ML19308A421
| ML19308A421 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 08/01/1979 |
| From: | Rogers O ALABAMA POWER CO. |
| To: | |
| Shared Package | |
| ML19208C305 | List:
|
| References | |
| E-8851, NUDOCS 7909260326 | |
| Download: ML19308A421 (8) | |
Text
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1 ALABAMA POWER COMPANY p\\ '
2 FPC DOCKET NO. E-8851 3
DIRECT TESTIMONY OF O. FRANKLIN ROGERS
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4 5
6 Q,
PLEASE STATE Y<OUR NAME AND ADDRESS.
7 8
A My name is O.
Franklin Rogers.
My business address is 9
1000 Crescent Avenue, N.E.,
Atlanta, Georgia 30309; lo 11 0
. BY WI!OM ARE YOU EMPLOYED?
i, 12 13 A
I am a member of the firm of Southern Engineering 14 Company of Georgia.
15 16 Q
PLEASE STATE YOUR EDUCATIONAL BACKGROUND.
17 18 A
I attended Emory University in Atlanta for two years and 19 Georgia Institute of Technology for two years, receiving 20 a degree'of Dachelor of Industrial Engineering from 21 Georgia Institute of Technology in 1955.s I also 22 attended Dmory University Law School.
23 24 Q
PLEASE STATE YOUR PROFESSIONAL EXPERIENCE.
(*0) 20 26 A
Upon graduation from Geore,la Tech, I served three years 27 as an fficer in the Unifad States Navy, after which I gg began working for Southern Engineering Company in 1958.
I have, during that time, headed the Retail and whole-29 30 sale Rate Departments in my Company.
I have performed rat studies for over seventy-five rural electric 31 p rative and municipal systems in thirteen states 32 during this period of time.
I have participated in 33 wholesale rate and contract negotiations with thirty-3/
}f six privately-owned investor., utilities in nineteen states.
During this period of time, I have prepared or participated in preparing numerous' cost of service studies of investor-owned utilities, and rural electric 38 cooperative and nunicipal systems.-
39
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40 0
MR. ROGERS, WITIl RESPECT TO ELECTRIC RATE CASE MATTERS,.
41 IIAVE YOU PREVIOUSLY GIVEN TESTIMONY BEFORE TIIIS 42 COMMISSION AND BEFORE STATE UTILITY REGULATORY 43 COMMISSIONS?
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Yes, I have.
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WILL YOU PLEASE IDENTIFY TIIOSE. PROCEEDINGS AND TIIE
.s, 9 1 9092403424,
c 4
1 COMMISSIONS BEFORE WIIICII YOU IIAVE TESTIFIED?
2 3
A I have testified as a rate cxpert before several State (kJ.
4 Commissions including North Carolina, South Carolina, 5
I have previously testified 6
before the Federal Power Commission in the following 7
proceedings:
Mississipni Power & Light Company, FPC 8
Docket No. E-7577; Carolina Power & Light Company,.FPC 9
Docket No. E-7564; Georgia Power Company, FPC Docket 10 No. E-7548; public service Company of Indiana, FPC 11
. Docket No. E-7645; Alabama Power Company, FPC Docket 12 No. E-7674; Gulf Power Comnany, FPC Docket No. E-7625; 13 Florida Power Corocra tion, FPC Docket No. E-7679; Duke 14 Power Company, FPC Docket No. E-7720; Pennsylvania 15 Electric Company, FPC Docket No. E-7718; Public Service 16 Company of New Hampshire, FPC Docket No. E-7742; 17 Indiana and Michigan Electric Company, FPC Docket No.
10 E-7740; and Virginia Electric and Power Company, FPC 19 Docket No. E-8026.
I have also submitted prepared 20 testimony in Consumers Power Company, FPC Docket No.
21 E-7803; Appalachian Power Company, FPC Docket No.
22 E-7775; and Toledo Edison Company, FPC Docket No.
E-7929.
23 24 25 Q
IIAVE YOU TESTIFIED BEFORE OTIIER COMMISSIONS?
