YT YouTube2Text

YouTube2Text → Transcripts → YouTube transcript (YN2juavJE4o)

YouTube transcript (YN2juavJE4o) — Transcript

51,364 words · 8,348 segments · language en · Watch on YouTube

Open in transcriber Summarize with AI Download SRT/VTT

Full transcript

21:00Good morning. I just want to check my
21:02microphone.
21:04>> Yes, I can hear you.
21:05>> Thank you so much.
30:57Good morning. We're now on the record.
31:00It's 9:00 a.m. on Thursday, June 11th,
31:022026. This is an evidentary hearing and
31:05proceeding number 25-0494E.
31:09Public service company of Colorado's
31:11electric rape case. I'm Eric Blank, the
31:14commissioner, the commission chair. Uh,
31:16can my colleagues introduce themselves
31:18for the record? Maybe starting with you,
31:20Commissioner Plant.
31:21>> Good morning, Commissioner Tom Plant.
31:25>> Good morning, Commissioner Megan Gimman.
31:28>> Uh, thanks. Uh, let's keep going uh with
31:31entries appearance by the parties uh
31:34public service.
31:36>> Good morning, commissioners. Can you
31:37hear me? Okay,
31:38>> we can.
31:40>> Okay, good. That's a good start, right?
31:42Um,
31:43>> it's not a bad start. [laughter]
31:45Um, my name is Tannis Samar Pacheco. I'm
31:47lead assistant general counsel for
31:49public service. Today with me is Pat
31:51Zmer from the Kosen Law Firm, Zeb Simp
31:55Zeb Simper from Dorsy, and Liz Brahma
31:58from Taft.
31:59>> Thank you.
32:01>> Uh, trial staff.
32:03>> Good morning. Katie Mclofflin, senior
32:05assistant attorney general on behalf of
32:07trial staff of the commission. With me
32:09today is my co-consel, Ailen Chong and
32:12Justin Larson.
32:13Uh, thank you. Uh, UCA.
32:20>> Good morning, Mr. Chairman. Uh, Gregory
32:23Bunker, senior assistant attorney
32:25general on behalf of the utility
32:28consumer advocate. And with me in this
32:30case will be Michelle Singer Nelson,
32:32also senior assistant attorney general.
32:36>> Thank you. Uh, next I have AARP.
32:40>> Yes. Good morning. Uh my uh on behalf of
32:44AARP uh my name is John Kaufman and I'm
32:47also uh here have co-consel Sophia FAA
32:51of the Baker Law Group here.
32:53>> Thank you. Uh city of Boulder
33:00>> commissioners uh Baronique Vanim,
33:02assistant city attorney for the city of
33:04Boulder.
33:06>> Uh thank you. Uh climaxing
33:10Mr. Chairman and Commissioners Richard
33:12Fano for Climax Malibdinum Company.
33:16>> Thank you. Uh Colorado Energy Consumers.
33:20>> Good morning. Austin Rushoff on behalf
33:22of the Colorado Energy Consumers. Uh
33:24joined by my colleague Frit Po and we'll
33:28also be joined by Michelle King later in
33:30the hearing. Thank you.
33:31>> Thank you. Uh Core Electric Cooperative.
33:35>> Good morning, commissioners. Laura
33:37Chartran on behalf of Core Electric
33:39Cooperative.
33:41>> Thank you. Energy Outreach Colorado.
33:45>> Good morning. Casey Canalio appearing on
33:47behalf of Energy Outreach Colorado.
33:50>> Thank you. Uh, federal executive
33:53agencies.
33:54>> Matthew Vandross with the Air Force
33:56Department on behalf of federal
33:57executive agencies. I might also have
34:00Mr. Thomas Jernigan co-consel joining at
34:02at portions of the proceeding. Thank
34:04you.
34:05>> Thank you. Uh, IBW Local Union 111.
34:11>> Good morning, commissioners and Mr.
34:13Chairman. Francis Consilia on behalf of
34:14the IBEW Local 111.
34:18>> Thank you. Uh, Kroger.
34:21>> Good morning. Kurt Aim appearing on
34:23behalf of the Kroger Company.
34:25>> Uh, thank you. Uh, Sierra Club.
34:30>> Matt Gertart appearing for Sierra Club.
34:33>> Uh, Walmart.
34:35Good morning, Julie Clark on behalf of
34:37Walmart.
34:38>> Welcome. And finally, Commission Counsel
34:45>> Mitchell Denzo um of Commission Council
34:48and I'm joined by Ruth Harper and Wendy
34:51Rosati.
34:52>> Uh thank you. Uh did I miss anyone?
34:59All right. Uh moving to electronic
35:02exhibits. uh a spreadsheet marked as
35:04hearing exhibit 1500 lists the latest
35:07versions of the pre-filed and settlement
35:09testimony and attachments.
35:11Uh again, we're not admitting uh all the
35:14exhibits on that quite yet. Just uh
35:17regarding that spreadsheet, is there any
35:20objection to the admission of hearing
35:22exhibit 1500?
35:27>> Not from the company, your honor.
35:29>> Thank you.
35:30>> Uh Mr. Mr. Chairman, if I could just uh
35:33indicate that we have four revised
35:37exhibits that are in box. I don't know
35:40if you'd like me to move those into the
35:42record at this point. U or or hold up,
35:46you know, hold off on that or do it now.
35:49>> Yeah, why don't we hold off on on that?
35:51Uh we'll either do it with the witnesses
35:53or uh after a break or lunch. Uh um if
35:57you can just make sure the parties have
35:59no concerns, uh that'd be great.
36:02>> Okay.
36:02>> Um wi with uh that one uh comment uh uh
36:09hearing exhibit uh 1500 is admitted. Um
36:13any uh objections uh to admitting all
36:17the items listed on hearing exhibit 1500
36:22uh noting Mr. Bunker's comment about uh
36:25uh some revised uh testimony. M
36:29>> from none from the company. Sorry, I
36:31didn't mean to talk over you.
36:33>> You're good. I was talking over you.
36:35[laughter]
36:36>> I would note along the same vein as what
36:38Mr. Bunker raised that we noticed in
36:40looking at the spreadsheet that although
36:42the PDFs of certain of Miss Balkley's uh
36:46attachments were in the record and we
36:48had thought the executables were filed,
36:50they'd been made available to the party
36:52since May that the executables weren't
36:54listed. So, we do have a similar issue
36:56where we just would like to get the
36:57executables available at the appropriate
37:00time and they are also in our box.
37:03>> Okay. if you could just work with the
37:05parties and Miss Federico and then maybe
37:07uh after lunch today or after a break
37:10we'll just get the record uh cleaned up
37:12and just make sure everybody's on the
37:14same page beforehand. Does that work?
37:17>> Yeah. Thank you.
37:19>> Um next on my uh list is uh witness
37:24excusal.
37:26Um
37:28I do have questions for Miss Howard
37:32and Mr. Good enough. Although my
37:34questions for Mr. Good Enough do not
37:36require him to listen to anything else.
37:41Um I do not have questions for M
37:44Deonberger. Uh do you Commissioner
37:47Plant?
37:52>> Uh no I do not.
37:54>> Commissioner Gilman.
38:00>> Sorry I'm getting there. No, nothing for
38:03Deutenberger.
38:04>> Uh, I do not for Shrub. Uh, Commissioner
38:08Plant,
38:09>> I'm sorry. Oh, uh, Shrub, no, I do not.
38:12>> Commissioner Gman,
38:14>> no.
38:15>> Uh, how about, uh, Lee or Lie?
38:20>> No.
38:21>> Commissioner Gilman.
38:26>> Uh, I'm not certain at this time. I
38:28understand that witness can't go until
38:30tomorrow anyway. So, I'm going to see if
38:32I can get um my couple questions
38:33answered with bouquet.
38:36>> Okay. Uh
38:39um Miss Geez, my eyesight. Uh Sheller,
38:43uh Commissioner Plant, I do not.
38:45>> No, no, I don't.
38:47>> Commissioner Gman.
38:53>> Sorry, I'm looking. The order has
38:56changed.
38:57>> I know 5:00 p.m. yesterday. So, I have
39:01to look a lot of places. Um,
39:04no, nothing for Sheller.
39:07>> Uh, how about Lovely? I don't have
39:11anything for Lovely.
39:12>> No.
39:14>> Commissioner Gilman.
39:15>> Um, I have a question that I'm really
39:18hoping Freighus can answer. Fredus.
39:21Freighus. I hope I'm saying that right.
39:23Sorry. Um, I know he is a bit later in
39:26the order. Um, so presuming I can get my
39:30question answered by Freighus, I would
39:32not need Lovely, but it wouldn't be
39:35until let's see when Freighus is maybe
39:38up tomorrow. So, um, it would only be
39:41after that that I would know if I was
39:43able to get that question.
39:44>> And you need Lovely to Listen to the
39:47prior. Um, yeah. Yeah. So, uh, if the
39:50company could just keep her available at
39:52her convenience, that would be great.
39:55>> Um, Mr. Watson.
39:58>> No.
40:00>> Commissioner Gilman.
40:01>> No.
40:03>> Uh, Mr. Hansen. Commissioner Plant.
40:07>> Yes.
40:09>> Okay. So, he is not excused.
40:12Uh,
40:14uh, Mr. Miller, Commissioner Plant.
40:19>> No.
40:20Commissioner Gumman
40:26>> Mhler.
40:27>> Um Miller.
40:29>> Miller. [laughter] Oh,
40:30>> there is a Muller.
40:32>> Well, Miller has cross.
40:34>> No. Okay.
40:36>> No. No. On Miller.
40:38>> Um I mean we can decide later in the
40:41hearing, but uh do you have question? I
40:44don't have questions for Dr. Dew. Do you
40:46have questions for uh him, Commissioner
40:48Plant? Yes, I do.
40:51>> He is not exquisition
41:01Gilman.
41:02>> I do not.
41:04>> Well, actually, I might Well, well, but
41:06I think Miss O'Neal
41:09uh Well, she can be she can be excused
41:13for now. I think I can get my questions
41:14answered with Miss O'Neal. Uh Mr. La
41:18Mer.
41:19>> No.
41:21>> No.
41:22>> Mr. Hagglin.
41:23>> No.
41:25>> No.
41:26>> Uh, Mr. Rivera Lugo.
41:29>> No.
41:32>> No.
41:34>> Uh, Dr. Boniardina.
41:37>> No.
41:40>> I may, but he would not have to listen.
41:48And I'll say the same thing for Miss How
41:50maybe, but she would not have to listen.
41:54Um,
41:58>> uh, uh, Miss Marcella,
42:01>> no.
42:08>> Oh, sorry. No.
42:11>> Uh, uh, Nardos. Uh, Commissioner Plant.
42:17>> No.
42:19>> No.
42:21>> Uh, I have questions for Miss uh, an
42:26uh, Mr. Fernandez from UCA. Mr. Plant,
42:30>> no.
42:32>> Uh, Commissioner Gman.
42:34>> No.
42:36>> Um,
42:38uh,
42:40let's see.
42:43Uh, Mr. Kirkindall.
42:46>> No,
42:49>> no.
42:51>> Uh, I have a very few qu set of
42:53questions for Mr. Neil, but he does not
42:55have to listen. Uh, Mr. uh, Ibraham.
43:02>> No.
43:04>> No.
43:06>> Uh, Mr. Brandt,
43:07>> no.
43:09>> No.
43:13Um,
43:15Mr. Higgins,
43:16>> no.
43:18>> No.
43:19>> I have a couple questions for Mr.
43:21Barrett, but he does not have to listen.
43:24Uh,
43:26Mr. Nusba, Dr. Nusbomber.
43:29>> No.
43:31>> No.
43:33>> Um,
43:36uh, Mr. Andrews,
43:38>> no.
43:39>> No.
43:41Mr. Leo,
43:42>> no.
43:44>> No.
43:45>> Mr. Walters,
43:46>> no.
43:47>> No.
43:49>> Uh, Dr. McGovern,
43:52>> no.
43:53>> No.
43:55>> All right. Sorry for that. I think we're
43:57excusing Mr. Deonburgger, Shrub, Lee,
44:02Sheller, Lovely, Watson,
44:07Miller,
44:09Lam Mer, Hagglin, Rivera, Lego,
44:13Vonardina,
44:15Marcella, Nardos, Fernandez, Kikondol,
44:21um, Ibraham,
44:23Brink,
44:27uh,
44:28Higgins,
44:31uh, Nus Bomber, Andrews, Leo, Walters,
44:35McGovern. Does that match everybody's,
44:38uh, notes?
44:40>> I I believe, chair, that um, I'm not
44:42sure if it was Commissioner Gilman said
44:44she may have questions for Ian Lee.
44:48>> Correct. I think August through with
44:54And I think that witness can't go until
44:56tomorrow anyway, so it wouldn't be a
44:59today.
45:01>> And I think Commissioner Gilman also had
45:03questions for Dr. Bonjiardina from
45:05[clears throat] staff.
45:08>> Correct. Sorry, I wasn't I wasn't
45:10tracking what he said.
45:12>> Thank you.
45:12>> No problem.
45:15>> So,
45:18so Lee and
45:24Okay,
45:26thank you. Um, does that track for uh
45:29everybody else? Any other further
45:30comments on witness? Uh, uh, Mr.
45:33Rushoff?
45:35>> Yes. Good morning. Um, one item just for
45:38clarification of the record. Mr. Higgins
45:40has testified before this commission,
45:41but in this case, we actually have Miss
45:44Courtney Higgins uh, as CEC's witness.
45:46So, I just wanted to clarify that. Um,
45:50and thank you for that excusal
45:52secondary. Do you do that on purpose or
45:54only hire Higgins or
45:57>> Hey, they're they're a great team. So,
45:59yes, we we try to
46:01>> Are they They're not married, are they?
46:03>> No, they are related. Father and
46:04daughter. Um
46:06>> Okay.
46:06>> Yes.
46:07>> Thank you.
46:07>> Um the second item I want to raise is
46:09you have questions for Mr. David
46:11Garrett. If possible, he would like to
46:13take the stand in on Monday or Tuesday
46:15if that's possible. So, um I don't
46:18believe he's available today or
46:20tomorrow. So, I just wanted to raise
46:21that now.
46:23you want to just assume uh say like
46:25Tuesday morning
46:27>> that sounds great for us. Thank you.
46:29>> Yeah. And again he does not have to
46:30listen and my questions will be will be
46:33brief and uh
46:34>> maybe Monday we can uh set a specific
46:37time.
46:38>> Okay, that sounds great. Thank you.
46:40>> Yep. Chair I just want to confirm too um
46:44the witness lovely I had said that I'm
46:47going to try my questions with Bradus
46:49which is slightly different order than
46:51shown um so it would be after Bradus I'd
46:54be able to let you know I just wanted to
46:56sure um I wasn't sure if you had lovely
46:58on your list
47:00>> um I think I screwed that up so the may
47:03are Ms Lee Ms lovely and Dr. Bonjina
47:08>> Ring. Yeah.
47:09>> Yeah. Okay. Miss Vanim.
47:15>> Um I just wanted to clarify if you had
47:18questions for Mr. Lairman um so that we
47:22could uh clarify his availability next
47:25week.
47:26>> Uh
47:28uh I do have questions for Mr. Lamman,
47:31but uh um but so does the company.
47:36So, um I mean we can we we can uh I mean
47:41we can see how we go today and tomorrow,
47:43but by Friday afternoon, we'll try and
47:45uh give him certainty about when he can
47:49appear if that's useful.
47:50>> That's helpful. Thank you so much.
47:54>> Um anything else on witness excus?
48:00>> I have a witness related topic, but I
48:02can make [laughter]
48:04>> that's a nice segue. We'll take that as
48:06transition.
48:08>> Um with uh with all of the um
48:12adjustments in cross time occurring over
48:14the last 24 hours, we do expect to have
48:18some witness availability related
48:20issues. If you look at the witness
48:23availability tab, there are fair number
48:24of people not available tomorrow on
48:28Friday. We can now that we know who's
48:31been excused, we can we can take a look
48:34and see who can be available tomorrow.
48:38We're not sure we can fill a full
48:40hearing day with availability. We're
48:42also thinking that depending on how
48:44things go with Mr. Pay and Miss Howard,
48:47if there's extra time today, we might be
48:49able to bring some other people up
48:50today. I know that's not ideal for all
48:52the parties to the case. So, I just
48:54wanted to raise it now just to see how
48:57you'd like to like to handle that.
49:00>> Um, I mean, I'm thinking we'll start uh
49:04Monday morning uh with Mr. Wer and Miss
49:07Bulley uh given their availability.
49:10Uh, and then we'll just have to figure
49:13out our best way through uh today. uh um
49:19is is what I'm thinking, but uh I think
49:22we're going to have to feel our way
49:23through it. It's just unclear how long
49:26everything's going to take.
49:28>> Right. One one item of clarification is
49:30that on Monday, we will need to start
49:32with Mr. Piscuchi. He's only available
49:35in the morning. So, he's available, you
49:38know, from 9 until basically we're done
49:41with him. It should be fine. But we'll
49:43have to start with Mr. Piscuchi on
49:44Monday.
49:45>> All right. So on Monday uh what's
49:47Monday? 12 13 14. So on 6:15
49:51we'll do uh Pascuchi number one uh
49:56winner number two and Bley number three
49:59is uh and that we'll hardwire today. Is
50:02that the the the plan?
50:05>> Yes, that's fine with us.
50:09Um, and then everything else will uh
50:12sort of adjust around those three.
50:17Um, does that I I assume that works for
50:19you, Commissioner Point and Gman?
50:22>> Yeah.
50:23>> Yeah. So, can we go over today maybe
50:26what we're expecting? That makes sense.
50:28>> Uh, say again,
50:29>> can we go over what we're expecting
50:31today for witnesses?
50:33>> Yeah. I think we're just going to go
50:34down the list of company witnesses uh as
50:39on the revised cross-examination sheet
50:41and we'll see about Ms. Lee and and Ms.
50:45Lovely. Uh and then when we get to
50:48Piskichi, Wter, and Bowley, we'll uh um
50:54skip them and then keep going with
50:57Hansen, Nickel, McGregor,
51:00Fredus.
51:01Um, I mean, the cross matrix says we
51:05won't get through with all those
51:06witnesses today and maybe even tomorrow.
51:09Um, but I think if we get through all
51:11the company's witnesses except for the
51:13three on Monday morning, I think we'll
51:15be in good shape.
51:16>> Okay. So, I was looking. It looks like
51:18then we have Pay
51:20then good enough then Allison.
51:24>> No, I think it's Pay Howard. Good
51:26enough.
51:26>> Oh, you have Howard. Okay. I wasn't sure
51:29if Howard got an excuse. Got it. Yeah.
51:32Yeah, we I need Howard.
51:34>> Okay, Howard. Good enough. Allison.
51:38Okay.
51:39>> Wait, I don't see I don't see Alison,
51:42>> just to be clear.
51:44>> Oh, Allison. I see Allison. Correct.
51:46>> And just to be clear, Lovely would um be
51:50after Doyle, but I would not know if I
51:53have questions for Lovely until after
51:55Bradith. So, why don't we uh plan on
51:58skipping lovely way uh until after Mr.
52:01Fredus?
52:02>> Yeah, thank you.
52:08>> I would note uh chair that uh Mr. Hansen
52:11is not available on Friday. So, we if we
52:15don't adjust to have him today and
52:17obviously we need to see how it goes, we
52:19should just revisit at the end of the
52:21day when he he probably would need to go
52:23on Monday then as well. But we can sort
52:25that out later.
52:26>> Would you like to move Hansen
52:29up uh
52:32just like after Doyle or after
52:35uh Salazar or Deagle?
52:42>> Uh
52:43yeah, he's uh he needs to leave at 4:00
52:48today. Is that right? Um so we could
52:51make him available if we get maybe
52:52through good enough. We could put him
52:54after good enough if we get that far. If
52:57not, we may need to revisit him coming
52:59on Monday.
53:00>> Okay.
53:02And do you care uh Commissioner Plan? I
53:04think you had questions for him. Do you
53:05care the order which he comes as long as
53:08he comes?
53:09>> I do not.
53:10>> Okay. So, we'll adjust on that.
53:13>> And we do apologize everybody for having
53:16to change witness order. It's one reason
53:18we wanted to get that on file yesterday.
53:19We just been juggling uh logistics. So,
53:22thank you for your patience.
53:25>> Appreciate that. Uh, any other uh
53:28witness scheduling issues for the
53:30parties?
53:35Uh, are there any other preliminary
53:37matters we need to address uh before
53:40public service calls its first witness?
53:42Uh, Miss Consilia.
53:45Uh, your honor, um, IBEDW has no
53:48witnesses to present and we have no
53:50cross-examination time. So, I would like
53:53to be excused from attending all of the
53:56hearing uh, in the interest of saving my
53:58clients money, but I will be listening
54:01to some witnesses.
54:03>> Uh, of course, uh,
54:07>> Miss Clark,
54:09>> good morning. Walmart's in the same
54:11position. our witness has been um
54:13excused and we have no
54:14cross-examination. So, I also request to
54:17be excused from attending the entire
54:19hearing, but we'll be monitoring it.
54:22>> Of course.
54:23>> Thank you.
54:24>> Uh Mr. Brown,
54:26>> uh thank you, your honor. Um same issue
54:29with with Kroger. Uh we did not present
54:31a witness in this case and don't have
54:32any exhibits.
54:34>> Uh thank you. Uh of course, no problem.
54:39>> Thank you.
54:40Uh
54:42any other
54:44uh preliminary matters, Mr. Bunker?
54:49Yes, thank you, Mr. Chairman.
54:51[clears throat] Uh UCA and I believe uh
54:55a handful of other parties have a
54:56concern with regard to the nonunanimous
55:01agreement being considered a settlement
55:05rather than just a stipulation between
55:07the parties. It is not unanimous. It is
55:11not comprehensive. And so we're
55:13concerned about the due process issues
55:16that may attach to viewing this case as
55:21the
55:22case centers on the settlement
55:25agreement. Whereas it's our view, the
55:28UCA's view that the entire case is up
55:33for discussion and substantial evidence
55:37has to be introduced in terms of each
55:40and every issue
55:42whether it's viewed under the settlement
55:44agreement or it's viewed based on the
55:48direct and rebuttal cases filed by
55:50public service and the answer positions
55:53filed by the various interveners. And so
55:55I just want to get on the record that we
55:57have a concern that if the view is that
56:02the starting point, if you will, for
56:03this hearing is a settlement agreement
56:08that is a concern for us because it is
56:10not unanimous. It is not comprehensive.
56:14It has not been joined by all the
56:16parties and in particular the parties
56:18that represent the majority of the
56:22rateayers
56:23which are the residential,
56:26small business, lower income customers
56:30of public service. They all oppose this
56:33uh non-unanimous agreement. And so I
56:36just want to get that on the record that
56:38we have a concern in that regard.
56:41>> Uh Mr. Kaufman. Uh I I feel like we've
56:46been through this at the prehering
56:47conference on Thursday. I think we've uh
56:51uh publicly and uh in writing
56:54acknowledge uh the concern. I think
56:56we've clarified that the burden of proof
56:59hasn't changed and that the settling
57:01parties uh need substantial evidence uh
57:05on the record to justify uh each
57:07component of the settlement agreement.
57:09So I I think your concerns have uh been
57:13noted. Uh I think the record is clear on
57:17this. Uh
57:19um uh and I don't think there's any
57:22further decision or vote to be taken. Uh
57:24but Mr. Kaufman, do you have anything to
57:26add to uh to that?
57:29>> Uh I don't to that argument. just would
57:31like to join that uh um objection by UCA
57:35and just make that a continuing
57:36objection so as to you know not burden
57:38the record with the continual objections
57:41and uh yeah we we take some comfort in
57:44the asurances that um have been given
57:46but of course the way that the case is
57:49ultimately decided will um impinge upon
57:52that. So just uh just like to make that
57:55a continuing objection so we don't need
57:57to uh continue to revisit it.
58:00Uh so noted uh everybody has their due
58:03process rights and this commission will
58:05do everything it can to uh honor those
58:09rights uh for all parties. Uh you know
58:11given the time we have available and you
58:14know we're we're uh doing the best we
58:17can which is why we agreed to uh allow
58:20settlement testimony uh from the
58:23opposing parties and um uh the
58:26continuing objection is noted.
58:29Appreciate it, your honor. Thank you.
58:31>> Uh, any other preliminary matters?
58:40Uh, Mr. Zmer, are you ready to call your
58:44first witness?
58:49>> Yes, I am, your honor.
58:52>> Sorry, we were just, excuse me,
58:54switching over speakers. Uh, the company
58:56will call Mr. Jason Pay. Uh, Mr. P, can
58:59you hold up your right uh right hand?
59:03Do you swear to tell the truth, the
59:04whole truth, and nothing but the truth?
59:06>> I did.
59:08>> Uh, you put your hand down. Is anybody
59:10with you or communicating with you in
59:12any way?
59:13>> No.
59:15>> If that changes, will you let us know?
59:18>> Absolutely.
59:19>> Uh, back to you, Mr. Zammer.
59:22>> Thank you, Chair Blank. Good morning,
59:24Mr. Pay. Could you please state Could
59:27you please state and spell your name for
59:29the record?
59:31>> Yes, it's Jason Pay.
59:34Last name is P EU q.
59:41>> Uh Mr. Okay. Your supplemental direct
59:43testimony hearing exhibit 123, your
59:47rebuttal testimony hearing exhibit 133
59:49and settlement testimony hearing exhibit
59:52156 along with direct testimony of
59:55Steven Berman hearing exhibit 101 which
59:58you've adopted as your own have been
1:00:00included in hearing exhibit 1500
1:00:03already. Um do you have a correction to
1:00:07your settlement testimony?
1:00:09Yes. I believe there's one number that
1:00:12needs updating.
1:00:13>> Uh, Miss Frederrico, I believe. Is Miss
1:00:16Frederrico running box.com?
1:00:19>> Yes, it's me today.
1:00:20>> Yes.
1:00:21>> Thank you. Um, there is a rev one of
1:00:24hearing exhibit 156 in the company's box
1:00:27folder. Could you please pull that up?
1:00:34And if you'll scroll down to page eight.
1:00:44Uh
1:00:48so
1:00:49uh I think we're going to have to re uh
1:00:52admit this because it's not shown in red
1:00:53line. Um so we can do this at the end.
1:00:56But if you scroll up
1:00:58um the number 2026
1:01:01is that the correction Mr. per day.
1:01:05>> Yes, I believe that 2026 average
1:01:08uh number in the top right corner of the
1:01:12screen here mistakenly said 2016. So,
1:01:17we've updated that to 2026.
1:01:20>> Chair Blank, we'll we'll do this in red
1:01:22line at the end uh maybe after launch
1:01:26because the when we generated the PDF,
1:01:28it looks like the red line the striketh
1:01:30through didn't uh or got accepted. So,
1:01:33And there's no reason no need to do this
1:01:36in uh real time. If the parties don't
1:01:38object then you can represent that uh
1:01:40we'll just uh uh admit the revised
1:01:43version say right right after lunch or
1:01:46after break.
1:01:51>> Um okay thank you chair blank.
1:01:54Uh with that uh Mr. Pay is available for
1:01:57crossexamination.
1:01:59>> Um Mr. Bunker, I have I think 60
1:02:04minutes. You're up, sir.
1:02:07>> Yes. Thank you, Mr. Chairman. Good
1:02:09morning, Mr. Pay.
1:02:11>> Good morning.
1:02:13>> If we could refer to hearing exhibit
1:02:16133, that is your rebuttal testimony.
1:02:23By the way, while that's being pulled
1:02:25up, if you notice, I look to my right.
1:02:28It's actually because I have another
1:02:30screen and so I am paying attention to
1:02:33you and your testimony, but I may be
1:02:36looking to my right at documents or
1:02:39questions.
1:02:43So, starting on uh page 34 at line one
1:02:47here, you summarize PiSco's responses to
1:02:50various intervenor answer testimony,
1:02:53right?
1:02:56>> Yes.
1:02:57And on lines 8 through 21 on that page
1:03:01here, you indicate that PiSco agrees to
1:03:05a test year using actuals for the 12
1:03:08months ended December 31, 2025. Correct.
1:03:14[clears throat]
1:03:15>> Correct.
1:03:17And when using the actuals for the 12
1:03:19months into December 31, 2025,
1:03:23this results in a total base rate
1:03:26revenue increase of $488.2
1:03:30million
1:03:32or 14.8%.
1:03:34Right.
1:03:35>> That's correct.
1:03:38And for the test year comprised of the
1:03:4212 months ending December 31st, 2025,
1:03:47Piasco's rebuttal position is to use the
1:03:50year-end ratebased methodology. Correct.
1:03:54>> Yes.
1:03:57And is it your recollection that several
1:03:59parties including UCA staff and AARP
1:04:05supported using a 13-month average
1:04:08approach?
1:04:13Yes, certainly staff and UCA recommended
1:04:17that. I'm um strugg struggling to recall
1:04:21recall exactly what the positions were
1:04:23of the other parties.
1:04:25Okay.
1:04:27And to your knowledge, did any
1:04:30intervenors specifically support using
1:04:33the year-end ratebased methodology in
1:04:36their respective answer testimonies?
1:04:40>> Several parties didn't opine on this. Uh
1:04:43notably, uh CEC did not advocate for
1:04:47average rate base.
1:04:50>> So the answer to my question would be
1:04:53no. No intervenor specifically supported
1:04:58using year-end rate base. Is that right?
1:05:03I I would phrase it slightly
1:05:04differently. I I would say the company
1:05:07supported year-end rate base. Other
1:05:10support other parties supported average
1:05:12rate base and other parties took no
1:05:13position.
1:05:15>> Okay.
1:05:17If we could turn to page 35
1:05:20on lines 3 through 8.
1:05:24here using actuals for the 12 months
1:05:27into December 31, 2025
1:05:31instead of the direct case proposal to
1:05:34use half actuals and half forecasted
1:05:38expenses and capital additions in 2025.
1:05:43That lowered the revenue requirement by
1:05:45$37.8 million. Is that right?
1:05:50>> Yes.
1:05:53And staying on page 35 of lines 9- 16.
1:05:58Uh here you indicate Pasco's rebuttal
1:06:01position with respect to the 2025 actual
1:06:06year capital structure and costs of
1:06:09long-term and short-term debt
1:06:13which all were generally consistent with
1:06:15the 2025 test year. But you note that
1:06:19the average cost of capital or the whack
1:06:22was lowered by two basis points
1:06:26from the direct testimony revenue
1:06:27requirement study to 7.44%.
1:06:31Right.
1:06:33>> Yes. The direct case had 7.46%
1:06:37whack I believe and the rebuttal case at
1:06:397.44.
1:06:42Would
1:06:43you agree that in PiSco's recent 2024
1:06:49gas rate case,
1:06:51that's proceeding number 24049G.
1:06:57In that case, the commission set Pasco's
1:07:00whack at 7.0%.
1:07:03Is that right?
1:07:06>> That's correct.
1:07:08And would you agree that Piesco appealed
1:07:11several issues from the commission's
1:07:13decision in that 2024 gas rate case,
1:07:18including the commission's 7.0
1:07:21whack decision and the Denver District
1:07:24Court affirmed the commission's 7.0%
1:07:28whack decision.
1:07:32>> That's my understanding.
1:07:36And staying on page 35, uh, starting at
1:07:41line 8 through page 39, at line 17,
1:07:49and actually I think that page number,
1:07:51let me strike that question.
1:07:54Um, I think that page citation,
1:07:59I may be wrong on that. Give give me a
1:08:02moment if you would
1:08:15actually page 38. Sorry.
1:08:19Pages 38 starting at W8 and page 39.
1:08:24Here you discuss intervenors
1:08:28recommendations in their answer
1:08:30testimony regarding Comanche 3 cost
1:08:32recovery, right?
1:08:35>> Yes.
1:08:36>> And in particular, the intervenors you
1:08:39discuss in this testimony passage
1:08:41regarding Comanche 3 cost recovery
1:08:44include CEC, Boulder staff, UCA, NARP.
1:08:52Is that right? Could
1:08:56you scroll down a little bit, Miss
1:08:58Federico, just so I can confirm? That
1:09:01sounds right. I can't remember.
1:09:03>> And I I tried to go in the order you
1:09:05>> I'm sorry to talk over you. I tried to
1:09:07go in the order you mentioned the party.
1:09:10So CEC, Boulder are both on page 38. And
1:09:15on the next page, staff, UCA, and AARP
1:09:19are discussed. Is that right?
1:09:21>> Correct.
1:09:23And is it fair to say that each of these
1:09:26five interveners expressed concerns with
1:09:28the operational history of Comanche unit
1:09:313 and the ongoing outage issues at the
1:09:35unit?
1:09:38>> I think that's a fair characterization.
1:09:41>> Yes.
1:09:42>> Okay. And is it also fair to say that
1:09:45Piasco generally disagreed with the five
1:09:47interveners recommendations
1:09:50regarding Comanche 3 cost recovery.
1:09:55>> That is also a fair characterization.
1:09:57Yes.
1:09:58>> Okay.
1:09:59>> And can you confirm for us that the
1:10:02annual revenue requirement for Comanche
1:10:043 is approximately $15 million
1:10:10>> in that order of magnitude? Yes, I
1:10:12believe it's above $100 million.
1:10:15>> Okay.
1:10:18Now, if we could uh move to the
1:10:22settlement agreement,
1:10:25which is hearing exhibit 155.
1:10:29>> Uh it's just going to take me a minute
1:10:31to scroll down to there. Oh, never mind.
1:10:33I had it up. Sorry.
1:10:35>> That's okay.
1:10:38And at the at the top of that document,
1:10:40Miss Frederrico, it says attachment a
1:10:43settlement agreement. Yes, it looks like
1:10:46you've got the document I'm referring
1:10:47to.
1:10:50If we turn to page 39
1:11:01and in particular paragraph 74
1:11:06and there's an agreement stated here or
1:11:11provision that PESCO will file a phase 2
1:11:13rate case within 12 months of a final
1:11:17decision in this proceeding. Is that
1:11:19correct?
1:11:20>> That's correct.
1:11:22>> And this promised uh future phase 2 case
1:11:26can address the topic of a low income
1:11:29residential rate. Is that correct?
1:11:33>> Yes, that's the phrasing used in the
1:11:35settlement agreement. Can address.
1:11:38>> How However, the settlement provision
1:11:40does not say that it shall or that it
1:11:43will
1:11:45address a lowinccome residential rate.
1:11:47Is that correct?
1:11:50>> That's correct.
1:11:53And
1:11:55so is it also correct that the agreement
1:11:57provides that it is up to public service
1:11:59to decide whether it will address this
1:12:02low income residential rate issue in the
1:12:05next phase 2 rate case.
1:12:08>> I would disagree with that
1:12:10characterization.
1:12:13The this provision simply says the topic
1:12:15of low-inccome rates can be addressed in
1:12:18this feature proceeding. It's it is not
1:12:20specific on who and at what time. So the
1:12:23the company could choose to explore the
1:12:25the topic. Other intervening parties
1:12:28could choose to explore the topic. The
1:12:30commission itself could choose to
1:12:32explore the the topic and all those are
1:12:34not mutually exclusive of course. So
1:12:36it's it's left open.
1:12:39>> Well, let me maybe ask it this way. In
1:12:41the advice letter and the direct case
1:12:43filing, public service would have the
1:12:46option, the the decision, the choice to
1:12:51make regarding whether the lowincome
1:12:54residential rate would be included. Is
1:12:56that is that accurate?
1:13:01>> Yes. Yes. It's not specified here. It
1:13:04could be concluded in the direct case.
1:13:06It could not be included.
1:13:09>> Okay. Um, and then looking at the last
1:13:11sentence there in paragraph 74 of the
1:13:15agreement, there is another provision
1:13:17that states Pasco will provide a 4CP-
1:13:23AED class to service study in this
1:13:26future phase 2 rate case forformational
1:13:29purposes. Is that right?
1:13:31>> Yes.
1:13:33And would you agree this acronym
1:13:364CP- AED stands for four coincident peak
1:13:41average and excess demand?
1:13:44>> Yes. And would you agree this is a cost
1:13:47of service allocation method used to
1:13:51assign fixed generation and transmission
1:13:54costs to customer classes based on how
1:13:58much they contribute to the systems four
1:14:00highest peak load intervals?
1:14:04>> Yes. And I believe that was featured in
1:14:07the company's last phase 2 case from a
1:14:10couple of years ago.
1:14:13And would you agree that large electric
1:14:17utility customers prefer this method
1:14:19because it rewards their local
1:14:21management and gives them direct control
1:14:24over a major portion of their bill and
1:14:27that they can produce a large cost
1:14:30savings when they can when they curtail
1:14:34during peak events.
1:14:36>> Objection, your honor. Mr. Bunker, could
1:14:39you just break that into two pieces?
1:14:40Sure.
1:14:44Would you agree that large electric
1:14:47utility customers prefer this method
1:14:49because it rewards their local
1:14:53it let me rephrase that. They prefer
1:14:57this method because it rewards load
1:14:59management.
1:15:03>> I'm sorry, Mr. Bunker. I wasn't a
1:15:04witness in the last phase 2 case. Uh, so
1:15:08I'm not as familiar with party positions
1:15:11taken in that case. I know the 4CP AED
1:15:14was was a component of that case to
1:15:16allocate some of the costs at issue.
1:15:20Other party positions are not something
1:15:22I tracked closely.
1:15:24>> Okay, I'll move on to a different topic.
1:15:26Uh, let's go to exhibit uh hearing
1:15:29exhibit 156.
1:15:32And this is your settlement testimony.
1:15:38And if we could look at page 44
1:15:46and lines 12 through 15.
1:15:54Here you state that the commitment to
1:15:56file a phase 2 case
1:15:59is within 12 months of the rate
1:16:01effective date in this proceeding. Is
1:16:03that correct?
1:16:06Yes.
1:16:09>> And that rate effective date per the
1:16:11settlement agreement is August 29th,
1:16:152026. Is that correct?
1:16:19>> That's correct. as the commission stated
1:16:21in a previous order in this case.
1:16:25>> And since that commitment is within 12
1:16:28months of the rate effective date in
1:16:30this proceeding,
1:16:32does PiSco view this commitment as it
1:16:34could file a phase 2 case at any time
1:16:37during that 12 month period after the
1:16:40rate effective date?
1:16:45>> Yes. Yes, it could be before 12 months.
1:16:49>> And does this commitment to file a phase
1:16:52two rate case
1:16:55contain a bar or a prohibition on public
1:16:58service filing a combined phase one and
1:17:01phase 2 rate case?
1:17:05>> There is no such prohibition here.
1:17:09Is public service willing to agree that
1:17:13this commitment to file a phase 2 case
1:17:17within 12 months of the of the rate
1:17:20effective date will not include another
1:17:24phase one rate case filing.
1:17:28I cannot make that commitment here
1:17:30today. the timing of the company's phase
1:17:33one
1:17:35electric rate cases or gas rate cases or
1:17:37or steam rate cases are are driven by
1:17:39the the financial
1:17:42fundamentals of the companies
1:17:46or the company it's a consolidated
1:17:47company and [clears throat] so without
1:17:49knowing the outcome of this case I can't
1:17:52opine on what the future course of phase
1:17:54one cases may or may not be
1:17:56>> y
1:17:59and public service gap pass was ordered
1:18:02to file a phase 2 gas rate case by the
1:18:04commission in its 2024 gas rate case.
1:18:08Correct.
1:18:15>> Sorry, Mr. Bumper. Your question was
1:18:17about the gas the last gas rate case.
1:18:19the last gas rate case and that one of
1:18:22the provisions of the commission's order
1:18:25was to file a phase two gas rate case.
1:18:31>> Yes, that's correct. Um I forget the
1:18:34exact time requirement involved, but the
1:18:36company's currently pending gas rate
1:18:39case is a combination phase one and
1:18:41phase two gas case. So we we adhere to
1:18:44that order. I believe there was a
1:18:46requirement by the end of the year to to
1:18:48file that the end of 2025 rather.
1:18:51>> Right. And Piesco filed that
1:18:53commissionord ordered phase 2 gas rate
1:18:56case in December of 2025
1:18:59along with a phase one rate case. Is
1:19:02that correct?
1:19:03>> That's correct.
1:19:06And is it your recol recollection that
1:19:08the commission order from the 2024 gas
1:19:12rate case did not include a directive to
1:19:15file a phase one rate case?
1:19:20It was only the phase two that was
1:19:22directed. Is that correct?
1:19:24>> Yes, I think that's correct.
1:19:29Is it your understanding that Piasco
1:19:32Electric's most recent phase 2 case was
1:19:37230243E.
1:19:42So the last phase 2 case for the
1:19:44electric uh division was roughly 3 years
1:19:48ago. Is that right?
1:19:50>> I think that's right.
1:19:54Would
1:19:57you agree the commission could order
1:19:59public service electric to file a phase
1:20:01two in its order in this case
1:20:04irrespective of the settlement
1:20:06agreement?
1:20:10>> That's within the commission's
1:20:12authority.
1:20:13>> Yeah.
1:20:14So you'd agree then if the commission
1:20:16rejects the settlement agreement, it
1:20:18could still independently order PSGO to
1:20:21file a phase 2 rate case, right?
1:20:26>> Yes. Just as it did in the the company's
1:20:29last gas rate case in 2024.
1:20:34If the commission modifies a settlement
1:20:36agreement and one settling party decides
1:20:40to make the agreement null and void,
1:20:43could the commission still independently
1:20:46order public service to file a phase 2
1:20:48rate case?
1:20:54Yes, the the commission can can order
1:20:57the the filing of a specific case.
1:21:03And if we could look at the settlement
1:21:05agreement at page 44
1:21:14and in particular paragraph 88.
1:21:24This settlement language creates a
1:21:26modification clause whereby it allows a
1:21:28settling party to withdraw from the
1:21:30settlement upon modification
1:21:33by the commission and this would render
1:21:35the settlement agreement null and void.
