7 1 State of Michigan 2 Before the Michigan Public Service
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7 1 STATE OF MICHIGAN 2 BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION 3 In the matter of the application of DTE Electric Company for approval Case No. U-18150 4 of depreciation accrual rates and other related matters. Volume 2 5 _______________________________________/ 6 CROSS-EXAMINATION 7 Proceedings held in the above-entitled 8 matter before Sharon L. Feldman, Administrative Law Judge 9 with MAHS, at the Michigan Public Service Commission, 10 7109 West Saginaw, Lake Michigan Room, Lansing, Michigan, 11 on Tuesday, October 24, 2017, at 9:00 a.m. 12 APPEARANCES: 13 JON P. CHRISTINIDIS, ESQ. DTE Energy 14 One Energy Plaza, 688WCB Detroit, Michigan 48226 15 On behalf of DTE Electric Company 16 STEPHEN A. CAMPBELL, ESQ. 17 CLARK HILL, PLC 212 East Grand River Avenue 18 Lansing, Michigan 48906 19 On behalf of Association of Businesses Advocating Tariff Equity 20 MEREDITH BEIDLER, 21 Assistant Attorney General 7109 West Saginaw Highway, Floor 3 22 Lansing, Michigan 48917 23 On behalf of Michigan Public Service Commission Staff 24 25 REPORTED BY: Marie T. Schroeder, CSR-2183 Metro Court Reporters, Inc. 248.360.8865 8 1 I N D E X 2 WITNESS: PAGE 3 ROBERT P. CHARLES Direct Testimony bound in 14 4 KEVIN J. CHRESTON 5 Corrected Rebuttal Testimony bound in 30 6 EDWARD T. HENDERSON Direct Testimony bound in 44 7 PAUL G. HORGAN 8 Direct Testimony bound in 58 9 KENNETH D. JOHNSTON Direct Testimony bound in 68 10 NEIL E. MORTENSEN 11 Direct Testimony bound in 91 12 DR. RONALD E. WHITE Direct and Rebuttal Testimony bound in 99 13 HOWARD R. COOPER 14 Direct and Rebuttal Testimony bound in 140 15 BRIAN C. ANDREWS Direct and Rebuttal Testimony bound in 173 16 RONALD J. ANCONA 17 Direct Testimony bound in 206 18 19 20 21 22 23 24 25 Metro Court Reporters, Inc. 248.360.8865 9 1 E X H I B I T S 2 NUMBER DESCRIPTION MRKD OFRD RECD 3 A-1 DTE Electric Retirement Unit Catalog 11 138 139 as of this filing 4 A-2 Historical Annual CPI and PPI 11 138 139 5 Escalation Rates 6 A-3 Projected Annual CPI and PPI 11 138 139 Escalation Rates 7 A-4 Schedule of Obsolete Inventory by 11 138 139 8 Plant 9 A-5 Account 397-Communication Equipment 11 138 139 10 A-6 Adjusted Summary of Decommissioning 11 138 139 Costs by Plant 11 A-7 Recommended DTE Electric 11 138 139 12 Depreciation Rates 13 A-8 Proposed Streetlighting & Signal 11 67 67 System Account Allocations 14 A-9 Proposed LED Luminaire Capital Cost 11 67 67 15 A-10 MEP Marysville Power Plant 11 90 90 16 Decommissioning Estimate 17 A-11 Recommended MERC Depreciation Rate 11 138 139 18 A-12 Marysville vs Harbor Beach Value 11 90 90 Analysis 19 A-13 Harbor Beach Land Appraisal 11 90 90 20 A-14 N-1, N-2, N-3, N-4 11 13 13 21 A-15 2016 Depreciation Study DTE 11 98 98 22 Energy by Foster Association 23 A-16 ABATE-2 Exhibit A-4 Schedule of 11 138 139 Obsolete Inventory with Detail 24 A-17 ABATE Decommissioning Costs 11 138 139 25 Metro Court Reporters, Inc. 248.360.8865 10 1 E X H I B I T S 2 NUMBER DESCRIPTION MRKD OFRD RECD 3 AB-1 (Sponsored by B. Andrews) 11 171 172 4 AB-2 (Sponsored by B. Andrews) 11 171 172 5 AB-3 (Sponsored by B. Andrews) 11 171 172 6 AB-4 (Sponsored by B. Andrews) 11 171 172 7 8 S-1 (Sponsored by R. Ancona) 11 205 205 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Metro Court Reporters, Inc. 248.360.8865 11 1 Lansing, Michigan 2 Tuesday, October 24, 2017 3 9:00 a.m. 4 - - - 5 (Hearing resumed pursuant to the schedule.) 6 (Documents were marked for identification by the 7 Court Reporter as Exhibits A-1 through A-13, A-14 8 Schedules N-1, N-2, N-3, and N-4; A-15 through A-17; 9 AB-1 through AB-4, and S-1.) 10 - - - 11 JUDGE FELDMAN: On the record. Good 12 morning, all. Today is the date we set aside for 13 cross-examination in this case. May I ask counsel 14 present to place their appearances on the record, please. 15 MR. CHRISTINIDIS: Yes, your Honor. Jon 16 Christinidis on behalf of DTE Electric Company. 17 JUDGE FELDMAN: Thank you. 18 MS. BEIDLER: Good morning, your Honor. 19 Meredith Beidler on behalf of Michigan Public Service 20 Commission Staff. 21 JUDGE FELDMAN: Thank you. 22 MR. CAMPBELL: Good morning, your Honor. 23 Steve Campbell of Clark Hill on behalf of Assocation of 24 Businesses Advocating Tariff Equity. 25 JUDGE FELDMAN: Thank you. And since Metro Court Reporters, Inc. 248.360.8865 12 1 it's my understanding the parties have agreed to bind in 2 the testimony, we're not expecting anybody else to come 3 this morning, right? 