We're going to go ahead
and get started here this
morning.
Just the kind of recap a
little bit of what today
and where we left off
yesterday and what today
will look like.
So it's 8:00 now.
I'm going to try to stay
consistent with a break
every two hours more or
less depending on kind of
where there is a good
break in the questioning.
12:00 we will break for
lunch.
We MAY go late today.
I was kind of alluding
that yesterday.
So I want to plan for
maybe a 9:00 finish if we
need that much time this
evening and then we will
have a break at some point
maybe as kind of a dinner
break at some point maybe
chat a little bit at the
lunch hour figure out when
the right time for that
would be.
So if we're good with
that, let's go ahead and
pick up where we left off.
MR. Stryker is here in the
witness box.
Sierra club, I will kick
it back to you.
>> if you are member
yesterday we were
discussing limitation
guidelines and your and
teco's contention at big
bend four and polk one
discharging waste waters
into underground injection
wells, is that correct?
>> MS. Sparkman: that is
correct.
>> can you please refer to
cl exhibit cl exhibit 799
purges f-6 207 and f6 208,
please?
So just staying on 206 --
or sorry, 207, teco spent
about $33.3 million to
build underground
injection wells at big
bend, correct?
>> MR. Stryker: that's
correct.
>> and then moving on to
the next page, teco spent
over $30 million to build
underground injection
wells at polk, correct?
>> MR. Stryker: that is
not correct.
The total cost of the
wells was about 30
million, but 50% was
funded by swift mud.
>> okay.
To map that out, that
would be about 15 million
and half --
>> MR. Stryker: about 7.5
million was funded by
water management district.
>> sorry, you said 22.5
million?
>> MR. Stryker: 7.5
million.
>> in total somewhere
around 55 million total
spent on underground
injection wells in total?
>> MR. Stryker: sounds
about right.
>> and were these wells
built to comply with the
eog rule, which was
imposed last year and
adopted earlier this year?
>> the primary purpose of
the polk wells to was to
reclaim to reduce its
groundwater withdrawal and
consume reclaimed water
from the city of lakeland
and the injection was part
of the treatment process.
-- one of which was
compliance with eog rule.
The other reason was an
additional way to manage
stormwater on the side.
>> can you please refer to
cel exhibit c4 starting on
f-6 06?
So this is big bend's
revised national pollutant
distribution system permit
application.
Are you familiar with it?
>> I am somewhat familiar
with it, yes.
>> this revised
application was submitted
in FEBRUARY 2024, is that
correct?
>> MR. Stryker: it was
originally submitted in
2015, but the renewal
process has been delayed
and my understanding
updated app application
because so much has
changed since the time the
application was originally
submitted.
>> right, so that update
was submitted in FEBRUARY
of this year.
>> MR. Stryker: I believe
that's correct.
>> and this application
generally covers teco's
application at big bend in
their compliance with the
clean water act, is that
right?
>> MR. Stryker: that's
correct.
>> can you please refer to
page 10 of this document,
which is f-6 515?
This permit generally
refers to eog rules permit
requirements, is that
right?
>> MR. Stryker: that's
correct, this document is
a fact sheet by the
environmental --
department of environment
protection.
>> no untreatable water
can be discharged into the
united states, is that
right?
>> MR. Stryker: I believe
that's correct, yeah.
>> so there's a revision
in this fact sheet that is
attached to the permit
application on this page
that states "the facility
does generate fgd
wastewater and therefore
the limitations of cfr --
for fgd wastewater are not
applicable in this case.
Do you see that?
>> MR. Stryker: I do.
>> and fgd is bluegrass
diesel fertilization,
which is a result of polk
combustion?
>> MR. Stryker: it's a
product of coal combustion
afterwards treated to
remove emissions.
>> and uic stands for
underground injection
control is?
>> MR. Stryker: that is
correct.
>> based on the
highlighting of this
provision, it looks like
the revision was published
in MARCH 29, 2023.
Teco went from stating
that it's fgd wastewater's
are subject to the fgd
rule to subject that it's
fgd wastewater's are not
subject because it will
now inject wastewater into
these uic wells, is that
correct?
>> MR. Stryker: I don't
know if we ever said the
waters are subject to the
elg.
This is in our document.
This is the florida dep's
document.
>> it looks like the
florida dep said added the
word "not".
So.
>> MR. Stryker: I don't
know that the highlight
means this wasn't an
addition.
I don't know who
highlighted this or why it
was highlighted.
>> okay.
Presumably, the florida
dep works with teco in
order to produce this
document, correct?
>> MR. Stryker: it is a
collaborative process, but
once again I don't know
who wrote what.
>> okay.
Understand.
But you nevertheless agree
with this statement?
>> MR. Stryker: I agree
with the statement as it
is currently written.
>> has epa confirmed this
language or, you know,
confirmed this permit
revision that fgd
revisions are not
applicable because fgd
blowdown can be discharged
to uic wells?
>> MR. Stryker: I don't
know whether epa has
agreed with it or not in
florida.
Florida MS. Wessling has
jurisdiction over the
program.
It is not require epa's
approval.
Epa would have opportunity
to review and comment on
the draft permit, which I
believe --
>> this permit has not
been granted yet?
>> MR. Stryker: that's
correct.
However, the epa has
reviewed and uic permit
has been issued.
Uic permit doesn't
specifically state that
fgd blowdown water can
beat injection -- injected
into the groundwater at
big bend.
>> has teco confirmed the
accuracy of this
contention within the
permit with epa --
>> MR. Stryker: dep has
primacy over this program.
>> is possible teco will
not be able to get around
fgd by injecting
wastewater into uic wells,
right?
>> MR. Stryker: no, as I
mission before, the
permitting agency that has
permitting of this is dep
of florida.
Elg are not applicable to
big bend because injection
controls are not --
>> objection.
Asked and answered.
>> CHAIRMAN La Rosa: it
has been.
>> could you please turn
to cl exhibit to cl
exhibit 121 in page c3 to
3580?
Epa estimated the cost of
elg compliance due to
dealing with fgd
wastewater at big bend is
about 129 million in
capital cost and 9 million
in operating and
maintenance cost, is that
right?
>> MR. Stryker: I'm going
to take your word for it
because there's no way I'm
reading that.
>> have you seen this
document before?
>> MR. Stryker: if it's
the same as the
spreadsheet during the
deposition, I saw it then.
>> are you aware of -- at
big bend?
>> MR. Stryker: I am.
>> and, MR. Stryker, when
do elg wastewater rules go
into effect?
>> MR. Stryker: I believe
this year.
>> can you please refer to
cl exhibit refer to cl
exhibit 798 page f-6 192?
Have you seen the cpa
document before, MR.
Stryker?
>> MR. Stryker: I saw it
recently when you guys
submitted it as a hearing
exhibit.
I have not seen it before
that.
>> would you accept it was
published along with 2024
elg guidelines in APRIL of
this year?
>> MR. Stryker: if you
say so.
I have no way to know its
source and authenticity.
>> okay.
could you turn to page 4
--
>> MR. CHAIRMAN?
Object on the bigness that
the witness just said he
doesn't know what this is
and there's no foundation
to what it is or accuracy.
>> CHAIRMAN La Rosa: can
you give more explanation
of what the exhibit is?
>> MR. CHAIRMAN, this
exhibit is a document
summons submitted to the
federal register.
Is a compliance cost
document associated with
the elg rule of which MR.
Stryker is apparently the
expert witness.
>> CHAIRMAN La Rosa: can
the witness clarify
whether they are familiar
with this document?
>> MR. Stryker: excuse
me?
>> CHAIRMAN La Rosa: can
you clarify whether you
are familiar with this
document?
>> MR. Stryker: I am not
familiar.
>> CHAIRMAN La Rosa: then
sustained.
>> could you please turn
to exhibit to exhibit 795
in the cl page f-6 120?
Which is the big bend uic
permit.
Are you familiar with this
document, -- one?
>> MR. Stryker: yes, I
am.
>> this is permit for the
two water injection wells
that teco built at big
bend four, correct?
>> MR. Stryker: that's
correct.
>> and I believe that
these were built in 2023,
is that correct?
>> MR. Stryker: they went
into service in 2023.
They were constructed over
a period of making it a
year or so.
>> this permit was granted
by the florida department
of environmental
protection, correct?
>> MR. Stryker: that's
correct.
>> if you turn to page 3
of this permit, f-6 122.
States the injection wells
will also be permitted to
receive bluegrass diesel
authorization or fgd
wastewater from tampa
electric big bend station
after department approval
of the analysis of the fgd
waste treaty.
Do you see that?
It's the middle of the
bottom paragraph on this
page?
>> MR. Stryker: I do.
>> has teco received this
department approval?
>> MR. Stryker: yes, we
have.
>> and winded teco receive
that?
>> MR. Stryker: was
recently.
However, that recent
approval was only to allow
direct ingestion of fgd
wastewater since the
initial we were permitted
to discharge the fgd
wastewater into the well
as part of -- recycled
water system.
The approval we recently
received from the eep
since day one of our
operation of the wells we
have been able to
discharge that same water
into the wells because it
was mixed into other waste
streams.
>> can you turn to page 6
of this document, f-6 125?
Here the permit states
injection of fgd
wastewater is authorized
after department approval.
The perimeter table MAY be
amended based on the
constituents detected in
the fgd or other waste
stream analysis.
Do you see where it says
that?
>> MR. Stryker: I do.
>> was the perimeter table
amended?
>> MR. Stryker: no, it
was not.
>> department approval?
When does teco anticipate
getting epa approval with
regards to the elg?
>> MR. Stryker: epa
approval?
Never.
>> why do you say that?
>> MR. Stryker: because
it's not a requirement to
do it in the state of
florida.
>> it's not a requirement
in the state of florida to
get an ea -- eap approval?
>> environmental
protection agency has --
in the state of florida.
>> MR. Stryker, I have a
few questions about teco
is summer and winter
reserve margins.
Should I ask these
questions or should they
be reserved for witness
aponte?
>> MR. Stryker: those are
questions better for
witness aponte.
>> could you please refer
to your testimony page 7?
Your I think direct
testimony.
And the master page number
is d is d255.
I'm so sorry, that might
be.
[Indiscernible]
>> MR. Stryker: okay.
You state that in addition
with the passage of the
inflation act, federal
government is providing
tax incentives that
benefit customers
, the
solar projects the
customers would not
receive the benefits of
the additional tax
incentives until a later
time.
Do you see that?
>> MR. Stryker: yes, I
do.
It's actually on page 8.
>> you go on.
These cost increases and
additional tax credits
were included in the solar
projects, cost-effective
still provide net savings
to our customers.
I understand that teco
incorporated tax credits
into the cost analyses
while electing to pursue
solar projects, is that
right?
>> MR. Stryker: that's
correct.
>> can you please refer to
teco response for fl psc
exhibit 114, which is
teco's response to sierra
club's 50th interrogatory
master page c32 c323261?
the company has board
approved plans to install
an additional 350 mw of
solar from 27-2028 and an
additional 755 mw of solar
from 2029-2033, right?
Tend to clarify, belong
document beyond 2028 the
plans are preliminary
based on current your site
plan.
>> great.
And then could you please
turn on the same exhibit
page c 32 page c 30 23266.
The company has board
approved plans through the
tenure site plan to
install an additional 70
mw storage project in
2028, correct?
>> MR. Stryker: that is
correct.
>> why is teco not
bringing on more than one
storage project in a six
year period from
2027-2023?
>> MR. Stryker: our basic
storage plan is based on
when we have a need as
based on winter reserve
margin falling below 20%.
We will likely as we move
on evaluate whether it
benefits customers further
to have a criminal storage
above and beyond that.
The only need we have as
far as additional capacity
is not until the winter of
2028.
>> could teco add
additional projects to
ensure mega wattages
impaired with stored while
retiring other assets like
we went for polk one?
>> MR. Stryker: that
would be a lot of storage
and I doubt we can get it
added in that timeframe.
>> but does teco need all
of big bend four in its
capacity?
>> MR. Stryker: yes, we
do.
>> 100% of the capacity of
big bend four to meet its
winter margin?
>> objection.
Asked and answered.
>> CHAIRMAN La Rosa: I'm
going to allow the
question to continue
because I think you're
trying to get something
specific.
>> MR. Stryker: as I
mentioned, this is being
built or proposed because
we will have a shortage in
the reserve margin in that
timeframe.
So by default that means
we need the capacity we
already have because we
are going to need more
than what we currently
have.
Further details of that
analysis would be deferred
to witness aponte, though.
>> because you said that,
could we please look at
exhibit
>> because you said that,
could we please look at
exhibit 120 c 32 3577?
And could you please zoom
in on the last row?
MR. Stryker, as you can
see here, this document
shows this is teco's
response to sierra club
interrogatory
.
It shows that teco's, it
shows teco's winter and
summer reserve margins,
the first column for each
year shows the winter
reserve margin.
Second shows the summer
margin.
Going out to 2033, at no
point does teco is reserve
margin dip below 21%.
So my question is how
could you possibly need
100% of polk one and big
bend four to meet reserve
margin when there's a
surplus of reserve margin?
>> MR. Stryker: there's a
serve -- surplus because
when you look at the
bottom two roles we --
maintain and keep from
falling below.
The second row is the
battery we were just
talking about and below
that is future of
combustion turbine.
Without those future
projects it would fall
below 28% requirement.
>> okay.
That 20%, 21% reserve
margin assumes polk one
and big bend four are
online, right?
>> MR. Stryker: that is
correct.
>> in order to get back up
to 21%, you would need
100% of capacity of big
bend four and polk one,
no?
>> MR. Stryker: I can't
do the math on the fly,
but pretty close to it.
>> that's all my
questions.
Thank you.
>> CHAIRMAN La Rosa:
thank you.
Florida retail federation.
>> good morning, -- one.
how are you?
>> MR. Stryker: great,
how are you?
>> I have a very brief
cross for you regarding
your company's plans and
consideration of what you
are calling carbon capture
and storage.
I've gotten used to
calling it carbon capture
and sql station, but
that's the same thing,
right?
>> MR. Stryker: it is the
same thing.
>> my basic question I
think is pretty simple.
What guarantees from
, what
guarantees does the
company expect to have
that co2 is going to stay
where you put?
>> the main, I wouldn't
call it a guarantee, but
the main assurance is the
class vi usc program,
which is administered by
the epa.
It's a very rigorous
permitting program to both
monitor the design,
construction, and
operation of the wells.
's apartment we are
working with the epa on.
These plans are pretty far
out in the future, but
that is the main method of
compliance.
There's also a 20-30 year
period even after you
would cease injection of
the ground.
The company would have the
obligation to monitor the
status of those wells and
make sure there's no new
effects.
>> MR. Scheffel Wright:
what would happen if a
well or start to leak co2
back into the ambient
atmosphere?
>> MR. Stryker: really
nothing other than he
would've lost what you
were trying to accomplish
in the first place.
Is not hazardous to health
unless in higher
concentrations it would
disperse pretty rapidly.
Currently, as we spoke
about before there is not
a mandate to do any sort
of -- project.
Mainly we're looking at
css because we believe it
prudent not to because the
potential economic
benefits to customers via
tax credits, but also the
significant federal
funding we have been
awarded.
>> MR. Scheffel Wright:
wouldn't you expect that
the potential for epa
enforcement would be
equivalent to a mandate?
>> MR. Stryker: I would,
but I just don't know
which rule they would be
enforcing under because if
there's not a rule saying
you have to do this.
>> MR. Scheffel Wright: I
understand that, and I
think we all understand
this is a future scenario.
My question is what
happens with that work.
>> MR. Stryker: I think
the biggest exposure in
all honesty is the call
back revision of the tax
credit if you do not keep
it sequestered.
the tax credit, you have
to give it back.
I think it's less of an
environmental issue than
in my mind.
>> MR. Scheffel Wright:
thanks very much.
That's all I have.
>> MR. Stryker: thank
you.
Walmart?
>> MS. Eaton: thank you.
I do have a couple of
follow-up questions.
We do appreciate your
commitment to adding clean
energy to your grade and
generation fleet and have
a cook of questions
related to collaboration
with customers in that
regard.
Were you here yesterday
when MRS. Sparkman was
testifying?
>> MS. Eaton: I was not
present in the hearing
room.
>> MS. Eaton: are you
familiar with the optional
customer programs she was
developing and talking
about?
>> MR. Stryker: at a very
high level.
>> MS. Eaton: I'm just
wondering if your team
collaborated with her team
ingathering information
from your commercial and
industrial customers about
their sustainability and
renewable energy goals and
how programs could
ultimately be developed
that help tampa electric
and all -- excuse me, and
all the customers.
>> MR. Stryker: there are
a few members for my team
involved.
Her team as the lead face
on customers.
My team has technological
input to the equipment and
design of potential
projects.
>> MS. Eaton: sure.
At some point your team
would get involved in
order to provide the
technical insight into how
to develop those programs.
The other thing that I
didn't hear you mention,
and perhaps this is
another witness, what is
tempos plans to do with
the renewable energy
credits with these new
solar energy and battery
storage units?
>> MR. Stryker: I don't
believe it's anybody's
testimony.
I know we are currently
selling the renewable
energy credits and hundred
percent flow back to
customers and fuel because
, witness heisey can
elaborate more.
>> CHAIRMAN La Rosa:
thank you.
Staff?
>> Staff: staff has just
a couple of questions.
Good morning, -- one.
I would like to ask you a
couple of brief questions
about the 98.4 million
from the department of
energy that you discussed
in your direct testimony.
Are you familiar with
that?
>> I am.
>> Staff: what was that
funding for?
>> MR. Stryker: it was
for three different
funding orders.
One of them was a front
end engineering and design
study to evaluate carbon
capture storage or
sequestration technology
in our polk unit two
combined cycle.
That was approximately $5
million award.
The second award was to
build upon on that study
and take the feed study to
the next level, which
would include evaluating
the storage and
transportation component
of the project.
Including developing
permit application.
It's really taking the
engineering to the next
level.
There was another $5
million.
The biggest award in the
$88 million as part of
what's called the carbon
safe program and that is
to do with detailed
geological
characterization including
drilling up to two wells
and 3d seismic survey.
>> Staff: could that
funding has been used for
something besides carbon
capture and storage
evaluation?
>> MR. Stryker: no, it
cannot.
>> Staff: is teco using
1/3 party -- who is that
contractor?
>> MR. Stryker: there's a
couple of them.
Sergeant lending is our
engineering consultant
doing the engineering.
what we call the balance
of planned engineering.
-- seven clean energy and
ari or advanced resources
internationalism are
geological consultant.
>> Staff: thank you very
much.
Those are all the
questions I have.
>> CHAIRMAN La Rosa:
thank you.
Commissioners, any
questions?
Commissioner graham?
>> Commissioner Graham: I
am a very serious question
for you.
Who is responsible for
naming these solar plants?
Bullfrog creek,
cottonmouth, I mean.
>> MR. Stryker: I wish it
wasn't me.
It's kind of a
collaborative effort.
It's funny, a lot of those
names have changed
multiple times, but we
tend to find a water body
or geological feature and
try to name them.
There actually is a
bullfrog creek and
cottonmouth branch.
>> Commissioner Graham:
thank you.
>> CHAIRMAN La Rosa:
commissioners, any other
questions?
Seeing none, we're back to
teco for redirect.
>> MR. Stryker, you recall
questions about the ccs
project yesterday and
today.
>> MR. Stryker: I do.
>> is teco requesting --
in this case?
>> MR. Stryker: no, as i
mentioned before, the only
request in this case is
our cost year of the doe
awards.
>> de recall a line of
questioning yesterday when
there is a current limit
of omissions for polk unit
two?
>> MR. Stryker: I do.
>> if there is not an
emissions limit, why are
you proceeding with this
now?
>> MR. Stryker: one is
the credibility of funding
that MAY not be available
in the future if and when
there becomes a mandate.
The other reason is, as I
mentioned, you heard in
witness collins testimony
we are constantly looking
for ways it can benefit
the customer and the
affordability concern and
the magnitude of the
taxpayers associated,
we're talking $3 billion
in tax credits over the
life of the project.
We feel it would be
imprudent for us to not
evaluate the potential of
such a project.
>> no further questions.
>> CHAIRMAN La Rosa:
great.
Thank you.
Let's start with moving
some exhibits into the
record.
Teco, do you have any
exhibits?
>> yes, we move exhibits
19 and 143 into the
record.
>> CHAIRMAN La Rosa: 19
and 143.
Any objections to those?
see no objections, see
them entered into the
record.
Do any parties have any
exhibits?
Start with opc.
>> things, MR. Chair.
Opc would move into the
record hearing exhibits
408, 300, and 457, please.
>> CHAIRMAN La Rosa: any
objections to those
exhibits?
Seeing none, show them
entered into the record.
Lulac?
>> thank you, MR. Chair.
Lulac would move hearing
exhibits 616, 646, 677,
678, and 711 into the
record.
>> CHAIRMAN La Rosa: any
thoughts or concerns?
>> no objections.
>> CHAIRMAN La Rosa: no
objections.
Show them entered into the
record.
>> sierra club would like
to introduce exhibits 799,
714, 121, 795, and 120
into the record.
>> no objections.
>> CHAIRMAN La Rosa: no
objections.
Show them entered into the
record.
Any other intervening
parties have exhibits to
enter into the record?
Seeing none, I think we
can go ahead and move on.
MR. Stryker, you are
excused.
Thank you for your witness
testimonies today.
All right.
I will throw it back over
to teco.
You can introduce your
next witness.
Okay.
MR. CHAIRMAN, before we do
that if you don't mind I
did a little lawyer map
and it looks like we've
got about 14 tampa
electric witnesses left
and 13 intervener
witnesses.
We talked about it on the
table electric side.
I talked to MR.
Trierweiler and MR.
Rehwinkel.
Tampa talk about we
probably would not
cross-examine intervener
witnesses.
We are part -- prepared to
say we would not
cross-examine any
intervener witnesses
and/or staff witnesses and
we are perfectly happy to
have them insert their
testimony into the record
as though red and the
excused without appearing.
I think public counsel
historically has liked to
have their witnesses make
a summary and they can
speak for themselves, but
we are perfectly happy for
them all to just be
entered into the record
without any summary or
anything.
We also talked a little
bit, there's been
discussion about outside
witnesses experts, trying
to get them all done
tomorrow.
We are fine with that.
I have also understood
from MR. Rehwinkel that
maybe they are going to do
a little bit of work and
see if they can figure out
how to trim
cross-examination, too,
but we are working on the
schedule and for planning
purposes wanted everyone
to know that tampa
electric is fine with all
the outside experts,
out-of-town witnesses
appearing tomorrow, we
would like hours to do
that, too, if we can and
will not be
cross-examining the
intervener or staff
witnesses.
>> CHAIRMAN La Rosa:
thank you, and I
appreciate the discussion
back and forth to help us
move along.
I'm going to consult with
my staff just really
quickly to see if there's
anything that we can maybe
move to expedite things.
So if you MAY be just give
me 2 and a half minutes
and I will come right
back.
>> CHAIRMAN La Rosa: all
right.
I think we can jump back
and.
Got what I needed from
that.
Certainly appreciate the
parties working through
things and to continue
working on things.
Thank you guys.
Let's move back to teco to
introduce their next
witness.
>> tampa electric calls
jose aponte, please.
>> CHAIRMAN La Rosa: MR.
Aponte, before you sit
down, I don't believe you
have been administered the
oath yet.
Do you mind stay standing
and raise your right hand.
Do you swear and affirm
the testimony you are
about to give will be the
truth, the whole truth,
and nothing but the truth?
Thank you.
Have a seat, settle in,
and will give you a few
seconds to get situated.
It's yours when you're
ready.
>> MR. Wahlen: would you
please state your name for
the record?
>> MR. Aponte: jose
aponte.
>> MR. Wahlen: and who is
your current employer and
business address?
>> MR. Aponte: table
electric company business
is 702 north franklin st.
>> MR. Aponte: table
electric company business
is 702 north franklin st.,
tampa, fl.
The limb did you prepare
cause to be filed in this
docket APRIL 22, 2024,
prepared direct testimony
consisting of 38 pages?
>> MR. Aponte: yes.
>> MR. Wahlen: did you
also prepare cause to be
filed prepare a rebuttal
testimony consisting of 15
pages?
>> MR. Aponte: yes.
>> MR. Wahlen: do you
have any additions or
corrections to your direct
rebuttal testimony?
>> MR. Aponte: I do not.
>> MR. Wahlen: if I would
ask you questions prepared
in your direct and
rebuttal testimony, with
those answers be the same?
>> MR. Aponte: yes, they
would.
>> MR. Wahlen: tampa
electric request it be
inserted into the record
as though red.
MR. Aponte, did you also
prepare cause to be filed
with your direct testimony
exhibit marked j a-one
consisting of 22
documents?
>> MR. Aponte: yes.
>> MR. Wahlen: did you
prepare cause to be filed
exhibit marked j a to
consisting of three
documents?
>> MR. Aponte: yes.
>> MR. Wahlen: MR.
CHAIRMAN, for the record
we will note exhibits ja
one and two have been
identified in the
comprehensive exhibit list
as exhibits 20 and 144.
>> CHAIRMAN La Rosa:
okay.
>> MR. Wahlen: MR.
Aponte, we please
summarize your direct and
rebuttal testimony.
>> MR. Aponte: good
morning, commissioners.
My name is MR. Aponte.
As you are aware, the
company is proposing
several resource additions
to its general portfolio
in order to satisfy our
reserve margin needs and
affordability for
customers.
My direct testimony
demonstrates that the
projects in the proposed
portfolio consisting of
this tampa resilience polk
one flexibility, future
energy storage and future
energy projects are
cost-effective, they are
prudent, promote
efficiency and fuel
diversity, and enhance the
reliability and resilience
of the company's system.
Together, these projects
are expected to save
customers about $1.2
billion in fuel costs.
And over $490 million in
cumulative present value
revenue requirements.
My rebuttal testimony
serves several purposes.
It refused criticism
raised by fipa and lulac.
It addresses comments from
sierra club about the
economics of converting
polk unit one to a single
cycle unit and responds to
fipug's -- this concludes
my summary.
Thank you.
>> MR. Wahlen: MR. Aponte
is available for
cross-examination.
>> CHAIRMAN La Rosa:
thank you.
Opc, you are recognized.
>> good morning.
Can I ask you to turn to
page 6 of your direct
testimony?
25302.
>> MR. Aponte: yes.
>> on page 6 starting on
line 13, then you say the
purpose of your testimony
is to do the
cost-effectiveness test to
support teco's request to
include the multiple
generic projects, correct?
>> MR. Aponte: yes.
>> okay.
and then if you move on to
page 7 of your testimony,
starting at line 1 you
start to say that your
testimony shows from a cpv
rr basis the company's
resource plan is
favorable, is that
correct?
>> MR. Aponte: yes.
>> okay.
What does cpvrr mean?
>> MR. Aponte:
communicative present
value revenue
requirements.
>> okay.
Would you agree that the
-- five is intended to
compare the alternative of
the proposed unit and its
revenue requirement to the
next alternative unit?
>> MR. Aponte: yes,
that's correct.
>> okay.
And you're the person who
developed the economic
evaluations and support
for the companies solar
projects, correct?
>> MR. Aponte: correct.
>> would you agree that in
your economic evaluations
for the new solar
resources, you used a 35
year service life for the
solar?
>> MR. Aponte: yes.
>> would you also agree if
you use ash longer or
shorter service life the
economic evaluation and
present value benefit or
harm of adding the
resource compared to the
base rate?
>> MR. Aponte: it would
change it.
>> and isn't it true if
you used a shorter service
life, it would reduce the
economic benefit of the
solar resources?
>> MR. Aponte: subject to
check, I believe the
change will be
insignificant.
>> but you would agree
that it would lessen the
economic benefit?
However slightly.
>> MR. Aponte: not having
done it, I would have to
say it's just a small
change.
I don't know which way it
would go.
>> okay.
If the solar project is
delayed or never billed,
that would reduce the
economic benefit of the
solar resource itself,
correct?
>> MR. Aponte: yes.
>> I would ask to look at
opc five.
And as soon as that is up,
there we go.
Do you see that workpaper?
>> MR. Aponte: yes.
>> okay.
Is this your analysis for
the solar farm project?
>> MR. Aponte: yes.
>> looking at the bottom
there's a note there, I
know it's difficult to
read and would be easier
from your laptop.
It says 2053 contains and
affects.
Does this mean the -- five
analysis was done for 30
years or three 2053?
>> MR. Aponte: what that
means is in order to
capture the full revenue
requirements for assets
that go in service later
in the time horizon, we
have to extend the
calculations past 2053 to
capture their full revenue
requirement components of
future assets.
>> okay.
Is a correct that the
company does not have any
specific plans to retire
its solar resources prior
to the 35 year service
life reflected in the
economic evaluations?
>> MR. Aponte: yes.
>> and would you agree
that in the near term, and
this is a slightly
different take.
Artificial intelligence
holds the possibility of
lowering operating costs
of and extending the lives
of your solar generation
facilities, if you know.
>> MR. Aponte: sorry, you
said artificial
intelligence?
>> mm-hmm.
>> MR. Aponte: I hope it
will.
I'm not sure it is.
>> I would ask you look at
opc 1, and this should be
a copy of the 10 year site
plan.
Are you familiar with this
document?
The company's 10 year site
plan?
>> MR. Aponte: yes, I am.
>> I think that's just the
coversheet, but if you
move down to page -- I'm
sorry, there it is.
Two pages you can see the
cover page for the 10 year
site plan.
>> MR. Aponte: yes.
>> then I would ask to go
to page 80 f21-80, which
is page 78 of this 10 year
site plan.
And once we get there, I
was going to ask you to
take a look at this, which
is the
, I believe it is
the english creek 10 year
site plan.
And if you can look down
at the bottom of this
portion of the document
and under line 13, I
believe it says that the
service life or the book
life here is 35 years, is
that correct?
>> MR. Aponte: yes.
>> okay.
And then if we go to the
next page, which is
another project, this is
the bullfrog creek
project, right?
>> MR. Aponte: yes, it
is.
>> okay.
And if you go down to that
same line, 13, and go to
book life years, it also
says 35 years, correct?
>> MR. Aponte: yes.
>> okay.
Let me take you back to
your testimony at page 13
,
and if you can let me know
when you get there.
>> MR. Aponte: I'm there.
>> okay.
I'm going to give it a
second for these guys to
also get there.
Starting at line 7 of your
testimony, you start
talking about the south
tampa resiliency project,
correct?
>> MR. Aponte: yes.
>> and you are adding four
reciprocating engines with
capacity of 71 mw on
macdill air force base, is
that correct?
>> MR. Aponte: that is
correct.
>> and if you go down
further on the line to
page 23 here, you through
the top of the next page,
you say in exchange for
access to the base side,
teco is getting an added
added level of resiliency,
is that correct?
>> MR. Aponte: yes.
>> am I correct that by
adding the resilience you
MAY not south tampa
resiliency project
generation is located in
the middle of a dense load
center?
>> MR. Aponte: yes, it
is.
>> okay.
And would you agree that
adding -- or would you
agree that this would
provide essential backup
power for the base in case
of emergency?
>> MR. Aponte: yes.
>> would you also agree
that you did not include
any government funding in
your -- five analysis?
>> MR. Aponte: I did not.
>> going to page 17 of
your testimony, starting
at line 14, you say the --
five differential was
favorable for customers by
only 10 million without
the omissions, is that
correct?
>> MR. Aponte: yes.
>> you would agree that
the cpvrr would've been
more favorable for
customers if governmental
monetary funding had been
sought?
>> MR. Aponte: not
knowing what type of
funding is good.
I don't know any type of
funding.
>> okay.
If we go on to page 18 of
your testimony, looking at
line 5, you start talking
about the future energy
storage projects, which is
the same thing as utility
scale battery storage,
correct?
>> MR. Aponte: yes.
>> at this time, is teco
planning four battery
storage projects in 2025?
Those would be over mabel,
wamama, and south tampa,
correct?
>> MR. Aponte: yes.
>> and south tampa has
been delayed to DECEMBER,
2025.
Is that still the case?
>> MR. Aponte: yes,
that's my understanding.
>> okay.
Going to the top of page
25 of this document, or
I'm sorry, 24, you discuss
the future solar projects,
correct?
>> MR. Aponte: yes.
>> and if you go over to
the next page on page 25
starting at line 22 if
you're there,
>> MR. Aponte: yes, I am.
>> you can see that you
are also starting to talk
about the company's plans
to build future solar.
Do you see that?
>> MR. Aponte: I do.
>> and on that line, you
say the company plans to
build 448.7 million mw of
additional solar scale pv
projects across its
service territory by the
end of 2026, is that
correct?
>> MR. Aponte: yes.
>> and mi correct these
projects are cottonmouth,
big for booster and
wamama?
>> MR. Aponte: yes.
>> okay.
Would you agree that you
have a total of 97.5 mw of
solar put in place by the
end of 2024?
>> MR. Aponte: yes.
>> okay.
And those would consist of
the english creek and
bullfrog creek project
,
correct?
>> MR. Aponte: yes, that
is correct.
>> if you can go to page
26 of your testimony, you
say that 140 mw of future
solar will be put in place
by the end of 2025, is
that correct?
>> MR. Aponte: yes.
>> those projects are --
and cottonmouth projects,
yes?
>> MR. Aponte: yes.
>> moving on further into
your testimony, you say
you have 240 mw of future
solar that will be put
into the place by the end
of 2026, correct?
>> MR. Aponte: yes.
>> those projects are the
remaining ones, big four,
booster, and wamama?
>> MR. Aponte: that's
correct.
>> if we can look at page
58 for bait stamp 70 of
the 10 year site plan that
is f272.
Soon as we get there we'll
take a look at that.
And yeah, I think 72 I
think master sheet
.
Okay.
And I know it's not right
side out.
You can see that this
shows the current summer
margin reserve for tampa
electric, correct?
>> MR. Aponte: yes.
>> it MAY be easier to
look up on the screen
because it has the correct
orientation.
Can you see that?
And can you see -- do you
have a better view?
Let me know when you got
it in a good orientation
for you to take a look at
it.
>> MR. Aponte: okay.
>> this shows the southern
reserve in 2026 and 29% in
2027, is that correct?
>> MR. Aponte: yes.
>> I'm going to ask you to
scroll to the next page of
this exhibit I believe
should be -- I'm sorry, f
73, which should be the
next page.
We MAY still have similar
orientation issues.
When you get that
oriented, let me know.
And this page should show
the winter reserve margin
for teco.
>> MR. Aponte: yes.
>> okay.
can you see over into the
last column where it says
there's a 23% reserve
margin in 2025, 23% in
2026, and 22% in 2027?
>> MR. Aponte: yes.
>> okay, and that's
correct as far as you
know?
>> MR. Aponte: yes.
>> would you agree that
solar does not contribute
to winter reserve margin?
>> MR. Aponte: that's
correct.
>> and would you agree
that right now there is no
carbon emission cost
imposed the federal
government or state of
florida?
Has that changed as of
today?
>> MR. Aponte: it has
not.
>> and would you agree
that the companies reserve
margin is above 20% for
both winter and summer
reserve margins from 2025
through 2027?
>> MR. Aponte: they are.
>> and is not correct that
the solar generation
projects are not needed to
meet the companies solar
peak needs in 2025 through
2027?
>> MR. Aponte: did you
say summer?
>> summer.
>> MR. Aponte: they
contribute to the summer
reserve margin, but a
small percent.
>> okay.
Would also be correct it
is not needed to meet the
company's winter peak
demand needs in 2025
through 2027?
>> MR. Aponte: yes.
>> okay.
I would like to call your
attention to your rebuttal
testimony page 7, and then
when you get there we will
be looking at lines 10
through 12.
Let me know
.
>> MR. Aponte: I'm there.
>> okay.
And looking at that
portion of your testimony,
you say the company
performed a sensitivity
analysis incorporating a
0.4% degradation per year
until the end of the
project's useful life for
the future solar projects,
is that correct?
>> MR. Aponte: yes, that
is correct.
>> and you used a 35 year
life for the solar in this
analysis, is that correct?
>> MR. Aponte: yes, I
did.
>> okay.
Thank you very much.
>> CHAIRMAN La Rosa:
thank you.
Florida rising and lulac.
>> thank you.
Good morning, MR. Aponte.
If we can go to f3.3-5838,
fll 177.
As MR. Christiansen just
ended out, I believe you
just said that solar
contributes zero points
the winter reserve margin
and that's because solar
has a zero assumed
capacity value during the
time of the winter peak.
>> MR. Aponte: that's
correct.
>> this chart here in
exhibit fll-177 is the
summer capacity value for
the solar plant that are
issued at this case?
>> MR. Aponte: yes.
>> so way four includes
the booster and wamama
solar booster project?
>> MR. Aponte: yes.
>> those are planned to
come into start generating
in 2027?
>> MR. Aponte: that's
correct.
>> so that will be part of
the subsequent year
adjustment?
>> MR. Aponte: yes.
>> they are assumed to
have a summer capacity
volume of one point
>> MR. Aponte: yes.
>> they are assumed to
have a summer capacity
volume of 1.5%?
>> MR. Aponte: they do.
>> why is that?
>> MR. Aponte: the reason
for that is the more solar
you add the effect on the
system peak is that it
moves the system peak to a
later time in the day.
The net between the load
minus the output of solar
is what we call net peak.
The more solar you add,
the later that net peak is
going to occur during the
day when the solar is
producing less output.
>> and if I can now direct
your attention to what has
been admitted on the cel,
this is master number c
32-1577.
Do you recognize this
document?
>> MR. Aponte: I do.
>> and what is it?
>> MR. Aponte: it is a
spreadsheet that we used
to calculate reserve
margins.
>> those diminished solar
reserve firm capacity --
>> MR. Aponte: if you
mean capacity values, yes.
>> for example, wamama
three has a capacity of --
but has a summer firm
capacity on this chart of
1.1 mw?
>> MR. Aponte: that's
correct.
>> would be fair to say
for the period of
2025-2027, in order to
maintain 20% would be the
winter reserve margin we
should be looking at the
could be driving plant
additions into the system?
>> MR. Aponte: can you
please repeat that
question?
>> sure.
In other words, the summer
reserve margin as
reflected in this chart
for 2025-2027 is higher
than the winter reserve
margin?
>> MR. Aponte: yes.
>> so any plant additions,
for reserve margin
purposes to meet that 20%
we should be looking at
that winter reserve
margin?
>> MR. Aponte: we are.
>> and solar plants are
assumed to not contribute
to that?
>> MR. Aponte: correct.
>> so the solar plants
that are being added to
the system or for the
energy value that
translates into economic
benefits for teco and its
customers?
>> MR. Aponte: yes, a big
portion of the benefit is
reduction of fuel costs.
>> so the solar is not
being added for its
capacity value?
>> MR. Aponte: correct.
>> you're not aware of any
recent analysis by teco
showing that if you went
below 20% reserve margin
that rolling blackouts
would be more likely to
occur?
>> MR. Aponte: I'm not
aware of any analysis like
that.
>> if I connect direct
your attention to master
page f 3.1-2651.
You are the sponsor of
this interrogatory?
>> MR. Aponte: yes.
>> and so teco does not
conduct loss of load
probability studies?
>> MR. Aponte: not at the
time.
>> what is a loss of load
probability study?
>> MR. Aponte: a loss of
load would indicate if the
portfolio, it's a measure
of the reliability of the
portfolio and it's trying
to determine the chances
of not meeting load.
The industry standard
seems to be one day in 10
years.
>> switching topics now,
you did a series of
cost-effective analyses in
connection with this case?
>> MR. Aponte: yes.
>> and if we can go to
what has been admitted as
staff exhibit 159 master e
master e1965.
This is a copy of the
financial inputs that you
used in your
cost-effective analyses
that were included in your
study?
>> MR. Aponte: yes.
>> you assumed a 10.2 %
return on equity?
>> MR. Aponte: I did.
>> if the return on equity
was approved it would
impact your analyses?
>> MR. Aponte: it would.
>> that would create a
different than the revenue
requirement?
>> MR. Aponte: it would
create a different revenue
requirement.
The only thing I would add
to that is when we are
doing cost-effective
analysis we are looking at
doing reference case as
well as a change case and
when the financial
assumptions change, they
have to be changed on both
and I'm saying that
because we expect the
changes to the results to
be not that material.
>> if I can direct your
attention to e your
attention to e2088.
This shows a copy of the
fuel price that was used
in the right case?
>> MR. Aponte: yes.
>> included in your
cost-effective analysis?
>> MR. Aponte: correct.
>> it does show escalating
gas prices?
>> MR. Aponte: it does.
>> the south tampa
resiliency project is a
series of reciprocating --
on the macdill air force
base?
>> MR. Aponte: yes.
>> it will provide backup
-- in case of an
emergency?
>> MR. Aponte: in the
case of an emergency, yes.
>> besides the land, the
us government is not
providing any contribution
to the us --
>> MR. Aponte: not that
I'm aware of.
>> if I can direct your
attention to f ll master
page f 3.3-5305.
This is one of your
documents?
>> MR. Aponte: yes.
>> and it includes the
reserve margin
calculations for the
winter with and without
the south tampa resiliency
project?
>> MR. Aponte: yes.
>> then if I connect
direct your attention to
exhibit fll 127 master
page f 3.2-3894.
>> MR. Aponte: I'm sorry,
MAY I have a clarification
on the previous exhibit?
>> we can go back to that
was master page f 3.3-505.
3.3 b
5305.
>> MR. Aponte: thank you.
When this exhibit was
developed and reflect with
and without the specific
project, I just wanted to
clarify the remaining
expansion plan has been
tailored to meet reserve
margin of 20%.
So this does not reflect
pulling the project out
and leaving a reserve
margin gap.
>> I'm sorry, could you
say that again?
>> MR. Aponte: yes.
For example, if I take
away all the proposed
projects that we have, we
would fall under 20%
reserve margin ready
quickly.
And to satisfy that
reserve margin, if we were
to not do the projects, we
would have to add capacity
in a different way.
Perhaps it's the next best
condition, which could be
a ct.
What I'm trying to say is
when we took away the
south tampa project, for
example, in this chart and
it created a reserve
margin need, we filled it
with another resource.
>> and I think we're going
to get there.
We have a lot of
documents, MR. Aponte.
I think what you're
referring to is the
documents that show the
base case and the change
case with each individual
projects and those base
cases has placeholder ct
for teco to meet its
reserve margin, is that
right?
>> MR. Aponte: that is
correct.
>> this would be in
reference to those base
cases?
>> MR. Aponte: yes.
>> if we can go back now
to master page f 3.2 b
3894, this is going to be
fll 127.
and this document provides
the detail of that base
case without the south
tampa resiliency project?
>> MR. Aponte: I believe
so.
>> and you would agree
there's no summer reserve
margin issue?
>> MR. Aponte: that's
correct.
>> and it does show on the
next page for the winter
it does show a 20% reserve
margin for the winter of
2026?
>> MR. Aponte: yes, I see
that.
>> and it does not show a
winter reserve margin
before then?
>> MR. Aponte: not before
then.
>> would you agree it
would be for economic
reasons, not capacity
reasons?
>> MR. Aponte: yes.
>> if I can now go to
fll-128, this is going to
be master page f.2-3897.
And so this document would
provide additional detail
regarding the reserve
margins with the south
tampa resiliency project.
>> MR. Aponte: I'm going
to go with that because I
don't see a title on the
page.
>> we can go through the
bait stamped number and
establish the trail.
>> MR. Aponte: that's
okay.
