nv energy certification rate design gas grc volume 1€¦ · certification period ended may 31,...
TRANSCRIPT
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SIERRA PACIFIC POWER COMPANY d/b/a NV Energy
GAS DEPARTMENT
BEFORE THE
PUBLIC UTILITIES COMMISSION OF NEVADA
IN THE MATTER of the Application of SIERRA ) PACIFIC POWER COMPANY, d/b/a NV Energy, ) filed pursuant to NRS 704.110(3), addressing its ) annual revenue requirement for general rates ) charged to all classes of Gas customers. ) __________________________________________ ) Docket No. 16- 06007
VOLUME 1 of 1 Certification Rate Design
Transmittal Letter Table of Contents
Certificate of Service Exhibit A Proposed Tariffs
Statement O
Prepared Certification Testimony of: Laura I. Walsh
Cary Shelton-Patchell Trevor Dillard
Statement O Work Papers
Recorded Test Year ended December 31, 2015 Certification Period ended May 31, 2016
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Transmittal Letter
Page 2 of 228
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September 6, 2016
Ms. Trisha Osborne Assistant Commission Secretary Public Utilities Commission of Nevada 1150 East William Street Carson City, Nevada 89701-3109
RE: Sierra Pacific Power Company d/b/a NV Energy’s Application addressing its annual revenue requirement for general rates charged to all classes of natural gas customers, in Docket No. 16-06007
Dear Ms. Osborne:
Attached please find Sierra Pacific Power Company’s (“Sierra’s”) single volume Certification filing for rate design issues. This Certification filing is made in accordance with NRS §704.110(3) and the Commission’s prehearing conference order. Through this Certification filing Sierra provides changes to historical results of operations related to the rate design for its Gas Division that are known and measurable with reasonable accuracy and that have become effective not later than May 31, 2016 (the “Certification Period”).
This filing consists of the following documents. • Transmittal Letter • Table of Contents • Certificate of Service • Certification Statement O • Certification Testimony of Laura I. Walsh • Certification Testimony of Cary Shelton-Patchell • Certification Testimony of Trevor Dillard • Certification Statement O Work Papers
Should you have any questions regarding this filing, please contact me at (775) 834-5694 or [email protected].
Respectfully submitted,
/s/Elizabeth Elliot Elizabeth Elliot Associate General Counsel
Page 3 of 228
mailto:[email protected]
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Table of Contents
Page 4 of 228
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Sierra Pacific Power Companyd/b/a NV Energy Gas Department
Certification Rate Design
Table of Contents
Volume 1 of 1 Description Page No. Transmittal Letter 2 Table of Contents 4 Certificate of Service 6 Exhibit A – Proposed Tariffs 8 Statement O 12
Prepared Certification Testimony of: Laura I. Walsh 19 Cary Shelton-Patchell 27 Trevor Dillard 110
Statement O Work Papers 114
1
Page 5 of 228
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Certificate of Service
Page 6 of 228
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CERTIFICATE OF SERVICE
Nev
ada
Pow
er C
ompa
nyan
d Si
erra
Pac
ific
Pow
er C
ompa
nyd/
b/a
NV
Ene
rgy
I hereby certify that I have served the foregoing SIERRA PACIFIC POWER
COMPANY D/B/A NV ENERGY’S FILING in Docket No. 16-06007 upon all parties of
record in this proceeding by electronic service to the following:
Tammy Cordova Staff Counsel Division Public Utilities Comm. of Nevada Public Utilities Comm. of Nevada 9075 West Diablo Drive Suite 250 1150 E. William Street Las Vegas, NV 89148 Carson City, NV 89701-3109
[email protected] [email protected]
Michael Saunders Attorney General’s OfficeSenior Deputy Attorney General Bureau of Consumer Protection Attorney General’s Office 100 N. Carson St. Bureau of Consumer Protection Carson City, NV 89701 10791 W. Twain Ave., Ste. 100 [email protected] Las Vegas, NV 89135-3022 [email protected]
DATED this 6th day of September, 2016.
/s/ Lynn D’Innocenti Lynn D’Innocenti Sr. Legal Admin. Assistant Sierra Pacific Power Company
1 Page 7 of 228
mailto:[email protected]:[email protected]:[email protected]:[email protected]
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Certification
Exhibit A
Proposed Tariffs
Page 8 of 228
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SIERRA PACIFIC POWER COMPANY dba NV Energy 6100 Neil Road Reno, NV 89511 47 th Revised PUCN Sheet No. 2H Tariff No. Gas No. 1 Cancelling 46 th Revised PUCN Sheet No. 2H
. .
Schedule Number & Type of Charge BTGR BTER REPR UEC DEAA
STATEMENT OF RATES EFFECTIVE RATES APPLICABLE TO SIERRA PACIFIC POWER COMPANY
GAS SCHEDULES
Total Rate RNG – Residential Natural Gas Service Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.09056 $0.34823 ($0.00039) $0.00330 ($0.05522)
INGR – Incentive Natural Gas Rate Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.06700 $0.34823 ($0.00039) $0.00330 ($0.05522) Tier II, Interruptible
COMP – Gas For Compression Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.10186 $0.34823 ($0.00039) $0.00330 ($0.05522)
Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.10186 $0.34823 ($0.00039) $0.00330 ($0.05522)
LCNG – Large Commercial and Industrial Natural Gas Service Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.06700 $0.34823 ($0.00039) $0.00330 ($0.05522)
AS SPECIFIED IN SHEET NOS. 3B THROUGH 3D
SCNG – Small Commercial and Industrial Natural Gas
$17.00 $0.38648
$2,300.00 $0.36292
$37.00 $0.39778
$37.00 $0.39778
$1,000.00 $0.36292
LPG – Liquefied Petroleum Gas Service BTGR BTER REPR UEC DEAA
Residential Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.09056 $0.34823 ($0.00039) $0.00000 ($0.05522)
Commercial Basic Service Charge, per meter per month Consumption Charge per therm, All Usage $0.10186 $0.34823 ($0.00039) $0.00000 ($0.05522)
Notes 1. The charges shown above are subject to adjustments for taxes and assessments as specified in the Tax Adjustment Rider (PUCN Sheet No. 5) and Schedule SC (PUCN Sheet Nos. 4-4B.) 2. BTGR = Base Tariff General Rate 3. BTER = Base Tariff Energy Rate 4. DEAA = Deferred Energy Accounting Adjustment (see Schedule DEAA, PUCN Sheet No. 2B(1).) 5. REPR = Renewable Energy Program Rate (see Schedule REPR, PUCN Sheet No. 2B(1)(a).) 6. UEC = Universal Energy Charge (see the UEC Special Condition of the applicable rate schedule.) 7. Residential Customers taking service in certain neighborhoods, identified in Schedule RNME, Retrofit Neighborhood Main Extensions, will be charged the Neighborhood Main Extensions Charge identified in that schedule, in addition to the charges identifed above. 8. Other charges may apply, please see the applicable rate schedule.
(Continued)
Total Rate
$17.00 $0.38318
$37.00 $0.39448
Issued: 09-06-16
Effective:
Advice No.: 319-G-R
Shawn M. Elicegui
Senior Vice President
Issued By:
(I) (R)
(R)
(I) (R)
(I) (R)
(R)
(I) (R)
(I) (R)
. .Page 9 of 228
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. .
SIERRA PACIFIC POWER COMPANY dba NV ENERGY 12th Revised PUCN Sheet No. 6A
Tariff No. Gas No. 1 Canceling 11th Revised PUCN Sheet No. 6A
Schedule No. TF FIRM TRANSPORTATION OF CUSTOMER-OWNED NATURAL GAS
(Continued) 3 FACILITY ADDITIONS (Continued) 3.2 Telemetering facilities are required prior to performing transportation service.
Telemetering facilities will be installed by the Utility at Customer expense. The Customer will be responsible for the installation of phone lines and any other facilities that may be required for the safe installation and operation and monthly service charge of the telemetering facilities.
