1 BEFORE THE PUBLIC UTILITIES COMMISSION OF OHIO - - - 2 In the Matter of the : Application of The Dayton : 3 Power and Light Company : Case No. 16-395-EL-SSO for Approval of its : 4 Electric Security Plan. : : 5 In the Matter of the : Application of The Dayton : 6 Power and Light Company : Case No. 16-396-EL-ATA for Approval of Revised : 7 Tariffs. : : 8 In the Matter of the : Application of The Dayton : 9 Power and Light Company : for Approval of Certain : Case No. 16-397-EL-AAM 10 Accounting Authority : Pursuant to Ohio Rev. Code: 11 §4904.13. : 12 - - - 13 PROCEEDINGS 14 before Mr. Gregory Price and Mr. Nicholas Walstra, 15 Attorney Examiners, at the Public Utilities 16 Commission of Ohio, 180 East Broad Street, Room 11-A, 17 Columbus, Ohio, called at 9:00 a.m. on Thursday, 18 April 6, 2017. 19 - - - 20 VOLUME III 21 - - - 22 ARMSTRONG & OKEY, INC. 222 East Town Street, Second Floor 23 Columbus, Ohio 43215-5201 (614) 224-9481 - (800) 223-9481 24 - - - 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 466 1 APPEARANCES: 2 Faruki Ireland Cox Rinehart & Dusing P.L.L. By Mr. Jeffrey S. Sharkey, 3 Mr. D. Jeffrey Ireland, and Mr. Christopher C. Hollon 4 110 North Main Street, Suite 1600 Dayton, Ohio 45402 5 Dayton Power and Light Company 6 By Ms. Judi Sobecki, General Counsel 7 and Mr. Michael Schuler, Regulatory Counsel 8 1065 Woodman Drive Dayton, Ohio 45432 9 On behalf of the Applicant. 10 Ohio Partners for Affordable Energy 11 By Ms. Colleen L. Mooney P.O. Box 12451 12 Columbus, Ohio 43212 13 On behalf of the Ohio Partners for Affordable Energy. 14 Sierra Club Environmental Law Program 15 Mr. Gregory E. Wannier, Staff Attorney 16 2101 Webster Street, 14th Floor Oakland, California 94612 17 On behalf of the Sierra Club. 18 Boehm, Kurtz & Lowry 19 By Mr. Michael L. Kurtz, Mr. Kurt J. Boehm, 20 and Ms. Jody Kyler Cohn 36 East Seventh Street, Suite 1510 21 Cincinnati, Ohio 45202 22 On behalf of the Ohio Energy Group. 23 - - - 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 467 1 APPEARANCES: (Continued) 2 McNees, Wallace & Nurick LLC By Mr. Frank P. Darr 3 and Mr. Matthew Pritchard 21 East State Street, 17th Floor 4 Columbus, Ohio 43215 5 On behalf of the Industrial Energy Users of Ohio. 6 IGS Energy 7 By Mr. Joseph Oliker 6100 Emerald Parkway 8 Dublin, Ohio 43016 9 On behalf of IGS Energy. 10 Vorys, Sater, Seymour & Pease, LLP By Mr. Michael J. Settineri 11 and Ms. Gretchen L. Petrucci 52 East Gay Street 12 Columbus, Ohio 43215 13 On behalf of Retail Energy Supply Association. 14 Kravitz, Brown & Dortch, LLC 15 By Mr. Michael D. Dortch 65 East State Street, Suite 200 16 Columbus, Ohio 43215 17 On behalf of Calpine Energy Solutions. 18 Carpenter Lipps & Leland LLP By Ms. Kimberly W. Bojko 19 and Mr. James D. Perko 280 North High Street, Suite 1300 20 Columbus, Ohio 43215 21 On behalf of the Ohio Manufacturers' Association Energy Group. 22 Carpenter Lipps & Leland LLP 23 By Ms. Angela M. Paul Whitfield 280 North High Street, Suite 1300 24 Columbus, Ohio 43215 25 On behalf of The Kroger Company. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 468 1 APPEARANCES: (Continued) 2 Environmental Law & Policy Center By Ms. Madeline Fleisher 3 21 West Broad Street, Suite 500 Columbus, Ohio 43215 4 On behalf of the Environmental Law & 5 Policy Center. 6 Spilman, Thomas & Battle, PLLC By Ms. Carrie M. Harris 7 310 First Street, Suite 1100 P.O. Box 90 8 Roanoke, Virginia 24002 9 On behalf of Wal-Mart Stores East, LP, and Sam's East, Inc. 10 Mr. Richard L. Sites 11 155 East Broad Street, Suite 301 Columbus, Ohio 43215 12 Bricker & Eckler, LLP 13 By Mr. Dylan Borchers 100 South Third Street 14 Columbus, Ohio 43215-4291 15 On behalf of the Ohio Hospital Association. 16 Ohio Environmental Council 17 By Mr. Trent A. Dougherty 1145 Chesapeake Avenue, Suite I 18 Columbus, Ohio 43212 19 On behalf of the Ohio Environmental Council. 20 Environmental Defense Fund 21 By Ms. Miranda Leppla 1145 Chesapeake Avenue, Suite I 22 Columbus, Ohio 43212 23 On behalf of the Environmental Defense Fund. 24 - - - 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 469 1 APPEARANCES: (Continued) 2 Mike DeWine, Ohio Attorney General By Mr. William Wright, 3 Section Chief Mr. Thomas W. McNamee 4 and Mr. Thomas Lindgren, Assistant Attorneys General 5 30 East Broad Street, 16th Floor Columbus, Ohio 43215 6 On behalf of the Staff of the PUCO. 7 Bruce E. Weston, Ohio Consumers' Counsel 8 By Mr. William Michael, Mr. Kevin F. Moore, 9 Mr. Ajay Kumar, and Mr. Andrew S. Garver, 10 Assistant Consumers' Counsel 10 West Broad Street, Suite 1800 11 Columbus, Ohio 43215-3485 12 On behalf of the Residential Consumers of The Dayton Power and Light Company. 13 Doll, Jansen & Ford 14 By Mr. Matthew T. Crawford and Mr. John Doll 15 111 West 1st Street, Suite 1100 Dayton, Ohio 45402 16 On behalf of the Utility Workers Union of 17 America Local 175. 18 Ohio Citizen Action By Mr. Ellis Jacobs 19 130 West Second Street Suite 700 East 20 Dayton, Ohio 45402 21 On behalf of Advocates for Basic Legal Equality and the Edgemont Neighborhood 22 Coalition of Dayton. 23 - - - 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 470 1 APPEARANCES: (Continued) 2 Carpenter Lipps & Leland LLP By Mr. Joel E. Sechler 3 280 North High Street, Suite 1300 Columbus, Ohio 43215 4 On behalf of EnerNOC. 5 Bricker & Eckler, LLP 6 By Mr. Devin D. Parram 100 South Third Street 7 Columbus, Ohio 43215-4291 8 On behalf of the People Working Cooperatively, Inc. 9 Calfee, Halter & Griswold LLP 10 By Mr. N. Trevor Alexander, Mr. James F. Lang, 11 Mr. Steven D. Lesser, and Mr. Mark T. Keaney 12 1200 Huntington Center 41 South High Street 13 Columbus, Ohio 43215 14 On behalf of Honda of America Manufacturing, Inc., and City of Dayton. 15 Isaac Wiles Burkholder & Teetor, LLC 16 By Mr. Mark Landes and Mr. Brian Zets 17 Two Miranova Place, Suite 700 Columbus, Ohio 43215 18 On behalf of the Adams County Residents 19 and Adams County Board of Commissioners. 20 Benesch Friedlander Coplan & Arnoff LLP By Mr. Orla E. Collier, III, 21 Mr. John F. Stock, Ms. Emily V. Danford, 22 and Mr. Michael J. Meyer 41 South High Street, Suite 2600 23 Columbus, Ohio 433215 24 On behalf of the Murray Energy Corporation. 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 471 1 APPEARANCES: (Continued) 2 Adams County Prosecutor's Office By Mr. C. David Kelley 3 110 West Main Street West Union, Ohio 45693 4 On behalf of Sprigg Township, Adams 5 County; Monroe Township, Adams County; Manchester Local School District; and 6 Adams County Ohio Valley School District. 7 - - - 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 472 1 INDEX 2 - - - 3 WITNESS PAGE 4 Cherish Cronmiller Direct Examination by Ms. Mooney 475 5 Cross-Examination by Mr. Garver 476 6 Emily Medine Direct Examination by Mr. Collier 483 7 Cross-Examination by Mr. Wannier 504 Cross-Examination by Mr. Sharkey 564 8 Redirect Examination by Mr. Collier 566 9 Michael Haugh Direct Examination by Mr. Michael 577 10 Cross-Examination by Mr. Alexander 594 Cross-Examination by Ms. Bojko 621 11 Cross-Examination by Mr. Ireland 634 Cross-Examination by Mr. Pritchard 650 12 Cross-Examination by Mr. Oliker 666 Cross-Examination by Ms. Petrucci 674 13 - - - 14 OCC EXHIBIT IDENTIFIED ADMITTED 15 11 Direct Testimony of Michael P. Haugh 577 680 16 - - - 17 MURRAY ENERGY CORPORATION EXHIBIT IDENTIFIED ADMITTED 18 2 Direct Testimony of Emily S. Medine 483 575 19 2A PJM West Dispatch Stack in 20 2020 and 2025 (Revised) 483 575 21 - - - 22 SIERRA CLUB EXHIBIT IDENTIFIED ADMITTED 23 1 Annual Energy Outlook 2017 518 576 24 - - - 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 473 1 INDEX (Continued) 2 - - - 3 EDGEMONT/OPAE EXHIBIT IDENTIFIED ADMITTED 4 1 Direct Testimony of Cherish Cronmiller In Support of the 5 Amended Stipulation and Recommendation on Behalf of 6 the Edgemont Neighborhood Coalition and Ohio Partners 7 for Affordable Energy 467 482 8 - - - 9 IEU-OHIO EXHIBIT IDENTIFIED ADMITTED 10 1 FERC Docket No. EL16-10-000 Response to IEU-Ohio's Motion 11 to Dismiss Complaint by the Office of the OCC 658 -- 12 - - - 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 474 1 Thursday Morning Session, 2 April 6, 2017. 3 - - - 4 EXAMINER WALSTRA: We will go on the 5 record. 6 The Public Utilities Commission of Ohio 7 has set for hearing at this time and place Case No. 8 16-395-EL-SSO, being in the Matter of the Application 9 of The Dayton Power and Light Company to Establish a 10 Standard Service Offer in the Form of an Electric 11 Security Plan. 12 My name is Nicholas Walstra. With me is 13 Gregory Price. We are the attorney examiners 14 assigned by the Commission to hear this case. 15 We will skip appearances since we are on 16 day three. We will go ahead with our first witness. 17 Ms. Mooney. 18 MS. MOONEY: Thank you, your Honor. Your 19 Honor, the Edgemont Neighborhood Coalition and Ohio 20 Partners for Affordable Energy call -- call to the 21 stand our witness Cherish Cronmiller. 22 EXAMINER WALSTRA: Thank you. 23 (Witness sworn.) 24 EXAMINER WALSTRA: Please state your name 25 and business address for the record. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 475 1 THE WITNESS: My name is Cherish 2 Cronmiller. My address is 719 South Main Street, 3 Dayton, Ohio 45402. 4 EXAMINER WALSTRA: Thank you. Go ahead, 5 Ms. Mooney. 6 MS. MOONEY: And, your Honor, I would 7 like to have marked as Edgemont Neighborhood 8 Coalition and Ohio Partners for Affordable Energy the 9 testimony of Cherish Cronmiller. It would be our 10 Exhibit 1. 11 EXAMINER WALSTRA: So marked. 12 (EXHIBIT MARKED FOR IDENTIFICATION.) 13 - - - 14 CHERISH CRONMILLER 15 being first duly sworn, as prescribed by law, was 16 examined and testified as follows: 17 DIRECT EXAMINATION 18 By Ms. Mooney: 19 Q. Ms. Cronmiller, do you have before you 20 what has been marked as Edgemont/OPAE Exhibit 1 which 21 is the direct testimony of Cherish Cronmiller in 22 support of the amended stipulation and 23 recommendation? 24 A. Yes. 25 Q. And did you prepare this testimony? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 476 1 A. I did. 2 Q. And if I were to ask you the same 3 questions today, would your answers be the same? 4 A. They would. 5 Q. And do you have any additions or 6 corrections to the testimony? 7 A. I do not. 8 MS. MOONEY: Your Honor, Ms. Cronmiller 9 is available for cross-examination. 10 EXAMINER WALSTRA: Thank you. 11 Any proponent questions? 12 MR. McNAMEE: No. 13 EXAMINER WALSTRA: Any cross? Nothing? 14 MR. GARVER: I just have a few questions, 15 your Honor. 16 EXAMINER WALSTRA: Okay. 17 - - - 18 CROSS-EXAMINATION 19 By Mr. Garver: 20 Q. Good morning, Ms. Cronmiller. 21 A. Good morning. 22 Q. Is it correct under the stipulation the 23 Community Action Partnership will receive $450,000 on 24 an annual basis during the term of the DMR? 25 A. That is correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 477 1 Q. And will that money go to the Community 2 Action Partnership of Dayton or the National 3 Community Action Partnership? 4 A. It would be to the Community Action 5 Partnership of the Greater Dayton Area. 6 Q. Okay. And will all $450,000 go to CAP or 7 will some of that go to OPAE and Edgemont 8 Neighborhood Coalition? 9 A. All of it will be going to Community 10 Action Partnership of the Greater Dayton Area. 11 Q. Okay. And will Edgemont have any say on 12 how that money is used by the Community Action 13 Partnership? 14 A. No. Edgemont will not have control over 15 the way we utilize those dollars. 16 Q. And is it the same for OPAE, they will 17 also not have control; is that correct? 18 A. That is correct. 19 Q. And is it true that CAP of the Greater 20 Dayton Area serves about eight counties in Ohio? 21 A. We weatherize in nine counties, and we 22 have offices in four counties. 23 Q. And so is it fair to say that the money 24 that CAP receives under the stipulation will only be 25 used in those nine counties? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 478 1 A. No. Actually there's likely that we 2 could work with the State to decide that the -- in 3 the past 26 different agencies had access. Those 4 were entities that obviously had DP&L customers in 5 their service area, and so it could be we decide to 6 work with them to ensure that some of those smaller 7 entities still have access to those as well, though 8 we being in Montgomery County, the problems are we 9 take up a majority of the DP&L area, and we spent out 10 a majority of the dollars. 11 Q. Okay. Thank you. And is it also true 12 that some of the counties that you serve contain -- 13 or some of the customers in the counties that you 14 serve are not served by DP&L; is that correct? 15 A. That's correct. 16 Q. And will any of the money from the 17 stipulation go to help customers that are not DP&L -- 18 that are not served by DP&L? 19 A. No. Typically we focus on the DP&L 20 customers. 21 Q. Okay. And if you could turn to your 22 testimony at page 2, please. And specifically I am 23 going to be looking at the question and answer at the 24 bottom of that page. 25 A. Yeah. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 479 1 Q. And lines 17 and 18 read "The Stipulation 2 provides for annual assistance to support consumers 3 at or below 200 percent of the federal poverty line 4 or those at risk of losing electric service." Did I 5 read that correctly? 6 A. Correct. 7 Q. And that seems to me that there are kind 8 of two potential groups of people that you can help 9 with this money, the first being those that are at or 10 below 200 percent of the federal poverty line; is 11 that correct? 12 A. Correct. 13 Q. And the second group would be those at 14 risk of losing electric service; is that right? 15 A. Yes. 16 Q. And for the second group there's no -- 17 their income for the household or their personal 18 income doesn't matter for that second group; is that 19 right? 20 A. I guess as written it indicates that, but 21 typically we are going to find individuals that are 22 at or below 400 percent of the poverty level. 23 Because we weatherize those individuals based on 24 other dollars, we do look at whether or not those 25 individuals currently have utilities in place before ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 480 1 we go and weatherize. And if they are in a place 2 where we need to make sure that they have those 3 utilities on, we will do such. 4 In the past all of the dollars have gone 5 to individuals that are at 200 percent of the poverty 6 level or below. 7 Q. Thank you. And in that -- in line 17 you 8 use the term "to support consumers." Could you just 9 give me -- what does "support" mean? What kind of 10 services or help will you be providing consumers with 11 this money? 12 A. So when individuals come to Community 13 Action Partnership of the Greater Dayton Area, often 14 they are coming in for utility assistance. So I'll 15 be able to use these DP&L funds to focus on electric 16 services which will allow me then to utilize other 17 grant dollars that I have for things such as water 18 shutoffs that aren't supported by any other entities. 19 Q. And when you say focus on electric 20 issues, do you mean all of the money will be used on 21 electric issues? 22 A. Yes. 23 Q. And that would include weatherization? 24 A. No. 25 Q. No? Okay. So it is just help for paying ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 481 1 bills. 2 A. Help paying the bills, getting utilities 3 turned back on or ensuring that people can get back 4 onto a payment plan. 5 Q. So is it also true that none of the 6 $450,000 will go to pay administrative costs for your 7 organization? 8 A. Typically the administration costs have 9 been capped at or below 5 percent. I wouldn't think 10 that we would need more than that because a lot of 11 those administrative costs are paid out of our grant 12 dollars, so we are already providing those services. 13 These dollars we want to focus, you know, to go 14 directly to direct client support. 15 Q. Okay. And then is it also true that none 16 of these funds will go to administrative costs of 17 OPAE? 18 A. That is correct. 19 Q. And the same with Edgemont? 20 A. Yes. 21 MR. GARVER: I have no further questions, 22 your Honor. 23 EXAMINER WALSTRA: Thank you. 24 Anyone else? No? 25 Any redirect? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 482 1 MS. MOONEY: No, no redirect. 2 EXAMINER WALSTRA: Thank you. 3 Thank you, Ms. Cronmiller. 4 MS. MOONEY: Your Honor, I move for the 5 admission of OPAE/Edgemont Exhibit 1. 6 EXAMINER WALSTRA: Any objections? 7 Hearing none, it will be admitted. 8 (EXHIBIT ADMITTED INTO EVIDENCE.) 9 MS. MOONEY: Thank you. 10 EXAMINER PRICE: Mr. Collier, you may 11 call your next witness. 12 MR. COLLIER: Yes. Call Emily Medine to 13 the stand, please. 14 (Witness sworn.) 15 EXAMINER PRICE: Please state your name 16 and business address for the record. 17 THE WITNESS: Emily Medine, Energy 18 Ventures Analysis, 1901 North Moore Street, 19 Arlington, Virginia 22209. 20 EXAMINER PRICE: Okay. Please proceed, 21 Mr. Collier. 22 MR. COLLIER: We are going to mark and 23 circulate two exhibits, your Honor. The testimony of 24 Emily Medine will be Murray Energy Corporation 25 Exhibit 2 and an updated chart which is part of her ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 483 1 testimony in color will be Exhibit 2A. 2 EXAMINER PRICE: It will be so marked. 3 (EXHIBITS MARKED FOR IDENTIFICATION.) 4 MR. MICHAEL: I don't think the witness's 5 microphone is on. I was having a little bit of a 6 hard time hearing. If you could ask her to turn it 7 on, please. 8 EXAMINER PRICE: Those two exhibits will 9 be so marked. 10 MR. COLLIER: Your Honor, I would note 11 for the record the Citizens Group to Protect DP&L 12 Jobs has joined in the direct testimony, in support 13 of the direct testimony, and I believe the Local 14 Union has also joined in the testimony. 15 EXAMINER PRICE: Noted. Thank you. 16 MR. CRAWFORD: That's correct. 17 - - - 18 EMILY MEDINE 19 being first duly sworn, as prescribed by law, was 20 examined and testified as follows: 21 DIRECT EXAMINATION 22 By Mr. Collier: 23 Q. Ms. Medine, do you have before you what's 24 been marked as Exhibit 2, your direct testimony, and 25 Exhibit 2A, an updated chart? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 484 1 A. Yes. 2 Q. Did you prepare both documents for 3 purposes of this case? 4 A. Yes. 5 Q. Do you have any additions or corrections 6 to your direct testimony? 7 A. I have one. 8 Q. Okay. 9 A. It occurred several places, but it's the 10 same change with the first place being on page 6, 11 item 16. Subsequent to the preparation of the 12 testimony, I learned that there had been an -- I 13 believe there may have been an extension granted for 14 the divestiture to May 31, 2017. So the January 1 15 date should be changed accordingly. 16 With respect to the content of my 17 testimony, it does not change anything. 18 MR. COLLIER: Your Honor, I am having 19 difficulty with the microphone. 20 A. It keeps going off. 21 EXAMINER PRICE: Sierra Club, did you 22 have an issue? 23 MR. WANNIER: Sorry. I haven't received 24 a copy of the exhibits. I don't know if they are 25 going around. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 485 1 Q. All right. Ms. Medine -- 2 MS. BOJKO: Excuse me. Can we all get 3 copies? 4 MR. COLLIER: Sure. 5 Q. Do you have any other additions or 6 corrections to your testimony? 7 A. No, I do not. 8 Q. If I were to ask you the questions in 9 your direct testimony, would your answers be the same 10 as presented in your direct testimony? 11 A. Yes, except for the one I just mentioned. 12 Q. And would the answers be true and 13 correct? 14 A. Yes. 15 Q. Do you adopt your direct testimony in 16 Exhibit 2A as your testimony in this case? 17 A. Yes. 18 MR. COLLIER: Your Honor, I have no 19 further direct. Tender the witness for 20 cross-examination. 21 EXAMINER PRICE: Thank you. 22 Mr. Oliker? 23 MR. OLIKER: No questions, your Honor. 24 EXAMINER PRICE: IEU? 25 MR. PRITCHARD: No questions, your Honor. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 486 1 EXAMINER PRICE: Consumers' Counsel? 2 MR. MICHAEL: No questions, your Honor. 3 EXAMINER PRICE: Sierra Club? 4 MR. WANNIER: Yes. Will your Honor 5 entertain motions to strike at this time? 6 EXAMINER PRICE: Of course. 7 MR. WANNIER: I would like to move to 8 strike several sections of the witness's -- of 9 Ms. Medine's testimony. 10 EXAMINER PRICE: You want to reset your? 11 MR. WANNIER: Oh, is it? Sorry. Can we 12 go off the record for a second? 13 EXAMINER PRICE: Change out with 14 Mr. McNamee. 15 MR. WANNIER: Are we back on the record? 16 EXAMINER PRICE: Yes. 17 MR. WANNIER: Your Honor, I would move to 18 strike several sections of Ms. Medine's testimony 19 that fall primarily into two categories. The first 20 category is based on -- is the objection is based on 21 the fact she is drawing legal conclusions and is not 22 qualified to do so. 23 I can give page citations. The first 24 section would be page 6, lines 4 to 5. And that's 25 the sentence that begins "The PUCO retained its ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 487 1 rights to approve divestments under Revised Code 2 4928.17." 3 The second section is also on page 6, 4 lines 14 to 15, and that's the sentence beginning "As 5 the transfer did not take place as required." 6 The next section is page 7, lines 7 to 9, 7 and that's the entirety of paragraph 20 on that page. 8 The next section is page 21 of her 9 testimony, that's lines 1 to 3, and that is the 10 entirety of the witness's answer on those three 11 lines. 12 MR. COLLIER: Could I have that cite? 13 MR. WANNIER: Yeah. Sorry. That is page 14 21, lines 1 to 3. 15 And the last one is also on page 21 -- 16 MR. MICHAEL: Can you wait just one 17 second so we can make sure we are on the right page? 18 MR. WANNIER: Yes, I can wait. 19 MR. MICHAEL: We got it. Thank you. 20 MR. COLLIER: I'm sorry. I have page 21. 21 MR. WANNIER: Page 21, lines 1 to 3. 22 This is the paragraph that begins "Obviously this is 23 for the PUCO to decide. My understanding is that" 24 and the rest of that. 25 And the last is also on page 21, lines 6 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 488 1 to 8, and that's beginning with the sentence "As that 2 approval expired at the end of 2016," et cetera. 3 EXAMINER PRICE: I will give you a moment 4 to argue the lack of legal conclusion and then we 5 will go on to Mr. Collier. 6 MR. WANNIER: Yes. So all of these are 7 opinions by the witness based on her understanding of 8 Ohio statute which -- and they are legal in nature, 9 and she is not here today to testify based on her 10 legal expertise. 11 EXAMINER PRICE: Thank you. 12 Mr. Collier? 13 MR. COLLIER: Yes, your Honor. 14 Ms. Medine has not been offered as an attorney nor is 15 she purporting to render a legal conclusion. As an 16 expert in the field and the PUCO procedures and the 17 history of deregulation, she has a working knowledge 18 of the provisions of these statutes and can testify 19 to that extent. 20 Again, these should not be interpreted as 21 an opinion of law but rather the regulatory 22 environment in which we all operate. 23 EXAMINER PRICE: Isn't she going a bit 24 beyond what we normally allow in terms of drawing 25 legal conclusions about -- I am focusing on 21, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 489 1 page 21, lines 6 through 8. She is drawing the 2 conclusion that the Commission's approval of Dayton's 3 application to transfer its generation assets has 4 expired and what Dayton's required to do. Isn't that 5 a bit beyond where we normally give lay witnesses 6 some leeway and allow them to testify as to 7 regulatory matters? 8 MR. COLLIER: I don't think so given the 9 events that have occurred in this case, your Honor. 10 First of all, there is a long history of the issue of 11 divestiture that was addressed principally by the 12 Commission in Case No. 13-2420-EL-UNC, a case and the 13 implications of which have been addressed by a number 14 of witnesses in this very proceeding. Factually the 15 Commission addressed divestiture initially, 16 established that the divestiture would include at net 17 book value with environmental liabilities and would 18 do so in a manner to fully insulate ratepayers. The 19 issue of the retaining of the debt was not addressed 20 in that case. 21 The Commission also granted Dayton Power 22 and Light a number of extensions on the transfer. 23 No. 1, because there was a potential buyer out there 24 to pursue the assets; and, No. 2, Dayton Power and 25 Light had to deal with bond implications, creditor ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 490 1 implications with regard to that transfer. 2 The Commission established a date of 3 January 1, 2017, for this transaction to have 4 occurred and be consummated. That did not occur. 5 And the assets today remain on the books of Dayton 6 Power and Light and are the subject now of the 7 stipulation. 8 MR. WANNIER: Your Honor, Mr. Collier is 9 not here to testify as to facts. 10 MR. COLLIER: Can I please? 11 MR. WANNIER: He is giving a factual 12 summary of events. 13 EXAMINER PRICE: He can make whatever 14 arguments he wants to make, and the Commission -- I 15 think we are capable of understanding what he is 16 doing. But, no, no, he is not doing very much to 17 address her qualification to make these comments. 18 MR. WANNIER: Okay. 19 MR. COLLIER: So in any event, whether 20 there was a deadline for that action and the -- and 21 the resulting impacts of the failure to abide by that 22 deadline and the implications now in this stipulation 23 and with regard to the financial crisis the company 24 purports to be in are issues before the Commission. 25 Now, Ms. Medine has said obviously it's ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 491 1 for the Commission to work all this through. And she 2 can take the position as an expert that there was an 3 approval engrained in what has occurred up to this 4 point and there is an issue for the Commission to 5 determine as to whether there is approval. I think 6 that's as far as she is going with her testimony, and 7 she's not making a legal opinion. That will be 8 something that will be subject to briefing and that 9 sort of thing. But certainly the facts that lead up 10 to all of this where we find ourselves today under 11 the regulatory regime are relevant. 12 MR. KUMAR: Your Honor. Over here. 13 EXAMINER PRICE: There you are. 14 MR. KUMAR: While I agree with 15 Mr. Collier, I wish -- I was wondering if I could be 16 heard on two of the specific motions to strike. 17 First of all, on line 21, lines 1 through 3, it 18 appears that Ms. Medine is just simply stating her 19 understanding of Ohio's corporate separation, not a 20 legal conclusion. 21 And then also on page 6, lines 14 and 15, 22 that doesn't also appear to be a legal conclusion. 23 That appears to be a factual question as to whether 24 or not the plants actually closed. 25 EXAMINER PRICE: What makes you say she's ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 492 1 not making a legal conclusion on 21, lines 1 through 2 3? Let me finish. She's saying "My understanding is 3 that under Section 4928.17 of the Ohio Revised Code 4 the PUCO must approve of a corporate separation 5 plan." She's drawing a legal conclusion as to what 6 the current status of their plan is and what we have 7 to do. 8 Plus, if you go further, I understand you 9 are not disputing this one, she's talking about the 10 Commission losing its right to approval of a 11 transfer. She's talking about the rights and 12 responsibilities of the Commission. Isn't that 13 clearly a legal question, Mr. Kumar? 14 MR. KUMAR: Well, your Honor, I most 15 respectfully disagree. My understanding of those 16 first few lines is simply a policy analysis of how 17 corporate separation must occur in Ohio rather than a 18 legal conclusion regarding whether corporate 19 separation has occurred or not or, you know. 20 EXAMINER PRICE: Sierra Club, you can 21 respond. 22 MR. WANNIER: Your Honor, I respectfully 23 agree with your Honor. 24 EXAMINER PRICE: Good choice. 