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NEVADA POWER COMPANY d/b/a NV Energy BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA IN THE MATTER of the Application of NEVADA ) POWER COMPANY, d/b/a NV Energy, filed ) pursuant to NRS 704.110 (3) and (4), addressing its ) annual revenue requirement for general rates ) charged to all classes of customers. ) __________________________________________ ) Docket No. 20- 06____ VOLUME 9 of 25 Prepared Direct Testimony of: OMAG Expense Lisa Holder Danielle Lewis Deborah J. Florence Revenue Requirements Harold Walker III Bill Trigero Terry A. Baxter Eric Fox Mariya Recorded Test Year ended December 31, 2019 Certification Period ended May 31, 2020 Expected Change in Circumstance Period ending December 31, 2020 Index Page 2 of 247 Nevada Power Company d/b/a NV Energy Volume 9 of 25 Testimony Index Page 1 of 1 Description Page No. Prepared Direct Testimony Of: OMAG Expense: Lisa Holder 5 Danielle Lewis 82 Deborah J. Florence 98 Revenue Requirements: Harold Walker III 108 Bill Trigero 160 Terry A. Baxter 199 Eric Fox 212 Mariya Coleman 241 Page 3 of 247 LISA HOLDER Page 4 of 247 1 BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA 2 Nevada Power Company d/b/a NV Energy Docket No. 20-06___ 3 2020 General Rate Case 4 Prepared Direct Testimony of 5 Lisa Holder 6 Revenue Requirement 7 8 I. INTRODUCTION, BACKGROUND, AND PURPOSE OF TESTIMONY 9 1. Q. PLEASE STATE YOUR NAME, OCCUPATION, AND BUSINESS 10 ADDRESS. 11 A. My name is Lisa Holder. I am Director, Compensation, Benefits and Human 12 Resources Records for NV Energy, Inc., and its two operating subsidiaries, 13 Nevada Power Company d/b/a NV Energy (“Nevada Power” or “Company”) d/b/a NV Energy 14 and Sierra Pacific Power Company d/b/a NV Energy (“Sierra” and together Nevada Power Company Company Power Nevada 15 with Nevada Power the “Companies”). My primary business address is 6226 and Sierra Pacific Power Company Pacific Power Sierra and Company 16 West Sahara Avenue in Las Vegas, Nevada. I am filing testimony in this 17 proceeding on behalf of Nevada Power. 18 19 2. Q. WHAT ARE YOUR PRIMARY RESPONSIBILITIES AS DIRECTOR, 20 COMPENSATION, BENEFITS AND HUMAN RESOURCES 21 RECORDS FOR NEVADA POWER AND SIERRA? 22 A. I manage the administration of the Companies’ employee compensation and 23 benefit programs. I also have responsibilities related to the maintenance of 24 human resources systems and records. 25 26 27 28 Holder-DIRECT 1 Page 5 of 247 1 3. Q. PLEASE DESCRIBE YOUR PROFESSIONAL BACKGROUND AND 2 EXPERIENCE. 3 A. I hold a Bachelor of Science Degree in Human and Family Resources and a 4 Master of Science Degree in Education. For the past 22 years I have worked 5 in human resources or have been in positions supporting the human resource 6 function. I spent five of these years as a consultant working with compensation 7 and benefits departments across the country implementing technology tools to 8 support their business needs. For the past 12 years I have been employed by 9 Sierra and Nevada Power in a variety of roles supporting the compensation 10 and benefits functions. 11 12 4. Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE THE PUBLIC 13 UTILITIES COMMISSION OF NEVADA (“COMMISSION”)? d/b/a NV Energy 14 A. Yes. Most recently, I filed testimony with the Commission in Sierra’s last Nevada Power Company Company Power Nevada 15 general rate case, Docket No. 19-06002. and Sierra Pacific Power Company Pacific Power Sierra and Company 16 17 5. Q. WHAT IS THE PURPOSE OF YOUR PREPARED DIRECT 18 TESTIMONY? 19 A. I address the reasonableness of test and certification period costs of the 20 Company’s employee cash compensation programs. 21 22 6. Q. ARE YOU SPONSORING ANY EXHIBITS WITH YOUR 23 TESTIMONY? 24 A. Yes. I have prepared and am sponsoring the following exhibits as part of my 25 testimony: 26 Exhibit Holder-Direct-1 Statement of Qualifications 27 28 Holder-DIRECT 2 Page 6 of 247 1 Exhibit Holder-Direct-2A Local 396 Wage Scales 2 Exhibit Holder-Direct-2B Executed Letter of Agreement – Contract 3 Extension 4 Exhibit Holder-Direct-3A Non-represented Salary Structure 5 Exhibit Holder-Direct-3B Benchmarking Data for Non-represented 6 Employees 7 Exhibit Holder-Direct-3C Salary Survey Participants 8 Exhibit Holder-Direct-4A Benchmarking Data for Officers 9 Exhibit Holder-Direct-4B Officer Compensation Comparison 10 11 7. Q. HOW IS THE REMAINDER OF YOUR TESTIMONY ORGANIZED? 12 A. In parts II, III and IV of my testimony, I support the reasonableness of test and 13 certification period costs associated with Sierra’s compensation programs for d/b/a NV Energy 14 represented employees, non-represented employees, and officers, Nevada Power Company Company Power Nevada 15 respectively. and Sierra Pacific Power Company Pacific Power Sierra and Company 16 17 II. BASE PAY FOR BARGAINING UNIT EMPLOYEES 18 8. Q. PLEASE DESCRIBE THE COMPENSATION STRUCTURE FOR 19 BARGAINING UNIT EMPLOYEES. 