1 THE PUBLIC UTILITIES COMMISSION OF OHIO 2 - - - 3 In the Matter of the : Application of Ohio Edison : 4 Company, The Cleveland : Electric Illuminating : 5 Company, and The Toledo : Edison Company for : Case No. 16-0743-EL-POR 6 Approval of Their Energy : Efficiency and Peak Demand : 7 Reduction Program Portfolio: Plans for 2017 through 2019: 8 - - - 9 10 PROCEEDINGS 11 before Mr. Richard Bulgrin, Attorney Examiner, at the 12 Public Utilities Commission of Ohio, 180 East Broad 13 Street, Room 11-D, Columbus, Ohio, called at 14 10:00 a.m. on Monday, January 31, 2017. 15 - - - 16 VOLUME V - REBUTTAL TESTIMONY 17 - - - 18 19 20 21 22 ARMSTRONG & OKEY, INC. 222 East Town Street, Second Floor 23 Columbus, Ohio 43215-5201 (614) 224-9481 - (800) 223-9481 24 Fax - (614) 224-5724 25 - - - ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 540 1 2 APPEARANCES: 3 FirstEnergy Service Company By Ms. Erika Ostrowski 4 Ms. Carrie M. Dunn 76 South Main Street 5 Akron, Ohio 44308 6 Kolich & Associates, LLC By Ms. Kathy J. Kolich 7 1521 Hightower Drive Uniontown, Ohio 44685 8 Jones Day 9 By Mr. Michael R. Gladman 325 John H. McConnell Boulevard, Suite 600 10 Columbus, Ohio 43215 11 On behalf of Ohio Edison Company, The Cleveland Electric Illuminating Company, 12 and The Toledo Edison Company. 13 Bruce J. Weston, Consumers' Counsel By Mr. Christopher Healey 14 Assistant Consumers' Counsel 10 West Broad Street, Suite 1800 15 Columbus, Ohio 43215-3485 16 Bricker & Eckler, LLP By Mr. Dane Stinson 17 100 South Third Street Columbus, Ohio 43215 18 On behalf of the Residential Customers 19 of Ohio Edison Company, Toledo Edison Company, and The Cleveland Electric 20 Illuminating Company. 21 Ohio Partners for Affordable Energy By Ms. Colleen L. Mooney 22 231 West Lima Street P.O. Box 1793 23 Findlay, Ohio 45839 24 On behalf of the Ohio Partners for Affordable Energy. 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 541 1 APPEARANCES (Continued): 2 Mike DeWine, Ohio Attorney General By Mr. William L. Wright, 3 Section Chief By Mr. John H. Jones 4 Ms. Natalia Messenger Assistant Attorneys General 5 Public Utilities Section 30 East Broad Street, 16th floor 6 Columbus, Ohio 43215 7 On behalf of the Public Utilities Commission of Ohio. 8 Environmental Law & Policy Center 9 By Ms. Madeline Fleisher 21 West Broad Street, Suite 500 10 Columbus, Ohio 43215 11 Environmental Law & Policy Center By Mr. Robert Kelter 12 35 East Wacker Drive, Suite 1600 Chicago, Illinois 60601 13 On behalf of the Environmental Law & 14 Policy Center. 15 IGS Energy By Mr. Joseph Oliker 16 6100 Emerald Parkway Dublin, Ohio 43016 17 On behalf of IGS Energy. 18 Carpenter Lipps & Leland LLP 19 By Ms. Angela M. Paul Whitfield 280 North High Street, Suite 1300 20 Columbus, Ohio 43215 21 On behalf of The Kroger Co. 22 Ohio Environmental Council By Ms. Miranda Leppla 23 1145 Chesapeake Avenue, Suite I Columbus, Ohio 43212 24 On behalf of the Ohio Environmental 25 Council and Environmental Defense Fund. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 542 1 APPEARANCES (Continued): 2 Carpenter Lipps & Leland LLP By Ms. Kimberly W. Bojko 3 and Mr. James D. Perko, Jr. 280 North High Street, Suite 1300 4 Columbus, Ohio 43215 5 On behalf of The Ohio Manufacturers' Association Energy Group. 6 McNees, Wallace & Nurick LLC 7 By Mr. Matthew Pritchard 21 East State Street, 17th Floor 8 Columbus, Ohio 43215 9 On behalf of the Industrial Energy Users of Ohio. 10 Law Office of Robert Dove 11 By Mr. Robert Dove P.O. Box 13442 12 Columbus, Ohio 43213 13 Natural Resources Defense Council By Ms. Samantha Williams 14 Staff Attorney 20 North Wacker Drive, Suite 1600 15 Chicago, Illinois 60606 16 On behalf of the Natural Resources Defense Council. 17 - - - 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 543 1 INDEX 2 - - - 3 WITNESSES PAGE 4 Eren G. Demiray Direct Examination by Mr. Gladman 545 5 Cross-Examination by Mr. Healey 548 6 Edward C. Miller Direct Examination by Ms. Kolich 563 7 Cross-Examination by Mr. Healey 571 Cross-Examination by Mr. Jones 588 8 Redirect Examination by Ms. Kolich 629 9 - - - 10 COMPANY EXHIBITS IDENTIFIED ADMITTED 11 16 Rebuttal Testimony of 546 562 Eren G. Demiray 12 17 Rebuttal Testimony of 563 634 13 Edward C. Miller 14 - - - 15 OCC EXHIBITS IDENTIFIED ADMITTED 16 10 Energy Efficiency and Peak 582 -- Demand Reduction Program 17 Portfolio Status Report 18 - - - 19 STAFF EXHIBITS IDENTIFIED ADMITTED 20 4 Page 4, 2015 Annual Report 605 -- Case No. 15-0900 21 5 Page 7, 2015 Annual Report 605 -- 22 Case No. 15-0900 23 6 Page 4, 2014 Annual Report 605 -- Case No. 15-0859 24 7 Page 7, 2014 Annual Report 605 -- 25 Case No. 15-0859 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 544 1 Tuesday Morning Session, 2 January 31, 2017. 3 - - - 4 EXAMINER BULGRIN: Okay. Let's go on the 5 record, and I believe this is day five of the hearing 6 in Case No. 16-576-EL-POR. 7 MR. HEALEY: This is 743. 8 EXAMINER BULGRIN: I'm sorry. I've got 9 the wrong case. Let me make sure I've got the right 10 testimony. Excuse me. 16-743-EL-POR, Being In the 11 Application of the FirstEnergy Operating Companies 12 for Approval of their Energy Efficiency and Peak 13 Demand Reduction Program Portfolio Plans for 2017 14 through 2019. 15 And we are here for the rebuttal 16 testimony of a couple of company witnesses, so I'll 17 turn it over to the company, first. 18 MR. GLADMAN: Thank you, your Honor. The 19 companies would call Mr. Eren Demiray. 20 EXAMINER BULGRIN: I will remind you you 21 are still under oath. 22 THE WITNESS: Thank you. 23 - - - 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 545 1 EREN G. DEMIRAY 2 being previously duly sworn, as prescribed by law, 3 was examined and testified on rebuttal as follows: 4 DIRECT EXAMINATION 5 By Mr. Gladman: 6 Q. Good morning, Mr. Demiray. 7 A. Good morning. 8 Q. Could you state your name and business 9 address. 10 A. My name is Eren Demiray, D-E-M-I-R-A-Y. 11 My business address is 76 South Main Street, Akron, 12 Ohio 44308. 13 Q. And, Mr. Demiray, where do you work? 14 A. For FirstEnergy. 15 Q. And what's your title? 16 A. I am the manager of the Reporting Group 17 in FirstEnergy Service Companies' Energy Efficiency 18 Department. 19 MR. GLADMAN: At this time I would like 20 to mark the rebuttal testimony of Eren G. Demiray on 21 behalf of the Ohio Edison Company, the Cleveland 22 Electric Illuminating Company, and the Toledo Edison 23 Company dated January 27, 2017, as Company 24 Exhibit 16. 25 May we approach the witness? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 546 1 EXAMINER BULGRIN: Yes. Thank you. It 2 will be so marked. 3 (EXHIBIT MARKED FOR IDENTIFICATION.) 4 Q. Mr. Demiray, do you have Company Exhibit 5 16 in front of you? 6 A. I do. 7 Q. And what is Company Exhibit 16? 8 A. My rebuttal testimony. 9 Q. Do you have any changes or corrections to 10 your rebuttal testimony at this time? 11 A. Yes, I do have some corrections to 12 footnotes. The first is on page 8, footnote 6, where 13 it cites to "Page 10 of 180, Table 3." It should 14 cite to pages 13-14, Table 3." 15 Q. Okay. Do you have -- 16 EXAMINER BULGRIN: I'm sorry, can you 17 repeat that? 18 THE WITNESS: Yeah. I will be happy to 19 provide this to the court reporter afterwards. The 20 next one is a little bit lengthy. 21 EXAMINER BULGRIN: Yes, yes. That would 22 be helpful as well. 23 THE WITNESS: But that was on page 8, 24 footnote 6 where it says "Page 10 of 180." It should 25 say "Pages 13-14 of 180." ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 547 1 EXAMINER BULGRIN: Thank you. 2 A. The next one is on page 9, footnote 8. I 3 would like to replace the current footnote with the 4 following. "See Case No. 16-0574-EL-POR, Direct 5 Testimony of Jon F. Williams on Behalf of Ohio Power 6 Company, June 15, 2016, page 19; December 9, 2016, 7 Stipulation and Recommendation, paragraph IV.D; 8 January 18, 2017, Opinion and Order, paragraphs 23, 9 33." 10 EXAMINER BULGRIN: Thanks. 11 A. And then last on page 13, footnote 14, 12 replace the reference to "p. 17" with "p. 16." 13 EXAMINER BULGRIN: I'm sorry, go over 14 that again. 15 THE WITNESS: Page 13, footnote 14. 16 EXAMINER BULGRIN: Okay. 17 THE WITNESS: Replace the reference to 18 "p. 17" with "p. 16." 19 EXAMINER BULGRIN: Thank you. 20 THE WITNESS: Would you like this? 21 EXAMINER BULGRIN: No. 22 Q. (By Mr. Gladman) Are those all of your 23 corrections to your rebuttal testimony, Mr. Demiray? 24 A. Those are. 25 Q. And if I asked you the questions that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 548 1 appear in Company Exhibit 16 with those corrections, 2 would your answers be the same? 3 A. They would. 4 Q. And was Company Exhibit 16 prepared by 5 you or under your direction and supervision? 6 A. Yes, it was. 7 Q. Is the information contained in Company 8 Exhibit 16 true and correct to the best of your 9 knowledge, information, and belief? 10 A. Yes. 11 MR. GLADMAN: I would move for the 12 admission of Company Exhibit 16, subject to 13 cross-examination. 14 EXAMINER BULGRIN: All right. 15 MR. GLADMAN: And Mr. Demiray is 16 available for cross-examining. 17 EXAMINER BULGRIN: Thank you. 18 Mr. Healey. 19 - - - 20 CROSS-EXAMINATION 21 By Mr. Healey: 22 Q. Good morning, Mr. Demiray. Let's start 23 by turning to page 3 of your testimony. 24 A. My rebuttal testimony? 25 Q. Yes. I'll be discussing you rebuttal ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 549 1 testimony today, so if I say "testimony," it will be 2 your rebuttal. I don't anticipate going back to your 3 original testimony at all. 4 A. Thank you. 5 Q. So let's look on page 3 starting at line 6 7. You here are noting benefits to customers, and 7 one you describe is that "The clear majority (no less 8 than 87%) of the calculated benefits produced through 9 cost effective management and delivery of energy 10 efficiency programs accrue to the companies' 11 customers." Do you see that on line 7 to 9? 12 A. I do. 13 Q. Now, when you are talking about 14 calculated benefits, you are talking about net 15 benefits, correct? 16 A. In this context I am referring to 17 adjusted net benefits calculated through the UCT. 18 Q. And with respect to the 87 percent number 19 you cite here, you arrived at 87 percent because the 20 highest tier in the shared savings mechanism is 21 13 percent? 22 A. Yes. It does say "no less than 87," so 23 it could be anywhere from all the benefits accruing 24 to customers to no less than 87 percent using the top 25 tier of 13 percent. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 550 1 Q. Understood. And so you took the 2 13 percent, subtracted it from 100 percent, and 3 that's how you got the 87 percent number there? 4 A. That's how the math works, yes. 5 Q. Now, that 13 percent number does not -- 6 let me restate that. 7 That 13 percent number does not include 8 the tax gross-up, correct? 9 A. Thirteen percent as listed later is 10 strictly as an incentive tier. The benefits stated 11 here are calculated benefits under the shared saving 12 mechanism. What you are referring to as an 13 aftertax/pretax consideration is something that is 14 done at a different stage of the process. 15 Q. Okay. Let's walk through an example 16 maybe. We're talking about the calculated net 17 benefits under the UCT, so let's say, for example, 18 that programs are run and that comes out to 19 $10 million, and let's say that you are in fact in 20 tier 5. So that 13 percent that goes to the 21 companies would be 13 percent of that 10 million, 22 correct, on an aftertax basis? 23 A. The calculated benefits, as stated here, 24 again, are an output of a certain stage of the 25 calculation. The tax treatment is in a later stage ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 551 1 so the 87 percent that we are talking about here is 2 purely on the adjusted net benefits calculated under 3 the UCT, so the tax treatment that you are speaking 4 to is, again, not a part of this particular aspect of 5 the mechanism but a later step. 6 Q. Maybe I will restate. I don't recall 7 mentioning tax in that question specifically so let's 8 come back to my hypothetical. The programs produce 9 $10 million in net UCT benefits, and that results in 10 the companies achieving savings to get into tier 5, 11 which is the 13 percent tier. 12 A. I'm sorry, your question is the 13 $10 million led to the 13 percent? 14 Q. I am just laying out the grounds for the 15 hypothetical. 16 A. Okay. 17 Q. In this hypothetical we have $10 million 18 in net benefits and we have enough savings, energy 19 savings, such that the companies achieve tier 5 under 20 the shared savings mechanism. Are you with me so 21 far? 22 A. So far, yes. 23 Q. And so to calculate the companies' 24 aftertax -- let's leave the taxes out of it. So to 25 calculate the companies' shared savings of ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 552 1 13 percent, you would multiply the 13 percent by the 2 10 million, correct? 