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26 27 A
Yes.
I have testified before the Atomic Safety and 29 Licensing Board of the United States Atomic Energy Com-29 mission in Consumers Power Company (Midland Plant, Units 30 1 and 2), AEC Docket Nos. 50-329A and 50-330A.
31 Additionally, I have submitted testimony before the 32 Atomic Safety and Licensing Board of what is now the 33 Nuclear Regulatory Commission in Alabama Power Company (JOC Ph M. Parley Nuclear Plants, Units 1 and 2), AEC 34 Docket Nos. 50-348A and 50-364A.
35 36 37 Q
BY WIIOM IS YOUR FIRN RETAINED IN TIII3 PROCEEDING?
30 39 A
By Alabama Electric Cooperative and by the distribution 40 cooperatives which are parties to this proceeding.
41 42 0-WIIAT WAS YOUR FIRM'S ASSIGN' ENT IN TIIIS PROCEEDING?
M 43 44 A
byy firm was to review the filing for increased rates to 45 wholesale customers made by Alabama Power Company 46
( APCo) in this proceeding, its direct testimony and ex.
g,j 47 hibits for Periods I.and II, and any other information
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1 we could' obtain relating to APCo's system operations and 2
sales to its customers.
We were to determine if the pro-3 jected cost of service filed by APCo accurately reflects
- f;gj properly projected costs of serving the wholesale 4
5 customers.
Specifically, we were to determine whether 6
the information and methods shown in Statements "A"
l 7
through "P" are proper according to Federal Power Commis-O sion precedent and sound rate-making procedures.
9 In instances where APCo's cost of service study 10 appeared to be in error we wt ic to perform studies and 11
.make the necessary adjustments to show-the appropriate 12 cost of serving the wholesale customers.
And lastly, we
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to study the proposed electric tariff, including 13 were 14 the contract form, and the voltage level discount, 15 as filed by APCo, in order to consider the justness 16 and reasonableness of the provisions thereof.
17 18 19 Q
HOW DID YOU DIVIDE YOUR FIRM'S ASSIGNMENT AMONG YOUR DIFFERENT WITNESSES?
20 21 22 A
Mr. Janjai Chayavadhanangkur and Mr. Stephen P. Daniel both of our firm, will also testify in this proceeding.
23 Mr. Chayavadhanangkur will testify concerning the proper 24 voltage level discounts _ to be incorporated in the rate (sc/
25 which is-a part of the proposed tariff.
26 Mr. Daniel has taken the cost of service study 27 pr s nted by APCo and has recalculated it to reflect, 28 from the exhibits and testimony sponsored by Mr. Daniel,
-29 lf and other. witnesses in this proceeding, the mys 30 scary adjustments to the overall cost of service, n
31 and then allocated the appropriate portion of such 32 ad usted overall cost of service to the wholesale 33 ustomers.
34 O-W11AT WAS YOUR PERSONAL ASSIGNMENT IN THIS PROCEEDING?
36 37 My assignment was to review the revenues and expenses A
30 contained in the exhibits in this proceeding and other 39 available information concerning APCo's development of 40 its study of costs to service wholesale customers, to 41 consider whether those revenues and expenses are 42 proper, just and reasonab_le,.
I have also been assigned 43 the responsibility for_ analyzing tariff provisions 44 proposed by APCo.
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WIIAT DATA HAVE YOU STUDIED AND WHAT STUDIES HAVE YOU 47 CONDUCTED IN ORDER TO PREPARE THIS TESTIMONY AND
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1 RELATED EXHIBITS ?
I 3
A I have reviewed the direct testimony Period I and II
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4 cxhibits in APCo 's filing, and certain additional 5
information concerning historic and projected opera-G tions providing in response to data requests made by 7
the FPC Staff and the Intervenors in this proceeding.
O Additionally, I have reviewed APCo's FPC Form No. 1 9
reports for several recent years including 1973 and 10 other pertinent data.