4 MR. CHRISTINIDIS: I am not, your Honor. 5 JUDGE FELDMAN: All right. Mr. 6 Christinidis, you may proceed when you are ready. 7 MR. CHRISTINIDIS: Yes, your Honor. 8 Would you like me to sort of serially go through all of 9 the witnesses and identify their testimony and exhibits 10 or how would you like to -- 11 JUDGE FELDMAN: I think any way that 12 makes sense to you, just so we get it all on the record. 13 I think I have notes that I can work from so we don't get 14 too lost. If you've got yours and I've got my notes, we 15 should be O.K. 16 MR. CHRISTINIDIS: All right, your Honor. 17 Consistent with the stipulation to bind in and waive 18 cross-examination, DTE Electric's first witness is Robert 19 P. Charles. He filed Qualifications and Direct Testimony 20 of Robert P. Charles, consisting of a cover sheet and 14 21 pages of questions and answers. He also sponsored an 22 exhibit and schedules that are designated as A-14 23 Schedule N-1 which is 144 pages, A-14 Schedule N-2, 103 24 pages, A-14 Schedule N-3, 132 pages, and Exhibit A-14 25 Schedule N-4, which is 27 pages. Metro Court Reporters, Inc. 248.360.8865 13 1 So with that, your Honor, the Company 2 would move to bind in the Qualifications and Direct 3 Testimony of Robert P. Charles and move the admission of 4 Exhibit A-14, Schedules N-1 through N-4. 5 JUDGE FELDMAN: All right. Let me ask 6 for the record if there are any objections to Mr. 7 Christinidis's request? Hearing no objections, the 8 prefiled direct testimony of Robert P. Charles will be 9 bound in the record and Exhibit A-14, including all four 10 Schedules N-1 through N-4, is admitted into evidence. 11 (Testimony bound in.) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Metro Court Reporters, Inc. 248.360.8865 14 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the Application of ) DTE ELECTRIC COMPANY ) for approval of depreciation accrual rates ) Case No. U-18150 and other related matters ) QUALIFICATIONS AND DIRECT TESTIMONY OF ROBERT P. CHARLES 15 DTE ELECTRIC COMPANY QUALIFICATIONS OF ROBERT P. CHARLES Line No. 1 Q. Will you please state your name and business address? 2 A. My name is Robert P. Charles. My business address is 55 East Monroe Street, 3 Chicago, Illinois, 60603. 4 5 Q. By whom are you employed and in what capacity? 6 A. I am employed by Sargent & Lundy, L.L.C. (Sargent & Lundy) as a Senior 7 Principal Consultant. 8 9 Q. What is your educational background? 10 A. I hold a B.S. in Electrical Engineering from Norwich University and an M.B.A. 11 from Benedictine University. I am a registered Professional Engineer in Illinois 12 and Pennsylvania. 13 14 Q. What are your responsibilities in your current position? 15 A. My responsibilities include planning, managing, and performing consulting and 16 engineering activities for power projects. As a senior project manager in the 17 consulting group I am responsible for the performance of consulting projects, 18 including: due diligence reviews, owner’s engineering services, and special 19 projects. Owners engineering services include conceptual design studies, feasibility 20 studies and economic evaluations, preparation of engineering, procurement, and 21 construction (EPC) specifications, evaluation of EPC bids, design review and 22 construction technical support. I am responsible for interfacing with the client on 23 progress, resolving emergent issues, and resolution of comments on the final 24 deliverable. I also managed the Sargent & Lundy Team that developed the DTE 25 Electric Company (DTE Electric or the Company) decommissioning cost estimate. RPC-1 16 R. P. CHARLES Line U-18150 No. 1 Q. Have you or Sargent & Lundy previously conducted demolition studies for 2 other utilities? 3 A. Yes, I directed the Sargent & Lundy teams that performed the decommissioning 4 cost estimate of fossil-fueled and renewable power generating assets for Montana- 5 Dakota Utilities and San Diego Gas & Electric. I reviewed and developed 6 decommissioning cost estimates for nuclear facilities, including: the Krummel and 7 Brokdof nuclear plants in Germany, the La Crosse Boiling Water Reactor, Big 8 Rock Point, Calvert Cliffs, and Nine Mile. I also evaluated the decommissioning 9 cost estimates and developed independent cost estimates for 12 nuclear plants 10 associated with asset evaluation for potential purchase.