3.3 To the extent that:
3.3.1 A Customer chooses to take service under this rate schedule and elects a firm level of service (MDRO) as required by Schedule TF , and
3.3.2 The Utility agrees to provide that Customer with that firm level of service (MDRO), and
3.3.3 The Customer decides to take service at the end of the contract period under a retail sales rate schedule, and
3.3.4 There is no longer capacity sufficient to serve that Customer with its maximum hourly demand,
The Customer shall be required to pay for all facilities required to serve that Customer in accordance with Rule 9, Gas Main Extensions.
4 RATES Rates shall be as set forth in this rate schedule and stated in the Service Agreement. Such rates may change from time-to-time with a Commission order. Monthly billings shall be the sum of:
4.1 Basic Service Charge The Basic Service Charge is equal to the Basic Service Charge in Schedule LCNG payable for the term of the service agreement. Rates can be found beginning on PUCN Sheet No. 2H. The Customer shall not be billed for more than one Basic Service Charge per meter per month.
4.2 Firm Transportation Charge Minimum Maximum
Per Therm per month of Maximum Daily Receipt Obligation see 4.2.1. below $1.35432
4.2.1 The minimum Firm Transportation Charge is the greater of the marginal cost to serve the Customer or $0.74662
4.2.2 The Firm Transportation Charge may vary from Customer to Customer based upon the Customer’s ability to change from one fuel to another, or the Customer’s demonstrated ability to bypass the distribution system.
(Continued)
Issued: 09-06-16
Effective:
Advice No.: 319-G-R
Issued By: Shawn M. Elicegui
Senior Vice President
(R)
(R)
. .Page 10 of 228
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. .
SIERRA PACIFIC POWER COMPANY dba NV ENERGY 8th Revised PUCN Sheet No. 6E.1
Tariff No. Gas No. 1 Canceling 7th Revised PUCN Sheet No. 6E.1
Schedule No. TI INTERRUPTIBLE TRANSPORTATION OF CUSTOMER-OWNED NATURAL GAS
(Continued) 3 FACILITY ADDITIONS (Continued) 3.3.4 there is no longer capacity sufficient to serve that Customer with its maximum hourly
demand. The Customer shall be required to pay for all facilities required to serve that Customer in accordance with Rule 9, Gas Main Extensions.
4. RATES Rates shall be as set forth in this rate schedule and stated in the Service Agreement. Such rates may change from time-to-time with a Commission order. Monthly billings shall be the sum of:
4.1. Basic Service Charge The Basic Service Charge is equal to the Basic Service Charge in Schedule LCNG payable for the term of the service agreement. Rates can be found beginning on Sheet No. 2H. The Customer shall not be billed for more than one Basic Service Charge per meter per month.
4.2. Interruptible Transportation Charge Minimum Maximum
Per Therm per month of Scheduled Quantity See 4.2.1. below $0.06700
4.2.1. The minimum Interruptible Transportation Charge is the lesser of a rate available to a Customer under another rate schedule or $0.02038 per therm.
4.2.2. The Interruptible Transportation Charge may vary from Customer to Customer based upon the Customer’s ability to change from one fuel to another, or the Customer’s demonstrated ability to bypass the distribution system.
4.2.3. In the case of bypass, the Customer must establish to the Utility’s satisfaction that bypass is economically, operationally, physically feasible and imminent.
4.2.4 All amounts delivered on a daily basis in excess of Firm Service as specified in the service agreement will be considered Interruptible gas as provided under this Schedule TI.
4.3. Imbalance Penalties
Monthly and daily imbalance penalties are stated in Schedule TOP, Transportation of Customer-Owned Natural Gas Operating Procedures and Imbalance Trading.
(Continued)
Issued: 09-06-16
Effective:
Advice No.: 319-G-R
Issued By: Shawn M. Elicegui
Senior Vice President
(R)
(R)
. .Page 11 of 228
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Certification
Statement O
Page 12 of 228
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SIER
RA
PA
CIF
IC P
OW
ER C
OM
PAN
Y ST
ATEM
ENT
O C
ERT
d/b/
a N
V En
ergy
1
of 6
G
AS
DEP
AR
TMEN
T SH
ELTO
N-P
ATC
HEL
L ST
ATE
MEN
T O
FO
R T
HE
TEST
PER
IOD
EN
DED
DEC
EMB
ER 3
1, 2
015
FO
R T
HE
CER
TIFI
CA
TIO
N P
ERIO
D E
ND
ED M
AY
31, 2
016
(IN
TH
OU
SAN
DS)
Pres
ent v
s Pr
opos
ed
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
SMAL
L SM
ALL
Ln
RES
IDEN
TIAL
R
ESID
ENTI
AL
CO
MM
ERC
IAL
CO
MM
ERC
IAL
LAR
GE
Ln
N
o D
ESC
RIP
TIO
N
REF
EREN
CE
TO
TAL
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
PRO
PAN
E
CO
MM
ERC
IAL
INC
ENTI
VE
TRAN
S.
No
11
2 Pr
opos
ed R
ate
Rev
enue
2
33
4 BT
GR
Rev
enue
s Pa
ge 5
, Lin
e 14
$
51,6
51
$ 39
,077
$
101
$ 10
,352
$
8 $
1,70
0 $
113
$ 30
1 4
5 Fu
el R
even
ues
Page
3, L
ine
6 55
,113
34
,529
77
15
,525
8
4,29
4 67
9 -
5 6
Tran
spor
tatio
n R
even
ues
@ P
rese
nt R
ate
Page
5, L
ine
25, C
ol (j
) 1,
951
1,95
1 6
7 IN
GR
Ince
ntiv
e Pa
ge 5
, Lin
e 23
, Col
. (i)
--
7 8
Oth
er R
even
ues,
Exc
ludi
ng T
rans
porta
tion
Page
3, L
ine
13
993
853
2 10
5 0
28
2 4
8 9
Tota
l $
109,
709
$ 74
,459
$
180
$ 25
,983
$
16
$ 6,
021
$ 79
4 $
2,25
6 9
10
10
11
Pres
ent R
ate
Rev
enue
s 11
12
12
13
BT
GR
Rev
enue
s St
mt.
J $
53,1
86
$ 39
,817
$
100
$ 10
,519
$
7 $
2,25
7 $
185
$ 30
1 13
14
Fu
el R
even
ues
Stm
t. J
55,1
26
34,5
29
77
15,5
25
8 4,
294
692
-14
15
IN
GR
Ince
ntiv
e/Tr
ansp
orta
tion
Rev
enue
s St
mt.
J 1,
951
1,95
1 15
16
O
ther
Rev
enue
s St
mt.
J 99
5 88
9 2
75
0 23
1
5 16
17
To
tal
$ 11
1,25
8 $
75,2
35
$ 17
9 $
26,1
20
$ 15
$
6,57
4 $
878
$ 2,
257
17
18
18
19
Tota
l Dol
lar C
hang
e $
(1,5
50)
$ (7
76)
$ 1
$ (1
37)
$ 1
$ (5
52)
$ (8
5)
$ (1
) 19
20
20
21
Le
ss B
TER
Rev
enue
Cha
nge
13-
--
--
13-
21
22
22
23
Rev
enue
Req
uire
men
t $
(1,5
37)
$ (7
76)
$ 1
$ (1
37)
$ 1
$ (5
52)
$ (7
2)
$ (1
) 23
24
24
25
25
26
Pe
rcen
t Cha
nge
-1.3
8%
-1.0
3%
0.33
%
-0.5
3%
7.68
%
-8.4
0%
-8.1
9%
-0.0
5%
26
Page 13 of 228
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SIER
RA
PA
CIF
IC P
OW
ER C
OM
PAN
Y ST
ATEM
ENT
O C
ERT
d/b/
a N
V En
ergy
2
of 6
G
AS
DEP
AR
TMEN
T SH
ELTO
N-P
ATC
HEL
L ST
ATE
MEN
T O
FO
R T
HE
TEST
PER
IOD
EN
DED
DEC
EMB
ER 3
1, 2
015
FO
R T
HE
CER
TIFI
CA
TIO
N P
ERIO
D E
ND
ED M
AY
31, 2
016
(IN
TH
OU
SAN
DS)
STAT
EMEN
T I R
ESU
LTS
ALL
OC
ATED
TO
RAT
E C
LASS
ES
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
SMAL
L SM
ALL
Ln
RES
IDEN
TIAL
R
ESID
ENTI
AL
CO
MM
ERC
IAL
CO
MM
ERC
IAL
LAR
GE
Ln
N
o D
ESC
RIP
TIO
N
REF
EREN
CE
TO
TAL
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
PRO
PAN
E
CO
MM
ERC
IAL
INC
ENTI
VE
TRAN
S.