25 MR. WANNIER: You know, Murray Energy is ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 493 1 free to brief these legal questions in their 2 post-hearing briefs. And Mr. Collier has testified 3 as to several factual issues that are in Ms. Medine's 4 testimony, and we are not moving to strike the 5 factual underpinning to her legal conclusions. We 6 are simply moving to strike the portion of her 7 testimony where she is drawing legal conclusions from 8 the factual situation that she's laid forward. 9 MR. COLLIER: I would also add, your 10 Honor, that if Medine -- Ms. Medine was questioned on 11 this issue and her understanding -- I suspect she 12 would testify that her understanding is provided upon 13 advice of counsel. 14 EXAMINER PRICE: That makes her testimony 15 worthless because I can't -- I can't cross-examine 16 her on the advice of counsel or any other party can't 17 cross-examine on her advice of counsel. 18 MR. COLLIER: Well, but you can 19 cross-examine her on -- the parties may cross-examine 20 her on her understanding. 21 MR. WANNIER: Your Honor, I am happy -- 22 EXAMINER PRICE: Let me finish. If her 23 understanding is based solely on the advice of 24 counsel, then her testimony adds nothing because 25 whatever your advice is to the Commission you will ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 494 1 put in your brief. She is actually going way beyond 2 what we normally allow lay witnesses. She is drawing 3 conclusions with what is the status of certain cases, 4 whether certain items are subject to the Commission's 5 jurisdiction today, and we are going to grant the 6 motion to strike in its entirety. 7 MR. WANNIER: Thank you. 8 MR. COLLIER: As to each of the items, 9 questions and answers that were referenced by the -- 10 EXAMINER PRICE: In the first motion. 11 MR. COLLIER: Only those. 12 MR. WANNIER: Yes, as to the first. 13 Thank you, your Honor. 14 The second portion of our motion to 15 strike is on the grounds of hearsay. And these are 16 situations where the witness has cited to newspaper 17 articles and other outside sources for the truth of 18 the matter asserted which is the legal definition of 19 hearsay. 20 I will give those citations now. The 21 first is on page 5, lines 3 to 7, which is the 22 entirety of paragraph 8. 23 MR. COLLIER: Let me catch up with you. 24 MR. WANNIER: I will give the citations 25 first, and then I can give my short argument on each ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 495 1 one because in this case, the arguments are more 2 individual to the motion -- or to the section. 3 The second citation is on page 9, lines 1 4 to 4. And that's the entirety of the witness's 5 response on the top of that page. 6 The third citation is page 12, lines 4 to 7 5, and that's actually just the sentence beginning 8 "Dynegy just announced a trade of its ownership in 9 Conesville." Well, the full sentence "Conesville #4 10 for AEP's ownership in Zimmer." 11 And actually the fourth one is a separate 12 motion, but on the same page, lines 5 to 6, it's the 13 next sentence that reads "In 2014, DP&L sold its 14 position in East Bend to Duke Energy Kentucky." 15 The fifth citation is on page 19, 16 lines 12 to 18, and then this also goes through to 17 page 20, lines 1 and 2. 18 EXAMINER PRICE: Can I have that again, 19 please? Start over again on that one, please. 20 MR. WANNIER: Oh, sorry. That one was 21 page 19, line 12, through page 20, line 2. And 22 that's her reference to the Sierra Club and DP&L 23 press releases. 24 And the final section is on page 32, 25 lines 16 and 17, and that's the sentence reading "It ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 496 1 is interesting, however, that AEP announced its bid 2 for Stuart" -- "Stuart cleared the auction for 3 2018/19." 4 MR. COLLIER: I'm sorry. What's the 5 cite? 6 MR. WANNIER: That's page 32, lines 16 7 and 17, that very last sentence of the witness's 8 response. And I can go through and give the 9 arguments individually, your Honor, at this time. 10 EXAMINER PRICE: Go ahead. 11 MR. WANNIER: So the first citation on 12 page 5, the -- here the witness is citing to DP&L and 13 Sierra Club press releases and citing to those press 14 releases for the truth of the facts that were in 15 those releases. The Sierra Club has not -- is not 16 presenting any witnesses in this hearing, and DP&L 17 did provide witnesses, so if Murray Energy wanted to 18 ask about those press releases, one of the DP&L 19 witnesses would have been the appropriate party to 20 ask about them. But it's inappropriate to bring 21 those -- that reference in at this time. 22 The second -- 23 EXAMINER PRICE: Let's stick -- 24 MR. WANNIER: Do them one at a time? 25 That's -- ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 497 1 EXAMINER PRICE: Actually I think we will 2 go through and rule on them one at a time to make a 3 record. Before I ask -- recognize Mr. Collier on 4 this one, I don't disagree the press releases are 5 hearsay and that we typically do not allow the 6 introduction of press releases or references to them 7 in our hearings. But in this particular case, since 8 it's -- the press releases are statements by party 9 opponents, Sierra Club and Dayton Power and Light, 10 why does that hearsay exception not apply here? 11 You certainly could put on a witness and 12 say that's not what we said; that's not what we 13 meant. And Dayton could have put on a witness saying 14 here is the press release. This is not what it said. 15 This isn't a third party. This is a press release 16 which clearly would be objectionable. This is a 17 statement by Dayton Power and Light and by Sierra 18 Club. 19 MR. WANNIER: Your Honor, I don't believe 20 that exception applies here because -- 21 EXAMINER PRICE: It's administrative law. 22 We can construe exceptions as broadly as we like. 23 MR. MICHAEL: Or as narrowly, as the case 24 may be. 25 MR. WANNIER: The Sierra Club is not a ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 498 1 party opponent to -- has not taken a formal position 2 either way on the stipulation, and so I don't think 3 that the party opponent exception would apply here. 4 EXAMINER PRICE: I think you are a party 5 opponent to Murray Energy. That much is clear today. 6 Mr. Collier. 7 MR. COLLIER: Yes. First of all, I don't 8 think the hearsay rule necessarily applies in full 9 effect in administrative hearings. It goes to the 10 weight of the evidence. You are entirely correct, 11 your Honor, if Sierra Club wished to put on a witness 12 to contest, they certainly could have done so. The 13 fact that the press releases are out there, have not 14 been withdrawn by any witness, I think is -- that 15 goes again to the evidence. 16 I find -- first of all, I find Sierra 17 Club's position in this entire case to be somewhat at 18 issue because it initially opposed the ESP but 19 apparently did not participate in the negotiations, 20 and its interests were not addressed in the amended 21 stipulation and cross-examination. 22 EXAMINER PRICE: What's your basis for 23 saying they didn't participate in the negotiations? 24 MR. COLLIER: I think they participated 25 in the negotiations, but I think it's been ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 499 1 represented, I think we know that they weren't a 2 signator to the stipulation, nor were they a 3 nonopposing party. They are not taking a position 4 one way or the other as to the stipulation so why is 5 he even cross-examining our witness? 6 EXAMINER PRICE: Is that fair? Do they 7 have to take a position? 8 MR. COLLIER: Well, I think it's an 9 issue, your Honor, as to what their position really 10 is in this case. 11 MR. WANNIER: Your Honor. 12 EXAMINER PRICE: He is definitely adverse 13 to your position, but I don't know why that -- 14 whether they take a position on the stipulation is 15 relevant one way or the other. 16 MR. WANNIER: And if I can add something 17 further, your Honor, this statement on page 5 also 18 misconstrues the Sierra Club's position in this case. 19 The implication here is that Sierra Club supports the 20 stipulation, and as you well know, the Sierra Club 21 has not taken a position either way on the 22 stipulation. 23 EXAMINER PRICE: Again, you had the 24 ability to put on a witness and say that's not what 25 our position is and there you have chosen not to. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 500 1 We are going to deny the motion to 2 strike. We are actually pretty strict in this 3 hearing room about hearsay, but we do try to construe 4 the exceptions broadly and will go ahead and construe 5 the party opponent on this one broadly and allow the 6 statement. 7 MR. WANNIER: Understood, your Honor. 8 And just to save us some time, would that same 9 justification also apply to the selection on page 19 10 and 20 which is also a citation to the press? 11 EXAMINER PRICE: Oh, most certainly. 12 MR. WANNIER: Moving on to the next one 13 which is on page 9, yeah, in this case the witness is 14 citing to a Business Wire report which is not -- 15 Business Wire is not a party to this proceeding, and 16 she is citing to that report for the truth of the 17 matter asserted. 18 EXAMINER PRICE: Mr. Collier. 19 MR. COLLIER: I think the Sierra Club 20 attorney can pursue that in cross-examination as to 21 the basis for the statement, but I think the evidence 22 could very well indicate that Business Wire is an 23 accepted industry publication and, therefore, was, in 24 fact, reported publicly, and she can testify to that 25 fact. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 501 1 MR. WANNIER: And, again, your Honor, I 2 will just note that Murray Energy can cite -- can use 3 the citation in their post-hearing briefing as 4 evidence there, but it would not be valid to wrap 5 that into Ms. Medine's testimony today. 6 MR. COLLIER: I also think this falls 7 within the material that an expert witness is 8 entitled to rely on in support of her written 9 testimony. 10 EXAMINER PRICE: I think we are going to 11 grant in part and deny in part the motion. I think 12 the part -- the first sentence is certainly widely 13 known. IP&L's status is not a mystery to anyone. 14 The second sentence I think appears to rely solely on 15 the Business Wire report and is hearsay, so we are 16 going to strike the second sentence but not the first 17 sentence. 18 MR. KUMAR: Your Honor, could you specify 19 exactly where that begins? Is it the sentence 20 starting "It is a fully regulated utility"? 21 EXAMINER PRICE: I'm sorry. You are 22 correct. I am misstating this. The third sentence 23 is being struck so the lines "IP&L," "IP&L, Indiana 24 Power and Light Company, is a fully regulated utility 25 which AES acquired in 2000" can stay. The second -- ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 502 1 the third sentence beginning "In 2014," will be 2 stricken -- will be stricken. 3 MR. WANNIER: And moving -- moving on to 4 page 12, and these two are right next to each other, 5 lines 4 to 5 and 5 to 6 so I will just talk about 6 them together. Both of these are citations again to 7 outside sources, neither crossroadstoday.com nor 8 cincinnati.com are parties to this proceeding. 9 EXAMINER PRICE: Consistent with our 10 prior rulings, the second motion beginning with the 11 phrase "In 2014," Dayton could put on a witness to 12 dispute that if they chose to, so we will deny that. 13 And the first sentence beginning with "Dynegy" just 14 we will grant the motion to strike. Appears to be 15 based solely on the press release. 16 MR. WANNIER: Sorry. To be clear, the 17 sentence beginning "Dynegy just announced" will be 18 stricken? 19 EXAMINER PRICE: Yes. 20 MR. WANNIER: The sentence "In 2014" will 21 not be stricken. 22 EXAMINER PRICE: That's correct. 23 MR. WANNIER: Thank you. And the final 24 one on page 32, sorry, the microphone dropped again, 25 again, here AEP is not -- is not a party to this ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 503 1 proceeding and this is a statement by an outside 2 party. 3 EXAMINER PRICE: What's your basis -- you 4 don't have a citation for that. What is your basis 5 for that? 6 THE WITNESS: I found a report that had 7 occurred. It's probably immaterial to the testimony, 8 so I'm certainly okay with it being struck. 9 EXAMINER PRICE: Good. We are going to 10 strike then. 11 MS. BOJKO: Your Honor, which page was 12 that on? 13 EXAMINER PRICE: 32, lines 16 and 17. 14 MS. BOJKO: Okay. 15 EXAMINER PRICE: Any further motions to 16 strike? 17 MR. WANNIER: Your Honor, if it's all 18 right with you, I reserve the right to bring a 19 further motion to strike depending on some of the 20 witness's responses to cross. 21 EXAMINER PRICE: That's fine. 22 MR. WANNIER: Thank you. 23 EXAMINER PRICE: Please proceed. 24 - - - 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 504 1 CROSS-EXAMINATION 2 By Mr. Wannier: 3 Q. Good morning, Ms. Medine. 4 A. Good morning. 5 Q. Ms. Medine, I am going to ask you a 6 series of questions that address both the Killen 7 plant and the Stuart plant, and all of these 8 sentences will -- I will ask if -- if something is 9 the case for both plants, and if it's not the case 10 for either of those plants, I would ask that you 11 identify that. 12 MR. WANNIER: And is that okay with 13 opposing counsel? 14 MR. COLLIER: Yeah. 15 MR. WANNIER: I can also ask about the 16 plants individually. 17 MR. COLLIER: No, no. Yes. You're fine. 18 MR. WANNIER: Okay. 19 Q. (By Mr. Wannier) Ms. Medine, in your 20 understanding the stipulation does not address the 21 closure of Killen or Stuart, right? 22 A. The stipulation itself does not. 23 Q. Thank you. And nothing in the 24 stipulation would prevent DP&L or AES after transfer 25 from selling their interests in Killen or Stuart, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 505 1 correct? 2 A. With respect to the stipulation itself, 3 that is correct. 4 Q. And, in fact, you, yourself, have 5 testified that DP&L has periodically solicited bids 6 for all of its coal-generation assets, right? 7 A. If you are referring to the specific 8 lines in my testimony? 9 Q. Yeah, sorry. I can refer you to your 10 direct testimony. That's on page 26, line 19. 11 A. My testimony stands. 12 Q. Your testimony stands and that includes 13 you are referring also to Killen and Stuart in there. 14 A. Correct. DP&L operates both the Killen 15 and Stuart power plants. 16 Q. Yes. And you have testified that they 17 have periodically solicited bids for those plants. 18 A. My testimony stands. 19 Q. Thank you. Furthermore, nothing in the 20 proposed stipulation would prevent a third party from 21 contacting DP&L or AES after transfer and trying to 22 buy Killen or Stuart, right? 23 A. Nothing in the plain language of the 24 stipulation does that, correct. 25 Q. Now, you were engaged as a witness in ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 506 1 this matter between two and three weeks before you 2 filed your testimony, right? 3 A. Before I filed my original testimony, 4 correct. 5 Q. On March 1? 6 A. Whatever the date was. 7 Q. Yeah. And in doing your analysis, and 8 indeed both in the original testimony and in the 9 testimony that we are considering today, in preparing 10 either of those testimonies, you didn't analyze the 11 impact closure of Killen or Stuart might have on 12 DP&L's credit rating, right? 13 A. The focus was on whether it was harmful 14 to ratepayers and to the area in which the power 15 plants are located, correct. 16 Q. Thank you. And you haven't done any 17 analysis of the financial integrity of DP&L, right? 18 A. I've discussed the financial issues 19 related to DP&L, but my analysis focused on the 20 impact of the lost generation on -- on customers and 21 on the local -- localities in which the plants were 22 located. 23 Q. Right. And so to be clear, that analysis 24 did not -- your individual analysis did not include 25 an analysis of the financial integrity of DP&L. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 507 1 A. Correct. My issue is not the financial 2 integrity of DP&L. 3 Q. Yeah. And you haven't done any analysis 4 of the financial integrity of DPL Inc. either, have 5 you? 6 A. Other than providing the context, I have 7 not done the additional analysis. 8 Q. You haven't done your own analysis. 9 A. I have not done my own analysis, correct. 10 Q. And you haven't -- you also have not 11 reviewed the financial projections of the coal 12 plants' cash flow that were presented by DP&L, right? 13 EXAMINER PRICE: You need to reset your 14 microphone. 15 A. I was not aware they were available. 16 They were not available, I believe, in the -- on a 17 nonconfidential basis. I did not see them. 18 Q. Okay. Have you seen them now? 19 A. No. 20 Q. You have not. And actually speaking of 21 confidential information, you didn't review any 22 confidential information in this case before filing 23 your testimony, correct? 24 A. Correct. 25 Q. And have you reviewed any confidential ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 508 1 information since filing your information? 2 A. The only information we reviewed that was 3 confidential was the redacted portion of Witness 4 Malinak's explanation about the impact of the 5 closures. 6 Q. Would that have impacted your testimony? 7 A. There was nothing there, no. 8 Q. Okay. And you didn't review any 9 discovery in the case in preparing your testimony. 10 A. No. My focus was the impact on a market 11 basis of the closure of the Killen and Stuart power 12 plants. 13 Q. Understood. And you also did not review 14 the most recent SEC filings by DP&L, DPL, AES, 15 Dynegy, or AEP in preparing this testimony? 16 A. I believe you asked me that. I was not 17 sure about -- I thought I had reviewed the most AES, 18 but I am not sure of the timing of the filings of 19 the -- I had reviewed certainly the 2015 numbers. I 20 am not sure if the 2016 annuals were out at the time 21 I prepared my initial testimony. 22 Q. Okay. So your -- you can't say for sure 23 that you reviewed the 2016 financials. 24 A. No. The financials that I reviewed and 25 incorporated into my testimony are footnoted. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 509 1 Q. Understood. Thank you. Now, you also 2 haven't undertaken any individual effort to value 3 Killen or Stuart, right? 4 A. Again, the purpose of my testimony was to 5 demonstrate that these power plants are in-the-money 6 power plants based upon our analyses and that our 7 experience is the best way to determine what the 8 value is to offer the power plants into the market 9 for sale and the highest bidder would win. So our 10 analysis was irrelevant to the determination of 11 whether we thought a party would be interested and 12 what price they would pay. 13 MR. WANNIER: Your Honor, I am going to 14 move to strike that entire response. I am just 15 asking a very simple question, "yes," "no" questions. 16 A. So -- 17 EXAMINER PRICE: We are going to deny the 18 motion to strike, but if you ask her a follow-up, I 19 am sure she will answer "yes" or "no." 20 MR. WANNIER: Okay. 21 THE WITNESS: Yes. 22 Q. So to be clear -- well, I have to ask it 23 again. Now, you have not undertaken any individual 24 effort to value Killen or Stuart, correct? 25 A. Not Killen or Stuart but we are aware of ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 510 1 some of the market prices for power generations 2 located on the river. 3 Q. The answer is "yes"? 4 A. Again, it would be a generic analysis of 5 power plants that are being sold on the river and 6 what they are being sold for and to the extent they 7 are -- that is relevant for the Killen and Stuart, so 8 I did not do an analysis just looking at negative 9 cash flow, no. 10 Q. Okay. I am just going to ask it again, 11 you have not done an individual analysis of the value 12 of Killen and Stuart. 13 MR. MICHAEL: Objection, asked and 14 answered. 15 EXAMINER PRICE: She hasn't answered it 16 yet. 17 MR. MICHAEL: I thought it was pretty 18 clear. 19 EXAMINER PRICE: Let me finish. I am 20 going to direct you to answer that question "yes" or 21 "no" right now. 22 THE WITNESS: No. 23 EXAMINER PRICE: Thank you. 24 Q. And you also have not tried in any way to 25 estimate the closing and/or retiring obligations for ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 511 1 either plant, correct? 2 A. I would have done that as part of my 3 analysis. I did not do that because I was not -- I 4 wasn't doing an independent evaluation. That wasn't 5 the point of my testimony. 6 Q. Okay. And you also have not seen any 7 cash flow projections for Killen or Stuart. 8 A. Correct. 9 Q. Okay. Can you please turn to page 14 of 10 your -- of your direct testimony. Now, you say there 11 you acknowledge there that poor performance at Stuart 12 has been a major issue at the plant, right? 13 A. Yes. 14 Q. And you would agree that the plant's 15 capacity factor -- well, sorry. Strike that. 16 Would you say that 60 percent capacity 17 factor is generally considered baseload? 18 A. Obviously it varies, but 60 percent I 19 would consider generally to be baseload. 20 Q. Okay. And -- 21 EXAMINER PRICE: Restart your microphone. 22 Thank you. 23 Q. And in the last three years, Stuart has 24 not met that metric, correct? 25 A. Correct. I think this table should say ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 512 1 the first half of 2016. I don't have the full year 2 2016 here. 3 Q. Understood. But with -- for the data 4 that you have, you don't see any indication from the 5 data that you provided to the Commission that Stuart 6 has met that metric, correct? 7 A. In the first -- correct, for the first 8 two-and-a-half -- the last two-and-a-half years. 9 Q. And so you would agree that the plant's 10 capacity factor for the data that you have in your 11 direct testimony does not indicate any material 12 improvement in performance since 2015, correct? 13 A. There's only six months of data since 14 2015. So for the six months of data from 2015, I 15 would agree with you. 16 Q. Okay. And you would agree that there's 17 been a move toward the closure of coal-fired power 18 plants in the last few years, right? 19 A. Move, the large number of retirements had 20 already occurred primarily related to compliance with 21 the Mercury Air Toxic Standard which we refer to as 22 MATS so -- so these units were fully met -- are fully 23 MATS compliant. And so that's one reason they were 24 not deemed to be candidates for closure. 25 MR. WANNIER: Move -- can I have that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 513 1 answer read back, your Honor? 2 EXAMINER PRICE: You may. Let's have the 3 question also, please. 4 (Record read.) 5 MR. WANNIER: I would ask to move that 6 entire response -- move to strike the entire 7 response. 8 EXAMINER PRICE: Denied. You asked her a 9 broad question. She gave you a broad answer. 10 Q. Okay. Let me rephrase. Would you agree 11 that there is certainly a move toward the closure of 12 coal-fired plants? 13 A. If you don't want the same answer, you 14 will have to make it a little narrower question. 15 Q. Would you agree in recent years in -- 16 generally in the coal industry, there has been a 17 trend of more coal plants retiring? 18 A. Unfortunately the answer is the same. 19 The reason for the large retirements in the eastern 20 U.S. were tied to MATS compliant. Those plants that 21 were MATS compliant were not part of that wave. In 22 the western U.S. the retirements were primarily due 23 to regional pay settlements so there were specific 24 reasons there were plant retirements in recent years. 25 Q. Okay. Would you agree that the current ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 514 1 market for coal is a challenging market? 2 A. The price for natural gas in 2015 made it 3 a challenge for coal plants to operate. Most 4 forecasters are calling for an increase in natural 5 gas prices which put coal -- remaining coal plants 6 back in the money, and so it is a challenge to get 7 through that period. But post-2016, 2017, and 8 beyond, we think there is a lot of opportunity for 9 coal plants. 10 MR. COLLIER: Your Honor, the microphone 11 is cutting out. 12 EXAMINER PRICE: It's fighting with you. 13 Q. That's okay. The microphone is fighting 14 with me as well. 15 A. I was going to say the attorney is 16 controlling those. 17 Q. Ms. Medine, your deposition was taken in 18 this case this past Saturday, right? 19 A. Yes. 20 MR. WANNIER: Okay. May I approach? 21 EXAMINER PRICE: You may. 22 MR. WANNIER: I am going to ask the court 23 reporter to mark as Sierra Club Exhibit 1 a copy of 24 the public portion only of the transcript of your 25 deposition that was taken on Saturday. I am going to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 515 1 bring it over and if you could take a moment to 2 satisfy yourself that it, in fact, looks like that. 3 EXAMINER PRICE: Counsel, are you using 4 this solely to impeach her? 5 MR. WANNIER: I am. 6 EXAMINER PRICE: You don't need to mark 7 it. 8 MR. WANNIER: I don't need to mark it. 9 Understood. Thank you. 10 MR. COLLIER: And if he is using it for 11 impeachment, I would suggest he ask a question first; 12 and if he is not satisfied with the answer, he can 13 present her deposition. 14 EXAMINER PRICE: He asked a question. 15 MR. COLLIER: All right. 16 MR. WANNIER: I asked a question. 17 EXAMINER PRICE: Since he is handing out 18 the deposition we can assume he wasn't satisfied. 19 MR. CRAWFORD: Excuse me. Could we get a 20 copy of the exhibit? 21 MR. WANNIER: Sure. Let me bring one to 22 you. 23 EXAMINER PRICE: Counsel, I have an odd 24 copy, the copy something. 25 MR. WANNIER: Oh, no. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 516 1 EXAMINER PRICE: It's no problem. I 2 don't know if this is confidential or what this 3 document is, and I don't want to have it. 4 THE WITNESS: I can't read it. 5 EXAMINER PRICE: Do your best. Can I 6 have a different copy and take this one away? 7 MS. WHITFIELD: Here, he can have mine. 8 MR. WANNIER: I apologize, your Honor. 9 EXAMINER PRICE: I don't know what it is. 10 If it's something important to you guys, I don't want 11 to have it. 12 MR. MICHAEL: Clean coal strategic plan 13 of Sierra Club. 14 EXAMINER PRICE: Exactly. Somebody left 15 the wrong thing on the printer. 16 MR. WANNIER: Is that a good copy, your 17 Honor? 18 EXAMINER PRICE: Yes. 19 Q. (By Mr. Wannier) If you could turn, 20 please, to page 87 of your testimony. 21 A. I hate to be difficult, and I appreciate 22 your efforts in conserving paper, but older witnesses 23 cannot read small print like this. So I can't really 24 see the words, so I will have to look at my counsel 25 to see if he agrees that's what's there. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 517 1 Q. I will represent to you and -- oh, you 2 have. 3 MR. STOCK: We have got a full page copy. 4 MR. COLLIER: If I may approach, your 5 Honor. 6 EXAMINER PRICE: You may. 7 Q. If you can turn to page 87, line 6. 8 A. Yes. 9 Q. Now, reading that, you testified, I 10 think, and I am quoting "I think that there is no 11 question that the current market is a challenging 12 market," and you said this in the context of a 13 question about the coal market, correct? 14 A. Correct. And I think I said that as well 15 here. 16 Q. Okay. Now, and you have testified also 17 that -- 18 MR. COLLIER: Wait, wait. If he is 19 questioning her for impeachment purposes and he is 20 taking one sentence out of her answer, I think 21 it's -- the correct approach would be to pose the 22 question, she reads the answer, and then he can 23 follow up as to whether that's inconsistent. But you 24 can't take one line out of context. That doesn't 25 impeach her. She said that's what I said before. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 518 1 EXAMINER PRICE: He is free to do his 2 impeachment the way he wants, and we will be the 3 judge whether it's effective or not. If you would 4 like to follow up on redirect on that matter, you 5 may. 6 MR. COLLIER: Okay. 7 Q. And you have also -- if you could turn to 8 page 25 of your testimony. 9 A. Yes. 10 Q. On line 3, you state that "the Energy 11 Information Administration also forecasts a 12 resurgence" -- "a resurgence in coal generation 13 during this period without the Clean Power Plan." Do 14 you see that? 15 A. Yes. 16 Q. Okay. 17 MR. WANNIER: Your Honor, may I approach? 