ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

Table of Contents

I. INTRODUCTION ...... 1 II. PURPOSE OF TESTIMONY ...... 3 III. RATE RELIEF REQUEST ...... 5 IV. HISTORICAL FINANCIAL AND STATISTICAL INFORMATION ...... 10 V. RATE BASE ...... 13 A. Rate Base Components ...... 14 B. Average Net Plant Summary ...... 14 C. Detailed Development of Working Capital, Unamortized Premium & Discount, and Customer Advance Construction ...... 15 1. Working Capital ...... 15 2. Unamortized Premium & Discount and Customer Advance for Construction17 D. Net Deferrals/Credits from Reconciliation Mechanism ...... 18 E. Detailed Development of Accumulated Deferred Income Taxes ...... 19 F. Rate Base Over/Under Capital Adjustment ...... 20 VI. CAPITAL EXPENDITURES AND PLANT ADDITIONS ...... 20 VII. INCOME STATEMENTS AND RATES OF RETURN ...... 22 A. Sales and Revenues ...... 23 B. Amortization of Deferred Charges and Credits ...... 24 1. Applicable to Electric and Gas ...... 25 2. Applicable to Electric Only ...... 28 3. Applicable to Gas Only ...... 32 C. Other Operating Revenues ...... 32 1. Applicable to Electric and Gas ...... 33 2. Applicable to Electric Only ...... 34 3. Applicable to Gas Only ...... 36 D. Depreciation ...... 36 E. Taxes Other Than Income Taxes ...... 37 F. Income Taxes ...... 38 G. Interest...... 38

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

VIII. OPERATION AND MAINTENANCE EXPENSES ...... 39 A. O&M Savings ...... 39 B. Development of O&M ...... 42 1. General Escalation ...... 42 2. Labor Escalation ...... 43 3. Normalization ...... 44 4. Program Changes ...... 44 5. Line Item Descriptions ...... 44 IX. COST ALLOCATIONS ...... 59 X. RECONCILIATIONS AND DEFERRED ACCOUNTING ...... 61 A. Modified Deferral or Reconciliation Mechanisms ...... 61 1. Major Storm Reserve (Electric) ...... 63 2. Energy Efficiency (Electric and Gas) ...... 64 3. Property Taxes (Electric and Gas) ...... 65 B. Terminated Deferrals or Reconciliation Mechanisms ...... 68 1. AMI Capital Expenditures (Electric and Gas) ...... 69 2. Credit Card Payment Fees (Electric and Gas) ...... 69 3. 2017 Tax Act and Bonus Depreciation...... 69 4. Gas Pipeline Safety Act of 2011 (Gas) ...... 70 C. New Deferral or Reconciliation Mechanisms ...... 70 1. Uncollectible Expense (Electric and Gas) ...... 71 2. Unidentified Non-Pipeline Solutions (Gas) ...... 72 3. Anticipated Laws and Regulations (Electric and Gas) ...... 73 XI. MULTI-YEAR RATE PLAN ...... 75 XII. CAPITAL STRUCTURE AND COST OF CAPITAL ...... 76 A. Fund Requirements and Sources ...... 76 B. Financial Ratios ...... 77 C. Rate of Return ...... 77

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 I. INTRODUCTION

2 Q. Would the members of the Accounting Panel please state your names and

3 business addresses?

4 A. John de la Bastide, 4 Irving Place, New York, New York 10003. Ann

5 Cedrone, One Blue Hill Plaza, Pearl River, New York 10965. Wenqi Wang, 4

6 Irving Place, New York, New York, 10003.

7 Q. By whom are you employed and in what capacity?

8 A. (de la Bastide) I am employed by Consolidated Edison Company of New

9 York, Inc. (“Con Edison”). I hold the position of Assistant Controller,

10 Corporate Accounting.

11 (Cedrone) I am employed by Orange and Rockland Utilities, Inc. (“Orange

12 and Rockland,” “O&R,” or the “Company”) where I hold the position of

13 Director – Financial Services.

14 (Wang) I am employed by Con Edison. I hold the position of Department

15 Manager - Regulatory Accounting and Revenue Requirements.

16 Q. Please explain your educational background, work experience and current

17 general responsibilities.

18 A. (de la Bastide) I graduated from Hofstra University in 1985 with a Bachelor of

19 Business Administration in Accounting. I was employed by Con Edison for 30

20 years. Between 1986 and 1996, I was promoted to various supervisory

21 positions in Corporate Accounting. In 1998, I was promoted to the position of

22 Section Manager, Employee Benefits. In 2001, I was promoted to Department

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Manager, Financial Forecasting, in Corporate Accounting and have held

2 various positions as Department Manager in Corporate Accounting and

3 Electric Operations. I assumed the position of Department Manager, Benefits

4 and Compensation, in March 2007. In June 2011, I was promoted to Director

5 of Compensation. In November 2016, I assumed the role of Director of

6 Financial Services for Orange and Rockland. In June 2019, I began my current

7 position at Con Edison. In my current role as Assistant Controller, I have

8 oversight of regulatory and accounting operations.

9 (Cedrone) I graduated from Stevens Institute of Technology in 2001

10 with a Bachelor of Engineering degree in Chemical Engineering. I

11 obtained my Master of Business Administration in 2013 from New

12 York University’s Stern School of Business, with concentrations in

13 Business Analytics and Quantitative Finance. After seven years in the

14 refining industry, I joined Con Edison in 2008 as a Senior Planning

15 Analyst in the Steam Long Range Planning group. I was promoted to

16 Section Manager of that group in 2014 and assumed my current role as

17 Director of O&R Financial Planning and Analysis (“FP&A”) on June 1,

18 2019. I am responsible for coordinating the financial, budget,

19 administrative and regulatory activities for the senior management of

20 Orange and Rockland. In addition, the FP&A department acts as a

21 financial liaison between the Company, Consolidated Edison, Inc.

22 (“CEI”) and Con Edison.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 (Wang) In June 1999, I received a Bachelor of Science Degree in Accounting

2 from the University at Albany, State University of New York. I began my

3 employment with Con Edison in July 1999 as a Management Intern. I worked

4 in the Corporate Accounting Department from July 2000 until April 2014,

5 primarily in the General Accounts section starting as a Staff Accountant, then

6 Supervisor and ultimately reaching the Department Manager level. In May

7 2014, I assumed my current position as Department Manager of Regulatory

8 Accounting and Revenue Requirements.

9 Q. Have any members of the Accounting Panel previously testified before the

10 New York Public Service Commission (“NYPSC” or “Commission”)?

11 A. (de la Bastide) Yes. I submitted testimony before the Commission in prior

12 electric and gas base rate cases for Orange and Rockland (Cases 14-E-0493

13 and 14-G-0494; 18-E-0067 and 18-G-0068) and have submitted testimony or

14 testified in Con Edison electric, gas, and steam rate cases (Cases 13-E-0030,

15 13-G-0031 and 13-S-0032; 19-E-0065 and 19-G-0066).

16 (Cedrone) No.

17 (Wang) I submitted testimony before the Commission in the prior electric and

18 gas base rate cases for Orange and Rockland (Cases 14-E-0493 and 14-G-

19 0494; 18-E-0067 and 18-G-0068) and have submitted testimony in Con Edison

20 electric and gas rate cases (Cases 16-E-0060 and 16-G-0061; 19-E-0065 and

21 19-G-0066).

22 II. PURPOSE OF TESTIMONY

23 Q. What is the purpose of your testimony in this proceeding?

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. Our testimony primarily covers the following topics:

2 • An overview of the factors driving the proposed electric and gas

3 revenue requirements for the twelve months ending December 31, 2022

4 (“Rate Year”);

5 • The steps taken by the Company to mitigate customer bill impacts in

6 light of the COVID-19 pandemic and current economic conditions;

7 • Historic financial statements and statistical data as required by the

8 Commission;

9 • Rate base for the twelve months ended September 30, 2020 (“Historic

10 Year”) through the Rate Year;

11 • A comparison of the projected revenues, expenses and rate base for the

12 Rate Year to the Historic Year;

13 • The development of the Rate Year electric and gas revenue

14 requirements;

15 • The Company’s requests related to certain deferral accounting and

16 reconciliation mechanisms; and

17 • The Company’s forecasted financial information for the two annual

18 periods beyond the Rate Year to provide a basis for settlement

19 discussions regarding a multi-year rate plan.

20 Q. Please describe your testimony and how it is organized.

21 A. The Accounting Panel testimony covers the below-listed topics and exhibits.

22 All of these exhibits were prepared under our supervision and direction, but

23 rely on input from other Company witnesses. Certain projections will be

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 updated based on the latest information available during the course of these

2 proceedings.

Exhibit Title and Description Exh. No. E, G* Historic Financial and Statistical Data AP-1 E, G Rate Base AP-2 E, G Operating Income AP-3 E, G Electric/Gas and Common Plant Forecast AP-4 E, G Capital Structure/Cost of Capital AP-5 E, G Common Capital Project/O&M White Papers AP-6 E, G

3 * The numbering convention for exhibits indicates whether the exhibits

4 address electric or gas (E, G) service as follows: AP-E1, AP-E2, etc. for

5 electric exhibits and AP-G1, AP-G2, etc. for gas exhibits. For ease of

6 presentation, the exhibits are often referenced without the commodity

7 designation.

8 As a preliminary matter, the Company would note that it is not proposing a

9 multi-year rate plan for electric or gas in its filing. However, in addition to

10 providing projections for the Rate Year in the AP-3 exhibits, the Company has

11 included forecasted financial information for two annual periods beyond the

12 Rate Year, i.e., the twelve-month periods ending December 31, 2023 and

13 December 31, 2024 (which we and other Company witnesses will refer to as

14 “RY2” and “RY3,” respectively, for ease of reference).

15 III. RATE RELIEF REQUEST

16 Q. What amount of rate relief is the Company requesting?

17 A. For electric, the Company is requesting approximately $24.5 million of rate

18 relief for the Rate Year. That amount equates to approximately a 3.3% overall

19 increase in customer bills and approximately a 5.8% increase on a delivery bill

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 basis.

2 For gas, the Company is requesting approximately $9.8 million of rate relief

3 for the Rate Year. That amount equates to approximately a 4.0% overall

4 increase in customer bills and approximately a 6.9% increase on a delivery bill

5 basis.

6 Q. In developing the rate relief request, what steps has the Company taken to

7 moderate customer bill impacts in light of the COVID-19 pandemic and

8 current economic conditions?

9 A. The Company is making a number of proposals, noted briefly here and

10 described in further detail later within this testimony, as part of the rate relief

11 request that have the effect of moderating customer bill impacts. For one, the

12 Company is continuing its Business Cost Optimization (“BCO”) program and

13 reflects all of the achieved-to-date and projected savings from the program as

14 reductions to the revenue requirement. Additionally, the Company proposes to

15 shorten the remaining amortization period associated with unprotected excess

16 deferred income taxes from 12 years to 3 years and extend the remaining

17 recovery period for deferred storm costs from 3 years to 5 years. The

18 Company is also proposing to recover energy efficiency costs over 10 years, as

19 discussed in the direct testimony of the Company’s Customer Service Panel.

20 In order to mitigate the proposed rate increase in RY1 relative to RY2 and

21 RY3, the Company is delaying proposed reductions to gas depreciation lives to

22 RY2 and delaying the onset of recovery of the depreciation reserve deficiency

23 until RY3. Additionally, the Company is levelizing pension and Other Post-

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Employment Benefits (“OPEB”) costs over the three RYs as such costs would

2 otherwise have been higher in RY1.

3 Q. What are the specific drivers of the requested rate increases?

4 A. The following table summarizes (in millions of dollars) the components

5 driving the need for increased electric and gas base rate revenues:

Table 1 Driver Electric Gas New infrastructure investment, including $ 13 $ 7 return, depreciation and property taxes ROE / Financing 2 1 Depreciation changes due to proposed 2 - rates Sales revenue change 9 3 Operations and maintenance expenses (8) - Regulatory Amortization 8 - Other 4 1 Income taxes (6) (2) Total $ 24 $10

6 Q. Please discuss the “new infrastructure investment, including return,

7 depreciation and property taxes” item shown in the above table.

8 A. One of the primary drivers of the requested rate increases is the continued need

9 to upgrade, reinforce, rebuild and invest in the Company’s infrastructure. The

10 carrying cost of this new investment (i.e., cost of capital and depreciation at

11 current rates), offset by a decrease in property taxes in the Rate Year, is $13

12 million for electric and $7 million for gas. The Electric Infrastructure and

13 Operations Panel (“EIOP”), the Gas Infrastructure and Operations Panel

14 (“GIOP”), the Customer Service Panel, the Information Technology (“IT”)

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Panel and the Environmental Health and Safety (“EH&S”) Panel explain these

2 needs in greater detail.

3 Q. What impact does the return on equity (“ROE”) and projected interest cost

4 have in this rate request?

5 A. Under the Commission’s rate order in the Company’s most recent electric and

6 gas base rate proceedings (Case 18-E-0067, Case 18-G-0068) (“2019 Rate

7 Order”), current electric and gas rates reflect an overall rate of return of 6.96%,

8 including an ROE of 9.0%. The weighted cost of long-term debt included is

9 5.14%. As shown in Exhibit AP-5 and discussed in the direct testimony of

10 Company witness Saegusa, the electric and gas revenue requirements in this

11 case reflect an overall rate of return of 7.04%, based on a 9.5% ROE and a

12 weighted cost of long-term debt of 4.62%. Although Company witness

13 Villadsen provided in her direct testimony that an ROE estimate of 9.75% is

14 appropriate for the Company, the Company’s electric and gas revenue

15 requirements reflect a 9.5% ROE. The Company selected the lower ROE in

16 order to mitigate customer bill impacts and facilitate reaching a multi-year rate

17 plan through settlement. As further justified by Company witness Saegusa, the

18 Company selected an equity ratio of 50%. Should the Commission assign

19 greater risks to the Company, the Company does not waive its right to a higher

20 return corresponding to such greater risks. Approximately $2 million of the

21 electric revenue requirement increase and $1 million of the gas revenue

22 requirement increase are attributable to the higher financing costs, including

23 the cost of capital associated with growth in rate base.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Q. Please discuss the next item in the table, “depreciation changes due to

2 proposed rates.”

3 A. As discussed in the direct testimony of the Depreciation Panel, the Company is

4 proposing to change its depreciation rates. These changes account for $2

5 million of the electric rate increase. There is no impact on the gas rate increase

6 in the Rate Year, as the Company has elected to defer the change in

7 depreciation rates until RY2, as discussed below.

8 Q. What effects do projected sales revenues have on the proposed revenue

9 requirements?

10 A. As discussed in the direct testimony of the Electric and Gas Forecasting

11 Panels, net sales revenues are projected to decrease by $9 million and $3

12 million for electric and gas, respectively, and the revenue requirements are

13 reflective of these changes in sales.

14 Q. Are operation and maintenance (“O&M”) expenses contributing to the need for

15 the electric and gas rate increases?

16 A. No, the Company is seeking electric and gas O&M expense levels that are

17 lower than the levels reflected in current rates. The net decrease in O&M

18 levels is primarily driven by the Company’s continuing initiatives to reduce

19 costs and work more efficiently through our BCO program, lower pension, and

20 OPEB costs, and our request to defer energy efficiency costs and recover these

21 costs over a 10-year period.

22 Q. Are regulatory amortizations contributing to the need for the electric and gas

23 rate increases?

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. Expiring customer credits and recovery of additional deferred costs necessitate

2 an $8 million increase in electric rates, but do not materially impact gas rates.

3 Q. Please discuss the final item in the table, “income taxes.”

4 A. The Company substantially mitigated its rate request by accelerating the pass

5 back of certain excess deferred income taxes resulting from the Tax Cuts and

6 Jobs Act of 2017 (the “2017 Tax Act”). In the 2019 Rate Order, the Company

7 was authorized to amortize unprotected excess deferred income taxes over 15

8 years. In this proceeding, the Company is proposing to refund the remaining

9 excess deferred income taxes resulting from the tax rate reductions that are

10 related to unprotected property over three years (2022 – 2024), rather than the

11 remaining 12-year period (2022 -2033) approved in the 2019 Rate Order. The

12 acceleration of this refund lowers the electric and gas rate requests by $9

13 million and $3 million, respectively. This reduction was partially offset by a

14 similar reduction to three years for the recovery of the remaining excess

15 deferred income taxes related to non-property, which increases the electric and

16 gas rate requests by $3 million and $1 million, respectively.

17 Q. Do any of your exhibits address in further detail the elements of the revenue

18 requirement you have summarized?

19 A. Yes, Schedule 1 of the AP-3 Exhibits.

20

21

22 IV. HISTORICAL FINANCIAL AND STATISTICAL INFORMATION

23 Q. Are you familiar with the Company’s accounting books and records?

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. Yes.

2 Q. Are the accounts of the Company kept in accordance with the Uniform System

3 of Accounts prescribed by the Commission?

4 A. Yes.

5 Q. Does this filing include the historic financial and statistical information

6 required by the Commission?

7 A. Yes. The required information for electric is included in Exhibit AP-E1

8 entitled “Historical Financial Data - Electric” and the required information for

9 gas is included in Exhibit AP-G1 entitled “Historical Financial Data – Gas.”

10 Each of those exhibits includes ten supporting schedules.

11 • Schedules 1 through 5 are balance sheets and supporting schedules as

12 of December 31, 2016, 2017, 2018 and 2019 and September 30, 2020.

13 • Schedules 6 through 10 are income statements and supporting

14 schedules for the twelve months ended December 31, 2017, 2018 and

15 2019 and September 30, 2020.

16 The data on these schedules have been taken directly from the books and

17 records of the Company except for the average plant per customer amounts on

18 Schedule 5 and the unit cost figures on Schedules 8 and 10, which have been

19 computed for the purpose of the respective exhibits. It should be noted that

20 Schedules 1, 2, and 6 reflect total Company operations for electric and gas but

21 not the operations of its subsidiaries. More specifically, the schedules in

22 Exhibit AP-E1 and Exhibit AP-G1 are as follows:

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 • Schedule 1 shows comparative balance sheets at December 31, 2016,

2 2017, 2018 and 2019 and September 30, 2020.

3 • Schedule 2 is a statement of retained earnings at December 31, 2016,

4 2017, 2018 and 2019 and September 30, 2020.

5 • Schedule 3 shows the net book value of electric or gas plant in service

6 by primary account at December 31, 2016, 2017, 2018 and 2019 and

7 September 30, 2020.

8 • Schedule 4 shows the net book value of common plant in service at

9 December 31, 2016, 2017, 2018 and 2019 and September 30, 2020.

10 • Schedule 5 shows electric or gas plant in service and the average cost

11 per customer at December 31, 2016, 2017, 2018 and 2019 and

12 September 30, 2020.

13 • Schedule 6 shows income statements for the twelve months ended

14 December 31, 2017, 2018, 2019 and September 30, 2020.

15 • Schedule 7 is a statement of electric or gas O&M expenses for the

16 twelve months ended December 31, 2017, 2018, 2019 and September

17 30, 2020.

18 • Schedule 8 of Exhibit AP-E1 shows electric operating expenses per

19 kWh sold for the twelve months ended December 31, 2017, 2018, 2019

20 and September 30, 2020. Schedule 8 of Exhibit AP-G1 shows gas

21 operating expenses per Mcf sold for those same periods.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 • Schedule 9 is a statement of electric or gas operating taxes, other than

2 income taxes, for the twelve months ended December 31, 2017, 2018,

3 2019 and September 30, 2020.

4 • Schedule 10 of Exhibit AP-E1 is a statement of electric operating

5 revenues per kWh of electricity sold for the twelve months ended

6 December 31, 2017, 2018, 2019 and September 30, 2020. Schedule 10

7 of Exhibit AP-G1 is a statement of gas operating revenues per Mcf of

8 gas sold for those same periods.

9 V. RATE BASE

10 Q. What exhibits support the Company’s electric and gas rate base amounts in this

11 filing?

12 A. The AP-2 Exhibits contain summaries and details of the Company’s rate base

13 for the Historic Year per books and the forecasted rate base for the Rate Year.

14 Q. Please describe the presentation of rate base in the AP-2 Exhibits.

15 A. The presentation approach is the same for both the electric and gas rate base

16 exhibits. There are a total of six schedules in each exhibit. Schedule 1

17 summarizes the overall rate base calculation for the Historic Year and Rate

18 Year. Schedule 2 shows the details of the forecasted net plant and non-interest

19 bearing Construction Work in Process (“CWIP”) calculation, as shown on page

20 1, lines 1 to 11. Schedule 3 provides the details of the working capital

21 components, unamortized premium & discount expense and customer advance

22 construction, as shown on page 1, lines 12 to 14. Schedule 4 provides the

23 details of the current and projected deferred balance from reconciliation

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 mechanisms, as shown on page 1, line 15. Schedule 5 shows the details of

2 accumulated deferred federal and state tax balances, as shown on schedule 1,

3 lines 17 to 18. Schedule 6 provides a detailed calculation of the Earning Base

4 Capitalization Adjustment amount, as shown on schedule 1, line 21.

5 For all rate base items, common balances were allocated based on the updated

6 common expense allocation factors detailed in Section IX of this testimony.

7 A. Rate Base Components

8 Q. What rate base items are included in the rate base calculation on Exhibit AP-2,

9 schedule 1?

10 A. Exhibit AP-2, schedule 1, shows the overall average rate base calculation for

11 the Historic Year and Rate Year. The rate base components include the net

12 plant, CWIP not subject to the Allowance for Funds Used During Construction

13 (“AFUDC”), working capital, unamortized premium & discount, customer

14 advance construction, net regulatory deferral from reconciliation mechanisms,

15 accumulated deferred income taxes and earning base capitalization adjustment

16 to rate base.

17 B. Average Net Plant Summary

18 Q. What rate base items related to net plant investment are included on Exhibit

19 AP-2, schedule 2?

20 A. Exhibit AP-2, schedule 2 includes projected net plant and a portion of CWIP

21 not subject to AFUDC. Net Plant includes utility plant in service, the allocated

22 portion of common utility plant, plant held for future use and accumulated

23 provision for depreciation.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Q. How did you determine the average balance of Net Plant and CWIP not subject

2 to AFUDC?

3 A. Both are based on capital budget models and the standard thirteen point

4 average methodology used in ratemaking.

5 Q. Was the remaining electric unrecovered legacy meter cost arising from the

6 implementation of Advanced Metering Infrastructure (“AMI”) reclassified

7 from accumulated reserve for depreciation to a regulatory asset as of RY1 of

8 this filing?

9 A. Yes, consistent with the Joint Proposal adopted by the Commission in Case

10 18-E-0067, because AMI was fully deployed as of December 2020, the

11 Company reclassified the projected remaining unrecovered legacy meter cost

12 of $19 million from accumulated reserve for depreciation to a regulatory asset

13 beginning in RY1 of this filing. Please see section VII.B Amortization of

14 Deferred Charges and Credits, Line 30 - Legacy Meters for further discussion

15 of this item.

16 C. Detailed Development of Working Capital, Unamortized 17 Premium & Discount, and Customer Advance Construction

18 1. Working Capital

19 Q. Please explain the rate base component labeled “Working Capital” on schedule

20 1 of the AP-2 exhibits.

21 A. The detailed elements of working capital rate base are shown on schedule 3 of

22 the AP-2 exhibits. Working capital rate base contains three categories:

23 Materials and Supplies, Prepayments, and Cash Working Capital.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 a. Material and Supplies

2 Q. How did you determine the average balance of Materials and Supplies rate

3 base on schedule 3 of the AP-2 exhibits?

4 A. The Company has taken the same approach used in past Company rate cases.

5 The Rate Year forecast of Materials and Supplies inventory generally

6 represents the Historic Year amount escalated using the general escalation

7 factor. For gas, we excluded from the rate base inventory balances of gas

8 stored underground and Liquefied Natural Gas in storage.

9 b. Prepayments

10 Q. What is included in the “Prepayments” category of working capital rate base

11 on schedule 3 of the AP-2 exhibits?

12 A. The prepayments component of working capital rate base includes Local

13 Property Taxes, Remarket, Computer License, Insurance, NYPSC Assessment

14 and New York State Gross Receipts Tax.

15 Q. Please explain how you developed the Rate Year Rate base amount for the

16 Prepayments items?

17 A. We projected all prepayments except for the prepaid property taxes at the

18 Historic Year amount plus general inflation. We forecasted prepaid property

19 taxes, the predominant prepayment item, to increase based on the projected

20 level of property tax bills.

21 c. Cash Working Capital

22 Q. Please explain the allowance for the cash working capital component of

23 working capital rate base on schedule 3 of the AP-2 exhibits.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. We determined the cash working capital component of working capital rate

2 base following well-established Commission practice, which includes applying

3 the 1/8 FERC Working Capital Formula. As such, we performed separate

4 calculations of the rate base amount for electric and gas. For each, we started

5 with projected total O&M expense from Schedule 6 of the AP-3 exhibits and

6 eliminated the expenses listed below to arrive at the level of O&M expense

7 that would be subject to the 1/8 FERC Working Capital Formula.

8 For electric, we eliminated purchased power and fuel expense, uncollectible

9 reserve, low income, system benefit charge (“SBC”), and renewable portfolio

10 charges.

11 For gas, we eliminated purchased gas expense, uncollectible reserve, low

12 income, and SBC.

13 For electric, while we eliminated fuel and purchased power from the 1/8 FERC

14 Working Capital Formula, we made a separate working capital adjustment to

15 account for the time lag between when fuel costs are paid to the New York

16 Independent System Operator and other agencies on a weekly basis and when

17 payments are collected from customers. This additional element of the cash

18 working capital allowance adds $8.5 million to the cash working capital rate

19 base for electric, as shown on schedule 3 of the AP-2 exhibits.

20 2. Unamortized Premium & Discount and Customer 21 Advance for Construction

22 Q. Please explain the unamortized premium/discount and expense and customer

23 advance for construction on schedule 1 of the AP-2 exhibits.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. The unamortized premium/discount and expense reflects the unamortized

2 balance of debt discounts, premiums and expenses, as additions to rate base.

3 The Company applied the forecasted unamortized balances as of the Rate Year

4 for inclusion in the rate base calculation.

5 Customer advance for construction represents the amount billed to customers

6 and others for the construction necessary to provide utility service to their

7 premises (rather than for general system service) and represent a reduction to

8 rate base. For electric, the Company adjusted the Historic Year level for

9 deposits expected to be returned to customers to arrive at the Rate Year

10 level. For gas, the Historic Year levels of these items were carried forward to

11 the Rate Year.

12 D. Net Deferrals/Credits from Reconciliation Mechanism

13 Q. Are deferral balances net of deferred income taxes?

14 A. Yes, the deferral balances are net of deferred income taxes.

15 Q. Please explain each item on AP-2 exhibit, schedule 4.

16 A. For detail on lines 1- 38 of AP-E2 exhibit, schedule 4, and lines 1- 27 of AP-

17 G2 exhibit, schedule 4, please refer to Section VII of this testimony.

18 Line 30 (G), Underground Gas Storage represents the Company’s

19 investment in gas stored underground. The Historic Year levels of

20 underground gas storage were carried forward to the Rate Year.

21 Line 40 (E)/Line 29(G), Unbilled Revenues represents the accrual of

22 unmetered revenues that have not been billed to customers. The Historic Year

23 levels of unbilled revenues were carried forward to the Rate Year.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Line 41 (E), Deferred Fuel represents the average over/under collection

2 balance related to such costs. The Historic Year levels of deferred fuel were

3 carried forward to the Rate Year.

4 E. Detailed Development of Accumulated Deferred Income 5 Taxes

6 Q. How were Accumulated Deferred Federal Income Taxes on schedule 5 of the

7 AP-2 exhibits developed?

8 A. Accumulated Deferred Federal Income Taxes for plant-related items were

9 developed using data from the Company’s capital budget and tax depreciation

10 models. The Company calculates the rate base impact for federal deferred

11 income taxes by using a proration methodology that is required by U.S.

12 Treasury Regulation §1.167(I)-1h(6)(ii). The Internal Revenue Service

13 (“IRS”) has determined that any revenue requirement calculation that employs

14 a future test period is subject to the proration requirement. Accordingly, in

15 calculating the deferred taxes associated with the Rate Year, a proration is

16 required that provides a weighted average to the monthly deferred tax activity

17 arising under the Company’s projections. The Company applied this

18 methodology in this case to avoid non-compliance with IRS normalization

19 rules.

20 Q. How were Accumulated Deferred State Income Taxes on schedule 5 of the

21 AP-2 exhibits developed?

22 A. Accumulated Deferred State Income Taxes for plant-related items were

23 developed using data from the Company’s capital budget and tax depreciation

19

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 models. The forecasted rate year balance is based on 50% of beginning and

2 50% of ending forecasted balance.

3 Q. How were Deferred Investment Tax Credits on schedule 5 of the AP-2 exhibits

4 developed?

5 A. Deferred Investment Tax Credits are amortized over the average service lives

6 of the property that generated the tax credits. The forecasted rate year balance

7 is based on the historical year balance plus the future forecasted amortization.

8 F. Rate Base Over/Under Capital Adjustment

9 Q. Please explain rate base over/under capitalization adjustment on AP-2

10 Exhibits, schedule 6.

11 A. Rate base over/under capitalization adjustment on AP-2 Exhibits, schedule 6,

12 reflects the required adjustment to rate base to make earnings base equal to

13 capitalization. This Earnings Base Capitalization (“EB/Cap”) Adjustment has

14 been required by the Commission in past proceedings to synchronize rate base

15 plus interest bearing items (together, “Earnings Base”) with the total

16 capitalization employed in utility service. Line 42 on AP-2 Exhibit, schedule

17 6, shows the EB/Cap adjustment amount to each electric and gas rate base.

18 The EB/Cap adjustment amount is calculated by taking the total capitalization

19 amount in line 40 less the rate base balance on line 22.

20 VI. CAPITAL EXPENDITURES AND PLANT ADDITIONS

21 Q. Please describe the Company’s presentation of its capital expenditure

22 projections and related plant additions, as set forth in the AP-4 Exhibits.

20

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. Schedule 1 presents the Company’s forecasted electric and gas capital

2 expenditures from the end of the Historic Year through the Rate Year and for

3 later periods. Schedule 2 presents the electric and gas plant additions for those

4 same periods. Supporting testimony is provided by this Panel as well as the

5 Company’s IT Panel, EIOP and GIOP.

6 Common plant capital expenditures and plant additions are presented on

7 Schedules 3 and 4, respectively. Schedules 3 and 4 are presented on a

8 corporate rather than a commodity basis. Supporting testimony is provided by

9 this Panel, as well as the Company’s Customer Service and IT Panels. The

10 Company’s allocation of costs between gas and electric operations is discussed

11 in Section IX of this testimony.

12 Q. Has the Accounting Panel prepared and presented in its exhibits projections of

13 any common capital projects?

14 A. Yes, we have developed projections for the following projects:

15 • Blooming Grove Building Management System- project to upgrade the

16 heating, ventilation and air conditioning controls throughout the

17 Company’s Blooming Grove operating center. The current system is

18 outdated and past its functional life.

19 • Port Jervis Exterior and Window Replacement- project to remove and

20 replace the asbestos clad windows at the Company’s Port Jervis office.

21 This will provide health and safety benefits and be more energy

22 efficient.

21

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 • Spring Valley Fuel Station Canopy- project for the designing and

2 installation of a canopy over the fuel station islands at the Spring

3 Valley Operating Center. Installation of a canopy has been shown to

4 reduce the deterioration of the exposed equipment.

5 • Real Estate Optimization Program- project to evaluate reducing the

6 Company’s rental footprint and reduce operating costs.

7 These projects are supported in greater detail in white papers provided in

8 Exhibit AP-6.

9

10 VII. INCOME STATEMENTS AND RATES OF RETURN

11 Q. Have you included a presentation of the Historic Year and projected Rate Year

12 revenues and expenses in your exhibits?

13 A. Yes. Historic Year levels and Rate Year levels of revenues and expenses are

14 presented in Exhibits AP-3.

15 Each of Exhibits AP-3 contains extensive detail regarding elements or

16 components of revenue and expense on which the Company’s rate request is

17 based. The first page of Exhibits AP-3 is an index of the schedules included in

18 the exhibits.

19 • Schedule 1 presents the major cost drivers of the proposed revenue

20 requirement increase.

21 • Schedule 2 presents the summary of the proposed revenue requirement

22 increase.

22

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 • Schedule 3 presents the total revenues at current rates used to develop the

2 revenue requirement.

3 • Schedule 4 presents projected amortizations of deferred debits and credits.

4 • Schedule 5 presents projected other operating revenues.

5 • Schedule 6 shows projected O&M expenditures.

6 • Schedule 7.1 presents depreciation at current rates and Schedule 7.2

7 presents depreciation at proposed rates.

8 • Schedule 8 presents projected taxes other than income taxes.

9 • Schedules 9 and 10 present projected state and federal income taxes.

10 • Schedule 11 projects Rate Year interest expense for purposes of reflecting

11 the interest deduction included in Schedules 9 and 10.

12 • Schedule 12 presents projected fund requirements and sources.

13 • Schedule 13 presents interest coverage ratios.

14 • Schedule 14 shows how the general escalation factor was derived.

15 • Schedule 15 summarizes normalizations, program changes, and other Rate

16 Year adjustments.

17 • Schedule 16 presents the proposed incremental employees over the

18 duration of the rate plan.

19 A. Sales and Revenues

20 Q. What was your source for the Rate Year projection of sales and delivery

21 revenues?

22 A. The Company’s Electric Forecasting Panel and Gas Forecasting Panel

23 provided the projections of sales and delivery revenues. The amounts are

23

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 shown on Exhibit EFP-1 and Exhibit GFP-1, as well as Schedule 3 of Exhibit

2 AP-E3 and Exhibit AP-G3.

3 B. Amortization of Deferred Charges and Credits

4 Q. Please summarize the Company’s proposals with respect to the disposition of

5 deferred charges and deferred credits.

6 A. With limited exceptions, the Company proposes that all projected deferred

7 charges and deferred credit balances as of the start of the Rate Year be

8 amortized over three years. The exceptions are the deferred balances related to

9 the Energy Efficiency Programs, Monsey Non-Wires Alternative (“NWA”)

10 Project, Pomona Distributed Energy Resources (“DER”) Program, REV

11 Demonstration (“REV Demo”) Projects, Storm Deferral, and Legacy Meters.

12 For the Energy Efficiency programs, Monsey NWA Project, Pomona DER

13 Program, and REV Demo Projects, the Company proposes an amortization

14 period of ten years in order to align cost recovery with customer benefits.

15 Further discussion of the Company’s proposal to recover Energy Efficiency

16 program costs over ten years is included in the direct testimony of the

17 Company’s Customer Service Panel. The Company proposes an amortization

18 period of five years for the storm deferral, and a twelve-year amortization

19 period for legacy meters.

20 The individual deferred charges and credits are listed on Schedule 4 of Exhibit

21 AP-E3 for electric and Exhibit AP-G3 for gas. Also shown are the actual

22 deferred balances as of the end of the Historic Year and the projected deferred

23 balances as of the start of the Rate Year. Schedule 4 shows that the

24

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 amortizations produce a net charge for the Rate Year of $13.214 million for

2 electric and a net credit for the Rate Year of $1.734 million for gas.

3 1. Applicable to Electric and Gas

4 Q. Do all of the deferred charges and deferred credits pertain to both electric and

5 gas?

