1 BEFORE THE PUBLIC UTILITIES COMMISSION OF OHIO 2 - - - 3 In the Matter of the : Regulation of the Purchased : 4 Gas Adjustment Clauses : Contained within the Rate : Case No. 17-0217-GA-GCR 5 Schedules of the Waterville : Gas & Oil Company and : 6 Related Matters. : 7 - - - 8 In the Matter of the : Uncollectible Expense Rider : Case No. 17-0317-GA-UEX 9 of the Waterville Gas & Oil : Company and Related Matters.: 10 - - - 11 12 PROCEEDINGS 13 before Ms. Greta M. See and Ms. Patricia A. Schabo, 14 Attorney Examiners, at the Public Utilities 15 Commission of Ohio, 180 East Broad Street, Room 11-C, 16 Columbus, Ohio, called at 10:00 a.m. on Tuesday, May 17 16, 2017. 18 - - - 19 20 21 22 ARMSTRONG & OKEY, INC. 222 East Town Street, Second Floor 23 Columbus, Ohio 43215-5201 (614) 224-9481 - (800) 223-9481 24 - - - 25 2 1 APPEARANCES: 2 Mike DeWine, Ohio Attorney General William L. Wright, Section Chief 3 Public Utilities Section By Mr. Werner L. Margard III 4 30 East Broad Street, 16th Floor Columbus, Ohio 43215-3793 5 On behalf of the Staff of the Public 6 Utilities Commission. 7 - - - 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 INDEX 2 - - - 3 WITNESS PAGE 4 Roger L. Sarver Direct Examination by Mr. Margard 7 5 - - - 6 EXHIBITS 7 JOINT EXHIBITS IDFD ADMTD 8 1 - Stipulation and Recommendation 6 10 9 WATERVILLE EXHIBITS IDFD ADMTD 10 1 - Certificate of Publication of the 6 10 Legal Notice 11 STAFF EXHIBITS IDFD ADMTD 12 1 - Financial Audit of the Gas Cost 5 10 13 Recovery Mechanisms for the Waterville Gas & Oil Company for the period 14 August 1, 2014, through July 31, 2016 15 2 - Audit of the Uncollectible Expense 6 10 Mechanisms of the Waterville Gas & 16 Oil Company for the periods January 2015 through December 2016 17 18 - - - 19 20 21 22 23 24 25 4 1 Tuesday Morning Session, 2 May 16, 2017. 3 - - - 4 EXAMINER SEE: Scheduled for hearing 5 today at this time is Case No. 17-217-GA-GCR, being 6 entitled In the Matter of the Regulation of the 7 Purchased Gas Adjustment Clauses Contained within the 8 Rate Schedules of the Waterville Gas & Oil Company 9 and Related Matters. 10 And Case No. 17-317-GA-UEX, In the Matter 11 of the Uncollectible Expense Rider of the Waterville 12 Gas & Oil Company and Related Matters. 13 My name is Greta See. On the Bench with 14 me today is Trish Schabo. We are the attorney 15 examiners assigned to these proceedings by the 16 Commission. 17 At this time I'd like to take statements 18 from the public. Are there any members of the public 19 present who wish to make a statement? 20 Let the record reflect there are no 21 members of the public present. 22 And now I'd like to take appearances. On 23 behalf of the staff of the Public Utilities 24 Commission. 25 MR. MARGARD: Thank you, your Honor. On 5 1 behalf of the staff of the Public Utilities 2 Commission, Mike DeWine, Ohio Attorney General, 3 William Wright, section chief, Public Utilities 4 Section, by Assistant Attorney General Werner L. 5 Margard, 30 East Broad street, 16th Floor, Columbus, 6 Ohio. 7 EXAMINER SEE: And it is my understanding 8 that you will also be representing Waterville. 9 MR. MARGARD: Your Honor, the parties 10 have reached an accord. We have a Stipulation to 11 propose today, and in light of that, Waterville will 12 not be appearing today. 13 EXAMINER SEE: Okay. Thank you. 14 Go ahead, Mr. Margard. 15 MR. MARGARD: Thank you, your Honor. As 16 a preliminary matter, I have a number of exhibits to 17 mark that we will be offering today. 18 EXAMINER SEE: Okay. 19 MR. MARGARD: The first exhibit, marked 20 Staff Exhibit No. 1, is the Financial Audit of the 21 Gas Cost Recovery Mechanisms for the Waterville Gas & 22 Oil Company for the period August 1, 2014, through 23 July 31, 2016, filed with the Commission on March 17, 24 2017. 25 EXAMINER SEE: Okay. 6 1 MR. MARGARD: The second, marked Staff 2 Exhibit No. 2, is the Audit of the Uncollectible 3 Expense Mechanisms of the Waterville Gas & Oil 4 Company for the periods January 2015 through 5 December 2016, filed with the Commission on March 17, 6 2017. 7 On behalf of Waterville Gas & Oil 8 Company, your Honor, I have marked as Waterville 9 Exhibit No. 1, the Certificate of Publication of the 10 Legal Notice in this matter. 11 And on behalf of both the staff and 12 Waterville Gas & Oil Company, Joint Exhibit No. 1 is 13 the Stipulation and Recommendation that has been 14 filed in this matter. 15 EXAMINER SEE: For the clarity of the 16 record, Mr. Margard, Waterville Exhibit 1 is attached 17 to the Stipulation? 