Contractual Overheads
SDG&E argues that D.04-12-015 under-stated the test year estimate by using an incorrect method to forecast Contractual Overheads. It seeks an additional $2.538 million on rehearing. The Worden declaration asserts there is a $3.317 million difference for "contractual escalation and overhead rates [which] are not applied within the SCE RO model and need to be calculated using labor and non-labor expenses authorized in D.04-07-022 and added to the SDG&E SONGS O&M revenue requirement outside the SCE model."22
In re-examining the method and estimate we included in D.04-12-015 for SONGS costs, we find that we did not specifically forecast an allowance for Contractual Overheads. The method we used, to extrapolate the Edison nuclear O&M expense accounts for SDG&E's equivalent share, does not support an adequate allowance for Contractual Overheads and we therefore find that D.04-12-015 was in error for this item and authorize SDG&E to recover the $2.538 million in Contractual Overheads it requests on rehearing.
22 Ex. 170, Appendix E-2.
