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U: 1NOTON Wi LMER, CUTLER &P.CKERIN<|Q630CT 31 ^ ^EW YORK 244B M STREET. N.W. BALTIMORE NORTHERN VIRGINIA WASHINGTON, DC 20037-I4EO LONDON BRUSSELS TELEPHON E +1 (202) 663 6000 BERLIN CATHERINE KANE RONIS (EOS) 663-6380 FACSIMILE +1 (202) 663 6363 CATHERINE.RONiasWILMER.COM WWW.WILMeR.COM October 31,2003
BY HAND
Honorable William L. Bouteiller Administrative Law Judge New York State Department of Public Service Three Empire State Plaza Albany, New York 12223
Re: Case 03-C-0980
Dear Judge Bouteiller:
Enclosed please find an original and 15 copies of the Direct Testimony of Marc Durocher, Steven Fedor, Bruce Lear, and Dinell Clark on behalf of Verizon New York Inc. in the above-captioned proceeding.
Please let me know if you have any questions.
Respectfully submitted. (ji/hl,^^ Catherine Kane Ronis
cc: Honorable Jaclyn A. Brilling, Secretary All Active Parties (By E-mail and U.S. Mail) '-.cCEIVLU iniBLlC SERViCF COMMISSION^ , OSEC-RLES-ALBANY
STATE OF NEW YORK 2003OCT3I PHM29 PUBLIC SERVICE COMMISSION
Proceeding on Motion of the Commission as to the Rates, Charges, Rules, and Regulations Relating to the Provisioning of Direct Current Case 03-C-0980 Power by Verizon New York Inc. for Use in Connection with Collocation Spaces by Verizon New York Inc.
DIRECT TESTIMONY OF
MARC DUROCHER, STEVEN FEDOR, BRUCE LEAR, AND DINELL CLARK ON BEHALF OF
VERIZON NEW YORK INC.
OCTOBER 31,2003 1 DIRECT TESTIMONY OF MARC DUROCHER, STEVEN FEDOR, BRUCE
2 LEAR AND DINELL CLARK
3
4 I. INTRODUCTION AND BACKGROUND OF THE WITNESSES
5 6 Q. WHO ARE THE MEMBERS OF THE WITNESS PANEL SPONSORING
7 THIS TESTIMONY?
8 A. The members of the witness panel are Mr. Marc Durocher, Mr. Steven Fedor,
9 Mr. Bruce Lear and Ms. Dinell Clark. They are testifying for Verizon New
10 Yorklnc. ("Verizon").
11 Q. WHAT ROLE DID EACH MEMBER OF THIS PANEL PLAY IN THE 12 PREPARATION OF THIS TESTIMONY?
13 A. While all members of this Panel have reviewed and support this testimony in its
14 entirety, each Panel member assumed primary responsibility for specific
15 segments of the testimony. Each Panel member relied on the facts and analyses
16 developed by the other Panel members in their areas of primary responsibility.
17 Specifically:
18 • Mr. Durocher was primarily responsible for analyzing the
19 characteristics that would be necessary for any power measuring system
20 and identifying what type of system would satisfy those characteristics.
21 • Mr. Fedor was primarily responsible for explaining the components and
22 operation of Verizon's power plants that supply direct current electrical
1 1 power ("DC power") to competitive local exchange carriers ("CLECs")
2 that collocate at Verizon's facilities.
3 • Mr. Lear was primarily responsible for explaining the current power
4 system that Verizon offers under PSC Tariff No. 8 ("Tariff No. 8"), as
5 well as how it allows CLECs to order the power they need and adjust
6 their orders by increasing and decreasing their power orders.
7 • Ms. Clark was primarily responsible for explaining the current rate
8 structure for providing DC collocation power, how that structure would
9 change if power measuring were ordered by the Commission, and why
10 the additional charges for a power measuring system (if ordered by the
11 Commission) should be implemented through a combination of non-
12 recurring and recurring charges.
13 14 Q. MR DUROCHER, PLEASE STATE YOUR NAME AND BUSINESS 15 ADDRESS. 16 A. My name is Marc J. Durocher. My business address is 251 Locke Drive,
17 Marlboro, Massachusetts 01752.
18 Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY? 19 A. I air i employed by Verizon Communications as a Central Office Engineering
20 Support Specialist, Power.
21 Q. PLEASE DESCRIBE YOUR EDUCATION AND WORK EXPERIENCE. 22 A. I have held my current position since 2002. In this capacity, I am responsible
23 for supporting Verizon's Engineering section on all matters pertaining to
2 1 power. Prior to my present position at Verizon, I was a power engineer and
2 was involved in detailing power requirements for central office applications.
3 Prior to that, I was a member of the Science and Technology Department at
4 NYNEX for 6 years. I have been employed by Verizon or its predecessor
5 companies in power-related capacities since 1969. I have been an active
6 member of the Institute of Electrical and Electronics Engineers, Inc. since 1998,
7 and I am a licensed electrician in the states of Massachusetts and Vermont.
8 Q. MR. FEDOR, PLEASE STATE YOUR NAME AND BUSINESS
9 ADDRESS.
10 A. My name is Steven M. Fedor. My business address is 230 W. 36th Street, 2nd
11 Floor, New York, New York 10018.
12 Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?
13 A. I am employed by Verizon as a Power Systems Engineer.
14 Q. PLEASE DESCRIBE YOUR EDUCATION AND WORK EXPERIENCE.
15 A. I have completed many engineering programs, including the following:
16 Overcurrent Protection Devices Seminars and Analysis of Harmonics in Power
17 Systems Training (Bussman Co.); Governors, Actuator and Generator Control
18 Training (Woodward Governor Co.); Galaxy DC Power Plant Training (Lucent
19 Technologies); and Fault Current Analysis and Method of Symmetrical
20 Components Training (Multi-Amp Corp.). I will receive a B.S. in Electrical
21 Engineering, magna cum laude, in December 2003 from the New Jersey
22 Institute of Technology.
3 1 I have worked for over 20 years as a power plant engineer. I began my
2 career in 1980 as an associate engineer with Western Electric (a former Bell
3 System company), where I worked for five years. My responsibilities at
4 Western Electric included the planning, design, and layout of generators.
5 switchgear, DC power boards, rectifiers, batteries, plant controllers, and power
6 distribution devices. I then worked for two years at NWL Transformers, where
7 I designed custom power magnetics and power supplies. In 1995, I joined
8 NYNEX. I am currently responsible for engineering and acceptance testing of
9 all power equipment installed for Verizon in the Bronx. I have designed and
10 implemented dozens of DC power plant installations and distribution systems.
11 I have received a number of awards for my work, including the "Leaders in
12 Excellence" award for my participation in the creation of power standards for
13 AC power systems.
14 Q. MR. LEAR, PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. 15 A. My name is Bruce Lear and my business address is 2980 Fairview Park Drive,
16 Falls Church, Virginia.
17 Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?
18 A. I am employed by Verizon as a Product Line Manager for Collocation in the
19 Wholesale Services Organization.
20 Q. PLEASE DESCRIBE YOUR EDUCATION AND WORK EXPERIENCE.
21 A. In my position, which I have held since 1996,1 am directly involved with the
22 negotiation of CLEC Interconnection Agreements and the development of
23 collocation service offerings in the former Bell Atlantic states and at the Federal
4 1 Communications Commission ("FCC"). I have 35 years of telecommunications
2 experience with Verizon and the former C&P Telephone Companies. Prior to
3 my current assignment, I have held a variety of positions of increasing
4 responsibility in Network Operations. I have previously filed testimony on
5 collocation-related issues in Delaware, Pennsylvania, New Hampshire, New
6 Jersey, Massachusetts and Maine.
7 Q. MS. CLARK, PLEASE STATE YOUR NAME, AND BUSINESS
8 ADDRESS.
9 A. My name is Dinell Clark and my business address is 125 High Street, Boston,
10 Massachusetts.
11 Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?
12 A. I am employed by Verizon as Staff Director in the Service Costs Organization.
13 Q. PLEASE DESCRIBE YOUR EDUCATION AND WORK EXPERIENCE.
14 A. I received a Bachelor of Science Degree in Business Administration from New
15 Hampshire College and a Master of Liberal Arts — Government Degree from
16 Harvard University. I have been employed by Verizon for 15 years and have
17 held numerous positions, the majority of which related to the outside plant
18 environment. I initially was hired to work in the Outside Plant Engineering
19 department to conduct long-range planning analyses. I subsequently transferred
20 to staff positions related to the process reengineering of the Outside Plant
21 organization. In 1997,1 assumed the position of Staff Director in the Service
22 Costs organization, where I am responsible for developing cost studies for
23 collocation. I have testified before the New Hampshire Public Utilities
5 1 Commission and the Massachusetts Department of Telecommunications and
2 Energy concerning collocation costs.
3 Q. WHAT IS THE SCOPE OF THIS TESTIMONY? 4 5 A. The scope of this testimony is governed by the ruling issued by the
6 Administrative Law Judge ("ATJ") on August 11, 2003. Pursuant to that
7 ruling, this first phase of the proceeding is concerned exclusively with "the
8 parties' metering proposals, any alternatives to metering for the Commission to
9 consider, the parties' rate structure and rate design proposals, and any issues
10 pertaining to the technical feasibility and practicability of implementing any
11 proposal presented in this phase."1' The AU deferred "the consideration of
12 specified costs and the need for any cost studies" to a subsequent phase of this
13 proceeding.^
14 II. SUMMARY OF ARGUMENT 15 16 Q. WHAT IS AT STAKE IN THIS PROCEEDING? 17 A. The main issue in this case is whether the Commission should require Verizon
18 to implement a novel and unproven system to measure DC power usage by
19 CLECs that are collocated in Verizon's central offices — a system that would
20 increase the overall costs of providing DC power while providing no significant
11 Ruling Establishing Case Procedures and Schedule, Proceeding on Motion of the Commission as to the Rates, Charges, Rules, and Regulations Relating to the Provisioning of Direct Current Power by Verizon New York Inc. for Use in Connection with Collocation Spaces by Verizon New York Inc., Case 03-C-0980 (Aug. 11, 2003), at 3-4. 2/ Id. at 4.
