X. Assignment of Proceeding
Carl W. Wood is the Assigned Commissioner and Dorothy Duda is the assigned ALJ in this proceeding.
1. D.02-03-048 provides the guidelines for calculating the annual cost-based charge that SDG&E can impose on Adelphia for attachment to poles in the transmission ROW on private land.
2. SDG&E and Complainants were unable to reach an agreement on the cost based charge for attachment to poles in the transmission ROW on private land.
3. On June 5, SDG&E submitted its proposed annual charge of $69.36 per pole for attachment to poles in the transmission ROW on private land
4. On July 5, Complainants filed their opposition to SDG&E's proposal and included calculations, which resulted in proposed annual attachment fees of $21.88 per wood pole and $239.33 per steel pole.
5. On August 5, SDG&E filed a response to Complainants' opposition. SDG&E modified its proposal to include separate annual fees of $33.41 per wood pole and $586.88 per steel pole.
6. On August 13, Complainants filed a reply to SDG&E's August 5 response.
7. The 12/31/00 wood pole plant balance is $34,678,260, which includes $466,171 for stubs and anchors. The total includes investment related to both attachable and non-attachable poles.
8. SDG&E's depiction of the number of wood poles, as of 12/31/00, changed from 13,430 in its June 5 submittal to 13,344 in its August 4 response.
9. SDG&E reduced the updated 12/31/00 wood pole count of 13,344 by 589 to account for multiple pole structures where only one pole is attachable.
10. In setting cable attachment rates, both the Commission and FERC have previously used an appurtenance adjustment factor of 15% for wood distribution poles for the purpose of developing net pole investment.
11. D.02-03-048 defines the ROW overhead factor for transmission poles as the investment in transmission ROW for poles divided by total net electric transmission plant excluding land and buildings.
12. The ROW overhead amount, on a gross basis, is $17,863,806.
13. The deferred tax amount associated with the ROW overhead is $1,230,148.
14. The amortization reserve associated with the ROW overhead is $2,480,013.
15. The gross balance for total transmission plant, less land and buildings, is $614,354,508.
16. The depreciation reserve that is associated with total transmission plant, less land and buildings, is $293,470,537.
17. The deferred tax amount that is associated with total transmission plant, less land and buildings, is $42,306,038.
18. D.02-03-048 specifies that the rates developed in this proceeding apply to transmission poles in private ROW.
19. For transmission poles, 68% are in private ROW.
20. The historical maintenance expense factors, as defined by this decision, are 0.79% for 1996, 0.89% for 1997, 1.15% for 1998, 1.21% for 1999 and 0.98% for 2000.
21. The historical A&G expense factors, as defined by this decision, are 2.43% for 1996, 2.08% for 1997, 3.22% for 1998, 2.90% for 1999 and 2.28% for 2000.
22. Net loaded pole investment is composed of poles and fixtures (93.04%), land (0.81%) and land rights (6.15%).
23. The application factor for poles and fixtures is 2.458; the factor for land is 1.074 and the factor for land rights is 1.292.
24. The depreciation rate for transmission poles and fixtures associated with the Southwest Power Link (SWPL) is 4.08%, while the depreciation rate for all other transmission poles and fixtures is 3.60%.
25. The amortization rate for land is 0%.
26. The amortization rate for land rights is 1.01%.
27. The transmission poles and fixtures plant balance includes the total company amount including that associated with SWPL.
28. SDG&E's depiction of the number of steel poles, as of 12/31/00, changed from 1,244 in its June 5 submittal to 811 in its August 5 response.
29. Based on an analysis of wood distribution poles, Complainants use an appurtenance adjustment of 15% for steel transmission poles, while SDG&E maintains that the appropriate adjustment for steel transmission poles is 0%.
30. The values for the ROW overhead factor, the cost of ownership factor and the space allocation factor are the same for wood and steel transmission poles.
1. Stubs and anchors are necessary pole related items and are included in the plant total of $34,678,260, which is used to develop the net wood pole investment.
2. Since there is a minimal difference in SDG&E's depiction of the 12/31/00 wood pole count, from the June 5 submittal to the August 5 response, it is reasonable to use the more recent count of 13,344 wood poles.
