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 Tuesday, 18 April 11, 2017. 19 - - - 20 VOLUME V 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 821 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 822 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 823 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 824 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 825 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 826 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 PJM Interconnection By Ms. Evelyn Robinson 8 2750 Monroe Boulevard Audubon, Pennsylvania 19403 9 On behalf of the PJM Interconnection. 10 11 - - - 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 827 1 INDEX 2 - - - 3 WITNESSES PAGE 4 David C. Parcell Direct Examination by Mr. Kumar 830 5 Cross-Examination by Mr. Ireland 832 6 John Finnigan Direct Examination by Ms. Leppla 853 7 Cross-Examination by Mr. Hollon 855 8 Patrick Donlon Direct Examination by Mr. McNamee 859 9 Cross-Examination by Mr. Michael 862 10 - - - 11 OCC EXHIBITS IDENTIFIED ADMITTED 12 15 Public Version Supplemental Testimony of David C. Parcell 829 853 13 15A Confidential Version 14 Supplemental Testimony of David C. Parcell (Confidential) 829 853 15 15B Direct Testimony of 16 David C. Parcell 829 853 17 - - - 18 EDF/OEC EXHIBIT IDENTIFIED ADMITTED 19 1 Supplemental Direct Testimony of John Finnigan 854 858 20 2 Direct Testimony of 21 John Finnigan 854 858 22 - - - 23 STAFF EXHIBITS IDENTIFIED ADMITTED 24 2 Prefiled Testimony of Patrick Donlon 859 909 25 - - - ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 828 1 Tuesday Morning Session, 2 April 11, 2017. 3 - - - 4 EXAMINER WALSTRA: We'll go on the 5 record. 6 The Public Utilities Commission has set 7 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 signed 14 by the Commission for today's hearing. And we are in 15 the fifth, hopefully final, day. 16 We'll get started. OCC, call your 17 witness. 18 MR. KUMAR: Thank you, your Honor. We 19 would like to call Dave Parcell to the stand. 20 EXAMINER WALSTRA: Raise your right hand. 21 (Witness sworn.) 22 EXAMINER WALSTRA: Thank you. Please be 23 seated. For the record state your name and business 24 address. 25 THE WITNESS: My name is David C. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 829 1 Parcell, P-A-R-C-E-L-L. My business address is 2 Technical Associates, Incorporated, 1503 Santa, like 3 Santa Claus, Santa Rosa Road, Richmond, Virginia 4 23229. 5 EXAMINER WALSTRA: Thank you. Go ahead. 6 MR. KUMAR: Thank you, your Honor. I 7 would like to mark Mr. Parcell's supplemental 8 testimony, the public version, as Exhibit 14. 9 EXAMINER WALSTRA: 15? 10 MR. KUMAR: The confidential version -- 11 EXAMINER WALSTRA: What number did you 12 say? 14? 13 MR. KUMAR: 14 or 15? 14 EXAMINER WALSTRA: I think it's 15. 15 MR. KUMAR: Sorry, your Honor. Yeah, 16 that's correct, as Exhibit 15 is the supplemental 17 public direct; the confidential version of his -- his 18 supplemental testimony I would like to mark as 15A; 19 and his direct, his previously filed direct 20 testimony, I would like to mark as 15B. 21 EXAMINER WALSTRA: So marked. 22 (EXHIBITS MARKED FOR IDENTIFICATION.) 23 - - - 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 830 1 DAVID C. PARCELL 2 being first duly sworn, as prescribed by law, was 3 examined and testified as follows: 4 DIRECT EXAMINATION 5 By Mr. Kumar: 6 Q. Now, Mr. Parcell, are you the same David 7 Parcell whose direct and supplemental testimony was 8 filed in these cases? 9 A. Yes. 10 Q. And on whose behalf are you appearing 11 today? 12 A. The Office of Consumers' Counsel. 13 Q. And do you have your prepared testimony 14 with you on the stand? 15 A. I do. 16 Q. Did you -- did you prepare that testimony 17 or have it prepared at your direction? 18 A. I prepared it, yes. 19 Q. Do you have any changes or corrections to 20 your testimony? 21 A. I have a few very minor corrections I 22 would like to make. The first on page 5 -- 23 MR. IRELAND: Which version? 24 THE WITNESS: 15A. 25 MR. IRELAND: Thank you. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 831 1 MR. KUMAR: I believe these changes will 2 be for 15 as well. 3 A. Page 5, line 7, in front of the "4.4 4 percent" insert the word "be," B-E. I will give 5 Mr. Ireland credit because he asked me a question in 6 my deposition that made me realize I left the word 7 "be" out, so I will thank him for that. 8 So the next one is page 11, page 11, line 9 1, in the middle of that line is the word "nearly," 10 N-E-A-R-L-Y. That should be "newly," N-E-W-L-Y. 11 Change "nearly" to "newly." 12 Page 13, this is not a correction; it's 13 an update. The little table between lines 18 and 19 14 contains six bond ratings. Under the column for DPL 15 in the row for S&P, the BB is now BB- so just put a 16 minus after the BB for DPL on the row S&P. 17 Page 14, on page 14, lines 14 through 18, 18 that is really part of the quotes. Somehow in the 19 last minute formatting they got stretched out to be 20 the full size but that's part of the quote that 21 continues on line 19. 22 And, finally, on page 16, line 21; page 23 16, line 21, the word "unfair" is there. Make that 24 "unfairly," U-N-F-A-I-R-L-Y. 25 And those are my corrections. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 832 1 MR. KUMAR: Your Honor, the OCC would 2 move for the admission of OCC Exhibits 15, 15A, and 3 15B, and we would make the witness available for 4 cross-examination. 5 EXAMINER WALSTRA: Thank you. 6 Mr. Sharkey? Mr. Ireland? 7 MR. IRELAND: Thank you, your Honor. 8 - - - 9 CROSS-EXAMINATION 10 By Mr. Ireland: 11 Q. Good morning, Mr. Parcell. 12 A. Good morning, Mr. Ireland? 13 Q. It is Mr. Ireland. It's nice to meet you 14 face-to-face after -- 15 A. Likewise. 16 Q. -- talking to you on the telephone. 17 Welcome to beautiful Columbus, Ohio. 18 A. Thank you. I went and bought an umbrella 19 this morning. I know what you mean. 20 Q. So I want to start by directing your 21 attention to I think it's page 4 of your March 29 22 testimony. 23 A. Page 4, you said? 24 Q. Yes. 25 A. Sure. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 833 1 Q. And here you refer to the standards 2 typically followed by the PUCO in settlements. Do 3 you see that? 4 A. Yes. 5 Q. And you did not attend any of the 6 negotiating sessions; is that right? 7 A. That is correct. 8 Q. And as to the first prong, whether or not 9 the amended stipulation is a product of serious 10 bargaining among knowledgeable parties, you are not 11 in a position to challenge that prong; is that fair? 12 A. That is fair and that's correct. 13 Q. Now, as I understand it, sir, this is the 14 first time you have ever testified in Ohio in an ESP 15 case; is that right? 16 A. That is correct also. 17 Q. And other than this case, you have never 18 offered testimony in opposition to a stipulation; is 19 that right? 20 A. In Ohio. I have done so in other states 21 but not Ohio. 22 Q. In Ohio. And as I understand it, all of 23 your testimony in Ohio over the last 30 years has 24 been on behalf of the Office of Consumers' Counsel; 25 is that right? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 834 1 A. I believe that's correct, yes. 2 Q. Okay. Now, as part of your testimony in 3 this case, you reviewed part of Mr. Malinak's 4 March 22, 2017, testimony; is that right? 5 A. That is correct. 6 Q. And Mr. Malinak's supplemental testimony 7 does not cite the cost of debt or rate of return; is 8 that fair? 9 A. He does cite the cost of equity but not 10 rate of return. 11 Q. Okay. 12 A. And I am not sure what your question was 13 referring to, so I will answer it that way. 14 Q. All right. That's fine. You have not 15 reviewed his deposition in this case; is that right? 16 A. That is correct, I have not. 17 Q. And I don't believe you were present for 18 his cross-examination; is that right? 19 A. That's also correct. 20 Q. Have you read a transcript of his 21 cross-examination? 22 A. No, I have not. 23 Q. And as I understand it, you did not 24 review any of his modeling; is that true? 25 A. That's correct. That was not the purpose ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 835 1 of my testimony, to review his modeling. I believe 2 Mr. Kahal did that, but I focused on the cost of 3 equity and debt and financial equity. 4 Q. So as I understand it, you looked at the 5 beginning of his testimony, but you didn't review the 6 section that had to do with -- the section of 7 Mr. Malinak's testimony that had to do with 8 methodology; is that fair? 9 A. I reviewed it, but I didn't study it 10 because I was not focused on that. That's beyond the 11 scope of my testimony. 12 Q. Right. 13 A. I did review; I did not focus on it. 14 Q. And you didn't focus on the section that 15 had to do with the input data for his financial 16 projections; is that right? 17 A. That is also correct, yes. 18 Q. And you didn't review -- didn't focus on 19 the section that had to do with DPL's and DP&L's 20 projected financial condition and integrity without 21 the DMR and the reconciliation rider; is that right? 22 A. Not the mechanics of it, no. 23 Q. And did you not focus on the section 24 referring to DPL's and DP&L's projected financial 25 conditions and integrity with the DMR and ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 836 1 reconciliation rider; is that right? 2 A. I'm sorry. I missed the word at the 3 beginning. Would you repeat that question? There is 4 one word I didn't understand. 5 Q. You did not focus on section F of his -- 6 of his testimony, DPL's and DP&L's projected 7 financial condition and integrity with the DMR and 8 reconciliation rider. 9 A. Yes, that's correct. Section F is what I 10 didn't hear the first time; but, yes, I agree. 11 Q. Nor did you focus on the conclusions 12 regarding the most favorable in the aggregate test; 13 is that right? 14 A. That's correct. That was not the focus 15 of my testimony. 16 Q. And you didn't address the capital 17 structure in this ESP case, true? 18 A. I did cite the capital structure I 19 believe in the -- in OCC Exhibit 15B, not in 15A but 20 15B as part of my testimony. I guess the answer to 21 that is I did. 22 Q. Okay. Now, turning to Mr. Jackson, you 23 read his direct testimony, right? 24 A. Correct. 25 Q. And you did not review his deposition? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 837 1 A. That is correct. 2 Q. And you weren't present for his 3 cross-examination either, were you? 4 A. That is correct, I was not. 5 Q. And I take it you have not read his -- 6 the transcript of his cross-examination. 7 A. That is correct. 8 Q. And so you have not calculated what would 9 happen to DP&L's financials in the event that the DMR 10 in the amended stipulation is denied; is that true? 11 A. Well, I haven't done any calculations, 12 per se, in my testimony. What I have focused on 13 is -- I hope is clear is that what are the options of 14 AES to correct the problem DPL is in. And I don't 15 want to give you a long answer. That was the focus 16 of my testimony. I didn't do calculations, per se. 17 MR. IRELAND: Your Honor, I would move to 18 strike his answer. 