6 1 benefit to any party. The Commission should reject this proposal and, instead,
2 maintain the current flexible and sensible system under which CLECs order and
3 pay for the power they need. If the Commission were to make the unfortunate
4 choice to order power measuring, it would then be incumbent upon the
5 Commission to implement a rate structure that would ensure that Verizon
6 would be able to recover its considerable fixed costs in providing DC power as
7 well as the substantial costs of the new power measuring system. Such a rate
8 structure should be developed on a cost-causative basis — thus, only usage-
9 sensitive costs should be recovered through usage-sensitive rates. The CLECs
10 should not be able to have their cake, eat it too — and not pay for it.
11 Q WHAT IS "POWER MEASURING," AND HOW IS IT DIFFERENT
12 FROM "METERING"?
13 A For purposes of this testimony, we use the term "power measuring" to mean
14 taking measurements, at particular points in time, regarding the power that a
15 CLECs collocation equipment is drawing. "Metering," on the other hand.
16 refers to a system by which a consumer's cumulative electrical usage is counted
17 on an ongoing basis and stored. The meters that electric utilities have placed
18 outside many residential power users' homes are an example of "metering"
19 because they tally all the power that flows into the user's home. In contrast to
20 the residential context, no "metering" approach exists to Verizon's knowledge
21 for cumulating the DC power consumption of telecommunications equipment
22 users. Thus, in the interest of accuracy, we will use the term "power
23 measuring" to refer to the systems discussed in this testimony.
7 1 Q. HAS THE COMMISSION ALREADY DETERMINED THAT POWER
2 MEASURING SHOULD BE IMPLEMENTED?
3 A. No. In its own words, the Commission commenced this proceeding in order to
4 "explore modifications" to Verizon's collocation power tariff and "consider
5 alternate DC power ordering and billing methods, including the possibility of
6 billing on a metered usage basis."2' The Commission's Order Denying Petition
7 in Case 03-C-0085 did just what its caption says: it denied AT&T and
8 WorldCom's petition for a ruling declaring Verizon's DC power tariff to be
9 unjust and unreasonable.-' The purpose of this proceeding is simply to explore
10 whether power measuring — or any modifications to the current system — are
11 necessary or justifiable.
12 Q. PLEASE SUMMARIZE YOUR DIRECT TESTIMONY. 13 A. Power measuring is an unworkable and wasteful "solution" to a non-existent
14 problem. The current system that Verizon offers in New York gives CLECs the
15 tools they need to effectively and efficiently manage their own power
16 requirements. CLECs can order the power they need and then increase or
17 decrease their power orders if their needs change.
11 Order Denying Petition and Commencing Proceeding, Joint Petition of AT&T Communications of New York, Inc. and WorldCom, Inc. for a Declaratory Ruling Concerning the Provisioning of Direct Current Power for Use in Connection with Collocation Spaces by Verizon New York Inc., Case 03-C-0085 (July 9, 2003) ("Order Denying Petition") at 9 (emphases added).
-' Id. ("[PJetitioners' request for a ruling declaring DC power cha[r]ges set forth in Tariff 8 to be unjust and unreasonable will be denied."). 1 By contrast, power measuring would be costly and inefficient and would
2 offer no improvement over the current system. Implementing a measuring
3 system would require large, up-front investments for the measuring equipment,
4 as well as for the systems needed to measure and record power usage and to bill
5 the Cl PCs for DC power on a monthly basis. Verizon also would incur
6 significant ongoing costs associated with processing the power measurements.
7 maintaining and calibrating the power measurement equipment, employing
8 additional workforce, and addressing billing disputes with CLECs regarding the
9 accuracy of Verizon's power measurements. Requiring Verizon to incur these
10 costs would be particularly unreasonable since the only variable part of the
11 charges for DC power — and hence the only part that would be billed based on
12 usage — is the relatively minor costs that Verizon incurs to purchase AC
13 power. (DC power is produced by rectifying AC power purchased from local
14 electrical utilities.)
15 Contrary to AT&T's suggestion, moreover, the question goes beyond
16 whether CLECs think that it would be cost effective to be billed based on their
17 metered usage. While Verizon would be entitled to implement wholesale rates
18 designed to recover the total costs of any system for measuring DC power
19 utilized by collocated CLECs, experience nonetheless shows that Verizon
20 would still absorb tremendous administrative costs if it were required to
21 implement a system that CLECs will never use (as is likely here, since the costs
22 of such a system would far outweigh any benefit to the CLECs). And if CLECs
23 stopped using the power measuring system, Verizon would lose even more
9 1 money if it were not able to continue to assess recurring charges that recover for
2 the ongoing costs of the system. For this reason, at a minimum, Verizon would
3 need to recover the substantial equipment and installation costs of a power
4 measuring system in an up-front non-recurring charge. The substantial ongoing
5 costs would then be recovered through recurring charges.
6 Given the costs and operational burdens associated with measuring
7 power, the Commission should simply require the CLECs to order only what
8 they need, and then augment as their needs grow. If a CLEC prefers to order all
9 of its potential capacity at once, it must bear the costs associated with that
10 decision. Just like other businesses, including Verizon, CLECs must balance
11 the higher monthly costs associated with ordering more capacity than they
12 initially need against the non-recurring cost of adding that capacity at a later
13 time.
14 If the Commission determines that CLECs should be permitted to
15 change power requirements frequently at a lower cost than under the current
16 rates, it should adopt Verizon's alternative proposal (as discussed later), which
17 would allow CLECs to order (and pay for through a non-recurring charge)
18 larger cables and then augment through fuse changes only. This alternative
19 would considerably reduce the costs of augmentation.
20 III. TECHNICAL BACKGROUND
22 Q WHY DO CLECS ORDER DC POWER FROM CARRIERS SUCH AS
23 VERIZON? 24 A CLECs order power from Verizon and other incumbent local exchange carriers
10 1 ("ILECs") because they frequently install telecommunications equipment on
2 ILEC premises for purposes of interconnecting their telephone systems with the
3 ILECs telephone system and/or accessing ILEC unbundled network elements
4 ("UNEs"). This practice of placing telecommunications equipment at the ILEC
5 premises is known as "collocation."
6 Q. HOW IS TELECOMMUNICATIONS EQUIPMENT POWERED?
7 A. Telecommunications equipment operates on DC power.
8 Q. DOES THE ELECTRIC COMPANY DELIVER DC POWER?
9 A. No. The electric company provides only alternating current electrical power
10 ("AC power"). Verizon purchases AC power from the electric company and
11 converts it into DC power, which it then supplies to both its own
12 telecommunications equipment and the telecommunications equipment of
13 CLECs collocated in the Verizon central office.
14 Q. HOW DOES THE CONVERSION AND DISTRIBUTION OF DC 15 POWER WORK?
16 A. The conversion and distribution of DC power takes a large amount of fixed
17 investment in equipment and infrastructure. The primary components,
18 described in further detail below, are switchgear distribution panels, rectifiers.
19 batteries, buss bars, controllers, cables and cable support, fuses, generators.
20 battery distribution fuse bays ("BDFBs") and power distribution boards
21 ("PDBs").
22 AC power comes into Verizon's plant to a distribution panel, called
23 "switchgear." From there, the power from the electric company is fed to a
24 number of rectifiers, which convert the power from AC power to DC power.
11 1 Power cables then carry the DC power from the rectifiers to strings of liquid
2 electrolyte batteries, which store the DC power.
3 The batteries serve two purposes. First, they provide a steady flow of
4 DC power to the system. Second, they ensure that Verizon is able to provide
5 uninterrupted DC power to the telecommunications equipment in the central
6 office in the event of an electrical power outage. If there were no batteries in
7 Verizon's central offices storing DC power, every piece of telecommunications
8 equipment would fail every time there was a power outage.
9 Another set of power cables carry the DC power from the batteries to
10 buss bars (large copper plates consolidating the output of the power from the
11 string of batteries). From there, another set of power cables carry the DC
12 power to the PDB, which is the primary distribution point for providing DC
13 power to telecommunications equipment. The controllers, which are essentially
14 computers specialized for monitoring and running telecommunications
15 equipment, manage the flow of DC electricity through the power system.
16 From the PDB, Verizon then routes the DC power through one of two
17 methods, depending on the size of the power requirement. For collocation
18 arrangements that require substantial amounts of DC power (typically, more
19 than 60 amps5' of fused capacity), Verizon runs large power cables directly to
20 the collocation arrangement. For orders of 60 amps or less, Verizon runs power
21 cables from the PDB to BDFBs, which are secondary DC power distribution
22 points placed throughout the central office. From the BDFBs, Verizon runs
5/ An "ampere," or "amp," is a unit of electrical current flow.
12 1 smaller power cables to the equipment or collocation arrangements that require
2 lesser amounts of powers Most CLECs take DC power from Verizon's
3 BDFBs, but some CLECs that need or anticipate needing large amounts of DC
4 power place their own BDFB in their collocation arrangement and take power
5 directly from Verizon's PDB.
