WEBVTT

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<v ->We will now
reconvene this meeting</v>

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of the Public Utility
Commission of Texas.

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Apologies for the delay

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we had some meal
delivery logistics challenges,

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and nobody wants to go hungry.

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And I think before we
dive into the agenda

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regarding logistics for tomorrow,

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I think everybody discussed casual.

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<v ->Jeans.</v>

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<v ->Jeans tomorrow,
so for all of our.</v>

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<v ->I'll do it, I'll
do it this time,</v>

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I will, I promise, I swear.

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<v ->But market participants
need to be in coat and tie, right?</v>

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(laughing)

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<v ->I was gonna offer the heads
up to our good stakeholders</v>

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that they too should feel free to come.

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<v ->I think that would be right.</v>

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<v ->Jeans and casuals
if to the extent</v>

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they're gonna be participating
in person tomorrow.

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<v ->I will, I will.</v>

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(laughing)

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<v ->I got a pair of jeans
somewhere (chuckles).</v>

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<v ->That's not required,
but given the Friday,</v>

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the Friday schedule we wanna
make it as casual and relaxed

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for everybody as we can.

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All right, item number
36, please Mr. Janae.

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<v ->36 is docket 5147O,</v>

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it's the application of
people's telephone co-op

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for alternative technology
for their polar obligations.

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You have before you
have revised proposed order

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that was filed on September 3rd,

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and Commissioner McAdams has a memo.

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<v ->I'll defer to you to
lay out your memo, sir.</v>

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<v ->Thanks Mr. Chairman.</v>

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As my memo indicated this is
a bit of a unique circumstance.

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These cases like we're
looking at here they are rare,

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they don't come up often.

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As my conclusion of law
implies I believe PURA allows us

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to adjust disbursement from USF

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for providers of last resort.

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Hence the memo articulating that

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and then the reporting requirement,

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because this happens so rarely,

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I believe we need ongoing data

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to gauge how to best
move forward in future

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on cases as these do come up.

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<v ->I think you put that very well,</v>

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agree with all of that
thoughts and comments.

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<v ->I support it, I agree.</v>

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<v ->I agree as well.</v>

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<v ->Commissioner, this
is Stephanie Potter</v>

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on behalf of peoples.

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First we appreciate
that this application

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is on the open meeting docket

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and appreciate your time
Commissioner McAdams

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in addressing it,

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I know this has been
pending for quite a while,

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and we certainly look
forward to and hope

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that it can be approved shortly.

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However, we have a couple
of issues with the language

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and the memo that was filed last night,

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with respect to the first
two points regarding to USF

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I think those are accurate
descriptions of the law

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that has not really been
part of the factual record

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that was established in this proceeding.

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And for a rate of return
regulated provider like peoples,

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I don't know that it's necessary

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because any changed its cost of service,

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as it implements new technologies

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is sort of automatically flows

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through to its reported earnings

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and thus to its to USF calculation,

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so I don't know that those
additions are necessary.

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I think that your rights exist in PURA,

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irrespective of whether
that's laid out in this order.

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But more concerned the next two findings

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that discuss people's
being a COA holder,

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peoples as a CCN holder
not a COA holder and as such

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it does not file the annual
reports under the rule

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that cited there.

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As a CCN holder, people's
annual reports are filed

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and under rule 26, 407,
and so it files very extensive

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and probably some of the
most thorough annual reports

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that you all have
gotten for any industry.

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And so it's just a distinct rule in law

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that those annual reports apply to.

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So I think the bottom
two findings certainly

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are not accurate in this
particular case I'm sure,

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maybe accurate in some, but
for a CCN holder I don't think

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we can include that language,

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and so we wanted to make
sure to raise that with you all

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before you vote on anything,

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because I think we would
have to have second thoughts

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about the application altogether

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if a finding were added requiring

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a different sort of annual report.

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<v ->So you believe
that you are already,</v>

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is this a conflict of law
or a substantive rule,

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or what are we dealing with here?

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<v ->It's just a different rule,</v>

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so certainly telecom providers

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that hold COA would be
subject to the filings requirements

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for COS but as a CCN holder

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it has different filing requirements.

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And so the particular
provision that you cited

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is absolutely accurate as to COS

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which doesn't apply to peoples,

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And so we don't think that
it should be included here.

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<v ->Is there a way to remedy that</v>

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by getting the substantially
the information you want

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with just different phrasing?

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Would there be a way?

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<v ->Well, so you are
not a SB COA holder.</v>

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<v ->Cracker CCN holder.</v>

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But we file extensive annual reports

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your staff is reviewing, right now.

