ML20003E974
| ML20003E974 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 12/31/1980 |
| From: | Schaffer D TEXAS, STATE OF |
| To: | |
| Shared Package | |
| ML19240B984 | List:
|
| References | |
| NUDOCS 8104170611 | |
| Download: ML20003E974 (25) | |
Text
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..p ijr r-DOCKET NO. 3460 RE: APPLICATION OF DALLAS i
PUBLIC UTILITY COMMISSION i
POWER AND LIGHT COMPANY FOR l
!,f2 AUTHORITY TO CHANGE RATES I
0F TEXAS l
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DIRECT TESTIMONY OF
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DALE SCHAEFER je ACCOUNTING DIVISION l.
PUBLIC UTILITY CCMMISSION OF TEXAS i
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5 DECEMBER 1980 l
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DOCKET NO. 3460 Page I of 16 i:.
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Q.
Please state your name and business address.
2 A.
Dale Schaefer, 7800 Shoal Creek Boulevard, Suite 400N, Austin, Texas.
3 Q.
By whom are you employed and in what position?
4 A.
I am employed by the Public Utility Commission of Texas as a Staff
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5 Accountant.
6 Q.
What are your principal areas of responsibility as a Staff Accountet?
7 A.
My responsibilities include testifying as a witness in accounting matters in 8
cases filed with the Commission, and participating in the overall analysis 9
and examination of Rate / Tariff Change Applications.
10 Q.
Please state your educational background and business experience.
11i A.
I received a BS Degree in 1975 with a major in accounting from Miami 12 University.
In December of 1975 I was hired by Blue Cross & Blue Shield of 13 Texas as an auditor. My primary responsibility at Blue Cross was to perform 14 audits of providers for the Medicare Program.
Following my employment at 15 Blue Cross, I was employed by The Owen Company Hospital Pharmacy Management 16 located in Houston, Texas as Assistant Controller and Internal Auditor.
17 During the two years I spent at The Owen Company my duties included the 18 prepart.; ion of the monthly financial statements, supervision of the accounts 19 payable and payroil departments, and the performance of pharmacy audits.
I 20 have also attended the National Association of Regulatory Utility I
21 Commissioner's annual studies program at Michigan State University and the 22 University of South Florida which are educational programs directed toward 23 utility regulation. I am a Certified Public Accountant in the states of Ohio 24 and Texas, a member of both the Ohio Society of Certified Public Accountants, 25 and the American Institute of Certified Public Accountants, and have been i
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DOCKET NO.
3460 Paga 2 of 16
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employed by the Public Utility Commission of Texas since June 1978.
2 Q.
Have you previously testified before this Commission?
3 A.
Yes, I have testified in electric, telephone, and water / sewer rate cases 4
before this Commission.
^
5 Q.
Mr. Schaefer, in connection with the present case before this Commission, 6
Docket No. 3460, have you and/or members of the Staff performed an 7
examination and review of th'e Rate Filing Package filed by Dallas Power &
8 Light Company (DP&L or Company) in support of its request to increase and 9
change Texas rates?
10 A.
Yes, I have.
l2 11 Q.
What will your testimony cover in this proceeding?
12 A.
My testimony will cover the test period cost of service or revenue 13 requirement of the Company for the test year ended Jur.e 30, 1980, and the r
14 invested capital at June 30, 1980.
In addition, I will also explain the 15 results of the Staff's review and examination of the Company's records and 16 any related Staff adjustments.
17 Q.
Will you please explain what you mean you use the phrase " test period cost of 18 service?"
19 A.
Yes, the Commission's Substantive Rules specifically define " cost of 20 service" as that amount of revenue required to cover all reasonable and 21 necessary costs incurred by the utility in rendering service to the public, 22 which would include a fair and reasonable return.
In determining this cost 23 of service upon which to base rates, one must look at a representative 24 twelve-month period.
The period selected must be thoroughly examined to 25 determine that no nonrecurring expenditures are included in the cost of i
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DOCKET NO. 3460 Paga 3 of 16 fI 1
service and that, if known and measurable changes have occurred, adjustments 2
are made to reflect those changes.
After an overall test period cost of 3
service is properly determined, it is then compared to the test period 4
operating revenue amount.
If the cost of service amount is larger than the
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5 operating revenue amount, then the utility is entitled to a revenue increase.
6 Q.
I have before me your Schedules I through III. Were these schedules prepared 7
by you or under you supervision as a result of your examination of this 8
case?
9 A.
Yes, they were.
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10 Q.
Would you please explain how these schedules are arranged and what each y
11 presents?
12 A.
Yes, Schedule I shows the cost of service for the Company.
Schedule II l,
13 presents an adjusted value of invested capital for the Company. Schedule III 14 shows the invested capital for the Company and the Staff's recommendations.
