ROBINSON. &McELWE RE:

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1 WILLIAM C. PORTH ATTORNEY AT LAW ROBINSON &McELWE P.O. BOX 1791 CHARLESTON, WV DIRECT DIAL: (304) wcooramlaw.com attorneys at law January 17,20 19 BY HAND DELIVERY Ingrid Ferrell, Executive Secretary Public Service Commission of West Virginia 201 Brooks Street Charleston, WV RE: Appalachian Power Company and Wheeling Power Company TariffJiling for approval of Economic Development Rider Case No E-T Dear Ms. Ferrell: I submit for filing in the above-referenced proceeding, on behalf of all the parties thereto, the original and twelve (1 2) copies of a Memorandum of Agreement, proposing for the Commission s approval an agreed modified version of the Economic Development Rider tariff filed by Appalachian Power Company and Wheeling Power Company, with one disputed provision that the parties request be decided by the Commission on the basis of arguments already presented. (W.Va. State Bar #2943) WCP:sr Enclosures cc: Service List Counsel for Appalachian Power Company and Wheeling Power Company (Rl )

2 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON CASE NO E-T APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY, public utilities. Tariff filing for approval of Economic Development Rider. MEMORANDUM OF AGREEMENT COME NOW all of the parties to the instant proceeding, Appalachian Power Company and Wheeling Power Company (collectively, the Companies ), the Staff of the Public Service Commission of West Virginia ( the Staff ), the Consumer Advocate Division of the Public Service Commission of West Virginia ( the CAD ), and the West Virginia Energy Users Group ( WVEUG ), and present this memorandum memorializing the agreement they have reached on all but one issue respecting the Economic Development Rider ( EDR ) tariff filed by the Companies. The parties state: 1. On November 28, 2018, the Companies filed an EDR tariff, designed to help spur economic development in the companies West Virginia service territories. The Companies requested that the EDR tariff be approved and go into effect on December 28, WVEUG and the CAD filed petitions to intervene on December 13, 2018 and January 3, 2019, respectively, which petitions were granted by the Commission. 3. On December 17, 2018, the Staff filed memoranda setting forth the Staff s recommendations and proposing modifications to the EDR tariff filed by the Companies. { R139979S. 1)

3 4. On December 19, 2018, the Staff filed a motion seeking the suspension of the EDR tariff, without objection from the Companies or WEUG, until January 31, On December 20, 2018, the Commission issued an Order, inter alia, suspending the effective date of the EDR tariff until January 31, and directing the parties to respond to the Staff memoranda within ten days. 6. The Companies and WVEUG filed responses to the Staff memoranda on December 21 and 27, respectively. Both responses supported a proposal that the parties engage in discussions in order to attempt to reach agreement on a version of the EDR tariff that they could all recommend to the Commission for adoption. 7. The parties have conducted discussions and have reached agreement on all but one of the issues respecting the Companies' EDR tariff. The agreed version of the EDR tariff is attached to this memorandum of agreement as Exhibit A. 8. The one issue on which the parties were unable to reach agreement is the Staffs proposal to exclude from the application of the EDR tariff commercial customers engaged in the retail sale to the average customer of consumer or final goods. The Staff explained in its memoranda the reasons for this proposed exclusion. The Companies and the CAD agree with the Staff on this issue. WVEUG explained in its response to the Staff why it did not regard the proposed exclusion to be justified. In Exhibit A, the disputed provision is printed in bold type within brackets on Original Sheet No The parties respectfully request the Commission to evaluate the arguments presented by the Staff and WVEUG for and against the retail sale exclusion and to decide whether that exclusion should be accepted or rejected. Apart from that one disputed issue, the parties are in agreement on the modified version of the EDR tariff contained in Exhibit A and { R } 2

4 respectfully request that the Commission approve it (with whatever the Commission s resolution of the one disputed matter may be) to take effect at the end of the suspension period on January 31, The parties regard the Companies EDR tariff as a useful step forward, but far from the financial action that can be taken to promote economic development in West Virginia. The parties are agreed that there should be consideration going forward of additional useful economic development measures. As one action that can help in moving toward that goal, the parties request that the Commission establish a task force to consider ideas for the retention of existing large electric loads. All of the parties are interested in participating in such a task force and agree that participation should also be open to other interested parties. Respectfully submitted this of January, APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY A STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA Its:.- (R I } 3

5 CONSUMER ADVOCATE DIVISION OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA WEST VIRGINIA ENERGY USERS GROUP { R I } 4