18 EXAMINER PRICE: You may. 19 Q. Now, if you can take a look at this 20 document which I am now marking as Exhibit Sierra 21 Club 1. 22 EXAMINER PRICE: It will be so marked. 23 (EXHIBIT MARKED FOR IDENTIFICATION.) 24 Q. Ms. Medine, this is the EIA report you 25 cited at footnote 24 on page 25 of your testimony, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 519 1 correct? 2 A. Yes. 3 Q. And you -- this citation was to support 4 your testimony about EIA forecasting a resurgence in 5 coal generation without the Clean Power Plan, 6 correct? 7 A. Yeah. For the record I think in our 8 discussion on Saturday I changed the word for 9 "resurgence" to "rebound" but that's correct. 10 Q. Okay. That's fine. Ms. Medine, well, as 11 you said, you -- in your deposition you stated that 12 resurgence was maybe not the right characterization. 13 EXAMINER PRICE: Wait a second. What she 14 said was totally not responsive whether you had a 15 question pending or not. So we are just going to 16 strike the rebound versus resurgence, and Mr. Collier 17 can raise this on redirect if he thinks it's 18 important. 19 MR. WANNIER: Well, I actually will ask 20 that question. I think Ms. Medine was anticipating 21 my question. 22 EXAMINER PRICE: Well, let's try to keep 23 the record clean here, question and answer and not 24 answer then question. 25 MR. WANNIER: Understood, your Honor. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 520 1 Q. (By Mr. Wannier) Now, Ms. Medine, in your 2 deposition on Saturday, you stated that resurgence 3 was maybe not the right characterization of this EIA 4 report, correct? 5 A. I exactly said the resurgence was not the 6 best word, yes. 7 Q. Okay. Ms. Medine, are there any other 8 places in your testimony where you have exaggerated 9 reports? 10 MR. COLLIER: Objection. 11 EXAMINER PRICE: Argumentative? 12 Sustained. 13 MR. WANNIER: This is an opposing 14 witness, your Honor. 15 EXAMINER PRICE: You still can't ask her 16 argumentative questions. 17 Q. All right. Are there other examples in 18 your testimony, Ms. Medine, where you may not have 19 used the best word to describe? 20 A. Not to my knowledge. 21 Q. Okay. And if you can turn to page -- 22 and -- well, actually let's turn to page 69 of 23 Exhibit -- of Exhibit Sierra Club 1. 24 MR. CRAWFORD: Is there an additional 25 copy of Sierra Club Exhibit 1? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 521 1 MR. WANNIER: Oh, did one not make it 2 down to you? Actually you can have this one. 3 MR. CRAWFORD: I got it. Thank you. 4 MR. WANNIER: You don't need one? All 5 right. 6 Q. (By Mr. Wannier) That's the chart that 7 you were citing to in your testimony, correct? 8 A. Yes. 9 Q. And you would agree that the no Clean 10 Power Plan case continues to show coal generation 11 would remain 25 to 30 percent below its -- what its 12 levels were at the start of the decade? 13 A. Yes. 14 Q. Thank you. Can you please turn to page 7 15 of your direct testimony and specifically line 11 16 which is also paragraph 22. 17 A. Yes. 18 Q. Now, do you see there where you talk 19 about the severe community economic consequences from 20 closure of Stuart and Killen? 21 A. Yes. 22 Q. Would you agree that there are several 23 instances where plants have been sold to new buyers 24 only to be closed a few years later? 25 A. Are you -- do you have examples to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 522 1 provide? 2 Q. I can give one. Dynegy, for instance, 3 has purchased coal plants recently and -- purchased 4 coal plants and moved to retire them recently, right? 5 A. Yes. 6 Q. And they have demonstrated willingness to 7 close coal plants in Ohio, right? 8 A. Are you referring to Stuart? 9 Q. Well, including Stuart. 10 A. Yes. 11 Q. And you would agree that it's entirely 12 possible that even after a sale of Killen and Stuart, 13 the purchaser could turn around and close them in a 14 couple of years. 15 A. Yes. 16 Q. Now, you are aware that -- are you also 17 aware that the owners of Killen and Stuart, by which 18 I mean AES, AEP, and Dynegy, have taken impairments 19 on Killen and Stuart to the degree that they have 20 ownership interests? 21 A. As I mentioned, yes, I am aware. 22 Q. And that was done in 2014. 23 A. I don't specifically recall. 24 Q. Okay. That's fine. And are you aware 25 that AEP has valued its ownership interest in Stuart ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 523 1 at zero dollars? 2 A. I am not sure of the exact number, but I 3 would accept that as -- if that's what you are 4 proffering. 5 Q. You don't have individual knowledge of 6 that fact? 7 A. I may. I just at this moment can't 8 recall if I have actually seen that number. It 9 wouldn't surprise me. I am not arguing with you. I 10 am just saying that at my fingertips I can't confirm. 11 Q. That's fine. We can move on. Are you 12 also aware or would you accept that Dynegy has valued 13 its interest in Stuart at zero dollars? 14 A. Again, I wouldn't be surprised. 15 Q. And are you aware of any of these 16 companies indicating that the value of their coal 17 assets has increased since taking those impairments? 18 A. Again, I'm not sure of that relevance, 19 but I would not be surprised. 20 Q. And, in fact, you would expect that to be 21 the case, right? 22 A. Not necessarily. I'm not speaking from 23 an accounting perspective, not necessarily. The fact 24 that it was -- it booked at zero may have tax 25 reasons, implications, and the like. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 524 1 Q. But you -- in your understanding of the 2 coal industry, you would not guess that any of these 3 plants would have in -- would have increased -- 4 indicated the value of their coal assets had 5 increased since taking impairments, right? 6 A. I would assume that they are following 7 accounting principles and whatever is required that's 8 what they -- what they provide. 9 Q. I'm not -- I'm sorry. I'm a little 10 confused by your answer. 11 A. Okay. 12 Q. Would you expect any of these companies 13 to have indicated an increase in the value of their 14 coal plant since taking the impairment? 15 A. What I would expect is for them to follow 16 accounting principles and if accounting principles 17 required them to increase the value of their plants 18 on their books, they would go ahead and do that. 19 That's not really all that relevant. 20 Q. Ms. Medine, again, you were deposed on 21 Saturday, correct? 22 A. Yes. 23 Q. Can you please turn to page 112, line 2, 24 of your testimony. 25 A. Yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 525 1 Q. Now, as I am reading through that, 2 Attorney Chris Bzdok asked the question "Have you 3 reviewed any industry documents or filings by any of 4 these companies indicating a perceived increase in 5 the value of any of those assets on which they have 6 taken impairments in the last couple of years?" And 7 your response was "I have not done that analysis. I 8 would not guess that would have happened," correct? 9 A. Correct. I think that's pretty similar 10 to what I am saying today, but yes. 11 Q. Okay. Well, is Murray Energy a customer 12 of Dayton Power and Light? 13 A. As I answered, I have no idea. 14 Q. Okay. But you have no specific knowledge 15 that it is a customer? 16 A. I have no specific knowledge either way. 17 Q. Understood. And are you testifying about 18 the impairments of the stipulation on Murray Energy 19 as a consumer? 20 A. No. I believe I am testifying as to the 21 impact of the closure of the Killen and Stuart 22 plants. 23 Q. Okay. Does Murray Energy currently own 24 any of the generating assets at issue in this 25 stipulation? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 526 1 A. Not to my knowledge. 2 Q. Okay. Do you know if Murray Energy has 3 offered to buy Killen and Stuart? 4 MR. SHARKEY: Your Honor, I am going to 5 object to that question. 6 MR. COLLIER: Objection. 7 MR. WANNIER: Your Honor, Murray 8 Energy -- 9 MR. COLLIER: If we are going to have 10 argument on this issue, we need to go off the record. 11 EXAMINER PRICE: We will hear the grounds 12 for the objection from Mr. Collier first, Mr. Sharkey 13 second, and then we will get your response. 14 Mr. Collier. 15 MR. COLLIER: We need to discuss this in 16 camera, your Honor, with the Bench and Dayton Power 17 and Light. It's confidential, proprietary. 18 EXAMINER PRICE: Before we get into this, 19 why don't you try rephrasing your question in a less 20 objectionable manner and see how it goes. 21 MR. WANNIER: Your Honor, if I am being 22 honest, I don't know that I can, and my subsequent 23 questions are probably more objectionable. I'm happy 24 to respond to all objections as they come. 25 MR. COLLIER: Your Honor, we really need ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 527 1 to go into an in camera examination with attorney 2 examiners and DP&L present. 3 EXAMINER PRICE: And Sierra Club? 4 MR. MICHAEL: And Ohio Consumers' 5 Counsel? 6 EXAMINER PRICE: Okay. Hold on a second. 7 MR. COLLIER: I need to explain. 8 EXAMINER PRICE: I understand where we 9 are going so I'm just asking a question to 10 Mr. Sharkey. You're objecting too. 11 MR. SHARKEY: Yes, your Honor. 12 EXAMINER PRICE: Is anything you are 13 objecting to covered by the confidentiality 14 agreement, or is it not covered by the existing 15 confidentiality agreement? 16 MR. SHARKEY: It would be our position 17 that it would not be covered by the existing 18 confidentiality -- you are talking about the 19 confidentiality agreement among the parties? It 20 would be our position that it would not be and should 21 not be. DP&L's position, if you would like me to 22 hear -- if you would like to hear it. 23 EXAMINER PRICE: Well, first, I am trying 24 to get to the question of who can be allowed in the 25 in camera discussion here, and then we will get to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 528 1 DP&L's position. 2 MR. SHARKEY: It would be our position 3 that nobody could be, your Honor, if there is to be 4 an in camera discussion, depending on the 5 circumstances. 6 EXAMINER PRICE: Okay. That's fine. 7 Let's go off the record. 8 (Recess taken.) 9 EXAMINER PRICE: Let's go back on the 10 record. 11 I have got a couple of questions for the 12 witness, and then we will go from there. 13 Ms. Medine, are you aware of any 14 regulatory obstacles to preclude Murray Energy from 15 buying these plants? 16 THE WITNESS: I'm not sure what you mean. 17 Beyond the standard regulatory obstacles or any? 18 EXAMINER PRICE: Any obstacles, anything 19 that prevents them from buying the plants. 20 THE WITNESS: Not my knowledge. 21 EXAMINER PRICE: Is there anything in the 22 stipulation that precludes any party from buying 23 these plants? 24 THE WITNESS: In the stipulation language 25 itself, not to my knowledge. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 529 1 EXAMINER PRICE: Thank you. Let's move 2 on. 3 MR. WANNIER: Your Honor, can I respond 4 for a couple of points? 5 EXAMINER PRICE: You can. 6 MR. WANNIER: Okay. First, I would like 7 to state or acknowledge for the record that there was 8 an in camera meeting off the record that didn't 9 include all the parties to this proceeding. And -- 10 EXAMINER PRICE: Yes, there was. 11 MR. WANNIER: Yes. And second -- 12 EXAMINER PRICE: You want to be clear it 13 was the Bench, Murray Energy, and Dayton Power and 14 Light. 15 MR. WANNIER: Thank you, your Honor. 16 And, second, I would like to just point out or -- 17 well, I haven't even heard of an actual objection, 18 but I'll just point out that Murray's interests in 19 this case are not clear, and if Murray Energy is a 20 potential buyer, then they're outside the scope of 21 interest protected by the ORC provisions that govern 22 this case. And if that's the case, then the 23 Commission should be aware of that in weighing Murray 24 Energy's and their witness's testimony. 25 EXAMINER PRICE: I appreciate that, and I ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 530 1 will just point out that the examiners have broad 2 discretion to control the testimony taken at this 3 hearing and there's no need to get into any potential 4 transactions between Dayton Power and Light and any 5 other party regarding any power plants at this time. 6 It has very limited bearing on the stipulation. As 7 the witness just acknowledged, there is nothing in 8 the stipulation which precludes Dayton Power and 9 Light from selling these plants to any party, and the 10 stipulation is the focus of this hearing. 11 MR. WANNIER: Okay. As long as the 12 Commission weighs Murray Energy's testimony 13 accordingly. 14 MR. MICHAEL: And I would just like to 15 say very briefly, your Honor, respectfully I would 16 obviously not dispute your Honor's discretion or the 17 Bench's discretion on what evidence it is taking. 18 However, I would object to the exclusion of parties 19 to discussions about potentially meaningful or 20 important issues involved in this. 21 I mean, you know, none of the parties, 22 opposing intervenors, were able to hear what Murray 23 Energy said, what Dayton Power and Light said, so 24 unfortunately the residential consumers of Dayton 25 Power and Light can't weigh in on whether or not your ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 531 1 Honor should hear it. So I obviously don't object to 2 your Honor's discretion, but I am just respectfully 3 saying I would object to the exclusion of parties to 4 the in camera meeting. 5 EXAMINER PRICE: I understand your 6 objection. It's noted for the record; but, you know, 7 it was important to understand the basis of their 8 request for an in camera proceeding to determine 9 whether or not you could participate. And they 10 persuaded me participation should be limited to the 11 two parties. 12 MR. WANNIER: Shall I continue? 13 EXAMINER PRICE: You may continue. 14 MR. WANNIER: Thank you. 15 Q. (By Mr. Wannier) Ms. Medine, can you 16 please turn to page 24 of your testimony. 17 A. Yes. 18 Q. Direct testimony. Do you see the chart 19 on the top of that page where you lay out the 20 capacity market dispatch curve in PJM? 21 A. Two comments, yes, I see that, and it was 22 replaced with an additional document. 23 Q. I apologize. Thank you. I had forgotten 24 that. We can turn to Exhibit 2A of your testimony. 25 A. Thank you. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 532 1 EXAMINER PRICE: Ms. Medine, is there any 2 difference between this chart and Exhibit 2A other 3 than this is nicely in color now and I can read it? 4 THE WITNESS: Yes. 5 EXAMINER PRICE: There are differences. 6 THE WITNESS: Yes. 7 MR. WANNIER: I was going to get -- 8 that's fine. 9 EXAMINER PRICE: So just ignore the chart 10 on page 24 of your testimony. 11 THE WITNESS: If you notice -- 12 MR. WANNIER: If I can ask a question 13 first. 14 Q. (By Mr. Wannier) What are the differences 15 between the charts on page 24 of your prefiled 16 testimony and Exhibit 2A? 17 A. Unfortunately 2020 and 2025 were the same 18 in the testimony which I did not realize until we 19 were going through the production of the discovery 20 requests. And at that point I modified the discovery 21 request to be correct, and as I mentioned during the 22 deposition, I would be updating the chart. 23 Q. Yes. Understood and we appreciate that. 24 Thank you. 25 A. You're welcome. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 533 1 Q. But there are no other differences other 2 than the fact that the 2025 is updated and it looks 3 like the presentation has been slightly altered? 4 A. Slightly altered. 5 Q. Okay. And no other changes. 6 A. Not to my knowledge. 7 Q. Thank you. Okay. So let's look at the 8 two charts on Exhibit 2A then. 9 A. Thank you. 10 Q. Ms. Medine, you have not yourself tried 11 to quantify what the increase in power prices might 12 be from closure of Killen or Stuart, right? 13 A. No. My point is when you remove 3,000 14 megawatts of capacity from the lower economic part of 15 the curve, it will increase your power price, but I 16 have not done the quantification. 17 Q. Okay. And you also have not done any 18 work that would enable you to qualitatively 19 characterize those price changes as large or small, 20 correct? 21 A. No. The only qualitative analysis I have 22 done is price changes would be positive. 23 Q. Okay. But you don't -- you would not be 24 able to testify -- you are not testifying today that 25 they would be large or small. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 534 1 A. No. They are positive. That's all I am 2 testifying to. It will increase the price of power. 3 Q. Okay. So let's look at this chart. How 4 would you go about estimating using this chart, the 5 increase in power prices that might result? 6 A. I wouldn't use this chart to estimate the 7 increase in power prices. 8 Q. But you could approximate it, right? 9 A. Maybe, but I think because this is sort 10 of an annual average number, in fact, power prices 11 vary from, you know, by season, by day, by hour, so 12 to get a closer approximation, I would actually use 13 the outputs of the model which would provide that 14 information. 15 Q. Okay. But looking at this chart at least 16 which you state represents the average demand and -- 17 and provides a dispatch curve of the supply in PJM, 18 do you see in this Exhibit 2A where there is this red 19 box that says "2020 Average Demand" -- 20 A. Yes, I do. 21 Q. -- in the first chart? And you see that 22 it intersects at it looks like approximately 37,000 23 megawatts? 24 A. I can't read this either; but, yes, I'll 25 accept that. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 535 1 Q. Well, it's your exhibit so I will ask you 2 to read it as best you can. 3 A. It's a number. 4 Q. Yeah. Well, I will represent it 5 intersects around 37,000. 6 A. I accept your representation. 7 Q. Thank you. 8 EXAMINER PRICE: Isn't that the number in 9 the box? Am I reading this wrong? 10 THE WITNESS: Could be. 11 MR. WANNIER: Sorry. Apologies, your 12 Honor, it, in fact, says 36,773. 13 A. Yes. 14 Q. Now, the combined capacity of Stuart and 15 Killen is approximately 3,000 megawatts, right? 16 A. Correct. 17 Q. Okay. And they -- in this curve that you 18 have provided, they are -- they are offering the 19 entirety of that 3,000 megawatts into this dispatch 20 curve, correct? 21 A. So let me try to explain again what a 22 dispatch curve is. It doesn't say what they are 23 offering them in at. This is what their costs are 24 per megawatt-hour. 25 Q. Okay. Thank you for that clarification. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 536 1 I may have used imprecise phrasing, but I think we 2 are in agreement on what -- the question was whether 3 the entirety of the 3,000 megawatts is represented in 4 this curve. 5 A. Yes. 6 Q. Okay. Thank you. Would you agree that 7 removing -- and you would agree that all of the units 8 at Stuart and Killen are to the left of the red 9 dotted line that represents average demand, right? 10 A. Yes. 11 Q. Okay. Now, would you agree that removing 12 3,000 megawatts from the left of this red dotted line 13 would allow -- were you to try to calculate the 14 impact of that, you could simply move the red dotted 15 line 3,000 megawatts to the right along the dispatch 16 curve? 17 A. Yes. But, again, I am not sure that 18 would give you a good estimate of the impact on the 19 power price, yes. Yes, it moves it to the right. 20 Q. By 3,000 -- by that amount. 21 A. Correct. You are contracting the supply 22 curve, so you are moving your average to the right, 23 correct, to a higher price area. 24 Q. So based on average demand -- actually I 25 am not seeing a Y axis on these charts. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 537 1 A. Correct. 2 Q. But based on the average demand, if you 3 move the line -- the red line 3,000 megawatts to the 4 right, you would be -- the price increase for the 5 average demand would be represented by the new 6 intersection 3,000 megawatts to the right. 7 A. Correct. 8 Q. Thank you. DP&L is only responsible for 9 prices for customers in its service territory, right? 10 A. DP&L -- I don't know if "responsible" is 11 the correct word but. 12 Q. But you would agree that their obligation 13 to provide safe and reliable service and their 14 consideration of -- or their obligation to reduce 15 costs for their consumers only extends to their 16 service area. 17 A. Their concern is their customers, 18 correct. 19 Q. Okay. Perfect. Ms. Medine, do you 20 believe the gas prices will go up in the next 5 to 15 21 years? 22 A. Yes. 23 Q. What's your basis for that belief? 24 A. Detailed supply analysis. 25 Q. And that was a report conducted by EVA, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 538 1 correct? 2 A. That's not a report. It's part of our 3 daily business to do analysis of the gas industry. 4 Q. Okay. Do you conduct the analysis that 5 goes into those reports? 6 A. For gas? For gas? 7 Q. Yes. 8 A. No. 9 Q. And you -- and you don't believe that any 10 regulatory developments will increase gas prices, 11 right? 12 A. Correct. 13 Q. In fact, regulatory developments may make 14 it easier to produce gas. 15 A. So while I don't think new regulatory 16 developments will continue to be regulatory costs for 17 gas production as there are regulatory costs for coal 18 production. I don't think we are entering an era of 19 freedom from all regulations, so there will continue 20 to be regulatory costs. 21 Q. But you believe those regulatory costs 22 will go down -- 23 A. For gas? 24 Q. Yes. 25 A. To my knowledge they are not that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 539 1 significant, so it was more of a concern about an 2 increase than a reduction. 3 Q. Okay. Now, can you please turn to 4 page 18 of your testimony. And that's line 10. 5 A. Yes. 6 Q. So you discuss in this paragraph the 7 February 2016 filing for an ESP with a reliable 8 electricity rider, correct? 9 A. I'm sorry? For the electric service 10 plan? 11 Q. With a reliable electricity rider. 12 A. Yes. 13 Q. Are you aware this filing has been 14 withdrawn? 15 MR. COLLIER: Objection. Could I, first 16 of all, get a reference to the page? 17 MR. WANNIER: Yeah. Again, that is 18 page 18, line 10, and really that entire paragraph is 19 discussing this. 20 EXAMINER PRICE: Grounds for your 21 objection? 22 MR. COLLIER: Assumes facts not in 23 evidence. 24 MR. WANNIER: Can I get a clarification 25 on that objection? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 540 1 MR. COLLIER: The basis of the question 2 was to assume something that is not in evidence. 3 MR. WANNIER: I am simply asking -- 4 EXAMINER PRICE: Which factors is he 5 assuming is not in evidence? 6 MR. COLLIER: That the ESP has been 7 withdrawn as opposed to the reliable electricity 8 rider. 9 EXAMINER PRICE: Mr. Sharkey, you can 10 solve this conundrum for us. 11 MR. SHARKEY: Yes, your Honor. The 12 Dayton Power and Light Company filed a notice of 13 withdrawal of its proposal for a reliable electricity 14 rider sometime before it filed its DMR application. 15 So I don't have the precise date in front of me. 16 EXAMINER PRICE: Is that notice in the 17 docket in the record of this case? 18 MR. SHARKEY: There is something in the 19 docket in this case formally requesting the reliable 20 electricity rider be withdrawn. 21 EXAMINER PRICE: Objection is overruled. 22 You can answer if you know. 23 A. I think there's no dispute that on 24 February 22, which is what this sentence says, this 25 ESP was filed and that's my only point there. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 541 1 Q. Okay. So you were not aware that it was 2 withdrawn. 3 A. Well, there was a filing. The act of 4 withdrawal doesn't necessarily remove the filing 5 itself. The filing continues to be there, and in the 6 filing the company represented the items that I talk 7 to in terms of the fact that coal was an integral 8 part of their future and that's simply the point. So 9 either -- assuming the company was honest in its 10 filing that's the entire point of that reference. 11 Q. Okay. So I will just -- 12 MR. WANNIER: Can I have that answer read 13 back and the question? 14 EXAMINER PRICE: Let's have the question 15 and answer back, please. 16 (Record read.) 17 MR. WANNIER: Your Honor, I am going to 18 move that as nonresponsive to the question. I was 19 not asking if there was a February 2016 filing. 20 EXAMINER PRICE: I am going to deny the 21 motion to strike, but if you would like to narrow the 22 question a bit, she will answer it in a more brief 23 and perhaps "yes" or "no" fashion. 24 Q. (By Mr. Wannier) Were you aware that a 25 withdrawal was filed on September 23, 2016, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 542 1 purporting to withdraw the February -- the February 2 2016 filing? 3 MR. COLLIER: Objection. That's a fact 4 not in evidence, your Honor. 5 MR. WANNIER: I thought -- 6 MR. COLLIER: You have the filing. We 7 have the filing. It is what it purports to be. It's 8 not as he characterized it. 9 EXAMINER PRICE: Mr. Sharkey, would you 10 care to respond? 11 MR. SHARKEY: Your Honor, the ever 12 helpful Chris Hollon has the exact language pulled up 13 on the computer screen, and the notice was -- states 14 that Dayton Power and Light Company provides notice 15 of withdrawal of its request in this case for a 16 reliable electricity rider. DP&L will continue to 17 pursue an alternative to the RER which has been named 18 the distribution modernization rider. And hold on a 19 second. I will get you a date. The date was 20 September 23, 2016. 21 EXAMINER PRICE: Counsel? 22 MR. COLLIER: Yeah. There is no dispute 23 they withdrew the reliability -- reliable electricity 24 rider is in the docket. The document also says they 25 didn't withdraw the ESP, the filing of an ESP. They ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 543 1 have amended it now substantially in the stipulation, 2 but they went on to state in addition to supporting 3 and explaining DP&L's DMR, DP&L will be filing 4 replacement direct testimony. DP&L's proposed ESP 5 still retains the key components of the benefit for 6 its customers. 7 EXAMINER PRICE: Okay. 8 MR. COLLIER: So that wasn't withdrawn. 9 EXAMINER PRICE: Let's try to cut through 10 this. Were you aware on September 23 Dayton Power 11 and Light withdrew the proposal for the reliable 12 electricity rider? 13 THE WITNESS: Yes. 14 EXAMINER PRICE: Thank you. 15 MR. WANNIER: Thank you, your Honor. 16 EXAMINER PRICE: Fix your mic. 17 Q. (By Mr. Wannier) Can you please turn to 18 page 22 of your testimony. 19 A. Yes. 20 Q. And specifically if you can look at 21 line 8. You're testifying here, correct, that "DP&L 22 has the burden of showing that closure of Killen and 23 Stuart is a better outcome for consumers than a 24 sale," correct? 25 A. That's my belief, yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 544 1 Q. And, in fact, you have stated that you 2 believe the February 2016 ESP filing creates that 3 burden, correct? 4 A. Not in and of itself, no. 5 Q. You don't believe that the -- 6 A. I said particularly given, not 7 exclusively given. 8 Q. Okay. So you believe that obligation 9 would exist even if there had not been a February 10 2016 ESP filing. 11 A. Correct. 12 Q. What's the basis for your belief that 13 that burden exists? 14 A. The basis for the belief goes back to 15 some of the legal challenges to the proceeding, but 16 the basis of the belief is that -- 17 Q. Sorry, if I can rephrase. Are there any 18 nonlegal basis -- bases for your -- I'm sorry to 19 interrupt. I will allow you to finish. I apologize. 20 A. Such that -- that there is a record that 21 I've presented that when the -- when requested for 22 the divestiture, either through a sale or a transfer, 23 that the Commission has the right, if not the 24 obligation, to show that it's in the public interest. 25 I'm sorry. And to complete the thought is that given ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 545 1 that the major change which is the expectation due to 2 announcements on the part of DP&L witnesses, DP&L, 3 DPL filing with PJM, et cetera, that there's a plan 4 to close the plant, I feel it's an obligation on the 5 company to show it's in the public interest for the 6 plant to be closed and that the Commission still has 7 the authority to do that. 8 MR. WANNIER: Your Honor, I am going to 9 move to strike that entire response for the same 10 reasons that I felt my motion to strike the legal 11 portions of her testimony. I am happy to rephrase 12 the question in a way that excludes that testimony. 