15 Q.
Mr. Schaefer, you mentioned previously that the Staff has examined the
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16 Company's records.
Will you please explain the purpose and the extent of
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17 your review in these proceedings?
18 A.
The purpose of my review was to determine if the Company's cost of service 19 included only reasonable and necessary expenses properly incurred (or 20 expected to be incurred) by the utility in rendering public service. In that 21 cause, the Staff examined the filing of the Company and responses to 22 interrogatories.
In addition, I met with a representative of Deloitte
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23 Haskins & Sells, a certified public accounting firm.
Deloitte Haskins &
24 Sells furnished me with the workpapers whi h were prepared during an c
25 examination of the Company.
I have reviewed these workpapers and the audit iL
- Ba j$
DOCKET N0. 3460 Page 4 of 16 f
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workpapers of the Company's affiliates.
I have also reviewed the Company's 2
books and records and the books and records of Texas Utility Services, Inc.
3 (TUSI), Texas Utilities Fuel Company (TUFCO) and Texas Utilities Generating 4
Company (TUGCO).
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5 Q.
What conclusion have you reached as a result of your examination and review 6
of DP&L's application and supplemental data?
7 A.
The Company has made pro forma adjustments to reflect what it considers to be 8
known and measurable changes.
It is the differences in interpretation of 9
"known and measurable" and " fair and reasonable return" which give rise to 3
10 the Staff adjustments presented in Column 6 of my Schedule I, page 1.
These 11 adjustments totaling $31,253,338 are the result of the Staff's detailed 12 analysis, examination and recomputations of data included in the flate Filing i
13 Package, responses to interrogatories of the Staff and intervenors and data 14 obtained from the Company during the Staff's on-site examination.
15 Q.
Mr. Schaefer, would you please explain your adjustments to the cost of 16 service shown on page 2 of your Schedule I?
l 17 A.
Yes.
18 (1)
Increased Unit Fuel Costs 19 The Company has proposed an adjustment to increase fuel costs $7,177,181 20 based upon a recomputation of test year mBtu consumption at the 21 June 1980 unit fuel costs. I have analyzed the Company's adjustment and 22 found the adjustment using June 1980 unit gas costs to be reasonable, i
23 however, I found that the mStu consumed to generate sales to other 24 electric utilities was misstated. I found the adjustment using lignite 25 unit costs to be unreasonable, as the unit costs for subsequent months 1
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DOCKET NO. 3460 Page 5 of 16 f
I have actually decreased.
I have also found the adjustment using fuel 2
oil costs to be unreasonable as an out of period expense of $221,942 was 3
included in the test year fuel oil expense.
I have recomputed fuel 4
expense taking into account the above observations and recommend that a
5 the Company's adjustment of $7,177,181 be reduced by $1,845,378.
6 (2) Fuel Expense - Change in kwh Sales 7
Ms. Laura Owen of the Commission's Economic Research Department has
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8 adjusted kwh sales based upon customer changes and weather 9
normalization, which in turn, will cause fuel expense to increase.
In 10 computing the increase in fuel expense, I utilized the net change in 11 generation of 293,646,006 kwh and applied the June 1980 heat rate and g
12 fuel costs. The result of this computation was to reduce the Company's 13 adjustment from $7,978,340 to $7,557,156.
14 (3) Payroll - Dallas-15 The Company has adjusted its payroll, by annualizing the June 1980 payroll and estimating additional payroll costs for a November 1980 pay 16 17 increase.
At the time of the filing, the Company had projected the 18 November 1980 increase to be 8 percent.
Subsequent to the filing the 19 international Brotherhood of Electrical Workers approved a contract 20 which included an 11 percent wage increase.
Because this 11h percent j
21 increase is both known and measurable and became effective in 22 November 1980, I
have recalculated the payrcil utilizing the 23 11b percent wage increase.
In computing the payroll increase, I 24 utilized the Company's methodology which I found to be reasonable. The 25 result of applying this 11 percent increase, is to increase the L
DOCKET NO.
3460 Pagg 6 of 16 If 1
Company's adjustment to payroll an additional $877,864.
2 (4) Payroll Related Costs 3
Consistent with the Staff increase in payroll, payroll related costs 3
4 should be increased.
In an analysis of the Company's adjustment, 5
however, it was noted that workmen's compensation as a percent of 6
payroll charged to operation and maintenance expense has actually 7
decreased during the last six months of the test year.
Because it J
8 appears that workmen's compensation does not vary directly with the 9
change in payroll, the workmen's compensation expense has not been 10 adjusted for the increase in payroll expense.
The thrift plan and the j
11 group life and accidental death and dismemberment insurance were 12 adjusted using the Company methodology applied to the Staff adjusted 13 payroll expense.
As a result of the aforementioned items, I have 14 decreased payroll related cost $2,592.
