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Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S. Nottingham BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON PACIFICORP ___________________________________________________________ Direct Testimony of Melissa S. Nottingham February 2020

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Page 1: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S. Nottingham

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

PACIFICORP

___________________________________________________________

Direct Testimony of Melissa S. Nottingham

February 2020

Page 2: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

PAC/1200 Nottingham/i

Direct Testimony of Melissa S. Nottingham

TABLE OF CONTENTS I. INTRODUCTION AND QUALIFICATIONS ....................................................................... 1

II. PURPOSE OF TESTIMONY .................................................................................................... 2

III. SCHEDULE 300 – CHARGES AS DEFINED BY THE RULES AND

REGULATIONS ......................................................................................................................... 3

Returned Payment Charge ........................................................................................ 4

Facilities Charges ....................................................................................................... 5

Temporary Service Charge ....................................................................................... 7

Paperless Bill Credit .................................................................................................. 8

Work Performed at Consumer’s Request—Service Connection Charge ........... 9

IV. HOUSEKEEPING ..................................................................................................................... 10

V. CONCLUSION .......................................................................................................................... 10

ATTACHED EXHIBITS

Exhibit PAC/1201—Schedule 300 Charge Review

Exhibit PAC/1202—Facilities Charge Calculation

Exhibit PAC/1203—Paperless Bill Credit Calculation

Page 3: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

PAC/1200 Nottingham/1

Direct Testimony of Melissa S. Nottingham

I. INTRODUCTION AND QUALIFICATIONS 1

Q. Please state your name, business address, and present position with PacifiCorp. 2

A. My name is Melissa S. Nottingham and my business address is 825 NE Multnomah 3

Street, Suite 2000, Portland, Oregon 97232. I am currently employed as Manager, 4

Customer Advocacy and Tariff Policy. I am testifying for PacifiCorp d/b/a Pacific 5

Power (PacifiCorp or the Company). 6

Q. Please describe your education and professional experience. 7

A. I have a Bachelor of Arts in English from Arizona State University and continue to 8

pursue continuing education courses relevant to the utility industry. I began working 9

for PacifiCorp in 1996, and worked in various positions with progressive 10

responsibility for the past 20 years. For the past 10 years, I have been the Manager of 11

Customer Advocacy and Tariff Policy in the Company’s Regulation department. 12

Q. Please describe your current duties. 13

A. My current duties include overseeing a team of five regulatory analysts who respond 14

to consumer commission complaints, sponsoring tariff changes, ensuring compliance 15

with the Company’s tariff rules, and participating in general rate cases and other 16

regulatory proceedings for PacifiCorp’s six state service territories. In addition, I 17

oversee a team of three business analysts responsible for the administration of the 18

contracts for new electrical load and the implementation and operation of the 19

Company’s customer guarantee program. As my team supports the Company’s tariff 20

rules in each state, we also support changes to Schedule 300, which are the charges 21

associated with the implementation of the rules. 22

Page 4: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

PAC/1200 Nottingham/2

Direct Testimony of Melissa S. Nottingham

Q. Have you appeared as a witness in other regulatory proceedings? 1

A. Yes. I have testified in proceedings before the California Public Utilities Commission 2

and the Washington Utilities and Transportation Commission. 3

II. PURPOSE OF TESTIMONY 4

Q. What is the purpose of your testimony in this case? 5

A. My testimony supports proposed changes to Schedule 300 of the Company’s Oregon 6

tariff schedules, Rule 10, Rule 11D, and a proposal for customers to receive a credit 7

for paperless billing. 8

The proposed changes to Rule 10, Rule 11D, and Schedule 300, Charges 9

as Defined by the Rules and Regulations, are provided in Mr. Robert M. 10

Meredith’s Exhibit PAC/1401. 11

Finally, I propose housekeeping changes to Schedule 300 regarding the 12

referenced rules. 13

Q. Why are you proposing these changes? 14

A. The proposed changes reflect the Company’s continued commitment to lower costs 15

for our customers, and to empower customers to control their monthly bills. 16

Q. Please provide a summary of your testimony and the proposed changes. 17

A. My testimony proposes an update to several customer charges in Schedule 300. The 18

Company reviewed the costs associated with Schedule 300 charges and identified 19

areas where costs have changed. A variety of factors, including automation of 20

returned checks and fluctuations in financial models for determining Facilities 21

Charges, have contributed to lower costs and different values. Accordingly, the 22