6 A. No. Although many of the deferred charges and deferred credits pertain to

7 both electric and gas and appear on Schedules 4 of Exhibit AP-E3 and of

8 Exhibit AP-G3, some pertain only to electric and some only to gas.

9 Q. Please identify and explain the deferred charges and deferred credits that

10 pertain to both electric and gas.

11 A. The deferred items that pertain to both electric and gas are as follows:

12 Line 1, 18A Assessment: This item represents the amounts collected from

13 customers relating to the Public Service Law §18-a (6) (“18-a”) temporary

14 assessment (Case 09-M-0311), which phased out in 2017 with the last

15 surcharge collection made on December 31, 2017.

16 Line 3, Deferred Tax Liabilities Carrying Charge: This item represents the

17 amounts to pass-back to customers relating to interest deferred on the

18 difference between the actual deferred Section 263A and tax depreciation

19 reflected in rate base and the actual tax deduction allowed by the IRS.

20 Line 4 Energy Efficiency: This item represents the amounts to collect from

21 customers for Energy Efficiency program costs, which the Company is

22 proposing to amortize over a ten-year period. The direct testimony of the

23 Company’s Customer Service Panel addresses the rationale for the ten-year

25

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 amortization proposal. The Company’s proposed methodology to reconcile the

2 revenue requirement effect of its energy efficiency spending is discussed in

3 Section X.A.2 of this direct testimony.

4 Line 5, Environmental Carrying Charge: This item represents interest to

5 refund to customers on environmental spending under-runs in accordance with

6 the environmental expense reconciliation mechanism.

7 Line 6, Excess FIT for 2018: This item represents residual amounts to pass

8 back to customers associated with the federal income tax difference between

9 the level embedded in rates at 35 percent and the new federal tax rate of 21

10 percent for calendar year 2018 under the 2018 Tax Act.

11 Line 7, Low Income: This item represents amounts to pass back to customers

12 related to the Company’s Low Income Program.

13 Lines 8 & 13, MGP and Other Environmental Sites: These items represent

14 amounts to be refunded or recovered related to SIR costs primarily associated

15 with former MGP sites. This item is discussed in more detail in the EH&S

16 Panel’s direct testimony.

17 Line 9, Non-Officer Management Variable Pay: This item reflects amounts

18 to pass back to customers associated with actual variable pay that was lower

19 than the allowance in rates for 2019 and an estimated amount for 2020,

20 pursuant to the reconciliation mechanism contained in the Company’s current

21 electric and gas rate plans.

22 Line 10, NYSIT Rate Change: This item represents the amount to be

23 refunded to customers for electric, and the amount to collect from customers

26

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 for gas, related to the reduction in the New York State Income Tax rate from

2 7.1% to 6.5%.

3 Line 11, Negative Revenue Adjustments. This item represents amounts to be

4 passed back to electric customers for failing to achieve the “call answer rate”

5 target and to gas customers for failing to achieve the “call answer rate” target

6 and gas safety performance measures.

7 Lines 12 & 14, OPEBs and Pensions: These items represent amounts to be

8 recovered or refunded, pursuant to the OPEB and pension reconciliation

9 mechanisms included in the Company’s current electric and gas rate plans.

10 Line 15, Plant Reconciliation: This item reflects the amount of estimated

11 carrying charges to be passed back to electric customers, in accordance with

12 the net plant reconciliation mechanism under the Company’s current electric

13 rate plan. This line also represents the Company collecting carrying charges

14 from customers pertaining to gas AMI net plant balances exceeding AMI plant

15 targets set forth in rates. The Company was granted authorization to accrue

16 such carrying charges in Case 17-M-0178, subject to an overall cost cap of

17 $98.5 million for the AMI project.

18 Line 16, Property Taxes: This item represents a refund of the over-collection

19 of property taxes under the reconciliation mechanisms included in the

20 Company’s current electric and gas rate plans.

21 Line 17, R&D: This item represents a refund of the over-collection of R&D

22 costs under the reconciliation mechanisms included in the Company’s current

23 electric and gas rate plans.

27

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Line 18, Rate Case Costs: This item represents the amount to be collected

2 from customers for electric, and the amount to refunded to customers for gas,

3 related to rate case costs.

4 Line 19, Credit Card Fees: This item reflects the amounts to be collected

5 from customers for credit card processing fees associated with payments of

6 utility bills above the targets set in the current rate plan.

7 Line 20, 18A General Assessment Refund 2017 to 2018. As result of the

8 PSC 18A audit review, the Department of Public Service (“DPS”) Staff

9 advised the Company to defer the 2017-2018 fiscal period general assessment

10 for future refund. The NYPSC reasoned that the Company had recovered the

11 2017-2018 fiscal period general assessment under-collection amount in 18A

12 assessment surcharge based on the estimated payment amount. Therefore, the

13 difference between final and estimated general assessment payment should be

14 deferred to the regulatory deferral account for customer’s benefit.

15 2. Applicable to Electric Only

16 Q. Please identify and explain the deferred assets and liabilities that pertain only

17 to electric.

18 A. The deferred charge items that pertain only to electric are as follows:

19 Line 2, Competitive Unbundling - Customer Information: This item

20 represents amounts to pass back to the customers related to costs for retail

21 access that were incurred prior to December 2010.

22 Line 21, Property Tax Refunds. This item represents the refund of the

23 customers’ portion of an $89,000 2019 Town of Haverstraw property tax

28

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 refund. After deducting the Company’s 14% of the refund and the costs to

2 achieve, the Company is proposing to refund $71,000 over three years.

3 Line 22, Reactive Power: This item represents the amounts to pass-back to

4 customers relating to the reactive power demand charge.

5 Line 23, Sale of Warwick: This item represents the customer’s share of the

6 gain from the sale of property in accordance with the Commission’s Order

7 dated July 28, 2014 in Case 14-E-0099. This amount to be recovered is a

8 result of two excess months of amortization beyond October 31, 2018 before

9 the current rate plan went into effect.

10 Line 24, Storm Deferral: This item represents amounts to be recovered from

11 customers under the major storm costs reconciliation mechanism.

12 Line 25, Covid-19 Deferrals- Uncollectible Balance (“UB”): This item

13 represents the amount to be recovered from customers related to the

14 incremental costs incurred due to the COVID-19 pandemic. The Company’s

15 current rate plans allow the Company to defer costs resulting from a change in

16 laws (under the Legislative, Regulatory and Related Actions provision of the

17 rate plans), if the costs exceed 10 basis points of the return on equity specified

18 in the current rate plans. The New York on PAUSE Order, and related

19 executive Orders, meet the criteria for the change in laws provisions, under

20 which deferral of all relevant costs is allowed once the thresholds are met.

21 O&R also notes the passage of the Parker Mosley Act and its utility non-

22 termination provisions in June 2020. O&R believes increases in the electric

23 UB reserve resulting from the COVID-19 pandemic were a direct result of the

29

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 economic impact of these Orders and qualify for deferral under the change in

2 laws provision. Note that while the Company is deferring the increases in the

3 electric UB reserve, this deferral was netted against the amount that actual

4 uncollectible write-offs have underrun the levels in rates since the onset of the

5 pandemic.

6 Line 26, Customer Portfolio Shared Earnings: This item represents 2019

7 excess earnings that is due to electric customers.

8 Line 27, Interest on Storm Reserve: This item represents the deferral of

9 interest amounts to be recovered from customers in accordance with the

10 Company’s major storm cost recovery mechanism.

11 Line 28, Exchange of Easement with Premium Outlets. This item represents

12 the amount to be refunded to customers due to the easement exchange with

13 Premium Outlets.

14 Line 29, Settlement of Storms Riley and Quinn. This item reflects the

15 amounts to pass-back to customers due to the settlement agreement reached

16 between the Company and the New York State Department of Public Service

17 to resolve all issues in Case 19-E-0108.

18 Line 30, Legacy Meters: As per the 2019 Rate Order, the Company has been

19 amortizing unrecovered legacy meter costs due to the implementation of AMI

20 since January 2019. The Company estimates approximately $19M in

21 unrecovered legacy meter costs at the beginning of RY1. The unrecovered

22 amount is currently classified as an accumulated reserve for depreciation.

23 However, per the terms of the 2019 Rate Order, once AMI is fully deployed,

30

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 the Company is to defer as a separate regulatory asset the remaining

2 undepreciated investment in legacy meters and recover it over a 15-year

3 period. Because AMI was fully deployed in December 2020, the Company

4 reclassified the $19 million in estimated unrecovered costs from accumulated

5 reserve for deprecation to a regulatory asset in RY1 of this filing. Given that

6 the Company has been recovering unrecovered legacy meter costs since the

7 beginning of 2019, it is recovering the remaining regulatory asset over 12-

8 years. This reclassification is also reflected within the Accumulated Reserve

9 for Depreciation – Plant in Service line in rate base exhibit AP-E2 schedule 2.

10 Line 31, Monsey NWA: This item represents costs to recover from customers

11 associated with the Monsey NWA project. We propose to recover these costs

12 over a 10-year period.

13 Line 32, Pomona DER: This item represents costs to recover from customers

14 associated with Pomona DER program costs authorized in the Company’s

15 2014 electric base rate case (Case 14-E-0493). The 2015 Rate Order

16 authorized recovery of these costs over a 10-year period.

17 Line 33, REV Demo Projects: This item represents costs to recover from

18 customers associated with REV Demo Projects. We propose to recover these

19 costs over a 10-year period.

20 Line 34, Carrying Charges on Clean Energy Future Projects. This amount

21 represents the amount to be refunded to customers in relation to the REV

22 Demo, Monsey NWA and Pomona DER rate base true-ups.

31

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 3. Applicable to Gas Only

2 Q. Please identify and explain the deferred charges that pertain only to gas.

3 A. The deferred asset and liabilities that pertain only to gas are as follows:

4 Line 2, Case 05-G-1594 interest on revenue deferral: This item represents

5 amounts to pass-back to customers due to the over-collection resulting from

6 the additional amortization that was booked beyond October 31, 2018.

7 Line 21, R&D Reconciliation. This item was included in the gas revenue

8 requirement in error and will be removed in the Preliminary Update.

9 Line 22, Pension Phase-in: This item represents the deferred amount to be

10 recovered from customers related to pension phase-in allowance provided in

11 the Company’s 2014 gas base rate case (Case 14-G-0494). In Case 18-G-

12 0068, the Company passed back an amount to customers in the anticipation

13 that it would overcollect the pension phase-in during the two stub period

14 months of November and December 2018. However, this pass back was not

15 needed because the pension phase-in was being collected through a surcharge

16 component of the MGA and expired at the end of RY3, so the Company never

17 overcollected this item.

18 C. Other Operating Revenues

19 Q. Please identify and explain how you projected the elements of Other Operating

20 Revenues shown on Schedule 5 of Exhibit AP-E3 and Exhibit AP-G3.

21 A. Following the same approach we used for the deferred charges and credits, we

22 will first address the remaining elements of Other Operating Revenues that

32

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 pertain to both electric and gas, followed by those that pertain to electric only,

2 and then those related to gas only.

3 1. Applicable to Electric and Gas

4 Elements of Other Operating Revenues that pertain to both electric and gas and

5 appear on Schedule 5 of Exhibit AP-E3 and Exhibit AP-G3 are as follows:

6 Line 1, AMR/AMI Meter Reading and Change out Fee: This item was

7 forecasted using the projected level of fees to be collected during RY1 through

8 RY3. The Meter Reading fee is assessed to any customer who opts-out of

9 AMI ($10/month for single service; $15/month for dual service) and the Meter

10 Change Out fee is a charge that is assessed to customers who want their AMI

11 meter removed.

12 Line 2, Customer Reconnect Fees: This item was forecasted using a three-

13 year average from October 2016 to September 2019, due to the fact that the

14 Historic Year did not reflect a normal level because of the impact of COVID-

15 19.

16 Line 3, Late Payment Charge (“LPC”) Revenues: This item was forecasted

17 by multiplying an LPC factor of 0.69% for electric and 0.39% for gas to the

18 Rate Year sales revenues. The LPC factor represents the ratio of actual LPCs

19 to actual total electric and gas sales revenues for the 12 months ended February

20 2020, the period before the onset of the COVID-19 pandemic.

21 Line 4, POR Discount: This item was forecasted by carrying forward the

22 Historic Year level.

33

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Line 5, Shared Meter Assessment: This item represents fines for improper

2 use of shared metering, which was forecasted using a three-year average.

3 Line 13 (E) & 8 (G) Joint Use Rents: This item relates to carrying charges

4 billed for facilities such as the Spring Valley Operating and Distribution

5 Centers and the Blooming Grove and Middletown facilities that provide

6 benefits to the Company’s subsidiary, Rockland Electric Company (“RECO”).

7 This item was forecasted by annualizing the current monthly carrying charge

8 level.

9 Lines 16-21 (E) and Lines 9-17 (G): All items listed in the section titled

10 Revenues Offset in Sales, Energy Clauses or O&M were normalized to zero

11 for the Rate Year because the Gas Volume and Revenue Forecasting Panel

12 included them in their sales revenues forecast or because they are collected

13 from or credited to customers through a separate surcharge.

14 Lines 22-37 (E) and Lines 18-37 (G): All items in the Regulatory

15 Accounting (Reconciliations/Amortizations/Deferrals) sections were

16 normalized to zero for the Rate Year. These amounts reflect the amounts

17 deferred netted by amortizations in the Historic Year. These amounts were

18 normalized because they are not applicable to the Rate Year.

19 2. Applicable to Electric Only

20 The remaining elements of Other Operating Revenues that pertain only to

21 electric and shown on Schedule 5 of Exhibit E-3 are as follows:

22 Lines 6 & 12 Agency Checks Dishonored and Other: These items were

23 forecasted by carrying forward the Historic Year level.

34

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Line 7, Acceller Inc.: Prior to August 2020, the Company was paid a fee for

2 customers it transferred to Acceller to have their cable and telephone

3 connected. Acceller stopped performing such services starting in August 2020

4 and therefore the forecast for this item is zero.

5 Lines 8 & 9, Bad Check Charges and Collection Charges: These items were

6 forecasted using a three-year average.

7 Line 10, NYSERDA: When homeowners obtain a loan from the New York

8 State Energy Research and Development Authority (“NYSERDA”), they can

9 repay the loan through their utility bill by using the on-bill recovery financing

10 program. The Company then remits the payments to NYSERDA. NYSERDA

11 pays the Company a one-time fee of $100 for each loan and a fee of 1% of the

12 amount of each loan to defray costs directly associated with implementing the

13 program. These revenues were projected based on the Historic Year level.

14 Line 11, Solar Application Fee: This item relates to fees associated with solar

15 installation. This is a state-set fee for applicants who want to install distributed

16 generation or energy storage systems for facilities 50 kW or more, which is

17 projected using historic level of revenues.

18 Line 14, Pole Attachment and Parity Billings: This item pertains to rent

19 collected from cable, Competitive Local Exchange Carriers, private customers

20 and telephone companies for use of Company poles. More specifically, for

21 parity billings a carrying charge is assessed to telephone companies if specific

22 ownership parity ratios are not maintained in accordance with joint use

23 agreements. The projection was based on a 1% increase in pole attachment

35

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 and parity billings from the historic period and any new known contract

2 increases.

3 Line 15, Other Rents: This item relates to rent received from parties due to

4 their use of electric property owned by the Company such as poles and

5 transformers. These revenues were projected based on the Historic Year level.

6 3. Applicable to Gas Only

7 The remaining elements of Other Operating Revenues that pertain only to gas

8 and shown on Schedule 5 of Exhibit G-3 are as follows:

9 Line 6, Access Fines: This item refers to monies collected from customers

10 because the Company was unable to access meters. We forecasted the Rate

11 Year level to be the same as the Historic Year level.

12 Line 7, R&D Ventures: This item refers to royalties received from a joint

13 R&D venture with other gas utilities. We forecasted the Rate Year level to be

14 the same as the Historic Year level.

15 D. Depreciation

16 Q. Please describe Schedule 7.2 of the AP-3 Exhibits regarding depreciation.

17 A. Schedule 7.2 of the AP-3 Exhibits is the depreciation expense summary at the

18 rates included in the revenue requirement calculation shown in AP-3. For AP-

19 E3 schedule 7.2, the electric depreciation expense is shown at proposed rates

20 with no reserve deficiency amortization for all three rate years. For AP-G3

21 schedule 7.2, the gas depreciation expense is shown at existing rates in RY1,

22 the new proposed rate in RY2 and RY3, with reserve deficiency amortization

23 reflected only in RY3.

36

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Q. Please describe Schedule 7.1 of the AP-3 Exhibits regarding depreciation.

2 A. Schedule 7.1 of the AP-3 Exhibits is a depreciation expense summary at the

3 existing rates and it is used only for comparison purposes to the depreciation

4 expense filed in this rate case.

5 E. Taxes Other Than Income Taxes

6 Q. Describe the development of Taxes Other than Income Taxes.

7 A. Schedule 8 of the AP-3 Exhibits present taxes other than income taxes for the

8 Historic Year and for RY1-RY3. Taxes other than income taxes include

9 Property Taxes, Payroll Taxes, Revenue Taxes, Sales and Use Taxes, and

10 Other Taxes.

11 The Property Tax forecast is addressed in the direct testimony of Company

12 witness Merritt.

13 Payroll Taxes were determined by applying the employer payroll tax rate to the

14 forecasted direct labor expense increases. Additionally, we made normalizing

15 adjustments of $631,000 and $312,000 to electric and gas payroll taxes,

16 respectively, due to federal CARES Act retention tax credits in the Historic

17 Year that we do not anticipate in the Rate Year.

18 Revenue Taxes were based on the estimated revenue multiplied by the

19 effective tax rates.

20 Finally, we have assumed the Historic Year level of sales and use and other

21 miscellaneous taxes, escalated by the general escalation factor, will be

22 representative of the Rate Year level.

37

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 F. Income Taxes

2 Q. Please describe how the calculations of State and federal income tax expenses

3 were performed.

4 A. The computation of State income tax is shown on Schedule 9 of the AP-3

5 Exhibits. Starting with operating income before income taxes, we then show

6 the various tax adjustments required to determine taxable income, which we

7 multiply by the statutory rate of 6.5% to determine the State income tax. We

8 note the calculations exclude the Metropolitan Transportation Authority

9 (“MTA”) surcharge rate of 1.91%, which is recovered as part of the current

10 MTA surcharge mechanism.

11 The computation of federal income tax is shown on Schedule 10 of the AP-3

12 Exhibits. Starting with operating income before income taxes, we then show

13 the various tax adjustments required to determine federal taxable income,

14 which we multiply by the statutory rate of 21% to determine the current federal

15 income tax. We then show the calculation of deferred federal income tax and

16 the amortization of the deferred excess federal income tax to arrive at the total

17 federal income tax expense.

18 G. Interest

19 Q. Please explain Schedule 11 of the AP-3 Exhibits.

20 A. Schedule 11 shows the calculation of the interest deduction included in

21 Schedules 9 and 10 of those exhibits. The majority of long-term debt has been

22 issued by Orange and Rockland for itself and its subsidiary utility, RECO.

23 This “synchronization” adjustment is necessary in order to allocate the proper

38

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 level of interest expense to each company. The adjustment has been calculated

2 in the same manner as has been employed in previous O&R rate cases.

3 VIII. OPERATION AND MAINTENANCE EXPENSES

4 Q. Please explain the development of O&M Expenses shown on Schedule 6 of the

5 AP-3 exhibits.

6 A. Schedule 6 shows the derivation of the projected expenses in the Rate Years 1,

7 2 and 3 from the Historic Year expense. Various Company witnesses,

8 including the Accounting Panel, explain any adjustments.

9 Q. Please summarize the projected net changes to the level of O&M expenses

10 during the Historic Year to the Rate Year.

11 A. For electric, the Historic Year level of $290.0 million is forecasted to decrease

12 by $10.6 million for a Rate Year level of $279.4 million.

13 For gas, the Historic Year level of $141.4 million is forecasted to decrease by

14 $2.2 million for a Rate Year level of $139.2 million.

15 The line items included in these totals, and their corresponding figures, are

16 detailed on AP-3 Schedule 6.

17 Please note that these figures represent overall electric and gas O&M expenses,

18 which include fuel and purchase power and other types of reconciled costs that

19 do not impact the revenue requirement.

20 A. O&M Savings

21 Q. What steps has the Company taken to find O&M savings and mitigate

22 customer costs?

23 A. The Company continuously strives to balance the objectives of increasing

39

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 productivity and reducing costs while providing safe and reliable service to its

2 electric and gas customers. In late 2017, the Company implemented the BCO

3 program to improve processes, functions, and tasks in order to identify savings

4 for the Company. The Company is now implementing initiatives to realize

5 those identified savings and, in do so, is transitioning from focusing on an

6 independent BCO program to integrating optimization approaches developed

7 under BCO to normal business planning and operation.

8 Q. How have forecasted BCO savings mitigated the proposed revenue

9 requirements for RY1, RY2, and RY3?

10 A. BCO savings projections are based on aggressive savings targets that are

11 deliberately challenging for the Company to meet. In order to mitigate

12 customer bills, however, the Company is decreasing its revenue requirements

13 by its projections of BCO savings. This proposal is designed to shield

14 customers from the impacts of that risk by passing on the aggressive savings

15 projections, even if those savings are not actually achieved.

16 The Company includes $3.0 million in savings in RY1, an additional $1.2

17 million in savings in RY2 and an additional $1.9 million in RY3 savings for

18 electric and $1.4 million in savings in RY1, an additional $0.6 million in

19 savings in RY2 and an additional $0.9 million in savings in RY3 for gas, net of

20 the costs to achieve. These BCO savings are reflected in the Company’s

21 electric and gas O&M program changes.

22 Q. The Company also had BCO targets established within the revenue

23 requirement in Case 18-E-0067 and 18-G-0068. How are those targets

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 incorporated into the revenue requirement in this filing?

2 A. In 2018, BCO was a nascent program and the Company did not yet have

3 reliable savings projections. The BCO imputations in the current rate plan

4 were negotiated to capture for customers a reasonable share of potential

5 savings. In this filing, the Company has provided customers with the higher of

6 either its realized savings or the current rate plan imputation for each year.

7 For the period from January 2019 through September 2020, realized BCO

8 savings reflected in the Historic Year expense levels were higher than those

9 imputed. This reflects that cost-saving process improvements were easier to

10 achieve in the initial years of the BCO program. Specifically, BCO savings

11 through September 2020 total $6.7 million, including $3.9 million in savings

12 during the Historic Year, compared to a total of $3.1 million in imputed

13 savings during 2019 and 2020. Additionally, in developing the Company’s

14 RY1 O&M projection, the Company is incorporating the RY3 imputed

15 amounts from the Company’s current rate plan to account for savings during

16 the linking period. These imputed amounts totaling $2.5 million are higher

17 than the Company’s developed savings projections for this period.

18 Q. Is the Company including a one percent labor productivity adjustment its

19 O&M projections in addition to the BCO savings?

20 A. No. We are including savings that are much greater than the traditional one

21 percent labor productivity adjustment. The BCO savings in this rate filing will

22 be over 3.5 times the savings level traditionally included. In developing its

23 labor escalation rates in past base rate cases, the Company has included a one

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 percent productivity adjustment as a proxy for future potential efficiencies. In

2 the instant proceedings, the Company has performed a thorough study and is

3 imputing quantified cost savings. Instead of waiting to realize concrete

4 savings from that program to credit customers, the Company is incorporating

5 the projected savings into its proposal in this filing.

6 7 B. Development of O&M

8 Q. How were O&M costs developed for the Rate Year?

9 A. The Company began with Historic Year O&M costs. Next, the Company

10 made adjustments to bring the costs forward to the Rate Year. Adjustments

11 made to expense levels were due to general escalation, labor escalation,

12 normalizations and program changes. The Company’s approach to each

13 adjustment is described below.

14 1. General Escalation

15 Q. Please describe how you escalated costs due to inflation.

16 A. The general escalation rate is applied to costs anticipated to increase at the rate

17 of inflation as measured by the Gross Domestic Product (“GDP”) price

18 deflator. For certain expenses, the escalation factor is specifically tailored to

19 the particular expense item, such as medical insurance costs addressed by the

20 Company’s Compensation and Benefits Panel, and is presented as a program

21 change. Additional detail on generally escalated costs is included in Schedule

22 14 of the AP-3 exhibits.

23 Q. Please describe how the general escalation rate was applied in developing

24 projected revenue requirements.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. The actual GDP deflator used to escalate various non-labor elements of the

2 cost of service was published as of October 2020 by the U.S. Bureau of

3 Economic Analysis. The quarterly forecasts for 2020 and 2021, as well as the

4 annual forecasts for 2022 and forward, are from the Blue Chip Economic

5 Indicators dated October 2020. Using these forecasts, the projected cumulative

6 effect of inflation from the Historic Year to the Rate Year is 3.49 percent. The

7 projected effect of inflation in Rate Years 2 and 3 is 1.60 percent.

8 2. Labor Escalation

9 Q. Please describe the labor cost escalation factors used in your projections.

10 A. Labor cost escalation factors are applied to labor-related elements of expense.

11 Labor escalation is reflected on Exhibit AP-3, Schedule 6.

12 With respect to employees of the Company’s bargaining unit, Local 503 of the

13 International Brotherhood of Electrical Workers (“Local 503”), labor cost

14 escalation was projected based on the terms of the collective bargaining

15 agreement in effect. The current agreement between the Company and Local

16 503 is in effect through May 31, 2023. The agreement provided, among other

17 things, for general wage increases of 3% on June 1, 2020, 2021, and 2022.

18 Accordingly, the escalation rates used in our labor cost projection calculations,

19 and reflecting the normalizing adjustments and program changes we explained

20 earlier, for employees paid weekly were 3% annually from the end of the

21 Historic Year through the Rate Year.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 The labor costs for employees paid monthly, including escalation applicable to

2 the normalizing adjustments and program changes explained earlier, were

3 calculated by applying a salary increase of 3% per year.

4 3. Normalization

5 Q. Please describe the normalization of O&M costs for the Rate Year.

6 A. The Company eliminated from the elements of expense (“EOEs”) those

7 amounts that are nonrecurring, out of period, or for which the Company has

8 decided to not seek recovery in this proceeding. The Company also annualized

9 amounts that were not fully recognized in the Historic Year in order to develop

10 Rate Year costs. Additional detail on normalized costs is found in Schedules 6

11 and 15 of the AP-3 exhibits.

12 4. Program Changes

13 Q. Please describe how O&M costs were adjusted due to program changes.

14 A. The Company adjusted O&M costs based on documented, planned program

15 changes. These program changes are driven by the business needs of the

16 Company. Estimated costs associated with these programs and additional

17 detail regarding these costs are included in Schedules 6 and 15 of the AP-3

18 exhibits.

19 5. Line Item Descriptions

20 Below are detailed descriptions of each type of expense and a designation to

21 which commodity(ies) it applies (E- Electric, G- Gas). For the Historic Year

22 amount, any adjustments, and the Rate Year forecast for each line item, please

23 see Schedule 6.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Line 1, Fuel and Purchased Power: (E, G) This item tracks projected fuel

2 and purchased power costs. The Rate Year forecast includes program changes

3 and normalizations discussed in detail in the direct testimony of the Electric

4 and Gas Volume and Revenue Forecasting Panels.

5 Line 2, A&G Health Ins. And Capital Overhead: (E, G) This line represents

6 the capitalized portion of administrative and general (“A&G”) overhead costs

7 applicable to construction activities, including general office salaries and

8 expenses, and health insurance premiums. The Historic Year expense is

9 escalated by the labor escalation factor to arrive at the Rate Year level.

10 Line 3, Bond Administration & Bank Fees: (E, G) This item includes bank

11 fees, revolving credit fees, line of credit fees, and credit rating agencies fees.

12 The Historic Year expense is escalated by the general escalation factor to

13 arrive at the Rate Year level.

14 Line 4, Company Labor - Corporate and Shared Services: (E, G) This item

15 reflects labor charges related to the various corporate and shared services

16 departments. Program changes added representing one additional employee

17 related to the Advanced Distribution Management System (“ADMS”) that is

18 discussed in detail in the direct testimony of the EIOP and two additional

19 employees related to the Cybersecurity and Digital Factory programs that are

20 discussed in the direct testimony of IT Panel. The line also includes

21 normalizations related to certain non-recurring removal costs and COVID-19

22 response costs. We then escalated the Historic Year expense and the

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 normalizations and program changes discussed above by the labor escalation

2 factor to arrive at the Rate Year amount.

3 Line 5, Company Labor - Customer Operations: (E, G) This item reflects

4 labor charges related to the Company’s Customer Operations departments.

5 The program changes include additional employees for journey mapping, data

6 analytics, billing oversight and implementation, and a position for major

7 account engineer. These program changes are discussed in the direct

8 testimony of the Customer Service Panel. We escalated the Historic Year

9 expense and program changes by the labor escalation factor to arrive at the

10 Rate Year amount.

11 Line 6, Company Labor - Electric/Gas Operations: (E, G) This item reflects

12 labor charges related to the Company’s Electric and Gas Operations

13 departments. The electric program change includes additional positions for

14 Oversight for Expanded Danger Tree Program, Additional Troubleshooters,

15 Distribution System Operators, Systems Specialist, Electric Portfolio

16 Management, Additional Line Technicians and Supervision, as discussed in the

17 direct testimony of the EIOP. The gas program changes include additional

18 positions for Night Supervisor, CAG Specialist, and Gas ERP and Large Scale

19 Gas Customer Outage risk support. These changes are discussed in detail in

20 the direct testimony of the GIOP. The gas program change also includes the

21 addition of an Emergency Preparedness (“EP”) Support Services -

22 Specialist/Senior Specialist in RY1. Although the Specialist will support

23 Orange and Rockland, Emergency Preparedness is a Shared Service with Con

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Edison, so this FTE will reside within Con Edison and report to a Con Edison

2 section manager. This new position in the EP organization will assist the

3 existing Senior Specialist position in the execution of all tasks associated with

4 gas emergency planning, preparedness, and response for the Company. This

5 position will support continuity of operations both on “blue sky days” as well

6 as during event response and restoration. Further details on this position can

7 be found in the AP-6 exhibit. We escalated the Historic Year expense and

8 program changes by the labor escalation factor to arrive at the Rate Year

9 amount.

10 Line 7, Company Labor - Engineering: (E, G) This item relates to labor

11 charges related to the Company’s Engineering department. The total electric

12 Rate Year forecast reflects program changes including additional T&S

13 Standards Engineer, Distribution Planner/Forecaster, Electrician Supervisor,

14 Senior Estimator, and UG Inspector/Technician, and ADMS / Operations

15 Support and System development. These program changes are discussed in

16 detail in the direct testimony of the EIOP. For gas, program changes for

17 additional positions for Gas Engineer - Technology Support, Gas Engineer -

18 PSMS (Pipeline Safety Management Systems) and Integrity Management and

19 data analytic support, and Compliance (CRM)/Trainer. These program

20 changes are discussed in detail in the direct testimony of the GIOP. We

21 escalated the Historic Year expense and any program changes by the labor

22 escalation factor to arrive at the Rate Year amount.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 Line 8, Company Labor - Substation Operations: (E only) This item relates

2 to labor charges related to the Company’s Substation Operations departments.

3 The total electric Rate Year forecast reflects a program change for additional

4 positions for Senior Specialist. This change is discussed in detail in the direct

5 testimony of the EIOP. We escalated the Historic Year expense and any

6 program changes by the labor escalation factor to arrive at the Rate Year

7 amount.

8 Line 9, Customer Billing Postage: (E, G) This item reflects the costs of

9 mailing monthly bills to customers. The Historic Year expense is escalated by

10 the general escalation factor to arrive at the Rate Year amount.

11 Line 10, Employee Welfare Expense: (E, G) this item relates to the

12 Company’s costs related to a number of employee benefits including, but not

13 limited to, medical, dental, prescription drug, vision coverage, tuition

14 reimbursement and the Company match for the Thrift Savings Plan. The

15 amounts are net of credits such as employee contributions and capitalized

16 amounts. The Rate Year normalization is related to one-time credits received

17 from the Company’s insurance carriers during the Historic Year. The Rate

18 Year forecast includes program changes to reflect projected costs for the Rate

19 Year. The Compensation and Benefits Panel provides additional detail

20 regarding the factors contributing to the amount of the program change.

21 Line 11, Executive Variable Pay: (E, G) The Rate Year forecast is

22 normalized to eliminate the cost of the executive variable pay plan. The

23 Company is not seeking to recover these costs through rates in this proceeding.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 This should not be interpreted as the Company waiving its rights to seek the

2 recovery of such costs in future rate proceedings.

3 Line 12, Facilities: (E, G) This item reflects non-labor charges related to the

4 Company’s Facilities and Field Services departments, such as building

5 maintenance and janitorial services. We then escalate the Historic Year

6 expense by the general escalation factor to arrive at the Rate Year amount.

7 Line 13, Information Technology: (E, G) This item reflects non-labor

8 charges related to the Company’s IT department, such as technology support,

9 hardware, software and cybersecurity maintenance, application services as well

10 as mainframe computers in general. The total Rate Year forecast includes

11 program changes related to OMS System Hardening and Cloud costs, which

12 are further discussed in the direct testimony of the Company’s IT Panel. We

13 have also included a normalization adjustment for the Voluntary Separation

14 Plan (“VSP”) payments that were a result of the Company’s IT outsourcing

15 efforts. The IT VSP was a voluntary separation plan offered to all IT

16 employees. 7 of 47 employees eligible for the plan accepted. We then escalate

17 the Historic Year expense and any program changes by the general escalation

18 factor to arrive at the Rate Year amount.

19 Line 14, Informational Advertising: (E, G) This item relates to informational

20 advertising directed to customers. The Historic Year expense is escalated by

21 the general escalation factor to arrive at the Rate Year amount.

22 Line 15, Injuries & Damages/ Workers Compensation: (E, G) This item

23 reflects the costs of Injuries & Damages/ Workers Compensation expenses.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 The Rate Year forecast includes program changes to reflect projected costs for

2 the Rate Year, which are primarily derived from projected claims net of

3 recoveries and capitalized amounts. We escalated the Historic Year expense

4 by the general escalation factor to arrive at the Rate Year amount.

5 Line 16, Institutional Dues & Subscription: (E, G) This item includes

6 membership fees paid to the American Gas Association, Edison Electric

7 Institute, and other association dues and membership fees. We escalate the

8 Historic Year expense by the general escalation factor to arrive at the Rate

9 Year amount.

10 Line 17, Insurance Premium: (E, G,) This item includes insurance premiums

11 the Company incurs for items such as property insurance and workers

12 compensation insurance. The Rate Year forecast includes program changes to

13 reflect projected costs for the Rate Year. We then escalate the Historic Year

14 expense and the program change by the general escalation factor to arrive at

15 the Rate Year amount.

16 Line 18, Intercompany Shared Services: (E, G) This item reflects

17 intercompany billing between the Company, CEI and Con Edison. O&R is

18 billed a share of the total costs of CEI and Con Edison operating the various

19 departments that provide services to the Company. In addition, the Company

20 is billed for 100% of other services provided solely on its behalf by Con

21 Edison. These charges are then allocated to O&R’s electric and gas operations

22 and subsidiaries by use of the common expense allocations. The Rate Year

23 forecast includes a program change to reflect projected increases in allocated

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 costs to be charged to the Company. We then escalate the Historic Year

2 expense and program change by the general escalation factor to arrive at the

3 Rate Year amount.

4 Line 19, Legal and Other Professional Services (E, G) This item includes

5 the cost of outside legal counsel and consultants. The program changes are

6 calculated by taking the three-year average of expenses from 12-month periods

7 ended September 2018 to 2020. We then escalate the Historic Year expense

8 and the program change by the general escalation factor to arrive at the Rate

9 Year amount.

10 Line 20, Load Dispatching: (E) This item represents the costs incurred in

11 load dispatching activities for system control. The Historic Year expense is

12 escalated by the general escalation factor to arrive at the Rate Year estimate.