No
1 C
ost o
f Ser
vice
Sal
es R
even
ue
1 2
2 3
Ope
ratin
g R
even
ues
(Pro
pose
d)
Cos
t Stu
dy, P
g. 1
, Ln.
43
$ 10
9,71
0 $
74,9
48
$ 18
2 $
26,1
78
$ 18
$
6,07
6 $
962
$ 1,
346
3 4
Less
Oth
er R
even
ues
Cos
t Stu
dy, P
g. 1
, Ln.
39
(993
) (8
53)
(2)
(105
) (0
) (2
8)
(2)
(4)
4 5
Less
Oth
er R
even
ues-
Tran
spor
tatio
n C
ost S
tudy
, Pg.
1, L
n. 4
1 (7
1)
--
--
--
(71)
5
6 10
8,64
5 74
,095
18
0 26
,073
18
6,
048
960
1,27
1 6
77
8 C
usto
mer
8
9 O
&M In
cl. A
&G
Cos
t Stu
dy, P
g. 1
, Ln.
31
$ 13
,561
$
11,1
67
$ 30
$
1,79
4 $
2 $
479
$ 68
$
22
9 10
O
ther
C
ost S
tudy
, Pg.
1, L
n. 3
2 24
,358
18
,944
50
4,
755
5 46
1 46
98
10
11
To
tal C
usto
mer
$
37,9
19
$ 30
,110
$
80
$ 6,
549
$ 6
$ 94
0 $
113
$ 12
0 11
12
12
13
C
omm
odity
C
ost S
tudy
, Pg.
1, L
n. 3
5 $
55,1
18
$ 34
,523
$
77
$ 15
,523
$
8 $
4,29
3 $
692
$ 2
13
14
14
15
Dem
and
Cos
t Stu
dy, P
g. 1
, Ln.
37
$ 15
,609
$
9,46
3 $
22
$ 4,
002
$ 3
$ 81
5 $
154
$ 1,
149
15
16
16
17
Bill
ing
Det
erm
inan
ts
17
18
18
19
Cus
tom
ers
Cos
t Stu
dy, P
g. 1
7, L
n. 1
16
1,37
5 14
7,78
6 39
6 13
,088
12
73
4
17
19
20
Met
ers1
20
20
21
21
22
Th
roug
hput
(The
rms)
C
ost S
tudy
, Pg.
17,
Ln.
22
181,
673,
356
99,1
55,5
91
221,
229
44,5
83,8
10
22,9
85
12,3
30,7
24
1,98
7,77
9 23
,371
,238
22
23
Ba
se T
hrou
ghpu
t at L
CN
G R
ates
St
mt J
, Pg.
3, L
n. 7
31
,763
23
24
Th
roug
hput
at R
ates
With
in a
Ran
ge o
f Rat
es
Stm
t J, P
g. 3
, Ln.
19
1,95
6,01
6 23
,371
,238
24
25
25
26
C
ost o
f Ser
vice
Rat
es -
As
Indi
cate
d B
y C
ost S
tudy
26
27
27
28
Ba
sic
Serv
ice
Cha
rge,
Per
Met
er/P
er M
onth
$
16.9
8 $
16.8
6 $
41.7
0 $
44.8
7 $
1,07
5.84
$
2,36
0.09
$
588.
17
28
29
Annu
al B
asic
Ser
vice
/Adm
inis
trativ
e C
harg
e R
ate
Rev
enue
s $
30,1
10
$ 80
$
6,54
9 $
6 $
940
$ 11
3 $
120
29
30
30
31
Com
mod
ity/D
eliv
ery
Rat
e, P
er T
herm
/Per
Mon
th
$ 0.
4436
0 $
0.44
968
$ 0.
4379
3 $
0.49
550
$ 0.
4142
8 $
0.42
592
$ 0.
0492
5 31
32
32
33
C
ost o
f Ser
vice
Rat
es -
Set C
usto
mer
Cha
rge
33
34
34
35
Basi
c Se
rvic
e C
harg
e, P
er M
eter
/Per
Mon
th1
$ 17
.00
$ 17
.00
$ 37
.00
$ 37
.00
$ 1,
000.
00
$ 2,
300.
00
$ 1,
000.
00
35
36
Annu
al B
asic
Ser
vice
Cha
rge
Rat
e R
even
ues
$ 30
,148
$
81
$ 5,
811
$ 5
$ 87
4 $
110
$ 24
0 36
37
37
38
Ad
min
istra
tive
Cha
rge,
Per
Cus
tom
er/P
er M
onth
2 $
300.
00
38
39
Annu
al A
dmin
istra
tive
Cha
rge
Rev
enue
s $
61
39
40
40
41
Basi
c Se
rvic
e C
harg
e, P
er M
eter
/Per
Mon
th C
ombi
ning
Pro
pane
Cla
sses
$
17.0
0 $
37.0
0 41
42
$
30,2
29
$ 5,
816
42
43
43
44
44
45
45
46
46
47
(1)
Ther
e ar
e 21
met
ers
in th
e Tr
ansp
orta
tion
rate
cla
ss.
The
cust
omer
cha
rge
is p
er m
eter
per
mon
th.
47
48
(2)
Ther
e ar
e 17
cus
tom
ers
in th
e Tr
ansp
orta
tion
rate
cla
ss.
The
adm
inis
trativ
e ch
arge
is p
er c
usto
mer
pre
mis
es p
er m
onth
. 48
Page 14 of 228
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SIER
RA
PA
CIF
IC P
OW
ER C
OM
PAN
Y ST
ATEM
ENT
O C
ERT
d/b/
a N
V En
ergy
3
of 6
G
AS
DEP
AR
TMEN
T SH
ELTO
N-P
ATC
HEL
L ST
ATE
MEN
T O
FO
R T
HE
TEST
PER
IOD
EN
DED
DEC
EMB
ER 3
1, 2
015
FO
R T
HE
CER
TIFI
CA
TIO
N P
ERIO
D E
ND
ED M
AY
31, 2
016
(IN
TH
OU
SAN
DS)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
SMAL
L SM
ALL
Ln
RES
IDEN
TIAL
R
ESID
ENTI
AL
CO
MM
ERC
IAL
CO
MM
ERC
IAL
LAR
GE
Ln
N
o D
ESC
RIP
TIO
N
REF
EREN
CE
TO
TAL
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
PRO
PAN
E
CO
MM
ERC
IAL
INC
ENTI
VE
TRAN
S.
No
1 C
alcu
latio
n of
the
BTG
R
1 2
2 3
Pres
ent R
ate
Sale
s R
even
ue
Cos
t Stu
dy, P
g. 1
, Ln.
43
$ 11
1,25
8 $
75,2
35
$ 17
9 $
26,1
20
$ 15
$
6,57
4 $
878
$ 2,
257
3 4
Tota
l Inc
reas
e/D
ecre
ase
Cos
t Stu
dy, P
g. 1
, Ln.
47
(1,5
49)
(287
) 2
58
3 (4
98)
83
(911
) 4
5 R
even
ue
109,
710
74,9
48
182
26,1
78
18
6,07
6 96
2 1,
346
5 6
Less
: G
as R
even
ues
From
Cos
t Stu
dy
Cos
t Stu
dy, P
g. 2
5, L
n. 5
3 55
,113
34
,529
77
15
,525
8
4,29
4 67
9 -
6 7
Mar
gin
Rev
enue
s 54
,597
40
,419
10
5 10
,653
10
1,
782
282
1,34
6 7
88
9 Ad
just
for:
9 10
Adj
ust f
or IN
GR
Sho
rtfal
l IN
GR
Sho
rtfal
l Wor
kpap
er
159
100
0 45
0
12
2 -
10
11
A
djus
t Tra
nspo
rtatio
n to
Pre
sent
Rat
e Pa
ge 5
, Lin
e 23
(9
10)
(570
) (1
) (2
56)
(0)
(71)
(1
1)
-11
12
Em
ploy
ee D
isco
unt A
t Pro
pose
d R
ates
1 Em
ploy
ee D
isco
unt W
orkp
aper
50
32
0
14
0 4
1 -
12
13
O
ther
Rev
enue
, Exc
ludi
ng T
rans
porta
tion
Cos
t Stu
dy, P
g. 1
, Ln.