3 A. In your situation you are assuming the 4 entire portfolio has $10 million worth of adjusted 5 net benefits under the UCT? 6 Q. Just for simplicity of the math, yes. If 7 you would like to use 100 million, we could do that, 8 too, but let's stick with 10 million so we can do 9 easy math. 10 A. Okay. So if the adjusted net benefits of 11 the portfolio somehow were $10 million under the UCT 12 scenario and that somehow also was derived through 13 savings achieved, the top tier 13 percent of 10 14 million, yes, that would be 1.3 million. 15 Q. Thank you. And, now, that 1.3 million as 16 a result of the tax issue is not the amount that 17 customers will pay to the companies in shared 18 savings, correct? 19 A. The financial incentive that is earned 20 under a shared savings mechanism is collected on an 21 aftertax basis so on a pretax there is a different 22 amount collected from customers, that's correct. 23 Q. And that different amount collected from 24 customers would be higher than 1.3 million in this 25 hypothetical, correct? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 553 1 A. Yes, it would. 2 Q. So when you state that the clear 3 majority, no less than 87 percent, of the calculated 4 benefits accrue to the customers, that's not actually 5 true as a result of the tax gross-up, correct, 6 because they are not keeping 8.7 million of that 10 7 million in this hypothetical, are they? 8 A. I disagree with that statement. The 9 statement stands as it's written. The calculated 10 benefits, no less than 87 percent, are accruing to 11 customers. You are trying to conflate this with a 12 later portion of the shared savings mechanism, and 13 that's inappropriate. This statement is strictly 14 saying that 87 percent of -- no less than 87 percent 15 of the calculated benefits, as determined under the 16 UCT, are accruing to customers. 17 Q. Well, let's talk about that later stage, 18 right? We are in a world where we have $10 million 19 in net benefits as a result of these programs, and 20 customers are also paying, as you acknowledge, more 21 than $1.3 million in shared savings to the companies, 22 so just by pure math they are not receiving $8.7 in 23 benefits, correct? 24 A. What you are talking about is a 25 collection issue, which is separate from this ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 554 1 statement. If your question is simply do the 2 companies receive a financial incentive on an 3 aftertax basis, yes, they do. The tax treatment is 4 taken into consideration during the collection phase. 5 But that has no bearing on the statement on page 3, 6 line 7 through 9, where the calculated benefits of 7 the UCT are pure and that no less than 87 percent of 8 those accrue to customers. 9 Q. I'll move on. Let's turn to page 7 of 10 your testimony now. And starting on line 7, you 11 discuss Mr. Spellman's proposal that the shared 12 savings trigger point should be about 600,000 13 megawatt-hours, and you disagree with that proposal, 14 correct? 15 A. Generally, for the reasons set forth in 16 this Q and A, yes. 17 Q. And on page 8, in the context of your 18 disagreement with Mr. Spellman, you note that AEP's 19 mechanism is triggered once AEP exceeds its statutory 20 benchmarks and not the targeted energy savings which 21 are higher. Do you see that, lines 3 to 6 on page 8 22 of your testimony? 23 A. I do. 24 Q. And then you conclude on line 6 to 7, 25 "There is no reason for the Commission to adopt a ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 555 1 different standard in this case." Do you see that? 2 A. I do see that. And I also add the 3 Commission addressed this in particular as recently 4 as the ESP IV case where the Commission very clearly 5 in unambiguous language said that shared savings are 6 a result of the companies exceeding their statutory 7 energy efficiency targets. 8 MR. HEALEY: Your Honor, I would move to 9 strike that last sentence given that it was 10 nonresponsive. 11 EXAMINER BULGRIN: Overruled. 12 Q. Mr. Demiray, given your statement that 13 there is no reason for the Commission to adopt a 14 different standard in this case, is it your testimony 15 that everything in AEP's settlement should be applied 16 to FirstEnergy? 17 MR. GLADMAN: Objection. 18 A. I don't know. 19 MR. GLADMAN: Does it cover every element 20 of it? Would he like to lay those out for this 21 witness, or is he specifically talking about a 22 portion of that? 23 EXAMINER BULGRIN: I'll sustain. 24 Maybe you can rephrase. 25 MR. HEALEY: I'll move on, your Honor. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 556 1 Q. (By Mr. Healey) Let's look at lines 12 to 2 13 on page 8 as well. There you state that "In 3 addition, it continues to encourage the Companies to 4 make prudent and cost-effective decisions that 5 maximize customer net benefits." And here we are 6 referring -- it refers to using the statutory 7 benchmark as the trigger, correct? 8 A. I would say that as an aspect of the 9 overall shared savings mechanism that was approved in 10 12-2190 and continued through this case, yes. 11 Q. And I assume that the company, from your 12 perspective, always makes prudent decisions, don't 13 they? 14 MR. GLADMAN: Objection. 15 EXAMINER BULGRIN: Sustained. 16 Q. Mr. Demiray, if the Commission ruled that 17 the trigger was something other than the statutory 18 benchmark, would that somehow not encourage the 19 companies to make prudent and cost-effective 20 decisions? 21 MR. GLADMAN: Objection. Vague, 22 ambiguous, not sure what he means by "prudent." 23 MR. HEALEY: Using his own language, your 24 Honor. 25 EXAMINER BULGRIN: Could I have the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 557 1 question reread. 2 (Record read.) 3 EXAMINER BULGRIN: I'll allow it. 4 You can answer if you know. 5 A. So this reminds me kind of an old saying 6 I've heard, as an old Italian saying. He who is 7 asked to carry the goat on his shoulders will at some 8 point be asked to carry the cow. 9 I guess my point here is that what I am 10 looking at is a stipulated agreement in which the 11 terms were settled. The stipulation had a shared 12 savings mechanism included in there that stated that 13 the companies would continue the existing mechanism. 14 To change that around and start putting 15 additional requirements on top of that I think would 16 be out of line with the agreed-upon stipulation. So 17 to change the underlying terms, I can't say that it 18 would have a -- I'll strike that. I think to 19 continually move the benchmark or the measuring stick 20 against which the companies are asked to achieve 21 shared savings, you undermine the stipulation, which, 22 again, was put together with a variety of interests 23 and puts forth a robust portfolio that has a shared 24 savings mechanism designed as the target. 25 MR. HEALEY: Your Honor, I would move to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 558 1 strike everything but the part about the goat because 2 I want that in the record. My question was -- my 3 question was about the companies' decision making, 4 and that response was some general commentary about 5 the shared savings mechanism that was nonresponsive. 6 EXAMINER BULGRIN: You asked the question 7 so I am going to allow the answer, including the 8 goat. 9 Q. (By Mr. Healey) Mr. Demiray, let's move 10 to page 10 of your testimony, please. And on this 11 page you are discussing -- you are discussing 12 Mr. Spellman's recommending that noncost-effective 13 programs be included in the shared savings mechanism, 14 correct, generally? 15 A. Generally it's a criticism of his 16 interpretation, yes. 17 Q. And, again, you give an example of AEP's 18 approved savings mechanism, and you note that -- and 19 this is on lines 13 to 15, you note that AEP's low 20 income program is excluded; is that right? 21 THE WITNESS: Can you reread that? 22 (Record read.) 23 A. Savings mechanism, if you are talking 24 about their shared savings mechanism, the stipulated 25 agreement, as I understand it, if you look at my cite ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 559 1 in the stipulation, it does talk that the shared 2 savings would continue from existing programs in the 3 community -- I think it's the community action 4 program -- or, sorry, community assistance program 5 would continue to count toward shared savings and the 6 calculation of the incentive tiers, even though it 7 does have a TRC score of less than 1. 8 MR. HEALEY: I'm sorry, can you read his 9 response back? 10 EXAMINER BULGRIN: Could you read the 11 question and the response, please. 12 (Record read.) 13 A. If I could modify just one thing on that. 14 When I said "count for shared savings," shared 15 savings eligibility in the incentive tier; however, 16 the net benefits of the community assistance program 17 are not included in their calculation of net benefits 18 through the UCT mechanism. 19 Q. Thank you. That is what I was looking 20 for. And so you note also, as you said, the TRC 21 score is less than 1 so that program is not projected 22 to be cost effective, correct? 23 A. The projection showed it to be noncost 24 effective, correct. 25 Q. So you conclude based on that that AEP in ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 560 1 fact does exclude noncost-effective, at least one 2 noncost-effective, program from its shared savings 3 program and, therefore, refuting Mr. Spellman's claim 4 that other utilities do not do that? 5 A. I am not inferring it from anything other 6 than the language in their stipulation that says that 7 adjusted net benefits of the community assistance 8 program are excluded from their shared savings 9 determination. 10 Q. Does AEP's settlement exclude any other 11 noncost-effective programs from its shared savings 12 mechanism? 13 MR. GLADMAN: Objection. Goes outside 14 the scope of his testimony, your Honor. 15 EXAMINER BULGRIN: I'll allow it. 16 If you know. 17 A. I am aware that the community assistance 18 program is not cost effective and is excluded in 19 their mechanism. I am not aware of the cost 20 effectiveness results of all other programs 21 underneath their portfolio. 22 Q. Are you aware of any provisions in the 23 AEP stipulation that would exclude noncost-effective 24 savings from the shared savings mechanism other than 25 for their low income program? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 561 1 MR. GLADMAN: Objection. If we are going 2 to ask him about the stipulation in the AEP case, I 3 would ask that he provide a copy of that document so 4 he can refer to it. 5 EXAMINER BULGRIN: Yeah. Can we move on? 6 I think the stipulation does speak for itself. 7 MR. HEALEY: I respect that, your Honor. 8 In that case can I move to strike his portion of the 9 testimony interpreting that stipulation? If I am not 10 allowed to ask him questions of his testimony giving 11 his lay interpretation, it should likewise not be a 12 part of the record. 13 MR. GLADMAN: Your Honor, he was free to 14 ask that question on the specific testimony that he 15 provided. He is now going beyond that testimony. 16 EXAMINER BULGRIN: Okay. I am going to 17 give you a little bit more leeway on this. 18 MR. HEALEY: Understood. One more 19 question. 20 EXAMINER BULGRIN: One more question. 21 Q. (By Mr. Healey) Mr. Demiray, if AEP's low 22 income program ultimately proves cost effective, it 23 will still be excluded from their shared saving 24 mechanism, correct? 25 A. I can't speak to the practice that AEP ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 562 1 will use over the feature other than the language 2 that's in the stipulation that specifically says the 3 low income program, the community assistance program, 4 is excluded from net benefits. 5 MR. HEALEY: That's all I've got, your 6 Honor. 7 EXAMINER BULGRIN: Colleen, did you have 8 anything? 9 MS. MOONEY: No questions. 10 EXAMINER BULGRIN: Staff? 11 MR. JONES: No questions, your Honor. 12 MR. GLADMAN: May we have a minute to 13 confer with Mr. Demiray? 14 EXAMINER BULGRIN: Sure. 15 (Discussion off the record.) 16 MR. GLADMAN: No redirect, your Honor. 17 Thank you. 18 EXAMINER BULGRIN: Thank you. You may 19 step down, sir. 20 Any objection to the admission of Company 21 Exhibit 16? 22 Hearing nothing, that will be admitted 23 (EXHIBIT ADMITTED INTO EVIDENCE.) 24 EXAMINER BULGRIN: Are we ready with 25 Mr. Miller? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 563 1 MS. KOLICH: We are, your Honor. At this 2 time the company would call Edward C. Miller to the 3 stand. 4 EXAMINER BULGRIN: Just remind you you 5 are under oath. 6 THE WITNESS: Yes, sir. 7 EXAMINER BULGRIN: Please have a seat. 8 MS. KOLICH: Your Honor, I have a 9 multi-page document here entitled Rebuttal Testimony 10 of Edward C. Miller on behalf of the companies that I 11 would like marked as Company Exhibit 17. 12 EXAMINER BULGRIN: It will be so marked. 