Thomas R. Teehan Senior Counsel October 6, 2009 VIA HAND DELIVERY & ELECTRONIC MAIL Luly E. Massaro, Commission Clerk Rhode Island Public Utilities Commission 89 Jefferson Boulevard Warwick, RI 02888 RE: Docket 4065 – National Grid Request for Change of Electric Distribution Rates National Grid Rebuttal Testimony Dear Ms. Massaro: On behalf of The Narragansett Electric Company d/b/a National Grid1, enclosed for filing, please find an original and nine (9) copies National Grid’s Rebuttal Testimony in the above-referenced docket. This transmittal consists of rebuttal testimony of the following individuals: • John Pettigrew • Rudolph L Wynter, Jr. • Susan F. Tierney, Ph.D. • Paul R. Moul • Julie M. Cannell • William F. Dowd • Robert L. O’Brien Thank you for your attention to this transmittal. If you have any questions, please feel free to contact me at (401) 784-7667. Very truly yours, Thomas R. Teehan Enclosure cc: Docket 4065 Service List 1 The Narragansett Electric Company d/b/a National Grid (“National Grid” or “Company”). Certificate of Service I hereby certify that a copy of the cover letter and / or any materials accompanying this certificate has been electronically transmitted, sent via U.S. mail or hand- delivered to the individuals listed below. _________________________________ October 6, 2009 Joanne M. Scanlon Date National Grid (NGrid) – Request for Change in Electric Distribution Rates Docket No. 4065 - Service List as of 8/25/09 Name/Address E-mail Distribution Phone/FAX Thomas R. Teehan, Esq. [email protected] 401-784-7667 National Grid. 401-784-4321 280 Melrose St. [email protected] Providence, RI 02907 Cheryl M. Kimball, Esq. (for NGrid) [email protected] 617-951-1400 Keegan Werlin LLP 617-951-1354 265 Franklin Street [email protected] Boston, MA 02110 Leo Wold, Esq. (for Division) [email protected] 401-222-2424 Dept. of Attorney General 401-222-3016 150 South Main St. [email protected] Providence, RI 02903 [email protected] Ladawn S. Toon, Esq. [email protected] 401-222-2424 Dept. of Attorney General [email protected] 401-222-3016 150 South Main St. Providence, RI 02903 [email protected] Audrey Van Dyke, Esq. [email protected] 202-685-1931 Naval Facilities Engineering Command 202-433-2591 Litigation Headquarters 720 Kennon Street, S.E. Bdg. 36, Rm 136 Washington Navy Yard, DC 20374 Khojasteh (Kay) Davoodi [email protected] 202-685-3319 Naval Facilities Engineering Command 202-433-7159 Director, Utility Rates and Studies Office [email protected] 1322 Patterson Avenue SE Washington Navy Yard, DC 20374-5065 Jerry Elmer, Esq. [email protected] 401-351-1102 Conservation Law Foundation 401-351-1130 55 Dorrance Street Providence, RI 02903 Michael McElroy, Esq. (for TEC-RI) [email protected] 401-351-4100 Schacht & McElroy 401-421-5696 PO Box 6721 Providence, RI 02940-6721 John Farley, Executive Director [email protected] 401-621-2240 The Energy Council of RI 401-621-2260 One Richmond Square Suite 340D Providence, RI 02906 Jean Rosiello, Esq. (for Wiley Ctr.) [email protected] 401-751-5090 MacFadyen Gescheidt & O’Brien 401-751-5096 Jeremy C. McDiarmid, Esq. [email protected] 617-742-0054 Environment Northeast (ENE) 6 Beacon St., Suite 415 Boston, MA 02108 W. Mark Russo (for ENE) [email protected] Ferrucci Russo, P.C. 55 Pine St. Providence, RI 02903 Roger E. Koontz [email protected] Environment Northeast 15 High Street Chester, CT 06412 R. Daniel Prentiss, P.C. (for EERMC) [email protected] 401-824-5150 Prentiss Law Firm 401-824-5181 One Turks Head Place, Suite 380 Providence, RI 02903 Samuel P. Krasnov (for EERMC) [email protected] 203 S. Main Street Providence, RI 02903 S. Paul Ryan (for EERMC) [email protected] 670 Willett Avenue Riverside, RI 02915-2640 Maurice Brubaker [email protected] Brubaker and Associates P.O. Box 412000 St Louis, Missouri 63141-2000 Ali Al-Jabir [email protected] Brubaker and Associates 5106 Cavendish Dr. Corpus Christi, TX 78413 David Effron [email protected] 603-964-6526 Berkshire Consulting 12 Pond Path North Hampton, NH 03862-2243 Bruce Oliver [email protected] 703-569-6480 Revilo Hill Associates 7103 Laketree Drive Fairfax Station, VA 22039 Dale Swan [email protected] 410-992-7500 Exeter Associates 410-992-3445 5565 Sterrett Place Suite 310 Columbia, MD 21044 Matthew Kahal [email protected] 410-992-7500 c/o/ Exeter Associates 410-992-3445 5565 Sterrett Place Suite 310 Columbia, MD 21044 Bruce Gay [email protected] 843-767-9001 Monticello Consulting Group 843-207-8755 4209 Buck Creek Court North Charleston, SC 29420 Lee Smith [email protected] 617-778-5515 Richard Hahn Ext. 117 Mary Neal [email protected] 617-778-2467 LaCapra Associates One Washington Mall, 9th Floor [email protected] Boston, MA 02108 File original & nine (9) copies w/: [email protected] 401-780-2107 Luly E. Massaro, Commission Clerk [email