1:21:38Is that correct?
1:21:41>> Yes.
1:21:43And do you agree this settlement
1:21:45provision allows any single settling
1:21:48party to withdraw upon any modification
1:21:51of the agreement by the commission and
1:21:54that this withdrawal by one settling
1:21:56party would render the agreement null
1:21:58and void?
1:22:02>> Yes, that's my understanding of this
1:22:04provision.
1:22:06And can other settling parties object to
1:22:09a single settling party who puts in
1:22:11writing to withdraw from the settlement
1:22:13agreement because of a commission
1:22:16modification?
1:22:20That's a procedural question that that
1:22:23I'm not sure about.
1:22:26Um I I think in that scenario
1:22:30if one party were to exercise its right
1:22:32to withdraw you know if the if the
1:22:36remaining settling parties
1:22:39still supported the agreement I think
1:22:41the option is open for them to uh
1:22:44continue to express interest in the
1:22:46settlement agreement in that scenario.
1:22:50Well, if one party withdraws from the
1:22:54settlement agreement, then it's null and
1:22:56void and has no effect in in this or any
1:23:00other proceeding. So, wouldn't that
1:23:04effectively
1:23:06terminate the settlement agreement?
1:23:09>> Yes, it becomes null and void. I'm I'm
1:23:12simply uh referencing a some some new
1:23:16provision that would be needed, some new
1:23:18agreement
1:23:19uh among other parties. But but you're
1:23:22correct, the settlement agreement itself
1:23:24becomes nonvoid
1:23:26if one party were to were to withdraw.
1:23:31And there's there's no language in the
1:23:34agreement that in this clause, this
1:23:37provision that would
1:23:40require the commission's modification to
1:23:44be substantive in nature, such as we're
1:23:48going to change the effective date
1:23:50[clears throat] and and move it by 30
1:23:52days versus a somewhat minor
1:23:57uh modification like a clerical ical
1:24:00error. Is that right?
1:24:03>> This paragraph did not
1:24:06state with specificity the the magnitude
1:24:09of a commission change. So yes,
1:24:11therefore any change
1:24:14allows a a settlement party to to
1:24:18withdraw if they deem that uh to be
1:24:21appropriate.
1:24:24Um, if we could now turn to hearing
1:24:27exhibit 156, that's your settlement
1:24:30testimony.
1:24:32And on page 10
1:24:34at lines 1 through 10,
1:24:37[clears throat]
1:24:38you indicate the nonunanimous agreement
1:24:41reflects careful and thoughtful
1:24:43consideration of all the issues. a
1:24:46careful balancing of interests and
1:24:48issues to see to achieve a holistic
1:24:51result
1:24:53and results in a just it results in just
1:24:57and reasonable rates in the that is in
1:25:00the public interest. Is that correct?
1:25:03>> Yes.
1:25:05And is it also correct that UCA, AARP,
1:25:10Bold, and Boulder all opposed the
1:25:13non-unanimous agreement and that EOC was
1:25:17continuing to evaluate its position at
1:25:21the time the agreement was filed. Is
1:25:23that right?
1:25:28>> Yeah. Yes. I believe that will that was
1:25:31the the company's positions or sorry the
1:25:34other party's positions the non-settling
1:25:36party's positions at the time we filed.
1:25:38>> Yep.
1:25:40And do you agree that UCA, AARP,
1:25:44Boulder, and EOC
1:25:46represent the vast majority of Pasco
1:25:50Electric's customers since their
1:25:53constituencies include residential,
1:25:56small business, lower income, or income
1:25:59qualified customers?
1:26:03>> Can you clarify what you mean by vast
1:26:05majority? I'm not following.
1:26:08>> Okay. Well, public service has roughly
1:26:111.4 to 1.5 million
1:26:16uh customers. Correct. Electric
1:26:18customers.
1:26:20>> We have 1.6 million customers.
1:26:22>> Okay. 1.6 million customers. And of that
1:26:251.6 million customers, roughly 1.5
1:26:29million are residential and small
1:26:32business lower income or income
1:26:35qualified customers. Would you agree
1:26:37with that?
1:26:39I do.
1:26:40>> Okay. So, when I said that these four
1:26:43entities represent the vast majority of
1:26:46those customers, that's what I was
1:26:48referring to.
1:26:50Do you do you understand that? Now,
1:26:53>> I I agree with with UCA's
1:26:58representation, the cons the
1:26:59constituency or groups of customers that
1:27:01UCA represents as well as Boulder. But I
1:27:06disagree that that those organizations
1:27:10solely speak for the interests of other
1:27:11customers. The company cares about all
1:27:14its customers. Staff of the commission
1:27:16has a broad mandate to think about the
1:27:19company's needs as well as customers
1:27:21needs. Not that those are mutually
1:27:23exclusive of of course, but needs to
1:27:25consider the the whole universe. The
1:27:27settlement agreement incorporates
1:27:30other [clears throat] other interests
1:27:31here. And so I would disagree that just
1:27:33a few parties speak for a specific group
1:27:36of customers.
1:27:38>> Well, would you agree? My question did
1:27:41not uh ask that that a few customers in
1:27:45this instance those that are the
1:27:47constituency of UCA, AARP, Boulder and
1:27:51EOC
1:27:53u are are deciding the settlement and
1:27:57the value of it.
1:28:00Can you clarify your question there, Mr.
1:28:02Bumper? I'm sorry.
1:28:04>> Sure. You said that the I believe your
1:28:07testimony a moment ago was that
1:28:12you were suggesting that UCA was
1:28:15representing that a
1:28:20that it was making a
1:28:23statement that it was
1:28:27Well, let me strike that. We'll just
1:28:29move on.
1:28:31I I think I got what I wanted there.
1:28:36>> [clears throat]
1:28:36>> Let's move to hearing exhibit 123, your
1:28:40supplemental direct testimony.
1:28:50And this was your first piece of uh
1:28:53testimony in this case, is that right?
1:28:56>> Yes.
1:28:58>> And that's because you adopted the
1:29:00direct testimony of Mr. Burman. Is that
1:29:03right?
1:29:04>> I did.
1:29:06>> Okay.
1:29:08And on page 19 under your statement of
1:29:11qualifications, you state that you were
1:29:13a senior economist at the Colorado PUC.
1:29:16Is that correct?
1:29:18>> Yes. Yeah. I enjoyed working for the
1:29:20commission.
1:29:21>> Yeah. And you were with the commission
1:29:24from July 2016 to December 2019,
1:29:29correct?
1:29:30>> Yes. about three and a half years.
1:29:33>> And among other duties, you filed cost
1:29:36of capital or return on equity
1:29:38testimony. Is that right?
1:29:41>> I did in several cases.
1:29:43>> Uh do you have any idea how many uh
1:29:46cases [snorts] you filed that testimony
1:29:49in?
1:29:52>> Uh good question. I would say three to
1:29:55four maybe.
1:29:59>> Okay.
1:30:03Um, if we could turn now to the
1:30:08settlement agreement, which is hearing
1:30:10exhibit 155.
1:30:16And looking at the first page of the
1:30:18settlement agreement,
1:30:21you indicate this is a comprehensive
1:30:24nonunanimous settlement agreement in the
1:30:27title. Is is is that correct?
1:30:31>> Correct.
1:30:33>> Would you agree this agreement is only
1:30:36comprehensive as to the settling
1:30:38parties?
1:30:42I disagree with that framing.
1:30:46>> In in what way?
1:30:50>> The settlement agreement provides a path
1:30:52forward through all issues presented in
1:30:54this case. The settlement agreement
1:30:56brings into it various items proposed by
1:31:00other parties. In my settlement
1:31:02testimony, I walk through some of those
1:31:04items related to the energy assistance
1:31:06proposals by the company, the prohibited
1:31:08expenses proposals in the settlement
1:31:10agreement, which we adopted some of
1:31:11UCA's ideas on and EOCC's ideas on
1:31:14respectively. I believe there was
1:31:16another topic or two as well that were
1:31:18bringing in ideas that were were raised
1:31:20in the case. Yep.
1:31:22>> Have you had a chance to read the
1:31:24testimony in opposition to the
1:31:26settlement filed by uh City of
1:31:29Boulders's witness, Mr. Lairman, EOCC's
1:31:33witness, Mr. Bennett, and UCA's
1:31:35witnesses, Mr.
1:31:38and Ms. Henry Seros?
1:31:41>> I have reviewed them. Yes.
1:31:44After reading those testimonies, would
1:31:46you agree that at least these three
1:31:49settling parties do not view this
1:31:51agreement as comprehensive?
1:31:56They do not view it as comprehensive
1:31:58because some of their recommendations
1:32:00were not adopted in the settlement
1:32:01agreement. I would disagree that the
1:32:05characterization that the settlement
1:32:06agreement is not comprehensive. It it is
1:32:08comprehensive. We consider those
1:32:10elements and we did not adopt that.
1:32:23If we could uh look here at the
1:32:25settlement agreement and move to page
1:32:2828,
1:32:30there is a table, table three.
1:32:39Okay.
1:32:40Um [clears throat]
1:32:43the column uh the columns that are
1:32:47labeled as balance at 12/3125
1:32:53and additional balance through rate
1:32:56effective date.
1:33:00That's that's what I'm referring to uh
1:33:03particular in particular in these uh in
1:33:05this table. Um this table three is for
1:33:10regulatory assets and liabilities. Is
1:33:13that correct?
1:33:15>> Yes.
1:33:18>> And here we see a total amount of $20.8
1:33:22million
1:33:24as of December 31 20 uh 2025. Is that
1:33:29correct?
1:33:30>> Um can I just interject real quick, Mr.
1:33:33Bunker? I think you meant 220.
1:33:36Uh thank you. I did I'm looking at the
1:33:40bottom uh of the first uh or actually
1:33:43the second column balance at uh 123125
1:33:48and I did mean to say about
1:33:52$220.8
1:33:54million.
1:33:56Is that correct?
1:33:58>> Yes, I see that now.
1:34:00And this is the total of actual
1:34:04historical amounts for calendar year
1:34:062025. Is that correct?
1:34:10>> Yes.
1:34:12>> And then moving to the next column uh to
1:34:15the right the additional balance through
1:34:17the rate effective date. These are
1:34:20projected balances from January 1st,
1:34:242026
1:34:26through August 26 of 2026. Is that
1:34:29correct?
1:34:33Yes.
1:34:35>> And that total in the uh last u the last
1:34:41row of that column is about $74.2
1:34:45million. Correct.
1:34:54>> Sorry. Could you say that total again?
1:34:55I'm not sure which number you were.
1:34:57>> 74.2 million.
1:35:00Okay, I see that. Yes, that's correct.
1:35:04>> And these projects apply to five
1:35:07regulatory assets. Is that correct?
1:35:15>> I'm counting. Yes, five.
1:35:18>> Okay. And so Pasco's settlement revenue
1:35:23requirement contains at least
1:35:27$74.2 $2 million of non-historical
1:35:31and non-actual amounts that are in fact
1:35:34projected amounts. Correct.
1:35:42Well, some of those are are known based
1:35:45on where we stand here today in
1:35:48in May and June when this was developed.
1:35:53Uh I'm not sure the exact
1:35:55split between the actuals and the
1:35:57forecasted here in this middle column.
1:36:00Um but but yeah, some of it would be
1:36:03projected through the rate effective
1:36:06date. I just can't tell you how much.
1:36:09>> Okay. And would would the reason that
1:36:12public service is reaching into 2026
1:36:17and including this amount in its 2025
1:36:20historical test year be because Piasco
1:36:24wants to avoid addressing these amounts
1:36:26and these regulatory assets in its next
1:36:29phase one rate case.
1:36:33>> I don't think that's a fair
1:36:35characterization. We're being very
1:36:37transparent about these amounts in terms
1:36:40of the totals being brought uh into this
1:36:43case and informing the the cost of
1:36:45service here. Uh Mr. Freighus could tell
1:36:49you a little bit more of those details.
1:36:51U but but we're bringing forward all the
1:36:52details here and being transparent about
1:36:54it. All all these balances are discussed
1:36:56in each in each rate case. Um there's no
1:37:00attempt here to to re avoid review or or
1:37:03anything of that nature.
1:37:06You'd agree, however, the though that
1:37:09the uh $74 million
1:37:12here in this column um is not
1:37:16included or is not amounts incurred in
1:37:19the 2025 historic test year.
1:37:24>> Yes, those amounts would not be included
1:37:27in the year-end balance column uh right
1:37:30before it.
1:37:31>> Okay. Uh moving to the next column uh
1:37:35the total deferred balance column. The
1:37:38total amount of regulatory assets and
1:37:40liabilities is about $295 million.
1:37:44Correct?
1:37:48>> Yes.
1:37:50>> And is it correct that there are only
1:37:52two amounts that are regulatory
1:37:54liabilities? The pension expense
1:37:58and the Colorado tax rate change.
1:38:06Yes, those are the two negatives here.
1:38:12And if we could turn to your settlement
1:38:16testimony,
1:38:18that is exhibit uh here in exhibit 156
1:38:25at page 39.
1:38:29Here
1:38:42you uh you state on lines 16 and 17
1:38:47that this case involves an abnormally
1:38:50large amount of deferred cost being
1:38:53advertised in base rates.
1:38:57And this uh reference here, you were
1:39:01referencing the $295 million that we
1:39:05were just looking at in the settlement
1:39:06agreement, right?
1:39:12Yes. The the costs included in that
1:39:14table, but there's also a few additional
1:39:16items that are in customers benefit. I
1:39:18would bring attention to the uh the
1:39:21revenue decoupling adjustment balance of
1:39:23about $14 million.
1:39:26uh the Cabin Creek ITC of about a
1:39:29similar magnitude, the property tax
1:39:31tracker uh which is roughly double that,
1:39:34you know, all of which is being provided
1:39:37through the settlement agreement back to
1:39:39customers
1:39:40uh in more timely ways in most most
1:39:42instances if I can remember through the
1:39:44ECA. And so if we were to consider those
1:39:46as similar items here, uh it's actually
1:39:49a a lower
1:39:52total
1:39:57Okay. In in the settlement, is there
1:40:00also over $10 million in annual revenue
1:40:05credits
1:40:12across a few of the settlement
1:40:14agreements provisions on legacy meters
1:40:17and transmission costs and the uh 2020
1:40:21WMP. There there are several revenue
1:40:24credits that add up to more than that I
1:40:28believe but yes the settlement agreement
1:40:30has
1:40:31has revenue credits as as part of it.
1:40:35Okay. And in particular I'm referring to
1:40:39u paragraph 37D
1:40:43which is legacy meters
1:40:46and it's on the top of page 21.
1:40:52and the components of that $10 million.
1:40:55U let me kind of just run through this
1:40:58for you. Legacy meters and of 1.1
1:41:02million in paragraph 37D.
1:41:07Uh just below that in paragraph 38B,
1:41:11transmission and distribution projects,
1:41:14$3 million is the annual revenue credit.
1:41:17Correct.
1:41:20Uh, m Miss Federico, that this is the
1:41:22settlement agreement itself. I believe
1:41:24Mr. Bumper is referring to.
1:41:26>> Yes, I'm sorry. Exhibit 155.
1:41:30And I'm on page 21.
1:41:35And uh, the first reference was to
1:41:37paragraph D, 37D at the top of page 21.
1:41:42The second reference was uh paragraph
1:41:4738B
1:41:49transmission and distribution projects
1:41:53that annual revenue credit of $3
1:41:55million. Correct.
1:42:00So on on this page I see the 3 million
1:42:02from transmission and distribution.
1:42:06Above it I see the 1.1
1:42:10million per year. that relates to legacy
1:42:13meters I believe
1:42:15>> and there's also one more category
1:42:18>> uh yeah actually there are two more uh
1:42:21paragraph 42A
1:42:25which is on
1:42:28the bottom of page 23
1:42:32and on to page 24
1:42:36and the 2020 wildfire mitigation plan
1:42:41deferral credit of $1.2 million. Do you
1:42:45see that?
1:42:51>> Yes, I see that at the bottom here.
1:42:53>> Okay. And then paragraph 55
1:43:00which is on page
1:43:05top of page 32 is in particular what I'm
1:43:08looking at but it's paragraph uh 55 on
1:43:12the bottom of page 31 and top of page
1:43:1532. And this is a settlement revenue
1:43:18requirement reduction of $5 million.
1:43:21Right.
1:43:24Yes, correct.
1:43:26>> Okay. So, if you com if you add those
1:43:29those four credits, it's roughly $10
1:43:32million. Would you agree?
1:43:36>> I would say it rounds to 10 and a half,
1:43:37but yes, a little over 10 million.
1:43:40>> Okay.
1:43:42And the amount of revenue credits uh is
1:43:46$10 million in the settlement,
1:43:49but Mr. Fritis's attachment APF30
1:43:55shows a revenue credit amount of 13.1
1:43:58million.
1:44:00And this could be a question I asked Mr.
1:44:03Frightus, but do you know what that
1:44:04additional $3 million is for?
1:44:10I would have to scroll through the the
1:44:12full settlement settlement agreement to
1:44:14make sure we're capturing all of these
1:44:17items to build into a $13 million number
1:44:20or any other number. The total
1:44:21adjustments in this settlement agreement
1:44:23are closer to $100 million. So, it's
1:44:26just a question of how you're um cutting
1:44:29and slicing things.
1:44:34>> Okay.
1:44:36So, that might be a question to ask Mr.
1:44:37Mr. for Friday, I take.
1:44:40>> Yeah.
1:44:40>> If you're referring to a specific uh
1:44:42piece of one of his detachments, yes, he
1:44:44he could answer it.
1:44:46>> But it's a question about a settlement
1:44:48agreement provision. I'm I'm happy to
1:44:50answer it.
1:44:51>> All right. Uh let's let's focus on this
1:44:54uh provision in paragraph 55 that's
1:44:57currently on the screen.
1:44:59And this uh $5 million for the
1:45:02settlement revenue requirement reduction
1:45:06is uh also discussed in your settlement
1:45:10uh testimony. Is that right?
1:45:14>> Yes.
1:45:16>> And the settlement agreement does not
1:45:19contain an itemization of what issues
1:45:21are meant to be covered in what amount
1:45:25with regard to this $5 million
1:45:27credit. Is that right?
1:45:31>> That's right. There's not a specific
1:45:32itemization, but you can see in this
1:45:35provision of the settlement agreement,
1:45:36we are listing a couple categories um
1:45:39that this 5 million it is addressing uh
1:45:42at least in some part. Um that's the
1:45:44prior case expenses and the 2020 WMP
1:45:48deferral. And there were a few other uh
1:45:50instances as well during the settlement
1:45:52negotiations that the settling parties
1:45:55kind of look to this this catchall
1:45:58um provision as as being important for.
1:46:02>> Yeah. Is another way to characterize
1:46:04this catchall provision as a blackbox
1:46:08provision.
1:46:12>> I think the UCA or any other party could
1:46:14characterize this in in a number of
1:46:16ways. we don't refer to as as that. We
1:46:19call it a settlement adjustment. Um
1:46:22capturing these topics in addition to
1:46:24others that are unlisted.
1:46:28Okay. And this uh provision in paragraph
1:46:3255, this $5 million to reduce the annual
1:46:36revenue requirement. Is that right?
1:46:41>> I'm sorry, Mr. Robert, could you ask
1:46:43that again? I said with regard to this
1:46:45provision in paragraph 55,
1:46:48this $5 million is to reduce the annual
1:46:51revenue requirement. Is that correct?
1:46:55>> Yes, it is a $5 million reduction to the
1:46:58cost of service and that is a reduction
1:47:00that'll show up on an ongoing basis each
1:47:03year.
1:47:05>> Okay. Uh practically, how does this get
1:47:08credited against the annual revenue
1:47:11requirement?
1:47:14In terms of the mechanics, you might
1:47:16have to talk to Mr. Freighus. Uh I'm not
1:47:19sure if he included this as a revenue
1:47:22credit or made some other adjustment to
1:47:23the cost of service to effectuate this
1:47:26change.
1:47:31But you indicated this this would be an
1:47:33annual $5 million reduction until public
1:47:37services next electric gray case, right?
1:47:42Yes. Until the rate effective date in
1:47:44the company's next phase one electric
1:47:47rate case, this $5 million adjustment
1:47:50will be in place.
1:47:51>> Okay. And if the company files another
1:47:55phase 1 rate case within 12 months, the
1:47:58new future base rates from that future
1:48:01case will not contain this $5 million
1:48:04reduction. Is that right?
1:48:07I can't opine on on what a future phase
1:48:09one case may or may not include.
1:48:14>> Okay. So, I guess the what I was asking
1:48:16is this $5 million credit may be of
1:48:19short duration
1:48:22uh in the event public service files
1:48:25another phase one gas rate case in the
1:48:29coming months or say year.
1:48:35If it is a short duration in between
1:48:38this case and the company's next case,
1:48:40then I think that that adequately
1:48:42reflects some of these categories that
1:48:44this $5 million adjustment is
1:48:45addressing. The two called out here,
1:48:48regulatory case expenses and a past
1:48:50deferral are by definition timelmited.
1:48:53They're talking about a specific chunk
1:48:54of costs incurred during a specific
1:48:57period of time. Um to have an ongoing
1:48:59permanent $5 million reduction wouldn't
1:49:02match that.
1:49:07Okay, let's let's look at the next
1:49:10paragraph here on the screen, which is
1:49:13paragraph 56 of the settlement
1:49:15agreement. And in this uh settlement
1:49:19provision, it states any revenue
1:49:21[clears throat] requirement or revenue
1:49:23deficiency item not addressed in this
1:49:26agreement is accepted as proposed by
1:49:29public service in its direct testimony
1:49:32and attachments,
1:49:35[clears throat]
1:49:36excuse me, as further revised in
1:49:39rebuttal testimony and attachments
1:49:41without acceptance of any methodology or
1:49:45principle. Is that correct?
1:49:48>> That's what it states here. Yes.
1:49:50>> And what is your understanding of that
1:49:52last clause without acceptance of any
1:49:55methodology or principle?
1:50:01>> I think what we're referring to in this
1:50:03provision of the settlement agreement is
1:50:04that parties aren't necessarily
1:50:06approving or signing off on every item
1:50:09not addressed in in the settlement.
1:50:11Sorry, not addressed. Yes, not
1:50:13addressing the settlement agreement but
1:50:15included in the company's case. It's
1:50:17saying all other provisions are as
1:50:18reflected in the company's case unless
1:50:20modified herein. It it's slightly
1:50:23different language, right, to say
1:50:25accepted versus approved or or something
1:50:27else.
1:50:28>> Okay. [clears throat]
1:50:31Would it
1:50:34Let me rephrase that. So, so if the
1:50:37commission were to approve this
1:50:39agreement,
1:50:40it would be agreeing to a number of
1:50:44items and their amounts which get swept
1:50:47into the settlement revenue requirement
1:50:51without the commission or interveners
1:50:54seeing what those amounts specifically
1:50:57are. Is that correct?
1:51:00>> No, I would disagree with that. The
1:51:02company has provided thousands of pages
1:51:05of testimony, thousands of pages of
1:51:07attachments,
1:51:08thousands of pages of discovery
1:51:10responses to provide information to all
1:51:12the parties in the commission in this
1:51:13case on its cost of service from a
1:51:16representative last year. All those
1:51:19costs
1:51:20were subject to examination and many of
1:51:22them were by the parties. So, so no,
1:51:26it's not I would disagree with the
1:51:27characterization that it's swept in. A
1:51:30lot of this has been reviewed and
1:51:32without acceptance of any methodology or
1:51:34principles is is acknowledging that it's
1:51:36saying the settlement cost of service uh
1:51:40and presentation of the settlement
1:51:41agreement results in a reasonable
1:51:44outcome of litigated issues in this case
1:51:47across diverse parties and we think it
1:51:49results in in just and reasonable rates.
1:51:52>> Okay. [clears throat]
1:51:53So with regard to any revenue
1:51:56requirement or revenue deficiency item
1:52:00that's not specifically addressed in the
1:52:03settlement agreement,
1:52:05this provision would move those
1:52:09those items and amounts
1:52:12into the revenue requirement. Do you
1:52:14agree?
1:52:16the items not addressed by the
1:52:18settlement agreement would would flow
1:52:21into the the settlement agreement cost
1:52:24of service. Yes.
1:52:25>> Okay. Okay. Uh would you agree that a
1:52:29technical conference might be uh
1:52:33necessary to uh address what these items
1:52:39uh whether they're a revenue requirement
1:52:42or revenue deficiency item. not
1:52:45specifically addressed that it might be
1:52:49a good idea to have technical conference
1:52:51to highlight
1:52:53what those items and amounts are.
1:52:58I think that's a determination for the
1:53:00commission to make. The commission often
1:53:02requires a technical conference at the
1:53:04end of a phase one or phase two rate
1:53:06case and I think it's often done so in
1:53:09in the company's previous cases. We're
1:53:11we're happy to comply with such orders.
1:53:14Uh so so we'd look to guidance from the
1:53:17commission on that.
1:53:20>> Okay. If we could go to your
1:53:23settlement testimony,
1:53:28that's exhibit 156 of page five
1:53:33in lines 12 through 15.
1:53:39Here you discuss
1:53:42the credit of over $23 million for 50%
1:53:47of the gain on mineral rights sold and
1:53:50the Cabin Creek ITC. Is that right?
1:53:57>> Yes, that's correct.
1:54:00And is it correct that this nine or this
1:54:03$23 million consists of approximately
1:54:07$9.35 million for crediting of 50% of
1:54:12the gain on mineral rights sold in
1:54:16December 2025
1:54:19and approximately $14 million for the
1:54:21Cabin Creek investment tax benefit. Is
1:54:25that accurate?
1:54:27>> That's correct.
1:54:31Is it also correct that the Cabin Creek
1:54:33ITC amount of $14 million
1:54:37is not delineated in the settlement
1:54:40agreement?
1:54:46I can't recall if we listed the amount
1:54:48of $14 million, but it was very clear
1:54:51from the company's direct and rebuttal
1:54:53cases what the that amount was. So,
1:54:57we're simply referring to that.
1:54:59>> Okay.
1:55:01And in Piesco's rebuttal testimony,
1:55:05Piesco had already agreed to a staff's
1:55:08position to credit the Cabin Creek ITC
1:55:10through the ECA. Is that correct?
1:55:16I believe we included a a provision on
1:55:20how to accelerate the return of that
1:55:22Cabin Creek ITC credit in direct case. I
1:55:26think we slightly modified that in
1:55:27rebuttal in response to staff's
1:55:30feedback. So, it's always been a
1:55:31component of of this proceeding.
1:55:34>> Okay.
1:55:36And this this uh credit for the
1:55:41gain on mineral rights this this refers
1:55:45to the sale of the mineral rights
1:55:48of uh the Fort St. Frame mineral rights.
1:55:51Correct.
1:55:52>> Yes. Associated with property around
1:55:55that facility.
1:55:56>> And any other uh mineral rights or just
1:55:59the Fort St. Fra mineral rights?
1:56:03just those.
1:56:06>> Okay.
1:56:08So, if the $9.3 million is credited for
1:56:1250% of the gain on the mineral rights
1:56:14sold in December 2025,
1:56:18then would you agree that logic dictates
1:56:20the gain on the sale of the mineral
1:56:22rights was
1:56:24two times that amount or roughly $18.7
1:56:28million?
1:56:32Yes, that was the full gain on the sale
1:56:35of which 50% is being shared in the
1:56:38settlement agreement.
1:56:40>> Okay. So, given that the company
1:56:43assigned no cost basis to these mineral
1:56:46rights, the gain on sale is equal to the
1:56:50sale price. Is that correct?
1:56:57Believe that's correct. less some
1:56:59transaction fees.
1:57:04>> Okay. And if we can look at the
1:57:06settlement agreement,
1:57:09uh let me see here which page I'm
1:57:11referring to paragraph 4
1:57:15and I believe that is on
1:57:20page 26.
1:57:27and in particular the table table two
1:57:29that's on page 27
1:57:35at the bottom of table two on page 27 it
1:57:39shows the gain on mineral rights has a
1:57:42carrying charge at whack is that correct
1:57:48>> yes since the since these gains are
1:57:51being credited to customers over a
1:57:53five-year period I believe in the
1:57:55settlement agreement that unamortized
1:57:58balance each year um grows at the rate
1:58:03of of whack to customer's benefit.
1:58:07Okay. And if we could go to page 31 of
1:58:10the settlement agreement,
1:58:17paragraph 54, it states that the
1:58:20crediting crediting of this amount of
1:58:22$9.3 million shall occur over five years
1:58:26through the ECA
1:58:28and the associated regulatory liability
1:58:31shall reflect a carrying charge
1:58:33calculated at the author authorized
1:58:35whack. Is that right?
1:58:38Yes, exactly.
1:58:40>> So, help me understand
1:58:43that understand this because the ECA
1:58:47itself
1:58:48is not a mechanism that has whack
1:58:52applied to its amounts. Correct.
1:58:57>> The ECA is predominantly a flow through
1:59:00of the company's fuel costs. There are
1:59:04lots of other pro provisions that are
1:59:06included in quarterly ECAs.
1:59:09The company and and the settling parties
1:59:11here think it's an efficient route to
1:59:13return a specific set of dollars to
1:59:16customers over a specific set of time.
1:59:18It it presents itself as a as a good
1:59:21vehicle for doing so.
1:59:28Okay, I'll ponder that for a moment. But
1:59:30let me ask the next question and that is
1:59:33does public service account for this
1:59:35regulatory liability
1:59:38in its regulated rate base.
1:59:44It accounts for the the regulated
1:59:47liability. Yes, I think the company
1:59:51could could in theory return that a
1:59:53number of different ways to customers.
1:59:56And as I was just saying a moment ago,
1:59:58the ECU ECA is an efficient way to do so
2:00:01quickly over a set amount of time and
2:00:03and to a very specific dollar amount.
2:00:08And so is the whack percentage applied
2:00:14to a decreasing amount of the $9.35
2:00:18million every ECA quarter?
2:00:30I'm I believe it would be yes as you
2:00:33described over a quarterly basis that
2:00:35I'd have to look at our our calculations
2:00:38in more detail to see if we apply that
2:00:40on a quarterly basis or annual basis but
2:00:43but yes the whack is applied to the
2:00:44unavertised balance.
2:00:47>> Okay.
2:00:47>> Uh so customers are getting that that
2:00:49benefit.
2:00:50>> Okay. [clears throat] Let me ask it this
2:00:52way and see if we're on the same page.
2:00:53Then the $9.35 million is subject to
2:00:58amortization each quarter.
2:01:02And so as the amount of the $9.3 million
2:01:079.35 million decreases,
2:01:12the balance that the whack is applied to
2:01:15also decreases.
2:01:18>> Yes. Over time that is correct. Okay.
2:01:26Why would Pasco simply not set this
2:01:29amount of $9.35 million
2:01:33up as a regulatory liability within its
2:01:36revenue requirement model?
2:01:45There's a number of different mechanisms
2:01:49uh and time periods that
2:01:52that one could return a set number of
2:01:56dollars back to customers. The
2:01:58settlement agreement chose one vehicle
2:02:00and one amount of time with specific
2:02:02provisions around that. There's other
2:02:04ways one could do that, but the
2:02:05settlement agreement landed on on this
2:02:08outcome as as a reasonable outcome. I
2:02:10think the important piece to to note on
2:02:12the spreading out over time is that it
2:02:16was I believe I can talk about
2:02:18settlement discussions at a high level
2:02:20without attributing it to any party but
2:02:22there there was spirited discussion over
2:02:24how to do this and and over what period
2:02:27of time think taking into account
2:02:29intergenerational equity right that
2:02:32these property rights have been in place
2:02:34for for some time there's been revenue
2:02:38sharing on those royalties
2:02:40for some amount of time and thus
2:02:42returning the gain on the sale of those
2:02:46those mineral rights or or or a portion
2:02:48thereof. Right? We're talking about 50%
2:02:50here. It's also reasonable to spread
2:02:52that out over time.
2:02:55>> Okay? Because if the [clears throat]
2:02:59the amount the balance of $9.35 million
2:03:02would not decrease until the next rate
2:03:05case if it was put in the revenue
2:03:07requirement model. Is that correct?
2:03:14>> Yes. Base rates do not change until you
2:03:16have a phase one rate case.
2:03:19So everything is kind of locked in
2:03:23uh on your cost of service
2:03:26until you you change that in a future
2:03:28case.
2:03:29>> Okay.
2:03:30Uh if we could turn to page 27 of the
2:03:34settlement agreement
2:03:36that's here in exhibit 155
2:03:41and this is table two here at the top of
2:03:43the page and the property tax tracker
2:03:48regulatory liability and revenue
2:03:52re revenue decoupling adjustment the RDA
2:03:56is what I'm focusing on Here
2:04:00at table in table two it shows the Cabin
2:04:03Creek ITC has a carrying charge at
2:04:06whack. Is that correct?
2:04:11>> Yes.
2:04:13>> Is it correct that the application of
2:04:15whack to an amount is known as earning
2:04:18at whack or whack earnings?
2:04:23>> I think there's a number of ways to
2:04:25describe it. I think carrying charge is
2:04:28probably the most accurate way to do so
2:04:30because that's the company's
2:04:33uh cost of capital and thus the time
2:04:36value of money is is reasonably
2:04:37represented by whack. Of course, you can
2:04:40see in this table not all provisions
2:04:42have a carrying charge and not all are
2:04:44at the whack. I think a [clears throat]
2:04:45carrying charge accurately describes the
2:04:47the situation.
2:04:49>> Okay. So, if I understand what you're
2:04:51saying, it's somewhat synonymous, just a
2:04:53different choice of words between
2:04:56earning at whack, whack earnings, or
2:04:59carrying charge at whack. Is is that
2:05:02accurate?
2:05:04>> Or time value of money. I think a lot of
2:05:06these terms are used interchangeably in
2:05:08in our regulatory discussions here.
2:05:10>> Yep. Okay. Uh Mr. Pay, uh thank you. I
2:05:15have nothing further.
2:05:18>> Uh thank you, Mr. Bunker. I think you
2:05:20hit your time uh exactly. Um
2:05:23>> thank you.
2:05:24>> Appreciate it. Uh let's take a 10-minute
2:05:26break till uh 10:45 and we'll come back
2:05:29with Mr. Kaufman at 10:45. Thank you.
2:05:32>> Thank you, Chair.
2:16:14Mr. Kaufman, you out there?
2:16:21>> Uh, yes I am. I am here.
2:16:24>> You're up, sir. I got 30 minutes and
2:16:26it's 10:45.
2:16:28>> Right. Thank you very much. uh going
2:16:30after UCA um helps reduce across and let
2:16:34me just say um I also think that I can
2:16:37wave some cross-examination for uh some
2:16:40other witnesses. Uh at least for now I I
2:16:44think we can eliminate our cross for Jod
2:16:46Allison and Nicole Doyle. And I see
2:16:49we're the only uh w uh party that's
2:16:52requested uh time for those witnesses.
2:16:54So
2:16:57>> you just uh if you could hold on for one
2:16:58sec. Commissioner Plant, did you have
2:17:01questions for Miss Allison or Miss
2:17:04Doyle?
2:17:04>> No, I don't.
2:17:06>> Commissioner Gman.
2:17:08>> Um, Allison, I do. Doyle, I do not.
2:17:12>> Uh, Allison is uh uh not excused, but uh
2:17:20Miss Doyle is.
2:17:23Uh, and with that, Mr. Kaufman, if you
2:17:25need more time with uh Mr. Okay, you're
2:17:28good.
2:17:28>> Okay, thank you.
2:17:29>> Sure.
2:17:30>> Blank.
2:17:31>> Good morning, Mr. Bquet. Can you hear
2:17:33me?
2:17:35>> I think uh Mr. Zmer had a question.
2:17:37>> Okay.
2:17:38>> Mr. Z, did you have a question?
2:17:40>> Yeah. Um Mr. Kaufman, if you could keep
2:17:43us surprised. I think you had um five
2:17:45minutes for Mr. McGregor as the only
2:17:48person. Um he's got some travel issues,
2:17:51so just as things progress, if you could
2:17:53keep us uh informed on that, that'd be
2:17:56great. Thanks. Sure. I I I will. Uh
2:17:58we're gonna we'll reassess here later
2:18:00today. Thanks.
2:18:02Um good morning, Mr. Bquet. For you.
2:18:06>> Good morning.
2:18:07>> Yes. My name is John Kaufman. I
2:18:08represent AARP
2:18:10and um I think we uh there's been
2:18:14already been some discussion of the um
2:18:18uh the fact that the parties
2:18:20representing residential customers in
2:18:22this case are opposing the non-unanimous
2:18:25agreement.
2:18:26Do can you
2:18:28um do you know the the percentage that
2:18:31residential customers make up of your
2:18:34customer base in Colorado?
2:18:39>> Not off the top of my head.
2:18:41>> Would 60% of the number of customers
2:18:44sound right to you
2:18:50>> across our electric system? Yeah, it
2:18:53could be in that realm
2:18:55>> about and that's about one and a half
2:18:57million residential and small business
2:18:59customers. I think is in that number
2:19:01that that 1.5 million is residential and
2:19:03small business. Is that right?
2:19:06>> Well, if we're talking residential and
2:19:07small business, you know, we're closer
2:19:10to
2:19:12we're 90% plus of our customer base.
2:19:14>> Okay. Okay.
2:19:17Do you have a a sense of how many of the
2:19:20residential customers you serve would be
2:19:23uh low-inccome eligible that is eligible
2:19:25for lie heap or some other um income
2:19:28based assistance program?
2:19:31We've talked a lot about that in in
2:19:33recent proceedings over the past few
2:19:35years as well as in our energy and
2:19:37security working group that was in place
2:19:39for a few years following the the last
2:19:42uh electric rate case uh coming out of
2:19:44the the 2023 decision there. And so
2:19:48estimates on that range quite a bit
2:19:50depending on the methodology. We
2:19:52submitted a report on this to the
2:19:53commission. Uh so depending on how you
2:19:56approach it, it can be anywhere from
2:19:57about 150,000 customers up to about
2:20:00300,000 or 275,000ish
2:20:04customers. So somewhere in that range
2:20:07and and that's the challenge in all of
2:20:08this is finding a precise estimate is is
2:20:11quite difficult. And there are programs
2:20:13in Colorado that are available,
2:20:15including light HEAP and uh perhaps
2:20:17other, you know, EAP programs. But would
2:20:20you agree with me that there are also um
2:20:22many customers who don't qualify for
2:20:24those programs, but that otherwise live
2:20:28paycheck to paycheck.
2:20:32And and if that's not clear, I could,
2:20:34you know, we could be more precise
2:20:36about. In other words, c um when I say
2:20:39paycheck to paycheck, I'm referring to
2:20:41customers who have have no savings and
2:20:44uh are are just barely meeting their
2:20:46their monthly expenses with the income
2:20:48that they have available to them.
2:20:51Do do you have any sense for how many
2:20:54more customers uh that that might be
2:20:57above the the the customers who are
2:20:59low-inccome eligible?
2:21:03I do not believe we've tried to quantify
2:21:07that. It's a sliding scale, right? I
2:21:09think we've focused here in Colorado to
2:21:11date on let's try to understand as much
2:21:13as we can the population of energy
2:21:15burdened and incomequalified customers
2:21:18and that was within the range we were
2:21:20just talking about. If you're then
2:21:22saying, hey, let's understand a broader
2:21:24population of energy burdened or or
2:21:27slightly higher income thresholds,
2:21:29that's going to give you a different
2:21:30answer. And I think we've collectively
2:21:32all kind of spent less time
2:21:34comparatively trying to answer that
2:21:36question. I agree it's an important
2:21:37question. Uh but I I don't have a number
2:21:40to associated with it. Uh here
2:21:42>> would you be surprised that um as many
2:21:44as say 40% of Coloradoatans are uh
2:21:48living paycheck to paycheck?
2:21:51Does 40% seem too high to you? I
2:21:54>> I would love to review an analysis on
2:21:57that because I think it's a a really
2:21:58interesting policy question. Well, let's
2:22:00just say no matter what the number is,
2:22:02if someone is living paycheck to
2:22:04paycheck, uh an increase uh that goes
2:22:07above their income as a result of this
2:22:09rate case would cause those customers to
2:22:11have to borrow that money, right?
2:22:16in order to pay their electric bill.
2:22:21>> I'd agree with a sentiment that for a
2:22:26for a household that faced socioeconomic
2:22:30challenges, right? Changes in in
2:22:33underlying household expenses
2:22:36um could increase that those those
2:22:39challenges by definition. In terms of
2:22:41what the solution set is in response to
2:22:44that, I think there's a a whole number
2:22:46of of options to explore. Um, you know,
2:22:49debt is one support and assistance
2:22:52programs from the utility, from local
2:22:54and state governments, from the federal
2:22:55government, from other nonprofits,
2:22:57right? There's a whole ecosystem of
2:22:59support out there, and that's what we're
2:23:00trying to to to contribute to and
2:23:02enhance through our our EE proposals
2:23:05here in this case. And in your
2:23:07testimony, uh, much of the support for
2:23:09your case here refers to inflationary
2:23:12pressures on the expenses that the
2:23:13utility has to pay. Is that fair?
2:23:16>> That's one component. It's not the sole
2:23:18component.
2:23:19>> And do you know what the general rate of
2:23:22inflation is in your service territory
2:23:25or the most recent recorded inflation
2:23:28rate?
2:23:30I believe over the past three years
2:23:33we've been at about a 10% change in the
2:23:37price index overall. So that brings it
2:23:39to roughly three three and a half%
2:23:41change per year.
2:23:43>> Um would you be surprised that in March
2:23:47of this year uh the Denver area reported
2:23:50an inflation rate of about 4.2%.
2:23:54>> That sounds about right.
2:23:56>> That's just for Denver.
2:23:59And
2:24:02based on the uh non-unanimous agreement
2:24:04that the company's uh proposing in this
2:24:06case, um would electric rates go up
2:24:09higher than that amount for residential
2:24:11customers?