We can move on.
>> and this document,
again, if I represent to
you is would be the south
tampa resiliency change
case, it would only
include the reserve
margins over the next
document that we're going
to get to, which would be
the south tampa resiliency
project case that you use
in your cost-effective
analysis.
>> MR. Aponte: okay.
>> so it does not include
all of the storage
projects after the --
project?
>> MR. Aponte: that's
correct.
>> this shows it would be
down to a 20% reserve
margin for the winter of
2027?
>> MR. Aponte: yes, that
is correct.
>> maybe I should've done
this in a different order,
but what let's now go to
master page f 3.2-3900.
And so this document shows
the base case and south
tampa resiliency project
change case used for your
cost-effective analysis?
>> MR. Aponte: yes.
>> so it does not include
any of the solar
subsequent to the dover
battery project in either
case, although teco is
moot landing to move
forward with those
projects?
>> MR. Aponte: that is
correct.
>> even for the change
case, it still shows a
need for the ct
?
>> MR. Aponte: yes.
>> and it does include the
polk one simple cycle
conversion project, is
that right?
>> MR. Aponte: it does.
>> we will discuss the
project more in-depth
later, but that actually
increases the depth of
that?
>> MR. Aponte: slightly,
yes.
>> if I can next direct
your attention to fll-233
master page f 3.2-388
direct your attention to
fll-233 master page f
3.2-3883.
And this shows your
cost-effectiveness results
for the south tampa
resiliency project?
>> MR. Aponte: yes.
>> and some basic
questions here.
If it's in parentheses,
that's savings.
If it's not in
parentheses, that's base
cost.
The biggest savings come
from system fuel, right?
And it is directed with
energy fuel, not -- this
project would not have
been found to be
cost-effective.
>> MR. Aponte: that's
correct.
>> if I can next direct
your attention to master
page if 3.2-3901.
This is fll-29.
And just want to direct
your attention to the
bottom of the page there's
a note.
It says the south tampa
resiliency project is
constrained to 37.6 mw
until summer of 2026.
Is that right?
>> MR. Aponte: yes, I see
that.
>> is that your
understanding that that's
true?
>> MR. Aponte: that is
true that analysis was --
we MAY have some
accelerating on that date.
>> one of the benefits of
the project for teco's
customers was to avoid
transmissions upgrades, is
that right?
>> MR. Aponte: yes.
>> if I can direct your
attention to fll-247
master page f 3.4 -- I'm
sorry, yes.
F 3.4-19921.
This is an earlier draft
of the cost-effectiveness
analysis for the south
tampa resiliency project.
>> MR. Aponte: yes.
>> and it shows an
estimate of approximately
$5.5 million in savings
and avoided transmission
is a benefit.
>> MR. Aponte: that's
correct, yes.
>> it also shows the cost
for the facility are
estimated to be 8.2
million.
>> MR. Aponte: yes.
>> sold those interdiction
costs are higher than the
avoided transmission
costs?
>> MR. Aponte: yes, they
are.
>> all right.
If I could go back to
master page c32-3577.
This is admitted exhibit
320.
This document contains all
of the generation and
storage projects that teco
has proposed through this
rate case?
>> MR. Aponte: I'm there.
>> this document contains
all of the stroller,
battery storage, and
generation projects that
teco has in this case?
>> MR. Aponte: it does.
>> if you go to winter of
2027, south tampa
resiliency has 75 mw of
capacity that's
contributing to that
winter reserve margin?
>> MR. Aponte: yes.
>> if you deduct that 75
mw, you would still have
that margin in 2027, would
you?
>> MR. Aponte: we MAY in
that year, we MAY fall
shorter than that.
>> you would agree that
through 2027 you would be
okay?
>> MR. Aponte: yes.
>> if I can next direct
your attention to fll-131.
This is going to be master
page f 3.2-3908.
This document would
include the big four solar
base case and change case?
>> MR. Aponte: okay.
>> and you would agree
that the reserve margins
on here are -- well, even
through 2027 are both 20%?
>> MR. Aponte: winter,
yes.
>> as comparison to the
base case and change case
we were looking at with
the south tampa resiliency
projects, the shows other
projects lingered on,
which is the energy
storage subsequent to the
dover energy project and
other solar projects that
come before this.
>> MR. Aponte: that's
correct.
>> and just for comparison
purposes, keep in mind the
summer reserve margin here
for 2027, and if we could
next go to fll-145, this
is going to be master page
f 3.2-3964.
Before we -- sorry, real
quick.
This does not show the
wamama three project?
>> MR. Aponte: it is not.
>> now let's go to that
master f 3.2-3964.
This document includes the
wamama change case and
base case?
>> MR. Aponte: yes.
>> and the reserve margin
is not all that different
from what we were looking
at before?
>> MR. Aponte: yes.
>> if we can next go to
fll-122.
This is going to be master
page f 3.2-3875.
This is your
cost-effective analysis
for the polk unit one
flexibility project, which
is the simple cycle
conversion project?
>> MR. Aponte: yes.
>> and this project found
savings or has savings
from the polk one project
upgrade and polk one
sustaining capital and
feeling?
>> MR. Aponte: yes.
>> so you would agree that
those savings are coming
from some kind of capital
investment teco is
assuming would need to be
made at polk unit one to
keep polk unit one as it
is without the flexibility
project?
>> MR. Aponte: yes, that
is correct.
>> and this is not a
project to add capacity to
the system?
>> MR. Aponte: it is not.
>> in fact, the expected
output of the converted
unit is about 20 mw less
than the converted cycle?
>> MR. Aponte: that's
correct.
>> if I can next direct
your attention to fll-92
master page f 3.1-2895.
Do you see that
interrogatory answer in
front of you?
>> MR. Aponte: I do.
>> this actually shows the
cost of that polk one
upgrade without the polk
one flexibility project.
>> MR. Aponte: I believe
so, yes.
>> so this will be the
cost necessary to maintain
polk one as is?
>> that's correct.
>> would you agree the
biggest cost is capital
for the steam turbine?
>> MR. Aponte: yes, I see
that.
>> and the next biggest
cost would be for the heat
recovery steam generator?
>> MR. Aponte: yes.
>> if I can next direct
your attention to fll 124.
This is going to be master
page f 3.2-3885.
And so this document shows
the reserve margins in the
fgd one flexibility base
case.
>> MR. Aponte: yes.
>> the base case for that
is flexibility project
does not move forward and
polk one stays as is?
>> MR. Aponte: that's
correct.
>> if I can next direct
your attention to fll --
master page 3888.
And this document shows
the reserve margins in the
fgd one flexibility case
as the project moves
forward.
>> MR. Aponte: yes.
>> and as alluded to
earlier, you would agree
the total installed form
capacity as compared to
the document we were just
looking at those down
slightly?
>> MR. Aponte: yes.
>> you would agree that
the summer reserve margins
are still well below 20%?
>> MR. Aponte: they are.
>> if we can next go to
fll-126 master page f
3.2-3891.
And this document shows
the polk one flexibility
base case and the polk one
flexibility change case.
>> MR. Aponte: yes.
>> and the fgd one
flexibility base case does
not include any of the
other projects at issue in
this case, correct?
Other than the dover
energy storage capacity
project going in 2024?
>> MR. Aponte: yes, in
this particular
illustration it does not.
>> it is not include the
-- it does not show any
need for additional
generation until 2027?
>> MR. Aponte: yes.
>> and that's going to be
based on the 20% reserve
margin for winter?
>> MR. Aponte: yes.
>> if I can next direct
your attention to f ll-97
master page f 3.1-3000.
You conducted a
cost-effective analysis
looking at the potential
to retire polk unit one?
>> MR. Aponte: yes, we
did.
>> and found such
retirement to be
cost-effective
?
>> MR. Aponte: did.
>> thank you.
That's all my questions,
MR. CHAIRMAN.
>> CHAIRMAN La Rosa:
thank you.
Next up is fipug.
>> thank you, MR.
CHAIRMAN.
Good morning.
>> MR. Aponte: good
morning.
>> I had a question
yesterday for your vice
PRESIDENT Of operations
with respect to how you
determine the need for
future facilities.
I believe he asked me to
ask you that question and
you are responsible for
future facilities, is that
right?
>> MR. Aponte: yes.
>> MR. Moyle: how do you
determine the need for the
solar plants that you are
putting in now?
You were asked a question
about an economic need
versus a physical reserve
margin need.
Explain how you would
determine the need for the
solar plants that you are
seeking recovery for,
please.
>> MR. Aponte: yes, of
course.
There are two basic
components of need or a
criteria for adding new
resources.
In the example of solar,
that is affordability.
It is an economic need,
adding the solar lowers
the cpvrr for customers
compared to not doing
those projects.
The second criteria is the
20% reserve margin.
We are required to
maintain 20%.
In the case of tampa
electric, it's a winter
reserve margin.
>> MR. Moyle: is part of
your analysis, if you're
looking and you have a 20%
reserve margin and there's
an economic benefit with
silver, when you keep
adding solar to take you
above 25 to go to 30?
Is there a hard line
anywhere stop on the
reserve margin?
>> MR. Aponte: well, with
solar, as I described very
briefly earlier, there's a
point where solar loses in
a capacity value, which in
this case will be in the
summer.
At some point, solar
doesn't really move the
needle in any way in terms
of reserve margin for
either winter or summer.
And we believe that is a
proper way to look at it
because if we don't do
that adjustment, solar
would artificially inflate
reserve margins and that's
just not a good
reliability metric to have
high reserve for solar.
That's why that adjustment
is necessary for the
summer.
>> MR. Moyle: I think you
answered a question where
you said there's no value
added to the winter.
There's a very small
benefit added to the
summer.
It was 1.5%, is that
right?
>> MR. Aponte: that's
correct.
That would be the last
couple of projects we are
presenting would have 1.5%
capacity value to the
summer.
>> MR. Moyle: and when
you say that 1.5% capacity
value to the summer,
explain exactly what that
means.
That doesn't mean you're
at 18.5 and it gets you
1.5, so you're at 20%, so
you're good on reserve
margin, does it?
>> MR. Aponte: no, it
does not mean that.
What that means is out of
the name plate capacity
out of solar going on
doing calculation for the
reserve margin on any
given year, I'm only
counting 1.5% of its
nameplate to contribute
towards reserve margin in
the summer in that year.
>> MR. Moyle: so what's
the math on that assuming
75 mw?
>> MR. Aponte: like one,
2 mw.
>> MR. Moyle: do you have
operational familiarity
with how your solar
utility skills solar
works?
>> MR. Aponte: yes.
Somewhat, yes.
>> MR. Moyle: there was a
discussion about if the
sun is not shining it can
degrade the solar unit
output.
Obviously, that makes
sense at night.
But in a discussion
yesterday with MR. Stryker
you said there's
variability on that.
Can the variability go
higher as well?
He was talking about it
going lower, but can I go
higher as well
operationally?
>> MR. Aponte: yes.
The variability of solar
can go both ways.
At any given hour, solar
could move a little bit up
or down.
>> MR. Moyle: and if
you're designing your
solar fields, utility
skills solar fields at
71.5, is that right?
>> MR. Aponte: that is
correct.
>> MR. Moyle: can go over
that on an ideal day for
solar?
>> MR. Aponte: no, it
cannot.
That is governed by the
converters.
>> MR. Moyle: inverter,
is that like a governor
that won't let it go about
that?
Have you heard of a
governor on a car?
>> MR. Aponte: yeah,
something like that.
>> MR. Moyle: on page 27
of your testimony, line
12, I mean, you run
cost-effective analysis on
all of these solar
projects, correct?
>> MR. Aponte: yes.
>> MR. Moyle: you said
one was not
cost-effective, yes?
Which one is that?
>> MR. Aponte: it's
english creek.
>> but you're asking it to
be approved even though
it's not cost-effective,
right?
>> MR. Aponte: that is
correct.
Although, there has been a
couple of changes to
inputs that have recently
happen.
For example, the increase
of the ptc from 27.5-$30
per megawatt hour.
We also filed a midcourse
correction forecast
several months ago as
another input change and I
believe that both of those
combined make english
creek the small benefit.
>> MR. Moyle: but you
haven't done an analysis
or have a document or
anything that suggests
that's the case, is that
correct?
>> MR. Aponte: that's
correct.
We believe it's going to
become a cost-effective
project.
>> MR. Moyle: MR. Collins
indicated that you did not
use a carbon ater with
respect to your analysis
of a cost-effectiveness of
solar projects.
Wasn't he half right when
he said that?
>> MR. Aponte: MR.
Collins was absolutely
correct.
I did not.
>> MR. Moyle: duly noted.
Let me come at it this
way.
Didn't you do an analysis
of your cost-effectiveness
assuming a carbon cost in
one way and then also not
assuming a carbon cost?
>> MR. Aponte: yes,
that's correct.
We did it both ways,
although the company's
criteria for determining
to move forward with
cost-effective projects
excludes all benefits from
the reduction of co2.
Exhibits show it to show
how much more benefit we
could potentially get in
the event that a carbon
tax becomes a mandate, but
the criteria for the
company to move forward
with cost-effective
projects excludes the
benefit of co2.
>> MR. Moyle: let's just
reference one.
The last exhibit in your
direct testimony.
It's on page 63.
Document number 22 page
101 of your direct
testimony.
>> MR. Aponte: I am
there.
>> MR. Moyle: I believe
-- okay, it's up there.
The name of this project
is, what?
>> MR. Aponte: wamama
three.
>> MR. Moyle: if you go
down so we can scroll down
to the co2 emissions cost.
>> MR. Aponte: yes.
>> CHAIRMAN La Rosa: that
figure, how did you come
up with that figure?
>> MR. Aponte: some time
ago we went out and
purchased a report from an
outside consultant that
based on their research
and their analysis
assigned a specific value
to a cost per ton of co2.
For our region.
So basically using that
value multiplied by the
amount of tons that the
solar project would reduce
on our system, that turns
into a benefit.
The amount of tons reduced
by the cost of each ton
that would've cost us if
there was a carbon tax,
that is what that cost
benefit.
The consultant's name was
called icf.
>> MR. Moyle: what did
the report conclude?
When you read it, what was
the rationale and
reasoning as to why a
carbon cost was projected
to be in place
particularly at a point in
time that it would affect
the solar units that you
are moving forward with.
>> MR. Aponte: like I
said, the report is a year
or two old and the report
looked at the macro
economics everything going
on with any type of
proposals for regulations,
emission regulations.
It looks at the region.
It looked at many factors
to come up with that.
>> MR. Moyle: and did his
report assume it would be
government action that
would impose a fee or tax
on carbon?
>> MR. Aponte: at the
time of that report, I
believe that it did assume
government action at a
certain year in the
future.
Like I said, the report is
a couple of years old.
>> MR. Moyle: did you, in
preparing your testimony,
did you check the
conclusion there might be
a tax on carbon imposed by
the government?
Did you check it with any
legislative people at the
state people and say I
think florida is going to
be putting a carbon tax in
place anytime soon?
>> MR. Aponte: not
outside the company, but
we recognize that the
moment there is no plan to
assign a carbon tax.
>> MR. Moyle: what about
within the company?
>> MR. Aponte: yes, we
recognize our immediate
plan to assign a carbon
tax.
>> MR. Moyle: same
question with regard to
federal legislative
actions you have.
>> MR. Wahlen: MR.
CHAIRMAN, this is
fascinating to me, of
course, but the testimony
is the company is not
relying on carbon ater to
prove cost-effectiveness.
I really don't know that
this is adding a lot.
If MR. Moyle wants to
continue, he can, but --
>> CHAIRMAN La Rosa: I
think the question has
been answered.
>> MR. Moyle: I was
trying to understand.
He said he did report.
I was trying to understand
the rationale for the
report.
They got exhibits that are
showing this.
They are saying they are
not relying on it, but
they done it and are
putting it in front of
you, but I think I've
exhausted that line of
questioning.
>> CHAIRMAN La Rosa:
okay.
Thank you.
>> MR. Moyle: you also
are projected savings
unprotected fuel savings
and you had to use a
forecast of what natural
gas prices would be going
forward, is that right?
>> MR. Aponte: yes.
>> MR. Moyle: the prices
that you used are higher
than the henry hub natural
gas price futures that
come from imex, is that
correct?
>> MR. Aponte: yes,
because we have databases
to get the fuel delivered
to our region.
>> MR. Moyle: I have no
further questions.
>> CHAIRMAN La Rosa:
thank you.
All right.
Fea?
>> fea has no questions.
Thank you, commissioner.
>> CHAIRMAN La Rosa:
thank you.
Sierra club?
>> yes, we have some
questions.
Good morning, MR. Aponte.
>> MR. Aponte: good
morning.
>> you state in your
testimony that the polk
one project will cost $85
million, correct?
>> MR. Aponte: yes.
>> can you please pull up
sierra club exhibit 17,
which is psc exhibit
>> can you please pull up
sierra club exhibit 17,
which is psc exhibit 84
page f-6 360?
And let me know when you
have that in front of you.
>> MR. Aponte: I see it.
>>
>> thanks.
When looking at the cost
with polk one cost
flexibly, we can see and
$90.1 million cost for the
conversion of polk one.
Do you see that?
>> MR. Aponte: I see it.
>> possible total cost of
the polk one flexibility
project is higher than
81.5 million?
>> MR. Aponte: what the
90.1 million represents is
the cost after we have
gone through the
calculation of adding the
revenue requirement for
that capital.
So the mpv of the revenue
requirement of that
capital becomes 90.1.
Seem
>> so which cost is passed
on to ratepayers, the 80.5
or this higher 90.1?
>> MR. Aponte: the 90.1.
>> all right.
Thank you.
Looking again at sierra
club the same exhibit on
page f-6 353, the tab,
this is a tab that
considers a scenario
without the polk one
flexibility project.
Thank you.
This also projects high
cost for maintaining the
unit as is, right?
>> MR. Aponte: yes.
>> including a $130.9
million project upgrade
cost, right?
>> MR. Aponte: yes.
>> when without upgrade
need to occur?
>> MR. Aponte: in 2025.
>> okay.
If polk one were to retire
in 2021, teco would avoid
incurring this roughly 1
$31 million cost, right?
>> MR. Aponte: if that
unit retires in 2025, it
will be replaced with the
same -- it would need to
be replaced with the same
amount of capacity to
retain reserve margin, so
I believe that the amount
of money would be higher
than that.
>> okay.
That feeds right into my
next question, so thank
you.
Teco is not performed a
retirement analysis for
polk one since 2022,
correct?
>> MR. Aponte: retirement
analysis for polk one
since 2022?
I know we have looked at
it several times.
Our most recent one might
be 2023.
>> 2023.
Is that in the record?
>> MR. Aponte: yes, it
is.
>> so was that the same
retirement analysis I had
asked witness -- about?
>> MR. Aponte: that's
correct.
>> but this study did not
consider any retirement
years apart from 2028,
right?
>> MR. Aponte: it did
not.
>> so when assessing the
cost of retiring polk one
versus keeping the unit
operational, teco did not
consider a scenario that
replaces polk one with
renewable energy or energy
storage, right?
>> MR. Aponte: we did
not.
>> in performing this
retirement study, teco did
not consider the cost of
acquiring renewable energy
such as storage through an
open source rfp process,
did it?
>> MR. Aponte: for
purposes of the analysis,
no.
>> but teco is not
planning on offering -- is
it?
>> MR. Aponte: I am not
the project expert, but we
have a competitive buying
methodology.
>> okay.
does that methodology
include an open source rfp
where participants can
bid?
>> MR. Aponte: I believe
it does.
I'm not the right person
to answer that.
>> okay.
I guess put differently
maybe this is more
helpful.
Teco is planning on
building its storage
itself, correct?
>> MR. Aponte: yes.
>> would you agree the
economics of building
storage are changing
rapidly?
>> MR. Aponte: yes, they
are changing.
>> for example, do you
anticipate the inflation
reduction act credits are
driving down the cost of
battery storage further?
>> MR. Aponte: yes, I do.
>> can you guarantee
holding an open source rfp
would not result in energy
storage then if teco build
its own energy storage?
>> MR. Aponte: I'm not
the right person to answer
that.
>> okay.
And who would be the right
witness in this case to
answer that?
>> that would be witness
stryker.
>> witness stryker
directed much of his
questions to you.
Did teco consider the cost
of the polk -- I
apologize, from 2023.
Did teco consider the cost
of the polk one project in
that study?
>> MR. Aponte: I'm sorry,
can you repeat the
question?
>> yes, I have the wrong
year.
Turning back to the 2023
polk one retirement study,
did teco consider the cost
of the diversity project
in conducting this study?
>> MR. Aponte: my
understanding is those two
projects are not
connected.
>> okay.
So did teco consider
, I
guess I will ask
differently.
Did teco consider the
costs of the teco --
>> MR. Aponte: no.
>> did teco consider the
cost of the polk one
flexibility process
?
>> MR. Aponte: ask me
that one more time,
please.
>> no problem.
>> MR. Aponte: in
conducting that retirement
study, did teco consider
the cost of the polk one
flexibility project?
>> MR. Aponte: in order
to do a complete analysis
for the polk one
flexibility, we looked at
a retirement analysis in
2028, yes.
That was one sensitivity
we did.
>> in performing the 2023
study, did teco factor in
compliance costs?
>> MR. Aponte: no, we did
not.
>> okay.
teco did not consider cost
of rules that were not
finalized after 2023 such
as the 2024 greenhouse gas
standards, right?
>> MR. Aponte: no, not on
that analysis.
>> so in your rebuttal
testimony on page 13, you
stated that if polk unit
one were to return to ijcc
-- would you still agree
with that statement?
>> MR. Aponte: can you
please point to me?
>> absolutely.
This is your rebuttal
testimony -- apologies,
that is actually witness
aldazabal's rebuttal, so
that is a mistake.
This is about polk unit
one and retirement.
I'm going to ask you this
question and if you are
unfamiliar, let me know.
But it's on witness
aldazabal's rebuttal on
page 13 line 20 --
>> MR. Wahlen: excuse me,
it sounds like she's about
to cross examine MR.
Aponte on MR. Aldazabal's
testimony.
>> CHAIRMAN La Rosa: can
we get clarification on
where you're going?
>> absolutely and that was
my mistake.
I'm just going to ask the
witness a question that
relates to this retirement
analysis.
It's just one statement
that was in witness
aldazabal's rebuttal, but
it relates to -- if this
witness is unfamiliar, MR.
Aponte can just let me
know.
>> CHAIRMAN La Rosa: go
ahead.
>> thank you.
So this is on witness
aldazabal's testimony on
page 13 lines 20-22.
And I can read it aloud
and you can let me know if
you're unfamiliar with
this topic.
Is that okay?
>> MR. Aponte: that's
okay.
>> thank you.
So MR. Aldazabal stated if
polk unit one were to
return to ijcc operation
but retire before 2032, it
would not be subject to
any greenhouse gas
emission standards.
Does that sound right to
you?
>> MR. Aponte: I am very
unfamiliar with that.
Any greenhouse gas
standards.
>> okay.
That's fine.
So then I will move on.
Okay.
So okay.
You are familiar with the
term reserve margin,
correct?
>> MR. Aponte: yes, I am.
>> can you briefly explain
how reserve margin impacts
and electric utilities
generation mix?
>> MR. Aponte: can you
repeat that question?
>> yes, of course.
Can you please briefly
explain how utilities
reserve margin impacts its
generation mix?
>> MR. Aponte: well,
planning reserve margin
and generation mix are two
different things.
We can satisfy reserve
margin in many different
ways very different
generation mixes.
I'm not sure I'm following
your question.
>> okay.
I think that answer is
helpful.
The higher reserve margin
makes it more difficult to
retire a generation asset,
all else equal, right?
>> MR. Aponte: higher
reserve margins make it
more difficult to retire
margins?
No, I don't agree with
that.
>> generally compared to
having a lower reserve
margin, is that right?
>> MR. Aponte: they don't
have to be online.
Every margin is based on
reserve store capacity.
>> okay.
It generally requires a
higher degree as opposed
to lower reserve margin,
right?
>> MR. Aponte: yes,
that's right.
>> when resources can be
retired without
replacement?
>> MR. Aponte: at this
moment, yes, we are a
winter need to.
>> okay.
Can you please turn to
florida psc exhibit 120
page c3 2-1577?
And we MAY need to zoom in
if possible.
I'm just looking at the
last row.
In the last row, can you
see that teco is winter
reserve margins for
2024-2027 are 30%, 23%,
23%, and 22%?
>> MR. Wahlen: MR.
CHAIRMAN, I think we have
been through this ground a
few times now.
>> it was asked.
I was trying to lay down a
foundation, but if
everyone is familiar with
it, I can ask my next
question.
Okay.
Focusing on this 30%
number for a second, would
you agree it's unusual to
have a reserve margin the
high.
>> MR. Aponte: no.
It's not unusual.
The reason that number is
that hi, I believe we, for
reliability purposes,
purchased some short-term
dpa's.
For like I said,
reliability on the energy
and fuel supply.
That's just temporary.
That's why you see that
bump up and you stated get
back down to 23% the next
year.
>> okay.
Teco is operating on an
assumption of 23% margin,
correct?
>> MR. Aponte: 20%.
>> it has far more
capacity than that for,
right?
>> MR. Wahlen: that has
been covered two or three
times, MR. CHAIRMAN.
>> CHAIRMAN La Rosa: I
would agree.
>> okay.
I will just ask one more
reserve margin question
and then I can move on if
that's fine.
That I believe hasn't been
asked.
So a 30% reserve margin
compared to say a 50% --
>> MR. Wahlen: asked and
answered.
>> okay.
I will move on to another
topic and we are close to
the end of these
questions.
Teco is planning to add
nearly 500 mw of new solar
across its service
territory by the end of
2026, correct?
>> MR. Aponte:
>> you would agree that
solar has no fuel cost,
correct?
>> correct.
>> you added that this
would save customers
nearly $800 million in
fuel costs over the
lifetime of the projects,
correct?
>> MR. Aponte: correct.
>> solar plants tend to
have lower operation
admittance costs than
fossil plants, yes?
>> MR. Aponte: they do.
>> teco is solar will
reduce costs and price
volatility for ratepayers,
right?
>> MR. Aponte: yes,
absolute.
>> you would agree that
solar generators conserve
more water than fossil
generators, right?
>> MR. Aponte: yes, I
would agree.
>> solar will supply 18%
of the energy on its
system, right?
>> MR. Aponte: subject to
checks, the year, yes.
>> okay.
And this will increase
teco fuel diversity,
right?
>> MR. Aponte: correct.
>> results will fuel
diversity from energy
storage, right?
>> MR. Aponte: some.
>> as well as energy
efficiency and demand
measures?
>> MR. Aponte: I'm not
sure about that when.
>> okay.
But a number of the
sources of energy can
hedge against high gas
prices, correct?
>> absolutely.
>> teco is planning on
bringing four new storage
units, right?
>> MR. Aponte: yes.
>> but teco is planning on
bringing only one new
storage project, a 70 mw
project, coming online in
2028 in the six year
period from 2027-2033,
right?
>> MR. Aponte: that's
what we are reflecting
now.
We have an degraded
resource plan process that
we execute every year as
part of the development of
the 10 year site plan.
We are always looking for
ways to optimize the
portfolio in ways that
creates value to
customers, affordability,
we look for reliability of
the system, we look for
many criteria, many
objectives, and to the
extent that we find more
battery storage is
cost-effective, it creates
value for customers.
It adds reliability and
resiliency to the system
we would consider doing
that.
It could change.
>> okay.
There's no technical
barrier from teco -- and
as teco brings on energy
storage, that storage can
be paired with teco's
existing solar units,
correct?
>> MR. Aponte: I'm sorry,
repeat that question.
>> as -- that storage can
be compared with solar
generation, right?
>> MR. Aponte: it could,
but we are finding it is
most cost-effective to
connect it to the grid and
optimize charging so it is
the most economic way of
charging might not be from
solar at this point.
>> do you know how many of
the storage projects
coming online or paired
with existing storage
projects?
>> MR. Aponte: the ones
coming online are all
connected with the grid.
>> thanks.
When storage is paired
with solar or optimized to
connect to the grid,
energy storage can saul's
power that is -- return it
to the grid at times of
peak demand, right?
>> MR. Aponte: a code if
that is the lowest-cost
way to dispatch it.
>> okay.
thanks.
The capacity of new energy
storage units is 100%,
right?
>> MR. Aponte: yes.
For the proposed projects,
it is.
>> this means they are
assumed to provide 100% of
capacity at times of peak
demand on teco the system,
right?
>> MR. Aponte: yes.
>> okay.
So if teco brings say more
than one storage unit in
the period from 2027-2023,
would you predict that
storage unit would also
have a 100% storage
capacity credit?
>> MR. Aponte: we need to
be studied, but I can tell
you the capacity of
storage at some point
, we
are not there yet.
It will start to decline
also, not as drastic as
earlier, but it will
decline.
Effective load carrying
incapability.
>> okay.
Teco measures credits for
solar at tons of peak load
as ranging from about 56%
in the summer to lower
around maybe one or lower
percent in the winter, is
that right?
>> MR. Aponte: that's
right.
>> but the energy storage
would be higher than this,
right?
>> MR. Aponte: I think it
will still be the same.
You just have batteries.
Also on the grid as
another asset.
>> okay.
But if, for example, there
were a storage unit that
repaired with a solar
unit, the capacity would
be higher, right?
>> MR. Aponte: again, it
depends.
If the portfolio was
asking for a solar plus
storage asset as one,
together it would create a
higher capacity value, but
those are not the type of
projects we are looking
for at this time.
>> okay.
Thanks.
Can you please look at
your direct testimony on
page 31?
And just let me know when
you're ready.
>> MR. Aponte: I'm there.
>> thank you.
Can you please read lines
1 through I believe it's
12 starting at public
policy considerations and
ending at possibility?
>> MR. Aponte: can you
point to me the row
number?
>> yes.
It begins on line 1
actually on that page.
>> MR. Aponte: okay.
>> I believe it is on page
31 and it begins with
public policy
considerations.
Actually, looks like it
does start on page 3 -- I
mean line 3. And then
extending to rule out that
possibility.
Spirit yes, public-policy
consideration expectations
in the united states and
around the world are
trending against carbon
emissions and in favor of
renewable energy like
solar innovation.
It is difficult to predict
when a carbon tax or fuel
will be imposed.
>> thanks.
You would agree that it's
possible new environment
or regulation could impose
limits on carbon
emissions, right?
>> MR. Aponte: is
possible.
>> emissions from carbon
are more intense than gas,
right?
>> MR. Aponte: yes.
>> gas is more carbon
intensive them solar,
right?
>> MR. Aponte: yes.
>> if -- deciding on its
generation mix, this would
make fossil fuel plants
more extensive than they
otherwise would be, right?
>> MR. Wahlen: MR.
CHAIRMAN, I think we have
been very clear that we
don't consider the cost of
carbon in our
cost-effectiveness and we
or maybe on the second lap
of this topic.
>> CHAIRMAN La Rosa: it
is certainly a similar
topic.
Let's do this.
It is 10:20 almost.
Let's take a quick break
for 10 minutes and then we
will jump back into
questioning.
>> actually, I have two
more questions.
>> CHAIRMAN La Rosa:
let's go with those.
>> is it fine if I just
re-ask that question?
>> CHAIRMAN La Rosa: is
it a question you just
asked before?
>> it is.
>> CHAIRMAN La Rosa: we
have talked about that
subject.
I think the question was
more related to policy.
If there's a direct
question in there, yes, I
will allow it.
I don't want to keep on
skirting around the same
subject.
>> okay.
That makes sense.
I will ask this last
question and just make it
one question, if that's
okay.
If teco were to consider
avoiding carbon cost and
deciding on its generation
mix, this would make
fossil fuel plants
relatively more expensive
and renewables relatively
more cost-effective,
right?
>> MR. Aponte: sorry, you
said that very fast.
>> I know.
Apologies.
I will say that more
slowly.
If teco were to consider
avoiding carbon cost and
deciding on its generation
mix, that would make
fossil fuel plants
relatively more expensive
and renewables relatively
more cost-effective,
right?
>> MR. Aponte: will make
renewables more
cost-effective, yes?
>> thank you.
No further questions.
>> CHAIRMAN La Rosa:
thank you.
Let's go ahead and jump
into a 10 minute break.
We will reconvene here at
10:30.
Thank you.
[Break]
>> CHAIRMAN La Rosa: all
right.
I think we can go ahead
and jump back in our seats
and get rolling.
So where we left off was
sierra club just finished
up with questions for
witness aponte.
I will go to florida
retail federation.
>> thank you, MR.
CHAIRMAN.
I don't have any cross for
MR. Aponte.
>> CHAIRMAN La Rosa:
thank you.
Walmart?
>> I don't have any cross.
Thank you.
>> CHAIRMAN La Rosa:
thank you.
Staff?
>> Staff: staff does not
have any questions for MR.
Aponte.
Thank you.
>> CHAIRMAN La Rosa:
seeing no questions, teco,
I threw it back to you for
redirect.
>> MR. Wahlen: thank you.
MR. Aponte, you are asked
about the solar project
and you indicated with the
increase in the tax
credit, the
cost-effectiveness was
better.
Do you are member that?
>> MR. Aponte: yes.
>> I was going to object
on asked and answered for
my friend, MR. Wahlen.
>> CHAIRMAN La Rosa: I'm
sure he appreciates that.
Go ahead, continue.
>> MR. Wahlen: if you
apply the higher tax
credits all the projects
you are imposing, with the
cost-effectiveness
improve?
>> MR. Aponte: yes,
absolutely.
>> MR. Wahlen: thank you.
You are asked some
questions about the south
tampa resiliency project
by the office of public
counsel and they asked you
the question, well, if the
government had paid money
toward the project, would
have improved?
Do your member that?
>> MR. Aponte: I remember
that.
>> MR. Wahlen: company is
getting the land from that
project for no cost,
correct?
>> MR. Aponte: that's
correct.
>> MR. Wahlen: if the
company had to buy land or
lease land from that
project, it would hurt the
cost-effectiveness,
wouldn't it?
>> MR. Aponte: yes, it
would be very expensive
almost impossible to get.
>> MR. Wahlen: the fact
that there's free land
helps the
cost-effectiveness of the
project, correct?
>> MR. Aponte: it helps a
lot.
>> MR. Wahlen: okay.
Thank you.
You are asked a question
about the winter reserve
margin.
When the company
calculates its winter
reserve margin, does the
company assume a
particular temperature?
>> MR. Aponte: yes.
That's correct.
We do.
>> MR. Wahlen: and what
is that temperature?
>> MR. Aponte: it is
30b0f.
>> MR. Wahlen: does the
company do temperature
analysis?
>> MR. Aponte: yes.
>> MR. Wahlen: could we
call up master document f
2.1-74, please?
Part of cel 226.
Is that the reserve margin
that you were sensitivity
that you were referring
to?
>> MR. Aponte: yes, it
is.
>> MR. Wahlen: what
temperature does this
assume?
The
>> MR. Aponte: 29b0.
>> MR. Wahlen: if the
temperature is 29b0 as
opposed to 31, what does
the winter reserve margin
look like in 2025?
>> MR. Aponte: well, it
drops significantly to
17%.
>> MR. Aponte: and that
is below the 20%, right?
>> MR. Aponte: it is
below.
>> MR. Wahlen: do you
recall whether replacing
the company solid fuel
assets -- you were asked
about whether the company
did an analysis about
replacing the company's
solid fuel assets with
solar and battery storage?
>> MR. Aponte: yes, I
recall.
>> MR. Wahlen: would it
be possible to
cost-effectively replace
the company's solid fuel
capacity generating
capacity with solar and
energy storage?
>> MR. Aponte: possible.
I mean, it would be
extremely expensive.
>> MR. Wahlen: would it
be cost-effective?
>> MR. Wahlen: solid fuel
units have the capability
of running 24/7
around-the-clock for
weeks.
In the event that fuel is
economic fuel or in the
event we have a disruption
with natural gas, those
units can run for extended
amounts of time.
To replace them with solar
and battery storage would
require a lot of solar and
battery storage.
Doing some mental math
here, it's going to not be
cost-effective.
It's going to be very
expensive.
>> MR. Wahlen: okay.
Thank you.
MR. Bradley marshall asked
you about your retirement
analysis for polk one.
Do you remember that?
>> MR. Aponte: I do.
>> MR. Wahlen: did you do
an analysis that showed
the compared retirement of
polk one to the simple
cycle conversion of polk
one?
>> MR. Aponte: yes.
>> MR. Wahlen: and which
was the most
cost-effective?
>> MR. Aponte: the status
quo option was the most
expensive option.
Retiring it in 2028 was a
slight benefit to
customers, but converting
the unit to simple cycle
was the most
cost-effective option.
>> MR. Wahlen: okay.
One last series of
questions.
There was talk about
reserve margin and its
role in the company's
planning.
Any generation additions
you are talking about
being proposed solely to
meet reserve margin
requirements?
>> MR. Aponte: well, as I
said earlier, the reserve
minimum is a minimum 20%
criteria.
To the extent we can add
assets that enhance value
to the customer or
affordability
, fuel
savings to the customer,
fuel price mitigation, we
would be comfortable with
being slightly above the
20% because of the added
benefit that it brings to
the customer.
So not all the proposed
additions are strictly due
to reserve margin
requirement contribution.
Many of them are just
additional value to
customer.
I mentioned the $1.2
billion of fuel cost
benefit over the
portfolio.
Part of that benefit comes
from an asset that MAY not
contribute to reserve
margin, but it's of
economic benefit to the
customer to do so.
>> MR. Wahlen: thank you
very much.
Those are my questions.
>> CHAIRMAN La Rosa:
thank you.
Now, let's --
>> commissioner?
This is patty christensen.
-- one has to question in
redirect regarding a
comment I made during my
cross, but he went further
afield, I think, of the
topic that I covered.
He asked about the use of
the land for the south
tampa resiliency project,
but I think there needs to
be some additional
information that needs to
be good out in cross and I
have just a few follow-up
questions.
>> CHAIRMAN La Rosa: let
me go to my advisors on
this.
It's not typically
something I prefer to do.
>> maybe we should hear
from -- one first, MR.
CHAIRMAN?
>> CHAIRMAN La Rosa:
let's do that.
>> MR. Wahlen: I didn't
think I was going beyond
the scope of her
cross-examination.
If I did, it was
inadvertent.
>> MR. CHAIRMAN,
unfortunately, I wasn't
here at the time.
It's within your
prerogative.
MR. Wahlen is supposed to
stay within the scope of
the cross-examination that
is conducted by the
parties and I wasn't here
and I don't have an
opinion on that, so it's
really within your
prerogative whether you
think it's appropriate or
not, but I can say it is
highly irregular in our
practice to have further
cross-examination after a
party has taken their
turn.
>> commissioner, I can
pose the question to ask.
>> CHAIRMAN La Rosa: go
ahead and propose it.
>> MS. Christensen: my
question would be how long
does teco have use of the
federal land for the south
florida tampa resiliency
project?
30 or 35 years?
>> CHAIRMAN La Rosa:
before you answer the
question --
>> MR. Wahlen: that's
fine.
She can ask that.
I don't mind.
>> CHAIRMAN La Rosa: go
ahead.
You MAY answer.
>> MR. Aponte: yes, I
believe it's 30 or 35
years.
>> MS. Christensen: thank
you.
>> CHAIRMAN La Rosa:
thank you.
let's now move exhibits
into the record.
Let's start with teco.
>> MR. Wahlen: thank you.
Tampa electric moves
exhibits 20 and 144 into
the record.
>> CHAIRMAN La Rosa: are
there any objections to
that?
Seeing none, show them
entered into the record.
Opc?
>> I would move to 30 and
I believe 226, but it MAY
have already been moved
in.
>> CHAIRMAN La Rosa: any
objections to those
exhibits?
>> MR. Wahlen: no
objection.
>> CHAIRMAN La Rosa:
okay.
Show them entered into the
record.
Lulac?
>> we have a list here.
>> CHAIRMAN La Rosa: just
read them slowly so
everyone else can digest.
>> exhibits 545, 552, 557,
582, through 589, 591,
605, 633, 637, and 707.
>> MR. Wahlen: no
objection.
>> CHAIRMAN La Rosa: no
objections.
Thank you.
Show them entered into the
record.
Sierra club.
>> sierra club moves
exhibit 804 into the
record.
>> MR. Wahlen: no
objection.
>> CHAIRMAN La Rosa:
seeing none, show them
entered into the record.
any other exhibits?
Seeing none, MR. Aponte,
you are excused.
>> MR. Aponte: thank you,
commissioners.
Appreciate it.
>> CHAIRMAN La Rosa:
thank you.
I will throw it back over
to teco.
In fact, before I do that,
let me do some
housekeeping here.
Still planning to break at
12:00.
I know there's still some
questions on some of the
witnesses.
I have course encourage
that.
What I would like to do
this afternoon, later this
afternoon is at 6:00 until
6:30 is have kind of a
brief dinner break and
then we will continue
after that.
So after the 6:30 hour
until 9:00 or so.
Just to make sure we all
have an understanding of
the schedule.
Is somewhat early now, but
just want to give you guys
a heads up anyone who's
got to make plans or
thoughts.
Hopefully give you enough
time to do anything
additional.
Again, still planning to
break at 12:00.
Teco, let's go ahead and
introduce your next
witness.
>> thank you, MR.
CHAIRMAN.
Tampa electric calls chip
whitworth.
>> CHAIRMAN La Rosa: mr.
whitworth, I do not
believe you have been
administered the oath.
Do you mind standing?
Do you swear and affirm
the testimony you are
about to give will be the
truth, the whole truth,
and nothing but the truth?
>> MR. Whitworth: I do.
>> CHAIRMAN La Rosa:
thank you.
Have a seat, get settled
in, we'll give you a
second to get organized.
Teco, we are ready when
you are.
>> thank you, MR.
CHAIRMAN.
Good morning, transacting.
>> MR. Whitworth: good
morning.
>> can you please state
your full name for the
record?
>> MR. Whitworth: --
seven.
>> were just sworn,
correct?
>> MR. Whitworth: I was.
Tampa electric company
business address is 702
north franklin st. Is 702
north franklin st., tampa,
fl.
>> did you prepare plan
cause to be filed APRIL
22, 2024 prepare direct
testimony consisting of --
pages?
>> MR. Whitworth: I did.
>> and did you prepare in
cause prepare rebuttal
testimony consisting of 15
pages?
>> MR. Whitworth: I did.
>> do you have any
additional questions to
your prepared rebuttal
testimony?
>> MR. Whitworth: I do
not.
>> if I would ask you
questions compared in your
direct and -- would your
interest the same?
>> MR. Whitworth: they
would.
>> tampa electric request
the prepared and rebuttal
testimony of transacting
the insert into the record
as the red.
Did you also prepare in
cause to be filed with
your direct testimony
exhibit marked cw-one
consisting of eight
documents?
>> MR. Whitworth: I did.
>> did you also prepare
cause to be filed exhibit
marked cw-two consisting
of three documents?
>> MR. Whitworth: I did.
>> MR. CHAIRMAN, tampa
electric would note for
the record that exhibit
cw-one and cw-two have
been identified on the
comprehensive exhibit list
as exhibits 21 and 145.
>> CHAIRMAN La Rosa:
okay.
>> MR. Whitworth, and to
prepare a summary of your
direct and rebuttal
testimony?
>> MR. Whitworth: I did.
>> would you please give
that testimony?
>> MR. Whitworth: good
morning, commissioners.