13 (EXHIBIT MARKED FOR IDENTIFICATION.) 14 - - - 15 EDWARD C. MILLER 16 being first previously sworn, as prescribed by law, 17 was examined and testified on rebuttal as follows: 18 DIRECT EXAMINATION 19 By Ms. Kolich: 20 Q. Mr. Miller, would you please state your 21 name and business address for the record. 22 A. My name is Edward C. Miller. My business 23 address is 800 Cabin Hill Drive, Greensburg, 24 Pennsylvania 15601. 25 Q. And are you the same Edward C. Miller who ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 564 1 submitted both direct and supplemental testimony in 2 this case? 3 A. I am. 4 Q. Do you have a copy of what's been marked 5 as Company Exhibit 17? 6 A. Yes, I do. 7 Q. Do you recognize that document? 8 A. Yes, I do. 9 Q. What is it? 10 A. It's my rebuttal testimony. 11 Q. Do you have any corrections to your filed 12 rebuttal testimony? 13 A. I do. 14 Q. Would you tell us what they are? 15 A. On page 3 I have two edits. Line 22, the 16 words "nonlow income" should be inserted prior to 17 "program." 18 EXAMINER BULGRIN: I'm sorry, where was 19 that again? 20 THE WITNESS: Line 22. 21 EXAMINER BULGRIN: Oh, okay. 22 THE WITNESS: In front of "programs." 23 EXAMINER BULGRIN: Page? 24 THE WITNESS: I'm sorry, page 3. 25 EXAMINER BULGRIN: I'm sorry. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 565 1 THE WITNESS: It should read, the 2 "Revised Plans and Nonlow Income Programs included 3 therein." 4 A. Also on page 3, line 23, the word bases," 5 B-A-S-E-S, should be "basis," B-A-S-I-S. 6 Q. Do you have any other changes? 7 A. I do. Page 19, footnote 8, the "at p. 8 31" should be deleted. 9 Q. Are those all of your corrections? 10 A. They are. 11 Q. So with those corrections in mind, if I 12 asked you the questions set forth in your rebuttal 13 testimony today, would your answers as set forth in 14 that testimony be the same? 15 A. Yes. 16 MS. KOLICH: Your Honor, at this time the 17 witness is available for cross-examination. 18 EXAMINER BULGRIN: Mr. Healey. 19 MR. HEALEY: Your Honor, I did have one 20 quick motion to strike, if that's all right with you. 21 EXAMINER BULGRIN: Sure. 22 MR. HEALEY: It's on page 10, starting at 23 line 5, your Honor, I would move to strike starting 24 at line 5 with the word "the" after the comma ending 25 with the word "Period." Here Mr. Miller is ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 566 1 interpreting a Commission ruling. The Commission's 2 orders speak for themselves. This lay interpretation 3 of the orders violates Rule of Evidence 1002, 4 commonly referred to as the best evidence rule. If 5 the Commission in fact so ruled as Mr. Miller claims 6 here in his testimony, then the parties can cite 7 those orders on brief, but the Commission should not 8 accept as evidence his interpretation of any such 9 orders. 10 MS. KOLICH: Your Honor, it may go to the 11 weight of the evidence and you could consider the 12 source, but Mr. Miller is simply giving his 13 interpretation of what he feels that Commission order 14 means. 15 EXAMINER BULGRIN: And do we have a cite 16 to the Commission order that he is referring to? 17 MS. KOLICH: Not in his testimony, but I 18 can find it. 19 EXAMINER BULGRIN: Then, yeah, let's 20 provide that. 21 MS. KOLICH: Okay. We'll get it before 22 close of the record. 23 EXAMINER BULGRIN: Do you know where 24 that's a cite to? 25 MR. HEALEY: I don't. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 567 1 EXAMINER BULGRIN: Well, maybe you can 2 ask that. 3 MR. HEALEY: I'll think about it. 4 Q. (By Mr. Healey) All right. Mr. Miller -- 5 MR. JONES: Your Honor, could I make a 6 motion to strike, too? I have a motion I would like 7 to have ruled on as well. 8 EXAMINER BULGRIN: Sure. 9 MR. JONES: This would be on page 14, 10 line 16 through 18, beginning with "Similarly" and 11 ending with "Line 10," as to line 18 because that 12 refers to a settlement with DP&L that's not concluded 13 with the Commission. It's pending before the 14 Commission, and you previously sustained an objection 15 raised as to a similar inquiry in this proceeding, 16 and so I am asking the Court to, consistent with that 17 ruling, strike this piece of testimony here referring 18 to the DP&L settlement that's pending before the 19 Commission. 20 EXAMINER BULGRIN: Ms. Kolich. 21 MS. KOLICH: Your Honor, actually, you 22 did not rule on the same situation. First of all, 23 this is being offered simply to show that the staff's 24 application, which they claim is to be consistent, is 25 not, in fact, consistent. The information provided ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 568 1 there is provided through a publicly available 2 document, basically the stipulation that's filed with 3 the Commission in its public record. 4 As for the ruling prior, you ruled 5 because I believe the party was a signatory party to 6 that stipulation. In this instance the companies are 7 not a party to that stipulation, would not be subject 8 to any confidentiality provisions, even if they would 9 apply, which in this case they don't. 10 EXAMINER BULGRIN: Okay. And let me just 11 ask, this settlement with DP&L is a publicly filed 12 document? 13 MS. KOLICH: Yes. 14 EXAMINER BULGRIN: And the witness or the 15 company will provide a cite for that as well? 16 MS. KOLICH: We can do that. 17 EXAMINER BULGRIN: I'll overrule both 18 motions to strike then. 19 MR. JONES: Your Honor, I further have 20 another motion to strike, and this would be on page 21 15, starting with line 13, and we would continue over 22 to the end of page 17, line 13. 23 Again, the Bench had given the company 24 some leeway here about talking about comparison to 25 AEP and their settlement that was approved by the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 569 1 Commission, how they have, you know, a different 2 budget, different programs, different plan than FE. 3 These are apples and oranges. 4 And also as to the acquisition cost, your 5 Honor, again, this is something that staff studied 6 and rejected, and you gave again the company a little 7 bit of leeway. Your Honor, I would say at this time 8 they have exhausted that leeway, and now they are 9 coming back to the Bench and trying to get more 10 evidence before the Bench on the same issue. They 11 have exhausted that leeway, your Honor. 12 EXAMINER BULGRIN: Ms. Kolich. 13 MS. KOLICH: Could I have that reread, 14 please. 15 (record read.) 16 MS. KOLICH: Your Honor, first of all 17 Mr. Donlon testified to quite a bit of what is in 18 this testimony. We are just following up and closing 19 the loop on that. 20 And, secondly, the leeway was dealing 21 with, as he said, the apples and oranges comparison. 22 This testimony takes out that -- those apples -- or 23 the oranges and makes them all apples, and that's 24 what this testimony does here. It's absolutely 25 relevant to our case. It's absolutely relevant to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 570 1 our rebuttal. 2 EXAMINER BULGRIN: Okay. Again, let me 3 ask, at the risk of giving the company any more 4 leeway, this is all referencing the filed documents, 5 publicly filed documents, in AEP's case, is it not? 6 MS. KOLICH: Yes, your Honor. 7 EXAMINER BULGRIN: And is that -- are 8 those documents referenced in here? 9 MS. KOLICH: Well, actually, the 10 information provided is from -- you'll see the 11 sources on page 16. Most of it is coming from FERC 12 Form 1 from both companies, which are both public 13 records. 14 EXAMINER BULGRIN: Okay. 15 MS. KOLICH: And what the testimony is 16 doing is taking out the variability of rate 17 structures, customer mixing, and shopping levels to 18 put them on even plain for an apples to apples 19 comparison, and that's why I say -- that's why it is, 20 in fact, relevant. 21 EXAMINER BULGRIN: Okay. 22 MR. JONES: In addition, your Honor, they 23 are providing analysis on that information as well, 24 which is new. 25 EXAMINER BULGRIN: Well, I am going to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 571 1 overrule the motion to strike. Any more? 2 MR. JONES: That's all, your Honor. 3 Thank you. 4 EXAMINER BULGRIN: Thank you. Are we 5 back to Mr. Healey again? 6 MR. HEALEY: I think so. 7 - - - 8 CROSS-EXAMINATION 9 By Mr. Healey: 10 Q. Good morning, Mr. Miller. 11 A. Good morning. 12 Q. As with Mr. Demiray, if I refer to your 13 testimony, I'm referring to your rebuttal testimony. 14 I don't anticipate going back to your original 15 testimony. 16 Let's start on page 12, please. And we 17 are starting near the bottom at line 19, and you note 18 that "the majority of PJM revenues resulting from 19 implementation of the Revised Plans will not be 20 realized until the next plan cycle." Just so I 21 understand what you are saying here, the next plan 22 cycle means after 2019, correct? 23 A. Yes. 24 Q. And it's true, though, that PJM revenues 25 from your prior plans will be realized between 2017 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 572 1 and 2019, correct? 2 A. PJM revenues from the prior plans, 3 depending upon the timing of the auction and the 4 delivery year, would be realized during the term of 5 the plan. However, given the scaled-back level of 6 the companies' programs in '15-'16, those revenues 7 will be limited as a result. 8 Q. Let's turn back to page 4 of your 9 testimony, and I want to talk about the portion of 10 your testimony starting on line 6 where you note that 11 "the Revised Plans propose a three-year budget which, 12 if approved by the Commission, would preclude the 13 Companies from recovering any costs above the 14 approved budget without first seeking further 15 Commission approval." Do you see those lines there? 16 A. Yes. 17 Q. And when you use the words "approved 18 budget" on line 8, you are referring to the budget 19 found in Exhibit A to the stipulation; is that right? 20 A. Yes. 21 Q. And I can hand you a copy of that, if you 22 would like, but I just want to confirm that approved 23 budget is about $268 million; is that right? 24 A. Exhibit A to the stipulation has a 25 three-year budget at approximately 268 million, ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 573 1 correct, for the three-year period. 2 Q. Okay. Now, starting on line 9, you state 3 that "the approved budget will serve as a 'cap' that 4 will control the costs of the Revised plans, 5 including all program costs and shared savings." Do 6 you see that on lines 8 to 10 of your rebuttal 7 testimony? 8 A. That is correct. 9 Q. And when you say "cap," you are referring 10 to the total amount spent over the three years of the 11 plan, correct? 12 A. Yes. 13 Q. So to clarify, if the companies were -- 14 spent under budget in 2017 and 2018, they could spend 15 that extra amount in 2019, correct, under the 16 settlement? 17 A. There could be different levels of 18 spending year over year during the three-year plan 19 that would be considered in relation to the total 20 budget of the 268 million. 21 Q. What I am just -- I am just trying to 22 clarify under the settlement if, say, you have -- the 23 settlement has a budget for 2017, 2018, and 2019, 24 correct, in Exhibit A? 25 A. There are projections throughout the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 574 1 three-year term of the plan. 2 Q. Right. 3 A. For participation, savings, and budgets. 4 Q. Sure. And so if FirstEnergy, say, is $10 5 million under those projections for '17 and '18, they 6 would be permitted to spend an extra 20 million in 7 '19 under the settlement as proposed if it were 8 approved. 9 A. I consider the plan budget a three-year 10 budget for the program so there -- again, there could 11 be variability in the -- in the projections year over 12 year, which would impact what the actual expenditures 13 are, again, keeping within the total three-year 14 budget for the programs as outlined in Exhibit A. 15 Q. So that's -- that's different than 16 staff's proposal, right, because staff is proposing 17 an actual annual cap on spending? So that would be a 18 distinction between -- 19 MS. KOLICH: Objection. 20 Q. The three-year budget and staff's 21 proposal for a cap for each of the three years 22 individually. 23 MS. KOLICH: Objection. I don't recall 24 anywhere in the evidence the staff is proposing a 25 one-year budget. Could you cite to where that -- ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 575 1 where that proposal is being made? 2 EXAMINER BULGRIN: I think he said annual 3 cap. 4 MR. HEALEY: I said annual 3 percent cap, 5 I believe. 6 MS. KOLICH: Oh. 7 EXAMINER BULGRIN: Maybe you can rephrase 8 the question. 9 MR. HEALEY: Sure. 10 Q. (By Mr. Healey) Mr. Miller, I am just 11 trying to understand the difference between a 12 three-year budget as proposed in the settlement and 13 staff's proposal for a cost cap. It's your 14 understanding that staff's proposal for a cost cap is 15 on an annual basis, correct? There's a cost cap for 16 '17. There's a cost cap for '18. There's a cost cap 17 for '19, correct? 