2:24:16>> At what moment?
2:24:19Well,
2:24:21when the rates are put into place as a
2:24:23result of this of of your non-unanimous
2:24:27agreement,
2:24:30>> I mean,
2:24:30>> so it's important.
2:24:32>> Well, let me justri [clears throat]
2:24:33strike that. And it hasn't the company
2:24:35represented that the non-unanimous
2:24:37agreement would result in uh rate
2:24:39increases of about 5.6%.
2:24:45>> Close to that level. Our bill impact
2:24:47analysis based on the settlement
2:24:49agreement is about 5.86% for residential
2:24:52customers a little bit lower for other
2:24:54customer classes uh um but but in that
2:24:57magnitude and so on the rate effective
2:25:00date yes that would be the change in
2:25:02base rates as a result of the settlement
2:25:04agreement. The important thing to
2:25:06remember is that base rates don't change
2:25:08over time unless you have a phase one
2:25:11electric case. And so there there are
2:25:13other riders that change annually or
2:25:16quarterly. But but it's important to
2:25:18remember that we haven't changed base
2:25:19rates in about three years between the
2:25:23rate effective date of this case and the
2:25:24last case. Uh and we're not sure right
2:25:28yet when the when the next base rate
2:25:30case would be. Well, I if if the the uh
2:25:34order coming out at the end of this case
2:25:36increases electricity prices um higher
2:25:40than the general inflationary rate that
2:25:43uh households and businesses are
2:25:44currently experiencing, you'd agree with
2:25:47me, wouldn't you, that it would that the
2:25:49that order would have the effect of
2:25:50increasing the overall rate of inflation
2:25:53in Colorado?
2:25:59All else equal, that statement would be
2:26:03true. But of of course we know in the
2:26:05economy all else is not equal, right?
2:26:06There's a lot of things that are
2:26:08changing in real time. Or if you look at
2:26:09grocery prices, uh rent prices, right?
2:26:13Other goods and services, housing in
2:26:15particular, um utility costs are are one
2:26:19component of that. And there's a lot of
2:26:20studies that show that Colorado's
2:26:23utilities costs are on average the
2:26:25lowest in the country. And so we think
2:26:27our component of overall inflation, our
2:26:30contribution to it is is quite small. Um
2:26:34and and and we're proud of that.
2:26:36>> And the um the roughly 5.6% impact of uh
2:26:41your proposal at this point, it doesn't
2:26:44include all the expenses um um or at
2:26:48least it doesn't seem to me. And I and
2:26:49I'd like you to help confirm or or not
2:26:52confirm that in the settlement
2:26:55agreement. And I I let me call this up
2:26:57here. I guess it's in um
2:27:01page um page 19 of the
2:27:05um non-unanimous settlement agreement.
2:27:08It has um referring to the wildfire
2:27:11costs. I is it
2:27:15uh is it true that the agreement reduces
2:27:18the revenue requirement that the company
2:27:19was asking for for wildlife uh wildfire
2:27:22related expenses?
2:27:27Yes, this
2:27:29>> provision in particular, I don't believe
2:27:31it's reflected here. I think it's a
2:27:32little bit lower. Yeah, starting there
2:27:34in subp part B.
2:27:35>> Um reduces
2:27:38>> Sorry.
2:27:39>> Go ahead. Sorry.
2:27:41>> Yes, this produc this provision reduces
2:27:44the the test year cost of service um by
2:27:48pulling out some of these wildfire
2:27:50related expenses and and those will be
2:27:52reviewed in more detail. uh in upcoming
2:27:55wildfire violence.
2:27:56>> So the company would expect to then
2:27:58recover those expenses through a a
2:28:02rider, right? A that is designed to
2:28:05cover wildfire expenses. Is that
2:28:08>> Yes. through the wildfire mitigation
2:28:11adjustment.
2:28:13>> So with regard to the to that
2:28:15adjustment, that doesn't really save any
2:28:18money for customers, right? because
2:28:20they're they're going to wind up facing
2:28:22those expenses in a writer.
2:28:25Correct.
2:28:28>> If there's no adjustment to those
2:28:30underlying amounts. Yes, that's correct.
2:28:34>> Um I'd like to al ask you about the
2:28:37provision in that non-unanimous
2:28:38agreement relating to legacy meters.
2:28:42Um,
2:28:44the total proposed revenue requirement
2:28:47for legacy meters under the settlement
2:28:49is uh approximately $119 million. Do I
2:28:53have that right?
2:29:00I don't I don't recall a $119 million
2:29:04figure associated with legacy meter, so
2:29:06you might have to walk me through that.
2:29:08>> Okay. exhibit um I think it's attachment
2:29:11five
2:29:14on um
2:29:1850 the the 15-year revenue requirement
2:29:21line.
2:29:22>> Sorry, Mr. Kaufman, are you referring to
2:29:24attachment five to
2:29:27exhibit 155?
2:29:29>> Correct. Yes.
2:29:31>> Okay. And what uh page or line did you
2:29:36say?
2:29:39>> Um let me see which line that is
2:29:45>> is the sum here.
2:29:46>> Well, is does this work? Is this big
2:29:48enough where you can see it?
2:29:50>> Yes. Yes. So the re the um
2:29:53that that would be that that in is my
2:29:56sum of the revenue require requirement
2:29:59line across the 15 years.
2:30:04Okay, I see that. Yes, that a magnitude
2:30:06of about 119 million. Okay.
2:30:09>> Sounds right when you incorporate a
2:30:11carrying cost at the long-term cost of
2:30:13debt.
2:30:14>> And um as far as car when you say
2:30:17carrying cost, do you mean both rate of
2:30:19return and long-term debt or debt?
2:30:24>> It'd be a carrying cost at the cost of
2:30:26long-term debt. Yeah, I think I think
2:30:28we're saying similar things,
2:30:30>> right? So over that [clears throat] uh
2:30:31so over that 15-year period, the rate of
2:30:34return or or profit to the utility would
2:30:36be about $30 million. Do I have that
2:30:39right?
2:30:43I disagree with the characterization of
2:30:45that as profit. Our time value of money
2:30:49is best estimated at the weighted
2:30:52average cost of capital or whack. This
2:30:54carrying charge is less than that. Uh so
2:30:58we see this as as a um as a as a
2:31:04component of the settlement settlement
2:31:05agreement that that reduces costs for
2:31:07customers part of the negotiated outcome
2:31:10here.
2:31:10>> But you don't characterize the uh return
2:31:12on equity as a as profit to the company.
2:31:18>> There's no return on equity here for
2:31:20legacy meters. we have a carrying charge
2:31:22that's below our weighted average cost
2:31:24of capital
2:31:25uh and that's below our time value of
2:31:28money.
2:31:29>> Okay.
2:31:32>> So, um
2:31:35the roughly uh so I guess there's an $1
2:31:39million credit to the $119 million for
2:31:42legacy meters. Is that right? So the
2:31:45would that mean that the rate impact is
2:31:47more like $108 million?
2:31:53>> Yes.
2:31:55>> Okay.
2:31:56But even with that reduction, that's
2:31:58that's on top of the uh return for new
2:32:02meters to the company, right? There's
2:32:04there's that's this is a separate and
2:32:06apart from what um
2:32:10Excel is asking for its new meters,
2:32:13right?
2:32:16Yes, the investment in new metering
2:32:19infrastructure would be part of rate
2:32:21base you know as determined in each
2:32:23phase one rate case and that rate base
2:32:26would receive a rate of return equal to
2:32:28the weighted average cost of capital. So
2:32:29these are um related issues of course
2:32:32because it all relates to the the Aegis
2:32:34roll out stemming from our 2016 CPCN
2:32:38that was approved by the commission. Um
2:32:40but distinct issues within that
2:32:42>> and do am I correct in um
2:32:46saying that the the impact of new meters
2:32:49is $295 million.
2:32:53>> I can't confirm or or deny. I don't have
2:32:56those numbers in front of me.
2:32:57>> All right. Just one more question on
2:32:59this on this provision relating to
2:33:01legacy meters. Um when it refers to the
2:33:04long-term debt, is that under this under
2:33:08the agreement that you reached with the
2:33:10staff, is that would that be fixed for
2:33:1215 years or is that subject to change in
2:33:15future rate cases?
2:33:21But so you can see in in this attachment
2:33:23it's assuming that long-term cost of
2:33:25debt stays fixed because that's our
2:33:27current
2:33:27>> right
2:33:28>> um long-term cost of debt based on the
2:33:30test year. I understand that that will
2:33:33change over time. Um but the mechanics
2:33:36of that question might be better
2:33:37addressed by Mr. Freighus could uh
2:33:40>> correct me if I'm wrong. So in this
2:33:42exhibit th that
2:33:45long-term debt rate of 4.55%
2:33:48across the 15 years is only there for
2:33:50illustrative purposes and that could be
2:33:52higher or lower in future uh years. Is
2:33:55that right?
2:33:56>> That's my understanding.
2:33:58>> Okay.
2:34:00Um
2:34:02let me ask you about the um
2:34:07the uh end of test year uh rate base
2:34:11issue that's um
2:34:15do you have a sense for what the dollar
2:34:17value is of that between uh the parties
2:34:20that um
2:34:23your proposal to use in year-end rate
2:34:26base as opposed to average rate base. Do
2:34:28you know how much of an impact that
2:34:30issue would have in this case between
2:34:32those those two differing
2:34:34recommendations?
2:34:37>> So when you compare the two
2:34:39methodologies against one another, there
2:34:41there's a couple other side decisions
2:34:43that flow into that, right? Are you also
2:34:46annualizing depreciation expense? Are
2:34:48you annualizing customer accounts and
2:34:50revenue or are you not? And so if you
2:34:52kind of put the whole package together
2:34:53or not, you can get kind of anywhere
2:34:55between $40 million to $60 million is my
2:34:58understanding. But but Mr. Freighus can
2:35:00give you a a more precise number.
2:35:03>> Okay. Well, maybe I I should address
2:35:05that with him.
2:35:07Um
2:35:11but there um the issues uh would you
2:35:14agree with me that the uh issues that
2:35:16we're wrestling with on that issue
2:35:17relate to u the companion issues in
2:35:22other words you know depreciation and
2:35:23other issues whether they should also be
2:35:26uh based on a endofear amount to match
2:35:30the test year uh the year- end rate base
2:35:33that you're proposing.
2:35:35I think there's lively discussion of of
2:35:37all of that here in the case and the
2:35:39settlement agreement um provides a a
2:35:42resolved path through that debate among
2:35:44the settling parties here. We think it's
2:35:48it of course it's a discussion that
2:35:49comes up in every proceeding phase one
2:35:51rate case here in Colorado. The
2:35:54settlement agreement charts are
2:35:55reasonable of course through that issue
2:35:57in combination with all other issues in
2:35:59the case. Well, whenever you're um
2:36:02analyzing a test year, would you agree
2:36:04with me that ideally each of the
2:36:07components uh in the revenue requirement
2:36:09should should be matched as much as
2:36:12possible in this?
2:36:19If your question is about the the
2:36:21matching principle generally
2:36:24yes that's a key feature of of rate
2:36:26making
2:36:28the company would disagree with a
2:36:30characterization if you're talking about
2:36:32average rate base or year end rate base
2:36:35and additional kind of averaging or or
2:36:38year-end amounts for these companion
2:36:39issues of as you describe them right if
2:36:41we're talking about
2:36:43>> depreciation expense or customer counts
2:36:46there can be very valid reasons
2:36:49to to not all align them on the same
2:36:53year end or average basis. Mr. Freighus
2:36:56talks about this quite a bit in his
2:36:59in his rebuttal testimony, I believe. Um
2:37:03so I would push that a little bit out of
2:37:06the the general matching principle. It
2:37:08depends on the issue.
2:37:11>> Okay. Um moving on, I want to talk about
2:37:14the Comanche
2:37:16um provisions in
2:37:18this case the the non-unanimous
2:37:21settlement would allow for recovery of
2:37:23Comanche 2 costs even though part of the
2:37:26rationale for keeping it open is to
2:37:28replace the Comanche 3 unit. Right.
2:37:35>> I'm not going to opine on on the
2:37:36rationale um for for Comanche 2's
2:37:40continued operation.
2:37:43You can talk to to other witnesses about
2:37:44that. uh the settlement agreement charts
2:37:49of course um whereby the the incremental
2:37:52costs from the operation of that unit uh
2:37:55would be dealt with moving forward and
2:37:57that's that the settling parties are
2:37:58saying that the PCCA provides a
2:38:00efficient process to do that we can
2:38:03change PCCA rates as needed to reflect
2:38:06actual costs there's um estimation and
2:38:10true processes within that as well as
2:38:13prudence reviews on the back end so we I
2:38:15think that presents a really helpful
2:38:18framework for capturing these these
2:38:21costs that the company's incurring and
2:38:23and reviewing them moving forward. Um I
2:38:26have a a a specific question about the
2:38:31um um I get paragraph 40 in the
2:38:34non-unanimous agreement that's on pages
2:38:3721 and 22 of the agreement. the there's
2:38:41a reference to um um an equivalent
2:38:45unplanned outage factor XUF
2:38:51and
2:38:54do you have some understanding of how
2:38:55that factor is
2:38:57um calculated and applied?
2:39:01>> A high level understanding uh but if we
2:39:03start peeling back layers of the onion
2:39:05here I might have to call in Mr. Hansen
2:39:08or or Mr. Pascuchi. So
2:39:12the um according to the agreement that
2:39:15there'd be a basel a baseline in this
2:39:17factor which is related to the amount
2:39:19the number of outages or or the extent
2:39:22of outages and that's at uh 13.49%.
2:39:28And according in the agreement that's
2:39:30defined as the industry average for coal
2:39:33units of comparable size. Is that right?
2:39:37>> Yes. That's what it says at the top of
2:39:38page 22 here. [clears throat]
2:39:40>> And it refers to a a 3% deadband as far
2:39:45as Excel meeting this baseline, which
2:39:48means no adjustment would be made if
2:39:50that 13.49%
2:39:52is 3% higher, 3% lower. Is that right?
2:39:56>> Correct.
2:39:57>> Okay. And then I notice in
2:40:01paragraph for I guess yeah paragraph 40
2:40:04sub subsection E
2:40:08uh there is uh overperformance
2:40:12is referred to overperformance in this
2:40:13factor and it states that the utility
2:40:16would then have will be allowed to
2:40:19offset any past or future penalties
2:40:22related to Comanche uh if the uh if
2:40:26Excel can overperform
2:40:29uh related to this outage factor. Is
2:40:31that fair characterization?
2:40:34>> Yes, that that's a correct way to
2:40:36characterize the the mechanics here. And
2:40:39[clears throat] I've note the importance
2:40:40of that pro provision, right, to all
2:40:43parties. It it was very important that
2:40:45in this in the settlement agreement that
2:40:47the company not have an opportunity to
2:40:50receive a net incentive from this new
2:40:52performance framework. Provision subp
2:40:55part E allows for kind of that the
2:40:58banking of of offsets
2:41:01in years before or after a particularly
2:41:04large outage if if one were to occur. Of
2:41:07course, it helps kind of average it out
2:41:10o over time. Um so we're really tracking
2:41:12to uh that that baseline target over
2:41:15over a few years that are contemplated
2:41:17here. But um is is the um is the bed
2:41:22deadband symmetrical in your opinion or
2:41:25is it um
2:41:28is overperformance
2:41:30um more likely than underperformance in
2:41:35in order to um that would cause the
2:41:37utility to be able to avoid uh future
2:41:40penalties?
2:41:43>> I'm sorry, Mr. Mr. Kaufman, this
2:41:46symmetry question you have that it seems
2:41:49like you phrase that around the dead ban
2:41:51itself or is your question actually
2:41:53around the target of 13.5?
2:41:55Well, I it's um I'm asking this question
2:41:59because it's not it's not clear to me um
2:42:02exactly how when the overperformance
2:42:05would kick in at what do you know at
2:42:06what number the overperformance would
2:42:09then um apply and allow the utility to
2:42:13avoid penalties
2:42:15or offset penalties.
2:42:20>> So I I think I'll answer your question
2:42:22in two parts here. The first part is the
2:42:263% deadband is symmetric, right? So
2:42:28offsets don't start until you get to
2:42:3010.4 knot. If you're if we achieve
2:42:33achieve an outcome that's less than that
2:42:35above 3.3 G based on the provision here
2:42:38in subpart P B, this was very important
2:42:41to to settle parties that the expected D
2:42:45rate of the unit small D rate coming out
2:42:47of this current outage be taken into
2:42:49effect. So essentially right there's
2:42:51only a pretty limited window performance
2:42:54window in which the company could earn
2:42:56an offset here that's between 3.3%
2:43:00XOF and 10.49.
2:43:04Once we're contemplating a scenario that
2:43:06goes um performance scenario that goes
2:43:10above 10.49 in a given year then we'd
2:43:13have to get up to 16.49 to actually
2:43:16incur penalties.
2:43:19your question around symmetry around
2:43:20that or or what is the expected value in
2:43:23a given year. Uh I don't I don't have an
2:43:26expected value number. I think the best
2:43:28way to answer that question is to look
2:43:30at the backcast that the company
2:43:32provided as a settlement attachment. I
2:43:34believe that was confidential settlement
2:43:36attachment six.
2:43:38You can see based on the performance in
2:43:40certain years, sometimes we're uh above
2:43:43that uh sorry performing better than
2:43:46that target in a given year and
2:43:47sometimes we're way higher. And so you
2:43:50can see that the total net amount is not
2:43:52a confidential number. So so we can talk
2:43:54about that the net amount contemplated
2:43:57close to hund00 million in penalties
2:43:59over the past five to six years in that
2:44:02backcast or sorry 10 years.
2:44:06uh and so there's there's an expectation
2:44:08of of very real penalties moving
2:44:10forward.
2:44:12>> Okay. My last area of questions uh
2:44:14relate to the um the timing of a phase 2
2:44:18rate case and um am I reading the u
2:44:23proposed non-unanimous agreement to say
2:44:26that that a phase two that that Excel is
2:44:29committing to filing a phase 2 rate case
2:44:31within the next 12 months?
2:44:35Yes, that's correct. From the rate of
2:44:36effective date.
2:44:38>> Okay. Do do you have any sense of when
2:44:41that would likely be?
2:44:43Would that likely be at 12 months from
2:44:45now or or would it be more likely to be
2:44:48filed earlier than that?
2:44:50>> I think it's
2:44:52standing here today, of course. I I
2:44:54think it's likely to expect a phase 2
2:44:57filing in August of 2027.
2:45:03uh whether it's early August or late
2:45:05August, I I think that window is is well
2:45:08within the the 12 months contemplated
2:45:10here in the settlement agreement, but I
2:45:11would expect it sometime between early
2:45:13and late August.
2:45:15Okay. And to the extent that there may
2:45:19be um
2:45:22subsidies between customer classes or
2:45:24inequities in the rate design currently
2:45:28um a rate increase decision from this
2:45:31commission will
2:45:33only tend to exacerbate those inequities
2:45:36or cut subsidies, right? Because it's
2:45:39going to be applied on an equal
2:45:40percentage basis even though that may
2:45:41not be what a cost study suggests in a
2:45:44phase 2 case.
2:45:49a a GRSA does spread that out fairly
2:45:52equally. Of course, we have a GRSA in
2:45:55this proceeding as well as a GRSAE.
2:45:57So, there's there's some nuance there. I
2:46:00would also highlight that the company
2:46:03the company's current base rates are
2:46:06operating off of a a phase 2 proceeding
2:46:09that concluded in 2023 and 2024. And so
2:46:12there hasn't been a phase one case since
2:46:14then. And so right that you could
2:46:18consider that the correct allocation of
2:46:20of costs and base rates is currently
2:46:22what's in effect. Riders have their own
2:46:25cost allocation to be reasonable based
2:46:27on the the costs incurred by customer
2:46:29class there. And so I think the right
2:46:31way to think about it is the company's
2:46:33current costs cost allocations
2:46:36appropriately reflect uh cost causation
2:46:40in in many instances. A GRSA applied
2:46:43here
2:46:44could bring that out of balance a little
2:46:46bit, but we're starting from a pretty
2:46:48good starting point.
2:46:49>> Well, what what is the
2:46:51>> I'm sorry. Go ahead.
2:46:54I was just going to say that a phase two
2:46:56case in the near future
2:46:59um would further bring things back in
2:47:01line to a a class cost of service study.
2:47:04>> So that g um the mechanism that you're
2:47:08referring to what is the rate design for
2:47:11that? How is how are the changes in that
2:47:14rider um applied? Are they applied on an
2:47:18equal percentage or applied only to
2:47:20energy?
2:47:23>> I'm sorry, Mr. Coffin, I missed the
2:47:25beginning of your question. Could you
2:47:26say that again?
2:47:27>> The the GR I'm I'm sorry, I haven't got
2:47:29the acronym right, but the um the the
2:47:32the writer that you refer to which
2:47:34relates to certain um in you know
2:47:37certain investments.
2:47:39How is that writer how does that writer
2:47:41apply to rates? Is it applied to u all
2:47:45rates or is it applied to volutric
2:47:47rates?
2:47:49>> Right. So for the residential class,
2:47:53we're proposing a GRSAE here, right? So
2:47:57it only affects the the energy and
2:47:59demand components. I believe small
2:48:00commercial is part of that too.
2:48:02>> Okay.
2:48:02>> For other customer classes, it's the
2:48:04GRSA component where it's kind of spread
2:48:06across all all RIDs.
2:48:09>> Okay. That's help that's helpful. And I
2:48:12think that's all the questions I have.
2:48:13Thank you for your time.
2:48:15>> Thank you, Mr. Kaufman. I have 45
2:48:19minutes for the city of Boulder.
2:48:29>> Good morning, Mr. Pay. Uh my name is
2:48:32Verique Bangim and I'm here on behalf
2:48:34city of Boulder. Um we would just like
2:48:38to start talking about the um O andM
2:48:42expenses and some reliability issues
2:48:46this morning. Um
2:48:49so
2:48:51the onm expense in the settlement is 41
2:48:55million less than in the direct case. Is
2:48:58that correct?
2:49:03I haven't compared that line item
2:49:05between our settlement cost of service
2:49:09attachment to the director rebuttal
2:49:12cases.
2:49:13>> Would you like me to take you through
2:49:15that or
2:49:17>> I'm happy to accept that that
2:49:19characterization for the purposes of our
2:49:21discussion. I just want to know that I
2:49:22haven't confirmed that number.
2:49:24>> Actually, Miss Vanim I wouldn't mind if
2:49:26you would uh uh take us through it
2:49:29briefly. uh that uh impacts some
2:49:33questions I have.
2:49:36>> Sure. So um you you um can find hearing
2:49:40exhibit 131 attachment APF20
2:49:44in the PDF page 36 is where the line
2:49:48item
2:49:49>> Hang on. I'm sorry you're going a little
2:49:50bit fast.
2:49:51>> Yes, of course.
2:49:53>> It's um Freight's second supplementary
2:49:56supplemental direct testimony. So here
2:49:58in exhibit 131,
2:50:01attachment APF20.
2:50:05>> Uh, so there's Okay. APF20.
2:50:09>> Yeah, it's confusing because there are
2:50:10like letters too, but it's APF20. If you
2:50:12go into the PDF, it's um instead of the
2:50:15executable, it's page 36.
2:50:18Line 22 shows what the line item for ONM
2:50:22expenses is.
2:50:29So that it shows um
2:50:34749 million
2:50:37981,66.
2:50:42>> You see that?
2:50:43>> Okay. Sure. Um and then if we go to um
2:50:47hearing exhibit 157 and pretest
2:50:51settlement testimony
2:50:54attachment APF30.
2:51:08And so, uh, page 27, please.
2:51:15Line 235 is a line item for ON&M
2:51:19expenses, and it says U approximately
2:51:23$78 million.
2:51:29>> Yes, it looks to be about a $26 million
2:51:32change here. That's shown in the last
2:51:34column.
2:51:35It looks like we we updated the O andM
2:51:38amounts I assume in second supplemental
2:51:40direct testimony which brought it down
2:51:42from the direct case.
2:51:44>> Great.
2:51:46>> Um so we we've got that established.
2:51:49Um
2:51:52so from direct down to settlement it was
2:51:55about probably 41 million less.
2:51:59Are you generally familiar with public
2:52:01services reliability metrics?
2:52:07>> Generally.
2:52:09>> Okay. Um would you agree that public
2:52:13services reliability metrics have been
2:52:16declining
2:52:17um in trend in the last 10 years?
2:52:23>> I would disagree with that. My rebuttal
2:52:26testimony discusses some of our
2:52:28reliability metrics specifically and I'm
2:52:32showing how we compared to the industry
2:52:34that we're actually a better performer
2:52:36on average. Uh I know that there's been
2:52:38a lot of storms in 24 and 25. Um there's
2:52:42been several PSPS events which are new
2:52:45development um which impact some of
2:52:48those numbers of course but compared to
2:52:50the industry we're a good performer. the
2:52:52exact trend over the past 10 years. I I
2:52:54can't recall.
2:52:56>> Okay. Um are you familiar with the
2:52:58answer testimony of Matthew Lairman
2:53:00regarding ONM expenses?
2:53:04>> Yes, at a high level.
2:53:06>> Okay. Um
2:53:12can we bring up Matthew Lman's answer
2:53:15testimony hearing exhibit 600
2:53:20page 40?
2:53:22Yes. Um, it's just going to take me a
2:53:24minute to scroll down there, but I've
2:53:26I've heard you. 600
2:53:55So, Mr. McKay, um, table five of Mr.
2:53:59Lairman's testimony compares Sadi Safety
2:54:02and Katie scores between 2016
2:54:07um, and 2025
2:54:10with and without major event days.
2:54:14Uh would you agree that this table shows
2:54:16uh that the reliability metrics have
2:54:18declined over the last 10 years
2:54:26>> in isolation?
2:54:28Yes, it appears that these metrics
2:54:32have declined on average over the past
2:54:3410 years. I'll again caveat that my
2:54:37settlement sorry my rebuttal testimony
2:54:39discusses this at length putting this
2:54:42into a broader context. There's a lot
2:54:44changing with the electric system.
2:54:45There's a lot changing with the company
2:54:47and there's a lot changing with the
2:54:48climate that's important to consider uh
2:54:52when looking at any one particular
2:54:53metric.
2:54:55>> Can you speak broadly to some of the ev
2:54:58evidence that you offered in your
2:55:00rebuttal testimony to support your
2:55:01opinion?
2:55:04>> Yes, absolutely. The way we're serving
2:55:06customers is very different now. We have
2:55:09way more variable renewable energy.
2:55:12We've got way more proumers than we've
2:55:15had in the past. These are customers
2:55:16that that use energy at certain times of
2:55:19the day and create energy to to feed
2:55:21back onto the grid at other times of the
2:55:22day. We're integrating um virtual power
2:55:26plants onto our system. We've had
2:55:29extensive customer growth and starting
2:55:31to see use per customer changes as well
2:55:34in light of that in light of our
2:55:36electrification trends in heating uh and
2:55:39in transportation. And so the electric
2:55:42grid, the things we're asking of it are
2:55:44very different now than it was back
2:55:45then. And [clears throat] I'll layer on
2:55:47top of that, the the weather component
2:55:49here too. In 24 and 25, I think we
2:55:53experienced multiples more of major
2:55:55event days uh than we have in the past.
2:55:58That's not something we can control.
2:55:59That's not something anyone can control.
2:56:01So that impacts uh reliability and the
2:56:04operation of our distribution system in
2:56:06real time. Some of those storms have
2:56:08been of a particular nature where we
2:56:10face hurricane force type winds where
2:56:12we've got to take a really targeted
2:56:14approach uh to protect public safety uh
2:56:18and and proactively deenergize lines.
2:56:22All of that is new and has occurred over
2:56:24the past 10 year period. So that's just
2:56:26the context that my my rebuttal
2:56:28testimony brings to bear.
2:56:31So you're saying the winds experienced
2:56:33in the last
2:56:35most recent years in the major event
2:56:37days and most recent years are different
2:56:39than 10 years ago.
2:56:42>> Yes, I think the climate that we're that
2:56:45we're confronting here in Colorado is is
2:56:47very different um from 10 years ago.
2:56:53>> Would you agree that other utilities in
2:56:55the state have experienced the same
2:56:57weather conditions? same or similar
2:56:59weather conditions.
2:57:03>> It's probably fair to say that they've
2:57:04experienced similar changes. I know
2:57:07Colorado has a lot of different
2:57:08geographic zones and different weather
2:57:10patterns, so it's certainly going to be
2:57:13more nuanced than that and specific to
2:57:14each region. But yes, so we're not
2:57:17immune to these changes. I think it's
2:57:18affecting a lot of Colorado energy
2:57:21providers and and energy providers
2:57:22across the country, particularly in the
2:57:25West.
2:57:27Would you agree that public services
2:57:30reliability metrics are lagging behind
2:57:32other Colorado utilities?
2:57:35>> Need to see data to
2:57:38>> Sure.
2:57:38>> on.
2:57:39>> Sure. Uh, can we scroll to page 42,
2:57:43table M7?
2:57:47So, Mr. Lairman's testimony here at MAL7
2:57:51compares public service reliability
2:57:53metrics um to nine other Colorado
2:57:57utilities.
2:58:00Um
2:58:02would you this table shows that the SAT
2:58:05score was the worst uh both with and
2:58:08without uh major event days. The safety
2:58:11score was second worst both with and
2:58:13without major event days. And the Katie
2:58:16score was the worst without major event
2:58:18days and second worst with major event
2:58:21days.
2:58:24Do you have any reason to dispute this
2:58:27analysis?
2:58:31>> I think it's important to again remember
2:58:33this context. I I think the specific
2:58:36geographic zones are important here too.
2:58:39I'm not sure ex exact I'm not a
2:58:42meteorologist so I don't know how these
2:58:43Chinook winds affect all these providers
2:58:46but I know it's a particular challenge
2:58:49in between the the kind of PBLO up to
2:58:51Boulder areas where we face these these
2:58:54hurricane type strength winds in certain
2:58:58storms.
2:58:59Uh I'm sure other utilities have have
2:59:01their own challenges but I I would need
2:59:03to see a more comprehensive comparison
2:59:05across metrics and I think Mr. Salazar
2:59:09uh who's our electric distribution
2:59:10witness here in this case could could
2:59:12probably talk about these and other
2:59:14metrics more. I think there's a whole
2:59:15host of distribution metrics that one
2:59:19can look at and I'm not sure if this is
2:59:20the the full universe of them.
2:59:23>> Thank you. I can um ask Mr. Salazar some
2:59:28of these these questions as well. I
2:59:30appreciate that. Um,
2:59:35can we scroll to page 41?
2:59:43Um,
2:59:48would you agree that public service
2:59:51reliability metrics have also declined
2:59:53over the last 10 years when compared to
2:59:56the proxy utilities used by PESCO to
2:59:59support this proceeding?
3:00:06I'm I'm not sure if that's what this
3:00:09table from Mr. Lurman is is
3:00:11representing.
3:00:13>> Yes. So, um table MAL6
3:00:17shows public services rankings for SD
3:00:20safety and KD scores and they show that
3:00:23they've declined between 2015 to 2024.
3:00:28Um and
3:00:30Mr. Lairman
3:00:32um compared all of the proxy utilities
3:00:37um to public services score and that's
3:00:40what this table shows.
3:00:45>> Gotcha. Thanks for clarifying. Could
3:00:48could you repeat your your original
3:00:50question? Would you agree that the
3:00:53ranking
3:00:55um has declined over the past 10 years
3:00:59um of public services reliability
3:01:01metrics when compared to the proxy
3:01:03utilities?
3:01:08So, so based on on that comparison over
3:01:11these two years shown, noting that the
3:01:15proxy group utilities are going to be in
3:01:17very different geographic zones dealing
3:01:20with very different challenges, right? I
3:01:23think that's an important uh caveat to
3:01:26apply here. Right? The numbers show what
3:01:28they show, but I just want to bring that
3:01:31broader context uh into the view here.
3:01:35But I don't have a reason to to object
3:01:37to these these numbers not having
3:01:39reviewed them closely. Um again, Mr.
3:01:42Salazar, I might be able to talk more
3:01:44about them um for the company in
3:01:45particular.
3:01:48So, kind going back to when we were
3:01:50speaking about the um Colorado community
3:01:54comparisons,
3:01:57you believe that two communities 15
3:02:00miles apart experience vastly different
3:02:03weather to the point that public
3:02:05services reliability metrics would be
3:02:08drastically different.
3:02:13>> Which communities are you referring to?
3:02:16We can go back up to
3:02:23table M
3:02:26five, please.
3:02:33Apologies. Uh, it's MAL7. I apologize.
3:02:40The city of Fort Collins and the city of
3:02:43Longmont versus
3:02:46the Boulder Division.
3:02:54>> Yeah, I'm I'm not a meteorologist. I'm
3:02:56I'm sorry I can't weigh in there. Uh Mr.
3:02:58Salazar might know more.
3:03:00>> Understandable.
3:03:05>> Can we um we'd go to page 43, please?
3:03:09Table MAL 9.
3:03:17Um, this table shows an average
3:03:20reliability score between 2019 and 2023
3:03:24and then for 2024 to 2025.
3:03:31Would you agree that public services
3:03:32reliability metrics for 2024 and 2025
3:03:36lag the historical average?
3:03:49That's in isolation. That seems to be
3:03:52the case here. Again, just knowing the
3:03:55broader context of what we've been
3:03:56talking about recently.
3:04:06Public service represents that it uh
3:04:09moving on to onm expenses. Um now public
3:04:16service represents that it kept its on
3:04:18and m expenses low compared to pure
3:04:20utilities. Is that correct?
3:04:28I think we've made a general statement
3:04:29to that effect in the company's direct
3:04:32case.
3:04:34>> I can't recall it specifically.
3:04:37>> Sure. Can we bring up page 44
3:04:45um in lines 9 through 12? You'll see
3:04:48here um
3:04:51a chart that shows public services on
3:04:53ON&M expense per megawatt hour that was
3:04:58um given as a presentation for Excel
3:05:01Energy investors in March of 2026.
3:05:05Would you agree that the chart shows
3:05:07that public services on&m expense per
3:05:09megawatt hour is fourth lowest among
3:05:11amongst its peer group?
3:05:14Yes, I I agree with that data shown here
3:05:18and I'll note the customer benefit in
3:05:20light of that. We're keeping costs low.
3:05:22That's why our electric wallet share is
3:05:24the best in the industry. Our rates are
3:05:26below average and our bills are
3:05:28significantly below average. And that's
3:05:30in large part from the results stemming
3:05:32from this exact graph.
3:05:35>> Thank you. And the chart shows that onm
3:05:38expense is approximately half of its
3:05:40peer group average. Is that right?
3:05:46It looks about half. Yes.
3:05:52>> Is it fair to say that public services O
3:05:54andM expenses did not grow as fast as
3:05:57capital expenses between 2016 and 2024?
3:06:07Not having any data in front of me, I I
3:06:09can't completely confirm uh but but that
3:06:13sounds about right generally that O andM
3:06:17would have increased
3:06:19at a at a relatively
3:06:22slower rate and that largely stems from
3:06:25the company's
3:06:27um performance goals of constantly
3:06:29trying to get more and more efficient
3:06:31across all departments.
3:06:34uh and do what we do better and with
3:06:36less.
3:06:43>> And public services net income per
3:06:45megawatt hour of sales was four times as
3:06:48much as its on&m expense per megawatt
3:06:50sales.
3:06:52Would you agree with that?
3:06:55>> Subject to check.
3:06:58>> You'd have to show me the the data on
3:06:59that. I'm I'm less familiar with that.
3:07:04We can go through it. It's It's in Mr.
3:07:07Lairman's answer testimony, but it might
3:07:09take us a while to get through the
3:07:10entire calculation.
3:07:12Um,
3:07:14I can show you on uh page
3:07:1845, lines 15 through 18.
3:07:23So, in the footnotes here, you can see
3:07:26that Mr. Lman calculated
3:07:30um
3:07:33185
3:07:35million and divided that by the number
3:07:38of megawatt hours about 34 million.
3:07:44um
3:07:46in footnotes 81 and 82 to get his um
3:07:52conclusion that public service spent 500
3:07:54$5.38
3:07:56per megawatt hour on transmission and
3:07:58distribution ONM but the net income was
3:08:02$23 per megawatt hour
3:08:07>> I think there's a lot of ways you could
3:08:09think about on&m or earnings looking at
3:08:13transmission and distribution costs and
3:08:16and assets maybe per megawatt hour is a
3:08:18reasonable way to do it. I can think of
3:08:20other ways to do it that would just look
3:08:23on a a dollar basis. And so I can't
3:08:26really opine on the validity of those
3:08:29those numbers or or on the approach. I'd
3:08:31have to think about that.
3:08:33>> Uh would Sal Mr. Salazar be a better
3:08:36witness to ask this question to?
3:08:40>> Mr. Salazar and Mr. Deagle might have
3:08:42thoughts on metrics that are are
3:08:44relevant in their distribution and
3:08:46transmission organizations
3:08:49um that they might
3:08:52>> Great. Thank you.
3:08:55>> Um
3:08:57so
3:09:00Mr. Trip, you're saying while
3:09:02reliability scores have declined
3:09:05since the last phase one rate case,
3:09:08public service has reduced its on&m
3:09:10expense
3:09:12um in its settlement compared to the
3:09:14direct case. Is that right? Despite
3:09:18reliability scores declining.
3:09:22So it's important to clarify that that
3:09:24there's a reduction compared to the
3:09:27company's direct and rebuttal cases as
3:09:31reflected here in the settlement
3:09:32agreement. Yes, we've walked through
3:09:34that that that point is true. That is
3:09:36very different than saying and M expense
3:09:38in general has declined. That is not the
3:09:40case. I believe still with the
3:09:41settlement agreement
3:09:43on&m levels you can see in the cost of
3:09:45service those will be higher than what
3:09:47they were coming out of the company's
3:09:49last base rate case in 2023.
3:09:54>> Would you agree it's the company's goal
3:09:56to improve reliability?
3:10:01>> Absolutely. We want to provide the most
3:10:03reliable and safe and carbon-f free
3:10:06energy that's possible and we want to do
3:10:08so as as cost- effectively as we can.
3:10:11So, we've got to we've got to balance
3:10:12all these goals that sometimes push in
3:10:14the same direction and other times
3:10:16conflict. And so, we've all got to
3:10:18collectively make make judgment calls
3:10:19here.
3:10:25And does the company's testimony in this
3:10:28rate case identify an ongoing revenue
3:10:30need to uh or or the ongoing revenue
3:10:34needed to restore reliability to the
3:10:36state that it was prior to the rate to
3:10:39the prior rate case?
3:10:44So if your question is what amount of
3:10:47funding is necessary to get certain or
3:10:52all reliability metrics
3:10:54back to they where they were in 2023.
3:10:58I I don't know the answer to that
3:10:59question. I don't think that's been
3:11:01answered. I think that's a interesting
3:11:03question that could be explored more in
3:11:05a future uh distribution system plan by
3:11:08from the company.
3:11:11>> And thank you Mr. Okay, that is all my
3:11:13questions.
3:11:19>> Thank you, Miss uh Van. I have uh five
3:11:23minutes uh for core.
3:11:28>> Thank you, Chairman Blank. Um Core is
3:11:31going to wave um Mr. Pay and at this
3:11:34time we'll also wave Mr. Freras.
3:11:39>> Okay. Thank you.
3:11:40>> Thank you. I have uh 10 minutes for EOC.
3:11:46>> Thank you, Mr. Chair. Um good morning,
3:11:49Mr. PK. Uh my name is Casey Canalio and
3:11:53I represent Energy Outreach Colorado and
3:11:55I have a short set of questions for you
3:11:57today. And chair, in case I go over a
3:12:00couple minutes, I uh would like to
3:12:02borrow some time I have reserved for UCA
3:12:04witness Dr. England.
3:12:07>> No worries. That'd be fine.
3:12:10>> All right. Um, if we could please pull
3:12:12up hearing ex uh exhibit 155 attachment
3:12:15three
3:12:17to start.
3:12:22>> Yeah, that's up there. Thank you.
3:12:25>> Sure. And while that's getting pulled
3:12:26up, this is the um settlement agreement
3:12:29attachment addressing the bill impacts
3:12:31of the non-unanimous settlement.
3:12:41Maybe we can zoom in a little. Thank you
3:12:43so much.
3:12:46>> Um, so Mr. PK, this exhibit represents
3:12:49uh the estimated average bill impacts by
3:12:50customer associated with the
3:12:52non-unanimous settlement agreement.
3:12:54Correct.
3:12:55>> Correct.
3:12:57>> And for a typical residential customer,
3:12:59and I think we've, you know, you've
3:13:00stated this earlier, but the exhibit
3:13:02reflects a bill increase of
3:13:03approximately 5.86%.
3:13:07Yes.
3:13:09>> And for um the customer classes, for the
3:13:12other customer classes, the average
3:13:13increase it ranges a little less from
3:13:165.59 to 4.44,
3:13:19right?
3:13:20>> Yes.
3:13:22>> Okay. Thank you. If we could now pull up
3:13:24um hearing exhibit 156, which is uh Mr.
3:13:28PK settlement testimony, and go to page
3:13:3022.
3:13:39Great. Yep. We're going to look at So
3:13:40this table so um this table JJPS-3
3:13:44reflects changes in base rate revenue
3:13:47and total retail revenue associated with
3:13:49the non-unanimous settlement agreement.
3:13:51Right.
3:13:53>> Yes.
3:13:54And looking at the total retail revenue
3:13:57line at the bottom, the settlement
3:14:00reflects an overall revenue increase of
3:14:03approximately 6.29%.
3:14:06>> Yes.
3:14:08>> Um so the average residential bill
3:14:10impact reflected in um in your table in
3:14:15your bill impact table is lower than the
3:14:18over overall re revenue increase
3:14:21reflected in this table.
