ML19308A424
| ML19308A424 | |
| Person / Time | |
|---|---|
| Site: | South Texas, Comanche Peak  |
| Issue date: | 06/26/1975 |
| From: | Rogers O AFFILIATION NOT ASSIGNED |
| To: | |
| Shared Package | |
| ML19208C305 | List:
|
| References | |
| E-9131, NUDOCS 7909260345 | |
| Download: ML19308A424 (7) | |
Text
{{#Wiki_filter:- / ( i ~ ~,. Q UNITED STATES FEDERAL POWER Com1ISSION DOCKET NO. E-9135 111SSISSIPPI POWER C0!! pat 4Y STATE OF GEORGIA ) ) SS: COUNTY OF FULTON ) I certify that the attached testiraony and exhibits in this docket were prepared by me or under my supervision and that the ansvers contained in such testimony and exhibits are true and correct to the best of my huouledge and belief. // G .;D>e :/lll/Lluu-O. Frauhlin Roge'rs Subscribed and sworn to before rae this 26th day of June, 1975 J tM$m,,/ TO Y i c., Am v J No tary Public riot.m/ Pau;:, G<cr63, State at ter,- f.f/ Commhun I:=p;re: TAar. 23,1970 V Ify Co maission expires !!ar.23,1976 i 7909260'3 f f
MISSISSIPPI POWER COMPANY FPC DOCKET No. E-9135 DIRECT TESTIMONY OF 0. FRANKLI'N ROGERS V 1 Q. PLEASE STATE YOUR NAME AND ADDRESS. 2 3 A. My name is 0. Franklin Rogers. My business address is 1000 Crescent 4 Avenue, N.E., Atlanta, Georgia 30309. 5 ~ 6 Q. BY WHOM ARE YOU EMPLOYED? 7 8 A. I an a member of the firm of Southern Engineering Company of Georgia. 9 10 Q. PLEASE STATE YOUR EDUCATIONAL BACKCROUND. 11 12 A. I attended Emory University in Atlanta for two years and Georgia 13 Institute of Technology for two years, receiving a degree of Bachelor 14 of Industrial Engineering from Georgia Institute of Technolcgy in 1955. 15 I also attended Emory University Law School. 16 17 Q. PLEASE STATE YOUR PROFESSIONAL EXPERIENCE. 18 19 A. Upon gradua, tion from Georgia Tech, I served three years as an officer 20 in the United States Navy, after which I began working for Southern 21 Engineering Company in 1958. I have, during that time, headed the 22 Retail and Uholesale Rate Departments in my Company. I have performed 23 rate studies for over seventy-five rural electric cooperative and 24 municipal systems in thirteen states during this period of time. I 25 have participated in wholesale rate and contract negotiations with HM 26 thirty-six privately owned investor utilities in nineteen states. 27 During this period of time, I have prepared or participated in pre-28 paring numerous cost of service studies of investor-owned utilities, 29 rural electric cooperatives and municipal systems. 30 31 Q. MR ROGERS, WITH RESPECT TO ELECTRIC RATE CASE MATTERS, HAVE YOU EVER 32 GIVEN TESTIMONY BEFORE THIS COMMISSION OR ANY STATE UTILITY REGULATORY 33 COMMISSION? 34 35 A. Yes, I have. 36 37 Q. WILL YOU PLEASE IDENTIFY THOSE PROCEEDINGS AND THE COMMISSIONS BEFORE 38 WHICH YOU HAVE TESTIFIED? 