VII. Steel Pole Attachment Charge

The following discussion addresses issues between the parties related to the development of the steel pole attachment charge, which is detailed in Attachment B to this decision. The issues between the parties specific to steel poles relate to the calculation of the net pole investment. Issues regarding ROW overhead, maintenance expenses, A&G expenses and depreciation are the same as for wood poles, since those factors apply to both wood and steel poles.

A. Net Pole Investment

There are two issues related to net investment for steel poles-the number of steel poles over which the pole plant costs should be spread and the value of the appurtenance adjustment factor that accounts for pole costs that are not necessary for pole attachment.

Regarding the number of poles over which the steel pole investment will be spread, Complainants use a count of 1,244 based on information supplied by SDG&E in its June 5 filing. In its August 5 response, SDG&E revised the total number of steel poles to 811. It is not clear why SDG&E's depiction of the total number of poles has changed. Regarding wood poles, we noted that the change from 13,430 to 13,344 (0.6% reduction) is minor and assumed that the more recent total is the appropriate number to use for this proceeding. However, the change in the steel pole inventory from 1,244 to 811 (34.8% reduction) is significant and to a large extent, other than the indication that "SDG&E performed a further analysis of the Summary of Library Numbers for Account E355, which resulted in the attached Revised Summary,"²⁷ unexplained. It is questionable as to whether 811 is the actual number of steel poles or if the "further analysis" resulted in identification of non-attachable poles that are not now included in the count. In the discussion related to wood poles, we indicated that both attachable and non-attachable poles should be included in the pole count for determining the average pole cost. To ensure that certain poles are not being excluded from the count while the related costs remain in the plant balance, we will use the earlier count of 1,244 steel poles to determine the net pole investment.

The second issue has to do with the appurtenance adjustment factor for steel poles. Complainants use the same 15% factor that was applied to wood poles and cite the same reasoning and precedents as for wood poles. SDG&E claims that steel transmission poles are configured and manufactured entirely differently from wood transmission poles and that no appurtenances and fixtures are charged to the pole and fixture plant account. Complainants responded to SDG&E's claim by citing the example of cross arms, which SDG&E does not consider to be an appurtenance since it is an integral and permanent part of the steel pole structure. Complainants argue that cross arms are one of the specific items that the FCC has identified as being an appurtenance and should be removed.

The 15% appurtenance adjustment factor was derived for wood distribution poles. In many respects wood distribution poles are similar to wood transmission poles. As discussed in the previous section regarding the wood pole attachment charge, SDG&E agreed that 15% was appropriate for a majority of the wood transmission poles but argued that recent pole configuration practice specific to SDG&E would reduce the factor to 10.5%. We determined that, for this proceeding, a 15% factor was appropriate for wood transmission poles. However, it is clear that the characteristics of wood distribution poles and steel transmission poles are different to the extent that there is no basis for applying a 15% reduction factor, which is based on an analysis of wood distribution pole appurtenances, to a steel transmission pole. Whether that factor should be 0% as claimed by SDG&E, or some higher number as indicated by the Complainants, cannot be determined without a thorough analysis specific to steel transmission poles. That analysis has not been provided. Without better information, we decline to make any adjustment for appurtenances related to steel pole investment.

The parties agree on a steel pole investment amount of $34,664,075. Dividing that amount by 1,244 poles results in an average investment per pole of $27,865.01. There is no adjustment for appurtenances, so that amount is divided by the application factor of 2.458, resulting in a net investment of $11,336.46 per steel pole. This is the amount included on line 1 in Attachment B.

B. Other Items

The remaining calculations for determining the attachment fee for steel poles are identical to that for wood poles. The principles and values for the factors related to ROW overhead, maintenance expense, A&G expense, depreciation expense, taxes and return are the same for wood and steel poles and are discussed in the previous section, "Wood Pole Attachment Charge." The calculation of the steel pole attachment rate is shown in Attachment B and results in an annual fee of $278.97 per pole.