3:14:24That's correct.
3:14:26>> And the average bill impacts shown for
3:14:29the other other customer classes are
3:14:30also below that 6.29% overall revenue
3:14:33increase.
3:14:37>> Yes.
3:14:38>> Could you explain the difference um
3:14:41between those um average increases and
3:14:44then the 629%
3:14:46increase?
3:14:49>> So the 6.29 29 is blending everything
3:14:53together, right? It's saying the change
3:14:56in base rates stemming from this this
3:15:00case, which then also has some small
3:15:02follow-on impacts to some writers that
3:15:04are applied on a percentage basis.
3:15:08Um, that's how you get up to the the
3:15:106.29.
3:15:11The the bill impacts
3:15:14should take all of that into account on
3:15:17average.
3:15:19Um, I'll have to double check if the
3:15:21bill impact analysis is keeping some of
3:15:23those rider impacts fixed or not.
3:15:26>> 114,
3:15:29>> but but I think they're measuring
3:15:31slightly different things that this is
3:15:33total revenues whereas the other ones
3:15:35bill impacts.
3:15:36>> Okay. I was just hoping to to clarify
3:15:38that. So, thank you. Um, we can or no, I
3:15:43think we're we're going to still have to
3:15:44talk about this exhibit. Um, so Mr. BK,
3:15:46just to confirm, you sponsored uh
3:15:48testimony in support of the
3:15:49non-unanimous settlement agreement, and
3:15:51it's actually pulled up right now.
3:15:53>> Yes.
3:15:54>> Uh and I want to confirm the settlement
3:15:57agreement does not adopt EOCC's proposal
3:15:59to utilize a portion of accumulated
3:16:01resalances for targeted bill assistance
3:16:03to income qualified customers. Right.
3:16:06>> It does not adopt.
3:16:08>> And we as we sit here today, would you
3:16:10agree EOC continues to pursue that
3:16:12proposal in this proceeding?
3:16:15Yes, EOCC continues to do so.
3:16:18>> Okay. Um Okay, great. We're already at
3:16:21page 22 of your um settlement testimony.
3:16:25So, um that we just went over this
3:16:28table, but um Mr. Bri, it's titled uh
3:16:30settlement agreement change and base
3:16:32rate revenue and total retail revenue.
3:16:34Correct.
3:16:35>> Yes.
3:16:37And this table identifies various
3:16:39revenue impacts associated with approval
3:16:41of the non-unanimous settlement
3:16:43agreement.
3:16:47>> Yes, in total.
3:16:50>> And the table compares revenues under
3:16:53current rates to revenues that would
3:16:55result if the settlement agreement were
3:16:57approved.
3:17:02>> Yes.
3:17:05And one of those revenue components is
3:17:07the renewable energy standard adjustment
3:17:09or RHSA revenue um on line six of your
3:17:13of this table. Correct.
3:17:16>> That's correct. The the RESA is a 1%
3:17:18charge um based on on certain renewable
3:17:23energy and and program requirements
3:17:25feeding into that.
3:17:27Uh so you can see that that roughly two
3:17:30two and a half million is equivalent to
3:17:32about 1% of the base rate change in this
3:17:36proceeding.
3:17:38>> Great. Thank you for explaining that. So
3:17:41um that $2.25 million figure shown here
3:17:44is an uh is an annual revenue amount.
3:17:48>> Yes.
3:17:49>> Okay. And that increase reflects the
3:17:52change to resa revenues resulting from
3:17:54approval of the non-unanimous settlement
3:17:56agreement.
3:17:58Correct.
3:17:59>> Okay, great. Um I now want to turn to um
3:18:02one of your settlement workpapers. It's
3:18:04not part of hearing exhibit 1500. Um I
3:18:07put the workpaper in EOCC's box folder.
3:18:11I don't think I need to uh move to admit
3:18:13it because I just want to go over some
3:18:14underlying numbers to form the basis of
3:18:17your settlement testimony, but defer to
3:18:19the company maybe on the appropriate um
3:18:22procedure for going over this workpaper.
3:18:24But it's it's work paper JJP-3.
3:18:29>> Is it um it's it's hearing exhibit 156
3:18:32workpaper JJP3?
3:18:35>> Yes. Thank you.
3:18:42I think from our maybe we just let this
3:18:45proceed and we can address admissibility
3:18:47when you finish up.
3:18:49>> Great. Thank you, Mr. Zoomer. Um, if we
3:18:52could zoom in maybe a little because the
3:18:53numbers are a little small.
3:18:57Awesome. Thank you. Um, so Mr. PK, I'm
3:19:00going to direct you to line six. Um
3:19:04for the RISA this uh reflects
3:19:06approximately 35.75 million in annual
3:19:10RISA revenues under current base rates.
3:19:14>> Yes.
3:19:16>> And under the non-unanimous settlement
3:19:19agreement, line six reflects
3:19:20approximately 38 million in annual res.
3:19:25>> Yes.
3:19:27And
3:19:29we went over this figure, but that
3:19:30difference uh between those two figures
3:19:32is approximately $2.25 million.
3:19:37>> Correct.
3:19:38>> And that same figure is reflected in
3:19:41table JJ-S3
3:19:43in your settlement testimony.
3:19:45>> That's correct.
3:19:47>> Okay, great.
3:19:48Um, and so you mentioned this, but just
3:19:51to confirm, the Rhysa rider is
3:19:53calculated as a percentage of retail
3:19:56revenues.
3:19:59>> Yes, I believe it's a 1% charge
3:20:03>> and the non-animous settlement increases
3:20:06um those retail revenues.
3:20:11>> Yes, marginally as shown here.
3:20:14>> Okay. Uh, as retail revenues increase,
3:20:17RISA revenues will increase as well.
3:20:20>> Yes.
3:20:22>> And therefore, approval of the
3:20:24non-unanimous settlement agreement
3:20:25increases annual RISA collections by
3:20:27approximately $2.25 million.
3:20:31>> Correct.
3:20:33>> All right, last set of questions. Um,
3:20:35the current renewable energy plan
3:20:38includes commission approved resunded
3:20:40programs and budgets. Would you agree
3:20:42with that?
3:20:47Yes.
3:20:48>> And the non-unanimous settlement at
3:20:51issue in this case um does not by itself
3:20:54modify those commission approved reset
3:20:56budgets or res R res budgets.
3:21:02>> No, we're not making changes to to the
3:21:05the REZ plan or or the RISA here in this
3:21:09proceeding besides these automatic
3:21:10impacts that show up here. It it's my
3:21:12understanding from the the outcome of
3:21:16the latest res plan is that these
3:21:19outstanding resalances will decline over
3:21:23the coming years based on the outcome of
3:21:24that case.
3:21:26>> Okay, thank you. Um
3:21:30so last question. The approval of the
3:21:32non-animous settlement agreement
3:21:34increases resa revenues independently of
3:21:36any changes to currently approved uh res
3:21:39plan program spending.
3:21:44Yes,
3:21:45>> thank you. Uh, no further questions for
3:21:47this witness.
3:21:49>> Uh, thank you.
3:21:52Um,
3:21:54we have 20 minutes for Sarah Club uh
3:21:57witness. Uh, do you think you'll need
3:21:59that time? Uh,
3:22:07>> I'm sorry, Chair, could you repeat that
3:22:09question? I didn't I didn't hear the
3:22:10last part of it.
3:22:16>> Mr. Do you have an estimate how much
3:22:19time you're going to need for cross?
3:22:22>> Uh probably a little bit less than uh
3:22:25the 20 minutes of probably 15 minutes.
3:22:29>> Um
3:22:31uh let's take a break till 1 and we'll
3:22:33start with you at 1. Uh 1 pm. Thanks.
3:22:40Thank you.
4:31:17All right. Uh it's 100 pm. We're back on
4:31:21the record and public service company uh
4:31:24Colorado's electric rate case. Uh before
4:31:27we go um uh just want to clarify that we
4:31:32admitted all the hearing exhibits all
4:31:34the exhibits and attachments on hearing
4:31:36exhibit 1500 into evidence in case I
4:31:41didn't say that properly.
4:31:43Uh and then second does anybody object
4:31:47to uh
4:31:50um Mr.
4:31:52uh revised testimony
4:31:58that is also uh admitted.
4:32:02Uh Miss Cornelio, uh did you have a
4:32:06preliminary matter?
4:32:07>> I did. Yes. Um thank you, chair. Um EOC
4:32:10has placed a corrected version of the
4:32:12previously filed joint stipulation in
4:32:15its box folder to ensure the exhibit
4:32:17header complies with commission
4:32:18requirements. The documents been marked
4:32:20as hearing exhibit 704. EOCC's conferred
4:32:23with the parties on this and no party
4:32:25has raised any objections. And so EOCC
4:32:27would like to move for the admission of
4:32:29hearing exhibit 704 the non-unanimous
4:32:32partial stipulation on electric
4:32:34affordability program enhancements
4:32:36entered into by EOC, the city of
4:32:38Boulder, UCA and AP.
4:32:42>> Any objections?
4:32:44So moved.
4:32:46>> Thank you. Any
4:32:48uh Mr. uh Vandrask?
4:32:54>> Yes, Chair Blank. The also had some
4:32:56items we would uh like to admit now if
4:32:59we may.
4:33:00>> Uh since you don't have a witness that's
4:33:02appearing, I think that'd be now would
4:33:04be a good time.
4:33:06>> So, Chair Blank, the
4:33:10uh answer testimony hearing exhibit 900
4:33:12of Christopher C. Walters and associated
4:33:16exhibits CCW1 through CCW17.
4:33:20Those were filed on April 28th on the
4:33:22PUC e- filing system in a combined PDF.
4:33:25Uh due to problems with the e- filing
4:33:27system, they were not separated. Um
4:33:29we've made multiple attempts to file
4:33:31them on the system separated. Um but we
4:33:33were unable to. So we would move to have
4:33:36those admitted now. They're in our box
4:33:38folder on on box.com. I'll also note I
4:33:42consulted with all parties yesterday. Um
4:33:45noted that FEA was intending to do this
4:33:47and asked if there were any objections.
4:33:50Um and no party objected.
4:33:53>> Uh any objections?
4:33:56Hearing none. So moved.
4:33:59>> Thank you.
4:34:01>> Uh Chair Blank, there's one more. Um on
4:34:05these preliminary sort of issues, we
4:34:07circulated the executable attachments.
4:34:10uh from Miss Balkley's rebuttal
4:34:12testimony that didn't get um on e
4:34:16filings correctly. Those are available
4:34:18in our box as well.
4:34:20>> Thank you for the clarification.
4:34:23>> I'm sorry, Mr. Zmer. I just want to make
4:34:24sure it's um hearing exhibit 133
4:34:28executable attachments AEB 3031 and 32.
4:34:32Right.
4:34:34>> That is correct. And then Mr. PK's uh
4:34:37corrected version. The Rev One is up
4:34:40there now uh with the appropriate red
4:34:41lines and we've moved their mission.
4:34:49>> All right. Uh Mr. Gar, uh you're up. I
4:34:52have 20 minutes.
4:34:55>> Thank you. Uh good afternoon, Mr. P. I'm
4:34:58Mard. I represent Sierra Club. Uh let me
4:35:01know if you have difficulty hearing me.
4:35:03Uh my questions are going to focus on
4:35:06the Comanche 3 performance mechanism.
4:35:11The the settling parties are asking the
4:35:13commission to approve that mechanism in
4:35:16this proceeding. Correct.
4:35:18>> Yes.
4:35:21>> And the settlement also proposes a
4:35:24prudence review regarding the current
4:35:26command 3 outage. That would be a
4:35:28standalone separate proceeding.
4:35:32That's correct. Yes. It's it's the
4:35:34combination of the performance framework
4:35:36as outlined in the settlement agreement
4:35:38and a follow on prudence review covering
4:35:41the entirety of the current outage.
4:35:45>> Okay.
4:35:46And in its testimony in this case,
4:35:48company witnesses have also referred to
4:35:50the possibility of
4:35:53addressing related performance
4:35:57issues at Comanche 3 in the step two
4:36:01variance application that's going to be
4:36:03filed on Monday. Are you aware of that
4:36:06at a high level?
4:36:08>> At a high level, yes.
4:36:10>> Okay. So
4:36:13if you put those all together, the
4:36:15company is proposing that Comanche 3
4:36:18performance issues would be addressed in
4:36:21three separate proceedings over the
4:36:23course of this year and next year. Is
4:36:25that fair?
4:36:33>> Yes. There are three forums to discuss
4:36:36um the operation and performance of
4:36:39Kmeni3.
4:36:42This this RA case
4:36:44>> sorry
4:36:45>> sorry to interrupt please go.
4:36:47>> As you said this Ray case a forthcoming
4:36:50prudence review on the current outage
4:36:53and in the convention 2 varants case.
4:36:58Did the company consider combining
4:37:02those issues into a single proceeding to
4:37:04address all of these Comanche 3
4:37:06performance issues?
4:37:13>> Well, when the I believe the Comanche 2
4:37:16variance proceedings started last year
4:37:19in 2025.
4:37:21I believe that started before we filed a
4:37:24phase one rate case. And so there's some
4:37:27degree of separation here among the
4:37:28issues because we didn't we didn't know
4:37:32what to expect in a in a phase one
4:37:34filing from parties here in this
4:37:36proceeding.
4:37:37Uh we didn't necessarily know Comanche 3
4:37:39would come up in the um Comanche 2
4:37:42conversation the way it did. Uh and we
4:37:46didn't know the outcome of the
4:37:47settlement agreement in advance either
4:37:48of of a separate standalone prudence
4:37:51review for the current Comanche 3
4:37:53outage. So, so some of this is just a
4:37:55hindsight foresight issue.
4:37:58Um, so you know, impossible to address
4:38:01before you know everything.
4:38:05>> You're aware that in proceeding 21A
4:38:090141E,
4:38:12the commission rejected a performance
4:38:15incentive mechanism for Comanche 3.
4:38:21>> Yes, at a high level, I'm aware of that.
4:38:23one was negotiated among a few parties
4:38:26but the commission did ultimately did
4:38:28did not adopt that version of that at
4:38:31that time.
4:38:34>> Are you aware that in the company's
4:38:36statement of position in that case the
4:38:38company
4:38:40offered an alternative to
4:38:43consider a Comanche 3 PM after the phase
4:38:472 just transition solicitation?
4:38:52I'm not aware of those specifics. I
4:38:53think Mr. Pascuchi would be the the
4:38:56right witness for that.
4:38:59>> Okay.
4:39:02Um
4:39:04I want to ask you some questions about
4:39:07the potential impacts of the performance
4:39:10mechanism if it were adopted. Um,
4:39:15would you agree that
4:39:18a potential outcome could be the company
4:39:20increasing capital spending at Comanche
4:39:233 in response to this performance
4:39:26mechanism?
4:39:30>> Yes, that is certainly one potential
4:39:32outcome. I I would say there's a
4:39:34universe of potential outcomes, right?
4:39:35You could have um no change in behavior.
4:39:38You could have more capital investment.
4:39:40you could have more O andM spending or
4:39:43or less capital investment or and less O
4:39:45andM because we're approaching the the
4:39:47retirement date. It's it's a little hard
4:39:48to say here in advance though I would
4:39:51say in in totality right the the goal of
4:39:54a performance mechanism or spec
4:39:58specifically here for convention 3 right
4:40:00it's it's a performance framework that
4:40:02does not contemplate net incentives
4:40:05is to change behavior or change outcomes
4:40:09and so I think we're going to look
4:40:10really hard coming out of this
4:40:12proceeding on what can we do to to live
4:40:16within the parameters outlined here um
4:40:19because all the parties are aligned on
4:40:22having steady reliable service from all
4:40:24of its assets including Comanche 3 and
4:40:26we're going to work hard to to live up
4:40:29to that um as we have in the past but
4:40:31now there's now there's a lot of money
4:40:33on the line at the same time.
4:40:35>> Okay. So, so given that increased
4:40:39capital spending at Comanche 3 is a
4:40:41possible outcome, [clears throat]
4:40:44can you point me to any provisions of
4:40:46the settlement that in any way restrict
4:40:50incremental capital spending at Comanche
4:40:523?
4:40:54Are there any such provisions?
4:40:57No, the settlement agreement does not
4:40:59get to that level of specificity of
4:41:01increased or decreased O andM spending
4:41:03or increased or decreased capital
4:41:06expenditure.
4:41:08>> Okay. And you're aware that Comanche 3's
4:41:11current retirement date is no later than
4:41:13January 1, 2031, right?
4:41:18>> That's correct. And I'll note that the
4:41:19company carries the burden of proof on
4:41:21on all of its investments. Um just like
4:41:24in this phase one rate case and in
4:41:26future rate cases. So we'd of course
4:41:28have to defend our our spending
4:41:32um on Command 3 is the same on on any
4:41:35other asset.
4:41:39>> Okay. But if if that burden to be
4:41:45prudent
4:41:47were a sufficient motivator, you
4:41:50wouldn't need this performance mechanism
4:41:52in the first place. Right? If
4:41:55if if the company's general obligation
4:41:57to act prudently were a sufficient
4:42:01incentive.
4:42:04>> I'm sorry, I'm not sure I understand the
4:42:06question. Is is it about whether the
4:42:08company was sufficiently motivated
4:42:11in the past or how that changes moving
4:42:13forward?
4:42:15>> I I'll try to rephrase and let me back
4:42:17up. Um
4:42:20I'll come in it this way. In in your
4:42:24testimony, you in your settlement
4:42:27testimony, do you recall talking about
4:42:31the potential unintended consequences of
4:42:34applying this performance mechanism to
4:42:36the year 2030?
4:42:40>> Yes.
4:42:41>> Okay.
4:42:43Is it fair to say that in that statement
4:42:46you're referring to the unintended
4:42:48consequences of making capital
4:42:50investments at a unit in the year before
4:42:53it's sueded to retire? Is that
4:42:55>> Yes,
4:42:56>> that's a fair characterization.
4:42:59>> Okay.
4:43:01where I'm going and what my question is
4:43:03is
4:43:06if you're acknowledging that this
4:43:08performance mechanism could potentially
4:43:10have unintended consequences in 2030,
4:43:14why doesn't that same concern apply to
4:43:17the year 2029 or 2028?
4:43:22>> Thanks for clarifying.
4:43:24Th this is this was a key element as as
4:43:27part of our settlement negotiations and
4:43:29I can't go into those those confidential
4:43:31discussions of course but the company's
4:43:34rebuttal testimony talks about that
4:43:36exact fact that this is a unit nearing
4:43:39uh its retirement date and so we need to
4:43:41be mindful about the the size of of or
4:43:46the magnitude of any performance
4:43:48mechanism here that that's applied and
4:43:50so we think the settlement agreement is
4:43:52a is a reasonable outcome of of very
4:43:55different opinions on this among the
4:43:56settling parties and and thrown out into
4:43:59the case
4:44:01and so we need to balance a lot of these
4:44:04considerations but of course the company
4:44:06thinks um it's acted prudently in the
4:44:09past.
4:44:11We always try to maintain the highest
4:44:13reliability from every unit that we can
4:44:16and this performance mechanism
4:44:18recognizes some of the concerns brought
4:44:20forward by other parties and we're
4:44:22turning that into a workable framework
4:44:24over these next few years.
4:44:29The performance mechanism
4:44:31doesn't in itself propose any
4:44:35new process or standard
4:44:38by which the parties or commission would
4:44:40evaluate incremental capital spending at
4:44:44Comanche 3. Is that accurate?
4:44:49It does not change the standard that is
4:44:51normally in place which is that the
4:44:53company has to support its spending and
4:44:56investment
4:44:58uh in a performance framework is a new
4:45:01dimension to those considerations.
4:45:08the settlement.
4:45:11Under the settlement,
4:45:13has the company agreed that
4:45:19normal cost recovery provisions will be
4:45:23different for any incremental capital
4:45:25spending at Comanche 3.
4:45:29I can rephrase if that's confusing.
4:45:32>> Sure. Thank you.
4:45:33>> Sure. Um
4:45:36the company
4:45:38through the performance mechanism hasn't
4:45:40a has not agreed that shareholders
4:45:44would eat 100% of any incremental
4:45:46capital spending at convention 3. Right.
4:45:50>> Correct. That's not part of the
4:45:51settlement.
4:45:52>> Okay. So
4:45:55going back to the idea that one
4:45:57potential outcome is increased capital
4:45:59spending. The company would expect
4:46:01absent a determination of imprudence
4:46:05a return of and on those increased
4:46:08capital costs
4:46:13in theory. Yes. And the reason I
4:46:16hesitate is because there there's a you
4:46:19know pre-settled pre-commission approved
4:46:23securization
4:46:25um and early retirement of this unit.
4:46:28And so I I bring that up because that
4:46:31that affects any earnings potential on
4:46:34on further capital investment in the
4:46:37unit. So so you know normal normal
4:46:40investments normal course of business
4:46:42that that statement is true. It's a
4:46:43little complicated with Kimichi3.
4:46:48Where I'm going with all this is it's
4:46:51theoretically possible the company could
4:46:54decide next year on an incremental $40
4:46:58million in capital spending to avoid a
4:47:02maximum penalty of 30 million. There's
4:47:04nothing in the settlement that specifies
4:47:07the level of capital spending in any
4:47:09given year. Right. That
4:47:12>> that's correct. And I think it's really
4:47:13important to point out the magnitude
4:47:15here. Right. $30 million. There's not a
4:47:19specific methodology underlying that for
4:47:21the magnitude of this performance
4:47:23framework for Comanche 3 performance
4:47:26over these next three years, right? With
4:47:282030 still to be defined,
4:47:30the company, as you saw in rebuttal
4:47:33testimony, was very concerned by ideas
4:47:36that put the entire revenue requirement
4:47:39of this unit on the line. I think that
4:47:41is a very different place
4:47:44to be in in terms of thinking about
4:47:46incremental spending and investment in a
4:47:48plant that's nearing retirement.
4:47:50Right? The the company operating
4:47:52operating prudently uh for customer
4:47:55dollars and shareholder investment would
4:47:58seek to minimize the risk from such an
4:48:03an enormous amount that could swing year
4:48:06to year. the settling parties landed on
4:48:0830 million as a as a reasonable landing
4:48:10zoning considering all the other issues
4:48:12in the case and the added risk that this
4:48:14presents
4:48:16um to the company and customers um
4:48:18looking over the past few years on the
4:48:20plan's performance that is a reasonable
4:48:22place to land. We think it balances all
4:48:24these considerations.
4:48:28>> Yeah. But what I'm trying to get at is
4:48:31I'm not seeing a provision in the
4:48:33settlement that balances
4:48:35the cost side of what you're talking
4:48:38about. Do I hear you saying that you're
4:48:41trying to balance competing
4:48:43considerations, but I'm not seeing a
4:48:44provision
4:48:47related to incremental costs expended at
4:48:50Comanche 3?
4:48:52>> Well, well, I think it's related to the
4:48:55the magnitude that I'm talking about
4:48:56here, right? with a
4:49:00with a performance metric, right? Just
4:49:02just to throw out different scenarios of
4:49:03of $10 million compared to $100 million,
4:49:07which is close to the revenue
4:49:08requirement of the unit, right? You one
4:49:10would reasonably expect different
4:49:12behaviors coming out of frameworks at
4:49:14those kind of two ends of the spectrum.
4:49:17And so we think $30 million is an
4:49:20appropriate balance of all these
4:49:21considerations of wanting to get as much
4:49:23availability out of the unit in his
4:49:25remaining lives as possible without
4:49:27creating unintended consequences or too
4:49:30much incremental investment to to
4:49:33mitigate against those risk risks. $30
4:49:36million is a reasonable landing zone to
4:49:39balance all of this.
4:49:44Chair, I apologize. I didn't uh start
4:49:47the clock when we started. Would you
4:49:49happen to know how many how much time I
4:49:51have left? I realize I'm getting close.
4:49:55>> You're 15 minutes in.
4:49:58>> Okay, perfect. I have just a few more
4:50:00questions. Um
4:50:03Mr.
4:50:04Do you recall in your rebuttal testimony
4:50:10referencing the commission's decision in
4:50:13the PIM matter that we were talking
4:50:16about in 21A 0141E?
4:50:22>> I can pull up your phone.
4:50:25>> Yes, that that would be helpful.
4:50:28>> Okay. Thank you. Uh, could we please
4:50:30pull up hearing exhibit 133
4:50:34and scroll to page 48?
4:50:37I believe it's lines one through three
4:50:40that
4:50:42reference the commission's decision in
4:50:44the on the pin.
4:50:47Does that help, Mr. Pay? I recognize
4:50:50you've submitted a lot of testimony.
4:50:52>> Yes, exactly. This is my recollection
4:50:54that there was a past conversation
4:50:56around a pin for Kamanchi3
4:50:59that was ultimately not adopted.
4:51:02>> Um, we could pull this down. I want to
4:51:05pull up the decision that you referenced
4:51:07here and that's in sierra clubsbox.com
4:51:11folder. It should be marked as hearing
4:51:12exhibit 206. I'm not going to seek to
4:51:15admit it. I'm just going to ask some
4:51:17questions about it.
4:51:27And so, Mr. Bet, this should be the
4:51:29decision that was referenced in your
4:51:31rebuttal testimony. Um, if we could
4:51:34scroll to page 11.
4:51:43And in the second sentence, it says with
4:51:47regard to unit 3 especially, one of the
4:51:50primary goals should be to curb all
4:51:52non-essential costs as the plant nears
4:51:55retirement given the limited life of the
4:51:57plant. Do you see that?
4:52:00>> I do.
4:52:01>> Okay.
4:52:03And so,
4:52:06uh, at the risk of being repetitive, um,
4:52:10as we've talked about, there isn't a
4:52:13specific
4:52:14there isn't specific language in the
4:52:16settlement that addresses this concern
4:52:18here in the PIN decision to curb
4:52:22non-essential costs as Kmeni3 nears
4:52:24retirement.
4:52:27not explicit language but it but
4:52:30implicit language based on the the
4:52:32structure and magnitude of this
4:52:34performance framework.
4:52:37>> Uh thank you. I appreciate your time. I
4:52:39have no further questions.
4:52:41>> Thank you. Uh Mr. Dart, uh Commissioner
4:52:46Plant,
4:52:48I'm up.
4:52:50You're up.
4:52:51>> Okay. Thank you. Uh good afternoon, Mr.
4:52:54Pay. Good afternoon. Good to see you.
4:52:59>> Um, I just had a a few questions uh
4:53:03about the coal plants and then and then
4:53:05I wanted to get into some more sort of
4:53:07just sort of spitballing on some
4:53:10different things and ways we might be
4:53:12able to address some issues. But um
4:53:15related to the command G3 that you were
4:53:18just discussing uh
4:53:20that was out of uh service August
4:53:24through December last year. Is that
4:53:25correct?
4:53:28>> Comanche 3 specifically Commissioner.
4:53:32>> Yes. I believe the current outage
4:53:34started in August 2025. I don't know the
4:53:38exact date uh but I think in the first
4:53:40half of the month sometime. uh and it
4:53:43continue it's continuing up until today
4:53:47>> and using
4:53:50we're using in the at least what you
4:53:52proposed in the settlement and I think
4:53:53in your uh direct testimony was a
4:53:56historic test year so that would look at
4:53:58the all the costs through the through
4:54:01the end of the year correct
4:54:04>> correct yes the 2025 test year is a full
4:54:07snapshot of the calendar year this this
4:54:09outage comprises
4:54:12a small portion of that volume
4:54:13>> about about a third I guess.
4:54:17>> So I think I heard when you were
4:54:19discussing the baseline with AAP that's
4:54:23that 13.5%
4:54:25planned outage time that's based on an
4:54:27industry average. Did you say
4:54:30>> that's correct? I believe that the
4:54:33source of that was um CEC testimony in
4:54:36this proceeding commissioner.
4:54:39And I mean, if you're looking at the
4:54:42industry average, you're looking at all
4:54:43the coal plants that are operating
4:54:44today. Is that
4:54:47>> correct? I I believe that's what their
4:54:48analysis focused on.
4:54:50>> Do you do you have any idea what the
4:54:51average age is of that fleet of coal
4:54:54plants?
4:54:56>> I do not. No.
4:54:59Um,
4:55:01our my understanding is that the the
4:55:04CPCN for PBLO unit 3 was anticipating a
4:55:076.7%
4:55:09unplanned outage rate. Um, I got that. I
4:55:13don't expect you to have that handy, but
4:55:15that's from a staff report in 2021
4:55:18in proceeding 20I 0437E.
4:55:23And that would fall well within the what
4:55:26what's called an exceptional performance
4:55:28level. Is that correct?
4:55:32>> Sorry, just to clarify, Commissioner BL,
4:55:34you're asking would that 6.6% fall
4:55:36within the 13.5 or or are these apples
4:55:39to orange?
4:55:40>> No, it's actually it would actually be
4:55:42outside of the deadband. So, you'd have
4:55:4513, you'd have another 3% I guess below
4:55:50that' be 10.
4:55:52So basically if you're operating at 50%
4:55:56over the unplanned outage that would be
4:55:59considered under the PIM structure
4:56:01exceptional performance.
4:56:05>> Yes. Under the PIM structure anything
4:56:07below 10%
4:56:10is where the unit starts to become
4:56:11eligible for
4:56:13uh a short band of offsets here.
4:56:18But I'll note that I I can't comment on
4:56:20that that staff figure specifically. Um
4:56:23ju just just not as familiar with with
4:56:25some of those pastum estimates. Mr.
4:56:28Pesuchi or Mr. Hansen might know better.
4:56:30But but I'd point out um that there's
4:56:34just a very limited band here in the
4:56:36structure in which the the company could
4:56:39earn an offset here that the penalty
4:56:41range is anything above 13 and a half or
4:56:45that 16 and a half deadband.
4:56:48uh each incremental one basis point or
4:56:51sorry 100 basis points of performance
4:56:53outside of that deadband generates
4:56:55essentially a million dollar
4:56:58um penalty or or offset against future
4:57:02penalties and so it's it's a pretty
4:57:04tight window for the company to to to
4:57:06perform above target.
4:57:09So the the
4:57:12expected number of operating uh or or
4:57:17planned outage days I think is somewhere
4:57:18around 25
4:57:20uh per year. Uh wouldn't it be simpler
4:57:23just to provide a base rate credit at
4:57:28the end of the historic test year for
4:57:29any days over that 25 days that was a
4:57:34part of that uh CPCN
4:57:37um and just reduce the
4:57:40base uh or the the the rate base uh
4:57:44request by that much? I mean, wouldn't
4:57:46that I mean, we've got a situation where
4:57:50customers have already paid for these
4:57:53three months. The unit wasn't operating
4:57:55those three months. Wouldn't it just
4:57:58make sense to credit the revenue
4:58:02increase by that amount rather than
4:58:04going through this sort of
4:58:07this PIM structure that uses, you know,
4:58:11a a planned outage rate that isn't
4:58:14relevant to this particular unit,
4:58:17you know, making up a number like 30
4:58:20million because it was sort of just a
4:58:21compromised number. [laughter] I just I
4:58:23don't understand why it wouldn't just be
4:58:24easier to take the number of days and
4:58:27reduce the revenue requirement by that
4:58:30much.
4:58:32Well, I think the the key difference
4:58:34there, Commissioner Plan, is is that
4:58:37you're presupposing that the company's
4:58:40actions, you know, leading up to and and
4:58:42after an unplanned outage were
4:58:45imprudent. And I think the the important
4:58:47thing to highlight in from this whole
4:58:48performance framework is that parties in
4:58:51this case have expressed concern around
4:58:53this unit's performance in the past.
4:58:55This is a framework to think about that
4:58:56over the next few years to align all of
4:58:59our incentives
4:59:01here. And and we've also got this
4:59:03standalone prudence review to look at
4:59:04this outage in particular. And so I I
4:59:07think right a lot of our our discussions
4:59:11and during our our settlement process
4:59:14focused on on this exact question on
4:59:16what is the right baseline how to think
4:59:18about planned versus unplanned outages.
4:59:20There's lots of different metrics and
4:59:21estimates floating around.
4:59:24The important thing to highlight there
4:59:25is that the amount my understanding at
4:59:27least Mr. Hansen can tell you more is
4:59:30that the amount of unplanned
4:59:33or sorry the amount of planned outage
4:59:35time can vary year to year and based on
4:59:38the the needs of the plan how it's
4:59:40operating what we found during previous
4:59:42maintenance outages and so it's not a
4:59:44static you know 25 days as you site or
4:59:47or something higher or or lower than
4:59:50that and so the the importance of the
4:59:52XEF
4:59:54metric is that it focuses on unplanned
4:59:57events It's saying when we think the
4:59:59unit's supposed to be operating, is it
5:00:01actually there and ready? So the these
5:00:04planned items are are taken off the
5:00:06table and we all want to encourage those
5:00:08planned maintenance
5:00:10um because that that's important to
5:00:12encourage reliability and availability
5:00:14moving forward. We don't want to have a
5:00:16perverse incentive to to not do that
5:00:18maintenance work. But if there's a and I
5:00:21don't want to belver this point, but if
5:00:22there's a CPCM that's based on a, you
5:00:25know, a 6.7 or 25 days of planned
5:00:28outage, that's kind of the basis for
5:00:30which this um unit was approved. I'm
5:00:35just thinking it would wouldn't it be a
5:00:37little easier to say, yeah, maybe you
5:00:40had an argument for why
5:00:44um days more than 25 are prudent or or
5:00:48not, you know, or or aren't prudent, but
5:00:50can't you just argue that within the
5:00:52case? You know, you've got say 100 days,
5:00:57you're allowed 25. So there's 75 days of
5:01:00question. And you know, you can make
5:01:02your argument for why that should be 70
5:01:06or why it should be 60. But at the end
5:01:08of the day, we just take the number of
5:01:09days that are determined to uh that fall
5:01:12outside of the CPCN that you know are
5:01:16not considered prudent and just subtract
5:01:18it from subtract that amount that that
5:01:21people have already paid for the for the
5:01:23unit. And then it's a much less
5:01:26complicated
5:01:27and sort of debatable structure of of uh
5:01:32you know a PIM.
5:01:35>> If I'm understanding you you're right,
5:01:37Commissioner. I think that sounds a lot
5:01:39like the the framework that staff was
5:01:42presenting in its answer testimony.
5:01:45Right. Looking back to past
5:01:48>> Yeah. I think they had like a uh they
5:01:51were saying to recover through the days
5:01:54that the unit was operating, which maybe
5:01:57is a little bit different. I'm just
5:01:59trying to go back to the what the unit
5:02:03was approved based on and and then, you
5:02:05know, work out from there. Um, but
5:02:09anyway, I just wanted to get your your
5:02:12thoughts around, you know, just a
5:02:14simpler structure that wasn't based on
5:02:17other, you know, maybe 45 year old coal
5:02:19plants,
5:02:21>> right? Yeah, I appreciate the uh
5:02:25the spitballing here to use your term. I
5:02:27I think that
5:02:29um you know, Mr. Pesco and Mr. Hansen
5:02:31can can weigh on on on metrics more. My
5:02:34my understanding of what you're
5:02:35suggesting might tweak the metric a
5:02:37little bit but seems a little bit more
5:02:39aligned with what staff was outlining in
5:02:41testimony. And I would just note that
5:02:42through the settlement process we all
5:02:45discussed and debated this a lot and we
5:02:47came to a resolution that the the the
5:02:51framework in the settlement agreement is
5:02:52a is a good place to land that there are
5:02:54a lot of perverse incentives created by
5:02:56putting more money on the table. Um
5:02:59there's also a lot of concern expressed
5:03:00by by parties by not having anything on
5:03:03the table that this was a reasonable
5:03:04metric and a reasonable amount of of
5:03:07money on the line each year.
5:03:11>> Okay. Uh moving on uh to the issues
5:03:16around Craig one and I know that um I
5:03:20forget the sort of term of art that was
5:03:23used regulatory something or another
5:03:26basically trying to talk about the
5:03:28federal government. I think it was some
5:03:30sort of a term. Um
5:03:34my understanding as it relates to Craig
5:03:36one is that there was a 202C that was
5:03:41issued to Tri-State.
5:03:45Is that that correct?
5:03:47>> That's correct.
5:03:48>> So this issue is certainly currently
5:03:52being litigated between Tri-State and
5:03:55and the federal government.
5:03:57I'm trying to understand what that issue
5:04:01has to do with
5:04:03um public service rateayers.
5:04:07Th
5:04:08>> this is a a topic that Mr. Besuchi's
5:04:10testimony deals with in more detail. I
5:04:13think the extent to which it comes into
5:04:14this case, we're talking about costs,
5:04:18incremental costs to keep that unit
5:04:20running beyond its planned retirement
5:04:22date. um of of which a portion of which
5:04:25could be the responsibility of XL Energy
5:04:27and its customers. We present the a PCCA
5:04:31rider route to handle those incremental
5:04:34costs.
5:04:34>> I guess what I'm wondering is why I
5:04:37guess what I'm wondering is I get I get
5:04:39that it may be a a
5:04:42um a cost to Excel. I'm wondering why
5:04:45it's a cost to the customers.
5:04:52That's a good question for for Mr.
5:04:55Pascuchi. I think he can give you a
5:04:56little bit more more detail there. His
5:04:59his rebuttal testimony goes into that.
5:05:01>> And the I I'll talk to him about it
5:05:05more. I guess we're operating under the
5:05:07presumption that what the federal
5:05:09government is doing is lawful.
5:05:12Is that correct?
5:05:15>> I'm sorry, I can't opine on that. I I
5:05:17know that there's um debates on this
5:05:20happening at various forums uh that that
5:05:22I just don't track closely.
5:05:24>> We kind of been stung by that in the
5:05:26past, the assumption that the federal
5:05:28government is operating lawfully and
5:05:30trying to get some tariff money back
5:05:31right now. Um, so I I do have some other
5:05:35questions just specifically for your
5:05:37colleagues, but I I I wanted to just
5:05:39talk to you real quickly about
5:05:42um, [clears throat] you know, big
5:05:45picture in terms of um the the credit
5:05:49ratings and creditworthiness of the
5:05:50company and that sort of thing. and what
5:05:53we try and do during the these rate
5:05:55cases to try and address those issues.
5:05:58It seems like, you know, I mean, this
5:06:00comes down, nobody wants to increase the
5:06:04cost of debt because of some kind of a
5:06:06downgrade, although there's been some
5:06:07discussion around what that relative
5:06:09cost actually is. But it seems like most
5:06:13of the issues that speak to the
5:06:15creditworthiness of the company come at
5:06:18a cost to rateayers.
5:06:20um whether it's increasing roe which
5:06:23increases the whack or increasing the
5:06:25equity percentage that increases the
5:06:26whack um
5:06:29and even the settlement which reduces
5:06:32the whack from the request from the
5:06:34company is actually an increase over the
5:06:36current level.
5:06:38Um if we look at the rating reports
5:06:41certainly wildfire liability risk is a
5:06:44huge part of their consideration. And I
5:06:45think I saw it in all of the the credit
5:06:48reports
5:06:50and I I would suggest that the the
5:06:53wildfire mitigation plan goes a long way
5:06:55towards addressing that risk, although
5:06:57it doesn't seem to be fully um
5:07:01uh recognized by the by the credit
5:07:04rating rating companies. Again, that's
5:07:07to at a significant cost to rateayers of
5:07:10a couple billion dollars. um the PSPS
5:07:14which mitigates that risk. Um again
5:07:18costs that are borne by rateayers.
5:07:21Do you see any approach that would
5:07:24balance uh some of those costs as
5:07:27they're deployed uh between the falling
5:07:31entirely on on the the customer base
5:07:34versus uh [snorts] you know sharing with
5:07:36the c the company?
5:07:39Well, I think we're seeing a lot of the
5:07:41sharing of the the risk here on a few
5:07:43specific topics in this case and
5:07:45certainly broader when we take a step
5:07:47back. The the Comanche3 framework as
5:07:50we've been talking about right puts real
5:07:52dollars on the line for company
5:07:54performance as of as does the DCA PIM
5:07:59uh also contemplated in this case. The
5:08:01company has, you know, more than a dozen
5:08:03other performance incentive mechanisms,
5:08:05some of which are symmetric, some of
5:08:06which are just downside only, right?
5:08:08When you look across QSP plans,
5:08:12um, other cost of construct, other
5:08:14availability pins,
5:08:16>> those are those are performance. I get
5:08:18that those are performance-based things.
5:08:20I'm I'm just concerned. I'm I'm looking
5:08:22at what the rating agencies are looking
5:08:24at for creditworthiness.
5:08:26Some of the issues that they bring up,
5:08:28how those issues uh really redown back
5:08:32to the to the customer base and in in
5:08:35increased rates. I'm just wondering
5:08:39I mean clearly if we can mitigate
5:08:42um you know harming credit to the
5:08:44company that benefits everybody
5:08:47but it seems like the costs of that
5:08:50really fall on achieving that really
5:08:53seem to fall on the the customers and
5:08:57I'm just wondering how we might be able
5:08:58to think about balancing that. I think
5:09:00Boulders's come forward with a
5:09:03>> an idea about a recovery fund. Um, for
5:09:07the businesses that end up paying the
5:09:09the costs of the PSPS, I know that
5:09:12there's been a number of folks who have
5:09:14brought up the issue of getting some
5:09:17sort of reimbursement from the company.
5:09:18Right now, there's really not an
5:09:20incentive for the company to not do a
5:09:22PSPS other than it really kind of pisses
5:09:24people off. But, you know, I mean,
5:09:27there's no financial,
5:09:31you know, hit to the company really. You
5:09:33you I I'm just trying to figure out how
5:09:36do you how do you you want the company
5:09:38to use it when it's necessary. We get
5:09:40that everybody wants to lower the risk
5:09:42of wildfire.
5:09:44It's just
5:09:46h how should we think about balancing
5:09:48that financial obligation?