13 Line 21, Low Income: (E, G) This item relates to the credits given to

14 customers enrolled in the Company’s Low Income Program. A normalizing

15 adjustment has been made to remove all such credits from O&M. Consistent

16 with the current rate plan, the Company proposes to use rate design to provide

17 Commission authorized credits to customers enrolled in the Low Income

18 Program.

19 Line 22, Ops - Corporate and Shared Services: (E, G) This item relates to

20 the non-labor charges of the Company’s Corporate and Shared Services

21 departments. The total Rate Year forecast includes a program change related

22 to corporate insurance policies billed to O&R through intercompany billings.

23 The line also includes normalizations related to certain non-recurring removal

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 costs, COVID-19 response costs, CWIP/OWIP write-offs, amortizations for

2 site investigation and remediation, and deferred charges recorded to reconcile

3 to Historic Year credit card fee targets. We escalate the Historic Year expense,

4 the normalizations and program changes discussed above by the general

5 escalation factor to arrive at the Rate Year amount.

6 Line 23, Ops - Customer Operations: (E, G) This item relates to the non-

7 labor charges of the Company’s Customer Operations departments. The Rate

8 Year forecast includes program changes discussed in the direct testimony of

9 the Customer Service Panel, which relate to Mandatory Virtual Audit

10 Software, CSS implementation, Communications Online Community, TODRS

11 Energy settlement & balancing software, and Privacy Readiness, all of which

12 are applicable to both electric and gas. We then escalate the Historic Year

13 expense and program changes by the general escalation factor to arrive at the

14 Rate Year amount.

15 Line 24, Ops - Electric/Gas Operations: (E/G) This item relates to non-labor

16 charges related to the Company’s Electric and Gas Operations departments.

17 The Rate Year forecast for electric includes program changes discussed in the

18 EIOP, including Expanded Three-Phase Clearance, Expanded Danger Tree

19 Removal Program, resources for Oversight for Expanded Danger Tree

20 Program, resources for Additional Trouble Shooter, Line Technicians and

21 Supervision, Software licenses for metering software, and REV/CLCPA

22 Initiatives. The Rate Year forecast for gas includes a program change for

23 Driver Training as discussed in detail in the direct testimony of the GIOP. We

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 then escalate the Historic Year expense and program change by the general

2 escalation factor to arrive at the Rate Year amount.

3 Line 25, Ops - Engineering: (E, G) This item relates to non-labor charges

4 related to the Company’s Engineering departments. The Rate Year forecast

5 includes program changes for electric related to Transmission System LiDAR

6 Survey, Interruptions Application Development, and Distribution Automation

7 – 4G / 5G, which are discussed in the direct testimony of the EIOP. The Rate

8 Year forecast includes program changes for gas related to Gas Control SCADA

9 upgrade and Display Upgrade, Inside Service Inspections, Right of Way

10 Clearing, and Locus View, all of which are discussed in the direct testimony of

11 the GIOP. We then escalate the Historic Year expense and program changes

12 by the general escalation factor to arrive at the Rate Year amount.

13 Line 26, Ops - Substation Operations: (E, G) This item relates to non-labor

14 charges related to the Company’s Substation Operations departments.

15 Program changes for fuel and maintenance expenses associated with new

16 vehicles are discussed in the direct testimony of EIOP. We escalate the

17 Historic Year expense along with the program changes by the general

18 escalation factor to arrive at the Rate Year amount.

19 Line 27, Other Compensation: (E, G) This line includes expenses related to

20 officer and non-officer long-term equity grants, which are made up of time

21 based and performance based restricted stock. As discussed in the

22 Compensation and Benefits Panel’s direct testimony, the Company is seeking

23 to recover non-officer long-term equity grants. The normalization adjustment

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 eliminates the cost of the officer long-term equity grants, as the Company is

2 not seeking to recover these costs through rates in this proceeding. The

3 Company is not waiving any of its rights to seek the recovery of such costs in

4 future rate proceedings. The Rate Year forecast includes program changes to

5 reflect projected costs for the Rate Year. The projection is based on the stock

6 price of $77.80 and the number of outstanding shares of 1,013,525 at

7 September 30, 2020.

8 Line 28, Pension and OPEB Costs: (E, G) This line reflects the actuarially

9 determined level of expenses for employee pensions and OPEBs, which was

10 based on two studies performed by the Company’s actuary, Buck; a forecast

11 dated May 22, 2020 for pensions and a forecast dated July 17, 2020 for

12 OPEBs. The studies incorporate the Company’s actual historical experience

13 supplemented by assumptions of future activity. Updated assumptions used in

14 the forecast of pensions include a discount rate of 2.95 percent and an expected

15 return on plan assets of 7.0 percent. OPEB projections were based on a

16 discount rate of 2.90 percent and an expected return on plan assets of 7.10

17 percent for the Management Retiree Health VEBA, 7.60 percent for the

18 Management Retiree Life Insurance VEBA and 8.10 percent for the Weekly

19 Retiree Health and Life VEBA, projecting from January 1, 2020.

20 Q. Please summarize the estimate of the Rate Year employee pensions/OPEBs

21 expense.

22 A. The net amount of the actuarially determined level of expense for employee

23 pensions/OPEBs and other payments, after normalizing for deferred charges

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 recorded to reconcile to Historic Year targets, is $25.5 million ($17.1 million

2 allocable to electric and $8.4 million allocable to gas). After applying program

3 changes to align with actuary projections, the cumulative Rate Year forecast

4 for electric and gas yielded $6.7 million for RY1, ($3.5) million credit for RY2

5 and $1.8 million for RY3. However, in order to smooth the effect of the

6 revenue requirement impact the Company is proposing to use a three-year

7 average of Rate Year projections resulting in projected cost of $1.7 million for

8 each Rate Year ($1.1 million allocable to electric and $600K allocable to gas).

9 Q. Does this line item include Supplemental Retirement Income Plan (“SRIP”)

10 costs?

11 A. Yes. Officer and non-officer SRIP costs are included in this line item, as they

12 relate to the Company’s long-term performance-based compensation for

13 management employees. The Company’s Compensation and Benefits Panel

14 addresses the reasonableness of this aspect of the Company’s compensation

15 program.

16 Line 29, Site Investigation & Remediation: (E, G) This item is addressed in

17 the testimony of the Environment Health & Safety Panel.

18 Line 30, Regulatory Commission Expense- General and R&D: (E, G) The

19 program change is forecasted based on the latest NYPSC Assessment letter

20 dated August 2020, excluding refunds, for the 2020-2021 State fiscal year

21 ending March 31, 2021. The Company will update this element of expense

22 based on any additional NYPSC Assessment letters received during these

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 proceedings. We then escalate the Historic Year expense and the program

2 change by the general escalation factors to arrive at the Rate Year amount.

3 Line 31, Renewable Portfolio Charges: (E) This program change matches

4 expenses that are collected as a separate surcharge through the Energy Cost

5 Adjustment (“ECA”) with the related ECA revenues to avoid a revenue

6 requirement effect.

7 Line 32, Rent: (E, G) This item represents general rents paid to lease various

8 properties or land on which the Company operates. The program change

9 reflects forecast for the Rate Year. Historic Year expense and the program

10 change are escalated by the general escalation factor to arrive at the Rate Year

11 estimate.

12 Line 33 Research & Development: (E, G) This item relates to non-labor

13 charges related to the Company’s R&D department. We escalate the Historic

14 Year expense, after normalizing for deferred charges recorded to reconcile to

15 Historic Year targets, by the general escalation factor to arrive at the Rate Year

16 amount.

17 Line 34, Storm Allowance: (E) This item represents the allowance for storm

18 related costs. We escalate the Historic Year expense by the general escalation

19 factor to arrive at the Rate Year amount. In this case, the Company is

20 proposing a change to the amount of pre-mobilization storm costs eligible for

21 deferral, which is discussed further within Section X.A.1 of this testimony.

22 Line 35, System Benefit Charge (“SBC”): (E, G) This program change

23 matches energy efficiency expenses that are collected as a separate surcharge

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 through the ECA/monthly gas adjustment (“MGA”) with the related

2 ECA/MGA revenues to avoid a revenue requirement effect.

3 Line 36, Uncollectible Reserve - Customer: (E, G) This item represents a

4 provision and write-off of customer accounts receivables that are not expected

5 to be recovered by the Company. The Company’s uncollectible factor, i.e.,

6 write-offs as a percent of revenues, for electric and gas equates to $0.50/$100,

7 which we then applied to Rate Year levels of sales revenues for both electric

8 and gas. The Company derived the uncollectible factor by reviewing

9 uncollectible trends from post-2018, when the Company did not perform active

10 collections work, similar to the period of the ongoing COVID-19 pandemic. In

11 light of the uncertainty regarding uncollectible trends during the Rate Year due

12 to the pandemic, the Company is proposing a full reconciliation of

13 uncollectible expenses in this case, which is discussed further in Section X.C.1

14 of this testimony.

15 Line 37, Uncollectible Reserve - Sundry: (E, G) This item represents a

16 provision and write-off of miscellaneous accounts receivables which are not

17 expected to be received by the Company. The Rate Year amount includes

18 program changes to reflect a twelve-month annualized average for the period

19 December 2019 through November 2020.

20 Line 38, Worker’s Comp NYS Assessment: (E, G) This item represents fees

21 levied against employers by the New York State Workers’ Compensation

22 Board. The fees consist of a single assessment, which covers the Board’s

23 various administrative and operational expenses related to administering the

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 law, as well as a 50-5 assessment (for self-insured employers such as the

2 Company). The Rate Year forecast includes program changes to reflect

3 projected costs for the Rate Year. We then escalate the Historic Year expense

4 and the program change by the general escalation factor to arrive at the Rate

5 Year amount.

6 Line 39, Bargaining Contract Unit Cost: (E, G) This line item represents

7 costs associated with negotiation and strike contingency efforts. The Rate Year

8 costs are set at the Historic Year level.

9 Line 40, Environmental Affairs: (E, G) This line item represents to the non-

10 labor charges related to the Company’s Environmental Health & Safety

11 departments. The Rate Year costs are set at the Historic Year level.

12 Line 41, External Audit Services: (E, G) This line item represents services

13 provided by the Company’s auditor, PwC. We escalated the Historic Year

14 expense by the general escalation factor to arrive at the Rate Year amount.

15 Line 42, Finance & Accounting Operations: (E, G) This line item relates to

16 the non-labor charges supporting the Company’s Finance and Accounting

17 Operations departments. We escalated the Historic Year expense by the

18 general escalation factor to arrive at the Rate Year amount.

19 Line 43, All Other: (E, G) This line item includes miscellaneous and general

20 expenses that did not fit into other categories of expense discussed above. The

21 normalization adjustment for electric of $1.2 million pertains to the food and

22 medicine spoilage reimbursement related to Tropical Storm Isaias.

23 Line 44, Business Cost Optimization: (E, G) As discussed in Section VIII.A,

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 the Company is imputing significant costs savings to customers based on

2 forecasts from its BCO program.

3 Line 45, Company Labor – Fringe Benefit Adjustment: (E, G) This

4 adjustment represents the net increase in employee welfare expenses and

5 workers’ compensation due to labor-related normalizations and the change in

6 projected labor costs through program changes as sponsored by various

7 Company witnesses. We escalated the adjustment by the general escalation

8 factor to arrive at the Rate Year amount.

9 IX. COST ALLOCATIONS

10 Q. Please describe the cost allocation procedures currently used by Orange and

11 Rockland to assign or allocate costs to its utility subsidiaries and between the

12 Company’s electric and gas operations.

13 A. Orange and Rockland’s wholly owned utility subsidiary is RECO, which

14 provides electric service in New Jersey. The Company charges costs that it

15 incurs for labor, material and services directly to the responsible utility (i.e.,

16 Orange and Rockland or RECO) to the extent practically identifiable, through

17 the use of time sheet reporting and Company specific account numbers. In

18 those instances where work performed is for the common benefit of both

19 utilities, costs are allocated through the use of common expense clearing

20 accounts and allocations.

21 Q. What common expense and common plant allocation factors does the

22 Company use in these proceedings?

59

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. The Company reviewed the allocation of common expenses and common plant

2 in these proceedings and proposes to continue its allocation factors. The

3 drivers of the common expense allocation factor are number of customers, net

4 revenues, T&D O&M and T&D net plant. There have not been significant

5 changes in distribution by service of these factors since the Company changed

6 the allocation rates in the last rate case,

7 The following table shows the common expense allocation factors (note that

8 the A0 and E0 splits are revised each year to reflect RECO’s net revenues as a

9 percentage of total O&R revenues):

Current/Proposed Allocation O&R - E O&R - G RECO All Companies - E&G (A0 Split) 55.65% 27.50% 16.85% O&R E and RECO (E0 Split) 77.46% 22.54% 10 O&R E&G (C0 Split) 66.93% 33.07%

11 O&R’s common plant allocation factors are reflected in the table below (note

12 that the intangible common plant factor is updated annually for changes in the

13 relative number of electric and gas customers.)

Current/Proposed Allocation O&R - E O&R - G Intangible Common Plant (software) 72.35% 27.65% 14 All Other Common Plant 66.93% 33.07%

15 Q. How are intercompany shared services allocated by the Company?

16 A. Common expenses incurred by CEI, which are not directly charged services,

17 are allocated under a three-factor formula to its subsidiaries. The Commission

18 approved a new allocation methodology in Con Edison’s most recent rate

19 order. Consistent with that Order, the Company has allocated expenses for 60

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 these intercompany shared services under a three-factor allocation using

2 forecasted operating revenue, segment payroll, and assets for each CEI

3 subsidiary. If a CEI subsidiary has equity method investments, the revenue

4 factor for that subsidiary includes a proportionate share of its equity method

5 investments’ revenues.

6 The following table shows the current intercompany shared services allocation

7 factors (note that this allocation is updated twice annually in February and

8 July):

Company Allocation Rate CECONY 85.590% CEB 6.400% CET (Electric) 0.063% CET (Gas ) 1.190% ORU 6.757%

9 X. RECONCILIATIONS AND DEFERRED ACCOUNTING

10 A. Modified Deferral or Reconciliation Mechanisms

11 Q. Is the Company proposing to continue the use of deferral accounting for the

12 cost and revenue items that the Commission has previously authorized and are

13 currently in effect?

14 A. Aside from those limited exceptions discussed below, the Company proposes

15 to continue all deferred accounting and reconciliation mechanisms (some with

16 modifications) that are in effect under the Company’s current electric and gas

17 rate plans. The reconciliation mechanisms that the Company proposes to

18 continue include, but are not limited to, the existing supply rider provisions

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 such as the Market Supply Charge, ECA, Gas Supply Charge and MGA,

2 reserve accounting for major storm costs, reconciliation mechanisms for

3 pensions and OPEBs, the Pomona DER program, REV Demo Project, Monsey

4 NWA, Platform Service Revenue, SIR costs, low-income program costs,

5 property taxes and costs related to legislative, regulatory and related actions.

6 The Company also proposes to continue the reconciliation mechanisms for net

7 plant (including the adjustment mechanism for unanticipated Non-Wires

8 Alternatives), non-officer management variable pay, and tree trimming costs,

9 which are downward-only reconciliation mechanisms in favor of customers.

10 For all mechanisms based on established targets, the target levels in effect

11 under the current electric and gas rate plans should be updated to reflect those

12 established in these proceedings.

13 Q. Why is the Company proposing, with very limited exceptions and

14 modifications, to continue the existing reconciliation mechanisms?

15 A. Those related to costs that are significant, highly variable even in the near term

16 and not subject to reasonable estimation, protect the interests of customers and

17 investors and are appropriate. For example, the Company is subject to the

18 Commission’s Policy Statement on Pensions and Other Post-retirement

19 Benefits and is required to true-up its annual pension and OPEB costs to the

20 levels provided in base rates “to protect companies and ratepayers from

21 potential volatility.” The supply rider mechanisms similarly protect the

22 Company and customers from volatility. Other reconciliation mechanisms,

23 such as those related to the SBC and low-income program benefits, are in

62

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 furtherance of public policy objectives. Moreover, continuing these true-ups in

2 connection with a one-year rate determination could enable the Company to

3 delay the need for rate relief at the expiration of the Rate Year.

4 1. Major Storm Reserve (Electric)

5 Q. Are you proposing to update the target, or base rate allowance level, for the

6 major storm cost reserve applicable to electric operations?

7 A. Yes. The RY1 amount shown in Exhibit AP-E3, Schedule 6, Line 34, reflects

8 the target in the current rate plan, adjusted for the effect of general inflation

9 over the linking period.

10 Q. Does the Company anticipate changes to its base rate allowance level on

11 Update?

12 A. Yes. Consistent with the August 19, 2020 Notice of Apparent Violations

13 Related to Tropical Storm Isaias to the Company in Case 20-E-0586, and as

14 discussed in the direct testimony of the EIOP, the Company is currently

15 working with Con Edison to add crewing capacity and develop other such

16 storm plans required by the Notice. The Company will quantify the annual

17 cost impact of these efforts and include such costs in its Update filing.

18 Q. Is the Company proposing to change its accounting for storm pre-mobilization

19 costs?

20 A. Yes. Under the Company’s current electric rate plan, the Company may

21 charge to the major storm reserve costs above $100,000 per storm incurred to

22 obtain the assistance of contractors and/or utility companies providing mutual

23 assistance in reasonable anticipation that a storm will affect its electric

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 operations to the degree meeting the criteria of a “major storm,” but which

2 ultimately does not do so. For pre-staging and mobilization costs in excess of

3 $1.75 million, per event, the Company is allowed to charge 85% of such costs

4 to the major storm reserve, and the Company expenses 15% of such costs in

5 the year incurred.

6 The Company is proposing to eliminate the $1.75 million cap per event. This

7 reflects the State’s increased emphasis that the Company should mobilize early

8 if a major storm is anticipated to impact the Company’s service territory.

9 Because it will be competing for resources with other utilities in the region

10 who are also under increased public and political scrutiny, the Company may

11 need to bring in more expensive contractors and/or mutual aid crews from

12 farther away in order to mobilize appropriately. These costs are outside the

13 Company’s control and should be fully recoverable.

14 2. Energy Efficiency (Electric and Gas)

15 Q. Does the Company propose a change in the method of deferring costs

16 associated with its energy efficiency program?

17 A. Yes. The ratemaking framework established in the Company’s current electric

18 and gas rate plans provide for the recovery of forecasted EE costs through

19 O&M expense with a downward reconciliation over the terms of the rate plans.

20 As noted above, in this case, the Company is proposing recovery of EE costs

21 over a ten-year period using the Company’s pre-tax rate of return. With the

22 change in recovery methodology, the Company proposes a change in the

23 reconciliation mechanism whereby the Company would apply a downward

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 reconciliation to the Company’s total revenue requirement impact of electric

2 and gas EE spending over a three-year period (i.e., 2022-2024). Further, the

3 Company proposes to evaluate the downward reconciliation on a portfolio

4 inclusive of both electric and gas so as to facilitate flexibility between the

5 electric and gas EE programs. The reconciliation for this combined program

6 would be implemented similar to the reconciliation of AMI costs, where costs

7 would be fully reconciled to the amounts included in electric and gas revenue

8 requirements, but subject to the aggregate revenue requirement established by

9 the Commission for the combined portfolio.

10 3. Property Taxes (Electric and Gas)

11 Q. You mentioned earlier that the Company proposes to continue a property tax

12 reconciliation mechanism. Is the Company proposing to continue the

13 reconciliation mechanism as it is currently designed?

14 A. No. The current rate plans do not provide for a full and symmetrical property

15 tax reconciliation mechanism. Full reconciliations were in place in Cases 14-

16 E-0493 and 14-G-0494 and the Company proposes that those mechanisms be

17 re-established.

18 Q. Why does the Company believe that a full and symmetrical property tax

19 reconciliation mechanism is appropriate?

20 A. In her direct testimony, Company witness Merritt explains at length why

21 property taxes are not subject to reasonable estimation. Absent a full and

22 symmetrical reconciliation mechanism, these circumstances result in the

23 potential for a significant windfall for either customers or the Company at the

65

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 expense of the other. There should be no such opportunity. The Company

2 further notes, as discussed below, that the Commission is particularly inclined

3 towards allowing full property tax reconciliations when economic conditions

4 are volatile. The precariousness of the current economic situation is discussed

5 at length in the direct testimonies of the Company’s Cost of Capital and Return

6 on Equity witnesses.

7 Moreover, regardless of the process by which the current rate cases are

8 concluded (litigated or settled), a large portion of the Company’s property

9 taxes for the Rate Year will most likely be unknown in time to be reflected in

10 the final revenue requirements.

11 Q. Should there be a concern that a full and symmetrical property tax mechanism

12 will lessen the Company’s incentive to take action to minimize its property tax

13 expense?

14 A. No, not even in the context of a single-year rate plan. As Company witness

15 Merritt explains, the Company has historically sought to minimize its taxes and

16 that effort continues on an ongoing basis – it is a normal course of business for

17 the Company. There should be no concern that full reconciliation would

18 diminish the Company’s incentive to minimize its property taxes and there is

19 no reason to not provide for it because a rate case does not result in a multi-

20 year rate plan.

21 The Commission has addressed these concerns in past cases. For example, in

22 Case 08-E-0539, the Commission set rates for Con Edison outside the context

23 of a multi-year rate plan and provided for a full and symmetrical reconciliation

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 of property taxes. Addressing the disincentive issue on pages 106-107 of its

2 April 24, 2009 order in that case, the Commission said:

3 4 We share DPS Staff’s concern about removing an incentive for the 5 Company to minimize its property tax expenses. However, the record 6 in these cases shows that the Company has aggressively sought to 7 minimize its property tax assessments. Indeed, there is no assertion to 8 the contrary. Moreover, our long standing policy is that a utility will 9 be allowed to retain a share of property tax refunds, frequently in the 10 10-15% range, to the extent it can be established conclusively that the 11 utility’s efforts contributed to that outcome. Taking these two factors 12 into account, we conclude that the Company already has and will 13 retain an incentive to minimize its property tax assessments.

14 15 Given the magnitude of the Company’s property taxes, the relative 16 uncertainty about the impacts of the economic downturn that we 17 consider unique, and that the Company will continue to have an 18 incentive to minimize its property tax assessments, we are adopting the 19 judges’ recommendation for full or bilateral reconciliation of property 20 taxes. (footnotes omitted)

21 22 The Commission’s explanation of why a full reconciliation mechanism was

23 appropriate in Case 08-E-0539 remains applicable here in the context of a

24 single rate year filing. The Company has continued to aggressively pursue

25 minimization of its property taxes. In addition, the economic circumstances

26 the Commission referred to as “unique” in that order are magnified today as

27 taxing entities face great fiscal stress and uncertainty due to the ongoing

28 COVID-19 pandemic and current economic conditions, which prevents the

29 ability to forecast future tax responsibility with any degree of certainty.

30 Q. What do you propose regarding the sharing between the Company and its

31 customers of any property tax savings the Company might obtain?

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. The Commission should continue the 86% customer / 14% Company sharing

2 mechanism for property tax refunds, including credits against tax payments or

3 similar forms of tax reductions (intended to return or offset past overcharges or

4 payments determined to have been in excess of the property tax liability

5 appropriate for O&R), net of costs incurred to achieve them, that exists under

6 the current electric and gas rate plans with one modification. In many

7 instances, the Company is able to negotiate future assessment reductions in a

8 property tax settlement, which is more efficient than pursuing lengthy litigation

9 in an attempt to obtain a concrete refund award. The sharing mechanism

10 should be modified to include savings from such settlements. The Company’s

11 approach to calculating savings and its underlying rationale for proposing to

12 share in such savings is explained by Company witness Merritt.

13 This modification to the tax sharing mechanism is consistent with established

14 Commission practice to incent utilities to pursue property tax reductions as the

15 Commission noted in the 2012 Rate Order (p. 30). Moreover, as explained by

16 Company witness Merritt, the Company’s recent property tax settlements have

17 produced material future benefits for customers.

18 B. Terminated Deferrals or Reconciliation Mechanisms

19 Q. Which deferral or reconciliation mechanisms that are currently in effect does

20 the Company propose be terminated?

21 A. The Company proposes that four deferral or reconciliation mechanisms that are 22 currently in effect be terminated.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 1. AMI Capital Expenditures (Electric and Gas)

2 Q. Is the Company proposing to continue its reconciliation for AMI Capital

3 Expenditures in this rate filing?

4 A. No. The Company is proposing to eliminate the reconciliation. The Company

5 completed deployment of AMI in December 2020 and plans to include a final

6 reconciliation of costs in its Preliminary Update.

7 2. Credit Card Payment Fees (Electric and Gas)

8 Q. Is the Company proposing to continue its current reconciliation mechanism

9 related to credit card fees?

10 A. No. In 2018, the Company proposed to include in base rates the estimated fees

11 associated with customers making credit card and debit card payments to

12 eliminate the per-transaction cost to our customers. At the time, the Company

13 was unable to reasonably estimate the number of customers who would switch

14 from their current method of payment and use a credit or debit card once the

15 fee was eliminated. As the program is no longer in its start-up years, the

16 Company has included in the revenue requirements the forecasted level of

17 credit and debit card fees to be incurred.

18 3. 2017 Tax Act and Bonus Depreciation.

19 Q. Please describe the Company’s reconciliation mechanism related to the 2017 20 Tax Act and Bonus Depreciation.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. The Company’s current rate plans included a reconciliation if it is permitted to 2 claim any bonus depreciation during 2018 and/or the term of the Rate Plans, as 3 a result of the 2017 Tax Act or any other changes in legislation.

4 Q. Is the Company proposing to continue such a mechanism in this filing? 5 A. No. The Company is proposing to eliminate the reconciliation. New and

6 material changes in bonus depreciation are traditionally deferred under the

7 Company’s rate plan provision on “new laws and regulations.” This specific

8 reconciliation was added in the current rate plans because parties had settled on

9 how to implement the 2017 Tax Act and wanted to be clear that bonus

10 depreciation, even if associated with the 2017 Tax Act, would still be

11 reconciled.

12 4. Gas Pipeline Safety Act of 2011 (Gas)

13 Q. Is the Company proposing to continue its current reconciliation mechanism for

14 unanticipated compliance costs stemming from the Gas Pipeline Safety Act of

15 2011 in this filing?

16 A. No. The Company is proposing to eliminate the reconciliation. The Pipeline

17 and Hazardous Material Safety Administration issued a final rule in October

18 2019 that addressed the most burdensome aspects of the Pipeline Safety Act of

19 2011. O&R’s forecasts in this case include costs to comply with the final rule.

20 C. New Deferral or Reconciliation Mechanisms

21 Q. Does the Company propose to establish any new deferral or reconciliation

22 mechanisms?

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A. Yes. The Company proposes three new deferrals or reconciliations, each of

2 which is detailed below.

3 1. Uncollectible Expense (Electric and Gas)

4 Q. What is the Company’s proposed accounting treatment for uncollectible

5 expenses in this case?

6 A. The Company proposes a full and symmetrical reconciliation of uncollectible

7 expenses.

8 Q. Why does the Company believe that a full and symmetrical reconciliation is

9 warranted?

10 A. The Company is unable to make an acceptable estimate of uncollectible

11 expenses given the continued uncertainty around the financial health of the

12 Company’s customers. The Company continues to see significant growth in its

13 aged accounts receivables balances since the onset of the COVID-19 pandemic

14 when New York issued its ‘on PAUSE’ and other executive orders and

15 economic conditions deteriorated. Whether those receivables will ultimately

16 be collected is dependent on a variety of factors outside of the Company’s

17 control. For instance, the Parker Mosley Act prohibits state utilities, including

18 the Company, from disconnecting residential customers during the COVID-19

19 state of emergency. Such prohibition will apply for an additional 180 days

20 after the state of emergency ends for residential customers who have

21 experienced a change in financial circumstances as a result of the pandemic.

22 Although the law is currently set to expire in March 2021, we anticipate the

23 law will be extended. The ultimate impact of this law, as well as the nature of

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 any other state or federal financial assistance packages and the overall strength

2 of the economic recovery, are all variables outside of the Company’s control

3 that will dictate the Company’s ability to collect on its receivables.

4 Q. How does the Company propose to perform the reconciliation calculation?

5 A. The Company proposes a methodology consistent with how it established the

6 uncollectible deferral balance in this case. The Company first establishes the

7 total uncollectible expenses in rates, which consists of the uncollectible

8 expense within the revenue requirement plus collections for uncollectibles

9 associated with commodity surcharges. That total is compared to the sum of

10 actual uncollectible write-offs plus or minus the change in the uncollectible

11 reserve to arrive at the amount to be deferred.

12 13 2. Unidentified Non-Pipeline Solutions (Gas)

14 Q. What is the Company’s proposed accounting treatment for non-pipeline

15 solutions (“NPSs”) that have not been included in base rates, but are later

16 identified and implementation begins in the Rate Year?

17 A. As discussed in the Direct Testimony of the Company’s GIOP, the Company

18 continues to explore innovative gas approaches. In the event a new NPS is

19 implemented in the Rate Year and results in the Company displacing a capital

20 project reflected in the Average Plant in Service Balances, the balance will be

21 reduced to exclude the forecasted net plant associated with the displaced

22 project. The carrying charge on the reduction of the Average Plant in Service

23 Balances that would otherwise be deferred for customer benefit will instead be

24 applied as a credit against the recovery of the NPS in the MGA. In the event 72

ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 the carrying charge on the net plant of any displaced project is higher than the

2 NPS recovery, the difference will be deferred for the benefit of customers.

3 The costs incurred by the Company for implementation of NPSs during the Rate

4 Year, including the overall pre-tax rate of return on such costs, will be

5 recovered over ten years. Recovery of such costs will be through the MGA.

6 Unrecovered NPS costs, including the return, will be incorporated into the

7 Company’s base rates when gas base delivery rates are reset.

8 3. Anticipated Laws and Regulations (Electric and Gas)

9 Q. Does the Company propose deferral of costs associated with certain anticipated

10 laws and regulations?

11 A. Yes, as detailed below, the Company proposes recovery of costs associated

12 with anticipated regulations pursuant to the Climate Leadership and

13 Community Protection Act (“CLCPA”).

14 Q. Aren’t these circumstances covered by the “new laws and regulations”

15 provision you propose continue?

16 A. Yes. However, application of the new laws provision would subject these

17 expenditures to a dollar threshold. While a dollar threshold has been applied

18 for unanticipated costs resulting from a change in law or regulations not

19 anticipated at the time rates are set, a threshold should not apply when the

20 potential circumstance is known at the time rates are set, although the details of

21 implementation are not.

22 Q. Is there precedent for the Commission permitting deferral of incremental costs

23 incurred as a result of anticipated laws?

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 A, Yes. In various O&R and Con Edison rate cases (e.g., Cases 13-E-0030, et al.,

2 16-E-0060, et al., 18-E-0067, et al., and 19-E-0065, et al.), the Commission

3 has adopted provisions for full deferral of costs associated with specific

4 anticipated changes in law.

5 Q. Why is the Company proposing recovery for additional costs that are expected

6 to be incurred to implement new regulations developed pursuant to the

7 CLCPA?

8 A. As discussed in the EIOP testimony, regulations implementing CLCPA are

9 still under consideration. Although the Company anticipates compliance costs

10 will be significant, the Company does not know the timing of when it will need

11 to be in compliance with the regulations or the full scope of work that the

12 Company will need to undertake to comply with the regulations. As such, the

13 Company has not included any projected compliance costs for the anticipated

14 regulations in this filing (although it has included projected costs for multi-

15 value transmission and distribution projects that will further CLCPA goals).

16 Given that the new regulations are anticipated and compliance costs are

17 expected to be substantial, to the extent that the Commission does not

18 otherwise specifically provide for recovery of compliance costs associated with

19 CLCPA, the Company proposes to defer all O&M expenses in excess of the

20 Company’s current Rate Year projection for costs related to compliance with

21 the CLCPA. Similarly, the Company proposes that if capital expenditures

22 resulting from compliance with CLCPA cause the Company to exceed its

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 aggregate net plant target, the Company be permitted to defer carrying charges

2 on the amount of net plant that exceeds the aggregate net plant target.

3 XI. MULTI-YEAR RATE PLAN

4 Q. Has the Company included forecasted financial information for periods beyond

5 the Rate Year in its filing?

6 A. Yes. The Company has included, for illustrative purposes only, financial

7 information for two annual periods beyond the Rate Year. Details of the

8 revenue requirement for the Rate Year and the two following twelve-month

9 periods, ending December 31, 2023, and December 31, 2024, are presented in

10 the AP-3 exhibits.

11 Q. What is the basis of the financial information presented in the AP-3 Exhibits?

12 A. Various Company witnesses have presented forecasts extending beyond the

13 Rate Year. There are also proposals by various witnesses, including the

14 Accounting Panel, which would affect periods beyond the Rate Year such as

15 amortization periods for deferred costs and credits.

16 Q. Is the Company proposing a multi-year rate plan for adoption by the

17 Commission?

18 A. No. This filing seeks Commission approval of what is commonly referred to

19 as one-year rates. The Company is, however, interested in pursuing, through

20 settlement discussions with Staff and the parties, a multi-year rate plan for each

21 gas and electric. The financial information presented, along with the

22 Company’s thoughts on some possible features of multi-year plans, could form

23 a basis for discussions to address the myriad of details and complexities that

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 must be addressed to establish multi-year rate plans that fairly considers the

2 interests of all stakeholders.

3 The Company believes that there is considerable merit to exploring a

4 mechanism that would enable the rate plans to be extended beyond the initial

5 multi-year terms if certain agreed-upon circumstances exist. This would go

6 beyond the “continuation provision” commonly included in multi-year rate

7 plans. It could reach to automatic modifications of the rate plans that become

8 effective at the end of the stated multi-year term. Examples of the type of

9 mechanism would be a tracking mechanism for increasing plant investment or

10 the effects of inflation. The rate plans might also provide for changes in the

11 level of recovery of net regulatory assets.

12 XII. CAPITAL STRUCTURE AND COST OF CAPITAL

13 A. Fund Requirements and Sources

14 Q. Are the Company’s projected sources and applications of funds presented in

15 the Company’s filing?

16 A. Yes. Schedule 12 of the AP-3 Exhibits, presents a statement of sources and

17 application of funds for the Rate Year for electric and gas operations. Sources

18 of funds are separated into internal and external sources. Internal sources

19 would generally include the change in retained earnings during the Rate Year,

20 depreciation, amortizations and deferred taxes. External sources would

21 generally include long-term debt and common stock equity. The primary use

22 of funds would generally be for construction and the retirement of debt. These

23 exhibits identify those projected for the Rate Year.

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ORANGE AND ROCKLAND UTILITIES, INC. DIRECT TESTIMONY OF ACCOUNTING PANEL

1 B. Financial Ratios

2 Q. Please describe Schedule 13 of the AP-3 Exhibits.

3 A. Schedule 13 of those exhibits presents the interest coverage ratios for Orange

4 and Rockland for the Historic Year and the last three available calendar years.