13 EXAMINER PRICE: Let's strike the answer 14 and go ahead and rephrase your question in a manner 15 that doesn't lend itself toward legal conclusions. 16 MR. WANNIER: Thank you, your Honor. 17 Q. (By Mr. Wannier) Ms. Medine, are there 18 any nonlegal bases for your belief that DP&L has this 19 burden? 20 A. Yes. I believe that the purpose of the 21 divestiture of generation proffers competitive 22 generation market, and I think that the Commission 23 should be aware of the fact and the company should 24 demonstrate that this is in the public -- selling or 25 closing the plant is not or is in the public ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 546 1 interest. 2 Q. So, to be clear, the basis is your 3 personal belief as to what you think DP&L and the 4 Commission should do, correct? 5 A. The basis of my belief is what I think is 6 in the public interest, yes. 7 Q. Okay. Thank you. 8 MR. WANNIER: Your Honor, may I request a 9 15-minute recess? I need to revisit some questions 10 in light of previous motions to strike. Or 10. 11 EXAMINER PRICE: Try to keep it to 10. 12 Let's break for 10 minutes. Thank you. 13 We're off the record. 14 (Discussion off the record.) 15 EXAMINER PRICE: Let's go back on the 16 record. 17 Please proceed. 18 MR. WANNIER: Thank you, your Honor. 19 Q. (By Mr. Wannier) Ms. Medine, you 20 mentioned this idea that -- sorry. I'll strike that. 21 You mentioned a public interest 22 requirement before we went on break, right? 23 A. Yes. 24 Q. Can you please turn to Appendix B of your 25 testimony. Now, with the understanding that you are ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 547 1 not an attorney and we have moved to strike portions 2 of your testimony, my question is simply: Is your 3 statement about the public interest based in any way 4 on your understanding of Appendix B? 5 A. In part. 6 Q. Okay. Can you please state what in 7 Appendix -- and I will just say for the record that 8 Appendix B is an excerpt of Ohio Statute 4928.17, 9 corporate separation plans. 10 A. Again, I think it speaks for itself, but 11 I think clearly provisions of A, B, and C relate to 12 that. My focus on that section of the Code derived 13 from the order issued by the Commission that 14 specifically referred to the fact that they felt at 15 that time the divestment of the company generation 16 into a -- an unregulated affiliate was in the public 17 interest pursuant to that provision. 18 MR. COLLIER: Ms. Medine, could you press 19 your microphone. 20 THE WITNESS: Sorry. 21 EXAMINER PRICE: That's the order where 22 the Commission granted Dayton the authority to 23 transfer its generation assets. 24 THE WITNESS: Correct. 25 EXAMINER PRICE: And that order was not ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 548 1 appealed. 2 THE WITNESS: I believe it was -- I can't 3 tell you specifically. I think there were appeals 4 along the way. I think that provision came out of 5 the appeals. It's referenced on page -- 6 EXAMINER PRICE: I am not saying we 7 didn't have rehearings. I am saying that is a final 8 nonappealable order; is that correct? 9 THE WITNESS: I am not 100 percent 10 certain of that. 11 EXAMINER PRICE: Is there any reason to 12 believe that order is not in effect today? 13 THE WITNESS: I believe that the order is 14 in effect today except that it was extended to 15 May 31, and since that transfer can't occur by then, 16 I think that's what reopens it. 17 EXAMINER PRICE: You make some -- I am 18 going to interrupt you. 19 MR. WANNIER: Yes. 20 EXAMINER PRICE: You make some comments, 21 while we are on this section in your testimony, let's 22 start on page -- you make some comments regarding 23 Senate Bill 221. Page 6, line 3, you talk about the 24 objective of Senate Bill 221's requirement for 25 utilities to divest their generation; is that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 549 1 correct? 2 THE WITNESS: That was my understanding, 3 yes. 4 EXAMINER PRICE: Your understanding is 5 Sebate Bill 221 requires a utility to divest their 6 generation. 7 THE WITNESS: I believe there is an 8 obligation related to Senate Bill 221 where 9 specifically in it, I can't cite you a place, but 10 that was my understanding of the purpose of Senate 11 Bill 221. 12 EXAMINER PRICE: Here is a copy. Could 13 you read the first two lines. They are in parens. 14 First page, top. 15 THE WITNESS: You mean to amend sections? 16 EXAMINER PRICE: Above in the parens. 17 Read them out loud, very top. 18 THE WITNESS: You are doing this 19 deliberately. I can't read the numbers, but it says 20 before General Assembly, and then the second one says 21 Amended Substitute Senate Bill No. 221. 22 EXAMINER PRICE: Sure. Now, show me in 23 221 where this is an obligation for utilities to 24 divest the generation assets. 25 THE WITNESS: I would not want to take ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 550 1 the time. 2 EXAMINER PRICE: I have time. 3 THE WITNESS: I don't. I mean, I have 4 time obviously, but I am not going to be able to get 5 to that. It was my understanding and it was in a 6 number of the documents that I, A, produced and, B, 7 read through the years that spoke to the divestment 8 obligation, that the intent was to provide -- I 9 cannot. 10 EXAMINER PRICE: You refer to in your 11 testimony to Senate Bill 221, so I want you to show 12 me where that obligation was. 13 THE WITNESS: As I said, I can't cite you 14 the chapter and verse. It was part of the general 15 production at the time that by divesting of 16 generation, that would improve the competitive market 17 for power. 18 EXAMINER PRICE: So you have no basis for 19 your statement that 221 requires -- 20 THE WITNESS: I have some basis. I 21 cannot cite you. 22 EXAMINER PRICE: We have time for you to 23 look in the bill. 24 THE WITNESS: I will defer. If you say 25 it's not here, it's not here. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 551 1 EXAMINER PRICE: I am not testifying 2 today. 3 THE WITNESS: I cannot find it. It would 4 be a lengthy break for me to do it, and I don't 5 specifically know where to identify that. 6 EXAMINER PRICE: Okay. That's fine. 7 We'll leave it at that. 8 Please proceed. 9 Q. (By Mr. Wannier) Well, I won't ask any 10 questions about that anyway. Can you turn back to 11 Appendix B. 12 A. Yes. 13 Q. Do you see Section A2 of Appendix B where 14 it says in relation -- or in regard to corporate 15 separation plans that there is a requirement that as 16 "The plan satisfies the public interest in preventing 17 unfair competitive advantage and preventing the abuse 18 of market power"? 19 A. Yes. Yes. 20 Q. Now, when that line mentions "public 21 interest," especially in relation to these two 22 specific comments, right? 23 A. Yes. 24 Q. Okay. So we will take those harms one by 25 one. What about closing Killen or Stuart would lead ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 552 1 to an unfair competitive advantage? 2 A. As I mentioned on Saturday, the issue 3 relates to the fact that the merchant generators were 4 looking to reduce capacity operating in the region in 5 order to reduce costs. And the two merchant 6 generators that you mentioned in closing the plant 7 are Dynegy and AEP Generation Resources. 8 Q. But do you have any basis for your claim 9 that Dynegy and AEP are motivated by in this closure 10 decision by desire to increase capacity prices? 11 A. Other than common business sense? Do I 12 have an actual document? 13 Q. Do you have any actual knowledge of that? 14 A. Common business sense. 15 Q. Okay. And do you have any evidence you 16 can point us to that AES or DPL Inc. or DP&L were 17 seeking or that one of their -- that their objective 18 in seeking to close Killen or Stuart was to increase 19 capacity prices? 20 A. No. I don't believe I said that. I 21 think there is interest basically -- the interest in 22 is getting approval of the ESP. And to the extent 23 that included the closing of those plants, that was a 24 price they were willing to pay. 25 MR. WANNIER: Okay. I am going to move ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 553 1 to strike that last sentence, your Honor. 2 EXAMINER PRICE: Let's have the question 3 and answer back in their entirety, please. 4 (Record read.) 5 EXAMINER PRICE: Wait a second. I 6 thought we agreed earlier that the amended 7 stipulation had no provisions to close Stuart and 8 Killen. 9 THE WITNESS: I think there is 10 significant collateral evidence to the contrary. The 11 actual amendment, per se, doesn't say that. 12 EXAMINER PRICE: Anywhere in the ESP 13 saying they are committing to close Stuart and 14 Killen? 15 THE WITNESS: In the ESP, no, because 16 they were saying at that point how great they were 17 and important to the financial -- the -- 18 EXAMINER PRICE: In the most recent 19 amended application of their ESP, do they represent 20 they are going to close Stuart or Killen? 21 THE WITNESS: No. As I said, the 22 evidence in the ESP application lies with the 23 testimony of Expert Malinak which specifically states 24 that he's been told that the company plans to close 25 those plants. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 554 1 EXAMINER PRICE: I am just asking are 2 they -- are they making -- seeking Commission 3 approval or authorization to close Stuart and Killen 4 in the ESP? 5 THE WITNESS: I don't think they need to 6 ask the company -- the Commission. 7 EXAMINER PRICE: How is it part of their 8 ESP if they are not seeking Commission approval to do 9 it? 10 THE WITNESS: It's a consequence of their 11 ESP. 12 EXAMINER PRICE: It's a consequence of 13 their ESP, but it's not part of the ESP. 14 THE WITNESS: It is indirectly part of 15 the ESP because there's components of the ESP 16 application that represent closure of those units. 17 It may not be in the stipulation per se, but to the 18 extent that the company has offered Witness Malinak's 19 testimony, he says a couple of times in his testimony 20 that these plants will be closed. 21 EXAMINER PRICE: Fair enough. 22 MR. WANNIER: I am going to renew my 23 motion to strike as nonresponsive. It wasn't 24 responsive to the question, your Honor. 25 EXAMINER PRICE: Denied. If you can ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 555 1 restate your question and get a better answer. 2 Q. (By Mr. Wannier) You don't recall that 3 AES is -- or DPL Inc. or DP&L's motivation is to -- 4 in closing the plants was to increase capacity 5 prices, correct? 6 A. I believe they were indifferent to the 7 consequence of higher prices. 8 Q. Thank you. And do you have any evidence 9 to demonstrate that DPL Inc. or DP&L or AES were 10 seeking to secure an unfair competitive advantage in 11 closing Killen and Stuart -- or Stuart? 12 A. Obviously that depends on what you 13 exactly mean, but obviously their intent was to get 14 approval of the ESP. And to the extent that that 15 resulted in an unfair competitive advantage, I would 16 argue that that's possible. 17 Q. Do you believe that approval of the ESP 18 would offer DPL Inc. and DP&L an unfair competitive 19 advantage? 20 A. Well, unfair in that it's providing 21 compensation for costs that are not necessarily 22 properly allocated to customers, yes. 23 Q. Okay. And what about closure, is there 24 anything about the closure of these two plants that 25 would enable an abuse of market power by DPL Inc. or ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 556 1 DP&L? 2 A. Since they are basically divesting 3 themselves of their generation at this point, it 4 would not. If their affiliate Ohio AES Generation 5 were to subsequently build new generation, yes, it 6 would. 7 MR. COLLIER: Breaking up again with the 8 microphone. 9 EXAMINER PRICE: Try to ignore it and not 10 speak into it is the only advice I can give you. Try 11 to line it up with counsel too and it will work a 12 little better. 13 MR. McNAMEE: It's a directional 14 microphone so. 15 THE WITNESS: Okay. 16 Q. It's fine. I am also having issues with 17 it. 18 MR. WANNIER: Apologies. Could we have 19 that last response read back? 20 EXAMINER PRICE: Can we have the previous 21 question and answer, please. 22 (Record read.) 23 Q. Do you have any evidence that part of the 24 motivation of the DPL/AES family, any of the three 25 corporate entities, in closing Killen or Stuart was ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 557 1 to enable the abuse of market power? 2 A. No, no. As I said earlier, the only 3 evidence I have with respect to DP&L is their desire 4 to get approval of the ESP. 5 Q. Okay. Thank you. Can you please turn to 6 page 31 of your direct testimony. 7 A. Yes. 8 Q. And here if you can turn to lines 17 to 9 20. 10 A. Yes. 11 Q. Do you see in -- in the testimony where 12 you -- in this paragraph you are testifying as to 13 the -- as to potential buyers for Killen and Stuart, 14 correct? 15 A. The categories of potential buyers. 16 Q. And there are three categories: Private 17 equity, merchant generators, and strategic players, 18 right? 19 A. Yes. 20 Q. Now, as an example of a potential private 21 equity buyer, you've provided us the example of the 22 sale of the Gavin power plant, right? 23 A. Yes. 24 Q. But Gavin was not just a coal 25 transaction, right? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 558 1 A. Correct. 2 Q. In fact, it included combined cycle 3 gas -- it included combined cycle gas assets. 4 A. Correct. 5 Q. And you don't actually know what portion 6 of the Gavin sale related to the actual coal assets, 7 right? 8 A. Yes and no. Well, we saw the value. We 9 did the analysis and concluded about $200 a kilowatt 10 was paid for Gavin. 11 Q. When -- when did you -- did you have that 12 information when you filed your direct testimony? 13 A. Yes. 14 Q. If I can please refer you back to the 15 deposition you took on Saturday. 16 A. Sure. 17 Q. If you can turn to page 111, line 21. 18 Ms. Medine, is it correct that in reading from this 19 transcript that you were asked, and I am going to 20 quote, "So sitting here today, you don't know what 21 role the coal gen played in that purchase price," 22 which I'll represent to be the Gavin sale, "that you 23 state," and you answered "Correct." 24 MR. COLLIER: I'm not sure that's an 25 accurate representation. I would ask you to read the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 559 1 question above it as to what was being discussed 2 there. 3 Q. Okay. We can read the whole page. 4 MR. COLLIER: No. You don't need to read 5 the whole page. Refer me to where -- 6 EXAMINER PRICE: No. 1, counsel will 7 direct their comments to the Bench, not to each 8 other. 9 MR. COLLIER: Sorry, your Honor. 10 EXAMINER PRICE: No problem. 11 MR. COLLIER: I am not sure it's 12 established -- 13 MR. WANNIER: Your Honor, I can get at 14 this another way. That might resolve the objection. 15 EXAMINER PRICE: Okay. That's fine. 16 Q. (By Mr. Wannier) Ms. Medine, do you see 17 that question on line 21? 18 A. I do. 19 Q. Now, when -- on line 22, the second line 20 of that question, when you were asked "what role the 21 coal gen played in that purchase price that you 22 state," is it your understanding that you were 23 discussing the Gavin sale at that time? 24 A. Yeah. I'm just -- I'm surprised because 25 I thought we had talked about $200. That's why I am ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 560 1 wondering if it's elsewhere in this document. 2 Subject to check, I'll defer to you, but I recall 3 mentioning that. 4 Q. Murray Energy's counsel -- 5 EXAMINER PRICE: Wait a second. This is 6 from your deposition, right? 7 THE WITNESS: Correct. 8 EXAMINER PRICE: Swore to tell the truth, 9 correct? 10 THE WITNESS: Absolutely. 11 EXAMINER PRICE: Okay. So am I reading 12 this correctly, line 25, "And you couldn't even 13 estimate it," and the answer -- 14 THE WITNESS: No. 15 EXAMINER PRICE: Let me finish. "Not off 16 the top of my head. And please note the typo in that 17 last sentence. It had should be 2015." That was 18 your testimony on Saturday. 19 THE WITNESS: My recollection is earlier 20 in the testimony I mentioned the $200, but I would 21 defer. If I didn't, it was hour four, and it's 22 possible I said that. 23 EXAMINER PRICE: First answer my 24 question. 25 THE WITNESS: That was my testimony, yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 561 1 EXAMINER PRICE: So if your counsel has 2 follow-up on this, I am sure we will do that in 3 redirect. 4 MR. COLLIER: We will go right to page 90 5 of your deposition. 6 EXAMINER PRICE: That will work and 7 that's fine. 8 MR. WANNIER: I'll move on. 9 Q. (By Mr. Wannier) Turning back to page 31 10 of your direct testimony. 11 A. Yes. I'm sorry. I found it in here so 12 if you want to -- 13 EXAMINER PRICE: It's a matter for 14 redirect. 15 THE WITNESS: Sorry, sorry. 16 Q. Turning back to page 31, you also cite 17 the example of the sale of the Duke Energy Ohio 18 plants on line 18, correct -- 19 A. Yes. 20 Q. -- as an example of merchant generators? 21 A. Yes. 22 Q. Yes. That sale included non-coal assets, 23 correct? 24 A. Yes. 25 Q. And you did not do an analysis of what ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 562 1 role the coal generation played in determining that 2 purchase price, correct? 3 A. Correct. 4 Q. Nor could you even estimate it. 5 A. I did not say that. 6 Q. Okay. One moment. 7 EXAMINER PRICE: Without referencing your 8 deposition, because he is going to do that, can you 9 just answer the question can you estimate the role 10 coal played? 11 THE WITNESS: Yes. 12 EXAMINER PRICE: You can. Thank you. 13 Q. You couldn't -- you couldn't estimate it 14 off the top of your head, right? 15 A. Correct. 16 Q. Do you have that number today? 17 A. No. 18 Q. Have you provided that number in any of 19 your testimony? 20 A. No. 21 Q. Okay. That's fine. Thank you. 22 Ms. Medine, can you give any other examples, without 23 violating proprietary or confidential information, of 24 potential buyers of this Stuart and Killen plants? 25 A. What do you mean "buyers"? You mean ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 563 1 names or do you mean pricing? 2 Q. I don't mean pricing. I mean entities 3 that would -- 4 A. So Riverstone bought Talen Energy in 5 2016. I don't have the total purchase price, but it 6 included all of PP&L coal plants as well as some gas 7 plants, so it's another part -- large party that is 8 actively participating in the market. Other sales -- 9 Q. Sorry. Can I -- 10 EXAMINER PRICE: Let her finish, please. 11 Q. Sorry, sorry. 12 A. Other sales that are going on is 13 Eversource which is the former Northeast Utilities is 14 currently auctioning off all of its assets in New 15 Hampshire being directed by the Public Service 16 Commission through an RFP process where they actually 17 require that they engage a financial adviser to do 18 the sale process. And those assets include two 19 coal-fired power plants, Schiller and Merrimack. 20 MR. WANNIER: Okay. So could we take a 21 quick 5-minute break, your Honor? I apologize. 22 EXAMINER PRICE: Yes. Let's go off the 23 record. 24 (Recess taken.) 25 EXAMINER PRICE: Let's go back on the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 564 1 record. 2 MR. WANNIER: We have no further 3 questions at this time. Thank you. 4 EXAMINER PRICE: Thank you. 5 OMAEG? 6 MS. BOJKO: Oh, no. Thank you, your 7 Honor. 8 EXAMINER PRICE: Kroger? 9 MS. WHITFIELD: No. Thank you, your 10 Honor. 11 EXAMINER PRICE: Mr. Lesser? 12 MR. LESSER: No. Thank you. 13 EXAMINER PRICE: Mr. Sharkey? 14 MR. SHARKEY: Yes, your Honor, briefly. 15 - - - 16 CROSS-EXAMINATION 17 By Mr. Sharkey: 18 Q. Ms. Medine, you are familiar with the 19 fact that the Commission uses a three-part test to 20 evaluate stipulations, right? 21 A. Yes. 22 Q. And it's true, isn't it, that you do not 23 dispute whether or not the stipulation in this case 24 satisfies that three-part test? 25 A. Correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 565 1 Q. It's also true, isn't it, that you know 2 that the stipulation contains various riders? 3 A. Yes. 4 Q. And you do not oppose DP&L's collection 5 of any revenues under any of those riders, right? 6 A. I don't have any opinion on any of the 7 riders. 8 Q. It's true, isn't it, that there is 9 nothing in the stipulation that discusses plant 10 closure? 11 A. Again, there is nothing in the four 12 corners of the agreement, but there is -- there is 13 information in the record that does speak to plant 14 closure. 15 Q. There's nothing in the stipulation that 16 would require plant closure if the stipulation is 17 approved, right? 18 A. Correct. Again, there's ample 19 information in the actual docket that do -- does 20 discuss plant closure. 21 Q. Finally, there's nothing in the 22 stipulation that would preclude DP&L from selling 23 Stuart and Killen to a third party, correct? 24 A. Nothing in the four corners of the 25 agreement, correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 566 1 MR. SHARKEY: Thank you, your Honors. No 2 further questions. 3 EXAMINER PRICE: Thank you. 4 Mr. McNamee? 5 MR. McNAMEE: No questions, thank you. 6 EXAMINER PRICE: Redirect? 7 MR. COLLIER: Thank you, your Honor. 8 - - - 9 REDIRECT EXAMINATION 10 By Mr. Collier: 11 Q. Ms. Medine, I would like to turn your 12 attention to your direct testimony, page 7. Are you 13 with me? Point 24 and 25, you address the sale 14 process and what your recommendations are, right? 15 A. Yes, I do. 16 Q. And, in summary, what is your 17 recommendation to the Commission regarding Killen and 18 Stuart and the sale process that's stipulated in the 19 stipulation? 20 A. I would recommend that the stipulation be 21 modified to include a bona fide sale process for all 22 of the Ohio generation. 23 Q. What do you mean by "bona fide sale 24 process"? 25 A. That it's a -- an effort that's conducted ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 567 1 with the intent of selling. 2 Q. Regarding Mr. Sharkey's last question or 3 recent questions concerning plant closure, you were 4 here for the testimony of Mr. Malinak? 5 A. Yes, I was. 6 Q. And does he not address quantifiable and 7 nonquantifiable benefits and costs of closure of the 8 two plants? 9 A. Yes. 10 Q. All right. I guess I should just work 11 backwards. You were asked a question about your 12 deposition. I would turn your attention to page 90 13 of your deposition. 14 A. Yes. 15 Q. You address there the $200 to 16 determine -- was ascribed to the Killen -- or the 17 Gavin plant. 18 A. Yes. 19 Q. And that was $200 per megawatt related to 20 coal generation. 21 A. $200 a kilowatt, yes. 22 Q. All right. In summary at this point, 23 Ms. Medine, do you see any justification for not 24 including Stuart and Killen in a sale process? 25 A. I see no justification. The only ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 568 1 justification that's been provided is that there has 2 been a negative cash flow, but the reality is that's 3 not how third parties would value that plant. A 4 third party would typically value that plant based 5 upon their own synergistic, their own assumptions 6 with respect to regulation, with respect to the price 7 they can buy their coal for, with respect to the 8 power market. So as far as I'm concerned, for a 9 company that's looking to add value, simply closing 10 them without testing the market to see what somebody 11 would pay is not a prudent strategy. 12 Q. All right. And I am going to ask that 13 question. You were asked a series of questions about 14 whether you had value to the Killen and Stuart 15 station. Do you recall that? 16 A. Yes. 17 Q. And you indicated it was irrelevant. 18 A. Correct. 19 Q. Why? 20 A. Well, it's irrelevant because ultimately 21 what determines what the value is is what somebody is 22 willing to pay for it. So when there are a number of 23 different ways people look at assets, one is looking 24 at cash flow and doing a discounted cash flow 25 analysis. Another is looking at comparable ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 569 1 transactions and see what the market is paying for 2 coal generation, what other parties are willing to 3 pay. 4 But most importantly it's your own set of 5 assumptions and analysis related to what you think 6 the outlook is for coal generation both from a 7 regulatory perspective as well as from a fuel 8 perspective as well as from a power market. So each 9 individual player has different opinions on that 10 subject, and so you cannot with any certainty come up 11 with a value based upon your own analysis of negative 12 cash flow. 13 Q. Can you come up with any certainty as to 14 value until there is a sale price? 15 A. You cannot come up with any certainty. 16 You can probably look at comparable transactions to 17 get an idea as to what the range is, of which Gavin 18 is one. But there are other comparable transactions 19 and so you get a sense as to what the market price 20 is, but you cannot, with any certainty, estimate 21 internally what you think somebody would bid for the 22 plant. 23 Q. In a sale price process would it be 24 important to know exactly what generation assets are 25 being put up for sale? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 570 1 A. Certainly. Everybody has a unique -- 2 each plant is somewhat different, so their quality 3 requirements, regulatory requirements, et cetera, but 4 obviously you would need to know what plant is being 5 sold. 6 Q. And would it be relevant to a bona fide 7 sale price for the buyer to know what liabilities 8 would track the assets? 9 A. Absolutely. 10 Q. Including environmental liabilities? 11 A. Absolutely. 12 Q. Including debt? 13 A. Presuming that -- unless you explicitly 14 acquire debt such as what AES did when it acquired 15 DP&L, you would not be acquiring debt, but if it 16 was -- in bankruptcy, for example, you would simply 17 be acquiring the hard asset. 18 Q. Do you understand that the debt will 19 retain with Dayton Power and Light, all debt? 20 A. The stipulation I believe speaks to 21 non-debt liabilities transferring with the asset but 22 the debt staying with DP&L. 23 Q. And -- 24 A. Or DPL. 25 Q. And you understand the stipulation will ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 571 1 provide that any sale proceeds will be ascribed to 2 pay off discretionary debt. 3 A. Again, the way it's written today, it 4 would be the sale proceeds related to Conesville, 5 Zimmer, and Miami Fort 7 and 8. 6 Q. Could that apply equally to Killen and 7 Stuart? 8 A. It certainly could if that was part of 9 the deal. 10 Q. You were asked about the capacity factor 11 for Stuart. 12 A. Yes. 13 Q. Could you -- could you address the 14 capacity factor for Killen in recent years. 15 A. The capacity factor for Killen has been, 16 you know, fairly good. I don't know what the exact 17 average is, but I think in one recent year was over 18 70 percent. It's a very good plant. It's relatively 19 new. It has a lot of fuel flexibilities. It's only 20 located 15 barge miles from Stuart, so it's a very, 21 very good plant. 22 Q. And what relevance does capacity factor 23 have? 24 A. Capacity factor indicates several things. 25 It indicates -- it could indicate things like plant ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 572 1 availability. Obviously the more the plant is 2 available the more it can operate. It also exhibits 3 its competitiveness in the market, so a high capacity 4 factor would show that it's not particularly being 5 impaired by, for example, gas prices. So it's a good 6 proxy for performance. It's -- there may be periods, 7 for example, where there is an unforced outage for an 8 extended period. A plant that will reduce its 9 capacity factors so that could change in any one 10 year, but over time it's a good indicator how well 11 the plant operates. 12 Q. What about regulatory compliance? You 13 were asked a question about Stuart and whether it was 14 MATS compliant. 15 A. Both Killen and Stuart is my 16 understanding they are MATS compliant. In my 17 testimony -- 18 MR. WANNIER: Objection, your Honor. It 19 misstates the testimony. She was never asked about 20 MATS compliance. 