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Sce Rule 15/16 Tutorial |
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| SCE is governed by Tariff's which dictate how they charge the rate payers and how they charge developers for making them (SCE) extend their system to feed new homes. This extension is commonly referred to as a line extension...sort of similar in concept to an extension cord with plugs for homes (services) at the end. You plug it in on one end to a source that involves a switch connected to a circuit breaker or fuse. The other end allows for meters to be "plugged" in to the system. |
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| In much the same way, SCE must extend their distribution line to feed new homes. The portion from where they pick up to just shy of the new homeowners property line is known as the line extension and is covered under the Rule 15 Tariff. The portion of the extension that goes from roughly the property line to the actual house is covered under the Rule 16 Tariff. |
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| For example, the Rule 15 portion includes primary cable, splicing, and structures. It also includes secondary cable, splicing, and structures. An Example of Rule 15 would be the transformer and handhole that are being installed to serve three houses. From the pick-up point to the transformer to the handhole is all covered under Rule 15. From the transformer to the house, or the handhole to the house is covered under Rule 16. |
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| When SCE prepares a work order package, (including a map/design and a contract/pricing package), they have the option to include pricing for both Rule 15 & 16. Both are accounted for on their Appendix A forms. SCE prepares a "Cost to Serve" for both separate portions of the new system based on a site specific analysis of the project. These costs to serve coupled with other charges and taxes, are billed to the developer for payment. This money essentially gives SCE the capital needed to build the system for the new homes. Thankfully, the C.P.U.C. has allowed a mechanism for the developer to retrieve some of their money back. |
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| This mechanism is known as the allowance. The concept is that since SCE will have a paying customer at this new house for many years to come, they should give back some of that capital they charged the developer to build the system in the first place. Makes sense right? It only gets confusing when considering the delivery method for the allowance. The allowance is essentially a credit that SCE grants per dwelling unit on the work order. The amount can vary from year to year, but currently it stands at $2,322 per unit. In recent years it was $1,247, and $1,406 before that. In order to grant the allowance, SCE requires that certain criteria be met. They must be assured that a customer with "bona fide load" will be occupying the unit within 6 months...which is a fancy way of saying that they want to verify that someone will be living there paying an electric bill within 6 months of them granting the allowance. Typically they require copies of building permits for every lot that allowances are being requested. As well, they have the option to visually observe the site to verify that slabs have been poured and that construction is underway. |
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| Here is where it can become confusing. Allowances can be granted up-front or on the back end. It totally depends on when the project qualifies for them and what your strategy is for pricing the work order...please see my recent blog on www.utilityplanners.wordpress.com regarding pricing strategies. If the applicant requests that SCE include the Rule 16 (services) with the Rule 15 package, SCE will typically show the cost to serve for all the lots in the work order. In order to avoid paying unnecessary taxes, the applicant can request that allowances be granted up-front to wipe out the Rule 16 charges (remember, someone must be living in the house within 6 months). Or, the applicant can request that SCE exclude the Rule 16 (services) from the Rule 15 package. Since most of the monies associated with Rule 15 are refundable, you're not losing anything by not asking for allowances. Either way has certain benefits and drawbacks depending on your SCE project strategy. |
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| If you have questions regarding the topics discussed here, please don't hesitate to call! |
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Call Utility Planners, Inc.
at (951) 272-8360 to set an appointment today! |
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