6 ~ ~ EXHIBIT A APPALACHIAN PO\VER COhlPANY WHEELING POWER C0hIP;INY (See Shcct Nos. 2-1 through 2-7 for Applicability) Original Sheet No. 28 P.S.C. W.VA. TARIFF NO. 14 (APPALACHIAN POWER COMPANY) P.S.C. W.VA. TARIFF NO. 19 (WHEELING POWER COMPANY) I I AVAILABILITY OF SERVICE EXPERIMENTAL RIDER E.D.R. (Economic Development Rider) In order to encourage economic development in the Company s service area limited-term Economic Development Rate Discounts descnbed herein are offered to qualifying new and existing retail customers who make applicatlon for service under this Rider Service under tius Rider is intended for specific types of ~ gn~~ei~~inl~nia dustnal customers whose operations, by their nature, will promote sustained economic development based lilies investment and job creation Senice unde: [bib Ridzr &specifically excludes-,customer requireniznts tor the ~ ~ ~ ~ ~ ~ ~ A v is ~ limited l ato customers b i on l a ifirst-come, t y first-served basis for customer load - additions totaling up to 250 MW in aggregate for Appalachian Power Company and Wheeling Power Company This Rider is available to large commercial, manufactunng. and industnal customers who are or would be served under Schedules G S, L C P and I P, and who meet the following requirements (1) A new customer must have a billing demand of 500 kw or more An existing customer must increase billing demand by 500 kw or more over the maximum billing demand dunng the 24 months prior to the date of the application by the customer for service under ths Rider (Base Billing Demand) at the same customer locatlon The Base Billing Demand for a new customer shall be 0 kw (2) A new customer, or the expansion by an existing customer, must result in the creation of at least ten (IO) full-time equivalent jobs (NE) maintained over the contract term or a capital investment at the service location in excess of two million five hundred thousand dollars ($2,500,000) Nothing in this Rider E D R otherwise lirmts or modifies the Comrmssions rules and procedures regarding special contracts generally, including Rule 39, the availability of such special contracts and the ability of the Company and a customer to enter into a special contract or other rate arrangement that includes rates, terms, and conditions different than those reflected in this Rider or other rate Schedules TERMS AND CONDITIONS (1) To receive service under this Rider, the customer shall make written application to the Company with sufficient information contained therein to determine the customer s eligibility for service. (2) For new customers, billing consumption for which the Economic Development Rate Discount will be applicable under this Rider shall be for service at a new service location and not merely the result of a change of ownership or name. Relocation of the delivery point of the Company s service, moving existing equipment from another West Virginia-served location within the Company s service territory, or load transfers from another West Virginia-served location within the Company s service temtory do not qualify as a new service location. (3) For existing customers, billing consumption for which the Economic Development Rate Discount will be applicable under this Rider shall be the result of an increase in business activity and not merely the result of resumption of normal operations following a force majeure, strike, equipment failure, casualty, renovation or refurbishment, or other such abnormal operating condition. In the event that such an occurrence has taken place during the 24-month period prior to the date of the application by the customer for service under this Rider, the monthly billing demands during the 24-month period shall be adjusted as appropriate to eliminate the effects of such occurrence. (Rl.IUUUIB.l)(C) Indicates Change, (D) Indicates Decrease, (I) Indicates increase, (N) Indicates New, (0) Indicates Omission, (T) indicates Temporary - Issued Pursuant to P.S.C. West Virginia Case No. Order Dated Issued By Christian T. Beam, President & COO Charleston, West Virginia Effective: Service rendered on or after.- s i