39
(993
) (8
53)
(2)
(105
) (0
) (2
8)
(2)
(4)
13
14
Mar
gin
Rev
enue
Req
uire
men
t Tar
get (
empl
. dis
coun
ts)
52,9
03
39,1
27
102
10,3
50
10
1,70
0 27
2 1,
342
14
15
15
16
Less
: Ba
sic
Serv
ice/
Adm
inis
trativ
e C
harg
e R
even
ue
Page
2, L
ine
36
37,3
30
30,1
48
81
5,81
1 5
874
110
301
16
17
Adju
sted
Mar
gin
$ 15
,573
$
8,97
9 $
21
$ 4,
539
$ 4
$ 82
6 $
161
$ 1,
041
17
18
18
19
Thro
ughp
ut (T
herm
s)4
Page
2, L
ine
22 /
ING
R L
ine
23
99,1
55,5
91
221,
229
44,5
83,8
10
22,9
85
12,3
30,7
24
31,7
63
23,3
71,2
38
19
20
20
21
Base
Tar
iff G
as R
ate
(BTG
R)5
Ln
. 13/
Ln.1
4 $
0.09
056
$ 0.
0940
7 $
0.10
182
$ 0.
1920
2 $
0.06
700
$ 0.
0670
0 21
22
22
23
Ba
se T
ariff
Gas
Rat
e (B
TGR
) Com
bini
ng P
ropa
ne C
lass
es
$ 0.
0905
6 $
0.10
186
23
24
24
25
25
26
26
27
27
28
28
29
29
30
30
31
31
32
32
33
33
34
34
35
(1)
Gas
Cos
t Attr
ibut
ted
to E
mpl
oyee
Dis
coun
t Is
Gro
ssed
-up
to R
efle
ct R
esid
entia
l Cla
ss In
crea
se.
35
36
(2)
Ther
e ar
e 21
met
ers
in th
e Tr
ansp
orta
tion
rate
cla
ss.
The
cust
omer
cha
rge
is p
er m
eter
per
mon
th.
36
37
(3)
Ther
e ar
e 17
cus
tom
ers
in th
e Tr
ansp
orta
tion
rate
cla
ss.
The
adm
inis
trativ
e ch
arge
is p
er c
usto
mer
pre
mis
es p
er m
onth
. 37
38
(4
) St
ated
ther
m th
roug
hput
for S
ched
ule
ING
R re
pres
ents
the
firm
por
tion
of to
tal t
herm
thro
ughp
ut fo
r the
cla
ss.
38
39
(5)
BTG
R s
tate
d fo
r Sch
edul
e IN
GR
is e
qual
to S
ched
ule
LCN
G B
TGR
and
is a
pplie
d on
ly to
the
firm
por
tion
of th
erm
thro
ughp
ut.
39
Page 15 of 228
-
SIER
RA
PA
CIF
IC P
OW
ER C
OM
PAN
Y ST
ATEM
ENT
O C
ERT
d/b/
a N
V En
ergy
4
of 6
G
AS
DEP
AR
TMEN
T SH
ELTO
N-P
ATC
HEL
L ST
ATE
MEN
T O
FO
R T
HE
TEST
PER
IOD
EN
DED
DEC
EMB
ER 3
1, 2
015
FO
R T
HE
CER
TIFI
CA
TIO
N P
ERIO
D E
ND
ED M
AY
31, 2
016
(IN
TH
OU
SAN
DS)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
SMAL
L SM
ALL
Ln
RES
IDEN
TIAL
R
ESID
ENTI
AL
CO
MM
ERC
IAL
CO
MM
ERC
IAL
LAR
GE
Ln
N
o D
ESC
RIP
TIO
N
REF
EREN
CE
TO
TAL
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
PRO
PAN
E
CO
MM
ERC
IAL
INC
ENTI
VE
TRAN
S.
No
1 C
alcu
latio
n of
Tra
nspo
rtat
ion
Bas
e Ta
riff G
ener
al R
ates
1
22
3 Th
roug
hput
(The
rms)
23
,371
,238
3
4 M
argi
n R
even
ues
$ 1,
041
4 5
5 6
Firm
Tra
nspo
rtatio
n 6
7 M
ax. P
er T
herm
/ Per
Mon
th B
TGR
Ln
. 4/L
n. 3
$
0.04
455
7 8
8 9
Min
. Per
The
rm/ P
er M
onth
BTG
R
9 10
Pr
opos
ed T
ax-e
ffect
ed R
ate
of R
etur
n1
8.50
%
10
11
Tran
spor
tatio
n Al
loca
ted
Rat
e Ba
se
Cos
t Std
y. P
g. 1
, Ln.
23
$ 6,
756
11
12
Min
. Per
The
rm/ P
er M
onth
BTG
R
$ 0.
0245
6 12
13
13
14
M
axim
um S
tate
d as
MD
RO
Ln
. 7 X
30.
4 $
1.35
432
14
15
Min
imum
Sta
ted
as M
DR
O
Ln. 1
2 X
30.
4 $
0.74
662
15
16
16
17
Inte
rrup
tible
Tra
nspo
rtatio
n 17
18
M
ax. P
er T
herm
/Per
Mon
th B
TGR
Pa
ge 3
, Ln.
21
$ 0.
0670
0 18
19
M
in. P
er T
herm
/Per
Mon
th B
TGR
19
20
Pr
opos
ed T
ax-e
ffect
ed R
ate
of R
etur
n1
8.50
%
20
21
Tran
spor
tatio
n Al
loca
ted
Rat
e Ba
se
Ln. 1
1 6,
756
21
22
Less
: D
em. C
ompo
nent
of R
ate
Base
C
ost S
tdy.
Pg.
1, L
n. 3
7 (1
,149
) 22
23
Tr
ans.
Allo
cate
d R
ate
Base
5,
606
23
24
Min
. Per
The
rm/ P
er M
onth
BTG
R
Ln. 2
0*Ln
.23/
Ln. 3
$
0.02
038
24
25
25
26
26
27
27
28
(1)
Cal
cula
tion
of T
ax-e
ffect
ed R
ate
of R
etur
n 28
29
Pe
r Stm
t. F,
Pg.
1
Tax
Gro
ss-u
p Fa
ct.
Tax-
effe
cted
RO
R
29
30
30
31
Wei
ghte
d C
ost o
f Cap
ital -
Deb
t 1.
19%
1.
19%
31
32
W
eigh
ted
Cos
t of C
apita
l -Eq
uity
4.
75%
1.
54
7.31
%
32
33
Tota
l Cap
ital
5.94
%
8.50
%
33
34
34
35
Tax
Gro
ss-u
p Fa
ctor
(1/(1
-.35)
1.
54
35
Page 16 of 228
-
SIER
RA
PA
CIF
IC P
OW
ER C
OM
PAN
Y ST
ATEM
ENT
O C
ERT
d/b/
a N
V En
ergy
5
of 6
G
AS
DEP
AR
TMEN
T SH
ELTO
N-P
ATC
HEL
L ST
ATE
MEN
T O
FO
R T
HE
TEST
PER
IOD
EN
DED
DEC
EMB
ER 3
1, 2
015
FO
R T
HE
CER
TIFI
CA
TIO
N P
ERIO
D E
ND
ED M
AY
31, 2
016
(IN
TH
OU
SAN
DS)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
SMAL
L SM
ALL
Ln
RES
IDEN
TIAL
R
ESID
ENTI
AL
CO
MM
ERC
IAL
CO
MM
ERC
IAL
LAR
GE
Ln
N
o D
ESC
RIP
TIO
N
REF
EREN
CE
TO
TAL
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
PRO
PAN
E
CO
MM
ERC
IAL
INC
ENTI
VE
TRAN
S.
