BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA
) | ||
IN THE MATTER OF THE | ) | |
APPLICATION OF OKLAHOMA | ) | |
GAS AND ELECTRIC COMPANY | ) | |
FOR AN ORDER OF THE | ) | |
COMMISSION APPROVING A | ) | CAUSE NO. PUD 202000021 |
RECOVERY MECHANISM FOR | ) | |
EXPENDITURES RELATED TO | ) | |
THE OKLAHOMA GRID | ) | |
ENHANCEMENT PLAN | ) | |
) |
Responsive Testimony of
Michael P. Gorman
Managing Principal
Brubaker & Associates, Inc.
On behalf of
Federal Executive Agencies
August 25, 2020
RESPONSIVE TESTIMONY OF MICHAEL P. GORMAN | PAGE 1 OF 23 |
CAUSE NO. PUD 202000021 |
Table of Contents for the | |
Responsive Testimony of Michael P. Gorman | |
Page | |
I. COMPANY PROPOSAL ............................................................................................. | 5 |
II. GEP MECHANISM..................................................................................................... | 7 |
II.A. Revised GEP Surcharge Revenue Requirement............................................. | 11 |
II.B. Allocation and GEP Mechanism Factor ........................................................... | 16 |
II.C. GEP Mechanism is Not Balanced Policy......................................................... | 18 |
Qualifications of Michael P. Gorman ............................................................................. | 20 |
Direct Exhibit MPG-1 through Direct Exhibit MPG-4 |
RESPONSIVE TESTIMONY OF MICHAEL P. GORMAN | PAGE 2 OF 23 |
CAUSE NO. PUD 202000021 |
BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA
) | ||
IN THE MATTER OF THE | ) | |
APPLICATION OF OKLAHOMA | ) | |
GAS AND ELECTRIC COMPANY | ) | |
FOR AN ORDER OF THE | ) | |
COMMISSION APPROVING A | ) | CAUSE NO. PUD 202000021 |
RECOVERY MECHANISM FOR | ) | |
EXPENDITURES RELATED TO | ) | |
THE OKLAHOMA GRID | ) | |
ENHANCEMENT PLAN | ) | |
) |
Responsive Testimony of Michael P. Gorman
- Q PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
- A Michael P. Gorman. My business address is 16690 Swingley Ridge Road, Suite 140,
- Chesterfield, MO 63017.
- Q WHAT IS YOUR OCCUPATION?
- A I am a consultant in the field of public utility regulation and a Managing Principal with
- the firm of Brubaker & Associates, Inc. ("BAI"), energy, economic and regulatory
- consultants.
- Q PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND AND EXPERIENCE.
- A This information is included in Appendix A to my testimony.
- Q ON WHOSE BEHALF ARE YOU APPEARING IN THIS PROCEEDING?
- A I am testifying on behalf of the Federal Executive Agencies ("FEA"), consisting of
- certain agencies of the United States government which have offices, facilities, and/or
RESPONSIVE TESTIMONY OF MICHAEL P. GORMAN | PAGE 3 OF 23 |
CAUSE NO. PUD 202000021 |
- installations in the service area of Oklahoma Gas and Electric Company ("OG&E" or
- "Company"), from whom they purchase electricity and energy services.
- Q WHAT IS THE PURPOSE OF YOUR TESTIMONY?
- A I will respond to OG&E's proposal to implemental a rider mechanism to recover
- capital expenditures associated with the Oklahoma Grid Enhancement Plan ("GEP").
- Q PLEASE SUMMARIZE YOUR RECOMMENDATIONS AND CONCLUSIONS.
- A In my testimony, I address the Company's proposal for a GEP Mechanism to adjust
8 | prices and bills to customers to reflect additional charges for GEP-related | |
9 | investments. My recommendations concern the following: | |
10 | 1. OG&E has not established the need to recover additional revenues in a | |
11 | GEP Mechanism. Indeed, based on the evidence in its filing, OG&E has | |
12 | not established that the revenue collected in base rates will not be | |
13 | adequate to provide it a fair opportunity to recover its GEP capital plan | |
14 | costs. | |
15 | 2. If a GEP Mechanism is approved, I recommend several adjustments in the | |
16 | development of revenue requirement, adjustments in the allocation of the | |
17 | reconciliation component of the GEP Mechanism across rate classes, and | |
18 | propose to modify the GEP Mechanism charge per class, from a kWh | |
19 | charge, to a kW charge for classes that largely pay for distribution and | |
20 | transmission services in demand charges. | |
21 | 3. With respect to the revenue requirement measurement for GEP | |
22 | incremental investments, I propose the following changes: | |
23 | a. Modify the rate base to an incremental rate base | formula by |
24 | tracking accumulated depreciation reserve changes over time for | |
25 | the amount of investments recorded in the same FERC accounts | |
26 | that the GEP investments will be recorded. This will ensure that | |
27 | the GEP Mechanism tracks changes in the net plant in-service | |
28 | rather than the gross plant in-service, for the FERC accounts | |
29 | where GEP investments will be recorded. | |
30 | b. I recommend modifying the authorized return on equity used in the | |
31 | GEP Mechanism to track today's much lower capital market costs | |
32 | relative to OG&E's last base rate case, and to reflect reduced cost | |
33 | recovery risk associated with the implementation of the GEP | |
34 | Mechanism. | |
RESPONSIVE TESTIMONY OF MICHAEL P. GORMAN | PAGE 4 OF 23 | |
CAUSE NO. PUD 202000021 |
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original document
- Permalink
Disclaimer
OGE Energy Corporation published this content on 25 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 August 2020 19:17:01 UTC