3. In determining investment per wood pole, the plant balance for wood transmission poles, which includes costs for both attachable and non-attachable poles, should be spread over all 13,344 wood transmission poles, not just the attachable poles.
4. For the purpose of developing an appurtenance adjustment factor, wood distribution poles and wood transmission poles have similar characteristics. Therefore, it is reasonable to use a 15% appurtenance factor for wood transmission poles for this proceeding, since a deviation from this value has not been justified.
5. Consistent with the definition of net plant, in converting the ROW overhead investment to a net plant amount, both the amortization reserve and the deferred taxes should be deducted from the gross plant amount. We therefore adopt SDG&E's calculated net amount of $14,153,645 for the ROW overhead numerator.
6. We will not alter the provisions of D.02-03-048, which specifically define how the ROW overhead factor should be calculated.
7. Complainants' calculation of the ROW overhead factor denominator, on a gross plant basis, conforms to the provisions of D.02-03-048 and will be adopted.
8. SDG&E's calculation of the ROW overhead factor denominator is inconsistent with the provisions of D.02-03-048 and will not be adopted.
9. The application factors, which are used to convert certain plant amounts or expense factors from a gross basis to a net basis, must be calculated in a manner such that the relevant depreciation/amortization reserves and deferred taxes are appropriately incorporated in the result.
10. To determine the denominator for the transmission pole ROW overhead factor, on a net plant basis, the depreciation reserve amount of $293,470,537 and the deferred tax amount of $42,306,038 should be deducted from the adopted gross plant amount of $614,354,508. The adopted result is $278,577,933.
11. In order to allocate transmission pole ROW overhead costs to poles in the private ROW, the calculated overhead factor of 5.08% should be divided by 68%, which is the percent of poles in transmission ROW on private land. This results in a ROW overhead factor of 7.48%.
12. The direct relationship of expense account 560 - operation supervision and engineering, account 566 - miscellaneous transmission expenses, and account 573 - maintenance of miscellaneous transmission plant to the maintenance of transmission poles has not been demonstrated. Therefore allocated portions of these accounts will not be included in the development of the maintenance expense factor.
13. Maintenance expense account 568 - maintenance supervision and engineering should be reflected in the maintenance expense factor analysis as a 3.75% overhead to all other maintenance expense accounts. The maintenance expense factor is then defined as account 571 - maintenance of overhead lines, with account 568 loading, divided by the sum of the balances for plant accounts 354 - towers and fixtures, 355 - poles and fixtures, 356 - overhead conductors and devices and 359 - roads and trails.
14. In determining the maintenance expense and A&G expense factors, it is reasonable to use a five-year (1996 - 2000) average in order to normalize fluctuating data over that timeframe. This results in a maintenance expense factor of 1.01% and an A&G expense factor of 2.58%, both on a gross plant basis.
15. The maintenance expense factor should only be applied to the portion of net loaded plant investment related to poles and fixtures. In order to accomplish that, it is reasonable to adjust the 2.458 application factor for poles and fixtures by 93.04%, the percent of net loaded pole investment associated with poles and fixtures, resulting in an application factor of 2.287. The maintenance expense factor, on a net plant basis, is then 2.31%.
16. Since the A&G expense factor is applied to net loaded plant investment, which consists of poles and fixtures, land and land rights, it is reasonable to use a weighted average application factor based on the application factors for each category and the amount of net loaded pole investment for each category. The resultant weighted average application factor is 2.375. The A&G expense factor, on a net plant basis, is then 6.13%.
17. Since SWPL is included in the poles and fixtures plant balance, the associated depreciation rate should be included in the determination of a poles and fixtures depreciation rate. The depreciation rates for SWPL and other poles and fixtures should be weighted, based on plant balances. This results in a depreciation rate of 3.66% for transmission poles and fixtures.
18. Since the depreciation expense factor is applied to net loaded plant investment, which consists of poles and fixtures, land and land rights, it is reasonable to develop a weighted average depreciation expense factor based on depreciation rates for each category, the application factors for each category and the amount of net loaded pole investment for each category. The resultant weighted average depreciation expense factor is 8.45%.
