DPL Docket No. 22344 CC/RD Page 1

DPL– Docket No. 22344 – CC/RD – Page 1

Note: Items that appear in [bracketed italics] are those that were presented in post-hearing briefs, as summarized by Policy Development staff. ISSUE NO. 1 1. Should generic customer classifications be 1a. Should the customer classifications in 1b. If the Non-Unanimous Agreement is not adopted? If so, what principles should guide the Non-Unanimous Agreement on Uniform adopted, what should the generic classes be? the determination? Customer Classification be adopted as the generic customer classification? AEP Yes. The Commission has determined that a Yes. Moncrief direct at p. 6, line 13-20; p. 13, AEP's original proposal consists of 7 customer uniform customer classification is appropriate for line 21 through p. 16, line 8. classes. Similar to NUA classes, except no the purposes of standardizing T&D rates in Texas. stratification for 10KW and a separate class for Order No. 17 at 10. unmetered service. EGSI Yes. The customer class configuration should Yes. This customer class configuration reflects The Company would still propose the classes in the represent significant differences in cost the differences in cost responsibility. Thornton Agreement. responsibility for a distribution system. Thornton direct at p.6, line 12 through p. 7, line 2. direct at p. 4, line 3-12. RELIANT Not during PTB period for HL&P. Generic NUA classes should not be imposed on HL&P Classes for HL&P should be as proposed in HL&P’s ENERGY HL&P classes should only be adopted if they follow because they are too dissimilar from current original UCOS filing, which were designed to mimic current class design in order to avoid creation of HL&P classes. NUA classes may work for HL&P current classes in order to avoid creation of headroom problems since the PTB rate is 6% off other utilities because they are comparable to headroom problems. JNP Direct, pp.2-4, and current delivery charges. JNP Direct, pp.3-4. current classes for those utilities. JNP Direct, Attachment A, pp. 22-28. pp.4-6,11. SHARYLAND If generic customer classifications are adopted, a UTILITIES, LLP utility that provides interval data recorder (“IDR”) meters for all customers should not be required to utilize customer classifications designed for non- demand metered customers. SPS Yes, generic customer classifications should be Yes, the Non-Unanimous Agreement should be Not Applicable. adopted. There should be a minimum number of adopted. (Keyser direct at p.6, line 1). broad classes based on simplicity, cost causation, SPS proposed to limit the Small Commercial and the portion of the distribution system utilized. class (Secondary < 10kW) to single phase service only, the Non-Unanimous Agreement is silent on this specific detail. (Keyser direct at p.8, line 1). TNMP TNMP supports the adoption of generic customer Yes. TNMP supports the adoption of If the NUS is not adopted, then it would be more classifications that are proposed in the NUS. generic customer classifications that are appropriate to return to the non-generic classes Principles that should guide the determination are proposed in the NUS. Principles that should proposed by the utilities based on utility specific customer characteristics and minimization of guide the determination are customer historic classes. Johnson Direct pp. 8-9. drastic changes from historic models. Johnson characteristics and minimization of drastic Direct p. 4 changes from historic models. Johnson Direct p. 4 TXU Yes. The determination should be guided by Yes. The NUA satisfies the principles The NUA should be adopted. See Issue #1. sound ratemaking principles that will enable the discussed in Issue #1. Sherburne Direct at pp. design of standardized cost-based rates for TDUS. 6-10. Voltage level differentiation that directly affects DPL– Docket No. 22344 – CC/RD – Page 2

Note: Items that appear in [bracketed italics] are those that were presented in post-hearing briefs, as summarized by Policy Development staff. ISSUE NO. 1 1. Should generic customer classifications be 1a. Should the customer classifications in 1b. If the Non-Unanimous Agreement is not adopted? If so, what principles should guide the Non-Unanimous Agreement on Uniform adopted, what should the generic classes be? the determination? Customer Classification be adopted as the generic customer classification? the cost to serve a class of customers and the customer class usage characteristics that define each class' use of the transmission and distribution system should be considered. Sherburne Direct at pp. 6-10. CITIES Cities neither support nor oppose the rate class While the NUA’s sweeping consolidation of If the NUA is not adopted, it would be appropriate to consolidation as proposed by the NUA because it customer classes simplifies the regulatory handle the customer classification issues in the is not possible at this time to determine the impact process and facilitates marketing decisions by individual UCOS proceedings. of consolidation on customer bills or competition. REPs, such consolidation creates the potential Andersen Direct at p. 7 line 15-20. for significant cross-subsidies and may deny Generic customer classifications should allocate access to competitive service for customers costs as fairly as possible and minimize the with electric usage that is small when com- potential in rates and bills that are not justified by pared to average usage within the assigned rate differences in costs. Andersen Direct at p. 6, line class and for customers with load factors that 13 - 15. Cities note that customer class are significantly lower than their class average consolidation like that proposed by the NUA load factor. Andersen Direct at p. 4, line 19-26. affects the use of class average costs used to Cities recommend the creation of size differen- design rates. Class average cost is less useful tiated subclasses. when classes are consolidated because consolidation tends to increase intra-class variation in customer size and load factors. Andersen Direct at p. 17, line 2 - 8. An example of the intra-class variations that develop as classes are consolidated shows that average use of the largest 25 percent of TXU customers taking primary service is 1000 times larger than the average use for the bottom quartile of primary service customers. Andersen Direct at p. 17, line 9 - 27. CITY OF Generic customer classifications should not be Generic customer classifications in the Non- Given the unique rate classes and rate design HOUSTON adopted unless, immediately upon adoption, an Unanimous Agreement should not be adopted characteristics of Reliant’s existing rates, it is almost exception is granted so that the generic customer unless, immediately upon adoption, an certain that any generic classes or rate design will classifications are not applicable to particular exception is granted so that those generic significantly hinder or eliminate retail competition for utilities, such as Reliant, where the result is to customer classifications are not applicable to a large number of Reliant’s existing customers. significantly hinder or eliminate retail competition Reliant. Daniel at p. 15, line 20, through p. 18, Therefore, it will likely be necessary to grant an for some customer groups. Daniel at p. 7, line 1 line 8. exception to utilities such as Reliant for just about any through p. 18, line 8. generic classifications and rate design. Daniel at p. 7, line 1, through p. 12, line 11. DPL– Docket No. 22344 – CC/RD – Page 3

Note: Items that appear in [bracketed italics] are those that were presented in post-hearing briefs, as summarized by Policy Development staff. ISSUE NO. 1 1. Should generic customer classifications be 1a. Should the customer classifications in 1b. If the Non-Unanimous Agreement is not adopted? If so, what principles should guide the Non-Unanimous Agreement on Uniform adopted, what should the generic classes be? the determination? Customer Classification be adopted as the generic customer classification? DFWHC/CICU Yes. See response to 1a Yes EGSI CITIES Cities do not support the generic customer classes Cities do not support the class It may be that a proposal to adopt generic classes is if ratchets are also adopted. Creation of generic recommendations if ratchets are adopted. not possible due to combining such dissimilar types classes in the NUA combines dissimilar of customers [usage patterns]. customers in primary and secondary. Their usage characteristics are dissimiliar. Because the revenue requirement for the class remains constant, use of ratchets provides the opportunity for certain customers to pay less and shifts costs to other customers without a true cost justification for such shift. NUCOR Yes. Yes, for purposes of this proceeding. Nucor believes that there must be a transmission voltage (or High Voltage) class. Nucor has previously contended that there should be interruptible transmission service, but we understand that the Commission has elected not to have utilities provide this service at this time. (We may ask the Commission to reconsider this issue at some point in the future after we gain experience in the restructured market.) At some future point, Nucor believes that consideration should be given to dividing this class (or creating subclasses) by different voltage levels, e.g., 345 kv, 138 kv, etc., however, Nucor is not advocating this step at this time.) Nucor takes no position on the remaining classes of service. OPC Yes. The PUC should be guided by principles No. TNMP and Reliant should be exempted from a class such as equity in the burden imposed on different definition which separates primary voltage and customers, efficiency (i.e., “price signal” to secondary voltage distribution customers due to lack customer reflects cost of consumption), of statistically valid load research based on this simplicity, understandability, public acceptability, distinction. feasibility of application, revenue stability, Stutz Direct at p. 29 line 10 through p. 31, line 16. avoidance of undue discrimination, discouragement of wasteful use of service, cost Stipulation also contains no provision for exceptions causation, and the impact on headroom. to the generic classes should the generic classes/rate Stutz Direct at pg. 7, line 11 through pg. 8, line design have adverse impacts on customers. 11; pg. 9, line 19 through pg.10, line 18; pg. 18; lines 1-5. Exhibit JS-2 attached to Direct DPL– Docket No. 22344 – CC/RD – Page 4

ISSUE NO. 2 2. Should generic design of TDU rates be 2a. Should the generic rate design include a 2a(i) What elements should be included in the adopted? If so, what principles should guide customer charge for each class? customer charge? the determination? AEP Yes. The Commission has determined that a Yes. Moncrief direct at p. 6, line 21 through p. Customer Service Charge: billing, collection, uniform rate design is appropriate for purposes of 7, line 4; p. 10, lines 1-12; p. 17, lines 2-18; economic development, call center costs, distribution standardizing T&D rates in Texas. Order No. 17 Exh. DRM-2. customer service costs. Moncrief direct at p. 17, lines at 10. [The rate design should be recovery-based 2-18. on equalized rates of return by class, distribution Metering Service Charge: capital and operating costs rates based on system use, annual maximum of metering customer usage. Moncrief direct at p. 17, demand, voltage levels, and simplicity. lines 2-18. Moncrief rebuttal at p. 9, line 6 - page 16, Brief at p. 4.] line 7. EGSI Yes. The rate design should be based on cost to Yes. Thornton direct at p. 9, line 7-12. The final determination of which elements to include serve with fixed location charges for all classes should be made in each individual IOU UCOS and volumetric charges for all classes except proceeding. Thornton rebuttal at p. 8, line 15 through Transmission. Thornton direct at p. 7, line 5 p. 9, line 8. through p. 8, line 5 and Riley direct, all pages. RELIANT Not during PTB period for HL&P. Generic rate Customer charges for PTB customers in HL&P Elements of customer charge for PTB customers ENERGY HL&P design should only be adopted if it follows service territory should follow current model as should follow current model, as proposed in HL&P’S current rate design in order to avoid creation of proposed in HL&P’s original UCOS filing in original UCOS filing, in order to avoid creation of headroom problems since the PTB rate is 6% off order to avoid creation of headroom problems. headroom problems. JNP Direct, pp.7-11. current delivery charges. JNP Direct, pp.7-11, JNP Direct, pp.7-11. and Attachment A, Fig. JNP-3. SHARYLAND If a generic rate design of TDU rates is adopted, a UTILITIES, LLP utility that provides interval data recorder (“IDR”) meters for all customers should not be required to utilize a rate design designed for non- demand metered customers but instead should be permitted to utilize a rate design appropriate for demand-metered customers. SPS Yes, generic rate designs should be adopted. Yes, the generic rate designs should include a All customer related costs should be included. Rate design should be simple, cost based, and customer charge (Service and Facility charge) Customer related costs are fixed costs associated with minimize costs that they are intended to recover. for each rate class. (Keyser direct at p.11, line metering equipment and service laterals, all meter (Keyser direct at p.9, line 5). 21 & p.12, line 16). reading, billing and customer service expenses, along with the appropriately allocated portions of administrative, general and common costs. (Keyser direct at p.11, line 21 & p.12, line 16) and (Keyser direct workpapers at p.298, 587, 606, 606, 644, 663, and 683). TNMP TNMP supports the generic design of TDU rates Yes. Johnson Direct p. 10 Customer charges should include, at a minimum, the proposed in the NUS. Principles that should cost of metering, meter reading, service drop and guide the determination are cost causation and billing costs. Johnson Direct pp. 10-11. minimization of drastic changes from historic models. Johnson Direct p. 10; Rebuttal p. 7 DPL – Docket No. 22344 – CC/RD – Page 6

ISSUE NO. 2 2. Should generic design of TDU rates be 2a. Should the generic rate design include a 2a(i) What elements should be included in the adopted? If so, what principles should guide customer charge for each class? customer charge? the determination? TXU Yes (with appropriate exceptions). Standardized Yes. Sherburne Direct at p. 14, line 2 - p. 15, The customer (or point of delivery) charge should rate design should (1) reflect the cost of service; line 7. recover costs associated with (1) obtaining customer (2) be equitable to customers within a given rate usage information, (2) rendering a bill, (3) distribution class; and (3) incorporate the requirements of the customer service, and (4) handling inquiries and Utilities Code and the associated Commission requests for distribution and discretionary services. Substantive Rules. Sherburne Direct at pp. 11- These costs are accounted for in the metering system 12. services, utility billing system services and utility customer services functions. Sherburne Direct at p. 14, line 27 - p. 15, line 7. CITIES Guiding principles include cost causation and the A generic rate design should provide for Costs classified as customer related include preservation of headroom for small customers multiple customer charges that vary with investment and expenses associated with meters and and low load factor customers. customer size. Because of the large variation in service drops, meter reading, and customer billing. customer size, a charge designed to recover Costs that should not be classified as customer related class average customer costs will not work if for the purpose of developing a generic rate design customer classes are consolidated as proposed include costs associated with distribution by the NUA. Either a stratified customer transformers, poles, conduit and lines. Andersen charge or the recovery of a share of customer- Direct at p. 15 line 17 – p. 16 line 29. related costs through the demand charge is appropriate. Cities support allowing small primary service customers to take service under a discounted secondary service tariff so that they may avoid paying a significantly higher bill than an otherwise comparable customer taking service at secondary voltage. Cities also support capping the minimum bill for low volume T&D customers at the current customer charge for bundled service as proposed by EGSI witness Thornton at p. 11. Andersen Direct at p. 18, line 17-25. Andersen Rebuttal at 14 line 26-29. CITY OF A generic design of TDU rates should not be Upon grant of an exception to Reliant, this Upon grant of an exception to Reliant, this issue HOUSTON adopted unless, immediately upon adoption, an issue should be decided in Reliant’s individual should be decided in Reliant’s individual UCOS case.] exception is granted so that the generic rates are UCOS case. not applicable to particular utilities, such as Reliant, where the result is to significantly hinder or eliminate retail competition for some customer groups. Daniel at p. 7, line 1, through p. 18, line 8. DFWHC/CICU Yes Yes Billing costs and minimum system costs should be included DPL – Docket No. 22344 – CC/RD – Page 7