5:09:53So maybe I I'll address your credit um
5:09:56metrics question or or credit quality
5:09:59piece first commission plan and then
5:10:01turn to the the PSPS element on the
5:10:05credit metrics front. I I agree with
5:10:07your statement right that that we've got
5:10:08to find the balance here on what is
5:10:11minimizing our cost of capital that
5:10:13that's our goal and so that it's the
5:10:17commission's obligations commission
5:10:18staffs um it's the companies to to
5:10:21maintain our financial integrity so that
5:10:24we can we can bring safe and reliable
5:10:26service to our customers. We think this
5:10:28settlement agreement by putting more
5:10:30than hund00 million in adjustments onto
5:10:33the table brings down those costs for
5:10:35customers. It's a reasonable um result
5:10:39of all these litigated issues of which
5:10:41there is there's lively debate on uh and
5:10:44it gets our credit metrics to a place
5:10:46that is kind of just above the
5:10:48thresholds that we're targeting to
5:10:50maintain our current ratings not to try
5:10:52to improve them to maintain them. We
5:10:55don't think there's a lot of wiggle room
5:10:57there and I think it's not a surprise
5:10:58that you see the set settlement
5:10:59agreement landing where it does. Uh and
5:11:02and Mr. Wayer can can go into more
5:11:04detail there. Of course, you also see
5:11:06from the credit rating reports, credit
5:11:08rating agency reports that there is
5:11:10absolutely a discussion of wildfire risk
5:11:12and that continues to evolve in the
5:11:14American West, but also of business risk
5:11:17and regulatory risk more generally. And
5:11:19you know that that's what brings us here
5:11:21today, right? Talking about the
5:11:22company's investments uh and the
5:11:24regulatory recovery that's afforded to
5:11:27those. Uh on the PSPS side of things, uh
5:11:31I Boulder's ideas on that are are
5:11:33interesting and we're happy to talk
5:11:34about those. I think our point in
5:11:36rebuttal was that let's talk about those
5:11:39in the ongoing M docket and it's my
5:11:41understanding that there could be a
5:11:42rulemaking on this front in the near
5:11:44future. And the settlement agreement
5:11:46actually contemplates additional metrics
5:11:48for the next electric QSP plan
5:11:52uh probably filed with within the the
5:11:54coming year um to address additional
5:11:56metrics. one for the WMP and PSPS
5:11:59elements as you described uh and another
5:12:02I believe was a was a call out to power
5:12:04quality and so there's forums to talk
5:12:07about this moving forward we just think
5:12:09there there wasn't sufficient time or or
5:12:12record built out in this case to kind of
5:12:13develop something here
5:12:15>> is the do you think the QSP is uh sort
5:12:19of the the best place to do an
5:12:21evaluation of performance metrics that
5:12:23might be then tied to
5:12:27um you know the recovery and that that's
5:12:30decided in other cases.
5:12:34I I think electric QSB is a is a really
5:12:37good venue um to to talk about what are
5:12:41our collective goals, right? What are
5:12:43the metrics we want to target to and
5:12:46have incentives and disincentives around
5:12:47those? I think the company's forthcoming
5:12:50WMP to just focus on a particular um
5:12:53topic of spending an investment here is
5:12:55another good place just as you know the
5:12:57upcoming company program filing on June
5:13:00on July 1st is a good place to talk
5:13:02about um incentives and program design
5:13:05more broadly for customer programs. So I
5:13:07think there's a lot of forums where you
5:13:09can tackle [clears throat] the specific
5:13:10question that that we're all interested
5:13:12in. Uh it's hard to do it all in a in an
5:13:14electric gray case, of course, but we
5:13:16think we've moved the ball here in a
5:13:18constructive way in the settlement
5:13:20agreement.
5:13:21>> Yeah. I mean, I think we've we've sort
5:13:24of run into this issue in a variety of
5:13:26different cases, whether it's the DSP or
5:13:29the
5:13:31>> or is it all right case? One of the
5:13:33things that I think Boulder brought up
5:13:34was also, you know, using maybe that
5:13:40QSP performance evaluation to reflect on
5:13:45an on an ROE
5:13:47uh level. I'm not sure exactly how that
5:13:49would work uh mechanically, but I think
5:13:52that was another thing that was brought
5:13:53up as well. And that that kind of brings
5:13:56me to another issue I'd just like to get
5:13:58your take on the the final area of sort
5:14:03of creditworthiness that the company
5:14:05brings up and one that I don't think has
5:14:09a specific cost um that falls on the
5:14:14rate payers is regulatory lag. Um the
5:14:18the the [clears throat] issue with
5:14:19rateayers I think is
5:14:21performance and you know are the costs
5:14:24that are included
5:14:26um you know are they justified and all
5:14:28those sorts of things. That's you know
5:14:30with a forward cost recovery those are
5:14:32the issues that come up as opposed to
5:14:34you know specifically
5:14:37um you know increasing the costs in in
5:14:39some way. And so I wonder if it would
5:14:42make sense and maybe to think about as a
5:14:48a way to kind of meet in the middle
5:14:51would be to do that kind of
5:14:54uh forward projection but tie it to
5:14:58performance indicators and um so that
5:15:01you can ensure
5:15:03that there is uh you know you're
5:15:06achieving the performance that's
5:15:08promised within the those expenditures
5:15:11prior to that when they are happening.
5:15:13But you don't actually you don't wait
5:15:18till the next rate case to collect it,
5:15:19but you collect it uh based on the
5:15:23achievement of those performance
5:15:24indicators and whether or not or maybe
5:15:26you get 50% up front and you get another
5:15:29[clears throat] 50% based on achieving
5:15:31certain performance indicators. some
5:15:32sort of structure like that that would,
5:15:35it seems to me,
5:15:37address the issues that the company
5:15:39brings up regarding regulatory lag, but
5:15:42also address the issues that are of
5:15:44concern around actual performance and
5:15:47achieving certain objectives. Is that
5:15:49something that the company might be
5:15:51interested in pursuing?
5:15:55>> Yes. To put a Yes. Yes. I would have
5:15:58those those conversations. uh
5:16:00commissioner plan in a nutshell it's
5:16:01it's yes you know I'll call out that the
5:16:03last settlement agreement from the 2022
5:16:08rate case right just decided um which
5:16:10the commission approved in 2023 had a
5:16:13provision for that that all the parties
5:16:15would come together through an M docket
5:16:18and kind of explore some of these these
5:16:20ratem cost of service performance
5:16:23questions to think about is is this the
5:16:25right paradigm that we're in right now
5:16:27or should we think about different ones
5:16:29ones that exactly as you're describing
5:16:31and potentially others. We didn't get
5:16:33around to that because there's a lot
5:16:35going on, right? There's not only in
5:16:39these phase one rate cases, right? We've
5:16:40had a lot of complicated proce uh
5:16:42planning proceedings that we want to
5:16:44spend sufficient time and attention on
5:16:46and it wasn't something that we could we
5:16:48could find a lot of traction on um among
5:16:51us as well as some other parties to find
5:16:53the the ability to to focus on that. So
5:16:57the the company's happy to to have that
5:16:58conversation moving forward, right?
5:17:00There's a long history of the company
5:17:03bringing forward
5:17:05uh for test years or other ways of
5:17:06thinking about regulatory lag which is
5:17:09hard for the company to manage around
5:17:11and and other interveners in this case
5:17:13and others expressing preference for for
5:17:16new or different performance metrics. So
5:17:20the the conversation is always ripe.
5:17:22Commissioner,
5:17:24>> thanks. Uh uh Mr. Chairman, that's all
5:17:26the questions I have. Thanks.
5:17:28>> Uh, thank you, Commissioner Plant. Uh,
5:17:30Commissioner Gman.
5:17:33>> Thanks. Good afternoon, Mr. Pay.
5:17:36>> Good afternoon.
5:17:37>> Um, I have, uh, first some questions for
5:17:40you about the PBLO unit 3 um, framework.
5:17:46Um, so
5:17:49when we look at PBLO unit 3, I see kind
5:17:52of three main issues. First there's the
5:17:55rate base and the inclusion of the plant
5:17:58in rate base. Then there's the cost to
5:18:01repair it you know as we look at the
5:18:03outage specifically as an issue cost to
5:18:06repair it and then the replacement power
5:18:09costs.
5:18:10Um so is it fair to think of this that
5:18:14the framework or PIM setup here or
5:18:17presented in the settlement is just
5:18:19addressing the first of those how how it
5:18:22comes through in rate base.
5:18:26>> I think that's right. Yes, we're
5:18:28addressing the the cost recovery piece
5:18:32and performance moving forward at the
5:18:34same time. the questions around right
5:18:38what what incremental investments or
5:18:40expenses were incurred to get the unit
5:18:42back online
5:18:44uh in 2026
5:18:46uh what the replacement power
5:18:48considerations are I think are all
5:18:50topics to be explored in the standalone
5:18:53prudence review that the settlement
5:18:54agreement contemplates and potentially
5:18:56in a future phase one case if those
5:18:58investments or expenses uh are at issue.
5:19:02>> Okay, got it. I want to make sure I'm
5:19:04thinking this all right. And then within
5:19:07the settlement agreement, the suggestion
5:19:09is that or the commitment I guess is
5:19:11that the company would file that
5:19:13standalone
5:19:15um prudence review by July of 2027.
5:19:19Correct.
5:19:21>> I think it says June 1st, 2027, but
5:19:24yeah, sometime in that time frame.
5:19:25>> Okay.
5:19:26>> They might have their own date, but
5:19:28yeah, sometime in in early summer of
5:19:292027.
5:19:31>> June, you're right. June 1st, 2027.
5:19:34Okay.
5:19:34>> Right.
5:19:35>> All right. Um
5:19:37and what um what is the first year in
5:19:42which the um unit 3 PIM would be
5:19:45applicable for performance?
5:19:48>> The settlement agreement contemplates
5:19:51that [clears throat] it is applicable
5:19:52starting on the rate effective date
5:19:56from this case. So starting on August
5:19:5829th,
5:20:00this performance framework would take
5:20:02effect.
5:20:04>> And when do you expect to have unit 3
5:20:06back operating?
5:20:09>> My understanding based on what we said
5:20:11in rebuttal is before the rate effective
5:20:13date. Sometime this summer. Uh so I
5:20:16don't have an exact date here, but I
5:20:18think sometime in in July or August.
5:20:21>> Okay.
5:20:22Um so it would not cover any of the
5:20:25portion of this year in which that um
5:20:27plant was in a
5:20:30>> Yes. Yes. Commissioner Go. The thought
5:20:32is that the the standalone prudence
5:20:33review would would tackle all that.
5:20:35>> Okay. Um wanted to um ask about
5:20:40something Mr. Lairman had a concern
5:20:42about in his testimony. Um first he
5:20:45cited no affirmation that the
5:20:47operational um use of unit 3 would
5:20:51continue to follow the parameters agreed
5:20:52upon in the settlement in 21A-0141E
5:20:58which was the company's prior ERP which
5:21:01set the retirement date for unit 3. Um,
5:21:04can you confirm if it is your intention
5:21:07to still abide by the operational
5:21:09restrictions set forth in that
5:21:11settlement agreement?
5:21:14>> As far as I'm aware, as as I sit here
5:21:16today, yes, we haven't made any um
5:21:19proposals or motions to to change that.
5:21:22Uh, if you want to talk more
5:21:24specifically around the operational
5:21:26thinking around the unit, I'm sure Mr.
5:21:28Pesuchi or Mr. Hansen can probably go
5:21:30more in depth there. But yes, we haven't
5:21:32proposed to to change any of that here.
5:21:35>> Okay. Gotcha. And then um Commissioner
5:21:38Plant had asked you about the average
5:21:39age of plants kind of in your uh average
5:21:44or baseline number being used for the
5:21:47forced outage rate. Do you recall that?
5:21:50>> Yes.
5:21:51>> Um and as I understood, you you didn't
5:21:54really know the kind of arrangement of
5:21:57ages within that average that's being
5:22:00used.
5:22:02I don't. Sorry. Um,
5:22:06yeah, I I really don't.
5:22:08>> Okay. I guess is it fair to say that the
5:22:11PBLO unit 3 coal plant is one of the
5:22:14newest coal plants in the country?
5:22:18>> I'm honestly not sure. Mr. Hansen might
5:22:21have a better understanding of of coal
5:22:23units around the country. U but but
5:22:26maybe not.
5:22:27Do you have an idea if it's a relatively
5:22:29young coal plant?
5:22:33>> As someone who spends a lot of my time
5:22:34focused on on gas planning and cost
5:22:37recovery, I I don't know a lot about the
5:22:40the specifics of our generation fleet
5:22:42and how that compares industrywide.
5:22:45Um but but others might.
5:22:48>> Okay. Um
5:22:52Okay, let's see.
5:22:55Um,
5:22:58does the unplanned outage rate and
5:23:01correct me if I got the wrong
5:23:02terminology there, you can fix my
5:23:05terminology, but does the outage rate
5:23:07that you're proposing um here for this
5:23:10PIM have any relationship to what is
5:23:13being used in resource planning?
5:23:19>> Are you referring specifically to the
5:23:20XEF metric?
5:23:22>> Correct. commission.
5:23:24>> My understanding is that reflects the
5:23:26the metric that the some of the more
5:23:29recent availability pins are are
5:23:33designed around um for some of the
5:23:35company's new newly approved units. So,
5:23:39so I think we've got a lot of um
5:23:42similarities there, but Mr. Besuchi
5:23:45knows all those details.
5:23:47>> You need to go on that. So you're not
5:23:49sure if this is a value that's used
5:23:51anywhere else in resource planning to
5:23:53apply.
5:23:53>> It is. Yes, I can I can definitively say
5:23:56that. Right. It's a metric that that we
5:23:58track. I think it's used uh externally
5:24:01here with the with the framework of some
5:24:03of these these performance mechanisms
5:24:05moving forward on new units. It's the
5:24:07it's the metric that we're tying uh the
5:24:10DCA pin to as well um unit by unit for
5:24:13the company's existing thermal fleet
5:24:15fleet as well as you know Caven Creek
5:24:17and some other dispatchable units. So
5:24:19it's yes it's it's very widely used by
5:24:22the company here in terms of
5:24:24industrywide right how often it's used
5:24:27compared to other metrics. Uh Mr. Hansen
5:24:29might be able to tell you more. Well,
5:24:30and I just wanted to clarify it. I
5:24:32wasn't necessarily asking about the
5:24:34metric, but the value of the metric that
5:24:37you are using to set the baseline for
5:24:39the PIM. Is that value carried over in
5:24:43any resource planning or other um uses?
5:24:46>> Oh, sorry. So, specifically about the
5:24:4813.49%
5:24:50value,
5:24:51>> is that used anywhere else? Uh, I'm not
5:24:55aware of that being used anywhere else.
5:24:57I think that number came in this
5:24:59proceeding right as I was talking about
5:25:01previously with with Commissioner Plant.
5:25:04I believe it stems from a a piece of
5:25:06CEC's answer testimony as a way to to
5:25:09think about evaluating the company's
5:25:11performance on on this unit.
5:25:14>> Okay. So that's not necessarily
5:25:16recognized in resource planning as the
5:25:19company's expectations for the plant's
5:25:21performance.
5:25:24>> I think that's correct. I'm not I'm not
5:25:26aware of us using that specifically, but
5:25:29uh Mr. Besuchi or Mr. Hansen could
5:25:31confirm more definitively.
5:25:33>> Okay, we'll do. Um and then um kind of
5:25:37in relation [clears throat] to some of
5:25:38Mr. Ghart's questions for you and
5:25:41concerns we saw in Mr. Lairman's
5:25:42testimony. Um there were concerns that
5:25:46there is no capital or on O andM
5:25:49restrictions or boundaries necessarily
5:25:51related to this PIM in terms of what
5:25:54could be spent um on unit 3. Is that
5:25:58correct?
5:26:00>> Yes. The the settlement agreement does
5:26:02not contemplate specific language on
5:26:04that.
5:26:05Um
5:26:08and then um in your rebuttal before the
5:26:12company essentially agreed to this py
5:26:16in your rebuttal you had indicated that
5:26:18staff's approach meaning the approach um
5:26:21as I take it to the performance metric
5:26:24impacting specifically unit 3 um quote
5:26:28would significantly affect how the
5:26:30company approaches planning and
5:26:32investment in Comanche
5:26:34a unit that's just a few years from its
5:26:36retirement. So, I was wondering if you
5:26:40could elaborate for me on how you view
5:26:44um this PIM significantly affecting the
5:26:48company's uh planning and investment in
5:26:50the unit.
5:26:52>> And are you referring specifically to
5:26:54the the settlement agreements $30
5:26:56million for the unit or or um answer
5:26:59testimony from other parties?
5:27:02Um, yeah. To the the 30 million's fine.
5:27:05I mean, if if you think it will not any
5:27:07longer significantly impact your
5:27:09planning and investment in the unit, let
5:27:11me know.
5:27:13>> Well, well, I think that gets to my
5:27:15conversation with with Mr. Ghart, which
5:27:18um just just wanted to know how you were
5:27:20thinking about it because it's as a as a
5:27:23prudent operator, right? If we've got a
5:27:26$100 million swing potentially yeartoear
5:27:29based on how the unit's performing based
5:27:31on a $30 million swing year to year,
5:27:32that's going to affect some of your
5:27:34spending and investment choices by
5:27:36definition, right? With with an extreme
5:27:38amount of dollars on the line, we would
5:27:41be imprudent not to do everything
5:27:43possible to keep that unit online, even
5:27:46if in the broader picture that wasn't
5:27:49the best idea. And that's that was the a
5:27:51chief kind of our chief critique of a of
5:27:53an amount of that magnitude. We think
5:27:56$30 million mitigates a good chunk of
5:27:59that concern, but it's still a lot of
5:28:00money on the line each year. Um, so it
5:28:03shows continued skin in the game from
5:28:05the company's perspective. I think an
5:28:08amount of that magnitude, the whole
5:28:10purpose is designed to to change
5:28:12behavior. We're going to do everything
5:28:14we can to keep this unit available and
5:28:17online. We think we've we've tried our
5:28:20best in the past. Now there's, you know,
5:28:22even more on the line here and so we
5:28:26think it's an appropriate amount.
5:28:28>> Okay. So I guess what I'm hearing is you
5:28:30think that the level at which that PIM
5:28:33amount is set will I guess cause you to
5:28:37make the most prudent decisions about
5:28:39what is too much to spend, the right
5:28:41amount to spend um to maintain the
5:28:45reliability of the unit moving forward.
5:28:49I I think yes I agree commissioner
5:28:52Gilman with that fra framing and I think
5:28:54that's the whole purpose behind a a
5:28:55performance mechanism right it's it's
5:28:58essentially the commission or parties
5:29:00right saying hey this is how much we
5:29:02value a certain outcome and so with that
5:29:06information in hand that's going to
5:29:08affect the company's decision- making
5:29:10thereafter that's the whole purpose and
5:29:13so with with an extreme amount on the
5:29:16line each here the full revenue
5:29:18requirement of the unit as some parties
5:29:19were suggesting uh at the start of these
5:29:22discussions
5:29:23that's a very different place than than
5:29:26where the settlement agreement lands
5:29:27which is a a much more balanced um and
5:29:31workable approach from the from the
5:29:33company's perspective.
5:29:35>> Okay. And so I understand like the
5:29:38company's
5:29:39profit motives or potential penalties
5:29:43may be new, but the company's
5:29:47responsibility
5:29:49to ensure that they are spending
5:29:52what is necessary and prudent and not
5:29:56more for reliable operation of the plant
5:29:59to operate in the public's interest. I
5:30:02guess I'm not clear why that didn't
5:30:03exist before.
5:30:05I I wouldn't say it didn't exist. It
5:30:07absolutely existed. The company works
5:30:09really hard and it's Mr. Hansen's job,
5:30:13and he can talk about this much more
5:30:14than I can, to make sure our units are
5:30:16performing well and available when we
5:30:18need them to serve customers. We have an
5:30:21inherent uh interest and motivation to
5:30:24do that. We care about our units. We
5:30:26care about our employees. We care about
5:30:28our customers. that all goes into the
5:30:30performance of any particular asset and
5:30:32particularly this this unit uh here in
5:30:35question
5:30:37an additional performance framework
5:30:38around that
5:30:41further incentivizes it. Right? That's
5:30:43the that's the whole purpose of a of a
5:30:45framework. Um parties have been
5:30:46frustrated at at the performance of this
5:30:48unit. We've been frustrated at times
5:30:51too. And this is us aligning around how
5:30:54to think about this over the next couple
5:30:55years.
5:30:57>> Okay. So then if you had this inherent
5:30:59incentive before, now there's more of a
5:31:02financial kind of value put to it for
5:31:04the company. Do you foresee significant
5:31:07changes in the capital and on andm
5:31:10expenditures the company is putting in
5:31:12the plant in the coming years?
5:31:17>> Uh it's a good question. I'm I'm not
5:31:19privy to any decisions we've made uh one
5:31:22way or the other. I think we were very
5:31:24curious in the outcome um of this
5:31:27proceeding and and the settlement
5:31:29agreement in particular.
5:31:31Uh Mr. Hansen can can talk a lot about
5:31:34uh the continued operation of this unit.
5:31:38We know it's it's nearing retirement,
5:31:40right? As I was talking about a lot with
5:31:41with Mr. Ghart, we're going to keep that
5:31:43in mind, right? it's not in anyone's
5:31:45benefit
5:31:46um to to continue invest in a to invest
5:31:50significant sums in a unit that's
5:31:52nearing retirement.
5:31:56>> Um okay. And then um question for you in
5:32:02in understanding there are no boundaries
5:32:04around this in the settlement agreement
5:32:06that's clearly of concern to several
5:32:08parties. Um,
5:32:10do you think it would be in the public
5:32:12interest for capital and on ONM related
5:32:16expenditures on the plant to increase
5:32:18disproportionate to any improvements in
5:32:20reliability in the coming years?
5:32:24>> I'm sorry, Commissioner, could you could
5:32:26you ask that question again? I wasn't
5:32:27tracking.
5:32:28>> Yeah. If we see increases in capital
5:32:31expenditure and on andm expenses for
5:32:34this plant that are disproportionate
5:32:37in relationship to increases in
5:32:39reliability of the plant in the coming
5:32:41years, do you think that would be in the
5:32:43public interest?
5:32:46>> Well, it's hard to say in advance,
5:32:49right? I think the the specifics of of
5:32:53any um capital investment or own
5:32:56expenses and the specifics around any
5:32:58potential future outages are going to be
5:33:01what what dictates the answer to that
5:33:03question. Of course, the company is
5:33:05going to do everything it can to to keep
5:33:07the unit online and available like it
5:33:09does for all of its units.
5:33:12The but we we don't have a crystal ball,
5:33:16right? We don't know exactly what's
5:33:17going to work, what's not going to work
5:33:20both at Command G3 as well as all the
5:33:22other units that now have performance
5:33:24incentives around them. So, we're going
5:33:26to do the best we can to be prudent
5:33:28operators and and prudent stewards of
5:33:30our customer dollars, but we know we're
5:33:32going to have to defend every dollar
5:33:34there um just like we have in the past.
5:33:38>> Okay. um you indicated in your rebuttal
5:33:41testimony when understandably the um
5:33:44suggestion from staff and answer
5:33:45testimony was a different quantity than
5:33:48we're talking about in the settlement
5:33:50but you had indicated that this approach
5:33:52um with regard to the unit 3
5:33:54availability pim uh generally would
5:33:57require an immediate writeoff of the
5:34:00PBLO 3 plant in service as well as it
5:34:04would be considered an impairment. Can
5:34:06you walk me through what that means and
5:34:07if those are still concerns now uh under
5:34:10the settlement term?
5:34:13>> Good question. So, so I'm not an account
5:34:15an accountant. I'll preface all this by
5:34:17by saying that. But but my understanding
5:34:19is, you know, to have a a write off,
5:34:22right? It's essentially a question of do
5:34:24we have confidence that we can recover
5:34:27um the depreciation expense of of the
5:34:31underlying asset with the full revenue
5:34:34requirement in question. The answer to
5:34:36that is pretty clearly no. Right? You're
5:34:38not just talking about the earnings
5:34:39component. You're talking about recovery
5:34:41of the underlying investment, the
5:34:44capital outlay to bring that unit
5:34:46online.
5:34:48and that that's covered by the by the
5:34:50depreciation expense. And so, right, 30
5:34:53million doesn't eat into that, right?
5:34:56The 30 million is is of a magnitude
5:34:58where whereby we're just talking about,
5:35:02you know, eliminating in a year, right?
5:35:04Just contemplating a scenario in which
5:35:06the unit was not available,
5:35:07[clears throat]
5:35:08we incurred a full $30 million penalty.
5:35:11Now we're talking about zero dollars of
5:35:13earnings on the unit and we're eating
5:35:15well into the uh the cost of debt
5:35:18associated with that revenue
5:35:20requirement. And so right that would
5:35:22require shareholders working over
5:35:24additional dollars to co to cover that
5:35:25that cost of debt. Um because as long as
5:35:29[snorts] if you're paying your debt
5:35:31expense that that's a very good thing.
5:35:33If you're not that means you're going
5:35:35bankrupt and that's absolutely an
5:35:37outcome that we're avoiding at all
5:35:39costs. And so um so so that that's the
5:35:43way to think about the the kind of
5:35:44hundred million versus $30 million um
5:35:48swing there to to the settlement
5:35:50agreement. I think that avoids the
5:35:52impairment um but but does not avoid it
5:35:55based on some recommendations and answer
5:35:58testimony.
5:35:59>> Okay. And can you define impairment for
5:36:01me because I feel like I'm conflating
5:36:03the write off and impairment.
5:36:05>> Yeah, I'm conflating those two, but
5:36:07maybe an accountant could tell you a
5:36:09different question. My understanding is
5:36:10that those are basically
5:36:11interchangeable.
5:36:12>> Okay.
5:36:13>> It's an impairment test on whether or
5:36:15not you have a write- off. So, I've been
5:36:17using those interchangeably.
5:36:18>> Okay. Got it. Um
5:36:23and then um you do say on the on page 44
5:36:26of your rebuttal testimony that um the
5:36:29unit referring again to PBLO unit 3
5:36:31rendering the majority of the 2025 test
5:36:34year. Do you know the percent of the
5:36:362025 test year um that the unit ran?
5:36:45>> So it was out
5:36:47from roughly mid August
5:36:50through the end of the year. So that's
5:36:53going to be the last
5:36:56quarter plus.
5:36:58>> Well, I I will indicate we are aware
5:37:00there were other outages.
5:37:04>> Oh. Oh, sorry. Are you talking about
5:37:05>> That's not the only outage the plant had
5:37:07in 2025.
5:37:08>> Oh gosh. Sorry if I misunderstood you.
5:37:10Are you talking about the history of the
5:37:11plant or just the test year?
5:37:13>> 2022 test year.
5:37:15>> Yeah. So in 2025 it'll be you know
5:37:18slightly more than that quarter. So a
5:37:20quarter and a half. So roughly roughly a
5:37:23third roughly 30%.
5:37:26>> But again that's just for the outage
5:37:27that began in August.
5:37:29>> Correct. I'm telling you, I believe
5:37:31there were other outages of the plant in
5:37:332025. Are you aware of other outages?
5:37:37>> Other unplanned outages? I'm not up to
5:37:40speed on those details. Mr. Hansen could
5:37:42could tell you.
5:37:43>> Okay. So, you wouldn't have a percentage
5:37:46to um allow us to understand what
5:37:49majority means.
5:37:52>> For unplanned outages, I'm not sure what
5:37:54the total numbers.
5:37:56>> Okay. Um,
5:38:00so, um, also in your rebuttal, you talk
5:38:02about the past company responsibility
5:38:04for PBLO unit 3 outages,
5:38:07including, uh, $14.4 million for a 2020
5:38:11outage, 11.6 million for a 2022 outage.
5:38:16Um, and you say there that in response
5:38:20to the 2020 and 2022 outages, the
5:38:24company proposed customer refunds right
5:38:27out of the gate. Does that sound
5:38:28familiar?
5:38:31>> Yes.
5:38:32>> Okay. Um, so I was curious with respect
5:38:36to the the 2025 um breakdown, has the
5:38:41company proposed any customer uh any
5:38:44company responsibility
5:38:47um for that breakdown or replacement
5:38:50power or its fixes um right out of the
5:38:53gate in this circumstance?
5:38:56not right out of the gate uh on this
5:38:59this current outage uh but just noting
5:39:01that we'll have this new per or the
5:39:04proposal is to have this new performance
5:39:06framework in place. The company's
5:39:08already committed to providing
5:39:10replacement power cost analysis in that
5:39:14uh in that standalone prudence review on
5:39:16the current outage and so all all
5:39:18that'll be reviewed at that time.
5:39:21Okay, it will be litigated, but we don't
5:39:24have a similar scenario like in the 2020
5:39:26and 2022 breakdowns where the company
5:39:29initially suggested uh company
5:39:31responsibility for some of the costs.
5:39:35>> That's true. We we haven't made a
5:39:36similar statement here. Uh I'm still
5:39:39coming up to speed on on the nature of
5:39:42the outage uh and the details around it.
5:39:45So, we we haven't made a similar
5:39:47commitment here.
5:39:48>> Okay. Um and as for that filing um that
5:39:52shall file in June uh by June 2027 per
5:39:55the settlement agreement um there seems
5:39:58some potential controversy over what's
5:40:00considered um replacement power costs.
5:40:03We have some um different parties
5:40:05suggesting that um extension of unit 2
5:40:09is part of the replacement power cost.
5:40:11So I was curious if there are any
5:40:14understandings as to what is within or
5:40:17outside of the analysis of what is
5:40:19considered replacement power costs for
5:40:21that future prudence um filing.
5:40:26>> We didn't outline those specifics here
5:40:27in the settlement agreement uh as I'm
5:40:29sure you you're noting here. Uh, of
5:40:33course there's always the potential to
5:40:34to confer with parties leading into that
5:40:37that prudence review um to preview our
5:40:40our replacement or approach to
5:40:41replacement power costs if other parties
5:40:43have different views. And of course,
5:40:45once you're into the actual prudence
5:40:46review itself, right, there's there's
5:40:48always a lot of requests that come at
5:40:51the company um for different looks and
5:40:53and pieces of analysis. So, so I would
5:40:56say it's it's probably a conversation
5:40:58most ripe for that prudence review. uh
5:41:01as I stand here today to today.
5:41:04>> Okay. Um
5:41:06and then um
5:41:09changing subjects [laughter]
5:41:13um staff witness Gabre expressed concern
5:41:17that the company may be including vacant
5:41:19um vacant positions or vacancies on
5:41:23staff in the revenue requirement um as
5:41:27they did in the 2024 gas rate case. Um,
5:41:31and I know the commission had directed
5:41:33in the company to remove them in that uh
5:41:362024
5:41:37um gas rate case. And I was curious um
5:41:41it it seems as though the company has
5:41:42confirmed those vacancies are out of the
5:41:44revenue requirement. I just wanted to
5:41:46confirm that since I didn't really see
5:41:48any explanation for that change in
5:41:50position or advocacy.
5:41:53>> Yes, there's nothing in the settlement
5:41:55agreement itself that that deals with
5:41:57with the issue of vacant positions. the
5:41:59the company continues to maintain that
5:42:02the the costs in the test year for labor
5:42:04are actual incurred costs.
5:42:07Um if if you have other questions around
5:42:10what's in or out of the the test year,
5:42:12Mr. Freighus might be able to go in more
5:42:13depth there on compensation costs, but
5:42:16these are the actual incurred costs, you
5:42:18know, subject to the additional removal
5:42:20of costs and the settlement agreement
5:42:22around AIP and LTI costs.
5:42:25>> Okay. And would that be for staffing
5:42:27levels as they were at the end of 2025
5:42:32given the use of the endofear values in
5:42:36the settlement agreement?
5:42:38>> I don't think it's a endofear or average
5:42:41year rate based question. I think it's a
5:42:43snapshot in time of of a full year,
5:42:45right? What were the total labor costs
5:42:47incurred
5:42:49during this test year as a
5:42:50representative look to to future costs?
5:42:54>> Okay. Are are you confident on that or
5:42:56should I check with Mr. Freigha?
5:42:58>> Mr. Freighus could confirm. Of course,
5:43:00that that's my understanding.
5:43:02>> Okay. Um and then I know there have been
5:43:06some concerns in the past over the
5:43:08company, especially cutting staffing
5:43:10related to customer service um
5:43:12functions. There was a significant
5:43:14decline in 2023.
5:43:16Um and while the company it looks like
5:43:19um from uh some testimony has increased
5:43:23some of the customer service staffing uh
5:43:25very recently toward the end of 2025.
5:43:28We're certainly don't look to be at 2023
5:43:31levels or pre-2023 levels. Um so I was
5:43:36curious how you know this seems to be an
5:43:39ongoing concern um where the company h
5:43:43has cut some of these positions or seen
5:43:45declines in staffing kind of after some
5:43:48of these rate cases um which sometimes
5:43:50results in uh concerns about customer
5:43:53service level that customers are
5:43:55getting. Um, so I was curious, is this
5:43:58something that there could be a rational
5:44:00way to track instead of just assuming
5:44:03certain levels whereby if the company
5:44:05cuts personnel after the re case um that
5:44:09would be onetoone tracked to ensure that
5:44:12that action does not result in
5:44:14additional company profit.
5:44:19So just to to clear up the company's
5:44:22actions here, right? In in no way was it
5:44:25the company cutting positions after a
5:44:27Ray case, right? Our our customer
5:44:30billing, call center staff, customer
5:44:33support generally supports
5:44:35eight states uh and four operating
5:44:38companies. And so I'm not aware of any
5:44:41decisions that were made in light of
5:44:42just one great case in one particular
5:44:45state. I I think the challenges we've
5:44:47described both in this testimony as well
5:44:49as in I think a report about a year ago
5:44:53acknowledging that we were slow to to
5:44:55respond to this was that exact fact that
5:44:57these trends happened coming out of the
5:44:59pandemic that it was really hard to re
5:45:01to retain customer service
5:45:04professionals. We had a lot of attrition
5:45:06and we were slow to react and the
5:45:08company takes full responsibility for
5:45:09that. We've wred the ship since then.
5:45:12We've gotten the staffing levels back up
5:45:13to where they need to be. uh as as as
5:45:16shown in our not only the testimony in
5:45:18this case, but we have quarterly
5:45:19reporting on that metric and a bunch of
5:45:21other metrics to to show how we're
5:45:23supporting our customers on billing and
5:45:25outages um in customer service call
5:45:28centers in particular. Uh so so very
5:45:32much our hope to to not see a similar
5:45:34trend happen again. Um but we we think
5:45:37that was largely out of our control in
5:45:39terms of the impetus of that. But yes,
5:45:41we were slow to react and now I think
5:45:43we're tracking it closer to make sure it
5:45:44doesn't happen again.
5:45:47>> Um, thank you for that. I mean, I guess
5:45:49regardless of the reason why there was
5:45:52less staffing, there was less staffing
5:45:55and so that revenue then goes to the
5:45:58company's bottom line. If there's not
5:46:00staff, you're you're paying with it. Um,
5:46:04the end result is maybe similar
5:46:06depending who initiated that. uh the
5:46:08customer struggled with customer service
5:46:10and and the company still retained the
5:46:12revenue. So, I'm just wondering if uh a
5:46:15better tracking of actual personnel
5:46:17expenses would be uh appropriate.
5:46:23>> Well, help me understand what you mean
5:46:25by by better tracking of it be beyond
5:46:27the the quarterly reporting that we're
5:46:29providing on these headcounts of course.
5:46:31Um are you
5:46:31>> Yeah, like an actual tracker mechanism
5:46:34in rates like how
5:46:35>> Oh, gotcha. Okay.
5:46:36>> Different other changeable amounts.
5:46:42>> Gotcha. Okay. Thank thanks for
5:46:44clarifying. Yeah, that that's one
5:46:46approach, right? I I know we'll have an
5:46:48electric QSP coming forward again at
5:46:50some point over the next year or so. Uh
5:46:53you know that that could be a good forum
5:46:54to talk about this because we have we
5:46:56currently have in place a metric around
5:46:59uh customer complaints and telephone
5:47:02response time and so it's captured in
5:47:04two existing metrics. if we wanted to
5:47:06add another one or change some of the
5:47:08structure of those, I think that's
5:47:09absolutely ripe for discussion. Um, so
5:47:11that could be another approach as well.
5:47:14>> Okay. Um, and then am I correct that the
5:47:18environmental LTI or long-term incentive
5:47:22uh employee incentive is proposed to be
5:47:25funded at 50% level in the settlement
5:47:27agreement in accordance with uh E36D.
5:47:31That kind of just seems to lump a few of
5:47:34those things together.
5:47:39Yes, [clears throat] I think that's
5:47:40that's a fair understanding that that
5:47:42the remaining LTI expense is the total
5:47:45amount less all of the um earnings or
5:47:49performance-based amount and you take
5:47:51all the remaining amounts and you divide
5:47:52it in half. So, so yes, for the
5:47:54environmental, for the safety, for the
5:47:57timebased, it's it's half of each of
5:47:59those.
5:48:00>> Okay. Um and then just wanted to ask you
5:48:04um quickly on the RHISA issue with
5:48:06regard to EOCC's recommendation to use
5:48:09some of the um outstanding RISA balance
5:48:13um to to fund some targeted help. um
5:48:17help me understand kind of in
5:48:19translation from the re proceeding and
5:48:23um the from the res proceeding what is
5:48:26your anticipated view of how that reset
5:48:30balance moves forward in terms of the
5:48:32cost of current programming and and like
5:48:34how how that's going to transpire
5:48:36roughly
5:48:38>> roughly my high level understanding of
5:48:41it not not being a witness in that case
5:48:43is that
5:48:44there is a large outstanding resa
5:48:47balance as of the duration of that case.
5:48:49I know that we're several months into
5:48:52that that um case being resolved.
5:48:56I think that resa based on the outcome
5:48:58of that case, the RISA balance is
5:49:00declining over time based on the changes
5:49:02made and in that case between costs
5:49:05flowing through the ECA directly versus
5:49:07the RISA. Um there used to be
5:49:09rebalancing that happens on the back
5:49:11end. Now it's a little cleaner and
5:49:13simpler. I think that change is going to
5:49:15drive reduction in the the outstanding
5:49:17visa balance. Uh I'm not sure the exact
5:49:20time frame over which that balance gets
5:49:22to zero, but it's my understanding that
5:49:24in the coming years that that balance
5:49:27should should decline significantly.
5:49:29>> Okay, got it. Um
5:49:34uh I think those are my only questions.
5:49:38Chairman,
5:49:39>> uh thank you, Commissioner Gman. Um
5:49:43good afternoon Mr. Pay.
5:49:46>> Good to see you.
5:49:48>> Uh just a few preliminary questions and
5:49:50then uh three or four areas to talk
5:49:52about with you. Uh is it fair to say
5:49:54that the capital spending uh that you're
5:49:57asking us to place in the rate base in
5:49:59this case will get advertised over many
5:50:01decades, 40, 50, 60 years. Is that
5:50:04right?
5:50:06>> Yes. Generally, yes.
5:50:09And is it accurate to say that the last
5:50:11electric rate case was decided in 2023
5:50:14and was based on an endear 2022 historic
5:50:18test year for ratebased N&M spending? Is
5:50:21that right?
5:50:22>> Yes.
5:50:24>> Okay. Under cost of service regulation
5:50:26in Colorado, is it fair to say that the
5:50:28company's earnings are directly linked
5:50:30to growth in capital spending and rate
5:50:32base? For example, and just roughly for
5:50:35every billion dollars in net uh rate
5:50:38based growth, the company's annual
5:50:40earnings grow all else equal by say 70
5:50:42million at a 7% lack or 71.4 million at
5:50:47a 7.14%
5:50:49lack. Is that is that link uh uh roughly
5:50:53accurate?
5:50:55>> Yes. Yes. The company earns money by um
5:50:58investing in infrastructure to provide
5:51:00safe and reliable service to customers.
5:51:03So we don't recover on those dollars
5:51:05until they flow through a base rate case
5:51:07like we have here or through a rider. Uh
5:51:09but but yes, I agree with the over our
5:51:12overall uh framing of them.
5:51:15>> All right, just a quick thing on average
5:51:17residential rates. Can we pull up what
5:51:19has been marked as hearing exhibit 1502?
5:51:23And uh let's start on the first page.
5:51:26And uh let me represent to you that this
5:51:29is the public service company uh of
5:51:32Colorado 10K from uh 20
5:51:3621. Uh and uh and do you see that uh I
5:51:43think uh right below the box with a
5:51:45check?
5:51:48>> Yes, I see.
5:51:50>> Okay. Can we go to page five? And uh I
5:51:54just want to um show that uh average
5:51:57residential revenue uh per kilowatt hour
5:52:00was uh uh 11.46 in 2020 and 12.46 in 21.
5:52:07Can you can you go to uh page five?
5:52:12>> This is page five.
5:52:13>> No. Can you go to page five?
5:52:16>> Yeah, this is this is page five.
5:52:18>> Oh, can uh can you scroll down uh five
5:52:22pages
5:52:25>> to page 10?
5:52:27>> Yeah, I guess
5:52:34>> this is page 11. Should I keep going?
5:52:37>> Oh jeez, I can't see it. It's frozen on
5:52:39my screen.
5:52:41Can you see it, Mr. Pay?
5:52:44>> I can see the screen. Yeah, but the the
5:52:47numbers are a little small.
5:52:50>> Um
5:52:54I
5:52:56don't know. It's uh this is frozen on my
5:52:58screen. I All I see is the first page.
5:53:02Let me go back to page five then. Um,
5:53:07what is it you're looking for again?
5:53:10>> I I can't see anything else other than
5:53:12the first page. I'm sorry. See if I can
5:53:15see it on my phone.
5:53:22>> Okay, there it is. Uh, sorry. Can you
5:53:26try page five of this?