No
1 C
alcu
latio
n of
Pro
pose
d R
ate
BTG
R R
even
ues
(in th
ousa
nds)
1
22
3 BT
GR
rate
Pa
ge 3
, Lin
e 21
/23
$ 0.
0905
6 $
0.09
056
$ 0.
1018
6 $
0.10
186
$ 0.
0670
0 $
0.06
700
3 4
4 5
Thro
ughp
ut (T
herm
s)1
Page
3, L
ine
19
99,1
55,5
91
221,
229
44,5
83,8
10
22,9
85
12,3
30,7
24
31,7
63
23,3
71,2
38
5 6
6 7
BTG
R P
ropo
sed
Rat
e R
even
ues
$ 14
,371
$
8,98
0 $
20
$ 4,
541
$ 2
$ 82
6 $
2 7
8 Le
ss E
mpl
oyee
Dis
coun
ts
Page
3, L
ine
12
(50)
(5
0)
8 9
9 10
An
nual
Pro
pose
d Ba
sic
Serv
ice
Cha
rge
Rat
e R
even
ues
Page
2, L
ine
36
37,2
69
30,1
48
81
5,81
1 5
874
110
240
10
11
11
12
Prop
osed
Ann
ual A
dmin
istra
tive
Cha
rge
Rev
enue
Pa
ge 2
, Lin
e 39
61
61
12
13
13
14
To
tal P
ropo
sed
Rat
e BT
GR
Rev
enue
s $
51,6
51
$ 39
,077
$
101
$ 10
,352
$
8 $
1,70
0 $
113
$ 30
1 14
15
15
16
16
17
17
18
C
alcu
latio
n of
ING
R In
cent
ive/
Tran
spor
atat
ion
Rev
enue
s at
Pre
sent
Rat
e (in
thou
sand
s)
18
19
19
20
Mar
gin
Rev
enue
Req
uire
men
t Tar
get (
empl
. dis
coun
ts)
Page
3, L
ine
14
$ 27
2 $
1,34
2 20
21
21
22
Le
ss P
ropo
sed
Rat
e BT
GR
Rev
enue
s Li
ne 1
4 (1
13)
(301
) 22
23
Ad
just
ING
R In
cent
ive
/ Tra
nspo
rtatio
n R
even
ues
to P
rese
nt R
ate
-91
0 23
24
24
25
IN
GR
Ince
ntiv
e Sh
ortfa
ll/Tr
ansp
orta
tion
Rev
enue
s at
Pre
sent
Rat
e $
159
$ 1,
951
25
26
26
27
27
28
28
29
(1)
Stat
ed th
erm
thro
ughp
ut fo
r Sch
edul
e IN
GR
repr
esen
ts th
e fir
m p
ortio
n of
tota
l the
rm th
roug
hput
for t
he c
lass
. 29
30
30
31
31
Page 17 of 228
-
SIER
RA
PA
CIF
IC P
OW
ER C
OM
PAN
Y ST
ATEM
ENT
O C
ERT
d/b/
a N
V En
ergy
6
of 6
G
AS
DEP
AR
TMEN
T SH
ELTO
N-P
ATC
HEL
L ST
ATE
MEN
T O
FO
R T
HE
TEST
PER
IOD
EN
DED
DEC
EMB
ER 3
1, 2
015
FO
R T
HE
CER
TIFI
CA
TIO
N P
ERIO
D E
ND
ED M
AY
31, 2
016
(IN
TH
OU
SAN
DS)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
SMAL
L SM
ALL
CO
MP
Ln
R
ESID
ENTI
AL
RES
IDEN
TIAL
C
OM
MER
CIA
L C
OM
MER
CIA
L C
OM
PRES
SED
LA
RG
E
Ln
No
DES
CR
IPTI
ON
R
EFER
ENC
E
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
PRO
PAN
E
NAT
UR
AL G
AS
CO
MM
ERC
IAL
INC
ENTI
VE
TRAN
S.
No
1 R
ate
Com
paris
on
1 2
2 3
Prop
osed
Rat
es:
3 4
4 5
Basi
c Se
rvic
e C
harg
e Pa
ge 2
, Lin
e 34
$
17.0
0 $
17.0
0 $
37.0
0 $
37.0
0 $
37.0
0 $
1,00
0.00
$
2,30
0.00
$
1,00
0.00
5
66
7 Ad
min
istra
tive
Cha
rge
(Tra
nspo
rtatio
n on
ly)
$ 30
0.00
7
88
9 BT
GR
Pa
ge 3
, Lin
e 21
/23
$ 0.
0905
6 $
0.09
056
$ 0.
1018
6 $
0.10
186
$ 0.
1018
6 $
0.06
700
$ 0.
0670
0 9
10
10
11
BTG
R IN
GR
Tie
r 2
ING
R S
hortf
all W
orkp
aper
#R
EF!
11
12
12
13
Firm
Tra
nspo
rtatio
n M
inim
um M
DR
O
Page
4, L
ine
15
$ 0.
7466
2 13
14
Fi
rm T
rans
porta
tion
Max
imum
MD
RO
Pa
ge 4
, Lin
e 14
$
1.35
432
14
15
15
16
Inte
rrup
tible
Min
imum
per
ther
m
Page
4, L
ine
24
$ 0.
0203
8 16
17
In
terr
uptib
le M
axim
um p
er th
erm
Pa
ge 4
, Lin
e 18
$
0.06
700
17
18
18
19
Pres
ent R
ates
: 19
20
20
21
Ba
sic
Serv
ice
Cha
rge
Exhi
bit B
$
14.0
0 $
14.0
0 $
18.0
0 $
18.0
0 $
18.0
0 $
1,00
0.00
$
2,30
0.00
$
1,00
0.00
21
22
22
23
Ad
min
istra
tive
Cha
rge
(Tra
nspo
rtatio
n on
ly)
$ 30
0.00
23
24
24
25
BT
GR
Ex
hibi
t B
$ 0.
1516
9 $
0.15
169
$ 0.
1725
3 $
0.17
253
$ 0.
1725
3 $
0.11
218
$ 0.
1121
8 25
26
26
27
BT
GR
ING
R T
ier 2
Ex
hibi
t B
$ 0.
0363
3 27
28
28
29
Fi
rm T
rans
porta
tion
Min
imum
MD
RO
Ex
hibi
t B
$ 1.
0716
0 29
30
Fi
rm T
rans
porta
tion
Max
imum
MD
RO
Ex
hibi
t B
$ 2.
2736
2 30
31
31
32
In
terr
uptib
le M
inim
um p
er th
erm
Ex
hibi
t B
$ 0.
0287
9 32
33
In
terr
uptib
le M
axim
um p
er th
erm
Ex
hibi
t B
$ 0.
1121
8 33
34
34
35
D
iffer
ence
: 35
36
36
37
Ba
sic
Serv
ice
Cha
rge
$ 3.
00
$ 3.
00
$ 19
.00
$ 19
.00
$ 19
.00
$ -
$ -
$ -
37
38
21.4
3%
21.4
3%
105.5
6%
105.5
6%
105.5
6%
0.0
0%
0.0
0%
0.0
0%
38
39
Ad
min
istra
tive
Cha
rge
(Tra
nspo
rtatio
n on
ly)
$ -
39
40
0.0
0%
40
41
BT
GR
$
(0.0
6113
) $
(0.0
6113
) $
(0.0
7067
) $
(0.0
7067
) $
(0.0
7067
) $
(0.0
4518
) $
(0.0
4518
) $
-41
42
-4
0.3
0%
-4
0.3
0%
-4
0.9
6%
-4
0.9
6%
-4
0.9
6%
-4
0.2
7%
-4
0.2
7%
42
43
BT
GR
ING
R T
ier 2
#R
EF!
43
44
#R
EF
! 44
45
45
46
Fi
rm T
rans
porta
tion
Min
imum
MD
RO
-3
0.3
3%
$
(0.3
2498
) 46
47
Fi
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Prepared Direct Certification Testimony of
Laura I. Walsh
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BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA Sierra Pacific Power Company d/b/a NV Energy
2016 General Rate Case Gas Department
Docket No. 16-06007
Prepared Certification Testimony of
Laura I. Walsh
Rate Design
I. INTRODUCTION
1. Q. PLEASE STATE YOUR NAME, OCCUPATION, BUSINESS ADDRESS
AND PARTY FOR WHOM YOU ARE FILING TESTIMONY.
