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PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON
At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the 27th day of February 2019.
CASE NO. 18-0645-E-D II APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY,
Application to Change Depreciation Rates.
and
CASE NO. 18-0646-E-42T
APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY,
Rule 42T application to increase rates and charges.
COMMISSION ORDER
The Commission approves a Joint Stipulation and Agreement for Settlement including an increase in the base rates of Appalachian Power Company and Wheeling Power Co. of $44,19 1,622, changes in depreciation rates, allocation and rate design provisions, and other matters.
This Order also extends a deadline set in G.O. 236.1. II BACKGROUND
Depreciation Case Filing, - Case No. 18-0645-E-D
On May 9, 20 18, the Appalachian Power Company (APCo) and Wheeling Power Company (WPCo) (collectively Companies) requested revised depreciation rates pursuant to Rule 20 of the Commission Rules of Practice and Procedure, 150 C.S.R. 1 (Procedural Rules). The Companies stated that the revised depreciation rates require a $67,088,3 10 increase in annual depreciation expenses for APCo and a $4,172,211 increase in annual depreciation expenses for WPCo, both on a total-company basis. The West Virginia jurisdictional portions of both increases were included in the proposed
$1 14.6 million increase in base rates requested by the Companies in Case No. 18-0646-E- 42T.
Rate Case Filing, Case No. 18-0646-E-42T
On May 9, 2018, the Companies also tendered for filing revised tariff sheets reflecting increased electric rates and charges of approximately $1 14,588,092 annually (a 7.85 percent increase) for furnishing electricity to approximately 467,295 customers in Boone, Brooke, Cabell, Clay, Fayette, Greenbrier, Jackson, Kanawha, Lincoln, Logan, Marshall, McDowell, Mercer, Mingo, Monroe, Nicholas, Ohio, Putnam, Raleigh, Roane, Summers, Wayne, and Wyoming Counties. The Companies proposed to implement the increase to all customer classes with proposed increases of 1 1.13 percent to residential customers, 1 1.5 1 percent to commercial customers, 1.06 percent to industrial customers, and 11.85 percent to other customers as noted on Tariff Form No. 8. The Companies requested an effective date of June 8, 20 18, subject to suspension.
Consolidated Cases
On June 6, 201 8, the Commission issued an Order (i) making APCo and WPCo respondents in Case No. 18-0646-E-42T, (ii) suspending the proposed depreciation rates to permit examination of those rates, (iii) suspending the proposed increased rates and charges in Case No. 18-0646-E-42T through Tuesday, March 5 , 2019, (iv) granting a waiver to allow the Companies additional time to provide individual notice to their customers, (v) granting petitions to intervene by the Consumer Advocate Division (CAD), the West Virginia Energy Users Group (WVEUG)', and The Kroger Co., (vi) consolidating the two proceedings, and (vii) setting a procedural schedule.2 The Commission also granted intervenor status to SWVA, Inc. (SWVA), Walmart, Inc. (Walmart), Kanawha County & Cities Association (KCCA), and the City of Charleston (Charleston). Cornmission Orders June 11, July 19,201 8, and August 27, 201 8.
On June 11, 201 8, the Companies filed in Case No. 18-0646-E-42T the direct testimony and exhibits of Christian T. Beam, Adrien M. McKenzie, Michael J. Adams, Renee V. Hawkins, A. Wayne Allen, Jason A. Cash, Michael N. Kelly, Kimberly Kaiser, Debra L. Osborne, Jenifer L. Fischer, Katharine I. Walsh, Alex E. Vaughan, and John J. Scalzo. They also filed on that date in the depreciation, Case No. 18-0645-E-D, the direct testimony and exhibits of Jason A. Cash and Debra L. Osborne.
WVEUG membership consists of The Chemours Company, Constellium Rolled Products Ravenswood, LLC, Covestro LLC, Marathon Petroleum Company LP, Westlake Chemical Company (Eagle-Natrium LLC), and WVA Manufacturing Company
1
Amended by Commission Order on June 28,20 18. 2
2
Extensive discovery was conducted and requests were submitted and responded to by the parties from whom discovery was sought.
On October 9, 2018, in Case No. 18-0646-E-42T, Commission Staff filed the direct testimony and exhibits of Terry R. Eads, Kaitlyn J. Shamblin, and Edwin L. Oxley; the CAD filed direct testimony and exhibits of Jonathan Wallach and Ralph Smith; WVEUG filed the direct testimony and exhibits of Stephen J. Baron; Walmart filed the direct testimony and exhibits of Gregory W. Tillman; Kroger filed the direct testimony and exhibits of Kevin C. Higgins; Charleston filed the direct testimony of Danny Jones; and KCCA filed the direct testimony of W. Kent Carper and William Cunningham. Also on October 9, 2018, Staff filed in Case No. 18-0645-E-D the direct testimony and exhibits of Eric F. deGruyter and David L. Pauley.
On October 24, 20 18, the Companies filed in Case No. 18-0646-E-42T the rebuttal testimony and exhibits of Christian T. Beam, Adrien M. McKenzie, Renee V. Hawkins, A. Wayne Allen, Michael N. Kelly, Kimberly Kaiser, Debra L. Osborne, Jenifer L. Fischer, Katharine I. Walsh, Alex E. Vaughan, and John J. Scalzo. They also filed on that date in Case No. 18-0645-E-D the rebuttal testimony and exhibits of Jason A. Cash and Debra L. Osborne. On October 24, 20 18, Staff filed the rebuttal testimony of Terry R. Eads; the CAD filed the rebuttal testimony of Jonathan F. Wallach; WVEUG filed the rebuttal testimony of Stephen J. Baron; SWVA filed the rebuttal testimony of Paul J. Wielgus; and Kroger filed the rebuttal testimony of Kevin C. Higgins.
On October 29, 2018, the Parties met in person and by telephone conference to discuss the possibility of reaching settlement on the issues in these proceedings. Further settlement discussion occurred thereafter, and on November 7, 20 18, the Companies, Staff, the CAD, WVEUG, Walmart, Kroger, Charleston and KCCA (collectively the Stipulating Parties) arrived at an agreement in principle for settling these cases.
On November 8,201 8, the Parties advised the Commission that they had reached a settlement in these cases and requested that out-of-town witnesses be excused. On November 13, 2018, the Parties filed a Joint Stipulation and Agreement for Settlement (Joint Stipulation). All parties, except SWVA, are signatories to the Joint Stipulation. SWVA did not join in the Joint Stipulation, but offered no objection to the Joint Stipulation.
On November 13 and 14, 2018, the Commission held an evidentiary hearing in these proceedings. At the hearing, the Commission entered into the record by agreement of the parties all of the pre-filed testimony and exhibits and received live testimony and statements of counsel in support of the Joint Stipulation. The Commission directed the Companies to prepare and file, with the approval of the other parties, two post-hearing exhibits providing a further explanation of some of the elements of the Joint Stipulation.
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On December 6, 20 18, the Companies filed Post Hearing Request Exhibits Nos. 1 and 2 with the approval of Stipulating Parties.
On January 1 1, 20 19, the Companies filed a Proposed Order, with the approval of all of the parties.
The Commission received 1,262 signatures on comments, letters of protest and petitions protesting the proposed rate increase. Public comment hearings were held in Princeton, Beckley, Wheeling, Huntington, and Charleston. Commission Order, August 27, 2018; Transcripts filed October 23 and 25, 2018, November 7, 13, and 19,2018.
DISCUSSION
Joint Stipulation
The Joint Stipulation supports an increase in the West Virginia retail jurisdictional revenue requirements for the Companies of $44,191,622, which is a reduction of $70.4 million from the amount of increase originally requested by the Companies. The adjustments that produce the recommended increase are shown on page one of Exhibit 1 attached to the Joint Stipulation and are supported by the cost of service summary on page two of the same exhibit. The agreed upon revenue requirement reflects a 9.75 percent return on equity and an overall rate of return of 7.283 percent. Tr. at 24-25 (Scalzo); Joint Stipulation at 715A. The Stipulating Parties agreed to a rate base of $4,004,980,890 that reflects the Companies’ filed rate base with the following adjustments: (1) a reduction of $22.1 million of post-test ycar investments, (2) a reduction of $28.8 million from the cash working capital component of rate base originally requested by the Companies, (3) an increase of $29.26 million to reflect appropriate base rate treatment of the amortization of the excess unprotected accumulated deferred federal income taxes (ADFIT) consistent with the terms of the settlement approved by the Commission in G.O. 236.1 (TCJA Settlement), and (4) a reduction of $92.6 million to reflect certain allocation adjustments discussed in paragraph 71 5E and below. Tr. at 25-26, 34-41 (Scalzo); Joint Stipulation at 7193.