5 C. Rate of Return

6 Q. Is the Accounting Panel sponsoring an exhibit regarding the Company’s

7 required rate of return?

8 A. Yes, along with Company witness Saegusa, we are sponsoring Exhibit AP-5,

9 which provides detail on the Company’s proposed rate of return. The inputs to

10 these exhibits are discussed in detail in witness Saegusa’s testimony.

11 Q. Will the rate of return be updated in this proceeding?

12 A. The Company may update the rate of return as part of the Company’s rebuttal

13 and update testimony if financial conditions at that time warrant such an

14 update.

15 Q. Does that conclude your pre-filed direct testimony?

16 A. Yes, it does.

77

Exhibit AP-E1

ORANGE AND ROCKLAND UTILITIES, INC.

INDEX OF SCHEDULES

Historical Financial Data - Electric

SCHEDULE TITLE OF SCHEDULE

1 Balance Sheet

2 Statement of Retained Earnings

3 Net Book Value of Electric Plant in Service

4 Net Book Value of Common Plant in Service

5 Statements Showing Electric Plant in Service and Average Cost per Customer

6 Statement of Income

7 Statement of Electric Operation and Maintenance Expenses

8 Electric Operation and Maintenance Expenses, Taxes and Depreciation per Kwh of Electricity Sold

9 Operating Taxes - Account 408

10 Electric Operating Revenues per Kwh of Electricity Sold Exhibit AP-E1 Schedule 1 Page 1 of 2 ORANGE AND ROCKLAND UTILITIES, INC. BALANCE SHEET

ASSETS AND OTHER DEBITS Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020

Utility Plant Electric Plant in Service 1,263,402,429.97 1,320,435,160.36 1,381,001,980.74 1,455,719,184.13 1,499,534,268.19 Gas Plant in Service 710,451,213.63 757,516,036.02 804,478,543.19 864,103,770.43 891,600,036.61 Common Utility Plant in Service 228,847,435.80 255,469,134.23 275,266,505.13 297,147,953.08 299,996,038.70 Electric Plant Held for Future Use 9,003,057.92 9,003,057.92 9,003,057.92 8,102,078.20 8,102,078.20 Gas Plant Held for Future Use - - - - - Construction Work in Progress 64,358,946.75 87,629,861.07 111,458,196.67 94,805,173.09 114,854,019.86 Total Utility Plant 2,276,063,084 2,430,053,250 2,581,208,284 2,719,878,159 2,814,086,442

Accumulated Provision for Depreciation: Electric 409,242,643 436,660,447 456,291,720 472,634,169 490,828,675.00 Electric Plant Held for Future Use 99,229 102,014 104,799 107,009 $ 108,667.00 Gas 223,042,765 237,235,523 253,624,953 270,419,184 $ 284,147,184.00 Gas Plant Held for Future Use 0 0 0 0 0 Common 100,196,015 109,734,560 121,273,534 134,562,138 145,391,296.00 Total Accum. Provision for Depreciation 732,568,963 783,732,534 831,295,006 877,722,500 920,475,822

Net Utility Plant 1,543,494,121 1,646,320,715 1,749,913,278 1,842,155,659 1,893,610,620

Other Property and Investments Nonutility Property 30,725 30,725 30,725 30,725 30,725 Accumulated Provision for Depreciation (46,218) (34,534) (34,534) (34,534) (34,534) Investments in Subsidiary Companies 280,410,090 293,856,590 308,740,224 329,888,534 352,596,592 Other Special Funds - - - - - Total Other Property and Investments 280,394,597 293,852,781 308,736,416 329,884,726 352,592,783

Current and Accrued Assets Cash (7,432,419) (6,002,367) (4,621,054) (4,249,403) (14,596,032) Other Special Deposits Working Funds 73,451 31,494 35,249 699,845 906,428 Temporary Cash Investments 8,275,000 1,575,000 28,250,000 3,925,000 - Customer Accounts Receivable 46,159,957 56,485,300 67,735,026 57,235,220 69,650,355 Other Accounts Receivable 5,083,183 6,362,368 7,110,250 9,529,702 14,711,960 Accum. Prov. for Uncollectible Accounts (4,576,474) (4,421,740) (5,245,157) (5,392,143) (8,816,839)

Accounts Receivable from Assoc. Cos. 10,768,250 12,467,714 19,311,402 11,879,068 11,347,128 Materials and Supplies 14,985,986 16,570,058 17,247,858 18,862,151 20,142,146 Stores Expense Undistributed 21,926 129,409

Gas Stored Underground 10,253,453 11,577,021 12,035,444 10,853,716 9,256,980

Liquefied Natural Gas Stored and Held for Processing 283,270 260,062 245,245

Prepayments 25,791,356 25,749,048 26,275,898 28,022,943 40,072,688

Accrued Utility Revenue 38,968,654 36,953,394 30,250,648 34,699,917 18,030,742 Misc. Current and Accrued Assets 28,058,099 37,699,805 24,656,516 28,732,478 35,857,733

Derivative Instrument Assets - Hedges 333,401 3,837,178 2,552,924 714,373 2,850,919 Total Current and Accrued Assets 176,741,899 198,884,272 225,878,275 195,794,854 199,788,861

Deferred Debits Unamortized Debt Expense 4,981,153 4,693,558 5,247,317 5,911,714 6,193,547 Prelim. Survey and Investigation Charges 1,775 1,774.80 361,645,315 367,507,397 365,055,827 Clearing Accounts 5,238 Miscellaneous Deferred Debits * 520,284,572 409,844,344 116,941 367,676 406,460 Investment in Research and Development - - 21,363,829 23,514,832 17,403,064 Unamortized Loss on Reacquired Debt 2,134,191 1,958,775 1,783,359 1,607,943 1,476,381 Accum. Deferred Federal Income Tax 120,525,222 262,889,374 275,509,457 288,405,679 281,745,585 Total Deferred Debits 647,926,912 679,393,063 665,666,218 687,315,241 672,280,863

Total Assets and Other Debits $ 2,648,557,530 $ 2,818,450,832 $ 2,950,194,186 $ 3,055,150,479 $ 3,118,273,127 Exhibit AP-E1 Schedule 1 Page 2 of 2 ORANGE AND ROCKLAND UTILITIES, INC. BALANCE SHEET

LIABILITIES AND OTHER CREDITS Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020

Proprietary Capital Common Stock Issued $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 Preferred Stock Issued 194,507,223 $ 194,507,223 $ 194,507,223 $ 194,507,223 $ 194,507,223 Accumulated Other Comprehensive Income (20,846,067) (20,074,149) (11,611,631) (15,269,917) (7,934,283) Capital Stock Expense (166,651) (166,651) (166,651) (166,651) (166,651) Other Paid in Capital 129,547,630 129,564,651 154,564,651 184,564,651 194,564,651 Unappropriated Retained Earnings 37,133,904 43,513,391 41,830,307 54,084,103 61,162,480 Unappropriated Undistributed Subsidiary Earnings 305,019,088 318,465,587 333,349,222 344,497,532 357,205,589 Total Proprietary Capital 645,200,127 665,815,052 712,478,121 762,221,941 799,344,009

Long term Debt Bonds Other Long Term Debt 660,000,000 660,000,000 760,000,000 825,000,000 900,000,000 Unamort. Prem. on Long Term Debt Unamortized Disc. on Long Term Debt (877,015) (836,587) (799,114) (767,621) (744,002) Total Long Term Debt 659,122,985 659,163,413 759,200,886 824,232,379 899,255,998

Current and Accrued Liabilities Long Term Debt Due Within One Year - - - - - Notes Payable 69,971,422 95,973,323 53,456,168 17,494,479 18,000,000 Notes Payable to Associated Companies 20,350,000 20,350,000 20,350,000 20,350,000 20,350,000 Accounts Payable 40,827,552 58,861,134 62,523,380 60,731,348 60,003,007 Accounts Payable to Associated Companies 30,205,415 38,881,314 34,224,618 34,601,355 22,705,205 Customer Deposits 9,211,281 9,014,026 9,296,463 9,339,541 11,444,358 Taxes Accrued 3,103,965 3,110,226 1,761,672 1,665,421 6,092,359 Interest Accrued 8,079,649 8,189,394 9,066,658 9,396,125 9,845,023 Tax Collections Payable 96,343 50,190 120,846 517,558 488,477 Derivative Instrument Liabilities - Hedges 9,995,402 9,505,045 11,496,554 18,636,370 21,452,855 Obligations Under Capital Leases - Current - - 923,926 952,920 Misc. Current and Accrued Liabilities 169,278,452 185,942,559 181,495,917 182,570,397 172,791,373 Total Current and Accrued Liabilities 361,119,481 429,877,212 383,792,277 356,226,521 344,125,576

Deferred Credits Customer Advances for Construction 2,580,963 20,312,945 16,347,581 10,786,156 12,604,820 Other Deferred Credits 2,889,036 3,614,307 13,419,597 12,620,205 13,314,139 Other Regulatory Liabilities 111,245,951 229,299,170 252,815,232 261,408,806 282,335,818 Accum. Deferred Investment Tax Credits 845,570 711,471 595,559 493,036 427,735 Accumulated Deferred Income Taxes: Other Propery 393,493,373 278,441,983 301,266,201 300,481,719 307,224,662 Other 161,998,342 219,370,126 222,467,716 238,226,905 240,443,672 Total Deferred Credits 673,053,234 751,750,002 806,911,886 824,016,826 856,350,847

Operating Reserves Obligations Under Capital Leases - Noncurrent - - 2,235,067 1,522,658 Injuries and Damages Reserve 5,999,700 5,392,737 5,540,846 5,690,891 6,218,887 Pensions and Benefits 303,803,367 304,466,088 277,568,877 276,903,242 209,624,333 Rate Refunds 250,636 242,636 242,969 242,969 Miscellaneous Operating Reserves 258,636 1,735,693 4,458,658 3,380,642 1,587,851 Total Operating Reserves 310,061,702 311,845,153 287,811,017 288,452,812 219,196,697

Total Liabilities & Other Credits $ 2,648,557,530 $ 2,818,450,832 $ 2,950,194,186 $ 3,055,150,479 $ 3,118,273,127 Exhibit AP-E1 Schedule 2 ORANGE AND ROCKLAND UTILITIES, INC. Statement of Retained Earnings

RETAINED EARNINGS (216) Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020

Unappropriated Retained Earnings - Beginning of Period $ 33,227,714.92 $ 37,133,904.31 $ 43,513,390.31 $ 41,830,306.31 $ 54,084,102.31

Stock Repurchase Program Redeem Series I Stock Expense Redemption of Preferred and Preference Sale of Stock (Merger) Balance Transferred from Net Income (A) 46,406,189 50,379,486.00 44,316,917.00 59,253,796.00 43,828,377 Dividends Declared: Preferred Stock - - - - - Preference Stock - - - - - Common Stock (42,500,000) (44,000,000.00) (46,000,001.00) (47,000,000.00) (36,750,000)

Dividend Received from Subsidiary -

Net Change to Unappropriated Retained Earnings 3,906,189 6,379,486 (1,683,084) 12,253,796 7,078,377

Unappropriated Retained Earnings - End of Period $ 37,133,904.31 $ 43,513,390.31 $ 41,830,306.31 $ 54,084,102.31 $ 61,162,479.31

UNAPPROPRIATED UNDISTRIBUTED SUBSIDIARY EARNINGS (216.1)

Unappropriated Undistributed Subsidiary Earnings - Beginning of Period $ 292,208,261.48 $ 305,019,089.91 $ 318,465,588.91 $ 333,349,222.91 $ 344,497,532.91

Add: RECO Dividend - - - - -

Equity in Earnings of Subsidiary Companies (A) 12,810,828 13,446,499 14,883,634 11,148,310 12,708,057 Other Changes (Merger) -

Unappropriated Undistributed Subsidiary Earnings - End of Period $ 305,019,089.91 $ 318,465,588.91 $ 333,349,222.91 $ 344,497,532.91 $ 357,205,590.00

(A) Reconciliation of Net Income to Balance Transferred from Net Income

Net Income 59,217,017.82 63,825,985.00 59,200,551.00 70,402,106.00 56,536,434.00 Less: Equity in Subsidiary Earnings 12,810,828.43 13,446,499.00 14,883,634.00 11,148,310.00 12,708,057.09

Balance Transferred from Net Income $ 46,406,189.39 $ 50,379,486.00 $ 44,316,917.00 $ 59,253,796.00 $ 43,828,376.91 ORANGE AND ROCKLAND UTILITIES, INC. Exhibit AP-E1 Net Book Value of Electric Plant in Service Schedule 3 December 31, 2016 Page 1 of 5

Accumulated Prov. Account Electric Plant in For Deprec. & No. Service Amortization Net Book Value Intangible Plant 301 Organization 302 Franchises and Consents $ 20,657 $ 20,657 303 Miscellaneous Intangible Software 23,472,479 15,038,589 8,433,890 Total Intangible Plant 23,493,135 15,038,589 8,454,546

Transmission Plant 350 Land and Land Rights 9,070,238 5,410,735 3,659,503 352 Structures and improvements 10,192,118 2,790,546 7,401,572 353 Station Equipment 94,075,244 31,084,405 62,990,839 354 Towers and Fixtures 9,325,813 3,467,258 5,858,555 355 Poles and Fixtures 73,464,532 26,871,457 46,593,075 356 Overhead Conductors and Devices 56,330,764 10,681,023 45,649,741 357 Underground Conduit 5,383,987 1,481,405 3,902,582 358 Underground Conductors and Devices 15,738,396 3,780,744 11,957,652 359 Roads and Trails 1,194,633 534,021 660,612 Total Transmission Plant 274,775,727 86,101,594 188,674,132

Distribution Plant 360 Land and Land Rights 6,830,294 621,478 6,208,816 361 Structures and Improvements 14,331,046 2,903,441 11,427,605 362 Station Equipment 178,280,469 41,319,701 136,960,768 364 Poles, Towers and Fixtures 158,722,459 56,947,026 101,775,433 365 Overhead Conductors and Devices 177,765,292 50,309,484 127,455,808 366 Underground Conduit 26,080,340 7,328,478 18,751,862 367 Underground Conductors and Devices 133,799,115 46,681,525 87,117,590 368 Line Transformers 122,197,687 35,389,448 86,808,239 369 Services 37,736,045 20,773,858 16,962,187 370 Meters 33,766,452 6,008,496 27,757,956 371 Installations on Customer Premises 518,730 368,782 149,948 372 Leased Property on Customer Premises - - 373 Street Lighting and Signal Systems 15,978,098 7,958,587 8,019,511 Total Distribution Plant 906,006,027 276,610,304 629,395,723

General Plant 389 Land and Land Rights 15,416 15,416 390 Structures and Improvements 7,468,232 1,718,418 5,749,814 391 Office Furniture and Equipment 11,713,550 8,381,632 3,331,918 392 Transportation Equipment 26,577,421 17,766,313 8,811,108 393 Stores Equipment 9,012 1,055 7,957 394 Tools, Shop and Garage Equipment 3,355,578 1,208,008 2,147,570 395 Laboratory Equipment 4,420,854 580,507 3,840,347 396 Power Operated Equipment 934,599 1,338,114 (403,515) 397 Communication Equipment 3,790,833 259,252 3,531,581 398 Miscellaneous Equipment 842,047 238,857 603,190 Total General Plant 59,127,541 31,492,156 27,635,385

Total Electric Plant in Service 1,263,402,430 409,242,643 854,159,787

Held for Future Use 9,003,058 99,228 8,903,830 Construction Work in Progress 41,781,981 41,781,981 Retirement Work in Progress - Unallocated Reserve (07-E-0949) - Net Utility Plant $ 1,314,187,469 $ 409,341,871 $ 904,845,598 ORANGE AND ROCKLAND UTILITIES, INC. Exhibit AP-E1 Net Book Value of Electric Plant in Service Schedule 3 December 31, 2017 Page 2 of 5

Accumulated Prov. Account Electric Plant in For Deprec. & No. Service Amortization Net Book Value Intangible Plant 301 Organization 302 Franchises and Consents $ 20,657 $ 20,657 303 Miscellaneous Intangible Software 31,371,149 17,951,419 13,419,730 Total Intangible Plant 31,391,806 17,951,419 13,440,387

Transmission Plant 350 Land and Land Rights 9,070,238 5,582,915 3,487,323 352 Structures and improvements 10,752,240 2,973,427 7,778,813 353 Station Equipment 98,380,164 33,103,341 65,276,823 354 Towers and Fixtures 9,329,852 3,392,839 5,937,013 355 Poles and Fixtures 73,337,085 28,676,267 44,660,818 356 Overhead Conductors and Devices 57,404,630 11,519,208 45,885,422 357 Underground Conduit 5,384,779 1,635,387 3,749,392 358 Underground Conductors and Devices 15,767,527 4,258,280 11,509,247 359 Roads and Trails 1,194,633 551,104 643,529 Total Transmission Plant 280,621,148 91,692,769 188,928,379

Distribution Plant 360 Land and Land Rights 7,095,408 693,180 6,402,228 361 Structures and Improvements 14,829,140 3,193,743 11,635,397 362 Station Equipment 185,370,879 44,999,941 140,370,938 364 Poles, Towers and Fixtures 167,188,808 59,370,169 107,818,639 365 Overhead Conductors and Devices 183,278,311 53,200,653 130,077,658 366 Underground Conduit 26,103,219 7,773,225 18,329,994 367 Underground Conductors and Devices 138,254,483 49,294,429 88,960,054 368 Line Transformers 125,878,855 37,295,293 88,583,562 369 Services 39,356,764 21,656,724 17,700,040 370 Meters 44,046,758 7,182,408 36,864,350 371 Installations on Customer Premises 518,730 373,349 145,381 372 Leased Property on Customer Premises - 373 Street Lighting and Signal Systems 14,240,577 7,835,369 6,405,208 Total Distribution Plant 946,161,932 292,868,483 653,293,449

General Plant 389 Land and Land Rights 15,416 15,416 390 Structures and Improvements 7,526,034 1,932,504 5,593,530 391 Office Furniture and Equipment 12,871,529 8,517,652 4,353,877 392 Transportation Equipment 27,868,278 19,337,218 8,531,060 393 Stores Equipment 9,012 1,818 7,194 394 Tools, Shop and Garage Equipment 3,749,830 1,368,720 2,381,110 395 Laboratory Equipment 4,524,481 852,135 3,672,346 396 Power Operated Equipment 934,599 1,382,227 (447,628) 397 Communication Equipment 3,896,127 577,582 3,318,545 398 Miscellaneous Equipment 864,968 282,365 582,603 Total General Plant 62,260,274 34,252,221 28,008,054

Total Electric Plant in Service 1,320,435,160 436,764,891 883,670,269

Held for Future Use 9,003,058 9,003,058 Construction Work in Progress 63,392,524 63,392,524 Retirement Work in Progress - Unallocated Reserve (07-E-0949) - Net Utility Plant $ 1,392,830,742 $ 436,764,891 $ 956,065,851 ORANGE AND ROCKLAND UTILITIES, INC. Exhibit AP-E1 Net Book Value of Electric Plant in Service Schedule 3 December 31, 2018 Page 3 of 5

Accumulated Prov. Account Electric Plant in For Deprec. & No. Service Amortization Net Book Value Intangible Plant 301 Organization 302 Franchises and Consents $ 20,657 $ 20,657 303 Miscellaneous Intangible Software 33,233,704 22,242,826 10,990,878 Total Intangible Plant 33,254,361 22,242,826 11,011,535

Transmission Plant 350 Land and Land Rights 9,070,238 5,708,378 3,361,860 352 Structures and improvements 10,642,575 3,057,904 7,584,671 353 Station Equipment 103,651,736 34,277,932 69,373,804 354 Towers and Fixtures 9,337,594 3,554,794 5,782,800 355 Poles and Fixtures 77,883,727 30,686,029 47,197,698 356 Overhead Conductors and Devices 58,741,535 12,482,041 46,259,494 357 Underground Conduit 5,384,779 1,789,391 3,595,388 358 Underground Conductors and Devices 15,767,527 4,736,037 11,031,490 359 Roads and Trails 1,194,633 568,188 626,445 Total Transmission Plant 291,674,344 96,860,695 194,813,649

Distribution Plant 360 Land and Land Rights 7,095,458 712,372 6,383,086 361 Structures and Improvements 14,842,756 3,487,886 11,354,870 362 Station Equipment 200,885,688 48,893,704 151,991,984 364 Poles, Towers and Fixtures 167,277,315 60,892,409 106,384,906 365 Overhead Conductors and Devices 195,737,989 56,511,418 139,226,571 366 Underground Conduit 28,174,046 8,241,427 19,932,619 367 Underground Conductors and Devices 146,214,966 51,931,765 94,283,201 368 Line Transformers 130,860,797 38,797,491 92,063,306 369 Services 40,905,244 22,606,054 18,299,190 370 Meters 48,536,910 2,552,754 45,984,156 371 Installations on Customer Premises 518,730 377,917 140,813 372 Leased Property on Customer Premises - 373 Street Lighting and Signal Systems 14,585,398 7,728,940 6,856,458 Total Distribution Plant 995,635,297 302,734,136 692,901,161

General Plant 389 Land and Land Rights 15,416 15,416 390 Structures and Improvements 7,970,698 2,152,999 5,817,699 391 Office Furniture and Equipment 9,888,869 5,652,431 4,236,438 392 Transportation Equipment 28,154,943 21,504,631 6,650,312 393 Stores Equipment 6,618 187 6,431 394 Tools, Shop and Garage Equipment 3,720,339 1,487,862 2,232,477 395 Laboratory Equipment 4,478,124 1,096,889 3,381,235 396 Power Operated Equipment 934,599 1,426,340 (491,741) 397 Communication Equipment 4,406,025 942,926 3,463,099 398 Miscellaneous Equipment 862,348 317,694 544,654 Total General Plant 60,437,979 34,581,959 25,856,020

Total Electric Plant in Service 1,381,001,981 456,419,616 924,582,365

Held for Future Use 9,003,058 9,003,058 Construction Work in Progress 70,160,455 70,160,455 Retirement Work in Progress - Non-Utility Plant in Service - Net Utility Plant $ 1,460,165,494 $ 456,419,616 $ 1,003,745,878 ORANGE AND ROCKLAND UTILITIES, INC. Exhibit AP-E1 Net Book Value of Electric Plant in Service Schedule 3 December 30, 2019 Page 4 of 5

Accumulated Prov. Account Electric Plant in For Deprec. & No. Service Amortization Net Book Value Intangible Plant 301 Organization 302 Franchises and Consents $ 20,657 $ 20,657 303 Miscellaneous Intangible Software 45,287,324 26,389,004 18,898,320 Total Intangible Plant 45,307,981 26,389,004 18,918,977

Transmission Plant 350 Land and Land Rights 9,070,238 5,824,768 3,245,470 352 Structures and improvements 11,810,732 3,027,141 8,783,591 353 Station Equipment 124,063,578 36,680,955 87,382,623 354 Towers and Fixtures 10,281,033 3,640,582 6,640,451 355 Poles and Fixtures 82,158,760 32,482,058 49,676,702 356 Overhead Conductors and Devices 59,160,372 13,399,119 45,761,253 357 Underground Conduit 5,384,779 1,908,934 3,475,845 358 Underground Conductors and Devices 15,767,527 5,186,988 10,580,539 359 Roads and Trails 1,194,633 585,271 609,362 Total Transmission Plant 318,891,652 102,735,816 216,155,836

Distribution Plant 360 Land and Land Rights 7,688,942 729,930 6,959,012 361 Structures and Improvements 15,510,960 3,523,146 11,987,814 362 Station Equipment 194,758,758 53,388,444 141,370,314 364 Poles, Towers and Fixtures 173,646,513 62,791,309 110,855,204 365 Overhead Conductors and Devices 205,667,583 59,913,570 145,754,013 366 Underground Conduit 28,506,357 8,689,526 19,816,831 367 Underground Conductors and Devices 150,686,082 54,845,444 95,840,638 368 Line Transformers 137,693,521 41,204,064 96,489,457 369 Services 42,718,570 23,488,833 19,229,737 370 Meters 50,997,126 (7,795,627) 58,792,753 371 Installations on Customer Premises 518,730 382,484 136,246 372 Leased Property on Customer Premises - 373 Street Lighting and Signal Systems 16,754,393 7,534,448 9,219,945 Total Distribution Plant 1,025,147,535 308,695,569 716,451,966

General Plant 389 Land and Land Rights 15,416 15,416 390 Structures and Improvements 7,527,088 2,388,811 5,138,277 391 Office Furniture and Equipment 10,516,597 5,930,755 4,585,842 392 Transportation Equipment 29,086,086 20,370,892 8,715,195 393 Stores Equipment 6,618 830 5,788 394 Tools, Shop and Garage Equipment 4,037,890 1,637,732 2,400,158 395 Laboratory Equipment 4,685,789 1,326,143 3,359,646 396 Power Operated Equipment 934,599 1,470,453 (535,854) 397 Communication Equipment 7,775,517 1,500,092 6,275,425 398 Miscellaneous Equipment 1,786,416 389,556 1,396,860 Total General Plant 66,372,016 35,015,265 31,356,751

Total Electric Plant in Service 1,455,719,184 472,835,653 982,883,530

Held for Future Use 8,102,078 8,102,078 Construction Work in Progress 64,340,109 64,340,109 Retirement Work in Progress - Non- Utility Plant in Service - Net Utility Plant $ 1,528,161,371 $ 472,835,653 $ 1,055,325,718 ORANGE AND ROCKLAND UTILITIES, INC. Exhibit AP-E1 Net Book Value of Electric Plant in Service Schedule 3 September 30, 2020 Page 5 of 5

Accumulated Prov. Account Electric Plant in For Deprec. & No. Service Amortization Net Book Value Intangible Plant 301 Organization 302 Franchises and Consents $ 20,657 $ 20,657 303 Miscellaneous Intangible Software 52,545,648 31,060,876 21,484,772 Total Intangible Plant 52,566,305 31,060,876 21,505,428

Transmission Plant 350 Land and Land Rights 9,070,238 5,912,061 3,158,178 352 Structures and improvements 13,298,489 3,192,060 10,106,430 353 Station Equipment 131,296,599 35,652,403 95,644,196 354 Towers and Fixtures 9,978,927 3,780,251 6,198,676 355 Poles and Fixtures 82,393,385 33,880,361 48,513,024 356 Overhead Conductors and Devices 58,043,476 14,114,374 43,929,102 357 Underground Conduit 5,384,778 1,998,590 3,386,188 358 Underground Conductors and Devices 15,767,528 5,525,201 10,242,326 359 Roads and Trails 1,194,633 598,083 596,550 Total Transmission Plant 326,428,053 104,653,383 221,774,670

Distribution Plant 360 Land and Land Rights 7,791,635 743,098 7,048,538 361 Structures and Improvements 16,075,682 3,774,030 12,301,652 362 Station Equipment 195,088,531 56,856,970 138,231,561 364 Poles, Towers and Fixtures 178,052,454 64,648,508 113,403,946 365 Overhead Conductors and Devices 214,110,542 63,187,765 150,922,777 366 Underground Conduit 32,191,017 9,057,037 23,133,980 367 Underground Conductors and Devices 155,541,113 57,021,435 98,519,677 368 Line Transformers 143,336,305 43,656,725 99,679,580 369 Services 44,256,172 24,289,279 19,966,893 370 Meters 44,388,027 (13,614,190) 58,002,217 371 Installations on Customer Premises 518,730 385,910 132,820 372 Leased Property on Customer Premises - 373 Street Lighting and Signal Systems 17,951,270 7,633,810 10,317,459 Total Distribution Plant 1,049,301,477 317,640,377 731,661,100

General Plant 389 Land and Land Rights 15,416 15,416 390 Structures and Improvements 7,527,088 2,564,381 4,962,707 391 Office Furniture and Equipment 10,059,105 5,944,365 4,114,741 392 Transportation Equipment 34,022,490 22,014,947 12,007,542 393 Stores Equipment 6,618 1,313 5,305 394 Tools, Shop and Garage Equipment 4,037,011 1,782,517 2,254,494 395 Laboratory Equipment 4,691,927 1,552,669 3,139,258 396 Power Operated Equipment 934,599 1,503,538 (568,939) 397 Communication Equipment 7,651,412 1,945,108 5,706,304 398 Miscellaneous Equipment 2,292,769 453,845 1,838,924 Total General Plant 71,238,434 37,762,682 33,475,751

Total Electric Plant in Service 1,499,534,268 491,117,319 1,008,416,949

Held for Future Use 8,102,078 8,102,078 Construction Work in Progress 70,631,796 70,631,796 Retirement Work in Progress - Unallocated Reserve (07-E-0949) - Net Utility Plant $ 1,578,268,142 $ 491,117,319 $ 1,087,150,823 Exhibit AP-E1 Schedule 6 Page 1 of 4 ORANGE AND ROCKLAND UTILITIES, INC. Statement of Income for Year Ending December 31, 2017

Company Electric Gas Total Department Department Utility Operating Income Operating Revenue$ 720,183,838 $ 487,985,143 $ 232,198,695

Operating Expenses: Operation and Maintenance 447,969,880 306,839,259 141,130,621 Depreciation Expense 54,905,119 37,251,845 17,653,274 Amortization of Other Limited Term Plant 7,931,831 5,983,297 1,948,534 Regulatory Debits 8,545,000 7,540,000 1,005,000 Taxes Other than Income Taxes 80,482,076 51,104,096 29,377,980 Income Taxes 16,472,648 7,637,875 8,834,773 Provision for Deferred Income Taxes 18,040,207 14,945,088 3,095,119 Investment Tax Credit Net (134,097) (80,681) (53,416) Total Operating Expenses 634,212,664 431,220,779 202,991,885

Total Utility Operating Income 85,971,174 $56,764,364 $29,206,810

Other Income Equity in Earnings of Subsidiary Companies 13,446,499 Interest and Dividend Income (15,126) Allowance for Funds Used During Construction 553,295 Miscellaneous Non-Operating Income 55,126 Gain in Disposition of Property Total Other Income 14,039,794

Other Income Deductions Miscellaneous Income Deductions 314,078 Total Other Income Deductions 314,078

Taxes - Other Income Deductions Taxes Other Than Income Taxes 14,611 Income Taxes 74,995 Deferred Income Taxes (170,333) Investment Tax Credit Adjustment Total Taxes - Other Income Deductions (80,727)

Net Other Income and Deductions 13,806,443

Interest Charges Interest on Long Term Debt 34,716,000 Amortization of Debt Discount & Expense 513,047 Interest on Debt to Assoc. Companies 244,511 Allowance for Borrowed Funds Used During Construction (851,034) Other Interest Expense 1,329,108 Total Interest Charges 35,951,632

Net Income$ 63,825,985 Exhibit AP-E1 Schedule 6 Page 2 of 4 ORANGE AND ROCKLAND UTILITIES, INC. Statement of Income for Year Ending December 31, 2018

Company Electric Gas Total Department Department Utility Operating Income Operating Revenue$ 737,571,799 $ 487,616,347 $ 249,955,452

Operating Expenses: Operation and Maintenance 482,632,970 320,855,559 161,777,411 Depreciation Expense 58,100,239 39,125,088 18,975,151 Amortization of Other Limited Term Plant 10,374,534 8,168,433 2,206,101 Regulatory Debits 8,545,000 7,540,000 1,005,000 Taxes Other than Income Taxes 80,921,524 49,846,429 31,075,094 Income Taxes 5,933,132 (2,114,813) 8,047,945 Provision for Deferred Income Taxes 11,890,319 12,916,360 (1,026,041) Investment Tax Credit Net (2,600) (1,840) (761) Total Operating Expenses 658,395,119 436,335,218 222,059,901

Total Utility Operating Income 79,176,680 $51,281,129 $27,895,551

Other Income Equity in Earnings of Subsidiary Companies 14,883,634 Interest And Dividend Income 484,855 Investment Income 113,312 Allowance for Funds Used During Construction 227,092 Miscellaneous Non-Operating Income 57,197 Total Other Income 15,766,090

Other Income Deductions Miscellaneous Income Deductions 931,617 Total Other Income Deductions 931,617

Taxes - Other Income Deductions Taxes Other Than Income Taxes 14,925 Income Taxes (4,391,455) Deferred Income Taxes 188,164 Deferred Income Taxes Credit (188,633) Investment Tax Credit Adjustment Total Taxes - Other Income Deductions (4,377,000)

Net Other Income and Deductions 19,211,473

Interest Charges Interest on Long Term Debt 35,582,042 Amortization of Debt Discount & Expense 500,185 Interest on Debt to Assoc. Companies 437,915 Allowance for Borrowed Funds Used During Construction (1,031,511) Other Interest Expense 3,735,928 Total Interest Charges 39,224,559

Net Income$ 59,163,594 Exhibit AP-E1 Schedule 6 Page 3 of 4 ORANGE AND ROCKLAND UTILITIES, INC. Statement of Income for Year Ending December 31, 2019

Company Electric Gas Total Department Department Utility Operating Income Operating Revenue$ 739,995,874 $ 480,601,079 $ 259,394,795

Operating Expenses: Operation and Maintenance 463,651,947 297,772,393 165,879,554 Depreciation Expense 64,797,154 43,255,926 21,541,228 Amortization of Other Limited Term Plant 11,254,745 8,696,124 2,558,621 Regulatory Debits 1,541,197 1,541,197 0 Taxes Other than Income Taxes 81,624,200 51,126,508 30,497,691 Income Taxes 21,365,136 19,521,104 1,844,033 Provision for Deferred Income Taxes (903,981) (5,284,552) 4,380,571 Investment Tax Credit Net (2,600) (1,740) (860) Total Operating Expenses 643,327,798 416,626,960 226,700,839

Total Utility Operating Income 96,668,075 $63,974,119 $32,693,956

Other Income Equity in Earnings of Subsidiary Companies 11,148,310 Interest And Dividend Income (3,399) Investment Income 99,923 Allowance for Funds Used During Construction 1,683,423 Miscellaneous Non-Operating Income 21,905 Total Other Income 12,950,162

Other Income Deductions Miscellaneous Income Deductions 450,873 Total Other Income Deductions 450,873

Taxes - Other Income Deductions Taxes Other Than Income Taxes 15,299 Income Taxes (2,859,107) Deferred Income Taxes 24 Deferred Income Taxes Credit (20) Investment Tax Credit Adjustment Total Taxes - Other Income Deductions (2,843,803)

Net Other Income and Deductions 15,343,093

Interest Charges Interest on Long Term Debt 38,183,158 Allowance for Borrowed Funds Used During Construction (1,293,788) Other Interest Expense 3,754,410 Total Interest Charges 41,609,062

Net Income$ 70,402,106 Exhibit AP-E1 Schedule 6 Page 4 of 4 ORANGE AND ROCKLAND UTILITIES, INC. Statement of Income for Twelve Months Ending September 30,2020

Company Electric Gas Total Department Department Utility Operating Income Operating Revenue$ 710,781,590 $ 472,601,477 $ 238,180,112

Operating Expenses: Operation and Maintenance 433,281,352 291,838,268 141,443,084 Depreciation Expense 67,318,796 44,716,552 22,602,244 Amortization of Other Limited Term Plant 12,861,755 10,559,780 2,301,975 Regulatory Debits 2,141,596 2,141,596 - Taxes Other than Income Taxes 83,193,189 52,170,747 31,022,442 Income Taxes 4,482,608 (1,093,601) 5,576,209 Provision for Deferred Income Taxes 12,609,582 10,619,484 1,990,098 Investment Tax Credit Net (2,600) (1,740) (860) Total Operating Expenses 615,886,278 410,951,086 204,935,193