My direct testimony
describes my companies
just vision system,
however system has grown
and changed since the
company's last base rate
case, our customers have
benefited from improved
blue sky and extreme
weather reliability and
white capital investments
in the tnd system since
the last rate cases were
necessary and prudent.
Are direct testimony
explains -- in our
transmission distribution
substation expansion and
upgrades that are needed
to support customer
growth, maintain and
improve system
reliability, improve grid
resiliency, replace aging
infrastructure, improve
our customers experience,
and meet our governmental
and regulatory
commitments.
Lastly, my direct
testimony describes how
tampa electric proposed
t&d and capital budgets
represent a strategic
approach that will provide
a modern grade to meet our
customers increasing
expectations, and after
growing demand, and ensure
a grid that will be safe,
resilient, secure, and
reliable for many years to
come.
My rebuttal testimony
addresses two main issues
raised by the office of
public counsel' is
testimony related to the
companies spare medium
power transformer
inventory and accounting
for spp work.
First, our rebuttal
testimony explained the
company's reasonable and
prudent process for
maintaining inventory.
tampa electric it
currently has four
transformers in stock and
the office of public
counsel has requested the
company reduce medium
power transformer
inventory by four.
I recommend the company
make no adjustment since
lead times for medium
power transformers are
approximately 1.5-2 years,
they are an essential
piece of equipment to
serve our customers and
needed to keep up with
energy demand and customer
growth.
Second.
My rebuttal testimony!
How opc's reclassification
of certain feeder
hardening costs from base
rates to the spp recovery
clause is inconsistent
with the commission's
order when tampa
electric's 2020 spp
settlement agreement was
approved.
That agreement, which opc
signed, requires tampa
electric to charge the
cost of removal for assets
that are being retired as
part of an spp project to
the accumulated
depreciation and rate
based used to set base
rates.
I recommend that the
commission make no
adjustments to the
hardening cost removal of
expenses since those were
charged properly under the
2022 spp agreement.
This concludes my summary.
Thank you.
>> we tender the witness
for cross-examination.
>> CHAIRMAN La Rosa:
thank you.
Opc, you are recognized
when ready.
>> good morning,
commissioners.
Good morning, MR.
Whitworth.
MR. Whitworth, can I have
you take a look at page 2
of the testimony that's up
there?
In your direct, you say
that your duties include
advanced metering and for
structure, advanced this
tradition management
systems, line clearing
activities, and fleet
equipment, is that
correct?
>> MR. Whitworth: that's
correct.
>> and are you aware of
the filing your company
made on AUGUST 22, 2024
where teco revised
portions of the gr r
program that is now
included in this request?
>> MR. Whitworth: could
you repeat the question,
please?
>> sure to go are you
aware of the AUGUST 22
filing that was made to
revise the request?
>> MR. Whitworth: yes, I
am.
>> are you aware in that
filing one of the things
they revised were a number
of things that were
included in the gr r?
>> MR. Whitworth: yes,
I'm aware of that.
>> can you tell me how
many programs from the
original 40 programs that
you discuss in your
testimony on page 22 have
been removed?
>> MR. Whitworth: that
question is better suited
for witness david lukcic.
>> david?
>> yes.
>> me ask you this
question.
Would I be correct that
removing this program from
this request does not mean
these projects will not be
done?
>> MR. Whitworth: that's
correct.
>> and looking at page 22
of your testimony, and let
me know when you get
there.
Lines 15 through 17, I
believe.
Referring to
.
In that portion of your
testimony, you say it is
teco's goal to complete
all the projects by 2030.
But you would agree that
completion date is not a
firm date?
>> MR. Whitworth: our
intent is to complete the
entire set of our gr
projects by 2030.
I would also like to note
we are not asking the
commission to approve the
entire set of the gr
projects for this rate
case.
We are only asking you to
approve a subset of those
in 2025 stubbs had asked.
>> mi fair to assume that
you agree with my question
that it's not a firm date?
>> MR. Whitworth: we
intend to complete it by
2030 and I would refer to
david lukcic about the
specific dates.
>> okay.
On the bottom of 2022 on
the page, this page of
your testimony, your claim
is that aggregating these
projects result in more
efficient capital spend
and enhancement
functionality.
Not that all these 40
projects cannot be done
individually, is that
correct?
>> MR. Whitworth: that's
correct.
>> living on the page 24
of this portion of your
testimony.
You say that the gr are
projects are necessary to
replace obsolete systems
and equipment that have
reached the end of their
life, correct?
>> MR. Whitworth:
correct.
That is one component of
the gr auto projects.
>> you would agree that
replacing old obsolete
equipment is normal
activities
, correct?
>> MR. Whitworth: in
certain circumstances it
is.
In other circumstances
when you can replace these
assets in a coordinated
fashion, there is a way a
company can execute these
projects and save the
customers further capital
by the efficiency these
are executed
.
david lukcic has a great
deal of --
>> you would agree it's
normal activities, right?
>> CHAIRMAN La Rosa: it
has been asked.
>> I know I asked it, but
I did not get a yes or no
answer.
If I can ask that the
witness give me a yes or
no answer.
>> CHAIRMAN La Rosa: I'm
going to allow the
question to be asked.
>> I think you agree it is
--
>> MR. Whitworth: I said
in certain circumstances
it is.
>> okay.
You then say in your
testimony that investments
are to improve
reliability, access to
data
, correct?
>> MR. Whitworth: what
page are you on, please?
>> I'm on page 22 -- or
I'm sorry, 24.
And I believe we are
looking at your answer
which starts at line 4.
>> MR. Whitworth: excuse
me?
Which line?
>> line 4 if you need to
read through that answer,
that's fine.
>> MR. Whitworth: okay.
Thank you.
>> so would you agree in
your testimony you say
investments are to improve
reliability, access to
data, and improve -- would
you agree that teco
routinely looks for ways
to improve its systems
functions?
>> MR. Whitworth: we do.
>> okay.
Let's go to page 29 of
your testimony.
Looking at lines 1 and two
on that page, it says the
company plans to begin the
grid reliability and
resiliency projects in
2024 and conclude in 2023.
Did you mean to say 2030
and that portion of your
testimony?
>> MR. Whitworth: yes,
that should say 2030.
>> would you agree that
existing field devices
communicate through your
radio network currently?
>> MR. Whitworth: they
do.
>> and would you agree
that the current radio
scata system was installed
in -- and that the scata
system needs replacing?
>> MR. Whitworth: that is
correct.
>> looking at your exhibit
for your testimony,
document seven, given a
minute here.
Okay.
This is an exhibit that
shows the gr project as
proposed, correct?
>> MR. Whitworth: no, it
does not.
This is a general graph
that shows large buckets
and timeline, but does not
depict any in-service
dates.
>> okay.
It's a general indication
of the projects and
timelines, but not
specific in-service date,
correct?
>> MR. Whitworth:
correct.
>> part of this talks
about the new
communication platform
that is the plt spectrum,
is that correct?
>> MR. Whitworth: it does
mention that, correct.
>> and that is the purple
line, correct?
>> MR. Whitworth: yes,
correct.
>> and the plte spectrum
project, that is projected
to go into service in
2026, is that still
correct?
>> MR. Whitworth: that's
my understanding, but
witness lukcic has the
specifics on the plte
project and all the
projects.
>> let me ask the
questions and to the
extent that you know you
can answer.
Looking at the blue field
devices, did your items
that will communicate the
plte system, correct?
>> MR. Whitworth: that's
correct.
>> your plan is to modify,
your plan is to modify
existing capacitors
already out in the field
to communicate through the
plte system, correct?
>> MR. Whitworth: yes, we
have to modify existing
equipment and if there's
other equipment we might
have to modify and what we
install new we will have
the ability to communicate
through the solar network.
Again, witness lukcic can
provide all the details
around how that
communications network
will interact with these
field devices.
>> you will also replace
older automated lateral
switches and modify the
newer als switches to
enact the plte spectrum
system, correct?
That's the plan?
>> MR. Whitworth: if
necessary, yes.
>> okay.
Starting on page 36 of
your testimony.
When we get there I'm
going to be looking at
starting at line 19 and
through the top.
Okay.
You mention the projects
included in the subsequent
year adjustment in your
testimony, correct?
>> MR. Whitworth: I'm
sorry, which page and
which line?
>> looking at page 36
starting online 19 you
have a question protecting
capital investments in 26
and 27 that were going to
be proposed to be put into
the subsequent year
adjustments.
Do you see that?
>> MR. Whitworth: I do.
>> that was my question.
This is the portion of
your testimony starting
here and going to the next
page where you discuss the
projects that will be
included in the 26 and 27
subsequent year
adjustments, correct?
>> MR. Whitworth: no,
that's not correct.
My answer says the
subsequent year
adjustments will be
explained by witness
lukcic.
>> to a certain extent you
do include gr projects?
>> MR. Whitworth: yes, I
discussed the gr projects
in a strategic overall
level of what we plan to
achieve in them.
Specific details how we
plan to execute that and
in-service dates of those
are with witness lukcic.
>> okay.
Let's go back to document
seven.
Okay.
And you have green boxes
with a line for breaker
replacements.
You would agree that
replacement breakers, that
you replace breakers when
they are old and obsolete,
correct?
>> MR. Whitworth: not
necessarily when they are
old and obsolete, but
certainly when they become
nonfunctional and
nonserviceable we make an
attempt to do that.
This is referencing relays
that are not compatible
with the cellular
communication technology
and plans for our
modernized grade.
>> let me ask you this.
When you replace older
breakers for whatever the
reason and put them into
service in between rate
cases, that would become
part of rate base that's
covered in the next rate
case.
Without me correct to your
knowledge?
>> MR. Whitworth: yes.
>> looking at the green
line for power transformer
replacement, you would
agree that you upgrade or
build out transformers
relative to teco's
customer planning and
growth in demand, right?
>> MR. Whitworth: I
would.
We do overhead
distillation planning
according to a city state
criteria.
>> you would also in the
agree -- put it into
service sween rate cases
it becomes part of rate
base that is then
recovered in the next base
rate, correct?
>> MR. Whitworth: that is
correct.
>> let me take you to opc
exhibit to opc exhibit
145, I believe is
f2.27210.
Are you familiar with this
document?
>> MR. Whitworth: I am.
>> and can we have you
look at page 3 of this
document?
And let me know when you
get there.
>> MR. Whitworth: I'm
there.
>> wonderful.
And if you look at the
bottom of that document
you see project risk
assessment header.
>> MR. Whitworth: I do.
>> okay.
You would agree that the
third bullet down talks
about the risk of material
shortages, correct?
>> MR. Whitworth: it
does.
>> if you look further
down about the for the
bullet is as program
benefits are not achieved
on specific timelines.
Is there another risk you
identified?
>> MR. Whitworth: that is
correct.
>> and an additional risk
that you identified is the
pace of change exceeds the
organizations ability to
adapt and you called that
change fatigue, correct?
>> MR. Whitworth:
correct.
>> another risk you
identified related to the
gr are programs is the
cost changing on
ecstatically over time,
correct?
>> MR. Whitworth:
correct.
What I really like about
this list shows the
company's forethought in
understanding the risk
before we enter a capital
project like this.
Before we even started, we
mapped it out.
We communicate it to our
leaders, staff, and we are
mapping out in
understanding what
mitigation plans do we put
in place to avoid this
risk?
We are thinking about it
ahead of time.
This is a testament to us
how we achieve success.
>> finally, one of the
other risks that you
identified is technology
and standards changeover
program life among other
risks, correct?
>> MR. Whitworth:
correct.
>> if I can have you look
back on page 24 of your
direct testimony.
And specifically I'm
looking at line 10-14.
You mention in always on
experience.
Do you see that?
>> MR. Whitworth: I do.
>> are you warranting that
customers will never lose
serious -- service if the
chief rre is never
implemented?
>> MR. Whitworth: I am
not.
>> am I correctly believe
the gr projects are giving
the distribution system
the brain whereas the spp
or the physical aspects
that are being replaced?
>> MR. Whitworth: that is
correct.
>> and you would agree
that there is a --
component, mechanical
devices that are going out
into the field, correct?
>> MR. Whitworth: that is
correct.
The mechanical devices are
installed since the crews
are there, they are
mobilized, they are
already performing the
work.
It's just a matter of
efficiency to have them
installed hardware and the
gr are welcome and --
>> can you tell me what
frf --
>> MR. Whitworth: yes, I
would.
>> you mainly rely on
alabama power as an
example of utility
development of a private
lte communication network
and flssr technology, is
that correct?
>> MR. Whitworth: no,
that is not correct.
We have a team of people
and staff of people who
evaluate this technology.
It's a proven technology
that's been installed
throughout the us and
alabama is one example of
an iou nearby, but there
are many examples across
the country of this.
>> this is the one you
have the most familiarity
with?
>> MR. Whitworth: that
would be the company I
visit with.
>> is it true the
affiliate company in
canada nova scotia power
does not have a gr program
or private network, to
your knowledge?
>> MR. Whitworth: not to
my knowledge.
>> the gr rp is prudent,
correct?
>> MR. Whitworth: we are
only seeking a portion of
the gr are project in its
entirety.
David lukcic can speak to
that.
>> it will not go into
service until after 2027,
teco will come back in the
future and ask for psc
authorization to recover
those costs later?
>> MR. Whitworth:
correct.
Whatever is not allowed in
2025, that will be for
another rate case.
>> you are not seeking
continual progress beyond
what you are asking for in
2027, correct?
>> MR. Whitworth:
correct.
>> I have no further
questions.
Thank you.
>> CHAIRMAN La Rosa:
thank you.
Florida rising, lulac.
>> good after -- I think
it's afternoon now.
Good afternoon, MR.
Whitworth.
>> MR. Whitworth: good
morning, or afternoon.
Whatever you want.
>> I think we met during
the depositions.
I have just a few
questions.
I'm going to try not to be
repetitive with the
questions MS. Christiansen
just asked.
I will direct you to your
-- actually, speaking
generally about your
testimony, you did look at
sort of long-term trends
of the grid reliability
project.
>> we did, yes.
>> thank you.
I will direct you to this
is staff exhibit 181 staff
exhibit 181e4022.
And if we can rotate it
.
Perfect.
Just scrolling down to
where there are the key
bullet points or key
observations, the first
bullet point does state
that teco has maintained
second place in the state
in the last few years with
minimal reliability and
proactive preventability
maidens programs, correct?
>> MR. Whitworth: that is
correct.
>> now I would like to
direct you to your
testimony particularly
this is master page
c6-938.
If we can scroll down to
lines 13 and -- yeah.
Lines 13.
Sorry.
C6-938.
Okay.
Sorry.
Oh, 398.
My own device is
.
[Indiscernible] Generally
speaking, the reliability
project is reported to
benefit customers,
correct?
>> MR. Whitworth: that's
correct.
>> thank you.
If we can pull up fll 265,
which is master number
f3.5-4488.
And these are I feel like
I'm going to say this
incorrectly, the mife
numbers regarding the --
project.
>> MR. Whitworth: it
looks like based on the
title this is the data
that was used for the ice
calculator.
>> thank you so much.
If you look under column b
it shows that residential
customers have a total
benefit of 6%.
>> MR. Whitworth: that's
correct.
>> and 94% would be going
towards other customers?
>> small cni, medium, and
large cni.
>> would you agree that
residential customers are
the vast majority of teco'
is customers?
>> MR. Whitworth: I would
say we have a higher
number of residential
customers, yes, then
commercial customers.
>> okay.
Thank you.
I'm not going to pull up
fll 266, which is master
number f fll 266, which is
master number f3.5-24492.
And once again might not
say this correctly, but
this shows the sadie
benefits?
>> MR. Whitworth: the
improvements look more
like customer minutes
improvements more so than
sadie improvements.
>> with the title of the
document jog your memory
on the top where it has
the bate stamp numbers?
>> MR. Whitworth: it
does.
Is is adi sadie ice
benefits.
Just not how I'm used to
seeing that data.
>> got it.
But if I can direct you to
column b third line this
shows that residential
customers have a total
benefit of 5%, correct?
>> MR. Whitworth: I do
not see 5% on this page.
>> are you on -- if you
scroll up,
>> MR. Whitworth: okay.
Yes, 5%.
>> thank you so much.
i believe those are all my
questions, MR. Whitworth.
Thank you.
>> CHAIRMAN La Rosa:
thank you.
Fipug.
>> thank you, MR.
CHAIRMAN.
Just a couple of quick
questions.
Good morning.
>> MR. Whitworth:
morning.
>> MR. Moyle: I had asked
a question about the smart
grid.
I'm interested in learning
a little bit more about
that and in particular
when do you believe you'll
have the ability for the
grid to notify the company
of an outage as compared
to customers having to
call and say hey, I have
an outage, can you come
fix it?
It seems like there's
evidence that suggests
that's a pretty
significant timepiece to
have a customer call and
then that message get
translated down?
I'm just looking for maybe
a narrative answer with
respect to the timing of
that and generally
speaking how it would
work.
>> MR. Whitworth: I did
hear witness sparkman's
testimony yesterday.
I'm familiar with the
question.
We do currently today have
the ability to know when
an entire circuit is out,
which translates to
customer outage as well.
we also have ami data that
comes through a system
that aggregates that shows
hey, these meters are out.
There MAY be a problem
here.
That coupled with a call
from a customer allows us
to troubleshoot from the
appropriate
.
We are not totally blind,
but not as specific as we
would like to get.
Something that witness
david lukcic can get at,
we expect to have that
technology to pinpoint
precisely where an outage
is and have the ability to
dispatch troubleshooters
and repair workers to
expedite those repairs.
>> MR. Moyle: just a
follow-up on the dispatch
piece.
Is that also projected to
be taking place at some
future point in time?
You referenced 2030, but
that would be done without
human beings being
involved?
You would just send a
message and go to a
message and no passing
along messages through
humans?
>> MR. Whitworth: as we
begin flssr, the
technology will be able to
detect an anomaly on the
grid or outage,
automatically restore as
many customers as possible
prior to human
intervention, and also
pinpoint where the fault
location is where we can
roll resources directly to
that location for repair.
>> MR. Moyle: and with
respect to where you are
rolling this system out,
are you prioritizing
circuits that say have
Mcdill air force base or
tampa general hospital
airport in a way so that
your more critical
infrastructure is going to
be plugged in first?
>> MR. Whitworth: we
currently do have customer
reliability programs for
folks like the airport or
tgh hospital and those
types of things.
Even walmart distribution
center where we track
those assets very closely
in the performance of
those already and we have
alarms and substation
alarms that come to the
control room on that
particular infrastructure.
As we roll out flisr
through gr are it's going
to -- as lims towers go in
we will then deploy field
devices and such that
follow that tower
construction and start to
bring that technology into
control.
>> MR. Moyle: just
briefly on the cell
network, is that going to
be a cell network that is
exclusive to teco's use or
a cell network that third
parties will be able to
use or something else?
>> MR. Whitworth: it is a
private cellular network
and was evaluated for
several reasons.
How we limit on that and
one of the biggest drivers
is that is more secure.
A much more secure way of
communication between
devices and data
transfers.
>> MR. Moyle: that's all
the questions I have.
>> CHAIRMAN La Rosa: fea.
>> no questions from fea.
>> CHAIRMAN La Rosa:
sierra club?
>> thank you, MR.
CHAIRMAN.
I have just a few
follow-up questions in
response to MS.
Christiansen.
My name is schef wright.
She asked you whether it
was normal to replace old
and obsolete equipment and
you said under certain
circumstances.
My question is when is it
not normal to replace old
and obsolete equipment?
>> MR. Whitworth: what I
meant by that is we have
to do that obsolete
equipment replacement in
an organized and timely
fashion.
And something that has to
be coordinated.
Typically that agreement
is integrated with other
pieces of equipment in and
around the system and as
soon as it becomes
obsolete we would have to
coordinate that.
The other thing is that
often times through proper
asset management programs
and health analysis we can
also work with that piece
of equipment for a
duration of time,
maximizing our capital
investment, which also
maximizes the customer's
investment as well so we
get the full use out of
that piece of equipment.
>> MR. Wright: so I think
I understood part of your
follow-on discussion to
indicate you might replace
the function of a piece of
equipment with better
equipment or equipment
that would do more than
the old obsolete equipment
did.
Is that kind of what you
were getting at?
>> MR. Whitworth: with
respect to gr and those
programs, I did.
>> MR. Wright: thank you.
That's all I had.
>> CHAIRMAN La Rosa:
walmart.
>> we have no cross, thank
you.
>> CHAIRMAN La Rosa:
staff.
>> Staff: staff has no
questions.
Thank you.
>> CHAIRMAN La Rosa:
staff has no questions.
I will send it back to
teco.
>> I would ask about this
document fll -- do you see
were at the top where it
says reliability
improvement?
>> MR. Whitworth: I do.
>> is the only benefit of
the grr project going to
be reliability benefit?
>> there are many
benefits.
In addition to
reliability.
Reliability is one of the
things we balance when we
consider what's happening
with the grid and how the
grid is changing.
I would add one of the
largest benefits to gr r
would be to weigh -- a way
to detect -- in 2030 we
expect to have around
27,000 customers with
rooftop power.
That's around 770 mw of
connected nameplate
capacity.
This will result in two
way power flows on our
system.
This is important for
three main reasons.
Number one, safety.
Safety of our workers.
Our workers need to
understand the direction
of power flow so they can
properly isolate the
system and remove the
hazardous energy and go to
work.
Number two, the implement
we install needs to be
technically capable to
handle two way power
flows.
Number three, to the
extent we can understand
the contribution of
renewable energy that's
being injected on our
grid, we can back down
traditional fossil fuels
and reduce line losses,
which saves the company --
customer money for fuel
savings.
There's many other reasons
from a security
perspective and
obsolescence perspective,
which we talked a lot
about and also improving
our customer experiences
and different data
offerings we will be able
to have access to.
>> will any of these
benefits accrue to
residential customers?
>> MR. Whitworth: yes,
they will.
>> no further questions.
>> CHAIRMAN La Rosa:
thank you.
It's now move exhibits
into the record.
>> table electric moves
exhibits 21 and 145 into
the record.
>> CHAIRMAN La Rosa: are
there objections?
Seeing none, show them
entered into the record.
Opc?
>> opc would move 370 into
the record if it has not
already been admitted.
>> CHAIRMAN La Rosa: is
there objections?
>> no objection.
>> CHAIRMAN La Rosa:
seeing none, so that
entered into the record.
Anybody else?
>> florida rising and
lulac would like to move
exhibits 725 and 726 into
the record.
>> CHAIRMAN La Rosa: any
objection?
>> no objection.
>> CHAIRMAN La Rosa: no
objection.
Show that entered into the
record.
Any other?
Seeing none, MR.
Whitworth, I almost said
you are recognized.
You are excused.
Thank you very much.
>> MR. Whitworth: thank
you.
Thank you so much.
>> CHAIRMAN La Rosa: all
right, teco.
I will throw it back to
you to introduce your next
witness and we will see
how far we get with him
before lunch.
>> thank you, MR.
CHAIRMAN.
Tampa electric calls david
lukcic.
>> MR. Wahlen: MR. Chair,
while we are on a break
would be all right if I
said congratulations for
making this document
system work and the
lawyers working at and
people working at?
It's actually turning out
to be fairly cool.
I don't want to jinx it or
anything.
>> CHAIRMAN La Rosa: I
had similar thoughts.
>> MR. Wahlen: so if it
fails this afternoon, you
can blame me, but I just
wanted to acknowledge all
of the hard work and
effort.
It looks like it's on its
way, and I appreciate
that.
>> CHAIRMAN La Rosa: from
my perspective up here
makes following along much
easier, especially doing
multiple things.
If you do jinx us, but
hopefully you don't.
MR. Lukcic, sorry I didn't
get you before you sat
down.
If you don't mind standing
up really quickly, I don't
believe you have been
administered the oath.
Please raise your right
hand.
do you swear and affirm
the testimony you are
about to give will be the
truth, the whole truth,
and nothing but the truth?
>> MR. Lukcic: I do.
>> CHAIRMAN La Rosa:
thank you.
>> good morning, MR.
Lukcic.
Can you please state your
full name for the record?
>> MR. Lukcic: yes, david
lukcic.
>> you were just sworn?
>> MR. Lukcic: yes, I
was.
>> who is your current
employer and business
address?
>> MR. Lukcic: tampa
electric company.
Business address is 702
north franklin st., tampa,
fl.
>> did you prepare cause
to be filed on this docket
APRIL 22, 2024 preparing
direct testimony
consisting of 61 pages?
>> MR. Lukcic: yes, I
did.
>> did you prepare cause
and file prepare rebuttal
testimony consisting of 20
pages?
>> yes, I did.
>> do you have any
additions or corrections
to your prepared or
rebuttal testimony?
>> MR. Lukcic: I do not.
>> MR. Lukcic, are you
familiar with the AUGUST
22 filing tampa electric
made to change the
company's revenue
requirement?
>> MR. Lukcic: yes, I am.
>> do you have any changes
associated with that
filing?
>> MR. Lukcic: I do.
On AUGUST 22, tampa
electric filed a change to
the revenue requirements
to remove the cost of the
project refined to as line
sensor software and the
distinguishing planning
software from the
company's sya.
This would change mike
direct and rebuttal
testimony in several
places.
Instead of going through
this page by page I want
to note on the record that
my testimony no longer
applies.
>> thank you.
Other than those changes,
if I would ask you
questions in your prepared
and rebuttal testimony
today, would your answers
be the same?
>> they would.
>> tampa electric requests
that -- be inserted into
the record as read.
MR. Lukcic, did you also
prepare cause to be filed
in your testimony
consisting of two
documents?
>> MR. Lukcic: I did.
>> MR. CHAIRMAN, tampa
electric would note for
the record that exhibit
dl-one has been identified
in the comprehensive
exhibit list as exhibit
22.
MR. Lukcic, did you
prepare a summary of your
direct and rebuttal
testimony?
>> MR. Lukcic: I did.
good morning,
commissioners.
My direct testimony
describes the company's
operation technology and
strategy department.
The ot resources and
applications tampa
electric uses to operate
its electric system
explains the progress made
to date in operation
technology and strategy
since the company's last
bait rate case.
The testimony summarizes
the ots plans and
explained the company's ot
and ask capital
investments and also
describes the grade
reliability and visit with
the project has been
created to increase
customer expectations, two
way power flows, obsolete
systems and equipment in
addition to safety and
reliability, concerns with
the evolving grid.
Grr is a collection of a
series of upgrades that
will deliver maximum value
in the most cost-effective
manner.
In addition to addressing
the issues above, grr will
also address cyber
security, operational
efficiencies, which will
reduce expenses, provide
fuel savings due to
reducing line losses, as
well as setting the
foundation for additional
customer programs.
The program will go into
service as subsequent year
adjustments in 26 and 27.
My rebuttal testimony
addresses why the
commission should address
inclusion of projects in
the company's sya.
My rebuttal testimony --
does allow recovery for
the grr project.
This concludes my summary.
Thank you.
>> tender the witness for
cross-examination.
>> CHAIRMAN La Rosa:
thank you.
Opc.
>> thank you, MR. Chair.
Good morning, teco team.
>> MR. Lukcic: good
morning.
>> I'm going to jump right
into questions.
Is a true the company has
already been implemented
individual components of
what you named the grr
project since 2022?
>> MR. Lukcic: that is
correct.
>> and the official name
is the advanced
distribution infra
structure, correct?
>> MR. Lukcic: I don't
know if I would call that
the official name.
Although it has been:
both advanced distribution
infrastructure and grid
reliability.
The names has been used
interchangeably.
>> would you agree it has
modernized its dispersion
network?
>> MR. Lukcic: I would
say that's fair.
>> and this is what the
individual components of
the adi were intended to
do when they were forecast
in the ordinary course of
business, right?
>> MR. Lukcic: I don't
know that I'd say it that
way.
I think what might be
helpful is understanding
what grr is.
Grr evolved out of a
series of grid
modernization projects and
as such as we gain through
time, I think archie
talked about it starting
in 2018.
Through time what we did
is we found a more
cost-effective way to
execute these projects by
looking at them in a
holistic way.
It really allowed us to
find the most
cost-effective way to
deploy them along with
providing the maximum
value to the customers.
It's more than a one plus
one equals two.
That's how these things
kind of evolved.
>> hasn't the company
already invested roughly
21 million in these
component projects from
2021-2024?
>> MR. Lukcic: that's
correct.
>> doesn't the 2025 test
year include for an
additional 65,871,743 for
these component grr
projects?
>> MR. Lukcic: that
numbers of accurate.
>> in other words, the
company has already been
accounted for adi projects
consistent with the
expectations underlying
the rate setting for the
2021 right settlement?
>> MR. Lukcic: can you
rephrase the question?
>> so these adi projects
are consistent with the
2021 settlement agreement,
correct?
>> MR. Lukcic: are
consistent with the 21
settlement agreement.
I'm not exact sure what
you are referring to.
>> these component capital
projects were planned for
and expected to be
deployed between the 2021
and 2024 rate case.
>> MR. Lukcic: so grr
hasn't evolved that way.
It is not a rate case
determined activity.
It's a continuation that
results from the increased
expectations from our
customers.
When we continue to see
the grid evolving out
underneath us as customers
make choices around
electric vehicle
selections, changes the
complexity of the grid.
We look at safety, which
chip mentioned pv are
becoming more prevalent.
We are seeing two way
power flow and safety
concerns.
In addition to customers
desires for better
expectations around
reliability and storm
restoration.
It's continuing to
methodically address those
issues that allow the grid
modernization first to
develop within devolve
into the most
cost-effective way to
deploy it and maximize
those benefits and that's
what evolved grr.
It's not a rate case
determination.
It's just next have been
in a relation continuing
to find better ways to
manage our grid.
>> yes or no these capital
plans are expected to be
deployed in the 2021 and
2024 rate cases.
>> MR. Lukcic: yes.
>> and these component
capital projects are
expected to be deployed
during the --
>> MR. Lukcic: yes.
>> the cost incurred in
2022 through 2024 are
being reviewed for
prudence in the next rate
case or the current one?
>> MR. Lukcic: the
current one.
>> is it fair to say the
main dispute between
yourself and opc witness
amera is at the prudence
included in the subsequent
year adjustments but
rather the company's
decision to seek separate
recovery of them over the
subsequent year
adjustments?
>> MR. Lukcic: I don't
want to necessarily speak
for -- there's four
components that are
critical we are asking for
in a subsequent year.
The first one is the plte
spectrum, which is the
background of the
communications network.
The second is another
significant but beneficial
investment of the
customers as it opens the
door to a tremendous
amount of customer
programs, more accurate
billing, those kind of
issues.
Then you also have the
work management system
that has been in for
decades and out of
support.
That will continue to
drive operating
efficiencies and -- back
office hardware portion of
it and those final pieces
go in in DECEMBER 2026.
Yes, there are substantial
investments.
Much of them are multiyear
projects and we felt the
sya was inappropriate
mechanism for recovery to
relieve pressure in some
of the out years.
>> and isn't spending on
the grr projects going to
continue beyond 2024?
>> MR. Lukcic: that is
correct.
>> in fact, the company
forecast these grr
spending to continue at
least until 2030, correct?
>> MR. Lukcic: that is
correct.
>> the company can choose
to re-profile the capital,
right?
>> MR. Lukcic: so it's
not a capital spend
project.
>> teco ting, can you
please answer the question
yes or no and then?
>> MR. Lukcic: I would
say no because these
projects are codependent.
You tried to drive towards
-- maximize the benefit to
the customers, they have
to go in a certain order.
A simple reorganizing
projects or delaying key
components is not an
effective way to maximize
the value to the
customers.
>> the company could
choose to cancel some of
the components that have
yet to be entered,
correct?
>> MR. Lukcic: it's a
possibility, but the
company would not.
>> wasn't the plte
component the only
component specifically
approved by the board
before this case was
filed?
>> MR. Lukcic: plte was
definitely approved by a
board before this case was
filed.
There have been several
grid modernization
projects that have been
approved.
I don't know of anything
else in grr that is been
approved by the board, but
the board did subsequent
league approve this
project in JUNE of this
year.
>> and is the plte
component still expected
to be in service by 2026?
>> MR. Lukcic: the plte
spectrum should be
deployed and functional in
AUGUST in AUGUST 2025.
Then the back office
hardware in DECEMBER 2026.
Those are the two
components.
>> isn't it true that one
of the criteria used by
teco are seeking to
contain what they name the
grr and subsequent year
adjustments was of the
project was large enough
to be eligible for afudc?
>> MR. Lukcic: no.
Afudc collection was not a
function for determining
what actually was asked
for recovery.
We picked the most
substantial investments.
Some of those qualify for
afudc, some did not.
>> do you have a copy of
that deposition?
>> MR. Lukcic: I do.
>> can you please go to
page 47 of that
deposition?
>> CHAIRMAN La Rosa: do
we know --
>> no.
One second.
Commissioners, can you
give us a moment to pass
out the depositions?
>> CHAIRMAN La Rosa:
sure.
I think we're ready when
you are, but just to
clarify the witness does
have a copy.
>> I do.
>> my apology,
commissioners, for the
delay.
Can you please take turn
to page 47?
>> MR. Lukcic: got it.
>> it sounds like you are
planning a standard here
that if something improves
efficiency it is -- can
you please read your
answer line 6-10?
>> MR. Lukcic: okay.
Can you state the first
part of that question or
just however you want to
phrase it.
>> yes.
Isn't it true that one of
the criteria used by teco
for seeking to recover
what they named the grr
project in subsequent year
adjustments as if the
project was subject to be
eligible for afudc?
And then the question you
were asked in your
deposition was it sounds
like you're planning a
standard here that if
something approves --
improves efficiency that
it's appropriate to
include in the sya?
Am I characterizing that
correctly?
Can you please read your
answer 6-10?
>> MR. Lukcic: a couple
of things.
The assertion that afudc
was the --
>> can you please read
your answer?
>> MR. Lukcic: my page 47
6-10 says lights in a --
along with potentially ev,
pv, and other edge type
devices.
>> MR. Lukcic, are you
looking at the -- second
deposition.
I apologize.
>> MR. Lukcic: I'm sorry.
Can you give me the page
number again three
>> 47.
>> MR. Lukcic: okay.
Which lines?
>> question I asked isn't
it true the criteria
seeking to recover adi
projects whether it was
eligible for afudc and in
this deposition you were
asked, I mean it sounds
like you're planning a
standard here that if
something improves
efficiency that's
appropriate to include in
the sya.
Am I characterizing that
correctly?
Can you please read your
answer from line 6-line
10?
>> MR. Lukcic: yes.
To be clear, number one
the project going to be
completed in that year and
the second criteria was
that the project large
enough to have been
eligible for afudc.
Is and that meet --
>> MR. Lukcic: the only
other thing I want to do
is add context.
You coming off reading
lines 6-10.
I want to add along with
adding benefits to the
customer.
>> so my next question is
with regards to the plte,
isn't it meant to replace
the company's current
obsolete radio system?
That is not in the
deposition.
>> MR. Lukcic: asked the
question again.
I'm sorry.
>> with regards to the
plte, is not meant to
replace the company's
obsolete radio system?
>> MR. Lukcic: yes.
If you start deviating
from the plan, doesn't
that create problems?
>> MR. Lukcic: if we
start deviating from plan,
that creates problems.
>> didn't the company just
file with the commission
adjustments -- or
eliminate elements to the
sya?
>> MR. Lukcic: the
company filed to eliminate
the recovery of elements
in the sya.
>> how many were removed
from your original asked?
>> MR. Lukcic: was listed
in my opening statement no
components.
>> thank you so much.
Nothing further.
>> CHAIRMAN La Rosa:
thank you.
Go to florida rising
lulac.
>> thank you.
Good afternoon/morning,
MR. Lukcic.
>> MR. Lukcic: good
afternoon.
>> I'm going to try to
keep this short and not
duplicate efforts.
So I will ask a few
questions about the
private plte network, but
just making sure that
nothing that I'm asking
has already been asked.
When considering I'm just
going to call it the plte
because that might be
easier.
Teco also considered the
cost of doing a
public/fiber network?
>> MR. Lukcic: that's
correct, yes.
>> and to these
considerations teco was
looking at other utilities
that currently have a
plte.
>> MR. Lukcic: that's
correct.
>> in those considerations
are there any other.
Utilities for teco that
use a plte?
>> MR. Lukcic: I'm sorry,
say that again?
>> are there any
.
Utilities in florida that
use a private plte
network?
The majority of the pure
utilities do not use a
plte network?
>> MR. Lukcic: that's
correct.
>> thank you.
I would like to bring up
this is fll 179 or master
number f3.3-5842.
Do you recognize this
document?
>> MR. Lukcic: I do, yes.
>> this is a document that
third parties burns and
Mcdonald used to look at
the private lte network?
>> MR. Lukcic: yes, they
were responsible for the
entire evaluation.
>> I think you scroll down
two or three pages you'll
see a pie chart.
>> MR. Lukcic: sorry,
there's lag here.
>> I was dealing with that
earlier.
>> MR. Lukcic: I guess
that lag was forever.
Yes, I'm there.
>> this shows the
breakdown of the estimate
of cost.
>> MR. Lukcic: summary of
10 year cost, yeah.
>> a huge chunk of it are
the lte devices.
>> MR. Lukcic: that is
correct.
>> followed by spectrum.
>> MR. Lukcic: that is
correct.
>> thank you.
Just making sure some of
the questions were not
asked.
Okay.
The last document I would
like to pull up is fll
189, which is master
number f f3.3-6365.
And if you can click the
hyperlink, the excel
there.
>> MR. Lukcic: okay.
>> this represents
different -- one second.
This represents different
operations projects and
the costs associated.
>> MR. Lukcic: I'm sorry,
what projects?
>> operation spending
cost.
And you recognize this
document?
>> MR. Lukcic: I do.
>> thank you so much.
Those are my questions,
MR. Lukcic.
Thank you.
>> CHAIRMAN La Rosa:
thank you.
Fipug?
>> no questions.
>> CHAIRMAN La Rosa: fea.
>> no questions.
>> CHAIRMAN La Rosa:
sierra club.
>> no questions.
>> CHAIRMAN La Rosa:
walmart?
>> no questions.
Thank you.
>> CHAIRMAN La Rosa:
staff.
>> Staff: no questions.
Thank you.
>> CHAIRMAN La Rosa:
commissioners, any
questions?
Seeing none, transit, give
it back to you for
redirect.
>> thank you, MR.
CHAIRMAN.
Just a few.
MR. Lukcic, do you recall
when MR. Waltrus asked you
and you said two?
Is the cost recovery in
this case for 40 trento
projects?
>> MR. Lukcic: they are
not.
>> how many are originally
included in this case?
>> MR. Lukcic: for the
subsequent year
adjustments there were six
and there are currently
four.
>> thank you.
Just one second, MR.
CHAIRMAN.
MR. Lukcic, do you
remember earlier when MR.
Waltrus asked you about
your deposition transcript
and you stated that afudc
was -- do you recall that?
>> MR. Lukcic: I do.
>> did you make a mistake
when you said that?
>> MR. Lukcic: in the
deposition, yes.
>> thank you.
No further questions.
>> CHAIRMAN La Rosa:
thank you.
Let's move exhibits into
the record.
Teco?
>> thank you.
We would move exhibits 22
into the record.
>> CHAIRMAN La Rosa: 22
into the record.
Any objection?
seeing none, show that
entered into the record.
Opc?
>> no exhibits from opc.
Thank you.
>> CHAIRMAN La Rosa: any
others?
Any other parties?
>> florida rising and
lulac would like to move
exhibits 649 and 639 into
the record.
>> CHAIRMAN La Rosa: any
opposition to moving
those?
>> no objections.
>> CHAIRMAN La Rosa: no
objections.
Show them entered into the
record.
Are there any other
exhibits entered into the
record?
Okay.
MR. Lukcic, thank you for
being with us today and
you are excused.
>> MR. Lukcic: thank you.
>> CHAIRMAN La Rosa: so I
think we are good for a
lunch break.
It is a few minutes before
12:0, so let's say 1:05.
Same 1:05 we will
reconvene here.
Fair?
Testing 10 987654321 this is a
test for the closed captioning
service for this afternoon.
Testing 10 987654321 this is a
test for the closed captioning
service test. 10 987654321
thank you.
A few minutes after 1 pm I
think we can start to get in
position to get rolling again.
We finished the last witness.
I think we will turn it back
over to teco to introduce the
next witness.
>> thank you MR. CHAIRMAN tampa
electric calls.
[Listing names]
>> Mike La Rosa,CHAIRMAN:
[Listing names] If you don't
mind before you sit down
administering the oath to swear
and affirm the testimony you
are about to give will be the
truth the whole truth and
nothing but the truth.
Have a seat and settle in.
>> teco: good afternoon will
state your name for
the record.
>>.
[Listing names].
Who is your current employer
what is your business address.
Tampa electric 702 n. Franklin
st. Tampa electric 702 n.
Franklin st., tampa, fl.
>> teco: did you prepare and
cause to be filed on this
docket APRIL 24 prepare direct
testimony insisting of 35 pages
.
>> I did.
>> teco: any corrections or
durations if I were to answer
the questions contained in your
prepared testimony would
renters be the same as those
written testimony.
>> Witnes: they would.
>> teco: MR. CHAIRMAN temple
electric prepared testimony to
be inserted into the record as
read.
Did you also prepare and cause
to be filed with your direct
testimony and exhibits marked
ch
b
one consisting of 2
documents.
>> Witnes: I did.
>> teco: MR. CHAIRMAN temple
electric window for the record
that exhibit seat one is
identified on the cl as exhibit
number 23.
Yes it is 23.
Would you please summarize your
testimony.
>> Witness: I will thank you
good afternoon commissioners
might direct testimony has five
primary objectives. Number one
,
it describes tampa electric
informational technology
department and the key services
it provides the company's
functional areas. Number two it
discusses our comprehensive
cybersecurity program now we
are addressing the ever
escalating and more
sophisticated cyber security
threats and data privacy
concerns. Number three,
explains the cost to operate
and maintain the idf locations
,
number four, it addresses the
important changes made since
our 2021 rate case to our major
idf locations. Lastly, I direct
testimony demonstrates the
information technology rate
base amount and operation and
maintenance expenses for 2025
test year are reasonable and
prudent.
That concludes my summary thank
you.
>> teco: [Listing names] Is
available for cross-examination
.
> Mike La Rosa,CHAIRMAN:
thank you.
>> MR. CHAIRMAN and
commissioners good afternoon
MR. Haack nice meeting you.
>> Witness: nice to meet you.
>> I think you just stated your
title is vice PRESIDENT Of
information technology?
Chief information officer tampa
electric.
>> Witness: that is correct.
>> at the time you filed your
testimony you have been a tampa
electric for exactly one year.
>> Witness: that's
correct.
>> immediately prior to APRIL
2023 you were the chief digital
officer beginning in 2020 is
that correct.
>> Witness: that's correct.
>> teco: [Listing names] Shows
you in that role on their
website is there a dual role
that you have.
> Witness:
there is a dual role that I
have I am doing both.
>> teco: are you transitioning
is it something that you do for
both companies.
>> Witness: I do it for both
companies for some period of
time undefined at this point.
>> teco: okay.
>> is all of your time on the
books of tampa electric that
you allocate time
.
>> Witness: I allocate based on
calendar entries and reviewing
that is my longing for our
spread.
>> do have an idea of what
roughly what split
.
>> Witness: it is exactly 75
tampa electric 25.
[Listing names].
>> in your role or your roles
different do perform
essentially the same functions
at.
[Listing names] And tampa
electric.
