July 15, 1998
VIA HAND DELIVERY
Mr. Donald P. Eveleth
Assistant Executive Secretary
Maryland Public Service Commission
6 Saint Paul Street
Baltimore, MD 21202
Re: Case No. 8768
Dear Mr. Evelyth:
Enclosed are the originals and three copies of the testimony of William R. Moore, Jr. and Richard J. Geisenberger filed herein on behalf of Delmarva Power & Light Company, Respondent. A disk of this testimony is also being filed herewith. Copies are being sent to the parties listed below.
In Hearing Examiner Joel M. Bright’s Notice dated June 24, 1998, he asked that the parties report back to him by July 22, 1998 as to proposed hearing dates and the future procedural schedule. To move things along, I would make the following suggestions and would appreciate hearing back from the other parties.
The Complainants, Staff Counsel and People’s Counsel have previously indicated that they do not intend to file testimony. If this is still the case, then we would suggest that, if the timeframe of September 15 - October 15 is suitable to the Hearing Examiner and to all parties, we pick two or three alternative dates that work for everyone within this timeframe and submit these dates to the Hearing Examiner. I would expect that the hearing would take less than a day. We would suggest that a simultaneous exchange of initial briefs would be due thirty days after the hearing and reply briefs fifteen days after the initial briefs.
If any other party decides to file testimony, then we would ask for 30 days to file rebuttal to that testimony. This would require extending the hearing schedule and the briefing schedule.
Again, this is just intended to propose a framework for discussion purposes. I look forward to hearing from the parties so that we can jointly respond to the Hearing Examiner’s request by July 22, 1998.
Very truly yours,
Thomas P. Perkins, III
Counsel for Delmarva Power & Light Company,
Respondent
TPP:ac
Enclosures
BA0DOCS1\0060456.01
cc: Hearing Examiner Joel M. Bright (by hand)
Gary Alexander, Esq. (fax and regular mail)
M. Catherine Dowling, Esq., Acting Staff Counsel (by hand)
John Sayles, Esq., Office of People’s Counsel (by hand)
“CUSTOM FOOTER”
BEFORE THE PUBLIC SERVICE COMMISSION
OF THE STATE OF MARYLAND
IN THE MATTER OF THE COMPLAINT OF )
MID-ATLANTIC PETROLEUM DISTRIBUTORS )
AND DELMARVA OIL HEAT ASSOCIATION ) CASE NO. 8768
AGAINST DELMARVA POWER & LIGHT COMPANY )
TESTIMONY OF WILLIAM R. MOORE, JR.
ON BEHALF OF DELMARVA POWER & LIGHT COMPANY
1. Q: Please state your name, position and business address.
A: My name is William R. Moore, Jr. and I am Manager of Regulatory Issues in the Regulatory Affairs Department of Conectiv, the parent of Delmarva Power & Light Company (“Delmarva” or the “Company”), 800 King Street, Wilmington, DE 19899.
2. Q: Describe briefly your educational background and professional qualifications.
A: I received an Associate of Science Degree in Business Administration from Delaware Technical and Community College in 1971 and graduated from Salisbury State College with a Bachelor of Science Degree in Business Administration in 1973. Immediately thereafter, I joined Delmarva as a Rate Analyst in the Rate Department in Salisbury, Maryland.
In December 1976, I was promoted to a Senior Analyst in the Regulatory Practice Department in Wilmington, Delaware. I was appointed to the position of Project Coordinator in 1979. In October 1981, I was promoted to a supervisory position where I was responsible for the preparation of electric and gas cost of service studies and the development of the revenue requirements for the Company. In December 1988, I was promoted to Manager of Revenue Analysis and given the responsibility for the coordination of revenue requirements, load studies, and cost of service studies in support of system electric and gas base rate cases. I assumed my present position in December 1995. In my current position, I am responsible for coordinating the Company’s activities and dealing with the changes coming about because of the industry’s movement towards a more competitive environment and for general regulatory matters of the Company before the Delaware Public Service Commission (“DPSC” or “Commission”), Maryland Public Service Commission (“MPSC”), the Virginia State Corporation Commission (“VSCC”) and the Federal Energy Regulatory Commission (“FERC”).
I am presently a member of the Southeastern Electric Exchange Rate Committee, a group of my peers and associates involved in the area of regulatory matters from investor-owned electric utilities around the country. I am also currently the vice-chairman of the EEI Task Force on Performance-Based Ratemaking and in 1994, I served on the Regulatory/Theory Issues and Case Activity Issues working groups for Governor Carper’s Public Utility Regulatory Task Force.