The Joint Stipulation includes reductions in the cost of service originally filed by the Companies to (1) remove the amortization of certain deferrals in accordance with the TCJA Settlement, (2) exclude EE/DR net lost revenues that will be recovered in future EEDR proceedings by agreement of the Stipulating Parties, (3) reduce by one-half the special contract revenue adjustment proposed by the Companies, (4) reflect adjustments to depreciation expense, and (5) reflect a variety of other expense adjustments. Tr. at 26 (Scalzo); Joint Stipulation at 715C.
The stipulated depreciation rates are set forth in Exhibit 2 to the Joint Stipulation. APCo’s West Virginia depreciation rates are based on a 2040 retirement date for the
4
Clinch River Units 1 and 2. Any remaining undepreciated plant balance will be transferred to the accumulated depreciation balance of the Amos and Mountaineer Plants and will be recovered over the remaining lives of those plants through charges to depreciation expense. Tr. at 27, 68-69 (Scalzo); Joint Stipulation at 715D.
The Stipulating Parties also agreed to use APCo’s production demand allocator to allocate APCo’s embedded transmission cost of service. On the date that the new base rates go into effect, PJM Transmission Owner Revenues will be allocated in the ENEX monthly deferral calculations using APCo’s production demand calculator. PJM LSE OATT Charges will continue to be allocated using APCo’s retail demand allocator in the ENEC monthly deferral calculations. Tr. at 27, 65-67 (Scalzo); Joint Stipulation at 715E.
The Stipulating Parties recommended that the stipulated revenue requirement increase of $44,191,622 be allocated as set forth in Column 8 of Exhibit 3 to the Joint Stipulation. Certain allocated base rate revenue increases will be mitigated by crediting a further portion of excess unprotected ADFIT. The mitigation credits will be implemented through the changes in the Tax Reform Rider Credit Rates (TRR Credit Rates) as shown on page 2 of Joint Stipulation Exhibit 4. The TRR Credit Rates were previously approved in G.O. 236.1 and the modifications to those credit rates will be approved in this case. The Joint Stipulation provides for the TRR Credit Rates to go into effect on March 1, 2019. The base rates, however, will not go into effect until the end of the statutory suspension period on March 6, 2019. Recommended TRR Credit Rates are set forth in Exhibit 4 to the Joint Stipulation with base rates set forth in Exhibit 5.
Tr. at 27-29 (Scalzo); Joint Stipulation at 716.
The Stipulating Parties agreed to support the Companies’ proposed modification of the Customer’s Liability section of the Terms and Conditions section of the Companies tariffs to include a prohibition to the making of any attachment to meters or other equipment of the Companies. The Stipulating Parties did not agree to proposed tariff language authorizing the Companies to charge customers in the event of meter tampering, and therefore, the Companies’ proposed language on this issue will not be adopted. Tr. at 29-30 (Scalzo); Joint Stipulation at 718.
Pursuant to the Joint Stipulation, the Companies have agreed not to initiate another base rate proceeding prior to April 1, 2020, unless unforeseen events occur that would cause extreme economic hardship to the Companies or would threaten the Companies’ financial integrity or their ability to meet their public service obligations in the absence of base rate relief. Tr. at 30 (Scalzo); Joint Stipulation at 719.
The Companies have agreed to work with the West Virginia Department of Commerce to create economic incentive programs to provide funds to aid in industrial development in the West Virginia service territories of the Companies to be fbnded by a combination of fees and some form of matching contributions from the Companies with
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the programs to be presented to the Commission for its consideration no later than March 31, 2019. Tr. at 30-31, 42-47 (Scalzo); Joint Stipulation at 720. The Stipulating Parties also requested that the deadline of December 31, 2018, set in G.O. 236.1 regarding the sum of $1 million earmarked for economic development be extended to March 3 1, 20 19, to allow for the possibility of some or all of these funds to be used in connection with the economic incentive programs mentioned in the 720 in the Joint Stipulation in the present case. Joint Stipulation at 720; Tr. at 31 (Scalzo).
At the hearing, John Scalzo, Managing Director of Regulatory Services and Finance for Appalachian Power Company, sponsored the Joint Stipulation. Mr. Scalzo provided a detailed summary of the Joint Stipulation, explaining why the Joint Stipulation is a reasonable resolution of this proceeding. Tr. at 21-85 (Scalzo). Alex E. Vaughan, Director of Regulatory Pricing and Analysis for American Electric Power Service Corporation, also testified on behalf of the Companies in support of the Joint Stipulation. Tr. at 86-94 (Vaughan). Staff witness Terry Eads testified that he regarded the Joint Stipulation as “very balanced” and “a good settlement.” Tr. at 96-97 (Eads). Counsel for the other Stipulating Parties, the CAD, KCCA, Charleston, Walmart, Kroger, and WVEUG offered statements in support of the Joint Stipulation. Tr. at 100-108. Although SWVA did not join in the Joint Stipulation, counsel for SWVA stated that SWVA had no objection to the approval of the Joint Stipulation and no additional comments. Tr. at 109.
The Commission has reviewed the Joint Stipulation in detail. In arriving at the Joint Stipulation, the Stipulating Parties have made substantial compromises and have moved from the positions that they had taken in their direct and rebuttal testimony and exhibits in order to reach common ground. The resolution of all of the issues presented in the Joint Stipulation reflects a moderation of the Stipulating Parties’ positions and constitutes a fair, just, and reasonable resolution of the disputed issues in these proceedings.
The obligation of the Commission in rate proceedings is to balance the interests of the parties, the ratepayers, and the State based on a review of all of the evidence, not just evidence submitted in favor of the Joint Stipulation. The full record in these proceedings supports the agreed revenue requirement and resolution of the other issues. Accordingly, the Commission will adopt the Joint Stipulation attached to this Order in resolution of the issues presented in these cases. The rates and charges set forth in the Joint Stipulation are fair and reasonable and should be approved.
Protective Treatment
On October 9, 2018, the Consumer Advocate Division filed a copy of the Direct Testimony of Ralph Smith under seal with asserted confidential information pertaining to a notice from a special contract customer of its intention to reduce its load supplied by the
6
Companies by 30,000kW and the Companies’ Long Term Incentive Plan and Supplemental Executive Retirement Program. On the same date, Staff filed a copy of the Direct Testimony of Edwin L. Oxley under seal with asserted confidential information pertaining to the Companies’ Supplemental Executive Retirement Program.
Rule 4.1 .f of the Cornmission Rules of Practice and Procedure (Procedural Rules) requires a Motion for Protective Treatment to be filed within one week of filing any information filed under seal. Because the information that CAD and Staff filed under seal was deemed confidential by the Companies and subject to a protective agreement, the Companies should have filed a motion for protective treatment for that information. The Companies are expected to file a motion for protective agreement, as a closed entry in this case, within fifteen days of this order. The Commission notes that Rule 13.6.c of the Procedural Rules requires a party responding to discovery to file one copy of the discovery responses with the Executive Secretary. The Companies should also comply with this Procedural Rule or explain to the Commission why they do not have to file this information with the Executive Secretary.
FINDINGS OF FACT
1. The Companies filed revised tariff sheets reflecting increases to base rates and charges of approximately $1 14,588,092. Application, May 9,2018.
2. Separately, the Companies filed a depreciation case requesting a $67,088,3 10 increase in depreciation expenses for APCo and a $4,172,2 1 1 increase in annual depreciation expenses for WPCo. These expenses were included in the rate increase request noted in Finding of Fact No. 1. May 9, 20 19 filing.
3. The Companies published proper notice of all filings and hearings in these proceedings in each of the counties where it provides service, satisfied all publication requirements, and provided evidence of proper notice to the Commission. Affidavits of Publication filed on June 25, 2018 and October 10, 2018; Tariff Form No. 6 filed on August 3,20 18.