19 MR. KUMAR: Your Honor, I think it's 20 responsive. He's been asking a series of questions 21 about what Mr. Parcell is testifying. I thin it is 22 appropriate for Mr. Parcell to sit and explain what 23 his testimony is about. 24 MR. IRELAND: He didn't answer the 25 question. He just gave a short speech about what he ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 838 1 did. The question was you did not make this 2 calculation. You did not calculate what would happen 3 to DP&L's financials in the event the DMR in the 4 amended stipulation is denied. 5 EXAMINER WALSTRA: I think he did answer, 6 so I am going to overrule. 7 Q. (By Mr. Ireland) And you have not done 8 any analysis of the financial metrics of what would 9 happen to DP&L in the event it does not receive the 10 $105 million in the DMR; is that right? 11 A. The simple answer is yes, but I would 12 answer it in the context with my prior answer. 13 Q. Now, you say at page 8 of your testimony 14 that it is your understanding -- 15 A. I am there. Page 8, you said? 16 Q. Right. It's your understanding that the 17 proposed settlement will result in a cost of debt of 18 5.29 percent and cost of equity of 10.5. Do you see 19 that? 20 A. I do. 21 Q. And that understanding is based upon the 22 sentence from the stipulation that you quote? 23 A. Correct. 24 Q. You, sir, have not made an analysis of 25 DP&L's ability to pay down its debt if the DMR is ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 839 1 rejected; is that right? 2 MR. KUMAR: Your Honor, I'm sorry. May I 3 have that question reread? 4 EXAMINER WALSTRA: Sure. 5 (Record read.) 6 A. I have not done an analysis. What I -- 7 again, back to my prior answer, what I have suggested 8 is that there is a better option because this debt 9 was created for the purpose of purchasing DPL and 10 DP&L in 2011; and, now, ratepayers are being asked to 11 pay for it. That's what I am proposing. 12 MR. IRELAND: I move to strike everything 13 after the first sentence, your Honor. 14 MR. KUMAR: Your Honor, he asked him, if 15 I remember correctly, whether -- what analysis he 16 conducted. I'm sorry. What was the question again? 17 EXAMINER WALSTRA: I am going to grant 18 the motion. 19 MR. IRELAND: Thank you. 20 Q. (By Mr. Ireland) You are not in a 21 position to say whether or not DP&L's ability to 22 provide safe and reliable service may be affected by 23 the denial of the amended stipulation. 24 A. Not one way or the other, no. 25 Q. And you have not done any analysis of ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 840 1 what happens to DP&L's credit ratings in the absence 2 of a DMR; is that right? 3 A. Well, again, I have not done 4 calculations, but the context of my testimony tells 5 you what I have done. I don't want to give you a 6 speech because I told you what I did. I am trying to 7 be fair, in other words. 8 Q. Well, I appreciate that, and so am I. 9 A. I appreciate that too. 10 Q. But you have not done any analysis of 11 what happens to DP&L's credit ratings in the absence 12 of the DMR being approved by this Commission; is that 13 true? 14 A. That's true in the absence of AES 15 stepping up and itself paying for the money that it 16 forced DP&L to pay for the merger. That's my 17 testimony. I hope I'm not coming across the wrong 18 way and not being responsive to you but that's what 19 my testimony is. 20 MR. IRELAND: Your Honor, I would move to 21 strike everything after "that's true." 22 MR. KUMAR: I think -- your Honor, I 23 think that answer was very responsive to the question 24 that was asked. 25 EXAMINER WALSTRA: I will grant the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 841 1 motion. 2 Q. (By Mr. Ireland) Mr. Parcell, you have 3 not done any analysis of the stipulation as more 4 favorable in the aggregate as compared to an MRO; is 5 that right? 6 MR. KUMAR: Your Honor, at this point I 7 am going to object. These are a series of questions 8 that we have gone far beyond the scope of 9 Mr. Parcell's testimony. Mr. Parcell has clarified 10 many times what the scope of his testimony is, so I 11 am going to object to this line of questioning. 12 EXAMINER WALSTRA: Mr. Ireland? 13 MR. IRELAND: Well, he is being offered 14 as a financial witness on behalf of the OCC. I 15 believe his resume says he's testified in over 545 16 cases. I think it's important to understand not only 17 what he did but what he didn't do in the context of 18 the evidence that the company is offering in support 19 of the stipulation. 20 MR. KUMAR: Your Honor, Mr. Ireland's 21 question was about the more favorable in the 22 aggregate versus MRO test. It's very clear that 23 Mr. Parcell is not here to talk about the ESP versus 24 MRO test. He is here to talk about the issues in his 25 testimony. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 842 1 EXAMINER PRICE: Why can't he just answer 2 no? Then we can move on. 3 MR. KUMAR: Because, your Honor, we have 4 been going down this line of questioning the past 10 5 minutes. I felt it necessary to at some point raise 6 an objection. 7 EXAMINER WALSTRA: And it's overruled. 8 MR. KUMAR: Thank you, your Honor. 9 A. Is your pending question -- am I supposed 10 to answer? 11 MR. IRELAND: I believe the question has 12 been answered. Has it? 13 Q. Let me ask it again, you have not done 14 any analysis of the stipulation as more favorable in 15 the aggregate as compared to an MRO, right? 16 A. No, I did not do that. 17 Q. And you have not done any analysis of the 18 economic development rider that is contained in the 19 amended stipulation; is that right? 20 A. That's right. I specifically said in my 21 testimony that I do not address any other rider 22 except the DMR. 23 Q. And you have not done any analysis of an 24 FFO-to-debt ratio, correct? 25 A. That is correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 843 1 Q. You would agree, would you not, that 2 customers of a utility benefit generally from a 3 financially healthy electric distribution company? 4 A. I would indeed, yes. 5 Q. And an electric distribution company with 6 financial integrity has investment grade securities; 7 is that true? 8 A. Yes. 9 Q. So if a utility with financial -- with 10 financial integrity is able to raise funds at a 11 reasonable cost, whether they be debt or equity, as 12 it needs to do so; is that right? 13 A. In general, yes. There are times when 14 that has not been true but in general, yes. 15 Q. And rating agencies couple DP&L and DPL 16 Inc., correct? 17 A. That is correct, as I state in my 18 testimony. 19 Q. So DPL Inc.'s financial condition affects 20 DP&L's financial integrity; is that right? 21 A. Yes. And as my testimony states, that's 22 the problem here. 23 Q. And an electric distribution utility that 24 has investment grade ratings tends to have a more 25 reasonable cost of debt; is that right? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 844 1 A. A lower cost of debt, that is correct, 2 yes. 3 Q. And the DMR is going to be used to pay 4 down DP&L's debt, true? 5 A. Yes, sir. That's the purpose of the 6 DPR -- DMR. 7 Q. And it would be beneficial if DPL Inc.'s 8 debt was paid down; would you agree with that? 9 A. By some source, either AES or DPL. 10 Q. And that would also be beneficial to 11 DP&L, right? 12 A. Again, same answer, yes, from whatever 13 source. 14 Q. And I think according to the recent 15 update that you just made to your testimony, Standard 16 & Poor's has downgraded DPL Inc. and DP&L; is that 17 right? 18 A. This was in deposition. I don't want to 19 give a speech here. Standard & Poor's in March of 20 2017 downgraded the issuer of credit ratings -- 21 issuer of credit of DPL and DP&L. Standard & Poor's 22 also downgraded the senior unsecured debt of DPL but 23 did not downgrade the senior unsecured debt of DP&L. 24 So the simple answer to your question was 25 the ratings for which DPL and DP&L were tied together ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 845 1 were downgraded. The ratings of DP&L to stand on its 2 own, which is the senior unsecured, were not 3 downgraded. 4 Q. Well, do you have up there in front of 5 you I think it's Company Exhibit 105? It should be 6 in a book. 7 A. RatingsDirect? 8 Q. Yes, yeah. 9 A. Yes, I have that. 10 Q. And right there across the top under 11 "Research Update," it says "DPL Inc. And DP&L 12 Downgraded To 'BB-' On Persistent Weak Financial 13 Measures And Coal Retirements; Outlook Negative." 14 Did I read that correctly? 15 A. You did, yes. 16 Q. All right. And if you go to the third 17 bullet down which says "We are lowering our rating on 18 DP&L's senior unsecured debt to 'B+' from 'BB' and 19 revising the recovery rating on this debt to '5' from 20 '4' based on deteriorating value of the merchant 21 power assets and the structural subordination of this 22 debt." That is a reduction to a non-investment 23 grade; is that true? 24 MR. KUMAR: Your Honor, may I have that 25 question reread? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 846 1 (Record read.) 2 MR. KUMAR: Your Honor, I believe the 3 question that was read said DP&L, whereas, I believe 4 the text says DPL. I just want to make sure we have 5 a clear record. 6 Q. Let me rephrase the question. 7 EXAMINER WALSTRA: Thank you. 8 Q. The third bullet point down, are you with 9 me, Mr. Parcell? 10 A. Yes. 11 Q. That reduction puts that debt at -- at a 12 non-investment grade; is that right? 13 A. I missed a word there. Before non, what 14 did you say? 15 Q. Debt. 16 A. You are not using the microphone. I 17 can't pick up everything you're saying. 18 Q. Okay. I'm sorry. I usually don't have a 19 problem being heard but. 20 EXAMINER PRICE: And the microphones 21 don't work. 22 THE WITNESS: Does not work? 23 EXAMINER PRICE: Give it a shot. 24 THE WITNESS: Why bother? 25 MR. MICHAEL: Even over your mumbling you ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 847 1 understood? 2 Q. Would you agree with me, Mr. Parcell, 3 going from B+ to BB is changing it from investment to 4 non-investment grade? 5 A. No, no. On bullet point 3, which you 6 read, that's DPL's senior unsecured debt. They went 7 from BB to B. Neither of those are investment grade. 8 BB is not investment grade. BBB is investment grade. 9 So DPL was not investment grade before, but the 10 following bullet point showed DP&L's rating was 11 affirmed, not downgraded, and it's BBB which is 12 investment grade. 