ISSUE NO. 2 2. Should generic design of TDU rates be 2a. Should the generic rate design include a 2a(i) What elements should be included in the adopted? If so, what principles should guide customer charge for each class? customer charge? the determination? EGSI CITIES Guiding principles include cost causation and the A generic rate design should provide for Costs classified as customer related include preservation of headroom for small customers multiple customer charges that vary with investment and expenses associated with meters and and low load factor customers. customer size. Because of the large variation in service drops, meter reading, and customer billing. customer size, a charge designed to recover Costs that should not be classified as customer related class average customer costs will not work if for the purpose of developing a generic rate design customer classes are consolidated as proposed include costs associated with distribution by the NUA. Either a stratified customer transformers, poles, conduit and lines. Andersen charge or the recovery of a share of customer- Direct at p. 15 line 17 – p. 16 line 29. related costs through the demand charge is appropriate. Cities support allowing small primary service customers to take service under a discounted secondary service tariff so that they may avoid paying a significantly higher bill than an otherwise comparable customer taking service at secondary voltage. Cities also support capping the minimum bill for low volume T&D customers at the current customer charge for bundled service as proposed by EGSI witness Thornton at p. 11. Andersen Direct at p. 18, line 17-25. Andersen Rebuttal at 14 line **. NUCOR Yes, a generic rate design should be adopted at Yes, at least for the transmission voltage class. For rates for transmission voltage customers, a least for ERCOT utilities. Tracking cost (Zarnikau direct at p. 6, 8). customer/facilities charge can be utilized to recover causation is most important; along with simplicity any costs that are directly assignable, that vary by and proper price signals to encourage behavior customer and/or do not vary on the basis of demand. . that will increase system reliability. (Zarnikau (Zarnikau direct at p. 6, 8). direct at p. 5, 7-8). OPC Yes. The PUC should be guided by principles Yes, so long as it is limited to costs which are Metering, billing, and only those costs directly such as equity in the burden imposed on different clearly and directly customer-related. required to perform metering/billing functions should customers, efficiency (i.e., “price signal” to Stutz Direct at p. 6, lines 7-15. be included. A&G and general customer service costs customer reflects cost of consumption), should be excluded. simplicity, understandability, public acceptability, Stutz Direct at p. 22, line 3 through p. 23, line10; pg. feasibility of application, revenue stability, 17 lines 1-6; avoidance of undue discrimination, Johnson Rebuttal at p. 13, line 12 through p. 14, line discouragement of wasteful use of service, cost 4. causation, and the impact on headroom. Stutz Direct at pg. 7, line 11 through pg. 8, line 11; pg. 9, line 19 through pg.10, line 18; pg. 18; lines 1-5. Exhibit JS-2 attached to Direct testimony of Stutz. DPL – Docket No. 22344 – CC/RD – Page 8

TEXAS Yes, with careful consideration to customer No position. No position. COTTON impacts. GINNERS TEXAS Yes. Yes. Saunders, direct at p. 10, L. 26-28. Per kWh (energy charge), only if metering constraints. INDUSTRIES Saunders, direct at p. 8, L. 12-16. TEXAS LEGAL Yes, subject to exceptions. Comparability to No. [If customer charges are included in residential SERVICES unregulated business (i.e., no customer or other distribution rates, they should be limited to only CENTER fixed charges.) metering and billing costs. Stutz Direct at p. 22, line 3 through p. 23, line10; pg. 17 lines 1-6; Johnson Rebuttal at p. 13, line 12 through p. 14, line 4.] TEXAS Yes, if possible with cost-driven rate design, Yes. Saunders, direct at p. 7, L15. Metering, billing, customer service (per UCOS RETAILERS using the “postage stamp” method (i.e., instructions). Saunders, direct at p. 7, L 17-24. ASSOCIATION distribution rates are the same for all customers at a given voltage level.) Saunders, direct at p. 2, L21. Saunders, cross-rebuttal at p. 3, L 7-10. TIEC Yes. The guiding principles should be to align Yes. Metering, billing and the cost of providing a basic (supported by cost-causation with cost recovery as closely as connection to the grid (e.g., service drop, line OXYCHEM) practicable. Pollock direct at p. 11, line 10–p. 12, transformer). Pollock direct at p. 12, lines 3-6. line 19; p. 13, line 3–page 16, line 2; Exhibit JP- 1. CLECO [TDU rates should not be adopted. Rates should [Yes, if the delivery/facilities charges are cost- CONNEXUS reflect utility–specific cost causation principles based and are consistent with previous rate including the Jan.1, 1999 rates on which PTB is design principles. based. Brief at p. 2.] Brief at p. 2.] COMMISSION Yes. See answer to question 1 Yes. Pevoto direct at page 17, line 6—page 21, Elements of the customer charge should include STAFF line 3; page 22, line 13—page 23, line 18; Page customer-related costs that normally vary directly with 30, line 8—page 33, line 2. the number of customers, such as billing, metering and customer services provided to customers regardless of usage. Pevoto direct page 20, line16-page 21, line 3. Pevoto cross reb. Page 24, line 13—page 26, line 5 COMMISSION Yes. Generic rates should be designed based Yes. The customer charge shall consist of costs that vary DECISION on cost causation. with the number of customers, such as metering, billing, and customer service. DPL – Docket No. 22344 – CC/RD – Page 9

ISSUE NO. 2 2a(ii) Should customer charges for services 2b. Should the generic rate design include a 2b(i) How should delivery/facilities charges be that will be competitive in the future be delivery/ facilities charge for each class? recovered from customers who do not have separately stated? demand meters (e.g. kWh, per KW, fixed monthly charges, etc.)? AEP Yes. Separate charges for metering and for Yes, except distribution customers taking at Per KW based on load profiles. AEP has proposed customer service. Moncrief direct at 17, line 2-8. transmission level. Moncrief direct at 7, line 5- alternative rate designs for residential and small 7; page 17, line 19 through page 19, line 12. commercial customers based on KWH charge, i.e., seasonal differential KWH charges and annual maximum energy charge. Moncrief direct at page 17, line 19 – page 19, line 12; page 20, line 3 – page 22, line 18. Moncrief rebuttal at p. 16, line 10 –- page 17, line 13. EGSI Yes, for the MET function. Thornton rebuttal at Yes. Thornton direct at p. 7, line 13 through p. The charges should be recovered through a “per kWh” p. 4, line 18 through p. 5, line 4. 8, line 5. charge. Thornton direct at p. 7, line 5-12.

RELIANT No. Separately stating such charges deviates Delivery/facilities charge should only be Customers without demand meters are residential and ENERGY HL&P from current HL&P model and could cause imposed if current rate design for PTB small commercial customers and are all subject to headroom problems for PTB customers in HL&P customers in HL&P service territory includes PTB. Rate design for these customers in the HL&P service territory. JNP Direct,pp. 7-11. delivery/facilities charge, in order to avoid service territory should mimic current rate design. JNP creation of headroom problems. JNP Direct, Direct, pp.7-11. pp.7-11. SPS SPS take no position on this issue. Yes, the generic rate designs should include For customers without demand meters, delivery/facility charge (System Capacity delivery/facility charges should be on a per KW basis, charge) for each rate class. using demands determined through the load profiling (Keyser direct at p.11, line 21, and p.12, line process. For classes where virtually all loads that can 16). be served with the minimum size distribution system (Residential, Small Commercial, and Lighting), these demand related costs should be recovered through a fixed monthly charge. (Keyser direct at p.11, line 21, and p.12, line 16, and p.13, line 7). TNMP Yes. Johnson Direct p. 10 [Yes] Per kWh Johnson Direct p. 10 Per kWh. Johnson Direct p. 10 TXU No. It is premature to separately state a metering Yes. A facilities charge is an appropriate Facilities charges should be recovered from residential component because metering will not become mechanism to recover the costs associated with and general service secondary-small customers on a competitive for 3 to 5 years or more and even distribution system service. Sherburne Direct ¢/kWh basis. For general service primary customers then the TDU will still have basic meters for its at p. 14, lines 3-25; p. 15, line 8-12. without demand meters, TXU Electric proposes to fix own billing purposes. Sherburne Rebuttal at p. 4, the billing demand at 5 KW, which is the maximum line 10- p. 5, line 2. “customer NCP max KW” demand from TXU Electric's load research data. For the lighting class, there should be a fixed facilities charge ($/light). Sherburne Direct at p. 14, lines 2-25; p. 16, lines 3-23; p. 17, lines 3-11. DPL – Docket No. 22344 – CC/RD – Page 10

ISSUE NO. 2 2a(ii) Should customer charges for services 2b. Should the generic rate design include a 2b(i) How should delivery/facilities charges be that will be competitive in the future be delivery/ facilities charge for each class? recovered from customers who do not have separately stated? demand meters (e.g. kWh, per KW, fixed monthly charges, etc.)? CITIES Yes. Yes. For the purpose of this question, Cities Cities recommend a customer charge that recovers no assume the delivery/facilities charge consists of more than the cost of the minimum service drop and costs associated with meters and service drops. meter required for the provision of service within the [However, small use and low load factor class. Andersen Direct at p. 5, line 9-12. customers who are not currently assessed a demand charge should be exempt from the delivery/facilities charge. Brief at p. 10.] CITY OF Upon grant of an exception to Reliant, this issue Upon grant of an exception to Reliant, this Upon grant of an exception to Reliant, this issue HOUSTON should be decided in Reliant’s individual UCOS issue should be decided in Reliant’s individual should be decided in Reliant’s individual UCOS case. case. UCOS case. EGSI CITIES Yes. Yes. For the purpose of this question, Cities Cities recommend a customer charge that recovers no assume the delivery/facilities charge consists of more than the cost of the minimum service drop and costs associated with meters and service drops. meter required for the provision of service within the class. Andersen Direct at p. 5, line 9-12. NUCOR Nucor has no position on this issue at this time. Yes, at least for the transmission voltage class. Nucor has no position on this issue.

OPC OPC proposed a customer charge and a per kWh Yes. For the residential class, these charges should be charge for residential rate design and did not recovered on a per kWh basis. address the possibility for separating out the Stutz Direct at pg. 17, line 9 through pg. 26, line 6. metering portion of the customer charge. OPC Johnson Rebuttal at pg. 8, line 16 through pg. 12, line does not oppose separating out metering from the 4. customer charge. TEXAS No position. No position. No position. COTTON GINNERS TEXAS LEGAL Only if recover on a per kWh basis [Per kWh.] SERVICES CENTER TEXAS Yes. Yes. Saunders, direct at p. 10, L. 26-28. Per kWh. Saunders, direct at p. 8, L. 12-16. RETAILERS ASSOCIATION TIEC Yes. Pollock direct at p. 12, line 20–p. 13, line 2. Yes. There should be separate transmission kWh. Pollock direct at Exhibit JP-1. and distribution delivery/facility charges for each class. Pollock direct at Exhibit JP-1. DPL – Docket No. 22344 – CC/RD – Page 11

ISSUE NO. 2 2a(ii) Should customer charges for services 2b. Should the generic rate design include a 2b(i) How should delivery/facilities charges be that will be competitive in the future be delivery/ facilities charge for each class? recovered from customers who do not have separately stated? demand meters (e.g. kWh, per KW, fixed monthly charges, etc.)? COMMISSION Yes. Pevoto direct, page 20, line 16-page 21, line Yes. Each class should contain a Fixed System For those customers w/out demand meters, (residential STAFF 3. charge, a Metering charge, a Transmission and secondary w/ demand less than or equal to 10KW Service charge, and a Distribution charge. or kVa) the Transmission Service charge and the Pevoto direct, page 18, line 8-page 21, line 3. Distribution Service charge should be recovered Pevoto cross reb. Page 15, line 3—page 26, through kWh charges. Pevoto direct page 19, lines 1- line 5.. 3; page 21, line 4—page 22, line 2. COMMISSION Yes. Metering charges shall be separately Yes. The delivery/facilities charges will be recovered on DECISION stated for wholesale purposes. a per-kWh basis for residential customers and secondary customers less than 10 kW or kVa (less than 5 kW for TNMP and EGSI).

