Fung are escalated. Please provide a reference to a specific cell or series of cells and associated workbook tab. RESPONSE 5.2: 5.2.1. The embedded cost studies, including the backbone transmission cost study, were developed using 2013 recorded costs and were not escalated to 2017 dollars. This can be seen in the cost allocation workpapers (SoCalGas Cost Allocation Model.xlsx, tab: Cost Allocation, cell E65). It shows the 2013 backbone transmission costs for SoCalGas of $214.9 million ($214,896 thousand) as set forth in Table 18 (page 12) of the Testimony of Sim-Cheng Fung. SoCalGas’ marginal costs, are based on 2013 underlying activities and then escalated to 2017 dollars to reflect SoCalGas and SDG&E’s estimated Test Year costs for this TCAP. 5.2.2. See response to 5.2.1 and the cost allocation workpapers (SDGE Cost Allocation tab: Cost Allocation, cell E42). It shows the 2013 backbone transmission costs for SDGE of $38.2 million ($38,229 thousand) as set forth in Table 18 (page 12) of the Testimony of Sim-Cheng Fung. QUESTION 5.3: With respect to the statement on page 8: “The O&M loading factors are applied to the direct O&M costs to develop the “fully-loaded” O&M costs for each customer class.” 5.3.1. Does the reference to each customer class reflect a focus on marginal customer costs rather than marginal distribution costs even though the discussion is jointly about developing marginal customer and marginal distribution costs? 5.3.2. If the answer to the previous question is “no,” please explain why and how separate O&M costs would be developed for each customer class within a marginal distribution cost calculation. RESPONSE 5.3: 5.3.1. Yes.
5.3.2. Not applicable. QUESTION 5.4: Regarding the statement: “For other customer classes, the costs of all customers, not just new customers, belonging to a specific customer class are used to estimate marginal MSA and service line costs because of low customer growth rates and the large variations in meter costs for these customers.” Referring to the workpaper, “SCG 2017TCAP LRMC Customer Costs.xlsx”: 5.4.1. Does the “sample size” column E, rows 32-185, refer to a “sample” of each of the core classes? 5.4.2. If the answer to the previous question is “yes,” was each sample selected randomly from each customer class? Please explain the sample selection process. 5.4.3. If the answer to Q.5.4.1 is “yes,” please identify the factors that are used to bring the cost measured for the sample to the cost for the full class or portion of the full class. 5.4.4. Does the “sample size” column E, rows 186-222, refer to a “sample” of each of the noncore classes or does this represent the entire number of customers in each of these customer classes? 5.4.5. If a sample of customers was selected, please identify the total number of customers for each noncore customer class and describe the sample selection process that SoCalGas used. RESPONSE 5.4: 5.4.1. No. Sample Size (in the “Meter cost detail” tab) refers to the number of customers with each particular configuration of meter type by customer class. For residential and small core commercial and industrial customers, this reflects the number of new customer hookups in SoCalGas’ service territory for the years 2009 through 2013. For other customer classes, this reflects all customers, not just new customers, belonging to a specific customer class.