13 Q. That's the lowest investment grade, true? 14 A. Yes, but it's investment grade. But they 15 were not downgraded, only the senior unsecured, only 16 DPL Inc. 17 Q. You would agree that this downgrading as 18 reflected in Company Exhibit 105 is not good news for 19 DP&L, true? 20 A. DP&L? 21 Q. DP&L. 22 A. It's -- it's true because DP&L is largely 23 responsible for paying the debt cost of DPL. That's 24 the reason it's true. 25 MR. IRELAND: Move to strike everything ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 848 1 after "It's true," your Honor. 2 MR. KUMAR: Your Honor, the answer was 3 clearly responsive to Mr. Ireland's question. 4 EXAMINER WALSTRA: Denied. 5 Q. (By Mr. Ireland) It's your understanding, 6 Mr. Parcell, is it not, that AES has not received any 7 dividends from DP&L since 2011? 8 A. I believe it's 2012. 9 Q. All right. Since 2012. And any 10 dividends paid from -- or that would have been paid 11 from DP&L -- excuse me. Any dividends paid from DP&L 12 to DPL Inc. have been used to pay interest on the 13 debt; is that your understanding? 14 A. Right. Again, the debt that was incurred 15 due to the financial merger, yes. 16 Q. So the provisions of this stipulation 17 that DP&L will not pay debts to AES provides some 18 protection to DP&L's customers, right? 19 A. Well, I address that in my testimony. 20 Can I refer you to that or is that improper? 21 MR. KUMAR: No. That's appropriate. 22 Q. Let's answer the question. 23 MR. KUMAR: Your Honor, he is. 24 EXAMINER PRICE: Can I have the question 25 back, please. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 849 1 (Record read.) 2 A. And what I said in my testimony, which is 3 a direct response to your question, is that DP&L has 4 been paying dividends, over $800 million since the 5 merger to DPL, which largely goes to pay for the debt 6 that was used to finance the merger which means 7 ratepayers are being asked to pay for the 8 acquisition. 9 EXAMINER PRICE: Does that mean "no"? 10 THE WITNESS: In that context it does, 11 yes. 12 Q. (By Mr. Ireland) So is it your testimony, 13 sir, that the provision that DP&L will not be paying 14 any -- or that DPL will not be paying any dividends 15 to AES provides no protection to DP&L's customers? 16 A. Well, it's no change because they are 17 not -- DPL hasn't paid dividends to AES since 2012, 18 so it's not a change. It's more of a guarantee now, 19 but it's not a change. And you are still paying 20 dividends from DP&L customers to DPL to pay incurring 21 costs of the debt. 22 Q. You also refer to tax payments in your 23 testimony. 24 A. Yes. 25 Q. I believe on page 23. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 850 1 A. That is correct. 2 Q. And to the extent the taxes are not being 3 paid to AES but instead are being used to pay down 4 debt, that benefits DP&L's customers, true? 5 A. If they -- if you assume they would pay 6 them in the absence of this agreement, it's true. 7 But it's not clear they have been paying them all 8 along so that's a conditional true. 9 Q. Now, you -- you would agree that any 10 calculation of return on equity is an estimate, 11 right? 12 A. Yes. 13 Q. There's no direct final uncontroversial 14 technique for measuring a return on equity; is that 15 true? 16 A. That is correct. 17 Q. And the cost of debt is not stated in the 18 stipulation; is that right? 19 A. That is correct. 20 Q. Nor is cost of equity defined in the 21 stipulation? 22 A. Mr. Malinak refers to a 10.5 percent 23 return on equity which I interpret to be defined. I 24 don't mean to be splitting hairs with you, but he 25 does refer to a 10.5, so I think he defined that, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 851 1 yes. So the answer is no. 2 Q. Is it defined in the stipulation? 3 A. No. It's in his testimony. It is not 4 defined to my knowledge in the stipulation, that's 5 correct. 6 Q. And if the amended stipulation is 7 approved, there is no rate of return that DP&L is 8 expected to earn as a result of the stipulation; is 9 that fair? 10 A. I can't answer that question directly. 11 May I tell you why? 12 Q. No. 13 A. Then I won't. 14 Q. You disagree with the cost of capital and 15 return on equity that Dr. Moron used in the rate 16 case, right? 17 A. Right. In 2015, that's correct. 18 Q. And you would agree that your differences 19 with Dr. Moron's numbers are ones of a professional 20 disagreement, right? 21 A. In timing. His analysis was two years 22 old, and mine are more current. It's timing and 23 differences in methodologies. 24 MR. IRELAND: Just a second. I may be 25 finished, your Honor. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 852 1 I have nothing further, your Honor. 2 EXAMINER WALSTRA: Thank you. 3 MR. IRELAND: Thank you, Mr. Parcell. 4 THE WITNESS: Thank you. 5 EXAMINER WALSTRA: Go around the room. 6 Ms. Bojko? 7 MS. BOJKO: No. Thank you, your Honor. 8 EXAMINER WALSTRA: Mr. Alexander? 9 MR. ALEXANDER: No. Thank you. 10 EXAMINER WALSTRA: Mr. Oliker? 11 MR. OLIKER: No. Thank you, your Honor. 12 EXAMINER WALSTRA: Anyone else? 13 Any redirect? 14 Staff? 15 MR. McNAMEE: No. Thank you. 16 MR. KUMAR: May I have a few minutes, 17 your Honor? 18 EXAMINER WALSTRA: Yeah. We'll go off 19 the record for 5 minutes. 20 (Discussion off the record.) 21 EXAMINER WALSTRA: We'll go back on the 22 record. 23 MR. KUMAR: I have no questions on 24 redirect, your Honor. 25 EXAMINER WALSTRA: Thank you, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 853 1 Mr. Parcell. 2 Would you like to move your exhibits? 3 Mr. Kumar? 4 MR. KUMAR: I'm sorry. We would like to 5 move for the admission of Exhibits 15, 15A, and 15B. 6 EXAMINER WALSTRA: Any objections? 7 Hearing none, they will be admitted. 8 (EXHIBITS ADMITTED INTO EVIDENCE.) 9 EXAMINER WALSTRA: Please call your next 10 witness -- your first witness. 11 MS. LEPPLA: Call John Finnigan. 12 (Witness sworn.) 13 EXAMINER WALSTRA: Thank you. Please 14 state your name and business address for the record. 15 THE WITNESS: John Finnigan, 128 Winding 16 Brook Lane, Terrace Park, Ohio 45174. 17 EXAMINER WALSTRA: Thank you. 18 - - - 19 JOHN FINNIGAN 20 being first duly sworn, as prescribed by law, was 21 examined and testified as follows: 22 DIRECT EXAMINATION 23 By Ms. Leppla: 24 Q. Mr. Finnigan, can you state where you 25 work and what capacity. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 854 1 A. I work at Environmental Defense Fund as 2 an attorney. My title is lead counsel. 3 MS. LEPPLA: At this time we would like 4 to mark Mr. Finnigan's supplemental direct testimony 5 as EDF/OEC Exhibit 1 and his direct testimony as 6 EDF/OEC Exhibit 2. 7 (EXHIBITS MARKED FOR IDENTIFICATION.) 8 Q. Mr. Finnigan, do you have copies of your 9 supplemental and direct testimony in front of you? 10 A. Yes. 11 Q. Do you have any changes or corrections to 12 your supplemental or direct testimony? 13 A. No. 14 Q. If I ask you the questions that appear in 15 EDF/OEC Exhibits 1 and 2, would your answer be the 16 same as indicated in those documents? 17 A. Yes. 18 Q. Was this testimony prepared by you or 19 under your supervision? 20 A. Yes. 21 Q. Is the information contained in those 22 exhibits true and accurate to the best of your 23 knowledge? 24 A. Yes. 25 MS. LEPPLA: At this time we would like ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 855 1 to move for the admission of EDF/OEC Exhibits 1 and 2 2, and Mr. Finnigan is available for cross. 3 EXAMINER WALSTRA: Thank you. 4 Mr. Hollon. 5 - - - 6 CROSS-EXAMINATION 7 By Mr. Hollon: 8 Q. Good morning, Mr. Finnigan. I am Chris 9 Hollon. I represent DP&L. Nice to meet you in 10 person. 11 A. Nice to meet you. 12 Q. You've reviewed the amended stipulation 13 filed in this proceeding, correct? 14 A. Yes. 15 Q. And you've reviewed the October 2016 16 testimony of Craig Jackson? 17 A. Yes. 18 Q. In your original testimony and in your 19 supplemental testimony you do not address whether the 20 financial integrity of DP&L or DPL Inc. is at risk, 21 correct? 22 A. Well, only to the extent of this item 23 that I mention in my supplemental direct testimony 24 and that is just to note that the revenues that are 25 collected through the amended stipulation are much ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 856 1 lower than what was proposed in the original 2 application. The original application proposed 3 145 million over seven years, and Mr. Jackson said 4 that that was necessary to protect the company's 5 financial integrity and what is being collected as a 6 result of the amended stipulation is much lower than 7 that. 8 Q. Okay. And you agree that it's important 9 that Dayton Power and Light be able to provide safe 10 and stable service to customers, correct? 11 A. Yes. 12 Q. And you agree that DP&L cannot provide 13 safe and stable service if it does not have 14 sufficient funds to do so, correct? 15 A. Yes. 16 Q. In either your original testimony or your 17 supplemental testimony you do not specifically 18 address whether DP&L can maintain its financial 19 integrity without the DMR, correct? 20 A. Yes. 21 Q. And you agree that grid modernization 22 would benefit DP&L's customers? 23 A. Yes. 24 Q. And you agree that grid modernization 25 would enhance the competitive market, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 857 1 A. Yes. 2 Q. Do you agree that grid modernization is 3 expensive? 4 A. Yes. 5 Q. And do you agree that DP&L needs to be 6 financially stable to pursue grid modernization? 7 A. Yes. 8 Q. And neither your direct testimony or your 9 supplemental testimony specifically addressed whether 10 DP&L will pursue grid modernization without the DMR, 11 correct? 12 A. Yes. 13 Q. And you agree if the DMR is approved, 14 then the amount that is recovered under it would not 15 be dependent on wholesale price, correct? 16 A. Yes. 17 Q. And you agree that all of the debt at 18 DP&L supports all of the operations of the company, 19 correct? 20 A. Yes. 21 Q. Including its distribution operation, 22 correct? 23 A. Yes. 24 MR. HOLLON: Your Honor, I have no more 25 questions. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 858 1 EXAMINER WALSTRA: Thank you. 2 Questions over here? 3 MR. ALEXANDER: No. Thank you, your 4 Honor. 5 EXAMINER WALSTRA: Any other questions? 6 MR. OLIKER: No. Thank you. 7 EXAMINER WALSTRA: Staff? 8 MR. McNAMEE: Nothing. 9 EXAMINER WALSTRA: Any redirect? 10 MS. LEPPLA: No redirect. 11 EXAMINER WALSTRA: Thank you. Would you 12 like to move your exhibits? 13 MS. LEPPLA: Yes. Exhibits 1 and 2, 14 please. 15 EXAMINER WALSTRA: Any objections? 16 Hearing none, they will be admitted. 17 (EXHIBITS ADMITTED INTO EVIDENCE.) 18 EXAMINER WALSTRA: And the court reporter 19 will need a copy of both. 20 MS. LEPPLA: I think they are actually up 21 on the stand. 22 EXAMINER WALSTRA: Mr. McNamee, you may 23 call your last witness. 24 MR. McNAMEE: I will. Thank you, your 25 Honor. At this time staff would call Patrick Donlon. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 859 1 (Witness sworn.) 2 EXAMINER PRICE: Please be seated and 3 state your name and business address for the record. 