L-15 (5)
Payroll at Jointly Owned Plants 16 The Company proposed an adjustment for payroll at the jointly owned 17 lignite plants similar to the one proposed for its own employees. Once 18 again, the Company's adjustment included an 8S percent pay increase 19 which has subsequently been determined to be 11h percent. Because this I
l 20 11\\ percent is both known and measurable, I have recomputed the payroll l
21 at the jointly owned plants utilizing this 11 percent pay increase. I 22 have, however, computed the payroll adjustment in a manner which takes 23 into account the three different categories of employees at the plants.
l 24 These three categories are administration and supervision, accounting 25 and technical, and power.
I have calculated the payroll adjustment for l
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DOCKET N0. 3460 Pag 2 7 of 16
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each of these categories separately, utilizing the annualized June 2
payroll and applying the test year overtime and expense percentages 3
along with the 111s percent payroll increase previously mentioned. The 4
result of this computation is to increase the Company's adjustment for 5
the jointly owned plants from $1,104,989 to $1,373,673.
6 (6)
Postage i
7 The Company has proposed an adjustment to increase postal expense to 8
reflect the year end level of customers and an anticipated postal rate 9
increase.
While the increase in postal expense due to an increase in
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10 customers represents a known and measurable change, the proposed postal
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11 rate increase is neither known ner measurable at this time. The process 12 of raising postal rates is similar to the process a utility must go 13 through to raise its rates.
The process lasts about ten months and 14 involves a h' earing with intervenors. The likelihood that the requested 15 rates will be those that are granted cannot be measured. Because of the 16 uncertainty of the ultimate level and effective date of the postal 17 increase, I have eliminated the portion of the adjustment that relates 18 to the postal rate increase, which is $155,860.
19 (7) Revenue Related Items (Uncollectibles) 20 The Company has included in its computation of revenue related items, I
21 the regulatory commission fee and street rental fees, along with 22 uncollectible accounts expense.
I agree with the Company's method of 23 computing these items, however, I have reclassified the regulatory 24 commission fee and street rental fees into taxes other than income. The 25 uncollectible accounts expense has been adjusted to $2,931,693 which is
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DOCKET NO. 3460 Pagn 8 of 16 c -
t e.,
1 based upon the Staff recommended cost of service.
2 (8) Rate Case Expenses 3
I have reviewed the Company's estimated rate case expenses and their 4
proposed period of amortization and find that they are reasonable with 5
the exception of the audit fees. The Commission Rules of Practice and 6
Procedure no longer require a financial audit at the test year end, as 7
long as the financial statements have been examined and reported on L
8 within the test year.
The rules do, however, require a test year j
9 review, which was performed by the independent accounting firm of l ~
10 Deloitte Haskins & Sells (DH&S). I consider the fee charged by Deloitte 3gj 11 Haskins & Sells to be reasonable, however, I do not feel that one 12 hundred percent of the fee should be charged to this rate case.
13 Deloitte Haskins & Sells did considerable work on a new computer billing 14 system which should aid DH&S in its year end audit work. In addition to 15 this specific audit work, general audit work such as the evaluation of l
16 internal control should also aid the auditors in their year end work.
17 Further, I have reviewed the charges that Texas Electric Service Company 18 was charged by DH&S, in Docket No. 3250, and found the charges to be 19 significantly lower.
Texas Electric Service Company was a recent case 20 before this Commission which involved a full financial audit rather than 21 the test year review.
Based upon the aforementioned items, it is my 22 recommendation that $20,000 of the audit fee be excluded from rate case 23 expenses, as it is applicable future time periods. The Company has some 24 ninety thousand dollars of fees from DH&S included in the test year, and 25 to include the full sixty thousand of requested rate case audit fees, 3
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DOCKET NO. 3460 Page 9 of 16 I
would, in all probability, duplicate some of the audit expenses.
2 (9) Residential Conservation Service Program 3
The Residential Conservation Service Program (RCSP) was initiated as a ri 4
result of the National Energy Conservation Policy Act (NECPA) of 1978.
5 The general purpose of the RCSP is to reduce the residential consumption 6
of energy by providing conservation information to each residential 7
customer and conducting, at the request of the customer, an on-site 8
inspection of the customer's residence for the purpose of advising the 9
customer of estimated energy savings if he were to implement recommended 10 energy conservation measures for his residence. DP&L will be offering
!.j 11 these energy audits to their residential customers in 1981. The Company 12 has proposed an adjustment of $451,600 to cover the costs of the 13 program announcement, the offering of the audit, the hiring of auditors, 4
14 and other ongoing costs of the program.
The Company has included in
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15 their request, salaries and benefits for 14 employees totaling 16
$369,900, less $87,680 for salaries included in the test year.