4. The Joint Stipulation filed on November 13, 2018 was executed on behalf of all of the parties to these proceedings except SWVA. Tr. at Joint Exhibit No. 1.
5 . Joint Stipulation.
The material terms of the settlement are outlined in Paragraphs 15-20 of the
6. The Stipulating Parties agree and recommend that the increase in base rate revenues should be $44,19 1,622 including the depreciation expense based on a return on equity of 9.75 percent. Joint Stipulation at 115.
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7. At the November 14, 2018 hearing, all parties except S W A expressed their support for the Joint Stipulation. Tr. at 21-108. SWVA stated that it did not object to the Joint Stipulation. Tr. at 109.
8. On December 6, 2018, the Commission received Post-Hearing Request ExhibitsNos. 1 and2.
9. On October 9, 20 18, CAD filed under seal the confidential direct testimony of Ralph Smith and Staff filed under seal the confidential direct testimony of Edwin L. Oxley. The infomation that these parties deemed confidential was provided to them by the Companies in response to discovery requests and deemed confidential by the Companies .
10. The companies did not file a Motion for Protective Treatment for the information filed under seal in the confidential direct testimonies of Ralph Smith and Edwin L. Oxley.
CONCLUSIONS OF LAW
1. The provisions of the Joint Stipulation reflect significant compromises of the positions of the parties to this proceeding.
2. The terms and conditions of the Joint Stipulation are just and reasonable. W.Va. Code $24-2-4a.
3. The Joint Stipulation properly balances the interests of the Companies, their customers, and the State as required under W.Va. Code §24-1-1(b).
4. The pre-filed testimony and associated exhibits filed in these cases as well as the testimony offered in sponsorship of the Joint Stipulation support the reasonableness of the Joint Stipulation.
5 . The rates set forth in the Join Stipulation will produce adequate revenue for the Companies but are not designed or intended to produce more than adequate revenue for their operations.
6. The rates set forth in the Joint Stipulation are just and reasonable.
7. The Companies should file a Motion for Protective Treatment for the information identified by the Companies as confidential and filed under seal in the direct testimonies of Ralph Smith and Edwin L. Oxley.
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8. The deadline of December 31, 2018, set in G.O. 236.1, for the Companies to develop, in cooperation with the West Virginia Department of Commerce a plan for use of the $1 million of Unprotected ADFIT funds designated to promote economic development should be extended to March 3 1, 2019, to allow the Companies to work on the economic development program in conjunction with the one discussed in 7/20 of the Joint Stipulation in the present case.
ORDER
IT IS THEREFORE ORDERED that the Joint Stipulation (attached hereto as Appendix A) and Post-Hearing Request Exhibits Nos. 1 and 2 (attached hereto as Appendix B and Appendix C, respectively) are approved and adopted in full as a reasonable resolution of these proceedings.
IT IS FURTHER ORDERED that the deadline of December 31, 2018 respecting the sum of $1 million earmarked for economic development in the G. 0. 236.1 settlement pertaining to Appalachian Power Company and Wheeling Power Company is extended to March 3 1, 20 19. The Executive Secretary should file a copy of this order in G.O. 236.1.
IT IS FURTHER ORDERED that, within thirty days of the date of this Order, Appalachian Power Company and Wheeling Power Company shall prepare and file an original and six copies of appropriately notated revised tariff sheets, to be effective for all services rendered on and after March 6,2019, reflecting the rates hereby approved.
IT IS FURTHER ORDERED that Appalachian Power Company and Wheeling Power Company shall file within fifteen days of this Order a Motion for Protective Treatment for the information filed under seal by the Consumer Advocate Division in the direct testimony of Ralph Smith and the Commission Staff in the direct testimony of Edwin L. Oxley. If the Motion for Protective Treatment is not filed within fifteen days of the date of this Order, the Commission will make public the information filed under seal. At the same time, the Companies shall also comply with Procedural Rule 13.6.c or explain to the Commission why they do not or should not have to file this information with the Executive Secretary.
IT IS FURTHER ORDERED that these cases be removed from the Commission docket of active cases on entry of this Order.
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IT IS FURTHER ORDERED that the Executive Secretary of the Commission serve a copy of this Order by electronic service on all parties of record who have filed an e-service agreement, and by United States First Class Mail on all parties of record who have not filed an e-service agreement, and on Commission Staff by hand delivery.
A True Copy, Teste,
Ingrid Ferrell Executive Secretary
SMS/tk 180645ci.sca
APPENDIX A
PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON
CASE NO. 18-0645-E-D APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY, public utilities.
Application to Change Depreciation Rates.
CASE NO. 18-0646-3-421: APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY, public utilities.
Rule 42 application to increase rates and charges.
JOINT STIPULATION AND AGREEMENT FOR SETTLEMENT
COME NOW the following parties to Case Nos. 18-0645-E-D and 18-0646-E-42T
(“these proceedings”): Appalachian Power Company (“APCo”) and Wheeling Power Company
(“WPCo”) (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”), West Virginia Energy Users Group (“WVEUG’) (its membershp . .
consists of The Chemours Company, Constellium Rolled Products Ravenswood, LLC, Covestro
LLC, Marathon Petroleum Company LP, Westlake Chemical Company, and WVA
Manufacturing Company), SWVA, Inc. (“SWVA”), Walmart Inc. (“Walmart”), The Kroger
Company (“Kroger”), the City of Charleston (“Charleston”), and The Kanawha County & Cities
Association (“KCCA”). All of the foregoing parties, except SWVA, shall be referred to
collectively as ”the Stipulating Parties.” The Stipulating Parties present herein a negotiated
resolution of all of the issues in these proceedings, and in support of that resolution they state:
{R1385924.1)
Rate Case Filing. Case No. 18-0646-E-42T
1. On May 9, 20 18, the Companies tendered for filing revised tariff sheets reflecting
increased electric rates and charges of approximately $1 14,588,092 annually (a 7.85 percent
increase) for furnishing electricity to approximately 467,295 customers in Boone, Brooke,
Cabell, Clay, Fayette, Greenbrier, Jackson, Kanawha, Lincoln, Logan, Marshall, McDowell,
Mercer. Mingo, Monroe, Nicholas, Ohio, Putnam, Raleigh, Rome, Summers, Wayne, and
Wyoming Counties. The Companies proposed to implement the increase to all customer classes
with proposed increases of 1 1.13 percent to residential customers, 1 1.5 1 percent to commercial
customers, 1.06 percent to industrial customers, and 1 1.85 percent to other customers as noted on
Tariff Form No. 8. The Companies requested an effective date of June 8, 2018, subject to
suspension.
Depreciation Case Filing. Case No. 18-0645-E-D
2. On May 9, 2018, the Companies requested revised depreciation rates pursuant to
Rule 20 of the Commission’s Rules of Practice and Procedure, 150 C.S.R., Series 1
(Procedural Rules). The Companies stated that the revised depreciation rates require a
$67,088,3 10 increase in annual depreciation expenses for APCo and a $4,172,2 1 1 increase in
annual depreciation expenses for WPCo, both on a total-company basis. Both increases were
included in the proposed $1 14.6 million ncrease in base rates requested by the Companies in
Case No. 18-0646-E-42T.
Consolidated Case
fR1385924.1) 2
I
3 . On June 6, 2018, the Commission issued an Order (i) making APCo and WPCo
respondents in Case No. 1 8-0646-E-42T, (ii) suspending the proposed depreciation rates to
permit examination of those rates, (iii) suspending the proposed increased rates and charges in
Case No. 18-0646-E-42T through Tuesday, March 5 , 2019, (iv) granting a waiver to allow the
Companies additional time to provide individual notice to their customers, (v) granting petitions
to intervene by the CAD, WVEUG and Kroger, (vi) consolidating the two proceedings, and (vii)
setting a procedural schedule, subsequently amended by a June 28,2018 Order.
4. On June 1 1, 2018, the Companies filed in Case No. 18-0646-E-42T the direct
testimony and exhibits of Christian T. Beam, Adrien M. McKenzie, Michael J. Adams, Renee V.
Hawkins, A. Wayne Allen, Jason A. Cash, Michael N. Kelly, Kimberly Kaiser, Debra L.