Page 5: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

PAC/1200 Nottingham/3

Direct Testimony of Melissa S. Nottingham

Company is proposing to sync customer charges to more accurately reflect current 1

costs. 2

My testimony proposes to update the applicability of the Service Connection 3

Charge to certain applicants requesting service connection at a location with remote 4

connection capability to reflect the Company’s ability to now perform remote 5

connections and avoid sending an employee to the premises to connect. 6

My testimony also proposes to implement a bill credit for customers who 7

choose paperless billing (Paperless Bill Credit). The proposed Paperless Bill Credit 8

will send a price signal to customers to incentivize behavior that results in actual cost 9

savings for the Company. The Paperless Bill Credit will provide a monthly benefit to 10

customers who participate as well as create an incentive for customers to adopt more 11

sustainable practices. 12

All of the proposed changes are a continuation of PacifiCorp’s ongoing 13

commitment to provide fair and reasonable charges by closely managing expenses 14

while still meeting customers’ increasing expectations. 15

III. SCHEDULE 300 – CHARGES AS DEFINED BY THE RULES AND 16

REGULATIONS 17

Q. Please describe the changes PacifiCorp is proposing to the Schedule 300 charges. 18

A. Table 1 shows the rule, a description of the charge, the current charge, and the 19

proposed charge. 20

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PAC/1200 Nottingham/4

Direct Testimony of Melissa S. Nottingham

TABLE 1 1

Rule Description of Charge Current Proposed R. 10-2 Returned Payment Charge $20 $12 R. 13-2 Facilities Charges, at Less than 57,000

volts, installed at Consumer’s Expense 0.5% per month

0.4% per month

R. 13-2 Facilities Charges, at Less than 57,000 volts, installed at Company’s Expense

1.4% per month 1.2% per month

R. 13-2 Facilities Charges, at and above 57,000 volts, installed at Consumer’s Expense

0.3% per month 0.2% per month

R. 13-2 Facilities Charges, at and above 57,000 volts, installed at Company’s Expense

0.9% per month 0.85% per month

R. 13-91 Temp Service Charge – Single Phase $85 $164

R. 13-9 Temp Service Charge – Three Phase2 $115 $164

Returned Payment Charge 2

Q. Please describe the Returned Payment Charge. 3

A. If a customer presents a payment that is returned by the customer’s bank, the 4

Company incurs a cost to process the returned payment. Payments can be returned 5

for a variety of reasons, including, but not limited to, insufficient funds, incorrect 6

account numbers, or closed accounts. 7

Q. What is the current Returned Payment Charge? 8

A. The current Returned Payment Charge is $20. 9

Q. What is the proposed change to the Returned Payment Charge? 10

A. PacifiCorp proposes to reduce the Returned Payment Charge from $20 to $12. 11

1 PacifiCorp Rate Schedule 300 currently notes the Temporary Service Charge comes from R. 13-9. The reference should read R. 13-11 and is corrected in housekeeping changes later in the testimony. 2 PacifiCorp is proposing to consolidate the single phase and three phase into one Temporary Service Charge, with the same charge amount.

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PAC/1200 Nottingham/5

Direct Testimony of Melissa S. Nottingham

Q. Why is PacifiCorp proposing this change? 1

A. Banks are now able to electronically transfer money from one bank to another bank 2

with less human interaction. This automation of a portion of the return payment 3

process has led to reduced costs to the Company when a payment is returned. Each 4

time the Company’s bank receives a returned item, the bank assesses a fee to the 5

Company. These fees account for the majority of the cost to the Company when a 6

customer’s payment is not acknowledged as valid. The fee can vary from $11 to $16 7

based on the bank presenting the returned payment, the amount of the payment, and 8

the number of times the payment is presented for payment. 9

While processing these payments has become more automated, labor costs are 10

not completely eliminated. Each returned item requires a PacifiCorp employee to 11

update the account information and reverse the payment if the billing system has 12

already posted the payment to the account. The labor costs range from $1 to $6 per 13

transaction. The Company is proposing $12 as it closely represents the low-end of 14

the average costs of both the labor and the bank fees associated with these returned 15

payments. See Exhibit PAC/1201 for the calculation of the proposed charge. 16

Facilities Charges 17

Q. What changes are you proposing for Facilities Charges? 18

A. PacifiCorp is proposing to lower the Facilities Charges for new distribution and 19

transmission service. Table 2 includes both the current Oregon Facilities Charge and 20

proposed Facilities Charge by voltage. 21

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PAC/1200 Nottingham/6

Direct Testimony of Melissa S. Nottingham

TABLE 2 1

Oregon Facilities Charge OR

Current OR

Proposed

Distribution-Voltage Equipment (<57,000 volts)