The 17 Staff has reviewed these salaries and benefits and found them to be 18 higher than the general levels of salaries for these types of auditors 19 by about $3,000 per employee. Accordingly, I have reduced the salaries
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20 for the supervision, senior field personnel and auditors by 13,000 each, 21 along with a corresponding adjustment to benefits. This resulted in a 22
$53,430 decrease in proposed salaries and benefits. In addition to the 23 salaries, I have reduced the printing costs of the offer to audit from 24
$.20 to $.10.
I have also utilized one half of the test year-end number 25 of residential customers and the current postal rates in computing the 3
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DOCKET NO. 3460 Pag 10 of 16
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I costs of printing and postage for the program announcement.
This 2
adjustment, together with the amortization of the initial costs over a 3
two year period rather than a four year period, results in an additional m
4
$20,628 reduction in the Company's proposed RCSP costs.
5 (10) Unallowable Expenses 6
In addition to the items removed from the cost of service by the I
7 Company, I have removed an additional $8,006 of expenses which I believe i
8 are specifically disallowed by the Commission.
Per the Commission's 9
Substantive Rules, funds expended in support of or membership in social, 10 recreational, fraternal or religious organizations shall be excluded 11 from the cost of service.
Because all but $720 of the above mentioned 12 expenditures fall into the scope of this rule, I have excluded these 13 cost from the cost of service.
The additional $720 which I have 14 excluded is 1 percent of the annual Edison Electric Institute dues.
15 This 1 percent is used for legislative advocacy which is also l
16 specifically disallowed by the Commission's rules.
17 (11) Other Operation and Maintenance Expense 18 Other operation and maintenance expense has been adjusted to $164,276 19 which is the level recommended by Ms. Laura Owen of the Commission's 20 Economic Research Division.
21 (12) Maintenance of Boiler Plant 22 From a review of the TUGC0 records, I learned that a recording error was 23 made in May of 1980 that was not corrected until July of 1980.
In that 24 the test year which ended in June of 1980 did not include this 25 correction, I have reduced the test year expense charged to boiler plant 3
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Pags [
of 16 3460 I
by $10,744 which is DP&L's allocated portion of the TUGC0 cost.
2 (13) Federal Income Taxes 3
In computing Federal income taxes, I have determined taxes as a r-4 derivation of the test period return amount. The test period amount is 5
the amount of dollars which will allow the Company to recoup its debt 6
and preferred stock capital costs and provide a fair return to its 7
equity holders.
This return to equity holders is an after income tax 8
amount.
Therefore, it is necessary to start with the return dollars 9
less amounts for debt interest plus any other items on which deferred 10 taxes have not been previously provided or which are direct offsets to f_p$
11 taxes payable.
This is the same method the Company has utilized in 12 computing its income taxes.
The Staff adjustment is the difference 13 aetween the Federal income taxes computed on the Company's requested 14 return and the Fe~deral income taxes computed on the Staff's recommended 15 return.
- f 16 Q.
The amount that you have deducted from interest in your tax calculation 17 differs from that shown on Schedule H of the Rate Filing Package. Can you 18 explain this difference?
19 A.
Yes, I multiplied the Staff's weighted average cost of debt by the Staff "as 20 adjusted" invested capital.
The purpose of this calculation is to allocate 21 to the imasted capital only that portion of the total interest costs that 22 would reduce operating income before taxes and accordingly have an effect on 23 the amount of Federal income taxes included in the cost of service.
24 (14) Payroll Related Taxes 25 As a result of the $877,864 adjustment I have proposed to payroll, I 1
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4 DOCKET NO. 3460 12 of 16 Page j
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l have also proposed an adjustment to payroll related taxes.
I have 2
reviewed the Company's methodology in computing its adjustment and I 3
have found it to be reasonable. I have utilized the same methodology in "i
4 computing the Staff adjustment to payroll related taxes.
5 (15) Ad Valorem Taxes c
6 Subsequent to the filing of the rate filing package, the 1980 ad valorem 7
tax rates became known. These rates were approximately.3 percent lower 8
than the 1979 tax rates.
I have applied the new 1980 rates to the June 9
1980 DP&L owned plant and recomputed the ad valorem taxes.
The lower 10 rates produce an increase in test year ad valorem taxes of $37,901
'f,f,
11 compared to the $2,188,052 increase in taxes proposed by the Company.
12 (16) Revenue Related Taxes 13 As mentioned previously in my testimony, I have reclassified the 14 regulatory commission fee and the street rental fee into taxes other 15 than income.
I have recomputed the Public Utility Commission gross 16 receipts assessment, street rental taxes, and the local and state gross 17 receipts taxes based upon the Staff's recommended cost of service.