For customers without demand metering in other classes, this issue shall be addressed in the individual UCOS cases. (See DPL #3(e) and (f)) DPL – Docket No. 22344 – CC/RD – Page 12

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ISSUE NO. 2 2b(ii) Should locations with existing IDR 2b(iii) What billing demand determinants 2b(iv) What demand interval is appropriate for installations have a different billing treatment should be used (e.g., NCP, CP)? the demand charges? than non-IDR locations? AEP No. Moncrief rebuttal at p. 4, line 12 –- p. 9, line Customer NCP KW with 100% ratchet for all 3. classes, except seasonal irrigation which will be billed on monthly NCP KW. Moncrief direct at page 17, line 19 – page 19, line 12. Moncrief rebuttal at p. 4, line 12 –- p. 9, line 3. EGSI No. It is inappropriate to shift costs between The billing demand determinants should be The demand interval appropriate for demand charges customers with and without an IDR. Thornton based on NCP. Thornton direct at p. 7, line 5- should be determined in each individual IOU UCOS rebuttal at p. 7, line 7 through p. 8, line 13. 12, Thornton rebuttal at p. 7, line 7-20 and proceeding. Thornton Exhibit JRT-G1. RELIANT Delivery/facilities charge for PTB customers, Billing demand determinants for PTB The demand interval for PTB customers should be the ENERGY HL&P both IDR metered and non-IDR metered, should customers should be the same as those same as that currently in use in order to prevent mimic the current rate design to prevent currently in use in order to prevent headroom headroom problems. A 60-minute interval billing headroom problems. JNP Direct, pp. 7-11. problems. JNP Direct, pp.7-11. demand does not capture the cost imposed on the system by customers with loads which fluctuate widely within the span of an hour, causing these customers to be subsidized by customers whose loads do not fluctuate widely over the span of an hour. JNP Direct, pp. 7-11; JNP Rebuttal, pp.14-15. SPS No, all locations within a rate class should have Billing demands should be the monthly [Billing demand intervals should be addressed in the same billing treatment, regardless of the type maximum demand at each point of delivery. company-specific cases. Brief at p. 16] The demand of meter. (Keyser direct at p.10, line 4, and p.12, line 5, indicating meters currently installed on the SPS and p.13, line 1). system utilize a 30-minute demand interval (electronic can be reprogrammed to 15 minutes, mechanicals cannot). Interval recording meters on the SPS system are capable of reading 15, 30, or 60 minute interval demands. (Keyser rebuttal at p.8, line 20). TNMP No Customer NCP 15 minute interval See CC/RD TXU Ex. 1, Sherburne Direct at 24; CC/RD TXU Ex. 3, Sherburne Rebuttal at 5-8. [15-minute interval is appropriate to avoid cost shifting to non-IDR metered customers. Brief at p. 7.] TXU No. All customers billed on the basis of demand NCP should be used because it is easy to A 15 minute demand interval should be used. The should be billed using the same demand billing calculate and explain and tracks cost causation. proposal by TIEC and Nucor to use hourly integrated determinants to avoid cost shifting and intraclass NCP also avoids the cost shifting, intraclass demand for the recovery of transmission costs for IDR subsidies. Sherburne Rebuttal at p. 5, line 12 –- subsidies, and potential for gaming that would customers should be rejected because it p. 8, line 3. result from CP billing. Sherburne Direct at p. inappropriately shifts costs to non-IDR customers. 23, line 22–- p. 24, line 20. Sherburne Rebuttal Sherburne rebuttal at p. 5, line 27 –- p. 6, line 28. at p. 5, line 12 –- p. 8, line 3; and p. 10, line 21–- p. 11, line 4.. DPL – Docket No. 22344 – CC/RD – Page 14

ISSUE NO. 2 2b(ii) Should locations with existing IDR 2b(iii) What billing demand determinants 2b(iv) What demand interval is appropriate for installations have a different billing treatment should be used (e.g., NCP, CP)? the demand charges? than non-IDR locations? CITIES No. Cities oppose the use coincident demand NCP. Lowest common denominator. (CP) billing as proposed by TIEC witness Pollock because it is discriminatory against customers within the same rate class that do not have meters capable of recording coincident demand. Nor does TIEC’s proposal result in a better match between customer bills and actual customer responsibility for costs incurred. TIEC’s proposal is only feasible if a subdivision of classes is made based on customer size and/or load factor. Even then, CP billing may distort the customer’s actual responsibility for cost. Andersen Rebuttal at p. 9, line 2 –- p. 12, line 20. CITY OF Upon grant of an exception to Reliant, this issue Upon grant of an exception to Reliant, this Upon grant of an exception to Reliant, this issue HOUSTON should be decided in Reliant’s individual UCOS issue should be decided in Reliant’s individual should be decided in Reliant’s individual UCOS case. case. UCOS case. DFWHC/CICU No NCP of customer/kwh 15 minutes EGSI CITIES No. Cities oppose the use coincident demand NCP. Lowest common denominator. (CP) billing as proposed by TIEC witness Pollock because it is discriminatory against customers within the same rate class that do not have meters capable of recording coincident demand. Nor does TIEC’s proposal result in a better match between customer bills and actual customer responsibility for costs incurred. TIEC’s proposal is only feasible if a subdivision of classes is made based on customer size and/or load factor. Even then, CP billing may distort the customer’s actual responsibility for cost. Andersen Rebuttal at p. 9, line 2 –- p. 12, line 20. NUCOR Yes. Specifically, Nucor is concerned with retail For retail rates by ERCOT utilities for the For the transmission voltage class in ERCOT, billing rates by ERCOT utilities for the transmission transmission voltage class, billing determinants demands should be determined on an hourly interval voltage class (for both transmission and should be based on the contribution to for all demand charges, consistent with ERCOT distribution-related costs). Since customers in coincident peak (specifically the 4-CP) transmission rates and cost causation. All customers this class in ERCOT have or will have IDR consistent with ERCOT transmission rates and in the class must use the same interval to avoid any meters, it is Nucor’s position that such customers cost causation. Given that there is no undue discrimination. (Zarnikau direct at p. 6, 8-9; can be billed on the basis of time-of-use; investment in distribution facilities to serve Zarnikau rebuttal at p.6) Hourly intervals are often specifically their contribution to coincident peak. these customers, any costs classified as used nationwide for both wholesale and retail At a minimum, Nucor believes that such meters distribution should be recovered either through customers, particularly for transmission rates. should be used so that billing will be done based the customer charge or the demand charge DPL – Docket No. 22344 – CC/RD – Page 15

TEXAS No position. NCP – this would most closely track current Monthly, based on actual demand in each month. COTTON charges, to reduce additional possibilities for GINNERS customer impacts. TEXAS Yes. Saunders, direct at p. 11, L. 8-9. For distribution, maximum customer demand. No comment at this time. RETAILERS Saunders, direct at p. 8, L. 19-21, p. 17. 4CP if ASSOCIATION possible for Transmission Service within ERCOT. Saunders, direct at p. 11, L. 2-9. TIEC All customers equipped with IDR metering CP billing should apply to all IDR-metered A 60-minute demand interval is appropriate for (supported by should be eligible for coincident billing. CP customers. This is consistent with FERC transmission charges billed under a CP rate. OXYCHEM) billing should not be limited only to existing IDR precedent and is the perfect marriage between Otherwise, 15-minute intervals are appropriate unless installations. Pollock direct at p. 16, line 3–p. 20, cost allocation and rate design because a different interval is specified in a customer’s line 12; Exhibits JP-2, JP-3, JP-4, and JP-5. transmission costs are allocated to classes on a contract. Pollock direct at Exhibit JP-1. CP basis. All other demand-metered classes should be billed on a customer NCP basis. Pollock direct at p. 16, lines 4–12; p. 18, lines 13–16. CLECO [Yes. IDR metered customers should pay CONNEXUS charges on a kW basis and demand metered customers charges should be based on load profiles. Brief at p. 2.] COMMISSION Yes. Pevoto cross reb. Page 32, line 10--page 33, Transmission kW charges for customers No position at this time. STAFF line 17. without an IDR meter and Distribution kW charges should be designed and billed to customers based on NCP demand. For the customers with IDR meters, the transmission kW charges should be billed on a 4-CP method. Pevoto direct p. 21, line 4—p. 22, line 2. Pevoto cross reb. p. 32, line 10 – p. 33, line 17. DPL – Docket No. 22344 – CC/RD – Page 16

ISSUE NO. 2 2b(v) Should ratchets be implemented? 2b(vi) If ratchets are implemented, what 2b(vii) For a utility that has historically billed on level of ratchet is appropriate and for which kVa, may this practice continue? customers? AEP Yes, for all customer classes. Moncrief direct at 100% for all customer classes [no ratchet No opinion. page 17, line 19 – page 19, line 12. Moncrief proposed for seasonal agricultural customers]. rebuttal at p. 4, line 12 - p. 9, line 3. Moncrief rebuttal at p. 17, line 15 - p. 23, line [Ratchets provide for steady recovery of fixed 2. [As a compromise, AEP is willing to accept assets and a predictable billing variable. Brief at 85% ratchet. Reply brief at p. 10.] p. 10] EGSI The company would consider the incorporation of 100% for classes with volumetric charges Yes. ratchets in the DSS schedule. Thornton direct at based on demand and applied on a 12 month p. 12, line 8 to p. 13, line 5. [The use of a ratchet rolling basis. Thornton direct at p. 13, lines 6- ensures equity in recovery costs. Also, the use of 15 and Thornton rebuttal at p. 5, line 6 through a ratchet is not inconsistent with the recognition p. 6, line 13. [This would not include of diversity among customer contribution to residential or secondary classes below 5 kW distribution system usage. Brief at p. 6-7.] demand in EGSI’s case. The use of regression analysis or coincidence factor analysis is not needed to determine proper ratchet level. Brief at p. 6-7.] RELIANT Yes. The demand ratchets for PTB customers The demand ratchet levels for PTB customers Yes. In the HL&P service territory, the current kVa ENERGY HL&P should be the same as those currently in use in should be the same as those currently in use to billing demand determinants should be used in order order to prevent headroom problems. JNP Direct, prevent headroom problems. For non-PTB to prevent headroom problems for PTB customers. In p.10; JNP Rebuttal, pp.5-7; rates, an 85% to 90% ratchet is reasonable. JNP addition, kVa billing sends the correct price signal for Direct, p.10; JNP Rebuttal, pp. 5-7. [If ratchet customers to correct power factor and replacing the is applied to all customers with demand meters would be costly. JNP Direct, p.15. meters, as proposed by Staff, it likely that a special subclass for MGS customers would have to be created to avoid headroom inequities. See brief at p. 10.] SPS Yes, all demand charges should include a demand Demand ratchets should be set at 100% to SPS takes no position on this issue. ratchet to reflect the fixed nature of the reflect the fixed nature of the distribution distribution system capacity costs. (Keyser direct system capacity costs. (Keyser direct at p.13, at p.13, line 1) and (Keyser rebuttal at p.11, line line 1) and (Keyser rebuttal at p.11). 2). [It is unfair to allow seasonal customers to only pay for a small portion of the distribution system, because they are using it only for a portion of the year. Brief at p. 18] TNMP Yes, for demand metered customers. Johnson 75% Johnson Direct p. 13. [Proposed 75% Yes. Direct p. 13 ratchet in large customer tariff. TNMP is willing to consider alternative ratchet levels for all demand-metered customers as long as the billing determinants are adjusted to reflect DPL – Docket No. 22344 – CC/RD – Page 18

ISSUE NO. 2 2b(v) Should ratchets be implemented? 2b(vi) If ratchets are implemented, what 2b(vii) For a utility that has historically billed on level of ratchet is appropriate and for which kVa, may this practice continue? customers? the ratchet level. Brief at p. 7-8.] TXU Yes. A ratchet ensures that customers within a All rates and riders that are billed on kW TXU Electric takes no position on this issue at this class are treated equitably; it reflects cost of should employ a ratchet of 100% of the time. service; and provides revenue stability. customer's maximum annual demand to reflect Sherburne Direct at p. 24, line 21 - p. 25, line 25. the fact that, from a transmission and distribution standpoint, the customer is responsible for the maximum facilities that are in place to serve him. Sherburne Direct at p. 25, lines 23 - 29. Sherburne Rebuttal at p. 8, line 4 - p. 9, line 20. [No valid conclusions can be drawn from Cities’ analysis of load data, because it examined the Company’s on-peak hours, not the entire month, which is how the ratchets and customer NCP works in TXU’s current rates. Brief at p. 8.] CITIES No. Ratchets do not further the Commission’s [If ratchets are used, Cities recommend ratchet No position. goal of developing cost-based electric bills and exceptions for low-load factor customers or place an excessive burden on low load factor creation of a subgroup for small use and low customers. Andersen Direct at p. 11, line 1 – 3. load factor customers without demand meters. Andersen Rebuttal at 4, line 17 - p. 5, line 25. Brief at p. 15, Reply brief at p. 4.] Cities’ extensive statistical analysis of utility load research data demonstrates that there is no support or weak statistical support for the use of ratchets. Andersen Direct at p. 13, line 1 – 25. In contrast, no party supporting ratchets has performed an analysis of billing determinants that shows that the use of ratchets improves the match between customer bills and customer responsibility of cost. Andersen Rebuttal at 4, line 19. Therefore, billing demand should be calculated based on a customer’s current monthly maximum demand with no ratchet provision. Andersen Direct at p. 14, line 3 – 6. CITY OF Upon grant of an exception to Reliant, this issue Upon grant of an exception to Reliant, this Upon grant of an exception to Reliant, this issue HOUSTON should be decided in Reliant’s individual UCOS issue should be decided in Reliant’s individual should be decided in Reliant’s individual UCOS case. case. UCOS case. DFWHC/CICU Yes. (Baron, p. 9, line 29 – p. 11, line 2) 80-85%. (Baron, at 11– 17) [Ratchet level Yes [Ratchets help fairly assign demand-related costs should recognize diversity within classes and can stabilize revenues for utilities. Ratchets between class peaks and individual customer DPL – Docket No. 22344 – CC/RD – Page 19