A. My name is Laura I. Walsh. I am the Director of Regulatory Analysis, Policy and
Strategy for Sierra Pacific Power Company, d/b/a NV Energy (“Sierra” or the
“Company”) and Nevada Power Company, d/b/a NV Energy (“Nevada Power” and
together with Sierra, the “Companies”). My business address is 6100 Neil Road,
Reno, Nevada. I am filing testimony on behalf of Sierra.
2. Q. HAVE YOU PREVIOUSLY OFFERED PREPARED DIRECT
TESTIMONY IN THIS CASE?
A. Yes, I have.
3. Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THE
CERTIFICATION UPDATE TO THIS CASE?
A. I am Sierra’s witness addressing policy matters related to the Company’s proposed
gas cost of service and rate design. My prepared certification testimony provides
updates to my prepared direct testimony regarding proposed Basic Service Charges
Walsh-DIRECT 1
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(“BSC”) which include the results of an updated Gas Rule 9 Facilities Study
(“Study”). The original Study has been modified to incorporate corrections to two
errors that were identified subsequent to the direct filing. Cary Shelton-Patchell
supports the development and technical aspects of the Company’s certification cost
of service study and Statement O rate design as well as the updates to the Rule 9
facilities costs.
II. POLICY GUIDING RATE DESIGN FOR THIS GAS GRC
4. Q. HAVE THE POLICY CONSIDERATIONS GUIDING THE GAS RATE
DESIGN CHANGED FROM THOSE STATED IN YOUR PREPARED
DIRECT TESTIMONY?
A. No. The Commission’s past recognition of the importance of moving toward cost-
based levels in each of the past three gas general rate review proceedings continues
to be reflected in the Company’s certification proposal. The Company proposes gas
prices that eliminate both inter-class and reduce intra-class subsidies by setting
class revenue requirements at cost, as well as Basic Service Charges (“BSCs”) that
recover all costs that are generally fixed in nature. The necessary exceptions
continue to be incentive natural gas rate (“INGR”) and gas transportation
(“Transportation”) rates.
Walsh-DIRECT 2
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III. BASIC SERVICE CHARGES
5. Q. PLEASE EXPLAIN WHY SIERRA’S PROPOSED INCREASES IN BASIC
SERVICE CHARGES SHOULD BE APPROVED.
A. Sierra is proposing increases in the BSC for the Residential and Small Commercial
customer classes. The proposed increases are consistent with a compliance item in
the Commission’s Order in Docket No. 13-06003 in that the BSC recovers Rule 9
facilities costs1 and reflects the importance of reducing intra-class subsidies. The
BSC reflect the certification cost of service results and are summarized below:
BSC Proposal
Present Proposed % of Customer & Facilities Residential 14.00 $ 17.00 $ 100% Small Commercial 18.00 $ 37.00 $ 89% Large Commercial $1,000.00 $1,000.00 93% Incentive $2,300.00 $2,300.00 100% Transportation $ 1,000.00 $ 1,000.00 170%
Large Commercial, INGR, and Transportation BSCs remain unchanged from
present. Additionally, the Transportation per-customer, per-month, administrative
charge, remains unchanged at $300.00. If approved, the certification proposal for
BSCs for all classes will essentially recover all customer and Rule 9 facilities costs.
The exception remains with the Small Commercial class. The Company proposes
to move the BSC for this class halfway from present rates toward a cost-based rate
to mitigate the effect of the change while making significant progress in eliminating
the intra-class subsidy. The proposed Small Commercial BSC at certification will
recover 89% of the customer and Rule 9 facilities costs.
1 Commission Modified Final Order in Docket Nos. 13-06002, 13-06003, and 13-06004, Directive 12, at p. 201.
Walsh-DIRECT 3
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As stated in my prepared direct testimony, cost-based BSCs reduce the intra-class
subsidy and produce a decrease in the volumetric price bringing it closer to its cost
based level. The proposal to have both the volumetric price and the BSC closer to
cost based results in dampened seasonal variation in both customer bills and
Sierra’s revenue stream. The chart below demonstrates this.
Walsh-DIRECT 4
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IV. RULE 9 FACILITIES COSTS
6. Q. HAS THE COMPANY’S CERTIFICATION COST OF SERVICE
PROPOSAL CHANGED FROM THAT PROPOSED BY THE COMPANY
IN ITS DIRECT FILING?
A. No. The Company continues to propose a cost of service study and class revenue
requirement including Rule 9 facilities as an allocation factor. Ms. Shelton
Patchell’s prepared direct and certification testimonies explain the incorporation of
the Rule 9 facilities into the gas cost of service study and the facilities study itself.
As she explains, inclusion of Rule 9 facilities is in response to the Commission’s
Order in Docket 13-06003, in which Sierra was ordered to include information on
the costs of Rule 9 facilities in the determination of cost based BSC. The updated
Rule 9 facilities are used to split out a portion of the Distribution Mains function to
a new category, Customer Rule 9 Mains in the certification cost of service study.
This is a better reflection of cost causation as it identifies a component of cost that
is directly tied to each class rather than continuing to utilize a less informed
allocation of Distribution Mains plant which is based on system peak demand.
Because Rule 9 facilities are local facilities, closest to the customer, and designed
to meet that customer’s individual planned maximum demand the cost causation
can be directly linked to each class. Once installed, these costs are relatively fixed
in nature. Therefore, identifying the Rule 9 facilities on a typical customer basis by
class is appropriate. As explained in the prepared direct testimony, the investment
per customer and estimate of the Rule 9 facilities plant additions were calculated to
reflect how investments were made over time in order to appropriately remove them
from Distribution Mains Plant. Ms. Shelton-Patchell’s testimony discusses this
process and the certification results.
Walsh-DIRECT 5
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7. Q. SHOULD THE RESULTING CERTFICATION COST ALLOCATIONS
AND RATES DRIVEN BY THOSE COSTS BE APPROVED?
A. Yes. For the reasons stated above and in my prepared direct testimony and that of
Mrs. Shelton-Patchell, the certification gas cost study and resulting gas prices
should be approved.
8. Q. DOES THIS COMPLETE YOUR PREPARED CERTIFICATION
TESTIMONY?
A. Yes.
Walsh-DIRECT 6
Page 25 of 228
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Page 26 of 228
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Prepared Direct Certification Testimony of
Cary R. Shelton-Patchell
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BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA Sierra Pacific Power Company d/b/a NV Energy
2016 General Rate Case Gas Department
Docket No. 16-06007
Prepared Certification Testimony Of
Cary Shelton-Patchell
Rate Design
1. Q. PLEASE STATE YOUR NAME, JOB TITLE, EMPLOYER AND
BUSINESS ADDRESS.
A. My name is Cary Shelton-Patchell. I am a Pricing Specialist in the Rates and
Regulatory Affairs Department for Sierra Pacific Power Company, d/b/a NV
Energy (“Sierra” or the “Company”) and Nevada Power Company, d/b/a NV
Energy, (“Nevada Power”). My primary business address is 6100 Neil Road,
Reno, Nevada. I am filing testimony on behalf of Sierra Pacific Power Company.
2. Q. HAVE YOU PREVIOUSLY OFFERED DIRECT TESTIMONY IN THIS
PROCEEDING?
A. Yes, I have.
3. Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY?
A. The purpose of my testimony is to sponsor Sierra’s Certification Gas Embedded
Cost of Service Study (“Cost Study”) and Certification Statement O, Rate Design.
Shelton-Patchell-GAS RATE DESIGN CERT 1
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4. Q. WHAT EXHIBITS ARE YOU SPONSORING?