18 (17) Total Return 19 The return is based upon the weighted average cost of capital of 20 10.80 percent, which will be discussed by Mr. Child, times the original 21 cost rate base shown on Schedule III. The Staff adjustment to return of 22
$13,807,589 is simply the difference between the amount requested by the 23
- Company,
$113,067,031 and the amount computed by the
- Staff, 24
$99,259,442.
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DOCKET N0.
3460 Page 13 of 16 I I 1
(18) Adjusted value of Invested Capital 2
Schedule II presents the major components of the Staff's proposed 3
adjusted value of invested capital at June 30, 1980.
I have used the O
4 mix percentages presented by Mr. Child, and the current cost of plant in 5
service net of age and condition recommended by Mr. Lee. The original 6
cost of net plant and the other elements of invested capital are shown 7
on my Schedule III.
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8 (19) Invested Capital
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9 With the exception of the items discussed below, the Staff concurs with 10 DP&L's elements of invested capital.
.j 11 (20) Accumulated Depreciation 12 For rate-making purposes, the Staff has increased the Accumulated 13 Depreciation by one-half of the depreciation adjustment that was 14 allowed in the cost of service.
This adjustment is made to normalize
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15 the effect of the depreciation adjustment over the test period, and 16 includes the assumption that the Company will seek another rate increase i
17 in one year.
It should be noted that this adjustment is made in this 18 rate case only for the determination of rates, and does not require a 19 book entry by the Company.
There is nothing in this adjustment that 20 precludes the Company from recovering the entire cost of the plant 21 through future depreciation.
22 (21) Construction Work in Progre::s 23 The construction work in progress requested by the Company includes all l
24 construction work in progress (CWIP) at the end of the test period and l
25 was adjusted by $1,027,582, which results in a total requested CWIP of l
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DOCKET NO.
3460 14 16 Page of N
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$308,313,988.
The Company's adjastment was to remove a noncurrent 2
payable related to the Martin Lake Unit 4 Project.
3 Mr. Child and I have discussed the various indicators of G
4 financial integrity in determining the level of CWIP to be recommended.
5 Our attempt was to balance the effects between the Company's financial 6
integrity and the customers' interest, and we believe that with the 7
inclusion of 78 percent of the requested CWIP, the Company will be able 8
to survive financially and not burden the customer any more than 9
absolutely necessary.
10 (22) Electric Plant Held for Future Use 11 The Company has requested that $2,568,848 of electric plant held for 12 future use be included in the Company's invested capital.
This plant i
13 held for future use is composed lignite leases and water rights.
In 14 determining the level of plant held for future use to be included in the 15 invested capital, there are several factors to consider. Most of these 16 factors are difficult to quantify and ultimate decision must be made
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17 through informed judgement.
If the Company does not purchase lignite 18 leases on a timely basis, they may not be available when they are j_
19 needed. On the other hand, if conditions in later years determine that 20 the plant is not required, the r @ n fne vill have had to pay the il 21 carrying costs for the needless plant.
For this reason, I feel that
'i 22 this risk should be borne by the ratepayers only t. hen it can be shown 23 that the Company has a definite plan for the investment's use within a 24 reasonable time period, or if the investment is a scarce resource.
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25 have excluded the Titus County water rights and fresh water supply along i
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DOCKET N0.
3460 Pag 2 15 of 16 1
N.
I with the Northeast Texas Municipal fresh water supply as the Company has 2
no plans for construction of a plant site before the 1990's.
I have, 3
however, included the investment in Culberson County because of the 4
scarcity of water in west Texas.
5 (23) Working Capital Allowance 6
I have included a working cash allowance in the working capit_al 7
component of invested capital equal to one-eighth of the Staff's 8
recommended operation and maintenance expense after deducting the 9
amounts charged to expense during the test year from materials and 10 supplies and prepaid items.
The Staff adjustment represents the j
11 difference between the amount of operation and maintenance expense 12 requested by the Company, and the amount recommended by the Staff.
In J.
13 addition, I have reviewed and agree with the average balance of 14 materials and supplies inventory and the prepayments included in 15 invested capital by the Company.
16 (24) Edison Electric Institute -- Accounts Payable 17 I have removed the unpaid assessments to the Edison Electric Institute 18 for the delayed Liquid Breeder Reactor Project. These assessments have 19 been included in the cost of service, but will not be payable until 1981 20 or 1982.
Because the Company has the use of these funds until they are 21 payable, I have included the $688,030 account payable in with other cost 22 free capital in computing the invested capital.
23 Q.
Mr. Schaefer, would you please summarize the Staff's recommendation in this 24 case?
25 A.
The Staff is recommending a reduction in the Company's claimed test period
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DOCKET N0.
3460 Paga 16 of 16 a
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cost of service of $37,739,187 which results in a fair and reasonable test 2
period cost of service of $542,907,032.
After excluding revenues from 3
sources other than base rates, there remains a base rate revenue deficiency 3
4 of $49,731,467.