18 A. That is my understanding. 19 Q. And so that would be different than the 20 settlement which proposes a three-year budget but 21 does not propose any individual year budget or cap? 22 A. I view plan costs and program costs 23 differently than I view the cap. The cap, as I 24 understand, is a cap on the annual spending, and 25 recovery of those costs, whereas the planned budget ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 576 1 is a three-year budget, as I discussed. 2 Q. Thank you. Let's look at that same 3 sentence. On line 8 to 10 where you note "the 4 approved budget will serve as a 'cap' that will 5 control the costs of the Revised Plans, including all 6 program costs and shared savings," I just want to 7 clarify. You are not suggesting that the approved 8 budget of $268 million under Exhibit A to the 9 settlement includes the shared savings amount, 10 correct? 11 A. The proposed budget in Exhibit A does not 12 include the shared savings costs. The reference to 13 shared savings here is by approving the program 14 budgets and for the programs that are -- approving 15 the planned budget for the programs that are included 16 in Exhibit A does control the cost of the programs, 17 but as a byproduct it does control expenditures that 18 impacts the shared savings calculations as well. 19 Q. I would like to go back briefly to lines 20 6 to 8, the first sentence in that paragraph where 21 you note a three-year budget would preclude the 22 companies from recovering any costs above the 23 approved budget without first seeking further 24 Commission approval. So your testimony is that the 25 companies could still ask the Commission for -- to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 577 1 authorize recovery above that $268 million budget? 2 A. Can you repeat the question? 3 Q. Sure. You testify that the three-year 4 budget would preclude the companies from recovering 5 costs above the approved budget, and then you say 6 "without first seeking further Commission approval." 7 Is it your testimony that the companies can seek 8 approval for spending above the $268 million budget? 9 A. It's my testimony that to the extent the 10 companies were to increase the cost of the plans, we 11 would seek Commission approval for an increase in the 12 planned costs. 13 Q. A little further down that page on lines 14 15 to 17, you note that "The Companies' opportunity 15 to earned shared savings is capped at its current 16 valve of $10 million (after tax)," and then "until 17 such time as the Companies are no longer receiving 18 revenue under Rider DMR." 19 Now, you understand that the Commission 20 approved rider DMR for three years 2017, 2018, and 21 2019, correct? 22 A. I'm aware that the Commission approved 23 rider DMR. I can't cite the exact duration of that 24 approval. 25 Q. Let's move to the top of page 5, first ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 578 1 three lines. You note that in the ESP case, "the 2 Companies are subject to a mechanism limiting average 3 customers' bills that establishes a further ceiling 4 on the total bill customers will pay over the next 5 two years." I just want to clarify by "next two 6 years" you are referring to 2017 and 2018? 7 A. The two-year period that the bill 8 mitigation mechanism is in place is from June of 2016 9 through May of 2018. 10 Q. Mr. Miller, can you turn to page 7, 11 please, of your testimony. And I am looking at line 12 20 where you state that "This results in an average 13 annual budget of approximately $90 million." Just to 14 clarify, that 90 million you are referring to is the 15 $268 million from Exhibit A divided by 3, subject to 16 rounding? 17 A. That is correct. 18 Q. And then you continue that sentence to 19 say, "before factoring in shared savings and other 20 costs outside of these budgets that would also fall 21 under Staff's proposed cost cap." Now, one of these 22 other costs is the $6 million per year for the 23 Community Connections program, correct? 24 A. That is correct. 25 Q. Are there any other costs that you are ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 579 1 referring to in line 21 of your testimony? 2 A. Page 8 of my rebuttal identifying other 3 costs starting at line 11, specifically the 4 individual mercantile applications. 5 Q. So is it your testimony then that the -- 6 these individual mercantile applications are not 7 included in the budget proposed for the mercantile 8 customer program in Exhibit A to the settlement? 9 A. The incentives associated with the 10 individual mercantile applications are not included 11 in the Exhibit A budget amount. 12 Q. Mr. Miller, let's go back to page 7 13 starting on line 13. Now, in this portion of your 14 testimony you are testifying that the companies 15 cannot realistically achieve their statutory EE and 16 PDR benchmark under staff's proposed cost cap, 17 correct? 18 A. Can you repeat the question? 19 MR. HEALEY: Can I have that read back, 20 please. 21 (Record read.) 22 A. It is my testimony that absent the use of 23 the Companies' banked savings, I do not. 24 Q. And you note here in your testimony on 25 line 17 that staff's proposed cap results in an ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 580 1 annual budget of $80.1 million for the three 2 companies. Do you see that? 3 A. Yes. 4 Q. And then, as we discussed, you note the 5 $90 million budget which comes from Exhibit A, and 6 then there is an additional 6 million a year for the 7 Community Connections program. Do you recall that? 8 A. I see on line 23 I discuss the 6 million 9 associated with the low income program. 10 Q. So you conclude that because the programs 11 are projected to cost about $90 million. There's 12 another 6 million for Community Connections, plus the 13 mercantile that we discussed, that the companies 14 cannot realistically achieve their EE benchmarks 15 because $80 million is significantly below that 16 amount, correct? 17 A. My rebuttal is that given that the annual 18 cost cap of 80 million would be inclusive of all 19 costs incurred by implementing the plans, which is 20 the $90 million average annual as shown on Exhibit A, 21 plus the additional 6 million for the Community 22 Connections program, the additional 10 million 23 associated with the aftertax shared savings amount, 24 as well as the additional costs associated with the 25 individual mercantile applications, that given the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 581 1 magnitude of the difference between the cost cap and 2 the amount of monies that would be capped under 3 staff's proposal that it is not realistic that we 4 would be able to achieve our statutory targets 5 without the use of banked savings. 6 Q. I would like to talk a little bit more 7 about this $90 million budget that you are referring 8 to here. Do you have Exhibit A to the settlement in 9 front of you? 10 A. I do. 11 Q. Now, with this $90 million annual budget, 12 the programs are projected to save a collective 13 1,781,833 megawatt-hours, correct? 14 A. That is correct. 15 MR. HEALEY: Your Honor, may I approach 16 the witness? 17 EXAMINER BULGRIN: Sure. 18 MR. HEALEY: I am handing the witness a 19 copy of Companies' May 12, 2016, Energy Efficiency 20 and Peak-demand Reduction Program Portfolio Status 21 Report for the period January 1 to December 31, 2015. 22 Your Honor, this is a public document 23 available on the DIS system. I would ask this be 24 administratively noticed, please. 25 EXAMINER BULGRIN: Sure. This is OCC ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 582 1 exhibit? 2 MR. HEALEY: This would be OCC 10. 3 EXAMINER BULGRIN: Thank you. It will be 4 so marked. 5 (EXHIBIT MARKED FOR IDENTIFICATION.) 6 EXAMINER BULGRIN: And this is available 7 on the Commission's website? 8 MR. HEALEY: Yes. 9 EXAMINER BULGRIN: However, it doesn't 10 have a URL where it says it's available. 11 MR. HEALEY: I have one, but it's not PDF 12 so you probably don't want it. 13 EXAMINER BULGRIN: Actually, I will have 14 to get back to you on that one. 15 Q. (By Mr. Healey) Mr. Miller, can you turn 16 to page 5 of the document I just handed you, please. 17 A. Okay. 18 Q. Now, page 5 has a table of the energy 19 savings from FirstEnergy's programs from 2013 to 20 2015, correct? 21 A. I see that the table is titled 22 "Annualized 2013-2015 cumulative portfolio energy 23 impacts and participation by program." 24 Q. And I would like to direct you to the 25 bottom right corner. The very last number down there ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 583 1 has megawatt-hours of 2,107,607. Do you see that 2 number? 3 A. I do. 4 Q. Now, that number is higher than the 5 1,781,833 projected in Exhibit A to the settlement, 6 correct? 7 A. That number is greater. 8 Q. And as we discussed, or I believe you 9 mentioned earlier, the companies -- and this was in 10 the context of the PJM revenue discussion. The 11 companies had suspended many of their programs in 12 2015 and 2016, so this megawatt-hour savings from 13 2013 to 2015 is for programs that were run in '13 and 14 '14 and then a smaller set of programs in '15, 15 correct? 16 A. This would represent the programs that 17 were offered in '13 and '14 as well as the programs 18 that were offered in '15, that is correct. 19 Q. Let's come back to page 7 of your 20 testimony. I would like to look at the question that 21 starts at line 13 again. I will give you a second. 22 Sorry. 23 EXAMINER BULGRIN: Can you give me the 24 cite again? 25 MR. HEALEY: Page 7, line 13, of his ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 584 1 rebuttal testimony. 2 A. Okay. 3 Q. Now, in this question it asks if "the 4 companies can realistically achieve their statutory 5 EE and PDR benchmarks under staff's proposed cost 6 cap? And as we discussed, you testified that without 7 using the banked savings, you do not believe that's 8 realistic. I just want to confirm when you are 9 referring to statutory EE benchmarks here, you are 10 referring to the requirement that the companies 11 achieve 1 percent savings of their baselines under RC 12 4928.66? 13 A. Well, which line are you referring to? 14 Q. I am referring to the word "benchmark" in 15 line 14 in the question. The benchmark there is 16 referring to the annual 1 percent benchmark under 17 Revised Code 4928.66, correct? 18 A. That is correct. 19 Q. And as we discussed last week, those 20 benchmark numbers are found in Ms. Mullins's 21 testimony, Exhibit DJM-A2. Do you recall that? 22 A. I recall that. 23 MR. HEALEY: Your Honor, may I approach, 24 please? 25 EXAMINER BULGRIN: Sure. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 585 1 MR. HEALEY: I am handing the company a 2 copy of DJM-A2, which is already in the record as 3 part of Ms. Mullins' testimony. I have a couple of 4 extra copies for those who don't have it handy. We 5 won't mark this as an exhibit since it's already in 6 the record. 7 Q. Mr. Miller, you are familiar generally 8 with this Exhibit DJM-A2, correct? 9 A. Generally familiar would be a fair 10 representation. 11 MR. KELTER: I'm sorry, where did you say 12 this is from? 13 MR. HEALEY: This is from Ms. Mullins' 14 Amended Testimony. It was the last exhibit attached. 15 Q. Now, you'll notice on Ms. Mullins' 16 exhibit that the column for Senate Bill 310 Opt Outs 17 does not have any data, correct? 18 A. I see the column. 19 Q. And that's because, as you understand, 20 when the companies were calculating their baselines 21 and benchmark for purposes of the settlement, they 22 did not assume that there would be any opt outs, 23 correct? 24 A. Can you repeat the question? 25 Q. Sure. In the settlement, as in the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 586 1 application as well, when the companies were 2 calculating their baselines and benchmarks, they 3 assumed no nonresidential customer opt outs, correct? 4 A. When we designed these 17 through 19 5 plans, we did not assume any opt outs, that is 6 correct. 7 Q. And you understand that the baseline is 8 the average of the previous three years adjusted 9 retail sales, correct? 10 A. Yes. 11 Q. So, for example, for 2017 it would be the 12 average of the fully adjusted retail sales from '14, 13 '15, and '16, correct? 14 A. Yes. 15 Q. Let's turn back to OCC Exhibit 10, and 16 this time turn to near the end, Exhibit 1. 17 A. I'm sorry, was there a page reference? 18 Q. It's just Exhibit 1. It's about the 19 fourth-to-last page in this printout. 20 MS. KOLICH: I'm sorry, Chris, where is 21 it? 22 MR. HEALEY: It's Exhibit 1 to OCC 23 Exhibit 10. It's near the end. 24 EXAMINER BULGRIN: It looks like it would 25 be page 28. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 587 1 A. I believe I am looking at the correct 2 page. 3 Q. Okay. I was making sure your counsel was 4 there as well. Now, this Exhibit 1 is a similar 5 calculation of baselines and benchmarks for the 6 historical programs from before 2017, correct? Or, 7 rather, let me rephrase. This Exhibit 1 has data 8 that is used to calculate the baselines for 2015, 9 correct? 