A. I sponsor the following exhibits and statement:
Exhibit Shelton-Patchell Certification-2, Certification Gas Embedded
Cost of Service Study;
Exhibit Shelton-Patchell Certification-5, Revised Rule 9 Mains
Facilities Study;
Exhibit Shelton-Patchell Certification-6, Certification Revenue
Requirement Drivers;
Exhibit Shelton-Patchell Certification-7, Certification Alternate Gas
Embedded Cost of Service Study;
Exhibit Shelton-Patchell Certification-8, Certification Alternate Rate
Design
Exhibit Shelton-Patchell Certification-9, Comparison of Certification
Results With and Without Rule 9 Facilities; and
Certification Statement O, Rate Design.
5. Q. PLEASE DESCRIBE THE COST STUDY AND CERTIFICATION
STATEMENT O.
A. The updated Cost Study is found in Exhibit Shelton-Patchell Certification-2. It
updates Exhibit Shelton-Patchell Direct-2 to my prepared direct testimony.
Certification Statement O demonstrates the rate design that is based on the
outcome of the Certification Cost Study. Both certification exhibits replace those
from Sierra’s direct filing.
Shelton-Patchell-GAS RATE DESIGN CERT 2
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6. Q. WHAT ADJUSTMENTS HAVE BEEN MADE TO THE DIRECT FILING
IN EXHIBIT SHELTON-PATCHELL CERTIFICATION-2?
A. Sierra has updated Statements F (cost of capital), I (revenue requirement) and J
(revenues) to recognize changes in results of operations through May 31, 2016.
Statements F, I and J contain, among other things, changes in rate of return,
expense levels, investment amounts, present rate revenues and sales that occurred
during the 12-month Certification period ended on May 31, 2016.
Exhibit Shelton-Patchell Certification-2 reflects the update to Sierra’s rate of
return for the natural gas division from 6.23% to 5.94%, changes in expense and
investment levels occurring during the certification period, and changes in present
rate revenues. As a result of these certification updates, the revenue requirement
required by Sierra’s gas operation to earn its proposed rate of return decreased
from a reduction of $8,000 in the direct filing (see Statement H) to a reduction of
$1,544,000 in this certification filing (see Statement I).
In addition to the revenue requirement updates, Exhibit Shelton-Patchell
Certification-2 reflects a correction to the Rule 9 Facilities Study. In reviewing
the Rule 9 Facilities Study, it was noted that two projects for Large Commercial
Natural Gas (“LCNG”) customers were duplicated and that total project costs for
projects that were for multiple rate classes were reflected in each rate class. The
two duplicate LCNG projects were removed from the study and project costs that
were for multiple rate classes were disaggregated to each rate class using the
number of meters assigned to each rate class. The results of the corrected Rule 9
Facilities Study are shown in Exhibit Shelton-Patchell Certification-5.
Shelton-Patchell-GAS RATE DESIGN CERT 3
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7. Q. WHAT ARE THE RESULTS OF THE CERTIFICATION COST STUDY?
A. The cost-based results of the Cost Study are shown on Page 1 of Exhibit Shelton-
Patchell Certification-2. These results are compared to the results from the direct
filing below in Table Shelton-Patchell-1:
Table Shelton-Patchell-1 A
CLASS
RNG-RESIDENTIAL NATURAL GAS
LPGR-RESIDENTIAL PROPANE
SCNG-SMALL COMMERCIAL NATURAL GAS
LPGC-SMALL COMMERCIAL PROPANE
LCNG-LARGE COMMERCIAL
INGR-INCENTIVE
TRAN-TRANSPORTATION
TOTAL PERCENTAGE CHANGE
B C
PERCENTAGE PERCENTAGE CHANGE CHANGE
EXHIBIT SHELTON-PATCHELL EXHIBIT SHELTON-PATCHELL CERTIFICATION-2 DIRECT-2
-0.38% 0.82%
1.31% 2.47%
0.23% 2.05%
22.57% 25.31%
-7.57% -6.18%
9.48% 5.88%
-40.37% -39.93%
-1.39% -0.01%
D
DIFFERENCE
-1.20%
-1.16%
-1.82%
-2.75%
-1.39%
3.61%
-0.44%
-1.38%
Compared to Exhibit Shelton-Patchell-Direct-2 in my prepared direct testimony,
all classes except for INGR experienced a decrease in the cost-based results. This
information updates the amounts discussed in Q&A 28 of my prepared direct
testimony.
8. Q. WHAT EXPLAINS THE DIFFERENCES BETWEEN EXHIBIT
SHELTON-PATCHELL DIRECT-2 AND EXHIBIT SHELTON
PATCHELL CERTIFICATION-2?
A. Changes in revenue requirement and the Rule 9 Facilities Study corrections drive
the differences between Exhibit Shelton-Patchell Direct-2 and Exhibit Shelton-
Patchell Certification-2. Between the direct filing and the certification filing,
sales and throughput for all customers and some allocators changed. These
Shelton-Patchell-GAS RATE DESIGN CERT 4
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changes to inputs produced small changes in the final allocation of costs between
rate classes. Present rate revenues were also updated for certification, causing the
percent-of-change calculation to change.
9. Q. DID YOU UPDATE EXHIBIT SHELTON-PATCHELL DIRECT-6,
WHICH WAS DISCUSSED IN Q&A 29 OF YOUR DIRECT
TESTIMONY?
A. Yes. As discussed in my direct testimony, changes in the Customer Weighting
Factor Study (“CWFS”), the Demand Study, the Meter Study and the Rule 9
Facilities Study resulted in significant cost shifts between classes. Exhibit
Shelton-Patchell Certification-6 updates the exhibit in my prepared direct
testimony and separately shows the impact of the Rule 9 Facilities Study
corrections discussed above. Line 1 shows the revenue requirement using the
customer weighting factor, demand and meter studies from Docket No. 13-06003.
The isolated changes dues to the customer weighting factor, demand, meter and
facilities studies are shown on lines 4 through 7. Line 8 shows the impact of the
corrections made to the Rule 9 Facilities Study.
10. Q. HOW HAS STATEMENT O CHANGED, GIVEN THE RESULTS OF
EXHIBIT SHELTON-PATCHELL CERTIFICATION-2?
A. The changes in Statement O mainly relate to the change in the revenue
requirement. All classes show a decrease consistent with the overall decrease in
revenue requirement.
Shelton-Patchell-GAS RATE DESIGN CERT 5
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11. Q. WHAT ARE THE RESULTS OF CERTIFICATION STATEMENT O?
A. The results of Certification Statement O are shown on Page 1 of the Certification
Statement O. The results compared to the direct filing are shown in Table Shelton
Patchell-2:
Table Shelton-Patchell-2
A B
STATEMENT O PERCENTAGE
CHANGE CLASS CERTIFICATION FILING
RNG-RESIDENTIAL NATURAL GAS -1.04%
LPGR-RESIDENTIAL PROPANE 0.32%
SCNG-SMALL COMMERCIAL NATURAL GAS -0.54%
LPGC-SMALL COMMERCIAL PROPANE 7.67%
LCNG-LARGE COMMERCIAL -8.42%
INGR-INCENTIVE -8.19%
TRAN-TRANSPORTATION -0.05%
TOTAL PERCENTAGE CHANGE -1.39%
C
STATEMENT O PERCENTAGE
CHANGE ORIGINAL FILING
0.18%
1.60%
1.32%
11.11%
-6.97%
-7.59%
-0.06%
-0.01%
D
DIFFERENCE
-1.22%
-1.28%
-1.86%
-3.44%
-1.45%
-0.60%
0.01%
-1.38%
Compared to the direct filed Statement O, all of the customer classes, except
Transportation, experienced a decrease in class revenue requirement. Also, the
percentage changes are consistent with the percentage changes from Shelton-
Patchell Certification-2.
Shelton-Patchell-GAS RATE DESIGN CERT 6
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12. Q. PLEASE UPDATE THE CUSTOMER COSTS THAT ARE THE BASIS
FOR SETTING THE BASIC SERVICE CHARGES THAT WERE FIRST
DESCRIBED IN Q&A 33 OF YOUR DIRECT TESTIMONY.
A. Between the direct filing and the certification filings, the Customer Costs for
various classes have been updated and decline as result of the lower revenue
requirement associated with the reduction in the rate of return for the natural gas
department mentioned above. Except for the Transportation class, the reduction
in the Customer Costs are not significant enough to change the Basic Service
Charges that are proposed in Sierra’s direct filing. The cost reductions for each
class are:
• Residential Natural Gas (RNG): From $17.36 to $16.98.