21 A. In my response to the Sierra Club as to 22 plant retirements, I explained that the remaining 23 plants are all MATS compliant because MATS has been 24 in effect. So primarily the retirements were people 25 who were not willing to comply with MATS that have -- ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 573 1 said differently, the plants have to be in MATS 2 compliance to be operating today. The plants on -- 3 and I also provide a citation where it's been stated 4 that both plants are compliant with CCR which is the 5 coal combustion residuals. 6 I don't know what was assumed in their 7 cash flow analysis regarding other things such as 8 ELGs, which is effluent limitations guidelines, or 9 Clean Power Plan. So I can't speak to whether -- 10 what the issue is there. The expectation is that the 11 current administration will either eliminate or 12 reduce some of the requirements under both of those 13 laws. 14 Q. And that -- 15 EXAMINER PRICE: One second, please. I 16 am about to strike her answer. Her answer is going 17 to be stricken on my own motion in its entirety 18 because I was lenient and did not strike your answer 19 to his question which had nothing to do with MATS; 20 doesn't open the door for your counsel to ask a 21 question on redirect regarding MATS. 22 MR. COLLIER: Thank you. That's all the 23 questions I have. Thank you, your Honor. 24 EXAMINER PRICE: Thank you. 25 Ms. Petrucci, recross? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 574 1 MS. PETRUCCI: No. Thank you. 2 EXAMINER PRICE: Mr. Boehm? 3 MR. BOEHM: No. 4 EXAMINER PRICE: IEU? 5 MR. PRITCHARD: No. Thank you. 6 EXAMINER PRICE: Consumers' Counsel? 7 MR. MICHAEL: No. Thank you, your Honor. 8 MR. WANNIER: Your Honor, may I just -- I 9 want to follow up on one line of questioning at the 10 very end of my original cross. Is that permissible? 11 EXAMINER PRICE: No. 12 MR. WANNIER: No. 13 EXAMINER PRICE: You can ask any 14 questions that stay within the redirect. 15 MR. WANNIER: Okay. 16 EXAMINER PRICE: No questions? 17 MR. WANNIER: No questions. 18 EXAMINER PRICE: Ms. Bojko? 19 MS. BOJKO: No. Thank you. 20 EXAMINER PRICE: Kroger? 21 MS. WHITFIELD: No questions. 22 EXAMINER PRICE: Mr. Lesser? 23 MR. LESSER: No, your Honor. 24 EXAMINER PRICE: Mr. Sharkey? 25 MR. SHARKEY: No questions, your Honor. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 575 1 EXAMINER PRICE: Mr. McNamee? 2 MR. McNAMEE: It's unanimous, no 3 questions. 4 EXAMINER PRICE: I have no questions. 5 MR. COLLIER: I move -- 6 EXAMINER PRICE: Let me excuse your 7 witness. 8 MR. COLLIER: Before she is excused, may 9 I move the admission of Exhibits 2 and 2A? 10 EXAMINER PRICE: You may. Any objections 11 to the admission of the exhibits Murray Energy 12 Exhibits 2 and 2A, subject to the motions -- 13 MR. WANNIER: Subject to the -- 14 EXAMINER PRICE: -- to strike? 15 MR. McNAMEE: No objection. 16 EXAMINER PRICE: They will be admitted. 17 (EXHIBITS ADMITTED INTO EVIDENCE.) 18 EXAMINER PRICE: Sierra Club? 19 MR. WANNIER: No objection. 20 EXAMINER PRICE: Do you want to move your 21 exhibit? 22 MR. WANNIER: I apologize. Yes, we do. 23 We would like to move the -- for introduction of 24 Sierra Club Exhibit 1. 25 EXAMINER PRICE: Any objections to the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 576 1 admission of Sierra Club Exhibit 1? 2 Seeing none, it will be admitted. 3 (EXHIBIT ADMITTED INTO EVIDENCE.) 4 EXAMINER PRICE: Thank you. At this time 5 we will break for lunch. Let's come back at 12:30 6 when we will take Mr. -- I thought we were taking 7 Williams first. 8 MR. HAUGH: He's in Pittsburgh. We 9 switched, he and I. 10 EXAMINER PRICE: Taking Mr. Haugh and 11 then we will be done for the day. Go off the record. 12 (Thereupon, at 11:30 a.m., a lunch recess 13 was taken.) 14 - - - 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 577 1 Thursday Afternoon Session, 2 April 6, 2017. 3 - - - 4 EXAMINER WALSTRA: We'll go back on the 5 record. 6 And, OCC, you want to call your witness? 7 MR. MICHAEL: Call Mike Haugh, your 8 Honor. 9 (Witness sworn.) 10 EXAMINER WALSTRA: Please be seated. 11 State your name and business address for the record. 12 THE WITNESS: Michael Haugh. Michael 13 Haugh and my business address is 10 West Broad 14 Street, Suite 1800, Columbus, Ohio 43215. 15 EXAMINER WALSTRA: Thank you. Go ahead. 16 MR. MICHAEL: Thank you, your Honor. 17 (EXHIBIT MARKED FOR IDENTIFICATION.) 18 - - - 19 MICHAEL HAUGH 20 being first duly sworn, as prescribed by law, was 21 examined and testified as follows: 22 DIRECT EXAMINATION 23 By Mr. Michael: 24 Q. Mr. Haugh, you should have before you 25 what was previously marked as OCC Exhibit 11. Do you ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 578 1 see that document? 2 A. Yes. 3 Q. Can you identify it, please. 4 A. It's my direct testimony in this case. 5 Q. And was it prepared under your direction 6 or control? 7 A. It was. 8 Q. And do you have any corrections or 9 additions to make to that testimony? 10 A. I do not. 11 Q. And if I were to ask you the questions in 12 that testimony, would your answers be the same? 13 A. They would. 14 MR. MICHAEL: Your Honor, I move for the 15 admission of OCC Exhibit 11, subject to cross. 16 EXAMINER WALSTRA: Thank you. 17 MR. OLIKER: Your Honor, at this time, 18 before we begin cross-examination, would it be a good 19 time to take motions to strike? 20 EXAMINER WALSTRA: Yeah. 21 MR. OLIKER: Thank you. Would you like 22 me to proceed? 23 EXAMINER WALSTRA: Go ahead. 24 MR. OLIKER: Thank you, your Honor. I 25 believe I have one motion to strike and this starts ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 579 1 on page 8, line 1, with the word "and" and continuing 2 to the end of line 3. 3 MS. BOJKO: I'm sorry. I did not hear. 4 MR. OLIKER: This would be on page 8, 5 line 1, starting with the word "and" and continuing 6 to the end of page -- or of line 3. 7 And then this is all for the same reason. 8 We will go to page 13, and it would be lines 6 9 through 11. And on line 11 it does end with the word 10 "appropriate." I wouldn't be moving to strike the 11 rest. But the basis for the motion to strike, your 12 Honor, is the same. This witness is offering a legal 13 conclusion, and he is not an attorney. These are 14 specifically legal recommendations for the Commission 15 that should be reserved for brief, if at all. 16 EXAMINER WALSTRA: Response? 17 MS. BOJKO: Your Honor, it might be more 18 expeditious, I have additional -- I don't have a mic 19 that works, but I have additional motions to strike 20 along the same lines as Mr. Oliker with regard to 21 legal -- legal conclusions as well as based on 22 Attorney Examiner Price's rulings earlier this 23 morning. 24 I have several others to add to that. I 25 think it might be beneficial to get them all out ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 580 1 there at the same time. 2 MR. MICHAEL: Under -- if I might 3 interrupt. It would be easier for OCC if we could 4 address them one at a time. That way I can respond 5 to Mr. Oliker and then listen to Ms. Bojko and 6 respond to Ms. Bojko's if your Honor would take that 7 under consideration. 8 EXAMINER WALSTRA: We can do it that way. 9 MR. MICHAEL: Thank you, your Honor. I 10 would first start with Mr. Oliker's second objection 11 regarding page 13, lines 6 through 11. Mr. Haugh is 12 testifying as a regulatory expert. He has been 13 before this Commission as a regulatory expert on many 14 occasions. And what Mr. Haugh is testifying today on 15 page 13, line 6 through 11 is a policy-related 16 argument regarding the proper -- what in his opinion 17 is the proper procedure for the review and 18 promulgation of rules. 19 He is not reaching any conclusions. He 20 is saying as a policy matter this is generally the 21 way and the way it should be done as far as reviewing 22 and promulgating rules. And as Mr. Oliker pointed 23 out, he opines as to what is appropriate or not, not 24 what is legal or not. 25 MR. OLIKER: Bill, are you done? I don't ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 581 1 want to interrupt you. 2 MR. MICHAEL: I was done with the 3 objection to 13, on page 13. 4 MR. OLIKER: And although he may have 5 said it's a policy recommendation, your Honor, he 6 specifically is citing to legal rules as the basis 7 for the conclusions he's offering in the testimony. 8 This isn't from his own policy perspective. This is 9 based on Ohio law if you read the testimony. 10 MR. MICHAEL: Well, actually, your Honor, 11 and I know your Honor can read the testimony, but 12 Mr. Haugh opines they should be reviewed in their 13 entirety at the time of every five years. So he is 14 simply opining based on his expertise what the proper 15 policy is for the review and promulgation of rules. 16 EXAMINER PRICE: Are you a lawyer? 17 THE WITNESS: No. 18 EXAMINER PRICE: Are you saying it would 19 be illegal to violate any statute, court order, or 20 Administrative Code Rule for the Commission to review 21 something outside of the five-year review? 22 THE WITNESS: No. I'm relating this to 23 public policy. 24 EXAMINER WALSTRA: I'll deny the motion 25 on 13 as he is giving an opinion on regulatory ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 582 1 policy. 2 MR. MICHAEL: Thank you, your Honor. And 3 if I might now address first a question of 4 clarification, Mr. Oliker, you moved to strike on 5 page 8, lines 1 through 3, beginning with the word 6 "and," correct? 7 MR. OLIKER: Yes. I believe it was the 8 portion saying it doesn't "follow the proper laws for 9 review." 10 MR. MICHAEL: And I would say, your 11 Honor, something similar in relation -- in relation 12 to this motion. This is a regulatory issue and 13 Mr. Haugh is being offered as a regulatory expert as 14 to what would be in his opinion the correct way as a 15 matter of public policy to address issues of 16 regulation, and the Commission has a history of 17 allowing regulatory experts to opine on such matters. 18 EXAMINER PRICE: Well, that would be 19 great if that's what he said. He actually says "do 20 not follow the proper laws for review of 21 administrative rules." 22 MR. MICHAEL: Well, your Honor, I'm 23 sorry. I would be willing to withdraw the reference 24 to the laws and leave everything else, if that would 25 cure your Honor's concern with that particular ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 583 1 provision. 2 EXAMINER WALSTRA: I am going to grant 3 Mr. Oliker's motion from the word "and" to the end of 4 the sentence. 5 MR. OLIKER: Thank you, your Honor. 6 EXAMINER WALSTRA: We will strike that. 7 Ms. Bojko is on microphone No. 4. 8 MR. MICHAEL: There must be a message 9 there. 10 MS. BOJKO: Yes. That you have not heard 11 me speak all day. 12 MR. MICHAEL: I am trying to keep that 13 going. 14 MS. BOJKO: Your Honor, I have several 15 motions to strike. If Mr. Michael would prefer I do 16 them one by one, I would be happy to do that. 17 MR. MICHAEL: That would be great. 18 MS. BOJKO: The first motion to strike is 19 on page 7, and it's lines 21 going over to page 8, so 20 I guess the remaining part of that paragraph that was 21 just stricken per Mr. Oliker's motion. And this -- 22 the witness is not an attorney as has been 23 established, and he is making legal conclusions that 24 cannot be made by a layperson. And the language in 25 Mr. Haugh's testimony is no different than the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 584 1 language and legal conclusions made by Ms. Medine 2 that OCC supported to be stricken and were, in fact, 3 stricken earlier this morning. He says it does not 4 follow the traditional rules and policies and 5 practices for reasonable arrangements and goes on to 6 say that -- it then refers to a specific statutory 7 section. 8 MR. MICHAEL: And if I might, your Honor, 9 in response to that, Mr. Haugh is obviously talking 10 about traditional rules and PUCO policies regarding 11 reasonable arrangements. Those are regulatory 12 issues. I don't want to beat the dead horse, but 13 Mr. Haugh is a regulatory expert, and he is giving 14 his opinion, right, and he is testifying to the 15 traditional rules and PUCO policy. So that's clearly 16 a matter of regulatory policy as it relate to the -- 17 relates to the statute, your Honor. He does, in 18 fact, say it appears inconsistent with a particular 19 statute. He does not make -- jump to the legal 20 conclusion that it is inconsistent with the statute. 21 So for those reasons the motion to strike should be 22 denied. 23 I would just say I don't recall our 24 joining any motion regarding Ms. Medine, but the 25 record will reflect what the record reflects on that. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 585 1 MS. BOJKO: Mr. Ajay -- 2 MR. KUMAR: I supported Mr. Collier in 3 his defending. 4 EXAMINER WALSTRA: Regardless. 5 MS. BOJKO: May I respond, your Honor? 6 This is no different than the pieces of Ms. Medine's 7 testimony that was struck on pages 7 and 21. It's no 8 different. She's -- especially on top of page 21, 9 she's opining of what her understanding of a 10 statutory provision is. This is no different when he 11 says something is inconsistent with the statutory 12 provision. That's a legal conclusion that he is 13 making. 14 EXAMINER PRICE: Well, I think he could 15 distinguish if he chose. I am not saying he should 16 because the provisions Ms. Medine was talking about 17 were whether the Commission had lost its rights and 18 whether the Commission had the ability to act. 19 He's just saying here -- he is not 20 questioning the Commission's ability to act. He's 21 just questioning whether it's following -- whether 22 the action would be consistent with a particular 23 statute that may or may not apply. But I'm not 24 saying we -- that's the basis. I am just throwing 25 that out there for you to respond to. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 586 1 MS. BOJKO: Yes, your Honor. He actually 2 makes a conclusion that something is contrary to Ohio 3 law. That -- that is a legal conclusion and he is 4 making that in the -- at least the second piece of 5 the part I am asking to be struck, and he references 6 Commission rules which are legal rules that are 7 binding upon the Commission. 8 MR. MICHAEL: And they are also known as 9 regulatory principles or practices which is obviously 10 one of the prongs. 11 EXAMINER WALSTRA: I am going to deny the 12 motion to strike. I think he does try to stick to 13 the policies and doesn't try to come to an exact 14 legal conclusion. So that motion is denied. 15 MR. MICHAEL: Thank you, your Honor. 16 MS. BOJKO: Your Honor, my next motion is 17 on page 8, lines 8 through 9. Again, he is referring 18 to a statutory provision, and he is saying what must 19 be done under that statutory provision. That is a 20 legal conclusion and that goes to exactly what 21 Mr. Price was discussing with Ms. Medine is what the 22 Commission can or cannot do under a particular 23 statutory provision. 24 MR. MICHAEL: Your Honor, not 25 surprisingly I disagree with Ms. Bojko. I think what ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 587 1 is clear Mr. Haugh is doing there is providing 2 context for the following paragraph regarding his 3 analysis. He's not coming to any legal conclusions 4 about what any particular statutory provision 5 provides. Rather, he is reiterating what it says and 6 he is certainly capable of reading and then he is 7 going on to make his policy and regulatory principle 8 argument, so there is no legal conclusion there to 9 strike. 10 EXAMINER PRICE: Why -- I mean, that's an 11 interesting point. Then why shouldn't we just strike 12 it based on relevance? If he is not opining that we 13 are acting under the statute, he is simply giving a 14 dissertation on a statute that we are not being asked 15 to act under today, which is interesting, but where 16 is the relevance? 17 MR. MICHAEL: Well, because -- I don't 18 want to speak for Mr. Haugh, but the relevance is and 19 the point Mr. Haugh is trying to make is that there 20 is a -- as a matter of policy and regulatory 21 principle a certain way this Commission handles 22 reasonable arrangements. 23 EXAMINER PRICE: But there are no 24 reasonable arrangements proposed in the stipulation. 25 MR. MICHAEL: But, I mean, it's an ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 588 1 economic development rider. He is addressing 2 economic development -- 3 EXAMINER PRICE: That's true, but doesn't 4 4928.143 allow economic development provisions? 5 MR. MICHAEL: Well, whether it does or 6 doesn't -- 7 EXAMINER PRICE: First, answer my 8 question. Doesn't it? 9 MR. MICHAEL: Yes, but I think what 10 Mr. Haugh is opining even though it does allow for 11 such things, the Commission should go about 12 evaluating and analyzing the degree to which it is 13 cost consistent with regulatory principles and is in 14 the public interest consistent with some principles 15 that it generally uses in other contexts for economic 16 development arrangements for the Commission's 17 consideration. 18 MS. BOJKO: Your Honor, I would like to 19 amend my motion to strike to include relevancy. 20 MR. McNAMEE: I have got a question of 21 clarification. Are we talking about the first 22 sentence in that paragraph? 23 MS. BOJKO: Yes, yes. 24 MR. McNAMEE: Not the second. 25 MS. BOJKO: Correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 589 1 MR. MICHAEL: You had -- 2 MS. BOJKO: The first two sentences. 3 MR. McNAMEE: First two sentences, lines 4 8 through 10. 5 MS. BOJKO: 8 through 10. 6 MR. McNAMEE: I thought you might. 7 MS. BOJKO: Are you joining in that 8 motion? 9 MR. McNAMEE: I am just sitting here. 10 MR. IRELAND: We will join in the motion. 11 MS. BOJKO: Thank you. I appreciate 12 that. 13 EXAMINER WALSTRA: I'm going to deny the 14 motion to strike. I think the statute speaks for 15 itself, but I think he is just providing context 16 there. 17 MR. MICHAEL: Thank you, your Honor. 18 MS. BOJKO: Your Honor, my next motion is 19 on page 10, lines 12 through 14. Again, he's drawing 20 a legal conclusion about what a particular rider does 21 in this case with regard to the law. And he is 22 making that legal conclusion based on his actual 23 prior statements including the -- I will leave it at 24 that. He is making legal conclusions based on the 25 prior statements. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 590 1 EXAMINER WALSTRA: That one speaks pretty 2 clearly about the law there so I will grant that 3 motion to strike. 4 MR. MICHAEL: Your Honor, may I ask a 5 quick question as it relates to that ruling, please? 6 And my question would be would OMA's counsel and your 7 Honor entertain simply the reference to circumventing 8 the law but allow the discussion regarding PUCO rules 9 which are regulatory matters? Obviously one of the 10 prongs is regulatory principles and practices and 11 public interest. I certainly, you know, respectfully 12 disagree with your Honor's ruling, of course, but I 13 was wondering if your Honor would limit the ruling to 14 simply the reference to the law and allow reference 15 to regulatory or PUCO rules which are regulations to 16 stand. 17 EXAMINER PRICE: You don't agree with us, 18 but you are asking us to compromise? 19 MR. MICHAEL: Yes, your Honor. We're 20 professionals. 21 MS. BOJKO: It's still -- an 22 administrative rule is still a law. 23 EXAMINER PRICE: We would like to think 24 it has the force of law. 25 EXAMINER WALSTRA: Your request for ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 591 1 compromise is denied. 2 MR. MICHAEL: Thank you, your Honor. 3 MS. BOJKO: Your Honor, my next motion is 4 page 10, the end of line 22, after the comma, 5 beginning with "and" to the end of the sentence for 6 the same reasons. Clearly talking about legal 7 conclusion. 8 MR. IRELAND: Where are you, Kim? 9 MS. BOJKO: Page 10, line 22, after the 10 comma, starting with "and." That, I think, meets 11 Mr. Michael's compromise for the rest of the 12 sentence. 13 MR. MICHAEL: If you would limit, 14 Ms. Bojko, your motion to strike to the law and I 15 think we have a deal. 16 MS. BOJKO: Since your last request was 17 denied, I don't believe that I am willing to go 18 there. 19 MR. MICHAEL: Your Honor, I would request 20 then that your Honor limits the ruling on the motion 21 to strike to the words "the law" and let the 22 reference to "rules" stand under the prong regarding 23 regulatory principles. 24 EXAMINER PRICE: Where -- what are you 25 saying it should now read? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 592 1 MS. BOJKO: Oh, no, no. Your Honor, I 2 don't want it to be read into the record. 3 MR. MICHAEL: I am going to answer your 4 Honor's question as I like to do. So it would read, 5 the last sentence, your Honor, "The rider is unjust 6 and unreasonable for that reason, and conflicts with 7 the PUCO rules." 8 EXAMINER PRICE: Isn't "unjust and 9 unreasonable" a term of art that has specific legal 10 meaning in our -- in what we do in the energy world? 11 MR. MICHAEL: It often does, your Honor. 12 MS. BOJKO: And that's why I believe my 13 position was a compromise to begin with, your Honor. 14 EXAMINER WALSTRA: I am going to grant 15 the motion to strike. 16 MS. BOJKO: Thank you. Oh, my next 17 motion, your Honor, is on page 11, the entire 18 question and answer 19 starting on lines 18 going 19 through page 12 through line 3. This is asking the 20 witness about whether a provision is unlawful and is 21 specifically and directly referencing a statutory 22 provision and is drawing legal conclusions about that 23 statutory provision and how the case is applicable to 24 that statutory provision. 25 MR. PRITCHARD: Ms. Bojko, are you ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 593 1 including footnote 6? 2 MS. BOJKO: Oh, I'm sorry. Yes, thank 3 you. Footnote 6 should be included. 4 MR. MICHAEL: And, your Honor, I would 5 say this motion to strike should be rejected on 6 grounds similar to the motion to strike that was 7 rejected by your Honor earlier. Mr. Haugh is simply 8 reciting a statute. It speaks for itself. And then 9 he is going on to his opinion as an expert regarding 10 the extent to which the payments made to various 11 parties in the stipulation are or are not rebates. 12 So there is no legal conclusion reached. 13 EXAMINER PRICE: Except the part where he 14 says "unlawful," right? 15 MR. MICHAEL: I was going to get to that, 16 your Honor. 17 MS. BOJKO: And the footnote, your Honor. 18 MR. MICHAEL: But, again, so as it 19 relates to the recitation of the statute, it's 20 nothing more than a recitation of the statute to 21 provide context. Then he goes on to his opinions, 22 and OCC would be willing, based on your Honor's prior 23 rulings, to strike "are unlawful." 24 MR. IRELAND: Your Honor, we would join 25 in the motion. Simply add what he is opining on are ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 594 1 legal conclusions, not just the statute, but then he 2 also offers a legal conclusion which is what the 3 Commission is supposed to do, not the witness. 4 EXAMINER WALSTRA: I am going to grant in 5 part and deny in part the motion. I am going to 6 strike the last sentence as well as the footnote. 7 MR. MICHAEL: Thank you, your Honor. 8 MS. BOJKO: Thank you, your Honor. That 9 concludes my motions. Thank you. 10 EXAMINER WALSTRA: Thank you. Anything 11 else? 12 Is he open for cross? 13 MR. MICHAEL: Yes, he is. 14 MR. ALEXANDER: Your Honor, I believe I 15 am going first. 16 EXAMINER WALSTRA: Okay. 17 - - - 18 CROSS-EXAMINATION 19 By Mr. Alexander: 20 Q. Good afternoon, Mr. Haugh. 21 A. Good afternoon. 22 Q. Would you please turn to your testimony, 23 page 3, line 10. 24 A. Yes. 25 Q. And here you address the Commission's ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 595 1 three-prong test for the evaluation of stipulations, 2 correct? 3 A. Yes. 4 Q. And the remainder of your testimony 5 addresses prongs two and three of that test, correct? 6 A. Correct. 7 Q. Do you contest that the proposed 8 stipulation was a product of serious bargaining among 9 capable and knowledgeable parties? 10 A. I have no opinion on that. 11 Q. You agree that there were numerous 12 settlement meetings open to all intervenors in this 13 proceeding, correct? 14 MR. MICHAEL: Object to relevance, your 15 Honor. Mr. Haugh just said that he had no opinion on 16 prong one, so I don't know why we need to ask any 17 questions about it. 18 MR. ALEXANDER: Your Honor, this is 19 actually a factual question. Mr. Haugh has factual 20 knowledge regarding these meetings; so, therefore, I 21 am asking him in his context as a fact witness. 22 EXAMINER WALSTRA: If he knows, he can 23 answer. 24 THE WITNESS: Could you reread the 25 question, please. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 596 1 EXAMINER WALSTRA: Please. 2 (Record read.) 3 A. I know there were settlement meetings 4 open to all. "Numerous" is a -- it's not a defined 5 term so. 6 Q. I will rephrase. 7 A. There were -- there were settlement 8 meetings open to all participants. 9 Q. And I will rephrase the question. You 10 will agree there was more than one settlement meeting 11 open to all intervenors, correct? 12 A. Yes. 13 Q. And OCC participated in those settlement 14 discussions, correct? 15 A. I don't know about all of the settlement 16 discussions. I know there was more than one that the 17 OCC participated in. 18 EXAMINER PRICE: How many meetings do you 19 have knowledge that OCC participated in? 20 THE WITNESS: Off the top of my head, at 21 least two or three. I can't count all of them right 22 now. 23 MR. ALEXANDER: And that was my next 24 question, your Honor. Thank you. 25 Q. Changing topics, I would like to discuss ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 597 1 rider TCRR-N and your recommendations there. First, 2 I think a little background would be helpful for the 3 record. Could you please provide your understanding 4 of what rider TCRR-N currently does. 5 A. From a basic standpoint it takes the 6 transmission costs incurred by Dayton Power and 7 Light's customers and essentially recovers those 8 costs. 9 Q. And to be even more specific, it recovers 10 the nonmarket-based transmission and ancillary 11 services costs for its customers. 12 A. Yes, yes. I'm sorry. I missed that. 13 Q. And the specific costs it recovers 14 include the network integration transmission 15 services, or NITS, charges, correct? 16 A. It's my understanding that's one of the 17 items, yes. 18 Q. And it also recovers the regional 19 transmission explan -- strike that. 20 It also recovers the regional 21 transmission expansion plan or RTEP charges, correct? 22 A. I believe that's true. 23 Q. And it also recovers the PJM scheduling, 24 system control, and dispatch service charges, 25 correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 598 1 A. You are getting -- you are getting a 2 little beyond my entire scope of knowledge of that 3 but that -- that would be one -- more than likely 4 that would be something that would be involved in 5 that. 6 Q. Would you agree there are at least nine 7 other types of nonmarket-based charges currently 8 included in rider TCRR-N besides RTEP and NITS? 9 A. To say there is nine, I'm not -- I can't 10 say that. I'm not trying to be evasive. I don't 11 know that. 12 Q. Did you review -- let's take it a step 13 back. You would agree that rider TCRR-N was created 14 in Dayton Power and Light's 2012 ESP, Case No. 15 12-426, correct? 16 A. I believe that's true, yes. 17 Q. And in connection with your testimony in 18 this proceeding regarding the TCRR-N pilot program, 19 did you have occasion to review Dayton Power and 20 Light's filing regarding the line items to be 21 included in the rider TCRR-N? 22 A. I'm sorry. You were cutting out there. 23 Q. Sure. In connection with your -- in 24 connection with your testimony in this proceeding, 25 did you have occasion to review Dayton Power and ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 599 1 Light's 2012 filings identifying the line items to be 2 included in rider TCRR-N? 3 A. I did not go into that detail, no. 4 Q. Have you ever reviewed the line items to 5 be included in rider TCRR-N? 6 A. I believe I did back when it was 7 originally filed. 