Download adjustment charges of williamsport

June 30, 2017
Felecia L. Greer, Executive Secretary
Public Service Commission of Maryland
William Donald Schaefer Tower
6 St. Paul Street – 16th Floor
Baltimore, Maryland 21202-6806
Re:
Case No. 8507(w)
Dear Ms. Greer:
An original and six copies of the Direct Testimony of Larry R. Allen on Behalf of the Staff of the
Public Service Commission of Maryland are attached for filing in the above-referenced docket. In addition,
the testimony is being filed electronically and copies are being sent to the parties of record in this
proceeding.
If you have any questions regarding this matter, please do not hesitate to call me.
Thank you for your consideration.
Very truly yours,
Lloyd J. Spivak
Assistant Staff Counsel
cc:
Parties of Record
/g:/wp/8507tes2.cov.doc
BEFORE THE
PUBLIC SERVICE COMMISSION
OF MARYLAND
IN THE MATTER OF THE CONTINUING
INVESTIGATION OF THE ELECTRIC FUEL
RATE AND PURCHASED POWER COST
ADJUSTMENT CHARGES OF WILLIAMSPORT
MUNICIPAL ELECTRIC LIGHT PLANT
*
*
*
*
*
CASE NO. 8507(w)
DIRECT TESTIMONY
OF
LARRY R. ALLEN
ON BEHALF OF THE STAFF
OF THE
PUBLIC SERVICE COMMISSION OF MARYLAND
JULY 12, 2000
Direct Testimony of Larry R. Allen
Williamsport Municipal Electric Light Plant
Case No. 8507 (w)
1
Q.
PLEASE STATE YOUR NAME AND POSITION WITH THE PUBLIC
SERVICE COMMISSION OF MARYLAND.
2
3
4
A.
My name is Larry R. Allen. I am a Public Utility Auditor - Senior with the Public
5
Service Commission’s Accounting Investigations Division.
I graduated from
6
Wilmington College, Wilmington, Ohio in 1996 with a Bachelor of Arts Degree
7
in Accounting.
8
operations with Cinergy, a large gas and electric utility in Cincinnati, Ohio. My
9
experience at Cinergy included positions as a Staff Analyst in General
10
Accounting, Staff Analyst in the Energy Delivery Business Unit, and a Power
11
Plant Flue Gas Desulferization Control Operator. I have previously presented
12
testimony in fuel cases for Thurmont Municipal Light Company (Case No.’s
13
8506(u) and 8506(v)), Hagerstown Municipal Electric Light Plant (Case No.’s
14
8505(u) and 8505(v)), Williamsport Municipal Electric Light Plant (Case No.
15
8507(v)), Town of Berlin (Case No. 8508(v)), NUI Elkton Gas (Case No.
16
8513(v)), Potomac Edison Company (Case No. 8523 (m)), and Washington Gas
17
Light Company (Case No. 8509(x)).
I have nine years experience in accounting, finance and
18
19
Q.
WHAT IS THE PURPOSE OF YOUR TESTIMONY?
A.
The purpose of this testimony is to comment on Williamsport Electric Light
20
21
22
Plant’s (Williamsport) Fuel Rate Adjustment (FRA) and Actual Cost Adjustment
23
(ACA). Under current Maryland practice, the adjustment clause of Williamsport
1
Direct Testimony of Larry R. Allen
Williamsport Municipal Electric Light Plant
Case No. 8507 (w)
1
is to be reviewed no less frequently than once per year. I present Staff’s position
2
regarding the application of the adjustment clause used by Williamsport since the
3
conclusion of the last review in May 1999.
4
5
Q.
WHAT MONTHS ARE REVIEWED IN THIS PROCEEDING?
A.
I reviewed the cost months of June 1999 through May 2000, inclusive.
Q.
HOW
6
7
8
9
DOES
WILLIAMSPORT
SATISFY
IT'S
ENERGY
REQUIREMENTS?
10
11
12
A.
