1 1 BEFORE THE PUBLIC UTILITIES COMMISSION OF OHIO - - - 2 In the Matter of the Regulation : 3 of the Purchased Gas Adjustment : Case No. Clauses Contained Within the : 16-218-GA-GCR 4 Rate Schedules of Duke Energy : Ohio, Inc., and Related Matters. : 5 In the Matter of the Audit of : 6 the Uncollectible Expense Rider : Case No. of Duke Energy Ohio, Inc., and : 16-318-GA-UEX 7 Related Matters. : 8 In the Matter of the Application : of Duke Energy, Ohio, Inc., for : Case No. 9 Approval of an Adjustment to : 16-418-GA-PIP Its Interim and Temporary PIPP : 10 Plan Rider Case. : 11 - - - 12 PROCEEDINGS 13 before Kerry K. Sheets, Attorney Examiner, at the 14 Public Utilities Commission of Ohio, 180 East Broad 15 Street, Room 11-C, Columbus, Ohio, called at 10:02 16 a.m. on Tuesday, February 7, 2017. 17 - - - 18 19 20 21 22 ARMSTRONG & OKEY, INC. 222 East Town Street, Second Floor 23 Columbus, Ohio 43215-4620 (614) 224-9481 - (800) 223-9481 24 Fax - (614) 224-5724 25 - - - ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 2 1 APPEARANCES: 2 Duke Energy Ohio, Inc. By Elizabeth H. Watts, Esq. 3 Associate General Counsel Amy B. Spiller, Esq. 4 Deputy General Counsel 139 East Fourth Street, 1303-Main 5 Cincinnati, Ohio 45202 6 On behalf of the Company. 7 Michael DeWine, Ohio Attorney General 8 By Thomas W. McNamee, Esq. Natalia V. Messenger, Esq. 9 Assistant Attorneys General 30 East Broad Street, 16th Floor 10 Columbus, Ohio 43215 11 On behalf of the Staff of the PUCO. 12 - - - 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 3 1 INDEX - - - 2 WITNESSES: PAGE 3 ROGER L. SARVER Direct Examination by Mr. McNamee 6 4 - - - 5 COMMISSION ORDERED EXHIBITS ID'D REC'D 6 1 - Duke Energy Ohio, Inc., Independent 5 11 Accountants' Report on the Uniform 7 Purchased Gas Adjustment for the 12-Month Period Ended August 29, 2016, 8 in Response to Case No. 16-218-GA-GCR 9 2 - Independent Accountants' Report on 5 11 Applying Agreed-Upon Procedures, 10 Deloitte & Touche, 16-318-GE-UEX 11 3 - Independent Accountants' Report on 5 11 Applying Agreed-Upon Procedures, 12 Deloitte & Touche, 16-418-GA-PIP 13 - - - JOINT EXHIBITS 14 1 - Stipulation and Recommendation 5 11 15 - - - 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 4 1 Tuesday Morning Session, 2 February 7, 2017. 3 - - - 4 ATTORNEY EXAMINER SHEETS: The Public 5 Utilities Commission of Ohio has set for hearing at 6 this time and place three cases involving Duke Energy 7 Ohio, 16-218, a GCR case, 16-318, the Uncollectible 8 Expense Rider, and 16-418, the PIPP Rider. 9 My name is Kerry Sheets. I'm an 10 Attorney Examiner for the Commission, and I've been 11 assigned to hear these cases. 12 I'll have the appearances of the 13 parties, please, starting with the Company. 14 MS. WATTS: Thank you, your Honor. On 15 behalf of Duke Energy Ohio, Amy B. Spiller and 16 Elizabeth H. Watts. 17 ATTORNEY EXAMINER SHEETS: Thank you. 18 Now Staff. 19 MR. McNAMEE: On behalf of the Staff of 20 the Public Utilities Commission of Ohio, Natalia 21 Messenger, and I am Thomas McNamee. Our address is 22 30 East Broad Street, 16th Floor, Columbus, Ohio 23 43215. 24 ATTORNEY EXAMINER SHEETS: Thank you. 25 Do we have any preliminary matters to ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 5 1 take care of? 2 MR. McNAMEE: No preliminary matters, 3 your Honor. We do have -- 4 ATTORNEY EXAMINER SHEETS: Go ahead and 5 mark exhibits. 