ISSUE NO. 2 2b(v) Should ratchets be implemented? 2b(vi) If ratchets are implemented, what 2b(vii) For a utility that has historically billed on level of ratchet is appropriate and for which kVa, may this practice continue? customers? also recognize fixed nature of T&D capital costs.] peaks; therefore, 100% ratchet is excessive. Brief at p. 3.] EGSI CITIES No. The use of ratchets would shift costs from See response to 2b(v). [The analysis of cost No position. high load factor customers to low load factor causation supports neither an 85% nor 100% customer with no cost basis. None of the utilities ratchet for any of the utilities evaluated. Brief performed an analysis of the need for ratchets. at p. 8.] The witnesses for high load factor customers presented a class coincidence factor analysis; not a customer coincidence factor analysis. The analysis of customers coincidence factor demonstrates no support for adoption of ratchets. [With the dissimilarity of customers within the proposed primary and secondary classes, intra- class subsidization is certain. Brief at p. 8.] NUCOR Nucor takes no position on ratchets at this time In any event, ratchets should not be applied to Nucor takes no position on this issue at this time. for classes other than the ERCOT transmission off-peak demands for the transmission voltage voltage class. For that class, Nucor believes that class. Costs for these customers are caused by the demand component of retail rates should be contribution to coincident peak demands. based on the 4 summer monthly CPs, which has (Zarnikau direct at p. 8, 9). the effect of a ratchet for these CP demands. No other ratchet should apply. OPC No, not for the Residential Class. Stutz Direct at Ratchets should be implemented for the non- OPC takes no position on this issue at this time. pg. 24, line 7 through pg. 25, line 13. Johnson residential classes only to the extent justified Rebuttal at pg. 12, line 18 through pg. 13, line 11. by analysis of credible, statistically reliable [With regard to ratchets for other customer load research data. classes, OPC supports the Cities’ position. Brief at p. 7.]

TEXAS Not for seasonal agricultural customers. [If a Ratchets should not be implemented for No position. COTTON ratchet is implemented, the demand charge could seasonal agricultural customers. GINNERS exceed the former bundled rate for these customers on annual basis] (Green Direct p. 6, lines 19, 20, 21) TEXAS INDUSTRIES TEXAS LEGAL SERVICES CENTER TEXAS Yes. Saunders, direct at p. 8, L. 22 – p. 9, L. 11. Approximately 85% for general service Yes. DPL – Docket No. 22344 – CC/RD – Page 20

ISSUE NO. 2 2b(v) Should ratchets be implemented? 2b(vi) If ratchets are implemented, what 2b(vii) For a utility that has historically billed on level of ratchet is appropriate and for which kVa, may this practice continue? customers? RETAILERS customers. Saunders, direct at p. 9, L. 12 – p. ASSOCIATION 10, L. 7. TIEC Yes. Pollock direct at p. 23, line 11–p. 24, line A 100% ratchet for should be applied for Yes. Pollock direct at Exhibit JP-1. (supported by 21. transmission charges billed on a CP basis. OXYCHEM) Otherwise, a ratchet no higher than 85% should apply to all other demand-metered customers. Pollock direct at p. 25, line 1–p. 26; Pollock rebuttal at pp. 5–10 and Exhibits JP-9, JP-10. [For customers billed on a CP basis for transmission charges, no ratchet is needed because each customer will pay a flat amount established on its 4 CP billing determinants each month regardless of usage. Brief at p. 8.] COMMISSION Yes. Pevoto cross reb. Page34, line 6---page 39, 85 % ratchet should be applied to all Yes. Proposed NUA classes would allow this practice STAFF line 9. distribution rate classes with a demand charge; to continue. Pevoto direct page 13, lines 16-22; page seasonal cotton gin customers should be 19, lines 1-3. exempt from the ratchet b/c applying ratchet to these customers could result in charges higher than the bundled rates they are currently paying. Pevoto cross reb. Page 37, line 12— page 39, line 9. COMMISSION A ratchet shall be implemented for An 80% ratchet shall be applied to all Yes, kVa billing may continue as recognized in the DECISION distribution cost recovery. distribution rate classes with a demand NUA. charge, except that a ratchet shall not apply to seasonal agriculture customers. DPL – Docket No. 22344 – CC/RD – Page 21

ISSUE NO. 2* 2c How should transmission service charges 2c(i) What design elements should apply to 2c(ii) Should transmission service rate design be recovered for ERCOT utilities? transmission service rates? include a transmission cost recovery factor (e.g., TCRF)? If so, how should it be designed? AEP TCRF with total transmission costs recovered Same billing determinants used for distribution Yes. The TCRF should use the same billing through an annual true-up mechanism. Moncrief system charges. Moncrief direct, page 23, line determinants as used for distribution system charges direct, page 7, line 8; page 28, line 6 – page 25, 19-21; page 25, line 1-5. based on 2002 transmission payments and allocation line 5. Moncrief rebuttal at p. 23, line 4 - p. 27, to classes based on ERCOT 4CP. An annual true-up line 21. [POST HEARING COMMENTS- It is mechanism should be incorporated in the tariff. inappropriate to design a rate other than the Moncrief direct at page 23, line 6 – page 25, line 5. [POST HEARING COMMENTS - AEP supports postage stamp rate, which should be applied to Moncrief rebuttal at p. 23, line 4 - p. 27, line 21. for billing purposes the transmission billing the REP’s total load. After transmission bills strawman (Staff Exhibit 3) developed at the are rendered to the REPs, customer class [POST HEARING COMMENTS - If the Commission hearings. This model uses the ERCOT ISO as an billing is the responsibility of the REP and approves AEP’s interpretation of the Staff strawman, aggregator of loads and bills from the TSPs to neither the distribution company nor the a TCRF is not needed. Brief at p. 14.] the REP. As an alternative, the distribution Commission should be involved in setting company could serve as a billing agent for the customer class-specific transmission prices or TSP to the REP. Brief at p. 10.] billing methodologies. Brief at pp. 10-12.] EGSI Not applicable, because EGSI is a non-ERCOT Not applicable, because EGSI is a non-ERCOT Not applicable, because EGSI is a non-ERCOT utility. utility. utility. RELIANT Total transmission costs should be recovered as See 2c. See 2c. ENERGY HL&P set forth in rider TCRF, which was proposed in HL&P’s initial UCOS filing. Rates would be [POST HEARING - The 4 CP billing [POST HEARING: Whatever methodology is used, adjusted annually for changes in cost and any methodology should not be used in the distribution company should not be at risk. If over or under recovery by the utility in the transmission billing to individual customers. It Order No. 14 approach is selected, a true up previous year. In addition, updated billing is the ability to move the power from procedure should be adopted for the distribution determinants would be used and costs would be generators to loads, not necessarily the ability utility to pass through and collect transmission costs. re-allocated among customer classes based on to meet peak demand that requires new Brief at pp. 10-11.] scaling of original charges by ratio of new billing transmission investment. Therefore, 4 CP determinants to original billing determinants. JNP billing does not perfectly reflect causation. 4 Direct, p.16; JNP Rebuttal, pp.7-11, 13-15. CP also creates opportunity for customers to game the system. HL&P proposed in its initial [POST HEARING COMMENTS - HL&P does UCOS filing that the period of 8 a.m. to 10 not oppose billing transmission costs through p.m., weekdays, from May 15 through October ERCOT, or directly from the transmission 15 be used for peak billing. Brief at pp. 11-12.] companies to REPs. Nor does HL&P oppose billing of TCOS through distribution companies, as proposed in Order No. 14. Whatever methodology is used, the distribution company should not be at risk. Brief at pp. 10-11.] SHARYLAND [Because all of Sharyland’s customers have IDR meters, there is no need to compromise in designing rates for its system. Sharyland requests limited exception to rate design to DPL – Docket No. 22344 – CC/RD – Page 22

ISSUE NO. 2* 2c How should transmission service charges 2c(i) What design elements should apply to 2c(ii) Should transmission service rate design be recovered for ERCOT utilities? transmission service rates? include a transmission cost recovery factor (e.g., TCRF)? If so, how should it be designed? permit it to fully use its metering capabilities. Brief at p. 1.] SPS SPS takes no position on this issue, as it relates to SPS takes no position on this issue, as it relates SPS takes no position on this issue, as it relates to utilities within ERCOT, and the SPS system is to utilities within ERCOT, and the SPS system utilities within ERCOT, and the SPS system is not not within ERCOT. is not within ERCOT. within ERCOT. TNMP Via a TCRF billed to each REP. Johnson Direct Flow through of ERCOT transmission costs. Yes, the TCRF should be designed to permit the p. 11; Johnson Rebuttal pp. 4-5. Johnson Direct p. 11 adjustment of the TCRF to incorporate transmission cost changes as ERCOT changes the transmission [POST HEARING - Both distribution and costs. Johnson Direct p. 11. ERCOT ISO acting as a billing agent provide workable models. The distribution companies, [POST HEARING – If the Order 14 model is selected, which are not providing transmission service a TCRF is needed. It would ensure that the should not be at risk of under recovery from Commission-approved component of the transmission transmission investment Brief at pp. 4-5. If the service can be reflected in the distribution company’s strawman model is used, TNMP submits that rates without need for wasteful, repetitive distribution additional evidence should be considered company rate proceedings. Brief at pp. 4-5.] regarding the impacts. Brief at pp. 4-6. ] TXU Transmission charges billed to the distribution Transmission charges billed to the distribution All transmission charges billed to the distribution utility should be recovered from retail customers utility should be recovered through a TCR that utility should be recovered through a formulaic TCR based on a formulaic TCR rate/rider. Because the is applied to the retail customer classes either rate/rider that will accommodate changes to distribution utility is merely a billing agent, on a $/kW or ¢/kWh basis, depending on the transmission service providers' Commission-approved transmission charges should not be considered a retail customer class' facilities charge rates. A monthly true up provision is necessary to base rate item. A monthly adjusting TCR ensures mechanism. Sherburne Direct at p. 20, lines ensure that the customer class responsible for the that the distribution utility recovers only the costs 11 - 19. transmission costs is actually being billed for the billed to it under the ERCOT transmission service costs, and that the distribution utility recovers only the providers' approved transmission rates. Sherburne [POST HEARING - Regardless of the method amounts billed to it by the transmission service Direct at p. 20, line 1 - p. 22, line 8. Sherburne used for transmission cost recovery, wholesale provides (i.e., that transmission recovery is a zero sum Rebuttal at p. 9, line 21 – p. 10, line 20. transmission costs should not be included in game). Sherburne Direct at p. 21, line 8 - p. 22, line 8; the base rates of distribution utilities. Sherburne Rebuttal at p. 9, line 22 - p. 10, line 20. [POST HEARING - There is ample evidence in Attempting to use 4CP in the billing process to Schmidt Rebuttal at p. 3, lines 3 - p. 5, line 30. the record to support a simple transmission cost REPs is cumbersome, complex, and would recovery mechanism: require billing data from ERCOT that the 1. At the wholesale level, TSPs would continue to settlement systems may not have the ability to use 4CP to set their transmission rates in provide. Brief at pp. 11-12] periodic utility-specific TCOS cases. 2. Each TSP would send a monthly invoice for wholesale transmission service to each distribution utility (or the ERCOT settlement agent). 3. The distribution utility or the ERCOT DPL – Docket No. 22344 – CC/RD – Page 23

[POST HEARING – No strong feelings as to whether REPs are billed for transmission service by ERCOT or distribution utility. However, since billing demands for users of the ERCOT transmission system are determined based on their demand at the time of ERCOT 4 CP, REPs should be billed for service to IDR-metered customers based on those customer’s contribution to the ERCOT 4-CP. Brief p. 3.] OPC These charges should be recovered through a No. T&D utility rate case. Stutz Direct at pg. 27, line 1 through pg. 29, line 29. Stutz Direct at pg. 27, line 1 through pg. 29, line Johnson Rebuttal at pg. 14, line 6 through pg. 18, line 29. Johnson Rebuttal at pg. 14, line 6 through pg. 6. 18, line 6. SHELL POST HEARING - Shell urges the Commission [POST HEARING -- The Commission should not to decide issues on the meager record before consider the impact of 4CP billing on it. The lack of any real record on 4CP billing competition and the market as a whole. Billing issue results from the fact that parties did not costs solely on the basis of summer peak have adequate notice that the issue would be ignores the changing nature of the market and addressed here. Even if transmission costs other factors that contribute to transmission comprise only 10% to 15% of the overall cost of and distribution investment. Brief at p. 2.] energy, changes in methodologies to allocate and bill these costs could have significant impact on headroom. A REP serving a predominantly DPL – Docket No. 22344 – CC/RD – Page 27