On Customer $ 0.5% 0.4% On Company $ 1.4% 1.2% Transmission-Voltage Equipment (≥57,000 volts)

On Customer $ 0.3% 0.2% On Company $ 0.9% .85%

Facilities Charges are calculated using the financial models provided as Exhibit 2

PAC/1202. 3

Q. What are Facilities Charges? 4

A. Facilities Charges are the fixed costs of ownership of facilities necessary to connect 5

new load to PacifiCorp’s system, including but not limited to, the return and recovery 6

of any capital investment, operations and maintenance costs, and ongoing taxes. 7

Since these costs vary based on the type of service installed and are funded by both 8

PacifiCorp and the customer, there are four different Facilities Charges percentages, 9

as reflected in Table 2. The percentages in Table 2 are applied to both the customer’s 10

up-front payment for new service and PacifiCorp’s capital investment. The product 11

of these calculations is the Facilities Charges. 12

Q. Why is the Company proposing to lower the Facilities Charges? 13

A. Over time, PacifiCorp has reduced costs and increased operational efficiencies, 14

reducing the minimum amount required to own and operate the required facilities. By 15

lowering the percentages used to calculate the Facilities Charges, the savings will be 16

passed onto the customer. PacifiCorp is passing these savings on to customers 17

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PAC/1200 Nottingham/7

Direct Testimony of Melissa S. Nottingham

through the proposal to lower the Facilities Charges. Please see Exhibit PAC/1202 1

for more detail. 2

Q. Please describe when Facilities Charges are billed to a customer. 3

A. When a customer requests to connect new or additional electric load on the 4

Company’s system, the request can trigger both capital investments and additional 5

maintenance costs. To ensure the new revenue generated will cover the costs 6

associated with the new electric load request, the Company contracts with the new 7

customers to recover the costs with a Contract Minimum Billing. 8

The Contract Minimum Billing is the greater of two items: the customer’s bill 9

or 80 percent of the customer’s bill plus the Facilities Charge. If the revenue from the 10

electrical usage covers the additional costs to own and operate the facilities, the 11

Contract Minimum Billing is fulfilled or the costs to own and operate are recovered 12

through the energy usage. If the revenue does not cover the additional costs to own 13

and operate the new electrical load, the Facilities Charge is added to the billing. 14

Temporary Service Charge 15

Q. Please describe the Temporary Service Charge. 16

A. A Temporary Service Charge applies when a customer requests the energization of a 17

temporary pedestal for temporary electric service. Temporary pedestals are typically 18

needed for periods when a premise is under construction. The Temporary Service 19

Charge covers the labor cost to bring either a single-phase or three-phase service line 20

to the temporary pedestal and energize the service. Once the service is energized, the 21

requesting customer is billed for the energy used. After the structure is completed, 22

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PAC/1200 Nottingham/8

Direct Testimony of Melissa S. Nottingham

the temporary service is de-energized and the meter is relocated to the permanent 1

meter base. 2

Q. What is the current Temporary Service Charge? 3

A. The current charge is $85 for single-phase service and $115 for three-phase service. 4

Q. What are the proposed changes to the Temporary Service Charge? 5

A. PacifiCorp is proposing to increase the charge to $164 for all temporary service 6

installations and combine all phases into one charge. The $164 charge is based on the 7

current loaded rate for one hour of journeyman time, which is similar to the 8

methodology used when the Temporary Service Charge was initially calculated in 9

1987. 10

Q. Why is PacifiCorp proposing a change to the Temporary Service Charge? 11

A. The Temporary Service Charge has not been updated since 1987 and does not reflect 12

the Company’s current cost to provide this service. See Exhibit PAC/1201 for a 13

summary of the cost calculation. 14

Paperless Bill Credit 15

Q. Please describe the Paperless Bill Credit. 16

A. PacifiCorp is proposing to add a credit to Schedule 300 and Rule 10 to provide 17

customers a monthly credit if they have enrolled in paperless billing. 18

Q. What is the proposed amount of the Paperless Bill Credit? 19

A. The proposed monthly credit is $0.50. 20

Q. Why is PacifiCorp proposing a monthly credit for paperless billing? 21

A. PacifiCorp is proposing a Paperless Bill Credit that is correlated to the savings and 22

benefits of not sending a paper bill to a customer when that customer voluntarily 23