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<v ->Is it the same information
that would be covered?</v>

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<v ->I believe it's more,</v>

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I would have to look
into what specific findings

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there might be about
alternative technologies.

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And I think that's certainly information

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that we would be willing to provide

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if it's not already included

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but the separate report
that you referenced

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just as an applicable to peoples.

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<v ->Okay, I wanna
confirm that with staff</v>

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in terms of the information

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that's pertinent to both holders.

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<v ->I'm not sure either
we can go back and look</v>

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and provide you information
on that Commissioner Mcadams.

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<v ->Well, maybe an
easy step through here</v>

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is we could delete the one about
the S-C-O-S-P-C-O-H holder.

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And just say in there
in the annual report

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are required under 26
407 or wherever it is,

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we want this information in the manner

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that's requested here.

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<v ->Will peoples have
a problem with that?</v>

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<v ->I'd have to consult with them.</v>

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And I apologize we would
have obviously coordinated

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with staff more and filed a
written response if we had time,

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we just got caught a little flat-footed,

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so I'm stepping in for
people's here today

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and would have to ask
if that specific language

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is acceptable, I
imagine that it is fine.

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And I think we would
prefer to even delay approval

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of the meeting rather than.

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<v ->Bottom line we
want the information.</v>

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<v ->We do.</v>

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<v ->So we need for
further evaluation</v>

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moving forward in all of these.

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<v ->We would hope they would.</v>

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They said they're gonna
do an analysis on this

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to decide which technology
they're gonna use it.

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They're gonna only use
and do alternative technology

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when there's cost savings
over fiber or cable wires.

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That information they're
gonna have to have to do

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with total (indistinct).

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<v ->So regardless of
the form or the report,</v>

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as long as that data is
provided, then we're good,

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and our consideration
moving forward, so.

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<v ->Yeah, I mean, let's
wait and let's go back</v>

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and we'll check.

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I'll make my people learn the rules

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and we'll come back
with something better.

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<v ->Okay, all right I'm
good with (indistinct).</v>

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<v ->Everybody okay
with table in this item</v>

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and Commission staff to work

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with peoples to address
the information issues,

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raising Commissioner McAdams memo.

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<v ->Yes.</v>

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<v ->That we'll revisit at
the earliest opportunity.</v>

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<v ->Yes, thank you Commissioners,</v>

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and I appreciate your time today.

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<v ->No problem.</v>

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Thank you, all right, so
we were gonna table docket

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51470, and that will
move us to, hold on Lori.

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item, let me see item 37, I
don't have anything for that.

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Item 38, staff filed a
memo on new interest rates

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being established for customer
deposits and billing issues.

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<v ->And a proposed order with that.</v>

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<v ->And a proposed order, it's
pretty straight forward to me.</v>

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(indistinct)

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<v ->But we need to approve
stash proposed order,</v>

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is there a motion?

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<v ->so moved.</v>

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<v ->Second.</v>

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<v ->All in favor say aye.</v>

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<v All>Aye.</v>

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<v ->Oppose the motion, passes,</v>

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I don't have anything for 39, item 41.

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Regarding customer complaints

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we fortunately don't have
anything specific on this,

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but we do want to take
this opportunity to thank staff

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for the memo and the
report, and more importantly,

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congratulate the entire
customer protection division

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for winning our annual award

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for distinguished employee performance.

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And the fact that the award

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for distinguished employee performance

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went to so many employees is a mark

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of how critical they have
been in this very trying year,

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all of them and is
indicative of how important

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their efforts are to this
agency and the degree

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to which they have performed
their duties with excellence.

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So thank you to all of the
teammates in that group.

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Not a small challenge in normal times

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and especially in these
times, so thank you all for that.

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Any other thoughts or
comments on that item?

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<v ->No comments sir.</v>

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<v ->Item, I think that
gets us to item 42.</v>

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Mr. Janae, could
you lay that out for us?

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<v ->Item 42 is project 52761,</v>

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sir before you is an
amendment to the statement

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on the use of our Consent Agenda.

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We discussed last open
meeting about adding proposals

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for publication to the Consent
Agenda and we have for you

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a revised statement that would do that.

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<v ->Thank you, sir.</v>

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Always trying to streamline processes,

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improve efficiency while
maintaining transparency.

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This I think does that,
any thoughts, comments,

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or a motion to approve
the proposed statement?

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<v ->So moved.</v>

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<v ->Second.</v>
<v ->Second.</v>

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All in favor say aye.