Osborne, Jenifer L. Fischer, Katharine I. Walsh, Alex E. Vaughan, and John J. Scalzo. They also
filed on that date in Case No. 18-0645-E-D the direct testimony and exhibits of Jason A. Cash
and Debra L. Osborne.
5. The Commission granted intervenor status to SWVA and Walmart in Orders
dated June 1 1 and July 19, 20 18, respectively.
6. On July 30, 2018, the KCCA and Charleston filed a joint petition to intervene.
The Commission granted intervenor status to KCCA and Charleston by Order dated August 27,
2018.
7. During the course of these proceedings, the Commission received many
comments and protests from members of the public.
8. Numerous discovery requests were submitted and responded to by the parties of
whom discovery was sought.
{ R1385924.1}
3
9. On October 9, 2018, in Case No. 18-0646-E-42T, the Staff filed the direct
testimony and exhibits of Terry R. Eads, Kaitlyn J. Shamblin, and Edwin L. Oxley; the CAD
filed direct testimony and exhibits of Jonathan Wallach and Ralph Smith; WVEUG filed the
direct testimony and exhibits of Stephen J. Baron; Walmart filed the direct testimony and
exhibits of Gregory W. Tillman; Kroger filed the direct testimony and exhibits of Kevin C.
Higgins; Charleston filed the direct testimony of Danny Jones; and KCCA filed the direct
testimony of W. Kent Carper and William Cunningham. Also on October 9, 2018, the Staff filed
in Case No. 18-0645-E-D the direct testimony and exhibits of Eric F. deGruyter and David L.
Pauley .
10. On October 24, 2018, the Companies filed in Case No. 18-0646-E-42T the
rebuttal testimony and exhibits of Christian T. Beam, Adrien M. McKenzie, Renee V. Hawkins,
A. Wayne Allen, Michael N. Kelly, Kimberly Kaiser, Debra L. Osborne, Jenifer L. Fischer,
Katharine I. Walsh, Alex E. Vaughan, and John J. Scalzo. They also filed on that date in Case
No. 18-0645-E-D the rebuttal testimony and exhibits of Jason A. Cash and Debra L. Osborne.
11. On October 24, 201 8: the Staff filed the rebuttal testimony of Terry R. Eads; the
CAD filed the rebuttal testimony of Jonathan F. Wallach: WVEUG filed the rebuttal testimony
of Stephen J. Baron; SWVA filed the rebuttal testimony of Paul J. Wielgus; and Kroger filed the
rebuttal testimony of Kevin C. Higgins.
12. On October 10, 2018, the Companies filed affidavits of publication evidencing
compliance with the notice requirements in the Commission’s Order of August 27,2018.
13. On October 29, 20 1 8, all of the parties met in person and by telephone conference
to begin discussion of the possibility of reaching settlement on the issues in these proceedings.
Further settlement exchanges occurred thereafter and on Kovember 7, 20 1 8, the Stipulating
(R1385924.1)
4
Parties arrived at an agreement in principle. This agreement was reduced to writing in the form
of the instant Joint Stipulation.
14. The Stipulating Parties propose to the Commission the elements set out below as
a fair and just resolution of all of the contested issues in this proceeding; uncontested issues
raised by the Companies' filings will be implemented as proposed.
15. The Stipulating Parties respectfully recommend and request that the Commission
approve a $44,191,622 increase in the Companies' West Virginia retail jurisdictional revenue
requirement, which is the equivalent of a reduction of $70.4 million fiom the revenue
requirement increase originally sought by the Companies. The adjustments that produce the
recommended increase agreed upon by the Stipulating Parties, which are shown on page 1 of
Exhibit 1 and supported by the cost of service summary shown on page 2 of Exhibit 1, reflect the
following:
A. A return on equity for the Companies of 9.75% and an overall rate of
return of 7.283%, as shown on page 3 of Exhibit 1, the use of which
lowers the Companies' originally requested revenue requirement increase
by $12.7 million.
A rate base of $4,004,980,890. which reflects the Companies' filed rate
base adjusted to reflect the following: (1) a reduction of $22.1 million of
post-test year investments; (2) a reduction of $28.8 million fiom the cash
working capital component of rate base originally requested by the
Companies; (3) an increase of $29.26 million to reflect the appropriate rate
base treatment of the amortization of the excess unprotected accumulated
deferred federal income taxes ("ADFIT") consistent with the terms of the
B.
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settlement approved by the Commission for the Companies in G.O. 236.1
(“the TCJA Settlement”); and (4) a reduction of $92.6 million to reflect
the allocation adjustment discussed in subparagraph E.
Reductions in the cost of service originally filed by the Companies, to
remove the amortization of certain deferrals in accordance with the TCJA
Settlement; to exclude EEDR net lost revenues (which the Stipulating
Parties agree will be recovered in the Companies’ future EEDR
proceedings); to reduce by one-half the special contract revenue
adjustment proposed by the Companies; to reflect adjustments to
depreciation expense; and to reflect various miscellaneous expense
adjustments.
Adoption of the depreciation rates set forth on Exhibit 2. APCo’s West
Virginia depreciation rates are based on a 2040 retirement date for Clinch
River Units 1 and 2, with the stipulation by the parties that whenever these
units are retired, any remaining undepreciated plant balance will be
transferred to the accumulated depreciation balances of the Amos and
Mountaineer Plants and will be recovered over the remaining lives of
those plants through charges to depreciation expense.
The use of APCo’s production demand allocator to allocate APCo’s
embedded transmission cost of senice: with the following stipulations by
the parties: on the date that new base rates go into effect, PJM
Transmission Owner Revenues will be allocated in the ENEC monthly
deferral calculations using APCo‘s production demand allocator; and PJM
C.
D.
E.
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LSE OATT Charges will continue to be allocated using APCo’s retail
demand allocator in the ENEC monthly deferral calculations. I
16. The Stipulating Parties recommend and request that the stipulated base rate
revenue requirement increase of $44,19 1,622 be allocated to the Companies‘ customer classes as
set forth in Column 8 of Exhibit 3 . In order to initially moderate the customer impacts, certain
allocated base rate revenue increases will be mitigated by crediting a further portion of the
remaining class balances of excess unprotected ADFIT. The mitigation credits are to be
implemented through changes in the TRR Credit Rates, as shown on page 2 of Exhibit 4. The
Stipulating Parties also recommend and request that $14 million of the remaining class balances
of excess unprotected ADFIT be used on March 1, 201 9 to reduce class responsibility for a
portion of the Companies’ accumulated ENEC under-recovery. The agreed-upon use of current
unprotected ADFIT balances and the respective balances remaining for each class after the
agreed-upon allocation and use of such balances are set forth on Page 1 of Exhibit 4. The non-
residential C&I Subsidy Reduction portion of the TRR credits as set forth on page 2 of Exhibit 4
will remain in place for 16 months beginning on March 1,20 19 and conclude on June 30, 2020.
The residential TRR credit as set forth on page 2 of Exhibit 4 will remain in place for 24 months
beginning on March 1, 2019 and conclude on February 28, 2021. The residential credit will
decrease by one-half on March 1, 2020 from $5.5 million annually to $2.75 million annually,
17. The Stipulating Parties recommend and request that the Commission approve the
TRR rates set forth on Page 2 of Exhibit 4 and the base rates set forth on Exhibit 5. The base
rates include changes to the rate design for classes RS and GS.
18. With respect to the Companies’ proposed changes in its Terms and Conditions of
Service in the Companies’ tariffs, the Stipulating Parties recommend that the Commission
{ R1385924.1)
7
approve the formatting and wording changes to the Customer's Liability section proposed by the
Companies to include a prohibition to the making of any attachment to meters or other
equipment of the Company. The proposed language on authorization to charge customers in the
event of tampering is not supported by the Stipulating Parties.
19. The Companies agree that they will not initiate a base rate proceeding prior to
April 1, 2020, unless unforeseen events occur that would cause extreme economic hardship to
the Companies or would threaten the Companies' financial integrity or its ability to meet its
public service obligations in the absence of base rate relief.