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PAC/1200 Nottingham/9

Direct Testimony of Melissa S. Nottingham

enrolls in paperless billing. Electronic delivery of the customer’s monthly bill 1

eliminates the cost of the bill paper, the envelope, printing and stuffing of the 2

envelope, and the postage to mail the bill. Eliminating these costs results in savings 3

of approximately $0.49 per metered service. By passing this savings to the customer 4

in a $0.50 monthly credit, the Company is encouraging customers to utilize a lower 5

cost billing option and a more environmentally friendly option. All customers, 6

whether they are currently participating in or are new to paperless billing, are eligible 7

to receive a credit as long as they are enrolled in paperless billing. Please see Exhibit 8

PAC/1203 for more detail on the calculation of the credit and Mr. Meredith’s Exhibit 9

PAC/1401 for the proposed tariff changes to Schedule 300 and Rule 10. 10

Work Performed at Consumer’s Request–Service Connection Charge 11

Q. Please describe the changes PacifiCorp is proposing to Schedule 300 and Rule 12

11D? 13

A. PacifiCorp proposes to add language to Rule 11D to indicate there is no Service 14

Connection Charge for customers requesting new service at a location with remote 15

connection capability during after-hours or on weekends/holidays. For locations with 16

remote connection capability, PacifiCorp will no longer be required to send an 17

employee to the site to manually turn the power on for a new service connection. 18

However, since not all meters in Oregon have been upgraded with a remote 19

connection meter, the Company still anticipates employees traveling to and from non-20

remote connection meter locations to turn on electric service. Customers requesting 21

service connection at locations without a remote connection capable meter will 22

continue to be charged the Service Connection Charge. 23

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PAC/1200 Nottingham/10

Direct Testimony of Melissa S. Nottingham

In addition to the change to Rule 11D, PacifiCorp proposes to change the 1

description of the Service Connection Charge in Schedule 300 to specify there is a 2

charge for non-remote service connections after hours and on weekends, and no 3

charge for remote service connection. Please refer to Mr. Meredith’s Exhibit 4

PAC/1401 for the proposed tariff change. 5

IV. HOUSEKEEPING 6

Q. What housekeeping changes are you proposing? 7

A. I am proposing housekeeping changes to Sheet No. 300.3 in Schedule 300 to correct 8

inaccurate sheet references. The Temporary Service Charge is changed from Sheet 9

R13-9 to R13-11 and the Contract Administration Credit is changed from Sheet R13-10

11 to R13-13. Please see Mr. Meredith’s Exhibit PAC/1401. 11

V. CONCLUSION 12

Q. Please summarize your testimony. 13

A. The proposed changes to PacifiCorp’s Schedule 300, Charges as Defined by the 14

Rules and Regulations, represent both the ongoing commitment by PacifiCorp to keep 15

operational costs low for customers and align customer charges with cost. With one 16

exception, all of the proposed charges are lower than current charges, and will benefit 17

a comprehensive and diverse group of customers. The proposed change to Rule 11D 18

will allow applicants connecting at a location with remote connection capability to 19

connect after hours, weekends, and holidays while avoiding connection fees. The 20

proposed bill Paperless Bill Credit creates an opportunity for customers to manage 21

costs and directly receive the benefits of their choices. 22

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PAC/1200 Nottingham/11

Direct Testimony of Melissa S. Nottingham

Q. What is your recommendation regarding changes to Schedule 300, Rule 10, Rule 1

11D, and the proposed paperless bill credit? 2

A. I recommend that the Commission approve the changes to Schedule 300, Rule 10, 3

Rule 11D, and the proposed Paperless Bill Credit (included in Rule 10). 4

Q. Does this conclude your direct testimony? 5

A. Yes. 6

Page 14: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Docket No. UE 374 Exhibit PAC/1201 Witness: Melissa S. Nottingham

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

PACIFICORP

___________________________________________________________

Exhibit Accompanying Direct Testimony of Melissa S. Nottingham

Schedule 300 Charge Review

February 2020

Page 15: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

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Page 16: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

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Page 17: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