>> Witness: and the technology
guy if you will and both
companies there is
a lot of
similarities and overlap but my
role at.
[Listing names] Is broader and
done for the parent company
overall affiliates.
>> do you
do work for
.
[Listing names]
>> in your role before at emera
you are the cio or chief
information
officer be 13 I was
.
>> arguably one of the largest
if not one of the largest five
utilities in the company.
Was your role there essentially
the same as what you do at
emera@tampa electric.
>> Witness: yes.
>> with your experience in the
utility world and your current
responsibilities you would've
had oversight knowledge and
responsibilities integration of
software application into a
whole array of business
operations of all the companies
?
Is that right.
>> Witness: this is true.
>> your responsibility as the
cdo chief digital officer.
>> Witness: I do.
>> at emera would include both
oversight knowledge and
oversight responsibility of the
integration of software
applications into the whole
array of business operations of
the emera operating companies
including tampa.
>> Witness: it is the knowledge
of as an employee of the parent
company it is more about
governance of what is done at
the affiliates than intimate
knowledge within the
affiliates.
>> I take it every single
software application does not
come across your desk.
>> Witness:
exactly.
>> I think in your testimony
you talked about cybersecurity
.
>> Witness: I do.
>> I both emera and tampa
electric.
>> Witness: yes.
>> would that role require all
software that supports
operations must at some degree
your organization and under
your overall supervision be
screened for compliance with
company security standards?
>> Witness: that's correct yes.
>> also for compliance with any
relations that you describe in
your testimony pages 14 and 15.
>> Witness: that's correct.
>> this concept would apply to
the software that you show in
document number two of your
exhibit.
>>.
>> Witness: gas.
>> that would be when I say
this concept I would say the
screening or governance of
cybersecurity reasons for the
software that was resident in
the capital budget of the other
operating departments of the
company presented in this case
.
>> Witness: can you repeat that
for me.
>> what I'm asking you present
your capital budget or your
department
.
>> Witness: yes.
> some of
the other operations they have
their own dedicated software
right.
>> Witness: yes.
>> even though you were not
talking about the prudence of
the software for software that
they use still has to come up
under your cybersecurity
governance.
>> Witness: this is correct.
>> in this sense you have a
general awareness of at least
the major software application
that support all areas of the
company's operation is that
there.
>> Witness: that is fair.
>> no rebuttal testimony from
you.
> Witness: correct.
>> no one has filed testimony
in response to your testimony
describe the historical and
projected cost of your
department.
>> Witness: that is correct.
>> I note in your that you
justify your testimony does not
include operations technology
applications and their
supporting staff their
supporting software supporting
hardware, which is described in
the direct testimony of.
[Listing names]
>> Witness: that's correct.
>> one might conclude the lack
of rebuttal would indicate
there is no controversy or
dispute relative to the it
department is that how you
look
at it.
>> Witness: I made no
assumptions.
>> fair enough.
In your testimony at 481
,
[Unclear audio] It is page 5.
Line 8-17 you recount tampa
electric company's major areas
of strategic focus and pointed
to MR. Collins testimony to do
it.
>> Witness: I do.
>> can you read aloud items one
and two please.
>> Witness: item 1 is carefully
imprudently manage operating
expenses and capital spending
to meet growing and changing
needs in our service area
excuse me and 2 to continuously
improve the safety of the
liability and resiliency of our
electric system.
>> in your testimony in this
vicinity you testified that the
company's it department your
department plays a vital role
in supporting those areas
.
>> Witness: yes.
>> would you agree that in your
testimony that you focus on
presenting the cost of both
capital and deity in
cybersecurity projects under
your purview.
>> Witness: I do.
>> would also be fair to
conclude at least in the area
of cybersecurity the company is
somewhat less
focused on
efficiencies and more focused
on striving to minimize if not
eliminate security threats.
>> Witness: it is risk
management that is what
cybersecurity is focused on.
>> outside cybersecurity aspect
of your role item 3 on page 41
lines 13-14 it would indicate
that the it department has a
significant role in developing
and implement thing software
solutions to achieve and
improve on efficiency in all
areas of temporal separation
that right
.
>> Witness: that's right we
partner with the other business
units and functions within
tampa electric and all
technology initiatives.
>> would you agree with me that
a growing aspect of achieving
efficiencies in electric
utilities sphere is the
application of artificial
intelligence machine learning
and advanced data analytics to
processes that are fundamental
to the utility operating
systems?
>> Witness: artificial
intelligence really is a broad
term. Artificial intelligence
has been around for decades.
There is artificial
intelligence and that the
systems we deploy in use today.
But it is not the height
artificial intelligence since
NOVEMBER artificial
intelligence since NOVEMBER
2022 when chad gpd was
introduced that's a whole
another legal artificial
intelligence and we do not use
and utilize today much in the
way of general ai.
>> when we talk about
artificial intelligence I'm
talking about generative ai.
>> Witness: fair enough I don't
agree can you ask your
question.
>> that is fair I was asking is
a growing aspect of achieving
efficiencies in electric
utility sphere and application
we can insert generative ai.
>> Witness: I would say it is a
potential it is emerging and
not growing.
That is not the right way to
characterize it today.
>> okay.
To your understanding of
generative ai would you agree
that these are overwhelmingly
if
not entirely software driven
applications to the extent that
they are being used.
>> Witness: yes software might
be embedded in hardware but it
is absolutely software.
>> are you familiar with human
interface human machine
interface applications?
>> Witness: sure!
Hmi yes.
>> is that a potential area as
an example where artificial
intelligence might be used in
the future.
>> Witness: into the future
yes.
>> do you know what machine
laurie learning is referred to
you considered that to be under
the
broad umbrella of artificial
intelligence.
>> Witness: it is it is not
generative ai.
>> teco: what about advanced
data analytics is that a
byproduct of machine learning
and ai.
>> Witness: again analytics can
be human based analytics or
artificial intelligence-based
analytics will be
pre-generative ai.
>> what was the word used
.
>> Witness: heuristics self
learning.
>> heuristics.
I have an exhibit MR. CHAIRMAN
I would like to discuss at this
time.
To see if it is in your book
that redbook over there, opc
217.
Confidential exhibit.
This has a number assigned to
it within the case center.
>> Witness: can you repeat the
number
.
>> it is opc b
217.
>> is it that cl 442?
>> I've been told yes it is.
>> okay thank you.
>> I forgot to bring my cl work
with me.
Okay.
This is a confidential document
it is labeled highly competent
by the company. I'm going to
ask you some preliminary
questions about it without
getting into the details of it.
I would ask you first off are
you familiar with this document
or what is in it?
It appears to be a document
presented at the NOVEMBER 7,
2023 tampa electric peoples gas
board meeting.
>> Witness: I have seen it
before.
>> okay you are familiar with
this document.
Would you agree that this
document is a document that was
presented to tampa electric
sort of as an information about
what potential generative
artificial intelligence
applications might exist for
the company in the future?
Or do have a different
characterization?
>> Witness: first it's been a
long time since I thought the
document NOVEMBER 7, 2023.
I have not seen it since then
before now.
I really cannot tell you what
the major themes are through
there.
>> okay.
There are
enough.
i was looking for his name I
saw men who presented this
seemed like his first name
began with a. Would you have
been at this presentation?
>> Witness: I'm sure I was am
not sure who presented it.
>> that is fair. In this
document can you read the title
on the first page?
Without revealing confidential
information?
I don't know if you worked out
with your attorney if I ask you
to do something and ask you if
it would reveal confidential
information is only hope you
look down the row and get a
thumbs up or something.
>> Witness: okay thank you for
that but yes I can remember it
generative ai use cases and
next steps.
>> okay.
Can you turn to the second page
which has a base number the big
large 7826?
On the left-hand side of the
landscape.
>> Witness: yes.
>> in this document on this
page would you agree that the
far right-hand column with the
darker blue arrow talks about
potential ai
.
Can you tell me what generally
that talks about?
It's without revealing
confidential information.
>> Witness: underneath the
fourth arrow is that which were
looking at.
>> yes.
>> Witness: okay you would like
me to.
>> above the number what is the
subheading in that arrow
.
>>
.
>> Witness: distributed
intelligence apps 2022 through
ongoing.
>> does this area show some
potential for the use of
generative ai in the future?
If you know?
>> Witness: this has to do with
applications that can run on
meters our new ami meters on
the edge.
Again, this is potential stuff.
That is not been deployed yet.
It would be part of the gr rr.
Were we helped use of these
edge applications that is
distributed on the distribution
network yes.
>> on the next 1278-28 and at
the same area of that page
there are some
, there is a
column it has a subheading that
starts with p pb.
On the far right-hand side.
>> Witness: yes
.
>> can you read those four
words without revealing
financial information.
>> Witness: driving value
across business.
>> does is talk about potential
overall areas where artificial
intelligence applications might
provide a benefit in the
future?
>> Witness: yes sure yes these
are all areas that would be
areas in the future would have
high potential to benefit from
artificial intelligence.
>> on the next 78 30
, if you
can look at that.
>> Witness: 7830?
>> teco: if you can read the
first
headline.
>> there without revealing
confidential information?
>> Witness: the main headline
or the one underneath.
>> it
starts with g.
>> Witness: generative ai at
tampa electric.
>> can you read what is below
that without revealing
confidential information?
>> Witness: yes I can.
Our foray into generative ai
again this year with a pallet
to assist team members with
annual benefits enrollment.
>> okay now I believe that has
been discussed in some of the
testimony at least in the
deposition in this case.
>> Witness: I'm not familiar
but I will trust you will not.
Box in the lower right-hand
corner you see the lower
right-hand quadrant with a
subheading there?
Can you read that
.
>> Witness: the subheading next
steps.
>> yes.
>> Witness:
>> is the three bullets under
that is that confidential if
they are not trying to push you
to read that?
>> Witness: I don't think it is
confidential.
>>
okay can you read each bullet
.
>> Witness: continue to evolve
existing data and ai governance
bullet number two, pursue
increasingly complex
applications of ai.
Ullet
number three explore potential
for ai across borders, business
units.
>> thank you there is no
timeframe associated with those
steps is that there.
>> Witness: there is not a
tempera I might add that that I
would characterize our position
on this technology and others
as a fast follower.
Where today many of the
articles that you provided on a
daily basis
, many vendors and
consultants talk about what
might happen.
We are more as being a fast
follower looking for show me
where the value has been
achieved?
This is all very high potential
very exciting technology. It
has high high potential. I
would liken it to the internet.
Back in the 90s. If you will
call all the speculation around
the internet and runs on the
stock market etc. Then the
subsequent bust. We didn't
start getting value out of the
internet for a decade.
This technology and its
potential is emerging and it's
in the same sort of category.
I think it has higher potential
than the internet does in the
long term. Right now it is even
more risky than the internet
was back in the mid-90s.
>> okay thank you.
In your role that we talked
about at the very outset of the
questioning.
Would it be fair to say as the
cdl at emera and in your role
at tampa electric you would
have some significant level of
awareness if there were it
applications that were going to
utilize generative ai machine
learning is that correct.
>> Witness: that is correct in
fact I helped develop a
strategy emera level that teco
participated heavily in for ai.
It is called the emera aia
strategy I helped to put that
together.
>> I think there is as we read
and hr pallet that is using
some level of generative ai in
limited applications.
>> Witness: that was for annual
enrollment and benefits yes.
>> we were told that there is a
vegetation management ai trial
that is going on maybe up in
canada that teco hopes to
learn.
>> Witness: this is correct I
would characterize it as a
proof of concept at this point.
But yes that is true. They
would like to pursue the use of
generative area to help with
their vegetation management.
>> apart from those to proof of
concept and pilot is there any
other application that is being
rolled out within tampa
electric company in the sphere
of this rate case 25, 26, and
27 that you are aware of
.
>> Witness: there is another
proof of concept that is at
tampa electric it is within the
customer experience realm.
Using generative ai in some
capacity is very much potential
it is a proof of concept to aid
our customer service
representatives humans being
better customer service reps.
>> okay is it sort of in
concert with a cht gpt
.
>> this would be poor for
something that would pop up on
the screen for the customer
service rep while they handle a
call.
>> apart from that anything
that you
are aware of.
>> Witness: that is it for the
entire time period that you
mentioned.
>> with respect to the customer
experience area have there been
any assumptions made about the
efficiencies that might begin
to through the use of that
proof of concept effort
.
>> Witness: I would say it's
far too early to have done that
and no, we have not.
>> okay beyond the three that
we talked about it your
testimony to the commission
that with respect to the
projected test year in the
subsequent years at issue here,
there are no known or under
implementation ai efficiencies
that you are aware of that are
not being included in the
revenue requirements.
>> Witness: I would further
clarify pricing generative ai
.
[Unclear audio] That is
correct.
>>
.
[Listing names] Thank you I
just needed to go through that
for the record I appreciate
your help and
information. Thank
you very much MR. CHAIRMAN
thank you.
> Mike La
Rosa,CHAIRMAN: thank you.
[Listing names].
>> thank you MR. CHAIRMAN good
afternoon MR. Heck I believe
all of my questions have been
covered I'm going to take a
quick second to make sure.
I believe I don't have any
other questions thank you.
>> Mike La Rosa,CHAIRMAN: thank
you. [Listing names]
>> I have just a few questions.
Page 8 line 4.
>> Witness: of my testimony?
>> yes sir.
You have a sentence in here I
will read it it says for
cybersecurity emera maintains a
set of standards based on
national institute of standards
and technology nist
cybersecurity framework csf
brian what is the national
institute of standards and
technology I was wondering is
that a canadian organization.
>> Witness: it is us
government.
It is indeed. I don't know what
branch it rolls up into but it
is an agency within the united
states government.
>> I will ask a few questions
about your cybersecurity will
hear a lot about that person if
there's anything were not
comfortable answering because
of a security reason just say
that you are not comfortable we
will figure out how to deal
with that.
You put a lot in
here about what
you all are doing just a few
questions it looks like you
have a full-time staff.
N
your department of 18 folks
that are tasked with
cybersecurity operations but
then you also say that you have
a team that you contract with
or others that you contract
with can you share a little bit
the relative composition of how
that works and it works
together?
>> Witness: part of it is the
realization you cannot go it
alone. As talented as our 18
people might be you need a
broader perspective etc. We
have a consulting firm I would
call it and a strategic advisor
or spread we have been other
companies that do more
repetitive routine type work.
That would be as an example, 7
x 24 monitoring particularly in
the overnight hours they review
all of our logs etc. And they
are very falstaff to make sure
we see every alert and everett
handle every alert around the
clock seven days a week. As an
example both strategic and the
more nuts and bolts of it as
well.
The 18 people they are loyal
employees that investigate
alerts and they do reporting to
mitigate risk and understand
risk etc.) That type of the
core work is done within tampa
electric by those 18 employees.
>> are you aware of the
situations in which cyber has
been used worldwide to take
down grades for extended
periods of time?
>> Witness: yes jiggly lately
in ukraine.
That would be the most dramatic
example.
>> any in the united states you
are aware of?
>> Witness: nothing material.
Or it would have been reported.
>> you said your job is to
manage risk
.
>> Witness: that is one of them
for cybersecurity absolutely!
>> a lot of times people in the
insurance business will save
your managing to risk there is
a policy for you. You have any
way to manage risk through
insurance and if so are you
doing that?
>> Witness: we do have
cybersecurity insurance the
aspirin.
>> what is it called.
>> Witness: cybersecurity
insurance.
>> that would cover revenue
that were not able to receive
because of a separate outage it
would cover any damages to the
customers explain that to me.
>> Witness: it's an insurance
policy that would basically
after the developable capital
losses from an incident where
cybersecurity criminals got
into our computer network and
data center etc. And brought
harm to the company.
The entire cost to restore
etc., they would cover a
portion of that above the
deductible
.
>> would it cover rent
somewhere payments as well.
>> Witness: it would cover that
all of it has to be approved
our cyber risk or audited by
the insurers etc. To make sure
we mitigate risk well good
cyber security programs to be
insured you have to go through
a lot of hoops to get there.
>> lost revenue because of
businesses that part of what is
insured.
>> Witness: that is a better
question for
an insurance person
I do not recall.
>> just a few more a lot of
acronyms in this spring.
>> Witness: I'm sorry it comes
with the territory.
>>.
[Listing names] Asked you a
question about.
[Listing names] What is.
[Listing names]
>> Witness: supervisor control
data acquisition is aware human
and operating center remotely
control equipment on the grid
basically. Within a generating
plant.
>> made a note in your answer
you said hmi.
>> Witness: human machine
interface.
>> you made a point about
analysis of information that
you received and there are two
ways that analysis can be done
heuristic is the word brian.
>> Witness: heuristics
.
>> that is machine analysis is
that correct.
>> Witness: is a term used for
the earliest forms of ai. I
think the word means self
learning.
Something like that.
>> you compared it with human
analysis.
Do you do both
.
>> Witness: for sure
, analytics
is a field where you can take a
bunch of data and manipulate it
in ways and I human can review
the results and make decisions.
Then artificial intelligence
would be using the same data to
make its own predictions
instead of human making the
analysis.
Typically it would
lead to human judgment.
At this point especially. It is
not meant to often to make its
own decisions on the fly.
>> here is what the
machines are
saying here is what the human
folks are saying. In that
decision ultimately would be
made by a human at this point
not a machine?
>> Witness:).
>> just a couple of other quick
questions.
The amide meters those are
meters that are smart meters
they can go on businesses and
homes is that right.
>> Witness: that is correct all
of our meters other than
exceptions are ami meters.
>> are they settled in such a
way that third parties cannot
hack in to the smart meter and
then begin access to turn on
lights in your house and listen
in and all of that self. Can
you explain that.
>> Witness: absolutely!
Cybersecurity is a big concern
with the ami they were designed
from the ground up with
cybersecurity in mind.
What you engine is a nuisance
but if they were to turn off
all meters at once we would
have a really bad day on the
distribution network.
So yes, a lot of cybersecurity
controls architected for the
ground up for cybersecurity
they are very secured devices.
Bless you.
>> I notice in your testimony
you did not list how many times
you have given testimony before
but I understand you have
worked previously is this your
first time testimony in a
regulatory proceeding
.
>> Witness: this is the first
time under oath.
>> thank you for answering my
questions.
>> Mike La Rosa,CHAIRMAN:
[Listing names]
>> no questions.
>> Mike La Rosa,CHAIRMAN:
sierra club.
>> no questions are on
.
>>.
[Listing names] For retail
federation no questions.
>> Mike La Rosa,CHAIRMAN:
walmart.
>> no question thank you
.
>> Mike La Rosa,CHAIRMAN:
[Listing names] Commissioners
any questions.
>> Giles Fay,Commissioner: that
you MR. CHAIRMAN and thank you
MR. Heck for being here it's an
interesting subject matter and
I can understand maybe why you
have not testified before.
It's a complicated thing to
talk about publicly. I will am
going to ask fairly specific
questions if any way you feel
that it's not appropriate to
answer that question please
feel free to do so.
Ur
commission like a lot of
jurisdictions have processes in
place that review the
implementation and consistency
of the sap standards through
the american that's in your
testimony you mentioned that
but do interpret anything that
this body does or the
commission does to limit the
utility's ability to go beyond
those requirements?
>> Witness: if I understand the
question correctly I think my
answer is no.
We don't feel like there is
limited funding for
cybersecurity today.
We are able to do what we think
we need to do to
satisfy.
[Listing names] And the other
standards.
Am I answering the question
that you asked.
>> Giles Fay,Commissioner: let
me ask it this way.
With the implementation of what
you do for both emera and more
importantly teco it is driven
by the mission to protect the
systems and continue operations
which you are able to do so in
a way that allows for
government coordination but
also not interference when need
be.
>> Witness: it is accurate.
I will add maybe a little bit
tangentially but I will add.
As I said you cannot go it
alone.
I think APRIL for
government agencies where it is
applicable would be to help
coordinate information flow
etc. With cybersecurity across
the utility industry.
There is ever sleep reporting
requirements on our side.
We would like to see some
benefit from those reporting
requirements as well with the
two-way flow of information.
Anything to help with that
conduit would be helpful I
think.
>> Giles Fay,Commissioner:
great!
I appreciate what you do
whenever we talk about this
topic I think the more you know
the less you sleep. I can
appreciate the commitment that
you have to keeping the grid
save so thank you.
Thank you MR. CHAIRMAN.
>> Mike La Rosa,CHAIRMAN:
back
to teco for redirect.
>> teco: no redirect.
>> Mike La Rosa,CHAIRMAN: let's
move the exhibits into the
record.
>> let's move exhibit 23.
>> Mike La Rosa,CHAIRMAN:
exhibit 23 is there an
objection?
>>
.
>> Mike La Rosa,CHAIRMAN: is
there an objection I thought
you were checking on. 23 I
believe no objection?
Show 23 is moved into the
record.
>> opc would move on?
>> teco: no objection.
>> Mike La Rosa,CHAIRMAN: no
diction show entered into the
record. Any other exhibits
seeing none. MR. Heck thank
you very much.
You are excused.
Teco I will forward back to you
for your next witness.
>> teco: thank you MR. CHAIRMAN
tampa electric calls.
[Listing names].
>> Mike La Rosa,CHAIRMAN:
miriam before you sit down to
mind administering the oath.
Thank you. Do you swear and
affirm the testimony you're
about to get but with the truth
the whole truth and nothing but
the truth?
Excellent thank you.
Feel
free to get settled in.
>> teco: thank you.
Would you please state your
name for the record.
>> Witness: [Listing names].
>> teco: who is your current
employer and what is your
business address.
>> Witness: tampa electric
company 702 n. Franklin temple
for to. 11 to prepare and cost
be filed in this document and
APRIL 2 address.
>> Witness: tampa electric
company 702 n. Franklin temple
for to. 11 to prepare and cost
be filed in this document and
APRIL 2, 2024 direct testimony
consisting of 55 pages.
>> Witness: visited.
>> teco: do you prepare and
cost be filed in this document
rebuttal testimony consisting
of 18 pages.
>> Witness: yes I did.
>> teco: do you have any
additions or corrections to
prepare direct rebuttal
testimony.
> Witness: yes I
do.
>> teco: would you please list
them.
>> Witness: in my direct
testimony on page 30 line 19,
the word million should be
billion in both places.
>> Witness:
>> teco: do have another
correct correction.
>
Witness: in my rebuttal
testimony on page 8 line 23
delete the words gulf power the
first order is a florida power
corporation and the second one
is golf.
> teco: with those
provisions if I were to issue
questions prepared in your
direction rebuttal testimony
would your answers be the same
listed in the testimony.
>> Witness: yes.
>> teco: tampa electric
requests the corrected prepared
direction rebuttal testimony
of.
[Listing names] Be inserted
into the record as the red.
> Mike La Rosa,CHAIRMAN:
okay.
Did you prepare and cause to be
filed with your direct
testimony and exhibits marked
mc b
one consisting of 10
documents.
>> Witness: yes.
>> teco: MR. CHAIRMAN tampa
electric would note for the
record that exhibit mc b
one
has been identified on the
comprehensive exhibit list as
exhibit 24.
You did not have a rebuttal
exhibited you?
>> Witness: I did have a
rebuttal.
>> teco: you did have a
rebuttal exhibit.
Hat was
that.
It's.
>> Witness: no did not.
I'm sorry. [Laughter].
>> teco: I was going to have to
blame case lines for that.
I thought I was wrong but I was
wrong.
Okay.
Would you please
summarize your
direction rebuttal testimony.
>> Witness: good afternoon
commissioners my direct
testimony provides an overview
of the priorities that the
human resource department it
explains the elements of our
employee compensation system.
And it shows that the companies
2025 expenses for total direct
composition and benefits are
reasonable.
We target our total direct
compensation to be at market
median so that we can balance
the need to hire and retain
quality team members without
desire and commitment to
maintain reasonable customer
rates.
Our current employee count is
approximately 2550.
In 2024 we expect to maintain
that level in 2025.
My rebuttal testimony response
to criticisms from the office
of public counsel and
.
[Listing names] About our
variable pay programs and it
shows that variable or at risk
pay is commonly used by
companies in the united states.
These programs serve as
valuable tools that both
motivate and focus our
employees and also help the
company manage total direct
composition expenses.
I also show that the financial
performance metrics within our
short term incentive plans are
part of a balanced scorecard
performance goals that reflect
the diverse priorities that all
our employees or managers and
senior leaders balance every
day so that we can provide
high-quality electric service
to our customers and maintain
reasonable rates.
This concludes my summary.
>> teco: the spec is available
for cross-examination.
>> Mike La Rosa,CHAIRMAN: thank
you opc.
>> thank you MR.
CHAIRMAN and
hello again.
>> Witness: good afternoon.
>> opc: I would like to start
off if I could MR. CHAIRMAN
within exhibit not
confidential.
It is opc b
42.
That is 267.
Yes.
MS. Catcher tori I have a
composite exhibit of the
responses to opc
interrogatories 12-17 cod 30 do
you see that?
>> Witness: yes.
>> opc: okay.
Going to response to
interrogatory 12 it asked for a
list of each of the company's
existing incentive composition
plans to see that.
It refers the viewer to cod 30
which contains the description
of the existing compensation
plans which is attached to this
exhibit do see that.
>> Witness: yes I do.
>> opc: under the answer here
on 53 5396.
There is a variety of
stock-based plans.
Emera senior measurement stock
option plan emera restricted
share unit or as you plan.
And emera deferred share unit
bs you plan to see that.
>> Witness:
endo.
>>
.
[Listing names] You mind moving
correct phone
closer as you
speak.
>> Witness: I would be glad to.
>> opc: which long-term and
short-term incentives which
category do those stock plans
on climax.
>> Witness: the ones that apply
to tampa electric is the emera
restricted stock share unit
yaris you plan the emera share
unit drs you and that psu or
long-term incentive plans that
will apply to a small group of
tampa electric senior leaders.
Also the short term incentive
plan and the teco
.
[Listing names] And the
restoration plan.
>> opc: the top one emera
senior stock option plan is
that not tampa electric
.
>> Witness: that is
administered at emera it would
not be within my purview it
might be MR. Collins is the
only one I'm not sure.
>> opc: the cost of any awards
under the emera senior
management stock option plan
does are included if any fear
included in this rate case?
>> Witness: that would be a
good question for jeff.
[Listing names]
>> opc: do you know.
>> Witness: I do not know.
I assume so any costs incurred
for tampa electric would appear
in this.
>> opc: okay but if I'm looking
to divide this list of
compensation incentive
compensation plans between
long-term short-term. The
first 4 at the same emera was a
long-term incentive plans that)
Right?
>> Witness: that is correct it
would appear that way.
>> opc: the pod 30 I don't want
to it's a lengthy document.
Would it suffice to say that
this describes the incentive
plan and it has some scorecards
attached to it that show what
is needed to achieve an award
under the plan?
>> Witness: that is correct.
>> opc: would you agree that
the long-term incentive plan
purpose is to align the
long-term incentive pay for
senior leaders with corporate
and shareholder goals?
>> Witness: yes.
>> opc: would you agree that
100% of the long-term incentive
plan compensation is tied to
reaching financial performance
goals that include the emera
stock price?
>> Witness: can you repeat the
question.
>> opc: would you agree 100%
long-term incentive
compensation is tied to
reaching financial performance
goals that include the emera
stock price.
>> Witness: yes.
>> opc: have you provided any
evidence to the commission if
they required long-term
incentive plans cost to be
borne by the shareholder that
it would require the company to
redesign its composition
structure and replace long-term
incentive with higher fixed
base pay?
>> Witness: yes.
>> opc: what is that
.
>> Witness: the mercer data
would show our total direct
compensation is in market
median verse or data would also
show that 62% of companies
leverage long-term incentive
for this small population of
senior leaders
.
Because we target market median
for these executives it
requires us the components of
that as our base salary our
short-term incentive and are
long-term incentive mercer data
market data would show this is
common in and regularly used to
attract and retain senior
leaders
.
>> opc: the people at mercer do
not require you to do anything
right?
>> Witness: mercer's role is to
look at the market and report
out on what is customary what
is going on in the businesses.
They do not dictate what we do
they show us data that informs
our decisions on our benefit
packages?
>> opc: have you provided any
evidence to the commission in
this case, that any utility has
ever canceled or scrapped a
long-term incentive plan
because regulator disallowed
ratepayer recovery of part or
all of that.
>> Witness: not that I am aware
of.
>> opc: is it your testimony
from MR. Collins in the public
counsel have the burden of
proof to prove that incentive
that incentive tampa electric
executives to help bolster
.
>> I'm going to object to the
question it calls for a legal
conclusion about the burden of
proof.
>> opc: let's go to 400 of your
testimony please.
400?
I think that is in her direct
testimony I'm sorry it is
rebuttal testimony.
On line number 10 dc where
you'll fill testimony says MR.
Colin has presented no evidence
that denying cost recovery of
the lt/ip of the element of the
company total compensation
program will not harm the
company's ability to attract
and retain executive team
members were responsible for
procuring the company's needs
and obligation to its customers
to see that.
>> Witness: do.
>> opc: are you not saying that
it is MR. Collins burden of
approving the lack of harm.
>> I'm going to object she's
just sitting what she things
but the evidence is she's not
making a
comment in the burden
prove that a legal concept and
the org lawyers can argue about
that in the brief.
>> I will look over to
my
advisor.
>> I think we need to let.
[Listing names] Find
.
>> opc: this testimony
literally says burden to
demonstrate on climax.
[Unclear audio].
I'm not asking for legal
conclusion this is literally
what her testimony is.
>> I don't think he is reading
that correctly it says MR.
Colin has presented no evidence
it is not same it is his burden
to present it. It says he is
not presented it.
There is a difference.
But she can answer the question
I will withdraw the objection.
>> Witness: can you repeat the
question of what time
.
>> opc: are you saying is MR.
Colin response ability to
demonstrate to this commission
the lack of harm when he
testifies that the shareholders
should shoulder the cost of
long-term compensation?
>> Witness: no, what I would
ask the commissioners to
consider we are targeting
market median for reasons we
need to balance the ability to
attract and retain our senior
leaders with some cost putting
say I do feel like the mercer
data shows us what we need to
be competitive especially in
the tampa bay area is an
extremely
competitive job
market.
In order to retain our current
leaders and attract new ones is
important part is part of doing
business as part of our total
competition strategy.
>> opc: would you agree that.
[Listing names] The senior
leadership of tampa electric
company are provided incentives
to increase rate base and cash
flow in order to help emera
earnings-per-share and stock
price?
>> Witness: that is one element
of our overall balance
financial goals.
>> opc: you came to emera from
another company you did not
come because the incentive
compensation tampa electric
company was better than what
you had with your then current
employer is that correct?
>> Witness: that is correct.
>> opc: I have no further
questions thank you.
>> Mike La Rosa,CHAIRMAN:
florida rising.
>> thank you MR. CHAIRMAN we
are one confidential exhibit to
head out for this witness.
>> Mike La Rosa,CHAIRMAN: go
ahead and do that.
>> Florida Rising,Inc.: I think
MR. CHAIRMAN can we get
started.
> Mike La
Rosa,CHAIRMAN: yes go ahead.
>> Florida Rising,Inc.: before
we get to that document had
questions on non-confidential
documents. If I can direct your
attention to fl all b
197 this
is gonna be MR. Kamber f 3.3 b
6487.
This document shows the board
expenses that teco customers
are responsible for.
>> Witness: guess.
>> Florida Rising,Inc.: joe's
for 2023 that amount was 573
$507 for teco board and 189,006
earned 7004 emera support for
total 673,000.
>> Witness: I see that.
>> Florida Rising,Inc.: next I
would like to direct your
attention to exhibit f ll b
the
ninth is a webmaster number.
[Listing names].
This table is an interrogatory
answer providing the estimated
cost of the short-term
incentive plan and the
long-term incentive plan in the
2025 test year.
>> Witness: yes.
>> Florida Rising,Inc.: the
long-term incentive plan is a
little bit over $6.2 million
that is attributed to teco?
>> Witness:
correct.
>> Florida Rising,Inc.: the
short-term incentive plan would
be about 26.5 million.
>> Witness: that is correct.
>> Florida Rising,Inc.: keep in
mind as we go to f ll b
101
this will be MR. Number f-3
.2 b
31.2 b
3126.
This you see this interrogatory
answer at the bottom.
>> Witness: yes.
>> Florida Rising,Inc.: this
includes similar data but also
includes seconded employee
expense is that correct.
>>
Witness: that would be
counted employee expense.
>> Florida Rising,Inc.: what is
a seconded employee
.
>> Witness: that is a employee
from another country say canada
working in the united states.
> Florida Rising,Inc.: once
include that those numbers go
up a bit for short-term
incentive and long-term
incentive cost attributable to
teco customers?
>> Witness: they are working on
tampa electric business so yes.
>> Florida Rising,Inc.: long
term incentive plan is
administered through the emera
performance share unit and it
emera restricted share unit is
the right be 13 yes.
>> Florida
Rising,Inc.: that
refers to unit equivalent value
of eight emera common share?
>> Witness: that is correct.
>> Florida Rising,Inc.: so it
cannot share values affect the
share price of the psu and rcu
.
>> Witness: truck.
>> Commissioner: teco provides
term incentive plan composition
let me direct you to f ll b
93
this will be f 3.1-2915 this is
another interrogatory answer
regarding the long-term
incentive plan?
>> Witness: yes.
>> Florida Rising,Inc.: it
shows that long-term incentive
plans are made available
predominantly at the director
and above level at teco?
>> Witness: does correct.
>> Florida Rising,Inc.: the
document referenced earlier if
we can go to exhibit f ll b
53
this week MR. Number
f-3-1-1267.
This is going to be one of the
mercer benchmark survey data
that you referenced earlier.
>> Witness: that is correct.
>> Florida Rising,Inc.: it
shows that 53% of the companies
in the survey do not offer
long-term incentive plans?
>> Witness: what I would call
your attention to is under the
long-term incentive eligibility
that 66% of executives are
offered long-term incentive
that is really important part.
What I would really ask for
consideration is this lti
therapy is a small part of the
total composition strategy that
is targeted at the market
median that means is half the
companies that more than we do
in half of the companies pay
less and we feel strongly that
this market median is born it
will be able to attract and
retain the talent we need to
serve our customers.
>> Florida Rising,Inc.:
directing your attention back
to my question the survey
indicates of the 3220
organizations surveyed 53% do
not operate any long-term
incentive plans?
>> Witness: does correct.
>> Florida Rising,Inc.: if I
could direct your attention to
f ll-200 this will be MR.
Number f-3 b
6641.
This is going to be the
equivalent survey for
short-term incentive plan.
>> Witness: does correct.
>> Florida Rising,Inc.:
'ssurvey showed for
short-term
incentive plan that 80% of
companies offer those.
>> Witness: that is correct.
>> Florida Rising,Inc.: if I
get next direct your attention
to f ll-269 that is master
number f-3-five f-3-5-2451
f-3-5-24515 this is a historic
comparison of the short-term
incentive budget for actuals
for teco?
>> Witness: correct.
>> Florida Rising,Inc.: in 2023
the budget was
26.1 million?
>> Witness: yes.
>> Florida Rising,Inc.: the
actual for that
year was 24.9
million.
>> Witness: that is correct.
>> Florida Rising,Inc.: then
teco's 2024 budget is $27.2
million
.
>> Witness: that is correct.
What I might add that we
budgeted we are going to
achieve target that is more of
a accounting budgeting process
then whatever we actually
achieve that is what is paid
out.
That is why the discrepancy.
>> Florida Rising,Inc.: if I
can next direct your attention
to f ll-101 this will be
master number f-3-two-
f-3-2-3124.
This shows the number of
employees eligible to receive
incentive compensation.
>> Witness: yes that is
correct.
>> Florida Rising,Inc.: and
2023 there were 722 employees
that were eligible for the
performance sharing program for
union employees
.
>> Witness: yes.
>> Florida
Rising,Inc.: then there was
1860 eligible for the
short-term incentive plan.
>> Witness: that is correct.
>> Florida Rising,Inc.: then
went 24 were eligible for both
long-term and short-term.
>> Witness: yes.
>> Florida Rising,Inc.: is a
total of 2000 1006 employees
eligible for incentive
composition.
>> Witness: what you have there
is employees that were started
the year then they left they
might have been retired you
might have some people know
employees people or employees
were there to get in than they
(It's a combination.
>> Florida Rising,Inc.: that's
the right rate.
>> Witness: visitors
.
>> Florida Rising,Inc.: in 2023
only 40 teco
employees did not
receive incentive composition.
>> Witness: that is correct
spacing in the group of 40
include business operation
competitive student interns
employs a voluntary resign
before payout of the incentive
composition and employees
received a final performance
review rating of it does not
meet expectations or on a step
of discipline during the
performance plan year.
>> Witness: tells
correct.
>> Florida Rising,Inc.: is not
like I listed a bunch each one
of those categories had people
in it.
>> Witness: the totality of
that yes.
>> Florida Rising,Inc.: if I
can next direct your attention
to fll-193 this will be master
number
f-3.3-3-633.
This spreadsheet shows the
comparison of the budget and
actual for long-term incentive
versus short-term incentive for
2020-2023.
>> Witness: yes.
>> Florida Rising,Inc.: looking
at the actual for range ranges
from 23.5 million-29.5
million.
>> Witness: that is correct.
>> Florida Rising,Inc.: if I
can next direct your attention
to fll when and six this will
be master number f-3
.3-6485.
This would show the total test
your budget for both short-term
incentive plan and long-term
incentive plan that is
attributable to teco the final
expense on the
general ledger.
>> Witness: that is correct.
>> Florida Rising,Inc.: if you
add those numbers together
there would be a little over
$34 million budgeted.
>> Witness: yes stp at target.
>> Florida Rising,Inc.: if I
can next direct your attention
to fll-89 this will be master
number f-3-one-1.23-eight.
This was an interrogatory
question regarding the amount
of short-term and long-term
incentive program cost that
shareholders were responsible
for?
>> Witness: yes.
>> Florida Rising,Inc.: it
indicates that teco cannot
calculate a precise amount
because the actual amounts and
the amount used to establish
the revenue requirements MAY
differ?
>> Witness: I don't actually
see that where are you reading
that?
>> Florida Rising,Inc.: I'm
looking at the second left
sentence after each because the
shelter is impacted by the
difference between actual
amount and the amount used to
establish revenue requirements
in the prior rate case do see
that?
>> Witness: I do I don't think
that was the question maybe you
can repeat the question.
>> Florida Rising,Inc.: let me
ask in a different way what I'm
trying to get up if the actual
amount the amount used to
establish revenue requirements
of the same shareholders will
not be impacted by short-term
incentive program long-term
incentive program cost better
in the past year as part of
this rate case?
>> Witness: believe that to be
true I think is a good question
to direct to.
[Listing names].
>> Florida Rising,Inc.: if I
can next direct your attention
to
fll-240 this will be master
number f-3.4-1482 if I can
direct your attention within
this document to master number
f-3
.4-14971.
>> Witness: this is it
sideways.
>> Florida Rising,Inc.: there
should be a rotate right
feature.
[Laughter].
>> Witness: thank you
.
>> teco: what is that I cannot
read it.
The number. The exhibit
number?
>> Florida Rising,Inc.: this is
exhibit fll-240 I have the cll
number here.
700.
>> teco: thank you.
>> Florida
Rising,Inc.: this
is the 2023
corporate scorecard.
>> teco Witness: that is
correct what is the purpose of
the corporate scorecard.
>> teco Witness: I'm so glad
you asked the balance scorecard
really allows tampa electric
employees and that is employees
are managers and senior leaders
to focus on all the different
priorities that we need to
focus on in a year. It is
balanced because has the
different categories called
out.
It mobilizes and focuses people
on the things that are going to
matter most for customers that
your.
>> Florida Rising,Inc.: this
indicates if tampa electric
does not meet their net
income
goal the entire scorecard
cannot pay out more than the
target.
>> teco Witness: that is
correct spacing measure with
ice wheat and the scorecard is
the tampa electric net income
measure.
>> teco Witness: or financial
goals or 35% of our balanced
scorecard but there is balance
with the other priorities as
well.
>> Florida Rising,Inc.: does
the higher weight and any other
measure on there.
>> teco Witness: that is
correct.
>> Florida Rising,Inc.: next I
like to direct your question to
fll b
-298 that is the
confidential.
Are you familiar with this
document.
> teco Witness:
actually this did not come from
yes.
The executive compensation
strategy
, is done at the emera
level.
>> Florida Rising,Inc.: you are
the witness responsible for
executive composition for teco
in this case. The information
that is not highlighted that is
not confidential?
>> teco Witness:
the information
that is.
>> Florida Rising,Inc.: not
highlighted is not
confidential?
Is that right?
>> teco Attorney: are we
getting ready to talk about fll
290 8c
.
>> teco Attorney: I'm going to
object. This is detailed
compensation information for
individual employees. I'm not
sure why it is relevant.
Were helpful to the commission
in this case.
>> Florida Rising,Inc.: I
believe teco are seeking
recovery of these costs from
the ratepayers and certainly
those costs are reasonable or
not reasonable it is certainly
an issue in this case I
believe.
[Listing names]'s testimony is
it is reasonable we think the
numbers help can speak for
themselves as to their
reasonableness. We think there
opposition is highly relevant
to this case.
>> teco Attorney: I just looked
at your position in your
prehearing statement you are
suggesting that this is issue
53.
Your position is that salaries
and benefits expense should be
produced for incentive
compensation and to remove ds
you are. But there is no
allegation in your position
that the general level of
composition is inappropriate?
>> Florida Rising,Inc.:
>> teco Attorney: don't see how
going through individual
composition amounts for
individual employees has
anything to do with the
positions you have taken in the
prehearing order.
>> Florida Rising,Inc.: unless
I'm mistaken I don't get is
confidential to state that
short-term incentive and
long-term incentive plan
compositions within this
document and certainly goes
towards total composition.
The objection is relevant can
we limit the scope.
>> MR. CHAIRMAN can have a
quick conversation with your
lawyers work this case
.
>> Mike La Rosa,CHAIRMAN: let's
take three minute break.
>> Mike La Rosa,CHAIRMAN:
discussion with my advisor I
will take it over to her to
talk about the legal position.
>> thank you MR. CHAIRMAN and
thank you for letting us take a
break to discuss this
internally. I recognize that
this is a highly sensitive area
that we are doubling into now
that MR. Marshall has brought
us to. When I look at MR.
Marshall's position and the
prehearing order to me he is
made an issue of the incentive
compensation. As I understand
this exhibit it addresses
incentive compensation.
I think it is relevant to
discuss I think we need to talk
about maybe a little bit about
how to go about discussing it.
This information is it has been
presented to us as highly
granular.
Meaning there is persons names
and specific numbers attached
to each. I'm not sure from the
company's perspective the names
here are confidential because
the way our process works
usually it is the information
that is highlighted in yellow
that is confidential I'm
confused about whether it is
all information on the page or
certain information on the
page?
Maybe if MR. Marshall can
direct this question on a more
global level instead of of a
with a particular level.
>> Florida Rising: I think that
is the right approach to this
document.
We certainly believe it is
relevant and within the scope
of our position in the
prehearing statement box.
>> Mike La Rosa,CHAIRMAN: I
want to make sure we clarify
but it's confidential what is
not confidential I'm confused
about what is and what is not.
>> teco Attorney: all the
numbers on these pages are
confidential.
this is the specific employee
compensation for specific
people. I guess the point I'm
trying to make is you don't
need this information to
calculate the adjustment we
have just gone through about
maybe half a dozen or one dozen
documents that show up with the
total amount of the
compensation is. And the basis
for their adjustment and what
I'm trying to say is that this
detailed information is not
needed to calculate that
adjustment.