Total Utility Operating Income 94,895,311 $61,650,392 $33,244,920

Other Income Equity in Earnings of Subsidiary Companies 13,041,359 Interest And Dividend Income 371,339 Investment Income 89,784 Allowance for Funds Used During Construction 1,427,958 Miscellaneous Non-Operating Income (21,502) Total Other Income 14,908,937

Other Income Deductions Miscellaneous Income Deductions 439,003 Total Other Income Deductions 439,003

Taxes - Other Income Deductions Taxes Other Than Income Taxes 15,326 Income Taxes 558,412 Deferred Income Taxes 198,623 Deferred Income Taxes Credit (18) Investment Tax Credit Adjustment Total Taxes - Other Income Deductions 772,343

Net Other Income and Deductions 13,697,591

Interest Charges Interest on Long Term Debt 39,115,947 Amortization of Debt Discount & Expense 484,650 Interest on Debt to Assoc. Companies 278,812 Allowance for Borrowed Funds Used During Construction (1,231,153) Other Interest Expense 2,702,352 Total Interest Charges 41,350,607

Net Income$ 67,242,296 Exhibit AP-E1 Schedule 7 Page 1 of 3 ORANGE AND ROCKLAND UTILITIES, INC. Electric Operation and Maintenance Expenses For the Twelve Months Ended

Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020 Production Expenses Steam Production Expense$ - $ - $ - $ - Hydro Production Expense - - - - Gas Turbine Production Expense - - - - Total Production - - - -

Other Power Supply Expense Non-Utility Generators 1,537,383 Renewable Energy Credit & Zero Emission Credits 4,195,296 5,452,899 6,385,737 6,632,643 Purch. Power Commodity 72,350,693 95,646,175 72,348,202 62,160,795 Capacity Charges 45,103,974 47,858,339 30,232,186 23,717,727 Purch. Power - NYISO - - - - Purch. Power - Penn P & L - - - - Total Purch. Power 123,187,346 148,957,413 108,966,126 92,511,166

Purchased Power - Deferred (3,829,596) 2,020,390 (3,236,355) (55,198) Purchased Power - Resale 248,177 Purchased Power - Other 3,801,235 (15,406,604) (940,473) 1,194,372 Load Dispatching 307,021 339,100 345,141 310,806 Total Purch. Power 526,837 (13,047,114) (3,831,687) 1,449,981

Total Other Power Supply Expense 123,714,183 135,910,299 105,134,439 93,961,146

Transmission Expenses Operation Supervision and Engineering 3,022,185 2,312,163 3,130,682 3,310,874 Load Dispatch Reliability 456,565 359,856 404,691 381,810 Load Dispatch Monitor & Operate Transm Sys 986,415 844,370 910,602 564,788 Scheduling, System Control & Dispatching Svc 374,356 1,023,932 967,874 1,039,997 Load DispatchTransmission ServiceAnd Scheduling 1,295,445 421,230 435,757 455,378 LT Reliab Planning & Standards Development 571,589 395,007 497,277 424,664 Lt Reliab Plann &Standards Devel Svcs 108,256 122,237 126,452 211,440 Station Expenses 3,209,706 3,251,057 3,153,974 2,951,505 Overhead Line Expenses 286,879 314,086 279,698 375,108 Underground Line Expenses 37,779 57,855 - - Transmission of Electricity by Others - Misc.Transmission Expense 2,858 49 50 48 Rents 1,834,894 1,424,275 1,627,041 1,652,923 Total Operation 12,186,927 10,526,117 11,534,098 11,368,536

Maintenance Maintenance Supervision and Engineering - 2,980 2,736 5,524 Maintenance of Structures 1,033 1,018 4,439 309 Maintenance of Station Equipment 145,447 230,192 256,436 360,364 Maintenance of Overhead Lines 3,325,606 2,330,886 2,688,915 3,006,593 Maintenance of Underground Lines 3,015 1,099 155,325 86,384 Maintenance Misc. Transmission Plant 5,303 123 6,782 2,263 Total Maintenance 3,480,404 2,566,298 3,114,634 3,461,438

Total Transmission Expenses$ 15,667,331 $ 13,092,415 $ 14,648,732 $ 14,829,974

Regional/Market Expenses Market Facilitation, Monitoring And Compliance Services 688,885 780,157 807,062 843,402 Total Operation 688,885 780,157 807,062 843,402

Total Regional/Market Expenses Expenses 688,885 780,157 807,062 843,402 Exhibit AP-E1 Schedule 7 Page 2 of 3

ORANGE AND ROCKLAND UTILITIES, INC. Electric Operation and Maintenance Expenses For the Twelve Months Ended

Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020 Distribution Expenses Operation Operation Supervision and Engineering$ 7,955,025 $ 7,521,741 $ 7,425,569 $ 7,109,291 Distribution Load Dispatching - Station Expenses 1,868,823 1,935,418 2,102,932 2,214,916 Overhead Lines Expense 1,585,042 1,464,440 1,345,443 1,504,037 Underground Line Expense 2,258,770 1,932,887 1,584,472 1,420,565 Street Lighting and Signal System Expenses - Meter Expense 3,295,353 3,403,662 3,169,697 4,612,981 Customer Installation Expenses 37,468 22,997 24,628 16,444 Misc. Distribution Expense 3,567,471 3,439,219 3,387,360 3,047,881 Rents 27,554 48,029 46,977 53,955 Total Operation 20,595,506 19,768,393 19,087,079 19,980,070

Maintenance Maintenance Supervision and Engineering - Maintenance of Station Equipment 1,052,903 872,157 915,300 903,786 Maintenance Overhead Lines 24,926,284 25,939,798 28,524,716 30,193,953 Maintenance Underground Lines 2,874,943 2,570,017 3,010,463 3,585,553 Maintenance Line Transformers 14,932 16,800 15,157 10,908 Maintenance Street Light & Signal 1,100,946 1,277,602 916,365 711,084 Maintenance Meters - Maintenance of Misc. Distribution Plant - Total Maintenance 29,970,008 30,676,374 33,382,001 35,405,285

Total Distribution Expenses 50,565,514 50,444,767 52,469,080 55,385,355

Customer Accounts Expense Operation Supervision - Meter Reading Expenses 3,081,722 2,678,955 2,164,240 1,980,257 Customer Records and Collection Expenses 12,869,402 13,468,499 14,132,993 13,337,539 Uncollectible Accounts 2,238,778 3,570,723 3,535,409 3,768,299 Miscellaneous Customer Accounts Expenses 58,166 61,082 176,590 264,967 Rents - Total Customer Accounts Expenses 18,248,068 19,779,259 20,009,232 19,351,063

Customer Service Expenses Operation Customer Assistance Expenses 28,946,829 28,960,007 29,664,402 27,375,095 Informational Advertising Expenses 383,786 339,473 329,691 305,564 Miscellaneous Customer Service Expenses 5,343,325 5,466,868 12,623,163 12,699,362 Rents - Total Customer Service Expenses$ 34,673,940 $ 34,766,348 $ 42,617,255 $ 40,380,020 Exhibit AP-E1 Schedule 7 Page 3 of 3

ORANGE AND ROCKLAND UTILITIES, INC. Electric Operation and Maintenance Expenses For the Twelve Months Ended

Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020 Sales Promotion Expenses Operation Supervision$ 9,826 $ 895 $ 6,369 $ 4,406 Demonstration and Selling Expenses 5,092 6,153 5,584 4,579 Sales Expenses - Total Sales Promotion Expenses 14,918 7,048 11,953 8,985

Administrative and General Expenses Operation Administrative and General Salaries 12,097,014 9,505,384 10,310,398 9,577,549 Office Supplies and Expense 2,894,196 3,174,331 3,276,744 5,024,558 Administrative Expenses Transferred - Cr. 7,819,646 10,805,651 9,822,246 8,676,532 Outside Services Employed 425,772 962,064 735,704 895,733 Property Insurance 235,292 252,742 280,686 321,024 Injuries and Damages 4,003,210 10,489,848 8,567,341 9,891,423 Employee Pensions and Benefits 28,170,566 2,687,869 2,680,893 2,782,566 Health and Life Expenses 5,721,913 5,606,070 5,953,573 Pension Expense 17,727,000 9,366,056 10,671,286 Other Post Retirement Benefit Expense 755,000 3,468,055 3,560,367 Regulatory Commission Expenses 5,214,055 2,431,990 1,998,226 2,070,062 Duplicate Charges - Cr. (977,533) (1,097,317) (1,156,617) (1,107,586) General Advertising Expense - Miscellaneous General Expenses 2,254,506 1,988,813 5,959,019 6,114,146 General Rents 9,826 9,482 8,975 369,670 Expenses of Data Processing Equipment - Total Operation 62,146,550 65,414,770 60,923,795 64,800,904

Maintenance Maintenance of General Plant 1,119,870 660,495 1,150,844 2,277,418

Total Administrative and General Expenses 63,266,420 66,075,265 62,074,639 67,078,322

Total Operation and Maintenance$ 306,839,259 $ 320,855,559 $ 297,772,393 $ 291,838,267 Exhibit AP-E1 Schedule 8 ORANGE AND ROCKLAND UTILITIES, INC. Electric Operation and Maintenance Expenses, Taxes and Depreciation Per Kwh of Electric Sold For the Twelve Months Ended

December 31, 2017 December 31, 2018 December 31, 2019 September 30, 2020 Per Amount Kwh Sold Amount Kwh Sold Amount Kwh Sold Amount Kwh Sold

Kwh Sold (000 Omitted) 4,056,841 4,232,576 4,122,410 4,054,392

Production Expenses Production Expenses $- $- $ - $ - $ - $ - $ - $ -

Other Power Supply 123,187,346 0.0304 148,957,413 0.0352 108,966,126 0.0264 92,511,166 0.0228

Total Other Power Supply 123,187,346 0.0304 148,957,413 0.0352 108,966,126 0.0264 92,511,166 0.0228

Deferred Purchased Power & Other 526,837 0.0001 (13,047,114) (0.0031) (3,831,687) (0.0009) 1,449,981 0.0004

Transmission 15,667,331 0.0039 13,092,415 0.0031 14,648,732 0.0036 14,829,974 0.0037

Regional/Market Expenses 688,885 0.0002 780,157 0.0002 807,062 0.0002 843,402 0.0002

Distribution 50,565,514 0.0125 50,444,767 0.0119 52,469,080 0.0127 55,385,355 0.0137

Customer Accounts 18,248,068 0.0045 19,779,259 0.0047 20,009,232 0.0049 19,351,063 0.0048

Customer Service 34,673,940 0.0085 34,766,348 0.0082 42,617,255 0.0103 40,380,020 0.0100

Sales Promotion 14,918 0.0000 7,048 0.0000 11,953 0.0000 8,985 0.0000

Administrative & General 63,266,420 0.0156 66,075,265 0.0156 62,074,639 0.0151 67,078,322 0.0165

Total Electric Operation and Maintenance 306,839,259 0.0756 320,855,559 0.0758 297,772,393 0.0722 291,838,267 0.0720

Depreciation and Amortization 50,775,142 0.0125 54,833,522 0.0130 53,493,247 0.0130 57,417,928 0.0142

Taxes Other Than Income Taxes 51,104,096 0.0126 49,846,429 0.0118 51,126,508 0.0124 52,170,747 0.0129

Total Operating Expenses Excluding Income Taxes $ 408,718,497 $ 0.101 $ 425,535,510 $ 0.101 $ 402,392,149 $ 0.098 $ 401,426,943 $ 0.099 Exhibit AP-E1 Schedule 9 ORANGE AND ROCKLAND UTILITIES, INC. Taxes Other than Income Taxes - Account 408.1 - Electric For the Twelve Months Ended

Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Sept. 30, 2020

Property Taxes 40,919,335 39,136,073 40,912,191 42,196,334

State and Local Taxes on Revenue 1,461,144 1,668,675 1,539,567 1,559,125

Payroll Taxes 4,027,739 4,206,518 3,971,603 3,518,578

Sales and Use Tax - 53,519 5,154 2,921

Public Utility Gross Tax 4,606,244 4,675,667 4,606,934 4,850,257

Other Taxes 89,634 105,978 91,059 43,532

Total Taxes Other than Income Taxes$ 51,104,096 $ 49,846,429 $ 51,126,508 $ 52,170,747 Exhibit AP-E1 Schedule 10

ORANGE AND ROCKLAND UTILITIES, INC. Electric Operating Revenues Per Kilowatt Hour of Electric Sold For the Twelve Months Ended

December 31, 2017 December 31, 2018 Kwh Revenue Kwh Revenue Sold (000) Revenues Per Kwh Sold (000) Revenues Per Kwh Sales of Electric Residential Sales 1,556,193 $ 268,452,630 $ 0.1725 1,668,063 $ 298,431,642 $ 0.1789 Commercial and Industrial Sales 2,198,272 162,328,545 0.0738 2,233,393 $ 166,922,249 0.0747 Public Lighting Sales 21,751 5,142,236 0.2364 18,913 $ 4,334,778 0.2292 Sales to Public Authorities 96,320 7,609,635 0.0790 121,486 $ 10,057,194 0.0828 Sales for Resale 184,305 18,159,760 0.0985 190,721 $ 19,733,274 0.1035 RDM - Residential and Commercial 13,988,411 (10,310,475)

Total Sales of Electric 4,056,841 475,681,218$ 0.1173 4,232,576 489,168,661$ 0.1156

Other Operating Revenues Miscellaneous Service Revenues 1,570,364 982,232 Revenue Subject to Rate Refund - Joint Operating Rents 5,501,568 5,710,476 Rent from Electric Property 1,378,211 2,722,379 Other Electric Revenues 3,853,782 (10,967,401)

Total Other Operating Revenues 12,303,925 (1,552,314)

Total Electric Operating Revenues$ 487,985,143 $ 487,616,347

December 31, 2019 September 30, 2020 Kwh Revenue Kwh Revenue Sold (000) Revenues Per Kwh Sold (000) Revenues Per Kwh Sales of Electric Residential Sales 1,615,892 $ 272,119,687 $ 0.1684 1,668,247 $ 278,574,900 $ 0.1670 Commercial and Industrial Sales 2,222,422 162,570,517 0.0732 2,079,776 $ 153,928,871 0.0740 Public Lighting Sales 16,877 3,566,391 0.2113 16,184 $ 3,137,112 0.1938 Sales to Public Authorities 97,333 6,736,702 0.0692 98,968 $ 5,753,018 0.0581 Sales for Resale 169,886 17,034,520 0.1003 191,216 $ 15,302,191 0.0800 RDM - Residential and Commercial - (303,873) - $ 6,512,415

Total Sales of Electric 4,122,410 461,723,943$ 0.1120 4,054,392 463,208,507$ 0.1142

Other Operating Revenues Miscellaneous Service Revenues 1,217,084 1,092,210 Revenue Subject to Rate Refund - 0 Joint Operating Rents 6,062,436 6,081,660 Rent from Electric Property 2,387,437 2,986,971 Other Electric Revenues 9,210,179 (767,871)

Total Other Operating Revenues 18,877,136 9,392,970

Total Electric Operating Revenues$ 480,601,079 $ 472,601,477

480,601,079 From Schedule 6 472,601,477 Exhibit AP-E2

ORANGE AND ROCKLAND UTILITIES, INC. Index of Schedules Initial Filing Electric Rate Base For The Twelve Months Ended December 31, 2022, 2023 and 2024

SCHEDULE TITLE OF SCHEDULE WITNESS

Summary Electric Rate Base Accounting Panel

1 Rate Base "

2 Net Plant "

3 Working Capital "

4 Regulatory Deferral "

5 Accumulated Deferred Tax "

6 Computation of Earnings Base/Capitalization Adjustment " Exhibit AP-E2 Schedule 1

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Rate Base - Electric Case xx-E-xxxx For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3 For The Twelve Months Ending Line September 30, Normalizating Rate Year Rate Year as Rate Year Rate Year as Line No. 2020 Adjustment Initial Update As Updated Adjustments Adjusted Adjustments Adjusted No. 1 Utility Plant 1 2 Electric Plant In Service $ 1,468,346 $ 167 $ 187,862 $ 1,656,375 $ 69,970 $ 1,726,345 $ 161,601 $ 1,887,946 2 3 Electric Plant Held For Future Use 8,269 (167) 0 8,102 - 8,102 - 8,102 3 4 Common Utility Plant (Electric Allocation) 202,099 - 22,368 224,468 22,215 246,683 25,145 271,828 4 5 Total 1,678,715 - 210,230 1,888,945 92,184 1,981,129 186,746 2,167,876 5

6 Utility Plant Reserves: 6 7 Accumulated Reserve for Depreciation - Plant in Service (477,619) - (107,443) (585,062) (48,438) (633,499) (53,006) (686,505) 7 8 Accumulated Reserve for Depreciation - Common Plant (Electric Allocation) (97,379) - (20,172) (117,550) (10,580) (128,130) (9,906) (138,036) 8 9 Total (574,998) - (127,614) (702,612) (59,018) (761,630) (62,912) (824,541) 9

10 Net Plant 1,103,717 - 82,616 1,186,333 33,167 1,219,500 123,835 1,343,335 10

11 Non-Interest Bearing CWIP 30,170 - 2,432 32,602 3,081 35,683 (4,336) 31,347 11 12 Working Capital - Materials/Supplies, Prepayment and Cash Working Capital 59,564 (1,106) 1,516 59,974 1,215 61,189 1,108 62,297 12 13 Unamortized Premium & Discount 5,367 - 528 5,895 284 6,179 200 6,379 13 14 Customer Advance Construction (21,937) - 8,686 (13,251) - (13,251) - (13,251) 14

15 Net Deferrals / Credits from Reconciliation Mechanisms 31,524 - 39,651 71,176 9,627 80,802 1,482 82,284 15

16 Accumulated Deferred Income Taxes - 16 17 Accumulated Deferred Federal Income Taxes (216,447) - 10,460 (205,987) (741) (206,728) (1,741) (208,470) 17 18 Accumulated Deferred State Income Taxes (36,615) - (5,727) (42,342) (3,328) (45,670) (3,371) (49,041) 18 19 Total (253,061) - 4,733 (248,329) (4,069) (252,398) (5,113) (257,511) 19

20 Average Rate Base 955,344 (1,106) 140,162 1,094,400 43,303 1,137,703 117,177 1,254,880 20

21 Earnings Base Capitalization Adjustment to Rate Base (66,434) - - (66,434) - (66,434) - (66,434) 21

22 Total Average Rate Base $ 888,910 $ (1,106) $ 140,162 $ 1,027,966 $ 43,303 $ 1,071,269 $ 117,177 $ 1,188,446 22 Exhibit AP-E2 Schedule 2

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Average Electric Net Plant Summary Case xx-E-xxxx For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3 For The Twelve Initial Line Months Ending Normalizating Rate Year Rate Year as Rate Year Rate Year as Line No. Description September 30, 2020 Adjustment Initial Update As Updated Adjustments Adjusted Adjustments Adjusted No. 1 Utility Plant 1 2 Electric Plant In Service $ 1,468,346 $ 167 $ 187,862 $ 1,656,375 $ 69,970 $ 1,726,345 $ 161,601 $ 1,887,946 2 3 Electric Plant Held For Future Use 8,269 (167) 0 8,102 - 8,102 - 8,102 3 4 Common Utility Plant (Electric Allocation) 202,099 22,368 224,468 22,215 246,683 25,145 271,828 4 5 Total 1,678,715 - 210,230 1,888,945 92,184 1,981,129 186,746 2,167,876 5 6 6 7 Utility Plant Reserves: 7 8 Accumulated Reserve for Depreciation - Plant in Service (477,619) (107,443) (585,062) (48,438) (633,499) (53,006) (686,505) 8 9 Accumulated Reserve for Depreciation - Common Plant (Electric Allocation) (97,379) (20,172) (117,550) (10,580) (128,130) (9,906) (138,036) 9 10 Total (574,998) - (127,614) (702,612) (59,018) (761,630) (62,912) (824,541) 10 11 11 12 Net Plant $ 1,103,717 $ - $ 82,616 $ 1,186,333 $ 33,167 $ 1,219,500 $ 123,835 $ 1,343,335 12 13 13 14 Non-Interest Bearing CWIP $ 30,170 $ 2,432 $ 32,602 $ 3,081 $ 35,683 $ (4,336) $ 31,347 14 Exhibit AP-E2 Schedule 3

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Working Capital - Electric Case xx-E-xxxx For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

For The RY 1 RY 2 RY 3 Twelve Months Initial Line Ending Normalizating Rate Year Rate Year as Rate Year Rate Year as Line No. September 30, Adjustment Initial Update As Updated Adjustments Adjusted Adjustments Adjusted No. 1 Material and Supplies 13,046 - 455 13,501 216 13,717 220 13,937 1

2 Prepayment - 2 3 Local Property Taxes 15,495 - (414) 15,081 918 15,999 674 16,673 3 4 Remarket / Liquidity 978 - 34 1,012 16 1,028 16 1,045 4 5 Computer Licence 987 - 34 1,021 16 1,037 17 1,054 5 6 Insurance 271 - 9 280 4 284 5 289 6 7 NYPSC Assessment 552 - 19 571 9 580 9 589 7 8 NYS GRT 672 - 23 695 11 706 11 717 8 9 - - - 9 10 Total 18,953 - (293) 18,660 975 19,635 732 20,367 10

11 Cash Working Capital 11 12 Total Operation & Maintenance Expenses 290,031 (18,906) 8,152 279,277 (477) 278,800 (1,984) 276,815 12 13 Less: 13 14 Fuel and Purchased Power 93,353 - 7,741 101,094 (1,019) 100,075 (5,565) 94,510 14 15 Purchased Power-Base Rate ------16 Uncollectible Reserve - Customer 2,468 - (257) 2,211 108 2,318 40 2,358 16 17 Uncollectible Reserve - Sundry 1,300 - (530) 770 - 770 - 770 17 18 Low Income 10,056 (10,056) ------18 19 System Benefit Charge 14,095 - (821) 13,274 (285) 12,989 (927) 12,062 19 20 Renewable Portfolio Charges 7,538 - (439) 7,099 (153) 6,946 (495) 6,451 20 21 - - - 21 22 O&M Working Capital Requirements 161,221 (8,850) 2,458 154,830 872 155,701 4,963 160,664 22 23 Cash Working Capital @ 1/8 20,153 (1,106) 307 19,354 109 19,463 620 20,083 23 24 Working Capital Related To Purchased Power 7,413 1,047 8,460 (85) 8,375 (464) 7,911 24 25 25 26 Unamortized Debt Discount/Premium Expense 5,367 528 5,895 284 6,179 200 6,379 26 27 27 28 Customer Advances for Construction (21,937) - 8,686 (13,251) (13,251) (13,251) 28

29 Total $ 42,994 $ (1,106) $ 10,730 $ 52,618 $ 1,499 $ 54,117 $ 1,309 $ 55,426 29 Exhibit AP-E2 Schedule 4

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Regulatory Deferrals - Electric Case xx-E-xxxx For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3 Rate Year Rate Year Line Adjustment Rate Year Adjustment Rate Year Line No. As Updated s as Adjusted s as Adjusted No.

1 18A Assessment $ (10) $ 3 $ (7) $ 4 $ (3) 1 2 Competitive Unbundling - Customer Information (10) 4 (6) 4 (2) 2 3 Deferred Tax Liabilities Carrying Charge (909) 364 (545) 364 (181) 3 4 Energy Efficiency Programs 5,040 9,829 14,869 8,971 23,840 4 5 Environmental Carrying Charge (171) 68 (103) 69 (34) 5 6 Excess FIT (125) 50 (75) 50 (25) 6 7 Low Income (6,386) 2,555 (3,831) 2,554 (1,277) 7 8 MGP Sites (3,108) 1,244 (1,864) 1,243 (621) 8 9 Non Officer Management Variable Pay (846) 339 (507) 339 (168) 9 10 NYSIT Rate Change 26 (10) 16 (10) 6 10 11 Negative Revenue Adjustments (185) 74 (111) 74 (37) 11 12 OPEB (8,228) 3,292 (4,936) 3,291 (1,645) 12 13 Other Environmental Sites 221 (89) 132 (89) 43 13 14 Pension 14,277 (5,711) 8,566 (5,711) 2,855 14 15 Plant Reconciliation (865) 346 (519) 346 (173) 15 16 Property Taxes (2,212) 885 (1,327) 885 (442) 16 17 R&D (279) 111 (168) 112 (56) 17 18 Rate Case Costs 329 (132) 197 (132) 65 18 19 Credit Card Fees 141 (56) 85 (56) 29 19 20 18A General Assessment Refund 2017 to 2018 (41) 17 (24) 17 (7) 20 21 Property Tax Refunds (44) 18 (26) 18 (8) 21 22 Reactive Power (4) 2 (2) 1 (1) 22 23 Sale of Warwick 55 (22) 33 (22) 11 23 24 Storm Deferral 43,606 (9,690) 33,916 (9,690) 24,226 24 25 Covid-19 Deferrals- UB 631 (252) 379 (252) 127 25 26 Customer Portfolio Shared Earnings (1,047) 419 (628) 419 (209) 26 27 Interest on Storm Reserve 572 (229) 343 (229) 114 27 28 Exchange of Easement with Premium Outlets (81) 33 (48) 33 (15) 28 29 Settlement of Storms Riley and Quinn (537) 215 (322) 215 (107) 29 30 Legacy meters 19,006 (1,584) 17,422 (1,584) 15,838 30 31 Monsey NWA Program 5,950 6,283 12,233 (356) 11,877 31 32 Pomona DER 3,667 (253) 3,414 (268) 3,146 32 33 Rev Demo Projects 2,575 706 3,281 74 3,355 33 34 Rev Demo Carrying Charges (1,996) 799 (1,197) 798 (399) 34 35 35 36 36 37 37 38 Total Deferred Balance 69,013 9,627 78,640 1,482 80,122 38 39 Add: 39 40 Unbilled Revenue (11401/24330) 5,979 5,979 5,979 40 41 Deferred Fuel (24329) (3,817) (3,817) (3,817) 41 42 42 43 43 44 Total Deferred Balance $ 71,176 $ 9,627 $ 80,802 $ 1,482 $ 82,284 44 Exhibit AP-E2 Schedule 5

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Accumulated Deferred Tax - Electric Case xx-E-xxxx For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3 For The Initial Line Twelve Months Normalizating Rate Year Rate Year as Rate Year Rate Year as Line No. Ending Adjustment Initial Update As Updated Adjustments Adjusted Adjustments Adjusted No. 1 Accumulated Deferred Federal Income Taxes 1 2 Accelerated Tax Depreciation (162,304) 28,115 (134,189) (723) (134,911) (825) (135,736) 2 3 Repair Allowance (46,924) 9,600 (37,323) (4,177) (41,500) (5,079) (46,579) 3 4 MSC Fed Norm (3,425) (12,006) (15,431) (19) (15,450) (18) (15,468) 4 5 Cost of Removal 2,635 (1,634) 1,002 (106) 896 (117) 779 5 6 Materials and Supplies Deduction (6,072) (505) (6,577) (930) (7,507) (905) (8,412) 6 7 Excess DFIT-Unprotected Property - (21,360) (21,360) 8,420 (12,940) 8,420 (4,520) 7 8 Excess DFIT- Non-property - 8,186 8,186 (3,227) 4,959 (3,227) 1,732 8 9 ITC (358) 63 (295) 20 (275) 9 (265) 9 10 10 11 Net Accumulated Deferred Federal Income Taxes $ (216,447) $ - $ 10,460 $ (205,987) $ (741) $ (206,729) $ (1,741) $ (208,470) 11 12 Accumulated Deferred State Income Taxes 12 13 Accelerated Tax Depreciation (17,123) (777) (17,900) (2,079) (19,979) (1,991) (21,971) 13 14 Repair Allowance (9,914) (2,478) (12,392) (1,441) (13,833) (1,633) (15,466) 14 15 MSC Fed Norm (774) (4,335) (5,109) (6) (5,115) (6) (5,121) 15 16 Cost of Removal (7,401) 2,649 (4,752) 506 (4,246) 558 (3,688) 16 17 Materials and Supplies Deduction (1,403) (786) (2,189) (308) (2,496) (299) (2,796) 17 18 - - - - 18 19 Net Accumulated Deferred State Income Taxes $ (36,615) $ - $ (5,727) $ (42,342) $ (3,328) $ (45,670) $ (3,371) $ (49,041) 19 20 20 21 Total $ (253,061) $ - $ 4,733 $ (248,329) $ (4,069) $ (252,398) $ (5,113) $ (257,511) 21 Exhibit AP-E2 Schedule 6

Orange and Rockland Utilities Inc. Computation of Earnings Base/Capitalization Adjustment Average Twelve Months Ended September 30, 2020 (000's)

Line Subsidiary Subsidiary Line No. Electric Gas Investment Electric Investment Gas Total No. 1 Utility Plant 1 2 Plant In Service $ 1,468,346 $ 872,049 $2,340,395 2 3 Plant Held For Future Use 8,269 8,269 3 4 Common Utility Plant ( Allocation) 202,099 89,737 291,836 4 5 Total 1,678,715 961,785 2,640,500 5

6 Utility Plant Reserves: - 6 7 Accumulated Reserve for Depreciation - Plant in Service (477,619) (275,069) (752,688) 7 8 Accumulated Reserve for Depreciation - Common Plant ( Allocation) (97,379) (41,567) (138,945) 8 9 Total (574,998) (316,636) (891,634) 9 10 Net Plant 1,103,717 645,149 1,748,867 10

11 Non-Interest Bearing CWIP 30,170 13,896 44,067 11 12 Working Capital (Material, Prepayment and O&M ) 59,564 24,759 84,323 12 13 Unamortized Premium & Discount 5,367 2,652 8,019 13 14 Customer Advance Construction (21,937) (1,868) (23,805) 14

15 Net Deferrals / Credits from Reconciliation Mechanisms 31,524 6,895 38,419 15

16 Accumulated Deferred Income Taxes 16 17 Accumulated Deferred Federal Income Taxes (216,447) (147,901) (364,348) 17 18 Accumulated Deferred State Income Taxes (36,615) (20,489) (57,103) 18 19 Total Accumulated Deferred Income Taxes (253,061) (168,390) (421,451) 19

20 Average Rate Base 955,344 523,094 1,478,439 20

21 Less Subsidiary Investment (92,216) 92,216 - - 21 22 Net Rate Base after Allocation to Subsidiary 863,128 523,094 92,216 - 1,478,439 22 23 Rate Base Allocation Percentage 58.38% 35.38% 6.24% 0.00% 100.00% 23 24 24 25 Capitalization Calculation 25 26 Common Stock 222,428 134,801 380,994 26 27 Retained Earnings 235,805 142,908 403,907 27 28 Long - Term Debt 477,655 289,480 818,167 28 29 Customer Deposits 5,889 3,569 10,087 29 30 Interest On Customer Deposits 45 27 77 30 31 Dividends Declared 4,719 2,860 8,083 31 32 Short Term Investment - Note Payable to associated companies 11,881 7,200 20,350 32 33 Short Term Investment - CP (base on daily average) 23,117 14,010 39,596 33 34 Investment In Subsidiaries (195,792) (118,658) (335,368) 34 35 Clearing Account (258) (156) (441) 35 36 Net Receivables / Payables From Subsidiaries 9,567 5,798 16,388 36 37 Temporary Cash Investments (1,101) (667) (1,886) 37 38 CWIP Interest Bearing (33,389) (20,235) (57,192) 38 39 Interest Bearing Items 36,128 21,895 61,884 39 40 Total Capitalization 796,694 482,832 85,118 - 1,364,645 40 41 41 42 Ebcap Adjustment (66,434) (40,262) (7,098) - (113,794) 42 43 43 44 Rate Base $ 888,910 $ 482,832 44 Exhibit AP-E3

ORANGE AND ROCKLAND UTILITIES, INC. Index of Schedules Initial Filing Electric Operating Income For The Twelve Months Ended December 31, 2022, 2023 and 2024

SCHEDULE TITLE OF SCHEDULE

1 Major Cost Drivers

2 Revenue Requirement

3 Sales Delivery at Current Rates - Electric

4 Amortization of Regulatory Deferrals - Electric

5 Other Operating Revenues - Electric

6 Electric Operation and Maintenance Expenses

7.1 Plant Depreciation Expense Current - Electric

7.2 Plant Depreciation Expense Proposed Rates - Electric

8 Taxes Other Than Income Taxes - Electric

9 State Income Tax - Electric

10 Federal Income Tax - Electric

11 Interest Expense - Electric

12 Fund Requirements and Sources - Electric

13 Interest Coverage Ratios - Electric

14 General Inflation Factors

15 Adjustment Summary

16 Labor-Related Program Changes Exhibit AP-E3 Schedule 1 ORANGE AND ROCKLAND UTILITIES, INC. Page 1 of 2 Revenue Requirement - Electric Major Cost Drivers ($000's)

RY1 Infrastructure - Return on Rate Base @ current ROE $ 7,100 - Depreciation on Plant Additions 6,900 $ 14,000

Cost of Capital 2,400 2,400

Sales Revenues 8,800 8,800

Other Revenues 3,900 3,900

O&M Expenses Company Labor 2,500 Intercompany Shared Services 4,700 Energy efficiency (10,100) Electric Operations 3,200 Pension/OPEBs (8,200) SIR 1,300 BCO (1,300) Other 400 (7,500)

Regulatory Amortizations Expiring net credits 10,800 Other (2,600) 8,200

Book Depreciation Changes 2,200 2,200

Property and other taxes Property Taxes (1,500) All Other Taxes 200 (1,300)

Income Taxes Amortization of EDFIT (500) Amortization of EDFIT - Accelerated (5,400) R&D Tax Credit (300) (6,200)

$ 24,500 Exhibit AP-E3 Schedule 1 ORANGE AND ROCKLAND UTILITIES, INC. Page 2 of 2 Revenue Requirement - Electric Initial Filing Major Cost Drivers ($000's)

RY1 RY2 RY3

Base Rate Increase - RY1 $ 24,468

Operating Revenues Sales Revenue (Net of Fuel & Revenue Taxes) (1,760) (984) Other Operating Revenues 36 11 Subtotal (1) (1,724) (973)

Operating Expenses Operation & Maintenance Expense (excl. fuel) - Labor & General Escalations 3,202 3,604 - Employee Welfare Expense 876 1,321 - Pension and OPEBs - - - Site Investigation & Remediation (6,041) (34) - BCO (1,249) (1,886) - All Other 3,639 557 Depreciation 4,489 10,511 Property and Other Taxes 2,828 2,280 Return on Rate Base 3,767 10,194 Income Tax Expense 1,315 2,530 Subtotal (2) 12,825 29,078

Increase in Net Operating Expenses (2) - (1) 14,549 30,051

Net Rate Change $ 24,468 $ 14,549 $ 30,051 Exhibit AP-E3 Schedule 2

X3A0T Page 1 of 2 ORANGE AND ROCKLAND UTILITIES, INC. Revenue Requirement Initial Filing Computation of Electric Revenue Requirement For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3 Initially Filed

Electric Rate Base $ 1,027,965 $ 1,071,269 $ 1,188,446

Rate of Return 7.04% 7.02% 7.02%

Required Return 72,369 75,203 83,429

Income Available for Return 54,573 64,622 61,573

Deficiency 17,796 10,581 21,856

Retention Factor* 72.73% 72.73% 72.73%

Additional Revenue Requirement $ 24,468 $ 14,549 $ 30,051

* Calculation of Retention Factor: Additional Revenue 100.00% $ 24,468 $ 14,549 $ 30,051 Less: Revenue Taxes 1.73% 423 252 520 Late Payment Charges Revenue -0.69% (169) (100) (207) Uncollectibles 0.50% 122 73 150 Subtotal 98.46% 24,092 14,324 29,588 Less: SIT on above @ 6.5% 6.40% 1,566 931 1,923 FIT on above @ 21% 19.33% 4,730 2,813 5,810 Retention Factor 72.73% $ 17,796 $ 10,580 $ 21,855 ORANGE AND ROCKLAND UTILITIES, INC. Revenue Requirement Initial Filing Electric Operating Income, Rate Base & Rate of Return For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3 For The Twelve Rate Year as Rate Year as Rate Year as Months Ending Adjusted for Adjusted for Adjusted for September 30, Normalizating Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Ref 2020 Adjustment Initial Update As Updated Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase Operating Revenues Sales & Deliveries to Public Sch 3 $ 447,906 $ - $ (5,797) $ 442,109 $ 24,468 $ 466,577 $ (2,834) $ 463,743 $ 14,549 $ 478,292 $ (6,654) $ 471,637 $ 30,051 $ 501,688 Sales for Resale Sch 3 15,302 - 149 15,451 15,451 549 16,000 16,000 71 16,070 16,070 Sales Revenues 463,209 - (5,648) 457,560 24,468 482,028 (2,285) 479,743 14,549 494,292 (6,584) 487,708 30,051 517,759 Other Operating Revenues Sch 5 9,393 - 2,770 12,163 169 12,332 35 12,367 100 12,467 11 12,478 207 12,685 Total Operating Revenues 472,602 - (2,879) 469,723 24,637 494,360 (2,250) 492,110 14,649 506,759 (6,573) 500,186 30,258 530,444

Operating Expenses Purchased Power Sch 6 93,353 - 7,741 101,094 101,094 (1,019) 100,075 100,075 (5,565) 94,510 94,510 Operations & Maintenance Expense Sch 6 196,678 (13,784) (4,715) 178,180 122 178,302 420 178,721 73 178,794 3,508 182,302 150 182,452 Depreciation Sch 7.2 55,276 - 10,106 65,382 65,382 4,419 69,801 69,801 10,349 80,150 80,150 Regulatory Amortization Sch 4 2,142 - 11,072 13,214 13,214 1,898 15,112 15,112 1,819 16,931 16,931 Taxes Other Than Income Taxes Sch 8 52,171 (753) 3,712 55,130 423 55,553 2,702 58,255 252 58,507 2,125 60,632 520 61,152 Total Operating Expenses 399,620 (14,537) 27,917 413,000 545 413,545 8,420 421,965 325 422,290 12,236 434,525 670 435,195

Operating Income Before Income Taxes 72,981 14,537 (30,795) 56,723 24,092 80,815 (10,670) 70,145 14,324 84,469 (18,808) 65,661 29,588 95,249

Income Taxes New York State Income Taxes Sch 9 3,404 (1,375) 2,029 1,566 3,595 (831) 2,764 931 3,695 (1,338) 2,357 1,923 4,280 Federal Income Taxes Sch 10 6,121 (5,999) 122 4,730 4,852 (2,093) 2,760 2,813 5,572 (3,840) 1,732 5,810 7,541 Total Income Taxes 9,524 - (7,374) 2,150 6,296 8,447 (2,923) 5,524 3,744 9,267 (5,179) 4,088 7,733 11,821 `

Operating Income $ 63,457 $ 14,537 $ (23,422) $ 54,573 $ 17,796 $ 72,368 $ (7,747) $ 64,622 $ 10,580 $ 75,202 $ (13,630) $ 61,573 $ 21,855 $ 83,428 Rate Base Electric Rate Base #1 $ 1,027,965 $ 1,027,965 $ 43,303 $ 1,071,269 $ 1,071,269 $ 117,177 $ 1,188,446 $ 1,188,446

Rate Of Return 5.31% 7.04% 7.02% 7.02% Exhibit AP-E3 Schedule 3

X5A0T ORANGE AND ROCKLAND UTILITIES, INC. Sales Delivery at Current Rates - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3 For The Twelve Months Ending September 30, Normalizating Rate Year Rate Year as Rate Year Rate Year as 2020 Adjustment Initial Update As Updated Adjustments Adjusted Adjustments Adjusted

Sales & Deliveries to Public 447,906 $ (5,797) $ 442,109 $ (2,834) $ 439,275 $ (6,654) $ 432,620 Sale for Resale 15,302 149 15,451 549 16,000 71 16,070 Total Sales Revenues $ 463,209 $ - $ (5,648) $ 457,560 $ (2,285) $ 455,275 $ (6,584) $ 448,691 X6A0T ORANGE AND ROCKLAND UTILITIES, INC. Amortization of Regulatory Deferrals - Electric Initial Filing ($000's)

Projected Deferrals Allowance Amortization Projected Lin Line Balance @ 10/1/2020- 10/1/2020- 10/1/2020- Balance RY1 RY2 RY3 Amortization e No. Regulatory Assets and Liabilities Account 9/30/2020 12/31/2021 12/31/2021 12/31/2021 12/31/2021 RY1 Deferral RY 2 Deferral RY 3 Deferral Amortization Amortization Amortization Period No.