6 The central office power system also includes large standby generators.
7 These large devices, which generally run on diesel fuel, are connected to
8 Verizon's rectifiers through the AC switch board and can supply the AC power
9- required to provide the DC power necessary to run the telecommunications
10 equipment in the central office in the event of an extended power outage, such
11 as the extensive blackout that struck the New York area recently.2'
12 Q. PLEASE DESCRIBE THE SIZE OF THIS POWER EQUIPMENT.
13 A. Collectively, the equipment used to provide DC power is considerably more
14 massive than any other type of equipment in the central office. Depending on
15 the size of the office and the load required, anywhere from 2 to 24 rectifiers
16 may occupy a given central office. Rectifiers range in size from a bookcase to a
17 footlocker. The individual batteries are the size of a file cabinet and, because
18 they are filled with liquid, weigh several hundred pounds each. A battery string
19 consists of 24 of these cells. Because of their mass and because they must be
* In 2002 and 2003, 95% of all CLEC applications requesting DC power were for amounts that, under Verizon's practices, would be distributed from a BDFB.
11 Photographs of all this power equipment and a diagram of the power system are provided as Exhibit A.
13 1 ventilated, they cannot be stacked higher than two tiers, and therefore require a
2 relatively large footprint. A central office will generally contain from one to 18
3 battery strings, depending on the load requirements. The power distribution
4 board is approximately seven feet tall and 24 inches wide, and a central office
5 may contain more than one of these large devices. BDFbs are about two feet
6 wide and range in height from about seven to 11 feet. Back-up generators are
7 enormous; their size ranges from that of a small car to that of a railway
8 locomotive.
9 IV. POWER MEASURING IS A SOLUTION IN SEARCH OF A PROBLEM 10 AND SHOULD NOT BE ORDERED BY THIS COMMISSION.
11 A. THE CURRENT SYSTEM FOR ORDERING AND BILLING DC 12 POWER IS EFFECTIVE AND REASONABTF.
13 Q. PLEASE DESCRIBE HOW VERIZON'S CURRENT COLLOCATION
14 TARIFF OPERATES.
15 A. The current system is straightforward and effective. Tariff No. 8 grants CLECs
16 the flexibility to specify the amount of DC power they wish to order from
17 Verizon in order to operate their collocation equipment. Under the Tariff,
18 "[t]he CLEC is responsible for engineering the power consumption in its
19 collocation arrangements."2' In response to a CLECs own specifications,
20 Verizon then "engineer[s] the power feeds to the collocation arrangement in
& TariffNo. 8, § 15.3.5(D).
14 1 accordance with industry standards based upon requirements ordered by the
2 CLEC on its collocation application."2'
3 The CLECs can order this power according to the amps they actually
4 intend to use. These ordered amps are called "load amps" because they indicate
5 the power draw — or "load" — being requested from the DC power plant on a
6 dedicated basis. Ordering the appropriate load is not difficult because CLECs'
7 power usage remains relatively constant over time. As an AT&T witness
8 recently testified in a Florida collocation proceeding, "telecommunications
9 equipment maintains a steady state power drain."12'
10 In addition to the load amps they order, CLECs can request that then-
11 equipment be fused at up to 250 percent of the ordered load.11' "Fusing" means
12 putting a fuse (or a circuit breaker) on a feed that establishes the maximum
13 current that can travel over the feed, and that opens the circuit if the current
14 exceeds that limit (for example, in the case of a short circuit). A 250 percent
2' Id.
m' AT&T Communications of the Southern States, LLC and TCG South Florida, Inc., Direct Testimony of Jeffrey A. King, Dockets Nos. 981834-rP/990321-TP (Ha. P.S.C. filed December 19, 2002) ("King Florida Direct"), at 10 (Exhibit B). Though the power drain is generally steady enough to allow CLECs to order their average draw without much difficulty, the drain can fluctuate under certain conditions. This possible fluctuation, as explained below, makes spot measurements inappropriate for billing purposes since spot measurements are snapshots rather than averages over time.
1X1 As a technical matter, Verizon generally uses circuit breakers rather than fuses for feeds that are connected to the PDB. Since both devices accomplish the same function, however, we will use the tenn "fuses" throughout this testimony to mean both fuses and circuit breakers for simplicity.
15 1 fusing policy allows a CLEC ordering (and paying for) 100 load amps to have
2 fuses installed that allow the CLECs' equipment to draw a total of 250 amps
3 over both feeds before the fuses would blow. This fused capacity allows for
4 spikes in power draw and provides the ability to draw enough power over one
5 feed so that if one feed goes down, the other feed can carry the entire load.
6 Allowing for spikes in power draw is necessary because telecommunications
7 equipment draws more current when a power plant is in distress than under
8 normal operating conditions (for example, when the AC power is interrupted).
9 This is the difference between so-called "List 1 Drain" (drain under normal
10 operating conditions) and "List 2 Drain" (maximum drain under distressed
11 conditions). In contrast to other ILECs around the country, Verizon does not
12 require the CLECs to pay Verizon for the additional fused capacity — only for
13 the actual load they order.
14 Once the CLEC has ordered the load amps that it wants, Verizon
15 recovers the costs for providing the power entirely through a monthly recurring
16 charge. A CLEC pays $19.64 per month for each load amp requested to the
17 collocation space if the request is for 60 amps or less. If the request is for more
18 than 60 amps, Verizon charges the CLEC $19.56 per amp per month.12' These
19 per-amp charges are the only charges Verizon imposes for providing DC
20 power, other than those one-time fees that Verizon may charge for power
12/ TariffNo. 8, §35.15.10.
16 12 1 augments. ' Of course, this rate structure does not reflect how costs are
2 actually incurred. Verizon spends money up front to build and augment power
3 plants and distribution infrastructure and does so whether the CLECs draw
4 another amp of power or not. The Commission recognized that this system
5 places "the burden on Verizon to provision power to CLECs when and where
6 requested without having the CLEC assume large non-recurring costs prior to
7 the start of a collocation arrangement."14'
8 Q. AT&T CLAIMS THAT VERIZON'S CURRENT TARIFF FORCES 15 9 CLECS TO ORDER POWER THAT THEY DO NOT NEED. ' IS THIS
10 CORRECT?
11 A. No. As Verizon previously explained in Case 03-C-0085, Tariff No. 8 does not
12 specify the amount of power a CLEC must order, nor does it obligate a CLEC
13 to order any minimum amperage. Because collocation equipment operates at a
14 fairly constant drain level, CLECs are entirely capable of forecasting the
15 amount of power that their equipment will use and ordering that amount of
16 power from Verizon. Moreover, when those power needs change, CLECs can
n' These one-time augment fees are designed to recover the administrative and engineering costs spent by Verizon to install the additional power cables and fuses requested by the CLEC, but not the costs of any of the DC power infrastructure, which are recovered through the monthly recurring charges.
J4/ Order Denying Petition at 2. & Complaint and Petition for Declaratory Judgment of AT&T Communications New York, Inc. and WorldCom, Inc., Against Verizon-New York, Inc. For Unjust and Unreasonable Practices Concerning the Provisioning of Direct Current Power for Use in Connection with Collocation Spaces, Case 03-C-0085 (filed Jan. 22, 2003), at 2.
17 1 adjust their power orders by requesting an augment or a power down, as
2 described below.
3 Q. HOW DOES A CLEC POWER DOWN UNDER THE CURRENT
4 TARIFF?
5 A. If a CLEC wishes to reduce the amount of DC power it has ordered for its
6 collocated equipment, the CLEC can request a "power down" by filling out a
7 "Notice of Termination/Reduction" form available on the Internet.16' If a power
8 down does not require a change in cabling, Verizon only charges for the labor
9 associated with changing the fuse.
10 Q. HAVE CLECS IN NEW YORK USED THIS PROCEDURE TO REDUCE
11 THE AMOUNT OF POWER THEY ORDER (AND HENCE ARE
12 BILLED FOR)?
13 A. Yes. The CLECs have requested frequent and substantial reductions to their
14 original power orders. In 2001 and 2002 alone, for example, Verizon processed
15 approximately 390 applications for power downs under Tariff No. 8 in New
16 York. Even after the biggest power downs in 2000 and 2001, CLECs have
17 continued to reduce their power substantially. For example, from October 2002
18 to July 2003, CLECs reduced their total power billed in the state under Tariff
19 No. 8 from 58,938 amps to 42,395 amps. This represents a cumulative power
20 reduction during that period of nearly 28 percent. Verizon did not charge fees
i& See
18 1 for these reductions and currently has no mechanism to recover for both the
2 stranded capacity and the costs incurred by Verizon for larger sized cables
3 caused by the CLECs' ordering more power than they actually needed and
4 subsequently submitting power downs. The fact that so many CLECs have
5 used existing procedures to reduce the power they order makes it clear that
6 Verizon's current Tariff No. 8 works well and does not require CLECs to order
7 and pay for more power than they desire.
8 Q HOW DO CLECS INCREASE THE POWER THEY ORDER UNDER
9 THE CURRENT TARIFF?
10 A If CLECs determine that their power needs have increased, they can request
11 that power using an "augment" application available on Verizon's web site.
12 For a one-time fee, Verizon will then perform all the functions necessary to
13 increase DC power available over the requested set of power feeds.12' These
14 steps may include:
15 • installing larger cables rated for greater capacity or additional power
16 feeds to handle the increased load;
17 • installing higher capacity fuses to maintain the 250 percent ratio of
18 ordered to fused amps (if requested by the CLEC);
19 • checking whether sufficient DC capacity is available in the particular
20 power plant at the point of distribution of the CLECs feeds in question;
12/ TariffNo. 8, § 15.4.1(A).