Or to prove their point. We
don't think it is really
probative or as much to the
discussion except that it is
really interesting to find out
how much individual employees
might be making. I just don't
think that is appropriate.
>> Florida Rising: if I MAY
respond to that MR. CHAIRMAN if
it was $10 million estate
spread across 1 million
employees at $10 each that's a
very different scenario than
$10 million being spread over
one employee. The amount going
for these top executives we
think is a relevant issue as to
whether the cost that are being
charged to teco's customers are
fair.
Hat is what this
document shows.
>> teco Attorney: he is not
offering any evidence that it
is fair he just wants to talk
about the amounts.
There is no competing evidence
that this is not the right
answer. He just wants to talk
about the amounts.
>> Florida Rising: the amounts
go to whether it is the right
amount.
>> teco Attorney: he is not
contesting the amount with
evidence he just wants to make
a big deal out of the numbers.
I just think it is
inappropriate not needed for
the calculation.
That is our objection.
>> Mike La Rosa,CHAIRMAN: I
understand where both sides
are.
I will go back to my advisor.
Straight-line looks to be on
highlighted.
That is probably what concerns
me.
I don't understand what is then
confidential?
From that point?
>> teco Attorney: the
information we claim is
confidential and we put in our
request for confidential
classification is all the
individual compensation amount
shown on here for all of the
individual employees.
Everything that is highlighted
in yellow is confidential.
>> the first line for each
employee where it said straight
those are not highlighted is
that information.
>> teco Attorney: that has been
disclosed in forum number one.
>> MR. CHAIRMAN my recognition
is understand there is grave
concern on the part of the
company with respect to this
exhibit. I appreciate that. But
MR. Marshall has not been able
to ask a question. Maybe a
better approach would be to
have MR. Marshall as his
question then we can see if
there is a specific objection
to the question because we
don't know quite frankly how he
plans on using it.
I think we
are all
sensitive now to.
>> teco Attorney: I'm sorry I
was just following the
instructions I got yesterday to
announce in objection early.
>> duly noted I apologize.
[Laughter].
I'm just trying to play along
here.
>> Florida Rising: MR. CHAIRMAN
if I MAY have a moment
to confer
with MR. Whelan, questions to
see if he thinks they are
confidential or problematic.
>> Mike La Rosa,CHAIRMAN: if
that helps to be smoother
absolutely.
>> Florida Rising: thank you
MR. CHAIRMAN MAY I proceed.
>> teco Attorney: understand he
will ask very general question
will not identify specific
people. But he does want this
in the record.
As long as we not going to talk
about specific people in at the
hearing I guess we will be
okay.
>> Mike La Rosa,CHAIRMAN: let's
proceed.
>> Florida Rising: thank you
MR. CHAIRMAN this document does
contain become position of top
teco executives you
added up is
in the millions of dollars.
>> teco Witness: yes.
>> Florida Rising: in many
cases the bonus another
compensation exceed the base
salary depicted.
>> teco Witness: would have to
look line by line before I
confirm that.
>> teco Witness: would you
accept that subject object
.
>> Florida Rising: would do
except in many cases long-term
incentive compensation exceed
the short-term extent of
competition for those
executives.
>> teco Witness: yes that is
based on compensation
strategies to keep a long-term
focus for customers.
>> Florida Rising: thank you
that's all my questions MR.
CHAIRMAN.
>> Mike La Rosa,CHAIRMAN:
[Listing names] Sierra club.
>> no questions.
Walmart
.
>> no questions
.
>> Mike La Rosa,CHAIRMAN:
commissioners any questions?
Seeing no questions teco back
in your hands for redirect
.
>> teco Attorney: think you
want to thank you for taking
the time to be careful about
that.
I
appreciated very much for the
snack one question.
[Listing names] You were asked
about whether the company
executives were being
incentivized to grow rate base
do you remember that?
>> teco Witness: yes.
>> teco Attorney: you answered
in terms the balanced scorecard
is that correct.
>> teco Witness: that is
correct.
>> teco Attorney: that goal is
net income is not rate based.
>> teco Witness: yes it is
answered incorrectly.
>> teco Attorney: that is all
of our questions.
>> Mike La Rosa,CHAIRMAN: let's
move to the exhibits.
>> teco Attorney: tampa
electric would move exhibit
number 24).
> Mike La
Rosa,CHAIRMAN: any objections?
Seeing no objections show it
entered into the record.
Other exhibits?
>> 267.
>> Mike La Rosa,CHAIRMAN: any
objection seeing no let's show
that entered into the record.
>> Florida Rising: we have a
bit of a series.
Exhibits 513, 549, 553, 561,
653, 656, 657, 660, 700, 729,
and it 758,
>> Mike La Rosa,CHAIRMAN: any
objection
.
>> teco Attorney: we continue
to object to the detailed
compensation exhibit whatever
that one is.
770.
16 758 that would be the last
one.
>> teco Attorney: understand
that that has been ruled on but
I will continue to object.
>> Mike La Rosa,CHAIRMAN: let's
show it into the record.
Any other exhibits.
Seeing none
.
[Listing names] You are
excused.
I will hand it back over to you
for your next witness.
>
teco Attorney: tampa electric
calls
.
[Listing names] To the stand.
>> Mike La Rosa,CHAIRMAN: MS.
Fuentes I don't believe you had
been administered the oath
whenever you're ready we will
do that before you sit down.
Please raise your right hand.
do you swear and affirm the
testimony you are about to give
will be the truth the whole
truth and nothing but the
truth.
>> teco Witness: I do.
>> Mike La Rosa,CHAIRMAN: feel
free to have a seat and get
settled in.
Will turn it
over to teco when you're ready.
>> teco Attorney: good
afternoon would you state your
full name for the record.
>> Mike La Rosa,CHAIRMAN: moved
the microphone closer.
I'm sorry MS. Fuentes.
>> teco Attorney: who is your
current employer what is your
business address.
>> teco Witness: tampa electric
company 702 w. Franklin st.,
tampa, fl.
>> teco Attorney: did you
prepare and cause to be filed
this document in APRIL 2, 2024
prepared direct testimony
consisting of 22 pages
.
>> teco Witness: his I did.
>> teco Attorney: did you
prepare and cause
to be filed in
this docket on JULY 2, 2024
prepare rebuttal testimony
consisting of 13 pages.
>> teco Witness: kiss I did.
>> teco
Attorney: you have any
additions or corrections to
your prepared direct or
rebuttal.
>> teco Witness: yes I do.
>> teco Attorney: do you have
any additions or corrections to
your direct or rebuttal
testimony.
>> teco Witness: no.
Speed 11 about.
>> teco Attorney:
always
cultures aggression prepared in
your direct rebuttal testimony
would treasures be the same as
her insurance prepared therein
.
>> teco Witness: yes.
>> Gabriella
Passidomo,Commissioner: MR.
CHAIRMAN electric request the
direct rebuttal testimony be
entered into the record. MISS
Point as doom repair
request be
filed in your direct testimony
and exhibits marked lc 1
consisting of 11 documents.
>> teco Witness: yes I did.
>> teco Attorney: did you
prepare and costly filed
provisions to document number
32 exhibit lc 1 on MAY 21,
2024?
>> teco Witness: yes I did.
>
teco Attorney: did you prepare
and cause to be filed
replacement nonconfidential
pages for mfr schedule f7 and
f8 on MAY 21, 2024.
>> teco Witness: yes I did
.
>> teco Attorney: to prepare
and cause be filed rebuttal
testimony in exhibit marked lc
2 consisting seven documents.
>> teco Witness: yes.
>> teco Attorney: MR. CHAIRMAN
logic would note for the record
that exhibits lc one and lcm to
have been identified on the cl
as exhibits 25 and 146.
MS. Fuentes did you personally
discover an error on the
company's answer to
interrogatory number 177 and
this 12 set of interrogatories
as part of the content
identified as exhibit 212
.
>> teco Witness: yes.
>> teco Attorney: MR. CHAIRMAN
electric would ask that the
revised answer which is been
dissipated to all parties and
to the commissioners be marked
and entered into the record.
>> Mike La Rosa,CHAIRMAN: okay.
>> I want to note for the
record commissioners
interminably that is exhibit
838.
>> teco Attorney: this point as
we do summarize your prepared
and direct testimony.
>> teco Witness: good afternoon
commissioners. My direct
testimony explains tampa
electric's load forecasting
process in the methodologies
and assumptions that were used.
It also describes the load
forecast used in the companies
test your budget that supports
the request for a base rate
increase. It demonstrates that
the forecast are appropriate
and reasonable.
My rebuttal testimony explains
by the commission should not
adopt the office of public
counsel's proposal as it
relates to load forecast. Also
demonstrate that the company's
projected 2025 2026 and 2027
retail energy sales forecast
are appropriate and reasonable.
This concludes my summary thank
you.
>> Gabriella
Passidomo,Commissioner: tampa
electric would enter MS.
Pointers for testimony
.
>> opc: good afternoon would
make sure I get this correct
new world direct upload
research and forecasting for
temper electric.
>> teco Witness: that's
correct.
>> opc: one of the
many things
the temple object forecasts is
their expected energy sales.
>> teco Witness: yes.
>> opc: tampa electric use a
process called econometric is
physically adjusted and use
forecasting models to develop
the forecast.
>> teco Witness: that is
correct.
>> opc: believe you just
referred to this
but you're
worth it opc expert witness
testimony challenging certain
aspects of tampa
electric's
energy sales.
>> teco Witness: I am aware
that brian.
>> teco Attorney: opc
challenged out of model
adjustments
the temple it took
me
to the results of its energy
sales forecast.
That is your understanding.
>> teco Witness: that is my
understanding.
>> teco Attorney: if we can go
to mfr at five which would be
page the case and number number
would be j135 police j1325.
Please. Hopefully that is
showing up on the screen in
front of you.
Do you see it there.
>> teco Witness: yes.
>> opc: you might have a copy
whichever is easier for you to
look at.
>> teco Witness: let me go to
my copy.
>> teco Attorney: adjustment to
confirm that this
page within
the mfr is one that you
cosponsored.
>> teco Witness: yes it is.
>> teco Attorney: this page is
where the three out of model
adjustments that we were just
discussing are located within
tampa electric's petition and
mfr is that accurate.
>> teco Witness: this is where
the three separate forecasts
are we refer to them as
separate forecast versus an
adjustment.
>> teco Attorney: you would
agree if the commission accepts
some or all of these
adjustments the customers bills
would be higher than they
otherwise would be without
the
adjustment.
>> teco Witness: no I don't
agree with that.
That is just one piece of the
picture if these were removed
from the forecast it will have
an effect on other things as
well.
>> opc: ultimately the effect
that would have another things
would lead to customers paying
more than if they were to pay
without these adjustments do
agree with that?
>> teco
Witness: all other things
equal. Yes.
>> opc: if the commission were
to reject each of these
adjustments then that would
result in a reduction of the
2025 revenue requirement of $12
million to 2026 revenue
requirement of $21 in the 2027
revenue requirement of $26
million?
Is that correct?
>> teco Witness: those are his
estimates yes.
>> opc: you have any reason to
believe that those numbers are
inaccurate if the commission
were to reject those
adjustments.
>> teco Witness: yes I disagree
with.
[Listing names]'s analysis.
Strongly disagree.
Those adjustments that he is
referring to are actually what
we call exertion is forecasts
there are three forecasts that
would be very careless of the
company if we left them out of
our process.
The conservation savings is a
piece that we have been
adjusting our forecast by for
probably 30 years.
It's been approved in every
rate proceeding the electric
vehicle adjustment he is
wanting to exclude in the
rooftop solar forecast that he
is wanting to exclude have also
been in all of our forecasts
for 10 years.
They have been approved in
prior rate cases as well. All
utilities in florida and
throughout the nation if they
have the electric vehicles and
rooftop solar within the
service territory they have to
forecast them. There is
absolutely no reason to exclude
them from the forecasted
results.
>> opc: understand you disagree
with.
[Listing names] But my question
is the numbers that he has
associated with the 2025-
2026-2027 testers as being the
amount the revenue requirement
would be reduced by you dispute
that those numbers are the
correct numbers if
the
commission were to reject the
adjustment.
>> teco Witness: his math is a
very high level calculation. He
just takes a composite rate.
And multiplies it by the energy
to get to those numbers if it
was done with the normal
process using building
determinants it could be
different.
>> opc: I need a
yes or no do you agree with the
numbers or do disagree with the
numbers.
>> teco Witness: no I don't
believe there are hundred
percent accurate.
>> opc: regarding the eb sales
adjustment if the eb sales were
under stated that would have
implications for the test your
revenue requirements are
failing to capture the impact
that eb growth would have been
company load is that accurate.
>> teco Witness: yes.
The ev sales adjustment relies
on assumptions regarding future
penetration levels of ev is
that correct
.
>> teco Witness: yes the ev
forecast relies on that.
>> opc: you agree that the
tampa area
is one of the fastest
growing regions in the country
with one of the fastest growing
states in the country.
>> teco Witness: I would agree
with that.
>> opc: the company predicts
customer growth of
approximately 3%.
>> teco Witness: no not 3% that
is too high.
>> opc: what is the number.
>> teco Witness: we are
projecting customer growth
around 1.8% over the next few
years over 10 years I believe
is closer to 1.4%.
>> opc: would you greet the
customer growth has been
significant enough to at least
partially offset higher
depreciation and all in them
expense and net
income year to
date.
>> teco Witness: I don't know
the
answer to that they'll be
best answered by.
[Listing names].
>> opc: 2017 is the only time
the company has reported sales
decrease in the last decade.
Correct?
>> teco Witness: I would have
to subject to check I will
agree.
>> opc: are you familiar with
the decrease in 2017?
>> teco Witness: I have to
refer to the graph.
>> opc: let me ask you a
question if you need to refer
to something let me know. Do
agree the forecasted sales
decreased in this case is
almost 10 times larger than the
2017 sales decrease?
>> teco Witness: the decrease
in again would have to see some
numbers to be able to confirm
that.
>> opc: with regard to usage
per customer has that climbed
by.6% on an annual average
basis between 2013 and 2023?
>> teco Witness: yes.
>> opc: is in this
significantly less than the
customers forecasted forecasted
decrease of 3.9% in 2024?
>> teco Witness: yes but you
are comparing apples and
oranges we are talking about
our historical average use
decline really without the
impacts of whether if you look
at the forecast for 2024 and
beyond it is based on normal
weather.
Decline your specifically talk
about is from 2023 which was a
very hot year. The forecast
transitions to what is called
what is based on normal
weather.
It is kind of apples to oranges
comparison.
I do have in my rebuttal
testimony graph that
illustrates this well.
I think it is in the cel
exhibit as well 146.
>> opc: the answer to that
question is you disagree that
the.6 decrease between 2023
and 2023 is significantly less
then the company's forecasted
usage per customer decrease of
3.0% in 2024.
>> teco Witness: obviously the
numbers are accurate but what
I'm saying is the comparison
that you are making is really
apples to oranges comparison.
>> opc: I'm not sure if you
were in the room listening but
if you could try to answer each
question yes or no and then
explain if you feel like you
need to.
It's important to try to get
the answer.
>> teco Witness: yes.
>> opc: thank you.
If we could can we go to page 8
of your rebuttal testimony?
I don't have the case center
number here.
>> teco Witness: okay.
>> opc: on line 7-10 you
mentioned load forecasters rely
on normal or expected whether
in terms of degrees.
do see this.
>> teco Witness: yes I do
.
>> opc: could you define what
the company defines is normal
or expected whether in terms of
degree days.
>> teco Witness: forecaster has
to rely on some assumptions for
the future.
The future whether the
seasonality throughout the
year.
Etc.. Since nobody can really
project accurately the weather
that far with the forecasters
do israelite history.
In the most common period of
time to use is the past 20
years.
Although florida utilities are
using 20 years or more I
believe one might use one
utility might use 30 years.
Nobody is using less than 20
years. What we do is we use a
20 year period that represents
to us what normal weather will
be and abuse of that in our
projections.
>> opc: thank you.
Not true that the number of
cooling degree days during the
years 2015-2023 the past nine
years is higher than during the
remainder of the 20 year
period.
>> teco Witness: I would agree
with that.
>> opc: again by late exhibit
illustrates that as well that
is document number six it is
also cel exhibit 216.
>> opc: just for the record bc
that identifying.
If you could turn to page 10 of
your rebuttal testimony.
On
lines 824 you dispute.
[Listing names] Conclusion that
a forecasting model has a
history of understating energy
sales productions you state
that you claim that to assess
the accuracy and reliability of
your models it would be more
reasonable to compare the
company's prior forecasts to
whether normalized sales
whether is that an accurate
characterization of your
testimony.
>> teco Witness: yes it is.
>> opc: on pages four and five
so lines of 15-25 then on to
the
next page I'm sorry what page.
>> opc: starting at page 4 line
15-page 5 line 3 you state
that the purpose of the
forecasting model is to support
rate case proceedings as well
as a public plan for future
generation and infrastructure
needs that correct?
>> teco
Witness: yes.
>> opc: would you agree the
prices customers pay for
electricity as well as utility
system for liability is in part
dependent on customer's actual
usage and those given years?
>> teco Witness: no not 100%.
>> teco Witness: in part would
you agree.
In part.
>> opc: this is somewhat of a
more general question would you
agree if a forecasting model
I'm not speaking about anything
specific.
As far as what tampa uses but
in general if a forecasting
model is consistently
inaccurate and at the same
directions meaning consistently
always overestimating or
submitting something, when
compared to the actuals it's
reasonable to question the
accuracy of that model?
>> teco Witness: I would
disagree with that.
Ou
actually in forecasting pickups
the weather has such an impact
on your actual usage to
understand the accuracy of your
bottles which are in a
normalized basis and to
understand if there is any
other underlying trends that
could be influencing customers
usage you have to remove the
impacts of whether we call that
the weather normalization. What
we do is look at the weather
normalization trends
historically and it is very
consistent with our forecast.
I just want to add one more
thing. I agree and understand
what you're saying about our
forecast being over or too low
for the past nine years.
That is strictly a result of
the weather.
If we were to show you what the
weather normalized accuracy
which we do somewhere we are
over and under it is not like
we are consistently over and
over the past 10 years are
accuracy has been a tense 1%
are forecast on the weather
normalized basis has been very
accurate.
It is not skewed to one side or
the other.
>> opc: even though it always
results in always
overestimating or
underestimating the same data?
>> teco Witness: not on the
weather delays basis that is
that always the same.
You have to realize you need to
break your forecast down.
residential forecast is what
has been driving our work has
to be on the low side because
that is the most the weather
sensitive sector that we have.
It has been hot and have used
more but if you were to look at
the commercial and industrial
our non-residential and
governmental they eventually
are forecast have been too
high.
>> opc: looking at the accuracy
speaking of accuracy of the
companies forecasting from MAY
2023 until APRIL 2024 each
forecast has been under
forecasted in total correct.
>> teco Witness: you
have
someplace I can.
>> opc: this is a florida
rising exhibit if I can refer
to that one?
Florida rising 120 which is
during exhibit 580.
>> opc: we
are pulling it up.
The bottom line here at the
totals for each of the customer
average use and energy sales
forecast each of those were
under forecasted correct?
>>
teco Witness: you are talking
of the total line?
Yes by 2/10 of a percent.
>> opc: that is underestimated
that is what the graph means.
>> teco Witness: if you look at
the piece some are under some
are over but to be off by 2/10
of a percent is a very good
forecast.
>> opc: you do agree there were
offspring nothing further.
>> Florida Rising: thank you
MR. CHAIRMAN.
Good afternoon MS. Boyd says
good to see you again.
>> teco Witness: good
afternoon.
>> Florida Rising: to start off
really quick I want to go over
the revisions to your door
response the newly filed
response.
I just want to make sure I'm
reading it right the basically
real changes here are that the
difference also minus column on
average is going from the
original 153 to 539?
>> teco Witness: what are we
looking at
.
>> Florida Rising: and looking
at a comparison of exhibit 212
and exhibit a 38?
Maybe the right way to do this
would be to pull up master
number 38210 if you can refer
to the updated copy.
Which would be 838.
>> teco
Witness: I'm sorry I didn't
know we were talking about my
revised one.
>> Florida Rising: I apologize
I'm just trying to get a feel
for the changes. If you look at
the difference: there is a bold
number at the bottom for
average.
The original number was 153 now
it is 539.
>> teco Witness: yes.
>> Florida Rising: the percent
difference: the same bold
number for average went from
.08% to 2.8%.
>> teco Witness: let me explain
initially when we read the
question it was talking about
her accuracy and the weather
normalized accuracy of 0.8%.
Incorrectly we put under the
table in the column that says
actual sales we just put
projected.
then as we were reviewing
things this week I realized
that that mistake. We have
corrected it and now we have
our actual sales. The first
time what you're seeing where
you saw 0.8% was really our
forecast versus the weather
normalized sales. That is the
accuracy look. Now I responded
correctly and we are looking at
the actual energy sales versus
the weather normalized sales.
Those differences basically
represent our estimate of the
impacted weather.
>> Florida Rising: thank you
and that's a very helpful
clarification.
In your role as the director
for load research and
forecasting.
Your team developed inputs that
will then be turned over to
teco cost of service team?
>> teco Witness: that is
correct.
>> Florida Rising: teco is
recommending for cp cost of
service in this case.
>> teco Witness: yes.
>> Florida Rising: know you
know you just want to get it on
the record the 4 specific peak
months that teco uses is
generally
, JUNE, JULY, and
AUGUST.
>> teco Witness: I'm not really
familiar with 4 cp but subject
to check I would agree.
>> Florida Rising: okay.
I believe it comes from your
testimony give me one second.
We can come back to that.
Would you agree that among
other reasons it is important
for teco to have an accurate
sales forecast to ensure it
will have enough generating
capacity to meet demand at any
given time?
>> teco Witness: I would agree.
>> Florida Rising: an accurate
forecast is also important to
make sure that teco has enough
sales in a given year tour
require its revenue requirement
to recover its revenue
requirement for that year.
>> teco Witness: yes.
>> Florida Rising: teco total
rate based revenue requirement
for any given year is recovered
from customers through a
combination of fixed and
volumetric charges?
> teco
Witness: can you repeat that.
>> Florida Rising: these are
foundational questions it's not
meant to be a trap. Just
clarifying that teco recovers
its revenue requirements for
any given year from customers
through a culmination of fixed
and volumetric charges.
>
teco Witness: I would agree.
>> Florida Rising: for the
volumetric portion of that
recovery and in very simple
terms the rate for any given
class are derived as a function
basically of the revenue
requirement that is allocated
to that class divided by the
kilowatt hours of load that
class is expected to consume
over that your.
>> teco Witness: I think you're
getting into an area that is
not my area of expertise.
>> would object is not in MS.
Puente's testimony I believe
these are questions directed to
MR. Williams testimony there is
no where in MS. Puente's
testimony that addresses this.
The subject you are being
questions prior
.
>> Mike La Rosa,CHAIRMAN: any
further thought if not I can
roll.
>> Florida Rising: I will try
to reframe what I'm trying to
get at is I believe is directly
properly directed at MS.
Fuentes inasmuch as it is the
impact of the forecasting on
the other piece bring a
recognize that she's not a cost
witness and trying to get a
look at the pieces they go into
that.
> Mike La
Rosa,CHAIRMAN: if you can point
to her testimony then do that
one or when applicable then she
can state if it is not in her
purview
.
>> Florida Rising: can attract
one or two and then move on.
>> Mike La Rosa,CHAIRMAN: yes.
>> Florida Rising: essentially
what I'm getting at is if teco
is loaded forecast ended up
being much higher or lower
rather if the actual sales in a
given year into being much
higher or lower than its loaded
forecast would you agree that
could be a problem for revenue
department recovery.
>> teco Witness: I don't think
I would agree with that.
>> Florida Rising: can you
explain why not.
>> teco Witness: I am thinking
in a given year if it is over
or under there is other things
also going on.
Expenses, it is not the big
picture I would need to make
that determination on the
revenue requirement
calculation.
>> Florida Rising: if we are
looking at revenue requirement
this is the picture that the
company says it needs to
recover for a given year.
That is allocated across the
classes and then broken down by
the expected consumption of
those numbers coming from your
department I'm just asking if
the actuals and up being for
instance much lower than what
you forecast is it possible
that teco would end up not
recovering the revenue
requirement anticipated for the
year
.
>> teco Witness: it is
possible.
>> Florida Rising: just one
more thing we will move on.
If teco is load were actually
much higher than the forecast
is it possible that teco could
over recover versus the revenue
requirement that they
anticipated for that year?
>> teco Witness: again all
other things equal possibly but
all things are not equal.
>> Florida Rising: thank you if
we can go to master number f1
6-nine for this is confidential
exhibit a 31 it is f16-94.
This is going to be an excel
spreadsheet.
MS. Fuentes are you familiar
with this document?
>> teco Witness:
>> Florida Rising: once it
comes up and you can see it.
>> teco Witness: yes I am.
>> Florida Rising: this is a
workpaper used in developing
your testimony.
>>
teco Witness: yes it is.
>> Florida Rising: [Unclear
audio].
If we go to the tab in summary
which we are on.
This shows the variance between
teco forecasts and actuals with
respect to the number of
customers and sales?
>> teco Witness: yes.
>> Florida Rising: teco is in
your average sales actuals are
1.9% below the forecasted sales
in this document?
>> teco Witness: that is
correct.
>> Florida Rising: since 2021
teco's three-year average
actual sales were below 3.2 the
actual sales.
Her forecasted sales.
>> teco Witness: that is
correct spacing if we can go to
master number 3.14
.
>> teco Witness: can we stay
there or to point out that 3.2%
commission on the weather
normalized basis which is how
you assess how your forecasts
are doing our forecasts are
only 1/10 of a percent off.
Then he would mention 1.9 our
tenure average 1.9% on the
weather normalized basis was
0.8% off.
That is the way we should look
at forecast accuracy.
>> Florida Rising: thank you
for the additional context you
would agree these numbers are
accurate and the start.
>> teco Witness: I agree with
the numbers that they are
accurate.
>> Florida Rising: if we can
move on to 3.4-6645.
This is hearing exhibit this is
hearing exhibit 663 or fll 203.
Do you recognize this document?
>> teco Witness: I see two
different documents can I look
at the one on my screen?
>> Florida Rising: what is the
number in the upper right-hand
corner for you?
>> teco Witness: [Listing
names].
>> Florida Rising: 6645.
>> teco Witness: that is what
we were looking at previously
that matches what is up there
now.
>> Florida Rising: okay.
This should be a different page
than the one we're looking at
before but it should have a
very similar looking chart. I
just want to confirm what we're
looking at here is the response
to a discovery request this is
an updated copy of the last
exhibit of your rebuttal
testimony?
>> teco Witness: I
don't recall this being in my
rebuttal testimony I have to
check.
>> Florida Rising: let me ask
the question fisher. What
changes were made to be updated
document in your rebuttal
testimony compared to your
original testimony.
> teco
Witness: I believe in my
rebuttal testimony what I
updated was I re-created some
numbers but on the weather
normalized basis.
No numbers were revised I just
pulled out the numbers that I
felt were the ones
we should be
looking at on the weather
normalized basis.
>> Florida Rising: as opposed
to the non-weather normalized
basis.
>> teco Witness: no
spreadsheets were revised.
>> Florida Rising: thank you.
If we can go to master number
16-95 hearing exhibit 831
there will be a number of
these.
[Unclear audio].
F 16-95.
MS. Fuentes is this another
workpaper of yours?
>> teco Witness: I cannot see
that.
Yes this is.
>> Florida Rising: yes we are
in the tab year to date
FEBRUARY.
This tab shows the forecasted
versus actual retail sales by
the month from JUNE 2023 until
FEBRUARY 2024.
>> teco Witness: that is
correct.
>> Florida Rising: energy sales
during the summer months trend
above teco's forecast?
>> teco Witness: that is
correct.
>> Florida Rising: 5% above in
JULY?
>> teco Witness: yes honey on
the weather normalized basis it
is have a percent
.
>> Florida Rising: I will be
talking about than non-weather
normalized basis and I respect
your position that then
normalized once is where we
should be looking. It was 6%
above in AUGUST?
> teco
Witness:
yes.
>> Florida Rising: 7.7 above in
SEPTEMBER
.
>> teco Witness: that is
correct.
>> Florida Rising: on the other
hand additional sales were
lower than forecast between
NOVEMBER and FEBRUARY?
>> teco
Witness: does correct.
>> Florida Rising: you will
create the biggest variances in
JANUARY 5.1% less than the
forecast.
>> teco Witness: yes.
Our forecast was too high.
>> Florida Rising: can we go to
master number e7770.
This from exhibit 208.
Admitted exhibit 208.
Once there it might be better
to do with the master number
this is for derogatory number
139 master number associate
with that is e master number
associate with that is e7796.
MS. Winters if you can give me
a nod when it has come up for
you. I recognize there is a
lag.
>> teco Witness: it is up.
>> Florida Rising: did you
sponsor the answer to this
interrogatory
.
>> teco Witness: gas.
>> Florida Rising: in this
insert to attribute higher
error rates and sales forecast
to "hotter than normal
weather".
>> teco Witness: does correct.
>> Florida Rising: go to the
next page.
Rather than zooming in on all
this unless good general
question about the spring you
would agree that teco is
forecast experienced greater
variance for non-weather
normalized sales and the
weather normalized sales
.
>> teco Witness: I would agree
with that.
>> Florida Rising: okay.
I guess what we are talking
about normalization and a
conversation with MS. Wessling
about whether normalization we
danced around the subject a
little bit. How exactly does
teco normalize for weather?
>> teco Witness: let me see if
I can explain where it makes
sense.
Whether normalizing is based on
a coefficient which represents
the kilowatt hour per degree
day this coefficient comes from
our regression models which
correlates the weather and
customer usage.
That is one piece we have this
coefficient that represent this
relationship between energy and
weather.
Then we look at our whether
what was normal what was
expected and what we used the
forecast and what actually
happened. We take the
difference in those degree days
multiply them by the
coefficient then multiplied
them by the terms of customers
that we have that gives you
what the weather impact was
that's how you normalize you
remove that when they're back
from your actual energy sales.
That is how you do the weather
normalization.
>> Florida Rising: would be for
the safe large loads and
ecosystem by the end use would
be space heating and cooling?
Depending on the season?
>> teco Witness: I would agree.
>> Florida Rising: would you
agree with those end-users are
entirely temperature dependent
entirely temperature dependent.
>> teco Witness: yes.
Specifically that is to go uses
a 65b0f breakpoint above or
below which each hvac systems
are soon to be heating or
cooling.
>> teco Witness: 65b0 is the
base yes.
>> Florida Rising: would you
agree there's a difference
between weather and climate.
>> teco Witness: I would agree.
>> Florida Rising: would you
agree that the weather would
capture the kinds of day-to-day
month to month even dirtier
variation in temperature within
a baseline.
>> teco Witness: I'm not an
expert in commonality but I
would high-level yes
.
>> Florida Rising: in general.
> teco Witness: gas.
>> Florida Rising: would you
also greet the comets more
describes the meta-system or
the baseline from which that
day-to-day or seasonal
variation is taking place?
>> Florida Rising:
> teco
Witness: I could agree with
that.
>> Florida Rising: would you
further agree that if the comet
were to change it would shift
the baseline around which that
variation would call weather is
occurring?
>> teco Witness: it is possible
but for the period of time I've
been doing this it has not
moved 65b0 is the base.
>> Florida Rising: I'm not
referring to that number
specifically just in general
terms if we talk about the
weather as inter-day inter-week
and inter-seasonal variation
around general baseline would
you agree that climate change
or changing the climate would
move the baseline in any
direction it would move that
baseline?
> teco Witness: i
believe it would be a gradual
change over time.
>> Florida Rising: there enough
if you go to master number
3.2-3815.
Do you have it up?
>> teco Witness: yes if it is
one that we have seen already?
>> Florida Rising: yes this is
one that opc pulled up.
I will ask you questions around
this but just to confirm this
document provides build first
projected energy versus use per
class for APRIL 24
.
>> teco Witness: yes
.
>> opc:
>> Florida Rising: if we go to
pages down does this page show
narrative explanations for the
variance between predicted and
actual sales.
>> teco Witness: yes it does.
>> Florida Rising: under the
heading peak demand section
does it note that predict
winter peak months are now
being driven by hunters rather
than cold weather?
>> teco Witness: I'm reading
it.
>> Florida Rising: it would be
cel h 15
.
>> teco Witness: for that
specific period but that is not
consistent all winter months.
For that period it was.
>> Florida Rising: it is your
testimony that the winter peaks
on the teco system are driven
by heating needs rather than
cooling needs?
>> teco Witness: can you repeat
that
.
>> Florida Rising: the variance
explanation on this page
attributes winter peak to
effectively it attributes them
to cooling needs rather than
heating needs because it is
saying there happening and hot
peak days and you're saying
that explanation applies in
this context to this time
period that do not agree that
it is representative of the
peak on teco systems.
>> teco Witness: I don't agree
I feel still think heating
degree will drive the winter
peak at times but sometimes
it's a cooling degree day. I
will say this first quarter of
it this year which is kind of
overlaps into. Was the mildest
period of time for those months
in the past 50 years.
Very mild.
>> Florida Rising: okay.
If we can go three pages down.
Master number ending 3820.
Looking at this page the
production for non-peak demand
shows a clear spike between
DECEMBER non-peak demand shows
a clear spike between DECEMBER
2023 and FEBRUARY 2024?
>> teco Witness: I need to see
that.
>> Florida Rising: the orange
line in the graph is the
predicted.
>> teco Witness: yes.
>> Florida Rising: I'm sorry.
You agree there is a predicted
spike there?
>> teco Witness: yes we predict
our winter peaks to be 31b0
days.
>> Florida Rising: that spike
does coincide with the teco is
winter
season.
>> teco Witness: yes.
It is evident that graph our
first quarter was very mild.
>> Florida Rising: would agree
the predicted forecaster winter
peak did not for materialize as
expected.
>> teco Witness: it did not.
>> Florida Rising: for FEBRUARY
this is looking up this will be
cel number 5k 5 looking at the
variance directory highlighted
cel for FEBRUARY 2024 the
actual peak was most 29% below
the expected.
>> teco Witness:
yes again that was a very mild
quarter
.
>> Florida Rising: for DECEMBER
it was 30% below?
>> teco Witness: for which
month
.
>> Florida Rising: sorry for
DECEMBER 2023.
>> teco Witness: it was 4.4%.
>> Florida Rising: I'm looking
at the percent variance my
apologies.
This is cell I five.
>> teco Witness: I see that
.
>> Florida Rising: simply for
JANUARY 2020 fourth the peak
was 52% lower than expected.
>> teco Witness: yes.
Can we go to master number
before we move on can I add
something if we were to extend
this this ends in MARCH if we
go through last month our JUNE
and JULY summer peak I just
want to point out the rolloff
by 8 mw.
In both JUNE and JULY. The peak
demand forecast and at the
forecast in this proceeding are
basically dead on I would like
to point out that we raised the
forecast for this proceeding by
almost 1% because we realized
residential forecast had been
on the low side.
The residential forecast year
to date in JULY is actually
3/10 of a percent below our
budget.
This forecast in this
proceeding that leads into the
test year is very very
accurate.
On a weather normalize basis
which no I like to talk about
it that way.
We are 1/10 of a percent above
because we had a hot JULY and
we also had an upside with an
industrial customer if we
remove the impact of that
customer we are actually
forecast through JULY is 0.0%.
We are below our budget by 3 gw
hours.
That's a very very good
statistic for a forecast any
proceeding.
>> Florida Rising: I think you
indicated but the reform or to
confirm your talk about the
weather normalized
.
>> teco Witness: both not
innate weather normalized our
presidential forecast is 3/10
of a percent below our budget.
Our budget is too high.
In total because we had hotter
weather last month as well as
an industrial upside if we
remove that industrial upside
our non-weather normalized
forecast is just off by 2/10 of
a percent if you weather
normalized at 2/10 of a percent
we are 0.0% off on our
forecast.
That is 3 gw hours below our
budget is where the actual
comes in.
>> Florida Rising: thank you
for the can we move on to
master number f16-89.
this is from hearing exhibit
831.
>> Mike La Rosa,CHAIRMAN: how
many more questions do think
you have for this witness
.
>> Florida Rising: I have a
fairly significant amount of
questions if it's time for a
break this would be a good time
for break.
>> Mike La Rosa,CHAIRMAN: let's
do that let's take a break
until 3:45 pm.
>> Mike La Rosa,CHAIRMAN: we
can jump back in are you ready.
>> Florida Rising: thank you
MR. CHAIRMAN MS. Fuentes to
recognize that document pulled
up
.
>> teco Witness: yes I do.
>> Florida Rising: this is a
report from the peak demand
from 2019.
>> teco Witness: yes.
>> Florida Rising: I apologize.
One second.
For context this is master
number f-16-89 comprehensive
exhibit 831.
This report is from
2019.
We will also go to separate
documents you have from 2020
-2023 will be as efficient as
possible going through these
all of these documents these
are
workpapers from the
development of your testimony
and mfr.
> teco Witness: I
believe they are
.
>> Florida Rising: please
scroll down to the section
which l peak demand this will
be role 109.
This section includes the real
actual and forecasted for each
month of 2019?
>> teco Witness: that is
correct.
>> Florida Rising: for instance
in 2019 JANUARY was forecast to
have a peak of 4337 mw
.
>> teco Witness: that is
correct.
>> Florida Rising: the actual
peak demand for JANUARY was
3091 mw.
>> teco Witness: that is
correct.
>> Florida Rising: looking at
the cell
below the forecast
number that represents a
variance of-29%.
>> teco Witness: that is
correct.
>> Florida Rising: put another
way
teco's forecast was 25%
higher than the natural for
JANUARY teco's forecast was 25%
higher than the natural for
JANUARY 2014.
>> teco Witness: just to remind
our winter forecast we
requested 31b0 peak at the time
to ensure we have the capacity
to meet a winter load. We do
have a occasional winter load
and in fact we don't have the
2010 peak report but if we did
that would show that peak in
2010 we had 14 consecutive days
of cold weather that peak is
actually only 50 mw or so off
our 2024 and 2025 winter peak.
If we have a winter peak we
will have a pretty sharp spike
in the demand.
I just want to explain broken
forecast for 31b0 and we don't
meet that every year.
Like I said when we have our
winter we will meet it and then
surpass it.
>> Florida Rising: if I can
draw your attention back to the
forecast rope we look across
the forecast role that has 4337
for JANUARY if you look across
that for the rest of the year
JANUARY is actually forecast to
be the peak for 2019.
JANUARY 2019 was forecast to be
the retail system peak for the
year
.
>> teco Witness: yes.
>> Florida Rising: the actual
retail peak for that year was
4298 mw in JUNE?
>> teco Witness: that is
correct.
>> Florida Rising: if we look
at the actual peak demand for
JANUARY, 2091 mw number we look
across the rest of that row
would you agree that the actual
peak was higher than the actual
peak in JANUARY for the months
of FEBRUARY, MARCH, APRIL,
MAY, JUNE, JULY, AUGUST,
SEPTEMBER, OCTOBER, NOVEMBER
NOVEMBER 2019
.
>> teco Witness: I would agree.
>> Florida Rising: putting
aside the months of JUNE-august
that is seven months outside of
the number four cp months that
the code uses higher than
.
>> teco Witness: I don't want
to speak about number four cp
that's a question for jordan
williams.
>> Florida Rising: it is your
forecast data that goes into
MR. Williams models.
>> teco Witness: yes they do.
>> Florida Rising: it is the
peak from those months the
drive the cost of service that
he uses.
>> teco Witness: that as well
as a number of other things.
>> Florida Rising: as we sit
here today is your
understanding that the peaks
using the 4 cp bottle is
JANUARY JUNE JULY and AUGUST is
that correct.
>> teco Witness: that would be
correct JUNE JULY and AUGUST
the peak was that on.
Can we go to the section net
integrated retail firm peak
data.
Alone ron line 129.
This
section includes for each month
total that was available for
interruption.
>> teco Witness: I'm sorry
where are we looking
.
>> Florida Rising: on line 129
.
>> teco Witness: okay
.
>> Florida Rising: that line
represent the monthly total
available megawatts they can be
interrupted?
>> teco Witness: that's
correct.
>> Florida Rising: the actual
the total megawatts actually
curtailed for that months is
represented by line 123 which
is called curtailed megawatts
interruptible.
>> teco Witness: yes 123 and
128.
123 york).
>> Florida Rising: subject to
check looking across the row
for potentially curtailed will
that line 123 range is roughly
180-260 mw depending on the
month.
>> teco Witness: that is
correct.
>> Florida Rising: those
potential portable megawatts or
the basis for credits for
interruptible customers.
>> teco Witness: I'm not sure
for these purposes it is we
produce to get the firm load to
do reserve margin calculations.
As far as credits to customers
I don't know if the same
amount.
>> Florida Rising: questions
about how retail how the
credits articulate for
interruptible customers will be
best directed to another
witness.
>> teco Witness: yes.
>> Florida
Rising: you agree if
you look across the road the
teco did not interrupt or
curtail any load from those
customers at any point over the
year.
>> teco Witness: at any time of
the peak there could have been
another hour there was not
reported monthly peak that
could have been an
interruption.
This was one point in time for
each month.
>> Florida Rising: sure. Do
your knowledge does teco
interrupt its curtail book
customers a time other than the
peak periods.
>> teco Witness: I cannot
answer that I'm not sure.
I would think they could.
>> Florida Rising: you don't
have any evidence that they do.
>> teco Witness: what would say
if they did interrupt that
would reduce the peak it MAY
not show up as the monthly peak
does that make sense?
>> Florida Rising: if they
interrupted it would show up as
reducing the firm load is that
not true?
>> teco Witness: it would
produce the firm load I don't
know if it would reduce the
actual peak load on these
reports.
>> Florida Rising: fair enough.
We will move on now to the same
report for 2020. The number
there is f16-90.
We did some groundwork on that
first one I think we can move
through the following years
quickly.
>> teco Witness: okay.
>> Florida Rising: if we can go
back down to the retail peak
section beginning with row 115.
Thank you. Four 2020 JANUARY
was forecast to the peak of
4384 mw?
>> teco Witness: that is
correct.
>> Florida Rising: three row
above that the actual peak for
JANUARY is 3538?
>> teco Witness: that is
correct it was 37b0 peak versus
31.
>> Florida Rising: that
forecast was 90% higher than
actual.
>> teco Witness: correct.
>> Florida Rising: looking
across the rest of the forecast
row JANUARY was expected to be
the peak for 2020?
>> teco Witness: JANUARY was
yes.
>> Florida Rising: the actual
p4 2020 was 4255 mw for
SEPTEMBER.
>> teco Witness: that is
correct.
>> Florida Rising: SEPTEMBER is
not one of the fortune one
months we discussed?
>> teco Witness: no it is not.
>> Florida Rising: looking at
the actual peak for january
3538 mw actual peak was higher
in MARCH APRIL MAY JUNE JULY
AUGUST SEPTEMBER and OCTOBER.
>> teco Witness: that is
correct.
>> Florida Rising: putting
aside the month of JUNE until
AUGUST that is high months with
higher demand than JANUARY
is
4cp months.
>>
teco Witness: that would be)
.
>> Florida Rising: if we go to
the net integrated retail firm
peak data looking across line
130.