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<v All>Aye.</v>

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<v ->Opposed motion passes.</v>

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I don't have anything else for 43 to 45,

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which now brings us to
the end of our agenda.

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At which point we will
revert to item number three.

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And Lori based on your work
at OPEC are recused from this,

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so we will excuse you from the diocese

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and hope you enjoy the
rest of your afternoon.

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<v ->Enjoy your afternoon.
(laughing)</v>

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<v ->Thank you so
much, best of wishes.</v>

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(laughing)

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<v ->All right.</v>

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Here we go.

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<v ->All right, we're still
searching our books.</v>

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(indistinct)

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<v ->What are your
mini charms doing?</v>

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(laughing)

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(indistinct)

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<v ->That's true.</v>

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<v ->All right, Mr. Janae
could you lay this item out</v>

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for us please, sir.

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<v ->Item three is docket 51415.</v>

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It's the application of SWEPCO

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to change their base rates.

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PFD was filed on August 27th.

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Exceptions and replies were filed,

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ALJ filed a memo with a
few proposed corrections

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and the changes.

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<v ->Thank you, sir.</v>

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As you all saw from the memo,

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the general agree with the PFD.

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Oh, I'm sorry sir, and the
chairman filed a memo.

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(laughing)

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<v ->Yeah, I guess your lunch
never did get here, did it?</v>

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(laughing)

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<v ->I was left hanging.</v>

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<v ->(laughs) That we can tell.</v>

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As you all saw from a memo,

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generally agree with the PFD,

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I think the ALJs did a good
job in a substantial case

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would be in support of adopting

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a majority of it with of course,

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the exceptions that I
laid out in my memo.

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So I'm happy to open up to
discussion, thoughts, comments

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on the items in the memo

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or anything else up for consideration.

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<v ->So I will just say
subject to any feedback</v>

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as a part of this proceeding.

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As I went through the PFD,

00:14:42.030 --> 00:14:46.650
I identified key areas
that I had concerns about,

00:14:46.650 --> 00:14:50.680
and I agreed with every point

00:14:50.680 --> 00:14:55.680
in your memo, Mr. Chairman,
you hit on each one that I had.

00:14:58.130 --> 00:14:59.430
I was gonna make a recommendation,

00:14:59.430 --> 00:15:03.697
I can't believe we even
settled on the ROE number

00:15:03.697 --> 00:15:05.723
that's where I was gonna come in at.

00:15:06.580 --> 00:15:07.445
Appreciate you explaining that.

00:15:07.445 --> 00:15:08.278
<v ->Really?</v>

00:15:09.160 --> 00:15:10.316
<v ->Yeah, you can ask Craig.</v>

00:15:10.316 --> 00:15:11.149
(laughing)

00:15:11.149 --> 00:15:12.350
<v ->I mean, I believe
you, I'm just, I'm stuck.</v>

00:15:12.350 --> 00:15:14.567
<v ->Yeah, it's weird.</v>

00:15:14.567 --> 00:15:17.380
<v ->I'm pleasantly surprised.</v>

00:15:17.380 --> 00:15:21.330
<v ->I appreciated the methodology
outlined in your memorandum.</v>

00:15:21.330 --> 00:15:25.903
So that's where I'm
at as a starting point,

00:15:26.900 --> 00:15:31.820
obviously hear everybody out,
but appreciated the document.

00:15:31.820 --> 00:15:32.653
<v ->Thanks sir.</v>

00:15:34.850 --> 00:15:37.405
<v ->Looks like I'm gonna
get voted down again, but.</v>

00:15:37.405 --> 00:15:39.310
(laughing)

00:15:39.310 --> 00:15:40.540
<v ->It feels good to get
out of your system.</v>

00:15:40.540 --> 00:15:42.370
<v ->That's right.</v>

00:15:42.370 --> 00:15:47.370
I appreciate the memo,
I appreciate the process

00:15:48.020 --> 00:15:51.320
that everybody has gone
through, all the parties have.

00:15:51.320 --> 00:15:55.750
I have tried in my own way to
make vegetation management

00:15:55.750 --> 00:15:58.523
a priority for everybody.

00:16:00.144 --> 00:16:05.144
As you all may recall one of
my jobs many, many years ago

00:16:06.430 --> 00:16:10.130
started the investigation
of the 2003 blackout,

00:16:10.130 --> 00:16:11.330
which began with a tree,

00:16:12.750 --> 00:16:17.750
and many other challenges
that our system face

00:16:19.020 --> 00:16:22.320
at the distribution level
are because of vegetation.