3. Q: Have you testified before any other regulatory agencies prior to this case?
A: Yes. I have previously presented testimony as a witness before the Maryland and Delaware Public Service Commissions and before the Virginia State Corporation Commission.
4. Q: What is the purpose of your testimony in this case?
A: On May 26, 1998 the Hearing Examiner in this case issued a ruling directing Delmarva to file testimony on two issues. My testimony deals with the issue of Delmarva’s compliance with the MPSC’s Promotional Practices Rules.
My testimony will demonstrate that the Promotional Practices Rules are not applicable to Delmarva under the circumstances that are the subject of this case.
5. Q: Let me refer you to the definitions of “Promotional Practices” and “Consideration” as set forth in the Maryland Promotional Practices Rules in Section .01G and .01C. They provide, in pertinent part:
“Promotional practices” means any consideration offered or granted by a public utility or its affiliate to a person for the purpose, express or implied, or inducing that person to select or use the service or additional service of the utility, or to select or install any appliance or equipment designed to use the utility service....
“Consideration” means any cash, donation, gift, allowance, rebate, bonus, merchandise (new or used), property (tangible or intangible), labor, service, conveyance, commitment, right, or other thing of value, but does not include items of token or trivial value which do not exceed a retail value of $30.
Are you familiar with these provisions?
A: Yes, I am.
6. Q: Does Delmarva Power offer or grant any “Consideration” (as defined above) to any customer to induce its customer to use the services of its regulated utility operations?
A: No.
7. Q: Does Delmarva Power charge each of its Maryland customers for utility services rates and charges as set forth in its Maryland tariff?
A: Yes. All rates and charges are set forth in Delmarva’s filed tariffs as approved by the MPSC, with the limited exception of the Negotiated Contract Rate (“NCR”) tariff. However, the NCR sets the guidelines for price determination and all such NCR contracts are approved by the MPSC.
8. Q: Does Delmarva Power offer or grant any Consideration of any kind to Conectiv Services to induce customers of Conectiv Services to use the services of Delmarva’s regulated utility operations?
A: No.
9. Q: Subparagraphs 5A and 6 of the Maryland Public Service Commission Promotional Practices Rules provide as follows:
.05 Filing of Proposed Promotional Practices.
A. public utility or its affiliate may not offer or grant any additional promotional practice or vary any existing promotional practice, directly or indirectly, or in concert with others, or by any means whatsoever, until a schedule showing the addition or variation, in the form prescribed by Regulation .04, above, has been on file with the Commission for a period of at least 30 days, except that a minor variation in an existing promotional practice may be implemented upon its filing with the Commission.
.06 Annual Report.
Each public utility shall file with the Commission, concurrently with the annual report required by law, a report of the promotional practices offered or granted by the public utility and its affiliates during the period covered by the annual report. The report shall show in reasonable detail the amounts expended with respect to each promotional practice offered or granted.
Are you familiar with these provisions?
A: Yes, I am.
10. Q: If filings were required under these sections would you have been made aware of any such filings?
A: Yes.
11. Q: Have any filings been made by Delmarva pursuant to the Promotional Practices Rules?
A: To the best of my knowledge, no. We have searched our files and made inquiries of those persons at Delmarva Power or with its affiliates who might, in the past, have had any connection with those types of filings. I have been unable to find any evidence that any filings have been made under the Promotional Practices Rules.
There have, however, been many applications to the Commission made over the years to implement, modify or close demand side management programs, such as Delmarva Power’s “Challenge 2000” program, but these filings are not submitted pursuant to the Promotional Practices Rules.
12. Q: Are you personally aware of any other electric utilities that have made any filings pursuant to the Promotional Practices Rules?
A: No, I am not.
13. Q: Did Delmarva’s counsel, Venable, Baetjer and Howard, attempt to determine whether it is the practice of electric utilities to make promotional practices filings with the Commission?
A: Yes.
14. Q: What was counsel able to determine?
A: Counsel made the following report to us, as summarized below:
Mr. Donald Eveleth at the Commission was requested in May to search the Commission data base to determine whether any such filings existed. The only indication of any possible filing was an indication of a notice filed by Potomac Edison on January 3, 1997 advising that it would include promotional materials in its bills. Mr. Eveleth indicated that, on January 30, 1997, Potomac Edison withdrew its filing. Efforts to produce these files were unsuccessful despite Mr. Eveleth’s best efforts, even including the use of “mail log numbers” used by the Commission to track filings.
15. Q: Did your attorneys’ investigation turn up any indication of any other promotional practice filings by other power companies in Maryland?