1 18A Assessment 15051/ 15052/ 24469 (113) 96 (16) 5 5 5 3 1 2 Competitive Unbundling - Customer Information 24316 (9) (6) (15) 5 5 5 3 2 3 Deferred Tax Liabilities Carrying Charge 24462 (4,735) 3,258 (1,478) 493 493 493 3 3 4 Energy Efficiency Programs - - 15,162 16,092 16,056 (1,516) (3,125) (4,731) 10 4 5 Environmental Carrying Charge 24485/ 15136 (152) (126) (278) 93 93 93 3 5 6 Excess FIT 24525 (6,176) 5,974 (203) 68 68 68 3 6 7 Low Income 24386/ 15244 (7,485) 12,688 (12,688) (2,889) (10,374) 3,458 3,458 3,458 3 7 8 MGP Sites 14605/ 22301 1,291 2,706 (6,478) (2,568) (5,049) 1,683 1,683 1,683 3 8 9 Non Officer Management Variable Pay 24514 (1,467) 3,696 (3,696) 91 (1,376) 459 459 459 3 9 10 NYSIT Rate Change 24393/ 15232 234 (191) 42 (14) (14) (14) 3 10 11 Negative Revenue Adjustments 24523 (300) - (300) 100 100 100 3 11 12 OPEB 14402/ 24366 (6,532) (1,909) (3,984) (943) (13,367) 4,456 4,456 4,456 3 12 13 Other Environmental Sites 14601 423 23 (88) 359 (120) (120) (120) 3 13 14 Pension 14401/ 24483 4,188 24,651 (9,159) 3,515 23,195 (7,732) (7,732) (7,732) 3 14 15 Plant Reconciliation 24399 (1,917) (183) 695 (1,405) 468 468 468 3 15 16 Property Taxes 14757 (206) 53,552 (55,030) (1,910) (3,594) 1,198 1,198 1,198 3 16 17 R&D 24408 63 (32) (717) 233 (453) 151 151 151 3 17 18 Rate Case Costs 15171 443 819 (726) 536 (179) (179) (179) 3 18 19 Credit Card Fees 24310/ 15232 238 279 (288) - 229 (76) (76) (76) 3 19 20 18A General Assessment Refund 2017 to 2018 24537 (66) (2) - (68) 23 23 23 3 20 21 Property Tax Refunds 24407 (60) - (11) (71) 24 24 24 3 21 22 Reactive Power 24510/ 15211 (246) - 240 (6) 2 2 2 3 22 23 Sale of Warwick 24414 28 61 89 (30) (30) (30) 3 23 24 Storm Deferral 15186 78,376 7,623 (7,623) (12,781) 65,595 (13,119) (13,119) (13,119) 5 24 25 Covid-19 Deferrals- UB 15276 1,024 - - 1,024 (341) (341) (341) 3 25 26 Customer Portfolio Shared Earnings 24463 (4,030) 2,330 (1,700) 567 567 567 3 26 27 Interest on Storm Reserve 15200 622 255 53 929 (310) (310) (310) 3 27 28 Exchange of Easement with Premium Outlets 24488 (128) (3) - - (131) 44 44 44 3 28 29 Settlement of Storms Riley and Quinn 24538 (852) (21) - - (873) 291 291 291 3 29 30 Legacy meters 19,006 (1,584) (1,584) (1,584) 12 30 31 Monsey NWA Program 15105/ 24496 (1,671) 2,990 (1,972) (654) 19,281 1,621 1,626 (1,863) (2,025) (2,187) 10 31 32 Pomona DER 15251 (429) 6,829 (1,268) 5,132 200 200 200 (533) (553) (573) 10 32 33 Rev Demo Projects 15250 1,893 2,048 (1,163) 2,778 1,883 1,068 310 (466) (573) (604) 10 33 34 Rev Demo Carrying Charges 24517 (1,762) (1,481) (3,243) 1,081 1,081 1,081 3 34

Total $ 50,486 $ 114,528 $ (99,662) $ (10,097) $ 74,260 $ 36,526 $ 18,981 $ 18,192 $ (13,214) $ (15,112) $ (16,931) X7A0T ORANGE AND ROCKLAND UTILITIES, INC. Other Operating Revenues - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY 2 RY 3 For The Twelve Rate Year as Rate Year as Rate Year as Lin Months Ending Adjusted for Adjusted for Adjusted for Lin e September 30, Normalizating Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate e No. 2020 Adjustment Initial Update As Updated Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase No. Miscellaneous Service & Other Revenues 0 1 AMI/AMR Meter Reading/Change Out Fees 67 78 145 145 145 145 145 145 1 2 Customer Reconnect Fees 51 90 141 141 141 141 141 141 2 3 Late Payment Charges 1,427 - (40) 1,387 169 1,556 (20) 1,536 100 1,636 (46) 1,591 207 1,798 3 4 POR Discount 979 - 979 979 979 979 979 979 4 5 Shared Meter Assessment (10) 10 ------5 6 Agency Checks Dishonored 1 - 1 1 1 1 1 1 6 7 Acceller Inc. 289 (289) ------7 8 Bad Check Charge 57 20 77 77 77 77 77 77 8 9 Collection Charges 34 27 61 61 61 61 61 61 9 10 NYSERDA 2 - 2 2 2 2 2 2 10 11 Solar Application Fee 91 91 91 91 91.0 91 91 11 12 Other 2 - 2 2 2 2.0 2 2 12 Total 2,990 - (104) 2,886 169 3,055 (20) 3,035 100 3,135.4 (46) 3,090 207 3,297

Rents 13 Joint Operating Rents 6,082 6 6,088 6,088 6,088 6,087.7 6,088 6,088 13 14 Pole Attachment and Parity Billings 2,895 202 3,097 3,097 55 3,152 3,152.0 57 3,209 3,209 14 15 Other Rents 92 92 92 92 92.0 92 92 15 Total 9,069 - 208 9,277 - 9,277 55 9,332 - 9,331.7 57 9,389 - 9,389

Revenues Offset in Sales, Energy Clauses or O&M: 16 BPP Revenues - Full Service 1,848 (1,848) ------16 17 BPP Revenues - Marketers 762 (762) ------17 18 MFC True-up 181 (181) ------18 19 SBC True-up 359 (359) ------19 20 Transmission Service Charges 84 (84) ------20 21 Interest on Hedging Program (65) 65 ------21 Total 3,170 - (3,170) ------

Regulatory Accounting (Reconciliations / Amortizations): 22 Distribution Level Demand Response Program (597) 597 ------22 23 Pike Corning ESA 2,418 (2,418) ------23 24 Standby Reliability Credit (271) 271 ------24 25 Deferred Income Taxes Carrying Charge (231) 231 ------25 26 Environmental Carrying Charge (204) 204 ------26 27 Reserve for Overearnings (1,700) 1,700 ------27 28 Residential Service Termination Incentive (661) 661 ------28 29 Tree Trimming (84) 84 ------29 30 Carbon Reduction Reconciliation (536) 536 ------30 31 Credit Card Reconciliation 71 (71) ------31 32 Make Whole Provision (1,706) 1,706 ------32 33 Energy Efficiency Reconcilaition (2,216) 2,216 ------33 34 Property Tax Incentive 10 (10) ------34 35 Non-Officer Variable Pay True Up (1,376) 1,376 ------35 36 Carrying Charge for Rev DEMO, Monsey, Pomona (1,397) 1,397 ------36 37 Negative Revenue Adjustment and Earnings Adjustments Mechanism 2,645 (2,645) ------37 Total (5,835) - 5,835 ------

Total Other Operating Revenues $ 9,393 $ - $ 2,770 $ 12,163 $ 169 $ 12,332 $ 35 $ 12,367 $ 100 $ 12,467 $ 11 $ 12,478 $ 207 $ 12,685 X8A0T ORANGE AND ROCKLAND UTILITIES, INC. Electric Operation and Maintenance Expenses Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

1.60% 2.98% RY2 RY1 RY2 RY3 1.60% 3.39% RY3 3.49% 6.38% For The Twelve Rate Year as Rate Year as Rate Year as Months Ending Adjusted for Adjusted for Adjusted for Line September 30, Normalizating Initial Program Initial General Initial Labor Proposed Rate Proposed Rate Rate Year Proposed Rate Proposed Rate Rate Year Proposed Rate Proposed Rate Line General Labor No. 2020 Adjustment Changes Escalation Escalation As Updated Increase Increase Adjustments Escalation Increase Increase Adjustments Escalation Increase Increase No. Escalation Escalation 1 Fuel and Purchased Power $ 93,353 $ - $ 7,741 $ - $ - $ 101,094 $ 101,094 $ (1,019) $ - $ 100,075 $ (5,565) $ - $ 94,510 1 N N 2 A & G Health Insurance and Capital Overhead (1,084) 175 - (58) (967) (967) (29) (996) (34) (1,030) 2 N Y 3 Bond Administration & Bank Fees 320 11 - 331 331 5 336 5 342 3 Y N 4 Company Labor - Corporate & Shared Services 6,811 (185) 191 - 435 7,252 7,252 71 218 7,541 10 256 7,807 4 N Y 5 Company Labor - Customer Operations 14,470 231 - 938 15,639 15,639 238 473 16,350 148 559 17,058 5 N Y 6 Company Labor - Electric Ops 29,290 801 - 1,920 32,011 32,011 802 978 33,791 666 1,168 35,625 6 N Y 7 Company Labor - Engineering 4,168 129 - 274 4,571 4,571 80 139 4,790 83 165 5,038 7 N Y 8 Company Labor - Substation Operations 4,168 60 - 270 4,498 4,498 94 137 4,729 5 160 4,894 8 N Y 9 Customer Billing Postage 1,263 - 44 - 1,307 1,307 - 21 1,328 - 21 1,349 9 Y N 10 Employee Welfare Expense 8,446 615 423 - - 9,484 9,484 863 - 10,346 1,301 - 11,647 10 N N 11 Executive Variable Pay 642 (642) ------11 N N 12 Facilities 1,319 46 - 1,366 1,366 22 1,387 22 1,410 12 Y N 13 Information Technology 4,960 (503) 1,069 193 - 5,719 5,719 797 104 6,620 448 113 7,181 13 Y N 14 Informational Advertising 306 11 - 316 316 5 321 5 326 14 Y N 15 Injuries & Damages/ Workers Compensation 863 (613) - - 250 250 (3) - 247 18 - 265 15 N N 16 Institutional Dues & Subscription 144 5 - 149 149 2 151 2 154 16 Y N 17 Insurance Premium 591 294 31 - 916 916 15 931 15 946 17 Y N 18 Intercompany Shared Services 13,572 803 502 - 14,877 14,877 (47) 237 15,067 154 244 15,464 18 Y N 19 Legal and Other Professional Services 401 7 14 - 422 422 7 428 7 435 19 Y N 20 Load Dispatching 483 17 - 500 500 8 508 8 516 20 Y N 21 Low Income 10,056 (10,056) ------21 N N 22 Ops - Corporate & Shared Services 10,320 (3,961) 283 232 - 6,874 6,874 92 112 7,078 32 114 7,224 22 Y N 23 Ops - Customer Operations 4,641 464 178 - 5,283 5,283 522 93 5,898 56 95 6,049 23 Y N 24 Ops - Electric Operations 18,828 3,585 782 - 23,196 23,196 482 379 24,057 190 388 24,635 24 Y N 25 Ops - Engineering 1,370 96 51 - 1,517 1,517 642 35 2,194 4 35 2,233 25 Y N 26 Ops - Substation Operations 1,711 67 62 - 1,841 1,841 2 30 1,872 2 30 1,904 26 Y N 27 Other Compensation 1,247 (1,020) 98 - - 325 325 1 - 326 0 - 327 27 N N 28 Pension and OPEB Costs 14,232 2,835 (15,931) - - 1,136 1,136 - - 1,136 - - 1,136 28 N N 29 Site Investigation & Remediation 5,109 1,361 - - 6,470 6,470 (5,948) - 522 (33) - 489 29 N N 30 Regulatory Commission Expense - General and R&D 2,070 126 77 - 2,273 2,273 36 2,309 37 2,346 30 Y N 31 Renewable Portfolio Charges 7,538 - (439) - - 7,099 7,099 (153) - 6,946 (495) - 6,451 31 N N 32 Rent 2,077 259 - - 2,336 2,336 53 - 2,389 43 - 2,432 32 N N 33 Research and Development 476 174 23 - 673 673 11 683 11 694 33 Y N 34 Storm Allowance 5,967 208 - 6,175 6,175 99 6,274 100 6,374 34 Y N 35 System Benefit Charge 14,095 - (821) - - 13,274 13,274 (285) - 12,989 (927) - 12,062 35 N N 36 Uncollectible Reserve - Customer 2,468 (257) - - 2,211 122 2,333 (14) - 73 2,391 (33) - 150 2,508 36 N N 37 Uncollectible Reserve - Sundry 1,300 (530) - - 770 770 - 770 - 770 37 N N 38 Worker's Comp NYS Assessment 136 - 5 - 141 141 - 2 143 - 2 145 38 Y N 39 Bargaining Unit Contract Cost 11 - - 11 11 - 11 - 11 39 N N 40 Environmental Affairs 188 - - 188 188 - 188 - 188 40 N N 41 External Audit Services 401 14 - 415 415 7 422 7 429 41 Y N 42 Finance & Accounting Operations 6 0 - 7 7 0 7 0 7 42 Y N 43 All Other 1,297 (1,216) (26) - - 55 55 3 - 58 (1) - 57 43 N N 44 Business Cost Optimization (2,964) - - (2,964) (2,964) (1,230) - (4,194) (1,857) - (6,051) 44 45 Company Labor - Fringe Benefit Adjustment 227 8 - 235 235 207 7 449 147 10 605 45 Y N

Total Operation & Maintenance Expenses $ 290,031 $ (13,784) $ (3,266) $ 2,513 $ 3,779 $ 279,274 $ 122 $ 279,396 $ (3,751) $ 3,152 $ 73 $ 278,870 $ (5,606) $ 3,548 $ 150 $ 276,962 X9A0T ORANGE AND ROCKLAND UTILITIES, INC. Plant Depreciation Expense Current - Electric For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3 For The Twelve Rate Year as Rate Year as Rate Year as Months Ending Adjusted for Adjusted for Adjusted for September 30, Normalizating Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate 2020 Adjustment Initial Update As Updated Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase Depreciation Expense $ 55,276 $ 11,816 $ 67,092 $ 67,092 $ 4,601 $ 71,694 $ 71,694 $ 10,380 $ 82,074 Less Clearing Accounts: Vehicle (3,920) (3,920) (3,920) (279) (4,199) (4,199) (240) (4,440) Reserve Deficiency - - - - - Total Depreciation Expense $ 55,276 $ - $ 7,896 $ 63,172 $ - $ 63,172 $ 4,322 $ 67,494 $ - $ 67,494 $ 10,140 $ - $ - $ 77,634 X10A0T ORANGE AND ROCKLAND UTILITIES, INC. Plant Depreciation Expense Proposed Rates - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3 For The Twelve Rate Year as Rate Year as Rate Year as Months Ending Adjusted for Adjusted for Adjusted for September 30, Normalizating Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate 2020 Adjustment Initial Update As Updated Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase Depreciation Expense $ 55,276 $ 13,716 $ 68,992 $ 68,992 $ 4,679 $ 73,670 $ 73,670 $ 10,573 $ 84,243 $ 84,243 Less Clearing Accounts: Vehicle - (3,610) (3,610) (3,610) (259) (3,869) (3,869) (224) (4,093) (4,093) Reserve Deficiency ------Total Depreciation Expense $ 55,276 $ - $ 10,106 $ 65,382 $ - $ 65,382 $ 4,419 $ 69,801 $ - $ 69,801 $ 10,349 $ 80,150 $ - $ 80,150 X11A0T ORANGE AND ROCKLAND UTILITIES, INC. Taxes Other Than Income Taxes - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY 1 RY 2 RY 3

For The Twelve Rate Year as Rate Year as Rate Year as Months Ending Adjusted for Adjusted for Adjusted for September 30, Normalizating Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate 2020 Adjustment Initial Update As Updated Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase Property Taxes State, County & Town $ 12,520 $ 627 $ 13,147 $ - $ 13,147 $ 1,181 $ 14,328 $ - $ 14,328 $ 396 $ 14,723 $ - $ 14,723 Village 1,949 153 2,102 - 2,102 56 2,158 - 2,158 53 2,212 - 2,212 School 26,343 1,262 27,605 27,605 1,260 28,866 28,866 1,510 30,376 30,376 40,811 - 2,042 42,854 - 42,854 2,498 45,352 - 45,352 1,959 47,311 - 47,311 Property Tax Over/ (Under) Collections State, County & Town 380 (380) ------Village (110) 110 ------School 1,115 (1,115) ------1,385 (1,385) ------

Total Property Taxes 42,196 (1,385) 2,042 42,854 - 42,854 2,498 45,352 - 45,352 1,959 47,311 - 47,311

Payroll Taxes 3,519 631 448 4,598 4,598 286 4,884 4,884 285 5,169 5,169

Revenue Taxes 6,409 1,220 7,629 423 8,052 (83) 7,969 252 8,221 (120) 8,101 520 8,621

Other Taxes - Sales and Use Tax 3 - 3 3 - 3 3 - 3 3 Other Taxes 44 2 46 46 1 47 47 1 48 48 47 - 2 49 - 49 1 50 - 50 1 51 - 51

Total Taxes Other than Income Taxes 52,171 (753) 3,712 55,130 423 55,553 2,702 58,255 252 58,507 2,125 60,632 520 61,152

Total Taxes Other than Income Taxes, Excluding Revenue Taxes $ 45,762 $ (753) $ 2,493 $ 47,501 $ - $ 47,501 $ 2,785 $ 50,286 $ - $ 50,286 $ 2,245 $ 52,531 $ - $ 52,531 X12A0T ORANGE AND ROCKLAND UTILITIES, INC. State Income Tax - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3 Rate Year as Rate Year as Rate Year as Adjusted for Adjusted for Adjusted for Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Initial Update Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase Operating Income Before Income Tax $ 56,723 $ 24,092 $ 80,815 $ (10,670) $ 70,145 $ 14,324 $ 84,469 $ (18,808) $ 65,661 $ 29,588 $ 95,249 Interest Expense (25,647) (25,647) (2,101) (27,748) (27,748) (1,742) (29,490) (29,490) Operating Income Before Federal Income Tax 31,076 24,092 55,168 (12,771) 42,397 14,324 56,721 (20,550) 36,171 29,588 65,759

Normalized Items Lien Date Property Tax (604) (604) (24) (628) (628) (25) (653) (653) Tax Depreciation (71,716) (71,716) (316) (72,032) (72,032) (8,067) (80,098) (80,098) Tax Gain/(Loss) (2,410) (2,410) (302) (2,711) (2,711) (192) (2,903) (2,903) Book Depreciation 43,127 43,127 2,024 45,151 45,151 3,295 48,445 48,445 Computer Software 13,167 13,167 1,986 15,153 15,153 6,214 21,367 21,367 BookDepreciation on Cost of Removal 12,400 12,400 819 13,220 13,220 784 14,004 14,004 Cost of Removal Expense (5,020) (5,020) - (5,020) (5,020) - (5,020) (5,020) Management Benefits (4,143) (4,143) 324 (3,818) (3,818) (835) (4,653) (4,653) Materials and Supplies (5,830) (5,830) - (5,830) (5,830) - (5,830) (5,830) MSC (3,293) (3,293) - (3,293) (3,293) - (3,293) (3,293) Repair Tax Expense (16,829) (16,829) (25,579) (42,409) (42,409) 18,460 (23,949) (23,949)

Total Normalized Items (41,151) - (41,151) (21,067) (62,218) - (62,218) 19,634 (42,585) - (42,585)

NYS Taxable Income (10,075) 24,092 14,017 (33,838) (19,821) 14,324 (5,497) (916) (6,413) 29,588 23,175

Tax Computation Current NYS Income Tax (655) 1,566 911 (2,199) (1,288) 931 (357) (60) (417) 1,923 1,506 Deferred NYS Income Tax - non-plant items 39 - 39 2 41 - 41 2 42 - 42 Deferred NYS Income Tax - plant items 2,644 2,644 1,367 4,012 4,012 (1,280) 2,731 2,731 Total New York State Income Tax $ 2,029 $ 1,566 $ 3,595 $ (831) $ 2,764 $ 931 $ 3,695 $ (1,338) $ 2,357 $ 1,923 $ 4,280 X13A0T ORANGE AND ROCKLAND UTILITIES, INC. Federal Income Tax - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3 Rate Year as Rate Year as Rate Year as Adjusted for Adjusted for Adjusted for Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Rate Year Rate Year As Proposed Rate Proposed Rate Initial Update Increase Increase Adjustments Adjusted Increase Increase Adjustments Adjusted Increase Increase Operating Income Before Income Tax $ 56,723 $ 24,092 $ 80,815 $ (10,670) $ 70,145 $ 14,324 $ 84,469 $ (18,808) $ 65,661 $ 29,588 $ 95,249 Interest Expense (25,647) (25,647) (2,101) (27,748) (27,748) (1,742) (29,490) (29,490) Operating Income Before Federal Income Tax 31,076 24,092 55,168 (12,771) 42,397 14,324 56,721 (20,550) 36,171 29,588 65,759

Flow Through Items Lien Date Property Tax (604) (604) (24) (628) (628) (25) (653) (653) Book Depreciation on Cost of Removal 12,400 12,400 819 13,220 13,220 784 14,004 14,004 Removal Costs (5,020) (5,020) - (5,020) (5,020) - (5,020) (5,020) Total Flow-Through Items 6,776 - 6,776 795 7,571 - 7,571 759 8,330 - 8,330

Normalized Items Tax Depreciation (53,780) (53,780) (1,641) (55,422) (55,422) (8,764) (64,185) (64,185) Tax Gain/(Loss) on Disposition of Assets (1,675) (1,675) (404) (2,079) (2,079) (326) (2,405) (2,405) Book Depreciation 43,127 43,127 2,024 45,151 45,151 3,295 48,445 48,445 Computer Software 13,167 13,167 1,986 15,153 15,153 6,214 21,367 21,367 Management Benefits (4,143) (4,143) 324 (3,818) (3,818) (835) (4,653) (4,653) Materials and Supplies (5,830) (5,830) - (5,830) (5,830) - (5,830) (5,830) MSC (3,293) (3,293) - (3,293) (3,293) - (3,293) (3,293) Repair Tax Expense (16,829) (16,829) (25,579) (42,409) (42,409) 18,460 (23,949) (23,949) Total Normalized Items (29,257) - (29,257) (23,290) (52,547) - (52,547) 18,044 (34,503) - (34,503)

Total Adjustments to Income (22,480) - (22,480) (22,495) (44,976) - (44,976) 18,803 (26,173) - (26,173)

Taxable Income Before Current State Tax Deduction 8,596 24,092 32,688 (35,266) (2,579) 14,324 11,745 (1,747) 9,998 29,588 39,586

Less: Current State Tax 655 (1,566) (911) 2,199 1,288 (931) 357 60 417 (1,923) (1,506)

Federal Taxable Income 9,251 22,526 31,777 (33,067) (1,290) 13,393 12,103 (1,688) 10,415 27,665 38,080

Tax Computation Current Federal Income Tax 1,943 4,730 6,673 (6,944) (271) 2,813 2,542 (354) 2,187 5,810 7,997 Deferred Federal Income Tax 5,552 5,552 4,597 10,149 10,149 (3,527) 6,622 6,622 Excess Deferred Federal Income Tax - Protected (1,845) (1,845) 255 (1,590) (1,590) 41 (1,549) (1,549) Excess Deferred Federal Income Tax - Unprotected (2,105) (2,105) - (2,105) (2,105) (0) (2,105) (2,105) Excess Deferred Federal Income Tax - Unprotected - Accelerated (6,315) (6,315) - (6,315) (6,315) - (6,315) (6,315) Excess Deferred Federal Income Tax - Non-Plant 807 807 - 807 807 - 807 807 Excess Deferred Federal Income Tax - Non-Plant - Accelerated 2,420 2,420 - 2,420 2,420 - 2,420 2,420 R&D Tax Credit (335) (335) (335) (335) (335) (335)

Total Federal Income Tax $ 122 $ 4,730 $ 4,852 $ (2,093) $ 2,760 $ 2,813 $ 5,572 $ (3,840) $ 1,732 $ 5,810 $ 7,541 Exhibit AP-E3 Schedule 11 X14A0T ORANGE AND ROCKLAND UTILITIES, INC. Interest Expense - Electric Initial Filing For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3

Initially Filed Rate Base $ 1,027,965 $ 1,071,269 $ 1,188,446 Interest Bearing CWIP 98,023 157,422 117,242 Dividends Declared (6,024) (6,303) (6,581)

Total 1,119,964 1,222,388 1,299,106 Interest Cost Factor (Debt + Customer Deposits) 2.29% 2.27% 2.27%

Allowable Interest Deduction $ 25,647 $ 27,748 $ 29,490 Exhibit AP-E3 Schedule 12 X15A0T ORANGE AND ROCKLAND UTILITIES, INC. Fund Requirements and Sources - Electric For The Twelve Months Ending December 31, 2022 ($000's)

Amount Sources of Funds:

Internal Operating Income 72,368 Dividend (37,146) Book Depreciation 65,382 Amortization of deferred Costs / (Credits) 13,214 Deferred Federal & State Income Taxes 1,198 All Other (65,219) Total Internal Sources of Funds 49,796

External Long Term Debt 66,930 Common Stock 33,465 Total External Sources of Funds 100,395

Total Sources 150,191

Application of Funds: Construction Expenditures (Net of AFUDC) 150,191 Long Term Debt Retirements -

Total Application of Funds 150,191 Exhibit AP-E3 Schedule 13

X16A0T ORANGE AND ROCKLAND UTILITIES, INC. Interest Coverage Ratios - Electric Initial Filing For The Twelve Months Ending ($000's)

December December December September 2017 2018 2019 2020 Actual Actual Actual Actual Net Income $ 63,863 $ 59,164 $ 70,402 $ 67,242 Federal Income & State Tax 41,669 15,371 17,400 18,451 Total Earnings Before Federal and State Income Tax 105,532 74,535 87,802 85,694 Fixed Charges 38,702 41,281 44,011 43,771 Total Earnings Before Federal and State Income Tax and Fixed Charges $144,234 $115,816 $131,813 $129,465

Interest on Long-Term Debt 35,187 35,829 38,213 39,234 Amortization of Debt Discount, Premium and Expense 513 500 477 366 Interest Component on Lease Payment 1,601 1,393 1,463 1,349 Other Interest 1,401 3,559 3,858 2,821

Total Fixed Charges $38,702 $41,281 $44,011 $43,771

Interest Coverage (Times) 3.73 2.81 3.00 2.96 Exhibit AP-E3 Schedule 14

X17A0T ORANGE AND ROCKLAND UTILITIES, INC. General Inflation Factors Initial Filing GDP Deflator 2012=100 Forecast Prepared October 2020

Forecast 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Mar. 31 97.28 99.32 101.14 102.94 104.03 104.87 107.01 109.24 111.42 113.42 114.60 116.43 118.30 120.19 Jun. 30 97.92 99.71 101.43 103.51 104.60 105.59 107.34 110.18 112.14 112.82 115.10 116.94 118.82 120.72 Sep. 30 98.55 100.23 101.92 103.96 104.93 105.95 107.87 110.61 112.53 113.60 115.50 117.35 119.23 121.14 Dec. 31 98.70 100.74 102.52 104.12 104.94 106.47 108.60 111.14 112.95 114.10 116.00 117.86 119.74 121.66

Average 98.1 100.0 101.8 103.6 104.6 105.7 107.7 110.3 112.3 113.5 115.3 117.1 119.0 120.9

Annual Average Year-over- year % change 2.1% 1.9% 1.8% 1.8% 1.0% 1.0% 1.9% 2.4% 1.8% 1.1% 1.6% 1.6% 1.6% 1.6%

Average 12 months Ended September 30, 2020 (Test Year) 113.1955 Average 12 months Ending December 31, 2022 (Forecast) 117.1461 Average 12 months Ending December 31, 2023 (Forecast) 119.0217 Average 12 months Ending December 31, 2024 (Forecast) 120.9274

Escalation rate for the 12 Months Ending 9/30/2020 to the 12 Months Ending 12/31/22 - Rate Year 1 1.0349 3.49%

Rate Year 2 (increase over Rate Year 1) 1.0160 1.60%

Rate Year 3 (increase over Rate Year 2) 1.0160 1.60%

Notes: Actual GDP Deflator from BEA. Quarterly Forecasts for 2020 through 2021 from Blue Chip dated Oct 2020. Annual Forecasts for 2022 on are from 2021 Forecast in Blue Chip dated Oct 2020. The quarterly values for 2022 on are extrapolated by applying the year-over-year rate to the prior year's corresponding quarter. Exhibit AP-E3 Schedule 15 Page 1 of 2

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Adjustment Summary For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3

Normalization Adjustment Initial Adjustment Initial Initial

A Sales & Deliveries to Public 1 To reflect forecast rate year sales and delivery revenues (5,797) (2,834) (6,654) 2 To reflect Sales for resale 149 549 71