39 40 A. I have testified as a rate expert before several State Commissions 41 including North Carolina, South Carolina, Kentucky and Indiana. I have 42 previously testified before the Federal Power Commission in the follow-43 ing proceedings: Mississippi Power & Light Company, FPC Docket No. 44 E-7577; Carolina Power & Light Company, FPC Docket No. E-7564; ccorgia 45 Power Company, FPC Docket No. E-7548; Public Service Company of Indiana, 46 FPC Docket No. E-7645; Alabama Power Company, FPC Docket No. E-7674; 47 culf Power Company 2 FPC Docket No. E-7625; Florida Power Corporation, 48 FPC Docket No. E-7679; Duke Power Company, FPC Docket No. E-7720; 49 Pennsylvania Electric Company, FPC Docket No. E-7718; Public Service 50 Company of Mew Hampshire, FPC Docket No. E-7742; Indiana and Michigan V l h
e i \\=M 1 Electric Company, FPC Docket No. E-7740; and Virginia Electric and Power 2 Company, FPC Docket No. E-8026, Carolina Power & Light Company, FPC 3 Docket No. E-8881. I have also submitted prepared testimony in Consumers 4 Power Company, FPC Docket No. E-7803; Appalachian Power Company, FPC 5 Docket No. E-7775; and Toledo Edison Company, FPC Docket No. E-7929; 6 and Mississippi Power Company, FPC Docket No. E-7625; carolina Power 7 and Light Company, FPC Docket No. E-8884; Alabama Power Company, FPC g Docket No. E-8851. 9 10 The privately owned electric companies with which I have personally 11 negoticted on behalf of wholesale customers are: 12 13 Florida P,uer Corporation (two occasions), Gulf Power Company, 14 Georgia Power Company (four occasions), Virginia Electric & Power 15 Company (three occasions), Carolina Power & Light Company, Delmarva 16 Power & Light Company of Virginia (three occasions), Delmarva Power 17 & Light Company of Maryland (three occasions), West Penn Power Company, 18 Pennsylvania Electric Company (three occasions), Metropolitan Edison 19 Company, (three occasions), New Jersey Power & Light Company (two 20 occasions), Buckeye Power, Inc., Duke Power Company (four occasions), 21 Public Service Company of Indiana, Northern Indiana Public Service 22 Company, Detroit Edison Company, Central Illinois Public Service 23 Company, Illinois Power Company, Nentucky Utilities Company, New York 24 State Electric & Cas Corporation, Alabama Power Company (tuo occasions), 25 Oklahoma Gas and Electric Company, Public Service Company of Oklahoma, (2) 26 Public Service Company of New Hampshire, Central Illinois Light Company, 27 Mississippi Power Company, Central Vermont Public Service Corporation 28 (two occasions), Florida Pouer & Light Company, Indiana and Michigan 29 Electric Company, Appalachian Power Company, and Consumers Power 30 Company. 31 32 Most of the negotiations involved rate sheedules which contained 33 fuel adjustment clauses. Fhny negotiations resulted in substan-34 tial changes in, or deletion of, the fuel adjustment clauses. 35 36 Q. HAVE YOU TESTIFIED BEFORE OTHER COMMISSIONS? 37 38 A.
- Yes, I have testified before the Atomic Safety and Licensing Board 39 of the United States Atomic Energy Commission in Consumers Power 40 Company (Midland Plant, Units 1 and 2), AEC Docket Nos. 50-329A and 41 50-330A. Additionally, I have subm.itted testimony before the Atomic 42 Safety and Licensing Board in the matter of Alabama Power Company 43 J seph M. Farley Nuclear Plants, Units 1 and 2, AEC Docket Nos. 50-348A 44 and 50-364A.
