PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON

Transcription

1 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON CASE NO E-P MONONGAHELA POWER COMPANY and THE POTOMAC EDISON COMPANY Petition for Reconciliation of Surcharge and Regular Review of Vegetation Management Surcharge.,.,. i,.. JOINT STIPULATION AND AGREEMENT FOR SETTLEMENT Pursuant to W. Va. Code (f) and Rule 13(d) of the Public Service Commission's Rules of Practice and Procedure, and certain Commission Orders and proceedings described below, Monongahela Power Company (Won Power") and The Potomac Edison Company ("Potomac Edison") (together, the "Companies"); the Staff of the Public Service Commission of West Virginia ("SW); the Consumer Advocate Division of the Commission ("CAD"); and the Companies' customers who have collectively intervened as the West Virginia Energy Users Group (the 'WVEUG")' hereby enter into this Joint Stipulation. Introduction In this Joint Stipulation, the Parties propose and recommend to the Commission a Joint Stipulation of the Companies' pending case. The Parties agree and recommend that the Commission approve the Joint Stipulation without modification and thereby establish rates to meet the Companies' current Vegetation Management Program ("VMP) cost of service and I WVEUG members for purposes of this case are: ArcelorMittal USA; The Chemours Com pany ; Essroc Cement Company; Graftech International Holdings, Inc.; Linde LLC; Novelis Corporation; QuadiGraphics, Inc.; Resolute Forest Products (Fibrek); U.S. Silica Company; Weyerhaeuser NR; and Zoetis Products, LLC. 1

2 ., revenue requirements as set forth herein. In support of this Joint Stipulation, the Parties state that: 1. On August 31, 2015, the Companies filed its first petition for review of its Vegetation Management Surcharge ( VMS ) and its VMP for the period of April 14, 2014, through June 30, They sought for the Commission to approve a total ann u a 1 rev en u e increase of $37,670,295 for a two year period representing an overall increase of 2.8 percent effective on or before January 1, The rate request includes an actual de fer r e d under-recovery balance of vegetation costs of $51,979,966 as of June 30, 2015, and a projected under-recovery of an additional $23,918,861 for the upcoming two year period without additional revenues. A substantial portion of the proposed rate change is weighted toward re si dent ial consumers. 2. On September 1, 2015, the CAD petitioned to intervene in this matter to represent the interests of residential electric consumers. CAD asserted that this matter has the potential for adverse effects on the interests of ratepayers that it is required to represent. 3. On September 16, 2015, the WVEUG petitioned to intervene in this matter to represent the interests of a collection of industrial customers. WVEUG asserted that no other party adequately represents the interests of its membership. 4. On September 15, 2015, Commission Staff filed an initial memorandum stating that it will continue to review the proposed rates. Staff also recommended a procedural schedule with an evidentiary hearing on December 3-4,

3 5. By order entered October 23, 2015, the Commission initiated the biennial review of vegetation management costs, established a procedural schedule, granted pending requests to intervene, and directed the Companies to publish notice. 6. In accordance with the procedural schedule set forth in this case, the Parties have filed direct testimonial and documentary evidence of witnesses: Companies: Raymond E. Valdes and Alex W. Patton Staff: Edwin L. Oxley, Donald E. Walker Rebuttal testimony was filed by Raymond E. Valdes. 7. The Parties undertook discovery, both of a formal and informal nature, including an examination of the books and records of the Companies and a review of extensive data responses and other documents provided by the Companies. 8. The Companies represent that they have satisfied all posting and publication requirements and provided evidence thereof to the Commission. The Joint Stipulation 9 The Parties have endeavored to address or eliminate all of the issues in the pending vegetation management case to reach an overall resolution of the issues. a. This Joint Stipulation shall be ineffective until and unless approved by the Commission in all of its material terms and without modification. Absent approval of this Joint Stipulation, the Parties reserve their rights to fully advocate their positions on the basis of all the evidence, unlimited by the terms of the Joint Stipulation. b. To avoid the additional expense that will result from the fully 3

4 litigated presentation of this case before the Commission, and in an attempt to achieve certainty in the outcome of this case, the Parties agree and recommend, based upon the discovery, testimony, discussions, and compromises made among them, that the Commission adopt the Joint Stipulation as the basis for its resolution of all of the issues presented in this case. The particulars of the Joint Stipulation, each of which the Parties believe to be an essential and integral element of a fair and reasonable resolution of this case that is in the public interest, consist of the terms and conditions set forth below. The Parties agree and recommend that the Commission should adopt the Joint Stipulation that provides for the following. 10 (a) The Companies agree to Staffs proposed change of the collection of capital property tax expenses in the VMS to be in the year when taxes are actually paid rather than when tax expenses are actually incurred. (b) The Parties agree to accept the Companies calculation of deferred costs prior to the institution of the VMS for the purposes of the deferral and the VMS rate calculation. The Companies agree to reduce the June 30, 2015 deferred balance by $669,304 to resolve all issues related to vegetation management costs incurred by the Companies prior to July 1, 2015, and the Companies are authorized to account for this in their discretion. (c) The Companies agree to work with Staff on the presentation of reliability information in a format acceptable to both parties for the A