• Residential Propane (LPG): From $17.24 to $16.86.
• Small Commercial Natural Gas (SCNG): From $46.48 to $41.70.
• Small Commercial Propane (LPG): From $50.12 to $44.87.
• Large Commercial (LCNG and LPG): From $1,065.60 to $1,075.96.
• INGR: From $2,504.85 to $2,360.35.
• Transportation: From $1,030.34 to $588.27.
Although the Customer Costs for the Transportation class have gone down by
43%, Sierra continues to propose that the per-meter-per-month charge for the
Transportation class be set at the same rate as proposed for large commercial
customers, or $1,000, to remain consistent with the requirement stated in the tariff.
Shelton-Patchell-GAS RATE DESIGN CERT 7
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http:1,030.34http:2,360.35http:2,504.85http:1,075.96http:1,065.60
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13. Q. WERE THE ALTERNATE COST STUDY AND ALTERNATIVE
STATEMENT O DISCUSSED IN Q&A 40 OF YOUR DIRECT
TESTIMONY UPDATED?
A. Yes. The alternate Cost Study that does not include the effects of the Rule 9
facilities cost breakout was updated and is Exhibit Shelton-Patchell
Certification-7. Exhibit Shelton-Patchell Certification-8 is the updated
alternative Statement O with rates that do not include the effects of the Rule 9
facilities cost break-out. Exhibit Shelton-Patchell Certification-9 compares the
rates proposed in Statement O with the alternate rates from Exhibit Shelton-
Patchell Certification-8.
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Shelton-Patchell-GAS RATE DESIGN CERT 8
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14. Q. DOES THIS CONCLUDE YOUR CERTIFICATION TESTIMONY?
A. Yes it does.
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Page 36 of 228
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$
5,99
4 $
953
$ (9
13)
2 3
Oth
er O
pera
ting
Rev
enue
Pa
ge 2
5, L
ine
35
2,93
2 3,
246
853
2 10
5 0
28
2 2,
256
3 4
ING
R M
argi
n (R
even
ue C
redi
ts)
Page
25,
Lin
e 40
7,
817
0 0
0 0
-0
0 -
4 5
Tota
l Rev
enue
$
144,
692
$ 10
9,71
4 $
74,5
84
$ 18
1 $
26,6
11
$ 18
$
6,02
2 $
955
$ 1,
344
5 6
6 7
Ope
ratin
g Ex
pens
es
7 8
Non
BTG
R O
&M E
xpen
se
Page
3, L
ine
2 $
91,4
55
$ 55
,126
$
34,5
29
$ 77
$
15,5
26
$ 8
$ 4,
294
$ 69
2 $
-8
9 BT
GR
O&M
Exp
ense
Pa
ge 4
, Lin
e 56
17
,929
17
,579
13
,810
36
2,
656
2 66
1 98
31
5 9
10
Dep
r and
Am
ort.
Page
5, L
ine
62
16,0
21
16,2
27
11,9
35
31
3,39
2 3
432
63
371
10
11
Taxe
s O
ther
Tha
n In
com
e Pa
ge 6
, Lin
e 11
2,
861
2,98
6 2,
228
6 58
9 1
84
13
67
11
12
Def
erre
d In
com
e Ta
x Pa
ge 6
, Lin
e 25
(7
,620
) 1,
621
1,17
4 3
354
0 40
6
43
12
13
Amor
t of I
TC
Page
6, L
ine
29
(49)
(5
2)
(37)
(0
) (1
2)
(0)
(1)
(0)
(1)
13
14
Fede
ral I
ncom
e Ta
x Pa
yabl
e Pa
ge 6
, Lin
e 33
12
,565
4,
157
2,75
4 7
1,09
1 1
138
22
148
14
15
Tota
l Ope
r. Ex
p.
$ 13
3,16
2 $
97,6
43
$ 66
,393
$
161
$ 23
,595
$
16
$ 5,
647
$ 89
5 $
942
15
16
16
17
Ret
urn
From
Ope
ratio
ns
11,5
30
$ 12
,066
$
8,19
0 $
20
$ 3,
016
$ 3
$ 37
5 $
60
$ 40
2 17
18
18
19
Ad
just
men
ts to
Ope
ratin
g In
com
e Pa
ge 6
, Lin
e 40
-
--
--
--
--
19
20
20
21
Adj
uste
d N
et In
com
e $
11,5
30
$ 12
,067
$
8,19
1 $
21$
3,01
6 $
3$
375
$ 60
$ 40
2 21
22
22
23
To
tal N
et R
ate
Bas
e Pa
ge 1
0, L
ine
50
$ 21
1,11
9 $
202,
776
$ 13
7,63
5 $
347
$ 50
,681
$
46
$ 6,
306
$ 1,
006
$ 6,
756
23
24
24
25
Rat
e of
Ret
urn
5.46
%
5.95
%
5.95
%
5.95
%
5.95
%
5.95
%
5.95
%
5.95
%
5.95
%
25
26
26
27
27
28
SUM
MA
RY
OF
PRO
POSE
D S
ALE
S R
EVEN
UE
REQ
UIR
EMEN
T PE
R C
OST
STU
DY
28
29
29
30
Cus
tom
er
30
31
O&M
Incl
. A&G
Pa
ge 2
7, L
ine
7 $
13,5
61
$ 11
,167
$
30
$ 1,
794
$ 2
$ 47
9 $
68
$ 22
31
32
O
ther
Pa
ge 2
7, L
ine
17
24,3
58
18,9
44
50
4,75
5 5
461
46
98
32
33
Tota
l Cus
tom
er
Page
27,
Lin
e 19
$
37,9
19
$ 30
,110
$
80
$ 6,
549
$ 6
$ 94
0 $
113
$ 12
0 33
34
34
35
C
omm
odity
Pa
ge 2
7, L
ine
33
55,1
18
34,5
23
77
15,5
23
8 4,
293
692
2 35
36
36
37
D
eman
d Pa
ge 2
7, L
ine
47
15,6
09
9,46
3 22
4,
002
3 81
5 15
4 1,
149
37
38
38
39
Oth
er R
even
ue, E
xclu
ding
Tra
nspo
rtatio
n Pa
ge 2
5, L
ine
33, 3
7, 5
9 99
3 85
3 2
105
0 28
2
4 39
40
40
41
Tr
ansp
orta
tion
Page
25,
Lin
e 36
71
-
--
--
-71
41
42
42
43
Pr
opos
ed R
even
ue R
equi
rem
ent
$ 10
9,71
0 $
74,9
48
$ 18
2 $
26,1
78
$ 18
$
6,07
6 $
962
$ 1,
346
43
44
44
45
Pres
ent R
ate
Sale
s R
even
ue
Stat
emen
t J
111,
258
75,2
35
179
26,1
20
15
6,57
4 87
8 2,
257
45
46
46
47
Tota
l Rev
enue
Cha
nge
$ (1
,549
) $
(287
) $
2 $
58
$ 3
$ (4
98)
$ 83
$
(911
) 47
48
48
49
Le
ss B
TER
Rev
enue
Cha
nge
13
--
--
-13
-
49
50
50
51
Tota
l Rev
enue
Req
uire
men
t $
(1,5
36)
$ (2
87)
$ 2
$ 58
$
3 $
(498
) $
96
$ (9
11)
51
52
52
53
53
54
Perc
ent
-1.3
8%
-0.3
8%
1.31
%
0.22
%
22.5
6%
-7.5
7%
10.9
5%
-40.
37%
54
55
55
Page 37 of 228
-
SIE
RR
A P
AC
IFIC
PO
WE
R C
OM
PA
NY
SP
PC 2
016
Gas
GR
C
d/b/
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Cer
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31,
201
5
FOR
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TIFI
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ER
IOD
EN
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D M
AY
31,
2016
FUN
CTI
ON
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FA
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RS
(IN T
HO
USA
ND
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(a)
(b)
(c)
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(g)
(h)
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Ln
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11
12
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