5:53:30This is page five.
5:53:32>> Okay.
5:53:34Oh jeez.
5:53:36Why don't we take a five minute break
5:53:37and see if I can get this uh
5:53:39straightened out. Uh come back at 2:30.
5:53:42Okay.
5:53:44Sorry.
6:00:57All right. Apologies. Uh, I had a frozen
6:01:01computer and the wrong hearing exit
6:01:03[laughter] number.
6:01:06I have bad dreams like this. Um uh can
6:01:10you uh just uh uh scroll um uh expand
6:01:14the view and do you see residential
6:01:16revenue per kilowatt hour of 12.46 in
6:01:202021 and 11.46
6:01:23in 2020.
6:01:27>> Uh could you scroll up slightly? I think
6:01:29it's right there. Yeah. So 11
6:01:3246 and a 12.46 and 11.46. I see that.
6:01:38>> Thank you. You can uh take that down. Uh
6:01:42just a brief conversation on capital SP
6:01:46spending. I think this record is really
6:01:48clear on plan on service and ratebased
6:01:50growth, but less so on capital spending.
6:01:54Uh can we pull up hearing exhibit 1502?
6:01:58And I think this is uh uh the last the
6:02:03same exhibit we just had up and got
6:02:04confused.
6:02:09All right. Uh, again, you see that's
6:02:11December 2021 Excel. Can you go to page
6:02:1447?
6:02:20All right. Do you see capital
6:02:21expenditures? And do you see for Excel
6:02:24it's 6 1.625
6:02:26billion in 2021.
6:02:29Do you see that, Mr. Pay?
6:02:32>> I do. Yes.
6:02:34>> Okay. Uh you can take this down. Uh can
6:02:37you pull up what has been marked as
6:02:39hearing exhibit 1503
6:02:42and let me represent that this is the
6:02:43Excel 10K for the year 2025.
6:02:50And you see that 2025?
6:02:54>> I do. Yes.
6:02:56And can you turn to page 53
6:03:04and scroll down a little to the public
6:03:06service company line? Do you see that
6:03:08capital spending in 2025 for public
6:03:11service company of Colorado was 5.44
6:03:15uh 0 billion? Uh would you accept that?
6:03:20>> Yes, I see that.
6:03:22>> And uh it's a projection. Uh but do you
6:03:24see uh 2026 is uh almost $6 billion?
6:03:31>> Yes, I see that.
6:03:33>> Okay. And uh you can take this down. And
6:03:36um I also have Excel Energy 10Ks for the
6:03:40calendar years 2022,23
6:03:42and 24 available on March. uh but
6:03:46subject to later check would you accept
6:03:48uh that public service company's capital
6:03:50spending at least according to the 10ks
6:03:53was 1.94 billion in 2022. Um that's on
6:03:58page 42 of that actual uh uh document
6:04:022.31 billion in 23 and 3.18 billion in
6:04:062024.
6:04:08Uh so subject to your attorneys making
6:04:11sure that's all all right. Would you
6:04:13accept that for now?
6:04:16Yes, I I don't have a basis to to
6:04:18disagree with any of that.
6:04:20>> Okay. Um, so we agree that capital
6:04:23spending was 1.625 billion in 2021 and
6:04:275.44 billion in 2025.
6:04:30So the company's capital spending in
6:04:32Colorado has more than tripled in the
6:04:35four years from 2021 to 2025.
6:04:38Um, and subject to later check, if I
6:04:41represented to you that this represents
6:04:42a compound annual growth rate of 35%,
6:04:46would you have any reason to doubt that?
6:04:52>> No.
6:04:53>> Okay. Uh, can we pull up what has been
6:04:56marked as hearing exhibit 1515?
6:04:59Uh, and let me represent that this is
6:05:01taken directly from the link in uh,
6:05:04hearing exhibit 600. It's Mr. Lurman's
6:05:07answer testimony at page 44, footnote
6:05:1076. And let me represent to you that
6:05:13this is an Excel Energy Investor
6:05:15presentation from March 2026.
6:05:19So, if you can pull that up, uh, Miss
6:05:21Federico.
6:05:22>> Yes. Sorry, my computer froze, too. I've
6:05:24got it.
6:05:25>> Okay. Thanks.
6:05:32So, do you uh maybe scroll down a
6:05:34little? Uh, do you Oh, go back.
6:05:38Do you recognize this as an Excel Energy
6:05:40Investor presentation from March 2026?
6:05:45>> Yes, that's what it says here.
6:05:47>> Can you go to page uh uh 17?
6:05:54Do you see where uh Excel is committing
6:05:56to the financial community 6 to8%
6:05:59earnings per share growth?
6:06:02>> Yes.
6:06:04And can we turn to page 11?
6:06:12GC where Excel is committing to the
6:06:15financial community that public service
6:06:17company of Colorado will grow rate base
6:06:19by 7% from 25 to 2030. Do you see that?
6:06:26>> Yes, I see that. And I'll note that
6:06:28that's far below the growth rates in
6:06:30some of our other jurisdictions just for
6:06:33full context.
6:06:34>> Fair enough. Fair enough. And if
6:06:37finally, if we could turn to page 25
6:06:41and I think this uh was in Mr. Lman's
6:06:43testimony, but do you see uh you're near
6:06:46the bottom of the pure group when it
6:06:47comes to nonfuel on M uh spending? Is
6:06:51that fair?
6:06:55>> Yes. Yeah, that's a fair
6:06:56characterization.
6:06:58>> Okay, you can take this down. Can we
6:07:00pull up hearing exhibit 123 attachment
6:07:04JJP1
6:07:06uh which is an uh the long-term rate
6:07:08model attached to your supplemental
6:07:11direct testimony. And I want to go to
6:07:13the CAPX uh selection tab.
6:07:19And can you go to uh cell B3 where it
6:07:22says 7%.
6:07:25And can you change that to original? I
6:07:27think if you click on that it'll give
6:07:29you a drop-own menu. Yeah,
6:07:33perfect. Um and now can you go to the
6:07:37revenue requirement tab? Uh line 32.
6:07:41Uh and do you see how uh equity returns
6:07:46uh go from 872 million to 1.682 billion
6:07:51in 2020 30 which is column I and you can
6:07:55scroll up so that he can see uh the
6:07:58dates.
6:08:01Yeah. Do you see how equity returns
6:08:02increases from 872 to 1.682?
6:08:10>> Yes. I see.
6:08:12And uh let's go to the class allocation
6:08:15tab. K3. Uh yeah, thanks. And can we go
6:08:19to K13?
6:08:21113, sorry. 113.
6:08:28And do you see how rates in 2030 are 21
6:08:31to 81? 21.81 cents a kilowatt hour. Is
6:08:35that right?
6:08:38>> Yes, that's what it shows here.
6:08:40Uh, can we go back to the capex
6:08:42selection side
6:08:44and can you put it on 7%.
6:08:51And now let's go to revenue requirement.
6:08:56And do you see how equity returns in
6:08:592030 are now 2.1 billion? So it's over
6:09:03$400 million higher. Do you see that
6:09:08>> in 2030? Yes, I see that.
6:09:11>> And that's it. Just assuming capital
6:09:12spend grows at 7% which is basically um
6:09:17what it seems like the company is
6:09:19committing to the financial community in
6:09:21its earnings uh presentation.
6:09:24And uh just one more thing and then I'll
6:09:26turn it back to you. Uh can you uh go to
6:09:29the class allocation side
6:09:32and you see in 2030 rates are now 25.2
6:09:36cents a kilowatt hour.
6:09:39Yes, I see that.
6:09:41>> So, basically by growing capital
6:09:44spending uh more quickly um is by by
6:09:49what you're saying, you know, earnings
6:09:51are $400 million higher, but it comes at
6:09:54a significant cost to customers is is
6:09:58well, let me say it this way. I think we
6:10:00agreed that average res residential
6:10:02rates at the beginning of 2021 were
6:10:0411.27% 27%
6:10:07cents per kilowatt hour. Uh so we're
6:10:10more than doubling average residential
6:10:12rates from 2020 to 2030 if capital
6:10:16spending grows at 7% and I think you've
6:10:18testified for the last four years it's
6:10:21grown at 35% subject to check. So I
6:10:24guess the question is can you understand
6:10:27why this might raise affordability
6:10:28concerns? Uh and any any any comments on
6:10:34this link between earnings, capital
6:10:36spending and rates? Uh um so you you you
6:10:40you can take this uh take this down.
6:10:47a couple comments in in there and
6:10:49apologies if I'm not um weaving it all
6:10:52together here, chair blank, but but I'll
6:10:54just note from the outset that
6:10:58the the 7% capex growth scenario that
6:11:02that we just ended on is not tied to the
6:11:05company's current forecast. Right? So
6:11:07what the company shows um in publicly
6:11:10available um investor decks and and in
6:11:13reporting through 10ks and otherwise is
6:11:17consistent with that original board base
6:11:19scenario in my long-term rate forecast
6:11:21model
6:11:23with in my supplemental direct
6:11:24testimony. I kind of I go through
6:11:27uh some some graphs and explanation for
6:11:30why that's not our capital plan. It is
6:11:33yes our capital growth or capital
6:11:35investment has increased in recent
6:11:37years. We are not projecting for that
6:11:40that same level of growth to continue in
6:11:42perpetuity.
6:11:44>> But didn't difference in in those
6:11:47scenarios? Didn't the investor
6:11:49presentation basically uh commit to 7%
6:11:54growth in rate base even though it's not
6:11:56con consistent with the capital forecast
6:11:59it presents but I think that's what
6:12:02you're committing to investors is 7% uh
6:12:06year-over-year growth in rate base. I
6:12:08mean, that's what it says
6:12:10>> that that's what that slide says, but it
6:12:12doesn't match the the capital forecast.
6:12:14And and I'll have to look at that closer
6:12:16to figure out what the discrepancy is.
6:12:18But I can 100% say that that 7% growth
6:12:21scenario from our long long-term rate
6:12:23forecast is not what we're projecting.
6:12:25It's not what we're planning for. It's
6:12:27not what we're managing to. It is the
6:12:29company's capital forecast. I think
6:12:31there's a slightly updated version. Oh,
6:12:33sorry.
6:12:33>> No, go ahead. I apologize.
6:12:35I was just going to say I think there's
6:12:37a slightly updated version of the
6:12:38long-term memory forecast in in the JTS
6:12:40proceeding that was submitted this
6:12:42spring. I think it's pretty similar to
6:12:44to the original forecast shown in my
6:12:47supplemental direct. I'm not saying
6:12:48there's a need to to pivot, but just
6:12:50wanted to show that like, hey, in both
6:12:52models, we're not showing anything near
6:12:55that that capex growth. Um, and so that
6:13:00the increase in rates I think is it's
6:13:02more important to focus on that original
6:13:04scenario that that you pulled up and in
6:13:06that which is still a big rate increase.
6:13:10>> Well, I it's a in nominal dollars, yes,
6:13:12it's an increase from 2021 and it's an
6:13:14increase from where we are today. I
6:13:16think the important thing is to dissect
6:13:18that, right? What is going into that
6:13:21that increased investment which is then
6:13:23driving those nominal rate increases
6:13:26over time? And I I kind of think about
6:13:28that in four big buckets. Um but but we
6:13:31can we can chat about those more, of
6:13:33course. And I I see that one as
6:13:36electrification, right? We're investing
6:13:37more in our generation, transmission,
6:13:39and distribution grids to be able to
6:13:41bring online new clean energy and to
6:13:43support the electrification of sectors
6:13:45that have used on other higher carbon
6:13:48emitting fuel sources, be that propane,
6:13:51gasoline, natural gas, or otherwise. So
6:13:54that's kind of bucket one. Bucket two is
6:13:58steel for fuel, right? It's kind of part
6:14:00of that electrification piece, but but
6:14:02different, right? We're we're making a
6:14:04lot of those big investments that
6:14:06explain the increase from 2021 to 2025
6:14:08to where we are. A lot of that's from
6:14:10steel for fuel based on prior planning
6:14:13proceedings where we've said, "Yes, we
6:14:15want to invest more in renewable energy.
6:14:17We all think this is a good idea for for
6:14:19carbon reasons and for cost-effective
6:14:21reasons, too." Those were the most cost
6:14:23effective resources on those
6:14:25solicitations a few years ago. U and I I
6:14:28still think they're they're cost
6:14:29effective. I'm not saying we're trying
6:14:30to change course at all. The third
6:14:33reason is aging infrastructure.
6:14:35>> Sorry.
6:14:36>> No, go ahead.
6:14:37>> Should I keep going? Okay. The the third
6:14:39reason is is aging infrastructure,
6:14:41right? We've we've invested a lot in the
6:14:43grid in recent years because a lot of
6:14:45our assets were installed in the 50s,
6:14:4860s, and 70s. We're coming up on what
6:14:50we've been describing as an investment
6:14:52cycle. The goal is that this doesn't
6:14:54continue forever. Obviously, but we want
6:14:56to make sure that their assets in the
6:14:58ground are safe and reliable and that we
6:14:59can um use them as long as as as
6:15:03appropriate, right? We want to get as
6:15:04much value out of these these assets as
6:15:07we can and that's in customers benefit
6:15:09of course. And then lastly, inflation,
6:15:12right? We've been we haven't been immune
6:15:14to the broader cost pressures on the
6:15:16industry and certainly on the economy in
6:15:17general. So when you combine all those
6:15:20factors together, yes, there there are
6:15:23nominal dollar increases in the rate uh
6:15:26when you control for inflation. I had a
6:15:29I think what was a helpful graph in my
6:15:32uh rebuttal testimony on this fact
6:15:34showing when you control for prices, I
6:15:37think it's on page 12 or so, uh our
6:15:40rates have largely stayed flat. There's
6:15:42been a slight increase over the past
6:15:43year or two. again some of these trends
6:15:46combining to to push rates above the
6:15:48rate of inflation but rates are largely
6:15:51stable.
6:15:53Is it possible that part of that is the
6:15:56extended amortization where uh you can
6:15:59increase capital spending at 35% a year
6:16:03but it doesn't increase rates in the
6:16:06near term uh that much. Is that one
6:16:10possible factor that could be accounting
6:16:13for the slow increase in uh in uh
6:16:18current rates?
6:16:20>> Well, right that that's a natural part
6:16:23of rate making, right? That we take the
6:16:25revenue requirement based on all these
6:16:27assets and they luckily these things
6:16:29have a really long life. So that's
6:16:30great. We can spread those costs out
6:16:32over a long period of time. That helps
6:16:34customers. Absolutely.
6:16:37Um both Mr. Schloozac in his answer
6:16:40testimony at pages 41 and 42 and Mr.
6:16:43Lurman in his settlement testimony page
6:16:45six raised concerns about capital bias
6:16:48driving the company's capital spending
6:16:50levels. Likewise in our uh GIP and DSP
6:16:54orders uh uh we uh express significant
6:16:59uh similar concerns. Any comments on
6:17:02this concern in this case and elsewhere?
6:17:05The capital bias, for example, the $400
6:17:07million and extra equity returns you get
6:17:10from growing capital spending at 7%
6:17:14uh is one big uh one factor leading to
6:17:17the large increases in the company's
6:17:18capital spending.
6:17:22So, it's a true statement, right, that
6:17:25the regulatory compact allows the
6:17:27company to to grow its business and earn
6:17:32more dollars by building infrastructure,
6:17:34right? That's the core of our business.
6:17:38I would I would challenge the notion
6:17:40that we're that we're investing too
6:17:42much, right? If anything, one could
6:17:45argue the opposite. every single dollar
6:17:48that we invest um every large project
6:17:52gets reviewed internally and externally
6:17:55here in this proceeding and and in
6:17:56others and so we're really mindful of
6:17:59every customer dollar. The the other
6:18:02important piece to remember um is that
6:18:07you know besides a couple limited issues
6:18:09in this proceeding where where folks are
6:18:10taking issue with some of the legacy
6:18:12meter costs some of the transmission
6:18:14project costs people are not saying hey
6:18:17what we did here what we invested in
6:18:19wasn't needed
6:18:21people recognize that interveners
6:18:23recognize the need to invest in Aegis
6:18:25and new meters right we're kind of going
6:18:28back and there's a little bit of a
6:18:29revisionist history on on the on what
6:18:31got us to that decision and and the
6:18:33costs entailed with that transition and
6:18:35and we reached a settlement agreement to
6:18:37address both of those issues here. Um it
6:18:40it was a it was a a good landing zone
6:18:43for all the parties and and we're all
6:18:44recognizing our our differences of
6:18:46opinions from as a starting place. So
6:18:49beyond those two buckets of costs and
6:18:51thinking about the investments at issue
6:18:53in this case folks are not saying hey
6:18:56you shouldn't have done that.
6:19:00Uh can we pull up hearing exhibit 104
6:19:03attachment AEB-10
6:19:06uh tab 2 and uh let me represent to you
6:19:10that this is a slide showing the ratio
6:19:12of 2025 to 2030 capital expenditures
6:19:16as the numerator divided by 2024 net
6:19:20plant for a proxy group of utilities.
6:19:22It's attached to Miss Balkley's
6:19:24testimony.
6:19:26Uh
6:19:27>> I'm sorry. Just going to take me a
6:19:28second to pull up the executable one.
6:19:30Um, you said, right?
6:19:33>> Yeah.
6:19:35Sorry, chair. Could you repeat? Was it
6:19:37AEB10?
6:19:39>> Yes.
6:19:40>> Thank you.
6:19:42>> You're in exhibit 104.
6:19:48And I think what you'll see is that uh
6:19:50public service company in terms of that
6:19:53capital spending ratio is the most
6:19:56aggressive utility in the pure group in
6:19:59uh growing capital plant uh capital
6:20:02spending as against the 2024 net plant.
6:20:09>> I I think that's that exhibit's being
6:20:11pulled up but but if I can just talk
6:20:13about it at a high level um if that's
6:20:15okay. Share link. Okay.
6:20:18So the the broad characterization that
6:20:20we're on the higher end of the proxy
6:20:22group in terms of equity ratio I think
6:20:24is correct. Uh Miss Bley can can talk
6:20:27more details there.
6:20:30>> Can you hit cap the second the second
6:20:32one? Yeah there's there's the there's
6:20:35the graph and maybe you can get in on
6:20:37it. You can see uh public service
6:20:39company is uh on the extreme right way
6:20:43above uh its pure utilities in terms of
6:20:46capital spending as a percent of uh 2024
6:20:49plant. So with that go ahead sorry
6:20:52>> no no thank thanks for clarifying and
6:20:54thanks miss there you go
6:20:57>> the the important context here and Mr.
6:20:59Wayer's testimony talks about this too
6:21:02is there's a reason behind this. It is
6:21:06it is to maintain
6:21:08our capital our our credit metrics in a
6:21:11financially efficient way and the equity
6:21:13ratio is is a great way to do that for
6:21:15customers benefit instead of having
6:21:18higher cash flow or higher RES
6:21:20otherwise.
6:21:22And the reason why we need to keep this
6:21:25more elevated compared to the proxy
6:21:26group largely stems from our our
6:21:29resource acquisition decisions. Those
6:21:31are in proceedings that that I'm usually
6:21:33not a witness in. So I I can't go too in
6:21:35depth there. But I know that company
6:21:37ownership is of a certain share. When
6:21:41it's not company ownership of a
6:21:42resource, it's a PPA or some other
6:21:45company building and owning that,
6:21:48our rating agencies consider that as
6:21:51debt. And so we're no longer splitting
6:21:54that between a debt and equity
6:21:56investment, in which case a 50/50 equity
6:21:58ratio um to debt would make sense. If
6:22:01that's treated as debt, we've got to
6:22:03compensate for that on other portions of
6:22:06our capital structure. And so that's why
6:22:08you see a ratio here that that's
6:22:10compensating for that exact fact. And so
6:22:12to maintain the credit metrics that we
6:22:14have, that's what's driving this along
6:22:17with those those resource planning
6:22:19decisions. If we were to own a little
6:22:21bit more of those portfolios, maybe
6:22:23there's a world where that that comes
6:22:25down a little bit. But I think based on
6:22:26where we are today and maintaining the
6:22:28credit metrics we have, which I think is
6:22:30in everyone's interest to keep costs low
6:22:33for customers, we've got to have a
6:22:35higher equity ratio. So just to be
6:22:37clear, this is not a capital structure
6:22:40uh graph. This is just projected capital
6:22:44spending from 2026 to 2030 divided by
6:22:482024 net plant. So it has nothing to do
6:22:51with capital structure. This is just
6:22:53showing that uh the capital spending of
6:22:57public service company compli compared
6:23:00to 2024 existing plant is significantly
6:23:04higher than any of uh its peer group and
6:23:08that includes uh you know uh D which is
6:23:12Dominion which has you know very large
6:23:15data center growth. It includes uh I
6:23:18think so which is southern company which
6:23:20has just put a giant nuclear plant in
6:23:23rate base. So even compared to your
6:23:27peers which are experiencing you know
6:23:30growing revenue doing all kinds of stuff
6:23:32you're with still basically relatively
6:23:36small sales or comparatively spending
6:23:40more capital compared to the existing
6:23:43base compared to compared to your pure
6:23:45groups. So I'm asking you about the
6:23:47level of capital spending, not the
6:23:50capital structure.
6:23:52>> I'm sorry for that. I was I was
6:23:54providing hopefully a good answer to a
6:23:56question that was not
6:23:57>> different question. [laughter]
6:24:00>> So that that's my mistake. Apologies. So
6:24:03on the capital expenditure side,
6:24:07uh I would say without digging into the
6:24:10details of every company here,
6:24:12the the goals of the company and the
6:24:15goals of Colorado
6:24:17must be driving this that that we're
6:24:20we're trying to be
6:24:23leaders in the industry and leaders in
6:24:26the world on driving carbon reduction in
6:24:28cost-effective ways. We're making
6:24:30targeted investments to achieve that.
6:24:32and those investments, you know, absent
6:24:35those couple examples I talked about
6:24:36before on some legacy meter costs and a
6:24:39few uh cost increases on transmission
6:24:42projects compared to what we originally
6:24:44estimated them at. Folks are not taking
6:24:46issue with the investments in this case.
6:24:49So, I agree based on the data you're
6:24:50showing here or that that Miss Bokeley
6:24:52has shown that we're spending uh more
6:24:58on capex than others are. And the
6:25:00question is what are we getting for
6:25:01that? Is that good or is that bad? Can't
6:25:03be answered just by looking at the cost.
6:25:05We've got to think about what are we
6:25:06getting. And we're getting carbon
6:25:08reduction, we're getting new customers,
6:25:09we're getting economic development and
6:25:11all the stuff that we want that that I
6:25:13would think we we'd want as as policy
6:25:16makers.
6:25:18>> Um, you testified that the company's
6:25:20capital spending was advertised over
6:25:22many decades. Uh well actually can you
6:25:26go to the first uh the first uh tab
6:25:30and can you scroll down to the public
6:25:32service one?
6:25:38Okay. Do uh do you know if the capital
6:25:41spending includes the NTP in it or not?
6:25:45You mentioned that uh the cap the
6:25:47company's capital spending plan uh was
6:25:50firm and not going to grow uh rate based
6:25:53by 7%. And do you know if the MP NTP is
6:25:55uh included in that original capital
6:25:58spending plan?
6:26:04>> Good good question. I don't think it's
6:26:06included in my long-term rate forecast
6:26:10since I think the basis for that was
6:26:13from a year prior. I think the capital
6:26:16forecast earlier in the JTS process. I
6:26:19think the forecast included in in a
6:26:23parallel proceeding this spring and into
6:26:26the JTS itself incorporates
6:26:29more of those assumptions
6:26:32um to to bring those closer in line to
6:26:35where we stand today. So, if we added
6:26:37the NTP spending, and I think we
6:26:39approved a billion dollar plus uh wind
6:26:42farm, that would move the original
6:26:46capital forecast
6:26:48uh closer to the 7% one. Is that fair?
6:26:52>> Well, well, I was answering from the
6:26:54perspective of my long-term rate
6:26:56forecast to show how this changes over
6:26:57time. In terms of Miss Bulkley's
6:26:59attachment here,
6:27:01>> I'm I would assume she's pulling the
6:27:03latest available. So this might include
6:27:06the NTP.
6:27:07>> All right. But uh All right. Uh you
6:27:11testified that the company's capital
6:27:13spending was advertised over many
6:27:15decades. Uh can you help me better
6:27:18understand why current wallet share is a
6:27:20relevant metric for investments that
6:27:22pancake in the rates over 40, 50, 60
6:27:25years?
6:27:30Electric wallet share is a is a helpful
6:27:33metric in our view because it it sets a
6:27:37a common metric to evaluate
6:27:40different utilities and states. So it
6:27:43compares our costs to what share of
6:27:46budget someone's paying for. Right? A
6:27:49median income, right? average bill
6:27:52compared to median income in a state or
6:27:54certain geographic area compared to
6:27:56other areas. And right, it's not just
6:28:00our data that shows I think as my
6:28:03supplemental direct testimony and
6:28:04rebuttal testimony talk about, right,
6:28:06there's other studies out there from
6:28:09um Charles River and move.org showing
6:28:12that Colorado's costs are super low for
6:28:15utilities um compared as a percent of of
6:28:19household income. That's great. That
6:28:21means we're doing a good job as a
6:28:22utility and as a broader regulatory
6:28:24environment here uh certainly the
6:28:27commission included and the and the
6:28:30state is doing a good job on economic
6:28:31development because we have higher than
6:28:33average wages. So both of that shows
6:28:36that that compared to other states
6:28:39utility costs are very affordable in
6:28:41Colorado. Of course everyone wants to to
6:28:43minimize their bill as much as possible
6:28:45and we're working hard to to keep costs
6:28:47low.
6:28:48All right, you can take this down, but
6:28:50it's a it would you agree it's just a
6:28:52current snapshot in time and it doesn't
6:28:54say much about how investments pancake
6:28:57into rates over 5 10 15 20 years uh
6:29:02given these 50-year amortization
6:29:04schedules.
6:29:07>> Well, we can certainly project wallet
6:29:08share. I think we might have projected a
6:29:10year out, but it it just it entails um
6:29:15our rate projections being combined with
6:29:17with income projections for the state.
6:29:20So, absolutely doable.
6:29:22>> Okay. You you can take this down, Miss
6:29:24uh Federico. uh you talked about uh a
6:29:27number of different buckets uh for
6:29:30capital investment uh CPP
6:29:33uh electrification
6:29:35and uh and is it fair to say both those
6:29:39type of investments either grow revenues
6:29:42or reduce costs? Is is that a fair
6:29:45characterization of those two buckets?
6:29:49>> Yes, I believe so. the goal is to
6:29:52connect more clean energy and and have
6:29:55uh encourage customers to use more of
6:29:57that clean energy uh to displace carbon
6:29:59elsewhere in the economy. So so yes, I
6:30:01believe most of it most of the
6:30:03investment is revenue producing uh if
6:30:05that's your question. Chair black.
6:30:07>> Yeah, for for for purposes of this
6:30:09conversation just focus on the economic
6:30:11benefit. So it it seems like if we're
6:30:14saving fuel or growing revenues on EVs,
6:30:19that helps put downward pressure on
6:30:21rates.
6:30:22>> Absolutely.
6:30:23>> And uh we've allowed TCA recovery for
6:30:27transmission uh uh expansion and we've
6:30:30allowed GMAC recovery for uh uh uh
6:30:35distribution investments that say
6:30:38increase revenues or interconnect new
6:30:40customers. Is that generally fair?
6:30:45>> Yes. In in those two buckets of
6:30:47investment in particular, yes.
6:30:50>> And I guess for ordinary course uh
6:30:52transmission and distribution, what you
6:30:54called replacement, um is it fair to say
6:30:57they're generally or often not eligible
6:30:59for accelerated cost recovery through
6:31:01the TCA or the GMAC?
6:31:04Is that an accurate characterization?
6:31:08>> Generally, yes. Right. are transmission
6:31:10investments that don't increase capacity
6:31:13are not permitted to flow through the
6:31:14TCA and and same for distribution
6:31:16investments. So asset health and
6:31:18reliability on the distribution side
6:31:20does not currently flow flow through the
6:31:23GMAC.
6:31:24>> All right. And in the W wildfire
6:31:26mitigation proceeding for spending that
6:31:28helped reduce wildfire risk but didn't
6:31:30really lower uh customer rates or costs,
6:31:34the company proposed and the PEC agreed
6:31:36to securitize capital spending. Is that
6:31:39right?
6:31:42>> Yes. Any thoughts about this commission
6:31:45providing more attractive uh cost
6:31:48recovery as sort of a general policy for
6:31:51call it economically productive
6:31:53investments like steel for fuel or
6:31:55beneficial electrification that help
6:31:58lower costs or increase revenues and put
6:32:00downward pressure on customer rates and
6:32:03at the same time provi perhaps providing
6:32:05less attractive cost recovery for
6:32:07ordinary course investments that do not
6:32:10help uh lower customer rates.
6:32:15So, so that seems like the paradigm
6:32:17we're we're in based on what we were
6:32:18just discussing. I I think my comments
6:32:21on that paradigm would be it it seems
6:32:24like we're inherently then valuing
6:32:28asset health and reliability investments
6:32:31that are not adding capacity but are
6:32:34still really important or valuing them
6:32:36less. from a regulatory perspective,
6:32:40the company does not have the same
6:32:41incentives
6:32:43um financial incentives to pursue them
6:32:44as aggressively.
6:32:46I I don't think that makes as much sense
6:32:49as to think about what provides the most
6:32:51value to to customers in the system. I
6:32:53would expand those buckets in light of
6:32:55those those asset health and reliability
6:32:58benefits. Um but but that's the regime
6:33:01we're we're in today. I' I'd agree.
6:33:04>> Okay. Uh last topic uh O andM and uh I
6:33:09know you talked about Commissioner
6:33:10Gilman uh and with Miss Vanim
6:33:14uh um and uh in your rebuttal testimony
6:33:18pages 23 to 31 you respond to a variety
6:33:21of concerns about customer service,
6:33:24reliability, unit performance. In his
6:33:27answer testimony at page 46 and in a set
6:33:30settlement testimony, Mr. Lurman argues
6:33:33that the company's inability to own a
6:33:35return on O andM may at least partially
6:33:38explain why the company proposes a
6:33:40significant increase in capital expend
6:33:42expenditures on which it earns a return
6:33:45and much less investment on O andM. And
6:33:48the peerroup data you and I just
6:33:50discussed shows that the company is near
6:33:53the bottom of O andM spending uh and at
6:33:56the very top of capital spending. So
6:33:59this this data does seem roughly
6:34:01consistent with a hypothesis that the
6:34:03company may be aggressively responding
6:34:05to, you know, regulatory incentives uh
6:34:09potentially misalign regulatory
6:34:11incentives. Thoughts, comments on on uh
6:34:16on on that hypothesis?
6:34:20>> I wouldn't describe it as misaligned
6:34:22regulatory incentives. I I would say
6:34:27looking at those those two graphs in
6:34:29particular, right, the company is really
6:34:32efficient at providing safe and reliable
6:34:35service to customers, right? We're we're
6:34:37expanding our systems to support state
6:34:41policy goals and we're doing so at a
6:34:44relatively low cost compared to our
6:34:46peers. That's great. That's something
6:34:48that everyone should should support.
6:34:51Are are there spaces to think about
6:34:53where we should be spending more in?
6:34:56Absolutely. We we can have that that
6:34:58conversation. It it's cases like this,
6:35:00right? Base rate cases, other cost
6:35:02recovery conversations that set our
6:35:05budget moving forward, right? What can
6:35:07we accommodate from an investment
6:35:08perspective
6:35:10before we need another rate case? What
6:35:11can we accommodate on O andM levels? And
6:35:14so these are all tied up in a proceeding
6:35:17like this. And I think the settlement
6:35:19agreement provides a a really good
6:35:21landing place on on how to balance this
6:35:23moving forward, right? It can let us
6:35:25support these these investments moving
6:35:27forward that do not have rider recovery
6:35:29at reasonable own levels, right? That
6:35:31the staffing um and support services we
6:35:34need to to effectuate it. Uh but but I
6:35:37don't I don't think we should we should
6:35:39be contemplating
6:35:42um
6:35:45re rejigriggering the the regulatory
6:35:47compact to try to drive less earnings
6:35:49but more on&m spending right it all
6:35:51comes from proceedings like this that
6:35:53with a bigger budget we can do more
6:35:55right we can hire more people to do more
6:35:56great work and continue to be efficient
6:35:59about it.
6:36:01Let me pull up what has been marked as
6:36:02hearing exhibit 5507.
6:36:05And let me represent that this is the
6:36:072025 Pasco 10 10K. And if we can turn to
6:36:11PDF uh page 31 and this is uh nonfuel
6:36:16and m expenses that shows spending of
6:36:20865 million in 23 92
6:36:24uh6 million in 24 and 977 million in
6:36:302025.
6:36:32Uh, do you see that?
6:36:36It's like the fourth line down under
6:36:38operating expenses.
6:36:41Operation maintenance expenses. Yes, I
6:36:43see.
6:36:44[clears throat]
6:36:45>> Yeah. So, it goes 865 and 23, 926 and
6:36:5024, and 977 and 25. Is that right?
6:36:54>> Yes, I see that.
6:36:56And uh would you agree since 2023 you've
6:36:59increased on&m spending by $112 million?
6:37:03Is that right?
6:37:05>> Yes, that's what the data shows here.
6:37:08>> Okay, you can take this down. Can we
6:37:10pull up what has been marked as hearing
6:37:12exhibit 1508
6:37:14and this is the PSCO 10K from uh 2024.
6:37:19And if you can go to page 32,
6:37:22this this will show, I think this is uh
6:37:24exactly on Commissioner Gilman's point,
6:37:27uh that you cut on and M spending uh
6:37:32uh let's see, do you see uh O andM
6:37:34spending 22 23 4.
6:37:48>> Uh, looks like it went up, but there was
6:37:51a decline in 2023,
6:37:54>> right? So, and do you see that decline
6:37:56was $40 million?
6:38:01>> Yes. and then it went back up to be
6:38:04higher than the level in 2022 and 2024.
6:38:08>> So, okay. So, something something
6:38:10interesting was happening in 2023.
6:38:12>> You know, some of those trends we saw in
6:38:14customer care might have been happening
6:38:15in in other parts of the business, but I
6:38:17I can't quite speak to all those details
6:38:20here in the moment.
6:38:22>> So, you testified that 2022 was the
6:38:24historical test year in the last rate
6:38:26case. So in 2023, the company had 9005
6:38:31million of O andM however it got through
6:38:35in the rates. And if the company only
6:38:37spent 865 on O andM in 2023,
6:38:42then the company increased its pre-tax
6:38:45earnings all else equal by 40 million in
6:38:482020 uh three. Is that correct? Would
6:38:51you agree with that characterization?
6:38:57Or said another way, the $40 million in
6:38:59ON&M cost cuts in 2023 all acrew to the
6:39:03company between rate cases. Is that
6:39:05right?
6:39:07Well, it's it's hard to know what else
6:39:08is happening, right? There could have
6:39:11been significant increases in in capital
6:39:13outlays to address particular problem or
6:39:17um challenges or or goals we were trying
6:39:19to achieve in other parts of the the
6:39:21company's electric system or gas system
6:39:24since this is consolidated.
6:39:27Uh so so it's hard to say in in in
6:39:30totality what's going on here without
6:39:32more details underlining these numbers.
6:39:34You know in isolation, right? Assuming
6:39:36all else didn't change, a statement like
6:39:38that is is correct that 40 million um
6:39:43would be would be an increase to the
6:39:46company. But all we all know in reality
6:39:48all else is not equal, right? So there's
6:39:50there's a lot going on in any given
6:39:52year. And I'm I'm pretty confident that
6:39:5540 million um was not uh on a one for
6:39:59one basis passed through to the company
6:40:01earnings as a result of this. I'm sure
6:40:02there was more going on.
6:40:04Okay. Can we pull up hearing exhibit
6:40:071517?
6:40:09And this is uh and go to page 13. This
6:40:14is uh you know a staff presentation in
6:40:18docka 23 uh
6:40:21uh in docket 24-0394E.
6:40:26And you can see uh this is the history
6:40:29of uh public service company penalties
6:40:33uh under the QSP where um you know was
6:40:37relatively small in 2021, 2022, 2023
6:40:42and then increased by a factor of four
6:40:46in 2024. Do you see that?
6:40:50>> Yes. Yes, I see that. That Okay, that's
6:40:52largely Oh, sorry. I'm sure you had a
6:40:55question on me. No, go ahead.
6:40:58>> I'll just note that the structure of the
6:41:00underlying QSP changed at this exact
6:41:03same time. So, it's not apples to apples
6:41:05to just compare the years to one
6:41:06another. We settled an electric QSP plan
6:41:10in the first half of 2024 which applied
6:41:14to the full calendar year of 2024
6:41:16performance and it added several new
6:41:18metrics and change the way we think
6:41:20about some of our electric reliability
6:41:24um customer credits. And so it was a
6:41:27combination of those two two pieces of
6:41:292024 being an exceptional year from a
6:41:32weather and storm perspective combined
6:41:34with uh kind of a changing underlying
6:41:37QSP structure to to drive that change
6:41:40>> and would uh weather impact uh your
6:41:43customer call response time which I
6:41:45think got worse by a fairly large
6:41:47amount. Is it fair fair to say that
6:41:50would be not dependent on weather?
6:41:54Actually, I think that really is
6:41:55dependent on on weather actually because
6:41:57when people lose electric service, they
6:42:00don't lose gas service basically ever,
6:42:02but when they they lose electric service
6:42:04because a tree falls on a line, that's
6:42:06usually because the wind's blowing real
6:42:08hard or there's hail or or other weather
6:42:11events going on. They they tend to call
6:42:14the company um to get information on
6:42:16outage restoration,
6:42:18on what's going on um or or other
6:42:22questions that they have.
6:42:26Well, let me ask it this way. In 2023,
6:42:29the guy got the company uh got up to 40
6:42:32million in pre-tax earnings bump. Uh
6:42:36uh uh again, all other things may not be
6:42:41equal, but the QSP has a maximum penalty
6:42:45that probably is around 10 million. And
6:42:47you can see it only had 6.5 million in
6:42:50actual penalties. It just seems like the
6:42:53QSP may be uh too small to really uh set
6:42:58proper incentives.
6:43:00Any comments on that?
6:43:03>> I'm trying to think of the total
6:43:05magnitude. I think that there's a cap of
6:43:07about 11 to 12 million total.
6:43:11>> Exactly.
6:43:12It might just be on the reliability
6:43:14side. I don't know if that's all
6:43:15inclusive.
6:43:16>> I think it's all inclusive.
6:43:19>> Okay. Yeah. happy happy to accept that
6:43:22then
6:43:24you know in terms of whether that's a
6:43:25lot or a little that's a fair question I
6:43:28think we can explore that in in the next
6:43:30QSP and and I you know that's an
6:43:32interesting comparison to make in light
6:43:34of the the Comanche 3 performance
6:43:36framework at issue here right that's
6:43:38going to be 3x that amount just for one
6:43:42one asset one metric
6:43:46>> here's my uh
6:43:48it seems like a profit maximizing
6:43:51strategy for the company. Uh I'm not
6:43:53saying you'll do it. Maybe to cut Owen O
6:43:56and M in 2026 right after the 2025
6:44:00historic test year in this case is set
6:44:02which would boost pre-tax earnings and
6:44:06you know to the extent there's uh modest
6:44:09QSP penalties they wouldn't rise to
6:44:11anything close to a $40 million cut. Any
6:44:15any comments on that fear? Uh
6:44:22>> I I think that that that kind of
6:44:24presupposes the concept that the company
6:44:28doesn't care about electric reliability
6:44:32or quality of of customer telephone
6:44:34response or the number of of complaints,
6:44:37right? We we care about all of that. We
6:44:39have an intrinsic
6:44:41um duty to provide the best service at
6:44:43the lowest price to our customers. And
6:44:46and we think we've done a good job. Of
6:44:48course, there have been challenging
6:44:49years at times. 2024 was one of them in
6:44:52particular from the weather perspective
6:44:55uh which which drove some of this which
6:44:57which we're talking about here. Um but
6:44:59but the company cares very much, right?
6:45:02Our employees are are part of our
6:45:03communities as are all the company's
6:45:06leaders. And so we know that we've got
6:45:10skin in the game in everything we do.
6:45:11We've got skin in the game when we come
6:45:13in in front of you and other regulators
6:45:15across all states. So, we've got to back
6:45:17up everything we do. And again, I'm not
6:45:19[clears throat] I'm not hearing issues
6:45:20from the other interveners in this party
6:45:23that what we were doing, what we're
6:45:25investing in, we shouldn't have been
6:45:27investing in. Um if if not, they're
6:45:30saying they want, you know, better
6:45:31results at at lower costs, but better
6:45:35results come with a cost. And so, we've
6:45:37got to find that appropriate landing
6:45:38spot. We think we we do a good job
6:45:41finding that balance. If we need to
6:45:43spend more on certain areas um then we
6:45:46can certainly talk about that um that
6:45:48that has bud budget implications. At the
6:45:50same time,
6:45:52>> given that the company has writed the
6:45:54ship, would the company agree to in this
6:45:56case to quadruple the the QSP caps to
6:45:59get closer to sort of offset the
6:46:03incentives uh to cut on and M or would
6:46:06if the company does cut O&M, would it
6:46:08share some of the cost savings with
6:46:10customers? Uh I think you testified how
6:46:13much uh on& and M savings could benefit
6:46:15customers. Uh if you cut it if you cut O
6:46:19andM in 26 will you share that with
6:46:21customers?