In addition, I have reviewed 11 the provisions of the proposed tariff, including the 12 Rate Schedule, General Terms and Conditions, and 13 Agreement for Electric Service.
14 15 Q
WILL YOU BRIEFLY. SUMMARIZE THE RESULTS OF YOUR FINDINGS?
16 17 A
Yes.
My studies show the following:
10 (1)
APCo's method for accounting for fuel expen_s,e 19 and revenues derived from application of the 20 Fuel cost Adjustment do not properly _ reflec_t_
21 the appropriate requirement for a matching of 22 revenues and expenses incurred during the test 23 period (Period II) upon which revenue, require-47 r.)
24 ments are being, determined and rates being 25 established.
26 (2)
APCo's ' tariff should be changed in several 27 respects which I will discuss in detail later 20 in my testimony.
29 Q
WAS THE DOCUMENT DESIGNATED EXHIBIT (OFR-1) 30 PREPARED UNDER YOUR SUPERVISION?
31 32 A
Yes.
33 34 Q
PLEASE EXPLAIN THIS EXHIBIT.
35 36 A
This Exhibit is c~ntitled "Intervenors' Revisions'Made 37 To Alabama Power Company's' Proposed' Tariff."
This 30 Exhibit was prepared to indicate appropriate changes 39 made to the tariffs applicable to the Cooperatives and 1
40 Municipalities as proposed by APCo.
The format of the 41 tariff changes I propose closely follows that proposed.
42 by APCo, with the exception that only those sheets of 43
'44 45 h~l l
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'l the APCo tariff which I have modified are contained in 2
my Exhibit.
The sheet number on each of my pages 3
corresponds with the same sheet number in the tariffs
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4 proposed by APCo.
5 6
Q PLEASE EXPLAIN THE CHANGES YOU MADE IN THE " GENERAL 7
TERMS AND CONDITION"
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A The first change, on Revised Sheet Nos. 11 and 18, is 10 in Paragraph 1,
" AGREEMENT ", in which APCo has pro-11 vided that " acceptance of electric service 12 shall bind" the wholesale customers "to the provisions 13 of this tariff It has.recently been held that 14 a provision of this type is " superfluous", that "its 15 inclusion in the tariff may only cause confusion and 16 controversy", and that.it "should be stricken".
See 17 the Initial Decision of the Presiding Administrative 18 Law Judge in Mississippi Power Company, 50 FPC 897, 19 911-914 (1972), affirmed-by the Commission on this 20 point,- 50 FPC 885, 887, 894 (1973).
To the same ef-21 fact is the more rec,ent Initial Decision of the Pre-22 siding Administrative Law Judge in Florida Power &
23 Light Company, Docket No. E-8008 (November 26, 1974),
24 at pp. 52-54.
f g) 25 Accordingly, I have deleted this provision from i
26 the tariff.
27 I have also modified the second subparagraph under 28 Paragraph 15 (Paragraph 14 for MUN-1), " MISCELLANEOUS",
-29 on Revised Sheet Nos. 17 anu 23, to make the provision-30 for assignment of the service agreement bilateral.
'A l so,
31 I have modified this provision to assure that written 32 consent ".
shall not be unreasonably withheld" by 33 either' party.
Ifeither party _ should have the right to 34 unreasonably withhold its consent to an ausignment.
35 36 Q
WAS THE DOCUMENT DESIGNATED EXHIBIT (OFR-2) 37 PREPARED UNDER YOUR) SUPERVISION?
30 39 A
Yes.
40
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41 Q
PLEASE EXPLAIN THIS' EXHIBIT,.
42 43 A
This Exhibit is titled " Alabama Power comoany Accrual 44 Analysis of Wholesale Customer Fuel Adjustment Revenues, 45 Proposed Rates - II".
This Exhibit was prepared to 46 show the error made by APCo in failino to match revenues.
N 47 and expenses incurre'd during the test period (Period II)
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1 under the application of the Fuel Ccst Adjustment 2
Clause to the wholesale customers.