8 Q. Would it refresh your recollection to 9 review the testimony of DP&L Witness Hale which 10 identifies those line items? 11 A. From 2012? 12 Q. Yes. 13 A. Sure. 14 MR. ALEXANDER: Your Honor, may we 15 approach? 16 EXAMINER WALSTRA: You may. 17 Q. I am just using this to refresh your 18 recollection, so I am not going to mark it. I have 19 just handed you Dayton Power and Light's -- strike 20 that. 21 I have just handed you a document 22 captioned "Direct Testimony of Claire E. Hale" from 23 Case No. 12-426. Is this the testimony you 24 previously reviewed? 25 A. There's not a time or date stamp on it ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 600 1 but it appears to be the same testimony from that 2 case. 3 Q. And if you could turn to page 4, starting 4 at line 14 of that testimony. Are you there? 5 A. Yes. 6 Q. And does this refresh your 7 recollection -- and does this refresh your 8 recollection as to the line items included in rider 9 TCRR-N? 10 A. Yes. 11 Q. Okay. So would you agree that rider 12 TCRR-N includes costs relating to PJM's scheduling, 13 system control, and dispatch service? 14 A. Yes. 15 Q. Would you agree rider TCRR-N includes 16 costs relating to transmission owner, system control, 17 and dispatch service? 18 A. Yes. 19 Q. Would you agree rider TCRR-N includes 20 costs relating to reactive supply and voltage 21 control? 22 MR. MICHAEL: Your Honor, if I could just 23 object to the questioning. I'm not sure if 24 Mr. Alexander is referring to the TCRR-N in that case 25 or this case or if the one in this case is the same ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 601 1 as the one in that case. That hasn't been 2 established yet and I would like some clarification 3 on that by way of my objection. 4 MR. ALEXANDER: Well, your Honor, the 5 rider TCRR-N pilot relates to the current TCRR-N. 6 These are all line items included in the rider TCRR-N 7 so as to the effect of the pilot, to evaluate that we 8 need to look at what line items are included in that 9 rider. 10 EXAMINER WALSTRA: Overruled. 11 Q. I believe there was a question pending. 12 A. Yes. 13 Q. And would you agree that rider TCRR-N 14 currently includes costs relating to black start 15 service? 16 A. Yes. 17 Q. And would you agree rider TCRR-N 18 currently includes NERC and RFC costs? 19 A. Yes. 20 Q. And would you agree rider TCRR-N includes 21 expansion cost recovery costs? 22 A. Yes. 23 Q. And would you agree rider TCRR-N includes 24 load response charge allocation? 25 A. Yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 602 1 Q. And would you agree rider TCRR-N includes 2 costs relating to generation deactivation? 3 A. Yes. 4 Q. And would you agree that rider TCRR-N 5 includes costs relating to the Michigan-Ontario 6 interface phase angle regulators? 7 A. I don't see that in the testimony. 8 Q. Okay. 9 A. So I can't confirm that. 10 Q. Now, in light of the 11 line items we've 11 just identified, can we agree to refer to the charges 12 currently in rider TCRR-N as the rider TCRR-N line 13 items? 14 A. That's fine. 15 Q. Okay. And would you agree that all of 16 the rider TCRR-N line items are not market-based 17 charges? 18 A. Yes. 19 Q. And all of the rider TCRR-N charges are 20 not able to be hedged, correct? 21 A. I can't agree to that necessarily just 22 because there are I would say almost an infinite 23 amount of hedging opportunities for people, and 24 people will do financial transactions on just about 25 everything in my experience in working in trading ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 603 1 organizations. So I can't -- I can't necessarily 2 agree with that. 3 Q. Let me ask you this, are you aware of any 4 product which would hedge any of these PJM line 5 items? 6 A. I'm not but. 7 Q. Now, I believe you already testified that 8 rider TCRR-N was approved in the 2012 DP&L ESP; is 9 that correct? 10 A. Yes. 11 Q. Now, as part of that 2012 ESP decision, 12 Dayton Power and Light had to get a waiver from Ohio 13 Administrative Code Section 4901:1-36, correct? 14 A. I don't know. 15 Q. Okay. Were you aware that Dayton Power 16 and Light had to get a waiver in order to charge 17 transmission charges on a nonbypassable basis? 18 A. Off the top of my head, no. 19 Q. Okay. The Dayton Power and Light 2012 20 ESP decision was issued in September of 2013, 21 correct? 22 A. That sounds right. 23 Q. And you would agree that prior to 24 September of 2013, all of the rider TCRR-N charges 25 were borne for -- strike that. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 604 1 You are aware that prior to September of 2 2013 for shopping customers, all of the rider TCRR-N 3 customer charges were borne by CRES providers. 4 A. Your "borne by CRES providers" -- they 5 were, yes. That's yes. 6 Q. And the CRES providers would then pay 7 Dayton Power and Light for those charges? 8 A. Yes. 9 Q. And those nonmarket-based rider TCRR-N 10 charges vary with customer load, correct? 11 A. Load and demand both, yes. 12 Q. So a large industrial customer will pay a 13 different amount than a residential customer, for 14 example? 15 A. In most cases, yes. There is the case if 16 it's a -- demand based, the charges incurred on a 17 demand base, then in theory if they end up with an 18 industrial customer, residential customer had the 19 same coincident peak, then you would end up -- then 20 they could be the same in theory. So it's not 21 always, but the majority of the time that would be 22 the case. 23 Q. And as a result of -- as a result of 24 rider TCRR-N, currently all customers are forced to 25 pay Dayton Power and Light for these line items on a ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 605 1 nonbypassable basis, correct? 2 A. For the TCRR-N yes. 3 Q. And you would agree that these rider 4 TCRR-N line items can fluctuate significantly. 5 A. They can fluctuate. The definition of -- 6 would define significantly. 7 Q. When the costs included in rider TCRR-N 8 fluctuate, those fluctuations are eventually 9 reflected in Dayton Power and Light's rider TCRR-N 10 compliance filings? 11 A. Sure. Dayton Power and Light will -- as 12 the cost changes, they will update the rider and 13 change that as it -- I believe it's annually they 14 change that. 15 Q. And so the costs included in -- strike 16 that. 17 And so the rate of rider TCRR-N will 18 fluctuate by year? 19 A. Yes. It's a passthrough essentially. 20 Q. Now, you would agree that some customers 21 value rate stability. 22 A. That's a possibility. 23 Q. And customers who do, in fact, value rate 24 stability may consider it a benefit to avoid 25 fluctuations in transmission and ancillary service ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 606 1 charges? 2 THE WITNESS: Could you reread the 3 question, please? 4 (Record read.) 5 A. If they value stability, I would assume 6 they would want stability in all their rates. 7 Q. True. I will be a little more specific. 8 Would you agree that customers who value rate 9 stability may like to sign a contract with their CRES 10 provider whereby the CRES provider will bear the risk 11 of changes in the line items included in rider 12 TCRR-N? 13 A. That's a possibility. 14 Q. Turning back to your testimony, page 5, 15 line 7. Do you see that? 16 A. I'm there. 17 Q. Now, here you say that the pilot program 18 does not provide any details for how the program 19 should be established. Wouldn't you agree that 20 whether or not customers -- actually strike that. 21 Do you see where I've referred you in the 22 testimony? 23 A. Yes. 24 Q. Okay. Wouldn't you agree whether or not 25 customers have a demand for this pilot program will ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 607 1 be reflected in the number of customers who sign up 2 for the program? 3 A. I'm not opining on if there is a 4 demand -- if customers want this or not. 5 Q. Do you agree customers would like to sign 6 up for this pilot program? 7 MR. MICHAEL: Objection. Beyond the 8 scope. He just said he wasn't opining on that 9 subject matter. 10 EXAMINER WALSTRA: Overruled. 11 A. I have no idea if customers would want 12 to. 13 Q. Would you agree that -- strike that. 14 You would agree that customer interest in 15 a pilot program is one of the factors the Commission 16 should consider in determining whether a pilot 17 program should be expanded? 18 A. Well, sure. People -- if you are going 19 to have a pilot program, you should want people that 20 want to enroll in it. 21 Q. And if customers do sign up for the pilot 22 program as anticipated in the stipulation, you agree 23 that their share of the rider TCRR-N costs will 24 transfer with those customers. 25 A. That I don't know and that's why part of ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 608 1 my testimony when I am saying there needs to be a 2 more complete evaluation of this program. 3 Q. Okay. And so would you agree that it 4 would be appropriate for the customers who 5 participate in that pilot program, the TCRR-N costs 6 would be transferred to their CRES providers? 7 A. That's what -- that's what the program 8 states will happen. My concern is that there will be 9 an undue -- there is a possibility of an undue 10 shifting of costs from customers leaving, to -- to 11 the customers that aren't. 12 Q. Sure. And that's what I want to explore. 13 As the rider TCRR-N line items vary with, as you 14 said, customer demand and energy usage, and we're 15 going back to the pre2013 methodology of allocating 16 those costs to the customers with their CRES 17 providers, wouldn't you agree there is no risk that 18 there will be cost shifting? 19 A. I can't say that. That's -- that's why I 20 am saying there needs to be a further evaluation of 21 this pilot program after a set amount of time. 22 Q. Wouldn't you agree we are going back to 23 the billing methodology in use prior to September of 24 2013? 25 A. Not necessarily. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 609 1 Q. Can you identify any specific difference 2 between the billing methodology proposed in the 3 stipulation and the billing methodology used prior to 4 September of 2013? 5 A. The issue is that -- I guess the issue is 6 that we don't really know what exactly is going to 7 happen in this pilot program. And that's essentially 8 why I am stating if there is going to be a pilot 9 program, it needs to be evaluated after a shorter 10 term than what's proposed in the stipulation. 11 Q. So you can't identify any difference 12 between the allocation of rider TCRR-N costs in the 13 pilot program and the allocation of those costs prior 14 to September of 2013. 15 A. I don't -- it's -- I don't think it's 16 a -- it's a possible evaluation. There's too many 17 variables that are out there, the differences between 18 what -- between pre2013 and what's proposed in this 19 pilot program. 20 Q. So can you identify any difference 21 between rider TCRR-N as proposed in the stipulation 22 and the way rider TCRR-N was billed prior to 23 September of 2013? 24 A. Now, there is going to be a difference of 25 certain customers will be leaving and certain -- it's ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 610 1 how different customers will be treated differently, 2 that customers within the same class and how their -- 3 those costs are then allocated based on -- based by 4 class and if there will be a short -- if there will 5 be a short and -- if there will be a change in -- a 6 shifting of cost between not only one customer to 7 another within the same class but also customers 8 between classes because the one -- the one issue is 9 that Dayton needs to recover all of the costs they've 10 received, and they will determine how that -- how 11 those costs are allocated. And without exact 12 metering data for all customers, then it could be -- 13 will be difficult to figure out exactly how this is 14 going to happen without receiving the data from this 15 pilot program. 16 MR. ALEXANDER: Your Honor, I move to 17 strike the response as nonresponsive. 18 EXAMINER WALSTRA: I am going to 19 overrule. 20 Q. I am going to ask this for a fourth time. 21 Can you identify any difference between the way the 22 TCRR-N costs were billed under the current pilot 23 program and the way TCRR-N costs were billed prior to 24 September of 2013? 25 MR. MICHAEL: Objection, asked and ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 611 1 answered. 2 MR. ALEXANDER: Your Honor, I haven't got 3 an answer to this question yet. 4 MR. MICHAEL: If I might, your Honor, he 5 just moved to strike what the answer was, and your 6 Honor denied it, so you have gotten an answer. 7 EXAMINER WALSTRA: Are there specific 8 differences that you can name, identify between the 9 two? 10 THE WITNESS: That's part of what I am 11 saying is it's unknown how this is going to affect 12 other customers. 13 EXAMINER WALSTRA: But between the two, 14 are there specific differences that make it -- 15 THE WITNESS: Specific, no. It's the -- 16 in its totality is the issue. 17 EXAMINER WALSTRA: Between the two, 18 between prior to 2013 and now, is there any specific 19 differences that you -- 20 THE WITNESS: Again, that's what I said, 21 no, no, but there -- 22 EXAMINER WALSTRA: Okay. Thank you. 23 MR. ALEXANDER: Thank you, your Honor. 24 Q. (By Mr. Alexander) If I could have you 25 move to page 5, line 15, where you address ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 612 1 implementation costs of the program, do you see that? 2 A. Yes. 3 Q. You agree there is no provision in the 4 stipulation which increases the cost to customers to 5 pay for the rider TCRR-N pilot program, correct? 6 A. There's none at this time. 7 Q. You are not aware of any evidence which 8 suggests there are any implementation costs 9 associated with the rider TCRR-N pilot program. 10 A. No. 11 Q. And you are not aware of any evidence 12 which suggests Dayton Power and Light will seek the 13 recovery of any future implementation costs from 14 customers, correct? 15 A. It would be my assumption that there are 16 costs they will be -- they will seek recovery from 17 customers. 18 Q. My question wasn't your assumption. My 19 question was you are not aware of any evidence which 20 suggests Dayton Power and Light will seek the 21 recovery implementation costs from customers? 22 A. It's not in the settlement. 23 Q. And at page 6, line 1, you address what 24 you identify to be things that should have been 25 identified in the pilot program. Do you see that? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 613 1 A. Yes. 2 Q. Now, is your objection to the TCRR-N 3 pilot program itself or to the lack of detail 4 provided in the stipulation about the rider TCRR-N 5 pilot program? 6 A. It's essentially, as I stated at the 7 start of this question and answer, question and 8 answer 10 on page 5, is that it's not set up as a 9 traditional pilot program. My -- I don't necessarily 10 opine on the merits of TCRR-N. It's more that if we 11 are going to have a pilot program, it needs to have 12 proper parameters. 13 Q. Okay. So fair to say you don't have an 14 opinion as to the merits of the pilot program itself? 15 A. Correct. 16 Q. Moving topics to the economic development 17 rider, if you could turn to page 7, line 21. 18 A. I'm there. 19 Q. Now, as you cite in your testimony, a -- 20 and here I am referring specifically to page 8, 21 line 8, "a reasonable arrangement" is a term of art 22 under Ohio law, specifically Section Revised Code 23 4905.31, correct? 24 A. Yes. 25 Q. And the rules governing reasonable ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 614 1 arrangements are located in Ohio Administrative Code 2 Section 4901:1-38, correct? 3 A. Yes. 4 Q. And your testimony identifies nothing 5 establishing that the economic development rider is, 6 in fact, a reasonable arrangement as defined under 7 Revised Code Section 4905.31, correct? 8 THE WITNESS: Could you reread the 9 question, please. 10 (Record read.) 11 A. No. I'm saying that those rules should 12 be considered when considering this -- this part of 13 the settlement. 14 Q. I believe you said "no" at the beginning 15 of that answer. I think you meant to say "yes," so I 16 will reask the question. 17 A. Yeah. Okay. 18 Q. Your testimony identifies nothing 19 establishing that the economic development rider is, 20 in fact, a reasonable arrangement as defined in the 21 Ohio Revised Code, correct? 22 MR. MICHAEL: Objection, asked and 23 answered. 24 EXAMINER WALSTRA: Overruled. 25 A. I think we got caught up in a double ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 615 1 negative. I was saying, no, it does not, so, yes. 2 Q. So your testimony does not identify -- I 3 will rephrase. 4 A. Yes. I can answer it as "yes." 5 Q. And your testimony identifies nothing in 6 the Ohio Administrative Code which would establish 7 the economic development rider is subject to 8 provisions of Section 4901:1-38, correct? 9 A. Correct. 10 Q. And you are not aware of any provision in 11 Ohio law which would establish that the economic 12 development rider is subject to the provisions 13 governing reasonable arrangements, correct? 14 A. Correct. 15 Q. And you are aware, as a regulatory 16 expert, that electric security plans are governed by 17 Section 4928.143, correct? 18 A. Subject to check on that, yes. 19 Q. Would it refresh your recollection to see 20 the statute? 21 A. I can -- I'll take your word for it. 22 Q. And you would agree the Commission 23 evaluates electric security plans under Section 24 4928.143, correct? 25 A. Yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 616 1 Q. Now, specifically -- actually strike 2 that. 3 I am going to provide you with a copy of 4 the statute just so you are not forced to guess. 5 All right. Mr. Haugh, I have just handed 6 you a copy of Revised Code Section 4928.143, correct? 7 A. Yes. 8 Q. Okay. Directing your attention to 9 Section (B)(2)(d), Revised Code Section 10 4928.143(B)(2)(d) does not include any requirement 11 that proposals subject to that provision are also 12 subject to the Commission's reasonable arrangement 13 rules, correct? 14 MR. MICHAEL: Objection, legal 15 conclusion. Ironic they move to strike stuff and 16 then ask him questions after handing him a statute. 17 MR. ALEXANDER: Your Honor, the witness 18 provides an opinion which was not stricken as to the 19 propriety of the reasonable arrangement rules and how 20 they should be covered and, to quote Mr. Michael, the 21 witness can read. 22 MR. MICHAEL: Then the statute speaks for 23 itself, and I add that to my objection. 24 EXAMINER WALSTRA: I feel like you are 25 asking for a legal conclusion from him so I am going ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 617 1 to sustain. 2 MS. BOJKO: Your Honor, I would like to 3 renew my motion to strike lines 8 to 10 on page 8. 4 MR. ALEXANDER: Your Honor, I would add 5 to that lines -- page 11, lines 20 to 21. 6 MS. BOJKO: Thank you. 7 MR. MICHAEL: Your Honor should reject 8 those motions for the same reason your Honor did the 9 first time, which was it was providing context and 10 the statute speaks for itself. Counsel for Honda and 11 Dayton are asking entirely different questions right 12 now about interpreting the statute and what it does 13 or doesn't require. 14 MR. ALEXANDER: Your Honor, this witness 15 is providing a regulatory opinion in the context as a 16 regulatory expert as to the standard that should be 17 applied by the Commission. The witness has cited 18 statutes in his testimony regarding reasonable 19 arrangements. I am asking him about another statute 20 which governs ESPs which does not include those 21 revisions, and I would like to get the witness's 22 opinion on that. 23 MS. BOJKO: Your Honor, if I may add, on 24 page 8, line 9, he specifically says "The process 25 requires an application," and I think that goes to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 618 1 the heart of what Mr. Alexander is trying to ask. 2 MR. MICHAEL: I don't know how Ms. Bojko 3 knows what Mr. Alexander's part does or does not -- 4 or is not aimed at but. 5 EXAMINER PRICE: She's special that way. 6 MR. MICHAEL: I know. 7 MS. BOJKO: Am I wrong? 8 MR. ALEXANDER: She's correct. 9 EXAMINER PRICE: Only Mr. Alexander has 10 the standing to raise that point. 11 MR. ALEXANDER: I agree with Ms. Bojko, 12 your Honor. 13 MS. BOJKO: Get that on the record. 14 EXAMINER WALSTRA: I am going to deny the 15 motions to strike. You can ask for his 16 understanding, but in terms of asking for a specific 17 interpretation of the law, I think that's getting 18 into a legal conclusion. 19 MR. ALEXANDER: Okay. 20 MR. MICHAEL: Thank you, your Honor. 21 MR. ALEXANDER: Thank you, your Honor. 22 Q. (By Mr. Alexander) Mr. Haugh, is it your 23 understanding that Ohio Revised Code Section 4928.143 24 (B)(2)(d) does not require the ESP provisions under 25 that statute to meet the requirements for reasonable ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 619 1 arrangements? 2 A. I am looking at (B)(2)(d) at terms, 3 conditions, or charges related to limitations on 4 customer shopping? And you asked if there were any 5 limitations on shopping in that section or 6 limitations on reasonable arrangements? 7 Q. I asked if that section represented the 8 reasonable arrangements rules. 9 A. That particular one does not. 10 Q. And similar to Section (B)(2)(i), does it 11 reference reasonable arrangement rules? 12 A. (B)(2)(i) does, yes. 13 Q. Can you please read the language in 14 Section (B)(2)(i) you are referring to for the 15 record. 16 A. Shall I refer to 2 and then go into i? 17 Q. Whatever language -- 18 A. Provisions under which the electric 19 distribution utility may implement economic 20 development, job retention, and energy efficiency 21 programs which provisions may allocate program costs 22 across all classes of customers of the utility and 23 those electric distribution utilities in the same 24 holding company system. 25 Q. And isn't it true nothing in that section ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 620 1 references the reasonable arrangement rules in either 2 the statute or rule we discussed previously? 3 A. That section does not. 4 Q. And, finally, would you agree that there 5 is nothing in Section (B)(2)(g) which references the 6 reasonable arrangement rules? 7 A. That section does not reference 8 reasonable arrangement rules. 9 Q. And isn't it true you can't identify any 10 Commission decision which has rejected an electric 11 security plan provision for failure to meet the 12 Commission's reasonable arrangement rules? 13 A. Not to my knowledge. 14 MR. ALEXANDER: No further questions, 15 your Honor. 16 Thank you, Mr. Haugh. 17 EXAMINER WALSTRA: Thank you. Just go 18 around the room. 19 MS. WHITFIELD: Well, I think Ms. Bojko 20 was wanting to be second. I do not anticipate I will 21 have questions after. 22 MS. BOJKO: Thank you, your Honor. 23 - - - 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 621 1 CROSS-EXAMINATION 2 By Ms. Bojko: 3 Q. Good afternoon, Mr. Haugh. 4 A. Good afternoon. 5 Q. Could you turn to page 3 of your 6 testimony, please. On line 18 of your testimony, you 7 mention the word "diversity." Do you see that? 8 A. Line 18? 9 Q. Yes. 10 A. Yes. 11 Q. And, Mr. Haugh, could you turn yours back 12 on, please. Thank you. 13 In your testimony you are not testifying 14 to the diversity issue; is that correct? 15 A. Correct. 16 Q. And could you turn to page 4, please. 17 Starting on line 3 you discuss "signatory parties." 18 For your testimony are you referring to just 19 signatory parties, or are you also including 20 consideration of nonsignatory parties? 21 A. In Q and A7, I lay out the parties that 22 have signed and then also the parties that have 23 agreed not to oppose. 24 Q. And the conclusions and recommendations 25 in your testimony, are you opining on the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 622 1 nonsignatory parties as well as the signatory 2 parties? 3 MR. MICHAEL: Object to form, your Honor. 4 I am not entirely sure what Counsel means when she is 5 asking if she is opining on the nonopposing parties. 6 MS. BOJKO: I'll clarify, your Honor. 7 EXAMINER WALSTRA: Thank you. 8 Q. On line 3 you say "Who are the signatory 9 parties," but then you go on to mention the 10 nonsignatory parties; is that correct? 11 A. Yes. 12 Q. So throughout the rest of your testimony, 13 when you draw certain conclusions, are you only 14 drawing conclusions with the signatory parties, or 15 are you also drawing certain conclusions with the 16 nonsignatory parties? 17 A. Certain opinions on the nonsignatory 18 parties who agreed not to oppose who are receiving 19 benefits from the settlement. 20 Q. Thank you. And isn't it true that the 21 amended stipulation is either supported by or not 22 opposed by several customer groups? 23 A. There are several parties that agree not 24 to oppose. 25 Q. That are customer groups? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 623 1 A. That are customer groups, yes. 2 Q. And, similarly, there are several parties 3 that have either supported or agreed to not oppose 4 that are specific customers of Dayton Power and 5 Light; is that correct? 6 A. Meaning individual customers? 7 Q. Yes. 8 A. Yes. 9 Q. And there's also a municipal customer 10 that has agreed not to oppose; is that correct? 11 A. By "municipal," do you mean the City of 12 Dayton? 13 Q. Yes. 14 A. Yes. 15 Q. And there are also groups that provide 16 services to or advocate for low-income groups that 17 have signed the settlement; is that correct? 18 A. I'm not positive on all of the interests 19 of all of the groups that have signed. 20 Q. You would agree with me that Edgemont 21 Neighborhood Coalition and the Ohio Partners for 22 Affordable Energy are signatory to the stipulation? 23 A. They are both signatory parties, yes. 24 Q. And you would also agree with me that 25 there are suppliers that have signed in support of ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 624 1 the stipulation; is that correct? 2 A. Energy suppliers, you mean? 3 Q. Sure. 4 A. Yes. 5 Q. Thank you for that clarification. And 6 there is also a demand response entity that has 7 agreed to not oppose the stipulation; is that 8 correct? An entity that provides demand response 9 services as well as other services. 10 A. If by -- do you mean EnerNOC? 11 Q. Yes. 12 A. I would have to refresh. I don't believe 13 they signed the -- did they agree not to oppose? Let 14 me refer. 15 Q. They are listed on line 11 of your 16 testimony as a nonopposing party. 17 A. Yes, I saw. I didn't see them when I -- 18 originally when I was looking at my testimony. Yes, 19 they are. I apologize for that. 20 Q. And on line 20 still on page 4, you talk 21 about the TCRR-N pilot program that you discussed 22 with Mr. Alexander, correct? 23 A. Yes. 24 Q. And that is referencing page 14 and 15 of 25 the amended stipulation, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 625 1 A. Take a look at the stipulation. I can 2 verify that. 3 Q. Excuse me. It goes to page 17, 14 4 through 17. 5 A. I agree with that. 6 Q. And isn't it true that the TCRR-N is 7 available -- pilot program is available to all 8 shopping customers, subject to the limitation of 50 9 accounts? 10 A. It would have voltage level customers. 11 Q. And it's open to any voltage level 12 customer that's a shopping customer that would like 13 to take advantage of the pilot program, correct? 14 A. That's my understanding. 15 Q. And isn't it also true that it's 16 available to eligible customers that are either new 17 or existing customers that have new or expanding 18 accounts subsequent to the implementation of the 19 pilot program? 20 A. What do you mean by "new or existing"? I 21 guess I am not sure what you were referring to. 22 Q. Sure. I will direct you to page 16 of 23 the amended stipulation. There are no line numbers, 24 but I would ask you to look in about the middle of 25 the paragraph, says that subject to the maximum of 50 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 626 1 accounts, new accounts of new customers and/or new 2 and expanded accounts of an existing pilot 3 participant shall also have the right to make such 4 election regardless of whether the accounts are known 5 or in existence by the deadline specified in the 6 stip. 7 A. Yes, that is what the stipulation says. 8 Q. And you're not disputing here today that 9 customers -- eligible customers that do agree to 10 participate could actually benefit from the pilot 11 program; is that correct? 