Teco did not interrupt or
curtail any load for many of
the interruptible
curtailed
customers during the year.
>> teco Witness: that is
correct.
>> Florida Rising: we are
flying we go to the report for
2021 the number on that is f16-
91.
When that is open we will go
back to the retail peak demand
on row 126.
If you look on row one 31
JANUARY 2021 was forecast of a
peak of 4400 mw?
>> teco Witness: yes.
>> Florida Rising: actual peak
demand for JANUARY is 2195 mw
.
>> Florida Rising: trench was
forecast with 31% higher than
actual.
> teco Witness: yes.
>> Florida Rising: JANUARY was
forecast to be the annual peak
for 2021.
>> teco Witness: yes.
>> Florida Rising: actual peak
for 2021 was 4293 mw in
AUGUST?
>> teco Witness: that is
correct.
>> Florida Rising: looking
official pay for JANUARY >>
Florida Rising: looking
official pay for JANUARY 2000
905 mw the peak was higher in
every single other month of the
year.
> teco Witness: that
is usually the case in JANUARY
if we don't have a winter peak.
JUNE JULY and AUGUST the peaks
are typically higher ones.
Like I said we forecast for a
cold winter peak.
We cannot avoid that.
>> Florida Rising: once again
putting aside the month of JUNE
-AUGUST is eight months higher
than JANUARY outside of their
4cp months if we go to the net
integrated firm data.
On line 41 shows teco did not
interrupt or curtail any load
from interruptible or curtail
book customers during any
monthly peaks of the year.
>> teco Witness: thumbs
correct.
>> Florida Rising: let's move
on to 2020 2f.6-92.
Retail peak demand row 131 in
this document.
Okay a few lines below that
JANUARY 2022 was forecast of a
peak of 4461 mw?
>> teco Witness: yes.
>> Florida Rising: actual peak
demand was 3731 mw.
> teco
Witness:
yes.
>> Florida Rising: teco's
forecast was 3% higher than
actual if you look across the
forecast bro general response
to bp for JANUARY 2022
annually.
>> teco Witness: yes.
>> Florida Rising: actual peak
for 2022 was 4385 mw in JUNE.
>> teco Witness: yes.
>> Florida Rising: looking at
the actual peak demand for
JANUARY the actual peak was
higher in MAY-september?
>> teco Witness: yes.
>> Florida Rising: that is two
months with higher peak in
JANUARY outside of the 4cp
months.
>> teco Witness: correct
.
>> Florida Rising: at line 146
confirming teco did not
interrupt or
curtail any
customers during any of the
monthly peaks of the year.
>
teco Witness:
that is correct.
>> Florida Rising: moving onto
the last one in the special
that is f16-93 the 2023 peak
demand.
JANUARY 2020 was forecast of a
peak of 4004 61 mw actual peak
with 3247 mw.
>> teco
Witness: gas.
>> Florida Rising: which was a
variance 25% higher than
actual.
>> teco Witness: yes
.
>> Florida Rising: JANUARY was
expected to do peak for 2023.
>> teco Witness: JANUARY is
always the peak.
>> Florida Rising: actual peak
was AUGUST for 4659 mw.
>> teco Witness: yes.
>> Florida Rising: looking at
the monthly peaks were higher
in MARCH through NOVEMBER.
>> teco Witness: yes.
>> Florida Rising: that is six
months with therapies outside
of teco is 4cp months
.
>> teco Witness: yes.
>> Florida Rising: if we go to
line 143 looking across at
NOVEMBER teco curtailed 109 mw
of interruptible customers.
>> teco Witness: in NOVEMBER.
That was the only instance of
curtailment we seen in the five
years of annual review we have
two review.
>> teco Witness: within five
years I thought we reported one
more don't know when that was.
It did not fall obviously on
any of the peak times.
>> Florida Rising: you might be
right I think you are right.
If we can also look in row 130
and 131 I'm looking at
NOVEMBER.
There peak for the month of
NOVEMBER occurred in the hour
ending in 5 pm?
>> teco Witness: in NOVEMBER
.
>> Florida Rising: I'm looking
at the cells and 130 I'm sorry
that is the hour ending at 4
pm. You are right.
The mint temperature at the
time was 87b0.
>> teco Witness: that is
correct.
>> Florida Rising: I left one
thing out in the 2022 report if
we can go back to that really
quickly.
F16-92.
Thank you.
There if we can go to the same
place looking at the peak for
NOVEMBER the time and
temperature. For NOVEMBER 2022
at the peak occurred in the
hour ending in 5 pm
.
>> teco Witness: I don't have
between two up yet.
2022 up
yet. I cannot see (.
>> Florida Rising: that is
fair.
>> teco Witness: thank you.
>> Florida Rising: I apologize
for missing this when we were
on the document.
>> teco Witness: what are we
looking at again
.
>> Florida Rising: looking at
the NOVEMBER peak row 133 and
134.
The peak for the month of
NOVEMBER occurred in at the
hour ending at 5 pm
.
>> teco Witness: that is
correct
.
>> Florida
Rising: the ambient
temperature at the time was 86b0
.
>> teco Witness: yes.
>
Florida Rising: we are done.
>> teco Witness: you don't have
the 2024 peak demand report I
want to reiterate in our
JANUARY peak I'm not talking
4cp I'm just talking in general
are generally peaks are always
going to be our highest peak
because with the plan for the
31b0 winter peak we need to make
sure we have enough capacity
underground to serve a winter
peak.
We don't have one every year
but we still have the plan for
that.
I just want to point out again
our JUNE and JULY are less two
months the peaks are within 8
mw that is 2/10 of a percent
our current forecast are used
in this proceeding are very
accurate.
>> Florida Rising: can we go to
f1 6-97 exhibit 831 we will go
to the tab total retail.
Are you there.
>> teco Witness: I am here.
>> Florida Rising: this
document with establishing the
historical retail peak from
1973 until 2023?
>> teco Witness: this
is one of
our working files.
>> Florida Rising: the bold
blue numbers in this chart
represents summer peaks.
>> teco Witness: I think that
was the intent.
>> Florida Rising: presumably
the blue is for cooling
compared to the red for heating
for the other bullet numbers.
>> teco Witness: it is called
peak versus hot peak.
>> Florida Rising: generally
speaking called peaks and
heartbeats are interchangeable
the summer and winter peaks.
Amanda flipped those but that
is the idea.
>> teco Witness: yes. I get
what you're saying.
>> Florida Rising: started with
the blue bullet numbers one
year had looking at the role we
will look at MAY.
Are you on the tab total
retail?
>> Florida Rising: if you go to
the column for MAY you would
agree scrolling down that there
is one year for which the
summer peak
fell in MAY?
>> teco Witness: yes.
>
Florida Rising: if we look over
at SEPTEMBER and count five
years the summer peak fell in
SEPTEMBER?
>> teco Witness: yes.
>> Florida Rising: looking at
the red numbers going first to
the column for FEBRUARY would
you agree there are 13 years
with a winter peak in FEBRUARY?
I will give you a second to
count.
>> teco Witness: how many did
you say.
>> Florida Rising: 13?
>> teco Witness: I counted 15?
>> Florida Rising: we can take
15.
>> teco Witness: now I counted
12 I will go with your number.
>> Florida Rising: I genuinely
believe it is 13 but it's
entirely possible I miscounted.
Looking now at the column for
MARCH.
There are five printer peak
spring with the winter peak
occurring in MARCH?
Then moving to the column for
NOVEMBER there were four with
printer peak NOVEMBER?
>> teco Witness: yes.
>> Florida Rising: looking at
the column for DECEMBER there
were three years with a winter
peak in DECEMBER
.
>> teco Witness: yes.
>> Florida Rising: you would
agree that MARCH MAY SEPTEMBER
NOVEMBER and DECEMBER or onset
of the 4cp months?
>> teco Witness: can you repeat
that
.
>> Florida Rising: MARCH MAY
SEPTEMBER DECEMBER
are not
within the 4cp months we are
talking about.
>> teco Witness: correct if you
will accept my representation
on the separation that would be
25 years with which at least
one seasonal peak occurred
outside of the 4cp month
subject to check
.
>> teco Witness: subject check.
>> Florida Rising: that is 25
years out of 50 years of data
shown
.
>> teco Witness: if your
numbers are correct
.
>> Florida Rising: roughly 50%?
>> teco Witness: yes.
>> Florida Rising:
>> teco Witness: want to point
out JANUARY we see all the red
in JANUARY we have numerous
winter peaks.
When we do have one it is a
pretty high peak. Looking at
2010. That's been our highest
one of our highest peaks winter
peaks ever.
I just want to point that out
JANUARY is we have a winter in
JANUARY the peaks they are very
high.
>> Florida Rising: can we
scroll down to six can we
scroll down to 6l 52.
You will see that if you click
on that row or hover over it
there is a note that pops up.
MR. Schultz you might have to
enable it
.
>> teco Witness: I just enabled
it.
>> Florida Rising: MS. Fuentes
are you able to read without
notes as.
>> teco Witness: not yet I'm
trying to make it bigger.
Give me one minute.
> Florida
Rising: I'm in no rush.
Okay.
Can you make out what the note
says?
> teco Witness: I'm
trying to read it now.
>> Florida Rising: you can read
it.
>> teco Witness: yes I
understand the note.
>> Florida Rising: essentially
the note is indicating that the
peak for that winter occurred
on hot tape that was televised
megawatts usage in the NOVEMBER
MARCH season the counted and
winter for the 18/19 peak
.
>> teco Witness:
that is correct
.
>> Florida Rising: can we hover
over the row for d 54 it should
be a red bold.
Is that the same idea for the
peak for the winter of
2019-2020 fell on hot day?
>> teco Witness: that is
correct.
>> Florida Rising: for the cell
directly below that there is
another note to indicate the
same thing.
>> teco Witness: the same thing
we tend to mark those we need
to separate cold and hot peaks.
>> Florida Rising: for the two
bold peaks for 2020 2022 and
2023 there is not a note on
those days will be in column l.
Neither of those has a note
from
.
>> teco Witness: that would be
because it was a cold
temperature.
>> Florida Rising: can I recall
or focus on the never peaks on
the 2022 and 2023 demand report
we can go back to establish my
representation we
establishedoccurred on an
afternoon with the
temperatures
in the high upper 80s or in the
upper 80s.
>> teco Witness: I do recall
that we just did not put a
footnote for those.
> Florida
Rising: that's perfectly fine
that is not a track.
Just trying to confirm for 4/5
years for which that has been
provided 4cp's winter peaks are
driven by air conditioning use
on holidays rather than heating
on cold days.
>> teco Witness: can you repeat
that.
>> Florida Rising: looking at
the three notes we just looked
at then the other 2 notes the
other two that did not have the
notes.
This is actually it is 5/6 of
the most recent years to which
we have data that the winter
peak is driven by air
conditioning use?
>> teco Witness: it doesn't
look like that.
>> Florida Rising: can we go to
c 10 b
-six 112 this is your
exhibit lc 1 is document number
h. 8. Do you have the document
up?
>> teco Witness: I have to
scroll it.
Which one are you at?
>> Florida Rising: I'm on
document number eight 's this
shows an increase in the
expected winter peak beginning
in 2024?
>> teco Witness: correct.
>> Florida Rising: it also
shows a decrease in the summer
peak beginning in 2024.
>> teco Witness: that is
correct.
>> Florida Rising: you
attributed the projected growth
in the winter peaks to which
you characterize as recent mild
winters?
>> teco Witness: yes you can
see 2023 was a mild winter is
transitioning to 2024 which is
based on 31b0 winter peaks.
In the summer of 2023 it was
very hot summer we had our hair
higher summer peak number
versus 2024 we are
transitioning back to normal
weather.
That is why is lower.
>> Florida Rising: think you
can we go to number f16-100.
We will go to tab cp.
>> Florida Rising: this tab
shows the console data for the
peak in 2023.
>> teco Witness: yes this is
2023.
>> Florida Rising: for JANUARY
2023 there was a peak of 3347
mw the resident coincident peak
was 1845 mw
.
>> teco Witness: that is
correct.
>> Florida Rising: subject to
check you would divide if the
residential coincident peak
into the overall peak would you
agree that number is roughly
55% does that sound right I
have a calculator.
>> teco Witness: that looks
about right.
>> Florida Rising: okay.
That is the percentage is the
amount of the
JANUARY retail
peak attributable to the
residential customer demand.
>> teco Witness: subject to
check yes.
>> teco Witness:
>> Florida Rising: would you
accept my representation that
if you did that same
calculation for each row of the
year that none of the
percentages for the residential
classes above 60%?
Does that sound
.
>> teco Witness: I would have
to do the math I don't know.
>> Florida Rising: in the
interest of doing or moving us
along I will not ask.
>> teco Witness: subject to
check I will agree.
>> Florida Rising: as we sit
here today although residential
customers are being given 60%
of system cost under the 4cp
model being driven permanently
by the JANUARY peak the
forecast peak you are not aware
of any month for which in the
actual data the residential
class resented 60% of the
coincident peak?
>> teco Witness: can you repeat
that.
>> Florida Rising: residential
customers are 60% responsible
for the peaks cost wise under
teco 4cp cost of service
methodology.
>> teco Witness: you are
starting to get out of my areas
of expertise I think this
should be directed at the
witness williams.
>> Florida Rising: we will move
past this.
We can go to master number
f16-96.
We are going to go to the tab
request forecast.
Let me know when you are there.
>> teco Witness: I am there.
>> Florida Rising: this shows
teco forecast for the 2025
energy sales by class and
month?
>> teco Witness: yes.
>> Florida Rising: so with the
exception of the lighting class
which is presumably varies in
the length and gsl d all of the
classes shown here
objected to
peak in SEPTEMBER.
>> teco Witness: I'm trying to
make it so I can see better
hold on.
You said with the exception of
.
>> Florida Rising: of lighting
and gsl d or all of the other
classes pictured here are the
remaining do the residential gs
and gst classes are they
projected to peak in SEPTEMBER?
>> teco Witness: we are talking
megawatts hours in energy not
peak demand?
>> Florida Rising: is the peak
usage here
.
>> teco Witness: there are
reasons for the schools and
universities are out part of
those summer months JULY and
AUGUST. SEPTEMBER everybody is
back.
That's what we have more energy
in at those months.
>> Florida Rising: looking at
the numbers the gst class usage
from 25 ranges from a low in
FEBRUARY from about half give
go what do I in SEPTEMBER from
a high of 6 kwh would you
accept my map that is roughly
35% increase.
>> teco Witness: I will accept
your math.
>> Florida Rising: if we look
at the gsl d class there
productive use ranges from a
low in FEBRUARY we look at the
gsl d class there productive
use ranges from a low in
FEBRUARY 2.15 gw hours to high
in JULY of.18 kwh.
Would you accept my map that is
about a 15% increase.
>> teco Witness: apple etc.
(*speaker14* you would agree to
large industrial and commercial
customers are not projected
toward fat consumption across
the year.
>> teco Witness: these are by
rate schedules.
There is nonindustrial
customers in all of these rate
classes.
This is just not an industrial
rate
.
>> Florida Rising: you would
agree that the gs d and gsl d
classes are associated with
larger commercial and
industrial customers
.
>> teco Witness: the gsl d
would be larger.
>> Florida Rising: that class
does not have flat consumption
for each of the year
but has
variation.
> teco Witness:
no it is not completely flat.
You have other things that
influence it.
Like seasonal weather the
number of days in the typical
billing period that fluctuate.
You will see differences
because of that not just
because of their consumption
pattern.
>> Florida Rising: you are
aware of the are we the teco is
seeking in this case.
>> teco
Witness: I'm aware.
>> Florida Rising: that is
11.5%.
>> teco Witness: yes.
>> Florida Rising: you are
where the teco is justifying
this requested 11.5% are we in
part on the basis that high
prices from present future
inflation estate higher return
you need to speak with.
[Listing names] Can we turn to
the confidential exhibit that
is been passed out.
This is hearing exhibit this is
hearing exhibit 766 it is fll
-306c.
>> teco Witness: I have it
.
>> Florida Rising: do you
recognize this document.
>> teco Witness: yes I do.
>> Florida Rising: this was
produced from your workpapers.
This is a confidential document
that shows the parts on this
document that are confidential
are highlighted in yellow?
>> teco Witness: yes, those
were productions.
>> Florida Rising: in general
terms, this document shows
patient escalation rates for
nonproduction cpi and
production hwi
.
>> teco Witness: yes.
>> Florida Rising: just to
clarify for the record cpi is
the consumer price index.
>> teco Witness: that is
correct.
>> Florida Rising: h wi is the
handy equipment index according
to this memo teco uses the cpa
to guide escalation cost of
expenses.
>> teco Witness: what I can
speak to is we provide this
memo we get these projections
from moody's analytics. We
prepared this memo and
submitted throughout the
company in four areas of the
company that do not have any
other indices to protect their
o&m expenses by praying it is
not used I don't know who uses
it. Like I said it is just
available for them as a guide
if they need value to escalate
their expenses by.
>> Florida Rising: if I can
return to my question.
The cpi is used by teco to
escalate content cost?
As a guide.
Would it be helpful
.
>> teco Witness: it would not
be all o&m cost I don't know
which o&m cost apply to the
cpi?
>> Florida Rising: if we look
at the first page of this memo
the uc under the chart do see
that all that is bold consumer
price index?
>> teco Witness: yes I do
.
>> Florida Rising: can you read
the sentence below that heading
the cpi at the most widely used
measure of inflation is a guide
use when escalating o&m temp
electric company.
>> Florida Rising:
>> teco Witness: it is a guide
there is many areas of the
company that haven't thrown
indices that they use to
escalate the roof o&m expenses.
>> Florida Rising: my question
is whether it was used as a
guide at teco for escalating
close expenses. Similarly does
teco use the handy equipment
index to escalate costs for
capital projects to guide the
escalation of cost for capital
projects?
>> teco Witness: we provided
whether it is used or not I'm
not sure I would assume some
areas MAY use it.
>> Florida Rising: can you read
the two sentences on the second
page below the heading that
reads and equipment index?
>> teco Witness: the h wi is a
widely used utility closet next
the trucks cause based on the
uniform consistent and related
plant items for the purposes of
peak it's a guide to use when
escalating projects associated
with our assets.
Again if they have no other
indices I don't know who is
using it or not.
>> Florida Rising: this is a
guidance memo that is issued to
departments at teco to use.
>> teco Witness: we issue this
annually
.
>> teco Witness: if we can go
back to the first page.
Without verbalizing any of the
highlighted numbers.
Can you confirm that this chart
for forecast both the cpi and h
wi numbers for the next period?
Basically, it begins in 21, 22,
23 the highlighted numbers
represent the forecast for
24-2030?
>> teco Witness: what was the
specific question
.
>> Florida Rising: making if it
is a correct characterization
of the highlighted values on
this page are the projected
values for that cpi and h wi
over that time period between
2024 and 2030?
>> teco Witness: yes those were
the projections of the time
that this was prepared 2023.
>> Florida Rising: and without
without verbalizing
confidential information could
you give an indication of the
general trend of those
forecasts?
I am actually this is also to
the council please let me know
if we're getting anywhere we
should not be?
>> understood thank you.
>> teco Witness: for 2024
inflation is actually higher
than what we have on this memo.
>> Florida Rising: I am just
asking what the memo is
referring to what does this
memo forecast in terms of
inflation. Does it dissipate
inflation increasing or
decreasing by these metrics?
>> teco Witness: we can see in
2022 we had a high it has been
coming down and the production
period for 2024 and 2025 and
beyond we expect 2024 to come
down. We expect 2025 inflation
to also come down some. Then we
expect 26-30 to remain at the
same level as 2025.
> Florida
Rising: thank you
.
>> teco Witness: I believe
inflation has been higher in
2024.
>> Florida Rising: are you
familiar with any documents
that cooperate that on this
record that you can point me
to?
>> teco Witness: not that I can
think of
.
>> Florida Rising: thank you
can we move on to f16-9h.
Just give me a nod when you're
ready.
>> teco Witness: I am there.
>> Florida Rising: okay.
Do you recognize this document.
The teco uses a 20 year
historical to forecast its
load.
That 20 year period is also
used for the predictive period
for normal weather.
Teco's normal weather is
developed by I want to make
sure I have this right it is by
averaging them monte carlo
simulation for the weather in
those years that directly from
the 20 years of actual usage
rather of actual weather data?
>> teco Witness: we are not
averaging anything from the
monte carlo simulation using
numbers directly from the monte
carlo simulation on the summary
tab to 50% probability is what
we are using to assume as
normal.
That is very similar to an
average of over the 20 years.
>> Florida Rising: I appreciate
the clarification. Let's talk
about the monte carlo
simulation for the moment.
Can you explain in general
terms how they work and are
used to establish teco's
baseline?
>> teco Witness: years back we
just did a simple average like
many utilities do. We started
incorporating the monte carlo
assimilation so we could get a
range of possible degree days.
What them monte carlo
assimilation do the run through
numerous iterations and they
will give you a chart like this
that says okay there is zero
probability of having degree
days at this level present a 5%
at this level etc. All the way
to hundred percent probability.
We used the 50% point that is
basically minimizing the risk
of the company.
It is saying there is a 50%
chance it is going to be harder
or there is a 50% chance it
will be not as hot.
That is how we use the monte
carlo simulation.
The reason we use the software
versus a simple average is we
are asked to do different
scenarios whether scenarios
which I have provided several
of those. What we can do is say
okay what kind of risks are we
looking at kara we want as
winterson does only a 5%
probability of this occurrence
that we have the numbers
already we don't have to figure
out a way like some utilities
have to do.
What is a 5% probability.
We have that available.
It is just convenient to use
the monte carlo simulations.
>> Florida Rising: would be a
fair comparison to the if you
want to know the distribution
of outcomes for rolling to dice
1000 times to get that
distribution curve of the
possible outcomes.
>> teco Witness: I don't think
I will relate
it to rolling
dice.
> Florida Rising: by
not.
>> teco Witness: I think I
can't explain exactly why. I
don't believe that it is the
same thing.
>> Florida Rising: I'm not an
expert in forecasting I'm
trying to have something to
compare it to. That is totally
fine.
Looking across the tabs for
this spreadsheet as a whole.
There are runs for each month
which are indicated by the
number following the simulation
results.
> teco Witness: that
is correct automatically
created by the software.
>> Florida Rising: the months
where teco can experience
heating or cooling those there
is an hcd and sed run.
>> teco Witness: that is
correct
.
>> Florida Rising: for the
summer months there is one run
for cdd?
> teco Witness: yes.
If we can turn to f3.1-3150
or fll 51.
You recognize this exhibit?
When it comes up?
>> teco Witness: yes I do.
>> Florida Rising: the attached
table on this exhibit shows per
table for 2022 countries
forecast or stated the heating
degree days by 50% on average
.
>> teco Witness: yes.
>> Florida Rising: it
understated cooling degree days
by roughly 20% on average
.
>> teco Witness: that is
correct.
>> Florida Rising: for JANUARY
but teco expected the annual
retail peak demand heating
degrees world fleet 80% and
cooling is roughly hundred 10%
higher than charges forecast
.
>> teco Witness: that is
correct the weather is very hot
in 2022
.
>> Florida Rising: that was my
next question to attribute this
to the record-breaking weather.
>> teco Witness: some of the
months.
>> Florida Rising: if we can go
to e >> Florida Rising: if we
can go to e268.
It is exhibit 216.
I gave the wrong number. Can we
go to e 8 271.
Do you recognize this document?
>> teco Witness: yes.
>> Florida Rising: this is late
filed exhibit from your desk
the person this is comparing
the expected energy sales based
on degree days for teco is twin
near-normal versus tenure
normal.
>> teco Witness: that is
correct.
>> Florida Rising: this chart
shows that if weather is in
line with the 10 year normal as
compared to the 20 year normal
teco should expect JANUARY
weather usage to be 20% low
.
>> teco Witness: can you repeat
that.
>> Florida Rising: if the
weather for the year is in line
with the 10 year normal instead
of the 20 near-normal that
would be associated with
roughly 1% decrease in energy
use is for JANUARY.
>> teco Witness: for JANUARY
I'm sorry I was looking at the
total
.
>> Florida Rising: for APRIL
and MAY sales would be about 2%
higher given use a 20
near-normal as reference
chemical that the reference?
>> teco Witness: I'm following
you.
> Florida Rising: for
APRIL and MAY it would be about
2% higher than the
reference.
>> teco Witness: yes.
>> Florida Rising: for NOVEMBER
would be to percent higher.
So similarly the effects of a
one year of weather that is
more in line with the 10 year
normal than the 20 near-normal
will be associated with an
additional 204 gw hours of
energy sales.
Looking at the summary row at
the bottom?
For the difference?
>> teco
Witness: which month were
you
referring to.
>> teco Witness: this would be
row 13 the total annual
difference yes.
>> Florida Rising: thank you if
we could just scroll down to it
this is late filed 4 does if we
can scroll to late filed 6 this
is 8/02/06 I'm sorry 8275.
>> teco Witness: want to point
something out before we move
on.
We talk about the 20 years
versus 10 years.
If we look at things other than
the last 10 years it has been
hot.
I mentioned earlier today 20
years is kind of the industry
standard.
It is actually for standard in
florida. There is no utility
using tenures or anything lower
than 20 years. There is a
reason for that person sample
size is the reason when you use
20 years you have a large
sample of it degree days. You
have 20 years. 10 years we
consider a small sample. Let's
import about a large sample is
stability. Every year when we
update our normals it's a
rolling lock.
Would dropping off your all
this year and adding your
newest year. Those two years
that are changing are very
different.
It is going to impact your new
normal degree days.
When you've assembled that is
20 years old it's a stable
transition from year to year
which is very important for the
company's long-term planning.
Which like you said before our
forecasts are not just used for
revenue it is used for
long-term planning of
generation of transmission
distribution infrastructure
also used for estate planning
at the florida liability court
and counsel this transition of
our normals is important.
When you go to attend your
simple regardless of what has
been happening with the weather
when it tenure simple there is
more instability when you drop
one year and add your new year
they are very different
near-normal will change.
It MAY change significantly.
That impacts expansion plans
the company's infra structure
planning.
Ou don't when you
plan you don't want these
sudden changes we need to add a
lot of generation not for sure
where to take it away. That is
why we use 20 years.
That's why am opposed to moving
to a 10 year look even if it
has been harder.
Our normal over 20 years the
gap is closing between 20 and
10 because we have these 10 hot
years in our 20
years. That gap
is closing our normals are very
very hot and warm here is.
I illustrate that I've said
that in my late filed exhibit
number six bullet it is the
exhibit number 16 this last
nine years not that it's just a
small sample it is anomalous
compared to the 40 or 50 years
our. I want to make that
point. Yes it has been hot
these past 10 years it is not
good forecasting practice to
just look at that back in time.
>> Florida Rising: it is your
testimony for the last nine
years are anomalous.
>> Florida Rising: compared to
what we see historically they
are.
>> Florida Rising: you would I
don't think anybody knows that.
But because there have been
some number of anomalies during
that period of time I just
don't believe that it's a good
period of time to use as
normals and to plan the
company's future with.
A lot of uncertainty there and
is not any utilities in florida
that are willing to do that
either.
>> Florida Rising: if I can
redirect you to my question.
You would agree that I will
withdraw the question and move
on.
If we can look at the document
we pulled up next.
This is e 8 275 this shows the
cooling degree days in the
total three days in the cooling
degree days from 1990-2023.
I apologize I think it should
be 1970.
-2023.
>> teco Witness: yes.
>> Florida Rising: looking at
the heating degree day chart
which should be I believe the
second.
The average 40 monte carlo is
it the average or the 20 year
normal for the monte carlo
simulation.
>> teco Witness: it is the 50%
probability.
>> Florida Rising: the 50%
probability which we called the
20 near-normal that number is
431 heating degree days
.
>> teco Witness: yes
.
>> Florida Rising: if we look
at this chart it shows that the
heating degree days have gone
down dramatically over time not
just in the last nine years.
>> teco Witness: they have gone
down. If we scroll to a few
more it is illustrated much
easier to see?
>> Florida Rising: we will get
there.
Would you accept subject to
check for the 54 years of data
that are shown here there are
23 years for which the total
heating degree days were fewer
than teco is 20 near-normal
.
>> teco Witness: subject to
check yes.
>> Florida Rising: subject to
check their work tenures with
fewer heating degree days lower
than the current 20 near-normal
in the 34 years between 1970
and 2003.
>> teco Witness: subject to
check.
>> Florida Rising: 10 out of
10/24 hours is roughly 1/3
subject to check this chart
shows there were 13 years with
fewer heating degree days than
the current 20 near-normal
between 2004 and 2023?
>> teco Witness: yes.
>> Florida Rising: would you
accept my map that 13/20 is
roughly 2/3.
>> teco Witness: yes.
>> Florida Rising: this one I
don't think we have to subject
to check there are fewer of
them none of tenures had a
fewer heating to read days the
20b0 normal.
>> teco
Witness: subject to
check aspirin.
>> Florida Rising: that would
be a rate of 90%
.
>> teco Witness: subject to
check your math yes.
>> Florida Rising: it's looking
at the next sheet cooling
degree days go through the same
exercise.
Again there is 54 years of data
shown on this chart.
I by my count there are 16
years for which the total
cooling degree days were higher
than teco 20 year normal.
Would you agree.
Would you accept there just six
years with more cooling degree
days than the current 20
near-normal in the 34 years
between 1970 and 2003.
>> teco Witness: the top left
is the heating degree days you
can see that I drafted the
solid red line is a 20
near-normal the dotted line is
the 10 year normal.
To do the degree days have been
going down the graph next to it
is cooling degree days you can
see it has been higher in the
last 10 years.
The point I want to make
customers are using more energy
and at the heating degree days
when it's the heating degree
date; degree day. In other
words 10 heating degree days
customers are going to use a
lot more than 10 cooling degree
days.
Door heating appliances just
use more electricity vendor
cooling appliances. We would be
losing some load on the heating
site. We are making it up on
the cooling side.
if you look at it together
which is important was on the
bottom two graphs.
The bottom left to start with
you can see the solid red line
which is my 20 near-normal.
It is way above those
historical values.
All the way back to 1970. We
are hovering over the highest
hottest years.
During that period yes we are
below the past nine which is a
are anomalous. Which leads me
to the second graph. The bottom
graph on the right. That has
buxton you see I've put a box
between 1970 and 2014.
That looks pretty stable if you
were to draw a trend line
through that it would be
relatively flat and maybe take
up a little bit one of those
years in their 2010 which was a
cold winter not even in a hot
year. It was a cold year which
made those total degree days
spike. That is a stable trend.
Now boxed in the past nine
years that we keep talking
about.
O me anomalous means
different than what you expect
different than what you've seen
in the past. That is why I'm
saying those tenures are
anomalous to me david been
extremely hot I agree.
It is nothing like what we have
seen. To say that those nine
years there are going to be our
new normal no utilities ready
to say that.
This to me is an important
illustration.
I work 20 years is somewhere we
have those nine years in that
box area then we have the 10
years prior to it. Our normals
are right in between there. Our
normals are getting harder and
harder.
I believe that is just the best
representation for future
weather for load forecasting.
>> Florida Rising: looking at
these illustrations as you note
you have your tenure or your 20
near-normal and retain your
normal as flatlands you would
agree that those are not best
lines for the date on this
chart on any of these charts.
>> teco Witness: albert 20 year
monte carlo 20 year average in
our monte carlo tenure average.
>> teco Witness: the data
points in this chart are not
monte carlo they are not monte
carlo numbers correct those are
actuals.
>> Florida Rising: you agree
that tenant 20 year monte carlo
lines
.
>> teco Witness: they are only
bested for the 20 year period
not for this entire period.
>> Florida Rising: even for the
20 year period if I understand
the cancellation.
>> teco Witness: is an average.
>> Florida Rising: to your
point if you draw a neat box
around the last nine years and
disaggregate that.
You would agree if you have one
year that is an outlier perhaps
it is not worth changing how
the system operates.
Is that fair to say?
>> teco Witness: that is fair
to say
.
>> Florida Rising: this is nine
years in a row
.
[Unclear audio].
>> teco
Witness: that's correct it is
still anomalous we had a lot of
winter or the weather events
such as el nic
a number of
those.
During that period that we do
not have in the period before
it.
I just don't believe those
tenures should represent our
future.
If we did obviously guess our
retail energy cells would go up
and all revenues would go up it
does not viscerally mean that
the income would go up.
We would have duet additional
infrastructure. That costs
money. There are two sides you
have to look at.
Not just the story on energy
cells.
>> Florida Rising: recognizing
we've been talking about up
time and again 2023 now we are
in 2024 has 2024 been
returned
to normal for teco system.
>> teco Witness: through JUNE
we were below our normal degree
days.
Through JUNE.
>> Florida Rising: I think we
have good document to
illustrate this to me go to the
late filed number five this
will be e 8 274.
Do you by any chance have a
copy of your late file that you
can look at I think it would be
helpful to go back and forth
between the heating and cooling
degree days on the
.
>> Florida Rising: it is just
for heating degree days about
the tenure normal.
>> teco Witness: that is
correct.
>> Florida Rising: for MARCH it
is 40 heating degree days
written aspirin.
>> teco Witness: that is pure
heating to read is about the 10
and 20 near-normal.
>> teco Witness: I'm sorry what
was the last thing you said.
>> Florida Rising: 40 heating
degree days will be below the
40 and 10 near-normal spread.
> teco Witness: you are in
MARCH looking at APRIL there
were three heating degree days
in APRIL 2024?
>> teco Witness: that is
correct.
>> Florida Rising: that is
below the 20 near-normal and
the 10 near-normal fred
.
>> teco Witness: yes.
>> Florida Rising: then of
course we don't expect heating
degree days in MAY and JUNE.
>> teco Witness: that is
correct if we go to the cooling
degree days.
There were 43 cooling degree
days in JANUARY there were 43
cooling degree days in JANUARY
2024.
>> teco Witness: that is
correct that is below the 20
and 10 year normal.
>> Florida Rising: yes.
There were 46 cooling degree
days in FEBRUARY
.
>> teco Witness: that is
correct again below the 10 and
20 near-normal.
> Florida
Rising: MARCH there were 122
cooling degree days and that is
above the 20 year normal.
>
teco Witness: that is.
>> Florida Rising: for APRIL
there was 212 cooling degree
days.
>> teco Witness: I believe that
is normal
.
>> Florida Rising: that is
exactly the 20 near-normal.
>> teco Witness: correct.
>> Florida Rising: for me to
work hundred 82 cooling degree
days.
>> teco Witness: yes.
>> Florida Rising: which is
above the 20 and 10 near-normal
spread.
> teco Witness: for
JUNE the most recent month for
which you have degree data at
the time this was produced
there were 5178 cooling degree
days.
That is above the 20 year
normal.
>> teco Witness: yes.
>> Florida Rising: and
the 10
for normal.
>> teco Witness: if we take a
moment to scroll up through
that column.
>> teco Witness: I can tell you
the total even the 1383 that is
the lowest we'd seen in 10
years.
>> teco Witness: 1383.
>> Florida Rising: I'm sorry
I'm on cooling degree days.
For JUNE I'm comparing that to
your late filed if we look up
through JUNE
.
>> teco Witness: we are
planning for the whole theorem
1383 is the lowest cooling
degree days with seen in
tenures.
>> Florida Rising: a 10 year
period which you have 10 year
period which you characterize
as
.
[Unclear audio].
>> teco
Witness:
>> Florida Rising: it's lowest
in the 10 year
period that you
characterize as higher elevated
.
>> teco Witness: that is lower
than the anomalous period we
are moving I'm just saying it
is lower than what we've seen
in the past 10 years.
>> Florida Rising: give me a
moment and try to see if I can
find a few questions.
If you can go to your late
filed number seven this should
be just a few pages that is not
included in the staff exhibit
that is 3.F 3.1-3152
comprehensive exhibit
comprehensive exhibit 512.
Thank you.
If we can go to page 10 of this
document.
I believe it is consistent with
earlier testimony I want to
confirm that teco still just on
point.
Even though many of the more
recent years they are being
driven by cooling not heating.
>> teco Witness: that is
correct like I said we need to
plan for the winter peak for
capacity planning.
>> Florida Rising: we are
getting very close.
>> Florida Rising: I would like
to follow up on something as
true in our conversations
during
your deposition as we sit here
today
everywhere if emera has
taken a position on climate
change.
>> teco Witness: I'm not aware
.
>> Florida Rising: the same
question for teco.
>> teco Witness: I don't know.
>> Florida Rising: in directing
the activities of local
researching forecasting for
temporal letter
company your
team acknowledge the coming
change is consistently
increasing the average
temperature of the teco service
territory.
>> teco Witness: whether it is
climate change or not I don't
know but I would agree it has
been hotter as we just
discussed.
Climate change is a gradual
change I've seen sudden changes
as far as I'm concerned.
>> Florida Rising: does
temperature increase as the
demand for air conditioning
increases
.
>> teco Witness: say that one
time.
>> Florida Rising: as to
average temperature grison is
it fair to say demand for air
conditioning increases.
>> teco Witness: the demand
will increase in the winter
months
it can actually decrease
.
>> Florida Rising: that is fair
I guess let's say given the
data that we look out for last
number of years which was
available we were seeing peaks
in the summer.
>> teco Witness: yes.
>> Florida Rising: as the
temperature in the summer
increased we would
expect to see
higher air-conditioning usage
during those months.
>> teco Witness: yes just based
on that.
But consumers to change their
behavior and do conserve at
times.
But in general guess.
>> Florida Rising: because I
will put it this way we spoke
about that breakpoint at 65b0
breakpoint brain that is
embedded in teco's forecasting
model.
> teco Witness: that
is correct.
>> Florida Rising: that does
not assume customers will
change their
behavior.
>> teco Witness: the 65b0 does
not.
>> Florida Rising: I recognize
you make model adjustments for
energy efficiency and other
behavioral changes looking at
just the model itself you would
agree that if the ambient
temperature is increasing
further away from 65b0 there
would be more load associated
with returning climate
controlled spaces to 65b0.
>> teco Witness: I would say
because our normal heating
degree days are increasing then
I would say even if the 65b0
points do not change for
calculating the heating and
cooling degree days on
historical basis the future
normal has changed.
>> Florida Rising: to clarify
something I might
have been
served I thank you said heating
degree days increasing did you
mean cooling degrees.
>> teco Witness: I meant
cooling probably.
>> Florida Rising: I just want
to make sure I am not cracking
up.
recalling our earlier
discussion on the accuracy of
load forecasting and its
potential impacts for revenue.
Could ignoring the change in
weather baseline in teco
service territory benefit teco
by allowing for higher revenue
recovery and what is forecasted
for the year
.
>> teco Witness: can you repeat
that
again.
>> Florida Rising: if teco is
forecast do not take into
account potentially the new
normal or you acknowledged the
temperatures leased and left
tenures have been elevated for
what you consider to be at the
baseline?
If teco is forecast
forward-looking forecast treats
those years anomalies and
continues to expect lower load
than his actual could it teco
be benefiting by recovering
more energy sales then is
forecast through the commission
as part of this rate.
>> teco Witness: save the last
part
of the question I got the
beginning.
> Florida Rising:
diego is making a forecast
through this commission about
the amount of energy it expects
to sell to customers.
That forecast as we discussed
as part of the predicate from
which the ultimate tariff sheet
and drive to make sure that the
company can recover its revenue
requirements. That is based on
an expected percentage of
sales.
>> teco Witness: yes
.
>> Florida Rising: rather an
expected total sales.
>> teco Witness: correct.
>> Florida Rising: if teco is
actual sales or above that
number it can over recover.
>> teco Witness: as of this
before you're looking at just
one part of the equation. You
need to look at the expense
side to if energy sales will
increase there will be
increases in the expense side.
I don't know what that net
impact is.
Hen you say
increase on the expense side
premium if energy sales are
higher there could be
additional content expenses
maintenance for operational
purposes. Things like that.
We are not looking at that burn
if you are talking long-term
there could be additional
capital infrastructure
expenses.
You can't just look at the
impact on energy sales and
revenue you have to look at the
big picture to determine what
the impact would be on the
revenue requirements.
>> Florida Rising: for the
three year rate period that is
at issue in this case you would
agree that that we are not
talking about long-term impacts
we are talking about the things
that are forecast for the next
three years.
>> teco Witness: it was either
late filed exhibit or my
rebuttal testimony were
actually did a scenario 10
years and yes revenues went up
8/10 of a percent energy went
up peak demand went up by close
to 170 mw.
In the test year of 2025. I
would think there would be some
additional cost associated with
that.
>> Florida Rising: do you
recall we looked that peak
demand charts the general range
that was offered the
interruptible and curtail bull
customers subject to check the
mid 160-280 I forget what it
was is it fair to say that
there was 200 mw that teco can:
for
curtailment.
>> teco Witness: yes
.
>> Florida Rising: to the other
just briefly mentioned increase
energy sales can be associated
with increased trend
that o&m
expense.
>> teco Witness: I would
believe it has an impact.
>> Florida Rising: that is not
recovered as part of the base
rate
.
>> teco Witness: I'm getting
out of my area of expertise I
will save the current 24 peak
demand forecast over the past
two months we've been 8
megawatts lower than forecast
2/10 of a percent or forecast
based on these 20 year
forecasts are very much in
line.
>> Florida Rising: based on the
weather normalization.
>> teco Witness: we don't
delete weather normalized to
the men it is more complicated
on an actual basis the peak
demands over the past two
months we've been the actuals
have been 8 megawatts lower
2/10 of a percent or forecast
the mid forecast online as well
as the energy forecast for this
proceeding.
>> Florida Rising: I have one
more thing for you can we
please go to f16-99.
We are going to go to tab ma
price.
[Unclear audio].
>> Florida Rising: that will
get you close we are just
looking for the graph that is
there.
[Unclear audio].
>> teco Witness: I can try to
scroll to it.
>> Florida Rising: I figured
out the cell hoping I can
figure out and save some time
from scrolling.
I apologize.
>> teco Witness: are you on the
moving average price.
>> Florida Rising: moving
average price it should be
delete 700 spring you will need
to go over to the right.
>> teco Witness: we are getting
there slowly.
Got it.
I am there.
>> Florida Rising: thank you.
This is one of your workpapers?
>> teco Witness: this is done
under my guidance. I did not
prepare it myself.
>> Florida Rising: this track
we are looking at tracks the
moving average price of
electricity per customer).
>> teco Witness: yes.
>> Florida Rising: really quick
about that while we talk about
ma does replace me and it is
adjusted for inflation.
>> teco Witness: correct this
the total price of inflation
not the base rate portion.
>> Florida Rising: I know you
are not here during MR. Collins
testimony you MAY not know the
answer to this. I don't know if
you're able to listen in but
MR. Collins testified earlier
this week when adjusted for
inflation teco is great not
increase in left tenures.
Would you agree with that
representation.
>> teco Witness: do you know
what he was talking about.
>> Florida Rising: he set in
this commission he said they
are not increased in the last
10 years.
I assume he's talking about
today.
And years ago.
>> teco Witness: 2023 if I put
my cursor on the residential
aqua colored line
.
>> Florida Rising: I'm assuming
he was talking 2024
.
>> teco Witness: I don't know
if this is the appropriate
comparison. This is done to
come up with a price of
electricity trying to put into
our consumption models it MAY
not really be what MR. Collins
was using.
>> Florida Rising: let's talk
about that trend for second.
The rockwell plan that is the
residential)
.
>> teco Witness: I will say
this is a 12 month moving
average.