6:46:24I can't commit here and now to to
6:46:26increasing the the QSP
6:46:29metrics or or penalties. Right. There's
6:46:32also been a longgoing discussion on
6:46:34making this more symmetric at the same
6:46:36time. But but I think you're raising a
6:46:39question of of performance rates. I
6:46:42think at its core, Sherblank, right? How
6:46:44do we think about what we're all
6:46:47targeting moving forward and what is the
6:46:49the cost of that service? Should we
6:46:52should we set rates on a forward-looking
6:46:54basis so we get aligned on this more
6:46:56before things come at us in a historical
6:46:58perspective or do we need a broader set
6:47:01of metrics to align around what we're
6:47:04pushing towards, right? be that
6:47:06emissions or cost or or reliability or
6:47:08some combination therein.
6:47:11Uh I I think that's the conversation
6:47:13rather than taking one discrete part of
6:47:15our budget or part of our work and
6:47:17saying, "Hey, we're going to track this
6:47:19closely and anything dips gets refunded,
6:47:22you know, then we'd want something on
6:47:23the other side to say, hey, if we end up
6:47:25investing more because we have more
6:47:26needs or we need to hit state goals
6:47:28faster or it makes sense to to do a
6:47:31particular project
6:47:33uh that's new or bring it up in time,
6:47:36then then how do we capture the the cost
6:47:38of that at the same time?" But you would
6:47:40agree that uh when you cut uh on and m
6:47:43in the year following a rate case uh
6:47:46that is not shared with customers and
6:47:48it's uh asymmetric to the customers in
6:47:512023 it looked like it was a $40 million
6:47:55benefit. So uh uh
6:48:00comments on that
6:48:01>> just yeah I think my one comment would
6:48:04be you know just as in other years that
6:48:06you were showing there were significant
6:48:08onm increases between years and and
6:48:10there's not a mechanism where the
6:48:12company recouped that right and so in
6:48:15any particular year could there be a
6:48:16decrease yes you showed an instance in
6:48:18what that hap in which that happened I
6:48:20think the general trend over time is
6:48:22that on and m is increasing just as our
6:48:25our capital expenditures are increasing
6:48:27too. Not saying they're at the same
6:48:29rates, of course, because we try to get
6:48:30more and more efficient, but but they're
6:48:32both increasing.
6:48:35That's all I had. Uh you want to uh you
6:48:39can pull this down. Uh you want to take
6:48:40a uh a quick break uh till say 3:25 and
6:48:45reconvene with uh redirect. Would that
6:48:47work for you, Mr. Zmer, or do you need a
6:48:49little more time?
6:48:50>> Uh could we have just a little more
6:48:52time? Mr. PK has been up for two
6:48:54straight hours and the court order may
6:48:57want a little
6:48:59>> Yeah, let's uh break till 3:30. Uh uh
6:49:03thank you.
6:49:04>> Thank you, Chair.
7:01:22All right, we're back on the record and
7:01:24uh I guess Miss Feder Rico, if you could
7:01:26just uh make sure the parties have uh
7:01:29access to all the documents uh uh we
7:01:32discussed, but I'm not going to move
7:01:34them uh into evidence. I think uh the
7:01:37oral testimony uh is enough. Um, so that
7:01:42Oh, Miss Federico. Uh,
7:01:44>> I was just going to say they're all in
7:01:45the shared hearing folder so everyone
7:01:47has access to them.
7:01:48>> Okay, cool. Uh, Mr. Zmer,
7:01:52>> thank you, Chair Blank. Uh, good
7:01:54afternoon, Mr. Pay.
7:01:56>> Hey, good afternoon.
7:01:59>> Um, all right. I'd like to start uh with
7:02:03something a little earlier in the day.
7:02:04You had a discussion uh with Boulder
7:02:07attorney Miss Vanim regarding O andM
7:02:09changes from second supplemental direct
7:02:12testimony to the settlement revenue
7:02:14requirement. Do you recall that?
7:02:17>> Yes, it was uh 26 millionish
7:02:22>> I
7:02:22>> 40 millionish. Yeah, depending on where
7:02:24you're starting.
7:02:25>> Yeah.
7:02:26So um just to clarify uh your discussion
7:02:30talked about um the settlement revenue
7:02:33requirement study APF29
7:02:36and uh APF20 which was the second
7:02:38supplemental direct revenue requirement
7:02:40study and that identified about a 40
7:02:44mill $41 million difference. Is that
7:02:47consistent with your understanding?
7:02:50>> Yes. Yes, that is. Can you describe what
7:02:53are the kind of drivers of that change?
7:02:58>> Yes. So the settlement agreement makes a
7:03:01few modifications to to own own expense,
7:03:04but but largely what it's doing is is
7:03:07shifting a good portion of the of the
7:03:09conversation into another form. Right?
7:03:11So about 20 to 25 million of that is
7:03:14going to come from the reduction in in
7:03:18onm expenses from the wildfire
7:03:20organization.
7:03:22Uh and so that's a 100% of of labor
7:03:25costs and 50% of non- labor are being
7:03:28moved to the WMA to be discussed and
7:03:31reviewed in those other settings. Um so
7:03:33so that's a good chunk of it. There's
7:03:35also a couple labor cost tweaks that
7:03:39were made. Um there was kind of a was a
7:03:41second year of merit increases
7:03:44included um that that we backed out one
7:03:47year of um there is the settlement
7:03:49agreements changes to to the 15% AIP cap
7:03:53and and splitting of LTI
7:03:56uh incentives.
7:03:58Uh and the the final change was
7:04:02uh [clears throat] the excess liability
7:04:04insurance premiums.
7:04:06I believe there was a 10 or 11 million
7:04:08error in the company's
7:04:11uh case which we fixed. And so when you
7:04:13add those all up, you you get to that
7:04:15$40 million. So So it's not really a
7:04:17characterization of of reducing O andM
7:04:20in a lot of that. It's just a couple
7:04:22targeted labor tweaks at the end of the
7:04:24day.
7:04:26>> Okay. And just to clarify, the movement
7:04:29of the costs uh out of base rates and
7:04:32into the WMA still provides for recovery
7:04:35of those costs. Is that correct?
7:04:38>> Yes. The company will will seek to
7:04:40recover those costs through the through
7:04:41the WMA uh and work with stakeholders on
7:04:44on the review of those costs.
7:04:46>> And those are all historical costs that
7:04:48were incurred in 2025.
7:04:50>> That's correct.
7:04:52Uh, Miss Frederrico, if you could pull
7:04:55up um and I may ask Chair Blank um for a
7:04:58hand here. I had uh the PSCO 202410K as
7:05:02hearing exhibit 10 or sorry 1507. Is
7:05:06that correct?
7:05:08>> Um no, the PSCO 202410K
7:05:11is 1508. I'll pull that up.
7:05:14>> Thank you.
7:05:20And could we go back to page 32?
7:05:26>> This is the table you discussed with
7:05:28chair blank. Do you recall that?
7:05:31>> Yes, we were looking at the on andm line
7:05:34there in the middle.
7:05:36>> Um, do you see the operating revenue
7:05:39line there?
7:05:46>> Uh, yes. at the top. I see that.
7:05:49>> And is it correct that operating
7:05:50revenues decreased between 2022 and
7:05:532023?
7:05:55>> Yes, those revenues went down by almost
7:05:58$200 million.
7:06:00>> And that's more than the $40 million
7:06:02change in on&m expense.
7:06:05>> That that's well above that $40 million.
7:06:07Yes.
7:06:09[clears throat]
7:06:09>> Okay.
7:06:11Um part of the discussion too was
7:06:14different mechanisms that could be used
7:06:16to align uh these sort of changes. Do
7:06:19you recall that?
7:06:22>> Yes.
7:06:24>> Would use of forward-looking rate making
7:06:26like a future test year have some of
7:06:28that alignment?
7:06:30>> Yes. Yes, it would. uh the company's
7:06:32proposed um just that in in past cases,
7:06:35but we've worked to align closer with
7:06:37the commission and other parties views
7:06:39in in base rate cases and so we we've
7:06:42moved away from that in recent years,
7:06:43but happy to have the conversation
7:06:45>> and so would formula rates.
7:06:50>> Yes.
7:06:52>> Okay. Could we bring up uh hearing
7:06:54exhibit 156, which is uh Mr. Pay's
7:06:58settlement testimony?
7:07:08And can we go to page eight?
7:07:14And just so folks are seeing this is the
7:07:16rev one that was put in this afternoon.
7:07:18Uh having that correction there. Um
7:07:23your discussion with chair blank talked
7:07:24about uh investment cycle beginning in
7:07:272021. Do you recall that?
7:07:30Yes.
7:07:32>> And what has happened to the wallet
7:07:35share for public service uh since 2021?
7:07:40>> It's stayed largely steady, right? It
7:07:42increased in one year, but looks like
7:07:44it's slightly lower today than what it
7:07:46was in in 2021, but but for all intents
7:07:49and purposes has stayed largely flat. Um
7:07:52you can see in the 2026 column off to
7:07:55the far right the red bar which is
7:07:57public service company would increase
7:08:00based on the the base rate change
7:08:01proposed in this proceeding and in the
7:08:03settlement agreement specifically.
7:08:06In in presenting this view I've kept the
7:08:08other two categories flat, right? Let's
7:08:10just assume the same level from other
7:08:12Colorado uh utility providers and let's
7:08:15same assume the same level nationally
7:08:16across utilities just for points of
7:08:19comparison. Uh our expectation is that
7:08:21both of those levels will increase as
7:08:23everyone's making uh continued
7:08:25investments. There are lots of
7:08:27outstanding rate cases across the
7:08:28country as we've talked about in in
7:08:30direct and rebuttal testimony in this
7:08:32case, but just for a point of
7:08:34comparison, we just kept it flat. Um and
7:08:37the company would continue to have a a
7:08:39much lower electric share of wallet than
7:08:42than the industry in general. And we're
7:08:45really proud of that.
7:08:48Part of the discussion too was that
7:08:49wallet shares a little bit of a snapshot
7:08:51in time. Do you recall that?
7:08:54>> Yes.
7:08:56>> What's your interpretation?
7:08:58>> Sorry.
7:09:00>> Yeah. Thanks. Uh Mr. Z, [clears throat]
7:09:03this shows the 12 year history here
7:09:05going back to 2014. And so not only just
7:09:08the period we were mostly discussing um
7:09:12back in my conversation with with all
7:09:14the commissioners over the past five
7:09:16years mostly but you go back even
7:09:18further you can see a downward trend
7:09:19over time um we've stayed really
7:09:22consistent in keeping rates low uh and
7:09:25as as affordable as possible for as many
7:09:27customers as possible. Uh, of course
7:09:30we've got additional proposals in this
7:09:32proceeding uh through energy assistance
7:09:34to make that to make our rates and
7:09:36service even more affordable for for
7:09:38energy burdened customers, but seen
7:09:40generally here uh we're the best in the
7:09:43industry.
7:09:46>> Mr. Frederrico, could you pull up uh
7:09:48hearing exhibit 133
7:09:56and go to page 17?
7:10:03Uh, Mr. P, you had a discussion with
7:10:06Chair Blank about the long-term rate
7:10:08forecast model. Do you recall that?
7:10:11>> Yes. Yes, I do.
7:10:13>> Is it your understanding that the rates
7:10:15in that model are in nominal dollars?
7:10:20>> Yes, they are. And I believe as part of
7:10:21that discussion, I noted that rates have
7:10:23largely been steady in real dollars over
7:10:26the past decade. I think I referenced a
7:10:28graph in my rebuttal testimony and and
7:10:30this is that exact graph graph. I noted
7:10:33that there has been an increase over the
7:10:35past year or two. Um these are some of
7:10:37the inflation trends uh investment
7:10:40trends coming on our electric generation
7:10:44transmission and distribution systems
7:10:46kind of coming to a head here as we try
7:10:48to build this system for the future. Um,
7:10:51but you can see the general trend here
7:10:53being pretty steady rates when you
7:10:56control for inflation.
7:11:00>> Uh, Miss Frederrico, could you pull up
7:11:02hearing exhibit one or 1515?
7:11:21And can we go to page 17?
7:11:26Nope. Sorry.
7:11:29Looking for the uh O andM chart.
7:11:43I don't know which page that was.
7:11:45>> Yeah, I've got it. Just a second. Sorry.
7:11:49>> Hold on. I can I can find it, too.
7:11:51>> I found it. It's uh 25.
7:11:57Uh Mr. K, you had a discussion of this
7:12:00chart with with Chair Blank and uh with
7:12:02Miss Van. Do you recall that?
7:12:06Yes.
7:12:07>> Is it your understanding that that Excel
7:12:09Energy number there is public service
7:12:12only?
7:12:16>> No, this this is Excel Energy in total.
7:12:19Uh I'm I'm not aware of the exact
7:12:21breakdown across the OPCO assuming right
7:12:24we're all kind of slightly above or
7:12:26slightly below that that average number,
7:12:28but it's that that's an Excel energy
7:12:30consolidated number as far as I'm aware.
7:12:35>> Thank you. Uh we can take that down. Um
7:12:39[clears throat] you we also had a
7:12:40discussion with chair blank um regarding
7:12:43calculating earnings based on the whack
7:12:46and rate base. Do you recall that?
7:12:50>> Yes.
7:12:51>> When you're doing that calculation is
7:12:54that only equity return?
7:12:58>> No. That also incorporates the share of
7:13:01debt in the capital structure and the
7:13:03cost of debt.
7:13:05And does that account for regulatory lag
7:13:07that may occur?
7:13:10>> I think in that quick example it it did
7:13:12not. We're kind of assuming a revenue
7:13:15requirement of some asset or investment
7:13:18being recovered in real time. Of course,
7:13:20regulatory lag will will decrease that
7:13:23over time as particularly as that lag
7:13:26increases.
7:13:28>> You also had a discussion with chair
7:13:29blank about the long-term recast model.
7:13:32You recall that? Yes.
7:13:36>> And does the long-term rate forecast
7:13:38model use the same sort of calculation
7:13:40that doesn't account for regulatory lag?
7:13:43>> It it does. It assumes uh
7:13:47essentially an immediate revenue
7:13:49requirement based on uh it assumes
7:13:51capital expenditure is basically
7:13:53equivalent to to to cap ads. It then
7:13:56calculates a real-time revenue
7:13:58requirement um based on that. of course
7:14:01making assumptions around and m and
7:14:02depreciation and and all of that. Um so
7:14:05it's so it's real time. It doesn't
7:14:07incorporate regulatory lag. So it's it's
7:14:09a little bit of an apples to oranges
7:14:11when you look at the historical rates
7:14:13and then you kind of merge into the the
7:14:15forecasts
7:14:17given that different treatment.
7:14:21>> Uh okay, changing topics. Uh you also
7:14:24had a discussion with Commissioner
7:14:25Gilman regarding um long-term incentive
7:14:28costs that were excluded from the
7:14:30settlement test year. You recall that?
7:14:33>> Yes.
7:14:35>> Is that an adjustment for ratemaking
7:14:36purposes?
7:14:39>> Yes, that is an adjustment for rate
7:14:41making purposes. you know, the the
7:14:43company will continue to to pay the the
7:14:47salaries and benefits
7:14:49uh that it deems appropriate to attract
7:14:52the right talent that we need in this
7:14:53industry. We try to keep really close to
7:14:56to those markets and and keeping the
7:15:00attracting and retaining the best people
7:15:01we can and so that the company's going
7:15:03to um do what it needs to to to
7:15:06accomplish that.
7:15:09>> Uh Miss Frederrico, I'm sorry to be
7:15:11bouncing around. Can we go back to
7:15:13hearing exhibit 155, the settlement
7:15:15agreement?
7:15:24And could we go to uh page 14?
7:15:29>> Uh Mr. P, could you just kind of get
7:15:31yourself familiar with paragraph 23
7:15:33here?
7:15:39>> Okay. Yeah. This is addressing year and
7:15:41ray base
7:15:43>> and the test year and the capital
7:15:45additions that are included therein.
7:15:48>> Yeah.
7:15:49>> Okay. Um and you had a lot of discussion
7:15:53uh commissioners plant and Gilman and
7:15:55Mr. Ghart regarding future investments
7:15:57for commande 3. Do you recall that?
7:16:00>> Yes.
7:16:02>> Um based on your review of this
7:16:05paragraph, are those future investments
7:16:06included in the test year revenue
7:16:08requirement?
7:16:10No, certainly not future investments um
7:16:14that that are unknown based on where we
7:16:16stand here today uh in light of of a
7:16:19performance framework for convention
7:16:22unit 3 being in place. And also that the
7:16:25current um investments or costs incurred
7:16:27for the current outage are also not
7:16:29included as part of the the test year.
7:16:32Um those would be um capital additions
7:16:35that issue in a future rate case um if
7:16:37if there were any of course.
7:16:40>> And those future capital additions would
7:16:42be reviewed for prudence as part of a
7:16:44future rate case. Is that your
7:16:46understanding?
7:16:46>> Yes.
7:16:47>> Yes, they would. They're they're not at
7:16:49issue here in this case.
7:16:53>> Okay. One more. I'm going way back to
7:16:57the beginning of the day, so I'm testing
7:16:59your memory here. Um, you had a
7:17:01discussion with Mr. Bunker regarding
7:17:04sale proceeds associated with mineral
7:17:06rights. Do you recall that?
7:17:09>> I do.
7:17:11>> What's your understanding of the mineral
7:17:14rights that were sold?
7:17:18>> My understanding of the mineral rights
7:17:20is is those are associated with
7:17:23subsurface rights on property that the
7:17:26company owns. I think they were largely
7:17:28associated with property around the the
7:17:30Fort St. Brain generating facility, but
7:17:34I don't think they're exclusively around
7:17:36that property. I might have described it
7:17:38as or Mr. Bunker might have described it
7:17:40as the Fort St. Brain um mineral rights
7:17:46uh solely, but but it's broader than
7:17:47that. The company sold those subsurface
7:17:49rights for all of its producing wells as
7:17:53it stood at the end of last year.
7:17:59Thank you. Let me check my notes.
7:18:08>> I believe that's it. Thank you very
7:18:09much, Mr. P.
7:18:11>> Uh, you can be excused. Uh, Mr. Pay,
7:18:14thanks for joining us.
7:18:19Uh, would you like to call your next
7:18:21witness?
7:18:23>> Yes, I will do that. and then we're
7:18:25going to do a role change here. So, I'll
7:18:28call uh the company calls uh Miss Dedra
7:18:31Howard.
7:18:44Trying to get my uh video working here.
7:18:46One moment.
7:18:49There we go.
7:18:50>> Oh, there you are. Miss Howard, can you
7:18:53hold up your right hand?
7:18:55You swear to tell the truth, the whole
7:18:57truth, and nothing but the truth.
7:18:59>> I do.
7:19:00>> Put your hand down. Is anybody with you
7:19:02or communicating with you in any way?
7:19:05>> No, sir.
7:19:06>> If that changes, will you let us know?
7:19:08>> I will do so.
7:19:10>> Thanks. Uh, back to you, M. Mart.
7:19:16>> Thank you. Good afternoon, Miss Howard.
7:19:19>> Good afternoon. Can you please state and
7:19:21spell your name for the record?
7:19:23>> It's Dedra Howard. That's D I E D R A.
7:19:27Last name H O W A R D.
7:19:31>> By whom are you employed and in what
7:19:33capacity?
7:19:34>> Excel Energy Services Incorporated. I am
7:19:37a director of customer policy and
7:19:39regulatory compliance.
7:19:42>> Did you cause to be filed in this case?
7:19:44Hearing exhibit 107, Rev 1, your direct
7:19:47testimony. Hearing exhibit 128, your
7:19:51supplemental direct testimony, and
7:19:53hearing exhibit 139, your rebuttal
7:19:55testimony.
7:19:56>> I did.
7:19:58>> And I don't believe you have any
7:19:59corrections today to these pieces of
7:20:01testimony. Is that right?
7:20:03>> That's correct.
7:20:05>> As they have already been admitted as
7:20:07hearing exhibits, Miss Howard is
7:20:08available for commissioner questions.
7:20:11>> Uh, Commissioner Plant, any questions
7:20:14for Miss Howard?
7:20:15>> Thank you. Uh, good afternoon, uh, Miss
7:20:18Howard.
7:20:19>> Good afternoon, Commissioner Plant.
7:20:20>> I just have a a couple, uh, quick
7:20:23questions, uh, regarding the company's,
7:20:27uh, proposal for the EAP program. Um,
7:20:30one of the elements, I believe, is
7:20:32reducing maximum energy burden from 3 to
7:20:351.5% for electric and 3 to 1% for gas
7:20:39for a total of 2 1/2%.
7:20:43Um, so I was just trying to figure out
7:20:45how this works exactly. For those
7:20:47receiving electric and gas, the combined
7:20:50burden would be 2.5%. Correct.
7:20:54And
7:20:56um, if you were only receiving electric,
7:21:00it'd be 1 and a half%.
7:21:02>> That's correct.
7:21:03>> Of the electric bill. And if you're
7:21:05above the threshold for gas. If if if
7:21:08you're if a customer is above the
7:21:11threshold for gas but below the
7:21:13threshold threshold for electric, would
7:21:16they qualify for PIP on their electric
7:21:18bill?
7:21:19>> They would.
7:21:20>> Okay. So, it's a combined
7:21:23>> calculation. Uh [clears throat] thank
7:21:25you for that. Um, staff witness an
7:21:27Anthony pointed out that of the four
7:21:30different methodologies in the energy
7:21:32and security working group report for
7:21:35calculating the number of eligible
7:21:37customers, the company decided not to
7:21:39use any of those. Why why did the
7:21:41company decide on a different method?
7:21:44[clears throat]
7:21:47>> I would say that um there's a number of
7:21:50ways and I think we've talked about it
7:21:51in testimony. There's a number of ways
7:21:53to look at um uh energy burden and what
7:21:58we landed on was wallet share um and
7:22:02using that as the foundation for you
7:22:04know where we think this um percentage
7:22:07should should be um especially for um
7:22:11our electric customers.
7:22:14>> Okay. And that's the combined two and a
7:22:17half%.
7:22:19>> Correct. Regarding um this was also
7:22:22mentioned in Miss An's uh testimony, the
7:22:25third-party auditing of the self addest
7:22:28addestation program. Um Miss Anie
7:22:32mentioned that California's similar
7:22:34program only unenrolled 2.3% of the
7:22:39enrolles. Does that sound right to you?
7:22:42>> Um I don't have it in front of me. Um
7:22:44but I have no reason to doubt that
7:22:47estimate. I was wondering if you've done
7:22:49any sort of cost effectiveness
7:22:52calculation. For example, if it's
7:22:55unenrolling 2.3% of the enrollies,
7:23:00what what's a what's a cost of that
7:23:03auditing? like are we spending way too
7:23:06much on auditing for the expected uh
7:23:10benefit of unenrolling or is there a
7:23:13certain percentage that you've
7:23:15calculated um below which it's just not
7:23:19worth it to do the auditing program?
7:23:22>> We haven't actually looked at that
7:23:23specific uh metric um but we are looking
7:23:27at a bunch of new ones um trying to
7:23:29model exactly what we think we're going
7:23:31to see. Um, I would expect that when you
7:23:34lower this percentage from an average of
7:23:36six um to two and a half that we're
7:23:39going to see fewer customers um not
7:23:42qualifying and therefore being able to
7:23:44stay enrolled. I think that's something
7:23:46that we'll probably need to look at here
7:23:48in the near term.
7:23:50>> Yeah. Well, I mean, if you if I guess
7:23:53what I'm saying is
7:23:55how do we figure out whether or not the
7:23:57audit itself is worth it? If
7:24:01>> it's if if you know, for example, it
7:24:03just unenrolls a percent but it costs
7:24:06millions [laughter] of dollars, is it
7:24:07really worth worth it to do it?
7:24:09>> I think we're going to know that pretty
7:24:10soon actually. I think if we're running
7:24:12this and you know after this first year
7:24:15we're doing that that audit process um
7:24:18we're going to find out exactly what
7:24:20it's going to cost us. I know that um
7:24:23you know we're looking at what that
7:24:24third party option might be for making
7:24:26that verification happen
7:24:28>> and then the number of customers that
7:24:30you know like it's a percentage 5% as as
7:24:33Miss Anie um recommended um we looked at
7:24:3710% as a potential possibility as well.
7:24:40Yeah, great. Thank you. That's all the
7:24:43questions I have.
7:24:45>> Uh, Commissioner Gilman, questions for
7:24:47Miss Howard.
7:24:49>> Thanks. I don't have any questions.
7:24:52>> Thank you. Uh, good afternoon, Miss
7:24:54Howard.
7:24:55>> Good afternoon, Sher Blank. Um, is it
7:24:58fair to say that lowering the energy
7:24:59burden threshold from 6 to% to 2 and
7:25:03a.5%
7:25:04increases the estimated population
7:25:07eligible for uh bill assistance energy
7:25:10affordability program benefits uh to
7:25:13roughly 450,000
7:25:15residential customers
7:25:17and I think today's levels maybe 250
7:25:22uh and I'm getting that from Mr. Ms.
7:25:24Antsy's uh testimony page 18 and uh
7:25:28attachment to does that does that sound
7:25:31right for to you or would you say that
7:25:32differently?
7:25:34>> You know, one of the things that I tried
7:25:36to address um in supplemental testimony
7:25:39and rebuttal was the fact that we have a
7:25:41lot of ways to estimate this this
7:25:43customer base. And I think what we
7:25:45really want to do now is move past that
7:25:47and say what do we really know if we
7:25:51lower this um percentage and more
7:25:54customers will qualify. We know that. Um
7:25:56but what does that really look like? And
7:25:59I think that's really that's one of the
7:26:01things that we really want to see is
7:26:03what happens this this next year um when
7:26:06we roll this out and um you know we're
7:26:09doing self addestation and categorical
7:26:12eligibility and some of these other
7:26:13things. and then holding disconnections
7:26:15like what do all of those measures put
7:26:17together um do to this population?
7:26:21>> Does it take some people out of it?
7:26:23>> So there's uncertainty, but it's
7:26:26hundreds of thousands. Whether it's 250,
7:26:29300, 450, it's it's unclear,
7:26:32>> but it it's a lot of people and and the
7:26:36change expands the universe.
7:26:38>> It does.
7:26:39>> Okay. And uh I guess you used a roughly
7:26:4425% participation assumption which
7:26:48implies
7:26:50you know a quarter of that large number
7:26:52would be participating. If you use 450
7:26:55it's a 100,000 customers. Uh if you use
7:26:59a lower number I guess it's a little
7:27:00lower. Is is that fair or would you say
7:27:03that differently?
7:27:04>> No I would say that's fair.
7:27:06>> Okay. And it sounds like the uh average
7:27:10uh participant received uh I'm sorry
7:27:13that uh uh and yeah the a median
7:27:17participant received an average yearly
7:27:19benefit including a rearage forgiveness
7:27:21of $800.
7:27:23Would you accept that? I think that also
7:27:25comes from Miss Anste's uh testimony.
7:27:29>> Again, I I don't have the most recent
7:27:31report that we filed in front of me, but
7:27:33I it's certainly possible that's
7:27:35accurate.
7:27:36>> Okay. So to so providing support to
7:27:40whatever the number is 80 90 100,000
7:27:43customers
7:27:45uh at that level would require I don't
7:27:47know 70 80 90 million a year which will
7:27:53certainly strain the resources uh given
7:27:56current spending. Is is that fair?
7:28:00>> I don't I don't know if it's going to
7:28:02expend everything. Again, I think it's
7:28:03going to take some time in terms of
7:28:05outreach and education to make sure that
7:28:07we're getting, you know, the the
7:28:09appropriate customers enrolled. Um, I
7:28:11know it's going to expand the audience.
7:28:14Um, you know, there's a lot of variables
7:28:16in there like, you know, how much um are
7:28:20customers going to be having that are
7:28:21maybe coming back um to the program? I
7:28:24think there's a lot of variables that
7:28:26that might affect that number.
7:28:28>> Okay. and and I think you're uh saying
7:28:32the company would like to hire four
7:28:34additional full-time staff to help with
7:28:36the education and outreach. And I think
7:28:37that comes from your direct testimony
7:28:39page 57. Is is that right?
7:28:42>> Okay.
7:28:43>> Uh can we pull up hearing exhibit 1509
7:28:47and let me represent to you that this is
7:28:49a March 2024 final report from the
7:28:51Colorado Energy Office entitled
7:28:54evaluation of the of the PEP. And if we
7:28:57can turn to page 20 138. Well, let let
7:29:01let's get the first page up. Do you do
7:29:03you see and recognize this report?
7:29:08>> Yes.
7:29:09>> Okay. Can we turn to page 138? and DC.
7:29:13This is a table showing the kinds of
7:29:15difficulties customers experienced
7:29:17enrolling in LEAP and that 37% of the
7:29:20company's electric customers that
7:29:22applied for LEAP in 2022 had difficulty
7:29:25in completing the application, 32% in
7:29:29providing income docu documentation and
7:29:32roughly one-third were denied. Is is
7:29:35that uh uh accurate
7:29:39on the electric side for public service?
7:29:44>> I I'm not sure that I would be able to
7:29:46tell you specifically to this level uh
7:29:49for LEAP customers. If we're talking
7:29:51about our programs, that might be
7:29:53different, but I
7:29:54>> Okay.
7:29:55>> Again, I don't have any reason to um
7:29:57question those numbers.
7:29:58>> Okay. Uh and can you scroll down uh to
7:30:01the next page? Well, actually, stop
7:30:04there. You can see for uh PIP, there's
7:30:08somewhat similar numbers. They're a
7:30:09little lower. Uh and it's across
7:30:11multiple utilities, but double digit
7:30:14percentage of people struggling to
7:30:16enroll. Is is that fair?
7:30:19>> Yes.
7:30:21And uh and if you can go down one more
7:30:23page to 139
7:30:32and you can see there's uh uh uh you
7:30:37know 18% couldn't complete the
7:30:39application and there's uh other reasons
7:30:43uh and again this is leap but I guess
7:30:46the only point I'm trying to make is
7:30:47that there's real significant barriers
7:30:50to uh opting into these programs. It
7:30:54sounds like you agree with that.
7:30:56>> I would say that for us because we
7:30:58autoenroll customers from LEAP, I think
7:31:01that that's a barrier that we've kind of
7:31:02removed.
7:31:04>> Okay, Vern. But the LEAP barriers uh uh
7:31:07are barriers uh to get into your
7:31:09program.
7:31:10>> They are.
7:31:12>> All right. Uh you can take this down.
7:31:14And just to complete the thought, it
7:31:16sounds like uh would you agree that poor
7:31:19internet access, medical or cognitive
7:31:21issues, difficulties with reading or
7:31:23speaking English, lower education
7:31:26levels, or lack of sophistication,
7:31:29uh uh also create barriers for customers
7:31:32to opt into these programs?
7:31:35>> I would agree.
7:31:37>> Okay.
7:31:38Uh, is it accurate to say that the
7:31:40company disconnected over 53,000 unique
7:31:43residential electric customers for
7:31:45non-payment in 2025?
7:31:48>> That is correct.
7:31:50>> And can you tell me the median or
7:31:52average times that these customers were
7:31:53without power?
7:31:56>> I do not have that information in front
7:31:58of me.
7:32:00>> And uh, Mr. Ms.
7:32:02the asked for that information in
7:32:04discovery and you were unable to uh
7:32:07provide it. Is that correct?
7:32:09>> That would be correct.
7:32:11>> And why why were you unable to provide
7:32:13it? It seems like you have uh you know
7:32:16the date the reconnect service went out
7:32:18and you have the date the disconnect uh
7:32:22uh occurred. So I I don't understand why
7:32:24you were not able to provide that data.
7:32:27>> It's not that we can't provide it. It
7:32:29was just that it was not available um in
7:32:31the in the manner that was requested. It
7:32:34is something that we can provide um you
7:32:36know with a little more time to to put
7:32:38it together.
7:32:40>> And can you tell me how many customers
7:32:42were disconnected and never reconnected?
7:32:46>> I don't have that information in front
7:32:47of me.
7:32:48>> And again, Miss Anste asked for that
7:32:51data and you were unable to provide it.
7:32:54>> That is correct.
7:32:56And again, can you help me understand
7:32:58why you couldn't provide that data?
7:33:00>> One of the one of the challenges with
7:33:02this particular request is that
7:33:05customers um often move without
7:33:08providing notification.
7:33:10Um sometimes someone might come in that
7:33:13we're not aware of. And so, you know,
7:33:15it's it's difficult to pinpoint exactly
7:33:18whether a customer um remains
7:33:20disconnected over a longer period of
7:33:22time.
7:33:25Can we uh pull up your supplemental
7:33:27direct testimony from April uh 3rd, 2026
7:33:31in the Gazray case? It's 25-0538G,
7:33:35hearing exhibit 129, which has been
7:33:38marked as hearing exhibit 1510 in this
7:33:41case.
7:33:42And uh
7:33:45let me just say I appreciate the
7:33:47testimony. I appreciate you crossing
7:33:49both cases. So
7:33:51despite uh some of the other concerns
7:33:54I'm going to express, uh let me just say
7:33:56thanks for that. Uh do you do you
7:33:58recognize us?
7:33:59>> I do. Can we go to page 13, line 15
7:34:13and uh basically uh paying 100% of their
7:34:18rearage for those customers that were
7:34:20actually disconnected will cost $34
7:34:22million. Do you do you see that?
7:34:25>> I do.
7:34:27>> Okay. And if we go down to page 14, you
7:34:29outline a proposal that would autoenroll
7:34:32customers in the EAP or GAP as well as
7:34:36providing uh 10, 50, and 80% a rearage
7:34:40relief based on the length of the
7:34:41aarage. Is that right?
7:34:44>> That's correct.
7:34:46>> And ultimately, you find this proposal
7:34:48to be too expensive since it would cost
7:34:50an estimated $160 million. And I think
7:34:54that's a page 15 line uh nine. Is that
7:34:57accurate?
7:34:59>> Just looking at it right now, you said
7:35:00line nine.
7:35:02>> Yeah,
7:35:04>> that's correct.
7:35:05>> Okay. Well, prior to disconnecting any
7:35:09customer with say a rear of 60 days or
7:35:12more, what do you think about auto
7:35:14enrolling them in the affordability
7:35:16program and then offering more modest
7:35:19help? It seems like by limiting the
7:35:21number of customers and lowering the
7:35:23percentages of a a rearage payment, it
7:35:26seems like we could help uh you know
7:35:29without getting to numbers anything like
7:35:31this. You know, we could do 0 10 20 for
7:35:35some subset of these customers. Any
7:35:37thoughts on that?
7:35:39>> I actually think that's what we're going
7:35:40to get a chance to do with the the
7:35:43current proposals that we have for the
7:35:45EP and the GAP programs. Um, one of the
7:35:48things that, um, we we spoke to staff
7:35:51about was the ability to try and, um,
7:35:54get some kind of notification for the
7:35:56program, um, for for, um, self
7:35:59addestation and categorical eligibility,
7:36:02put that in, some kind of noticing, and
7:36:04I think we could back that up, and I
7:36:06think we might see really good results
7:36:08with that. So, we're pretty excited
7:36:09about the opportunity to try that.
7:36:12>> Uh, you can take this down. I guess I'm
7:36:15asking a different question. Um um you
7:36:19know given the limited resources
7:36:20available
7:36:22I'm struggling to see why isn't why it
7:36:25isn't better to focus bill assistance on
7:36:28some subset of the 53,000 customers you
7:36:32disconnected
7:36:34instead of a universe of whatever it is
7:36:37250 300 or 50 or 450
7:36:40where the funds seem to get systematic
7:36:43systematically allocated
7:36:46uh to the most sophisticated customers
7:36:49that seem to need it the least. So I
7:36:54guess I'm trying to understand why don't
7:36:55we just focus on discon instead of like
7:36:58hiring people to reach out to this huge
7:37:01universe. Why don't we just focus on who
7:37:04you're going to disconnect since you
7:37:06know who they are and um uh um so can
7:37:10you just help me understand why we can't
7:37:13focus on this smaller universe instead
7:37:15of this optin thing which I think is
7:37:19potentially really problematic.
7:37:22I think what I would say to that is this
7:37:24is kind of a philosophical question in a
7:37:26way. Um
7:37:28if you look at the the universe of these
7:37:31customers that may be experiencing a
7:37:32disconnection. There may be many reasons
7:37:34why that's taking place. It may not be
7:37:36about energy burden. Um it could be you
7:37:40know maybe there's mental health
7:37:41concerns in the household. Um you know
7:37:44perhaps they're um not you know not
7:37:48staying there full-time or something.
7:37:49There could be a number of reasons why
7:37:51someone might experience a
7:37:52disconnection. I think what we're really
7:37:55trying to address is those customers
7:37:56that are experiencing critical need and
7:37:59and imagine for those customers that we
7:38:02are not helping or if we were not
7:38:03helping them um our disconnection rates
7:38:06could be much higher and those are
7:38:08customers that really need need the
7:38:10assistance. I can't I can't say that
7:38:12we're going to prevent a 100% of those
7:38:14disconnections, but I can say that um we
7:38:18are going to pres we're going to prevent
7:38:20probably more than what you're seeing
7:38:22right now and it will be targeted based
7:38:24on income and and other factors in the
7:38:27household that we can identify. The
7:38:29other thing is that some customers may
7:38:31not reach out to us. They might be
7:38:33eligible for assistance. We are spending
7:38:35a lot of our time talking to them and
7:38:37trying to make sure they're getting
7:38:38access to those resources. helping them
7:38:41walk through those applications
7:38:43um because customers may need that help.
7:38:45We offer obviously um other languages
7:38:48for applications as well as you know our
7:38:50communications with those customers. Um
7:38:53our goal is to interact with them and
7:38:55engage with them so that we can prevent
7:38:57more of that from happening.
7:39:00Well, uh I guess my concern is that the
7:39:02optin uh may systematically bias the
7:39:06support to those customers that need it
7:39:08the least because it's uh requires
7:39:12significant sophistication
7:39:15to to opt in. So, so that that's the
7:39:18concern. Um well, any comments on that?
7:39:22>> You know, we've been experimenting. We
7:39:24have a program in Minnesota that's
7:39:26mentioned in testimony. um where we are
7:39:29allowing customers to self attest and
7:39:33provide cate categorical eligibility
7:39:35information from another program. Um
7:39:38we've got over 20,000 customers in that
7:39:40program and I would say that that gives
7:39:43me hope that we are going to be able to
7:39:45address this. Um you know we will
7:39:48continue to do outreach to these
7:39:49customers and I think our methods are
7:39:51getting more sophisticated in terms of
7:39:53reaching people right where they are. I
7:39:54think red truck is a testament to that.
7:39:57We've been seeing some very powerful
7:39:58results uh around that program where
7:40:01customers can come up. We've got an a
7:40:03computer there. We've got translation
7:40:05devices. Um we're reaching people at
7:40:08those events and we're reaching them in
7:40:10other forums as well. And I really think
7:40:12that this is something that that's going
7:40:14to it's going to drive more customers to
7:40:17programming.
7:40:19>> Can you pull up uh hearing exhibit 1513?
7:40:23Uh let me uh represent to you that this
7:40:26was uh presented at a prior uh
7:40:28commission information meeting and it's
7:40:31a Metro Denver homeless initiative state
7:40:34of homelessness uh 2022 2023
7:40:38and can you turn to page 72
7:40:42and uh you can see there's a line uh
7:40:46maybe
7:40:47seven or eight down that says unable uh
7:40:50to pay for uh utilities. ities is
7:40:53mentioned by over 12% of respondents as
7:40:56a self-reported cause of homelessness.
7:41:00So, uh I'm not going to introduce this
7:41:02as evidence uh uh nor will we rely on it
7:41:06or will I rely on it in our decision,
7:41:08but are you aware of any information
7:41:11other information on this record or
7:41:13elsewhere that explores the link between
7:41:15utility disconnection and homelessness?
7:41:19I'm not aware of a study.
7:41:22>> Uh you can take this down in the last uh
7:41:26can you pull up a hearing exhibit? Well,
7:41:28not yet. Uh can in the last electric
7:41:32rate case uh well actually pull up
7:41:34hearing exhibit 1514.
7:41:37In the last electric rate case, PUC
7:41:39order C235922-0530e
7:41:45at pages four to five uh from September
7:41:4823.
7:41:50Um, we said as discussed below, the
7:41:53commission modifies paragraph 70 of the
7:41:56settlement agreement to direct the
7:41:58energy and security working group to
7:42:00develop an outreach program to contact
7:42:02and interview disconnected customers to
7:42:05better understand their circumstances,
7:42:07their options after disconnect, the
7:42:09barriers and challenges to reconnection
7:42:12and possible avenues of assistance, as
7:42:15well as efforts to explore new
7:42:17approaches for identifying customers
7:42:19most in need. If you could go to page 12
7:42:22of this report, um
7:42:26uh the company says it planned to start
7:42:28conducting uh interviews uh the first
7:42:31week of June 24 and to interview uh you
7:42:35you can just scroll down. I think it's
7:42:37the highlighted portions.
7:42:41Yeah, you can see we'll start conducting
7:42:42interviews the first week of June. Um
7:42:45did the company ever conduct the
7:42:47interviews? And if so, can you point me
7:42:49to the results?
7:42:52>> Um, I believe it was filed in this
7:42:53report, although I I don't know where it
7:42:56may have been filed. Um, but we did
7:42:58conduct the interviews. It took us quite
7:43:00a bit of time to get disconnected
7:43:02customers to to talk about this with us.
7:43:05Um, but I don't know exactly where it
7:43:07might be filed in here.
7:43:09>> Um, can you see if uh as part of the
7:43:11record in this case, you can find that?
7:43:13Uh, I I went through this record and
7:43:16these reports and I couldn't find
7:43:17anything. Nor was there evidence that
7:43:20the interviews were conducted. So, if
7:43:23you could find that, that would be
7:43:24great.
7:43:27>> You want me to look for that right now?
7:43:28>> No. No. Before the case closes.
7:43:33>> Yeah, I do have I do have the results of
7:43:35those um interviews and so happy to
7:43:38provide that.
7:43:39>> Yeah, if you would, that would be great.
