Control Number: 50893 Item Number: 9 Addendum StartPage: 0 ~<~fFE6*-Ai« ~' RECEIVED ~ AUG 0 7 2020 INDEX TO THE DIRECT TESTIMONY BY--« t OF MICHAEL G. GRABLE, WITNESS FOR ONCOR ELECTRIC DELIVERY COMPANY LLC AND»U«f ONCOR ELECTRIC DELIVERY COMPANY NTU LLC I. POSITION AND QUALIFICATIONS 2 Il. PURPOSE OF DIRECT TESTIMONY 3 Ill. OVERVIEW OF APPLICATION 4 IV. REQUEST FOR LIMITED WAIVERS AND CLARIFICATION.................... 5 A. Unknown Affiliates 6 B. Non-Competitive Affiliates and Employee Reimbursements .............. 12 C. NTU Coverage Under the Oncor Code of Conduct 16 V. CODE OF CONDUCT SAFEGUARDS AND COMMITMENTS............... 17 VI. SUMMARY AND CONCLUSION....................................................18 VII. AFFIDAVIT 19 Vlll. EXHIBIT: Exhibit MGG-1 Affiliate Identification and Posting Policy PUC Docket No. 50893 Grable Direct Oncor Electric Delivery and NTU Code of Conduct Waiver Application -1- -1 -laJ 1 DIRECT TESTIMONY OF MICHAEL G. GRABLE 2 I. POSITION AND QUALIFICATIONS 3 Q. PLEASE STATE YOUR NAME, BUSINESS ADDRESS, AND CURRENT 4 EMPLOYMENT POSITION. 5 A. My name is Michael G. Grable. My business address is 1616 Woodall 6 Rodgers Freeway, Dallas, Texas 75202. I am Vice President, Regulatory 7 Strategy and Chief Compliance and Risk Officer for Oncor Electric Delivery 8 Company, LLC ("Or'Icor" or "Company"). 9 Q. PLEASE DISCUSS YOUR EDUCATIONAL BACKGROUND AND 10 PROFESSIONAL EXPERIENCE. 11 A. I hold a Bachelor's degree from Duke University and a Juris Doctor degree 12 from the College of William and Mary School of Law. I began working for 13 Oncor in 2018 as Vice President, Corporate Development & Strategy and 14 earlierthis yearassumed my current title and responsibilities. Before joining 15 Oncor, I was the President of Lone Star Transmission, LLC ("Lone Star"), a 16 position that I began in April 2010. I served as Vice President, General 17 Counsel, and Corporate Secretary for the Electric Reliability Council of 18 Texas, Inc. ("ERCOT") from January 2008 until April 2010 and as ERCOT's 19 Assistant General Counsel for Regulatory Affairs from October 2006 until 20 January 2008. Before joining ERCOT, l was employed by the Public Utility 21 Commission of Texas ("Commission") as Advisor to then-Commissioner 22 Barry T. Smitherman from May 2004 until September 2006, and as a Senior 23 Attorney in the then-Policy Development Division of the Commission from 24 October 2003 until May 2004. I also worked as an associate attorney on 25 telecommunications and technology regulatory matters at two Washington, 26 D.C. law firms, Crowell & Moring LLP and Harris Wiltshire & Grannis LLP, 27 between 1998 and September 2003, and I served as briefing attorney to 28 Texas Supreme Court Justice Craig Enoch in the 1997-98 court term. 29 Q. WHAT ARE YOUR RESPONSIBILITIES IN YOUR CURRENT POSITION? PUC Docket No. 50893 Grable Direct Oncor Electric Delivery and NTU Code of Conduct Waiver Application -2- N 1 A. In my current role, in addition to certain regulatory and risk-management 2 activities, my responsibilities as Chief Compliance Officer include ensuring 3 that Oncor understands those laws and regulations applicable to the 4 company and has the processes, systems, and people in place to ensure 5 and track compliance. In addition to this enterprise-wide function, on which 6 I have specific reporting obligations directly to the Audit Committee of the 7 Oncor Board of Directors on a dashed-line basis, I have also assumed 8 specific responsibility for Oncor's compliance with affiliate-company laws 9 and regulations, and the reporting obligations that apply to Oncor and its 10 affiliates. 11 Q. HAVE YOU PREVIOUSLY SUBMITTED TESTIMONY BEFORE THE 12 COMMISSION? 13 A. Yes. I have previously testified in several dockets before the Commission 14 on behalf of Lone Star , including Docket No . 39551 , Application of Lone 15 Star Transmission, LLC for a Limited Waiver with Respect to its Code of 16 Conduct . I also testified in Docket No . 38230 , Application of Lone Star 17 Transmission, LLC for a Certificate of Convenience and Necessity for the 18 Central A to Central C to Sam Switch/Navarro Proposed CREZ 19 Transmission Line , the docket in which , together with a settled portion that 20 was severed into Docket No. 38642 for early resolution, Lone Star was 21 granted a certificate of convenience and necessity to build Lone Star's 22 portion of the competitive renewable energy zone transmission plan. I also 23 testified in Docket No . 40020 , Application of Lone Star Transmission , LLC 24 for Authority to Establish Interim and Final Rates and Tariffs, and \n Docket 25 No . 42469 , Application of Lone Star Transmission, LLC for Authority to 26 Change Rates . Finally , I filed written testimony in Docket Nos . 40798 , 27 41378 , and 41765 , each of which was styled Application of Lone Star 28 Transmission, LLC for Interim Update of its Transmission Rates. 