ISSUE NO. 2* 2c How should transmission service charges 2c(i) What design elements should apply to 2c(ii) Should transmission service rate design be recovered for ERCOT utilities? transmission service rates? include a transmission cost recovery factor (e.g., TCRF)? If so, how should it be designed? recognize the differences in collections that will occur every year, it could simply adjust the rate on an annual basis to reflect actual collections (i.e., TCOS adjusted to reflected additions, minus overcollections or plus undercollections from the previous period, and divide by billing determinants for the most recent summer). This would eliminate all risk of undercollection and would justify a lower rate of return. Brief at p. 12] COMMISSION In Order 17, the Commission determined that the The transmission costs should be allocated Transmission service rate can include a TCRF. TCRF STAFF ERCOT TSPs should bill the T&D utility (or the among customer classes using consumption should be designed to pass through only changes in distribution utility for those utilities that have a information for the distribution utility. The ERCOT TCOS approved by Comm’n or allowed separate transmission utility and distribution transmission revenue requirement for the under Comm’n transmission pricing rules. Pevoto utility) which would then bill REPs for distribution utility to recover from REPs should direct page 26, line 6—page 29, line 2; Pevoto cross transmission service provided by TSPs in be based on the ERCOT transmission pricing reb. page 26, line 14—page 30, line 2. addition to billing for the distribution service it is system and should be the distribution utility’s providing to the REPs. Pevoto direct page 23, share of the total ERCOT transmission costs POST HEARING – If a TCRF is approved, it should line 19—page 29, line 4; cross reb. Page 26, line based on its load share at the ERCOT system be limited to collection of capital additions and for 14—page 30, line 2. coincident peak. The transmission charge recovery of Commission approved costs. Brief at p. would be either a per kwh charge or a per kW 14.] [POST HEARING – Commission staff charge, depending on customers’ metering recommends that transmission service charges capability. Pevoto direct page 18, line 8—page for ERCOT utilities be recovered as 22, line 12, page 23, line 19—page 26, line 5; contemplated in Order No. 14, as outlined in the cross reb. page 26, line 14—page 30, line 2. testimony of Kit Pevoto. Brief at p. 6 ] COMMISSION Transmission service charges shall be Transmission service rates shall be designed The Commission agrees with Staff and approves its DECISION recovered for ERCOT utilities based on the as described in Commission Staff’s methodology for a TCRF. The Commission Order No. 14 approach, as outlined in testimony and briefs. recognizes that this approach does not Commission Staff’s testimony and briefs. The address the risk to the distribution utility for distribution utility shall act as the billing under and over collection of the transmission agent. service charges. This risk will be considered in setting the distribution utility’s rate of return. DPL – Docket No. 22344 – CC/RD – Page 29

[POST HEARING – Commission should continue its movement toward removing the distribution company from the process of billing and collecting transmission charges for non-ERCOT utilities. That process is one involving only the transmission company and the REP as contemplated in Entergy’s OATT. Brief at p. 10] RELIANT No comment. No comment. No comment. ENERGY HL&P SPS Transmission costs should not be included in the Yes, a separate rate or adjustment should be This specific rate design should be left to the distribution delivery tariffs of non-ERCOT adopted for customers taking service directly individual company UCOS cases. SPS proposes to utilities. This service is strictly FERC out of the substation. provide delivery service to such customers under the jurisdictional in accordance with FERC Order distribution tariff for customers at transmission Nos 888 and 2000. If PUCT Order No. 17 delivery voltage, and add a specific monthly charge to requires such inclusion, it may be in conflict cover the fixed cost associated with the specific these FERC Orders. (Keyser direct at p.14, line substation investment. 10) and (Keyser rebuttal at p.12, line 7). (Keyser confidential workpaper at p.694).

POST HEARING – For non-ERCOT utilities, the generic order should provide that the RTO bill the approved scheduling entity under the FERC- approved OATT. The distribution delivery tariff DPL – Docket No. 22344 – CC/RD – Page 30

TXU TXU Electric takes no position on this issue at No. TIEC's proposal essentially seeks a There should be no substation rate or adjustment. See this time. separate class designation for a subgroup of Issue 2e. customers taking primary distribution service, thereby shifting costs to other primary customers and ultimately reducing headroom for residential and small commercial customers. Sherburne Rebuttal at p. 11, line 5 through p. 12, line 10. CITIES No position. TIEC has not quantified the costs If a sub-class is created the rate should be designed as at issue or customer impacts. There is a trade- a per kW discount for sub-station service, with the off between rate simplification and the increase dollar amount of the discount determined in the UCOS in precision that can be obtained with the cases. creation of sub-classes. It is not apparent that the creation of a substation sub-class should be assigned a priority higher than the priority assigned to other candidates for sub-class creation. CITY OF No position. No position. No position. HOUSTON DFWHC/CICU No position No See Answer to 2(e) EGSI CITIES EGSI’s has failed to explain clearly how REP No position. TIEC has not quantified the costs If a sub-class is created the rate should be designed as load profiles will be developed if a REP is billed at issue or customer impacts. There is a trade- a per kW discount for sub-station service, with the directly. Any differences between REP load off between rate simplification and the increase dollar amount of the discount determined in the UCOS profiling procedures and Commission allocation in precision that can be obtained with the cases. procedures need to be explained and reconciled. creation of sub-classes. It is not apparent that EGSI needs to provide equivalent transmission the creation of a substation sub-class should be charges per retail billing determinant even if a assigned a priority higher than the priority REP is to be billed based on the OATT. This is assigned to other candidates for sub-class DPL – Docket No. 22344 – CC/RD – Page 31

[POST HEARING - Cities do not object to EGSI’s basic position that REPs be wholesale purchasers of transmission pursuant to FERC wholesale tariffs. However, the Commission must address how to determine if sufficient headroom exists for each class and sub-class. Brief at p 12.] NUCOR Nucor takes no position on this issue. Nucor takes no position on this issue. Nucor takes no position on this issue.

OPC The combined TDU rate schedule should be No. If the rate is approved, any revenue deficiencies based upon retail customer rate design and associated with the sub-class should remain wholly collected from the REP. FERC tariff rates should within the primary class. be converted to retail rate schedules. TEXAS No position. No position. No position. COTTON GINNERS TEXAS No comment at this time. No, this would create a discrete class which A substation rate or adjustment should not be allowed, RETAILERS would have significant bill impacts on other in this case or in the individual UCOS cases. ASSOCIATION primary class customers. This departs from grouping customers on basis of a given voltage level, which is incorporated into the NUA classes. Saunders, cross-rebuttal at p. 2, L. 4 – p. 3, L. 13. TIEC The approved OATT should be used to design Yes. A distribution substation customer is The components of the distribution substation revenue (supported by separate transmission service charges for each basically the same as a transmission-level requirement include investment booked to FERC OXYCHEM) generic customer class. Ancillary services and customer, with one additional transformation. Accounts 353, 361 and 362 and O&M expenses congestion charges should not be included. Since No other distribution demand costs are incurred booked to Accounts 561-563, 569-579, 581-582 and the FERC must approve changes in the OATT, a to serve a distribution substation customer. A 591-592, and associated overheads. Pollock direct at TCRF is not needed for the Non-ERCOT utilities. separate rate for distribution substation service p. 22, line 3–p. 23, line 3; Exhibit JP-7. Pollock direct at pp. 31–34; Pollock rebuttal at p. therefore is cost-based. Pollock direct at p. 20, 10–p. 14, line 15. line 13–p. 22, line 2; p. 23, lines 4-10; Exhibit JP-6. DPL – Docket No. 22344 – CC/RD – Page 32

ISSUE NO. 2* 2d How should transmission service cost 2e Should a separate rate or adjustment be 2e(i) If so, how should the substation rate or recovery be implemented for non-ERCOT adopted for customers taking service adjustment be designed or should the design be left utilities, consistent with PUCT Order No. 17 directly out of the substation? up to the individual UCOS cases? and FERC Orders 888 and 2000? COMMISSION The Commission has addressed the design of re- No position STAFF tail transmission rates for non-ERCOT utilities in Order No. 17 and ordered the retail transmission rates to be calculated in the company-specific proceeding. The Commission concludes in Order 17 that where a FERC transmission rate for retail access customers has been set, the Commission will employ that rate. Otherwise, the Commis- sion will use the FERC wholesale rate, and through its rate design, convert that wholesale rate to the retail transmission rate. Where the customer is demand metered, the wholesale per kW rate can be used. Otherwise, the Commission will use the wholesale rate in place today in the open access tariff and set rates for retail-access customers based on the rate design adopted for residential and commercial customers. If the Commission concludes that separate transmission and distribution rates are appropriate for non-ERCOT utilities, Staff recommends that these utilities be required to file a copy of the proposed transmission tariff and an explanation of the key feather of the tariff at least 45 days before filing the tariff with the FERC. Staff also recommends that other parties have an opportunity to file comments on the proposed tariff. Pevoto direct page 29, line 5—page 30, line 7; Pevoto cross reb. page 30, line 3—page 32, line 18. COMMISSION The Commission affirms its decision in Order No. N/A DECISION No. 17 that transmission cost recovery for non- ERCOT utilities shall be consistent with the FERC Open Access Transmission Tariff. Specific compliance with Order No. 17 shall be addressed in the individual UCOS cases. DPL List – Docket No. 22344 – CC/RD – Page 33

ISSUE NO. 2* 2f Should lighting rate design be addressed 2f(I) If the lighting rate design is addressed 2g Should a separate rate for standby generically or on a utility specific basis in the generically, what design should be adopted? transmission service be adopted? individual UCOS cases? AEP Utility specific in UCOS cases. Moncrief direct If generic, design should be differentiated into No. Moncrief direct, page 25, line 6 – page 26, line 5. at page 26, line 7 – page 29, line 21. Municipal Street Lighting and Non-Roadway Moncrief rebuttal at p. 28, line 1 - p. 31, line 10. [Standardized lighting charges should not be Lighting. Use of system charge same as [Transmission investment is fixed and does not vary developed, because: (1) customers of municipal Secondary Voltage  10KW plus facilities by how much it is used. Brief at p. 16.] lighting services are and will remain in fixed charge. Moncrief direct, page 26, line 7 – page locations, and therefore, will have no reason to 29, line 21. [A facilities charge resulting from compare rates charged by various distribution the application of a fixed charge rate to the charges; (2) company lighting tariffs vary difference between the costs of standard significantly. Brief p. 15] facilities for each type of light offered and the cost of a light on an existing pole. The facilities charge was developed by taking current prices and removing distribution and energy prices. Brief pp. 15-16.] EGSI Lighting rate design should be on a utility The lighting rate design should include a fixed No. The company does not believe the PUCT could specific basis in each individual IOU UCOS location charge and a flat volumetric charge approve such rates since the FERC has exclusive proceeding. Thornton rebuttal at p. 2, line 9 based on kWh. There should also be fixed jurisdiction for standby transmission service rates for through p. 3, line 19 and Thornton Exhibit JRT- charges for each type of lighting fixture. non-ERCOT utilities. Riley rebuttal at p. 6 line 15 G1. [After retail competition begins, provision of Thornton direct at p. 7, line 5-12 and Thornton through p. 7 line 14. lighting services could vary among different Exhibit JRT-G1. IOUs. Brief p. 16.] RELIANT Lighting design should be as proposed by Street lighting and security lighting should be No. There is no justification for a standby delivery ENERGY HL&P individual utilities. JNP Direct, pp.6-7. separate rates. JNP Direct,pp. 6-7; JNP rate. JNP Direct, pp.13-15. [Standby rate proposed Rebuttal, p. 4. [The two distinct classes, street by industrial intervenors is not cost justified and lighting and guard/security lighting, are would inappropriately shift costs. Transmission costs characterized by different costs. Brief p. 9.] are not entirely peak driven; thus, transmission costs are not reduced just because the standby customer is not likely to contribute to one of the four hourly coincident peaks. Brief at p. 13.] SPS Yes, generic rate designs for lighting service Lighting rates should consist of a flat charge No, there should be no separate rate for standby should be adopted. per light per month, which recovers all transmission service. (Keyser rebuttal at p.16 and customer and system capacity related costs. Attachment RAK-2) [Standby service is a generation These charges should be differentiated by the function, not a transmission service. It would be total connected wattage of the lights. Further, unfair to establish one price for an intermittent load lighting rates should be separated into two and a lower price for a standby load with similar load subclasses depending on whether the utility or characteristics. Also, standby customers could use the the customer owns, operates, and maintains the transmission system to sell electric generation into the light. For utility owned lights, rates should market (i.e., when value of electricity is greater than reflect the investments in various types of the commodity the customer produces) Brief at p. 10]. lights. (Keyser direct at p.13, line 7) and (Keyser workpapers at page 319) DPL List – Docket No. 22344 – CC/RD – Page 34