20 A. Wages for represented employees are established through collective 21 bargaining in accordance with federal law. Exhibit Holder-Direct-2A shows 22 wage scales for the International Brotherhood of Electrical Workers, Local 23 396 (“Local 396”) employees. 24 25 26 27 28 Holder-DIRECT 3 Page 7 of 247 1 9. Q. IS NEVADA POWER CURRENTLY ENGAGED IN COLLECTIVE 2 BARGAINING WITH LOCAL 396? 3 A. No. The collective bargaining agreement with Local 396, was executed on 4 September 24, 2013 (“CBA”) and was originally set to expire September 22, 5 2017. However, Nevada Power and Local 396 agreed to extend the CBA 6 through June 30, 2021. Exhibit Holder-Direct-2B is a copy of the executed 7 extension agreement. The payroll expense levels reflected in Schedule H- 8 CERT-17 for bargaining unit employees are based on the CBA and the 9 estimated workforce level in January 2020. This provides an annualized 10 amount from which to estimate costs at the end of May 31, 2020. 11 12 10. Q. HAS THE COMMISSION PREVIOUSLY REVIEWED THE CBA, 13 WHICH WAS USED TO CALCULATE ANNUALIZED PAYROLL OF d/b/a NV Energy 14 BARGAINING UNIT EMPLOYEES AS OF MAY 31, 2020? Nevada Power Company Company Power Nevada 15 A. Yes. The CBA was in place during the test period for Nevada Power’s last and Sierra Pacific Power Company Pacific Power Sierra and Company 16 general rate case, Docket No. 17-06003. 17 18 11. Q. IS THE BASE PAY FOR LOCAL 396 EMPLOYEES UNDER THE CBA 19 REASONABLE? 20 A. Yes. The benchmarking analysis described below demonstrates that the 21 compensation levels negotiated under the CBA are in fact reasonable and 22 consistent with regional industry standards. It is also important to recognize 23 that the Company negotiates a total wage, benefit and work rule package with 24 the Local 396. As a result, in some instances, wage increases may be granted 25 if savings are captured from other areas (e.g. changes to work rules, changes 26 to pension funding, etc.). 27 28 Holder-DIRECT 4 Page 8 of 247 1 12. Q. PLEASE EXPLAIN NEVADA POWER’S BENCHMARKING OF 2 LOCAL 396 WAGES. 3 A. The Company utilized benchmarking data from the EAP Data Information 4 Solutions (“EAPDIS”) 2018 Energy Technical Craft Clerical Survey to 5 validate current Local 396 wage rates. The data from the survey is effective as 6 of April 1, 2018, and was aged 2.5 percent, to December 31, 2019, using an 7 independent on-line market pricing system. 8 9 The Company’s market analysis compares Nevada Power’s average hourly 10 wages for benchmarked positions and the median hourly wages as reported 11 within 1) All Companies; 2) the Mountain/Plains Region; 3) the Western 12 Region; and 4) the average between the Mountain and Western scopes. The 13 analysis revealed that the average hourly wage for Nevada Power’s d/b/a NV Energy 14 benchmarked positions is 3.9 percent greater than All Companies, 7.0 percent Nevada Power Company Company Power Nevada 15 greater than the Mountain/Plains Region average, 10.6 percent lower than the and Sierra Pacific Power Company Pacific Power Sierra and Company 16 Western Region average, and 1.8 percent lower than the average composite of 17 these two regions.1 18 19 13. Q. WHAT IS THE IMPORTANCE OF COMPARING WAGE RATES TO 20 REGIONAL WAGE LEVELS? 21 A. This is an important comparison because electric utilities in the western United 22 States and some mountain states compete directly with Nevada Power for 23 skilled craft employees. In evaluating the reasonableness of Nevada Power’s 24 compensation costs, the Company considers the labor markets in which it must 25 compete for skilled labor to perform the work to serve customers. Although 26 1 To protect the integrity of the salary survey results, as only one survey source was used, the benchmarking analysis cannot be published and is considered proprietary information; however, the analysis can be reviewed 27 on-site upon request. 28 Holder-DIRECT 5 Page 9 of 247 1 higher wage levels are commanded by skilled utility workers in the Western 2 Region, the hourly wages for Local 396 are positioned between the Western 3 Region and the Mountain/Plains Region. 4 5 III. BASE PAY FOR NON-REPRESENTED EMPLOYEES 6 14. Q. PLEASE DESCRIBE THE CASH COMPENSATION COMPONENTS 7 FOR NON-REPRESENTED EMPLOYEES. 8 A. The components of the cash compensation program for non-represented 9 employees reflected in the revenue requirement calculated in this case include: 10 • Base pay, which is provided to all employees; 11 • Short Term Incentive Plan (“STIP”), which provides a financial 12 incentive for meeting or exceeding Nevada Power’s short-term 13 strategic goals and meeting or exceeding personal performance goals d/b/a NV Energy 14 which contribute to the achievement of company goals.

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