00:16:22.320 --> 00:16:24.400
It's the single most issue.

00:16:24.400 --> 00:16:26.760
We do a lot of things at ERCOT,

00:16:26.760 --> 00:16:29.280
we do a lot of things
in reliability rules

00:16:29.280 --> 00:16:33.300
that make our system safer and reliable,

00:16:33.300 --> 00:16:36.950
but the single greatest issue is trees,

00:16:36.950 --> 00:16:40.240
it's vegetation contacts
to in our rights of way.

00:16:40.240 --> 00:16:45.240
And I agree with your memo,
I think we need reporting

00:16:46.210 --> 00:16:51.210
on what the vegetation
management programs continue to be,

00:16:55.210 --> 00:17:00.210
what are the active vegetation
management procedures?

00:17:00.470 --> 00:17:03.040
What are the lines
that are being tripped,

00:17:03.040 --> 00:17:07.263
not just the last 10 and
their SAIDI and SAIFI report.

00:17:08.131 --> 00:17:12.810
We need to really get our
arms around this in my opinion.

00:17:12.810 --> 00:17:17.810
And I just feel that in an area that,

00:17:19.730 --> 00:17:22.260
and one of their service territory areas

00:17:22.260 --> 00:17:25.193
they have a lot of trees
we've had wet weather years.

00:17:27.770 --> 00:17:29.550
First of all, I think an
increase in the money

00:17:29.550 --> 00:17:32.120
for vegetation management is warranted.

00:17:32.120 --> 00:17:33.683
I can't sit here and say,

00:17:35.110 --> 00:17:36.420
you got to improve your
vegetation management

00:17:36.420 --> 00:17:38.780
and then not give them
some money to do so,

00:17:38.780 --> 00:17:39.613
and I believe that,

00:17:39.613 --> 00:17:40.630
and I don't even know if the number

00:17:40.630 --> 00:17:42.550
that we're giving them
is the right number.

00:17:42.550 --> 00:17:45.380
It may not be, it may need to be more,

00:17:45.380 --> 00:17:50.380
but if we want the numbers
of distribution outages

00:17:50.500 --> 00:17:52.690
to be reduced, we have
to address this issue,

00:17:52.690 --> 00:17:54.180
and I brought our context app

00:17:54.180 --> 00:17:56.810
for all of the distribution utilities.

00:17:56.810 --> 00:17:59.310
How do we ensure that
rights of away are cleared?

00:17:59.310 --> 00:18:03.790
And how do we ensure
that we're using technology

00:18:03.790 --> 00:18:07.477
best practices, drones, LiDAR,

00:18:09.310 --> 00:18:12.580
other technologies
that can help us improve

00:18:12.580 --> 00:18:17.580
and target the necessary
vegetation management practices

00:18:17.840 --> 00:18:21.173
that we need to ensure that
these systems are reliable.

00:18:22.843 --> 00:18:27.843
I spoke with SWEPCO a few
weeks ago about a single tree,

00:18:29.580 --> 00:18:31.270
and one of their rights of
away, they made a mistake,

00:18:31.270 --> 00:18:33.820
and I acknowledged it was a mistake,

00:18:33.820 --> 00:18:37.453
but it showed a lack of coordination.

00:18:39.110 --> 00:18:42.773
It caused 7,000 customers
to be out of service.

00:18:43.940 --> 00:18:46.475
And it doesn't work for me,

00:18:46.475 --> 00:18:51.475
this is the basic principle
of managing these wires

00:18:52.240 --> 00:18:54.520
for their customers is being reliable

00:18:54.520 --> 00:18:57.790
and vegetation management
is absolutely key.

00:18:57.790 --> 00:19:02.790
And that is why I think that a
9.0% ROE is the right number,

00:19:06.500 --> 00:19:11.190
not 9.3 but a 9.0 I think
it's a important signal

00:19:11.190 --> 00:19:13.957
all across the industry to say,

00:19:13.957 --> 00:19:16.691
"Guys get your right of away clean,

00:19:16.691 --> 00:19:20.560
get your house in order."

00:19:20.560 --> 00:19:21.520
You can do a lot of things

00:19:21.520 --> 00:19:24.430
with a lot of cool technologies
out there when it comes

00:19:24.430 --> 00:19:25.730
to smart meters and this and that,

00:19:25.730 --> 00:19:28.400
but they don't even work,

00:19:28.400 --> 00:19:31.990
if your rights of away aren't
clear and your outages happen.

00:19:31.990 --> 00:19:34.240
So with that, that's my proposal.