18 MR. MARGARD: It was attached to the 19 Stipulation, yes, your Honor, as filed with 20 docketing. I am submitting it today as a separate 21 exhibit just for the clarity of the record. 22 EXAMINER SEE: Okay. 23 MR. MARGARD: And, your Honor, in support 24 of the that Stipulation and the exhibits, I would 25 like to call Mr. Roger Sarver to the stand. 7 1 EXAMINER SEE: Thank you, have a seat. 2 - - - 3 ROGER L. SARVER 4 being first duly affirmed, as prescribed by law, was 5 examined and testified as follows: 6 DIRECT EXAMINATION 7 By Mr. Margard: 8 Q. If you will please, sir, state your name 9 and by whom you are employed and your business 10 address. 11 A. My name is Roger L. Sarver. I'm employed 12 by the Public Utilities Commission of Ohio as an 13 energy specialist, and my business address is 180 14 East Broad Street, Columbus, Ohio, 43215. 15 Q. And, Mr. Sarver, are you familiar with 16 the proceedings today? 17 A. Yes, sir. 18 Q. And were you, in fact, the staff member 19 who was responsible for conducting the audits that 20 are marked as Staff Exhibits 1 and 2? 21 A. Yes, sir. 22 Q. And have you had an opportunity to review 23 those audits prior to your testimony today? 24 A. Yes, sir. 25 Q. Do you have any changes, corrections, or 8 1 modifications to those documents as offered? 2 A. No, sir. 3 Q. Mr. Sarver, do you also have before you 4 what has been marked as Joint Exhibit No. 1, the 5 Stipulation and Recommendation? 6 A. Yes, sir. 7 Q. And were you a participant in the 8 negotiations that resulted in this Stipulation? 9 A. Yes, sir. 10 Q. Do you have any changes, modifications, 11 corrections, clarifications of any kind to the 12 Stipulation as offered? 13 A. No, sir. 14 Q. Mr. Sarver, in your opinion, was this 15 agreement reached between knowledgeable and capable 16 parties? 17 A. Yes, sir. 18 Q. Are there public benefits to this 19 agreement? 20 A. Yes. The point of both of these audits 21 is to verify the accuracy of the company's either the 22 GCR mechanism or the uncollectible rider. Both of 23 those are costs that the utility incurs to provide 24 service to the utility customers, and the audits are 25 to ensure the accuracy of the company's calculations, 9 1 the costs they incur, and the recovery of those costs 2 through their ratepayers. 3 Q. Mr. Sarver, are you familiar with any 4 regulatory principle that was violated by this 5 agreement? 6 A. No, sir. 7 Q. And in your opinion and based on your 8 long experience in handling GCR matters, do you 9 believe that this agreement, this understanding 10 between the parties, satisfies the Commission's 11 traditional three-part test for such agreements? 12 A. Yes, sir. 13 MR. MARGARD: Your Honor, I have no 14 further questions for the witness. 15 EXAMINER SEE: Thank you. 16 Mr. Sarver, in regards to the first 17 component of the Commission's three-part test used to 18 evaluate stipulations, on what basis do you conclude 19 that the parties that negotiated this agreement are 20 knowledgeable of the Commission's process and the 21 issues addressed and are capable parties? 22 THE WITNESS: On behalf of Rob Black, I 23 think Rob has been in the business and been filing 24 these GCRs since 1981, 1982, so he's got a good 35 25 years of filing these. 10 1 I've been doing this for almost 30 years 2 myself, so combined we're pushing in excess of 60 3 years' experience in these matters. 4 EXAMINER SEE: Thank you, Mr. Sarver. 5 THE WITNESS: Yes, ma'am. 6 MR. MARGARD: Your Honor, I have no 7 further witnesses and would move for admission of 8 Staff Exhibits 1, 2, Joint Exhibit No. 1, and on 9 behalf of Waterville Gas and Oil Company, also move 10 for the admission of Waterville Exhibit 1. 11 EXAMINER SEE: And as there are no 12 objections, Staff Exhibits 1 and 2 are admitted into 13 the record, as well as Waterville Exhibit 1 and Joint 14 Exhibit 1. 15 (EXHIBITS ADMITTED INTO EVIDENCE.) 16 EXAMINER SEE: If there is nothing 17 further. 18 MR. MARGARD: I have nothing further, 19 your Honor. Thank you. 20 EXAMINER SEE: The hearing is adjourned. 21 Thank you very much. 22 (The hearing adjourned at 10:10 a.m.) 23 - - - 24 25 11 1 CERTIFICATE 2 I do hereby certify that the foregoing is a 3 true and correct transcript of the proceedings taken 4 by me in this matter on Tuesday, May 16, 2017, and 5 carefully compared with my original stenographic 6 notes. 7 _______________________________ Rosemary Foster Anderson, 8 Professional Reporter and Notary Public in and for the State of 9 Ohio. 10 My commission expires April 5, 2019. 11 (rfa-83963) 12 - - - 13 14 15 16 17 18 19 20 21 22 23 24 25