XI. Whether SCE's Sub-Transmission Costs Should be Considered Distribution Costs for the Purpose of Calculating the Line Extension Allowance

A. Positions of Parties

SCE

SCE states that sub-transmission costs should be included in the net revenue calculation because they are similar to other distribution costs and are recovered through distribution rates.

TURN

TURN states that SCE's sub-transmission costs should not be considered distribution costs for the purpose of determining line extension allowances because residential customers are not served at the sub-transmission level, and sub-transmission costs are not directly associated with line extensions.

CBIA

CBIA states that electric sub-transmission costs should be included in net revenues because such facilities are radial feeds to large customers at higher than normal voltage levels and are not used to serve substations that subsequently provide distribution services at normal distribution voltages.

B. Discussion

Unlike PG&E and SDG&E, SCE's sub-transmission costs are recovered in residential distribution rates. Inclusion of such revenues in the net revenue calculation is consistent with the Commission's policy that the allowance should be revenue-justified. Thus, we do not remove SCE's sub-transmission costs from the net revenue calculation.