A: No.
16. Q: Did your counsel file a data request with Staff Counsel to seek information concerning promotional practices filings?
A: Yes.
17. Q: Did this produce any additional information?
A: No.
18. Q: What are your conclusions with regard to the applicability of the Promotional Practices Rules and filing requirements relative to the matters raised in this docket?
A: As far as I am aware, the Commission has never required a Maryland utility or any affiliate of a Maryland utility to make filings pursuant to other Promotional Practices Rules. In any event, the rules and resulting reporting requirements are not applicable to Delmarva in the circumstances at issue in this case. Delmarva has not offered any consideration to its affiliates, nor have its affiliates offered any consideration to Delmarva. Tariffed services are available to any entity qualifying for the tariff on a non-discriminatory basis.
19. Q: Does this conclude your testimony?
A: Yes.
BEFORE THE PUBLIC SERVICE COMMISSION
OF THE STATE OF MARYLAND
IN THE MATTER OF THE COMPLAINT OF )
MID-ATLANTIC PETROLEUM DISTRIBUTORS )
AND DELMARVA OIL HEAT ASSOCIATION ) CASE NO. 8768
AGAINST DELMARVA POWER & LIGHT COMPANY )
TESTIMONY OF RICHARD J. GEISENBERGER
ON BEHALF OF DELMARVA POWER & LIGHT COMPANY
1. Q: Please state your name, position and business address.
A: My name is Richard J. Geisenberger. I am Manager of Finance-Conectiv Services. I work in the Conectiv Enterprises Finance Team and I am an employee of Conectiv Resources Partners, Inc., the shared support services subsidiary of Conectiv. My business address is Christiana Building, 252 Chapman Road, P. O. Box 6066, Newark, DE 19714-6066.
2. Q: Describe briefly your educational background and professional qualifications.
A: I graduated from Franklin and Marshall College in 1986 with a B.A. in Government and graduated from the University of Pennsylvania in 1992 with a Master in Government Administration.
In 1986 I joined Manufacturers Hanover Corporation in New York, New York as a Management Trainee and was promoted to Senior Credit Analyst. I was elected Assistant Secretary of Manufacturers Hanover Bank (Delaware) in Wilmington, Delaware in 1988, responsible for selling credit and other banking services to large corporate customers in the Mid-Atlantic Region.
From 1991 to 1992, I worked as a Financial Consultant under contract with Delmarva Capital Investments, Inc. (“DCI”), a subsidiary of Delmarva Power & Light Company (“Delmarva”) where I was responsible for debt restructuring, acquisition analysis, financial modeling and cash forecasting. In September 1992, I was hired by Delmarva as Assistant Treasurer of Subsidiaries with added responsibility for DCI’s tax planning and cash management functions.
From 1993 to 1996, I worked for the State of Delaware in a number of appointed positions including Economic Policy Advisor to Governor Thomas R. Carper, Executive Assistant to the Secretary of State, and Secretary of the Diamond State Port Corporation. In those capacities, I served as the Governor’s Office liaison to the Economic Development Office, the Delaware Public Service Commission, and the Departments of State, Labor, Agriculture, and Nature Resources and Environmental Control. I coordinated a number of legislative initiatives on behalf of the Governor’s Office including Telecommunications and Utility Regulatory Reform, School Technology and Internet Access, Environmental Permitting Reform, Open Space and Farmland Preservation, Wilmington Riverfront Development, and the State’s purchase of the Port of Wilmington.
In December 1996, I rejoined Delmarva as Manager of Business Development for Conectiv Services, Conectiv’s HVAC business, responsible for acquisition analysis and strategic planning. I assumed my present position in March, 1998 where I provide financial support services to Conectiv Services including planning, budgeting, analysis, forecasting, financing, and product price analysis.
As described above, I have spent all of my time during employment with Delmarva, and with its affiliates, working on non-utility matters.
3. Q: What is the purpose of your testimony?
A: On May 26, 1998, the Hearing Examiner in this case issued a ruling directing Delmarva to file testimony. In particular, the Hearing Examiner asked for a description of “the activities (and cost allocations) of the ESBU division.” My testimony is intended to describe the Energy Services Business Unit (“ESBU”) as it existed at the time that depositions were taken in this case on September 26, 1997 and to describe the subsequent transformation of this business unit resulting from the merger involving Delmarva and Atlantic Energy. It is the further objective of my testimony to demonstrate that in the operations of the ESBU and its successor business group, the unregulated operations of Conectiv Services, Inc. have not been and are not at present subsidized in any way by Delmarva Power.