5 Q.
What do the revenues from other sources represent?
6 A.
As shown on page 5 of my Schedule I, the $200,990,431 that I have deducted 7
from cost of service is comprised of two major sources.
One source is
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8 miscellaneous operating revenues as detailed on Schedule N-2 of the Rate 9
Filing Package adjusted for the removal of forfeited discounts as recommended 10 by Mr. Lee, and the recomputation of the allowance for prepayment of sales (3
11 tax. The other represents fuel adjustment clause revenues in the amount of r!.
12
$193,551,489.
13 Q.
Why have you adjusted test period base rate revenues?
14 A.
The Company computed test period base rate revenues using the adjusted Kwh
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15 sales for customers and weather.
Because the Staff has adjusted the Kwh 16 sales for. customers and weather, it is necessary to recompute test period 2
17 base rate revenues in determining the deficiency.
18 Q.
Does this conclude your testimony?
19 A.
Yes, it does.
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i DOCKET NO. 3460 Schedule !
Page 1 of 5 PUBLIC UTILITY COMMISSION OF TEXAS DALLAS POWER & LIGHT COMPANY COST OF SERVICE TWELVE MONTHS ENDED JUNE 30, 1980 Company Staff Lin2 Schedule Test Period Claimed As No.
Description Reference Amount (a)
Deficiency Total (a)
Adjustments Adjusted (1)
(2)
(3)
(4)
(5)
(6)
(7) 1 Fuel Scheduic i, pg. 2
~$ 196,478,973
$ 196,478,973
$(2,266,562)
$194.212.411 a
2 Operation and Maintenance Schedule I, pg. 2 105,951,405 441,243 106,392,648 (450,788) 105,941,860 3
Depreciation 33,149,401 33,149,401 33,149,401 4
Federal Income Taxes Schedule I, pg. 4 39,669,986 35,151,733 74,821,719 (16,912,649) 57,909,070 5
Taxes Other Than Income Schedule I, pg. 3 51,706,271 4,853,677 56,559,948 (4,301,599) 52,258,349 6
Interest on Customers' Deposits 176,499 176,499 176,499 7
Return Schedule II, pg. I 71,801,952 41,265,079 113,067,031 (13,307,589) 99,259,442 4
8 Total Cost of Service
$ 498,934,487
$81,711,732
$ 580,646,219
$(37,739,187)
$542,907.032 9
Fuel and Other Revenues Schedule I, pg. 5 (205,363,203)
(726,927)
(206,090,130) 5,099,699 (200,990,431) 10 Base Rate Revenue
$ 293,571,284
$80,984,805
$ 374,556,089
$(32,639,488)
$341,916,601 11 Test Period Base Rate Revenue (293,571,284)
(1,386,150)
(292,185.134) 12 Base Rate Revenue Deficiency (Excess)
$ 80,984,805
$(31,253,338) t 49,731,467 (a) !*Fedule A, page 1 (Rate Filing Package) with street rental fees and regulatory fees reclassified to other taxes.
m
ld f,
i DOCKET NO. 3460 Schedule I Page 2 of 5 PUBLIC UTILITY COMMIS$10N OF TERAS DALLAS POWER & LIGHT COMPANY DETAll 0F ADJU5TMENTS - SCHEDULE I (5CHAEFER) PAGE I TWELVE MONTH 5 ENDED JUNE 30, 1980
'y i
Test Period Adjustments Adjustment Lina Schedule Per Per To Company No.
Adjustment Reference Company Staff Requested Arount 1
Increased Unit Fuel Costs 5 7,177,181
$ 5.331,803
$(1,845,373) 2 Fuel Expense - Change in kwh Sales 7,978,340 7.557,156 (421,184)
N' Total Fuel Expense Adjustments 1 (2,266,562)
- s. -
3 Payroll - Dallas 5 5,037,725
$ 5,915,589 877,864 4
Payroll Related Costs 199,990 196,393 (2,592) 5 Payroll at Jointly Owned Plants 1,104,999 1,373,673 269,684 6
Postage 175,011 19,151 (155,860) 7 Revenue Related Items (Unco 11ectibles) 699,428 495,536 (203,792) 8 Rate Case Expenses 246,377 226,377-(20,000)
.4
'Q 9
Residential Conservation Service Program 451,600 377,542 (74,053) 1 :~ 10 Unallowable Expenses (35,307)
(43,313)
(8,006)
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11 Other Operation and Maintenance Expense 1,236,560 164,276 (1,122,234) 12 Maintenance of Boiler Plant (10,744)
(10,744)
Total D&M Adjustments 5
(450,783) 13 Total Federal Income Taxes Schedule I, pg. 4
$ 74,821,719
$57,909.070
$(16,912,649) 14 Payroll Related Taxes 539,757
$ 593,642 5
53,835
_, 15 Ad Valorem Taxes 2,188,052 37,901 (2,150,151) 16 Revenue Related Taxes Schedule I, pg. 3 7,620,002 5,414,669 (2,205,333)
Other Taxes 5 (4,301,599) 17 Total Return
$113.067,031
$99,259,442
$(13,837,539) o Ii-3 l_
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Schedule I PUBLIC UTILITY COMMISSION OF TEXAS 3
DALLAS POWER & LIGHT COMPANY REVENUE RELATED TAXES
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TWELVE MONTHS ENDED JUNE 30, 1980
,a Line Staff No.