- - (5,648) (2,285) (6,584) B Other Operating Revenues 1 AMI/AMR Meter Reading/Change Out Fees - 78 - - 2 Customer Reconnect Fees - 90 - - 3 Late Payment Charges - (40) (20) (46) 5 POR Discount - - - - 6 Shared Meter Assessment - 10 - - 7 Agency Checks Dishonored - - - - 8 Acceller Inc. - (289) - - 9 Bad Check Charge - 20 - - 10 Collection Charges - 27 - - 11 NYSERDA - - - - 12 Distributed Energy Resources (DER) Application Fee - - - - 13 Other - - - - 14 Joint Operating Rents - 6 - - 16 Pole Attachment and Parity Billings - 202 55 57 17 Other Rents - - - - 18 BPP Revenues - Full Service - (1,848) - - 19 BPP Revenues - Marketers - (762) - - 20 MFC True-up - (181) - - 21 SBC True-up - (359) - - 22 Transmission Service Charges - (84) - - 23 Interest on Hedging Program - 65 - - 24 Distribution Level Demand Response Program - 597 - - 25 Pike Corning ESA - (2,418) - - 26 Standby Reliability Credit - 271 - - 27 Deferred Income Taxes Carrying Charge - 231 - - 28 Environmental Carrying Charge - 204 - - 29 Reserve for Overearnings - 1,700 - - 30 Residential Service Termination Incentive - 661 - - 31 Tree Trimming - 84 - - 32 Carbon Reduction Reconciliation - 536 - - 33 Credit Card Reconciliation - (71) - - 34 Make Whole Provision - 1,706 - - 35 Energy Efficiency Reconcilaition - 2,216 - - 36 Property Tax Incentive - (10) - - 37 Non-Officer Variable Pay True Up - 1,376 - - 38 Carrying Charge for Rev DEMO, Monsey, Pomona - 1,397 - - 39 Negative Revenue Adjustment and Earnings Adjustme - (2,645) - - - - 2,770 35 11 C Operations & Maintenance Expense 1 Fuel and Purchased Power 7,741 (1,019) (5,565) 2 A & G Health Insurance and Capital Overhead 175 3 Bond Administration & Bank Fees 4 Total Company Labor - Corporate & Shared Services (185) 191 71 10 5 Company Labor - Customer Operations 231 238 148 6 Company Labor - Electric Ops 801 802 666 7 Company Labor - Engineering 129 80 83 8 Company Labor - Substation Operations 60 94 5 10 Employee Welfare Expense 615 423 863 1,301 11 Executive Variable Pay (642) 12 Facilities 13 Information Technology (503) 1,069 797 448 14 Informational Advertising 15 Injuries & Damages/ Workers Compensation (613) (3) 18 16 Institutional Dues & Subscription 17 Insurance Premium 294 18 Intercompany Shared Services 803 (47) 154 19 Legal and Other Professional Services 7 20 Load Dispatching 21 Low Income (10,056) 22 Total Ops - Corporate & Shared Services (3,961) 283 92 32 23 Ops - Customer Operations 464 522 56 24 Ops - Electric Operations 3,585 482 190 25 Ops - Engineering 96 642 4 26 Ops - Substation Operations 67 2 2 27 Other Compensation (1,020) 98 1 0 28 Pension and OPEB Costs 2,835 (15,931) - - 29 Site Investigation & Remediation 1,361 (5,948) (33) 30 Regulatory Commission Expense - General and R&D 126 31 Renewable Portfolio Charges (439) (153) (495) Exhibit AP-E3 Schedule 15 Page 2 of 2

ORANGE AND ROCKLAND UTILITIES, INC. Initial Filing Adjustment Summary For The Twelve Months Ended December 31, 2022, 2023 and 2024 ($000's)

RY1 RY2 RY3

Normalization Adjustment Initial Adjustment Initial Initial

32 Rent 259 53 43 33 Research and Development 174 34 Storm Allowance 35 System Benefit Charge (821) (285) (927) 36 Uncollectible Reserve - Customer (257) (14) (33) 37 Uncollectible Reserve - Sundry (530) 38 Worker's Comp NYS Assessment 39 Bargaining Unit Contract Cost 40 Environmental Affairs 41 External Audit Services 42 Finance & Accounting Operations 43 All Other (1,216) (27) 3 (2) 44 Business Cost Optimization (2,964) (1,230) (1,857) 45 Company Labor - Fringe Benefit Adjustment 227 207 147

Total O&M (13,784) (3,266) (3,751) (5,606)

D Depreciation 1 Electric 13,716 4,679 10,573 2 Less Clearing Accounts: Vehicles (3,610) (259) (224) - - 10,106 4,419 10,349 E Taxes Other Than Income Taxes Property Taxes 1 State, County & Town 627 1,181 396 2 Village 153 56 53 3 School 1,262 1,260 1,510 4 Property Tax Over/ (Under) Collections (1,385) 5 Property Tax Refunds & Settlements 6 Payroll Taxes 631 448 286 285 7 Revenue Taxes 1,220 (83) (120) 8 New York State Franchise Tax 9 Taxes on Health Insurance 10 Sales and Use Tax - - - 11 Other Taxes 2 1 1 (753) 3,712 2,702 2,125

Total $ (14,537) $ 7,673 $ 1,120 $ 295 Exhibit AP-E3 ORANGE AND ROCKLAND UTILITIES, INC. Schedule 16 Labor-Related Program Changes Proposed New Employees - Electric

Annual Number of Proposed Salary O&R Electric Responsible Panel Positions Hire Date Per person O&M Exp Rate Year 1 Weekly Positions Sr. Service Layout Technician Electric Infrastructure and Operations 1 Jan 2022 $ 123,000 $ 56,597 Additional Troubleshooters Electric Infrastructure and Operations 4 Apr 2022 $ 123,725 $ 379,539 Additional Line Technicians Electric Infrastructure and Operations 2 Apr 2022 $ 133,100 $ 122,489 Subtotal Weekly 7 $ 558,625 Monthly Positions Electric Portfolio Management - Section Manager Electric Infrastructure and Operations 1 Jan 2022 $ 140,000 $ 107,366 Electric Portfolio Management - Project Specialist Electric Infrastructure and Operations 1 Jan 2022 $ 120,000 $ 92,028 ADMS Engineer Electric Infrastructure and Operations 1 Jan 2022 $ 110,000 $ 63,269 Senior Systems Analyst Electric Infrastructure and Operations 1 Jan 2022 $ 110,000 $ 84,359 Electrician Supervisor Electric Infrastructure and Operations 1 Jan 2022 $ 120,000 $ 59,818 UG Inspector/Technician Electric Infrastructure and Operations 1 Jan 2022 $ 90,000 $ 9,000 Chief Construction Inspector - Hazard Tree Removal Electric Infrastructure and Operations 1 Mar 2022 $ 100,000 $ 100,000 Major Account Engineer Customer Service 1 Jan 2022 $ 127,000 $ 97,396 Billing Oversight and Implementation Customer Service 2 Jan 2022 $ 120,000 $ 133,656 Cybersecurity Information Technology 1 Jan 2022 $ 122,676 $ 68,318 Digital Factory Information Technology 1 Jan 2022 $ 110,000 $ 61,259 Subtotal Monthly 12 $ 876,470 Rate Year 1 Total 19 $ 1,435,095 Rate Year 2 Weekly Positions Additional Troubleshooters Electric Infrastructure and Operations 4 Apr 2023 $ 123,725 $ 379,539 Additional Line Technicians Electric Infrastructure and Operations 2 Apr 2023 $ 133,100 $ 122,489 Subtotal Weekly 6 $ 502,028 Monthly Positions Distribution System Operator Electric Infrastructure and Operations 1 Jan 2023 $ 165,000 $ 126,539 Senior Specialist Compliance Electric Infrastructure and Operations 1 Jan 2023 $ 120,000 $ 92,028 Dist. Planner/Forecaster (CLCPA/DSIP) Electric Infrastructure and Operations 1 Jan 2023 $ 100,000 $ 76,690 Electric Portfolio Management (Marketing EPM) Electric Infrastructure and Operations 1 Jan 2023 $ 120,000 $ 92,028 Operating Supervisor for Line Technicians Electric Infrastructure and Operations 1 Apr 2023 $ 125,000 $ 57,518 Data Analytics Positions Customer Service 2 Jan 2023 $ 120,000 $ 133,656 Major Account Engineer Customer Service 1 Jan 2023 $ 127,000 $ 97,396 Digital Factory Information Technology 1 Jan 2023 $ 110,000 $ 61,259 Subtotal Monthly 9 $ 737,113 Rate Year 2 Total 15 $ 1,239,141 Rate Year 3 Weekly Positions Additional Troubleshooters Electric Infrastructure and Operations 3 Apr 2024 $ 123,725 $ 284,654 Additional Line Technicians Electric Infrastructure and Operations 3 Apr 2024 $ 133,100 $ 183,734 Subtotal Weekly 6 $ 468,388 Monthly Positions Systems Specialist CIP Protection Electric Infrastructure and Operations 1 Jan 2024 $ 120,000 $ 92,028 T&S Engineering Standards Engineer Electric Infrastructure and Operations 1 Jan 2024 $ 100,000 $ 76,690 Operating Supervisor for Line Technicians Electric Infrastructure and Operations 1 Apr 2024 $ 125,000 $ 43,138 Journey Mapping Position Customer Service Panel 1 Jan 2024 $ 120,000 $ 66,828 Data Analytics Position Customer Service Panel 1 Jan 2024 $ 120,000 $ 66,828 Subtotal Monthly 5 345,512 Rate Year 3 Total 11 $ 813,900

Total Proposed Positions 45 $ 3,488,137 Exhibit AP-E4

ORANGE AND ROCKLAND UTILITIES, INC.

INDEX OF SCHEDULES

Electric and Common Plant Forecast

SCHEDULE TITLE OF SCHEDULE WITNESS

1 Electric Capital Expenditures by Project Accounting Panel O&R Forecast October 2020 to December 2024

2 Electric Plant Additions by Project " O&R Forecast October 2020 to December 2024

3 Common Capital Expenditures by Project " O&R Forecast October 2020 to December 2024

4 Common Plant Additions by Project " O&R Forecast October 2020 to December 2024 Orange and Rockland Utilities, Inc. Electric Rate Case Electric Capital Expenditures by Project O&R Forecast October 2020 to December 2024 ($000s)

Rate Year 1 Rate Year 2 Rate Year 3 Project Description In Service Date Oct-20 to Dec-21 Jan-22 to Dec-22 Jan-23 to Dec-23 Jan-24 to Dec-24

Electric Capital Expenditures:

Blankets Various $ 51,726.4 $ 48,296.7 $ 47,881.1 $ 48,317.1

Regular Projects Under $1 Million Various 14,922.9 10,913.5 8,672.2 12,589.8

Regular Projects Over $1 Million

Lines 55/56, Structure 33 and Lines 551/56, Structures 48 & 50 Dec 2020 1,168.4 - - - Lovett 138kV Oil Circuit Breaker Replacements Dec 2020 442.7 - - - Tuxedo Park - Mountain Farm Rd to Continental Dec 2020 510.7 - - - West Shore Rail Line Structures 30, 110, 145 Dec 2020 977.8 - - - Community DG/Value of Distributed Energy Resources Mar 2021 202.4 - - - Monroe 61-2-13 New Station (6,000 Ft) Jun 2021 1,918.2 - - - Burns Breaker Replacements Dec 2021 1,745.8 - - - CSX West Shorelines Structures 190, 197, 211 Dec 2021 1,407.6 - - - Port Jervis Subst 2-35MVA Bank, CKt Exits & 69kV Intrastation Tie Dec 2021 21,969.5 - - - Vayoel Moshe Gardens Dec 2021 1,451.2 - - - West Haverstraw Banks - 194E/W 138kV UG Replacement Dec 2021 1,343.3 - - - West Nyack - Rt 59 - Urd - 3500' Dec 2021 2,390.3 - - - Glen Spey - Mohican Lake Road - 2 Miles Hendrix Mar 2022 - 1,395.1 - - Monsey UG Circuit Exit Upgrades Jun 2022 1,800.0 1,190.0 - - Line 31 Reconductor Dec 2022 757.9 517.9 - - OMS Enhancements Dec 2022 1,926.9 2,185.5 - - Blooming Grove Banks, UG Ckt Exits, Transm Ext May 2023 897.0 10,652.3 12,307.8 918.3 O&R REV/DER/EEDM Forecasting Tool May 2023 - 1,261.7 338.3 - Silver Lake, Upgrade Bank 2113 to 35MVA Jun 2023 510.6 2,620.0 840.0 - Burns - 19-12-13 - 4,000 Ft Dec 2023 - 100.0 2,290.3 Ladentown Four - 345kV Breaker Purchase Dec 2023 779.0 1,066.7 598.2 - Line 51 Upgrade Dec 2023 50.1 2,000.0 3,975.1 - Lovett 345kV Station, Remote Relaying and Transmission Dec 2023 12,537.0 17,015.3 16,518.1 - NYSERDA PON 4074 Westtown Dist Automation Dec 2023 820.0 1,015.0 153.3 - Old Nyack Turnpike UG Ckt 21-16-13 Dec 2023 50.0 250.0 894.9 - Pascack Rd UG Ckt 19-13-13 Dec 2023 50.0 250.0 895.1 - Rio - 5-3-34 URD Dip Dec 2023 - 800.0 400.0 - U/G Storm Hardening - Blue Lake Ckt Exit Dec 2023 - 2,000.0 1,400.0 - U/G Storm Hardening - Congers Ave, Congers Dec 2023 - 2,000.0 1,500.0 - Woodbury Batteries Dec 2023 500.0 6,002.0 3,501.9 - Wurtsboro Sub Upgrade 34kV Dec 2023 50.0 250.0 994.8 - ADMS Software System Jan 2024 5,847.3 6,939.9 4,842.5 29.2 Little Tor Substation, Transm Tap and UG Circuit Exits Jun 2024 1,213.2 3,883.3 9,553.5 3,882.3 Lines 11/14 Pole 68 Dec 2024 - - 3,900.0 5,959.3 Little Tor Substation - Rt 45 (S Mtn to Rt 202) - 3.800 Ft - Urd Dip Dec 2024 - - 200.0 2,190.2 U/G Storm Hardening - Gilchrest Rd, Congers Dec 2024 - - 200.0 1,700.0 U/G Storm Hardening - Thiells Mt Ivy Rd, Thiells Dec 2024 - 200.0 1,800.0 3,500.0 West Haverstraw - Rt 202 to Rt 9w - 6400ft Dec 2024 - 200.0 2,000.0 2,500.0 Burns 3rd Bank Addition Jun 2025 - - 500.0 4,000.0 Burns UG Circuits Jun 2025 - - 100.0 2,000.0 Dean Substation Upgrade Design and Construction Jun 2025 338.9 221.1 1,004.7 1,338.3 Upgrade of Trans. Lines 841, 851, 853 to 69kV Jun 2025 2,710.8 1,762.8 2,031.0 16,699.3 Wilson Gate Joint Substation Jun 2025 336.1 220.6 1,004.1 1,337.6 ADMS Phase 2-DERMS Dec 2025 - - 3,850.0 1,500.0 DA RTU Replacement Dec 2025 80.0 560.0 800.0 1,200.0 GRID Mod 4G-5G Dec 2025 1,479.6 1,233.0 1,233.0 1,469.9 New Woodbury Substation, UG Transmission and UG Exits Dec 2025 - 634.6 2,500.0 6,700.0 Line 96 Double Circuit Rebuild Dec 2026 - 300.0 300.0 1,000.0 New Line 705 Underground Dec 2026 1,410.3 1,004.8 1,518.0 5,532.0 5kV Banks Replacements Dec 2027 86.7 12.3 657.9 2,592.7 Transmission Refiguration for Shoemaker 69/138kV Yards Dec 2027 - - 250.0 3,000.0 Upgrade of Transmission Lines 12 & 13/131 Dec 2027 - 800.0 2,000.0 5,000.1

69,759.3 70,543.9 86,852.5 74,049.2

Total Electric Capital Expenditures $ 136,408.6 $ 129,754.1 $ 143,405.8 $ 134,956.1

Exhibit AP-E4 Exhibit

Schedule 1 Schedule Orange and Rockland Utilities, Inc. Electric Rate Case Electric Plant Additions by Project O&R Forecast October 2020 to December 2024 ($000s)

Rate Year 1 Rate Year 2 Rate Year 3 Project Description In Service Date Oct-20 to Dec-21 Jan-22 to Dec-22 Jan-23 to Dec-23 Jan-24 to Dec-24

Electric Plant Additions:

Blankets Various $ 50,583.8 $ 47,248.9 $ 46,672.0 $ 47,063.2

Regular Projects Under $1 Million Various 19,780.8 9,981.4 8,488.6 9,725.5

Regular Projects Over $1 Million

Lines 55/56, Structure 33 and Lines 551/56, Structures 48 & 50 Dec 2020 2,130.8 - - - Lovett 138kV Oil Circuit Breaker Replacements Dec 2020 1,858.1 - - - NYSERDA PON for PowerClerk Enhancements Dec 2020 1,187.4 - - - OMS Enhancements Dec 2020 1,848.9 - - - Shoreline Protection & Foundation Replacement - Tower 147, T/L 26 Dec 2020 3,347.8 - - - Tuxedo Park - Mountain Farm Rd to Continental Dec 2020 3,612.3 - - - West Shore Rail Line Structures 30, 110, 145 Dec 2020 1,755.0 - - - Woodbury Interchange UG Dist Realignment Dec 2020 2,217.8 - - - Community DG/Value of Distributed Energy Resources Mar 2021 1,105.2 - - - Monroe 61-2-13 New Station (6,000 Ft) Jun 2021 3,393.1 - - - Burns Breaker Replacements Dec 2021 2,066.1 - - - CSX West Shorelines Structures 190, 197, 211 Dec 2021 1,587.3 - - - 2021 OMS Enhancements Dec 2021 1,154.3 - - - Port Jervis Subst 2-35MVA Bank, CKt Exits & 69kV Intrastation Tie Dec 2021 36,444.3 - - - Vayoel Moshe Gardens Dec 2021 1,451.2 - - - West Haverstraw Banks - 194E/W 138kV UG Replacement Dec 2021 1,968.4 - - - West Nyack - Rt 59 - Urd - 3500' Dec 2021 2,390.3 - - - Glen Spey - Mohican Lake Road - 2 Miles Hendrix Mar 2022 - 1,395.1 - - Monsey UG Circuit Exit Upgrades Jun 2022 - 2,990.0 - - 2022 OMS Enhancements Dec 2022 - 2,185.5 - - Line 31 Reconductor Dec 2022 - 1,481.3 - - Blooming Grove Banks, UG Ckt Exits, Transm Ext May 2023 - - 6,916.8 17,883.9 O&R REV/DER/EEDM Forecasting Tool May 2023 - - 1,600.0 - Lovett 345kV Station, Remote Relaying and Transmission Jun 2023 3,303.5 4,918.4 43,017.6 - Silver Lake, Upgrade Bank 2113 to 35MVA Jun 2023 - - 3,970.6 - Burns - 19-12-13 - 4,000 Ft Dec 2023 - - 2,390.3 - Ladentown Four - 345kV Breaker Purchase Dec 2023 - - 2,443.9 - Line 51 Upgrade Dec 2023 - - 6,025.2 - NYSERDA PON 4074 Westtown Dist Automation Dec 2023 - - 1,988.3 - Old Nyack Turnpike UG Ckt 21-16-13 Dec 2023 - - 1,194.9 - Pascack Rd UG Ckt 19-13-13 Dec 2023 - - 1,195.1 - Rio 5-3-34 URD Dip Dec 2023 - - 1,200.0 - UG Storm Hardening - Blue Lake Ckt Exit Dec 2023 - - 3,400.0 - UG Storm Hardening - Congers Ave, Congers Dec 2023 - - 3,500.0 - Woodbury Batteries Dec 2023 - - 10,003.8 - Wurtsboro Sub Upgrade 34kV Dec 2023 - - 1,294.7 - ADMS Software System Jan 2024 - - - 19,375.0 Little Tor Substation, Transm Tap and UG Circuit Exits Jun 2024 - - - 28,123.8 Lines 11/14 Pole 68 Dec 2024 - - - 9,859.3 Little Tor Substation - Rt 45 (S Mtn to Rt 202) - 3.800 Ft - Urd Dip Dec 2024 - - - 2,390.2 UG Storm Hardening - Gilchrest Rd, Congers Dec 2024 - - - 1,900.0 UG Storm Hardening - Thiells Mt Ivy Rd, Thiells Dec 2024 - - - 5,500.0 West Haverstraw Rt 202 to Rt 9w - 6400ft Dec 2024 - - - 4,700.0

72,821.8 12,970.3 90,141.2 89,732.2

Total Electric Plant Additions $ 143,186.4 $ 70,200.6 $ 145,301.8 $ 146,520.9

Exhibit AP-E4

Schedule 2 Orange and Rockland Utilities, Inc. Electric Rate Case Common Capital Expenditures by Project O&R Forecast October 2020 to December 2024 ($000s)

Rate Year 1 Rate Year 2 Rate Year 3 Project Description In Service Date Oct-20 to Dec-21 Jan-22 to Dec-22 Jan-23 to Dec-23 Jan-24 to Dec-24

Common Capital Expenditures:

Blankets Various $ 14,068.9 $ 14,865.3 $ 13,946.9 $ 13,418.5

Regular Projects Under $500k Various 1,673.4 1,124.1 785.3 300.0

Regular Projects Over $500k

ORU REV Communications Expansion Oct 2020 92.0 - - - Contractor Oversight System Mobile Enhancement Dec 2020 119.7 - - - Willow Brook Dam Enhancements Sep 2021 5,358.3 - - - Communications HUB Sites - Highland Falls Dec 2021 539.4 - - - Blooming Grove Building Maintenance System Apr 2022 504.0 251.5 - - Spring Valley Fuel Station Canopy Sep 2022 - 647.8 - - AMI ORU/CECONY Synch Work Dec 2022 1,000.0 892.1 - - Enterprise Scheduling System Dec 2022 300.0 200.0 - - Port Jervis Exterior and Window Replacement Apr 2023 - 449.0 247.9 - Project Management Software May 2023 228.0 225.6 150.4 Customer Information System Jul 2023 9,578.9 10,110.7 4,926.2 - Real Estate Space Optimization Sep 2023 796.4 2,986.9 2,975.7 - Budget System Software Enhancements Dec 2023 62.2 75.5 75.5 - Oracle HCM Cloud Implementation Dec 2023 2,036.8 1,822.4 1,532.0 - Oracle EBS Cloud Migration Sep 2024 161.9 403.0 3,607.0 223.0 O365 E5 Renewal Oct 2024 - - - 1,863.1 Artificial Intelligence Dec 2024 - - - 500.0 CRM System Dec 2024 - 1,000.0 1,000.0 2,979.4 Main Frame Elimination Dec 2024 513.4 532.8 1,114.8 776.3 Oracle Analytical Systems Platform Dec 2024 - 500.0 1,000.0 500.0 CC&B Enhancements Dec 2025 - - - 500.0 REV Settlement and Regulatory Requirements Dec 2025 1,250.0 1,250.0 1,000.0 500.0 WMS Replacement Project Dec 2027 - - - 10,000.3

22,541.0 21,347.3 17,629.5 17,842.1

Total Common Capital Expenditures $ 38,283.3 $ 37,336.7 $ 32,361.7 $ 31,560.6

Exhibit AP-E4Exhibit

Schedule 3 Schedule Orange and Rockland Utilities, Inc. Electric Rate Case Common Plant Additions by Project O&R Forecast October 2020 to December 2024 ($000s)

Rate Year 1 Rate Year 2 Rate Year 3 Project Description In Service Date Oct-20 to Dec-21 Jan-22 to Dec-22 Jan-23 to Dec-23 Jan-24 to Dec-24

Common Plant Additions:

Blankets Various $ 14,231.7 $ 15,016.1 $ 14,097.6 $ 13,581.5

Regular Projects Under $500k Various 3,401.6 1,515.7 849.0 -

Regular Projects Over $500k

ORU REV Communications Expansion Oct 2020 555.0 - - - Contractor Oversight System Mobile Enhancement Dec 2020 903.4 - - - Iron Net ORU Dec 2020 523.4 - - - Willow Brook Dam Enhancements Sep 2021 5,554.6 - Communications HUB Sites - Highland Falls Dec 2021 539.4 - - - Blooming Grove Building Maintenance System Apr 2022 - 728.0 - - Spring Valley Fuel Station Canopy Sep 2022 - 647.8 - - AMI ORU/CECONY Synch Work Dec 2022 - 1,892.1 - - Enterprise Scheduling System Dec 2022 - 500.0 - - Port Jervis Exterior and Window Replacement Apr 2023 - - 653.0 - Project Management Software May 2023 - - 1,089.0 - Customer Information System Jul 2023 - - 28,967.2 - Real Estate Space Optimization Sep 2023 - - 6,456.3 - Budget System Software Enhancements Dec 2023 - - 732.3 - Oracle HCM Cloud Implementation Dec 2023 - - 5,488.0 - Oracle EBS Cloud Migration Sep 2024 - - - 4,430.2 O365 E5 Renewal Oct 2024 - - - 1,863.1 Artificial Intelligence Dec 2024 - - - 500.0 CRM System Dec 2024 - - - 4,979.4 Main Frame Elimination Dec 2024 - - - 2,937.3 Oracle Analytical Systems Platform Dec 2024 - - - 2,000.0

8,075.8 3,767.9 43,385.8 16,710.0

Total Common Plant Additions $ 25,709.1 $ 20,299.7 $ 58,332.4 $ 30,291.5

ExhibitAP-E4

Schedule4 Exhibit AP-5

ORANGE AND ROCKLAND UTILITIES, INC.

INDEX OF SCHEDULES

Cost of Capital

EXHIBIT TITLE OF SCHEDULE WITNESS

AP-5 Rate of Return Required / Capitalization Y. Saegusa

Schedule 1 - Rate of Return Required / Capitalization for December 31, 2022

Schedule 2 - Rate of Return Required / Capitalization for December 31, 2023

Schedule 3 - Rate of Return Required / Capitalization for December 31, 2024

Schedule 4 - Cost of Long-term Debt at September 30, 2020

Schedule 5 - Cost of Long-term Debt at December 31,2022

Schedule 6 - Cost of Long-term Debt at December 31,2023

Schedule 7 - Cost of Long-term Debt at December 31,2024 Exhibit AP-5 Schedule 1

ORANGE AND ROCKLAND UTILITIES, INC. & SUBSIDIARIES RATE OF RETURN REQUIRED FOR THE RATE YEAR Thirteen Month Average Ending December 31, 2022

Forecasted Adjusted % 13 Month Average (Capped at 50% Cost Weighted December 31, 2022 Ratio Common Equity) Rate Cost Long-Term Debt ORU 1,008,333,333 RECO 0 Total 1,008,333,333 52.07% 49.37% 4.62% 2.28%

Customer Deposits ORU 10,087,238 RECO 2,775,911 Total 12,863,148 0.66% 0.63% 1.53% 0.01%

Common Equity Par 5,000 Premium 478,655,207 Expense (166,651) Retained Earnings 436,929,690 Total 915,423,247 47.27% 50.00% 9.50% 4.75%

Total Capitalization 1,936,619,728 100.00% 100.00% 7.04% Exhibit AP-5 Schedule 2

ORANGE AND ROCKLAND UTILITIES, INC. & SUBSIDIARIES RATE OF RETURN REQUIRED FOR THE RATE YEAR Thirteen Month Average Ending December 31, 2023

Forecasted Adjusted % 13 Month Average (Capped at 50% Cost Weighted December 31, 2023 Ratio Common Equity) Rate Cost Long-Term Debt ORU 1,075,000,000 RECO 0 Total 1,075,000,000 51.51% 49.41% 4.57% 2.26%

Customer Deposits ORU 10,087,238 RECO 2,775,911 Total 12,863,148 0.62% 0.59% 1.53% 0.01%

Common Equity Par 5,000 Premium 528,655,207 Expense (166,651) Retained Earnings 470,533,950 Total 999,027,506 47.87% 50.00% 9.50% 4.75%

Total Capitalization 2,086,890,655 100.00% 100.00% 7.02% Exhibit AP-5 Schedule 3

ORANGE AND ROCKLAND UTILITIES, INC. & SUBSIDIARIES RATE OF RETURN REQUIRED FOR THE RATE YEAR Thirteen Month Average Ending December 31, 2024

Forecasted Adjusted % 13 Month Average (Capped at 50% Cost Weighted December 31,2024 Ratio Common Equity) Rate Cost Long-Term Debt ORU 1,100,000,000 RECO 0 Total 1,100,000,000 50.45% 49.42% 4.58% 2.26%

Customer Deposits ORU 10,087,238 RECO 2,775,911 Total 12,863,148 0.59% 0.58% 1.53% 0.01%

Common Equity Par 5,000 Premium 558,863,540 Expense (166,651) Retained Earnings 508,841,815 Total 1,067,543,704 48.96% 50.00% 9.50% 4.75%

Total Capitalization 2,180,406,853 100.00% 100.00% 7.02% Exhibit AP-5 Schedule 4 ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES Long-Term Debt At September 30, 2020 (Actual) .

Issue Maturity Amount Original Premium or Expense of Net Actual Cost Effective Date Date Outstanding Issue Amount Discount Issuance Proceeds of Money Annual Cost

Orange and Rockland Utilities Debentures: Series E/F 6.50% due 12/01/27 12/18/97 12/1/27 80,000,000 80,000,000 0 (905,000) 79,095,000 6.50% 5,200,000 Ser. B 2009, 6.00%, due 12/1/39 12/10/09 12/1/39 60,000,000 60,000,000 0 (616,117) 59,383,883 6.00% 3,600,000 Ser. B 2010, 5.50%, due 8/10/40 8/9/10 8/15/40 115,000,000 115,000,000 (218,500) (1,156,872) 113,624,628 5.50% 6,325,000 Ser. A 2015, 4.95%, due 7/1/45 6/18/15 7/1/45 120,000,000 120,000,000 (727,200) (1,440,515) 117,832,285 4.95% 5,940,000 Ser. B 2015, 4.69%, due 12/1/45 12/7/15 12/1/45 100,000,000 100,000,000 0 (1,126,771) 98,873,229 4.69% 4,690,000 Ser. A 2016, 3.88%, due 12/1/46 12/14/16 12/1/46 75,000,000 75,000,000 0 (593,412) 74,406,588 3.88% 2,910,000 Ser. A 2018, 4.35%, due 9/1/48 8/28/18 9/1/48 125,000,000 125,000,000 0 (716,055) 124,283,945 4.35% 5,437,500 Ser. B 2018, 4.35%, due 9/1/48 12/20/18 9/1/48 25,000,000 25,000,000 0 (151,075) 24,848,925 4.35% 1,087,500 Ser. A 2019, 3.73%, due 12/1/49 11/21/19 12/1/49 43,000,000 43,000,000 0 (312,301) 42,687,699 3.73% 1,603,900 Ser. B 2019, 2.94%, due 12/1/29 12/19/19 12/1/29 44,000,000 44,000,000 0 (317,391) 43,682,609 2.94% 1,293,600 Ser. C 2019, 3.46%, due 12/1/39 12/19/19 12/1/39 38,000,000 38,000,000 0 (279,028) 37,720,972 3.46% 1,314,800 Ser. A 2020, 2.02%, due 10/1/30 9/30/20 10/1/30 8,750,000 35,000,000 0 (229,660) 34,770,340 2.02% 176,750 Ser. B 2020, 3.24%, due 10/1/50 9/30/20 10/1/50 10,000,000 40,000,000 0 (262,160) 39,737,840 3.24% 324,000

Sub Total ORU Debt 843,750,000 4.73% 39,903,050

Unamortized Discount (744,002) 31,523 Unamortized Debt Expenses (6,193,547) 287,554 Unamortized Loss on Reaquired Debt (1,476,381) 175,416

Total ORU 835,336,069 4.84% 40,397,543

Total Consolidated $ 835,336,069 4.84% $ 40,397,543 Exhibit AP-5 Schedule 5 ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES Long-Term Debt At December 31, 2022 (Forecast)

Issue Maturity Amount Original Premium or Expense of Net Actual Cost Effective Date Date Outstanding Issue Amount Discount Issuance Proceeds of Money Annual Cost

Orange and Rockland Utilities Debentures: Series E/F 6.50% due 12/01/27 12/18/97 12/1/27 80,000,000 80,000,000 0 (905,000) 79,095,000 6.50% 5,200,000 Ser. B 2009, 6.00%, due 12/1/39 12/10/09 12/1/39 60,000,000 60,000,000 0 (616,117) 59,383,883 6.00% 3,600,000 Ser. B 2010, 5.50%, due 8/10/40 8/9/10 8/15/40 115,000,000 115,000,000 (218,500) (1,156,872) 113,624,628 5.50% 6,325,000 Ser. A 2015, 4.95%, due 7/1/45 6/18/15 7/1/45 120,000,000 120,000,000 (727,200) (1,440,515) 117,832,285 4.95% 5,940,000 Ser. B 2015, 4.69%, due 12/1/45 12/7/15 12/1/45 100,000,000 100,000,000 0 (1,126,771) 98,873,229 4.69% 4,690,000 Ser. A 2016, 3.88%, due 12/1/46 12/14/16 12/1/46 75,000,000 75,000,000 0 (593,412) 74,406,588 3.88% 2,910,000 Ser. A 2018, 4.35%, due 9/1/48 8/28/18 9/1/48 125,000,000 125,000,000 0 (716,055) 124,283,945 4.35% 5,437,500 Ser. B 2018, 4.35%, due 9/1/48 12/20/18 9/1/48 25,000,000 25,000,000 0 (151,075) 24,848,925 4.35% 1,087,500 Ser. A 2019, 3.73%, due 12/1/49 11/21/19 12/1/49 43,000,000 43,000,000 0 (312,301) 42,687,699 3.73% 1,603,900 Ser. B 2019, 2.94%, due 12/1/29 12/19/19 12/1/29 44,000,000 44,000,000 0 (317,391) 43,682,609 2.94% 1,293,600 Ser. C 2019, 3.46%, due 12/1/39 12/19/19 12/1/39 38,000,000 38,000,000 0 (279,028) 37,720,972 3.46% 1,314,800 Ser. A 2020, 2.02%, due 10/1/30 9/30/20 10/1/30 35,000,000 35,000,000 0 (229,660) 34,770,340 2.02% 707,000 Ser. B 2020, 3.24%, due 10/1/50 9/30/20 10/1/50 40,000,000 40,000,000 0 (262,160) 39,737,840 3.24% 1,296,000 Ser. A 2021, 3.88%, due 9/1/51 9/1/21 9/1/51 75,000,000 75,000,000 0 (771,250) 74,228,750 3.88% 2,910,000 Ser. A 2022, 3.85%, due 9/1/52 9/1/22 9/1/52 33,333,333 100,000,000 0 (990,000) 99,010,000 3.85% 1,283,333

Sub Total ORU Debt 1,008,333,333 4.52% 45,598,633

Unamortized Discount (673,075) 31,523 Unamortized Debt Expenses (7,209,022) 348,041 Unamortized Loss on Reaquired Debt (1,081,695) 175,416

Total ORU 999,369,542 4.62% 46,153,613

Total Consolidated $ 999,369,542 4.62% $ 46,153,613 Exhibit AP-5 Schedule 6 ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES Long-Term Debt At December 31, 2023 (Forecast)

Issue Maturity Amount Original Premium or Expense of Net Actual Cost Effective Date Date Outstanding Issue Amount Discount Issuance Proceeds of Money Annual Cost