10 A. I didn't create this table. I can't 11 necessarily speak to it. I do note that this was 12 included in the annual report that was filed on May 13 12th of 2016. I do know that Denise -- I'm sorry, 14 Witness Mullins adjusted the baseline calculations in 15 her Exhibit DJM-A2. 16 Q. Just a couple more questions. Let's 17 stick with Exhibit 1. The fourth column from the 18 left discusses Total Opt Outs. Do you see that 19 column? 20 A. I do. 21 Q. And it has opt out data from 2012, '13, 22 and '14 for each of the three companies? 23 MS. KOLICH: Objection. The witness has 24 indicated he did not prepare this and is not familiar 25 with this chart. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 588 1 EXAMINER BULGRIN: Well, you can answer. 2 I'll overrule. You can answer if you know. 3 A. I see the values indicated in the Total 4 Opt Out column of Exhibit 1. 5 Q. Let me ask you this independent of 6 Exhibit 1. It's 2017 now. The companies have opt 7 out data from 2014, correct? 8 A. No. 9 Q. The companies do not have any data on the 10 opt outs that occurred for year 2014? 11 A. The opt outs were available for 2015 and 12 '16 when the companies amended their plans. 13 Q. Okay. So it's 2017 now. Do the 14 companies have data for opt outs from 2015? 15 A. The companies have data for opt outs from 16 2015. 17 MR. HEALEY: Okay. That's all I have, 18 your Honor. 19 EXAMINER BULGRIN: Staff? 20 MR. JONES: Yes. 21 - - - 22 CROSS-EXAMINATION 23 By Mr. Jones: 24 Q. Good morning, Mr. Miller. My name is 25 John Jones, and I represent the staff in this case. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 589 1 A. Good morning. 2 Q. I have a few questions for you. I want 3 to turn your attention to page 5 of your testimony at 4 line 19. 5 A. Yes, sir. 6 Q. And there you state that "Staff did no 7 such analysis"; is that correct, in the context of 8 your question from line 5? 9 A. That is correct. 10 Q. Okay. And did you at any time speak to 11 Mr. Donlon and his team as to what analysis staff 12 conducted in this case? 13 A. While I did not speak directly with 14 staff, I was relying in my statement on the testimony 15 that Witness Donlon provided in this case which 16 didn't provide any analysis or any explanation of the 17 data that was reviewed from the '12 through '14, 18 period. 19 MR. JONES: Your Honor, if I could ask to 20 strike everything after he did not speak to staff. 21 That was the question, as to whether or not he spoke 22 to Mr. Donlon and his team regarding the analysis 23 done in this case as unresponsive. 24 EXAMINER BULGRIN: Ms. Kolich. 25 MS. KOLICH: Your Honor, he asked, Did ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 590 1 you speak with the staff? And all he said was what 2 he did rely on. He did not rely on the conversation 3 but he relied on what Mr. Donlon put in his 4 testimony. 5 MR. JONES: That was not my question, 6 what he relied on. I asked if he spoke with staff. 7 MS. KOLICH: He is -- 8 EXAMINER BULGRIN: I will overrule the 9 motion to strike. 10 Maybe you can rephrase the question. 11 Q. (By Mr. Jones) So, Mr. Miller, did you 12 directly speak to Mr. Donlon or any staff as to their 13 analysis conducted in this case? 14 MS. KOLICH: Objection, asked and 15 answered. 16 EXAMINER BULGRIN: Overruled. 17 You can answer. 18 A. I did not speak to staff. 19 Q. Thank you. Now, I want to turn your 20 attention to page 6 of your rebuttal testimony. Now, 21 at lines 9 through the rest of the page there on page 22 6, you give an example there on the -- on the 23 lighting, CFL lighting, in favor of LED lighting; is 24 that correct? 25 A. That is correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 591 1 Q. Okay. And LED lighting is more expensive 2 than CFL lighting because of the new technology in 3 LEDs; is that correct? 4 A. I can't speak to why LED lighting is more 5 expensive, but I think it's logical that it's based 6 on the -- based on the technology associated with the 7 manufacture of that product. 8 Q. Okay. And any new product that has 9 that -- that provides new technology which would 10 provide better efficiency, it's expected to be more 11 expensive when first offered in the market, is that 12 correct, to your understanding? 13 A. That's really hard to say. That's -- 14 there's -- I mean, generally speaking, new technology 15 is more expensive, but I -- I think that's a 16 "depends" question. 17 Q. And would you expect that over time that 18 LED lighting would be less expensive, over time? 19 MS. KOLICH: Objection, calls for 20 speculation. 21 Q. If you know. 22 EXAMINER BULGRIN: Overruled. 23 You can answer. 24 A. LED lighting -- 25 Q. Compared to other products that have new ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 592 1 technology that's offered. 2 MS. KOLICH: Can I have that question 3 reread, please. 4 (Record read.) 5 EXAMINER BULGRIN: Maybe you want to 6 rephrase that. 7 Q. (By Mr. Jones) I think I asked you a 8 compound question. I'm sorry. Would you expect the 9 price to come down and over time after new technology 10 and a product is offered in the market? 11 A. Golly, I might not be following that 12 question. Could you rephrase that again? I'm 13 hearing LED lighting. I'm hearing new technology, so 14 I'm not sure of the question. 15 Q. Let's stick with LED lighting and the 16 technology associated with that and providing better 17 efficiency. Would you expect that over time 18 eventually that price will come down? 19 A. I have observed that the pricing of LED 20 lighting has decreased somewhat over the past few 21 years since it has come out. I'm not aware of any 22 price projections going forward regarding the pricing 23 of LEDs as to whether it will continue to decrease or 24 whether it will remain at the current levels. 25 Q. Okay. And the companies' change in the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 593 1 programs to incentivize LED lighting over CDL -- CFL 2 lighting for their plan here in this case was not 3 required by law or Commission order, was it? 4 A. The design of the revised plan to 5 prioritize LED lighting over CFL lighting was one of 6 the terms of the stipulation. I'm not aware of law 7 or regulation that required that. 8 Q. Okay. So that was a -- that was a 9 management decision? 10 MS. KOLICH: Objection. 11 EXAMINER BULGRIN: Basis? 12 MS. KOLICH: It's dealt with in the 13 stipulation, which is confidential. 14 EXAMINER BULGRIN: Overruled. 15 You can answer if you know. 16 A. The question again? 17 Q. Was that a management decision? 18 A. The decision to prioritize LEDs over 19 CFLs? 20 Q. Yes. 21 A. That was a decision taken in context with 22 all of the components of the stipulation and the 23 terms of the stipulation. So the stipulation on a 24 whole would be a management decision. 25 Q. Okay. Mr. Miller, referring your ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 594 1 attention back to page 5, again, lines 19 through 22, 2 going over to page 6, line 1, starting with 3 "Mr. Donlon supports his recommendation based on data 4 from 2012-2014." Do you see that? That's your 5 testimony. 6 A. Yes, I do. 7 Q. And so you have -- you are familiar then 8 with the annual reports that have been filed by 9 FirstEnergy over those years up to -- up to today as 10 to that history that staff had looked at? 11 A. That is correct. 12 Q. And I want to first start with, since you 13 have it in front of you, I believe still, OCC Exhibit 14 10, if I could refer you to page 4 -- or page -- yes, 15 page 4, and if you would look here for the Table 2-1, 16 and looking at the second column of that table where 17 it says "Updated 2015 for Compliance Benchmark," do 18 you see that? 19 A. Yes. 20 Q. Okay. And would you read the total then 21 at the bottom of that first column? 22 A. The total for that column? 23 Q. Yes. 24 A. On Table 2-1? 25 Q. Yes. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 595 1 A. 1,900 -- I'm sorry. 1,990,668 2 megawatt-hours. 3 Q. Okay. And that total is then the 4 compliance benchmark for all three operating 5 companies of FirstEnergy? Is that what you just 6 read? 7 A. I believe this is the cumulative 8 benchmark at the end of 2015. 9 Q. Okay. So the cumulative benchmark, so 10 that would be from 2009 through 2015; is that 11 correct? 12 A. If I understand the table correctly, yes. 13 Q. Okay. And likewise then if you would 14 read -- if you would follow me then to the fifth 15 column over that's titled Savings from Approved 16 Programs and Pending Projects, do you see that 17 column? 18 A. I do. 19 Q. Okay. And this is what the FirstEnergy 20 companies achieved cumulatively, is that correct, 21 cumulative, total? 22 A. That is my understanding if I understand 23 the table correctly. 24 Q. Okay. And what is the -- what's the 25 totals provided there for the cumulative number for ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 596 1 achievement? 2 A. For Savings from Approved Programs and 3 Pending Projects? 4 Q. Yes. 5 A. The total that's shown on this table is 6 3,922,812 megawatt-hours. 7 Q. Okay. 8 MR. JONES: Your Honor, I also have the 9 2014 and 2013 annual status reports, but I don't -- I 10 just have the pages where the table is provided. I 11 don't have the whole report, like OCC has provided 12 here. 13 I would like to ask for administrative 14 notice of all -- the two other reports, 2014 and 15 2013, be taken by the Bench; and I do have at least 16 the tables to provide for the witness to follow for 17 what I need from those tables for those years. 18 EXAMINER BULGRIN: Sure. Why don't we go 19 ahead and just -- like a single page? 20 MR. JONES: Yes, your Honor. 21 EXAMINER BULGRIN: Mark that as an 22 exhibit? 23 MR. JONES: I have got it marked, so may 24 I approach the witness, your Honor? 25 EXAMINER BULGRIN: Sure. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 597 1 MR. KELTER: Have you got any more 2 copies? 3 MR. JONES: I do. 4 EXAMINER BULGRIN: Could you just let us 5 know what case numbers these were filed in? 6 MR. JONES: Does anybody else need a 7 copy? 8 MS. MOONEY: Just need to know where it 9 comes from. 10 MR. JONES: Yes. 11 MS. MOONEY: It's publicly filed. 12 EXAMINER BULGRIN: Let's go off the 13 record here for a second. 14 (Discussion off the record.) 15 EXAMINER BULGRIN: Let's go back on the 16 record. 17 Ms. Kolich, did you want to read some 18 things into the record? 19 MS. KOLICH: Yes, your Honor. During the 20 break -- well, yes. We've obtained those citations 21 that you asked for regarding the DP&L stipulation 22 that was filed in Case No. 16-649-EL-POR and 23 16-1369-EL-WVR. The AEP stipulation was filed in 24 Case No. 16-0574-EL-POR. 25 With regard to Mr. Miller's reference to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 598 1 the opportunity to earn, we would cite to footnote 1 2 where the ESP IV order is cited. Basically with 3 regard to an interpretation of an order, you have a 4 layperson interpreting the order -- well, not 5 interpreting the order. The order basically says 6 that the companies -- nowhere does it say they are 7 guaranteed to receive shared savings. 8 EXAMINER BULGRIN: Let's not have you 9 testify. 10 MS. KOLICH: No, no, no. Basically he's 11 not interpreting the order. He is using common 12 sense. 13 MR. HEALEY: I'm satisfied with the 14 citation, your Honor. 15 EXAMINER BULGRIN: Yeah. That's plenty, 16 right? 17 MS. KOLICH: Fine. 18 EXAMINER BULGRIN: Thank you. 19 Okay. Mr. Jones. 20 MR. JONES: Yes, your Honor. I just 21 wanted to put on the record I still want the 22 citations to the reports that I asked administrative 23 notice be taken of. 24 EXAMINER BULGRIN: Yes, if you would. 25 MR. JONES: Okay. For the 2013 annual ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 599 1 report to the PUCO from FirstEnergy, that would be 2 Case No. 14-0859, which was filed on May 15, 2014. 3 For the 2014 report that would be Case No. 15-0900, 4 and that report was filed on May 15, 2015. And -- 5 well, just the two, I guess, because the third one 6 was OCC's, yes. 7 EXAMINER BULGRIN: Okay. Thank you. 8 MR. JONES: I think, your Honor. 9 MS. KOLICH: Your Honor, before we move 10 on with the cross-examination, if we are going to 11 take administrative notice of the companies' prior 12 reports, I would ask that the Commission also take 13 administrative notice of the prior reports of AEP, 14 DP&L, and Duke, and I have those case numbers as 15 well. 16 A lot of our case is based on comparisons 17 and consistency among the utilities so if there is 18 data being used for ours, we would at least have -- 19 want the opportunity to compare them to the other 20 utilities. 21 EXAMINER BULGRIN: Sure. 22 MR. JONES: I would object, your Honor. 