ISSUE NO. 2* 2f Should lighting rate design be addressed 2f(I) If the lighting rate design is addressed 2g Should a separate rate for standby generically or on a utility specific basis in the generically, what design should be adopted? transmission service be adopted? individual UCOS cases? TNMP Lighting should be addressed on a utility specific Per light unit pricing based on matrix of total Yes. Johnson Direct pp. 11-13. [However, TNMP basis in the individual UCOS cases. Johnson charges for each type of light service. Johnson does not support the creation of a separate class for Direct p. 13. Direct p. 13. standby service. Brief at p. 6.] TXU Lighting rate design should be addressed For the lighting class, the rate structure should No. Standby transmission service is not a "service" generically. Sherburne Direct a p. 5, line 5 – p. be a customer or point of delivery charge that is recognized either under the Commission's 6, line 21; p. 14, lines 22-25; p. 17, line 1 – p. 19, ($/customer) and a fixed facilities charge transmission rules or the draft ERCOT protocols, but line 2. [No position. The lighting service rates ($/light). Sherburne Direct at p. 14, lines 22- instead it is a financial mechanism that will simply can be consolidated into a single standard 25; p. 17, line 1 - p. 19, line 2. [The fixed enable certain customers to pay less by shifting costs lighting service rate. However, the Commission facilities charge would recover the costs of the to other customers. Sherburne Direct at p. 26, line 1 - can develop the lighting rate design on a utility- light fixtures, and the cost of the distribution p. 29, line 2. Sherburne Rebuttal at p. 12, line 11 - p. specific basis in the individual UCOS cases. system used to deliver the power to the lights 20, line 28. Schmidt Direct at p. 6, line 29 - p. 9, line Brief p. 13.] as well as continuing maintenance of the 2. Schmidt Rebuttal at p. 6, lines 1-23. distribution and lighting facilities. Brief p. 13.] AES New Energy [Yes, adoption of a separate standby transmission rate will help encourage development of distributed generation, as directed by SB 7. Reply brief at p. 1.] CALPINE Yes. CITIES Rate design for lighting should be developed in No. Further, Cities note that the need for a special the individual UCOS proceedings. rate or rider for standby service is mitigated if ratchets are not used when measuring billing demand. Andersen Direct at p. 10, line 11 – 17. CITY OF Because of the wide variety of utility specific See response to f. No position. HOUSTON types and sizes of lights and fixtures currently offered, lighting rates should be determined on a utility specific basis in the individual UCOS cases. DFWHC/CICU No position No. [Standby rate would shift costs to other customers and would not track cost causation. Initial Brief at p. 9-15.] EGSI CITIES Rate design for lighting should be developed in No. Further, Cities note that the need for a special the individual UCOS proceedings. rate or rider for standby service is mitigated if ratchets are not used when measuring billing demand. Andersen Direct at p. 10, line 11 – 17. NUCOR Nucor takes no position on this issue. Nucor takes no position on this issue. Nucor takes no position on this issue. DPL List – Docket No. 22344 – CC/RD – Page 35

SHELL [No, Shell agrees with Dallas Fort Worth Hospital Council that TIEC’s proposal will improperly subsidize industrial customers at the expense of other customers. Brief at p. 3.] TEXAS No position. No position. No position. COTTON GINNERS TEXAS No comment. No comment. No, standby rates are not warranted for delivery RETAILERS service and could require other customers to unfairly ASSOCIATION pick up additional costs left due to such a rider. Saunders, direct at p. 11, L. 11 – 22. Saunders, cross- rebuttal at p. 3, L. 24 – p. 5, L. 2. [Standby service should be a point of negotiation between the customer and REP, not a pricing issue for regulated rates. Initial brief at p. 16.] TIEC N/A N/A Yes. Standby transmission customers will require (supported by transmission service only intermittently, when OXYCHEM, generation equipment is either forced out of service or ALCOA) down for scheduled maintenance. Because of this infrequent use, these customers will have much lower coincidence factor than full requirements customers, which have coincidence factors in excess of 50%. Such a dramatic difference in coincidence factor supports a lower rate for standby service. To charge the same rate for transmission service would force standby customers to subsidize other customers. Al- Jabir direct at p. 4, line 17–p. 14, line 15; Al-Jabir rebuttal at pp. 6-14. [P.U.C. SUBST. R. 25.344(j) and Order 17 provide support for a standby rate. Brief at pp. 13-14. ] COMMISSION Rate design for the lighting classes should be See response to question 2(f) No position at this time. [Staff is in agreement with STAFF addressed in the individual UCOS cases. Pevoto those parties contending there should be no standby direct 14, line 9—page 15, line 5. rate. Brief at p. 15.] COMMISSION Lighting rate design shall be addressed in the N/A No. DECISION individual UCOS cases. DPL List – Docket No. 22344 – CC/RD – Page 36

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ISSUE NO. 2* 2g(i) If so, how should the rate for standby 2g(ii) If so, what terms and conditions are 2g(iii) Should a separate rate for standby transmission service be designed? appropriate for standby transmission service transmission service be adopted for non-ERCOT or should the terms and conditions be utilities? addressed in the transmission rulemaking in Project No. 23157? AEP [Standby service should be secured, if at all, Transmission Rulemaking, Project No. 23157. directly from the TSP. If the TSP agrees to Moncrief rebuttal at p. 31, lines 11-21. provide standby transmission service, those rates [If terms and conditions decided in this can be billed to and by the distribution company proceeding, the Commission should reject the to the extent this is the billing mechanism is used 120-day provision proposed by TIEC. Use of for all other transmission services. Brief at p. 16. the system for 120 days does not constitute See also Moncrief direct at p. 25, line 6 – p. 26, “intermittent” usage. Brief at p. 17.] line 5.] EGSI The company does not believe the PUCT could The company does not believe the PUCT could No. The company does not believe the PUCT could approve such rates since the FERC has exclusive approve such rates since the FERC has approve such rates since the FERC has exclusive jurisdiction for standby transmission service rates exclusive jurisdiction for standby transmission jurisdiction for standby transmission service rates for for non-ERCOT utilities. Riley rebuttal at p. 6 service rates for non-ERCOT utilities. Riley non-ERCOT utilities. Riley rebuttal at p. 6 line 15 line 15 through p. 7 line 14. Please refer to 2g. rebuttal at p. 6 line 15 through p. 7 line 14. through p. 7 line 14. [No party disputes that this is a FERC jurisdictional issue. If end-use customers or REPs desire standby transmission service from non- ERCOT utilities, then REPs should request such a rate from FERC. Brief at p. 17.] RELIANT If a standby delivery rate is found appropriate, it This question uses confusing terminology. If No. There is no justification for a standby delivery ENERGY HL&P should be designed in accordance with HL&P’s the “terms and conditions” are the specifics of rate. JNP Direct, pp.13-15; JNP Rebuttal, pp.11-13. alternative proposal. JNP Direct,pp. 13-15; JNP the rate schedule itself, including how and Rebuttal, pp.11-13. [There should be a penalty when the rate is to be applied, then those issues for a standby customer who uses the system more should not be addressed in this docket. High than the maximum allowed number of standby level “terms and conditions” could be hours. Standby rate should apply solely to addressed in Project No. 23157 or Project No. transmission service rates. Brief at p. 13.] 22187, with specific tariff language determined in the UCOS cases. SPS Not Applicable. Not Applicable. Not Applicable. There should be no transmission service charges in the distribution tariffs of non- ERCOT utilities. See SPS positions on No. 2(d) and No.2(g). TNMP A monthly fixed charge plus a volumetric charge Terms and conditions must meet ERCOT No position. [on a per kWh basis]. Johnson Direct p. 12; scheduling requirements and track ERCOT Johnson Direct Exhibit CC/RD Ex. GMJ-4. requirements and should be addressed in [This per kWh pricing is based on the T&D Project No. 23157. demand charge for that customer classification, assuming a 15% load factor. If standby customers’ usage exceeds a 15% load factor, the rate design would make it logical for customers DPL – Docket No. 22344 – CC/RD – Page 38

ISSUE NO. 2* 2g(i) If so, how should the rate for standby 2g(ii) If so, what terms and conditions are 2g(iii) Should a separate rate for standby transmission service be designed? appropriate for standby transmission service transmission service be adopted for non-ERCOT or should the terms and conditions be utilities? addressed in the transmission rulemaking in Project No. 23157? to choose full requirements service. Brief at p. 6- 7.] TXU If a standby transmission rate is approved, the The proper forum is through a rulemaking. TXU Electric takes no position on this issue at this customer should pay the same rate as a firm Schmidt Direct at p. 8, line 11 - p. 9, line 2. time. service customer for the month in which the [Standby rate design can be addressed at same standby customer actually uses the service. In time as terms and conditions of such service in months when the customer does not use the the current transmission rulemaking project. service, it should pay a reservation fee that is Brief at p. 14.] But if the Commission 50% of the rate contained in the Rider TCR for addresses terms and conditions in this docket, that voltage level service, applied to the TXU Electric's positions with respect to the maximum load that the customer could place on terms and conditions proposed by TIEC are set the transmission system. Sherburne Direct at p. forth in Sherburne Rebuttal at p. 18, line 5 - p. 28, line 13 - p. 29, line 2; Exhibit JMS-CC/RD-4. 20, line 28. CITIES See 2(g). See 2(g). No. CITY OF No position. No position. No position. HOUSTON DFWHC/CICU [The Commission should reject TIEC’s proposal for a “standby” transmission rate. An alternative should reflect the following elements: 1) Sliding scale of declining cost responsibility for the standby customer that has consistently limited demands on the system; 2) Suspend declining rate if customer used system more than threshold levels; and 3) Availability of standby service would truly reflect standby status. Initial brief pp. 14-15] EGSI CITIES See 2(g). See 2(g). No. [Supports EGSI’s position. Brief at p.12.] NUCOR Nucor takes no position on this issue. Nucor takes no position on this issue. Nucor takes no position on this issue. OPC If the rate is approved, any revenue deficiencies If approved, the terms and conditions of stand- No. associated with the sub-class should remain by transmission service should be addressed in Johnson Rebuttal at pg. 18, line 7 through pg. 25, line wholly within the transmission class. The stand- this generic docket. OPC generally supports 5. by demands should be included in the Cost of the testimony of TXU and TRA on the issue of Service Study to avoid interclass cross- what terms and conditions are appropriate. subsidization. Johnson Rebuttal at pg. 22, line 12 through pg. 25, line 3. TEXAS No position. No position. No position. DPL – Docket No. 22344 – CC/RD – Page 39

ISSUE NO. 2* 2g(i) If so, how should the rate for standby 2g(ii) If so, what terms and conditions are 2g(iii) Should a separate rate for standby transmission service be designed? appropriate for standby transmission service transmission service be adopted for non-ERCOT or should the terms and conditions be utilities? addressed in the transmission rulemaking in Project No. 23157? COTTON GINNERS TEXAS If a standby rate is adopted, it should be designed RETAILERS to include the following: no discounting in ASSOCIATION months when power is taken; limitations on the number of days the service is available; and separate metering for partial standby customers. Saunders, cross-rebuttal at p. 5, L. 3-21. TIEC The rate should consist of a minimum monthly The terms and conditions for standby A separate rate, like the one for ERCOT utilities, (supported by charge and a two-tiered monthly usage charge. transmission service should be addressed in this would be preferable for non-ERCOT utilities. In lieu OXYCHEM, The minimum monthly charge should be 11.8% proceeding, not in Project No. 23157. The of a separate rate, a standby transmission customer CALPINE, Alcoa) of the transmission demand charge applicable to terms and conditions should be as follows: should be able to take service directly under the transmission-level customers. Customers using  Service may only be taken in conjunction OATT. Billing for network service should be on a standby transmission service for seven days or with the utility’s transmission voltage rate coincident peak basis. However, the customer should less in a billing period should pay 23% of the full schedule; have the option to take point-to-point service. Under requirements transmission demand charge for that  Customer’s standby contract capacity may both services, the billing demand should be based on billing period. Customers using standby not exceed the maximum demonstrable net-metered load. This is in contrast to Entergy and transmission service for more than seven days in capacity of the customer’s generating SPS, who would charge a standby customer the same a billing period should pay 100% of the full units; for transmission service as a non-generating customer. requirements transmission demand charge for that  Use in excess of the standby contract The Commission has the authority to prevent such billing period. Al-Jabir direct at p. 14, line 16–p. capacity will be billed under the applicable practices, by filing a motion and protest at the FERC. 26; Al-Jabir rebuttal at pp. 15-24. full requirements rate schedule for two Pollock direct at p. 32, line 10–p. 34, line 18. Reply months, and the standby contract capacity brief at p. 17. will be increased to the demand level established in this month for the direction of the customer’s contract, not to exceed 24 months.  A maximum of one full monthly transmission demand charge shall apply that does not exceed one calendar month in duration;  Customer must provide at least 50 days prior notice of maintenance outages;  Maintenance outages may include up to four occasions that total up to 60 days in a calendar year;  Maintenance outages must be scheduled DPL – Docket No. 22344 – CC/RD – Page 40

[TIEC is willing to reduce the allowed level of standby use to 90 days, instead of 120 days. Reply brief at 14.] COMMISSION N/A N/A No position at this time. [Staff is in agreement with STAFF those parties contending there should be no standby rate. Brief at p. 16.] COMMISSION N/A N/A No, unless dictated otherwise by FERC. DECISION DPL – Docket No. 22344 – CC/RD – Page 41