12 A. No, I am not disputing that. 13 Q. And if we could turn to page 5 of your 14 testimony, line 12, you talk about the term of the 15 pilot program. Isn't it true that the pilot is for a 16 limited time period? It's for the duration of the 17 ESP? 18 A. Yes. And I state that that's too long 19 for a pilot program. 20 Q. And you are aware that the term of the 21 ESP is six years? 22 A. Yes. 23 Q. Could you turn -- I want to turn your 24 attention to the economic development rider that you 25 discussed with Mr. Alexander. I believe it starts on ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 627 1 page 10 of your testimony. 9, sorry. Thank you. 2 A. Yes, I'm there. 3 Q. Isn't it true that the incentives that 4 you reference in your testimony for certain customers 5 are on a per kWh basis? 6 A. Yes, I state that in line 12 of page 9. 7 Q. And isn't it true that incentives for 8 certain customers on a per kWh basis have been 9 previously approved by this Commission? 10 A. Meaning that the Commission's approved 11 volumetric discounts for customers? 12 Q. Yes. 13 A. Yes. 14 Q. And the Commission has approved such 15 credits such as interruptible credits and the 16 automaker credits; is that correct? 17 A. I know that the -- definitely the 18 interruptible credits I can agree on. 19 Q. Would you turn to page 12 of your 20 testimony, please. On line 7 you reference a case 21 05-376. Do you see that? 22 A. Yes. 23 Q. Do you know the date of the order on 24 remand that you referenced there? 25 A. I believe it was -- I don't know the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 628 1 exact date. It would have been, I believe, early 2 2015. 3 Q. Would you agree that, subject to check, 4 it could be December -- or February 11, 2015? 5 A. That sounds reasonable. 6 Q. And isn't it true, subsequent to the date 7 of that order or subsequent to February 11, 2015, the 8 Commission has approved settlements containing 9 various types of payments to parties? 10 A. I'm trying to -- trying to recall if 11 the -- if there are final opinions and orders on 12 those cases. 13 Q. Let me help you. Let's walk through a 14 couple. Isn't it true that the Commission has 15 approved a settlement containing various types of 16 payments to parties in the FirstEnergy ESP case, 17 14-1297, with an order issued March 31, 2016, which 18 was affirmed on rehearing, the last time was October 19 12, 2016? 20 A. I'm trying to remember. I get some of 21 the ESPs mixed up, so I am trying to remember the 22 cash payments. Yes, there were. 23 Q. And isn't it true that in the AEP energy 24 efficiency portfolio filing of 16-574, the 25 stipulation contained payments to various groups, and ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 629 1 that one was approved January 18, 2017? 2 A. I don't know that one. I was not 3 involved in that case. 4 Q. And isn't it true that the AEP purchase 5 power agreement rider, 14-1693, that in that case the 6 Commission approved a settlement that contained 7 various types of payments to customers which was 8 approved on March 31 -- March 31, 2016, and affirmed 9 by subsequent entry on hearing, the last being 10 April 5, 2017? 11 A. On that particular case, I'm sorry, I 12 can't recall if those were -- a lot of the issues in 13 that were punted to another -- to a subsequent 14 hearing, so I'm not sure if those -- I can't 15 necessarily say -- agree that there were -- that 16 those were approved in that case. 17 Q. Do you recall in that case there were 18 payments to the Ohio Hospital Association as well as 19 a discount on feed charges to the Ohio Hospital 20 Association? 21 A. Off the top of my head, I can't recall 22 that. 23 Q. You wouldn't be surprised if provisions 24 like that were contained in the settlement in the AEP 25 PPA case, would you be? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 630 1 A. There were a lot of settlements. As I 2 said, I am not sure if they were in that case or if 3 they were moved to the subsequent PPA expansion. 4 Q. So, I guess overall though, you would 5 agree even though you can't sit here today 6 necessarily remembering every provision in every 7 case, you would agree subsequent to February 11, 8 2015, that there have been cases with -- that the 9 Commission has approved settlements containing 10 various payments to parties; is that fair? 11 A. It lists -- there was only one I could 12 recall there were actual cash payments made that was 13 approved in that case. 14 Q. In which case? 15 A. The FirstEnergy ESP case. 16 Q. So you are agreeing with me that you know 17 of at least one where -- 18 A. You said several. There's one -- there 19 is only one that I can agree to. 20 Q. Let's talk about another one. What about 21 the AEP global settlement, that's the common name for 22 that one, and it's 10-2929, and I believe that you 23 participated in that case? And do you recall in that 24 case that there were payments to various parties 25 under the settlement that was approved by the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 631 1 Commission on February 23, 2017? 2 A. I believe there were refunds. I don't 3 believe there were cash payments in that case. There 4 were refunds of costs that were recovered in a 5 previous case. 6 Q. And there were payments that went to 7 customers in the form of either a reduction to a 8 particular rider or credits, one-time credits to 9 bills? 10 A. The difference with that is those were 11 refunds of charges that were already collected by AEP 12 and then refunded back to customers. These in 13 particular are cash payments to signatory parties. 14 Q. I think you are referring to the FAC 15 refund but there were other provisions in there that 16 either had a reduction to the PIRR for customers that 17 were signatory parties to the settlement. Do you 18 recall that? 19 A. I thought the -- my -- I'll reference 20 this by saying most of my focus was on residential 21 customers and the refunds they received, and I can't 22 recall payments to only certain customers or customer 23 groups in that particular case. 24 Q. You can't recall? 25 A. No. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 632 1 EXAMINER PRICE: Isn't it true OCC was a 2 signatory party to that stipulation? 3 THE WITNESS: Yes. 4 Q. (By Ms. Bojko) And you were a witness in 5 the AEP portfolio -- PPA case, weren't you? 6 A. Yes. 7 Q. You just don't recall what the exact 8 settlement provisions were for nonresidential 9 customers; is that fair? 10 A. By AEP PPA, the 14-1693? 11 Q. Yes. 12 A. And, I'm sorry, your question again? 13 Q. You are just not -- or you don't recall 14 here today on the stand the -- the credits that may 15 or may not have been given to nonresidential 16 customers for their signatories -- for their 17 signatures. 18 A. Correct. As I said, some were moved onto 19 another case and not necessarily approved in that -- 20 in the order in that case. 21 Q. And you are aware, sir, that AEP 22 currently has an interruptible credit that is given 23 to customers that participate in an interruptible 24 program? 25 A. Yeah. I believe that was from their ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 633 1 second ESP case. 2 Q. Right. And that was approved by the 3 Commission? 4 A. Yes. 5 Q. And that's a volumetric credit; is that 6 correct? 7 A. I believe it's demand based. 8 Q. Thank you. Demand-based credit? 9 A. Yes. 10 Q. Based on demand. It's a per kWh charge 11 or credit; is that correct? 12 A. Yes. 13 EXAMINER PRICE: Before we leave this 14 topic, I just wanted to clarify one thing for the 15 record. The case you discuss on page 12, line 7, 16 05-376. 17 THE WITNESS: Yes. 18 EXAMINER PRICE: You discuss the 19 settlement. 20 THE WITNESS: Yes. 21 EXAMINER PRICE: OCC was a signatory 22 party to that settlement as well, weren't they? 23 THE WITNESS: Yes. 24 EXAMINER PRICE: Thank you. 25 MS. BOJKO: Thank you. I have no further ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 634 1 questions. Thank you, Mr. Haugh. 2 EXAMINER WALSTRA: Thank you. 3 MS. WHITFIELD: I have no additional 4 questions beyond that. Thank you. 5 - - - 6 CROSS-EXAMINATION 7 By Mr. Ireland: 8 Q. Good afternoon, Mr. Haugh. 9 A. Good afternoon. 10 Q. Jeff Ireland for the company. Just so I 11 am clear, you have no opinions on the financial 12 integrity of DP&L; is that right? 13 A. Correct. 14 Q. No opinions on the financial integrity of 15 DPL Inc.? 16 A. Correct. 17 Q. And you, as part of your testimony, have 18 not made any analysis of DP&L's ability to provide 19 safe or reliable service; is that right? 20 A. Correct. 21 Q. And I believe you said this earlier, but 22 just so we have it under oath, you are not an 23 attorney, right? 24 A. Correct. 25 Q. You are offering testimony as to the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 635 1 second prong of the three-prong test; is that right? 2 A. Yes. 3 Q. Which has to do with the public interest 4 and you would agree that the public interest includes 5 all customers, does it not? 6 A. Yes. 7 Q. It's more than just residential 8 customers, true? 9 A. True. 10 Q. And you would agree that this stipulation 11 affects the interests of residential customers in a 12 positive way, right? 13 A. Not necessarily. 14 Q. Well, do you recall being deposed a week 15 or so ago? 16 A. Yes. 17 Q. Do you have a copy of your deposition 18 with you? 19 A. I do not. 20 MR. IRELAND: May I approach the witness, 21 your Honor? 22 EXAMINER WALSTRA: You may. 23 MR. MICHAEL: Do you have any more, Jeff, 24 or should I go up to the witness and read over his 25 shoulder? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 636 1 MR. IRELAND: You can read over my 2 shoulder. 3 Q. Directing your attention, Mr. Haugh, to 4 page 16 of your deposition. 5 A. 16 of the condensed pages? 6 Q. Yeah. Page 16 condensed or 7 non-condensed. 8 A. Each page is defined, and then at the 9 bottom there is also a page. I wanted to make sure I 10 was on the same. 11 Q. It starts at the top. The question at 12 the top is "When you say customers." 13 A. Yes. 14 Q. Okay. Page -- or line 12. 15 A. Yes. 16 Q. The question was "Do you think this 17 stipulation affects the interest of any residential 18 customers in a positive way? 19 "Answer: Yeah. There are some positives 20 to this. 21 "Question: What are they? 22 "Objection. 23 "Answer: I find that the auctions for 24 the Standard Service Offer are a benefit to customers 25 switching from a self-supplied generation to full ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 637 1 auctions beneficial to the customers." Did I read 2 that correctly? 3 A. Yes. 4 Q. Now, on page 3 of your testimony you 5 refer to -- you refer to the -- that the PUCO -- PUCO 6 should also routinely consider whether the parties to 7 the stipulation represent diverse interests. Do you 8 see that? 9 A. Yes. 10 Q. And am I to understand what you just said 11 in response to Ms. Bojko that you have no opinion in 12 this proceeding as to whether or not there is 13 diversity among the parties to the stipulation? 14 A. Yes. 15 Q. So okay. Now, your testimony is that the 16 TCRR-N is -- is not set up in a way as a traditional 17 pilot program should be; is that right? 18 A. That's correct. 19 Q. In your view, a traditional pilot program 20 is a small-scale, short-term program used to 21 determine how a larger program may work in the 22 future; is that right? 23 A. That's -- that's my testimony on page 5, 24 yes. 25 Q. And you have in your -- prior to working ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 638 1 with OCC, you worked for a company called Just 2 Energy; is that right? 3 A. Correct. 4 Q. And in that capacity, you worked on 5 planning and implementing pilot programs; is that 6 right? 7 A. Correct. 8 Q. And one of the ones that you worked on 9 with Just Energy was a pilot program that included 10 the distribution of thermostats to retail customers 11 in Ohio, Michigan, Indiana, and Illinois; is that 12 right? 13 A. Very simplified, yes. 14 Q. Well, I am kind of a simple guy, so I 15 appreciate that. That was certainly a much larger 16 pilot program than the one that's described on 17 pages 14 to 17 of this stipulation; is that right? 18 A. Yes. 19 Q. So a pilot program can be very, very 20 large; would you agree with that? 21 A. I would say that it -- based on the total 22 number of customers in those four states, as a 23 proportion, might not be considered large. 24 Q. Well, it was tens of thousands of 25 participants in that pilot program, right? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 639 1 A. Out of tens of millions of customers. 2 Q. And you also believe that the pilot 3 program should be limited in time, right? 4 A. Correct. 5 Q. And this one is, right? 6 A. At a time longer than I would suggest. 7 Q. Well, you would agree a pilot program may 8 take a few years to evaluate, right? 9 A. Yes. And I state a few years is how long 10 this should last. 11 Q. So a few years could be five or six years 12 or not? 13 A. I would consider a few to be two to three 14 as I state in my testimony. 15 Q. One of the things you -- criticisms of 16 this pilot program is that it does not benefit all 17 customers; is that right? 18 A. Yes. 19 Q. And would you agree that benefiting all 20 customers is not an absolute requirement for a pilot 21 program? 22 A. If I could strike that. I state that it 23 should benefit all customers. 24 Q. Right. But do you believe benefiting all 25 customers is an absolute requirement for a pilot ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 640 1 program? 2 A. All customers, it's -- all pilot programs 3 are different, so they should be evaluated 4 differently based on their own accord. 5 Q. So every pilot program needs to be 6 evaluated on its own merits; would you agree with 7 that? 8 A. Yes. 9 Q. And would you agree that this rider is 10 subject to review by the staff of the Public 11 Utilities Commission? 12 A. I don't believe it is. 13 Q. You don't believe it is. 14 A. I would have to review the stipulation to 15 verify that. 16 Q. Well, it doesn't say that in the 17 stipulation, would you agree, that riders are 18 generally reviewable by the staff of the Public 19 Utilities Commission? 20 A. I don't know that all are. And this, it 21 is not specifically laid out in this stipulation the 22 staff will review. 23 Q. So your answer is "I don't know"? 24 A. Yes. 25 Q. Now, at the bottom of page 6 of your ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 641 1 testimony, you talk about the consolidated billing. 2 A. Yes. 3 Q. Do you see that? 4 A. Yes. 5 Q. And you testify that generally -- you 6 qualify your answer by saying "Generally, no." You 7 would agree that some customers may desire 8 consolidated billing; is that right? 9 A. Some may. 10 Q. And for those customers this would be a 11 benefit; is that right? 12 A. If they desire it, then it would be a 13 benefit to them. 14 EXAMINER PRICE: Mr. Haugh -- excuse me, 15 Mr. Ireland. I just had one question. Maybe not. 16 On page 7 at line 4, you say "I know in the case of 17 residential customers the majority of those customers 18 would prefer to get one bill from the utility." How 19 do you know that? 20 THE WITNESS: From my work at different 21 marketing companies. 22 EXAMINER PRICE: You've spoken with every 23 residential customer? 24 THE WITNESS: It was a -- there was 25 research that was done that -- regarding customers on ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 642 1 their desire to be billed and how we were trying to 2 market products to different customers, how we would 3 bill customers for those products. 4 EXAMINER PRICE: Survey research? 5 THE WITNESS: I can't remember the 6 details of it. 7 EXAMINER PRICE: Did you conduct the 8 survey research? 9 THE WITNESS: I did not conduct the 10 survey. It was -- 11 EXAMINER PRICE: Do you have a copy of 12 the survey? 13 THE WITNESS: I do not. 14 EXAMINER PRICE: So your basis is a 15 survey which you did not conduct; you do not have a 16 copy with you today. 17 THE WITNESS: By saying "survey" or 18 "research," it was -- it was work that was done at 19 a -- while I was with the marketing company. 20 EXAMINER PRICE: Have you done any work 21 while with Ohio Consumers' Counsel to determine 22 residential customers, whether that fact statement is 23 true with respect to residential customers? 24 THE WITNESS: No. It's -- it's -- as I 25 said, it was something that was considered while -- ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 643 1 while marketing to residential customers. 2 EXAMINER PRICE: Isn't it true you really 3 don't know this? You simply think this to be true. 4 THE WITNESS: It was provided in research 5 while I was with a marketing company. I don't have 6 the research with me. It was a -- and it was we 7 based a lot of our marketing programs off that 8 information we received. 9 EXAMINER PRICE: Fair enough. 10 MR. IRELAND: I was just going to get to 11 that, your Honor. I would like to ask -- 12 EXAMINER PRICE: You can ask all the 13 follow-ups you want. 14 MR. IRELAND: Well, no. You did a very 15 fine job. Thank you. 16 Q. (By Mr. Ireland) Do you take service from 17 DP&L? 18 A. I do not. 19 MR. IRELAND: Well, then I would move to 20 strike, your Honor, the portion of his testimony that 21 begins on page 7, line 4 to line 9, because there is 22 absolutely no basis for the statement as to what he 23 knows with residential customers. He doesn't have a 24 survey. Whatever information was general came from 25 a -- his prior employment. And I suppose if he was a ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 644 1 DP&L customer, he might be able to offer an opinion 2 as a customer, but he's not. 3 MR. MICHAEL: Your Honor, Mr. Haugh is 4 testifying as an expert. As your Honor is well 5 aware, experts are allowed to testify based on their 6 experience and working in the industry. That's what 7 makes them an expert. They don't have to shed what 8 they know through the course of a 20-year career when 9 they walk in these hearing room doors. 10 The Commission obviously has the 11 opportunity to weigh that testimony to the degree it 12 wants to, but it's certainly appropriate for an 13 expert to testify based on what they know based on 14 their experience. Mr. Haugh clearly testified that 15 he was engaged with a marketing company. One of the 16 things they did was market research as to how 17 customers felt about those things. So he has 18 personal experience with the results of those surveys 19 and how the market with whom he worked treated that 20 information. 21 EXAMINER PRICE: But how can Mr. Ireland 22 cross-examine him on the results of those surveys if 23 it's just he does not identify the survey and brought 24 the instrument forward with him? Maybe there are 25 flaws in the survey that Mr. Ireland would like to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 645 1 point out. 2 MR. MICHAEL: He can ask all the 3 questions he wants, but as I said, your Honor, an 4 expert can testify based on their experience. That's 5 part of what makes them an expert. If he wants to 6 probe their experience and call it into question, 7 that's fine. 8 MR. OLIKER: Your Honor, if I may be 9 heard on this matter as well? Actually to some 10 extent, I support Mr. Michael, and I would only 11 strike the words "from the utility" on line 5 which, 12 I think, is inconsistent with his testimony where I 13 think he said they want to receive one bill. 14 MR. MICHAEL: I appreciate the support, 15 but I don't know what you said otherwise. 16 MR. OLIKER: We can strike the sentence 17 though. 18 MR. IRELAND: Your Honor, certainly an 19 expert can come in and testify about their 20 experience, but they can't just say I have had this 21 experience and assert that I know something without 22 any basis for it whatsoever. 23 EXAMINER WALSTRA: I'm going to grant in 24 part and deny in part. I will strike the lines -- 25 the sentence beginning on line 4 and going and ending ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 646 1 on line 6. I will allow him to state his opinion 2 otherwise. Go ahead. 3 MR. IRELAND: Thank you, your Honor. 4 MR. ALEXANDER: Your Honor, one 5 clarifying. Are you starting on line 4 with the word 6 "I"? 7 EXAMINER WALSTRA: Yes. 8 MR. ALEXANDER: Thank you, your Honor. 9 Q. (By Mr. Ireland) So one of the things 10 Mr. Alexander handed you was a copy of Ohio Revised 11 Code Section 4928.143. Do you recall that? 12 A. Yes. 13 Q. And just so we are clear, you would agree 14 that this is a policy that should be taken into 15 consideration in evaluating from your perspective? 16 It's a policy that should be taken into consideration 17 in evaluating the third prong of the three-part test; 18 is that right? 19 A. I think the Commission can take whatever 20 they want to into consideration when determining the 21 merits of an ESP. 22 Q. And certainly part of the -- what they 23 should take into consideration is 143(2), the plan 24 may provide or include, without limitation, any of 25 the following, and then subsection little (i), that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 647 1 has to do with the provision under which the utility 2 may implement economic development, job retention, 3 and energy efficiency programs. You would agree with 4 that, right? 5 A. I returned mine back to Mr. Alexander, 6 but if it's in that section, then the Commission 7 has -- can weigh however they would like. 8 Q. Now, do you consider Honda, Kroger, and 9 Miami Valley Hospital to be large employers? 10 A. I don't know the number of employers that 11 they have. 12 Q. You don't know the number of employees? 13 A. Employees, correct. They each have one 14 employer, I guess. 15 Q. Let's assume that they -- that they do 16 have a lot of employees and that they -- that they 17 are large employers. Do you agree that if a large 18 user of electricity receives an electric security 19 discount, it may make that company more competitive? 20 A. I can't say that. 21 Q. So you don't know? 22 A. I'm -- if you could reread the question. 23 Q. Sure. 24 A. Make sure I give a correct answer. 25 Q. Let's assume Honda, Kroger, and Miami ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 648 1 Valley are large employers. They have a significant 2 number of employees. Do you agree that if a large 3 user of electricity with a large number of employees 4 receives an electric security discount, that it may 5 make that company more competitive? 6 A. Not necessarily. 7 Q. So you disagree? It would not make that 8 company more competitive? 9 A. There are a lot of factors that would go 10 into the "competitive," so I can't say an economic 11 discount or an economic -- a discount on electricity 12 rates would necessarily make them more competitive. 13 Q. Well, a discount on electricity rates is 14 certainly going to make more money available to them 15 for that business; is that fair? 16 A. In theory it could. 17 Q. Why that -- why do you say "in theory?" 18 Isn't that the practice if you are paying less for 19 electricity, don't you have more money available to 20 you? 21 MR. MICHAEL: Objection, argumentative. 22 EXAMINER WALSTRA: Overruled. 23 A. You are taking one -- one -- one sliver 24 of the financial -- the financial of a company, so I 25 can't necessarily say that an electricity discount ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 649 1 will automatically. There are other variables that 2 would affect the profitability and cash flows of the 3 company. 4 Q. Well, paying less money for electricity 5 is going to have a positive impact on cash flow, is 6 it not? 7 A. It will reduce their expenses. 8 Q. And reducing the expenses may mean that 9 there's more money available to the company to hire 10 employees; is that right? 11 A. It's possible. 12 Q. And it's possible that paying less money 13 for electricity may free up money for capital 14 investments; is that right? 15 A. It can -- yeah. There's -- once again, 16 with the qualifications there are lots of -- I will 17 state that it can free up -- it can reduce our 18 expenses which after that it's unknown what will 19 happen with the company and what they will do. 20 Q. Turning lastly to page 12 of your 21 testimony, you have this testimony about noncommodity 22 billing and your objection that the settlement 23 requires the staff to request the Commission to 24 conduct a rules review prematurely, I think is what 25 you are really saying there; is that right? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 650 1 A. Basically, yes. 2 Q. And you don't -- you are not aware of any 3 prohibit -- prohibition that would -- against the 4 staff doing so at its prerogative, right? 5 A. No. I am saying more traditional 6 regulatory policy is a five-year review. 7 MR. IRELAND: Let me have one second. 8 EXAMINER WALSTRA: We'll go off the 9 record and take a 10-minute recess. 10 (Recess taken.) 11 EXAMINER WALSTRA: We'll go back on the 12 record. 13 Mr. Pritchard. 14 MR. PRITCHARD: Thank you, your Honor. 15 - - - 16 CROSS-EXAMINATION 17 By Mr. Pritchard: 18 Q. Good afternoon, Mr. Haugh. 19 A. Good afternoon. 20 Q. I have some follow-up questions on your 21 criticisms of the TCRR-N pilot. Will you turn to 22 page 5 of your testimony. 23 A. I'm there. 24 Q. And beginning on page -- or line 10 and 25 continuing down for a few lines, your criticism is ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 651 1 the pilot program fails to identify the objectives or 2 benefits of the program, correct? 3 A. Correct. 4 Q. Do you have the stipulation in front of 5 you? 6 A. I do. 7 Q. Will you turn to page 14 of the 8 stipulation. 9 A. I'm there. 10 Q. Can I draw your attention to the third 11 sentence under subparagraph c on that page? Do you 12 see the sentence that begins "More specifically"? 13 A. Yes. 14 Q. And that sentence continues on "the 15 purpose of this pilot program is to explore whether 16 certain customers could benefit from opting out of 17 DP&L's TCRR-N" and then it continues for the rest of 18 that page and on to the top of page 15, correct? 19 A. Yes. 20 Q. That sentence? And, now, I want to 21 explore a little bit your understanding of how 22 transmission costs are assigned and billed. PJM -- 23 let me back up. 24 It's your understanding, following up 25 with Mr. Alexander's questions, that network ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 652 1 integration transmission service, or NITS, is 2 included in the TCRR-N, correct? 3 A. It is nonbypassable, correct. 4 Q. And so that PJM line item is in that -- 5 in the nonbypassable transmission rider, correct? 6 A. Yes. 7 Q. And it's your understanding that PJM 8 allocates NITS costs on a single coincident peak 9 basis, correct? 10 A. Yes. 11 Q. And it is your understanding that DP&L's 12 nonbypassable transmission rider is billed on monthly 13 billing demand, correct? 14 A. Correct. 15 Q. And do you know how DP&L calculates 16 monthly billing demand? 17 A. I believe that's on a 1 CP. 18 Q. Have you previously reviewed DP&L's 19 TCRR-N tariff? 20 A. A while -- not recently. 21 Q. Would it refresh your recollection of 22 what's in that tariff if I showed you a copy of the 23 tariff? 24 A. Yes. 25 MR. PRITCHARD: May I approach, your ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 653 1 Honor? 2 EXAMINER WALSTRA: You may. 3 MR. PRITCHARD: I'm not marking this yet. 4 Q. (By Mr. Pritchard) I would like to draw 5 your attention, Mr. Haugh, to the bottom of page 3 of 6 4. Are you there? 7 A. I'm there. 8 Q. Have you reviewed the language there 9 about the determination of kilowatt billing demand? 10 A. Yes. 11 Q. And does this refresh your recollection 12 that DP&L's billing demand for the TCRR-N is further 13 established by cross-reference to DP&L's distribution 14 tariffs? 15 A. Yes. 16 Q. Have you previously reviewed DP&L's 17 distribution tariffs? 18 A. At some -- yes, at some point I have. 19 Q. Do you recall under the distribution 20 tariffs how monthly billing demand is calculated? 