23 Are we going to try the whole AEP case in this 24 proceeding? That doesn't sound fair. 25 EXAMINER BULGRIN: No. But if they need ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 600 1 to make arguments, they can certainly cite to the 2 public record of what was done in another case. 3 MS. KOLICH: And for the record -- 4 MR. KELTER: Those are probably filed 5 reports. We don't even need to take administrative 6 notice of them to cite them, do we? 7 EXAMINER BULGRIN: I'm not going -- I am 8 not going down that rabbit hole. 9 MS. KOLICH: For the record I can give 10 you the citations. 11 EXAMINER BULGRIN: Yes, if you would read 12 those in. 13 MS. KOLICH: For AEP it would be 14 14-0853-EL-EEC. For the '15 report it would be 15 15-0919-EL-EEC, and the '16 report would be 16 16-109-EL-EEC. 17 For Dayton Power and Light the '14 report 18 is 14-738-EL-POR. The '15 report is 15-0777-EL-POR, 19 and Dayton Power and Light '16 is 16-0851-EL-POR. 20 For Duke the report for '14 is 21 14-0456-EL-EEC. The Duke '15 report is 22 15-0454-EL-EEC, and their '16 report is 23 16-0513-EL-EEC. 24 EXAMINER BULGRIN: Thank you. 25 MR. JONES: Your Honor, could I at least ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 601 1 have a limiting order on the scope of that -- those 2 reports would be limited to the scope of 3 cross-examination? 4 EXAMINER BULGRIN: Yes. 5 MR. JONES: Thank you. 6 MS. KOLICH: Well, let me make sure I 7 understood that. Is it limited to his 8 cross-examination or limited to what they argue in 9 their brief that we may rely on similar information 10 to respond in our reply brief? Because it may be two 11 different things. 12 MR. JONES: Your Honor, I didn't open the 13 door for that. That's beyond the cross-examination 14 here as to introducing these reports for 15 cross-examination purposes of Mr. Miller. 16 EXAMINER BULGRIN: Yeah. I would agree 17 to that. I mean, you can certainly -- on brief you 18 can always cite to what the Commission has done in 19 other cases, which I believe -- 20 MR. KELTER: That was my point. 21 EXAMINER BULGRIN: -- was your point. So 22 with that understanding. 23 MR. JONES: Thank you, your Honor. May I 24 continue? 25 EXAMINER BULGRIN: Oh, yes, Mr. Jones. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 602 1 MR. JONES: Thank you, your Honor. 2 Q. (By Mr. Jones) Mr. Miller, I want to 3 refer your attention again back to OCC Exhibit 10. 4 And we were discussing, I believe, the table on page 5 4, Table 2-1. And the fifth column there, it deals 6 with Savings from Approved Programs and Pending 7 Projects. Do you see that again? 8 A. Yes. 9 Q. Okay. And you gave me the number there, 10 the total for that column, as a cumulative number for 11 what was achieved here for the energy efficiency 12 benchmarks. Now, in order to find or to calculate 13 for that number to find out what achievement was -- 14 what was achieved for the 2015, you would have to 15 compare that to the 2014 report in the same table; is 16 that correct? 17 MS. KOLICH: Could I have that question 18 reread, please. 19 (Record read.) 20 MS. KOLICH: The witness might know, but 21 which number are you referring to? 22 MR. JONES: I am trying to get there, but 23 I need to -- 24 MS. KOLICH: I mean, when you reference 25 that number, I don't know. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 603 1 MR. JONES: Oh, in this table? 2 MS. KOLICH: Yes. 3 MR. JONES: I'm sorry, the 3 million 822 4 number. 5 MS. KOLICH: Okay. 6 Q. I'm sorry, did you answer, Mr. Miller? 7 A. I believe the answer is generally yes. I 8 note that there are some footnotes to that table. 9 There's a footnote 1 associated with savings from 10 approved programs that notes that there are 11 modifications for prior period adjustments. I am not 12 aware of what those adjustments are, but there is 13 that notation. 14 Secondly, there is a second footnote that 15 specifically calls out T&D projects pending before 16 the Commission. So from looking at the table I think 17 generally, yes, but there could be exceptions to 18 that. 19 Q. Okay. Let me -- let me follow-up there. 20 I handed you the other exhibits, staff exhibits there 21 that's before you. If you would refer to Staff 22 Exhibit 4, please, for the 2014 report. 23 A. Not 3? 24 Q. No, not 3. Past 3, go to Exhibit 4, 25 please. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 604 1 MS. KOLICH: I'm sorry, counselor. I 2 hate to interrupt. What is Staff Exhibit 4? 3 MR. JONES: Staff Exhibit 4 is the 2014 4 report. 5 MR. KELTER: Actually -- 6 EXAMINER BULGRIN: Let's go off the 7 record for a minute. 8 (Discussion off the record.) 9 EXAMINER BULGRIN: Mr. Jones. 10 MR. JONES: Thank you, your Honor. 11 Q. (By Mr. Jones) Starting with Staff 12 Exhibit 4, I would like to have that marked that is 13 the two thousand -- this is from the 2014 annual 14 report of FirstEnergy, and that is Case No. 15-0900. 15 EXAMINER BULGRIN: It will be so marked. 16 MR. JONES: And then for Staff Exhibit 5, 17 this is from again the 2014 annual report for 18 FirstEnergy in Case No. 15-0900. 19 EXAMINER BULGRIN: Okay. 20 MR. JONES: And for Staff Exhibit 6 would 21 be page 4 of the 2013 annual report filed by 22 FirstEnergy, and that is in Case No. 14-0859. 23 EXAMINER BULGRIN: Okay. 24 MR. JONES: And, finally, we have Staff 25 Exhibit 7, which is page 7 of the 2013 annual report ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 605 1 filed by FirstEnergy in Case No. 14-0859. 2 EXAMINER BULGRIN: Okay. Thank you. 3 Those will be so marked. 4 (EXHIBITS MARKED FOR IDENTIFICATION.) 5 MR. HEALEY: Your Honor, can I get a 6 clarification? There will be no Staff Exhibit 2 or 7 3? 8 MR. JONES: That's correct, because 9 that's covered by OCC Exhibit 10. 10 EXAMINER BULGRIN: Are we ready? 11 MR. KELTER: So actually, just a quick 12 question, so, John, you are not filing -- Staff 13 Exhibit 3 is completely out? 14 EXAMINER BULGRIN: We don't need this on 15 the record? 16 MR. KELTER: No, no. 17 (Discussion off the record.). 18 EXAMINER BULGRIN: Let's go back on the 19 record. 20 Q. (By Mr. Jones) Mr. Miller, I want to 21 compare, if you refer to OCC Exhibit 10 for the 2015 22 annual report, page 4, Table 2-1, that column 5 that 23 we just went over, the number 3,922,812, I want you 24 to then look at Staff Exhibit 4, which is the 2014 25 annual report by FirstEnergy, again looking at Table ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 606 1 2-1, and would you read then from that column 5 of 2 Table 2-1 from the 2014 report, what is the total 3 number for the three operating companies? 4 A. The fifth column? 5 Q. The fifth column, yes. 6 A. Savings from Approved Programs and 7 Pending Projects? 8 Q. Yes. 9 A. The total? 10 Q. Yes. 11 A. Okay. 3,265,176 megawatt-hours. 12 Q. Okay. And so in order -- because these 13 are cumulative numbers, in order to get to 2015, what 14 was achieved for just 2015, wouldn't you take the 15 total from column 5 and in Table 2-1 in OCC Exhibit 16 10 and minus the total in column 5, Table 2-1, in 17 Staff Exhibit 4? 18 A. Generally speaking, again, noting the 19 same footnotes apply onto the tables. 20 Q. I'm sorry? 21 A. Generally speaking, again noting that 22 there are footnotes in the tables that talk about 23 modifications for prior period adjustments, which I'm 24 not sure of, so there could be differences that 25 contribute to that calculation that this table ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 607 1 doesn't illustrate. 2 Q. Okay. But with that noted, then, that's 3 the calculation that you would make to determine what 4 then was achieved for the FirstEnergy companies for 5 2015, correct? 6 A. Generally speaking. 7 Q. Okay. And subject to check, if you were 8 to do the math calculation on subtracting 3,265,176 9 from 3,922,812, you get approximately 657,632 in 10 megawatt-hour savings, is that correct, subject to 11 check? 12 A. Subject to check. But I do note that on 13 page 5 of OCC Exhibit 10 there is a breakout of 14 savings by programs, and the T&D improvements program 15 was approximately 10 percent of the savings in that 16 time period so that could have a material impact on 17 that calculation. 18 Q. Okay. Now, if I could also then refer 19 you to table -- to page 7 of OCC Exhibit 10, Table 20 3-1, do you see that table? 21 A. Yes, sir. 22 Q. Okay. And here, again, although there is 23 not a calculation total for each of those columns for 24 each of the operating companies, would you agree that 25 if you were to add all these numbers for the three ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 608 1 operating companies, it would give you the cumulative 2 number for the -- for the cost of the programs for 3 the FirstEnergy companies from 2009 through 2015? 4 MS. KOLICH: Objection, your Honor. This 5 is well beyond the scope of his testimony. The 6 numbers speak for themselves. If staff wanted to do 7 these analyses, they should have put a witness on to 8 explain their analyses. I don't see anywhere in his 9 testimony where he is talking about any of this 10 material, and it's well beyond the scope. 11 MR. JONES: Your Honor, it goes right to 12 how, you know, the companies are attacking the staff 13 as to their looking at the history here to see, you 14 know, as a barometer, you know, what this plan period 15 would cover and how they could meet their benchmarks. 16 MS. KOLICH: No, he did not testify to 17 the historic -- 18 EXAMINER BULGRIN: I will allow a little 19 leeway on this, but let's try to move it along. 20 MR. JONES: Okay. 21 MR. KELTER: Can I make a point, your 22 Honor? 23 EXAMINER BULGRIN: Sure. 24 MR. KELTER: I don't recall Mr. Donlon 25 referring to these reports. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 609 1 EXAMINER BULGRIN: I note that. 2 Go ahead. 3 MR. JONES: Your Honor, I have to go 4 through a couple of extra steps here because these 5 are cumulative numbers, the way they're formatted to 6 provide to the Commission. I am trying just to get 7 down to the year budget here, but I'll have to deal 8 with cumulative numbers. 9 EXAMINER BULGRIN: Maybe you can ask it 10 subject to check. 11 MR. JONES: Yeah. That's what I am 12 doing. Thank you. 13 Q. (By Mr. Jones) So, Mr. Miller, these 14 numbers that are provided for the program cost for 15 the three operating companies, these are cumulative 16 numbers; is that correct? 17 MS. KOLICH: Your Honor, I would just 18 note a continuing objection to this entire line of 19 questioning and also to note that the witness -- I 20 don't recall any foundation as to whether he prepared 21 these documents or is familiar with these documents. 22 EXAMINER BULGRIN: I understand. 23 However, are we talking about the last row in this 24 table? 25 MR. JONES: We are looking at the -- ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 610 1 well, the row for Ohio Edison, the first row for Ohio 2 Edison, the first column, and the first column for 3 Cleveland Electric, and the first column for Toledo 4 Edison. 5 EXAMINER BULGRIN: Okay. I'll overrule 6 the objection. 7 MR. KELTER: John, are you still on the 8 2014 report? 9 MR. JONES: This is the 2015 report, OCC 10 Exhibit 10. 11 MR. KELTER: Oh, thank you. 12 MS. KOLICH: Which page? Sorry. 13 MR. JONES: Page 7. 14 MS. KOLICH: Thank you. 15 MR. JONES: Sure. I believe I had a 16 pending question. 17 EXAMINER BULGRIN: Could you ask it 18 again? 19 MR. JONES: Yes. 20 Q. (By Mr. Jones) Mr. Miller, looking at 21 page 7 of OCC Exhibit 10 and Table 3-1, and you see 22 the -- for Ohio Edison, Cleveland Electric, and 23 Toledo Edison, the total programs spending including 24 common costs, do you see those numbers for all the 25 programs listed? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 611 1 A. I do see numbers reported in that table. 2 Q. So if you were to add all of those 3 numbers for the three operating companies together, 4 they would be the cumulative number then for the cost 5 of the programs from 2009 through 2015? 6 MS. MOONEY: Your Honor, object. Just 7 simply I don't understand where 2009 has to do -- 8 MR. JONES: Well, it's the cumulative 9 number. I guess I am making it as a reference. 10 MR. KELTER: I'm a little confused too. 11 Does it say "2013 to 2015"? 12 MS. MOONEY: What's 2009 got to do with 13 it? 14 MR. JONES: '13 to '15, excuse me. 15 THE WITNESS: Could I hear the question 16 again so I'm clear? 17 MR. JONES: '13 to '15. 18 Q. (By Mr. Jones) Mr. Miller, if you were to 19 add then the numbers provided in Table 3-1 of OCC 20 Exhibit 10 for the three operating companies, if you 21 were to add all these numbers for the three 22 companies, this would be the cumulative number for 23 the program costs for the three companies for these 24 costs for the programs? 