19. Since there is a significant difference in SDG&E's depiction of the 12/31/00 steel pole count, from the June 5 submittal to the August 5 response, and the difference is largely unexplained, we will use the June 5 submittal count of 1,244 steel poles. This will ensure that the count is not being reduced to account for non-attachable poles.
20. For the purpose of developing an appurtenance adjustment factor, wood distribution poles and steel transmission poles do not have similar characteristics. SDG&E claims the factor should be 0% for steel poles, and there is nothing on the record to substantiate the use of any other number. Therefore, we will not incorporate an appurtenance factor for steel transmission poles, in this case.
IT IS ORDERED that:
31. For attachment to poles in transmission right-of-way on private land, San Diego Gas & Electric Company may charge Highland Carlsbad Cablevision, Inc. d/b/a Adelphia, an annual fee of $22.12 per wood pole and $278.97 per steel pole as of the effective date of this decision.
32. Case 00-09-025 is closed.
This order is effective today.
Dated May 22, 2003, at San Francisco, California.
MICHAEL R. PEEVEY
President
CARL W. WOOD
LORETTA M. LYNCH
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
ATTACHMENT A
WOOD POLE ATTACHMENT AND ROW FEE
Annual Fee per Pole
Line No. |
Item |
Amount per pole |
||
Adopted |
SDG&E |
Complainants | ||
1 |
Net Pole Investment |
$898.69 |
$990.04 |
$880.80 |
2 |
ROW Overhead (investment in transmission ROW for poles divided by total net electric transmission plant excluding land and buildings) |
7.48% |
36.10% |
9.33% |
3 |
Net Loaded Pole Investment (L1x[1+L2]) |
$965.91 |
$1,347.49 |
962.98 |
4 |
Maintenance Expenses (%) |
2.31% |
4.12% |
2.30% |
5 |
Administrative & General Expenses (%) |
6.13% |
6.35% |
5.50% |
6 |
Depreciation Expenses (%) |
8.45% |
8.98% |
8.85% |
7 |
Taxes (%) |
5.30% |
5.30% |
5.30% |
8 |
Return (%) |
8.75% |
8.75% |
8.75% |
9 |
Cost of Ownership Factor (L4+L5+L6+L7+L8) |
30.94% |
33.51% |
30.70% |
10 |
Annual Cost of Ownership (L3xL9) |
$298.85 |
$451.50 |
$295.63 |
11 |
Space Allocation Factor (%) |
7.40% |
7.40% |
7.40% |
12 |
Annual Charge for Wood Poles in Transmission ROW |
$22.12 |
$33.41 |
$21.88 |
(END OF ATTACHMENT A)
ATTACHMENT B
STEEL POLE ATTACHMENT AND ROW FEE
Annual Fee per Pole
Line No. |
Item |
Amount per pole |
||
Adopted |
SDG&E |
Complainants | ||
1 |
Net Pole Investment |
$11,336.46 |
$17,390.56 |
$9,635.88 |
2 |
ROW Overhead (investment in transmission ROW for poles divided by total net electric transmission plant excluding land and buildings) |
7.48% |
36.10% |
9.33% |
3 |
Net Loaded Pole Investment (L1x[1+L2]) |
$12,184.42 |
$23,669.37 |
$10,534.91 |
4 |
Maintenance Expenses (%) |
2.31% |
4.12% |
2.30% |
5 |
Administrative & General Expenses (%) |
6.13% |
6.35% |
5.50% |
6 |
Depreciation Expenses (%) |
8.45% |
8.98% |
8.85% |
7 |
Taxes (%) |
5.30% |
5.30% |
5.30% |
8 |
Return (%) |
8.75% |
8.75% |
8.75% |
9 |
Cost of Ownership Factor (L4+L5+L6+L7+L8) |
30.94% |
33.51% |
30.70% |
10 |
Annual Cost of Ownership (L3xL9) |
$3,769.86 |
$7,930.78 |
$3,234.22 |
11 |
Space Allocation Factor (%) |
7.40% |
7.40% |
7.40% |
12 |
Annual Charge for Steel Poles in Transmission ROW |
$278.97 |
$586.88 |
$239.33 |
(END OF ATTACHMENT B)