5 future. (d) For all other matters, the review period is closed and costs accepted as properly and prudently incurred. (e) The parties agree to the continuation of the Vegetation Management Program and the Vegetation Management Surcharge for the next two year period. (f) The Companies shall file a reconciliation of the surcharge and a review of the Program by September 1, I1 The Parties acknowledge and represent to the Commission that each and every one of these provisions is a reasonable resolution of each such issue, to which each of the Parties has agreed within the overall context of the Joint Stipulation. 12 The Parties jointly acknowledge and represent to the Commission that the Parties' pre-filed direct and rebuttal evidence and exhibits filed in this case, as well as the testimony to be offered in sponsorship of this Joint Stipulation, even though it reflects some areas of dispute among the Parties on a wide range of ratemaking issues, is adequate to support the Joint Stipulation. The Parties each agree and recommend that their respective pre-filed testimony and exhibits be admitted into the evidentiary record without the necessity of each witness's sponsorship or attendance at hearing. 13 The Joint Stipulation is based upon the Parties' analyses of the existing and foreseeable financial condition of the Companies and the existing statutory and regulatory framework that imposes certain obligations upon the Companies. 5

6 a. The Parties support this Joint Stipulation and represent that each and every one of its provisions acceptably resolves each issue raised by the Companies' case. Based on the record, the Parties agree and recommend that the Commission accept this Joint Stipulation in complete resolution of this case. b. Nothing in this Joint Stipulation shall prevent the Parties from taking whatever position they deem appropriate in relation to any special contracts or rate experiments. C. This Joint Stipulation is entered into subject to the acceptance and approval of the Commission. It results from a review of all record evidence and filings in this case, and extensive, good faith negotiation. The Joint Stipulation embodies substantial compromises and modifications by the Parties of their respective positions in this case, and is being proposed to expedite and simplify the resolution of this proceeding and other matters in the context of an overall settlement. d. The Parties agree and recommend that the Commission adopt this Joint Stipulation as being in the public interest, without adopting or recommending the adoption of any of the compromise positions set forth herein as ratemaking principles applicable to future regulatory proceedings, except as may otherwise be provided herein. The Parties further acknowledge that it is the Commission's prerogative to accept, reject, or modify any stipulation, but they respectfully reiterate that each component of the Joint Stipulation, and in particular the resolution of disputed issues and the provisions of this paragraph, is integral to and inseparable from the others. None of the Parties advocates the 6

7 Commission's resolution of any issue as proposed in this Joint Stipulation other than in the context of their support for the Joint Stipulation as a whole. Accordingly, in the event that the Joint Stipulation is modified or rejected by the Commission, in whole or in part, it is expressly understood that the Parties are not bound to accept the Joint Stipulation as modified or rejected, and may avail themselves of whatever rights are available to them under law and the Commission's Rules of Practice and Procedure. [Signature pages follow] I

8 WHEREFORE, the Parties on the basis of all of the foregoing respectfblly recommend and request that the Commission make appropriate findings of fact and conclusions of law adopting and approving the Joint Stipulation in its entirety. Dated and effective this day ofnovember, MONONGAHELA POWER COMPANY and THE POTOMAC EDISON COMPANY By Counsel 5001 NASA BoulevGd Fairmont, West Virginia (304) THE STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA Public Service Commission 201 Brooks Street, P 0 Box 812 Charleston, WV CONSUMER ADVOCATE DIVISION By Counsel Jackie Roberts, Esq. Consumer Advocate Division 8

9 WHEREFORE, the Parties on the basis of all of the foregoing respectfully recommend and request that the Commission make appropriate findings of fact and conclusions of law adopting and approving the Joint Stipulation in its entirety. Dated and effective this day of November, MONONGAHELA POWER COMPANY and THE POTOMAC EDISON COMPANY By Counsel Gary A. Jack (WV Bar # 1855) Mon PoweriPE 5001 NASA Boulevard Fairmont, West Virginia (304) THE STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA By Counsel John R. Auville, Esq. Public Service Commission 201 Brooks Street, P 0 Box 812 Charleston, WV CONSUMER ADVOCATE DIVISION I 1 Consumer Advocate Division 8

10 700 Union Building 723 Kanawha Boulevard, East Charleston, WV WEST VIRGINIA ENERGY USERS GROUP Spilman Thomas & Battle, PLLC PO Box 273 Charleston, WV Derrick P. Williamson, Esq. Spilman Thomas & Battle, PLLC 1100 Bent Creek Blvd., Suite 101 Mechanicsburg, PA

11 MONONGAHELA POWER COMPANY AND THE POTOMAC EDISON COMPANY CALCULATION OF VMS SETTLEMENT RATES CASE NO E-P Schedule Revenue' kw/kva2 kwh' I $ % $ % s % I kw/kva kwh 1 kw/kva kwh I kw/kva kwh E& G 5 82, ,021, ,739,698 C & E $ 234,836, ,880,690 CSH $ 3, ,577,713 $ 155,268 D & PH $ 86,839,762 2,630,967 $ 2,122,521 K E PP $ 338,959,667 12,073,885 $ 3,778,366 AGS $ 369, ,416 $ 8,443 LIGHTING $ 10,120,689 59,655,445 $ 600,355 TOTAL $ 1,325,043,182 $ 37,670, % $ 3.4% $ 4.4% $ 2.4% $ 1.1% $ 2.3% $ - 5.9% I_ 2.8% s 2, % $ 7,672, % $ % $ 2,071, % $ 3,717, % $ 8, % $ 577, /. I 36,689, % $ (75,099) -0.1% $ $ $ (o.ooolo) (208,501) -0.1% $ 2.30 $ 2.28 $ (0.02) (4,553) -0.1% $ $ $ ( ) (50.885) ~0.1% $ $ $ (0.020) (57,462) 0.0% $ $ $ (0.005) (179) 0.0% $ $ $ (0.002) (22.981) -G% $ $ $ ( ) ( ) -0.1% 'Direct Testimony of Raymond E. Valder, Table 2. page 4 'Exhibit REV-26 to the Direct Testimony of Raymond E. Valdes