "U4&5 Coal Systems Control Power Failure - RCD 2009-004." The Alert's "lessons learned" section lists a number of problems and solutions related to the outage event. These include:

SCE admits that the MCC was equipped with overload devices which did not mitigate the power surge sufficiently to prevent damage to the local control system. However, SCE contends that correction of either or both of the back up power systems noted in the Alert would not have prevented the outage, because the outage did not occur due to an extended local power failure. SCE also contends that the outage occurred because diagnosis and repairs to the control system due to damage caused by the power surge took longer to finish than the operational time that the coal stockpile reserve provided. SCE claims that DRA fails to address the actual reason for the outage, and that DRA misunderstands the information provided in the Alert.

SCE maintains that the design of the coal conveyer system already included a contingency for online emergency repairs. Regarding Allen Bradley processors, SCE claims that the station did have a spare processor in the warehouse at the time of the event, which was installed as part of the repair. SCE says that it is still considering the cost-effectiveness of updating firmware and software when the spare is installed and placed into service, versus while in warehouse storage. Finally, SCE claims it is not cost-effective to install a true manual control system. Even if a manual control system did exist at the time of the outage, SCE contends this would not have prevented the outage because the entire digital control system was out of service, which would have made any manual features inoperable as well.

7.1. Discussion

We find that SCE acted reasonably with respect to the January 17, 2009 outage at the Four Corners Unit 4. In hindsight, it appears possible that SCE could have taken measures which would have prevented the outage. However, SCE had already taken preventative measures ahead of the outage, including having a spare Allen Bradley processor available and having analyzed the cost-effectiveness of manual control system. DRA has not presented clear evidence of any violation of the reasonable manager standard, while SCE has presented substantial evidence of reasonableness.

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