20. The Companies agree to work with the West Virginia Department of Commerce
to create economic incentive programs to provide funds to aid in industrial development in the
Companies' West Virginia service territories, comparable to economic incentive programs
currently in place in Kentucky Power Company's senice territory, to be funded by a
combination of electric service customer fees and some form of matching contributions fiom the
Companies' (which will not be included in the Companies' cost of service and which will not
exceed $1.2 million), with the programs to be presented to the Commission for its consideration
and approval as soon as practicable in 20 19, but not later than March 3 1, 201 9. The Stipulating
Parties request that the deadline of December 31, 2018 respecting the sum of $1 million
earmarked for economic development in the G.O. 236.1 settlement pertaining to the Companies
be extended to March 31, 2019, to allow for the possibilit) of some or all of these funds being
used in connection with the economic incentive programs.
2 1. The substantive terms of the settlement set forth above reflect substantial
compromises by the Stipulating Parties of their original positions and constitute a fair and
8
reasonable resolution of all of the contested issues in these proceedings, taking into consideration
the interest of the Companies and their customers and the public interest of West Virginia.
22. Negotiated settlements of multi-faceted cases before the Commission are usually
carefully balanced arrangements, with various terms predicated on the substance of other terms
and the totality embodying reciprocal give-and-take by a variety of parties on the issues of
particular importance to each party participating in the settlement. The Joint Stipulation is
perhaps even more intricate and meticulously balanced than the typical settlement. The
Stipulating Parties therefore respectfully request that the Commission approve the settlement
which they present in toto and without modification, lest a change in any individual element
unravel the complex and finely calibrated structure on which many parties of diverse interests
were able to reach agreement.
23. This Agreement is entered into subject to the acceptance and approval of the
Commission. It results from a review of any and all filings in this proceeding, the Stipulating
Parties’ prefiled testimony and exhibits, and thorough discovery and discussion. It reflects
substantial compromises by the Stipulating Parties and the 1%-ithdrawal of their respective
positions asserted in this case, and is being proposed to expedite and simpli& the resolution of
this proceeding. It is made without any admission or prejudice to any positions which any party
might adopt during subsequent litigation, except as expressly provided herein. The Stipulating
Parties adopt this Agreement as being in the public interest, without adopting any of the
compromise positions set forth herein as ratemaking principles applicable to future proceedings,
except as expressly provided herein. The Stipulating Parties acknowledge that it is the
Commission’s prerogative to accept, reject, or modify any stipulation; however, in the event that
this Agreement is rejected or modified by the Commission. it is expressly understood by the
{ R 1385924.1 }
9
APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY
Their: W C l h l S &
STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
By: Name: Its:
CONSUMER ADVOCATE DIVISION OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
WEST VIRGINIA ENERGY USERS GROUP
THE KROGER COMPANY
(R1385608.1) 11
APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY
By: Name: Their:
STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
A
I , - . . - , /
CONSUMER ADVOCATE DIVISION OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
By: Name: Its:
WEST VIRGINIA ENERGY USERS GROUP
By: Name: Its:
SWVA, INC.
By: Name: Its:
{ R 1385608.1 ) 11
Stipulating Parties that they are not bound to accept this Agreement as modified, and the
Stipulating Parties may avail themseives of whatever rights are available to them under law and
the Commission’s Rules of Practice and Procedure.
WHEREFORE, the Stipulating Parties respecthlly request that the Commission adopt in
toto and without modification all of the elements of the negotiated settlement arrived at by the
Stipulating Parties.
Respectfully submitted this 13th day of November, 201 8.
(R1385924.1) 10
Settlement Exhibit 1 Page 1 of 3
Adjust Depreciation for 12/31/17 CWlP Storm/lGCC/CCS Amortization Expense Staffs Depreciation Rates Net Lost Revenue 50% of SC Load Reduction SERP Rate Case Expense 50% of LTIP Payroll tax associated with LTlP Adj 50% of Aviation Savings Plan associated with LTlP Adj
As-Filed by the Companies
Settlement Rate Base I Revenue Deficiency
4,119,267,635 114,588,092
ROE and Rate Base Adjustments
Cash Working Capital (25,796,306) (2,594,216) TCJA Rate Base Adjustment 29,264,842 2,636,426 CWlP moved to EPlS (22,130,894) (1,993,739)
86,380,038 4,004,980,890
(17,827,181) (13,628,508) (4,476,215) (2,855,016)
(236,700) (35,833)
(2,134,826) (163,314) (165,463) (85,393)
1 44,191,622
I--.--- 4,004,980,890
Settlement Exhibit 1 Page 2 of 3
Appalachian Power Company 4% Wheeling Power Company Case Number 18-0646-E-42T
Settlement Revenue Requi rernent
TCJA AND SETTLEMENT
AS FILED ADJUSTMENTS SETTLEMENT
Operating Revenues
Operation and Maintenance Expense Net Operating Income Before F.I.T.
Federal Income Taxes
Net Operating Income
Rate Base
Rate of Return
Proforma Revenue
Going Level Revenue
Revenue Requirement
1,589,786,074 (63,069,739) 1,526,716,335
865,841,7 1 5 (24,217,654) 841,624,061 357,223,490 (21,875,517) 335,347,973
47,497,693 (3,840,683) 43,657,009
309,725,797 ( 1 8,034,834) 291,690,964
4,119,267,635 (1 14,286,745) 4,004,980,890
7.51 9% 7.283%
1,589,786,074 (63,069,739) 1,526,716,335
1,475,197,982 7,326,731 1,482,524,713
114,588,092 (70,396,470) 44,191,622
Settlement Exhibit 1 Page 3 of 3
APPALACHIAN PGWER COMPANY & WHEELING FOWER COMPANY
CAPITAL STRUCTURE AND COST OF CAPITAL WEST VIKGINIP. P . s . ~ 2010 BASE RATE CASE
ACTJALAS OF DECEMBER 31,2017
Long-term Debt
Short-term Debt
Common Stock
Overall Cost of Capital
Total Debt
Total
Amount Outstanding
($000)
$4,066,317
$ 124,738
$4 191,055
$4,277,838
$8 400,893
Weighted Return
Component percent Cost Rate % % %
4a 357% 4.909
1.183% 1.261
?GOO/;
9.75
2.374
0.019
2.393
4.891
7.203
Case No. 18-0645-E-D
Settlement Exhibit 2 APPALACHIAN POWER COMPANY
SETTLEMENT DEPRECIATION RATES BASED ON PLANT IN SERVICE AT DECEMBER 31,2017
STE.4M PRODUCTION PLANT
.A WOS UNITS I &2
311 312 312 314 315 3 I6
31 I 312 312 314 315 316
31 1 312 3 I4 315 316
311 3!2 312 314 315 316
Smicrttres Et Improvements Fv:e; Pmit Equipment 3 d e r Pimt Equip. SCR Catalyst ? ,x'cogmeratcr Units 4:.cswr) Electrical Equip. ?.:isc Pobxer Flant Equip
Tcral
-__ .A3IO5 UNIT 3
S .-w;t~-es Er Ixprovements Goi i i . ~ PIan! Equipment 2mie.: Plant Equip. SCR Caral!.st Ti&-generator Units .tcces*or) Electrical Equip Llisc h w e r Pimt Equip
it XC? x e s Et I i x provements Boiie: Plant Equipment 1 iirbo-,enerator Units .Ax:ssog Electrical Equip. Ll isc. ?oner P h t Equip
Tom!