19 1 • re-engineering the arrangement so that the power feeds are distributed
2 from the PDB instead of a BDFB if the order increases the requested
3 amperage from 60 amps or below to over 60 amps (BDFBs handle fused
4 capacity only up to 60 amps);
5 • augmenting power plant infrastructure if sufficient capacity is not
6 available; and
7 • changing the billing for this arrangement and updating records.
8 Q WHY IS THIS FORMAL AUGMENT PROCESS IMPORTANT?
9 A This process is important because it allows Verizon to manage the power plant
10 effectively. The CLEC application enables Verizon to ensure the requested
11 capacity is available and, if it is not, to build the capacity or engineer the feed to
12 another point in the plant that has sufficient capacity. If this process were not
13 in place, a CLEC would have no assurance that it would be able to receive the
14 power it needs. Worse, if CLECs could draw as much power as they wanted
15 without regard to their orders or fusing, they could draw more power from the
16 plant or power distribution point than the plant was capable of providing on an
17 ongoing basis. Overdrawing the plant or distribution point capacity could cause
18 a catastrophic failure for both CLEC and Verizon equipment. Only if Verizon
19 receives formal notice of a CLECs plans to draw more power on a consistent
20 basis can Verizon assure the safe and reliable operation of its power plants. In
21 addition, CLECs might change orders constantly if they did not need to pay for
22 augments because they would not absorb any of the substantial costs in making
23 these changes.
20 1 Q. IS THERE EVIDENCE THAT CLECS NEED TO INCREASE THEIR
2 POWER ORDERS FREQUENTLY BECAUSE OF GROWTH?
3 A. No. In fact, the opposite is true. Approximately 95 percent of all active
4 collocation arrangements under Tariff No. 8 have requested no power augments
5 to increase their power requirements in the 33 months since the beginning of
6 2001. Even accounting for the fact that some collocation arrangements may
7 have augmented more than once, increases in power as a percentage of the 454
8 active collocation arrangements under Tariff No. 8 have been only about 2
9 percent per year. This virtually de minimis level of augmentation has continued
10 even in the most recent year despite the large reductions in power ordered at
11 collocation arrangements in 2000 and 2001.
12 Q. WHY IS IT IMPORTANT THAT CLECS ORDER AND PAY FOR
13 POWER RATHER THAN FOR JUST WHAT THEY USE?
14 A. If CLECs did not pay for the power they order, and instead paid only for some
15 "usage" based on power measuring, they would lack incentives not to order
16 large amounts of power because they would not need to pay for it. In addition.
17 Verizon would not know how much power plant to build and might build too
18 much (which would be wasteful and costly) or too little (which would
19 jeopardize operation of Verizon's and the CLECs' systems). This would
20 impose significant costs on Verizon, as the CLECs over-ordering of power
21 already has, because of the expense associated with building DC power plant.
22 as well as the significant investments for larger capacity power cables. The
23 costs of building and maintaining the DC power plant are fixed and substantial
21 1 regardless of whether a CLEC draws the full amount of its ordered load or only
2 one amp.
3 Q. HAVE OTHER STATES ADOPTED VERIZON'S CURRENT METHOD
4 OF CHARGING CLECS FOR THE AMOUNT OF POWER THEY
5 ORDER, RATHER THAN THE AMOUNT USED?
6 A. Yes. Forty eight states and the District of Columbia allow TLECs to charge for
7 DC power based on the amount of power ordered, rather than the amount used.
8 And four state Commissions have rejected metering outright:
9 • The Florida Public Service Commission found that metering "would be 10 costly and time-consuming" and that its costs "could exceed the 11 difference in costs of applying the rate" to a CLECs forecasted usage. 12 and accordingly declined to adopt it.12'
13 • The South Carolina Public Service Commission, in rejecting a CLECs 14 suggestion that "central office power to each CLECs collocation 15 arrangement [could] be separately metered," determined that metering 16 "is technically infeasible and would be an inefficient use of ILEC and 17 CLEC resources," particularly where the ILEC offered the CLECs the 18 opportunity to receive smaller quantities of power from the ILECs own 19 BDFB.12'
20 • The Massachusetts Department of Telecommunications and Energy, 21 despite hearing arguments from WorldCom in favor of creating a 22 "usage-based rate structure in which CLECs pay only for the power that 23 they actually use," found Verizon's use of a "per load amp" rate 24 structure to be reasonable.22'
w MCImetro Access Transmission Services LLC, Order No. PSC-01-0824-FOF- TP, 2001 WL 460666, at *78 (Ha. P.S.C. Mar. 30, 2001).
12/ BellSouth Telecommunications, Inc., Docket No. 2001-209-C, Order No. 2002- 77, 2002 WL 480605, at *23 (S.C. P.S.C. Feb. 14, 2002).
22/ Verizon New England, Inc. d/b/a Verizon-Massachusetts, Decision T.E. 98-57 Phase IV, 2002 WL 31470391, at *6 (Mass. D.T.E. May 14,2002).
22 1 • An arbitration panel of the Michigan Public Service Commission 2 recently expressly rejected MCI's effort to require SBC to bill DC power 3 based on a usage-based metering system, finding that SBC "should not 4 be required to spend millions in an effort to accommodate [MCTs] 5 proposed [method of] power cost recovery."21'
6 Contrary to AT&T's claim in its complaint in this case, the Illinois
7 Commerce Commission ("ICC") did not order metering. The ICC simply
8 directed SBC to "recalculate the charges along the lines suggested by Staff' —
9 which had proposed that SBC either provide power for collocation "on a per-
10 unit basis" or charge CLECs for power based on the square footage of the
11 CLECs collocation space.22' Though the Tennessee and Georgia Commissions
12 have endorsed "usage-based billing" for DC power, neither provided any
13 analysis of the issue and neither has specified any technical means by which
14 measuring for such usage-based billing could be implemented.22' To Verizon's
15 knowledge, power measuring is not taking place in either of those jurisdictions.
211 Decision of the Arbitration Panel, Michigan Bell Telephone Company d/b/aSBC Michigan's Petition for Arbitration of Interconnection Rates, Terms and Conditions and Related Arrangements with MCImetro Access Transmission Services, LLC Pursuant to Section 252(b) of the Telecommunications Act of 1996, Case No. U- 13758 (Mich. P.S.C. June 26, 2003), at 28-29.
227 Second Interim Order, Investigation Into Forward-Looking Cost Studies and Rates of Ameritech Illinois for Interconnection, Network Elements, Transport and Termination of Traffic, Docket Nos. 96-0486/96-0569 (111. C.C. Feb. 17, 1998), at 99.
^ Review of Cost Studies, Methodologies, Pricing Policies, and Cost Based Rates for Interconnection and Unbundling of BellSouth Telecomms., Inc.'s Services, Docket No. 14361-U (Ga. P.S.C. June 24, 2003), at 41; Interim Order of Arbitration Award, Petition of MCImetro Access Services, LLC and Brooks Fiber Communications of Tenn., Inc. for Arbitration of Certain Terms and Conditions of Proposed Agreement with BellSouth Telecomms., Inc. Concerning Interconnection and Resale under the Telecomms. Act of 1996, Docket No. 00-00309 (Tenn. R.A. Apn 3, 2002), at 42-43.
23 1 Q. HAS THE FCC REJECTED POWER MEASURING?
2 A. Yes. The FCC has expressly determined that it would "not require LECs to
3 provide power on a measured, actual use basis because we are not persuaded
4 that such a rate structure would reflect the way costs are incurred better than
5 power offered in increments."24'
6 Q. PLEASE SUMMARIZE WHY VERIZON BELIEVES THE CURRENT
7 SYSTEM WORKS WELL AND SHOULD NOT BE CHANGED.
8 A. Verizon believes the current system in place gives CLECs the tools they need to
9 manage their power needs and ordering effectively. CLECs should order the
10 power they need and increase or decrease their power orders if they find that
11 their circumstances have changed — a practice they have repeatedly followed
12 in the last several years. Verizon charges a reasonable application and
13 engineering fee under the current system to cover the materials and labor costs
14 of installing the larger cables and fuses or additional feeds necessary to handle
15 the increased load. Finally, the current system should not be changed because
16 there is insufficient evidence that CLECs need to increase their power for
17 "growth" to justify implementing a new system.
18
w Second Report and Order, Local Exchange Carriers' Rates, Terms and Conditions for Expanded Interconnection Through Physical Collocation for Special Access and Switched Transport, 12 FCC Red 18730, 18759 \ 59 (1997) {"Second Report and Order on Expanded Interconnection Through Physical Collocation").
24 1 B. POWER MEASURING WOULD BE COSTLY AND 2 CUMBERSOME. 3 4 Q WHAT MINIMUM OPERATIONAL CRITERIA WOULD A POWER 5 MEASURING SYSTEM NEED TO MEET? 6 7 A At a minimum, any power measuring system would need to satisfy certain
8 fundamental operational criteria in order to be considered a suitable tool for
9 measuring CLECs' DC power usage in their collocation arrangements.
10 First, any power measuring system would need to record CLECs' actual
11 power usage accurately. To obtain accurate measurements, the power
12 equipment must be able to take measurements frequently over time — rather
13 than occasional spot measurements — to capture any fluctuating levels of the
14 CLECs power usage, and would also have to record these frequent
15 measurements automatically and systematically so they could be audited later.