6 MR. McNAMEE: All right. Your Honor, 7 I'd ask to have marked as Commission Ordered Exhibit 8 1 a document filed on November 14, Duke Energy Ohio 9 Independent Accountants' Report on the Uniform 10 Purchased Gas Adjustment for the 12-Month Period 11 Ended August 29, 2016, and as Commission Ordered 12 Exhibit 2 another document filed on November 14 by 13 Deloitte called -- titled, "Independent Accountants' 14 Report on Applying Agreed-Upon Procedures," under the 15 Case No. 16-318-GA-UEX. As Commission Ordered 16 Exhibit No. 3 we have another document from Deloitte 17 titled, "Independent Accountants' Report on Applying 18 Agreed-Upon Procedures." This was filed in Case 19 16-418-GA-PIP, and finally we have a Joint -- what I 20 ask to have marked for identification as Joint 21 Exhibit 1, the Stipulation and Recommendation filed 22 in this case which resolves all issues in all of the 23 dockets. 24 ATTORNEY EXAMINER SHEETS: Thank you. 25 (EXHIBITS MARKED FOR IDENTIFICATION.) ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 6 1 ATTORNEY EXAMINER SHEETS: Does the 2 Company have any exhibits? 3 MS. WATTS: Nothing, your Honor. 4 ATTORNEY EXAMINER SHEETS: The 5 publication? 6 MS. WATTS: Yes. I didn't bring a copy 7 of it with me, but I believe it was docketed, your 8 Honor, on February 3rd, 2017. 9 ATTORNEY EXAMINER SHEETS: Very good. 10 Do you have any witnesses to call? 11 MR. McNAMEE: Yes, we do, your Honor. 12 The Staff would call Roger Sarver. 13 With permission to approach the witness 14 so I can put my papers down there. 15 ATTORNEY EXAMINER SHEETS: Yes. 16 (Mr. Sarver was sworn.) 17 ATTORNEY EXAMINER SHEETS: Be seated. 18 - - - 19 ROGER L. SARVER, 20 being first duly sworn, as prescribed by law, was 21 examined and testified as follows: 22 DIRECT EXAMINATION 23 BY MR. McNAMEE: 24 Q. Mr. Sarver, would you state and spell 25 your name for the record, please. ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 7 1 A. My name is Roger L. Sarver. My last 2 name is S-a-r-v-e-r. 3 Q. By whom are you employed and in what 4 capacity? 5 A. I'm employed by the Public Utilities 6 Commission of Ohio as an Energy Specialist. 7 Q. What is your business address? 8 A. 180 East Broad Street, Columbus, Ohio 9 43215. 10 Q. Mr. Sarver, do you have before you 11 what's been mark for identification as Commission 12 Ordered Exhibit 1? 13 A. Yes, sir. 14 Q. What is it? 15 A. It is the financial audit of Duke's Gas 16 Cost Recovery Mechanism. 17 Q. Okay. And what does it tell us? 18 A. It is the Gas Cost Recovery Audit of 19 Duke Energy for the period -- 12-month period ending 20 August 29th of 2016. 21 Q. And does it contain recommendations that 22 are included within what's been mark for 23 identification as Joint Exhibit 1, the Stipulation 24 and Recommendation? 25 A. In that the joint recommendation the ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 8 1 Company agrees to accept all of the audit 2 recommendations found in these exhibits. 3 Q. Okay. And that resolves your issues in 4 that regard, yes? 5 A. Yes, sir. 6 Q. Good. Now let's turn our attention to 7 Commission Ordered Exhibit 2. Do you have that? 8 A. Yes, sir. 9 Q. Good. What is it? 10 A. This is the audit performed by Deloitte 11 & Touche of Duke's Uncollectible Expense Rider. 12 Q. Okay. And does it contain the 13 recommendations? 14 A. It contains some findings that the 15 Company is going to incorporate into its next filing. 