43 46 Q. MR. ROGERS UILL YOU PLEASE DESCRIBE IN GREATER DETAIL YOUR EXPERIENCE 47 CONCERNING FUEL ADJUSTMENT CLAUSES? 48 49 A. I have designed many fuel adjustment clauses and I have analyzed and i 50 negotiated fuel adjustment clauses on behalf of our clients with their %.) _ _ _ _ _ _ _ _ _ l
V 1 wholesale power suppliers. 2 3 In many, if not most, of the rate cases and negotiations noted above, 4 a fuel clause was at issue. Additionally, I have testified in the 5 following proceedings which involved only fuel adjustment clauses. 6 7 The North Carolina Utilities Commission, Docket No. 8 E-7, Sub. 114 the result of which was that Duke Power 9 Company's proposed fuel adjustnent clause for retail 10 customers was disallowed by that Commission; 11 12 The Federal Power Commission in FPC Docket No. E-7720 13 Duke Power Company; and The Federal Power Commission in 14 the rulemaking proceeding concerning fuel adjustment clauses 15 in wholesale rate schedules, Docket No. R-479, in which I 16 represented the American Public Power Association, the 17 National Rural Electric Cooperative Association, many 18 statewide cooperative organizations, and statewide municipal 19 organizations, as well as regional and individual organizations. 20 21 Q. BY UHOM IS YOUR TESTlMONY SPONSORED IN THIS PROCEEDING? 22 23 A. My testimony is sponsored by Coast EPA, Singing River EPA, and 24 East !!ississippi EPA. 25 b 26 Q. WILL YOU OUTLINE BRIEFLY YOUR ASSIGMMENT ON BEHALF 0F THE INTERVENOR 27 IN THIS PROCEEDING? 28 29 A. My assignment was to determine whether MPCo's proposed fuel cost adjust-30 nont, environmental cost adjustment and income tax adjustment for 31 cervice to EPA's in this proceeding is reasonable. 32 33 Q. MR. ROGERS, PLEASE DESCRIBE THE COMPANY'S FUEL COST ADJUSDIENT. l 34 35 A. Mississippi Power Company will add or subtract an amount per kilowatt-36 hour used by association calculated in the follcwing manner: 37 38 Fuel Cost Adjustment 39 40 To the above charges for cicetric service, there shall be added or 41 subtracted an amount per kilowatt-hour used by Association determined 42 as follows: 43 44 1. For current month, add total cost of fuel at Company's generating i 45 plants, exclusive of fuel cost at plant on site of specific customer, 46 and total fuel cost of energy purchased in interchange and subtract 4 47 therefrom revenue derived from total fuel cost of energy sold 48 in interchange. 49 50 2. From above amount, subtract product of 7.000 mills times territorial ? %.) l
/ I cnergy supply. (Territorial energy supply equals the sum of total 2 Company generation, exclusive of Lo.ieration on site of specific 3 customer, plus total energy received in interchange, less total 4 energy delivered in interchange during the month of cost determination). 5 6 3. Divide difference so obtained by territorial energy supply, less trans-7 mission losses and carry to nearest.001 mill. 8 9 4. Amount so determined shall be applied to energy consumption during 10 first billing month following month of cost determination. 11 4 12 Q. DOES THE COMPANY'S FUEL COST ADJUSTMENT CLAUSE CONFORM UITil THE COMMISSION'S 13 ORDER H0. 517 CONCERNING FUEL ADJUSTMENT CLAUSES IN UHOLESALE RATE SCllEDULE? 14 15 A. It does not. The Company's proposal is deficient in the following respects: i 16 17 1. The use of the total cost of fuel at the Company's generating 18 plants. 19 20 2. Th'c use of current transmission losses in the calculation of the 21 reduction assigned to the base period. 22 23 Q. WHAT FUEL COST DOES ORDER No. 517 INCLUDE FOR FUEL CONSUMED IN COMPANY 24 GENERATING PLANTS? 25 (.) 26 A. The cost of fossil fuel should include no items other than those listed 27 in Account 151 of the Commission's Uniform System of accounts for Public 28 Utilitics and Licensecs. The cost of nuclear fuel shall be that as 29 shown in Account 518, except that if Account 518 also contains any 30 expense for fossil fuel which has already been included in the cost 31 of fossil fuel, it shall be deducted from this account. FTCo has 32 included fuel costs from Accounts 501 and 547. The handling costs 33 which are included in this sum should be removed. 34 35 Q. ARE THERE ADDITIONAL DEFICIENCIES IN THE COMPANY'S FUEL COST ADJUSTMENT? 