16 Second, any power measuring system would need to have the ability to
17 measure all CLEC power feeds running to collocation arrangements — which
18 we estimate number approximately 8,000 in New York — so that all CLECs
19 could be billed based on their measured usage. Because of the way that
20 Verizon's central offices are designed, achieving universal coverage of a power
21 measuring system would be complicated. In many cases, CLECs' collocation
22 arrangements receive a power feed (or, in some cases, multiple feeds) from
23 BDFBs. These BDFBs typically serve the equipment of multiple CLECs, and.
24 in some cases, the equipment of both CLECs and Verizon. Therefore, any
25 power measuring system would need to include a measuring device for each
26 power feed so that each individual CLECs power usage could be accessed and
25 1 tallied. Although some larger CLECs, such as AT&T, draw some of their
2 power from large feeds attached directly to the power distribution board, any
3 power measuring system that was confined to measuring these larger feeds
4 could not measure the usage of CLECs that draw power from shared BDFBs,
5 and would therefore be incomplete.
6 Third, the power measuring system would need to be independent from
7 Verizon's power plants. The system should be engineered so that CLECs could
8 remotely access the power measuring system to verify readings without
9 entering the networks that control Verizon's systems. Any power measuring
10 system that gave CLECs access to Verizon's network would put the network at
11 an unacceptable risk.
12 Finally, the power measuring system could not pose an unreasonable
13 risk to the network equipment (of either Verizon or collocating CLECs) or to
14 persons present in the central office. For example, manually measuring power
15 on open circuits would present an unacceptable risk of electrocution to the
16 employee performing those measurements. Similarly, power measuring
17 equipment that places undue physical strain on the power feeds themselves (or
18 requires readers to move feeds around to achieve access) heightens the odds of
19 a power circuit becoming disconnected, thereby leading to the risk of a fire or
20 loss of service within the central office. Thus, power measuring would have to
21 be designed so as to eliminate to the extent possible contact with the power
22 circuits and to minimize the physical strain on the electrical equipment already
23 in place.
26 1 Q HAS VERIZON DESIGNED A POWER MEASURING SYSTEM THAT
2 MEETS THE CRITERIA DISCUSSED ABOVE?
3 A Yes. Verizon evaluated the material and equipment requirements that would
4 need to be implemented to meet the criteria identified above. If the
5 Commission required Verizon to implement a power measuring system (which
6 it should not do), Verizon proposes the following power approach. The current
7 would be measured by Hall-effect transducers permanently mounted on the
8 supply side of the power feed located close to each CLECs collocation
9 equipment. Hall-effect transducers are doughnut-shaped devices that measure
10 the power flowing through a particular power feed. These transducers would be
11 attached to monitors in a different part of the central office. Monitors are
12 capable of measuring and storing power usage on up to 32 sets of power feeds
13 per card within the central office, with a capacity of 4 cards in some instances.
14 After being loaded with the appropriate software, the monitors would be
15 capable of automatically taking frequent power readings over the course of each
16 day and recording them. After the necessary infrastructure was put in place, the
17 data would then be accessed remotely by Verizon's billing department and used
18 to calculate the monthly bills. Exhibit C provides a diagram of such a system.
19 Verizon has determined, based on a preliminary analysis, that the above
20 approach is the most reliable, complete, independent, and safe approach
21 available today. The monitoring devices contemplated under Verizon's
22 approach would provide an accurate and auditable means by which Verizon
23 could measure (and, if necessary, later verify) each CLECs DC power usage
27 1 because the system would automatically measure the current flowing through
2 the power feeds on a frequent basis and would record and store the
3 measurements. Verizon's approach would also be complete because it would
4 permit measurements of all power feeds, including feeds in congested
5 distribution bays that may not be accessible for manual readings, as well as
6 CLEC feeds that come from both BDFBs and from the power distribution board
7 directly. The use of separate controllers would ensure the independence of the
8 system and allow CLECs to access the monitors without compromising the
9 security of Verizon's network. Finally, such a solution would be safe because it
10 would significantly reduce the risks (to both Verizon and the CLECs)
11 associated with making manual power measurements on open power circuits
12 and the risk that a power feed might accidentally break during a manual
13 reading, resulting in a potential service interruption.
14 Q. AS AN ALTERNATIVE, WOULD IT BE ACCEPTABLE TO MEASURE
15 EACH CLEC POWER FEED MANUALLY USING HAND-HELD
16 "CLAMP-ON" METERS?
17 A. No. This approach, which was briefly discussed in the Commission's Order as
18 a short-term solution suggested by AT&T,25' is unworkable. A "clamp-on"
19 meter is a handheld device that, as its name suggests, clamps around a feed
20 using a mechanism like a pliers or a scissors. The user operates a hand-grip to
21 make opposing prongs close around the feed. Once the prongs have encircled
257 Order Denying Petition at 6.
28 1 the feed, the device can read the current flowing through the feed and report
2 this information to a display panel mounted on the device.
3 The requirement that the prongs completely encircle the feed for the
4 device to work is the first major problem with this approach to power
5 measuring. As the photographs in Exhibit D demonstrate, the power cables in
6 central offices are extremely congested. They are typically bound together in
7 big cables made of 10 to 20 feeds which all run together. The feeds frequently
8 also run under or over the racks that are found in collocation cages and are
9 intertwined through each other, the cages and other equipment, as well as being
10 laced in place at the time of installation. In addition, the cables are usually
11 between 3/8 and 1 3/4 inches thick, and are heavy and extremely stiff, so it is
12 often difficult to get the prongs around the cable. These characteristics of the
13 cables and their placement make it impossible to read many feeds and difficult
14 to read others. In addition, if the clamp-on meter prongs do not make a solid
15 connection to each other, the readings will be inaccurate.
16 Moreover, the tight placement and extreme stiffness of the cables poses
17 dangers from hand-held reading, as we discuss above. As pictured in Exhibit
18 D, the congested cables frequently force clamp-on readings to be taken, if at all.
19 near the connection point between the feed and the BDFB, An employee
20 manually reading the CLECs' power feeds could loosen the connections or
21 cause a short by touching them. This approach is therefore not safe for the
22 network, and potentially not safe for the employee taking the measurements.
29 1 Finally, "clamp-on" meters allow only one-time spot measurements and
2 thus do not necessarily reflect CLECs' actual power usage. Although the
3 power requirement of telecommunications equipment is generally steady state, *•
4 the power draw does fluctuate to some extent. The most dramatic example of a
5 current spike would occur if, at the time of the measurement, the equipment
6 were drawing power up to the List 2 Drain because the power plant was in
7 distress. But even if a power swing is small, say 10 percent, it will cause billing
8 to be significantly inaccurate if that measurement is the only one taken for six
9 months and forms the basis for billing that entire period.
10 Finally, manually measuring each of the estimated 8,000 plus CLEC
11 feeds within every central office housing collocation arrangements in New
12 York on a regular basis would result in extremely high labor costs.
13 Q WOULD PLACING A DIGITAL DISPLAY ON BDFBS BE A
14 SATISFACTORY APPROACH TO POWER MEASURING?
15 A No. The basic idea behind this proposal, as discussed in the Commission's
26 16 Order, ' is that CLECs would add a digital display, like that on a clock radio, to
17 their BDFBs that would show the power passing through at any particular time.
18 However, only a few CLECs, including AT&T, have their own BDFBs at
19 collocation arrangements. Because most CLECs' power needs are more
20 modest, and because a BDFB can generally provide up to 20 pairs of power
21 feeds per load, CLECs typically share BDPBs, either with Verizon or with each
2& Id.
30 1 other. AT&T's proposal would therefore be of no use to the majority of the
2 CLECs, and could not be used by AT&T at some of its collocation
3 arrangements. Moreover, the digital display does nothing to solve the
4 reliability problem posed by infrequent measurements discussed above because
5 it would only show the current when a contractor came along to look at the
6 meter, rather than taking frequent readings as under Verizon's proposal.
7 Finally, AT&T's proposal still requires Verizon to collect data manually
8 for the thousands of CLEC collocation power feeds in New York. Even if the
9 CLECs paid for the tremendous number of labor hours to read the panels, the
10 costs to Verizon to coordinate and supervise these visits, and to audit thousands
11 of readings, would be unacceptable. AT&T's approach also would
12 undoubtedly lead to billing disputes.
13 Q WOULD A POWER MEASURING SYSTEM THAT MET THE
14 NECESSARY CRITERIA BE EXPENSIVE?
15 A Yes. Although cOsts are to be addressed in the second phase of this proceeding.
16 if one is necessary, the following generally describes the magnititue of the costs
17 associated with the power measuring system designed by Verizon,
18 First, Verizon would have to purchase Hall-effect transducers for each
19 of the estimated 8,000 plus CLEC power feeds. Second, Verizon would need to
20 purchase enough monitors, which cost thousands of dollars each, to process and
21 store the power readings for each of those power feeds. The system would
22 require at least one monitor per central office (in some cases, more than one
23 monitor would be required per central office), and more than 200 offices
31 1 contain CLEC collocation arrangements. Thus, the system would require
2 several hundred monitors to cover all of Verizon's statewide central offices,
3 cables to connect the transducers and the monitors, and relay racks to house the
4 measuring equipment. Verizon would also be entitled to charge for the central
5 office floor space, cable rack space, and DC power that the power measuring
6 system consumes.
7 Second, in addition to the materials costs, installing such a power
8 measuring system would create large, up-front labor costs. While safer, more
9 reliable and ultimately more cost effective than attempting to take manual
10 readings, the initial costs of installing the transducers on each of the estimated
11 8,000 plus CLEC power feeds would be high. That is the case because, as we
12 discussed above, feeds are frequently bound together and difficult to pull apart
13 because they are heavy and very stiff. The installation costs associated with the
14 bulky monitor equipment, as well as running the additional cables from the
15 donuts to the controllers in tight central office space, would also be high. The
16 system would also have to be maintained and calibrated on a routine basis.