4 THE WITNESS: It's Patrick Donlon, 180 5 East Broad, Columbus, Ohio. 6 - - - 7 PATRICK DONLON 8 being first duly sworn, as prescribed by law, was 9 examined and testified as follows: 10 DIRECT EXAMINATION 11 By Mr. McNamee: 12 Q. Mr. Donlon, by whom are you employed and 13 in what capacity? 14 A. Public Utilities Commission of Ohio as 15 the director of rates and analysis. 16 MR. McNAMEE: Okay. At this time, your 17 Honor, staff would ask to have marked for 18 identification as Staff Exhibit 2 a document filed in 19 this case denominated prepared testimony of Patrick 20 Donlon. 21 EXAMINER PRICE: It will be so marked. 22 (EXHIBIT MARKED FOR IDENTIFICATION.) 23 Q. Mr. Donlon, do you have before you what's 24 been marked for identification as Staff Exhibit 2? 25 A. I do. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 860 1 Q. What is it? 2 A. It is my prefiled testimony. 3 Q. Was it prepared by you or under your 4 direction? 5 A. It was. 6 Q. Do you have any corrections to make to 7 that document here this morning? 8 A. I do. I have three. 9 Q. Could you read them to us very slowly, 10 please. 11 A. Yes. The first one is on page 4, line 12 71. The last word in that sentence which is "both" 13 should be "all." 14 Q. Okay. 15 A. On page 5, line 109, twice in that 16 sentence it says "qualitative" and both of those 17 should be "quantitative." So the very first word in 18 the sentence -- or in the line quantitative -- it 19 says "qualitative." It should be "quantitative 20 benefits" and then "the additional" instead of 21 "qualitative" it should be "quantitative." And those 22 are all the changes. 23 Q. All right. Excuse me. With those 24 corrections that you just noted, are the contents of 25 what's been marked for identification as Staff ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 861 1 Exhibit 2 true to the best of your knowledge and 2 belief? 3 A. Yes, they are. 4 Q. Excuse me. Do you adopt the contents of 5 what's been marked for identification as Staff 6 Exhibit 2 as your direct testimony in this case? 7 A. Yes. 8 MR. McNAMEE: Okay. The witness is 9 available for cross. 10 EXAMINER PRICE: Thank you. The 11 stipulation proponents. 12 Mr. Alexander? 13 MR. ALEXANDER: No questions. 14 EXAMINER PRICE: Kroger? 15 MS. WHITFIELD: No. 16 EXAMINER PRICE: OMAEG? 17 MS. BOJKO: No. Thank you. 18 EXAMINER PRICE: Mr. Oliker? 19 MR. OLIKER: No. Thank you. 20 EXAMINER PRICE: Mr. Settineri? 21 MR. SETTINERI: No. Thank you, your 22 Honor. 23 EXAMINER PRICE: Mr. Pritchard? 24 MR. PRITCHARD: No. Thank you. 25 EXAMINER PRICE: Mr. Boehm? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 862 1 MR. BOEHM: No. Thank you, your Honor. 2 EXAMINER PRICE: Consumers' Counsel? 3 MR. MICHAEL: We've obviously moved on to 4 opponents of the amended stipulation, correct? 5 EXAMINER PRICE: I thought that was 6 implied. 7 MR. MICHAEL: I don't like to leave 8 anything for implication. 9 - - - 10 CROSS-EXAMINATION 11 By Mr. Michael: 12 Q. Good morning, Mr. Donlon. 13 A. Good morning. How are you? 14 Q. I'm well, thank you. You were here for 15 the testimony by the Company Witness Jackson, 16 correct? 17 A. I have been in and out, so I was here for 18 at least partial of it. 19 Q. Okay. For that portion of Witness 20 Jackson's testimony you heard, there's nothing with 21 which you disagree, correct? 22 A. Well, seeing as I wasn't here for all of 23 it, I hesitate to say yes to all of that because I'm 24 not sure what exactly -- what portions you are 25 referring to, so I think it's a pretty open-ended ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 863 1 question. 2 Q. Well, if you would like to listen to my 3 question, Mr. Donlon. I asked you for the portion 4 you were here, you didn't hear anything with which 5 you disagreed, correct? 6 MR. McNAMEE: I object. 7 EXAMINER PRICE: Argumentative? 8 MR. McNAMEE: Yes, indeed. 9 EXAMINER PRICE: Sustained. Let's not be 10 argumentative for our last witness. Go ahead and ask 11 your question. 12 MR. MICHAEL: I apologize. The witness 13 was a little argumentative with me so. 14 EXAMINER PRICE: I don't think so. Let's 15 rephrase the question. 16 MR. MICHAEL: Certainly. May I actually 17 have the actual question read back, your Honor, 18 please? 19 EXAMINER PRICE: You may. 20 MR. MICHAEL: Thank you. 21 (Record read.) 22 A. Not that I recall. 23 Q. Okay. And you were here for a portion of 24 Company Witness Schroder's testimony as well, 25 correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 864 1 A. I think hers was a very small portion, 2 but yes. 3 Q. Okay. And for that portion of Company 4 Witness Schroder's testimony that you heard, there is 5 nothing with which you disagree, correct? 6 A. Not that I recall. 7 Q. Okay. And you were here for Company 8 Witness Malinak's testimony, correct? 9 A. Portions of it. 10 Q. Okay. And for those portions of the 11 testimony that you heard, Mr. Donlon, there is 12 nothing with which you disagree, correct? 13 A. Not that I can recall. 14 Q. If you would please turn, Mr. Donlon, to 15 page 3, line 52, of your testimony. 16 A. I'm there. 17 Q. And in that sentence, Mr. Donlon, you 18 reference a "diverse group of interests," correct? 19 A. Correct. 20 Q. And staff agrees, Mr. Donlon, that when 21 evaluating a stipulation, one of the things that the 22 Commission should consider is the extent to which 23 there is a diverse group of interest that supports 24 the stipulation, correct? 25 A. It's not specifically one of the three ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 865 1 prongs, but I think it is relevant. 2 Q. And just a point of clarification, 3 Mr. Donlon, when you say "I think it is relevant," 4 you're testifying not in your personal capacity but 5 on behalf of staff right now, correct? 6 A. Correct. 7 Q. I wanted to talk to you, Mr. Donlon, 8 about the first prong of the three-prong test 9 regarding serious bargaining, if I might, okay? 10 A. That's fine. 11 Q. And you are aware that the stipulation we 12 are here talking about is denominated an amended 13 stipulation, correct? 14 A. That is correct. 15 Q. And the reason why it is an amended 16 stipulation is because there had been a previous 17 stipulation filed in this docket, correct? 18 A. Correct. 19 Q. Okay. And, Mr. Donlon, you're familiar 20 with the notion that the Commission has made very 21 clear that no single party should have undue 22 influence or a veto, if you will, over a stipulation, 23 correct? 24 A. That has -- I have read the orders that 25 have stated that no parties have a veto, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 866 1 specifically -- well, I will just leave it at that. 2 Q. Okay. And by no parties, staff would 3 agree that staff is included in that no parties, 4 correct? 5 A. I would agree with that. 6 Q. Okay. Mr. Donlon, you read Company 7 Witness Schroder's testimony as to why there is an 8 amended stipulation, correct? 9 A. Actually did I read it? I glanced at it. 10 I didn't read it extensively. 11 Q. Okay. Staff was not on the stipulation, 12 correct? 13 A. Are you talking about the first 14 stipulation? 15 Q. Yes, I am. 16 A. Yes, we were not. 17 Q. And staff is on the amended stipulation. 18 A. That is correct. 19 Q. Okay. And do you recall, Mr. Donlon, 20 based on your I believe you described it as review of 21 Witness Schroder's testimony as to why we are at an 22 amended stipulation, that one of the things that 23 Witness Schroder mentioned as to why we are at an 24 amended stipulation is because the company continued 25 to work with the parties; and, now, the company has ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 867 1 staff on the amended stipulation and a broader scope 2 of parties than was on the first stipulation? 3 A. I would have to look at her's to remember 4 exactly what she said. 5 MR. MICHAEL: Okay. May I approach for 6 purposes of refreshing? 7 EXAMINER PRICE: You may. 8 MR. MICHAEL: Let me find it real quick, 9 your Honor. Give me a moment. 10 EXAMINER PRICE: Let's go off the record. 11 (Discussion off the record.) 12 EXAMINER PRICE: Go back on the record. 13 Mr. Hollon has while we were off the 14 record given Mr. Donlon a copy of Ms. Schroder's 15 testimony. 16 Q. (By Mr. Michael) Mr. Donlon, if I might 17 refer you, please, to page 4 of Witness Schroder's 18 testimony and specifically lines 9 through 17. When 19 you have had an opportunity to read that, Mr. Donlon, 20 please let me know. 21 A. I have read it. 22 Q. Okay. And, Mr. Donlon, does that having 23 had the opportunity to read that portion of Witness 24 Schroder's testimony, does that refresh your 25 recollection as to at least the company's advantage ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 868 1 point as to why we now have an amended stipulation? 2 MR. McNAMEE: Objection, relevance. 3 The -- I don't know why we are discussing a 4 stipulation that's not been presented to the 5 Commission that this witness -- that the staff did 6 not sign. This witness is testifying on behalf of 7 the staff. He is being cross-examined by the OCC 8 that didn't sign either stipulation. It doesn't seem 9 to have any bearing on anything. 10 EXAMINER PRICE: I think that Mr. Michael 11 is trying to prove the continuing good faith 12 negotiations by the very capable and knowledgeable 13 parties throughout the proceeding. 14 MR. McNAMEE: And I would thank him for 15 that. 16 MR. MICHAEL: Does that mean you are 17 going to withdraw your objection? 18 EXAMINER PRICE: We will give Mr. Michael 19 more leeway to pursue this point. 20 MR. MICHAEL: Thank you, your Honor. 21 THE WITNESS: Can we have the question 22 reread, repeated, please? 23 (Record read.) 24 A. Well -- yes. 25 Q. Okay. And, Mr. Donlon, the question I ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 869 1 have for you as it relates to the serious bargaining 2 prong is does the evolution of how we got to the 3 amended stipulation raise questions with staff as to 4 the uncertainty that parties may feel were they to 5 sign a stipulation that staff is not on given the 6 precedent in this case that a utility making an 7 application will continue the negotiation process and 8 make changes in order to get staff onboard the 9 stipulation? 10 MR. McNAMEE: Objection. 11 MR. ALEXANDER: Can I have the question 12 read? 13 EXAMINER PRICE: Let's have the question 14 back and then we will hear Mr. McNamee. 15 MR. SHARKEY: I have objections too, your 16 Honor. 17 EXAMINER PRICE: And Mr. Sharkey. 18 (Record read.) 19 EXAMINER PRICE: Mr. McNamee. 20 MR. McNAMEE: The -- I guess the simplest 21 way to explain the objection is it calls for 22 speculation. Although the witness has many skills, 23 he is not clairvoyant. He is not able to read other 24 parties' minds and what their motivations might be. 25 EXAMINER PRICE: Mr. Sharkey. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 870 1 MR. SHARKEY: I join that objection. I 2 would also add the question is vague. It is not even 3 really clear what it is that Mr. Donlon is being 4 asked and it's compound and there's various items in 5 the question that he is being asked about. 6 EXAMINER PRICE: Mr. Alexander? 7 MR. ALEXANDER: I join both of those, and 8 in addition, it assumes facts not in evidence such 9 that there is, in fact, uncertainty among other 10 parties and ask the witness to speculate as to what 11 other potential signatory parties besides staff may 12 be thinking. 13 MS. BOJKO: Your Honor, I join all three 14 and add, up the ante, that it's confidential 15 settlement discussions that can't be disclosed. 16 EXAMINER PRICE: I am going to sustain 17 the objection on all four grounds. 18 MR. MICHAEL: Would you like to hear my 19 response first, your Honor? 20 EXAMINER PRICE: You know, it is so 21 overwhelmingly clear the objection should be 22 sustained it would just not be good use of our time. 23 MR. MICHAEL: How can you reach that 24 conclusion until you hear the responses to it? 25 EXAMINER PRICE: It is obviously ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 871 1 speculation. It clearly is asking him to read 2 into -- read into what other parties' minds are. It 3 establishes -- Mr. Alexander is correct, it assumes a 4 fact not in evidence that there is such an 5 uncertainty. And I agree with Ms. Bojko because it 6 is in the confidential settlement negotiations. 7 MR. MICHAEL: If your Honor would indulge 8 me to respond -- 9 EXAMINER PRICE: Sure. 10 MR. MICHAEL: -- to each of those very 11 quickly, I would very much appreciate it. Thank you 12 very much. 13 As it relates to Mr. McNamee's 14 objections, this is a matter of policy. Mr. Donlon 15 is obviously a senior member of PUCO's staff as 16 director of rates and analysis department. And I 17 clearly asked Mr. Donlon if staff had considered the 18 degree to which there would be uncertainty created. 19 As it relates to the objection 20 Mr. Sharkey added, which I believe was compound, the 21 compound question, as your Honor well knows, 22 involves, you know, an and, an or, and something to 23 that effect where you are asking two questions in 24 one. Mine was clearly a single answer and not two 25 questions in one. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 872 1 As to Mr. Alexander's objection, again, I 2 asked a senior official on the PUCO staff if staff 3 had considered what could be a very important policy 4 consideration, and I think that Mr. Donlon in his 5 capacity as director of rates and analysis department 6 is very well positioned to consider -- to answer the 7 question as to whether or not staff considered it. 8 And, lastly, I am not even sure the 9 confidentiality objection makes any sense because I 10 wasn't asking the nature of the negotiations. I was 11 asking about whether or not staff had considered 12 something. 13 So thank you for the time, your Honor. I 14 appreciate it. Does that change your mind? 15 EXAMINER PRICE: Not at all. Objection 16 is sustained on all four grounds. 17 MR. MICHAEL: Thank you, your Honor. 18 Q. (By Mr. Michael) Mr. Donlon, isn't it 19 true that the PUCO has never approved a pilot program 20 of a duration of six years? 21 A. I couldn't speak to never in their 22 history. 23 Q. Okay. Are you aware of the PUCO ever 24 approving a pilot program that is proposed to last 25 six years in duration? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 873 1 A. I think in FirstEnergy's ESP the 2 transmission pilot is actually eight years. So not 3 exactly six but I think it actually goes the full 4 term of the ESP which would be eight. 5 EXAMINER PRICE: Do you recall, 6 Mr. Donlon, in AEP's last distribution rate case 7 there was a pilot proposed by Consumers' Counsel for 8 a decoupling rider and the duration of that? Could 9 it have been at least six years or longer? 10 THE WITNESS: Unfortunately I wasn't here 11 during that, and I'm not aware of that. 12 EXAMINER PRICE: Okay. Thank you. 13 MR. MICHAEL: Thank you, your Honor. 14 Q. (By Mr. Michael) Mr. Donlon, other than 15 the one you just referenced that you think might be 16 eight years, can you think of any others? 17 A. Off the top of my head, I'm not 18 100 percent sure, but I think there might be. I am 19 sure there's been some, but I really don't know. 20 Q. Okay. Now, do you recall, Mr. Donlon, if 21 the transmission pilot you referenced had a 22 requirement that the utility file some sort of report 23 with the Commission to enable staff to evaluate the 24 pilot program being proposed? 25 A. I would have to go back and check the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 874 1 exact specifics of that. 2 Q. Mr. Donlon, isn't it correct as a general 3 proposition the Commission requires that a utility 4 file a report regarding a pilot program to enable 5 staff to evaluate the extent to which the pilot 6 program is doing what it's purported to do? 7 THE WITNESS: Could you please reread 8 that. 9 (Record read.) 10 MR. PRITCHARD: Objection, your Honor. 11 It calls for speculation as to facts that are not in 12 evidence. He asked him to agree with a general 13 policy, and we haven't established whether there is 14 or is not any general policy. 15 EXAMINER PRICE: Try it in a different 16 way, do you think it would be sound regulatory 17 practice for the Commission to require some sort of a 18 periodic report for a pilot program being approved by 19 the Commission? 20 THE WITNESS: I think in certain 21 circumstances that it is good to have a report or 22 some sort of evaluation. A report may not be the 23 best -- in all cases the best way to do that. But 24 you should evaluate if you are going to do a pilot 25 program, yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 875 1 EXAMINER PRICE: Thank you. 2 Q. (By Mr. Michael) And, Mr. Donlon, how 3 long after the beginning of a pilot program does 4 staff believe it would be good to conduct that 5 evaluation that you just referenced? 6 A. Well, all of that is dependent on the 7 specific pilot program. I mean, at this point it 8 sounds like we are talking about a generic pilot. 9 So, you know, one, I think you should be doing it and 10 looking at it throughout the course. And then 11 depending on how much information there is, how long 12 the pilot is, that's going to depend on how long it 13 takes you to actually do that final evaluation based 14 on the information that's there. 15 Q. Isn't it true, Mr. Donlon, that it would 16 be sound regulatory policy for the evaluation to 17 occur no more than two years into the pilot program? 18 A. Not necessarily. 19 Q. If you would turn to your testimony, 20 Mr. Donlon, on page 4 and specifically line 79 21 through 89. And let me know when you are there, 22 please. 23 A. I'm there. 24 Q. Okay. And it's correct, Mr. Donlon, that 25 the primary purpose of the DMR is to pay off debt, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 876 1 correct? 2 A. I think it is -- that's only a portion of 3 it. It's -- it's not necessarily the primary. I 4 think the primary is actually to allow the company to 5 be able to invest in the distribution grid. The -- 6 to get to that point, they have to pay down debt, so 7 they can actually incur -- be able to go out and get 8 new debt, get debt at a reasonable rate without 9 massive covenants, but the primary goal is to invest 10 in the grid. 11 Q. Mr. Donlon, do you have a copy of the 12 amended stipulation with you? 13 A. I do. 14 Q. And, Mr. Donlon, if you would, please, 15 turn to page 5 of the amended stipulation and 16 specifically paragraph b. 17 A. I'm there. 18 Q. Okay. And just please take a moment to 19 read it real quick, if you would, Mr. Donlon. I am 20 going to ask you some questions about it. 21 A. I'm good. 22 Q. Okay. And in that paragraph it describes 23 how the cash flow from the DMR will be used, correct? 24 A. Correct. 25 Q. Okay. And the first item describing how ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 877 1 the cash flow will be used is to pay interest 2 obligations on existing debt at DPL Inc. and DP&L, 3 correct? 4 A. Correct. 5 Q. And the second item describing how cash 6 flow from DMR will be used is to make discretionary 7 debt prepayments at DPL Inc. and DP&L, correct? 8 A. Correct. 9 Q. And then, lastly, the last item as to 10 what cash flowing from the DMR will be used for is to 11 "position" DP&L to make capital expenditures to 12 modernize and/or maintain DP&L's transmission and 13 distribution infrastructure, correct? 14 A. Correct. 15 Q. So none of the money from DMR is going to 16 go directly to distribution investments, correct? 17 MR. McNAMEE: Can we have the question 18 reread, please? 19 EXAMINER PRICE: You may. 20 (Record read.) 21 A. I would disagree with that statement. 22 Q. Okay. Please point, if you would, 23 Mr. Donlon, to language in paragraph 5b that serves 24 as the basis for your disagreement, if you will. 25 A. So with -- to be able to invest in the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 878 1 grid with the covenants that the company currently 2 has on their debt, they have to pay down debt to be 3 able to invest in the grid. So, you know, it is -- 4 by paying down debt, it directly enables them to be 5 able to invest in the grid. 6 Q. Okay. 7 EXAMINER PRICE: Let me ask a question. 8 If the company used the DMR funds to invest in the 9 grid directly, cash from the DMR to invest in the 10 grid directly, would that be an allowable usage under 11 c? 12 THE WITNESS: Yes. 13 Q. (By Mr. Michael) To follow up on Attorney 14 Examiner Price's question, if I might, Mr. Donlon, 15 although it may be an allowable usage under c, it's 16 not a required usage under c, correct? 17 THE WITNESS: Can you reread that, 18 please? 19 (Record read.) 20 A. I would say by the reading of paragraph b 21 the requirement would be to use it in a, b, or c. 22 Q. Correct. But what I am focusing on, 23 Mr. Donlon, is the first word in paragraph -- in item 24 c, if you will, which is to "position" DP&L. That 25 word does not require DP&L to make any investments ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 879 1 with the cash it receives under DMR, correct? 2 MR. McNAMEE: Objection, asked and 3 answered. He said what these three things are. It's 4 allowed to invest in any of the three. He has 5 already given his answer. 6 MR. MICHAEL: And I understand 7 Mr. McNamee's objection, your Honor. However, the 8 question I asked is a little bit different than the 9 question Mr. McNamee objected to. Your Honor pointed 10 out that paragraph c may very well allow the 11 investment, and the question I am now asking is 12 whether or not paragraph c requires the use of DMR 13 funds to invest in distribution modernization. 14 EXAMINER PRICE: I think he answered that 15 question. I think he said it's a, b, or c. 16 Sustained. 17 MR. McNAMEE: Exactly my point. 