00:19:34.240 --> 00:19:37.460
But I just, I want this to be a message

00:19:37.460 --> 00:19:39.920
to all the transmission
and distribution utilities

00:19:39.920 --> 00:19:41.620
that we've got to get this in order,

00:19:41.620 --> 00:19:46.060
it is an ongoing annual issue.

00:19:46.060 --> 00:19:49.460
I don't expect it to go away,
and I know y'all don't either,

00:19:49.460 --> 00:19:51.220
let's work together to get it solved,

00:19:51.220 --> 00:19:53.972
let's find the best
practices to make it happen,

00:19:53.972 --> 00:19:55.233
let's do what's right.

00:19:57.200 --> 00:20:00.410
<v ->So on that Commissioner
points well taken,</v>

00:20:00.410 --> 00:20:01.860
and I thought about that too,

00:20:02.850 --> 00:20:06.450
but in the same vein that
I got to have the money

00:20:06.450 --> 00:20:08.300
and the resources and the wherewithal

00:20:09.560 --> 00:20:11.260
to accomplish the mission.

00:20:11.260 --> 00:20:14.230
And so that's, again,

00:20:14.230 --> 00:20:17.090
why I didn't want to cut SWEPCO too hard

00:20:17.090 --> 00:20:18.933
on the return on equity.

00:20:21.800 --> 00:20:26.800
And again, provision is made
within the further conditions

00:20:26.970 --> 00:20:30.323
to remediate against trees.

00:20:31.928 --> 00:20:34.428
But you don't consider
those adequate, sufficient,

00:20:36.100 --> 00:20:37.500
you've worked in this space.

00:20:38.410 --> 00:20:40.423
<v ->First of all, I don't consider,</v>

00:20:41.400 --> 00:20:43.670
I mean, for the vegetation
management plans

00:20:43.670 --> 00:20:46.430
on all of our transmission
or distribution utilities,

00:20:46.430 --> 00:20:49.143
the amount that they
spend is very small.

00:20:51.360 --> 00:20:53.270
There are lots of challenges with this.

00:20:53.270 --> 00:20:57.270
I mean, most of this is contracted,

00:20:57.270 --> 00:21:00.250
so the contractors, there
there's a lot of competition

00:21:00.250 --> 00:21:01.120
for these contractors,

00:21:01.120 --> 00:21:03.220
keeping them on your system is hard.

00:21:03.220 --> 00:21:04.910
Maybe some of this
should be brought in-house

00:21:04.910 --> 00:21:06.370
and that should be a consideration

00:21:06.370 --> 00:21:09.750
so that they can have some
minimal component of this

00:21:09.750 --> 00:21:11.470
that is, in their rates,

00:21:11.470 --> 00:21:13.420
and they know that it
will be done every year

00:21:13.420 --> 00:21:14.700
and it will be supplemented.

00:21:14.700 --> 00:21:16.620
That's obviously not for right now.

00:21:16.620 --> 00:21:21.620
But I think that, I mean, I'm
happy to negotiate on an ROE.

00:21:24.180 --> 00:21:29.180
I know that that is the biggest issue

00:21:29.240 --> 00:21:30.073
that we're setting here,

00:21:30.073 --> 00:21:33.000
but the biggest message
that I just want to make

00:21:33.000 --> 00:21:35.770
is we got to do vegetation,

00:21:35.770 --> 00:21:37.960
we have to do vegetation management.

00:21:37.960 --> 00:21:40.600
We have to provide the
right amount of money,

00:21:40.600 --> 00:21:43.190
they have to be willing to
spend it and spend it efficiently

00:21:43.190 --> 00:21:45.820
and wisely and create
the best practices.

00:21:45.820 --> 00:21:48.390
<v ->Well, I believe I
got your message,</v>

00:21:48.390 --> 00:21:53.080
I mean, that's a message, Mr. Chairman.

00:21:53.080 --> 00:21:55.890
<v ->I'm certainly happy to just
have the discussion about ROE.</v>

00:21:55.890 --> 00:22:00.890
It's an important issue and
an often overlooked issue,

00:22:02.020 --> 00:22:04.550
especially in the public domain.

00:22:04.550 --> 00:22:09.550
And where our citizens interact
with the resources we manage

00:22:10.050 --> 00:22:13.653
is when tree branches fall in lines.

00:22:15.010 --> 00:22:18.517
So it's a majority of the outage,

00:22:18.517 --> 00:22:19.910
the vast majority of is we have,

00:22:19.910 --> 00:22:22.210
so I'm certainly happy
to have the discussion.