17 Third, because such a measuring system has never been implemented.
18 Verizon would also have to pay an outside vendor to create a new operational
19 support system ("OSS"), and to modify the existing billing system, so that the
20 raw data from the monitors could be converted into a format that could be used
21 to bill CLECs on a monthly basis.
22 In sum, while this is not the phase of the litigation where the parties are
23 performing and presenting cost studies, it is clear that a workable power
32 1 measuring system would require a significant up-front investment, running into
2 the hundreds of thousands of dollars for the average Verizon central office, as
3 well as significant ongoing maintenance and administrative costs.
4 Q. GIVEN THESE COSTS, WOULD THE DISADVANTAGES OF POWER
5 MEASURING OUTWEIGH ANY ADVANTAGES? 6 A. Yes. The costs of implementing a power measuring system would far outweigh
7 any potential benefit. For the reasons we have explained, any power measuring
8 system would add little or no value and be costly. The equipment, installation
9 and administrative costs of such a system would be significant. And power
10 measuring would add a significant amount of cabling and complexity to already
11 crowded and complicated central office environments.
12 At the same time, for reasons discussed in more detail in Section V, the
13 only part of the DC power rate that is variable, and hence could be assessed on
14 a measured basis, would be the AC power from the electric company. The AC
15 component, however, comprises only a small fraction of the overall DC power
16 rate. Devoting such a considerable amount of resources to measuring such a
17 small part of the costs of providing DC power is particularly unwise.
18 C. THE COMMISSION SHOULD ALTERNATIVELY ADOPT 19 CHANGES TO VERIZON'S AUGMENT PROCESS IN LIEU OF 20 POWER MEASURING. 21 22 Q. DOES VERIZON HAVE AN ALTERNATIVE PROPOSAL TO ALLOW 23 CLECS TO INCREASE THEIR POWER? 24 25 A. Yes. If the Commission makes the determination that CLECs need to power up
26 regularly (despite the substantial evidence to the contrary), Verizon proposes
33 1 the following as an alternative to power measuring. First, in conjunction with
2 an initial application or an augment, CLECs would be permitted to order cables
3 sized to meet their ultimate power needs from the BDFB. Second, if the
4 CLECs power needs grow over time, Verizon would change out the fuses
5 without the need for a full augment charge in order to provide the additional
6 requested power. The fee for the larger initial cables would be a non-recurring
7 charge to account for the difference between the load ordered at the time of
8 installation and the additional marginal cost of a larger cable size. The fee for
9 the fuse change would be a non-recurring charge to account for the
10 administrative costs of changing billing and the engineering costs of ensuring
11 the requested capacity was available and changing the fuses.
12 y IF THE COMMISSION DID ORDER POWER MEASURING, IT WOULD 13 NEED TO RESTRUCTURE THE EXISTING POWER CHARGES AND 14 ADOPT NEW CHARGES. 15 16 Q IF THE COMMISSION ORDERED POWER MEASURING, WHAT
17 RATE STRUCTURE ISSUES WOULD THE COMMISSION NEED TO
18 RESOLVE TO ENSURE THAT VERIZON PROPERLY RECOVERS
19 ITS COSTS?
20 A The Commission would need to resolve two basic issues to ensure that Verizon
21 recovers its costs. First, the Commission would need to redesign the current
22 DC power rate to break out DC infrastructure, AC power, and cabling costs.
23 Second, the Commission would need to establish new rates to recover the costs
24 associated with the DC power measuring system.
34 1 Q. HAS THE COMMISSION RECOGNIZED THAT THE CURRENT
2 RATE FOR DC POWER COULD NOT BE APPLIED TO A USAGE-
3 BASED REGIME WITHOUT SIGNIFICANT CHANGES?
4 A. Yes. In its order denying the complaint filed by AT&T and WorldCom, the
5 Commission expressly rejected the contention that the current rates could be
6 applied to a usage-based system. The current capacity-based system, the
7 Commission explained, "recovers all fixed investment and variable costs in a
8 monthly recurring charge."22' Because applying the fixed investment costs on a
9 usage-based system "could result in underrecovery of Verizon's power
10 investment," the Commission held that "[c]hanges to the current rates structure
11 would first be necessary for metered billing to be appropriate for DC power
12 provisioning."28'
13 Q. WHAT GUIDANCE DID THE COMMISSION GIVE REGARDING 14 HOW THE RATE WOULD BE RESTRUCTURED TO
15 ACCOMMODATE USAGE-BASED BILLING?
16 A. The Commission stated that a usage-based rate structure must address the
17 following issues: "a method to allocate shared investment costs (rectifiers,
18 batteries, power panels, generators, etc.; non-recurring charges for directly
19 attributable investments based on the CLECs requested power requirement
w Order Denying Petition at 6-7.
28/ Mat?.
35 1 (individual CLEC power feeds, fuses or distribution bays; and recurring charges
2 for variable costs (such as, commercial power)."-
3 Q. PLEASE EXPLAIN THE CURRENT RATE STRUCTURE FOR DC 4 COLLOCATION POWER PROVIDED BY VERIZON IN NEW YORK. 5 6 A. Verizon supplies DC power to collocating CLECs entirely through recurring
7 monthly charges. The rates are $19.64 per amp for orders not exceeding 60
8 amps and $19.56 per amp for orders over 60 amps. The small difference is due
9 to the need for a BDbB to distribute power, after it comes from the power
10 distribution board, for arrangements drawing 60 amps and below. Although
11 Verizon incurs the substantial costs for DC infrastructure and cabling and
12 fusing for a CLEC up front, Verizon does not levy non-recurring charges for
13 these items. Verizon recovers these costs only over time through the monthly
14 recurring charge.
15 Q- HOW WOULD THIS RATE BE RESTRUCTURED UNDER A POWER 16 MEASURING SYSTEM?
17 A. The main task in restructuring the rate would be to break out the usage sensitive
18 AC power costs from the fixed DC infrastructure costs. As the Commission
19 explained, "[t]he current DC power rate structure recovers all fixed investment
20 and variable costs in a monthly recurring charge. Usage-dependent components
21 (e.g., associated commercial power costs) are recovered in the factors applied to
22/ Id. at 7-8.
36 1 the investment components. This structure reflects the fact that the costs
2 associated with power provisioning are predominately fixed."3®
3 Q. PLEASE EXPLAIN IN MORE DETAIL WHICH DC
4 INFRASTRUCTURE COSTS ARE FIXED.
5 A. DC infrastructure costs are large, upfront costs that do not vary based on the
6 amount of power drawn by the CLECs. These costs reflect all of the equipment
7 necessary to convert AC power to DC power, and to store and distribute that
8 power to the requesting CLEC. We discuss the specific components of these
9 costs above. Verizon incurs these costs whether the CLECs use the power they
10 order or not, and thus should be recovered on a fixed basis based on the power
11 that the CLEC has ordered.
12 Q. PLEASE EXPLAIN WHAT PORTION OF THE CURRENT POWER
13 RATE WOULD BE CHARGED ON A USAGE-SENSITIVE,
14 MEASURED BASIS.
15 A- Because only the AC component of the DC power rate, which recovers the cost
16 of the AC power Verizon purchases from the electric company, is usage-
17 sensitive, it is the only component that would be billed on a measured basis.
- 18 All of the other costs included in Verizon's DC power rate would continue to
19 be billed on a fixed basis regardless of usage.
20 Q. APPROXIMATELY HOW MUCH OF THE CURRENT DC POWER
21 RATE IS ATTRIBUTABLE TO AC POWER?
22/ Order Denying Petition at 7 (emphasis added).
37 1 A. The exact amount of the current rate attributable to AC usage would need to be
2 determined in a second phase of this litigation on costs, if one is necessary.
3 However, this amount is undoubtedly a small fraction of the overall DC power
4 rate, as an AT&T witness recognized in recent Florida testimony.21'
5 Q. DO THE FCC'S TELRIC RULES (WHICH THE COMMISSION
6 RELIED ON IN SETTING THE CURRENT DC POWER RATES)
7 RECOGNIZE THAT THE DC INFRASTRUCTURE COSTS ARE FIXED
8 AND SHOULD BE RECOVERED THROUGH FLAT-RATED
9 CHARGES?
10 A. Yes. The FCC has "require[d] that the charges for dedicated facilities be flat-
11 rated, including, but not limited to, charges for unbundling loops, dedicated
12 transport, interconnection and collocation."® Charges for DC power, as a
13 regulated element of collocation, must therefore be fixed. Because sufficient
14 facilities must exist to provide the requested power on a constant basis, DC
15 infrastructure is like physical space or loops, which must be recovered through
16 flat-rated charges.
^ AT&T Communications of the Southern States, LLC, Rebuttal Testimony of Steven E. Turner, Dockets Nos. 981834-TP/990321-TP (Fla. P.S.C. April 18, 2003), at 28 (Exhibit E) ("[T]he other part of the DC Power rate is the AC power that is purchased from the electric utility that is then converted into DC power. This part of the DC Power rate element is a smaller part of the overall DC power cost.").
w First Report and Order, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996; Interconnection between Local Exchange Carriers and Commercial Mobile Radio Service Providers ("Local Competition Order"), 11 FCC Red 15499, 15874 "fl 744 (1996) (emphasis added).
38 1 In contrast, the analogy given by AT&T in its complaint of switches is
2 inapposite. In its UNE costing orders, this Commission has recognized that
3 switch costs are incurred (and should be recovered) partly on a usage-sensitive
4 basis and partly on a recurring basis. These determinations have been based on
5 a recognition that costs should be recovered based on the manner in which they
6 are incurred, fixed versus usage-based. Beyond that, whether DC power costs
7 are fixed or usage-sensitive depends upon the specific characteristics of the
8 equipment and the nature of the Underlying costs, which differ from the costs
9 underlying switching. As we show above, the costs of providing DC power are
10 predominantly fixed.