25 A. I did not create this table, so I can't ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 612 1 speak to it with certainty. I do note the column 2 heading does say "Total 2013-'15 Program Spend 3 Including Common Costs." I also note that in 2015 4 our programs were suspended so I would not view this 5 information as necessarily being representative on 6 that basis as well. 7 MR. JONES: Your Honor, I don't believe 8 that was a responsive answer. Could I ask him to 9 answer the question? 10 EXAMINER BULGRIN: Well, let me try this, 11 Mr. Miller, the table that appears on OCC Exhibit 10, 12 page 7, as I understand it, you were not responsible 13 for creating this table? 14 THE WITNESS: That is correct. 15 EXAMINER BULGRIN: Would you have been 16 involved in the creation of this -- the production of 17 these numbers? Are you familiar with the numbers 18 that are appearing on this table? 19 THE WITNESS: I am not. 20 EXAMINER BULGRIN: What staff witness 21 would that be? I'm sorry, what company witness? 22 Sorry. I mean, this report was filed by the 23 FirstEnergy companies, if I am reading this 24 correctly. 25 MS. KOLICH: That is correct, your Honor. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 613 1 EXAMINER BULGRIN: And so there should 2 be -- let's go off the record for a minute. 3 (Discussion off the record.) 4 (Thereupon, at 12:04 p.m., a lunch recess 5 was taken.) 6 - - - 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 614 1 Tuesday Afternoon Session, 2 January 31, 2017. 3 - - - 4 EXAMINER BULGRIN: Back on the record. 5 Mr. Jones. 6 MR. JONES: Thank you, your Honor. 7 MS. KOLICH: Your Honor, before Mr. Jones 8 starts his -- restarts his cross, can I be heard on 9 this entire line of questioning? 10 EXAMINER BULGRIN: Sure. 11 MS. KOLICH: I mean, if you look at 12 Mr. Miller's testimony, the extent of his testimony 13 regarding staff's analysis is basically to observe 14 that staff did no analysis and he references 15 Mr. Donlon's recommendation based on the data from 16 2012 to 2014. 17 That's the extent of his testimony. This 18 witness has testified that he has not prepared these 19 documents. He is not familiar with the source of 20 those documents -- 21 MR. JONES: Your Honor, I am going to 22 object. This is a reargument. You've already 23 decided the issues. 24 MS. KOLICH: -- the footnotes that may 25 impact the calculations that staff is asking him to ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 615 1 do, and the documents speak for themselves. What 2 this is is clearly a backdoor attempt by staff to get 3 in the record that which should have been in their 4 direct testimony. 5 EXAMINER BULGRIN: Okay. Well, I think 6 it's fair to say that even though he did not 7 personally prepare these reports, these are the 8 annual reports filed by the companies with the Public 9 Utilities Commission, so to the extent that he can 10 use those to ask questions about his relevant 11 testimony in their cross, I am going to allow it. 12 Now, beyond that, I would agree with you 13 that, you know -- 14 MS. KOLICH: Well, at a minimum 2012 to 15 2014. There is no reference to 2015 in his 16 testimony, so any discussions about the 2015 report 17 are beyond the scope of his testimony. 18 MR. JONES: Your Honor, it says, Staff's 19 focus on backward-looking data incorrectly assumes 20 the status quo for a period of up to seven years, 21 which includes 2015. 22 EXAMINER BULGRIN: Yes. And I think, you 23 know, the purpose of this case is going forward what 24 are we going to do, so I think anything going to the 25 future is kind of fair game, at least if he has an ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 616 1 opinion, you can ask him -- or he can answer, sorry. 2 But let's go back on the record. 3 Mr. Jones -- I guess we were on the record. 4 Okay. Mr. Jones. 5 MR. JONES: Yes, thank you. 6 MS. KOLICH: Your Honor, was that 7 discussion on the record? 8 EXAMINER BULGRIN: Yes, it was. 9 MS. KOLICH: I thought it was. 10 EXAMINER BULGRIN: It was, right? 11 THE COURT REPORTER: Yes. 12 - - - 13 EDWARD C. MILLER 14 being first previously sworn, as prescribed by law, 15 was examined and testified further on rebuttal as 16 follows: 17 CROSS-EXAMINATION (Continued) 18 By Mr. Jones: 19 Q. Mr. Miller, I think where we were, we 20 were comparing the Table 3-1 in OCC Exhibit 10 to 21 Table 3-1 in Staff Exhibit 5 for comparing 2015 and 22 2014. Do you recall those two tables. 23 A. Yes, I do. 24 Q. Okay. And comparing those two tables, 25 when you add up all the program costs for -- for the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 617 1 three operating companies for Table 3-1 in Staff 2 Exhibit 5 and deduct that then from if you add up all 3 the costs in Table 3-1 of OCC Exhibit 10, then that 4 would give you the program costs for 2015, correct? 5 A. I don't know. 6 Q. Well, because the tables provide for 7 cumulative numbers from 2013 and 2014 for both OCC 8 Exhibit 10 and Staff Exhibit 5, and we're comparing 9 those cumulatives from 2015 to 2014, if you subtract 10 the 2014 from 2015, that would give you the 2015 11 program costs, wouldn't it, for the FirstEnergy 12 companies? 13 MS. KOLICH: Objection. The witness said 14 he didn't know. 15 EXAMINER BULGRIN: He can answer if he 16 knows. 17 A. I don't know that. I see what the 18 reports say in terms of the costs. I note that 19 earlier I commented that there were adjustments to 20 savings that occur between the reporting periods. I 21 don't know if there is any adjustments to the 22 spending or if there is any other factors in these 23 numbers that, you know, may or may not be included in 24 these numbers in these reports. 25 Q. Mr. Miller, you would not dispute that ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 618 1 for 2015 FirstEnergy companies spent 16 million on 2 their portfolios plans -- programs? 3 A. I'm not aware of the -- where that 4 calculation is shown. 5 Q. Well, subject to check, if you were to 6 add the costs for the programs in Staff Exhibit 5 for 7 the three operating companies and subtract that from 8 the total costs from all the program costs being 9 added up in OCC Exhibit 10, subject to check, 10 wouldn't that be $l6 million? 11 A. I see a lot of numbers on this report. 12 If you're producing a calculation that the difference 13 between the two is 16 million, but, again, I can't 14 speak to any adjustments that may have occurred 15 within these reports or after these reports 16 associated with these numbers. 17 Q. Okay. And I am asking this to stick with 18 the tables. I understand you have got caveats but 19 just with the tables. 20 MS. KOLICH: Objection. It speaks for 21 itself. 22 MR. JONES: Your Honor, it's my question. 23 They can't tell me what the question can be. 24 MS. KOLICH: The document speaks for 25 itself. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 619 1 MR. KELTER: Your Honor -- 2 EXAMINER BULGRIN: Let's go off the 3 record. 4 (Discussion off the record.) 5 EXAMINER BULGRIN: Let's go back on the 6 record. Mr. Jones. 7 MS. KOLICH: Can I have the last question 8 and answer reread, please. 9 (record read.) 10 EXAMINER BULGRIN: Could you reask it? 11 Maybe that's easier. 12 MS. KOLICH: Did we get a response to the 13 last question, and was it "I don't know"? 14 MR. JONES: I don't think he answered the 15 question. 16 MS. KOLICH: Okay. 17 Q. (By Mr. Jones) Okay. Mr. Miller, subject 18 to check, if you were to take all the program costs 19 from Staff Exhibit 5 in Table 3-1 and subtract that 20 total from the total of the costs in 3-1, the Table 21 3-1 on page 7 on OCC Exhibit 10, wouldn't you get $l6 22 million for the program costs for the FirstEnergy 23 companies? 24 A. I believe I answered that question. 25 EXAMINER BULGRIN: Well, could you answer ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 620 1 it again, please. 2 THE WITNESS: Certainly. I have not done 3 the calculation of the difference between those two 4 tables. If you have done the calculation and it's 16 5 million, that, you know, is a number. But as I 6 noted, I don't know that there is any adjustments to 7 these numbers or if these numbers reflect total 8 program costs associated with the plan or the 9 programs included therein, as well as any adjustments 10 that may have occurred after the reporting period. 11 Q. So you are accepting it, subject to 12 check? 13 A. Subject to my caveats. 14 Q. Okay. Now, if I could refer your 15 attention to Staff Exhibit 6, please, and I am 16 referring you to the Table 2-1 on page 4 of 17 FirstEnergy's 2013 annual report. Do you see the 18 table? 19 A. I'm sorry. Which table? 20 Q. 2-1. 21 A. Yes. 22 Q. And in the second column there, that 23 provides for -- do you agree that provides for the 24 compliance benchmark for 2013 for the three operating 25 companies? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 621 1 A. I see that the report identifies the 2 second column as the updated 2013 compliance 3 benchmark. 4 Q. Okay. And the total there being 5 1,704,537 for the three companies? 6 MS. KOLICH: Objection. These pages 7 speak for themselves. There is no foundation as to 8 whether this witness is familiar with these tables. 9 MR. JONES: We've already established the 10 foundations. They are their reports. 11 EXAMINER BULGRIN: Okay. Well, maybe you 12 could ask the question without making him do the 13 math. 14 I mean, these are company-filed reports 15 that are on our website, if I am understanding 16 correctly. 17 MS. KOLICH: That is correct. However, 18 this witness did not prepare those reports. 19 EXAMINER BULGRIN: I understand that, but 20 he should be knowledgeable, I would assume, of what's 21 happening with the companies' operations. 22 MS. KOLICH: This was not part of his 23 testimony. 24 MR. JONES: Objection. It is part of his 25 testimony, your Honor. He says "the reports" in his ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 622 1 testimony. 2 EXAMINER BULGRIN: Well, he didn't attach 3 this report to his testimony. 4 MR. JONES: He comments on the reports, 5 these reports for these years. 6 EXAMINER BULGRIN: Okay. Well, let's see 7 if we can get done here before the day is over. I 8 certainly don't want to be another day. 9 Q. (By Mr. Jones) Mr. Miller, I want to 10 direct your attention then to the fifth column on 11 Staff Exhibit 6 in Table 2-1. Do you see that, 12 "Savings from Approved Programs and Projects"? 13 A. Yes. 14 Q. Okay. And you see that there is a total 15 number there for the three operating companies? 16 A. Yes. 17 Q. Okay. Now, subject to check, if you were 18 to take the total -- total savings that are listed 19 there from Staff Exhibit 6 and subtract it from the 20 savings that are provided in Staff Exhibit 4, the 21 same column, column 5 in Table 2-1, do you see that 22 reference there for the two tables? 23 A. Staff Exhibit -- I'm sorry? 24 Q. 4. 25 A. Exhibit 4? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 623 1 Q. Yes. Column 5 in Table 2-1, if you were 2 to subtract the number -- the total number in Staff 3 Exhibit 6 from Staff Exhibit 4, the same column, you 4 would come up with the compliance achieved savings of 5 773,372, subject to check? 6 MS. KOLICH: Objection. Didn't you just 7 instruct that he is not going to do the math? The 8 numbers speak for themselves. 9 MR. JONES: Your Honor, they -- they had 10 examination where they had Mr. Donlon doing 11 calculations, subject to check, and we are not 12 allowed to do that, too? 13 MS. KOLICH: Those calculations were 14 based on his testimony. 15 MR. JONES: These are based on the 16 companies' numbers. 17 EXAMINER BULGRIN: Time out. Can't we -- 18 can't we just have him -- ask if he would accept 19 what's on the companies' filed report? I mean, do we 20 really need him to be doing the math? 21 MR. JONES: Well, the way the information 22 is provided in the reports, your Honor, these numbers 23 are all in cumulative numbers, so I can't -- there is 24 nothing that shows me the number for, you know, 2014. 25 EXAMINER BULGRIN: Maybe you could ask ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 624 1 him what that number is. 2 Q. (By Mr. Jones) Mr. Miller, is the 3 FirstEnergy's energy efficiency compliance achieved 4 for 2014 773,732 megawatt-hours? 5 A. I don't know that. 6 MR. JONES: Can I go back to my question 7 of the math then? 8 EXAMINER BULGRIN: Okay. A little bit 9 further with it. That's it. 10 Q. So subject to check, Mr. Miller, isn't 11 that the number you would get, 773,372 12 megawatt-hours, when you subtract the total number in 13 column 5 of Staff Exhibit 6 from the number provided 14 as a total in Staff Exhibit 4, column 5, Table 2-1, 15 subject to check? 16 A. Subject to check, again with the same 17 notes that there are footnotes on both of these 18 tables that talk about modifications from prior 19 period adjustments as well as projects pending 20 Commission approval. 