Description Reference Amount 1
PUC Assessment
[
2 Staff Cost of Service Schedule I, pg. 1
$542,907,032 3
Assessment rate X
.001667 905,026
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State Gross Receipts 5
Test year tax per books Schedule A, pg. 24
$ 8,436,803 6
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Test year cost of service per books Schedule A, pg. 1
+ 451,974,187 7
Rate e
.0187 I3 8
Staff Cost of Service X 542,907,032
$10,152,361 I
9 Lyal Gross Receipts 10 Test year tax per books Schedule A, pg. 24
$ 17,151,924 11 Test year cost of service per books Schedule A, pg. 1
+ 451,974,197 12 Rate i
.0379-l 13 Staff Cost of Service X 542,907,032
$20,576,177 14 Street Rental Fees 15 Test year fee per books Schedule A, pg. 14 543,970
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16 Test year cost of service per books Schedule A, pg. 1
+ _451,974,187 t
l 17 Rate
.0012 18 Staff Cost of Service X 542,907,032 651,488
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l Schedule I DOCKET NO. 3460 Page 4 of 5 PUBLIC UTILITY COMMISSION OF TEXAS DALLAS POWER & LIGHT COMPANY FEDERAL INCOME' TAXES TWELVE MONTHS ENDED JUNE 30, 1980
?.,,
I Line m
No.
Description Amount 1
Return on invested capital (Schedule I pg. 1)
$ 99,259,442 2
Interest (30,296,187) (a)
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3 Non-normalized timing differences and i
other credits:
4 Amortization of investment tax credit
$(1,050,799) (b)
,d 5
Depreciation 4,614,181 (b) iG 6
Consolidated tax savings and surtax expemption (530,562)(b) 7 Other adjustments (2,159,481) (b) 873,339 8
Taxable component of return
$ 69,836,594 9
Factor for federal income taxes
.851851852 10
$ 59,490,431 11 Amortization of investment tax credit
$(1,050,799)
.s 12 Consolidated tax savings and surtax exemption (530,562)
(1,581,361) 13 Staff federal income taxes
$ 57,909,070 14 Company federal income taxes 74,821,719 (b)
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15 Staff adjustment
$(16,912,649) t i'~
(a) Staff weighted average cost of debt applied to Staff as adjusted invested capital.
(b) Schedule A (Rate Filing Package) page 32.
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~2 Schedule I DOCKET NO. 3460 Page 5 of 5 PUBLIC UTILITY COMMISSION OF TEXAS DALLAS POWER & LIGHT COMPANY
[UEL AND OTHER REVENUE TWELVE MONTHS ENDED JUNE 30, 1980 Company Staff Test Period As Description Amount (a)
Adjustments Total (a)
Adjustments Adjusted Recoverable Fuel Costs
$195,596,108
$195,596,108
$(2,044,619)(c) $193,551,489 Other Revenues 9,767,095 726,927 10,494,022 (3,055,080)(b) 7,438,942 Total
$205,363,203 726,927
$206,090,130
$(5,099,699)
$200,990,431 (a) Schedule N-2 (Rate Filing Package)
(b) Removal of Forfeited Discounts - Schedule N-2 (Rate Filing Package) page 2, plus reduction in allowance for prepayment of sales tax.
(c)
Staff adjustment to fuel expense - Schedule I, page 1, less out of period fuel oil costs of $221,943.
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l DOCKET NO. 3460 Schedule II Page 1 of 1 PUBLIC UTILITY C09t!$510N OF TEXAS DALLAS POWER & LIGHT COMPANY ADJUSTED VALUE CI INVESTED CAPITAL 3
June 30, 1980 Line
. Mix No Description Schedule Reference Computation Amount 1
Net Plant - Original Cost Schedule III, pg. 1
$ 686,839,799 T
2 Percentage Mix Child X
63.375
$ 435,284,723 3
Net Plant - Current Cost Lee
$1,466,488,552 4
Percentage Mix Child X
36.625 537,101,432
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Construction Work in Progress 240,484,911 6
Electric Plant Held for Future Use Schedule III, pg. 2 2,318,327 la L3 7
Nuclear Feel in Process Schedule III, pg. I 13,811,857 t.~.