The peak that we have because
of the fuel would be pushed
would be seen out into the
future.
One year or so. That is why I'm
saying it is not a good
comparison.
>> Florida Rising: is a 12
month moving average this chart
would flatten the highest
peaks.
you might see on a
month-to-month basis.
>> teco Witness: it would
smooth out the month-to-month
variations.
>> Florida Rising: looking at
that blueline you would agree
that residential prices on this
chart are shown to be the
highest they've been in about
15 years.
The moving average price for
residential customers.
>> teco Witness: again, I would
have to recall how we came up
with all of these numbers.
>> Florida Rising: looking at
the documents you provided us.
That is what it shows?
>> teco Witness: that is what
it looks like.
>> Florida Rising:
>> teco Witness: that MAY not
be reality.
>> Florida Rising: that is
because of the big spikes
starting in 2022?
>> teco Witness: possibly with
the fuel increases that
we
celebrated.
>> Florida Rising: there is a
note the one we had to move so
we can see the blue line. That
note indicates the spike is due
to the rate increases following
the 2021 settlement agreement.
>> teco Witness: I would assume
that
does include the 2022 rate
increases.
Speed 14.
>> Florida Rising: the note.
[Unclear audio].
It does not mention fuel prices
.
>> teco Witness: no.
It could be including the fuel
prices we just don't specify
these are comments for our own
use.
>> Florida Rising: you would
agree that the aqua blue line
is higher than the lines for
industrial and commercial
commercials which are
represented by
purple and dark
blue.
>> teco Witness: guess.
>> Florida Rising: would agree
following the rate case in 2021
the residential line increase
proportionally higher and more
sharply than the lines for the
cna classes.
>> teco Witness: that is what
it looks like unless it is a
skill.
This shows the 12 month moving
average.
This is looking only at
residential.
And commercial customers.
>> teco Witness: that is
correct
.
>> Florida Rising: to your
knowledge does not commercial
include industrial is it meant
to be business versus
residential was that strictly
commercial.
>> teco Witness: I am not sure.
>> Florida Rising: would agree
at every point on this graph
blue line is higher than the
red line?
>> teco Witness: the rate in
general is higher for
residential. So yes.
>> Florida Rising: when we look
you see the data plans to come
up in the key under the x axis
describes those as residential
last year and commercial last
year those represent a forecast
of what prices would do that
was made years before this
document was produced.
>> teco Witness: those would've
been the assumption that we had
used in the prior forecast.
If this was updated
correctly
sometimes we don't update every
graph friend.
>> Florida Rising: assuming the
teco document is correct this
forecast shows that following
2022 prices would decrease for
customers.
At least the residential and
commercial classes shown here.
>> teco Witness: in real terms
that is what it looks like.
>> Florida Rising: the fact
they increased pretty
significantly from that point.
>> teco Witness: again it could
be the cpi we were using we had
8% inflation at some point.
>> Florida Rising: I am just
asking what the graph shows.
You agree with that
characterization?
>> teco Witness: repeat your
characterization.
>> Florida Rising: instead of
the client after 2022 prices
have increased?
I'm sorry after from 2022
prices have increased on this
chart?
>> teco Witness: that is what
the graph shows.
>> Florida Rising: I think this
gives us a better definition of
what I was trying to ask on the
other chart you would agree
looking at the two lines
following the last rate case
the line for the blue class the
presidential class is a much
steeper slope associated with
it.
>> teco Witness: it does look
like it there is a foot note
talking about the.
[Listing names] I'm not
familiar with those components
and what would drive the
residential higher.
>> teco
Witness: is it fair to say
that.
[Listing names] Increases
general rate-based adjustment
increases is a modification to
the rate made in the context of
rate case?
Are you familiar with the term.
[Listing names]
>> teco Witness: guess I'm just
saying these step increases
that are being reflected in the
graphs I don't know if that is
what is causing the steeper
increase in the residential
there MAY be a difference in
those step increases from the
different classes.
This is not my area of
expertise. When it comes to the
actual rate.
>> teco Witness:
>> Florida Rising: looking at
this document which was
produced under your direction
you would agree that if we look
at the data point for 2024
doesn't look cute like there
has ever been a time in this
chart when reverential
customers were further apart
from the commercial class in
terms of the higher price that
they were paying?
>> teco Witness: not looking at
this chart but again this chart
MAY not reflect the same things
that the witness collins was
looking at.
>> Florida Rising: I'm not
concerned with MR. Collins
testimony we will keep it to
this since you are not here.
You would agree on this chart I
will ask it this way. Is there
any point in the history of
this chart where reverential
customers have paid a higher
have been further above the
commercial class than they are
currently?
In terms of the real average.
The moving average the real
price?
>> teco Witness: not on this
graph.
>> Florida Rising: thank you
very much for your patience
that's all the questions that I
have.
>> Mike La Rosa,CHAIRMAN: let's
move to.
>> fipug: I have a question for
you I think I need
clarification on an answer you
gave to previously you were
asked a lot of questions about
a lot of things and
temperatures the peak and
everything that I hear you just
say the cultists they that has
ever occurred I assume that
translates into the highest
peak was in JANUARY the day is
that ever since you been with
the company?
>> teco Witness: the coldest
temperature occultist cement
but
be different.
>> Florida Rising: you just
made a reference he said
JANUARY was the coldest day I
remember.
>> teco Witness: I was speaking
to JANUARY 2010.
That is been
our coldest winter
peak.
>> Florida Rising: how long
have you been with the company
.
>> teco Witness: 37 years.
Thank you that is all I have.
>> fea: no questions.
>> Sierra Club: no questions
thank you.
>> Florida Retail Federation:
no questions.
>> Walmart: no questions.
>> all right good afternoon MS.
Fuentes.
>> teco Witness: good
afternoon.
>> has teco's calculated its
cooling degree days for JULY
2020 fourth using international
airports recorded temperature
data?
>> teco Witness: for JULY this
past month yes we have.
>> what is that number.
>> teco Witness: I don't have
that in front of me.
>> are you able to locate it.
I'm going to look to see if I I
know I had JUNE.
I will say it was hot.
It was probably about or about
our normals I'm sure earlier I
believe I heard you indicate
that no florida utility is
using less than 20 years of
historical temperatures to
determine normal weather that I
hear you correctly.
>> would it surprise you to
learn on AUGUST 22 of this year
for a public utility company
filed testimony with his
commission basing its energy
use per customer forecast on 10
year normals for cooling degree
days in docket no: 2024 basing
its energy use per customer
forecast on 10 year
normals for
cooling degree days in docket
no: 2020 40099 b
ei.
>> teco Witness: that would
surprise me as of MAY 1 all the
utilities met there
was not any
I'm not sure if they were
represented at the florida
reliability coordinating
council
.
>> when you testified earlier
today and you were unaware of
that fact.
>> teco Witness: yes I was.
>> I would like to go back to
the monte carlo simulation
probabilities if we could. Did
I understand correctly that
teco's production of annual
cooling does have a 15%
probability of being higher
than actual cooling degree
days.
>> teco Witness: that is
correct.
>> also the converse 50%
probability of being lower than
actual cooling days.
>> that's basically the same as
using the simple average.
>
for the last nine years or
2015-2023 every year teco's
projected cooling degree days
that were lower than actual
cooling degree days is that
correct.
>> teco Witness: that is
correct.
>> can you explain the method
for calculating the probability
of that occurrence.
>> teco Witness: it's an
automatic regulation by the
monte carlo demolition and
software. We provide the 20
years worth of data monthly.
And we have it go through 500
or 1000 iterations of
distribution and it comes up
with the probabilities from
0-100 automatically.
>> I'm asking about the
specific sequence that occurred
of those nine years.
Do you know how to calculate
the probability of that
occurring?
The nine years of
data from 2015
.
>> teco Witness: we did do a
scenario where we used they
told us to use I'm not sure if
it was the staff or another
intervener had us run the monte
carlo simulation for a tenure
scenario. We did that and we
look at that earlier increased
our sales by 1%.
Increased revenues by
approximately 8/10 of a
percent.
We have done that scenario.
>> let me ask you this would
you agree that nine straight
years of actual cooling degree
days being above the 50%
probability level is
represented by the no meal of
one over two to the ninth power
or 1/512 which would be 0.2%.
>> teco Witness: I will trust
your mouth I cannot do that in
my head.
>> thank you very much MS.
Fuentes I know it was a long
day I appreciate you answering
my questions.
We have nothing further for
her.
>> Mike La Rosa,CHAIRMAN: thank
you commissioners any
questions?
Seeing no questions let's send
it back to teco's for redirect
.
>> teco Attorney: no redirect.
>> Mike La Rosa,CHAIRMAN: let's
talk about the exhibits and
entering them into the organ
spent tampa electric would like
to move exhibits 25 and 146 and
the newly identified 138 into
the record.
>> Mike La Rosa,CHAIRMAN: any
objection?
seeing none I show them entered
into the record.
Porter rising would move into
.
[Unclear audio].
>> Mike La
Rosa,CHAIRMAN: objection no
objection show that entered
into the record.
>> Florida Rising: we would
move in hearing exhibit 511,
512, 766.
, 663.
, I don't know how we want to
approach the step exhibit
number three which is 831 do
you want to move those and by
attachment or move in the
entire document?
Or the entire exhibit
.
>> Mike La Rosa,CHAIRMAN: I'm
not familiar with what else is
attached to it I will look to
staff.
> Staff: I would
recommend just making it a
competent exhibit it's already
been numbered as a 31.
>> Mike La Rosa,CHAIRMAN: the
whole exhibit.
>> Florida Rising: I didn't
want to draw an objection
bringing in too many things I
will
bring 831.
>> Mike La Rosa,CHAIRMAN: is
that all anything else is there
objection?
Seeing no objection I show that
entered
.
>> Staff: MR. CHAIRMAN when you
said the last exhibit did you
same 838 or 138
.
>> opc: I said 838
.
>> Mike La Rosa,CHAIRMAN: let's
move 838 if there are no
objections and exhibit that
porter rising his offered into
the record.
Anything else.
Any other exhibits.
Seeing none MS. Fuentes. Your
excuse.
I'm sorry you are excused.
>> she wants to stay longer if
she could.
>> Mike La Rosa,CHAIRMAN:
normally a witness does not
deny that.
>> teco Witness: I
thought you asked if I had any
questions
.
>> Florida Rising: MS. Fuentes
if you want to do any more
questions we can do this all
night.
>> Mike La Rosa,CHAIRMAN: as
long as there is not a 30 year
comparison we are all) Thank
you for your testimony I will
kick this over to diego for the
introduction of the next
witness.
>> teco Attorney: tampa
electric calls ned ellis.
>> Mike La Rosa,CHAIRMAN: do
not believe you had been
administered euros if you mind
standing in raising the right
handprint do swear or affirm
that this is money you're about
to give will be the truth the
whole truth and nothing but the
truth?
>> teco Witness: yes.
>> Mike La Rosa,CHAIRMAN: as he
gets settled still the plan is
to take a break at 6 pm we are
still on target we will see how
this line of questioning goes
we will break halfway in the
middle if we need to.
I will send it over to teco's.
>> teco Attorney: good
afternoon are you settled.
>> teco Witness: yes.
>> teco Attorney: will you
state your full name for the
record.
>> teco Witness: my name is
.
[Listing names]
>> teco Attorney: who is your
current employer and what is
your business address.
>> teco Witness: smith at smith
at 207 senate ave.
MS. Mac
.
>> teco Attorney: did you
prepare and cause to be filed
in this docket on APRIL 2,
2024
prepare direct testimony
consisting of 46 pages.
>> teco Witness: yes.
>> teco Attorney: did you
prepare or cause to be filed
this document on JULY 22 22
four prepare for battle because
many consisting of 43 pages.
>> teco Witness: yes.
>> teco Attorney: you have any
additions or corrections to
your prepared direct or
rebuttal testimony.
>> teco Witness: I do not.
>> teco Attorney: if I were to
ask you the questions contained
in your prepared direct and
rebuttal testimony today would
your answers be the same as
those contained therein.
>> teco Witness: yes.
>> teco Attorney: MR. CHAIRMAN
tampa electric request the
prepared direct rebuttal
testimony of.
[Listing names] Be inserted
into the record as the red did
you prepare and caused to be
filed with your direct
testimony and exhibit marked na
1 consisting of four documents.
>> teco Witness: yes.
>> teco Attorney: did you also
prepare and cause to be filed
with your rebuttal testimony
and exhibit marked na 2
consisting of three documents.
>> teco Witness: yes.
>> teco Attorney: MR. CHAIRMAN
tampa electric would note for
the record that exhibits na one
in any 2 have been identified
under ce l as exhibits 26 and
147.
>> teco Attorney: would you
summarize your prepared and
summarize your direct and
rebuttal testimony.
>> teco Witness: good afternoon
CHAIRMAN And commissioners my
name is.
[Listing names] I performed the
depreciation study on behalf of
temperature company my direct
testimony presents and explains
that study. The depreciation
study was conducted based on
industry-standard methods and
procedures that are consistent
with prior depreciation studies
performed for utilities in
florida. The study equipment
service life and salvage as
misplaced property account as
well as lifespan estimates for
each of the companies
generating facilities those are
then used along with the
current company's current
balance is to catholic
depreciation rates for each of
these property groups.
Estimates that are recommended
incorporate statistical
analysis of historical data
information obtained from site
visits meetings with company
personnel. As well as the
overall experience of myself
and my staff which includes
conducting similar depreciation
studies for utilities across
the country.
Including other florida
utilities as well.
The study results and overall
increase in depreciation
expense of approximately $40.7
million. As of DECEMBER 31 2024
does overall increase the
result of several factors the
largest of which is actually
just the mechanical updating of
depreciation rates to
incorporate current balances
that accounts for about 36 of
the $40 million increase. The
recommended service life and
that some adjustments are made
study for transmission
distribution accounts result in
increased offset by a decrease
in due to longer service life
for generation accounts net to
about a $4 million increase.
My rebuttal testimony response
to the depreciation blended
testimony of opc related
witness.
[Listing names] MR. Collins
proposed adjustment to lifespan
the sewer facilities as well as
to the average solvers life
energy storage which anderson
has been for the belated we
propose longer lifespans for
cycle facilities as well as
different interim survivor for
production plan accounts longer
service life for underground
dissolution conductors and less
negative that salvage estimates
for several) That this customer
bottle has money does agree
with each of these
recommendations opc and that
the proposal for longer
lifespans for solar and cycle
plans do not in my opinion
adequately consider factors
will contribute to the
retirement of these facilities
just changing technology
changes the operating
environment and other economic
factors that I believe are
likely to limit the overall
lifespan of these facilities.
The proposed survivor curves
are a set of best practices and
typical estimates in the
industry example the estimate
of no three survivor curve is
very unusual and does not
really suit the property study
particularly well.
Additionally I think MR. Enders
testimony did not interpret
historical data is also true
with the net salvage estimates
and made in general I think my
recommendations are better
aligned with the data was
properly interpreted and
analyzed prints in summary
think the other party's
proposals are based on limited
information analysis and failed
to consider the
many ways the
company and really the entire
industry will change in the
coming decades. I think my
regulations for each of these
accounts reflect the future
life and that salvage estimates
life net salvage expectations
based on the information and
data we have today. Thank you I
concludes my summary.
>> teco Attorney: we tender the
spec for
cross-examination.
>> opc: thank you MR. Chair
hello MR. [Listing names] If
you don't mind milliken jumped
right into questioning.
You recommended a 30 year
average
service life for solar
facilities
correct.
>> teco Witness: yes.
>> opc: isn't true that the
teco service life as officers
is 35 years.
>> teco Witness: not exactly.
Based on the settlement of the
prior case if there is a b
35
lifespan and the company
proposed a 30 year lifespan of
the prior depreciation study.
>> Florida Rising:
>> opc: thank you and 2021 you
testified on behalf of florida
power & light companies
depreciation study.
>> teco Witness: yes.
>> Florida Rising:
>> opc: ur b
35 lifespan for
solar facilities.
>> teco Witness: I don't make a
cushion at the request of
witness ferguson ever was a 30
year lifespan for solar
facilities.
>> opc: fpl current levels all
facilities in 35 years.
>> teco Witness: based on the
result of that case.
>> opc: in this case you
provided calculations for a 35
year average service life.
>> teco Witness: I did in my
rebuttal testimony want to make
sure that dk collated
depreciation rates from other
proposals were performed
consistent with how we have
done depreciation studies
everywhere that mary bottle has
money.
>> opc: that's on exhibit any 2
page 1 of
two.
>> teco Witness: correct.
>> opc: your calculations are
not original in support of a 35
year overall service life for
solar generation facilities.
>> teco Witness: I'm not sure I
fully understand the question.
>> opc: are your calculations
for a 35 year service life for
tampa electric solar
generation
facilities reasonable.
>> teco Witness: I've proposed
30 your life I would expect I
believe that to be the most
reasonable. 35 is appose
outside the range of
possibilities I think a 30 year
lifespan is more reasonable
regarding a 35 year lifespan is
reasonable.
>> teco Witness: that is not
what it said it is within range
of potential more reasonable
possibilities for the future.
>>
opc: thank you that's all
from opc.
>> Florida Rising: I just have
very short questions.
Thank you CHAIRMAN Brintnall
good afternoon good
evening.
[Listing names] Generally would
you agree it makes sense as a
practice to match depreciation
with service life?
>> teco Witness: yes.
>> Florida Rising: thank you so
much of those are my questions
.
>> fipug: I just have a few
questions.
In response to the question
about the combined cycle she
said there is a range that is
reasonable what is the range?
>> teco Witness: he asked me
about the solar lifespans.
>> fipug: what was your range
when you said there was a
range.
>> teco Witness: for solar we
typically seen lifespans in the
25-35 year range
kind of the
midpoint of that.
>> fipug: have you looked do
have knowledge a lot of leases
being dealt with solar or 35
years with five years options
those type of things.
>> teco Witness: I'm not sure
if you are referring to any
specific ones I know some solar
cells have leases in the map
during terms.
>> fipug: I'm just asking you
do this pretty regularly with
solar rights?
>> teco Witness: I'm not
familiar with every lease term
until their lease terms and
things like that but I been
involved in the studies that
had hundreds of different solar
facilities.
>> fipug: in europe and he said
the entire industry will change
materially in the
future what
did you mean by that.
>> teco Witness: there is quite
a bit to it.
First of all technology.
Technology has changed a lot.
I look back to when I started
about 18 years ago when most of
the generating fleet was a
coal-fired generation and
things in the past 18 years we
saw that turnover a lot sooner
than people expected.
That is been driven by new gas
fire cycle technology that is
gotten much more efficient and
solar and other things like
that. I think in the future we
will see a lot more of those
type of changes that will
potentially impact the existing
generation might be there new
things without thought of yet.
I think were seeing changes in
load growth electrification and
things like that will have an
impact obviously there is need
to make system resilient and
reliable does a lot of
investments going on.
Really for my experience I
think there is a lot that is
going to change in the coming
two decades.
Hat will impact
public just about everything.
>> fipug: that's all I have
thank you.
>> Mike La Rosa,CHAIRMAN:
>> fea: no questions.
>> Sierra Club: no questions.
>> Fuel Retailors: no
questions.
>> Walmart: no questions.
>> yes MR. CHAIRMAN.
MR. [Listing names] Is it
correct that teco recently
filed an updated revenue
requirement which includes an
increase of battery storage
life from your proposal of
b,10-20 years?
>> teco Witness: I don't know
exactly what was filed my
understanding is that yes they
stipulated to a 20 your life
for energy storage.
>> will that increase in
service life have any impact on
teco's theoretical reserve
balance as of DECEMBER 21 of
2024.
>> teco Witness: yes it will
although was a fairly masses I
would not have it fairly big
impact brian box when you say
you don't expected to have that
much of an impact you have any
sort of estimate or number that
you can give me roughly?
>> teco Witness: that might be
in the I think we did
calculations with the 20 year
period in my rebuttal
testimony.
i don't know I have that
information it is certainly
something that we can
calculate.
>> also want to ask you is it
correct that opc proposed use
35 year service life for the
sole facilities and set up your
30?
>> teco Witness: yes 35 year
average service life instead of
three years.
>> if the commission approved a
b,35 service life what would be
the impact again on the reserve
balance?
>> teco Witness: similarly it
would change.
I don't know thereby have been
discovery that we responded to
that.
>> teco Witness: up or down
with a longer life the
theoretical reserve would
decrease which would it would
make the reserve in balance it
depends on whether positive or
negative number. It
would change
the theoretical reserve which
might make it larger or smaller
depending.
>> thank you I have nothing
further for that witness.
>> Mike La Rosa,CHAIRMAN: thank
you commissioners. Any
questions.
Seeing none I sent it back to
you for redirect
.
>> teco Attorney: no redirect
.
>> Mike La Rosa,CHAIRMAN: let's
talk about exhibits on the
record.
>> teco Attorney: tampa
electric like to move exhibit
26 and 147 into the record.
>> Mike La Rosa,CHAIRMAN: any
objection?
seeing none I sure them entered
into the record.
Opc any of the units.
>> opc: no exhibits.
>> Mike La Rosa,CHAIRMAN: any
other parties have exhibits.
Seeing none thank you for being
here today.
You are excused.
All rights it's about seven
minutes before 6 o'clock I said
we will take a break at 6
o'clock let's take a break
early we can reconvene at 6:30
pm.
We will see you guys then.
>> Mike La Rosa,CHAIRMAN: I
think we are ready to
reconvene.
Where we have left off.
It is now back in teco's hand
to introduce the next witness.
>> teco Attorney: thank you MR.
CHAIRMAN tampa electric called.
[Listing names] To the stand.
>> Mike La Rosa,CHAIRMAN: do
you mind standing up to
administer the oath to swear or
affirm the testimony you're
about to give will be the truth
the whole truth and nothing but
the truth.
Thank you.
>> teco Attorney: good evening.
[Listing names] Would you
please state your full name for
the record.
>> teco Witness: [Listing
names]
>> Mike La Rosa,CHAIRMAN: I
think your microphone might be
off.
The green light?
>> teco Witness: [Listing
names].
>> teco Attorney: who is your
current
employer what is your
business address.
>> teco Witness: [Listing
names] Address 1400 1400 merck
pkwy., kansas city, mo. Spinner
did you prepare and cause to be
filed in this docket and APRIL
2, 2024 prepared direct
testimony consisting of 19
pages.
>> teco Witness: kisha davis.
>> teco Attorney: did you
prepare and caused
to be filed
in this docket on JULY 2, 2024
prepared rebuttal testimony
consisting of 16 pages.
>> teco Witness: yes.
>> teco Attorney: do you have
any additions or corrections to
your
prepared direct or rebuttal
testimony.
>> teco Witness: no.
>> teco Attorney: if I were to
ask you the questions prepared
in your direct and rebuttal
testimony today would your
answers be the same as your
answers contained therein.
>
teco Attorney: MR. CHAIRMAN
tampa electric would like to
prepared direct and rebuttal
testimony of.
[Listing names] To be inserted
into the record is so red.
Did you also prepare and cause
to be filed with your direct
testimony and exhibits marked j
kate 1 consisting
of three
documents.
>> teco Witness: yes.
>> teco Attorney: tampa
electric would note for the
record that exhibit jk one has
been identified in the ctl as
exhibit 27.
Would you please summarize your
prepared direct and rebuttal
testimony.
>> teco Witness: commissioners
i provided direct testimony in
this case regarding the
dismantlement study prepared by
me and my team at 1898 for
electric company. As outlined
in my direct estimate the
purpose of the study was to
review tampa electric's fleet
of generating assets and make
recommendations to the company
regarding the total cost of
this metal the facilities at
the end of their useful life.
My team and I previously
prepared a similar study for
the company in 2020 in support
of the company's depreciation
filing the qantas military
service to update the cost
presented in the 2020 study for
changes to market conditions
physical changes that have
occurred at the plants and
incorporating new facilities
that have been constructed or
acquired since 2020. My team
and I relied upon our vast
experience and in-house data as
well as information from
electric company to perform the
study. The total dismantling
cost is determined by 1898 and
reflected in the dismantlement
study are net of salvage value
for scrap materials at each
plant. This mental exhaustion
study brutalize as an input
into killing dismantlement
approvals in this case.
The estimates of dismantlement
cost were repaired with the
intent of most accurately
representing what 1898 wooden
displayed contractors bidding
to dismantle the equipment
address environmental issues
and restore the site through a
competitive bidding process.
Site-specific cost estimates
were developed using a bottom
up cost estimating approach
request estimates are developed
from scratch through the
development of site-specific
quantity estimates and that the
application of unit pricing
rates to the quantity
estimates.
The dismantlement study is
consistent with the rule 25-
6.0436 four of the florida
administrative code regarding
electric utilities
dismantlement study's inc.'s
methodologies used in prior
studies we are prepared that
have been approved by this
commission and other utility
commissions throughout the
country. And incorporates
industry-standard data. The
study results and cost
estimates are reasonable
estimates and appropriate for
the company to rely on their
dismantlement preserve needs.
My rebuttal testimony addresses
three issues raised by the
direct testimony of florida
office of public counsel
witness was back witness
recommends dismantlement
expense should exclude all
forecasts growth in the
dismantlement cost and expense
beyond the end of the test year
over rule 25-6.0436 four of the
florida administrative code
regarding electric utilities
dismantlement study's
specifically includes
escalation rates used in
converting the current
estimated dismantlement cost to
future estimated dismantlement
cost. It is reasonable and
appropriate that the 2023 cost
I provided my dismantlement
study should be escalated to
future years to account for the
impact of inflation to put them
in the year dollars in which
they will be expended and to
most accurately reflect the
actual cost to be incurred
consistent with this role.
Witness: recommend the of the
dismantlement cost on the solar
generating assets because he
suggest removing or for site
restoration activities each of
these facilities. Rule 25-
6.0436 four of the four
admission of code regarding
electric utilities
dismantlement study's
specifically includes site
restoration and its definition
of dismantling cost. These are
reasonable and appropriate cost
that should be included in the
garden for the solar generating
asset facilities. Just as they
are at the other generating
facilities.
Lastly MR. Collins states that
the company's contingency
assumptions are extremely
speculative and not known and
measurable. Again rule
25-6.0436 four of the florida
mission of code regarding
electric utilities
dismantlement study is also
specifically addressed this
contingency is a component of
dismantlement study spread
furthermore the application of
contingency is not only
appropriate but also entered
industry practice which is been
approved by this commission on
prior cases electric and other
utilities.
This concludes my
summary.
>> teco Attorney: MR. CHAIRMAN
we tender.
Listing names] For
cross-examination.
> opc:
thank you MR. CHAIRMAN and good
evening.
[Listing names]
>> teco Witness: good evening.
>> opc: I will go and
get into
the questioning would you agree
that a lease agreement
typically states the
requirements for the lease land
which the solar facilities
constructed.
>> teco Witness: ps.
>> opc: those requirements MAY
impact decommissioning
assumptions.
>> teco Witness: ps.
>> opc: MAY impact
decommissioning obligations.
>> teco Witness: ps.
>> opc: requirements such as
environmental remediation.
>> teco Witness: test
that can
be one components.
>> opc: requirements are set
restoration.
>> teco Witness: yes.
>> opc: is it true that you do
not review the lease at 25/35
solar sites.
>> teco Witness: some of the
lease agreements were not
available for review.
>> opc: new do not build the
rimadyl remediation performance
for the 25 sites.
>> teco Witness: I don't know
if there were any additional
.
>> opc: can you please answer
the question with a yes or not
then answer the question.
>> teco Witness: yes no I don't
know if there any requirements
specifically stated in those
leases but typically those
requirements are above and
beyond our standards
assumptions for site
restoration would typically
include a minimum
level of site
restoration that is appropriate
and we reviewed those leases to
see if there is additional
requirements beyond those
minimal requirements.
>> opc: thank you for your time
today opc
has no more questions.
>> Florida Rising: thank you
CHAIRMAN Good evening.
I have one question for you
generally
speaking do you teco
future projected peaks
affect
dismantling cost.
>> teco Witness:?
>> Florida Rising: that's my
question.
> fipug: good
evening.
[Listing names] For the.
[Listing names] You mention you
reviewed some places do recall
if those were 35 year leases.
>> teco Witness: I don't recall
it is not looking for the
duration of lease just the site
requirements or site
restoration performance were
included.
>> fipug: you have any
information with respect to
property owners possibly not
wanting to solar facilities
removed from their property if
they are continuing to produce
energy. If that was the case
there would not be any
dismantlement cost associated
with that correct.
>> teco Witness: are not aware
of any of the leases I guess
I'm not quite sure I understand
the question.
>> fipug: if you own the
property and lease it for 30 or
35 years to a utility utility
comes in and put a bunch of
solar assets on it but say
after 15 years they said you
know what there are no more
efficient solar and they put
solar assets on it have another
15 years on the lease at the
end if the landowner had the
option to say thank you the
lease is over.
Go about your business you
don't need to get the solar off
the property.
Just leave it here I will take
it over I will sell the energy
from it.
And operate the solar field
have you ever seen that or her
of that.
>> teco Witness: I've heard of
it being an option in the
lease.
Our studies are all looking at
the liability at the end of the
useful life of the facility.
This is what is the cost for
restoring the site and that
obligation is still typically
on the utility at the end of
the life to take it out.
>> fipug: if you're looking at
a lease and saw that provision
would you make an adjustment
for that?
Or would you assume that they
will come get this up and have
to take it out?
>> teco Witness: I haven't seen
leases that include the option
for the owner to make their
decision about living in things
like
, roads at a windfarm or
things like that. But the
obligation is still always on
the lessor I'm sorry to lessee
the utility to take out
everything at the end of life.
>> fipug: that's all I have.
>> fea: no question thank you
.
>> Sierra Club: no questions
MR. CHAIRMAN
.
>> Florida Retail Federation:
no questions.
>> Walmart: no question thank
you.
>> no question thank you
.
>> Mike La Rosa,CHAIRMAN:
commissioners see none teco
back in your hands for
redirects.
>> teco Attorney: no redirects.
>> Mike La Rosa,CHAIRMAN: let's
talk about exhibits teco any
exhibits to enter into the
record
.
>> teco Attorney: yes MR.
CHAIRMAN we would move exhibit
27 into the record please.
>> Mike La Rosa,CHAIRMAN: any
objection I show that entered
into the record opc none any
other parties that have
objections seeing non-excellent
. Thank you for being here
today you are excused.
Teco back in your hands to
produce your next witness.
>> teco Attorney: I will do the
oath if you don't mind stand
and raise your hand to affirm
that this is the money you're
about to give is the truth the
whole truth and nothing but the
truth.
>> teco Witness: yes.
>> Mike La Rosa,CHAIRMAN: thank
you.
>> teco Attorney: good
evening.
>> teco Witness: good evening
spinning can you state your
full name for the record.
>> teco Witness: [Listing
names]
>> teco Attorney: who is your
current employer and what
is
your business address.
>> teco Witness: it is.
[Listing names] My business
address is 3000 atrium way
suite 200 in mount laurel new
jersey.
> teco Attorney: did
you prepare and caused to be
filed in this docket and APRIL
2, 2020 fourth prepare direct
testimony consisting of 92
pages
.
>> teco Witness: yes.
>> Fuel Retailors: you prepare
and cause to be filed in this
docket on JULY 2, 2024 prepare
rebuttal testimony consisting
of 135 pages.
>> teco Witness: yes.
>> teco Attorney: you have any
additions or corrections to
your prepared direct or
rebuttal testimony?
>> teco Witness: no.
>> teco Attorney: if I were to
ask you the questions contained
in your prepared direct or
rebuttal testimony today would
your answers be the same as
those contained therein.
>> teco Witness: they would.
>> teco Attorney: MR. CHAIRMAN
electric requests that prepared
and direct and rebuttal
testimony of.
[Listing names] Be inserted
into the record as though
ready.
Did you also prepare and cause
to be filed with your direct
testimony and exhibits marked
dw d 1 consisting of 15
documents.
>> teco Witness: ps spinning
did you also prepare and cause
to be filed with your testimony
and exhibits marked dw d 2
consisting of 19 documents.
>> teco Witness: yes.
>> teco Attorney: MR. CHAIRMAN
tampa electric would note for
the record that exhibits dw d 1
2 have been identified on the
cl as exhibit 28 and 148.
Would you please summarize your
prepared direct and rebuttal
testimony.
>> teco Witness: good evening
commissioners thank you for the
opportunity to appear today. My
name is.
[Listing names] I'm a partner
at scott madden inc. The
purpose of my testimony is to
provide a recommendation
regarding the return on common
equity referred to as are we
our cost of equity. For tampa
electric company.
Which I also referred to as
teco. As well as provide an
assessment of the company's
capital structure is to be used
for ratemaking purposes.
Please note I felt direct
testimony and exhibits on
behalf of teco as well as
submitted rebuttal testimony to
respond to the florida office
of public counsel or opc
witness.
[Listing names] Federal
executive agencies or fea
witness christopher walters
florida retail federation or
afar witness stephen chris.
[Listing names] With respect to
the companies roe in this case
I will refer to those parties
as the intervener roe
witnesses.
In a few of current markets and
the results of my analytical
models presented in my
testimony the reasonable range
of roe applicable to teco is
between 10.31% and 11.93%.
Within that range I recommend
that the commission to
authorize and roe of 11.50%.
My recommended roe considers of
various factors to get sitter
the required return to the
equity investors of the
company.
My testimony discusses the
multiple analytical approaches
that were evaluated to develop
my roe recommendations my
testimony explains that no
single model is inherently so
precise that it can be allowed
on to the exclusion of other
theoretically sound models.
Using multiple models as a
liability to the estimated
common equity cost ratio and
supported both the financial
literature and regulatory
precedent.
My testimony explains how the
analysis to determine an
appropriate roe is affected by
the various business and
financial risk faced by the
company.
My roe recommendation also
considers factors as effective
rotation cost of the company's
bond rating. As well as the
company's high level customer
growth whether risk and capital
investment plans relative to
the companies in the proxy.
The analysis presented in my
testimony support the company's
requested ratemaking capital
structure which includes a
common equity ratio of 54%.
That common equity ration is
consistent with equity ratio
maintained by the proxy groups
and their operating utilities
subsidiary companies.
Finally my testimony response
to the issues raised by the and
addresses the shortcomings
within the intervening roe
witness testimony none of the
arguments changed by conclusion
that the company should be
authorized an opportunity to
earn a roe of 11.50% likewise
the analysis should not
persuade the commission to
approve a roe for teco up below
my regulation. That includes my
summary.
>> teco Attorney: we tender.
[Listing
names] For
cross-examination.
> opc:
good evening.
[Listing names] How are you
doing.
>> teco Witness: doing well.
>> opc: I would ask you to take
a look at let me start with
this, you have testified or
filed testimony in a proximally
150 predatory
proceedings
correct.
>> teco Witness: yes.
>> opc: it would be true to say
in all of those cases you
testified on behalf of of
utilities right.
> teco
Witness: yes.
>> opc: let me direct your
attention to page 19 of your
testimony.
>> teco Witness: yes ma'am
.
>> opc: it looks like we are
there as well. In this section
of your testimony this is where
you start your discussion about
capital structure.
>> teco Witness: yes the bottom
of page 19 starting at line
22.
>> opc: okay.
am I correct that tampa
electric is requesting a
capital structure of 41.57%
long-term debt and 54% equity?
>> teco Witness: common equity
yes.
>> opc: you use a proxy group
to be representative of teco
and the equity ratio and the
return on equity it
should
receive correct.
>> teco Witness: yes ma'am.
>> opc: in looking at page 23
of that testimony of your
testimony, [Unclear audio].
I'm assuming you are looking at
918.
Of that portion?
>> teco Witness: you mean lines
9-18?
>> opc: let me get there just
one second?
I'm specifically looking at the
sentence that starts at line
18.
It says the equity ratios of
your proxy group of companies
range from 28.9%-56-56.13%
for the fiscal year 2022 as
shown in pages three and four
of your document number three
is that correct.
>> teco Witness: that is right.
>> opc: would you agree the
simple average for the 14
companies in your proxy group
is a 33 is a 33.46% equity
ratio subject to check
.
>> opc:
>> teco Witness: if you look at
document number three page 4 of
five there is the simple
average of the proxy group
companies.
That is there.
The common equity ratio the
simple average is 41.49 but my
testimony faith that the 54%
equity ratio is within the
range of capital structures
,
maintained by the proxy group
person and their operating
subsidiaries. Like I said it's
appropriate because it is
representative of an electric
utility company.
>> opc: just want to make sure
heard you correctly.
This simple average which you
said you calculated is actually
44%?
For the proxy group.
>> teco Witness: no it would be
bates number I guess 107.
>>
opc: I'm sorry which page are
you looking at it and if you're
looking at document number
three page number four go to
the bottom it says proxy group
14 electric utility companies.
You will see the average of the
14 utility companies it is 55%
or 55.3% long-term debt.
2.72% short-term debt.
0.49% preferred stock and 41.49
common equities do you see
that?
>> opc: that is what I'm trying
to say.
>> teco Witness: it is up
there.
>> opc: I'm seeing that now.
That is divided by years
correct
.
>> teco Witness: if you look at
the top row of that schedule
you will see it is 2022 /2021.
What I was looking at their
four 2022 is that number.
>> opc: okay.
You are just looking at 2022 of
the five year average for the
proxy group would be 53.4%?
>> teco Witness: the long-term
debt ratio is 53.4%.
>> opc: the five year average
for the
common equity is 43.26%?
>> teco Witness: that is
correct.
>> opc: you would agree based
on this average that we've
looked at on page 4/5 the only
company actually let me take
you to page 3 of this exhibit.
The only company that I see
that has a higher equity ratio
then tampa electric is I corp.
Which is an equity ratio of 56%
is that correct
.
>> teco Witness: that is
correct like a said my
testimony is that it is
consistent with the range if of
both the holding company and
the operating subsidiary
companies of the proxy group
companies if you take a look at
the page 5/5 of that document
you'll see that a lot of the
operating companies are in that
low 50 52 mid 50 range.
>> opc: these were at the proxy
group companies that you
actually chose as a
preventative correct
.
>> teco Witness: the issue with
using operating subsidiary
companies in a roe analysis is
that you cannot use them is
they don't have the market
data. In an ideal world you
would have publicly traded
utility companies to do your
roe analysis. In this case you
have to use these holding
companies.
The more appropriate proxy when
you look at the appropriate
capital structure would be the
operating subsidiaries. But
anyway you slice it if you use
holding companies
.
>> opc: commissioners can I ask
to answer the question that
asked witches this was the
proxy group that he chose?
That was the question.
>> Mike La Rosa,CHAIRMAN: if
you have a sufficient answer to
the question let's move on to
the next question.
>> opc: thank you.
Conversely the lower the
percentage of the debt the
company
has in its capital
structure the lower the return
on equity or exposure to
financial risk the common
equity investors expect correct
.
>> teco Witness: can you repeat
that please.
>> opc: let me ask you this
first brian would you agree
that the higher the percentage
of debt in the capital
structure fire at the financial
risk the common equity owners
they would expect a higher
return on common equity
forbearing desire financial
risk?
>> teco Witness: agree.
>> opc: conversely, the lower
the percentage of debt the
company has in its capital
structure the lower the return
on equity for exposure to
financial risk the common
equity investor would expect?
>> teco Witness: this is all
equal.
>> opc: all else being equal.
>> teco Witness: then I would
agree with you.
>> opc: looking at your
document number one your
exhibit 1 document number two
let me see if let's get there.
Okay, this shows the models
that you used for excuse me
preparation of your recommended
roe correct?
>> teco Witness: yes ma'am it
was superseded in my exhibit dw
d 2 my initial analysis is what
you are referring to.
>> opc: in other words this is
your 4 miles that you use with
your updated results.
>> teco Witness: the government
did not rely on the non-
regulated proxy group in this
case nor did I rely on the
pr/pm in this case. Just
predictive risk model.
>> opc: we will get that in the
second.
In this case you are
recommending a roe of 11.5 is
that
correct.
>> teco Witness: that is)
.
>> opc: you are recommending
the 11.5 a roe despite the
company's capital structure and
that cost.
>> teco Witness: despite?
I'm going to disagree with your
question. If you look at dw d1
or d to schedule a tour
document to the first thing you
do you look at your model
results then you compare them
with you compare teco with the
proxy group company.
To figure out whether or not
they have extremely risk or
not. When you look at lines 6
and seven on document number
two page number one. You will
see that the credit risk
adjustment on line 6 is a
negative risk adjustment. Based
on bond spreads.
Credit rating is a common
measurement of both business
and financial risk. Any type of
lower financial risk that the
company has like a higher
equity ratio would
>> opc: you would agree that
the negative credit risk
adjustment is your adjustment
because teco is less risky than
the proxy group that you chose,
correct?
>> teco Witness: as far as
credit risk, yes.
>> opc: in this document the
report to results for your
approaches is that correct?
>> yes.
When includes the prpm and one
excludes it.
>> opc: okay.
Now, looking at the column
which shows the results with
dep rpm which the commission
rejected previously, you would
agree that this commission
previously rejected the
approach because the results
could not be duplicated,
correct?
>> I do not agree.
I have given the commission
staff ample opportunity to
access my model and they have
not taken it up, or taken me up
on it.
In the people's case or in this
case.
>> opc: that was not the
question.
My question was whether the
commission rejected it because
they said they could not
duplicate the results.
Is that correct?
>> you will have to point me to
where it says that.
>> opc: looking at your range
of results with indicative
common equity and cost rate
before adjustments.
If you look further down
indicated in common equity cost
rate after adjustments.
those are your ranges based on
the four predictive models,
correct?
>> teco Witness: no.
I have it in my testimony.
I will just point to this
document instead.
If you look at line number 5,
it is the low number which is
the dcf model.
And the high model from the m
model does not contemplate or
use the fourth line which is
the market models comparable
risk.
It is the three models, the
dcf, the risk premium model.
>> opc: with that caveat that
the market model is applied,
nonprice regulated companies
were rooted from that range.
That the range of results
online five and then further
down with your other
adjustments, those would be the
results from the remodel
correct?
>> teco Witness: yes.
That is correct.
In that range without dep rmp
is with your adjustments as 9.9
to 12.42 correct?
>> teco Witness: yes.
Correct.
>> opc: isn't it true that your
recommended roe is above this
range which would be 11.16?
>> teco Witness: yes.
But I did explain why went
above the range in my rebuttal
testimony.
Believe it is
easier to show you on the
graph.
If you would turn to exhibit
dwd to.
>> teco Witness: I disagree.
You asked how it was and I am
explaining why it was.
>> teco Attorney: let's move on
to the next question.
Would you agree that teco has
not paid any location cost?
>> teco Witness: when you talk
about flotation cost equity
that's is infused has flotation
costs.
And they have to be returned
back or they will not be able
to attract the capital that
they are supposed to.
>> so the answer to my question
is no.
>> teco Witness: yes.
But when you're talking about
the cost of capital you have to
cover the flotation costs from
the parent company.
If you do not, they will not
get their full return on
investment.
>> so, and other words the
flotation cost that you have
included are costs that they
have for issuing stock on their
behalf correct?
>> teco Witness: the flotation
cost which you are including in
this as an adjustment is a cost
that is born by the company.
>> teco Witness: not exactly.
When we issue the stock, they
incur costs.
When it is in the form of a
percent.
If you take a look and this is
where I have to explain this.
If you look at document number
9 page 1 then you will see the
issuances.
Those issuances like I said
document nine page one of one.