21 A. Off the top of my head -- I'm sure you 22 have it for me. 23 Q. Okay. Would it refresh your recollection 24 if I showed you a copy of DP&L's distribution tariff? 25 A. That would be appreciated. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 654 1 Q. Mr. Haugh, I have handed you sheets D21 2 and D22 from DP&L's distribution tariff. Do you have 3 those in front of you? 4 A. I do. 5 Q. And sheet D21 is for primary substation 6 customers, correct? 7 A. Yes. 8 Q. And beginning on page 2 of 3 of sheet 9 D21, there's a heading labeled "Determination of 10 Kilowatt Billing Demand," correct? 11 A. Yes. 12 Q. And under this have you had an 13 opportunity to review this section of the tariff 14 sheet? 15 A. I have. 16 Q. And under this section of DP&L's 17 distribution tariff, it provides three options for 18 calculating a primary substation customer's billing 19 demand, correct? 20 A. Yes. 21 Q. And it is the greater of the three, 22 correct? 23 A. Yes. 24 Q. And the first item is offpeak which is 25 further defined as 75 percent of the greatest demand ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 655 1 during and it lists the offpeak times, correct? 2 A. Yes. 3 Q. And item No. 2 is onpeak and that's 4 defined as 100 percent of the customer's demand 5 during the billing month at any of the non-offpeak 6 hours, correct? 7 A. Yes. 8 Q. And item No. 3 is 75 percent of the 9 customers offpeak or onpeak demand as used for 10 billing, and then it lists the prior period of time 11 where that would be applicable -- let me strike this 12 question. 13 Item No. 3 specifies that monthly billing 14 demand would be 75 percent of the customer's greatest 15 offpeak or onpeak demand as used in billing in the 16 months of June, July, August, December, January, 17 February during the past 11 months, correct? 18 A. Yes. 19 Q. Switching topics slightly but still 20 within the TCRR-N pilot, are you aware under PJM's 21 open access transmission tariff whether retail 22 customers can directly access that transmission 23 tariff? 24 A. There's some conditions but, yes, they 25 can. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 656 1 Q. Following up with a couple of questions 2 from Mr. Alexander on the implementation of DP&L's 3 nonbypassable TCRR-N as part of the last ESP. You 4 indicated that prior to the second ESP, the 5 transmission costs were bypassable by shopping 6 customers, correct? 7 A. All transmission costs, did you say? 8 Q. Yes. 9 A. Yes, yes, they were. 10 Q. And with the implementation of the second 11 ESP and the TCRR-N, what was defined as 12 nonmarket-based transmission costs became 13 nonbypassable, correct? 14 A. Correct. 15 Q. And you are aware that with the 16 implementation of the TCRR-N that there was a cost 17 shift among customers, correct? 18 A. Did you say with the advent of the TCRR-N 19 there was cost shift? 20 Q. Correct. 21 A. I didn't do that analysis, but logic 22 would say there would be. 23 Q. And one of your criticisms of the pilot 24 is you indicate on page 5 that the pilot should 25 not -- should provide benefits to participants but ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 657 1 not unnecessarily shift costs to nonparticipants, 2 correct? 3 A. Yes. 4 Q. Would any shift in costs fail your 5 proposal? 6 A. There has to be a cost/benefit analysis 7 that's done. If there are shifting of costs, do the 8 benefits outweigh the costs that are being shifted? 9 Q. So under -- following up on your answer, 10 would any shift in costs from customers not 11 participating in the pilot pass your proposed test? 12 A. It's possible. 13 Q. And also on page 5 you criticize the 14 pi -- the TCRR-N pilot as not being set up by what 15 you categorize as a traditional pilot, correct? 16 A. Yes. 17 Q. Is your criticism there that it's not 18 available to every single customer in DP&L's service 19 territory? 20 A. No. As I stated, the pilot program 21 should have a limited amount of participants. 22 Q. Are you aware that a group of industrial 23 customers previously filed a complaint at FERC in 24 Case EL16-10 that complained about AEP Ohio's 25 nonbypassable transmission charge? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 658 1 A. I'm vaguely aware of that. 2 Q. Are you aware whether the complaint 3 challenged the lawfulness of a nonbypassable retail 4 transmission charge that used monthly billing to 5 determine -- determinants that were different than 6 the way PJM billed for network integration 7 transmission service costs? 8 A. I don't know the details of that. 9 MR. PRITCHARD: Your Honor, at this time 10 I would like to mark as IEU-Ohio Exhibit 1. 11 EXAMINER WALSTRA: So marked. 12 (EXHIBIT MARKED FOR IDENTIFICATION.) 13 Q. Before I ask a couple of questions about 14 this document I handed you -- actually let me just 15 move to marking this document. Mr. Haugh, do you 16 have in front of you what I marked as IEU-Ohio 17 Exhibit 1? 18 A. Yes. 19 Q. And the title of this document is 20 "Response to Industrial Energy Users-Ohio's Motion to 21 Dismiss Complaint by the Office of the Ohio 22 Consumers' Counsel," correct? 23 A. Correct. 24 Q. And this document indicates that the FERC 25 Case No. was EL16-10, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 659 1 A. Yes. 2 Q. And the -- at the top of the page there 3 is a time stamp on this document of January 6, 2016, 4 correct? 5 A. Yeah. I would say it's not what I would 6 traditionally call a time stamp, but I will assume 7 that's -- 8 Q. If you will turn to the last page, the 9 certificate of service indicates that it's dated 10 January 6, 2016, and it's signed by counsel for the 11 Office of the Ohio Consumers' Counsel, correct? 12 A. Yes. 13 Q. Are you aware that OCC had intervened in 14 IEU-Ohio's complaint case and filed this responsive 15 pleading? 16 A. Now that I look at it, I have some 17 recollection, but I would not -- I did not work on 18 that particular case at the OCC. 19 Q. Sure. Let me turn your attention to 20 page 3, the second paragraph on the page. And let me 21 know when you are there. 22 A. Second paragraph on page 3? 23 Q. Correct. 24 A. I'm there. 25 Q. Let me know if I read this correctly. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 660 1 "This Complaint raises serious concerns regarding the 2 ability of retail customers and CRES providers in 3 Ohio to access wholesale transmission services on the 4 PJM system at Commission-approved Tariff rates." Did 5 I read that correctly? 6 A. That is correct. 7 Q. And if you look down two sentences 8 further, do you see the sentence beginning "Denial"? 9 A. Yes. 10 Q. Let me know if I read this correctly. 11 "Denial or dismissal of this complaint may also 12 require Ohio retail customers, either directly or 13 through CRES providers, to pay more for transmission 14 services than the filed rate authorized under the PJM 15 Tariff." Did I read that correctly? 16 A. No. "Denial or dismissal of the 17 complaint," not "this complaint." Other than that 18 everything was correct. 19 Q. Thank you. 20 MR. MICHAEL: Nice. 21 Q. And turning to the last sentence on that 22 page that begins with "This," do you see that 23 sentence? 24 A. Second to the last word? 25 Q. Yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 661 1 A. Yes. 2 Q. Let me know if I read this sentence 3 correctly. "This is because the Ohio program bases 4 charges for wholesale transmission services on a 5 method that departs from the 1 CP method approved in 6 PJM's Tariff." Did I read that correctly? 7 A. Yes. 8 Q. So it's fair to say as between your 9 opposition to the TCRR-N pilot in this proceeding and 10 your advocacy before the Federal Energy Regulatory 11 Commission, that the Office of the Ohio Consumers' 12 Counsel has a fairly fluid position on the scope of 13 an appropriate -- let me just strike that whole 14 question. 15 MR. MICHAEL: I was going to object to it 16 anyway. 17 Q. I want to turn your attention to the EDR 18 section of your testimony. Drawing your attention to 19 page 7. 20 A. I'm there. 21 Q. Here you -- you critique Section IV of 22 the stipulation, correct? 23 A. In question and answer 14? Yes. 24 Q. And your criticism is that the economic 25 development rider does not follow Commission rules ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 662 1 and practices for reasonable arrangements, correct? 2 A. Yes. 3 Q. And in questions posed by Mr. Alexander, 4 you indicated that the applicable Commission rules 5 were in Chapter 38 of the Commission's rules, 6 correct? 7 A. 4901.138. 8 Q. And you understand that there are 9 different kinds of arrangements specified in that 10 chapter of the Commission's rules, correct? 11 A. Yes. 12 Q. The only reasonable arrangements rules 13 that you looked at were regarding economic 14 development arrangements, correct? 15 A. Yes. 16 Q. You would agree with me that part IV of 17 the stipulation recommends the Commission authorize a 18 credit to customers, correct? 19 A. If I could just take a second to look at 20 Section IV real quick. 21 Q. Sure. 22 A. It's -- did you ask if it was -- 23 discusses a volumetric discount for customers for 24 certain customers? 25 Q. That wasn't my question. I can rephrase. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 663 1 A. Please. 2 Q. You would agree with me this section of 3 the stipulation recommends that the Commission 4 authorize a credit for certain customers, correct? 5 A. Correct, yes. 6 Q. And this section of the stipulation 7 specifies criteria that the -- that customers would 8 need to meet to be eligible to receive the credit, 9 correct? 10 A. Yes. 11 Q. For example, in Section IV.1.a.i, it 12 specifies that a single site customer needs to have a 13 demand of 10 megawatts or greater with an average 14 load factor of at least 80 percent, correct? 15 A. Yes. And then lists the number of 16 customers that are eligible for that. 17 Q. And in subparagraph little ii, it -- 18 customers available for this credit would have to 19 have a megawatt demand of 4 megawatts or greater, 20 correct? 21 A. Correct. 22 Q. And under iii, subparagraph iii, it's 23 available to businesses headquartered in the State of 24 Ohio that have an aggregate demand of 2 megawatts or 25 greater, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 664 1 A. Yes, that's correct. 2 Q. And jumping back to paragraph 2.i, you 3 would agree with me that this paragraph provides a 4 credit for certain types of business activity, 5 correct? 6 A. It's called an "Automaker Incentive," but 7 it doesn't necessarily -- the definition of it 8 doesn't limit it to automakers. 9 Q. Fair enough. Jumping around a little 10 bit, will you turn your attention to page 11 of your 11 testimony. 12 A. I'm there. 13 Q. You refer to the economic development 14 grant fund as a rebate, correct? 15 A. Yes. 16 Q. Could you provide us with a definition -- 17 your definition of what a rebate is in the context 18 you use in your testimony. 19 A. Sure. It's essentially returning or 20 giving to an entity costs that were incurred. 21 Q. And at pages 11 and 12 of the 22 stipulation, under the economic development grant 23 fund section, it said for specific payments, correct? 24 A. Mine are specifically on subsection c. 25 Q. Correct. And subsection c that begins on ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 665 1 page 11 and continues to page 12, the stipulation 2 sets forth the specific payments under that part of 3 the economic development grant fund, correct? 4 A. Correct. 5 Q. And all the economic development grant 6 funds A, B, and C are under the provision VI that 7 begins on page 10, correct? 8 A. It's just -- 9 Q. Let me rephrase that question. These 10 subparagraphs, A, B, and C, that are or begin on 11 page 11 are under -- are a subset of paragraph VI 12 that begins on page 10, correct? 13 A. Correct, yes. 14 Q. And let me know if I am reading this 15 sentence correctly that begins on the bottom of 16 page 10. "DP&L agrees to make the following economic 17 development payments, which payments shall not be 18 recoverable from customers." Did I read that 19 correctly? 20 A. That is correct. 21 MR. PRITCHARD: Thank you, Mr. Haugh. I 22 have no further questions. 23 THE WITNESS: Thank you. 24 EXAMINER WALSTRA: Mr. Oliker? 25 - - - ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 666 1 CROSS-EXAMINATION 2 By Mr. Oliker: 3 Q. Good afternoon, Mr. Haugh. 4 A. Good afternoon. 5 Q. Just a few questions for you today. 6 Let's start with -- 7 EXAMINER PRICE: Matt broke it. You'll 8 just speak out loud. 9 MR. OLIKER: I am usually pretty loud. 10 Q. Mr. Haugh, let's start with your 11 background a little bit. Am I correct that earlier 12 you indicated you worked for a retail supplier at one 13 point? 14 A. More than one. 15 Q. And that would be Enron? 16 A. Yes. 17 Q. Also Integrys? 18 A. MidAmerican Energy was in between that, 19 yes. 20 Q. And Just Energy? 21 A. Correct. 22 Q. And in that role you held various 23 capacities, correct? 24 A. Yes. 25 Q. And one of those capacities was project ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 667 1 management, correct? 2 A. Yes. 3 Q. And in that capacity you would have 4 experience regarding billing systems, correct? 5 A. Yes. 6 Q. And also product marketing? 7 A. Yes. 8 Q. And taking another step back to your role 9 at OCC, could you explain your duties as I believe 10 you are Assistant Regulatory Analyst -- or, I'm 11 sorry, Assistant Director of Analytical Services. 12 A. That is my title, yes. 13 Q. Could you explain what your scope is in 14 that capacity. 15 A. Sure. Personnel management, managing 16 case activity, obviously filing expert testimony in 17 cases, reviewing -- reviewing documents that go out 18 that are produced within the company or within the 19 organization. 20 Q. And does that include coordinating with 21 outside experts? 22 A. Yes. 23 Q. In this proceeding were you responsible 24 for reviewing Matthew Kahal's testimony? 25 A. I was not. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 668 1 Q. Have you reviewed it? 2 A. I may have -- I read portions of it. I 3 did not read it front to back, the entire document. 4 Q. Do you remember which portions? 5 A. Honestly, no. 6 Q. Okay. 7 A. I didn't review it in any detail. 8 Q. Now, in your work for retail suppliers, 9 would you agree that you learned that retail 10 suppliers spend potentially millions of dollars to 11 maintain their billing systems? 12 A. Depending on the size, it could reach 13 millions of dollars. It could be tens of thousands 14 with a smaller marketer. 15 Q. And would you agree that those billing 16 systems are necessary simply to interact with a 17 utility's consolidated billing system? 18 A. At a bear minimum, yes, you would need 19 that. 20 Q. And would you agree that the various 21 retail suppliers you worked for had large IT 22 departments? 23 A. Not all. 24 Q. But some did, correct? 25 A. Once again, it's all -- it's all -- you ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 669 1 use "large." "Large" is based on it's a -- it's sort 2 of a -- it's got a -- it's all relative, I should 3 say. 4 Q. And in this case would you agree that if 5 a supplier consolidated billing pilot program is 6 approved, that it will require participating retail 7 suppliers to spend their own resources to update 8 their own billing systems? If you know. 9 A. I don't know. 10 Q. And turning to page 7 of your testimony, 11 you indicate currently in DP&L's service territory a 12 retail supplier can either use utility consolidated 13 bill or a dual bill, correct? 14 A. Yes. 15 Q. And in your experience working for a 16 retail supplier, would -- am I correct that based on 17 that experience, a retail supplier would not bill for 18 products using a dual bill because customer 19 enrollment was lower relative to the same product on 20 utility consolidated bills, all else being equal? 21 THE WITNESS: Could you have that 22 question reread, please. 23 (Record read.) 24 A. I'm a little confused by the question. 25 Q. Which part don't you understand, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 670 1 Mr. Haugh? 2 A. I -- what you are asking that there are 3 less -- that less customers would desire dual 4 billing? I am kind of mis -- you are connecting the 5 number of customers, dual billing, utility 6 consolidated billing. 7 Q. Maybe I can ask it this way, Mr. Haugh, 8 given a choice between marketing the same product 9 with a dual bill or utility consolidated bill, in 10 your experience a retail supplier would always choose 11 consolidated billing because a customer is likely to 12 enroll, correct? 13 A. Not necessarily. Some customers don't 14 care if they get one bill or two bills. Others -- 15 others specifically only desire one bill. There are 16 a variety of different customers with a variety -- 17 variety of different desires. 18 Q. And can you identify instances where a 19 retail supplier that you worked for would choose to 20 utilize a dual bill for a product when utility 21 consolidated billing or supplier consolidated billing 22 was available? 23 A. When I was at Enron, we had a large 24 number of dual bill customers. There were large 25 commercial/industrial customers. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 671 1 Q. And besides the exception you just 2 identified, can you think of any other instances? 3 A. To be honest, I did not -- I was not 4 involved in all billing aspects. That was one that 5 just came to mind. 6 Q. So the answer is no to your knowledge, 7 Mr. Haugh? 8 A. Yeah, I don't know. 9 Q. And turning to your testimony on page 13. 10 A. I'm there. 11 Q. Am I correct that the gist of your 12 testimony is you don't believe any review of 13 noncommodity billing rules should be undertaken until 14 after 2019 or in 2019? 15 A. Traditionally the Commission will start 16 the real review process well before the date. So I'm 17 saying that it should just -- when the rest of the 18 CRES rules are being reviewed is when they should be 19 included in that review. 20 EXAMINER PRICE: If the Commission began 21 consideration of the entire chapter of all the CRES 22 rules simultaneously with the rules making in 23 particular here and simply moved up the rule review 24 early, would you be opposed to that? 25 THE WITNESS: No. It's an examination in ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 672 1 its totality. There is often positive and negatives 2 that are weighed throughout the give and take on 3 different sections of the rules and that's why taking 4 a one-off review, I don't feel that's appropriate. 5 Q. Mr. Haugh, earlier -- scratch that. 6 Would you agree that there are Ohio electric 7 utilities that currently offer noncommodity products 8 that are not available to CRES providers? 9 A. I believe it was discussed in -- 10 Mr. White discussed that. I wasn't fully aware of 11 those, of the details of those. 12 Q. Are you an AEP customer, Mr. Haugh? 13 A. I am. 14 Q. Do you receive letters in the mail asking 15 you to enroll in utility line service? 16 A. Yes, I do quite frequently. 17 Q. And do you know whether any of those 18 offers indicate that the product may be listed on 19 your utility bill? 20 A. Most of those get thrown away. 21 Q. So the answer -- 22 A. I don't look at the details about those. 23 Q. So I will ask you just to assume a 24 hypothetical for a second. To the extent that a 25 utility offers noncommodity service or noncommodity ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 673 1 billing, would you agree that any rules related to 2 the offering of that product would not be considered 3 in the CRES rules? 4 A. I would consider that a competitive 5 product and should be considered the same as anything 6 offered by a marketer. They should be treated the 7 same. 8 Q. And do you know if different rules apply 9 to Ohio electric utilities than the CRES rules? 10 A. I'm not sure. The one -- the one issue 11 here is that I wouldn't necessarily consider this a 12 utility product. I would consider it a competitive 13 product that should be treated as a -- as the same as 14 anything offered by a marketer. 15 Q. And as you understand it, does this 16 provision of the stipulation apply to both CRES 17 providers and electric utilities that may offer 18 noncommodity service on the utility bill? 19 A. If I could take a quick look at the 20 stipulation. 21 This states that -- the settlement states 22 that the Commission will conduct a review -- a rule 23 review to establish parameters to all for 24 noncommodity billing in all electric distribution 25 utility service territories. I would think a ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 674 1 noncommodity item, whether offered by a utility or 2 marketer, should fall under this. 3 Q. Okay. Mr. Haugh, did you participate in 4 the docket commonly referred to as fixed means fixed 5 rules? 6 A. In that it was an offshoot of the -- is 7 that the 3151 rule or COI? Yes. 8 Q. And if you know, did the Ohio Consumers' 9 Counsel oppose any proposals by the Commission to 10 modify rules related to CRES providers in that 11 docket? 12 A. I wasn't part of any comments filed in 13 that case. 14 MR. OLIKER: If I could have one minute, 15 your Honor. 16 That's all the questions I have, your 17 Honor. 18 Thank you, Mr. Haugh. 19 EXAMINER WALSTRA: Thank you. 20 Ms. Petrucci? 21 - - - 22 CROSS-EXAMINATION 23 By Ms. Petrucci: 24 Q. Good afternoon. I am not going to try to 25 work with the microphone at all. If you can't hear ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 675 1 me, let me know. 2 Let's stick with the noncommodity billing 3 subject. The Commission has the flexibility to 4 manage its rule review dockets; isn't that correct? 5 A. Yes, the Commission can review as they 6 wish. 7 Q. And are you aware that the Supreme Court 8 of Ohio has even stated that the Commission has the 9 flexibility to manage its dockets? 10 A. I'm not aware of that. 11 Q. If the Commission decided to conduct a 12 rule review on -- with regard to noncommodity billing 13 on a stand-alone basis, do you have any reason to 14 believe that it would not be open to all interested 15 parties who wish to participate? 16 A. A rule review invites -- traditionally 17 would invite all interested parties to participate. 18 Q. And with regard to the supplier 19 consolidated billing subject, under supplier 20 consolidated billing, the customer receives one bill 21 for the electric service, correct? 22 A. Yes. 23 Q. And under utility consolidated billing, 24 the customer also receives one bill for the electric 25 service, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 676 1 A. Yes. 2 Q. Are you aware that the Commission has 3 adopted an administrative rule that allows supplier 4 consolidated billing in Ohio? 5 A. Yes. 6 Q. And are you familiar perhaps with the 7 number being 4901:1-21-18? 8 A. I don't know the exact cite. I know it's 9 allowed though. 10 Q. Okay. And do you recall that it's in the 11 CRES rules? 12 A. Yes. 13 Q. And do you know how many years the 14 Commission -- how many years ago the Commission 15 adopted that particular administrative rule that 16 allows supplier consolidated billing in Ohio? 17 A. You know -- I know at least 10, maybe 18 more. It's been in the -- it's been in there for a 19 while. 20 Q. And are you aware that under the supplier 21 consolidated billing pilot that's proposed, a 22 customer would -- a customer who was -- let's assume 23 that the supplier consolidated billing pilot is put 24 into place, and a CRES provider has a customer on the 25 supplier consolidated billing. Are you aware that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 677 1 the terms of the pilot that is contained in the 2 stipulation would prohibit a CRES provider from not 3 allowing a customer to return to the utility 4 consolidated billing? 5 A. Is there a part of the stipulation you 6 could point me to? 7 Q. If you can turn to page 25. At the top 8 of the page there's subparagraph h. 9 A. Yes. 10 Q. Do you see that provision there? 11 A. Yes. 12 Q. And essentially is it your understanding 13 then that customers during the pilot have the -- can 14 move back to the utility consolidated billing? 15 A. That is what subsection h says. 16 MS PETRUCCI: I have no further 17 questions. 18 EXAMINER WALSTRA: Thank you. 19 Staff? 20 MR. McNAMEE: No questions. Thank you. 21 EXAMINER WALSTRA: Redirect? 22 MR. MICHAEL: None. Thank you, your 23 Honor. 24 EXAMINER WALSTRA: Thank you, Mr. Haugh. 25 THE WITNESS: Thank you. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 678 1 MR. PRITCHARD: Your Honors, at this time 2 I would like to move for the admission of IEU-Ohio 3 Exhibit 1. 4 MR. MICHAEL: We would object, your 5 Honor. First off, it's a FERC document. Mr. Haugh 6 was pretty clear that he didn't participate in it at 7 all. It's not relevant to DP&L. It involves Ohio 8 Power Company. It's a pleading and, you know, there 9 is no relevance to the application of the three-prong 10 test or the proposed amended stipulation. 11 MR. PRITCHARD: May I respond? 12 EXAMINER WALSTRA: You may. 13 MR. PRITCHARD: Mr. Haugh's testimony 14 criticizes the pilot in both the number of customers 15 that may participate and then the duration. And this 16 document is a statement by OCC. It's an admission, 17 and it is contrary to Mr. Haugh's testimony because 18 this document, as we went through the various 19 passages, indicates that OCC had concerns that -- 20 about retail transmission riders being billed 21 differently than the PJM allocation methodology and 22 its application and says -- refers to all Ohio retail 23 customers, not just the AEP Ohio service territory. 24 EXAMINER PRICE: Mr. Pritchard. 25 MR. PRITCHARD: Yes, sir. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 679 1 EXAMINER PRICE: Do you feel like the 2 proper foundation for this document was laid? He had 3 no familiarity with it. This was just something, you 4 know, you read passages. He said that's what they 5 are, but he had never said he had seen it before. He 6 participated in drafting it. He declined to 7 acknowledge he participated in this matter. 8 MR. PRITCHARD: It's a statement by OCC. 9 It's an admission against -- contrary to their -- his 10 testimony. I don't feel I need to establish that he 11 participated and drafted this because -- 12 EXAMINER PRICE: You need to authenticate 13 it though. 14 MR. PRITCHARD: It's -- it's a FERC 15 document publicly available on the FERC website just 16 like when we use other pleadings in Ohio against 17 parties. 18 EXAMINER PRICE: Those we usually take 19 administrative notice, right? 20 MR. PRITCHARD: Various attorney 21 examiners have different practices but, yes, 22 administrative notice has been one way we've 23 addressed that issue. So if you are not inclined to 24 admit this document, I would request that 25 administrative notice be taken. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 680 1 And one final point, whether Mr. Haugh 2 directly worked on this, he indicated he was familiar 3 with OCC's participation in the proceedings. 4 MR. MICHAEL: I believe it was vaguely, 5 if I am not mistaken. 6 EXAMINER WALSTRA: It will not be 7 admitted, but the Bench will take administrative 8 notice. 9 OCC. 10 MR. MICHAEL: Yes. We moved, your Honor, 11 subject to cross, and I will move for the admission 12 of OCC Exhibit 1. 13 EXAMINER WALSTRA: Any objections, 14 subject to the motions to strike? 15 MR. OLIKER: Subject to renewing the 16 motions to strike, even the ones that were denied, 17 your Honor. 18 EXAMINER WALSTRA: It will be admitted, 19 subject to our previous rulings. 20 (EXHIBIT ADMITTED INTO EVIDENCE.) 21 EXAMINER WALSTRA: And I believe that's 22 all, and we will be adjourned until Monday. And we 23 will go off the record. 24 (Discussion off the record.) 25 (Thereupon, at 3:11 p.m., the hearing was ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 681 1 adjourned.) 2 - - - 3 CERTIFICATE 4 I do hereby certify that the foregoing is 5 a true and correct transcript of the proceedings 6 taken by me in this matter on Thursday, April 6, 7 2017, and carefully compared with my original 8 stenographic notes. 9 10 _______________________________ 11 Karen Sue Gibson, Registered Merit Reporter. 12 13 (KSG-6342) 14 - - - 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481