ISSUE NO. 2* 2h Should a standard power factor correction 2h(i) If the power correction formula is to 3 Should exceptions to the generic customer ISSUE NO. 3 formula be approved in this docket or in be approved in this docket, what should the classifications and rate design be approved for Section 5.5.5 of the generic Tariff for Retail formula be? specific utilities? Delivery Service being established in Docket No. 22187? AEP Section 5.5.5 of the generic Tariff for Retail No position. Delivery Service, Project No. 22187. EGSI The power factor correction formula should be The formula should be: (kW billing demand Yes. Exceptions to the Non-Unanimous Agreement addressed in both Dockets and be consistent X .95) / power factor. Thornton direct at p. 14, should be considered in the context of each individual between the two dockets. The Company would line 19 through p. 15, line 7. IOU UCOS proceeding. Thornton rebuttal p. 2, line 9 consider the incorporation of power factor through p. 3, line 4. adjustments in the DSS schedule. Thornton direct at p. 14, line 3 through p. 15, line 7. RELIANT If HL&P continues to bill on kVa, there is no HL&P generally supports the formula proposed Yes. Exceptions to generic design should be granted ENERGY HL&P need for a power factor correction formula in in Project No. 22187. to prevent creation of headroom problems and provide HL&P’s rates. HL&P supports a power factor certainty for market participants. JNP Direct,pp. 10- correction formula for those billing on kW. JNP 12; JNP Rebuttal,pp. 2-4. [Evidence that generic class Direct, p. 15. consolidation creates equitable headroom, efficient ratemaking before market opening, and robust competition for all PTB customers does not exist. Parties should not be penalized for requesting exceptions that are allowed by Order 17. Reply brief p. 6.] CLECO [Yes. Exceptions should be granted to prevent CONNEXUS increased rates or insufficient headroom for a particular customer or set of customers during the PTB period. Brief p. 1] SPS This issue should be addressed in Section 5.5.5 of Not Applicable. It may be appropriate to consider exceptions to the the generic Tariff for Retail Delivery Service generic customer classifications and rate design be being established in Docket No. 22187. approved for specific utilities. TNMP No position. Formula should be consistent with ERCOT Not in the generic proceeding. Exceptions should be requirements for power factor. considered in the context of each individual utility UCOS proceeding. Johnson Rebuttal p. 6. [Headroom impact on specific customers cannot be determined at this time, because the individual utility revenue requirement and competitive transition charges (CTC) have not been determined. The creation of subclasses and/or rate design solutions could possibly mediate headroom adversities. Reply brief p. 6.] TXU It is necessary for the Commission to approve a The proper formula is: Adjusted Billing Yes, but only in limited circumstances that can be standard power factor correction formula, either Demand = (Billing Demand x .95)/Power fully justified at this time. Any other approach would DPL – Docket No. 22344 – CC/RD – Page 42

ISSUE NO. 2* 2h Should a standard power factor correction 2h(i) If the power correction formula is to 3 Should exceptions to the generic customer ISSUE NO. 3 formula be approved in this docket or in be approved in this docket, what should the classifications and rate design be approved for Section 5.5.5 of the generic Tariff for Retail formula be? specific utilities? Delivery Service being established in Docket No. 22187? in Docket No. 22344 or in Project No. 22187. Factor. Sherburne Rebuttal at p. 21, lines 1-8. defeat the concept of generic rate design and customer Approval of the formula in either forum would [A credit for a power factor exceeding 95% is classification. Sherburne Rebuttal at p. 21, lines 16- have the same effect. Sherburne Rebuttal at p. unwarranted. Reply brief p. 11.] 21. [However, standardization should not be a 20, line 29 - p. 21, line 30. straightjacket. The Commission should not ignore the legitimate individual needs of the utilities or customers, and therefore, thoroughly consider each request for exception. Brief p. 15.] CITIES Cities take no position at this time, but reserve the Cities take no position at this time, but reserve Potential adverse impacts caused by adopting the right to address issues raised at hearing through the right to address issues raised at hearing generic customer classifications and rate design cross-examination and in briefing. through cross-examination and in briefing. should be mitigated by following Cities’ ratchet and customer charge recommendations. Andersen Direct at p. 7, line 15 – 20. [In addition, negative impacts can be mitigated with the development of subgroups, shifting of primary service customers to secondary service, and stratification of primary service customer charges. Brief p. 7] CITY OF No position. No position. Exceptions should be granted to any approved generic HOUSTON customer classifications and generic rate design and should not be implemented for particular utilities where the result is to significantly hinder or eliminate retail competition or a significant number of customers. Daniel at p. 7, line 1 through p. 18, line 8 [Order 17 requires exception requests, and therefore, parties should not be penalized. Brief p. 7]] DFWHC/CICU No position Yes EGSI CITIES Cities take no position at this time, but reserve the Cities take no position at this time, but reserve [Generic customer classification should not be right to address issues raised at hearing through the right to address issues raised at hearing adopted. Hence, no exceptions would be needed. cross-examination and in briefing. through cross-examination and in briefing. Brief p. 13.] Potential adverse impacts caused by adopting the generic customer classifications and rate design should be mitigated by following Cities’ ratchet and customer charge recommendations. NUCOR Nucor has not determined its position on this Nucor has not determined its position on this In general, no, other than in the specific UCOS cases issue at this time. issue at this time. as recommended by Staff witness Pevoto if absolutely necessary on an intra-class basis. (See Pevoto rebuttal at p. 11-13). DPL – Docket No. 22344 – CC/RD – Page 43

ISSUE NO. 2* 2h Should a standard power factor correction 2h(i) If the power correction formula is to 3 Should exceptions to the generic customer ISSUE NO. 3 formula be approved in this docket or in be approved in this docket, what should the classifications and rate design be approved for Section 5.5.5 of the generic Tariff for Retail formula be? specific utilities? Delivery Service being established in Docket No. 22187? OPC OPC takes no position on this issue at this time. OPC takes no position on this issue at this time. Yes. Stutz Direct at pg. 29, line 10 through pg. 31, line 16. TEXAS No Position. No Position. Yes, if customer impact considerations dictate. COTTON GINNERS TEXAS LEGAL Yes – inverted block rate for Reliant. [The inverted SERVICES block rate benefits low-usage, low-income customers. CENTER Brief p. 8] TEXAS No comment at this time. No comment at this time. Except for very limited circumstances, any exceptions RETAILERS should be determined in the UCOS cases. Saunders, ASSOCIATION direct at p. 12, L. 9 – p. 13, L. 3. Saunders, cross- rebuttal at p. 9, L. 1-18. TIEC A standard power factor correction formula The formula proposed by AEP is reasonable. A standby transmission rate should be approved for all (supported by should be approved in this Docket since it will However, customers providing a power factor utilities. A separate charge for distribution substation OXYCHEM) only apply to utilities that bill on a kW demand in excess of 95% should be eligible for a credit. service should be approved for all utilities that provide basis. Pollock direct at Exhibit JP-1. Pollock direct at Exhibit JP-1. this service. To the extent that other groups are identified that have materially different cost-causing characteristics, then the class average should propose alternative customer classifications or rate designs that reflect the lower costs of service. Al-Jabir direct and rebuttal; Pollock direct at p. 20, line 13–p. 23, line 10; p. 32, line 10–p. 34, line 18; Exhibits JP-6 and JP-7. COMMISSION No position at this time. No position at this time. Commission should finalize generic classes in this STAFF docket. To the extent possible Commission should finalize generic rate design structures in this docket. Exceptions to generic rate design to address extraordinary headroom impacts on customer classes or groups of customers should be addressed in individual UCOS cases; Separate phase to address extraordinary headroom impacts of rate design for TXU and AEP should be established; hearings in these phases to be in early Feb. Pevoto direct page 8, line 15 —page 9, line 16, page 35, line 6--page 36, line 9; Pevoto cross reb. page 10, line 11---page 13, line 22. DPL – Docket No. 22344 – CC/RD – Page 44

ISSUE NO. 3 3a Is it appropriate to consider exceptions at a 3b What criteria should be considered in 3b(i) Should customer impacts be considered in later time (e.g., after finalization of PTB rates, determining exceptions? determination of exceptions? etc.)? AEP Moncrief rebuttal at p. 32, line 2 - p. 35, line 2. Burden should be high. Moncrief rebuttal at p. Yes, if significant showing of adverse customer 34 line 17 - p. 35, line 2 impacts. Moncrief rebuttal at p. 34, line 2 - p. 35, line 2. EGSI Yes. [Exceptions should be considered in the The criterion should include, at least, the Yes. [However, customer impacts can be mitigated individual IOU UCOS proceeding. Brief p. 19.] results of an analysis of shopping credits of through rate design. Brief p. 19.] groups of customers. Thornton direct at p. 11, line 10-19 and Thornton rebuttal at p. 2, line 9 through p. 3, line 4. RELIANT No. It is preferable to deal with exceptions now Headroom/ fairness/ equity ( opportunity to Yes. To the extent that headroom issues and ENERGY HL&P in order to prevent creation of headroom participate in market, creation of winners and gradualism impact customers, customer impacts problems and provide certainty for market losers, affiliated REP serving customers at a should be considered. JNP Direct, pp. 2-4; JNP participants. Fixing headroom problems later, loss), gradualism, rate shock, certainty (so Rebuttal, PP 2-4. during individual rate case phase, is far more REPs and TDU can prepare for market difficult, time consuming and confusing than opening.) JNP Direct, pp. 2-4, 7-8; JNP [Staff’s study demonstrates a 300% difference in preventing creation of the problems in the first Rebuttal, pp. 2-4; Disc. Conf. Oct. 20, pp. 66- headroom among residential customers with the place. In the end, subclasses will have to be 69 adoption of the NUA classes. Because of these created which will result in nonstandard rates and headroom disparities, affiliate REPs will seek the classes, defeating the goal of generic classes and most attractive customers with adequate headroom rate design. JNP Direct, pp. 11-12; JNP Rebuttal, while serving some customers at a loss. Brief pp. 3-4.] pp. 3-4. [Mitigating headroom disparities with piecemeal class and/or rate design “fixes” will require the expenditure of significant resources by Staff, intervenors, and HL&P. Reply brief p. 5] CLECO [Yes. Exceptions can be determined in the [Customer impact and rates. Brief p. 1] [Yes. Brief p. 1] CONNEXUS individual unbundling cases after completion of the PTB rulemaking. Brief p. 1.] SPS If exceptions are considered, they should be The criteria for exceptions should be based on Customer impact should not be a criterion for considered at a later time in the company specific physical characteristics and associated costs of exceptions. These rates do not apply to customers, UCOS cases. specific utilities distribution systems (ie. 30 they apply to REPs. Customer impacts are a function minute demand meters, or direct assigned of market prices chargedby independent REPs or PTB substation facilities). (Keyser rebuttal at p.8, rates charged by affiliated REPs. (Keyser rebuttal at line 20) and (Keyser confidential workpaper at p.6, line 5). p.694). TNMP Yes, depending on the impact to specific Customer impacts. Johnson Rebuttal p. 6. [In Yes. Johnson Rebuttal p. 6. customer groups. Johnson Rebuttal p. 6. [Allows particular, the adverse consequences of thorough evaluation of the customer impacts. separating primary and secondary voltage Brief p. 2] customers. Brief p. 3.] DPL – Docket No. 22344 – CC/RD – Page 46

ISSUE NO. 3 3a Is it appropriate to consider exceptions at a 3b What criteria should be considered in 3b(i) Should customer impacts be considered in later time (e.g., after finalization of PTB rates, determining exceptions? determination of exceptions? etc.)? TXU Exceptions that can be fully justified at this time Any exceptions should be just and reasonable, Yes, but only to the extent that consolidation of the should be approved. Sherburne Rebuttal at p. 21, and should not be so broad as to defeat the existing rate classes causes a headroom problem. line 19. The Commission should not postpone concept of generic customer classification and Exceptions should not be a vehicle for one group of consideration of exceptions in a manner that will rate design. Sherburne Direct at p. 29, lines 21- customers to shift costs to another group of customers. unduly prolong the UCOS cases or adversely 26. Sherburne Rebuttal at p. 21, lines 19-21. Sherburne Rebuttal at p. 21, line 22 - p. 22, line 7. impact the pilot projects. [Headroom analysis should be conducted in the compliance stage not in a separate UCOS phase. Brief p. 12.] CITIES While Cities support granting exceptions to Primary criteria (1) differences in size and load Yes. mitigate potential adverse customer impacts, if factor that cause significant intra-class exceptions are numerous it may be appropriate differences in cost, (2) access to competitive for the Commission to reevaluate the merits of service (headroom), and (3) customer impact moving to 6 uniform classes. [In addition, both before and after expiration of price-to-beat proposed mechanisms for mitigating potential service. adverse impacts should be submitted in the individual unbundled cost of service dockets. Brief p. 5.] CITY OF In addition to exceptions that are granted Exceptions should be granted when evidence Yes. [In particular, the headroom impacts on HOUSTON immediately upon adoption of generic customer establishes that the application of generic residential and small commercial customers. Brief p. classifications and rates, exceptions should be classes and rates will significantly hinder or 2.] granted at a later time, i.e. when new evidence eliminate retail competition for a significant establishes that the result of applying generic number of customers. Daniel at p. 6, lines 3– classes and rates is to significantly hinder or 21. [Especially, when insufficient headroom eliminate retail competition for some customer does not attract competition from the non- groups. Daniel at p. 6, lines 13-21. affiliated REPs residential and small [If the Commission requires additional headroom commercial consumers. Brief p. 10.] analysis, a separate phase should also be set up for Reliant. In addition, exceptions with a tremendous amount of flexibility should be granted in HL&P’s individual UCOS case. Brief p. 8.] DFWHC/CICU Yes EGSI CITIES While the Cities support granting exceptions to Primary criteria (1) differences in size and Yes. [Generic classes systematically discriminate mitigate potential adverse customer impacts, if load factor that cause significant intra class against all small customers and should not be exceptions are numerous it may be appropriate differences in cost, (2) access to competitive adopted. Therefore, exceptions are not warranted. for the Commission to reevaluate the merits of service (headroom), and (3) customer impact Brief p. 13] moving to 6 uniform classes. both before and after expiration of price to [Opposes adoption of generic classes. No need beat [Opposes adoption of generic classes. No for exceptions at any point. Brief p. 13.] need for exception criteria. Brief p. 13] DPL – Docket No. 22344 – CC/RD – Page 47