The flotation costs are
expressed in percent.
So it is two percent of what
the net proceeds are.
>> teco Attorney: can I ask a
question and get him to answer
a yes, sir no?
>> opc: please restate the
question.
>> teco Attorney: is a correct
that they are issuing stock at
their level?
>> teco Witness: yes.
>> teco Attorney: thank you.
I'll move on.
He highest roe
is 12.9 percent for your
nonregulated group, correct?
>> teco Witness: it is 12.95.
>> okay.
You did not include that in
your range correct?
>> I did not.
>> looking at document three,
your cash flow model is 9.89
percent, correct?
>> teco Witness: it is
superseded by my rebuttal
testimony.
And that result is 10.29
percent.
If you look up dwd, a
discounted model using updated
data is 10.29 percent.
This model does not require you
to estimate risk, correct?
>> the risk is in the stock
prices which runs in the
dividend yield.
I am not estimating risk.
It is estimated in the price
that we used to calculate the
model.
>> teco Attorney: so I believe
the answer to my question is
yes.
You did not calculate risk.
>> teco Witness: the point of
every cost of capital model is
to get a measure of risk to
have a return on the risk.
So, in that aspect the answer
is yes.
>> teco Attorney: your two
highest results are for your
risk premium model, is that
correct?
>> teco Witness: yes.
>> teco Attorney: and in both
of those you had to give a risk
premium for those is that
correct?
>> teco Witness: yes.
>> teco Attorney: you would
agree that the 30 year treasury
is about 4.61 percent.
Is that current?
>> it is not.
>> what is the current 30 year
treasury yield?
>> I believe it is around 4.2.
It is generally around her
projected interest rates.
So, it is not, the current
interest rate sometimes is not
as accurate or applicable as
the others.
>> teco Attorney: you would
agree that the 30 year treasury
yield is down about five
percent from earlier this year
correct?
>> teco Witness: yes.
But it is up one percent from
the pandemic.
>> teco Attorney: and you have
included a credit risk
adjustment for your roe
correct:
>> teco Witness: that is
correct.
>> teco Attorney: would you
have any reason to disagree
with me if I said, are you
aware that the commission has
recently approved a 10.3 rop
for duke energy operating in
florida?
>> MR. CHAIRMAN, same
objection.
Which is f21 6124.
This is opc's exhibit of the rr
inventory of awarded and
historic roe's.
>> MR. CHAIRMAN, I would object
to this as showing out-of-state
decisions that are irrelevant
in this matter.
i request other utilities that
fit these conditions.
>> not the kind that this
commission considers.
>> one, I think we've already
admitted the exhibit.
Two, the gentleman is actually
estimating roe's based on what
the market will actually hold
and approve.
And what kind of competition
for capital that teco would
have to be up against.
In fact, approved roe's are
extremely relevant information.
He is the witness.
So he would be the person to
ask about this information.
I do think it is highly
relevant.
>> and this was entered into
the record.
>> this is the exhibit that MR.
Weiland took issue with.
>> could I approach the witness
and provide him a copy with of
this.
>> approved.
>> could we have a couple
minutes to confer with the
staff who deals with this on a
regular basis?
That would not be me.
>> absolutely.
Let's take three minutes.
>> just rehashing a little bit
of all discussion.
Let's reconvene.
And I will go to marianne on
what we just discussed.
>> thank you MR. CHAIRMAN.
My suggestion is to go forward
and allow MS. Christiansen to
ask a couple of questions.
From there, I think you can
determine whether we think that
the questions are relevant to
this proceeding in the way that
this commission sets the rotc
based on the filings that have
been made.
>> commissioner, MAY I be
briefly heard?
>> yes.
In order number pse 2023 038
eight fo
, the rate proceeding
on page 71 and the conclusion
staff indicated that it relied
on, I apologize.
The commission relied on the
national average of awarded
roadies of approximately 9.5
percent and should enable us to
enable the cash flow for
near-term financial obligations
and make the capital
investments needed to maintain
expanded systems to fund
unexpected events and sustained
confidence in florida's
regulatory environment among
the created agencies and
investors.
This is the type of information
that this commission has relied
on to make a recommendation.
I would suggest that this is
highly relevant information.
I am sure if the company
believes that we are being
repetitive they can certainly
make whatever interjections
they like at the time.
But I believe I should be given
the leeway necessary to explore
this relevant information.
>> I will not respond by saying
this is in the record.
If we want to spend the next
three hours having our witness
questions about what ever other
information they have about
other states, I guess we can do
that.
But we are trying to move this
thing along.
I know it does not feel like
it.
But the commission has
historically relied primarily
on the models and the models
are not based on returns or
requested returns.
This is in the record.
I hope we do not have to go
line by line through every one
of these decisions and talk
about it.
I was asked yesterday to object
to early.
So that is what I am doing.
>> okay.
I will allow the questions to
start.
We will take the direction and
see how relevant they are in
comparison.
And of course how the witness
answers.
I will allow questions to
begin.
>> MAY I approach the witness
to give him the larger copy?
>> yes.
Thank you.
Are you familiar with smp's
capital iq rate history?
>> yes.
>> and you would agree this is
the summary of awarded
summaries by smp.
Otherwise you are generally
familiar with the content,
correct?
>> I have not gotten through
the entire document.
Is there pending roe's, further
down?
>> looking at page I think it
is the last page of the
document.
This list of pending cases.
Do you see that?
>> sure.
>> there are cases listed there
for pennsylvania electric and
pennsylvania power.
O you see
those?
>> do you mean the next next to
the last page?
>> yes.
Do you see that there is a
request for an 11.3 percent are
oe?
>> yes.
I am the witness in that case.
>> so you are the witness in
those cases.
Are you also the witness in
the.
[Listing names] Case?
>> no.
Do you know.
[Listing names]?
>> professionally, yes.
>> and are you closely aligned
with him in providing these
roe's on behalf of the
utilities?
>> I disagree with everything
you just said.
>> in 2020 when did you conduct
his testimony in a kentucky ray
case?
>> he was in a coma and the
company reached out for me to
do what was it, it was
discovery responses.
So no I did not adopt his
testimony nor defendant.
While he was in the hospital
recovering, I did the right
thing and gave responses to
discovery for a client that we
share.
>> okay.
One moment please.
I think that MAY be all the
questions I have for this
exhibit.
There MAY be others.
Sure.
Okay.
Are we ready again?
>> yes.
>> would you agree that the
florida commission has made roe
rewards that are higher than
the national average?
>> yes.
I would like to take some time
and talk about that.
>> I will object.
This is going well beyond.
I did not even ask him the
question.
>> would you agree that doctor
woolrich has recommended a roe
of 9.54 teco?
>> yes, in this case, yes.
>> isn't it true that on page 9
of your direct testimony, line
14 that you acknowledged that
authorized roe's, I believe
this is actually on your
rebuttal testimony.
>> yes, ma'am, I am there.
>> looking at line 14 which you
acknowledged that authorized
roe's are reasonable benchmarks
of acceptable roe's?
>> the end of the sentence says
they do not reflect the current
cost of common equity.
>> if you go to the top of the
next page, you then claim that
simple comparisons of roe are
of little value, correct?
>> yes, ma'am. They are not
timely.
They do not reflect the risks
of the specific companies
involved.
Some of these, if we want to go
back to this, you could take a
look and see that you have
companies that start their rate
case in 2020 and do not get
resolved until 2022 or 2023.
Even though the data MAY seem
recent, it is not recent nor
timely.
>> I believe he is going past
the questions.
>> do you know what the most
recently authorized roe was?
>> fully litigated?
>> no.
settled.
>> objection.
>> sustained.
>> hold on.
Can I have just a moment
please?
>> sure.
Let's take two minutes.
>> MR. CHAIRMAN?
Yes, sir?
>> public council is in a
difficult spot.
We asked the question and we
were given an answer.
We have a document from the
state of kentucky, in order
that shows that the witness's
statement was inconsistent with
the state of kentucky's order.
We have no way of impeaching
the witness.
We have advised council for the
company about the situation.
It is a serious matter and we
need to get to the bottom of
it.
>> we are happy to have them
read the order to him.
He can answer if he thinks that
is what happened.
This is not a big deal.
We are not going to get hung up
on whether or not the document
is in case center.
>> we heard testimony that did
not adopt testimony.
When he said that, we abandoned
a plot of questioning about
321.
I don't know if it's possible
here to get a court reporter to
read the question back.
But this is a serious matter.
>> I have suggested that they
just ask about the order.
And then see what happens.
>> I will go to my advisor from
a procedural position.
>> MR. Wallin, as I understand
it has offered to allow
cross-examination about the
order from kentucky.
It seems to me that we could go
forward on that way.
Do we need to stop and make a
couple of copies of the order
for people to have it?
>> okay.
>> so, procedurally they will
make the copies is there
anything else that we need?
Should we awake the copies?
>> before we do that, is there
anything else that we need to
do to instruct during this time
out?
>> not that I am aware of.
I'm not sure if anyone else has
the suggestion.
>> let's take five minutes.
When the copies are ready we
can reconvene.
And then we will go from there.
>> certainly.
Thank you.
>> we are good.
All right.
Let's reconvene here.
I will go to opc who handed out
some paperwork.
>> yes we did.
Once we are ready to roll,
>> before we get started, we
are getting a couple of other
items printed out that are
relevant to this.
I do not know if you want to
wait for all of it.
>> I do.
I would prefer not to stop
again.
How far along are we in that
process?
>> I am not sure who is doing
the printing.
>> let's hold tight and not go
too far.
We will reconvene once
everything is back.
>> commissioner, they MAY have
their copies ready by the time
redirect is up.
He can introduce those as part
of his redirect.
We can continue to move along
if that is the CHAIRMAN's wish.
>> let's still hold for a few
seconds.
But I MAY take you up on that.
>>.
>> okay.
Let's go ahead and get started.
There is something printed but
we should have it shortly.
We were about to start to talk
about the other things.
>> have you had an opportunity
to have a conversation with
your attorney about the order
that I am about to show you?
>> yes.
>> for clarification of the
record, can we ask that the
court reporter read back the
question regarding the kentucky
in the adoption of the
testimony in kentucky in your
response.
>> court reporter, is that
possible?
We MAY have to give a bit of
direction.
>> how far back?
>> I don't think it was too far
back.
>> I would say in the last two
or three minutes.
>> I will give her a moment to
find it.
>> take your time please.
>> if you could play back the
question in response, that
would be helpful.
Thank you.
>>
[Audio unclear]
>> thank you MADAM Court
reporter.
Sir, can you see the order from
the commonwealth of kentucky
and the matter of electronic
application of delta natural
gas company inc. For an
adjustment in its rates for
being public convenience and
necessity case number 2020
100185?
> I do.
>> can you read the second
paragraph of that order on the
first page?
>> sure.
>> in support of this motion,
delta explains that it learned
on JULY 20 that one of its
witness MR. [Listing names] Was
in a bicycle accident which
prohibits him from giving
responses.
Further it delta states that we
have adopted another person for
direct testimony which seeks an
extension of time.
>> let me take you back to
exhibit 96.
Which is the list of the rra
comparative.
Do you see on that second to
last page where it says
pennsylvania light company?
>> yes, ma'am.
>> well, not yet.
But I am sure it is there.
>> yes.
And do you see the 11.5 percent
there?
>> yes, ma'am.
>> is not testimony where he is
seeking an 11.5 are roe.
>> I have no further questions.
>> commissioner, could I get
the order marked for
identification?
Or given an identification
number to move it into evidence
at the end?
>> let's give it a number.
I will have to ask my staff for
a little bit of help.
>> MR. CHAIRMAN, I do believe
that is 839.
>> thank you.
>> moving on to
florida rising.
>> good evening MR. CHAIRMAN.
>> good evening!
>> if I could direct your
attention to master number
83443.
It should splash up on your
screen.
This is from admitted exhibits
staff 177.
So, this document contains the
reference documents for your
testimony.
Is that correct?
>> okay.
The specific one that we are
looking at is the smp global
rating score snapshot.
If you look at the bottom of
the page there is a key
strength that the electric
company says that this is a low
risk utility.
Is that correct?
>> yes.
It is the same description it
gives to every single utility
company that it covers.
>> as a key risk it says very
large capital programs will
pressure credit metrics.
>> yes, sir.
>> if I could direct your
attention to two pages later.
>> that is 23632.
On the bottom.
>> yes.
That is correct.
>> it says that the negative
outlook on tec reflects the
negative outlook of its parent.
[Listing names].
It reflects its current minimal
financial condition from the
downgrade threshold.
>> yes, sir.
>> if I could direct your
attention to master number
e3454 within the same document.
>> you said e3454 correct?
>> yes.
This would be moody's credit
opinion for teco from DECEMBER
2023.
If I could direct your
attention to the last paragraph
of that page.
It says that tampa electric's
credit rating is restrained by
the week parent company of its
parent company.
Most notably, this puts
pressure on tampa electric.
Therefore they MAY rely more
heavily on tampa electric and
MAY need the utility to
upstream dividends for high
company debt and other
obligations.
>> did I read that correctly?
>> yes.
If I could direct your
attention next to master number
83459.
This is just a few pages down.
That is part of that same
document.
It says under the second
heading that they issued a
significant amount of debt and
subordinated hybrid notes to
finances acquisition of.
[Listing teco.
Is that right?
>> yes, sir.
>> you are not aware of any
time that you have recommended
a lower returnreturn on equity
correct?
>> I am not aware.
>> as far as you are aware of,
as far as their subsidiaries,
the author's return is highest
at teco.
>> yes.
Based on basis points.
Ask and that is at the current
authorized rate of return
correct?
>> that's right.
>> you say that the roe should
be raised correct?
>> yes.
Based on my analysis.
>> who would agree that canada
generally has lower roe's?
They provide an opportunity for
higher return as compared to
for example, nova scotia power?
>> yes.
This was all in my deposition.
We were talking about how other
canadian companies have
invested in american companies
because generally, the risk is
the same but the return is
higher in america.
Given basic financial precepts
you will want to spend money
where you can get the highest
return.
>> other than in alaska you are
not aware of any other
utilities being returned 11.5
percent or higher?
>> I am not aware.
But we use it generally this
stuff.
They don't have an entire
picture of roe's.
But generally, no.
Not at the size.
>> and just to clarify your
testimony.
You are not offering an opinion
on whether customer costs are
reasonable, correct?
>> correct.
My testimony is the appropriate
rate of return that investors
require on, equity investors
require in teco.
>> thank you.
>> I have a handful of
questions.
I would like to refer to the
witness if I could just
briefly.
They have a chart that MR.
Pollick will talk about
tomorrow.
It has not been admitted yet.
It is 6027? 2859.
It should be pulled up on the
screen in front of you.
>> this is a two-page chart.
This is the first page.
Page one of two.
And on the second page the
screen will need to be scroll
down.
That is the second page.
I know you briefly looked at
the first page.
Do you see any cases in their
that you testified upon on the
first page?
>> louisiana southwestern
electrical power company.
>> that is number 5.
>> yes.
Number 5, number 9, maybe
number 20.
I did testify in kentucky.
I do not know if it is the
recent one or not.
21, if we go on the next page,
50.
>> 50.
Yes.
What they did is similar to the
other exhibit where he has gone
back and looked at the last
couple of years and looked at
the roe's that have been
reported.
And has calculated an average
for 2023.
In an average for 2024 of 9.72.
Is that correct?
>> that is correct.
>> I assume that you identified
and testified about all of
those with the exception.
Number 8 in california.
They all ended up at
single-digit roe.
is that correct?
>> yes.
There were some gas cases that
were over time.
But they are not on this list.
>> I want to spend a moment and
talk about what has been done
here.
I think walmart has a similar
approach.
I asked the PRESIDENT Yesterday
whether this type of
information had a lot of
comparisons being made.
This type of information is
probative and meaningful.
He said yes.
Do you similarly agree that
this can be used as an approach
to roe.
It is different ways of perhaps
getting to a similar point.
It's a long-winded question.
But if you can answer it I
would appreciate it.
>> sure.
I will start with no.
It is because of a couple
things that I said earlier.
There are different companies
with different sets of
circumstances.
All you have to do is look at
the people discuss and what the
commission did in that case.
They ran their models and
looked at the companies.
They looked at the models and
then they made the
determination.
MS. Christiansen was right when
she read her order.
But, they did not adjust their
model results up or down based
on what the average was.
So it MAY be a guidepost.
But like the commission has
done so much in the past and
what they should continue to do
is to follow the model.
the model is the market.
The outcomes of these cases are
results of things like this.
Where I have my number, the
doctor has his number, MR.
Walters has his number and it
is up to the commission to try
and balance those interests.
My opinion is that the roe is
11.5 percent.
A lot of the parties don't have
that.
But when you are talking about
using that as market data, it
is not.
Because it does not move with
market rates.
When the stock price changes,
or dcf changes.
Everything affects everything.
These are stuck in the mud.
There are several different
things of why you do not use
author's returns as reference
to roe.
That is your opinion, correct?
>> yes.
>> and you are aware that
others have different opinions.
Orrect?
>> no.
The witnesses that are expert
witnesses and they do these
types of things, they have
these models and don't use
author's returns.
And neither does MR. Walters.
And neither does MR. Garrett
before him.
One of the
witnesses use author's returns
as their number.
As opposed to some of the other
witnesses.
It is not high or low.
He does not say what number he
wants.
He just cautions you about one
thing or another.
>> the five cases that you
testified here today, do they
all go through the process that
you are describing?
>> the models that you use and
the discounted cash flow model.
Do they provide that testimony
in the five that you referenced
here?
>> yes.
Because you bring it up?
If it is settled, it is based
on other things.
If you could bring that exhibit
up again,
>> there is nowhere that tells
you if it was or it was not.
>> here is the question.
With respect to the ability, if
all the states do these things
with these approaches and this
is a high-level document that
just says well, they don't all
work, here is where the rates
are.
That is a way in which you
could determine relevant
information.
Do you agree with that?
>> I do not.
>> there are further reasons
why I said it already.
>> if you are satisfied with
the answer, that is
satisfactory.
>> were you here today or did
you listen to the witness talk
about how duke establishes
their salaries?
>> which witness?
>> I do apologize.
Teco.
It was a witness today from
teco who talked about how they
establish their salaries.
Are you familiar?
>> no.
>> do you know that some
utilities use the median as a
way for establishing salaries?
>> some utilities will use a
median to look at their other
utilities and say what is the
median price that other
utilities are paying executives
for a way of making a decision?
>> that is not relevant.
It MAY be relevant to how you
do compensation.
>> I will ask the question.
If this similar to teco?
>> this is a comparison of the
median.
It is the same thing.
It's just the point I wanted to
make.
>> sierra club?
>> f rf?
Thank you MR. CHAIRMAN.
Good evening.
Quick question if I could ask
MR. Schultz to please bring up
what is identified as f rf
five.
They are in our exhibit list.
F7? 44 and f7? 79 is the
first page.
These are simply copies of hope
and bluefield to which you are
referring your testimony.
I would just like to say yes,
this is what they are.
Thank you.
I will move these later.
But that is all I need to do
with those for now.
I will ask a few questions.
About exhibit 321 out of
respect for my friend and
everybody's time, I will
condense my questions and not
go line by line.
I have identified results for
several of the operating
companies that are owned by the
parent companies in your proxy
group.
Your proxy group is as shown on
page 19 of your direct
testimony, correct?
> I do
believe I updated it.
But I get the just.
>> I will ask you is this
company owned by such and such?
And then we will go on from
there.
I don't think it will take
long.
Is it true that duke energy
carolinas into energy progress
are owned by duke energy
corporation?
In wisconsin power and light is
owned by.
[Listing names].
Brooklyn general electric
company appears to be the same
name as the operating utility
company.
Is that correct?
>> it MAY be the only operating
company that is publicly
traded.
>> and they are owned by
southern company?
And nsp is owned by xl?
> it
is.
>> thank you.
>> my next question is very
simple.
Would you agree that the smp
global exhibit compilation that
is shown as exhibit 321 which
does include both recently
awarded and pending rate
increase requests shows what it
purports to show.
>> yes.
Thank you.
>> if we could go back to the
document that MR. Boyle was
just asking, it is identified
as c 27? 2859.
In your discussion with MR.
Boyle just now, you identified
several of the cases in which
you testified.
My question for you is which of
these are operating utility
companies owned by members of
your proxy group?
If you could just run down the
list, that would be great.
>> out of these 52 companies,
you want me to tell you which
ones I testified for and if
they are a member of my proxy
group?
>> no sir.
I just wanted to ask you which
of these are members of your
proxy group?
You already told us which ones
you testified in.
>> I believe it is five, nine,
12, 13, 15, 18, 20, 21, 23, 25,
26, 35, 36, 39, 31, I think 42
came in on my rebuttal.
43.
And 52.
And this is just looking at it
now.
I could have gotten some and
missed some.
But looking at it right now,
that is what sounds about
right.
>> thank you.
>> are you aware of any
evidence that any of these
utilities, the ones that you
just identified as members of
operating utility companies
owned by the members of your
proxy group, any evidence that
any of these utilities has not
been able to provide safe and
reliable service?
>> I cannot tell you.
>> similar question any
evidence that these utilities
have not been able to obtain
significant capital?
>> I could not tell you.
>> I'm pretty confident that
you are aware that since
JANUARY 2022, tampa electric
has operated first, for the
first six months of an.
during that time, their equity
ratio has been 54 percent,
correct?
>> yes.
>> are you aware of any
evidence that they have been
unable to provide the needed
capital to provide service at
the time?
>> I do not think so.
>> are you aware of any
evidence that in 2025 tampa
electric would not be able to
obtain the needed capital to
make the necessary investments?
>> I do not know.
>> is it not true that tampa's
affiliate has been able to make
needed investments with rates
based on its approved board of
public service commission
approved roe of 10.15 percent
since the rates took effect in
JANUARY of this year?
>> I am not part of the
treasury team.
I do not know what kind of
issues they have raising
capital.
>> I will ask you a similar
question.
Have you been aware of anything
that they have not been able to
make and necessary investments?
>> I do not know.
Probably, probably not.
>> and you were a witness in
the case correct?
>> yes I was.
>> I think we have covered
this.
Is it true that the 10.15
percent at the psc approved for
peoples was 65 basis points
above the us national average
for gas utilities.
>> yes.
Octor shows how
little weight the commission
staff have on national average
roe's.
>> I think we will allow them
to decide on their averages.
Do you agree with that?
>> sure.
>> thank you.
That is all my questions.
I told you I would be quick.
How about walmart?
>> yes.
Thank you.
You are not a teco employee are
you?
>> I am not.
>> and you are not an employee
of the teco affiliate?
>> I am not.
You are part of the consulting
firm in new jersey, correct?
>> it is based in raleigh.
But I am stationed in new
jersey.
>> and that is where you have
come from to testify for us
today?
You are a paid consultant for
teco in this matter.
Is that correct?
>> I am.
>> like some of my colleagues,
I will ask you a few questions
about your opinions on your
return in equity.
On page 31 of your direct
testimony, you discussed the
risk premium model.
Do you recall that discussion,
generally?
>> sure.
>> then, on page 38 you also
discussed a predictive risk
premium model or prp m. Do you
recall that discussion?
>> yes.
It is a mouthful.
I believe on page 41, at lines
13? 14 of your direct
testimony, you mentioned that
the south carolina public
service commission found your
arguments persuasive in a 2017
document involving blue-green
water company.
Do you recall that?
>> yes.
Would you agree that it is not
an electric utility case?
>> it is not.
>> and that decision was six
years ago.
>> that is right.
>> on page 42 at lines 7
through 19 you then also
reference a north carolina city
commission approval of your rpn
analyses and docket w3 54 sides
363, 364, and 365.
Do you see that?
>> yes, ma'am.
>> and would you also agree
that it was a water case?
>> yes, ma'am.
>> for your direct testimony
exhibit, dwt one which I
believe is cl exhibit 20 a.
That north carolina case looks
like it occurred in JUNE 2019.
>> that sounds correct.
It MAY have gone into 2020 by
the time the decision went.
>> sure.
In your direct testimony
exhibit, was that you were
trying to capture times where
you worked on those cases the
month or the year that you
worked on this case is?
>> yes.
Generally witnesses have their
cvs and expert witness
appearances.
It is simply that.
>> sure.
I heard you tell MS.
Christiansen that you have
provided testimony and many
other states which includes
kentucky and maryland.
Is that correct?
>> yes.
i believe in kentucky you
presented testimony in case
number 2020 100190 which was
the electric application duke
energy kentucky inc. For an
adjustment of the natural gas
rates.
And all required waivers which
is kentucky psc ordered
DECEMBER 20, 2021.
Does that sound familiar?
>> yes.
I believe it was a settlement.
>> do you recall the duke
equity recommended at 10.3?
>> that sounds about right.
>>
and you recall whether you
provided testimony on the stand
or simply provided testimony
prior to the matter at
resolving?
>> settled and we did go to
frankfurt and there was no
questions.
I was there.
>> do you recall what the
kentucky commission said in its
order about your testimony on
behalf of of duke kentucky?
>> I believe they talked about
the nonregulated proxy group
giving little weight to it and
rejecting the prp m and
similarly, I believe we
explained earlier that I did
not consider those in this case
for my recommendation.
>> sure.
Just for the record and to make
sure that that is accurate, can
you pull up walmart five which
is cl 820?
That is the order in kentucky
case number 2021? 00110.
>> and again, that is a
settlement.
>> and there is a commission
order following that case I
wanted to ask you about that
order.
You said you provided
testimony.
Correct?
>> you provided testimony on
behalf of of duke kentucky,
correct?
>> yes.
I was characterizing this order
as a settlement.
>> can you turn to page 14 of
the commission please?
>> sure.
>> I do apologize that I do not
have the jump page.
>> it looks like it is fine at
127.
>> on page 14 do you agree that
the commission stated quote due
to kentucky's use of the
predictive use premium model
the the prpm has only been
addressed and three regulatory
commissions and is not
universally accepted in the
commission further stated that
they are concerned about the
blackhawk aspects of the prpm.
>> MR. CHAIRMAN, I am not sure
why this is relevant.
He has indicated that he has
not used that model in this
case.
I do not know why we are
cross-examining about a model
that MAY have been rejected by
another commission and had not
been used in this commission.
>> it is included in his direct
testimony.
He also said that he did still
model it in this case.
In addition, I believe he said
that he offered commission
staff and opc the opportunity
to use this model.
He disagreed with this
commission's opinion.
But it was relevant.
>> he can answer the question.
that is fine.
I do not think he has used it.
>> that is fine.
I agree with what the order
says.
Like MR. Whelan said, if you
take a look at page 44 of my
direct testimony, line 12
through 45 line 4 says that I
have changed my application of
the prpm and I have not
considered it in my analysis
while leaving it for you to
look at.
In my analysis, this does not
hold any weight.
>> in your direct on page 44,
starting at line 24 that is
your full answer.
While I respectfully disagree
with the commission and by the
commission you are speaking of
this commission, correct.
>> yes.
>> while you respectfully
disagree with this commission's
finding order esc 2023? 3088?
Fof? G you have presented my
roe prp m as can be gleaned
from document number 2. My
recommendation is still within
the range of roe's produce
without the prpm.
Did I read that correctly?
>> yes you did.
But if you look at, I do not
want to get into semantics.
I am not considering it in this
case.
>> sure.
I was presenting this kentucky
order because I did not want
you to have to just recall it
off memory.
I believe you have answered my
questions as to what it stated.
I would like to move on to
asking you some questions about
a case you presented testimony
for in maryland.
do you recall presenting our ot
testimony in maryland.
Case number 9490 in the matter
of the potomac edison company
to reach retail rates for the
distribution of electric
energy.
Which was a maryland decision.
MARCH 22, 2019.
Do you recall?
>>.
It was five years ago.
I do recognize it.
>> do you recall that you
recommended a roe of 10.8
percent?
>> can I see the order please?
>> yes it is cl 821.
And on page 2 of that
commission order, can you see
what the maryland commission,
do you have that?
>> not yet.
I do apologize.
It takes a second to pull it
up.
It's very good technology but
there is definitely a bit of a
lag.
>> I will let you know.
It is still chugging along.
Okay.
I think I am there.
Master of 1974?
>> do you recall that you had
recommended a roe of 10.8.
And that the maryland
commission ordered a roe of
9.65 percent?
>> yes.
This thing is breaking down.
But I do recall.
Can we go to page 74 of that
order?
>> I do not think so.
>> this is pollock staff.
>> by pollock you are
referencing MR. Pollick who is
referenced in this case
correct?
>> this is old stuff.
Do you see on page 74 where the
maryland commission refers to
the baltimore gas and electric
case?
2011.
Do you see that reference?
>> yes.
>> in that footnote 269, the
maryland commission states that
they have previously found that
included regulated proxy groups
that are significantly out of
line for regulated distribution
company.
Do you see that?
>> yes.
On page 75, the commission
further finds that the
adjustments proposed by potomac
edison were business risk,
credit risk, and flotation
should be rejected.
O you see
that?
>> yes.
>> and those are
recommendations that you made,
correct?
>> yes.
But in the people's gas case,
they accepted my flotation cost
analysis using the same parent
company and same sister
company.
And that was last year.
Not five years ago.
It was in florida.
Not in maryland.
The more relevant decision
would be the people's gas case.
As far as my recommendation as
compared to if we want to go up
to page 73,
>> no.
I finished my questions.
I would like to move along.
I have prepared a chart which
charts the kentucky case that
we just looked at.
in the maryland case as well as
others for which you have
testified the information about
which cases you have testified
in comes from your cv.
Which is exhibit dwd one to
your direct testimony I would
like to pull up chart which has
been marked as cl 819 and it is
walmart four.
This is intended to make it a
little bit faster and easier
than going through all the
cases.
I have simply selected a few.
Do you see the chart yet?
>> the kentucky and maryland
cases are on the chart as well
as others.
Is that correct?
>> kentucky is a settlement.
New jersey is a settlement.
The north carolina ones are
settlements.
Both texas are settlements.
These are fully litigated.
In the second one is not.
>> to do all of these cases
appear to be cases in which you
have provided testimony?
>
yes.
Does the chart show recommended
rotc made as well as either
stipulated or litigated
outcomes?
>> subject to check, do you
agree that the recommendations
accurately reflect your
recommendations in these cases?
>> there MAY be times where
recommended a range.
But I would take that subject
to change.
>> do you agree that these
outcomes reflect the actual
release that were stipulated or
authorized after litigation?
>> yes.
I do believe we have talked
enough about the circumstances
surrounding settled roe's.
They are part of a package.
If one piece falls apart then
everything falls apart.
It is a product of give and
take.
These are not specifically
market-based numbers.
Or precedent-setting.
>> I do appreciate your
opinion.
I need you to stick to the
questions so that we can get
through this.
Have any stipulated or
litigated outcomes come out on
this chart match the release
that you have recommended?
>> no.
>> many of these outcomes are
100 basis points lower than
your recommendation is that
correct?
>> if you are.
>> would you not agree that the
roe's that utilities agree to
reflect roe's that the
utilities agree can support
sufficient capital needed for
investments?
>> I do not know why they enter
the settlements.
I am never in the room with
them.
Generally they come up with a
package with the other
interveners and they move on.
>> do you contend that any of
the utilities on this chart
have not been able to provide
safe and reliable service with
the roe's that they were
awarded?
>> it depends.
Some of them went right back in
and filed these cases.
Because they did not get what
they wanted.
Like sps.
they went right back in.
The next year.
>> would you consider duke
energy florida the closest peer
to teco in the same state?
As in a similar environment
I.E., in florida coastal and
hurricane risk?
> no.
>> what would you consider a
look closest peer?
>> you cannot compare the two.
There is a fair amount of
discussion with MR. Collins
about how much bigger duke
florida is compared to teco.
In preparation of my testimony
and of this cross-examination,
I reviewed the teco danger
scores of the counties served
by duke florida and tampa
electric.
The danger score for teco is
98.
Which is categorically high.
And the danger score for duke
florida is 83 which is
significantly less.
You cannot talk about
comparability.
Every company has unique risks.
>> we have to stick to the
question I ask you.
You said no.
So with respect to duke energy,
is it duke energy corporation
and some of its subsidiaries
part of your proxy group?
>> yes.
When you select a proxy group
you do not get exact replicas
of teco energy.
I am asking you whether or not
it is okay to say yes, sir no
to this?
Is duke energy florida the
closest peer utility to teco in
florida?
>> how many more qualifiers.
I would say they are similar.
as they are 100 percent
regulated it electric utility
companies.
>> want to ask you some
questions about your rebuttal
testimony.
On page 3 line 6? Seven you
reiterate your recommendation
of the 11 and a half roe.
Is that correct?
>> yes.
In your rebuttal you responded
with witnesses direct testimony
on the issue 39 which is the
roe issue.
Is that correct?
>> yes.
>> on page 2 of your rebuttal,
line 6? 19 you identified the
opposing roe witnesses that you
are addressing.
But as
.
That is.
[Listing names].
Do you understand that doctor.
[Listing names] Is working with
the other people.
>> subject to check.
That is what the office of
public council represents.
Christopher walters, the
federal executive agencies is
testifying on behalf of of
those military and other
federal agencies.
>> steve chris is a witness for
the florida retail iteration
including my client, walmart
incorporated.
And MR. Pollick is a witness on
behalf of of all industrial
user customers.
>> yes.
And carl is also representing
residential customers correct?
>> yes.
>> that means that all five
witnesses disagreed that teco
should be given an 11.5 hourly
is that correct?
>> yes.
Only two of them provided
market analysis.
>> I believe that was one of
the criticisms that you had of
MR. Chris's testimony.
But he did not undertake a
market-based analysis of.
Teco's roe.
When you look at regulated
teco, they do not look at
market.
>> when you're talking about
market-based analyses, the
market data moves with market
actions.
Authoress returns do not.
>> do you consider what MR.
Chris did was analyze market
data.
>> yes.
More observations and analysis.
>> so, they did use analytical
models because they used the
dcf.
Is that correct?
>> yes.
And MR. Walters uses the risk
premium model.
>> would you agree that this
commission is not bound to
adopt any analysis and setting
an authorized early?
Roe?
>> and you would say that this
commission has broad discretion
to talk about a number of
variables correct?
>> yes.
In fact we MAY talk about
recent roe's that we have
approved correct?
>> it would be against what is
usually done.
But yes.
Isn't that true?
>> again, it's against what
they usually do.
But yes, they could.
>> I would like to return to
the previous roe's in this
docket.
Do you recall these were
recommended?
>> idea.
>> I can list them off.
And ask you for subject to
check if you would like.
>> I'm sure you will try.
Subject to check, to doctor
woolridge, the witness
recommend an rotc of 9.5
percent?
>> for christopher walters
recommended an rotc of 9.6
percent?
>> within a range of 880? It
looks like 1143.
MR. Walters at an indicated
rotc of 1143.
This is all shown in my
document number 11 which is the
histogram of his indicated
rotc.
>> what did you call it?
I histogram?
>> if you could pull up
document number 11, page 1.
Could you describe in words
what you mean as a histogram?
>> pictures are typically more
than words.
>> it is exhibit w d2, document
11.
Page 101.
So,
>> there it is.
This is a histogram of MR.
Walters our ot results.
This is the history of data.
Within a population of results.
If you see the histogram, you
could see that the majority of
this is beyond recommendation.
>> are you calling the
histogram the bar chart?
>> that's all I was asking you.
So, you disagreed that MR.
Walters in this case
recommended a roe of 9.6
percent?
>> I was expressing a range.
>> did you see his
recommendation at 9.6?
>> that does not reflect his
results.
And it was in my rebuttal
testimony.
>> did you see MR. Pollick
recommend a roe of 9.8 percent?
>> I do believe that was based
on the average.
>> subject to check.
>> do you recall the doctor
recommending a roe of 9.5
percent?
Do you recall MR. Chris, the
witness for f art of
referencing a range to date the
2021? 2024 average as of the
time his testimony was 9.62 and
thus far was 9.72?
>> I do not believe he provided
a recommendation.
>> he did not recommend a
range.
Frankly, he did not conduct an
analysis.
>> do you recall that
testimony?
>> yes.
>> would you agree that none of
these witnesses recommend or
support a roe above 9.7
percent?
>> I agree with that.
Their individual model results
indicate higher roe's.
>> would you say that there is
a significant difference
between these?
>> would you also agree that
the difference between 11 and
half percent and 9.8 percent is
over $100 million subject to
check?
>> still, I do not know.
>> stop has no questions.
Commissioners:
>> this is quick.
When you pick proxy groups, a
number that you put in for your
analysis, is that the same for
every time there appears a
witness for another utility?
>> it depends on the type of
company.
If it is an electric group,
since there is a large
population of them, I am able
to tighten the screws down
unregulated assets attributable
to regulated service to try and
get them closer to 100 percent
pure play.
But, if there is a water
company that has a limited
number, you kind of relax the
range.
To get where you can to have a
robust analysis.
>> thank you.
>> no further questions.
>> thank you MR. CHAIRMAN.
And thank you for the help of
the staff getting a couple of
these things printed out.
We are handing out a couple of
orders and filings in the case
that was subject to the
document and identified as
exhibit 839.
I would like to ask about
these.
MR. CHAIRMAN, just for
simplicity purposes, I wonder
if we could get a document
number four and exhibit number
4.
Delta natural gas companies
notice of witness every
substitution.
That would be 8:40.
>> I believe we are at 8:40.
Within the second document
which is entitled order and
appears to be dated NOVEMBER
12, we can make that 841?
>> yes.
>> if you recall, you were
asked about document 839 which
is an order that indicates that
you adopted MR. Mel's direct
testimony after he had been in
a bicycle accident?
I would like you to look at
document 840.
Are you familiar with that
document?
>> yes.
And is that a filing that the
utility made is not based
number 202100185?
>> yes.
Would you read for the record,
just read the whole thing.
>> sure.
>> on JULY 27, 2021 delta
natural gas company provided
the notice that the direct
testimony was directed by.
[Listing names] Due to a
serious accident that prevented
MR. [Listing names] As serving
as a witness.
On AUGUST 13, MR. [Listing
names] Had data requests that
were important to MR. [Listing
names]'s testimony.
His health now does not allow
him to continue with equity
matters.
As such, he redirects his
testimony to MR. [Listing
names].
The commission staff requests
for information from the
attorney general's first
request for information.
MR. [Listing names] Is not
expected to have further
involvement in this proceeding.
>> did you have any further
involvement in that case after
SEPTEMBER 20?
>> no.
>> I would not ask you to look
at the document we have
identified as number 841.
do you see that?
>> yes.
>> without reading the whole
thing.
Could you just focus on the
second paragraph.
Generally describe what this
order does.
>> it says that there is good
cause to grant delta's notion.
>> so he readopted his
additional testimony and then
testified on behalf of the
utility.
And you did not?
>> yes.
That is correct.
Do you think that explains the
confusion for the order that
was identified as 349?
>> absolutely.
>> during your
cross-examination by MS.
Christiansen, she was asking
you some questions and you
wanted to explain your
histogram and why you ended up
with your 11.5 roe and MS.
Christiansen did not allow you
to answer that question.
Could you briefly explain why
you landed on 11.5?
>> yes I can.
If you look at my document
number 2, that would be the
rebuttal testimony 187 the
number the number is at the
bottom.
I will wait.
It would start at page 1 and go
to page 4. It will show that I
did a similar analysis to what
I did with MR. Walters about my
indicated results.
In the distribution of them.
If you look at those and look
at the bottom percentile rank
of my recommended roe of 11.5
and falls in the middle of my
indicated results.
even though my recommendation
is about the midpoint of my
analyses.
My recommendation is right in
the middle of my indicative
roe's.
>> thank you.
No further questions.
>>.
>> any objection?
>> seen him, I show them
entered into the record.
>> opc would ask to have
exhibit 321, which I believe
has already been admitted in
the record.
And 839 admitted into the
record.
>> any objection?
>> no objection.
Seeing none, it is entered into
the record.
>> MR. CHAIRMAN, florida retail
federation is 814 and 815.
Those are the two cases that we
identified already.
>> is there objection?
>> seeing none, show it entered
into the record.
>> j p1 exhibit 82 for a
comprehensive exhibit list.
>> I will object to that.
That is MR. Pollock's
testimony.
>> it is not his exhibit.
I cannot object it when MR.
Pollock talks about it
tomorrow.
I'm not sure I want him to talk
about it tomorrow.
>> whichever way you want to do
it is fine with me.
I do not have strong feelings
about it.
>> I believe it is better when
MR. Pollock comes up to admit
that one.
It has already been used.
Anything else?
>> yes.
we would like walmart 819 on
the cal through 828.
That is the chart that I showed
as well as the orders that
support the information on the
chart.
>> any objection?
Seeing none, I show those
entered into the record.
>> we have a scheduling matter
before we adjourn tonight.
Let's excuse the witness.
S
that fair?
>> we are paying him by the
minute.
So let's get him.
>> thank you sir for your
witness testimony.
>> we have had some very
productive discussions today
with the consumer parties.
I do appreciate it.
Our proposal for the
commission's consideration, if
I get it wrong I will invite
the interveners to correct me.
We would propose that beginning
tomorrow morning we would start
with the intervener witnesses
as listed in the prehearing
order.
On page 6 and try to get
through all of them.
>> is starting off with MR.
[Listing names]
>> once we are through with all
the intervener witnesses, we
can pick back up with the tampa
electric border of witnesses
with type c strickland
chronister sizemore and
williams with a twist that we
would go ahead and have MR.
[Listing names] And MR.
Williams present their direct
rebuttal together instead of
separately.
Which I believe will be more
efficient.
i got that wrong, somebody
please pipe up.
But I do believe that's what
was contemplated.
>> MR. Wallin is correct.
With one other twist.
Which is I would hope there is
a little bit of flexibility
that we can take by agreement
with the intervener witnesses
among ourselves.
Doctor woolridge asked to give
a deposition in the morning
that he is going to do
remotely.
From some location here in
tallahassee.
He expects that it will be 10
by 11.
I do ask for some flexibility
to work through that among the
parties if it suits the
commission.
>> we have no objection.
>> I think we can definitely
accommodate that.
>> MR. CHAIRMAN, stop and offer
that staff witnesses could go
first then tomorrow to provide
more time to accommodate
everyone's schedule as they are
proposing.
>> that could definitely be
better for the witnesses.
So, tomorrow we will start with
stops witnesses.
Then we will go to opc's
witnesses and then we will pick
back up where we left off.
>> I think the idea was that
they were all fine.
I think we would go through all
of the witnesses and then go
back and resume with the
witnesses as my understanding.
>> that was my mistake.
All right.
Good deal.
I think we have a reshuffled
deck for tomorrow.
>> MR. CHAIRMAN, sierra club
would like to waive the rights
of the rest of the cross and be
excused for the last couple of
days while remaining a pretty
record.
>> you don't want to say?
>> I'd love to.
>> that is fine.
If no other parties have any
objections.
>> no objections.
>> thank you.
>> tomorrow morning, we will
start at 8:00 A.M.. Similarly
to how we did today.
We will gauge it as we go
along.
Every two hours we will have a
break and try to break for
lunch around the 12:00 hour.
If we have to go into the
evening and we will again.
Similarly with the dinner
break.
I will keep you guys updated as
we go along.
>> before sierra club gets
excused, do you need to move
your witness testimony into the
record?
>> we stipulated at the
beginning of his hearing.
>> just wanted to make sure.
>> I appreciate that.
>> that will be tomorrow's
schedule.
If we are all good, no further
business we will reconvene