21 Q. Okay. Mr. Miller, the megawatt-hours 22 savings for 2015 that you previously testified to, 23 subject to check, is 657,632 megawatt-hours. If you 24 were to subtract that or -- I mean, compare that to 25 the 773,0372 for 2014, what was achieved by the ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 625 1 FirstEnergy companies -- 2 MS. KOLICH: Excuse me. I hate to 3 interrupt. Could you give me a reference where you 4 are getting these numbers? 5 MR. JONES: He previously testified 6 before we broke for lunch as to the megawatt hours 7 from the OCC Exhibit 10 as to being 657,632 8 megawatt-hours for 2015 for the FE companies. And my 9 question goes to comparing those two numbers. 10 Q. (By Mr. Jones) Isn't it -- wouldn't you 11 agree, subject to check, that the 657,632 is 12 85 percent of the '14 compliance or achieved 773,372? 13 It's 85 percent of that number? 14 A. I'm sorry, what numbers am I comparing? 15 Q. Yes, 2014 and '15. 16 A. The difference between 2014 and '15? 17 Q. Yeah. '15 -- I'm sorry '15 to '14, yes. 18 I am saying '15 is 85 percent of what was achieved in 19 '14. 20 A. And you had a number? 21 Q. Yes. It was -- for '15 it was 657,632. 22 The number for '14 was 773,372. 23 A. Seven hundred -- 24 Q. 773,372. 25 A. And the question? ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 626 1 Q. That is 85 percent of the 2014 achieved 2 savings? 3 A. So the 657,632 is 85 percent of 773,372? 4 Q. Yes. 5 MS. KOLICH: Your Honor, subject to 6 check, we'll stipulate it. 7 EXAMINER BULGRIN: Thank you. 8 MR. JONES: Thank you. 9 MS. KOLICH: Just to the math. 10 EXAMINER BULGRIN: Duly noted. 11 Q. Mr. Miller, going then to Staff Exhibit 7 12 and Table 3-1, do you see what was spent on program 13 costs for the three operating companies on that 14 table? 15 A. I see Table 3-1 with -- on Staff Exhibit 16 7 that provides total 2013 programs spending 17 including common costs values. 18 Q. So if you were to take the total of all 19 the program costs that were spent for 2013 in Staff 20 Exhibit 1 and subtract that from what the table shows 21 for all the program costs spent by the FirstEnergy 22 companies in Staff Exhibit 5, you would have a total 23 of $51,400 that was spent by the FirstEnergy 24 companies for the program, correct? 25 MS. KOLICH: Objection. No foundation as ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 627 1 to whether all -- this includes all of the programs 2 in either of the tables. I don't see Community 3 Actions in here. 4 MR. JONES: It's their table. It's their 5 programs listed, your Honor. I am going by what 6 their table is showing for this exhibit. 7 EXAMINER BULGRIN: Let's go off the 8 record. 9 (Discussion off the record.) 10 EXAMINER BULGRIN: Let's go back on the 11 record. 12 Mr. Jones. 13 MR. JONES: Thank you, your Honor. Can I 14 have just a second, your Honor? 15 EXAMINER BULGRIN: Sure. 16 Q. (By Mr. Jones) Mr. Miller, the tables we 17 have been referring to here for Staff Exhibit 5 and 18 Staff Exhibit 7, as well as the table from OCC 19 Exhibit 10 on page 7, these are all the costs of the 20 programs. Shared savings is not included in any of 21 those tables, are they, for any of those years '13, 22 '14, or '15? 23 MS. KOLICH: I'm sorry. Could I have the 24 question reread. 25 (Record read.) ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 628 1 MS. KOLICH: Objection as to 2 characterization this may include all of the 3 programs. 4 EXAMINER BULGRIN: I am going to sustain 5 that. 6 MR. JONES: I didn't quite hear what you 7 said in response. 8 MS. KOLICH: I objected as to the 9 characterization that this is all of the programs. I 10 don't think it has been established on the record and 11 you are assuming facts not in evidence. 12 MR. JONES: Your Honor, my question was 13 very targeted, asking him if shared -- he can look at 14 the tables and see if shared savings is included. 15 That's what I asked him. 16 EXAMINER BULGRIN: Okay, so looking at 17 the table. 18 MR. JONES: Looking at the tables. 19 EXAMINER BULGRIN: Can you tell whether 20 shared saves are included? 21 THE WITNESS: I cannot looking at the 22 table. 23 MR. JONES: Okay. That's all I have, 24 your Honor. 25 EXAMINER BULGRIN: Thank you. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 629 1 MS. KOLICH: Could we take a few minutes? 2 EXAMINER BULGRIN: Sure. 3 (Discussion off the record.) 4 EXAMINER BULGRIN: Let's go back on of 5 record. 6 Ms. Kolich. 7 MS. KOLICH: Thank you, your Honor. 8 - - - 9 REDIRECT EXAMINATION 10 By Ms. Kolich: 11 Q. Mr. Miller, OCC counsel asked you 12 questions regarding the PJM revenues that would be 13 received during the plan period of 2017 to 2019. Do 14 you recall that line of questioning? 15 A. I do. 16 Q. Do you have an estimate as to 17 approximately how much -- or what level of revenues 18 that would be during the plan period? 19 A. Yes. The companies estimate the 20 approximately 2 to 2-1/2 million dollars per year, on 21 average, from the PJM revenues to be received during 22 the period of the 2017 through '19 plan. 23 Q. Okay. And staff counsel asked you a 24 number of questions regarding numbers in reports 25 during the period 2013 through 2015. Do you believe ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 630 1 that a comparison of the data reported in the 2 companies' annual status reports for that period are 3 comparable to what you expect to see occurring in the 4 period during -- in which this plan will be in 5 effect, namely, 2017 to 2019? 6 A. No, I do not. 7 Q. And why is that? 8 A. As I lay out in my rebuttal testimony, 9 when the companies were developing our plans for 2017 10 and '19, we specifically looked at the programs and 11 the measures that we're offering and looked at the 12 baseline and efficient conditions associated with 13 those measures. In many cases the savings associated 14 with many measures are decreasing, which requires us 15 to generate more participation in the programs in 16 order to achieve even the same level of savings as we 17 have historically. 18 In some cases the costs of the equipment 19 is increased requiring us to factor in increased 20 incentors for the measures. The example we discussed 21 earlier, which is a good example, is the transition 22 from CFL lighting in the prior plan period versus LED 23 lighting in the -- in the '17 through '19 period. 24 The other thing I would note is in the 25 '12 through '15 period, a further example of lighting ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 631 1 is our reported savings for lighting was not 2 exclusively adjusted for the EISA baselines 3 associated with baseline. EISA reduced the savings 4 for CFL and LED lighting effective 2012; however, 5 there was a transition period that occurred over the 6 '13, '14, '15 period where the prior baselines were 7 incandescent bulbs, which produce significantly more 8 savings for lighting. 9 The easiest way to say it is generally 10 lighting savings post-EISA, is about 40 percent less 11 than lighting savings pre-EISA just due to the change 12 in the baselines over that time period. The CFL 13 versus LED example, again, is a good one wherein that 14 time period we were incenting CFLs at roughly a 15 dollar per bulb. In our plan from '17 through '19 we 16 are estimating estimated an average incentive of 17 about $3 per bulb. 18 Savings are comparable. LEDs are 19 slightly more than a CFL, but effectively we are 20 paying three times the incentive on a per-unit basis 21 associated with that transition. 22 The other thing I note in my rebuttal 23 testimony is the contribution of savings from T&D 24 projects. I note OCC Exhibit 10 calls out T&D 25 improvements in that table, and I note that it's ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 632 1 roughly 10 percent of the total over that '13 through 2 '15 period, whereas in the term of the '17 through 3 '19 plan, when we developed our projections, we 4 worked very closely with our T&D planners who are 5 developing the plans as to what transmission 6 distribution projects are completed over the next 7 several years, and we work very closely with them to 8 understand what projects they're planning and what 9 projects would generate savings. 10 As a result, the savings in our '17 11 through '19 plan is just a little bit over 1 percent 12 so a significant change just with T&D projects where 13 effectively there's -- there's no cost for those 14 projects within the plan budgets, either historically 15 or going forward. But, however, given the change -- 16 given the reduction from 10 percent to 1 percent is a 17 significant transition of removing no- to low-cost 18 items from the plan and having to make that up with 19 other utility-administered programs that we included. 20 The other thing that I would note in the 21 discussion is we -- we suspended programs for 2015 22 and 2016, and some of the discussion earlier was 23 looking at differences between '15 and '14 and '13, 24 you know, a lot of differences between the tables. 25 While we suspended programs in 2015, we did provide a ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 633 1 transition period for customers who had projects in 2 the pipeline that were preapproved. They were 3 allowed to complete those projects in the 2015. That 4 ended up resulting in a sizable amount of savings 5 being included in the 2015 period, whereas we did not 6 have as much program implementation costs due to 7 collectively suspending the programs in 2015. 8 So I just wanted to highlight some of 9 those things. I think most of them are covered in my 10 rebuttal already, but those are the items that come 11 to mind. 12 EXAMINER BULGRIN: Just to clarify, when 13 you say EISA. 14 THE WITNESS: I am referring to the 15 Energy Independence and Security Act that phased out 16 the incandescent bulbs beginning in 2012. 17 Effectively the 100-watt incandescents were 18 eliminated from import or manufacture. In 2013 it 19 reduced the 60-watt incandescent bulbs, and 2014 20 would have been 40-watt bulbs. 21 EXAMINER BULGRIN: Thank you. 22 Q. One more follow-up, just to clean up the 23 record. I believe you spoke of the 2012 to 2014 24 period. Would that hold true for 2015 as well? 25 A. That is correct. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 634 1 MS. KOLICH: That's all I have, your 2 Honor. 3 MR. JONES: Nothing further, your Honor. 4 EXAMINER BULGRIN: Very good. You are 5 excused. Thank you. 6 Okay. We have pending Company 7 Exhibit 17. Any objections? 8 MR. HEALEY: Just a renewal of my earlier 9 motion to strike, your Honor, which I understood was 10 overruled, but just wanted to -- 11 EXAMINER BULGRIN: Yes. 12 MR. HEALEY: -- reassert. Thank you. 13 EXAMINER BULGRIN: Motion duly noted. 14 MS. KOLICH: Your Honor, you didn't 15 change your ruling on that, right? I didn't hear 16 you. 17 EXAMINER BULGRIN: What's that? 18 MS. KOLICH: I didn't hear what you said. 19 EXAMINER BULGRIN: No. Subject to his -- 20 we're admitting it subject to his motion to strike. 21 It will be admitted. 22 (EXHIBIT ADMITTED INTO EVIDENCE.) 23 MR. JONES: Your Honor, I still have 24 Staff Exhibits 4, 5, 6, and 7, although we took 25 administrative notice of the reports. ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 635 1 EXAMINER BULGRIN: I was going to say, 2 and I think the same thing holds true for OCC Exhibit 3 10. 4 MR. HEALEY: I'm fine with the 5 administrative notice, your Honor. 6 EXAMINER BULGRIN: Yeah. We don't really 7 need to accept those -- or admit those into the 8 record. 9 MS. KOLICH: I'm sorry, can I get 10 clarification? His testimony is going in subject to 11 a motion to strike? Was the motion to strike 12 granted? 13 EXAMINER BULGRIN: The motion to strike 14 was denied. 15 MS. KOLICH: Okay. Thank you. 16 EXAMINER BULGRIN: He just wanted it on 17 the record they are still objecting. 18 Okay. Is there anything further we need 19 to do? 20 I guess let's go off the record. 21 (Discussion off the record.) 22 EXAMINER BULGRIN: Ms. Ostrowski, can you 23 just repeat that? 24 MS. OSTROWSKI: Yes. So on behalf of 25 Staff, OCC, the companies, and the environmental ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 636 1 groups, we had agreed that the initial brief would be 2 due on February 21 and the reply brief would be due 3 on March 3. 4 EXAMINER BULGRIN: Okay. Is that good 5 with everybody? 6 Anything further? 7 Well, then this record will be closed and 8 submitted for the Commission's decision. 9 Thank you all. 10 (Thereupon, at 1:53 p.m., the hearing was 11 concluded.) 12 - - - 13 14 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481 637 1 CERTIFICATE 2 I do hereby certify that the foregoing is a 3 true and correct transcript of the proceedings taken 4 by me in this matter on Monday, January 31, 2017, and 5 carefully compared with my original stenographic 6 notes. 7 8 _______________________________ Karen Sue Gibson, Registered 9 Merit Reporter. 10 11 ________________________________ Rosemary F. Anderson, Registered 12 Professional Reporter. 13 (KG-83007) 14 - - - 15 16 17 18 19 20 21 22 23 24 25 ARMSTRONG & OKEY, INC., Columbus, Ohio (614) 224-9481