7 APPALACHIAN POWEK COMPANY \\'HEELING POWER COlIPASY (See Sheet Nus. 2-1 through 2-7 for Applicability) Original Sheet No P.S.C. W.VA. TARIFF NO. 14 (APPALACHlAN POWER COMPANY) P.S.C. W.VA. TARIFF NO. 19 (WHEELING POWER COMPANY) EXPERIMENTAL RIDER E.D.R. (Economic Development Rider) (continued) (4) All Economic Development Rate Discounts offered under this Rider shall be applicable for a maximum of five years. (5) The existing local facilities of the Company must be deemed adequate, in the judgment of the Company, to supply the new or expanded electrical capacity requirements of the customer. If construction of new or expanded local facilities by the Company is required, the customer may be required to make a contribution-in-aid of construction for the installed cost of such facilities pursuant to the provisions of the Company's Terms and Conditions of Service. DETERMINATION OF QUALIFYING INCREMENTAL BILLING DEMAND The Qualifying Incremental Billing Demand shall be determined as the amount by which the billing demand for the current billing penod s x c e e d s the Base Billing Demand Such incremental billing demand shall be considered to be zero, however, unless it is at least 500 kw&r new custornergd eusting cu5tomers DETERMINATION OF ADJUSTMENT FACTOR Customers meeting all availability and terms and conditions above shall contract for service for a period up to five (5) years and be billed on the applicable Schedule G.S., L.C.P., or I.P. For customers receiving service on Schedule L.C.P. or I.P., the Economic Development Rate Discount shall be the product of the Qualifying Incremental Billing Demand, the on-peak base rate Demand Charge (excluding ENEC and other surcharges), and forty percent (40%). For customers receiving service on Schedule GS, the Economic Development Rate Discount shall be the product of the Qualifying Incremental Billing Demand, the on-peak base rate Demand Charge (excluding ENEC and other surcharges), and 40 percent (40%). In addition, the Schedule G.S. base rate charge for the First 350 kwh per kw will be discounted by $0.006 per kwh. The Economic Development Rate Discount shall be applicable over a penod of not more than 60 consecutive billing months beginning with the first such month following the end of the start-up period. The start-up period shall commence with the effective date of the contract addendum for service under this Rider and shall terminate by mutual agreement between the Company and the customer. In no event shall the start-up period exceed 12 months, excluding construction. TERMS OF CONTRACT A contract or agreement addendum for service under this Rider, in addition to service under Schedule L.C.P., I.P. or G.S. shall be executed by the customer and the Company for the time period which includes the start-up period and the up to five-year period immediately following the end of the start-up period. The contract addendum shall specify the Base Billing (R )(C) Indicates Change, (D) Indicates Decrease, (I) Indicates Increw?, (N) Indicates New, (0) Indicates Omission, (T) Indicates Temporary Issued Pursuant to PAC. West Virginia Case No. Order Dated Issued By Christian T. Beam, President & COO Charleston, West Virginia Effective: Service rendered on or after

8 APPALACHIAN POWER COMPANY WHEELING POWER COMPANY (See Sheet Nos. 2-1 through 2-7 for Applicability) Original Sheet No P.S.C. W.VA. TARIFF NO. 14 (APPALACHIAN POWER COMPANY) P.S.C. W.VA. TARIFF NO. 19 (WHEELING POWER COMPANY) EXPERIMENTAL RIDER E.D.R. (Economic Development Rider) (continued) Demand, the anticipated total demand and related provisions to be applicable under this Rider. and the effective date for the contract addendum. The customer may discontinue service under this Rider before the end of the contract or agreement addendum only by reimbursing the Company for any Economic Development Rate Discounts received under this Rider. SPECIAL TERMS AND CONDITIONS Except as otherwise provided in this Rider, wntten agreements shall reman subject to all of the provisions of the 1 applicable tanff This Rider is subject to the Company s Terms and Conditions of Service._- - Formatted: Indent: First line: 0.5, Tab stops: O.Y, Left + Not at 0 1 J (Rl400UlY.l)(C) Indicates Change, (D) Indicates Decrease, (I) Indicates Increase, (N) Indicates New, (0) Indicates Omission, (T) Indicates Temporary Issued Pursuant to P.S.C. West Virginia Case No. Order Dated Issued By Christian T. Beam, President & COO Charleston, West Virginia Elfective: Service rendered on or after

9 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON ASE NO E-T APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY, public utilities. Tariff filing for approval of Economic Development Rider. CERTIFICATE OF SERVICE I, William C. Porth, counsel for Appalachian Power Company, do hereby certify that true copies of the foregoing Memorandum of Agreement were served by hand delivery or first-class U.S. Mail this 17'h day of January, 2019, addressed to the following: Wendy Braswell, Esquire Derrick P. Williamson, Esquire Public Service Commission Barry Naum, Esquire 201 Brooks Street Spilman Thomas & Battle, PLLC Charleston, West Virginia Bent Creek Blvd., Suite 101 Counsel for Mechanicsburg, PA Staff of Public Service Commission Counsel for of West Virginia West Virginia Energy Users Group Susan J. Riggs, Esquire Jacqueline Roberts, Esquire Jason C. Pizatella, Esquire Tom White, Esquire Spilman Thomas & Battle, PLLC Consumer Advocate Division 300 Kanawha Blvd., East 7th Floor, Union Building Charleston, WV Kanawha Boulevard, E. Counsel for Charleston, WV West Virginia Energy Users Group Counsel for Consumer Advocate Division (R I }