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 201

9

Exhibit PAC/1201 Nottingham/3

Page 18: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Tariff R

espo

nses

Contact(s):  Ro

b Stew

art Ch

arge

Curren

t Fee

 in Effect

Commen

ts

Facilities C

harges

   On Facilities a

t Less tha

n 57

,000

 Volts

   Installed at Customer's Expe

nse

0.5%

 per m

onth

Curren

t data supp

orts a re

duction.  The

 data is from

 the corporate Use of F

acilitie

s Cha

rges fo

und on

line in th

e corporate Fina

ncial A

nalysis

 To

ols/Mod

els.  The

 facilities c

harges are based

 on the inform

ation repo

rted

 in th

e compa

ny's Fede

ral Ene

rgy Re

gulatory Com

miss

ion Fo

rm 

No. 1 (F

ERC form

 1), an

d supp

ortin

g working

 pap

ers. 

Facilities C

harges

   On Facilities a

t Less tha

n 57

,000

 Volts

   Installed at Com

pany

's Expe

nse

1.4%

 per m

onth

(corrected

)Prop

osed

 new

: 1.2% per m

onth.  Cu

rren

t data supp

orts a re

duction.  See

 explana

tion ab

ove.

Facilities C

harges

   Fo

r Facilitie

s at a

nd abo

ve 57,00

0 Vo

lts   Installed at Customer's Expe

nse

0.3%

 per m

onth

(corrected

)Prop

osed

 new

: 0.2% per m

onth.  Cu

rren

t data supp

orts a re

duction.  See

 explana

tion ab

ove.

Facilities C

harges

   Fo

r Facilitie

s at a

nd abo

ve 57,00

0 Vo

lts   Installed at Com

pany

's Expe

nse

0.9%

 per m

onth

Prop

osed

 new

: 0.85%

 per m

onth.  Cu

rren

t data supp

orts a re

duction.  See

 explana

tion ab

ove.

Test Yea

r:  H

istoric

al tw

elve

 mon

ths e

nding June

 201

9

Exhibit PAC/1201 Nottingham/4

Page 19: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Docket No. UE 374 Exhibit PAC/1202 Witness: Melissa S. Nottingham

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

PACIFICORP

___________________________________________________________

Exhibit Accompanying Direct Testimony of Melissa S. Nottingham

Facilities Charge Calculation

February 2020

Page 20: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Distribution  Transmission

1 Return on Capital 4.42% 4.94%2 Recovery of Capital 2.83% 1.87%3 State & Federal Income Taxes 0.99% 1.09%4 Local Property Taxes 0.73% 0.80%5 Operation & Maintenance 2.91% 0.82%6 Administrative & General 0.53% 0.53%7 Other Taxes 0.46% 0.13%8 Customer Accounts & Services 1.49% N/A

9 TOTAL (lines 1‐8) 14.36% 10.18%10 Monthly % 1.20% 0.85%11 Monthly Proposed (rounded)  1.20% 0.85%

12 Subtotal Lines 4‐8 6.12% 2.28%13 Capital Replacement Annuity 0.91% 0.54%

14 TOTAL (lines 12‐13) 7.03% 2.82%15 Monthly % 0.59% 0.24%16 TOTAL (lines 4, 5, 7 & 13) 5.01% 2.29%17 Monthly % 0.42% 0.19%18 Monthly Proposed (rounded) 0.40% 0.20%

USE OF FACILITIES CHARGES, Annual, %2018

Company Provides Initial Capital Investment (allowance)

Customer Provides Initial Capital Investment (customer advance)

Exhibit PAC/1202 Nottingham/1

Page 21: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Docket No. UE 374 Exhibit PAC/1203 Witness: Melissa S. Nottingham

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

PACIFICORP

___________________________________________________________

Exhibit Accompanying Direct Testimony of Melissa S. Nottingham

Paperless Bill Credit Calculation

February 2020

Page 22: Docket No. UE 374 Exhibit PAC/1200 Witness: Melissa S ... · Direct Testimony of Melissa S. Nottingham . 1 . TABLE 1 Rule Description of Charge Current Proposed . R. 10-2 Returned

Proposed Paperless Credit Calculation

Average Cost of One Sheet Paper Bill

Paper $0.0107

Envelope $0.0382

Printing and Mailing $0.0562

Postage $0.3910

Total Cost $0.4961

Proposed Paperless Credit ($0.50)

Exhibit PAC/1203 Nottingham/1