Orange and Rockland Utilities Debentures: Series E/F 6.50% due 12/01/27 12/18/97 12/1/27 80,000,000 80,000,000 0 (905,000) 79,095,000 6.50% 5,200,000 Ser. B 2009, 6.00%, due 12/1/39 12/10/09 12/1/39 60,000,000 60,000,000 0 (616,117) 59,383,883 6.00% 3,600,000 Ser. B 2010, 5.50%, due 8/10/40 8/9/10 8/15/40 115,000,000 115,000,000 (218,500) (1,156,872) 113,624,628 5.50% 6,325,000 Ser. A 2015, 4.95%, due 7/1/45 6/18/15 7/1/45 120,000,000 120,000,000 (727,200) (1,440,515) 117,832,285 4.95% 5,940,000 Ser. B 2015, 4.69%, due 12/1/45 12/7/15 12/1/45 100,000,000 100,000,000 0 (1,126,771) 98,873,229 4.69% 4,690,000 Ser. A 2016, 3.88%, due 12/1/46 12/14/16 12/1/46 75,000,000 75,000,000 0 (593,412) 74,406,588 3.88% 2,910,000 Ser. A 2018, 4.35%, due 9/1/48 8/28/18 9/1/48 125,000,000 125,000,000 0 (716,055) 124,283,945 4.35% 5,437,500 Ser. B 2018, 4.35%, due 9/1/48 12/20/18 9/1/48 25,000,000 25,000,000 0 (151,075) 24,848,925 4.35% 1,087,500 Ser. A 2019, 3.73%, due 12/1/49 11/21/19 12/1/49 43,000,000 43,000,000 0 (312,301) 42,687,699 3.73% 1,603,900 Ser. B 2019, 2.94%, due 12/1/29 12/19/19 12/1/29 44,000,000 44,000,000 0 (317,391) 43,682,609 2.94% 1,293,600 Ser. C 2019, 3.46%, due 12/1/39 12/19/19 12/1/39 38,000,000 38,000,000 0 (279,028) 37,720,972 3.46% 1,314,800 Ser. A 2020, 2.02%, due 10/1/30 9/30/20 10/1/30 35,000,000 35,000,000 0 (229,660) 34,770,340 2.02% 707,000 Ser. B 2020, 3.24%, due 10/1/50 9/30/20 10/1/50 40,000,000 40,000,000 0 (262,160) 39,737,840 3.24% 1,296,000 Ser. A 2021, 3.88%, due 9/1/51 9/1/21 9/1/51 75,000,000 75,000,000 0 (771,250) 74,228,750 3.88% 2,910,000 Ser. A 2022, 3.85%, due 9/1/52 9/1/22 9/1/52 100,000,000 100,000,000 0 (990,000) 99,010,000 3.85% 3,850,000

Sub Total ORU Debt 1,075,000,000 4.48% 48,165,300

Unamortized Discount (641,551) 31,523 Unamortized Debt Expenses (6,838,981) 370,041 Unamortized Loss on Reaquired Debt (906,279) 175,416

Total ORU 1,066,613,189 4.57% 48,742,280

Total Consolidated $ 1,066,613,189 4.57% $ 48,742,280 Exhibit AP-5 Schedule 7 ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES Long-Term Debt At December 31, 2024 (Forecast)

Issue Maturity Amount Original Premium or Expense of Net Actual Cost Effective Date Date Outstanding Issue Amount Discount Issuance Proceeds of Money Annual Cost

Orange and Rockland Utilities Debentures: Series E/F 6.50% due 12/01/27 12/18/97 12/1/27 80,000,000 80,000,000 0 (905,000) 79,095,000 6.50% 5,200,000 Ser. B 2009, 6.00%, due 12/1/39 12/10/09 12/1/39 60,000,000 60,000,000 0 (616,117) 59,383,883 6.00% 3,600,000 Ser. B 2010, 5.50%, due 8/10/40 8/9/10 8/15/40 115,000,000 115,000,000 (218,500) (1,156,872) 113,624,628 5.50% 6,325,000 Ser. A 2015, 4.95%, due 7/1/45 6/18/15 7/1/45 120,000,000 120,000,000 (727,200) (1,440,515) 117,832,285 4.95% 5,940,000 Ser. B 2015, 4.69%, due 12/1/45 12/7/15 12/1/45 100,000,000 100,000,000 0 (1,126,771) 98,873,229 4.69% 4,690,000 Ser. A 2016, 3.88%, due 12/1/46 12/14/16 12/1/46 75,000,000 75,000,000 0 (593,412) 74,406,588 3.88% 2,910,000 Ser. A 2018, 4.35%, due 9/1/48 8/28/18 9/1/48 125,000,000 125,000,000 0 (716,055) 124,283,945 4.35% 5,437,500 Ser. B 2018, 4.35%, due 9/1/48 12/20/18 9/1/48 25,000,000 25,000,000 0 (151,075) 24,848,925 4.35% 1,087,500 Ser. A 2019, 3.73%, due 12/1/49 11/21/19 12/1/49 43,000,000 43,000,000 0 (312,301) 42,687,699 3.73% 1,603,900 Ser. B 2019, 2.94%, due 12/1/29 12/19/19 12/1/29 44,000,000 44,000,000 0 (317,391) 43,682,609 2.94% 1,293,600 Ser. C 2019, 3.46%, due 12/1/39 12/19/19 12/1/39 38,000,000 38,000,000 0 (279,028) 37,720,972 3.46% 1,314,800 Ser. A 2020, 2.02%, due 10/1/30 9/30/20 10/1/30 35,000,000 35,000,000 0 (229,660) 34,770,340 2.02% 707,000 Ser. B 2020, 3.24%, due 10/1/50 9/30/20 10/1/50 40,000,000 40,000,000 0 (262,160) 39,737,840 3.24% 1,296,000 Ser. A 2021, 3.88%, due 9/1/51 9/1/21 9/1/51 75,000,000 75,000,000 0 (771,250) 74,228,750 3.88% 2,910,000 Ser. A 2022, 3.85%, due 9/1/52 9/1/22 9/1/52 100,000,000 100,000,000 0 (990,000) 99,010,000 3.85% 3,850,000 Ser. A 2024, 4.75%, due 9/1/54 9/1/24 9/1/54 25,000,000 75,000,000 0 (771,250) 74,228,750 4.75% 1,187,500

Sub Total ORU Debt 1,100,000,000 4.49% 49,352,800

Unamortized Discount (610,028) 31,523 Unamortized Debt Expenses (7,231,621) 378,610 Unamortized Loss on Reaquired Debt (730,863) 175,416

Total ORU 1,091,427,488 4.58% 49,938,350

Total Consolidated $ 1,091,427,488 4.58% $ 49,938,350 ORANGE AND ROCKLAND UTILITIES, INC. Rate Case 21-E-XXXX, 21-G-XXXX

Witness: Accounting Panel

Exhibit __ (AP-6)

Common Capital Project/O&M White Papers Exhibit AP-6

ORANGE AND ROCKLAND UTILITIES, INC.

INDEX OF SCHEDULES

Common Capital Projects

EXHIBIT TITLE OF SCHEDULE WITNESS

AP-6 Capital Projects Accounting Panel

1 Schedule 1 - Blooming Grove Building Management System

2 Schedule 2 - Port Jervis Exterior and Window Replacement

3 Schedule 3 - Real Estate Optimization Program

4 Schedule 4 - Spring Valley Fuel Station Canopy

5 Schedule 5 -Emergency Preparedness FTE Exhibit AP___6 Schedule 1 Page 1 of 4 Facilities Management 2021 1. Project / Program Summary

Type: ☒ Project ☐ Program Category: ☒ Capital ☐ O&M

Work Plan Category: ☐ Regulatory Mandated ☒ Operationally Required ☐ Strategic

Project/Program Title: Blooming Grove BMS System

Project/Program Manager: Kevin Duggan Project/Program Number (Level 1): 21485565

Status: ☐ Initiation ☐ Planning ☒ Execution ☐ On-going ☐ ☐ Other: ______

Estimated Start Date: 2021 Estimated Date In Service: 2022 B. A. Total Funding Request ($000) ☐ 5-Year Gross Cost Savings ($000) Capital: $500 ☐ 5-Year Gross Cost Avoidance ($000) O&M: O&M:

Capital: C. 5-Year Ongoing Maintenance Expense ($000) D. Investment Payback Period: O&M: (Years/months) (If applicable) Capital: Work Description: The BG Building Management System (BMS) is a project to upgrade the heating, ventilation and air conditioning (HVAC) controls throughout the Company’s Blooming Grove operating center. The existing controls are pneumatic and the system is old and leaking control air, making it difficult to operate the system properly. The BG BMS System will include electronic controls on all the equipment with a software package that allows for remote oversight.

Justification Summary: The current system is outdated and past its functional life. The system has to be replaced in order to maintain the Blooming Grove operating center with proper conditioning. The ventilation system is critical at this time to provide proper air exchanges to remove air contaminated with Carbon Dioxide (CO2) and Covid-19.

Relationship to 5-Year and Long-Range Plans and Enterprise Risk Management Strategy This project aligns with the Company’s long-range plans to minimize our facility’s carbon footprint, as the new system will be more energy efficient.

Exhibit AP___6 Schedule 1 Page 2 of 4 2. Supplemental Information

Alternatives There is no alternative as the system is at the end of its life. A new system is critical to maintaining the building

Alternative 1 description and reason for rejection This alternative is not recommended as many groups would have to purchase portable equipment and there would always be an issue with connectivity.

Alternative 2 description and reason for rejection

Alternative 3 description and reason for rejection

Risk of No Action Give the consequences, including enterprise risks that might arise by not doing the project/ program. Quantify the risks, if applicable.

Risk 1 No action will leave the space with no technology upgrades and require personnel to determine if the space works for their particular meeting. Many groups would need to look elsewhere for meeting space including off site.

Non-Financial Benefits • Increased energy efficiency and employee safety/comfort

Summary of Financial Benefits and Costs (attach backup) 1. Cost-benefit analysis (if required)

2. Major financial benefits

3. Total cost

4. Basis for estimate

5. Conclusion

Project Risks and Mitigation Plan

N/A

Exhibit AP___6 Schedule 1 Page 3 of 4 Technical Evaluation / Analysis N/A Project Relationships (if applicable) N/A

3. Funding Detail

Historical Spend Actual 2016 Actual 2017 Actual Actual Historic Forecast 2018 2019 Year 2020 (O&M only) Capital O&M

Total Request ($000):

Total Request by Year: Request 2021 Request 2022 Request 2023 Request 2024 Request 2025 Capital O&M*

Capital Request by Elements of Expense: EOE 2021 2022 2023 2024 2025 Labor M&S Contract Services Other 250 250 Overheads Total

Total Gross Cost Savings / Avoidance by Year: 2021 2022 2023 2024 2025 O&M Savings O&M Avoidance Capital Savings Capital Avoidance

Total Ongoing Maintenance Expense by Year: 2021 2022 2023 2024 2025 O&M Capital

*If whitepaper is supporting a capital project/program this refers to implementation O&M

Exhibit AP___6 Schedule 1 Page 4 of 4

4. Definitions

Total Funding Request: All funding requested for program or project over program/project lifecycle or for on-going programs the five-year requested amount, including all capital, O&M, retirement.

Cost Savings: Reductions in costs that are currently being incurred (e.g., reduced annual maintenance cost relative to today)

Cost Avoidance: Reductions in anticipated future costs that don’t occur today (e.g., anticipated short- term fixes/maintenance if capital isn’t deployed)

Project Status:

• Initiation – New project, not authorized yet • Planning – Project authorized, not started yet • Executing – Project in-flight • On-going – Annual program

Exhibit AP___6 Schedule 2 Page 1 of 4 Facilities Management 2021 1. Project / Program Summary

Type: ☒ Project ☐ Program Category: ☒ Capital ☐ O&M

Work Plan Category: ☐ Regulatory Mandated ☐ Operationally Required ☒ Strategic

Project/Program Title: Port Jervis Exterior and Window Replacement

Project/Program Manager: Kevin Duggan Project/Program Number (Level 1): 22642267

Status: ☐ Initiation ☒ Planning ☐ Execution ☐ On-going ☐ ☐ Other: ______

Estimated Start Date: 2022 Estimated Date In Service: 2023 B. A. Total Funding Request ($000) ☐ 5-Year Gross Cost Savings ($000) Capital: $1,000 ☐ 5-Year Gross Cost Avoidance ($000) O&M: O&M:

Capital: C. 5-Year Ongoing Maintenance Expense ($000) D. Investment Payback Period: O&M: (Years/months) (If applicable) Capital: Work Description: This project is to remove and replace the asbestos clad windows at the Company’s Port Jervis office (16 Pike Street, Port Jervis, NY) with new energy efficient windows, as well upgrade the exterior siding on the building.

This building was left vacant in 2012 when the operations group was shifted to Westfall, PA. Due to the sale of Pike County Light & Power Company in 2018, electric operations staff returned to this building. Minimal maintenance had been performed on the building in anticipation of selling the property.

The windows have asbestos caulk and are single pane glass. The entire storefront including 32 windows and 1 door entranceway needs to be replaced as the aluminum frames are degrading. The brick work also needs attention.

Justification Summary: The building needs to be maintained now that operations staff has relocated to it. If a window breaks, it will take an asbestos contractor to remove and replace the window. Energy is lost due to the single pane glass. The building is one of the first things seen by travelers as they enter NY from PA and it needs to be brought up to the Company’s standards.

Exhibit AP___6 Schedule 2 Page 2 of 4 Relationship to 5-Year and Long-Range Plans and Enterprise Risk Management Strategy This project is funded within the Company’s 5-year plan and is consistent with our long-range plan goals concerning environmental excellence and energy efficiency.

2. Supplemental Information

Alternatives The alternative is to do nothing and maintain the building to best of our ability.

Alternative 1 description and reason for rejection Waiting for the building to deteriorate further is not a proper strategy. Proactive measures will allow the Company to maintain the buildings in a safe and secure environment for the staff using the building. Postponing this maintenance work will likely increase its cost.

Risk of No Action

Risk 1: No action allows the building to deteriorate further, thereby increasing the ultimate repair costs.

Non-Financial Benefits • Increased safety, and energy efficiency, or customer satisfaction

Summary of Financial Benefits and Costs (attach backup) 1. Cost-benefit analysis (if required)

2. Major financial benefits

3. Total cost

4. Basis for estimate

5. Conclusion

Project Risks and Mitigation Plan N/A

Technical Evaluation / Analysis N/A

Project Relationships (if applicable) N/A

Exhibit AP___6 Schedule 2 Page 3 of 4 3. Funding Detail

Historical Spend Actual 2016 Actual 2017 Actual Actual Historic Forecast 2018 2019 Year 2020 (O&M only) Capital O&M

Total Request ($000):

Total Request by Year: Request 2021 Request 2022 Request 2023 Request 2024 Request 2025 Capital O&M*

Capital Request by Elements of Expense: EOE 2021 2022 2023 2024 2025 Labor M&S Contract Services Other 750 250 0 0 Overheads Total

Total Gross Cost Savings / Avoidance by Year: 2021 2022 2023 2024 2025 O&M Savings O&M Avoidance Capital Savings Capital Avoidance

Total Ongoing Maintenance Expense by Year: 2021 2022 2023 2024 2025 O&M Capital

*If whitepaper is supporting a capital project/program this refers to implementation O&M

Exhibit AP___6 Schedule 2 Page 4 of 4 4. Definitions

Total Funding Request: All funding requested for program or project over program/project lifecycle or for on-going programs the five-year requested amount, including all capital, O&M, retirement.

Cost Savings: Reductions in costs that are currently being incurred (e.g., reduced annual maintenance cost relative to today)

Cost Avoidance: Reductions in anticipated future costs that don’t occur today (e.g., anticipated short- term fixes/maintenance if capital isn’t deployed)

Project Status:

• Initiation – New project, not authorized yet • Planning – Project authorized, not started yet • Executing – Project in-flight • On-going – Annual program

Exhibit AP___6 Schedule 3 Page 1 of 4 Facilities Management 2021 1. Project / Program Summary

Type: ☒ Project ☐ Program Category: ☒ Capital ☐ O&M

Work Plan Category: ☐ Regulatory Mandated ☐ Operationally Required ☒ Strategic

Project/Program Title: Real Estate Optimization

Project/Program Manager: Denis Smalley Project/Program Number (Level 1): 24656639

Status: ☐ Initiation ☒ Planning ☐ Execution ☐ On-going ☐ ☐ Other: ______

Estimated Start Date: 4/1/2021 Estimated Date In Service: 12/31/2023 B. A. Total Funding Request ($000) ☐ 5-Year Gross Cost Savings ($000) Capital: 6.800 ☐ 5-Year Gross Cost Avoidance ($000) O&M: O&M:

Capital: C. 5-Year Ongoing Maintenance Expense ($000) D. Investment Payback Period: O&M: (Years/months) (If applicable) Capital: Work Description: • Real Estate Optimization is a project directed by Con Edison’s Real Estate department to investigate ways to reduce both Con Edison’s and O&R’s operating costs by reducing their rental footprint. • Real Estate, in cooperation with O&R’s Facilities department, is developing a plan to relocate office staff located in rental properties, such as One Blue Hill Plaza in Pearl River, NY, into existing office space currently owned by O&R. Renovations to the owned office space will be required to facilitate the relocations. • Expenditures expected will be for Architectural/Engineering planning, design and construction oversight, as well as the actual construction costs to renovate the O&R owned spaces to facilitate staff relocation from the leased spaces.

Justification Summary: The Company continues to investigate ways to reduce its operating expenses. The Company has implemented a program, Business Cost Optimization (BCO), to mitigate operation and maintenance related cost increases. As part of this BCO effort, the Real Estate department began a program to reduce expenses by reducing the leases for both office space and land that is no longer needed by the Company.

Exhibit AP___6 Schedule 3 Page 2 of 4 While this program is still in the development stage, funding is necessary to develop the plans to determine exactly how many persons can be relocated to existing properties owned by the Company.

Relationship to 5-Year and Long-Range Plans and Enterprise Risk Management Strategy This project is funded in the current 5 year plan.

2. Supplemental Information

Alternatives There are a number of alternatives to be reviewed. The program is looking to relocate as many O&R employees as practicable from leased/rental properties into its existing owned facilities. The alternatives are how many persons and where they will be relocated to. As we move forward, the Company will review cost proposals to determine the most appropriate and cost-effective moves.

Risk of No Action

Risk of no action is to miss the opportunity to provide meaningful cost reductions in our operating expenses.

Non-Financial Benefits • As the plans are developed, we will look at consolidation of groups to one area so that persons can collaborate and develop a more fluent operation by having persons able to assist each other in close proximity.

Summary of Financial Benefits and Costs: This project will allow the Company to terminate leases and the associated on going costs.

Project Risks and Mitigation Plan

Risk 1 Slow decision making Mitigation plan: Get early buy-in with upper management so that we do not need to renew leases and can take full opportunities of cost reductions as quickly as possible.

Technical Evaluation / Analysis Architectural/Engineering reviews are needed to determine the proper space persons require to complete their jobs efficiently. The information is then transferred to

Exhibit AP___6 Schedule 3 Page 3 of 4 required space and where the space is available in our existing facilities. Multiple relocations are possible so that everyone is properly placed.

Project Relationships (if applicable) N/A

3. Funding Detail

Historical Spend Actual 2016 Actual 2017 Actual Actual Historic Forecast 2018 2019 Year 2020 (O&M only) Capital O&M

Total Request ($000):

Total Request by Year: Request 2021 Request 2022 Request 2023 Request 2024 Request 2025 Capital O&M*

Capital Request by Elements of Expense: EOE 2021 2022 2023 2024 2025 Labor M&S Contract Services Other 800 3,000 3,000 Overheads Total 800 3,000 3,000

Total Gross Cost Savings / Avoidance by Year: 2021 2022 2023 2024 2025 O&M Savings O&M Avoidance Capital Savings Capital Avoidance

Total Ongoing Maintenance Expense by Year: 2021 2022 2023 2024 2025 O&M Capital

Exhibit AP___6 Schedule 3 Page 4 of 4 *If whitepaper is supporting a capital project/program this refers to implementation O&M

4. Definitions

Total Funding Request: All funding requested for program or project over program/project lifecycle or for on-going programs the five-year requested amount, including all capital, O&M, retirement.

Cost Savings: Reductions in costs that are currently being incurred (e.g., reduced annual maintenance cost relative to today)

Cost Avoidance: Reductions in anticipated future costs that don’t occur today (e.g., anticipated short- term fixes/maintenance if capital isn’t deployed)

Project Status:

• Initiation – New project, not authorized yet • Planning – Project authorized, not started yet • Executing – Project in-flight • On-going – Annual program

Exhibit AP___6 Schedule 4 Page 1 of 4 Facilities Management 2021 1. Project / Program Summary

Type: ☒ Project ☐ Program Category: ☒ Capital ☐ O&M

Work Plan Category: ☐ Regulatory Mandated ☐ Operationally Required ☒ Strategic

Project/Program Title: Spring Valley Fuel Station Canopy

Project/Program Manager: Kevin Duggan Project/Program Number (Level 1): 22652805

Status: ☐ Initiation ☒ Planning ☐ Execution ☐ On-going ☐ ☐ Other: ______

Estimated Start Date: 2/1/2022 Estimated Date In Service:12/30/2022 B. A. Total Funding Request ($000) ☐ 5-Year Gross Cost Savings ($000) Capital: 645.5 ☐ 5-Year Gross Cost Avoidance ($000) O&M: O&M:

Capital: C. 5-Year Ongoing Maintenance Expense ($000) D. Investment Payback Period: O&M: (Years/months) (If applicable) Capital: Work Description:

• This project consists of the design and installation of a canopy over the fuel station islands at the Spring Valley Operating Center. • Work includes hiring an Engineering firm to design the canopy which will span two fuel station islands that hold dispensing stations for gasoline, and diesel. The canopy also will cover a special station to fill fuel tankers operated by the Company’s transportation group that are used to provide fuel to equipment at remote locations. • This project may require approval from the Town of Ramapo Planning Board which would require the Company to retain outside legal counsel to assist in the application and approval process.

Construction of the canopy will be competitively bid and constructed with oversight by trained Company staff Justification Summary: The Company installed the existing fuel station equipment in 2013. The equipment has been exposed to the weather and is showing signs of deterioration. Installation of a canopy has been shown to reduce the deterioration of the exposed equipment. The Company has installed canopies at its Blooming Grove and Middletown Operating Centers. As a result, the equipment at those two locations is protected and in good condition.

In addition, Company personnel using the station are subject to inclement weather and potential injury when snow/ice builds up around the dispensers.

Exhibit AP___6 Schedule 4 Page 2 of 4

Relationship to 5-Year and Long-Range Plans and Enterprise Risk Management Strategy Explain how this project/program will help achieve goals in 5-year and long-range plans. Explain how this project/program addresses risk mitigation activity. List specific departmental and/or corporate risk being impacted.

2. Supplemental Information

Alternatives

The alternative is to leave the station as is and replace the equipment as needed. Facilities will continue to maintain the area as best it can during inclement weather but the risk to personnel will not be diminished.

Risk of No Action

Risk 1 – If no action is taken, the fuel station equipment will continue to degrade at an accelerated rate than if no canopy were in place. In addition, the safety concerns that arise while fueling vehicles in inclement weather will persist.

Non-Financial Benefits • Increased safety and more reliable fueling equipment

Summary of Financial Benefits and Costs (attach backup) 1. Cost-benefit analysis (if required)

2. Major financial benefits

3. Total cost

4. Basis for estimate

5. Conclusion

Exhibit AP___6 Schedule 4 Page 3 of 4 Project Risks and Mitigation Plan N/A

Technical Evaluation / Analysis N/A

Project Relationships (if applicable) N/A

3. Funding Detail

Historical Spend Actual 2016 Actual 2017 Actual Actual Historic Forecast 2018 2019 Year 2020 (O&M only) Capital O&M

Total Request ($000):

Total Request by Year: Request 2021 Request 2022 Request 2023 Request 2024 Request 2025 Capital 645.5 O&M*

Capital Request by Elements of Expense: EOE 2021 2022 2023 2024 2025 Labor M&S Contract Services Other 645.5 Overheads Total 645.5

Total Gross Cost Savings / Avoidance by Year: 2021 2022 2023 2024 2025 O&M Savings O&M Avoidance Capital Savings Capital Avoidance

Total Ongoing Maintenance Expense by Year:

Exhibit AP___6 Schedule 4 Page 4 of 4 2021 2022 2023 2024 2025 O&M Capital

*If whitepaper is supporting a capital project/program this refers to implementation O&M

4. Definitions

Total Funding Request: All funding requested for program or project over program/project lifecycle or for on-going programs the five-year requested amount, including all capital, O&M, retirement.

Cost Savings: Reductions in costs that are currently being incurred (e.g., reduced annual maintenance cost relative to today)

Cost Avoidance: Reductions in anticipated future costs that don’t occur today (e.g., anticipated short- term fixes/maintenance if capital isn’t deployed)

Project Status:

• Initiation – New project, not authorized yet • Planning – Project authorized, not started yet • Executing – Project in-flight • On-going – Annual program

Exhibit AP-6 Schedule 5 Page 1 of 7

Business Unit / Division Budget Year 1. Project / Program Summary

Type: ☐ Project ☒ Program Category: ☐ Capital ☒ O&M

Work Plan Category: ☐ Regulatory Mandated ☒ Operationally Required ☐ Strategic

Project/Program Title: Emergency Preparedness Support Services - Specialist/Senior Specialist

Project/Program Manager: Don Higgins Project/Program Number (Level 1):

Status: ☐ Initiation ☒ Planning ☐ Execution ☐ On-going ☐ ☐ Other: ______

Estimated Start Date: 1/1/22 Estimated Date In Service: 12/31/22 B. A. Total Funding Request ($000) ☐ 5-Year Gross Cost Savings ($000) Capital: ☐ 5-Year Gross Cost Avoidance ($000) O&M: $463.6 O&M: Capital: C. 5-Year Ongoing Maintenance Expense ($000) D. Investment Payback Period: O&M: (Years/months) (If applicable) Capital: Work Description: This new position in the Emergency Preparedness (“EP”) organization will assist the existing Senior Specialist position in the execution of all tasks associated with gas emergency planning, preparedness, and response for the Company. This position will support continuity of operations both on “blue sky days” as well as during event response and restoration. The position will ultimately support the Company’s identified Enterprise Risk Management findings (“ERMs”) and the three strategic priorities: 1) Safety, 2) Operational Excellence, and 3) Enhancing the Customer Experience.

Justification Summary: Several of Orange and Rockland Corporate Risks have the potential to significantly impact the gas delivery system. These risks could impact the entire Company, as well as external stakeholders. Without proper preparedness measures and resources, the Company’s response and reputation are undermined. Any event with the potential to impact the gas delivery system can result in widespread service interruptions and challenge existing resources. Additionally, an increased focus on the Gas business and the implications of less than adequate preparedness in that area, has made risk mitigation imperative for this line of business. With the additional position, existing mitigation, preparedness, and response programs and practices can be enhanced and more robust ones developed. Risk mitigation strategies include EPs projects, programs, and resources (internal and external) to address risk. It is important to engage the Company’s workforce and prepare it to successfully execute their Emergency Response Plan (“ERP”) and other guiding documents. The value of an additional EP representative comes from the employee’s ability to efficiently and effectively collaborate with and support Gas operations in at least five core areas: 1) risk mitigation planning, implementation, and progress monitoring (e.g., benchmarking; Gas ERP); 2) instilling and training on core Incident Command System (“ICS”) principles; 3) compliance and communication with external agencies,

1 Exhibit AP-6 Schedule 5 Page 2 of 7

regulators and other stakeholders; 4) assisting in developing an exercise and training program; and 5) Co-facilitator of the after action process following exercises and incidents.

Emergency Preparedness strives to effectively manage the Company’s emergency preparedness, response, and recovery efforts. The increasing needs and expectations of customers (both internal and external), regulators, and agency partners, as well as increased regulatory oversight, as it pertains to Gas safety and awareness/education , presents, and will continue to present, a challenge with limited staffing.

Emergency Preparedness’ efforts and programs support all organizations/commodities within the Company as it relates to emergency preparedness, response, and recovery efforts. As an example, the commitment to increase the number of Gas related exercises and training opportunities conducted on an annual basis with first responders. Further, the company will work with Staff, local fire departments, and emergency management organizations to adopt the principles of the Pipeline Emergency Responders Initiative (“PERI”).

Emergency Preparedness leads the design and execution of a tabletop and a functional exercise that encompasses the Gas group and electric as well as, agency first responders (Police/Fire/Office of Emergency Management). This exercise, and the annual Operations Exercise, are large and complex undertakings, and require the assistance of a vendor because of current limited staffing. Emergency Preparedness also assists with the designing and facilitation of the Orange and Rockland 101 Seminar. In this course, Emergency Preparedness staff will outline the coordination between utility and first responders during the initial response to an event. This course is offered to all first response agencies, municipalities and other stakeholders in the Orange and Rockland service territory in regional offerings at local training centers (e.g., Rockland County Fire Training Center, Orange County Emergency Operations Center).

Currently, Emergency Preparedness has only a single employee conducting external agency training and support. This employee spends approximately 120 – 220 hours, annually, conducting these activities. This relationship, and the service provided, is one of the most valued services provided by the Company, as evidenced by feedback from external responder agencies.

Relationship to 5-Year and Long-Range Plans and Enterprise Risk Management Strategy Large Scale Gas Customer Outage risk was added to the Con Edison Inc. risk profile in the fourth quarter of 2019 and then to Orange and Rockland risk profile in the second quarter of 2020. A significant driver for adding this risk stemmed from two recent major industry events which resulted in large scale gas customer outages (the 2018 Columbia Gas Event in Massachusetts, and the 2019 National Grid Aquidneck Island Outage in Rhode Island), where over 7,000 gas customers lost service in each event. As a result, it was recognized that gas utilities, including Orange and Rockland, need to improve the capability respond to a similar large event, especially if it occurs in the winter or lasts for an extended period of time (e.g., multiple weeks).

Some of the existing major risk mitigation efforts include:

• Corporate Response to Incidents and Emergencies Guideline • Gas Emergency Response Plan • Risk Event Guides • Exercise and Training Programs • Monthly Officers and Chiefs Meetings

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Exhibit AP-6 Schedule 5 Page 3 of 7

• Mutual Assistance Agreements • External Agency and Regulatory Relationships • Weather and Security Risk Assessment • Benchmarking • Systems and Applications (Gas Outage Management System -future)

Maintaining and enhancing these mitigation efforts safeguard the Company’s energy delivery systems and facilities, response, and reputation. These mitigation efforts also contribute to the success of operational mitigation efforts, such as improved emergency response and restoration, efficient and accurate communication with regulatory agencies and other external stakeholders, and reduced cost to customers.

2. Supplemental Information

Alternatives

Alternative 1 description and reason for rejection Con Edison EP personnel have been used on an as-needed basis to assist with the increased workload, especially during weather events and field emergencies. However, availability of this resource is contingent upon the needs of Con Edison EP being met by other department personnel. Historically, Orange and Rockland’s support needs occur simultaneously with Con Edison’s, reducing the practicality of this alternative. Given the high level of specialization associated with the execution of the Company’s emergency management philosophy and processes, there are no other viable alternatives under consideration.

Alternative 2 description and reason for rejection

Alternative 3 description and reason for rejection

Risk of No Action

Risk 1 Given the significant number of recommendations and anticipated revisions made to the Emergency Response Plan, along with the additional workload associated with these initiatives, and a continued focus on the need to enhance gas emergency preparedness, the process may not be performed at the historically high levels consistent with the expectations of the department from its constituents. Without additional staffing, the Emergency Preparedness group will be challenged to maintain, and, more importantly, enhance the identified risk mitigation efforts for Gas Operations.

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Exhibit AP-6 Schedule 5 Page 4 of 7

Risk 2

Risk 3

Non-Financial Benefits • Better Use of Staff During Events -- Because of increased work volume during storms and other major events, the Section Manager has historically split his/her efforts between developing strategic objectives, and the tactical response laid out for the Sr. Specialist to achieve those objectives. The tactical response has been concentrated on sharing the tasks and duties of the Sr. Specialist along geographical boundaries. Having an additional position will allow the Section Manager to focus more effort and energy on the strategic objectives and responding to high-level inquiries. • 24 Hr./Day Coverage During Events -- EP presently uses a split-shift schedule to provide 18 hr./day response coverage during major events. An additional position will allow for full 24 hr./day coverage which is typically needed. • Improved Communications with Stakeholders -- The addition of a position will help to alleviate the bottleneck created as a result of availability of only one Sr. Specialist, and a manager, during major events and would also give an opportunity to have one person solely dedicated to providing strategic support to the Gas group. • Increased Training & Exercising -- Having an additional position will allow for an enhanced training and exercise program inclusive of refresher training and Incident Command System training for both internal and external stakeholders. • Day-To-Day Operations -- To better serve the Company’s EP administrative needs, the additional position will allow for sharing the duties of the position with the incumbent Sr. Specialist.

Summary of Financial Benefits and Costs (attach backup) 1. Cost-benefit analysis (if required) n/a

2. Major financial benefits n/a

3. Total cost $463,600

4. Basis for estimate

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Exhibit AP-6 Schedule 5 Page 5 of 7

Cost estimate is based on the wages and benefits for other similar existing specialists within the department.

5. Conclusion In order to provide consistent and robust service, additional staff is required. The administrative and non-administrative duties associated with maintaining a robust and effective Emergency Preparedness program are currently performed by one Senior Specialist under the direction of a Section Manager (whose time is split -- 40% supporting Orange and Rockland and 60% supporting Con Edison for all commodities). An additional staff member would ease the administrative burden and allow the department to focus on more critical strategic objectives and programs with the Gas Department.

This additional resource will enhance and increase the number of current Exercise Programs for Gas, so that greater proficiency is achieved (e.g., work with all departments towards more effective exercises, and a building-block approach towards the development of annual Gas exercises). This person will work with Gas Operations and other support groups to enhance O&R’s risk assessment resources (e.g., storm hardening, changing weather patterns, Cyber-attacks; rogue employee involvement, and possibly a new OMS which may require a re-calibration of our matrices), and introduce/utilize new systems and applications in order to better execute the ERP (e.g., automated call-out system, crew management, OMS etc.). Additionally, this resource will enhance our external agency training and relationships (e.g. NY-Pipeline Emergency Responders Initiative participation; Gas safety training; exercises; electric safety storm training,) along with providing additional coverage during major events.

Project Risks and Mitigation Plan

Risk 1 Mitigation plan

Risk 2 Mitigation plan

Technical Evaluation / Analysis n/a

Project Relationships (if applicable) n/a

3. Funding Detail

Common Split Percentages A0 C0 E0 01 02 O&R Electric O&R Electric 55.69% 66.93% 76.69% 100.00% − O&R Gas X O&R Gas 27.51% 33.07% − − 100.00% RECO RECO 16.80% − 23.31% − −

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Mark an “X” in each box that applies; the common split percentages noted above will be used unless otherwise indicated.

Historical Spend Actual 2016 Actual 2017 Actual Actual Historic Forecast 2018 2019 Year 2020 (O&M only) Capital O&M

Total Request ($000):

Total Request by Year: Request 2021 Request 2022 Request 2023 Request 2024 Request 2025 Capital O&M* $150.0 $154.5 $159.1

Capital Request by Elements of Expense: EOE 2021 2022 2023 2024 2025 Labor M&S Contract Services Other Overheads Total

Total Gross Cost Savings / Avoidance by Year: 2021 2022 2023 2024 2025 O&M Savings O&M Avoidance Capital Savings Capital Avoidance

Total Ongoing Maintenance Expense by Year: 2021 2022 2023 2024 2025 O&M Capital

*If whitepaper is supporting a capital project/program this refers to implementation O&M 4. Definitions

Total Funding Request: All funding requested for program or project over program/project lifecycle or for on-going programs the five-year requested amount, including all capital, O&M, retirement.

Cost Savings: Reductions in costs that are currently being incurred (e.g., reduced annual maintenance cost relative to today)

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Exhibit AP-6 Schedule 5 Page 7 of 7

Cost Avoidance: Reductions in anticipated future costs that don’t occur today (e.g., anticipated short- term fixes/maintenance if capital isn’t deployed)

Project Status:

• Initiation – New project, not authorized yet • Planning – Project authorized, not started yet • Executing – Project in-flight • On-going – Annual program

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