16 Q. Okay. And does that resolve your issues 17 in that case? 18 A. Yes, sir. 19 Q. Okay. Let's turn to Commission Ordered 20 Exhibit No. 3. What's that? 21 A. This is Deloitte & Touche's financial 22 audit of Duke's Percentage of Income Payment Plan. 23 Q. Okay. And what conclusions does that 24 document reach? 25 A. This audit found that they were largely ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 9 1 in agreement with the calculations performed by Duke. 2 Q. Does that resolve any issues you might 3 have in this case? 4 A. Yes, sir. 5 Q. Okay. Let's turn our attention to Joint 6 Exhibit No. 1. 7 A. Yes, sir. 8 Q. What is that? 9 A. This is the Joint Stipulation between 10 Staff and Company that adopts the findings contained 11 within the three audits. 12 Q. Okay. Does that resolve all the issues 13 that you have in all three of those cases? 14 A. Yes, sir. 15 Q. Great. Now, was this Stipulation and 16 Recommendation negotiated between knowledgeable and 17 informed parties? 18 A. Yes, sir. 19 Q. Okay. You were involved in those 20 negotiations, weren't you? 21 A. Yes, sir. 22 Q. Okay. Does this Stipulation and 23 Recommendation further the public interest? 24 A. Yes, it does. It works to address any 25 inaccuracies contained within these three riders that ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 10 1 Duke provides to its customers, so any of the errors 2 that may have occurred in the calculation of these 3 riders have been addressed. 4 Q. Good. And all the problems have been 5 resolved? 6 A. They have been resolved or will be 7 resolved going forward. 8 Q. Okay. Does this Stipulation and 9 Recommendation violate any important policy or 10 procedure or statute, to your knowledge? 11 A. No, sir. 12 MR. McNAMEE: Okay. With that, your 13 Honor, I have no further questions. 14 ATTORNEY EXAMINER SHEETS: Thank you. 15 Does the Company have any questions? 16 MS. WATTS: No questions, your Honor. 17 ATTORNEY EXAMINER SHEETS: You're 18 excused. 19 (Witness excused.) 20 MR. McNAMEE: At this time the Staff 21 would move for the admission of what's been marked 22 for identification as Commission Ordered Exhibit 1, 23 Commission Ordered Exhibit 2, Commission Ordered 24 Exhibit 3, and Joint Exhibit 1. 25 ATTORNEY EXAMINER SHEETS: Very good. I ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 11 1 will admit all exhibits into evidence at this time. 2 (EXHIBITS ADMITTED INTO EVIDENCE.) 3 MR. McNAMEE: And with that, your Honor, 4 I believe the case is complete. All issues have been 5 resolved by agreement between the parties of the 6 case, and there's nothing further to be presented. 7 ATTORNEY EXAMINER SHEETS: Does the 8 Company agree? 9 MS. WATTS: The Company agrees. 10 ATTORNEY EXAMINER SHEETS: Very good. I 11 will consider this matter submitted on the record. I 12 thank you for coming. 13 MR. McNAMEE: Thank you. 14 MS. WATTS: Thank you, your Honor. 15 (Thereupon, the hearing was concluded at 16 10:12 a.m.) 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481 12 1 CERTIFICATE 2 I do hereby certify that the foregoing 3 is a true and correct transcript of the proceedings 4 taken by me in this matter on Tuesday, February 7, 5 2017, and carefully compared with my original 6 stenographic notes. 7 ___________________________ 8 Valerie J. Sloas, Registered Professional Reporter and 9 Notary Public in and for the State of Ohio. 10 11 12 My commission expires June 10, 2021. 13 (VJS-83064) 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio 43215 (614) 224-9481