00:22:23.577 --> 00:22:24.535
<v ->Can I just say one other thing?</v>

00:22:24.535 --> 00:22:25.368
<v ->Yeah.</v>

00:22:25.368 --> 00:22:26.790
To interrupt, I'm sorry, I
meant to say this before,

00:22:26.790 --> 00:22:29.760
but if we look at their last right case,

00:22:29.760 --> 00:22:32.180
there was another issue in there

00:22:32.180 --> 00:22:33.390
that they were supposed to
report on and supposed to do,

00:22:33.390 --> 00:22:36.070
and that was called
vegetation management.

00:22:36.070 --> 00:22:39.690
So this isn't something
that's come up in 2021,

00:22:39.690 --> 00:22:40.710
this is something that happened

00:22:40.710 --> 00:22:42.563
in their last rate case as well.

00:22:45.030 --> 00:22:45.865
(indistinct)

00:22:45.865 --> 00:22:50.840
<v ->I would also ask if do
you have either formalized</v>

00:22:52.450 --> 00:22:57.230
or informally a benchmark of the amount

00:22:57.230 --> 00:22:58.950
of like dollars per mile,

00:22:58.950 --> 00:23:02.836
or is there some
benchmark in other markets

00:23:02.836 --> 00:23:06.813
that you would prefer to have
that we can set as a standard?

00:23:08.340 --> 00:23:11.404
<v ->To be fair I think that's
on a utility by utility basis.</v>

00:23:11.404 --> 00:23:14.820
It has to do with the amount
of vegetation that they have,

00:23:14.820 --> 00:23:17.921
the amount of rainfall
that they have in the region

00:23:17.921 --> 00:23:19.140
so I don't have that.

00:23:19.140 --> 00:23:21.400
I'm sure there are
some that are out there

00:23:21.400 --> 00:23:23.420
that we could coalesce around.

00:23:23.420 --> 00:23:26.540
I don't believe that the
utility would be opposed

00:23:26.540 --> 00:23:29.593
to doing more tree trimming,
I think they probably wanted,

00:23:30.540 --> 00:23:32.870
but we gotta find a
way to do it efficiently

00:23:32.870 --> 00:23:36.423
and in a way that helps consumers.

00:23:38.870 --> 00:23:40.390
I think the last thing
that I'll say on this

00:23:40.390 --> 00:23:44.550
is we can't let this become
an issue every single year,

00:23:44.550 --> 00:23:46.130
every single rate case, has got it,

00:23:46.130 --> 00:23:48.103
we got to start seeing progress.

00:23:49.070 --> 00:23:52.350
My look back I haven't seen
a huge amount of progress.

00:23:52.350 --> 00:23:56.120
<v ->Yeah, behavior hasn't
changed based on past efforts,</v>

00:23:56.120 --> 00:23:58.240
past tools, so what do we do differently

00:23:58.240 --> 00:24:00.403
is what I'm hearing, hearing from you.

00:24:02.470 --> 00:24:04.470
We've got some folks here
that I'm sure we would be happy

00:24:04.470 --> 00:24:06.290
to answer some of your questions here.

00:24:06.290 --> 00:24:07.980
<v ->Yes, chairman thank you.</v>

00:24:07.980 --> 00:24:09.900
Bill Co on behalf of SWEPCO

00:24:09.900 --> 00:24:12.990
and joining me here at the
table is SWEPCO's president

00:24:12.990 --> 00:24:15.140
and chief operating officer.

00:24:15.140 --> 00:24:17.789
And Commissioner you are correct

00:24:17.789 --> 00:24:21.130
in that we have addressed
vegetation management

00:24:21.130 --> 00:24:23.600
in the previous two rate cases.

00:24:23.600 --> 00:24:25.360
And in both of those instances,

00:24:25.360 --> 00:24:28.980
we have asked for more
money to be earmarked

00:24:28.980 --> 00:24:32.570
for vegetation management,

00:24:32.570 --> 00:24:36.240
and we've gotten that and
we've filed monthly reports.

00:24:36.240 --> 00:24:41.240
And you can see that
work improves the reliability

00:24:42.080 --> 00:24:44.510
on those circus that we can get to.

00:24:44.510 --> 00:24:48.310
We can't get to them all at once

00:24:48.310 --> 00:24:53.310
but the company has been
building that capability, I guess,

00:24:54.201 --> 00:24:56.640
through its rate cases.