36 37 A. Yes, Sir. In the Company's calcu;. tion it has divided the increase in 38 fuel cost by the territorial energf supply minus current transmission 39 losses. This method vill recover less than the cost actually expended 40 when losses in the current period are greater than those in the base 41 period. Ccnversely, it vill recover more than the cost actually expended 42 when losses in the current period are less'than those in the base period. 43 This ia evident from the following calculation. 44 45 Let Fuel Cost in Curr'ent Month in Dollars. 46 Fc = 47 48 Pb Fuel Cost in Base Period in Dollars. = 49 50 %.) ---i---- - ~
~ V 1 G Territorial Energy Supply Cut rent !!onth. = c 2 Gb Territorial Energy Supply B se Period. = 3 L Transmission Losses in Curre..t Month. = e 4 Lb Transmission Losses in Base Period. = 5 6 The Company calculates the adjustment as: 7 8 (1) Fr - $0.007C Fe $0.007 G,, c 9 Cc - Le Gc - Lc G ~L c c 10 11 But Gc - Lc = ~ Sales, or Sc, in current period. So the above 12 expression can be rewritten as: 13 14 (2) Fe. 0.007Ge Fb E Sc n ere $0.007 { = 1 17 j 18 (3) F Tb G F G ({b } ((G } F c -{ - (g)( ) ({c } ({e } c ~ 19 20 21 22 llowever, the cost per kilowatt-hour sold in the base period can 23 be expressed as(h) (h). When one compares the base period deduction 24 Gb Sb 25 assigned at line (3) with the actual expenditure, ( )( ), it is g 27 obvious that; 28 29 (4) If L > b, Company method will recover less than cost expended. 30 S Sb c 11 32 (5) If & < Gy. Company method will recover more than cost expended. 33 Sc Sb 34 35 (6) If & = h, Company will recover cost expended. 36 S Sb c 37 38 Stated another way, this means that r.s losses increase over the 39 base period MPCo will recover less than the cost actually expended; as 1 40 losses decrease, MPCo will recover more than the cost actually expended. 41 42 Q. MR. ROGERS, llAVE YOU FORMED AM OPINION CONCERNING TIIE FORM OF AN 43 ACCEPTABLE FUEL ADJUSTMENT CLAUSE 7 44 ( 45 A-Yes, Sir. An acceptabic clause would conform with the Commission's 46 Order No. 517. I have prepared such a clause in Exhibit (OFR-1). 47 48 Q. MR. ROGERS, DO YOU llAVE. ADDITIONAL COMMENTS CONCERNING MPCO'S PROPOSED 49 TARIFF 7 l 50 V-I ,, _ l
/ k"M 1 A. Yes, Sir. The Company has included an Environmental Cost Adjustment 2 which will be added to EPA's monthly bill whenever the amount by which 3 the twelve months ending with current nonth cost to own, operate, and 4 maintain enviromental protection equipment exceeds such costs for the 5 tuelve conths ending with Decenber, 1975. Automatic escalator clauses 6 should be granted only after a need for such a clause has been clearly 7 established. The Company has submitted nothing to demonstrate the 8 necessity for such a clause. 9 10 The Environmental Cost Adjustment should be deleted. These 11 costs are plant rclated. The expenses and return associated with 12 these facilities, therefore, should be reflected in the filing of 13 rate changes uith the proper regulatory authorities; not through 14 some automatic adjustment clause which gives no consideration to 15 the justness and reasonableness of such expenses and rate of return. 16 17 Q. MR. ROGERS, DO YOU HAVE ADDITIONAL CO:CIENTS CONCERNING THE COMPANY 'S 18 TARIFF? 19 20 A. The Company has included an Income Tax Adjustment to compensate for 21 changes in income tax rate of Federal and State Income Taxes. Again, 22 this is an automatic escalator clause for which no need has been 23 established. It should be removed from the Tariff. 24 25 Provision has been made to compensate for changes in the tax ka/ 26 rate but no provision has been made to compensate for other changes 27 in the tax laws, e.g. the change in allowable deductions. Obviously 28 these changes'in tax laws could occur. As a result of any such change 29 which night reduce the taxable income but not change the tax rate, 30 MPCo night recover amounts in excess of those which were actually 31 expended. 32 33 Additionally, income tax rates have not been frequently changed. 34 MPCo is proposing an automatic adjustment for a relatively stable 35 cost. 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 \\) l _. _ _.. ~ i 1}}