APCo's error can-(5=)
3 best be seen by examining Statement O, Exhibit 4
(EBH-9), page 1.
As noted in footnote (a) on that 5
Exhibit (EBH-9), the Company's tabulation's re-6 flect costs and operations of the second preceding 7
month.
This is confirmed by the fact that the data 8
listed in columns (1) through (6) for September 1974 9
are those actually experienced in July 1974 as shown 10 on Exhibit (EBH-7).
The energy listed in column 11 (7) for September 1974 is the July 1974 figure shown 12 on APCo's Operating Budget - 1974, Het Energy Supply, 13 page 17 (in response to Intervenors' Data Request 14 0-1).
The Fuel Cost Adjustment Factor shown in 15 column (8) of.319 mills per kwh (APCo's Exhibit 16 (EBH-9) Statement O) for September 1974 is derived 17 ntirely from July 1974 data.
In order to properly.
18 match revenues and expenses under the Fuel Cost Adjust-19 m nt C1,ause, for cost of service purposes, the Fuel Clause Adjustment Factor of.319 mills per kwh derived 20 fr m July data should be applied in July for revenue 21 Purposes.
My Exhibit (OFR-2) simply shows the 22 d rivation of the Fuel Cost Adjustment Clause charges:
23 (1) as rr n usly applied by APCo, (2) as properly 24 PPlied, and (3) the resulting difference.
roj 25 26 Column (a) of page 1 of Exhibit (OFR-2 ) shows 27 the kilowatt hour purchases during Period II by the 28
. wholesale customer, column (b) shows the Fuel Cost 29 Adjustment Clause charges as improperly applied by 30 APCo and column (c) shows the resulting dollars derived 31 therefrom.
Column (d) shows the proper Fuel Cost 32 Adjustment Clause charges (utilizing.319 mills per kwh for the month of July 1974 as derived from July 33 1974 d ta) and column (c) shows the resulting dollars 34 fr m such proper application.
Co lum'. (f) shows the 35 differ nce between APCo's erroneous application and 36 the proper application--the difference between columns
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"9 38 of $93,940 for Cooperatives (Line 13), $148,120 for
'9 Municipalities (Line 26) for a total of $242,060 for 40 the wholesale customers as shown on Line 27 of Exhibit' 41 (OFR-2).
42 43 The fallacy in APCo's method can be most readily 44 seen by noting the charges shown on page 1 of Exhibit 45 (OFR-2 ), column (d), for May of 1975 (Lines 11 A_f 46 and 24) of.344 mills per kwh and for June of 1975 47 (Lines 12 and 25) of.275 mills per kwh.
Notwithstanding
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the fact that these are the actual Fuel Cost Adjust-2 ment Clause charges calculated from May and June of
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1975 data and notwithstanding the fact that both of v
4 these months are included in Period II, neither of 5
these increments is utilize'd in APCo's method of c.nl-G culating the Fuel Cost Adjustment Clause charges 7
imposed on the wholesale customers.
Obviously, the 8
charges of.344 and.275 mills per kwh derived for 9
May and June of 1975 will be imposed on the wholesale 10 customers and should be computed for cost of service 11 purposes as revenue to APCo.
Failure to do so con-12 stitutes an unjustified deviation from accrual account-13 ing methods utilized for cost of service purposes.
14 It is acknowledged that APCo sustains a lag in 15 the collection of revenue under the Fuel Cost Adjust-16 ment Clause via the application of a charge based on 17 costs experienced in the second preceding month.
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18 IIowev e r, this does not change the fact that this 19 revenue "will be collected by APCo and should be so 20 included for cost of service charges.
Additionally, 21 it should be noted that Mr. Daniel's cost of service 22 study includes an allowance for 45 days fuel expense 23 in working capital.
24 Page 2 of this Exhibit (OFR-2 ) shows the dif-25 ferences, derived in the same fashion, based upon D
26 Present rates, of $61,421 for cooperatives, and 27
$100,639 for, municipals, for a total of $162,062.
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