protected] 401-941-1691 Public Utilities Commission [email protected] 89 Jefferson Blvd. Warwick, RI 02889 [email protected] [email protected] National Grid The Narragansett Electric Company INVESTIGATION AS TO THE PROPRIETY OF PROPOSED TARIFF CHANGES Rebuttal Testimony Book 1 of 1 October 6, 2009 Submitted to: Rhode Island Public Utilities Commission Docket No. R.I.P.U.C. 4065 Submitted by: Rebuttal Testimony of John Pettigrew THE NARRAGANSETT ELECTRIC COMPANY d/b/a NATIONAL GRID Docket No. R.I.P.U.C. 4065 Rebuttal Witness: Pettigrew PRE-FILED REBUTTAL TESTIMONY OF JOHN PETTIGREW 1 THE NARRAGANSETT ELECTRIC COMPANY d/b/a NATIONAL GRID Docket No. R.I.P.U.C. 4065 Rebuttal Witness: Pettigrew Table of Contents I. INTRODUCTION AND PURPOSE OF TESTIMONY.....................................................1 II. UNION CONTRACT COMMITMENTS...........................................................................2 III. INSPECTION & MAINTENANCE PROGRAM...............................................................3 IV. VEGETATION MANAGEMENT......................................................................................9 V. CAPITAL FORECAST.....................................................................................................12 VI. SERVICE COMPANY ALLOCATIONS.........................................................................21 2 THE NARRAGANSETT ELECTRIC COMPANY d/b/a NATIONAL GRID Docket No. R.I.P.U.C. 4065 Rebuttal Witness: Pettigrew Page 1 of 25 1 I. INTRODUCTION AND PURPOSE OF TESTIMONY 2 Q. Mr. Pettigrew, please state your name and business address. 3 A. My name is John Pettigrew. My business address is 40 Sylvan Road, Waltham, MA 4 02451. 5 6 Q. Have you sponsored direct testimony in this proceeding? 7 A. Yes. My direct testimony was submitted in this proceeding with the Company’s initial 8 filing on June 1, 2009. 9 10 Q. What is the purpose of your rebuttal testimony? 11 A. I am submitting rebuttal testimony in response to the testimonies of Richard S. Hahn, Lee 12 Smith, and David J. Effron sponsored by the Rhode Island Division of Public Carriers 13 (the “Division”). 14 15 Q. Would you summarize the specific areas covered by your rebuttal testimony? 16 A. Yes. My rebuttal testimony addresses recommendations made by the Division in relation 17 to the following topics: 18 1. Contractual Commitments for Union Labor 19 2. Costs Associated with the Inspection & Maintenance Program 20 3. Costs Associated with Vegetation Management 21 4. Capital Forecast 22 5. Service Company Allocations 3 THE NARRAGANSETT ELECTRIC COMPANY d/b/a NATIONAL GRID Docket No. R.I.P.U.C. 4065 Rebuttal Witness: Pettigrew Page 2 of 25 1 II. UNION CONTRACT COMMITMENTS 2 Q. Would you first address Mr. Effron’s recommendation on the Company’s union 3 contract commitments? 4 A. Yes. Mr. Effron recommends that the Company’s adjusted test-year cost of service be 5 reduced by $1,363,000 to eliminate the cost associated with union employees that will be 6 hired and on payroll before the end of calendar year 2010 (the rate year for this case). 7 Mr. Effron claims that the Company has not identified the tasks that these new hires will 8 be performing and, in fact, the employees will be hired in order to reduce the amount of 9 contract labor that is used by the Company (Effron Direct Testimony at 7). 10 11 Q. Is Mr. Effron correct in the basis for his union labor adjustment? 12 A. No. The amount of $1,363,000 should not be eliminated from the Company’s cost of 13 service because (1) the Company is contractually committed to these costs, (2) the 14 contractual commitment was made in order to institute a five-year ramp up of capital 15 work in the State of Rhode Island, and (3) the increased workload cannot be managed 16 without additional labor resources (both internal and external). Specifically, the 17 Company’s capital work plan will involve an increased level of asset replacement and 18 other reliability-related work, such as load-relief projects. Increased labor will also be 19 needed to carry out the work plan for the Inspection and Maintenance (“I&M”) Program. 20 The increased amount of work has been determined based upon the Company’s 21 experience conducting a Feeder Hardening program in Rhode Island which although 22 similar to the I&M program is more limited in scope and volume. To manage this 4 THE NARRAGANSETT ELECTRIC COMPANY d/b/a NATIONAL GRID Docket No. R.I.P.U.C. 4065 Rebuttal Witness: Pettigrew Page 3 of 25 1 increased work load, it was necessary for the Company to incorporate increased staffing 2 levels into the currently effective collective bargaining agreement in a way that was 3 coincident with the ramp-up of field work. Moreover, these incremental internal 4 resources will be needed in addition to – and not in the place of – external resources, as 5 Mr.