29 Il. PURPOSE OF DIRECT TESTIMONY 30 Q. PLEASE SUMMARIZE THE PURPOSE OF YOUR DIRECT TESTIMONY. PUC Docket No. 50893 Grable Direct Oncor Electric Delivery and NTU Code of Conduct Waiver Application -3- 03 03 1 A. The purpose of my direct testimony is as follows: 2 • I provide an overview of the Application,1 including a description of 3 the relief that Oncor and NTU (collectively, "Applicants") are seeking 4 in this docket; 5 • I explain and support Applicants' specific requests for limited waivers 6 of certain of the Commission's code of conduct and affiliate 7 requirements and their request for clarification of NTU's coverage 8 under Oncor's Code of Conduct; and 9 • I reiterate the Oncor Code of Conduct safeguards and commitments 10 described in the Application and this testimony. 11 My direct testimony and exhibit were prepared by me or under my 12 direction, supervision, or control, and is true and correct. I will address each 13 topic in the same order reflected in the above listing. 14 Ill. OVERVIEW OF APPLICATION 15 Q. PLEASE PROVIDE AN OVERVIEW OF THE APPLICATION IN THIS 16 DOCKET. 17 A. Oncor filed the Application in this docket to secure a Commission-approved 18 tailoring of Oncor's Code of Conduct based on Oncor's current, complex, 19 and ring-fenced ownership structure that also respects the intent of the 20 affiliate requirements. These would be Oncor's first Code of Conduct 21 waivers and good cause supports the relief requested in this docket. After 22 the Sempra Acquisition and the Sharyland Acquisition, both of which 23 resulted in changes to Oncor's corporate affiliations, Oncor has been 24 reviewing its practices regarding the investors in Oncor's minority owner, 25 TTI. As further detailed in the Application, TTI is essentially composed of 26 two indirect owners: (1) a private investment group led by OMERS, acting 27 through its infrastructure investment entity OMERS Infra; and (2) GIC, which 28 manages and controls its investment in TTI through GIC Infra. Because of 1 Unless l specify otherwise, the short-hand terms I use herein have the same meaning as defined in the Application. PUC Docket No. 50893 Grable Direct Oncor Electric Delivery and NTU Code of Conduct Waiver Application -4- 1 the far-reaching, diverse global interests held by OMERS and GIC, and the 2 functional separation of their infrastructure investment divisions from the 3 rest of their portfolio of investments, Oncor cannot always be certain of 4 immediate, full compliance with the Commission's affiliate rules. 5 Q. WHAT SPECIFIC RELIEF ARE ONCOR AND NTU SEEKING FROM THE 6 COMMISSION IN THIS DOCKET? 7 A. As I explain below in Section IV of my testimony, Applicants are seeking 8 limited, good-cause waivers from certain portions of the Commission's 9 affiliate reporting and transaction requirements in 16 TAC §§ 25.84 and 10 25.272. Applicants are also requesting clarification that NTU is to be 11 governed by and operate under Oncor's Commission-approved Code of 12 Conduct, which is consistent with the Commission's final order in the 13 Sharyland Acquisition.2 In connection with these requests, I am detailing in 14 this testimony a proposed framework for Oncor's regular, good-faith efforts 15 to identify all new Oncor affiliates resulting from the approximately 9.8% 16 indirect ownership interest that each of GIC and OMERS respectively have 17 in Oncor (see Section IV and my Exhibit MGG-1). In support of Applicants' 18 waiver requests, I also further explain the Code of Conduct safeguards and 19 commitments referenced in the Application that we intend to use as the 20 basis for Commission approval of our requested relief (see Section V). 21 IV. REQUEST FOR LIMITED WAIVERS AND CLARIFICATION 22 Q. WHAT SPECIFIC LIMITED CODE OF CONDUCT WAIVERS AND 23 CLARIFICATION ARE APPLICANTS' REQUESTING? 24 A. As detailed below, Applicants are requesting limited, or narrowly tailored, 25 good-cause waivers from certain affiliate reporting and affiliate transaction 26 requirements of 16 TAC §§ 25.84 and 25.272, as adopted by the 27 Commission under PURA § 39.157. We are also requesting clarification 2 Joint Report and Application of Oncor Electric Delivery Company, LLC, Sharyland Distribution & Transmission Services, L.L.C., Sharyland Utilities, L.P. and Sempra Energy for Regulatory Approvals under PURA §§ 14 . 101 , 37 . 154, 39 . 262, and 39 . 915, Docket No . 48929 , Order at 30, Ordering Paragraph No. 3 (May 9, 2019). PUC Docket No. 50893 Grable Direct Oncor Electric Delivery and NTU Code of Conduct Waiver Application -5- Crl 1 relating to NTU's governance under Oncor's Code of Conduct. For ease of 2 presentation, we have organized our requests into three subject areas: (1) 3 Unknown Affiliates; (2) Non-Competitive Affiliates and Employee 4 Reimbursements; and (3) NTU Coverage Under the Oncor Code of 5 Conduct.