18 Q. (By Mr. Michael) Okay. So just so the 19 record is clear then, Mr. Donlon, it is staff's 20 position that cash flow from the DMR can be directly 21 used to make direct distribution investments; is that 22 accurate? 23 A. Yes. 24 Q. And is it staff's position that the 25 amended stipulation requires cash flow from the DMR ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 880 1 to be invested in distribution investments? 2 MR. McNAMEE: Objection. Again, asked 3 and answered. He said the money can be used for all 4 three of these things. 5 EXAMINER PRICE: Sustained. 6 Q. (By Mr. Michael) Mr. Donlon, the amended 7 stipulation doesn't include a modernization plan, 8 correct? 9 A. It includes a proposal that the company 10 will file a plan but that plan will be done after the 11 PowerForward Initiative or by February 1 of 2018. 12 MR. MICHAEL: Move to strike. 13 Nonresponsive, your Honor. 14 MR. McNAMEE: I think it's perfectly 15 responsive. 16 EXAMINER PRICE: You have to explain why 17 it's not responsive. 18 MR. MICHAEL: I asked him a "yes" or "no" 19 question, and I said the amended stipulation doesn't 20 include a distribution -- or, pardon me, a 21 modernization plan. The answer is either, "yes, it 22 does" or, "no, it doesn't" and that wasn't part of 23 his answer. 24 MR. McNAMEE: Well, actually the answer 25 isn't "yes" or "no." The answer is as he presented ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 881 1 it. It is more complicated than just "yes" or "no." 2 EXAMINER PRICE: I don't think that was 3 strictly a "yes" or "no" question. Overruled -- or 4 denied. Sorry. You can ask him a "yes" or "no" 5 follow-up though, if you want. He can answer "yes" 6 or "no" this time. 7 Q. (By Mr. Michael) Mr. Donlon, did staff 8 analyze what DP&L's borrowing rates would be if the 9 DMR were not approved? 10 MR. McNAMEE: Could I have that question 11 reread, please? 12 EXAMINER PRICE: You may. 13 (Record read.) 14 A. Are you talking specifically like 15 interest rates? 16 Q. Yes. 17 A. Really with what the covenant that the 18 company already has, the availability, they can't get 19 any loans with this. So, yes, I would say we did. 20 Q. And did staff analyze, Mr. Donlon, what 21 rates DPL Inc. could borrow at in the absence of the 22 DMR? 23 A. I would say it's the same answer as the 24 previous. 25 Q. Mr. Donlon, did you read OCC Witness ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 882 1 Kahal's testimony? 2 A. I did not. 3 Q. As the director of the rates and analysis 4 department on staff, you are familiar with the 5 concept of ring fencing, correct? 6 A. I am. 7 Q. And staff in response to DP&L's amended 8 application did not consider ring fencing as part of 9 the solution to the problem that now brings us here, 10 correct? 11 A. That would not -- staff does not think 12 that's actually a viable option in this case. 13 Q. Okay. Tell me why. 14 MR. SHARKEY: I am going to object, your 15 Honor. Ring fencing is a vague term that could mean 16 different things to different people. Without any 17 specificity as to what Mr. Michael means about ring 18 fencing, I think the question is vague. 19 EXAMINER PRICE: Well, I think Mr. Donlon 20 understood the question. You know, it might be -- 21 let's just hear his answer to this question. There 22 might be some talking past each other but we will 23 clarify that if we need to. 24 THE WITNESS: The question at hand is 25 "Tell me why," correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 883 1 MR. MICHAEL: Correct. 2 MR. McNAMEE: Perhaps we can have the 3 question reread to be precise. 4 EXAMINER PRICE: It will be "Tell me 5 why." 6 MR. McNAMEE: I want to hear that again. 7 EXAMINER PRICE: Let's have the question 8 back. 9 MR. MICHAEL: It was a complicated one. 10 (Record read.) 11 A. So the stipulation actually in staff's 12 opinion covers a lot of ring fencing issues, so -- 13 and I forget exactly what page it is. Let's see, I 14 think it's the -- okay. So page 3 of the stipulation 15 first says that the company DPL Inc. agrees not to 16 pay dividends to AES Corp. So that in a sense is 17 actually a ring fencing from DPL Inc. which the 18 Commission actually through this stipulation we were 19 able to negotiate which is something that is outside 20 of the Commission's actual authority to be able to do 21 in an order without the company in a stipulation. 22 There's a form of ring fencing that staff 23 and all the parties were able to negotiate into the 24 stipulation. Again, in -- with really even the tax 25 sharing liabilities and the ability for the company ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 884 1 to -- or AES to forgive those and infuse equity is a 2 type of ring fencing in staff's opinion which, again, 3 only through the stipulation would we be able to -- 4 would the Commission be able to have the authority 5 over that. 6 Q. Mr. Donlon, are you aware if any member 7 of staff read Mr. Kahal's testimony regarding ring 8 fencing? 9 A. I can't speak to what any one of my -- 10 the 300 employees within the PUCO did or didn't do. 11 Q. So you don't know what people within your 12 department are doing? 13 MR. McNAMEE: Objection. 14 EXAMINER PRICE: Grounds? 15 MR. McNAMEE: Argumentative. 16 EXAMINER PRICE: Very much so. 17 Sustained. 18 MR. MICHAEL: Thank you, your Honor. 19 Q. (By Mr. Michael) Now, Mr. Donlon, I just 20 want to understand your testimony, if I could. In 21 response to my initial question about ring fencing, I 22 believe you mentioned that staff did not feel that 23 was an appropriate solution to the problem, but then 24 when I asked you to tell me why, you referred to ring 25 fencing that was in the stipulation. So my question ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 885 1 is does staff not think that ring fencing is an 2 appropriate solution, or does it think only that the 3 ring fencing that the company has asked for and 4 that's reflected in the amended stipulation is an 5 appropriate solution? 6 A. Well, I think the comment that the 7 company asked for the ring fencing is very misleading 8 and probably incorrect. It was a negotiated term and 9 we -- staff did not feel ring fencing between DP&L 10 and DPL Inc. was appropriate. However, the ring 11 fencing that we did -- that was negotiated through 12 the stipulation between AES and DPL Inc. was 13 appropriate and was only available through a 14 stipulation. 15 Q. And I want to, if I could, Mr. Donlon, 16 follow up a little bit regarding your references to 17 page 3, paragraph 1 under Roman Numeral II. If I am 18 not mistaken, you referred to items a and b as items 19 that staff had successfully negotiated into the 20 stipulation; is that accurate as to what staff was 21 able to do? 22 MR. McNAMEE: Objection. 23 EXAMINER PRICE: Grounds? 24 MR. McNAMEE: It goes to settlement 25 discussions and that would be confidential. It asks ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 886 1 what positions people took in the settlement 2 discussions themselves and that is out of bounds. 3 EXAMINER PRICE: Mr. Michael? 4 MR. MICHAEL: I was following up on 5 something Mr. Donlon himself testified to. If 6 Mr. McNamee would prefer, I would be happy to ask the 7 court reporter to go back in his testimony to find 8 that quote from Mr. Donlon, but I wanted to follow 9 up. 10 EXAMINER PRICE: Even if Mr. Donlon spoke 11 loosely, clearly the provisions in a and b are the 12 result of the stipulation negotiation process and 13 that's really pretty much all we need to know. So I 14 will sustain the objection. 15 MR. MICHAEL: Thank you, your Honor. 16 Q. (By Mr. Michael) Mr. Donlon, did -- does 17 staff feel that it is in a position to negotiate 18 concessions from AES? 19 THE WITNESS: Can you reread that? 20 MR. McNAMEE: I think I'll object. 21 EXAMINER PRICE: Let's have the question 22 back. 23 MR. MICHAEL: Statute of limitations, 24 your Honor. 25 EXAMINER PRICE: Let's have the question ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 887 1 back, please. 2 (Record read.) 3 EXAMINER PRICE: Grounds, Mr. McNamee? 4 MR. McNAMEE: Again, AES is not a party 5 to this case. I don't know even in what context you 6 would negotiate with someone who is not a party in 7 this case that would have relevance for this case. 8 EXAMINER PRICE: I think Mr. Donlon 9 opened the door to -- a little bit on this line with 10 his answer to the question a couple questions ago. 11 So go ahead and answer if you can. 12 A. So within this case, I think there are 13 certain items that through DPL Inc., DP&L, and their 14 executives that were at the negotiating table that 15 are senior members of AES Corporation so they agreed 16 to that -- these terms. So I would say that -- it's 17 an odd way of saying it. Through DPL Inc. they 18 agreed to do things for AES, so I guess yes. 19 Q. Thank you, Mr. Donlon. Mr. Donlon, if 20 you would please turn to page 5 of your testimony, 21 lines 99 through 101, and let me know when you have 22 had an opportunity to get there. 23 A. I'm there. 24 Q. Okay. When reaching your conclusion, 25 Mr. Donlon -- excuse me, I apologize -- that's ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 888 1 reflected in your answer on page 99 through 101, did 2 staff consider the cost of the SmartGrid rider? 3 A. The SmartGrid rider is a zero-based 4 rider. 5 Q. Okay. So because it's a zero-based 6 rider, staff obviously didn't know what the cost of 7 the SmartGrid rider will turn out to be ultimately, 8 correct? 9 A. At this point it's zero. So in -- as 10 well as in a hypothetical, it would -- I think we -- 11 staff's belief is that it would fall under the ESP or 12 MRO. 13 Q. Okay. 14 EXAMINER PRICE: Are you saying you think 15 staff believes that there could be a SmartGrid rider 16 irrespective of whether it was an ESP or MRO? 17 THE WITNESS: Yes. 18 EXAMINER PRICE: So it will be a wash. 19 THE WITNESS: Yes. 20 EXAMINER PRICE: Thank you. 21 Q. (By Mr. Michael) And, Mr. Donlon, staff 22 in reaching that conclusion again in -- on lines 99 23 through 101, staff did not consider the cost of these 24 storm cost riders, correct? 25 A. Again, staff believes it could be an ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 889 1 either ESP or MRO, so it would be a wash. 2 Q. Okay. Just in the interest of time, 3 Mr. Donlon, I am going to ask you about a couple more 4 riders the same question, and you tell me if your 5 answer is different. The decoupling rider? 6 A. It's the same answer. 7 Q. Okay. The DIR? 8 A. Same answer. 9 Q. The reconciliation rider? 10 A. Same answer. 11 Q. Economic development rider? 12 A. Same answer. 13 Q. And the TCRR-N? 14 A. Same answer. 15 Q. Okay. Thank you, Mr. Donlon. If I could 16 draw your attention, Mr. Donlon, to page 5, lines 111 17 through 113, please. 18 A. I'm there. 19 Q. Okay. Could you please tell me, 20 Mr. Donlon, what incentive or incentives promote 21 competition? 