Williamsport has signed a full requirements contract with the Allegheny Power
13
Service Corporation (Potomac Edison Company). Williamsport is currently
14
serving customers under the contract.
15
16
Q.
WHAT ARE YOUR DUTIES REGARDING WILLIAMSPORT’S FUEL
RATE CALCULATION?
17
18
19
A.
I am responsible for the continuous audit and review of Williamsport's Fuel Rate
20
Application (FRA) and Actual Cost Adjustment (ACA) factors applied to
21
customer bills.
22
23
2
Direct Testimony of Larry R. Allen
Williamsport Municipal Electric Light Plant
Case No. 8507 (w)
1
Q.
PLEASE DESCRIBE THE FRA AND ACA FACTORS.
A.
The FRA factor is a rate assessed to customers to recover purchased power costs.
2
3
4
On a monthly basis, an FRA factor is developed and applied to customer bills.
5
The FRA factor is determined by dividing the total bill covering purchased power
6
by the kilowatt-hours sold and delivered by Williamsport to its customers during
7
the most recent month. It should be noted there is a two-month normal time lag
8
between the cost month and billing month. An ACA to recover fuel and purchase
9
power cost adjustment under- or over- collections is computed by taking the
10
actual cost of power as recorded on the books of the company during the
11
determination period, and subtracting an amount equal to (1) the base cost of
12
electricity per kWh multiplied by the actual kWh sales during the determination
13
period and (2) the actual revenues recorded on the books of the company during
14
the determination period. From this amount, any over- or under- recovery balance
15
at the beginning of the determination period is added or subtracted. The derived
16
amount is divided by the actual kWh sold during the determination period. The
17
resulting unit rate is reflected for a twelve-month period. The ACA calculation is
18
graphically presented on Exhibit LRA-1.
19
20
21
Q.
WERE FRA AND ACA FACTORS APPLIED TO CUSTOMER BILLS
ACCURATELY?
22
3
Direct Testimony of Larry R. Allen
Williamsport Municipal Electric Light Plant
Case No. 8507 (w)
1
A.
Based on a review of random customer bills from each tariff class, I believe
2
Williamsport consistently applied the authorized ACA factor during the period
3
under review. During the review of the application of the FRA factor to customer
4
bills, a minor error to a customer bill was discovered. Williamsport is correcting
5
the error and having their billing software corrected to prevent this error from
6
occurring again.
7
8
Q.
DID
WILLIAMSPORT
SUBMIT
A
RELEVELIZED
ACA
CALCULATION?
9
10
11
A.
Yes. Williamsport developed a relevelized ACA to be applied. The over-recovery
12
of $17,071, as illustrated by exhibit LRA-1, is divided by the forecasted cost of
13
purchased power of kWh sales of 17,278,055. The resulting factor of ($0.0010)
14
per kWh is the ACA factor that will be billed for the twelve-month period that
15
begins August 2000, which is added to the monthly FRA factor.
16
17
Q
WHAT ARE YOUR CONCLUSIONS, ASIDE FROM THE MINOR
DISCREPANCY NOTED ABOVE?
18
19
20
A.
I believe Williamsport calculated and applied FRA and ACA factors in
21
accordance with its tariff. The previous period ACA factor of (0.0018) yielded an
22
under-recovery of $13,735. When netting the $13,735 against the beginning over-
23
recovery balance of $30,806, it results in an amount of $17,071 still over-
24
recovered. The new calculation of the ACA factor of (0.0010) represents a
25
decrease in the over-recovered amount; bringing actual collections nearer to
26
actual billing for the time period under review. I believe therefore it is proper that
4
Direct Testimony of Larry R. Allen
Williamsport Municipal Electric Light Plant
Case No. 8507 (w)
1
Williamsport should utilize an ACA factor of $(0.0010) per kWh for the twelve
2
month period that begins August 2000.
3
4
Q.
DOES THIS CONCLUDE YOUR TESTIMONY?
A.
Yes.
5
6
5