5i?.!ct:::es Et Improvements 13~i;e: P l a ~ Equipment Soiier Plant Equip SCR Catalyst TTcrbogenrratcr Units .4cces,or) Electrical Equip I : i S C . Power Plwt Equip
Case No. 18-0645-E-D
APPALACHIAN POWER COMPANY SETTLEMENT DEPRECIATIOS RATES
BASED ON PL.4NT IN SERVICE AT DECEMBER 31,2017
ACCT XO ACCOLJNT TITLE GEPRECIATION RATE (1) (2) (3)
OTHER
3 I 1 Centralized Maintenence 3 16 Central Machine Shop 3 1 1 3 12 3 t 5
Little Broad Run Ash Disposal Little Broad Run Ash Disposal Little Broad Run Ash Disposal
1.95% 2.49% 3.74% 3.72% 3.86%
Total 1.41%
Total Steam Production Plant 3.19%
HYDRACLIC PRODCCTION PLAST
33 1 332 333 334 335 336
331 332 333 334 335
331 332 333 334 335 336
Structures B Improvements Resenoirs, Darns & Waterways Watemheels, Turbines & Gen Accessory Electrical Equip Misc Power Plant kquip Roads, Railroads & Bridges
Total
BYLLESBY
Structures & Improvements Reservoirs. Dams & Waterways Waterwheels. Turbines & Gen Accessory Electrical Equip Misc Pouer Plant Equip
Total
CLAYTOR
Structures & Improvements Reservoirs, Dams & Waterways Waterwheels, Turbines & Gen Accessory Electrical Equip Misc Power Plant Equip Roads, Railroads & Bndges
Total
6 35% 9.73% 5 52% ? 28%
1 2.7 I % 4 77%
X 6296
10.33% 1 1 98% 1 1 .SO% 8 65% Io 97%
1 : .44%
3.01% 2.10% 2.75% 2 5746 3.24% G.?9?’c
2 4836
Case No. 18-0545-E-D
APPALACHIAN POWER COMPANY SETTLEMENT DEPRECIATION RATES
BASED OK PLANT IN SERVICE AT DECEMBER 31,2017
ACCT NO ACCOUNT TITLE DEPRECIATION UTE ( 1 )
33 1 332 333 334 338 336
331 332 333 334 335 336
33 I 332 333 334 335 336
33 I 332 333 334 335
Structures & Improvements Kesen oirs. Dams & Waterways Waterwheels, Turbines & Gen Accessorq Electrical Equip ~Misc Poaer Plant Equip Roads, Railroads & Bridges
Total
LOXDOX
Str’tctures & lmprovements Reservoirs, Dams & Waterways Waterwheels, Turbines & Gen Accessory Electrical Equip Misc Power Plant Fquip. Roads. Railroads & Bridges
Total
MARMET
Structures & Improvements Resenoirs, Dams & Watenvays Waterwheels. Turbines & Gen Accessory Electrical Equip Misc Power Plant Equip Roads, Railroads & Bridges
Total
Structures & Impro\ements Reservoirs, Dams & Waterways Waterwheels. Turbines & Gen Accessory Electrical Equip Misc Poaer Plant Equip
Total
(3)
2.51% 2 07% 1.87% 3.71% 3.27% 0.80%
2 30%
3.57% 2 59% 3.97% 2.16% 3.839‘0 148%
3.49%
2 63% 3 10% 4.42% 2 82% 3.21% 140%
3 66%
14.76% 10.16% 4.48% 14.40% 6.40%
10.23%
Case No. 18-0645-E-D
APPALACHIAN POWER COMPAi%Y SETTLEMENT DEPRECIATIOS RATES
BASED OS PLANT IK SERVICE AT DECEMBER 31,2017
(1)
331 332 333 334 335 336
33 1 332 333 334 335 336
ACCT NO ACCOUNT TITLE DEPRECL4TIOS RATE
(2) (3) SMITH MOUNTAIN
Structures & Improvements Reservoirs, Dams & Waterways Waterwheels, Turbines & Gen. Accessory Electrical Equip. Misc. Power Plant Equip. Roads, Railroads & Bridges
Total Smith Mountain
WISFIELD
Structures & Improvements Reservoirs, Dams & Waterways Watenvheels, Turbines & Gen Accessory Electrical Equip Misc Power Plant Equip Roads. Railroads & Bridges
Total
Total Hydraulic Production
OTHER PRODUCTIOY PLANT
CERED0
341 Structures & Improvements 344 Generators 345 Accessory Electrical Equip 346 Misc PoNer Plant Equip
Total
DRESDEh
341 Structures & Improvements 342 344 Generators 345 Accessorq Electrical Equip 346 Misc Poner Plant Equip
Fuel Holders, Producers & Access
Total
Total Other Production Plant
Total Production Plant
187% 0 98% 3 20% 3 49% 3 53% 6 83%
2.64%
3.94% 2.58% 4.06% 4.12% 2.57% 2 72%
3.47%
3.73%
1.34% 134% I .40% 3.98%
136%
3.32% 2 90% 3.10% 3.07% 3 84%
3.16%
2.58%
3.15%
Case No. 18-0645-E-D
APPALACHIAN POWER COhIPANY SETTLEMENT DEPREClATIOU R4TES
BASED ON PLANT IN SERVICE A T DECEMBER 31,2017
ACCT NO ACCOUNT TITLE "UE%€CIAT!ON RATE ( 1 ) ( 2 ) ( 3 )
TR4SSMiSSIOS PLAST
35 I 352 353 354 355 336 357 358
Energy Storage Equipment Snuctures & Improvements Station Equipment 7 owers & Fixtures Poles & Fixtures OH Conductor & Devices Ilnderpound Conduit Underground Conductor
1 $223'0 162% 2 31% 159% 2 71% 1 5 3 % 2 ? I % 5 24%
Total Transmission Plant 2.11%
DISTRIBUTIOX PLANT - N'V
361 362 363 3 64 365 366 367 368 369 3 70 371 3 73
Structures & Improvements Station Equipment Energ$ Storage Equipment Poles, Towers, & Fixtures Olerhead Conductor & Devices Underground Conduit Underground Conductor Line Transformers Services Meters Installations on Custs Prem Street Lighting & Signal Sys
Tota! Distribution Plant - WV
1 c)ph
2 52'40 7 -38% 4 77% 3 , j 8% ! 73% 2 05% 4 65% 4 22% I2 43% W O ? b 8.17%
4 06%
Case No. 18-0645-E-D
APPALACHIAN POWER COMPANY SETTLEMENT DEPRECIATIOV RATES
BASED ON PLAXT IN SERVICE AT DECEMBER 31,2017
ACCT NO ACCOUNT TITLE DE'ZRECIATION RATE (1) (2) ( 3 )
GENERAL PLANT
390 391 3 92 393 394 395 3 96 3 97 39s
Structures & Improvements Ofice Furniture & Equipment Transportation Equipment Stores Equipment Tools Shop & Garage Equipment Laborator) Equipment P o w r Operated Equipment Communication Equipment Miscellaneous Equipment
1.91% 3.17% 3 40% 1.80% 2 57% 4.01% 3.90% 4.98% 2.70%
Total General Plant 2.75%
Total Depreciable Plant 3.19%
Case No. 18-0645-E-D
Settlement Exhibit 2 WHEELING POWER COMPANY
SETTLEMENT DEPRECIATION RATES BASED OK PLANT IS SERVICE AT DECEMBER 31,2017
ACCT NO ACCOUNT TITLE DEPRECIATION RATE (1) (2) (3 )
STEAM PRODUCTIOS PLANT
311 312 3 ( 2 3 14 315 316
Structures & improvements Bo:ier Plant Equipment Boiler Plant Equip. SCR Catalyst Turbogenerator Units Accessov Electrical Equip Misc. Power Plant Equip.
2.7994 1.94%
(: 9.27% 1.699'0 2.39% 2 539'0
Total Steam Production Plant 2.90%
TRANSMISSION PLAHT
352 Structures & Improvements 353 Station Equipment 354 Towers & Fixtures 355 Poies &Fixtures 356 OH Conduc:or & Devices 357 Underground Conduit 35s Undergiound Conductor
Total Transmission Plant
DISTRIBVTIOX PLAXT
361 3 62 364 365 366 367 365 369 370 371 3 73
Structures & Improvements Station Equipment Poles, Towers, & Fixtures Overhead Conductor & Devices 1Jnderground Conduit Underground Conductor Line Transformers Services Meters Installations on CUSS Prem Street Lighting & Signal Sys.