8 Undistributed Construction Overhead Costs Schedule III, pg. 1 247,808 9
Job Orders to be Closed to Construction Work in Progress Schedule III, pg. I 145,910 10 Working Capital Schedule III, pg. 2 34,148,328 11 Customer Deposits Schedule III, pg. 1 (3,004,431) 12 Customer Advances for Construction Schedule III, pg. 1 (74,024) l g
13 Advance Paynents for Work to be Done for Customers Schedule III, pg. 1 (1,320,415) 14 Accumulated Deferred Federal Income Taxes Schedule !!!, pg. 1 (48,216,591) 15 Reserve for Insurance and i
Casualties Schedule III, pg. 1 (641,770).
16 Other Cost Free Capital Schedule III, pg. 2 (5,670,804) 17 Total Adjusted Value of Invested Capital
$1,204,615,261 18 Return 0 8.24%
99,259,442 9
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DOCKET NO. 3460 Schedule III Page 1 of 2 PUBLIC UTILITY COPNISSION OF TEXAS DALLAS POWER AND LIGHT COMPANY INVESTED CAPITAt AND RETURN
_ JUNE 30, 1980
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Line Staff Schedule Company As i
No.
Description Reference Amount (a)
_ Adjustments Adjusted 1
Original Cost of Plant in Service
$ 983,118,804
$ 983,118,804 2
Accumulated Depreciation Schedule III, pg. 2 (296,026.943)
$ (252,062)
(296,279,005) 3 Net Plant in Service 3 687,091,861 3
(252,062) 3 686,839,799 4
Construction Work in Progress Schedule III, pg. 2 303,313,988 (67,829,077) 240,484,911 5
Electric Plant Held for
^
Future Use Schedule 111, pg. 2 2.568,848 (250,521) 2.318,327 6
Nuclear Fuel in Process 7
Undistributed Construction 13,811,857 13,811,857 t
Overhead Costs 5
8 Job Orders to be Closed to 247,808 247,803 i 'n Construction Work in Progress 145,910
- 145,910 9
Working Capital Schedule III, pg. 2 34,407.903 (259,575) 34,148,328 10 Customer Deposits 11 Customer Advances for (3,004,431)
(3,004,431)
Construction 12 Advance Payments for Work to (74,024)
(74,024) be Done for Customers 13 Accumulated Deferred Federal (1,320,415)
(1,320,415)
Income Tax 14 Reserve for Insurance and (48,216,591)
(48,216,591)
Casualties (641,770)
(641,770) 15 Other Cost Free Capital Schedule U., pg. 2 (4,982,774)
(683,030)
(5,670,804) 6 16 Total Invested Capital 3 983,348,170
$(69.279,265)
$ 919.068,905 17 Return 9 11.44% Company
$ 113,067,031
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18 Return 9 10.80% Staff (b)
$ 99,259,442 (a) Schedule A, page 31 of Rate Filing Package (b) Testimony of Chris Child, Economic Research Division
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DOCKET NO. 3460 Page 2 of 2 PU8LIC UTILITY COMISSION OF TEXAS DALLAS POWER & LIGHT COMPANY INVESTED CAPITAL - STAFF ADJUSTMENTS r ',
June 30, 1980 Line Staff No.
Description Adjustment g
1 Accumulated Depreciation 2
Adjustment to reflect one-half of adjustment to expense (252,062)(a) 3 Construction Work in Progress 4
Construction Work in Progress - Staff
$ 240,484,911 (b)
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5 Construction Work in Progress - Company 308,313,988 (c) $
(67,829,077) 6 Plant Held for Future Use 7
Exclusion of Titus County Water Rights (64,639)(d)
' Q l;.j 8
Exclusion of Titus County Fresh Water Supply (159,763)(d) 9 Exclusion of Northeast Texas Municipal Water Supply (26.119)(d) $
(250,521) 10 Working Capital 11 Staff Operating and Maintenance Expense
$ 105,941,850 (e) 12 Less: Amounts charged to expense from prepayments and inventories (3,774,132)(f) 14 102.167,728 15 Rate 12.5%
16 Cash Working Capital 12,770,966 17 Prepayments and Inventories 21,377,362(f) 18 Staff Allowance for Working Capital 34,148,328 19 Company Amount 34,407,903(f) $
(259.575) 20 Other Cost Free Capital
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21 Payables to Edison Electric Institute (688,030)(g)
(a) Computed using Schedule A (Rate Filing Package)
(b) Represents seventy-eight percent of construction work in progress (c) Schedule 8 (Rate Filing Package)
(d) Obtained from General Counsel First Request for Information - Question #6 (e) Schedule I, pg. I (f) Schedule G (Rate Filing Package)
(g) Determined from information obtained during review of books and records.
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