00:24:56.640 --> 00:25:01.640
And concerned that throwing
in some kind of penalty

00:25:02.980 --> 00:25:06.180
on the ROE that's gonna be
there on the entire rate base

00:25:06.180 --> 00:25:09.344
all year long is counterproductive

00:25:09.344 --> 00:25:14.344
to maintaining
reliability and continuing

00:25:14.469 --> 00:25:17.954
to expand the vegetation
management program.

00:25:17.954 --> 00:25:19.160
And I don't know, Malcolm,

00:25:19.160 --> 00:25:21.390
do you have anything to add to that?

00:25:21.390 --> 00:25:24.870
<v ->Sure, good afternoon
Commissioners?</v>

00:25:24.870 --> 00:25:27.230
So on the issue of the
additional (indistinct)

00:25:27.230 --> 00:25:28.593
I would ask you do not do that,

00:25:28.593 --> 00:25:32.093
I think that's being too punitive.

00:25:33.490 --> 00:25:35.177
I would point out that we have increased

00:25:35.177 --> 00:25:38.410
our transmission line,
vegetation management dollars

00:25:38.410 --> 00:25:42.457
and I think I've shared that
with Commissioner Glotfelty.

00:25:42.457 --> 00:25:46.360
And it is true we did have the event

00:25:46.360 --> 00:25:47.573
that you've referred to,

00:25:48.570 --> 00:25:51.610
and we certainly try
to manage our systems

00:25:51.610 --> 00:25:56.130
so that those don't
occur T and D systems.

00:25:56.130 --> 00:26:00.920
And trees grow and tree outages do occur

00:26:00.920 --> 00:26:04.650
just like the equipment failure,
excuse me, occur as well.

00:26:04.650 --> 00:26:07.480
And we don't and just can't anticipate

00:26:07.480 --> 00:26:09.577
and prevent every outage
that can occur of course.

00:26:09.577 --> 00:26:11.823
And so we respond
to those that do occur,

00:26:12.790 --> 00:26:16.820
and we try to take the dollars
that we do have for T and D,

00:26:16.820 --> 00:26:19.763
and get the most bang for the buck.

00:26:20.700 --> 00:26:23.180
So again, I would point
out that we have increased

00:26:23.180 --> 00:26:27.297
the vegetation spending
for T and on the D side,

00:26:27.297 --> 00:26:29.470
as Mr. Cole mentioned,
we've been working

00:26:29.470 --> 00:26:31.130
on increasing that, and
we have increased those

00:26:31.130 --> 00:26:32.080
in previous cases,

00:26:32.080 --> 00:26:34.580
and we're spending those for the need

00:26:34.580 --> 00:26:36.680
is absolutely the greatest
thing we provide reports

00:26:36.680 --> 00:26:38.510
on that annually.

00:26:38.510 --> 00:26:43.060
If you look at our SAIFI which
is the frequency of outages

00:26:43.060 --> 00:26:48.060
in 18 and 19, and
then compare that to 20,

00:26:49.900 --> 00:26:51.730
the SAIFI improved in 20,

00:26:51.730 --> 00:26:54.070
which means there were less outages.

00:26:54.070 --> 00:26:59.070
And of course, if we
could eliminate all outages

00:26:59.171 --> 00:27:01.520
there would be no minutes, of course.

00:27:01.520 --> 00:27:04.600
So, but the valleys that
we focus on preventing,

00:27:04.600 --> 00:27:06.350
or the ones where the needs, the grays

00:27:06.350 --> 00:27:08.160
in the most benefit would occur.

00:27:08.160 --> 00:27:11.050
So I feel like that we
have been able to do that

00:27:11.050 --> 00:27:13.610
since our SAIFI the frequency number

00:27:13.610 --> 00:27:16.293
improved in 20 compared
to the previous years,

00:27:17.240 --> 00:27:19.240
although our duration numbers did not,

00:27:19.240 --> 00:27:20.740
but duration numbers are affected

00:27:20.740 --> 00:27:22.730
by of many different causes,

00:27:22.730 --> 00:27:24.740
lots of different things
depending on, for example,

00:27:24.740 --> 00:27:26.970
just how many hours are
occurring at one time, for example,

00:27:26.970 --> 00:27:29.060
it can affect the duration number.

00:27:29.060 --> 00:27:31.623
So without getting too deep
in the weeds, I won't do that,

00:27:31.623 --> 00:27:33.450
I could, but I won't do that.

00:27:33.450 --> 00:27:36.330
But we're focused
on improving reliability

00:27:36.330 --> 00:27:38.900
and have the same focus
that you do Commissioner

00:27:38.900 --> 00:27:41.250
to make it better and that's our goal.