22 A. I want to make sure I hit them all, so I 23 am going to look. 24 Q. Take your time. 25 MR. McNAMEE: Your Honor, if the witness ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 890 1 needs time to review his testimony, perhaps we should 2 take a break, give him the time. Do you need the 3 time? 4 THE WITNESS: No. I quickly wanted to 5 scan over the stipulation so that I am sure 6 I don't -- 7 EXAMINER PRICE: The break is over. 8 THE WITNESS: -- miss any. 9 A. So one portion of this which actually I 10 don't -- which is not in the 9 million would be the 11 consolidated billing portion and the portion that 12 competitive CRES providers are actually paying so. 13 EXAMINER PRICE: Mr. Donlon, are you 14 saying the $150,000 shareholder contribution by the 15 company towards billing changes is an incentive that 16 promotes competition? 17 THE WITNESS: Yes. But to my belief, I 18 don't think that was actually in the calculation for 19 the 9 million. 20 MR. MICHAEL: If it makes it easier, your 21 Honor, I am focused on just the calculation of the 9 22 million, if that makes it easier for Mr. Donlon. 23 A. Also the City of Dayton payments, that 24 energy efficiency, while they are focused on energy 25 efficiency they also have a result on competition. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 891 1 So a lot of these -- some of these that go into the 9 2 million, they are going to hit more than just one 3 item. So the energy efficiency to Dayton will go 4 towards competition as well as energy efficiency. I 5 would say, you know, the payments, the Honda items go 6 towards competition, I think the OHA portion, and, 7 again, pretty much the PWC as well with the energy 8 efficiency. That has an effect on competition as 9 well. That looks to be all of -- all of them. 10 Q. Okay. And I have to ask you these 11 questions, Mr. Donlon. I don't mean to be tedious, 12 and I apologize if it is, but they are simply not 13 defined in your testimony, so I need to understand 14 the specifics of it, so as it relates to the 15 reliability and what you are referring to and please 16 limit your answer to the $9 million that you 17 reference in your testimony. 18 A. Again, anything that's energy efficiency 19 is going to have an effect on reliability. So that's 20 all of the ones that I just mentioned with energy 21 efficiency are going to have that. The Hos -- or the 22 airport funds and battery backup is absolutely going 23 to have reliability of the airport for that. Ohio 24 Hospital Association's have -- have a reliability 25 component of it. That was the end of my answer. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 892 1 Q. Okay. And same question regarding the 2 economic development, Mr. Donlon? 3 A. I would say every single one of them -- 4 Q. Okay. 5 A. -- were economic development. 6 Q. And what's the last one? Oh, energy 7 efficiency, same thing? 8 A. Yes. 9 (CONFIDENTIAL PORTION EXCERPTED.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 (OPEN RECORD.) 24 MR. ALEXANDER: Your Honor, I believe we 25 may need to mark that portion of the transcript as ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 893 1 confidential. 2 MR. SHARKEY: I was just checking with my 3 client on the same item. 4 EXAMINER PRICE: Yes. Let's put the 5 entire question and answer in the confidential 6 portion of our transcript. 7 THE WITNESS: Sorry. 8 Q. (By Mr. Michael) Now, Mr. Donlon, in the 9 next sentence, what we were just referring to so it 10 would be the bottom of page 5 and the top of page 6, 11 you state that "These incentives are entirely funded 12 by shareholders and should be considered quantitative 13 benefits when evaluating the ESP versus MRO test," 14 correct? 15 A. That is what it says. 16 Q. And my question is how important was it 17 to staff in the evaluation of the MRO versus ESP test 18 that the provisions that you and I just discussed are 19 "funded by shareholders"? 20 A. From a quantitative analysis, staff took 21 what was in the stipulation and took that, so each 22 payment, did it by the three years of the DMR to 23 calculate that. 24 Q. And I am just trying to understand that 25 sentence I drew your attention to, Mr. Donlon. I ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 894 1 mean, if those provisions that we discussed were not 2 funded by shareholders, would that have changed that 3 portion of staff's analysis of the ESP versus MRO 4 test? 5 A. You would still have a quantitative 6 benefit, but it wouldn't be $9 million. 7 Q. How much would it be? 8 A. I would have to go and look at it. And 9 that's very -- that takes a lot of assumptions in 10 because some of these stipulations are that the first 11 year will be funded by shareholders, and then they 12 will be -- what's the exact language -- proposed for 13 recovery through a different rider. So you would 14 have to go and make assumptions on each one of those 15 individual riders if it got approved, if it didn't. 16 So we went forward with the assumption 17 that none of them got approved in a different rider. 18 But you still would have a quantitative benefit based 19 on the first year of funding of shareholders either 20 way, but it would be less, and then you would have to 21 pick and choose which ones aren't, so you wouldn't 22 know that right now. 23 Q. Okay. And the -- but the MRO versus ESP 24 test requires consideration of the duration of the 25 proposed ESP and not just the first year, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 895 1 A. Right. But either way it would still 2 pass quantitatively because of the first year 3 payments from shareholders. 4 EXAMINER PRICE: So what you are saying 5 is there is a range of potential benefits. The max 6 is 9. There's some lower number which if we added 7 them up in the stipulation, we would know what the 8 lower number is. 9 THE WITNESS: Yes. Actually I think 10 Witness Malinak projected that all of them would be 11 over five years of the -- that the DMR got extended 12 over five, and I think his was roughly around $11 13 million where ours was 9, and you could have a 14 smaller number, but all three numbers still 15 quantitatively pass and are above the MRO. 16 Q. (By Mr. Michael) Mr. Donlon, could I draw 17 your attention to page 6, lines 119 through 122, of 18 your testimony. 19 A. Yes. 20 Q. When you suggest that the DMR may be 21 potentially recoverable through an MRO application, 22 do you see that portion of your testimony? 23 A. Yes. 24 Q. And you cite to a provision of the 25 Revised Code there in RC 4928.142(D)(4). Do you see ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 896 1 that? 2 A. Yes. I was waiting for the question. 3 Q. And what -- what exactly -- what 4 provision do you think in the MRO statute potentially 5 authorizes the DMR? What does it say? 6 A. There was two questions in there. What 7 statute which would be 4928.142(D)(4). 8 Q. Uh-huh. 9 A. Right? 10 Q. Right. What does it say? 11 EXAMINER PRICE: Do you have a copy of 12 that statute with you? 13 THE WITNESS: Yes, I do. 14 Q. Let me get mine out real quick, 15 Mr. Donlon, if I could. 16 Okay. 17 A. Are we asking to read the whole (D)(4) 18 paragraph into the record? 19 Q. I want you to point to me in (D)(4) where 20 it says that a DMR may potentially be available under 21 an MRO. 22 A. And that would be -- and I don't have 23 line items on mine but let's see. I will read the 24 whole sentence here. "Additionally, the Commission 25 may adjust the electric distribution utility's most ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 897 1 recent Standard Service Offer price by such just and 2 reasonable amount that the Commission determines 3 necessary to address any emergency that threatens the 4 utility's financial integrity." And then it goes on. 5 Q. Okay. And, Mr. Donlon, it's true that in 6 the state of Ohio we haven't yet had a utility file 7 for an MRO, correct? 8 A. Actually that is not true. 9 Q. Okay. When did a utility file for an 10 MRO? 11 A. I do not have the exact years, but I know 12 that they have. 13 Q. Okay. And was that application 14 withdrawn, and then the utility filed for an ESP, 15 correct? 16 A. I believe it was withdrawn, but the 17 specifics about if it was withdrawn or changed or 18 amended I'll leave to the record. 19 Q. Okay. And it's true, Mr. Donlon, that an 20 application for an MRO has never been heard in its 21 entirety before the Commission, correct? 22 A. I believe that to be the case. 23 EXAMINER PRICE: You are assuming a fact 24 not in evidence, very much not in evidence. 25 MR. MICHAEL: Which fact is that, your ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 898 1 Honor? 2 EXAMINER PRICE: We are going to strike 3 that last question and answer. 4 MR. MICHAEL: Which factor is that, your 5 Honor? 6 EXAMINER PRICE: The MRO has never been 7 fully heard by this Commission. You are assuming a 8 fact not in evidence. 9 MR. MICHAEL: I was just simply asking 10 the director of rates and analysis department if that 11 were true. I am not assuming anything. 12 EXAMINER PRICE: Why don't you ask him 13 more directly and say isn't it true that. Why don't 14 you ask him if he is aware of. 15 MR. MICHAEL: Okay. 16 Q. (By Mr. Michael) Mr. Donlon, are you 17 aware as to whether or not an MRO application has 18 gone through a complete adjudication before the PUCO? 19 MR. OLIKER: Objection. 20 EXAMINER PRICE: Grounds? 21 MR. OLIKER: Calls for a legal 22 conclusion. 23 EXAMINER PRICE: Sustained. Even I am 24 not sure what "complete adjudication" means. 25 MR. MICHAEL: Adjudication to its ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 899 1 finality. 2 Q. (By Mr. Michael) Mr. Donlon, are you 3 aware of whether or not an MRO has ever gone through 4 an entire hearing process to conclusion after which 5 the PUCO has rendered an opinion on that application? 6 A. I am not -- I am not aware of one. 7 Q. And, Mr. Donlon, are you aware as to 8 whether or not the Ohio Supreme Court has ever issued 9 an opinion interpreting the MRO statute? 10 A. I am not aware of one. 11 Q. And, Mr. Donlon, I trust then that that 12 is why you qualify your answer on page 6, lines 117 13 through 122, as to whether or not the DMR would be 14 possible under an MRO test with the word 15 "potentially," correct? 16 A. Well, when you are comparing the MRO to 17 the ESP, one of the two, either side you are on -- 18 well, actually you wouldn't do an MRO to an ESP so 19 that doesn't -- sorry. 20 The MRO would be hypothetical because 21 there isn't one in front of us, so it would always be 22 hypothetical when you are comparing it, its 23 potential. 24 Q. So staff can't say with certainty, in 25 other words, that the DMR would be available under ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 900 1 the MRO statute, correct? 2 A. Staff believes that through, you know, RC 3 4928.142(D)(4) that we believe it would be eligible. 