11 Q. DO THE RATE STRUCTURES IN OTHER STATES RECOGNIZE
12 THAT THE DC INFRASTRUCTURE CHARGES ARE FIXED?
13 A. Yes. Charging for DC power infrastructure on a fixed basis — according to
14 either load amps or fused amps ordered — is the accepted approach throughout
15 the country. Indeed, 49 states and the District of Columbia have implemented
16 systems in which DC infrastructure charges are assessed on a fixed basis.22'
^ The SBC experience in Dlinois, in addition to being the solitary outlier for the entire country, further demonstrates the problems — recognized by this Commission — with implementing a power measuring system in the absence of corresponding rate structure adjustments. Implementation of such a system in New York would run afoul of the Commission's observation about the inappropriateness of "applying] ... a capacity-based rate to a usage-based metered billing scenario." Order Denying Petition at 7.
39 1 Q. WOULD A POWER MEASURING SYSTEM THAT DID NOT CHARGE
2 CLECS FOR THE FIXED COSTS OF WHAT THEY ORDER CREATE
3 THE PROPER INCENTIVES?
4 A. No. If CLECs did not have to pay for the power they order, they would have
5 strong incentives to order far more than they need. The FCC recognized this
6 fact when it determined that collocation facilities should be charged on a flat-
7 rated basis to avoid this tendency to over-consume resources that are free. The
8 FCC explained that is was requiring flat-rated charges because they are "most
9 efficient," and usage-based charges would create "uneconomic incentives" to
10 order more than they use.25'
11 Q. IF THE COMMISSION ORDERED POWER MEASURING, HOW 12 SHOULD THE RATES BE STRUCTURED FOR THE EXTRA COSTS
13 OF POWER MEASURING?
14 A. The substantial costs of measuring DC power should be recovered through a
15 combination of non-recurring and recurring charges. The non-recurring charges
16 would recover the cost of the equipment and installation of the power
17 measuring system. The primary equipment charges would include the Hall-
18 effect transducers, the controllers, and the cabling between the transducers and
19 the controllers.
20 Q- WHY IS IT IMPORTANT THAT VERIZON RECOVER THE 21 EQUIPMENT AND INSTALLATION COSTS IN A NON-RECURRING 22 CHARGE?
Ml Local Competition Order, 11 FCC Red at 15874 •n 744.
40 1 2 A A non-recurring charge for the equipment and installation of the power
3 measuring system is appropriate because the system would be completely
4 initiated by and dedicated to the CLECs. If this system were recovered entirely
5 through recurring charges, Verizon would likely be left holding the bag for
6 these substantial costs once the CLECs, as they have many times before.
7 realized that they did not really want this system despite their insistence on
8 having it installed.
9 Q ARE THERE EXAMPLES IN WHICH VERIZON WAS UNABLE TO
10 RECOVER ITS COSTS FOR SYSTEMS INSTALLED FOR CLECS?
11 A The history of collocation is filled with examples of CLECs not using systems
12 they insisted that they needed. The most obvious example, of course, is DC
13 power capacity itself. But this example is not isolated. For example, the
14 CLECs insisted that vast numbers of cross-connects be installed at collocation
15 arrangements, at great expense to Verizon, but have used only a small fraction
16 of these facilities. Of the more than 3.5 million cross-connects that Verizon has
17 installed for collocating CT FCs, less than 10 percent are currently in use. This
18 misguided ordering, fueled by a system that did not create the proper incentives
19 for appropriate CLEC behavior, created substantial stranded investment which
20 Verizon has not recovered. This cross-connect over-ordering also caused the
21 premature depletion of distribution frame capacities in some of Verizon's
22 central offices. If CLECs are not required to compensate Verizon for the
23 substantial fixed equipment and installation costs of any power measuring
24 system up front, such over-ordering, waste, and under-recovery is nearly
41 1 certain.
2 Q. WHAT WOULD THE RECURRING CHARGES COVER?
3 A. The recurring charges would recover ongoing costs of collecting data,
4 maintaining the power measuring equipment, and billing. These costs include
5 powering the power measuring system itself, creating a new OSS, instituting a
6 new billing system, calibrating and maintaining the meters and the controllers.
7 and updating software in the controller.
8 Q. SHOULD CLECS HAVE THE OPTION OF CHOOSING BETWEEN
9 POWER MEASURING AND AN ALTERNATIVE BILLING
10 APPROACH?
11 A. No. Whatever DC power billing method the Commission adopts in this
12 proceeding must be applied to all CLECs. Because power measuring would be
13 complex and require Verizon to make major investments in equipment and
14 installation, power measuring would be feasible, if at all, only if all CLECs
15 participated and were required to continue to use the system. In addition,
16 requiring Verizon to offer more than one type of billing method for DC power
17 would be incredibly complicated from an administrative perspective, placing a
18 burden on Verizon's billing department that would lead to significant additional
19 costs.
20 Q. DOES THIS CONCLUDE YOUR TESTIMONY?
21 A. Yes.
42 Direct Testimony of
MARC DUROCHER, STEVEN FEDOR, BRUCE LEAR, AND DINELL CLARK ONBEHALFOF
VERIZON NEW YORK INC.
EXHIBIT A Power Plant Diagram
Micro General Collocation Area Processor Cage -Cage
I I BELEC , IMELEC | 1 Equipment Equipment Rectifiers Batteries - PDB >60 Ar"-mps
Power Room PDSC < 60 Amps BDFB
Switchgear & Automatic GeDerator Breakers
Commercial AC Power Switchgear From Power Company Switchgear for Emergency Engines Controllers
S**!*--! HWsrtIPfei WlUMot ^i^y•;r^p iMl^ Rectifiers
d -: ^f^S-J^^i •48V DC Batteries Power Distribution Board (PDB) Battery Distribution Fuse Bays (BDFBs) Generators Buss Bars DC Power Cables and Cable Support Direct Testimony of
MARC DUROCHER, STEVEN FEDOR, BRUCE LEAR, AND DINELL CLARK ON BEHALF OF
VERIZON NEW YORK INC.
EXHIBIT B BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
DIRECT TESTIMONY OF
JEFFREY A. KING
ON BEHALF OF
AT&T COMMUNICATIONS OF THE SOUTHERN STATES, LLC AND TCG SOUTH FLORIDA, INC.
DOCKET NO. 981834-TP
DOCKET NO. 990321-TP
DECEMBER 19,2002 1
1 Q. ISSUE 6A: SHOULD AN ILEC'S PER AMPERE (AMP) RATE FOR THE
2 PROVISIONING OF DC POWER TO AN ALEC'S COLLOCATION SPACE
3 APPLY TO AMPS USED OR FUSED CAPACITY?
4 A. The ILEC's "per ampere" power rate should be based on the ALEC's actual usage such
5 as the specified load or amps used.
6
7 ISSUE 6B: IF POWER IS CHARGED ON A PER-AMP-USED BASIS OR ON A
8 FUSED CAPACITY BASIS, HOW SHOULD THE CHARGE BE CALCULATED
9 AND APPLIED?
10 Q. PLEASE EXPLAIN WHY POWER CHARGES SHOULD BE BASED ON
11 ACTUAL USAGE.
12 A. Following cost-causation pricing principles, since the ILEC incurs its expense from its
13 power supplier based on actual usage then the ELEC (as a secondary supplier of power)
14 should charge its customers (i.e., AI.RCs) based on the actual amperage used by the
15 ALEC's installed equipment. Any deviation, or attempt to charge on a "per fused" basis,
16 introduces opportunities for significant over recovery of the ILEC's true cost.
17 Q. WHAT METHODOLOGY DOES AT&T PROPOSE TO BASE POWER
18 CHARGES ON USAGE?
19 A. There are two ways recommended, in priority order, to capture actual ALEC power
20 usage: (1) metering and (2) using the List 1 Drain of installed equipment as provided by
21 the equipment vendors.
22 Metering entails the actual placement of meters, or utilization of existing measurement
23 facilities, at the power distribution board (PDB) or the battery distribution fuse bay
0 1 (BDFB) to measure actual amperage drained by the collocation equipment for which the 2 ILEC is providing the power.
3 Using List 1 Drain entails using the power requirements that the collocation equipment 4 vendor has specified as the maximum steady state drain for the equipment. The
5 Collocation Application process requires the ALEC to provide to the ILEC the List 1
6 Drain of installed equipment.
7 AT&T believes the Commission should order the use of List 1 Drain specifications as a
8 suitable proxy for actual usage when determining collocation power charges if meters or
9 measuring facilities are unavailable or not economically feasible at the PDB or BDFB.
10 Q. HAVE ANY OTHER STATES ORDERED THE USE OF ACTUAL USAGE FOR
11 DETERMINING COLLOCATION POWER CHARGES?
12 A. Yes. In its Order in ICC Docket Nos. 96-0486 and 96-0569 {ConsoL}, the Illinois
13 Commerce Commission ordered the use of power meters for determining the number of
14 amps for calculating collocation power charges. The installation of the power meters was
15 completed in the first quarter of 2001 and the actual amperage readings from those meters
16 are now being used as the basis for determining DC power charges.