ISSUE NO. 3 3a Is it appropriate to consider exceptions at a 3b What criteria should be considered in 3b(i) Should customer impacts be considered in later time (e.g., after finalization of PTB rates, determining exceptions? determination of exceptions? etc.)? NUCOR In general, no, other than in the specific UCOS See the response to 3 a. See the response to 3 a. cases as recommended by Staff witness Pevoto if absolutely necessary on an intra-class basis. (See Pevoto rebuttal at p. 11-13). OPC Yes [Exception should be granted for now until The PUC should be guided by principles such Yes. the companies’ cost allocation phases are as equity in the burden imposed on different complete. Brief p. 11] customers, efficiency (i.e., “price signal” to customer reflects cost of consumption), simplicity, understandability, public acceptability, feasibility of application, revenue stability, avoidance of undue discrimination, discouragement of wasteful use of service, cost causation, and the impact on headroom. Stutz Direct at pg. 7, line 11 through pg. 8, line 11; pg. 9, line 19 through pg.10, line 18; pg. 18; lines 1-5. Exhibit JS-2 attached to Direct testimony of Stutz. Johnson Rebuttal at pg. 6, line 1 through pg. 8, line 32; pg. 12, line 5 through pg. 13, line 32. TEXAS Exceptions should be considered at this time, if Customer impacts. (Green Direct p.5, lines 21- Yes. (Green Direct p.5, lines 21-23, p. 6, lines 9-12) COTTON possible. Some issues will impact customers of 23, p. 6, lines 9-12) GINNERS all utilities in the same manner. TEXAS LEGAL [Does not oppose the Commission’s [Public interest, headroom impacts, and retail Yes. [In particular, the headroom impact on low- SERVICES consideration of exceptions during this docket. competition. Brief p. 8] usage, low-income customers. Brief p. 8.] CENTER Brief p. 8] TEXAS Yes, after the finalization of the PTB or during The generic customer classification/ rate design Yes, bill impacts should be as important here as they RETAILERS the individual UCOS case. Currently, there is should apply to Reliant with certain exceptions would be in any general rate case. Saunders, direct at ASSOCIATION insufficient information to perform the granted during the UCOS case for specific p. 11, L. 24 – p. 12 , L. 7. appropriate bill impacts. Saunders, direct at p. 12, classes/ customers. Reliant should not be L. 9 – p.13, L. 3. Saunders, cross-rebuttal at p. allowed to introduce a new class that is a departure from the generic classes. Saunders, cross-rebuttal at p. 8, L. 6 - p. 9, L. 18. [Reliant does not demonstrate how the resulting cost differences will impact headroom for residential and small commercial and large commercial consumers. Brief p. 18.] TIEC Exceptions may be considered. However, in no Exceptions should be limited to circumstances Customer impacts can only be considered for price-to- (supported by event should exceptions be made that would where a group of customers has demonstrably beat customers, since all other customers will be DPL – Docket No. 22344 – CC/RD – Page 48

ISSUE NO. 3 3c What customer classes and rate design 3d What rate design should be approved for 3e For the primary class customers without should be approved for Reliant Energy HL&P the transformation rates for each applicable demand meters, what billing demand should be (e.g., the customer classes and rate design customer class for the TXU Electric used for the TXU Electric transmission utility and proposed in its initial UCOS filing or the transmission utility? the TXU Electric distribution utility (e.g., a fixed generic customer class/rate design)? 5kW based on Company load research data)? AEP No position. No position. EGSI This issue should be resolved in each individual This issue should be resolved in each This issue should be resolved in each individual IOU IOU UCOS proceeding. individual IOU UCOS proceeding. UCOS proceeding. RELIANT The customer classes and rate design proposed in No comment. No comment. ENERGY HL&P HL&P’s initial UCOS filing should be approved for HL&P. Classes and rates should be designed to mimic current classes and rates in order to avoid creation of headroom problems, since the PTB rate is 6% off current delivery charges. This is the only rate design that allows all PTB customers in HL&P service territory access to the competitive market. JNP Direct, PP. 2-12 and Attachment A, Fig. JNP-3; JNP Rebuttal, pp. 2-4. [In order to avoid average base delivery cost of service changes, MGS and LGS customers should remain in their existing classes. The Commission should grant the greatest possible flexibility in designing solutions for headroom problems. Brief p. 6.] SPS SPS takes no position on this specific issue. SPS takes no position on this specific issue. SPS takes no position on this specific issue. TNMP No position. No position. No position. TXU TXU Electric takes no position on this issue at The TXU Electric transmission utility's Rate To reduce potential adverse effects for general service this time. XFMR is a distribution-related charge designed primary customers without demand meters, TXU to recover transformation (i.e., substation) costs Electric proposes an exception to the generic rate that are not eligible for inclusion in TCOS. No design. The billing demand for such customers should customer charge is proposed, since the be fixed at the maximum "Customer NCP max kW" distribution utility will incur the associated demand from TXU Electric's load research data, metering and billing costs. A facilities charge which is 5 kW. Sherburne Direct at p. 14, lines 17-21. is proposed for all customer classes (per kWh Sherburne Rebuttal at p. 22, line 26 - p. 23, line 3. or kW), except the high voltage class, which does not take transformation service. The charge should be recognized as a separate charge, to facilitate proper revenue accounting in the event the transmission utility is sold to another transmission owner. [Having separate charge is consistent with the Utilities Code that a states that a utility have a tariff or rate schedule for every utility service. TXU brief at DPL – Docket No. 22344 – CC/RD – Page 50

ISSUE NO. 3 3c What customer classes and rate design 3d What rate design should be approved for 3e For the primary class customers without should be approved for Reliant Energy HL&P the transformation rates for each applicable demand meters, what billing demand should be (e.g., the customer classes and rate design customer class for the TXU Electric used for the TXU Electric transmission utility and proposed in its initial UCOS filing or the transmission utility? the TXU Electric distribution utility (e.g., a fixed generic customer class/rate design)? 5kW based on Company load research data)? p. 16.] The charge should not be aggregated with transmission charges billed by the distribution utility or the distribution utility's distribution charges. Schmidt Direct at p. 3, line 13 - p. 6, line 27. Sherburne Direct at p. 13, line 6 - p. 14, line 1. Sherburne Rebuttal at p. 22, lines 9-22. CITIES The need for exception cannot be determined These costs should be rolled into the demand These customers should be given the option of taking until the Commission determines the shape of any and energy charge for distribution service, service at the rate for secondary service < 10 kW. generic rate structure and the criteria to be used in Under TXU’s proposal, the minimum monthly bill for determining when sub-class creation is justified. TXU primary service increases from $160.38 to [However, HL&P will not be the only one $182.23. For 57 of the 374 customers included in affected by the generic customer consolidation of TXU’s primary voltage load research database, TXU’s customers with dissimilar size and load factor. proposal when combined with Ms. Pevoto’s Brief pp. 1-2.] illustrative customer charge results in rates higher than TXU’s equivalent current rate for bundled service. Andersen Rebuttal at 14, line 5-25. CITY OF Neither. Upon grant of an exception to Reliant, No position. No position. HOUSTON this issue should be decided in Reliant’s individual UCOS case. [Any Commission approved generic classes and rate design should be phased in over some period of time in the future. Brief p. 12.] DFWHC/CICU No position No comment NUCOR In general, it is Nucor’s position that a generic TXU properly does not propose to charge Nucor takes no position on this issue at this time. rate design and customer classes should be transformation costs to customers served at established in this proceeding for all utilities. As transmission voltages. Nucor takes no position a result and since Nucor is not connected to at this time on how the TXU transmission Reliant, Nucor has not examined Reliant’s utility should charge other classes for such specific proposal for its utility. costs. OPC OPC takes no position at this time. [HL&P OPC takes no position on this issue at this time. should be exempted from grouping their customers on the basis of primary and secondary voltage. Brief p. 3.] TEXAS No Position. No Position. No Position. COTTON GINNERS DPL – Docket No. 22344 – CC/RD – Page 51

ISSUE NO. 3 3c What customer classes and rate design 3d What rate design should be approved for 3e For the primary class customers without should be approved for Reliant Energy HL&P the transformation rates for each applicable demand meters, what billing demand should be (e.g., the customer classes and rate design customer class for the TXU Electric used for the TXU Electric transmission utility and proposed in its initial UCOS filing or the transmission utility? the TXU Electric distribution utility (e.g., a fixed generic customer class/rate design)? 5kW based on Company load research data)? TEXAS LEGAL Inverted block should be retained SERVICES CENTER TEXAS To the extent possible, the generic class It should be treated as a distribution charge. No comment at this time. RETAILERS classification and rate design should apply to ASSOCIATION Reliant. Reliant should not be allowed to introduce a new class designation that moves further away from standardization. Saunders, cross-rebuttal at 8, L. 6 – p. 9, L. 18. TIEC The generic customer class/rate design applicable This is the same issue as 2e. The substation No position. (supported by to all utilities should also be approved for Reliant. charge would apply to all distribution primary OXYCHEM) customers. The primary customers would also pay a separate distribution wires charge. COMMISSION Customer classes in NUA should be used for [Based on the evidence developed at the No position at this time. STAFF Reliant; Reliant has failed to demonstrate it hearing, Staff does not object to TXU’s should be exempted from these classes. Pevoto proposal for a separate tariff for direct page 9, line 18--page 17, line 5; Pevoto transformation services for the TXU cross reb. page 5, line 9—page 10, line 10. transmission utility. Reply brief at p. 9. ] Generic rate design proposed by Staff should be used for Reliant; Exceptions to generic rate A separated transformation rate is not needed. design to address extraordinary impacts on The costs associated with the transformation headroom for customer classes or groups of should be recovered through one distribution customers should be addressed in Reliant’s charge along with other distribution-related UCOS case. Pevoto direct page 17, line 6--page costs. 36, line 9; Pevoto cross reb. page 16, lines 1- 4;page 17, lines 3-6; page 19, lines 1-6; page 20, line 9—page 21, line 18; page 23, line 1—page 26, line 13. COMMISSION The NUA classes shall be applied to Reliant This rate shall be addressed as a wholesale This issue shall be addressed in TXU’s individual DECISION Energy HL&P. rate in TXU’s individual UCOS case. UCOS case. DPL – Docket No. 22344 – CC/RD – Page 52

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ISSUE NO. 3 3f For the primary class customers without 3g Should TNMP and Reliant be exempted 4 Miscellaneous ISSUE NO. 4 demand meters, what billing demand should from a class definition that separates be used for the SPS distribution utility? primary voltage and secondary voltage customers? AEP No position. No position. EGSI This issue should be resolved in each individual This issue should be resolved in each IOU UCOS proceeding. individual IOU UCOS proceeding. RELIANT No comment. Yes, for HL&P. Class definitions and rate ENERGY HL&P design for PTB customers should mimic the current classes and rate designs to prevent headroom problems, since the PTB rate is 6% off current delivery charges. This is the only rate design that allows all PTB customers access to the competitive market in the HL&P service territory. JNP Direct, pp.2-12; JNP Rebuttal, pp.2-4. See 3c. SPS For customers on the SPS system in both the SPS takes no position on this specific issue. primary and secondary distribution delivery classes who do not have demand meters installed, the billing demands should be determined through the load profiling process. (Keyser rebuttal at p.8, line 6). TNMP No position. Not in this phase, however if this separation adversely affects specific customer groups, this issue should be considered after finalization of PTB rates. Johnson Rebuttal p. 6. TXU TXU Electric takes no position at this time. [An TXU Electric takes no position on this issue at exception should be made for these customers this time. that fixes the billing demand at the average maximum customer NCP max kW, which is 5kW. Brief at p. 17.] CITIES Cities take no position at this time, but reserve the Cities take no position at this time, but reserve right to address issues raised at hearing through the right to address issues raised at hearing cross-examination and in briefing. through cross-examination and in briefing. DFWHC/CICU No position No position NUCOR Nucor takes no position on this issue at this time. In general, it is Nucor’s position that a generic Nucor opposes TXU’s proposal to charge $1/kw for rate design and customer classes should be demand in excess of contract demand as not justified established in this proceeding for all utilities. in a restructured market where the utility is only However, Nucor has not specifically examined charging for delivery services and charges are directed this issue due to its inapplicability to Nucor. to REPs rather than customers. This is also not consistent with a generic rate design. DPL – Docket No. 22344 – CC/RD – Page 54

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