Total Distribution Plant
GEKER4L PLAST
390 Structures Br Iifiprovements 391 Office Furniture & Equipment 393 Stores Equipment 394 397 Communication Equipment 398 Miscellaneous Equipment
Tools Shop & Garage Equipment
T o h i General Plant
Total Depreciable Plant
1 15% 2 2244 2.65OA 2.4190 1.324'2 9 94% 13 98%
2.16%
1 i 1 % 2.22% 5.28% 3.43?4 1.91% I .98% 4.67% 4.59% 6.97% 13.4 1 '/io
13.61 90
3.88%
1 08% 2.13% 178% 1.6556 5.09% 2.7 6%
2.23%
2.95%
Settlement Exhibit 3
Customer Class
Appalachian Power Company & Wheeling Power Company Revenue Allocation
Test Year 201 7
Current Proposed Increase Revenue Increase
Base Rate increase
I Base Rate Subsidy Progress I I I Net
%
Base Rate Increase TRR Net Increase
% Credits' Increase Current Subsidy
' TRR Credits are an estimated annual amount Residential class credit is $5.5 million the first year and decreases to $2.75 million the second year it is in effect CBI subsidy reduction credits will run for 16 months beginning on March 1, 2019 and concluding on June 30, 2020
Settlement Change in Subsidy Subsidy
As of T V A Scnlement APCo/WPCo West Vlrglnla jurisdictional share of generation and dirtrlbution function unprotected excess ADFIT summary J",lSalCIlDNl
18/19 Temponly M( Indunrlel In6urtrk.l RcmOhlnl WV S h n d ENECUndn- VMPUnda-
ZU17 Rata Rase Unpmtccted R.mYcyl*loms Rrmvw*!hCnrs Conetructbn brr(mnrc Emnomk W M w Rue. Subsldy SubMv lufhdl=tbn4Sh.nof AllUulor E M S A W I T M e t Off* SUlchsm~ Funding Rilewe S u p p a F w d Adlurtmmc Adlusttm.nt Reddunhn Unpmtmad t k c r s ADFlT
Base Rate Case Settlement Items N t W
lnaemsntal Rase ENEC RsmPlnkHWV Judsdktbnsl Case TRR Rete Tnnrmlshn Share of Unpmtened EI(cs
C d k s 0 f f S . S ADFIT
*-
I Start Date I September I, 2018 I December 1,2018 September 1, 2018
End Date I February 28,2019 February 28,2019 I dM30,.2820 Fcb 28,2019 ~
Settlement Exhibit 4
I I -
Startoate 1 March _.___ 1,2019 - March 1, 2019 March 1,2020 - End Date June 30.2020 February 29,2020
L
Notes: * Currentlyapproved C&l subsidy reduction rate rredits will increase on March 1,2019 per thc base rate case settlement agreement -
Settlement Exhibit 5 APCO/WPCO WV BASE RATE SZJILIMARY
Rates Residential:
Standard Rates:
First Block < 500 kWh Second Block > 500 kWh
Winter Block > 1,350 kWh
Storage Water Heating kWh Customer
Time of Dav: On-Peak kWh
Off-peak kWh
Customer
Emdovee Rates:
First Block < 500 kWh Second Block > 500 kWh
Winter Block > 1,100 kWh
Customer
ODtiOnd Residential Demand 'l'ariifi Energy Charge - All kWh
Off Peak Energy Charge On-Peak Demand Charge per kW
Customer Charge
- sws: First Block < 7,000 kWh
Second Block > 7,000 kWh
Standard Customer
kW h kWh kWh
kWh Bills
kWh
kWh
Bills
kWh
kWh kWh Bills
kWh
kWh
per kLV
Bills
kWh
kWh Bills
0.08219 0.06920 0.03980 0.02687
12.00
0.13126 0.02687
15.00
0.07194 0.07194 0.03980
12.00
0.07256 0.04407
3.64 15.00
0.07240 0.06170
15.00
- ss: Secondary Billing Demand All kWh Bills
Primary
per kW per kWh per bill
2.65 0.05 104
20.00
Billing Demand
All kWh
Bills
Primary - Athletic Fields All kWh
Bills
d SGS Standard k Wh
LM-TOD On-Peak kWh
LM-TOD Off-peak kWh
Standard Customer Unmetered Customer
LM-TOD Customer
- GS: Secondary Billing Demand Block 1 kWh
Block 2 kWh
kVAr Off-peak Excess
Maximum
Floodwalls
Alt Feed Service Bills - Standard
Primary Billing Demand
Block 1 kWh
Block 2 kWh
kVAr
Off-peak Excess Maxi mum
Floodwalls
Bills - Standard
Primary - Athletic Fields All kWh Bills
per kW
per kbVh
per bill
per kWh
per bill
kWh
kWh
kW h Bills
Bills Bills
per kW
per kWh
per kWh
per kVAr per kW
per kWh per kWh
per bill
per kW
per kWh
per kLVh
per kVAr per kW per kWh
per kWh
per bill
per kWh
per bill
1.95 0.04625
60.00
0.05206 25.00
0.04833 0.08786 0.01418
15.00 14.00 18.45
10.55 0.02534 0.00866
0.70 3.37 0.20
0.02095 3.25
$35.00
$8.63 $0.02431 $0.00830
$0.70 $1.70 $0.20
$0.01 607 100.00
0.04458 25.00
Subtransmission Billing Demand Block 1 kWh
Block 2 kWh
kVAr
Off-peak Excess Maximum
Bills
Transmission Billing Demand
Block 1 kWh Block 2 kWh
kVA r Off-peak Excess
Maximum Bills
GS-TOD: Secondary
On-Peak kWh Off-peak kWh Bills
Primary
On-Peak kWh Off-peak kWh Bills
LGS-TOD:
Secondary Demand
On-Pea k Energy
Off-peak Energy Customer
per kW per kWh
per kWh
per kVAr
per kW
per kWh
per bill
per kW per kWh
per kWh
per kVAr
per kW per kWh
per bill
per kWh
per kWh per bill
per kWh per kWh per bill
per kW per kWh per kWh per bill
6.89 0.0241 9 0.00826
0.70 0.97
0.20000 250.00
6.76 0.02374 0.0081 1
0.70 0.92
0.20000 350.00
0.08591 0.02955
35.00
0.07767 0.02360 100.00
6.29 0.05482 0.02000
35.00
Primary
Demand
On-Peak Energy
Off-peak Energy
Customer
LCP. Secondary
Billing Demand All kWh kVAr
Off-peak Excess Alternate Feed Service Bills
Primary
Billing Demand
AlJ kWh kVAr
Off-peak Excess
Alternate Feed Service Bills
Su btransmission
Billing Demand All kWh
kVAr
Off-peak Excess
Alternate Feed Service Bills
Transmission
Billing Demand
All kWh kVAr
Off-peak Excess Alternate Feed Service Bills
per kW
per kWh per kWh
per bill
per kW
per kWh
per kW
per kW
per bill
per kW
per kWh
per kW
per kW
per bill
per kW per kWh
per kW per kW
per bill
per kW per kWh per kW per kW
per bill
4.47 0.05261 0.01 919 100.00
16.55 0.00738
0.70 3.47
3.25000 85.00
14.76 0.0071 8
0.70 1.96
3.25000 275.00
12.196 0.0071 3
0.70 1.59 3.25
375.00
11.692 0.00700
0.70 1.52
3.25000 475.00
- IP: Secondary
Billing Demand
Ail kWh kVAr
Off-peak Excess
Alternate Feed Service Bills
Primary
Billing Demand
All kWh
kVAr
Off-peak Excess Alternate Feed Service
Bills
Subtransmission
Billing Demand
All kWh
kVAr
Off-peak Excess Alternate Feed Service
Bills
Transmission
Billing Demand All kWh
kVA r Off-peak Excess
Alternate Feed Service Bills
- OL: Incandescent
090 189 Watt
High Pressure Sodium (HPS) 108 70W Overhead 94 IOOW Overhead I
97 200W Overhead
per kW
per kWh per k W
per k W
per bili
per kLV per kLVh
per kW
per k1V
per bill
per kW
per k'vV5
per k W per kW
per bill
per k W per k\Vh per k'\N
per k'f l
per bill
20.01 0.00336
0.70 4.32 3.25
85.00
17.849 0.00327
0.70 2.44 3.25
275.00
15.066 0.00325
0.70 1.82 3.25
375.00
14.432 0.00319
0.70 1.68
3.250 475.00
4.95000
7.94000 8.16000 9.55000
98 400W Overhead 106 70W Post Top 11 I 1 OOW Post Top 122 150W Post Top 101 200W Post Top 103 250W Post Top 104 400W Post Top 112 200W Flood OH 107 250W Flood OH 109 400W Flood OH 141 100W Mongoose OH 142 200W Mongoose OH 143 400W Mongoose OH 146 IOOW Mongoose PT 147 200W Mongoose PT 148 400W Mongoose PT
129 105 130 139 110 116 131 123 125
Metal Halide (MH) 175W Flood PT (13,000 Lumens) 400W Flood PT IOOOW Flood PT 175W Flood OH 250W Flood OH 400W Flood OH IOOOW Flood OH 15OW OH 15OW Flood PT