7:43:40Uh,
7:43:41>> sure. You can you can take this down.
7:43:44Um,
7:43:47can we pull out what has been marked as
7:43:48hearing exhibit 1516 from uh uh the same
7:43:53M docket that report was filed and it's
7:43:5523M-13
7:43:57EG
7:43:59and uh do you recognize this as the
7:44:02company's 25 uh 2025 disport
7:44:06disconnection report data in Excel f
7:44:09format as filed on March 2nd uh 2026
7:44:13and it's referred to multiple times in
7:44:15Miss Anste's uh answer testimony
7:44:18footnotes 105355
7:44:2083 two of our attachments and page 27 of
7:44:24Mr. uh Pay's rebuttal testimony do you
7:44:28recognize us miss Howard
7:44:29>> I I'm having trouble recognizing it only
7:44:31because the print is so small and I
7:44:33don't know if there's any way to blow
7:44:34that up a little bit but um I am
7:44:37familiar with this report although I
7:44:39have not studied it in preparation for
7:44:41testimony. Yeah, fair enough. Do Do you
7:44:44see it now? Just
7:44:46>> Yes, I do.
7:44:47>> All right. Can we go to ABH? Uh uh
7:44:51customer account.
7:44:54Yeah, that one. And [clears throat]
7:44:56uh
7:44:58uh and do you see that it's uh so you
7:45:02see it's by zip code. And if you can see
7:45:05uh column S, it's disconnection for
7:45:08non-payment. Does does that look look
7:45:10right to you?
7:45:14>> Yes.
7:45:15>> And S is uh uh and S is for all
7:45:19customers and T, if you can just scroll
7:45:22over a little is for IQ customers.
7:45:27Does that look right?
7:45:32>> Um
7:45:34I I I
7:45:36would assume so. Okay. Can we go to uh
7:45:40cell E673,
7:45:43which is March uh 1st for zip code 811
7:45:49A673
7:45:51way down.
7:46:00All right. You see that zip code 811?
7:46:02>> I do. And if we scroll over to column uh
7:46:07uh S&T, can we see what the
7:46:12Do you see the disconnections for uh
7:46:14non-payment are 477?
7:46:17>> I do see that.
7:46:18>> And that could be IQ or other customers
7:46:21we we we don't know. The 13 is just the
7:46:24customers we do know are IQ. Is that
7:46:27fair?
7:46:28>> That's fair.
7:46:29>> Okay. Um,
7:46:33let me uh uh let me represent to you
7:46:36that we looked at disconnections by zip
7:46:38code. I looked at disconnections by zip
7:46:40code and identified the top 15 zip codes
7:46:44with the most uh disconnections
7:46:47and found that 15 zip codes or 4% of the
7:46:50340 zip codes accounted for 37
7:46:55uh uh% of the disconnections.
7:46:58Let me further represent that Z zip code
7:47:01uh 811 had the highest disconnections
7:47:05with 2946 in 2025.
7:47:10Someone else will need to verify all
7:47:11this and uh I'm certainly not going to
7:47:14use any of this as evidence, but subject
7:47:17to later track check, is there any
7:47:19reason to doubt that this type of
7:47:21calculation rank ordering the the zip
7:47:23codes by disconnects could be done with
7:47:26this data?
7:47:28I don't see any reason why it couldn't.
7:47:30>> Okay. Can we pull up what has been
7:47:32marked as hearing exhibit 1512? Let me
7:47:36represent to you that this is US census
7:47:38data tabulated at the website shown at
7:47:40the bottom of the page. Again, this is
7:47:43intended for the sole purpose of helping
7:47:45to frame our conversation and I'm not
7:47:48going to introduce this as evidence or
7:47:50rely on it in any decision. Uh, having
7:47:53said that, uh, do you see how the top
7:47:55block refers to Colorado as a whole and
7:47:58the second block refers to zip code 811?
7:48:02Do do you see that? And maybe you can
7:48:03>> see that the data below it is a little
7:48:06bit difficult to read.
7:48:07>> Uh, yeah, if you can just uh scroll in a
7:48:10little uh
7:48:12>> Okay.
7:48:13>> Um, and go back to the top.
7:48:15>> Okay.
7:48:16>> And and you can see that Colorado has uh
7:48:19uh uh 1.263 263 million people of
7:48:22Hispanic origin out of a total
7:48:24population of 5.774
7:48:27million or roughly 22% of Colorado is
7:48:30Hispanic. But in this zip code, if you
7:48:33scroll down, u more than half of the
7:48:362020 population is Hispanic.
7:48:39And I guess the bottom line is that when
7:48:41you go through the disconnect data, it
7:48:44appears that the zip codes with the 15
7:48:46highest disconnections
7:48:48appear to be either predominantly black,
7:48:51Hispanic, or both. And all 15 seem to
7:48:54have uh disproportionately impacted
7:48:57census blocks within the zip code. So
7:49:00somebody besides me will have to go
7:49:02through this. And again, it's not going
7:49:04to be evidence, but my question to you
7:49:07is, is there any data on this record or
7:49:09elsewhere that would contradict or
7:49:12address this concern that the company's
7:49:14disconnections are heavily concentrated
7:49:17in minority communities?
7:49:20>> Based on what's been presented here, I
7:49:22would not I would not refute that.
7:49:25>> And do are you aware of any data
7:49:27anywhere else that would refute that?
7:49:30>> I'm not aware of any data.
7:49:32>> Okay. Can we go down to the last page?
7:49:35Do you see that V for all of Colorado uh
7:49:38uh 16.7% of respondents uh speak a
7:49:42language at home other than English
7:49:45while in zip code 11 811 51.4%
7:49:50speak a language other than English at
7:49:52home. Likewise, do you see that 478%
7:49:56of Colorado has a BA or higher, while
7:49:59the zip code 811, only 19.9% have a BR
7:50:04BA or higher.
7:50:06Uh, and again, yeah. Oh, thanks. Um so
7:50:11again we're not going to use it uh as
7:50:13evidence but it such it appears that zip
7:50:16code 811 as well as the other 15 zip
7:50:20codes by number of disconnects have
7:50:22levels of education in income access to
7:50:25health care and English proficiency that
7:50:28are generally well below the state
7:50:30averages. Uh
7:50:33uh given our discussion about the uh
7:50:36barriers to opting into existing bill
7:50:38assistance programs, are you aware of
7:50:41any evidence on this record or elsewhere
7:50:43that would that would address or
7:50:45contradict this concern that opt-in bill
7:50:48assistance benefits may be
7:50:50systematically allocated away from the
7:50:53communities that appear to have the most
7:50:54concentrated disconnections?
7:51:04I think what I would say is that because
7:51:06we are doing so much work to try and
7:51:08make everything accessible
7:51:11um for customers, especially those that
7:51:13may um speak a different language or um
7:51:18you know have other challenges and and
7:51:20the work that we're doing to try and
7:51:22make sure that we're going to help them
7:51:24with those things. I would say that just
7:51:26the programming that we're talking about
7:51:28doing and what we're already doing, I
7:51:30think is going to help address this and
7:51:32has been.
7:51:35>> You can take this down.
7:51:38So when I look at this, I'm concerned
7:51:40that disconnections appear to be
7:51:42concentrated in poor, predominantly
7:51:44black and Hispanic communities, and that
7:51:47the bill assistance, given the opt-in
7:51:49approach, is being disproportionately
7:51:52allocated to zip codes with higher
7:51:54levels of income and language p
7:51:56proficiency.
7:51:58I don't think it's against the tariffs
7:51:59are illegal, but does the company think
7:52:02it's acceptable public or good public
7:52:05policy to concentrate disconnections in
7:52:07poorer, less educated, predominantly
7:52:09minority communities while perhaps
7:52:12systematically allocating bill
7:52:14assistance elsewhere because of the
7:52:15opt-in nature of those programs?
7:52:18>> I don't think that's the case. If I'm
7:52:20being honest, I I don't see that. Um
7:52:22what I see is that there's a certain
7:52:24threshold that that customers can reach
7:52:26where they are eligible for
7:52:27disconnection. It does not have anything
7:52:29to do with any other determinants. Um
7:52:34but I don't think that we're targeting
7:52:35energy assistance elsewhere. I think
7:52:38we're targeting it everywhere.
7:52:41But the people who are opting in to opt
7:52:44in requires it seemingly requires a
7:52:48certain level of proficiency in English,
7:52:50perhaps a certain level of education, a
7:52:53certain level of internet access, a
7:52:55certain level of uh health. And it seems
7:52:59like the communities where the most
7:53:00disconnects are happening are not the
7:53:04communities that are going to be able to
7:53:07opt in the best.
7:53:10Well, we don't currently do any opt-in
7:53:12for customers, but as it stands in in
7:53:16our plans, we will be addressing
7:53:18communities um where there might be
7:53:20other barriers. I think we will do so
7:53:22through the additional outreach. We'll
7:53:24do so through materials that will be in
7:53:26other languages. Um I I think there's
7:53:30there's a lot that we can do to make
7:53:31sure that we're addressing those needs.
7:53:36>> Any thoughts? if the commission were to
7:53:38ask staff uh to try and start uh looking
7:53:42into and maybe uh addressing some of the
7:53:44questions and concerns that we discussed
7:53:46today. Any guidance if we uh wanted to
7:53:49do that?
7:53:51>> I think that we would we would welcome
7:53:53the opportunity to have a greater
7:53:55discussion and make sure that we are
7:53:57addressing things that the commission
7:53:58deems to be critical because they're the
7:54:00same things that are critical to me in
7:54:02these programs as well as to the people
7:54:04that work in that department. So
7:54:06definitely we're we're we're definitely
7:54:08interested in that.
7:54:10>> Uh I guess just one last question. Uh
7:54:16can you just help me understand why we
7:54:18can't do more with uh some subset of the
7:54:22discon disconnected customers? You know
7:54:25who they are because you're
7:54:27disconnecting them. Why can't we focus
7:54:30more on that and less on trying to get
7:54:33people to opt in to to LEAP or other
7:54:36programs? I I just uh it just seems like
7:54:41those are the people who need help the
7:54:43most and uh I think a lot of those and
7:54:47who may have the most worst outcomes in
7:54:50terms of homelessness and may have the
7:54:53least ability to opt in. So, just one
7:54:56last time, any any thoughts on that?
7:54:59I I think that what we're getting ready
7:55:00to do is going to change those numbers
7:55:02dramatically. That's what I think. I
7:55:04will say that um you know we use an
7:55:07Experian model combined with information
7:55:10we have on past due balances as well as
7:55:14um rates of disconnection and those are
7:55:16the customers we're targeting for
7:55:17outreach. Um I think we're going to be
7:55:19able to do more now and I think that um
7:55:22sending applications forward which
7:55:24obviously we haven't had so we haven't
7:55:26tried it. I do think we're going to see
7:55:28results that are going to lower those
7:55:29disconnections, especially if you think
7:55:32about just what we're doing in the
7:55:34program itself by not allowing any
7:55:36disconnections while they're enrolled.
7:55:38>> I know. But for people who can for who
7:55:41can't figure out how to opt in for
7:55:43language or other reasons,
7:55:46you disconnect them and maybe
7:55:48permanently.
7:55:50What? And I mean it just what about
7:55:54autoenrolling somebody in the
7:55:56affordability program before you
7:55:58disconnect them and then if they can't
7:56:00pay you know maybe you have to
7:56:02disconnect people in the affordability
7:56:04program. But it just seems like so much
7:56:07hinges on the opting in. You if you opt
7:56:10in, you can't be disconnected, but if
7:56:13you can't figure out how to opt in, you
7:56:15know, you just get disconnected without
7:56:17any help. and it does seem like they're
7:56:20targeted at minority and and DI
7:56:22communities. So,
7:56:24>> I think I think that we need to explore
7:56:26this further. We need to see what these
7:56:28programs can do um with these changes,
7:56:31but I think we're we're definitely
7:56:33willing to explore any options that are
7:56:34going to help customers avoid uh
7:56:36disconnection of service. Absolutely.
7:56:40>> Uh it just seems Well, all right. Uh
7:56:43redirect.
7:56:46>> Thank you, Chair Blank. I have a few
7:56:48questions for Miss Howard. Um, Miss
7:56:50Howard, do you view programmatic bill
7:56:52assistance to be a static proposition?
7:56:55And does the company have the
7:56:56flexibility to adapt to address concerns
7:56:59such as those raised by Chair Blank?
7:57:02>> We do.
7:57:04We definitely have the ability to um
7:57:07make changes.
7:57:09Would
7:57:11the company's proposed EE enhancements
7:57:13as adopted under the settlement
7:57:15agreement expand and simplify EE
7:57:17enrollment pathways even for those
7:57:20identified by chair blank?
7:57:22>> It will.
7:57:28>> Would customers facing disconnection be
7:57:30able to self attest to their income and
7:57:32enroll in E under the proposals made by
7:57:34the company and the settle parties?
7:57:37>> Yes, that's correct.
7:57:40Uh going back to the data related
7:57:42issues, is the calculation of time
7:57:45disconnected a straightforward
7:57:47calculation?
7:57:48>> It is not.
7:57:50>> Could you expand on that a bit please?
7:57:54>> Um there there are many intervening
7:57:56factors for how long someone is
7:57:57disconnected, whether there's any
7:57:59interruptions to that. Um I would say
7:58:02that um you know in terms of customers
7:58:05experiencing a disconnection again you
7:58:07know there may be reasons why um maybe
7:58:11they're you know struggling with other
7:58:13issues in including moving to another
7:58:15place or something along those lines. So
7:58:17there's a lot of factors involved in
7:58:19what happens with customers uh through
7:58:21disconnection processes.
7:58:23>> Thank you. As part of the settlement
7:58:26agreement, has the company agreed to
7:58:27further look at trends related to
7:58:29enrollments and disconnects?
7:58:31>> Yes, we have.
7:58:33>> The company has recognized that looking
7:58:35at disconnects along with the settling
7:58:36parties is a is an important area to
7:58:38further explore. Would you agree with
7:58:40that?
7:58:41>> I would agree.
7:58:43>> Would the company's proposed E
7:58:45enhancements as adopted under the
7:58:47settlement agreement prevent
7:58:49disconnections
7:58:51in E?
7:58:52>> Yes, it will.
7:58:54or that are otherwise income qualified.
7:58:57>> Correct.
7:58:59[snorts]
7:59:04>> You're familiar with the settlement
7:59:06agreements provisions on E enhancements.
7:59:09Miss How?
7:59:09>> I am.
7:59:10>> Would you like to expand at all on the
7:59:12benefits to our customers from the
7:59:14provisions agreed to in the settlement
7:59:16by the settling parties related to E?
7:59:20>> I would say there's a number of um
7:59:22elements to this one. the the issue that
7:59:24we've just talked about in terms of
7:59:26preventing disconnection. Um lowering
7:59:28energy burden or wallet share for
7:59:31customers who otherwise can't afford um
7:59:34their rates and making sure then that
7:59:36they're able to afford other things.
7:59:38It's going to enroll a a much larger
7:59:41number of customers um based on that. Um
7:59:44so I I think those are just a few. I can
7:59:47certainly go on with more, but that's a
7:59:51good start.
7:59:53Thank you. I have no further questions.
7:59:56>> Uh, thanks so much for joining us today,
7:59:58Miss Howard. And if you can uh have your
8:00:01council supplement the record with what
8:00:03you find uh in response to those
8:00:05interviews, I'd love to see it before uh
8:00:08we talk to uh Miss Anste and uh Mr.
8:00:12Bennett. So, thank you.
8:00:14>> Thank you. Thanks for having me.
8:00:18Uh, Miss Samard Pacheco, who's next?
8:00:22>> I think it's Mr. Good Enough and my
8:00:24colleague, Miss Brahma, will be
8:00:25defending Mr. Good Enough.
8:00:28>> Uh,
8:00:30uh, I doubt it'll amount to a defense.
8:00:33But, uh, uh, uh, Mr. Good Enough, can
8:00:36you hold up your right hand?
8:00:38Uh, do you swear to tell the truth, the
8:00:40whole truth, nothing but the truth?
8:00:42>> I do.
8:00:43>> You can put your hand down. Uh and uh is
8:00:47anybody with you or communicating with
8:00:48you in any way?
8:00:50>> No.
8:00:51>> And uh if that changes, you'll let us
8:00:54know.
8:00:54>> I will.
8:00:56>> Thanks.
8:00:58>> Good afternoon, Dr. Good Enough. Um
8:01:00would you mind stating and spelling your
8:01:02name for the record, please?
8:01:03>> Yes. My name is John Good Enough. J O H
8:01:06N G O O D E N O U G H.
8:01:10>> And for who do you work and in what
8:01:12position? the director of sales, energy,
8:01:14and demand forecasting for Excel Energy
8:01:16Services.
8:01:18>> And did you cause to be submitted into
8:01:20this record uh hearing exhibit 120 as
8:01:23your direct testimony and hearing
8:01:25exhibit 150 as your rebuttal testimony?
8:01:28>> I did.
8:01:29>> I don't think you have any additional
8:01:31corrections or corrections today. Is
8:01:33that correct?
8:01:34>> That's correct.
8:01:35>> All right. And with that, uh, Dr.
8:01:36Goodnap is available for
8:01:37crossexamination or it sounds like
8:01:39commissioner questions primarily. Uh,
8:01:42thank you. I didn't realize you were Dr.
8:01:44Good Enough. Uh, uh, uh, Commissioner
8:01:47Plan, any questions for Dr. Goodna?
8:01:49>> I do not have any questions.
8:01:51>> Commissioner Gilman.
8:01:53>> Yeah. Hi. I have a few questions. Good
8:01:55afternoon, Dr. Goodna.
8:01:57>> Good afternoon.
8:01:58>> Um,
8:02:00just a few questions first about kind of
8:02:02general sales trends that you're
8:02:04observing so I can be sure I'm on the
8:02:07right page. Um, in your direct
8:02:10testimony, you had discussed that after
8:02:13normalizing for weather, the company's
8:02:15total electric retail sales have
8:02:18declined slightly over the past five
8:02:20years. Is that accurate?
8:02:21>> Yes, that's correct.
8:02:23>> Okay. Um, and then you do indicate I I
8:02:27think you made a revision here maybe in
8:02:29your direct um that from 2019 to 2024
8:02:34you've seen an average um residential
8:02:37growth rate of8% per year. Does that
8:02:40sound right?
8:02:41>> Uh yeah, that's correct. And that
8:02:43revision was just clarifying the the
8:02:45time frame of the the average growth
8:02:47from 19 to 20
8:02:48>> 2019 is not on the table, but it was
8:02:51necessarily used. Got it. Um but just to
8:02:55clarify, despite how that averaging
8:02:58works, um the residential sales for 2024
8:03:02are still lower than they were in 2020.
8:03:05Correct.
8:03:07>> Um yes. So we saw during that time we
8:03:11saw a a a jump in residential sales with
8:03:14people being at home during COVID and
8:03:17then we've kind of seen that work its
8:03:18way back down to the overall long-term
8:03:20downward trend. um kind of as as we've
8:03:23returned to normal, people go back to
8:03:25work, those sorts of things.
8:03:26>> Okay. And so in that um I think the
8:03:30phenomenon you're talking about in that
8:03:32table in your direct, you actually show
8:03:35a decline each year since 2021 to
8:03:38through 2024, right?
8:03:40>> That's that sounds right. Yes.
8:03:41>> Okay. Um, and also in your direct you
8:03:46mentioned that you get a monthly
8:03:48forecast of the impacts of new be
8:03:51programs, beneficial electrification
8:03:53programs from the DSM regulatory
8:03:57and strategy and planning department. I
8:04:00don't know that's that's what that's
8:04:02what it calls it in your testimony. Um,
8:04:05based on observed adoption since the
8:04:07introduction of these programs, is that
8:04:09accurate? Um, so we get a a forecast of
8:04:14monthly adoptions. We don't get it get
8:04:16the forecast on a monthly cadence. It's
8:04:18it's a forecast of monthly impacts due
8:04:20to adoptions.
8:04:22>> And does that include like actuals for
8:04:24what has been observed and then it kind
8:04:27of re-calibrates a forecast going
8:04:30forward?
8:04:31>> Yeah. So it's um you know for the
8:04:34purposes of this proceeding where we
8:04:36were forecasting really the rest of 2025
8:04:39is is largely what I'm describing here
8:04:42and the the forecast that was provided
8:04:44by that team. Um I won't try to say the
8:04:47name again. Um really looked at recent
8:04:51adoptions like the trends in recent
8:04:53adoptions and kind of extrapolated that
8:04:55through the end of the year. So really
8:04:57the beginnings that we're starting to
8:04:58see of of electrification extrapolated
8:05:01an additional 6 months.
8:05:03>> Okay, got it. Um, have you provided that
8:05:06portion of the forecast separated out
8:05:08anywhere?
8:05:10>> I don't believe so.
8:05:13>> Okay, that I just I know in other
8:05:15proceedings there's been interest in
8:05:17looking at at the forecast of these
8:05:19things coming and since you mentioned
8:05:20you get a discreet one, I was just
8:05:22wondering if we had seen that, but it
8:05:24sounds like no. Um
8:05:27so um in
8:05:30your direct testimony
8:05:33um you included essentially um actuals
8:05:37through June for 2025 actuals from
8:05:40January to June and then forecast from
8:05:43July to December. Correct.
8:05:45>> That's correct.
8:05:46>> Okay. And then um
8:05:49in your rebuttal you provide then a
8:05:52comparison between those forecasted July
8:05:56to December monthly sales and the
8:05:59actuals.
8:06:01>> Yes.
8:06:02>> Okay. And as I understand it um I I just
8:06:05trying to better understand what
8:06:07forecast was used in your direct to come
8:06:10up with the July through December. It
8:06:13sounds like there's a a semianual or
8:06:16like a twice annual revamp of the
8:06:19forecast. Can you help me understand
8:06:20when that's done and what all feeds into
8:06:22that um that reassessment of the
8:06:26forecast?
8:06:27>> Yeah, so just as standard practice, we
8:06:29update our forecast twice a year. Um
8:06:32it'll be a finalized forecast in March
8:06:34and then a finalized forecast in July.
8:06:36We, you know, from a couple months ahead
8:06:37of that, we're developing the forecasts.
8:06:40So the forecast that was used for the
8:06:42the remainder of 25 in my in the direct
8:06:45case was that forecast that be finished
8:06:47in July.
8:06:50>> Okay. So you said one's finished in
8:06:52March and one's finished in July.
8:06:54>> That's right.
8:06:55>> Okay. So not not necessarily at an even
8:06:57interval through the year.
8:06:58>> Yeah. Not not semianual I guess but you
8:07:01know there's kind of a spring forecast
8:07:03and a summer forecast.
8:07:04>> Okay. Got it. Um so and and that's when
8:07:07it's like done. Yes.
8:07:10>> In March of each year, you have a new
8:07:12results and then in July of each year
8:07:14you also have new results.
8:07:16>> Yep, that that's correct.
8:07:17>> Okay, got it. Um and so this um what
8:07:24this was utilizing that July forecast
8:07:26from 2025.
8:07:29So would that have that would have been
8:07:31informed by actuals for the first half
8:07:34of the year
8:07:35>> um for sales and customer accounts? Yes.
8:07:39Um
8:07:40for some of the the kind of adjustments
8:07:43that we make after we run those base
8:07:45models like electric vehicle counts
8:07:47perhaps this beneficial electrification
8:07:50adjustment. I would have to go back and
8:07:52see
8:07:53like kind of when they're they're
8:07:54trending the data they had as they were
8:07:56developing the trends that they were
8:07:57passing us along the forecast. It might
8:07:59have been the end of 24 not the first
8:08:01few months of 25 where we had actual
8:08:03data to develop those external
8:08:05adjustments to the forecast.
8:08:07>> Okay. Got it. And then I I know for here
8:08:10the objective was 2025 to understand how
8:08:13the test year looked, but I'm curious
8:08:15how far out do you run when you do those
8:08:18reassessments of the forecast? Like does
8:08:20that reassess the entire future of the
8:08:24forecasting that you have? I know for
8:08:25other proceedings you do much longer
8:08:27range for more much longer range
8:08:30forecasting than here.
8:08:32>> Uh yeah. So every every forecast
8:08:34iteration we do is a 30-year forecast.
8:08:37Got it. Okay.
8:08:39>> Okay. So, you just sucked out the 2025
8:08:42portion, but like in reality, it it
8:08:44reassessed much longer than that.
8:08:46>> That's right.
8:08:48>> Um, and I I'm curious, is this the same
8:08:53forecast that would be used in like the
8:08:56JTS and DSP type proceedings, planning
8:09:00proceedings before the commission? And
8:09:02now it is it is possible we would make
8:09:04changes and I I think it's the nature of
8:09:06of what you described with focused
8:09:08focusing on kind of the you know the
8:09:11last six months of the year versus a
8:09:12longer run planning forecast. So we make
8:09:16potentially could make different
8:09:17assumptions on large loads in the longer
8:09:19term planning forecast different
8:09:21assumptions on the timing and the pace
8:09:24of electrification
8:09:26um among other other things. Electric
8:09:29vehicle adoption could potentially be
8:09:31different. um in a longer a longer term
8:09:33outlook used for longer term purposes.
8:09:36>> Okay. So like safe to say the further on
8:09:39the future we're looking the more fuzzy
8:09:42the accuracy of these estimates are but
8:09:45the closer we get to the future the more
8:09:47we're using like um nearer term
8:09:51understandings of what's going on.
8:09:52>> I think in general forecasting that's
8:09:55that's a true statement.
8:09:56>> Okay. Um
8:09:59so um on page seven of your rebuttal you
8:10:04in this in this proceeding you show kind
8:10:07of this comparison between um the
8:10:10forecast which as I understand came from
8:10:14um oh thank you there it is came from um
8:10:18the July iteration so halfway through
8:10:222025
8:10:24um the forecasted what the remainder of
8:10:262025 five would look like and then
8:10:28compared that to the actuals and it
8:10:31looks like the actuals were just a tad
8:10:34higher in total than the forecast.
8:10:38>> Uh yes, I agree.
8:10:39>> Okay. Um and then I I wanted to
8:10:43understand what the total um 2025 sales
8:10:46looked like. Maybe there was somewhere
8:10:49this was, but I went back to hearing
8:10:51exhibit 120 attachment JMG1 where you
8:10:55showed the actuals for the first half of
8:10:57the year and just blended it with the
8:10:59actuals for the second half of the year.
8:11:01Um, and there um let's see, I came up
8:11:07with um 28 let's see 28
8:11:13are we gigawatt hours or megawatt hours
8:11:16here? megawatt hours.
8:11:17>> Megawatt hours. All right. Then
8:11:1928,797,840
8:11:23megawatt hours for total retail sales
8:11:26for 2025. Does that sound reasonable?
8:11:29>> It does. And I believe there's an
8:11:31attachment to my rebuttal that shows the
8:11:34full year of of actuals. And and if
8:11:37you're not spot on, you're very very
8:11:38close.
8:11:39>> Okay. Okay. It's it's in the
8:11:40neighborhood. Um so I went back. I was
8:11:45just curious how this compared to what
8:11:46we've seen in other proceedings and
8:11:49actually UCA had submitted um the direct
8:11:53testimony JTS forecast um which I think
8:11:57they had marked as hearing exhibit 302
8:12:00attachment LHS
8:12:0238.
8:12:04Um and in that on page 45
8:12:10you can see here uh total retail sales.
8:12:13So at that point in time when this was
8:12:15submitted for the JTF
8:12:17um the forecast for retail sales was
8:12:2132,810.
8:12:23Now we're in gigawatt hours. Um
8:12:25>> yes
8:12:26>> uh do you see that?
8:12:28>> I see that.
8:12:29>> Okay. And then I will say also um I have
8:12:33uh provided to Miss Fuo your rebuttal
8:12:37from the JTS which I think we've
8:12:40premarked as hearing exhibit 15 19 which
8:12:44shows a similar table updated in your
8:12:48rebuttal on page 17 of that.
8:12:54Um, and hopefully we can get that up,
8:12:57but the number uh, yeah, page 17, the
8:13:00number increased to 33,373
8:13:05um, megawatt hours there. Do you see
8:13:08that?
8:13:10>> I do.
8:13:11>> For total retail. Okay. So essentially
8:13:14between the direct case and rebuttal
8:13:17case we had about a 1.7% increase in the
8:13:21total retail forecast in the JTS. Does
8:13:25that make sense?
8:13:27>> Um yes.
8:13:29>> Okay. Um but we would compare that. So
8:13:32this is the most recent that we had in
8:13:34the JT. This was submitted in May of
8:13:372025.
8:13:39>> Okay. Um and this was 33,373
8:13:43gawatt hours um as the forecast for 2025
8:13:47and we were you know nearly halfway
8:13:49through the year when this was
8:13:50submitted. Um so that is about 13.7%
8:13:56higher than the actual sales in 2025.
8:13:59Does that sound accurate?
8:14:01>> Well, so a couple things to note here.
8:14:04Um it's not apples to apples. So, first
8:14:07in the JTS, it's energy, not sales. So,
8:14:10we're adding back the line losses. So,
8:14:13that's going to add um six 7% somewhere
8:14:17in that range most likely um to a sales
8:14:19forecast or an energy forecast. And then
8:14:22the second piece is in the JS it's
8:14:23native. So, we're also adding back the
8:14:25impact of solar.
8:14:27>> So, there they should be they should be
8:14:29pretty different.
8:14:31>> Are there any is there any place where I
8:14:33can see that comparison?
8:14:36not in the record in this case I
8:14:38believe.
8:14:39>> Okay. I'm trying to understand you know
8:14:41we we get forecast across all of these
8:14:43different proceedings and they are
8:14:45different values. So I think it's
8:14:47increasingly important for the
8:14:49commission to be able to compare
8:14:51>> these values across different
8:14:53proceedings to understand what's being
8:14:56presented in each.
8:14:58>> Uh understood. We can take that as a
8:15:00note to maybe just include a
8:15:03you know in one or the other we can
8:15:04include the other concept as well as a
8:15:06point of comparison.
8:15:07>> Okay. Yeah, that would be very helpful
8:15:09just so we can look at how actuals are
8:15:12actually stacking up to these forecasts
8:15:14because it seems like we have somewhat
8:15:16incompatible um data is is what you're
8:15:20saying. And I would really appreciate
8:15:22the ability to be able to to compare it
8:15:24side to side.
8:15:26>> Okay, understood.
8:15:27>> Awesome. Those are my only questions.
8:15:29Thanks so much.
8:15:30>> Uh you can take that down. Uh Dr. Good
8:15:33enough, would you be willing to provide
8:15:37uh uh uh an exhibit in this case that
8:15:40shows the difference between the uh ERP
8:15:43and the rate case uh you know sales to
8:15:47to generation uh link. So we can see
8:15:50that uh could you do that uh you know
8:15:54sometime uh in the coming days? Yeah, we
8:15:57can we can certainly provide the sales
8:15:59from the JTS kind of the lower concept
8:16:01in JTS. I'm I'm thinking through if we
8:16:04have like the final solar numbers um for
8:16:062025
8:16:08to get to a native but just any point
8:16:10any anchoring point we can provide the
8:16:12sales from the the JT.
8:16:14>> Yeah. And it doesn't have to be perfect
8:16:16if it could just be indicative so we can
8:16:18understand. Um can you pull up hearing
8:16:20exhibit 152 uh JMG uh 8
8:16:27And uh I think this is the uh document
8:16:30you refer to uh with Commissioner
8:16:32Gilman. It's 2025 actual sales and
8:16:36customers. Uh and I think uh
8:16:39Commissioner Gilman quoted 28797841.
8:16:44Uh
8:16:49>> yeah, you see that
8:16:50>> this is what I was referencing. That's
8:16:52correct. And this is I think the tab
8:16:56number in the Excel spreadsheet says
8:16:592025 actual sales and customers. Uh uh
8:17:03would you accept that is what how it's
8:17:05labeled?
8:17:06>> Uh yes I would.
8:17:08>> And I'm uh just going down a little bit
8:17:11of a different path. Uh this is all
8:17:14weather normalized. So it is not
8:17:16actuals, right? It's not actual sales.
8:17:19It's weather normalized sales.
8:17:22it it is uh weather adjusted as as
8:17:24labeled. I think I was trying to like
8:17:27draw the line between actual weather
8:17:29normalized sales and then the forecast
8:17:30that we had initially provided.
8:17:32>> Understood. Um it seems like all the
8:17:37financial documents the 10ks and the
8:17:40investor presentations
8:17:43uh assert sales grew in 2025. But I
8:17:47think when you look at actual sales, it
8:17:50actually declined I think by almost a
8:17:53decent amount. Um so and I guess two
8:17:56questions. One, do you have actual sales
8:17:59anywhere on this record or anywhere? Uh
8:18:02everything I saw was all weather weather
8:18:05normalized.
8:18:06>> I I believe everything in this record
8:18:08would be weather adjusted.
8:18:11Um uh well maybe as part of responding
8:18:14to Commissioner Gman, could you present
8:18:17uh actual actuals?
8:18:19Uh and I'm I'm not saying it's not uh
8:18:21labeled correctly. I guess I guess the
8:18:23reason I'm asking is because uh I just
8:18:28wonder if how confident you are in the
8:18:31weather normalization.
8:18:33Uh I mean it seemed like it was a really
8:18:36hot year. It seems like there's been
8:18:38multiple really hot years and you know
8:18:41are we weather normalizing uh these
8:18:44sales based on data back 20 30 years
8:18:48when the same patterns may not hold. Can
8:18:52you just talk a little bit about the
8:18:54weather normalization?
8:18:56>> Yeah, so our current weather uh
8:18:58normalization process uses um
8:19:00coefficients from 15-year regression. So
8:19:03it's monthly observations for 15 years.
8:19:06Um, you know, it's not perfect. I we'll
8:19:09we'll certainly agree to that. And
8:19:11particularly when particularly when you
8:19:13see extreme weather, so a warmer month
8:19:17than you've seen, you know, a warmer
8:19:18winter month than you've seen in the
8:19:20last 10, 15, 20 years, those kinds of
8:19:21things. The the model kind of breaks
8:19:23down at those tail ends. It does a
8:19:24better job in, you know, a weather
8:19:26that's been observed, you know,
8:19:28frequently over over that period of
8:19:30time. Um, I would have to go back and
8:19:33look at the adjustments we made and and
8:19:36you know providing actuals would allow
8:19:37you you all to do that as well. Um, I
8:19:40think what we ended up adding a lot back
8:19:41in the winter months because they were
8:19:43mild milder than normal more so than you
8:19:45you were mentioning some hot summers. I
8:19:47think we were we were taking sales away
8:19:49in the summer months if I remember
8:19:50correctly. Um, but yeah, it's it's
8:19:54certainly um, you know, we we have faith
8:19:56in the estimates. We think they're
8:19:57they're uh good estimates. Um but
8:20:00they're they're not perfect partic in
8:20:02particular when you see the that extreme
8:20:03weather.
8:20:05>> Well, if you could just do uh the
8:20:07actuals versus the weather normalized
8:20:09for the last few years. Um
8:20:11>> yeah,
8:20:11>> that would be valuable to me. Uh I'm
8:20:14just I'm just not sure what normal
8:20:16weather is uh right now. and uh um
8:20:23just trying to make up my mind what this
8:20:26story is and uh uh what's going on
8:20:29because you know certain documents talk
8:20:31about increases when actuals actual
8:20:34actual actuals decrease. So uh that's
8:20:37all I had uh redirect miss Brahma
8:20:42>> no redirect thank you
8:20:45>> uh Mr. Good enough. You may be excused.
8:20:47Thanks uh for joining us today.
8:20:52>> Uh let's see who's next? Uh
8:20:57I think we'll call it a day. Um
8:21:00uh any final things before we break?
8:21:04>> Uh yes, chair. I do have a couple of
8:21:07questions. I I if I recall correctly
8:21:09from this morning, I believe
8:21:11Commissioner Gilman wanted to reserve
8:21:13Yen Lee if she didn't get the answer she
8:21:17was looking for from Mr. Pay. So, I just
8:21:20was, if I remembered correctly, I just
8:21:22wanted to see if we still need to have
8:21:24her available tomorrow.
8:21:26>> No, she can be excused. Thank you.
8:21:28>> Thank you very much.
8:21:30>> And how about Miss Miss Allison, I
8:21:32guess, is the next one,
8:21:34>> right? It was a little unclear to us
8:21:36whether Uh, AERP still has uh, we may
8:21:40have misheard. We don't know if they
8:21:41still have cross for Miss Allison or
8:21:43Miss Doyle.
8:21:45>> I think we've excuse Miss Doyle. I think
8:21:49uh, AARP did not have questions for Miss
8:21:52Allison, but I think Commissioner Gilman
8:21:54may have.
8:21:55>> That's correct.
8:21:57>> That That is correct.
8:22:00And I uh I can also um I believe I can
8:22:06wave um Mr. Salazar and Mr. uh Digel or
8:22:11Digel.
8:22:14>> I have questions for M Mr. Deagel Digle.
8:22:18>> Okay.
8:22:20>> Uh but and it looks like Boulder has
8:22:22questions for Mr. Salazar.
8:22:24>> Yeah. Okay.
8:22:26>> So, uh it looks like tomorrow we're
8:22:28going to start with Ms. Allison
8:22:30go to Ms. Lovely,
8:22:34Salazar,
8:22:37Deagle.
8:22:39We excuse Watson
8:22:42and then Mhler, McCone,
8:22:46Hansen, Nickel, McGregor, Miller. Oh,
8:22:49Miller I think is excused.
8:22:54So, uh, is that consistent with your
8:22:57witness order and where we're at,
8:23:00>> Miss?
8:23:01>> My witness, sorry, chair. Um, my witness
8:23:04order is slightly different. I do know
8:23:06Mr. Hansen is not available on Friday,
8:23:08so he will need to go on Monday.
8:23:11>> Okay. Okay.
8:23:15>> Uh, and I believe uh Chad Nickel also
8:23:20>> is Monday.
8:23:22Uh, I'm checking or yeah, Monday or
8:23:25Tuesday, but I think he is also
8:23:26unavailable tomorrow.
8:23:28>> Okay.
8:23:30>> Um, as is Paul McGregor. I did have a
8:23:33question. It looks like there's only
8:23:36five minutes reserved for Paul McGregor
8:23:38and I'm wondering if we need to bring
8:23:40him in for that.
8:23:43>> Uh, I think that's up to Mr. Kaufman.
8:23:46>> Up to Mr. Kaufman. Yes.
8:23:49I I can I can wave my questions of him.
8:23:55>> Are you sure? You don't have to.
8:23:57[laughter]
8:23:58>> No, I'm sure. I'm sure. Yes.
8:24:01>> All right.
8:24:02>> I don't have any questions for him
8:24:04either.
8:24:05>> Okay. Uh how about you, Commissioner
8:24:07Goen?
8:24:08>> I don't. Um and I did just want to in
8:24:12Sorry, long day. Um, [laughter] in
8:24:15response to the questions about order,
8:24:17I'm expecting that if we need to bring
8:24:20Miss Lovely, it'll be after Mr.
8:24:22Freighus. Um, because I'm hoping he can
8:24:24just answer the questions. So, just a
8:24:26note on that order.
8:24:28>> Correct. And we've checked on her
8:24:30availability. It doesn't look like we
8:24:32have any problems with her availability.
8:24:35So, that should be fine.
8:24:37>> Okay, let me uh try again. So, we got
8:24:40Allison, Salazar, Deagle, Mhler, McCone,
8:24:45uh,
8:24:46Freighus, Lovely.
8:24:51Is that that right?
8:24:52>> Yes.
8:24:53>> And then we'll start Monday with
8:24:55Piscuchi, Wer, Buckley, Hansen, Nickel.
8:25:03>> That sounds fine with us, your honor.
8:25:05And I just wanted to confirm, did we did
8:25:07we 100% confirm that the uh
8:25:10commissioners don't have any questions
8:25:11for Mr. McGregor?
8:25:14>> Okay,
8:25:15>> Commissioner Plant.
8:25:18>> No, I don't.
8:25:19>> I don't.
8:25:20>> Commissioner. All right.
8:25:22Uh, Miss Nelson.
8:25:24>> Yes, Chair Blank. I just want to let
8:25:26everybody know that UCA has waved uh Mr.
8:25:31Mulliver to the extent we need um any
8:25:34time uh we can move that 30 minutes over
8:25:37to somebody else but just for planning p
8:25:40uh purposes for tomorrow we won't be
8:25:43asking him any questions.
8:25:45>> All right. So we'll see. Tomorrow may be
8:25:48an early day. Uh uh I don't think uh we
8:25:53put staff on till uh Monday. Uh um so
8:25:59that maybe that helps Miss uh O'Neal uh
8:26:02plan
8:26:04uh or at least I won't be ready uh till
8:26:07Monday. Um all right. Any other uh
8:26:11matters uh before we uh break for the
8:26:14night?
8:26:16>> Not from the company. Thank you.
8:26:18>> All right. Thanks all. See you tomorrow
8:26:20at 9:00 a.m. 9:00 a.m.
8:26:24>> Thank you, your honor.

About this transcript

This page contains the full transcript of YouTube transcript (YN2juavJE4o) , generated from the public captions YouTube serves with the video. The transcript has 51,364 words across 8,348 segments, with the original timestamps preserved so you can click any line to jump to that moment in the embedded player.

What you can do with it

Use the transcript to take notes, quote the speaker, build a study guide, generate a summary with ChatGPT or Claude via the YouTube Summary tool, or export it as a timed subtitle file with YouTube to SRT. You can also re-open it in the transcriber to translate the transcript into 100+ languages.

Free YouTube transcript tool

YouTube2Text is a free YouTube transcript generator — no signup, no daily limit. Paste any YouTube link and get the full transcript instantly, with timestamps, click-to-jump, translation to 100+ languages, AI prompts for ChatGPT, Claude, and Gemini, and exports to TXT, SRT, VTT, or Markdown.