17 The Tennessee Regulatory Authority ("TRA") ordered BellSouth to work out a method
18 of usage based charges as a result of a complaint filed by MCI/Worldcom. Based on the
19 TRA's order, the AT&T/BellSouth ICA was revised May 22,2002, to incorporate usage
20 based power charges and BellSouth will be reading the AT&T owned BDFB meters as
2i the basis for usage charges where the collocation site is equipped with a BDFB. Further,
22 Verizon (in its local service territories, including North Carolina in Docket No. P-l 00,
23 Sub 133j) advocates actual "load" as the correct method of charging for power.
in r
1 Q. ISSUE 6C: WHEN SHOULD AN ILEC BE ALLOWED TO BEGIN BILLING AN
2 ALEC FOR POWER?
3 A. As also discussed in Issue IB, an ALEC should be billed for power once power is
4 being provided and used by the ALEC. Once equipment has been installed and
rd 5 activated by the ALEC the ILEC (or certified 3 party representative) will
6 perform a collocation site survey and record the metered power. Unless future
7 augments occur to a collocation site metering surveys could occur quarterly. This
8 is due to the fact that telecommunications equipment maintains a steady state
9 power drain.
10 Q. ISSUE 7: SHOULD AN ALEC HAVE THE OPTION OF AN AC POWER FEED
11 TO ITS COLLOCATION SPACE?
12 A. Yes, an ALEC should have the option of an AC power feed to its collocation
13 space. This is essential to enable ALECs to place AC powered equipment in their
14 collocation space. In addition, ALECs can also convert AC power to DC power if
15 needed. Such conversion may also be more economical for an ALEC than
16 purchasing DC power from the ILEC.
17 Q. ISSUE 8. WHAT ARE THE RESPONSIBILITIES OF THE ILEC, IF ANY,
18 WHEN AN ALEC REQUESTS COLLOCATION SPACE AT A REMOTE
19 TERMINAL WHERE SPACE IS NOT AVAILABLE OR SPACE IS NEAR
20 EXHAUSTION?
21 A. The ILEC should be responsible for notifying the ALEC community via its form
22 of communications such as website postings or Carrier Notification Letters, of the
23 remote terminal sites that are exhausted. For these sites pre-determined to be
n I
Direct Testimony of
MARC DUROCHER, STEVEN FEDOR, BRUCE LEAR, AND DINELL CLARK ON BEHALF OF
VERIZON NEW YORK INC.
EXHIBIT C •>V' Cage Enclosure Single
Note: This drawing is presented for illustrative purposes only. It presents one of many office layouts and construction alternatives, it Is not interned as a contract document Drawing is not to scale.
- Cable Rack (ironwork) In Overhead
Verizon Central Office Commercial Electrical Supply - (A) Pewar CaU* - MonttM la BDFB (BM « RM) (B}MonlUr (C) Pow«r C«lil» • PWMf Beard to CLEC BAY (A FMtfOnly) DC Power Layout (DJTramtfuctr Collocation Office Layout
MARC DUROCHER, STEVEN FEDOR, BRUCE LEAR, AND DINELL CLARK ON BEHALF OF
VERIZON NEW YORK INC.
EXHIBIT D m - cs.' r'
© • © @ Q©)«. © a C^S
'm^mi&jMtri sc£223>©
j^y ^*aS ^M. . ; ^^^^'\ dm &•
.«*» ^
Direct Testimony of
MARC DUROCHER, STEVEN FEDOR, BRUCE LEAR, AND DINELL CLARK ON BEHALF OF
VERIZON NEW YORK INC.
EXHIBIT E BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition ofCompetitive Carriers for •) Commission Action to Support Local ) Docket No. 981834-TP Competition in BellSouth's Service Territory )
In re: Petition of ACI Corp. d/b/a Accelerated ) Connections,Inc. forGenericlnvestigationto ) Ensure that BellSouth Telecommunications, Inc., ) Sprint-Florida, hcoiporated, and GTE Florida ) Docket No. 990321-TP Incorporated Comply with Obligations to Provide ) Alternative Local Exchange Carriers with ) Flexible, Timely, and Cost-Efficient Physical ) Collocation )
REBUTTAL TESTIMONY OF
STEVEN E. TURNER
ON BEHALF OF AT&T COMMUNICATIONS OF SOUTHERN STATES, LLC
REDACTED VERSION
April 18,2003
OOCUMfNl Kl^-r;, CATf 03596 APfiiQ£> j
J
1 appropriate conversions are made to reflect a TELRIC calculation of cost from
2 BellSouth's data.
3 Q. HAVE ANY OTHER STATE COMMISSIONS IN THE BELLSOUTH 4 TERRITORY RECENTLY UTILIZED THIS INVESTMENT LEVEL TO SET DC 5 POWER RATES FOR COLLOCATION? 6 A. Yes. The Georgia Public Service Commission recently concluded its re-evaluation of the
7 costs for UNEs and collocation. Please understand that BellSouth requested the same
8 investment in Georgia per fuse amp - $286.00 - that BellSouth is seeking in Florida. In
9 the Georgia proceeding, the Commission determined that $165.80 per fuse amp or
10 $248.70 per used amp are the appropriate investments to utilized for establishing the
11 TELRIC cost for DC power. See Georgia PSC Docket No. 14361-U, rates approved on
12 March 18,2003, written order not yet released.
13 2. AC Comnonentofthe DC Power Rate 14 Q. COULD YOU EXPLAIN WHAT THE AC COMPONENT OF THE DC POWER 15 RATE IS? 16 A. Yes. There are two main components to the DC Power rate. First, the majority of the
17 cost is associated with recovering the cost of the equipment necessary to generate DC
18 power. Virtually all telecommunications equipment operates on DC power (or direct
19 current power). Yet, the power that can be purchased from the electric utility is AC
20 power (or alternating current power). A whole series of equipment must be installed by
21 BellSouth to convert this AC power to DC power and provide for its redundancy:
22 rectifiers (which actually convert the AC power to DC power); batteries (which stabilize
23 the DC power and provide for short-term backup in the event-of an AC power failure);
24 controllers and power distribution service cabinets (for managing the DC power elements
25 and distributing the power throughout the central office); and the emergency generator
26 (for providing long-term backup in the event of a lengthy AC power failure). The cost
27 1 recovery of these elements constitutes the majority of the costs in the DC Power rate.
2 Second, the other part of the DC Power rate is the AC power that is purchased from the
3 electric utility that is then converted into DC power. This part of the DC Power rate
4 element is a smaller part of the overall DC power cost.
5 Q. ARE THERE PROBLEMS WITH BELLSOUTH'S AC COMPONENT OF THE 6 DC POWER RATE? 7 A. Yes. There are two. ^/ra/, BellSouth is imposing a higher cost on ALECs for AC power
8 than what BellSouth itself incurs from the AC electric utility. Specifically, BellSouth has
9 indicated in its DC Power cost study that BellSouth pays $0.07 per kilowatt hour for AC
10 electricity. See "FLphycol.xls" Workbook, "INPUTS_Recurring" Worksheet, Cell B26
1 ] ("Average Monthly Cost per KWH") and Cell F26. BellSouth proposed precisely the
12 same cost per kilowatt hour in Georgia well. However, in Georgia we also obtained
13 copies of invoices for two of BellSouth's central offices and learned that BellSouth
14 actually incurs costs that are much lower than the $0.07 per kilowatt hour that BellSouth
15 seeks here. The problem in Florida is that AT&T asked the same discovery request as in
16 Georgia but BellSouth has not provided an adequate response. Nonetheless, alternative
17 data does exist that allows me to restate the AC kilowatt hour rate.
1 g Attached as Exhibit SET-5 to my testimony I have provided the US Department
19 of Energy Estimated U.S. Electric Utility Average Revenue per Kilowatt Hour to
20 Ultimate Consumers by Sector, Census Division, and State, Year-to-Date (November)
21 2002 and 2001. This report provides the average AC kilowatt hour rate for residential,
22 commercial, and industrial power users for every state in the country. The report is
23 updated every six months and reflects the average AC rate over the preceding 12 months.
24 The appropriate category to use for BellSouth is the industrial user category. I am
25 confident of this selection for at least two reasons. First, from experience I know that the
28 *
i incumbent LECs tend to have AC power rates that are most closely approximated by the
2 rates in this column. Second, incumbent LECs normally have load-sharing arrangements
3 with the AC power provider in that the incumbent LECs can provide their own AC power
4 if needed. Moreover, incumbent LECs often have agreements that allow them to place
5 AC power back onto the power grid, if needed by the electric utility. The bottom line,
6 however, is that I have used the industrial category for 2002 in identifying the appropriate
7 AC kilowatt hour rate for BellSouth and the other incumbents.
8 Q WHAT IS THE SECOND PROBLEM THAT YOU HAVE WITH BELLSOU1H 9 AC COMPONENT OF THE DC POWER RATE? 10 A Quite simply, BellSouth has used a rectifier efficiency that is too low. Rectifiers are used
11 to convert AC power from the electric utility into DC power that is used by
12 telecommunications equipment. Whenever this conversion is done, there is some loss
13 that is experienced through the rectifier in that the amount of AC power that is brought
14 into the rectifier does not come through completely as DC power. The inverse of this
15 loss is expressed as the efficiency of the rectifier. BellSouth has recommended the use of
16 85 percent efficiency on its rectifiers. See "FLphycol.xls" Workbook, "wp H.l.B"
17 Worksheet, Row 19 ("Rectifier Efficiency"). In reality, based on the rectifiers used in
18 AT&T's network which are similar to those used in incumbent networks, the efficiency
19 of rectifiers is at least 90 percent. There is no reason to believe that BellSouth's rectifiers
20 should operate at less efficiency than AT&T's. Moreover, in a TELRIC environment, the
21 most efficient, least-cost technology should be used in the developing the forward-
22 looking cost.
29