Mercury Vapor (MV) 093 175W Overhead 096 250W Overhead 095 400W Overhead 099 175W Post Top 114 400W Flood OH 119 1OOOW Flood OH
SL: - High Pressure Sodium (HPS) 70W Overhead 1 OOW Overhead 200W Overhead
5800 lumens 9500 lumens 22000 lumens
10.47000 13.05000 13.78000 23.00000 23.87000 25.41000 26.82000 10.07000 10.59000 12.60000 11.74000 12.06000 12.33000 16.44000 21.03000 22.88000
23.67000 30.37000 37.1 3000 12.69000 12.7 1 000 12.73000 21.80000 9.13000
31.40000
7.83000 8.88000 9.42000 8.59000
13.76000 20.79000
5.850 5.280 4.390
400W Overhead lOOW Mongoose OH 200W Mongoose OH 400W Mongoose OH 70W Special IOOW Special 15OW Special 200W Special 400W Special IOOW Post Top IOOW Mongoose PT 200W Mongoose PT 400W Mongoose PT
Mercury Vapor (MV) 1 OOW Overhead 175W Overhead 250W Overhead 400W Overhead 1 OOOW Overhead 175W Special 400W Special 175W PT
50000 lumens
5800 lumens 9500 lumens 16000 lumens 22000 lumens 50000 lumens 9500 lumens
3500 lumens 7000 lumens 1 1000 lumens 21 000 lumens 58000 lumens 7000 lumens 21000 lumens 7000 lumens
Metal Halide (MH) MH Overhead - 150W MH Special - 150W (cobra head) MH Special - 15OW (post-top)
9100 lumens 91 00 lumens 9100 lumens
Energy and Minor Maintenance MV - 175W 7000 lumens MV - 400W 21000 lumens HPS - IOOW 9500 lumens HPS - 150W 16000 lumens HPS - 200W 22000 lumens HPS - 250W 27000 lumens HPS -400W 50000 lumens
2.020 1 1.740 12.060 12.330 13.110 12.300 1 1.380 10.350 6.180 7.100
21.910 21.260 21.890
3.850 3.320 2.530 0.720 0.580 9.580 4.820 4.560
11 242 24.019 29.898
1.390 0.240 2.330 1.470 0.550 0.400 0.260
PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON
CASE NO. 18-0645-E-D APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY, public utilities.
Application to Change Depreciation Rates.
CASE NO. 18-0646-E-42T APPALACHIAN POWER COMPANY and WHEELING POWER COMPANY, public utilities.
Rule 42 application to increase rates and charges.
CERTIFICATE OF SERVICE
I, William C. Porth, counsel for Appalachian Power Company and Wheeling Power Company, do hereby certifjr that true copies of the foregoing Joint Stipulation and Agreement for Settlement were served by hand delivery or US . mail on this 1 3 ~ day of November, 2018, addressed to the following:
Wendy Braswell, Esquire Linda Bouvette, Esquire Public Service Commission 201 Brooks Street Charleston, West Virginia 25301 Counsel for Staffof West Virginia Charleston, West Virginia 25301
Jacqueline Lake Roberts, Esquire Heather Osborn, Esquire Thomas White, Esquire Consumer Advocate Division 700 Union Building, 723 Kanawha Blvd. East
Course1 for Consumer Advocate Division Public Service Commission
Susan J. Riggs, Esquire Jason C. Pizatella, Esquire Spilman Thomas & Battle, PLLC 300 Kanawha Blvd., East Charleston, WV 25301 Counsel for W E U G
Derrick P. Williamson, Esquire Barry A. Naum, Esquire Spilman Thomas & Battle, PLLC 1100 Bent Creek Blvd., Suite 101 Mechanicsburg, PA 17050 Counsel for W E U G
Thomas E. Scarr, Esquire Charles K. Gould, Esquire Jenkins Fenstermaker PLLC 325 Sth Street, 2"d Floor Huntington, WV 25701 Counsel for S W A
Kurt J. Boehm, Esquire Jody Kyler Cohn, Esquire Boehm, Kurtz, and Lowry 36 E. Seventh St., Suite 1510 Cincinnati, OH 45202 Counsel for The Kroger Company
{R 1385920.1 }
Kristina Thomas Whiteaker, Esquire The Grubb Law Group 1 1 14 Kanawha Boulevard East Charleston, WV Counsel for The Kroger Company
Mandi Kay Carter, Esquire Paul D. Ellis, Esquire City of Charleston 501 Virginia Street E Charleston, WV 25301 Counsel for City of Charleston
Ralph Smith Larkin & Associates 15728 Farmington Road Livonia, MI 48154 Consultant for Consumer Advocate Division
Jonathan Wallach, Vice President Resource Insight, Inc. 5 Water Street # 10 1 Arlington, MA 02476 Consultant for Consumer Advocate Division
Andrew T. Gunnoe, Esquire Mark J. Slotnick, Esquire PO Box 3627 Charleston, WV 25336 Counsel for KCCA
Richard Gottlieb, Esquire Spencer D. Elliott, Esquire Lewis Glasser PLLC PO Box 1746 Charleston, WV 25326 Counsel for Walmart
Stephen J. Baron J. Kennedy & Associates, Inc. 570 Colonial Park Drive, Suite 305 Roswell, GA 30075 Consultant for WVEUG
Kevin Higgins Energy Strategies, LLC Parkside Towers 21 5 South State Street, Suite 200 Salt Lake City, Utah 841 11 Consultant for The Kroger Company
William C. Porth (WV State Bar ID No. 2943)
(R1385920.1)
Commission Post-Hearing Request Exhibit 1 TRR Credit Timeline
1 TCJA Tax Savings Credit
2 TCJA 2018/2019 Winter Rate Credit
3 TCJA CBI Subsidy Reduction Credit
Replacement CBI Subsidy Reduction Credit *
Residential First 500 kWh Credit
Resldential First 500 kWh Credit
40a5ecase
5Ebsecase
6BaseCase
- Notes: ' Cgd subsidy rcduaion TRR credi was originally designed in the TClA settlement to pcoduce rates credits tdallirg roughly $20 million over 22 months. Under the base case settlement Mme rate credits are increased beginning March 1, 2019 and are now designed to pmduce rate credits totalling appmximately $35.5 million over the 22 month period ending June 30,2020. Unes 3 and 4 are the same credit in the TRR, It is shown on two seperate lines to Illustrate the increase in rate credit Wels beginning March 1,2019 as a result of the base case setl!ement
2 Expanded tome SGS class beginning on March 1,2019
APPENDIX C
Commission Post-Hearing Request Exhibit No. 2
Future Ratemakine Issues Resolved By the Joint Stipulation
Subject to the Commission's approval of the Joint Stipulation, the following are the "express exceptions" noted in Paragraph 23 to the Stipulating Parties' freedom to adopt whatever positions they may wish in subsequent litigation:
- 1. Stipulation 1 11 5C. The Stipulating Parties agree that EE/DR net lost revenues (which are to be excluded from base rates) will be recovered in the Companies' future EE/DR proceedings.
- 2. Stipulation 11 15D. Whenever Clinch River Units 1 and 2 are retired, the Stipulating Parties agree that any remaining undepreciated plant balance will be transferred to the accumulated depreciation balances of' APCo's Amos and Mountaineer Plants and recovered over the remaining lives of those plants through charges to depreciation expense.
- 3. Stipulation 11 15-E. The Stipulating Parties agree that APCo's production demand allocator will be used to allocate APCo's embedded transmission cost of service; that, on the date that new base rates for the Companies go into effect, PJM Transmission Owner Revenues will be allocated in the ENEC monthly deferral calculations using APCo's production demand allocator; and that PJM LSE OATT charges will continue to be allocated in the ENEC monthly deferral calculations using APCo's retail demand allocator.