4 Q. Okay. So just so I am clear, Mr. Donlon, 5 are we -- should we revise your written testimony 6 then? Because your written testimony says 7 "potentially" and if I am understanding you 8 correctly, you are now saying that staff believes it 9 would be available under an MRO. 10 MR. McNAMEE: Objection. 11 EXAMINER PRICE: Grounds? 12 MR. McNAMEE: That's not what he said. 13 EXAMINER PRICE: Sustained. 14 Q. Mr. Donlon, does staff believe that the 15 DMR is available under the MRO statute? 16 A. Again, through a hypothetical, 17 theoretical, yes, it's potentially available through 18 that. 19 Q. Mr. Donlon, is -- if the Commission were 20 to deny -- or modify the stipulation, I should say, 21 such that Dayton Power and Light could not get the 22 DMR, would the MRO versus ESP test be failed? 23 MR. McNAMEE: Could I have the question 24 reread, please? 25 EXAMINER PRICE: You may. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 901 1 (Record read.) 2 MR. ALEXANDER: I am going to object, 3 your Honor. 4 EXAMINER PRICE: Grounds? 5 MR. ALEXANDER: The question is vague. 6 It does not identify whether he is asking about the 7 quantitative test or the qualitative in the aggregate 8 test addressed in the statute. 9 EXAMINER PRICE: There is only one test. 10 It's well established there is only one test. There 11 are three aspects of the test, right? I understand 12 what you are saying. 13 MR. ALEXANDER: Thank you. 14 EXAMINER PRICE: I am not going to let it 15 stand there is three tests. There is only one test. 16 If you could be more specific. 17 Q. (By Mr. Michael) I am not quite sure how 18 much more specific I can be. You are familiar with 19 the MRO versus ESP test, correct? 20 A. Correct. 21 Q. Okay. And my question is if the amended 22 stipulation were to be modified such that the DMR 23 rider was no longer a part of it, would the ESP 24 versus MRO test be failed, which is to say the ESP 25 would no longer be more favorable in the aggregate ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 902 1 than the expected results under the MRO? 2 MR. ALEXANDER: Now, I am going to 3 object. I think the question has now been changed. 4 I think counsel might have misspoken there. You 5 might want to rephrase that question. 6 MR. MICHAEL: Can we have it read back, 7 your Honor? 8 EXAMINER PRICE: Let's have the question 9 back again. 10 (Record read.) 11 EXAMINER PRICE: You can answer. 12 A. Since the belief is that a DMR could 13 potentially be recovered through an MRO or an ESP, if 14 it exists or doesn't exist, it's a wash. 15 Q. Okay. Mr. Donlon, do you know -- 16 EXAMINER PRICE: I would like to follow 17 up on that question real fast. 18 MR. MICHAEL: Certainly, your Honor. 19 EXAMINER PRICE: If there were no -- how 20 can I say this? You do believe that the DMR has 21 qualitative benefits in terms of grid modernization, 22 do you not? 23 THE WITNESS: Qualitative? 24 EXAMINER PRICE: Qualitative. 25 THE WITNESS: Yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 903 1 EXAMINER PRICE: In terms of the position 2 of the company to modernize the grid. 3 THE WITNESS: Yes. So from -- I was 4 speaking from a quantitative. 5 EXAMINER PRICE: But just based on 6 overall looking at the qualitative and quantitative 7 sides, do you believe that if the Commission modified 8 the DMR, that the ESP -- to eliminate it, the ESP 9 would still pass the MRO -- ESP-MRO test? 10 THE WITNESS: Staff believes if the 11 Commission eliminates the DMR, that the company will 12 reject the ESP so there will not be an ESP would be 13 the way I would put my money on. But I think there 14 is a lot of items in the stipulation. Yes, yes, I 15 do. 16 EXAMINER PRICE: Thank you. 17 Q. (By Mr. Michael) Mr. Donlon, you are 18 familiar that Dayton Power and Light had a rider 19 called the service stability rider, correct? 20 A. Yes. 21 Q. And do you know during the duration of 22 the service stability rider how much consumers were 23 charged under that rider? 24 A. I get the two riders -- the acronyms 25 confused. Are we talking about the rider in ESP II ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 904 1 that doesn't now exist or the rider in ESP I? 2 Q. The rider in ESP II. 3 A. That was roughly 101, I believe. 4 Q. A year? 5 A. I think so. 6 EXAMINER PRICE: 110. 7 THE WITNESS: 110. 8 EXAMINER PRICE: 110. It's a matter of 9 record, it's 110. 10 MR. MICHAEL: Matter of record. Good. 11 Q. And let's go back to the rider in ESP I. 12 It sounds like that's easier for you to refer to them 13 rather than by an acronym. Do you know, Mr. Donlon, 14 how much Dayton Power and Light charged consumers 15 under that rider? 16 A. I believe that rider was 73 million. 17 Q. And before staff signed on to the amended 18 stipulation that would authorize Dayton Power and 19 Light to charge consumers an additional $105 million 20 a year, did staff inquire of the company what it had 21 done with the roughly $110 million a year they had 22 already collected under the service stability rider 23 (ESP II rider)? 24 MR. McNAMEE: Objection. 25 EXAMINER PRICE: Grounds? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 905 1 MR. McNAMEE: Relevance. I don't see 2 how -- however the company chose to spend money in 3 the past in this regard makes any difference in this 4 case today. 5 MR. SHARKEY: I am also going to object, 6 your Honor. It inquires into settlement 7 communications between the parties. He asked whether 8 they inquired what they did in the course of the 9 negotiations. 10 EXAMINER PRICE: Mr. Michael? 11 MR. MICHAEL: Well, I would say, your 12 Honor, that as Witness Jackson testified, you don't 13 soundly manage yourself into a financial crisis. The 14 question I have and why it's relevant is before we 15 authorize Dayton Power and Light to charge consumers 16 an additional $105 million a year, it might be useful 17 for the Commission to know what happened to the 18 $110 million a year that Dayton Power and Light 19 charged under the SSR on the theory that past 20 behavior is forecast of future results. 21 EXAMINER PRICE: But you are not asking 22 for something that happened in settlement 23 negotiations? 24 MR. MICHAEL: I am not, your Honor. 25 EXAMINER PRICE: You are asking whether ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 906 1 the staff had issued a data request to the staff? 2 MR. MICHAEL: Did staff consider it, yes, 3 basically. 4 EXAMINER PRICE: You can answer if you 5 know. 6 THE WITNESS: Can you reread that 7 question, please? 8 EXAMINER PRICE: Why don't we rephrase it 9 to make it more clear. 10 MR. MICHAEL: That would be fine, your 11 Honor. 12 Q. (By Mr. Michael) Mr. Donlon, before staff 13 signed on to an amended stipulation that would 14 authorize -- 15 EXAMINER PRICE: Let's not preface it 16 with that. 17 MR. MICHAEL: That's my favorite part. 18 EXAMINER PRICE: I know. 19 MR. McNAMEE: I was going to object to 20 that. Take all the fun out of this. 21 EXAMINER PRICE: Let me take a shot. In 22 the course of investigating the company's ESP 23 applications in this case, did the staff issue a data 24 request inquiring what the company used the 25 $110 million from the SSR for? To the best of your ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 907 1 knowledge. I am sure you had lots of data requests. 2 THE WITNESS: I do not remember if a 3 specific data request went out asking that specific 4 question. 5 MR. MICHAEL: And if I might, your Honor. 6 Q. Mr. Donlon, same question regarding the 7 ESP I rider? 8 A. I do not remember if a data request went 9 out specific to that. I would not have issued one, 10 but I can't remember all of the data requests that my 11 staff issued. 12 Q. And did staff consider and evaluate at 13 all the degree to which it should sign on to this 14 amended stipulation given that Dayton Power and Light 15 is in a financial crisis notwithstanding they charged 16 consumers all that money under the ESP II rider and 17 ESP I rider? 18 MR. McNAMEE: Objection. 19 EXAMINER PRICE: Grounds? 20 MR. McNAMEE: That goes directly to 21 settlement discussions, the mind-set of the staff 22 while involved in those discussions, and why they did 23 what they did. 24 EXAMINER PRICE: Sustained. 25 Mr. Donlon, I do have a question while we ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 908 1 are on this topic. Could you turn to your -- the 2 stip page 5, section b. 3 THE WITNESS: Yes, sir. 4 EXAMINER PRICE: One of the differences 5 between the DMR and the SSR is the existence of these 6 requirements as to what the company can do with the 7 money; is that correct? 8 THE WITNESS: Correct. 9 EXAMINER PRICE: Thank you. Thank you. 10 MR. MICHAEL: May I have just 5 minutes, 11 your Honor, to consult with my colleagues? I think I 12 am done, but I would like the opportunity to do that, 13 please. 14 EXAMINER PRICE: Let's go off the record 15 for 10 minutes. Everybody deserves a break at this 16 point. 17 (Recess taken.) 18 EXAMINER PRICE: Let's go back on the 19 record. 20 Mr. Michael. 21 MR. MICHAEL: I have no further 22 questions, your Honor. 23 Thank you, Mr. Donlon. 24 EXAMINER PRICE: Thank you. 25 Mr. Sharkey, I neglected to ask you if ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 909 1 you had any cross for this witness. Do you have any 2 cross? 3 MR. SHARKEY: I have none, your Honor. 4 EXAMINER PRICE: Any other parties 5 opposing the stipulation have cross for this witness? 6 Seeing none, redirect? 7 MR. McNAMEE: None. Staff would move for 8 the admission of Staff Exhibit 2. 9 EXAMINER PRICE: Maybe I have questions. 10 MR. McNAMEE: Okay. I'm sorry. 11 EXAMINER PRICE: I don't have any 12 questions. You are excused. 13 MR. McNAMEE: Playing with us. 14 EXAMINER PRICE: Any objection to the 15 admission of Staff Exhibit 2? 16 Seeing none, it will be admitted. 17 (EXHIBIT ADMITTED INTO EVIDENCE.) 18 EXAMINER PRICE: Let's go off the record. 19 (Discussion off the record.) 20 EXAMINER PRICE: Let's go back on the 21 record. 22 Company, do you have any rebuttal 23 testimony? 24 MR. SHARKEY: No, your Honor. 25 EXAMINER PRICE: Thank you. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 910 1 We had discussion off the record about 2 briefs. Initial briefs will be due Friday, May 5, 3 and reply briefs will be due on May 15. 4 Any other issues we need to address 5 before we go off the record for the last time? 6 Seeing none, we are adjourned. 7 Thank you all. 8 (Thereupon, at 11:08 a.m., the hearing 9 was concluded.) 10 - - - 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 911 1 CERTIFICATE 2 I do hereby certify that the foregoing is 3 a true and correct transcript of the proceedings 4 taken by me in this matter on Tuesday, April 11, 5 2017, and carefully compared with my original 6 stenographic notes. 7 8 _______________________________ 9 Karen Sue Gibson, Registered Merit Reporter. 10 11 (KSG-6345) 12 - - - 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481