00:27:41.250 --> 00:27:43.780
So I'll be glad to answer any questions

00:27:43.780 --> 00:27:45.783
that you might have about that.

00:27:47.650 --> 00:27:50.330
<v ->Well, I appreciate our
discussions and thank you</v>

00:27:50.330 --> 00:27:52.640
for following up on the incident.

00:27:52.640 --> 00:27:56.270
I still, I kind of scratch
my head a little bit,

00:27:56.270 --> 00:27:58.670
now I recognize your answer,

00:27:58.670 --> 00:28:01.080
which was it was
gonna get cut next year,

00:28:01.080 --> 00:28:04.840
and that we had had a
communication issue on a line

00:28:04.840 --> 00:28:09.840
being taken out, but the
standards that customers expect

00:28:11.630 --> 00:28:13.030
are for you not to do that,

00:28:13.030 --> 00:28:17.440
for you all to maintain
the rights of way

00:28:17.440 --> 00:28:19.160
that they've entrusted you with.

00:28:19.160 --> 00:28:24.160
And I understand that the ROE
adjustment is something that,

00:28:26.810 --> 00:28:28.910
affects the entire year.

00:28:28.910 --> 00:28:33.910
I feel that this has
been an ongoing issue.

00:28:34.252 --> 00:28:36.100
Some of it it's our responsibility

00:28:36.100 --> 00:28:37.940
that we have to give them more money.

00:28:37.940 --> 00:28:39.790
Some of it it's their responsibility

00:28:39.790 --> 00:28:41.700
that they got to manage
their rights of way.

00:28:41.700 --> 00:28:43.290
They got to come in here and tell us,

00:28:43.290 --> 00:28:44.790
It's not getting the job done,

00:28:46.110 --> 00:28:48.203
we can't sit here and say

00:28:48.203 --> 00:28:50.210
that we know everything
about every right of way

00:28:50.210 --> 00:28:53.950
on your system, but we have to trust

00:28:53.950 --> 00:28:55.800
that you all will come to us and say,

00:28:56.920 --> 00:28:58.090
these things aren't working,

00:28:58.090 --> 00:29:00.667
we gotta figure out a
different way, that's my view.

00:29:00.667 --> 00:29:05.390
<v ->Is there some combination of a
reduced ROE plus more money</v>

00:29:05.390 --> 00:29:08.860
that is currently asked for?

00:29:08.860 --> 00:29:13.860
<v ->Well, I think it was
staff that suggested</v>

00:29:13.960 --> 00:29:16.220
a four-year cycle.

00:29:16.220 --> 00:29:18.430
<v ->Rubber repairs
for efficient staff,</v>

00:29:18.430 --> 00:29:21.230
we recommended a four-year
trim cycle in docket 46 449,

00:29:21.230 --> 00:29:23.530
the previous rate case
and in this one we believe

00:29:23.530 --> 00:29:25.950
it's the best solution to make sure

00:29:25.950 --> 00:29:28.500
that they're trimming
their trees every four-years.

00:29:29.910 --> 00:29:31.910
SWEPCO came back with a
number of those $32 million,

00:29:31.910 --> 00:29:34.940
we have no evidence of how
much it would actually cost,

00:29:34.940 --> 00:29:37.360
it would be more than what
they're requesting in this case,

00:29:37.360 --> 00:29:40.540
but it probably is in staff's
opinion the best solution

00:29:40.540 --> 00:29:41.910
to get their distribution,

00:29:41.910 --> 00:29:43.350
vegetation management under control.

00:29:43.350 --> 00:29:48.350
<v ->So I'm not an expert on
vegetation management trim cycles.</v>

00:29:49.970 --> 00:29:52.340
I know they can be three, four or five,

00:29:52.340 --> 00:29:55.030
in fact, I think we ought
to understand the value of,

00:29:55.030 --> 00:29:56.930
and the benefits and the cost of each.

00:29:59.870 --> 00:30:01.170
<v ->By geography.</v>

00:30:01.170 --> 00:30:05.343
<v ->Absolutely, it's very geography
and weather dependent.</v>

00:30:07.170 --> 00:30:09.200
So I don't know, a
four-years the right cycle,

00:30:09.200 --> 00:30:12.640
I know four-years is a
much greater cost, so yes,

00:30:12.640 --> 00:30:14.183
I would believe that we would need

00:30:14.183 --> 00:30:16.170
to coalesce around a number

00:30:16.170 --> 00:30:19.620
that gives you additional
monies in that space,

00:30:19.620 --> 00:30:23.370
or find a way to create
another mechanism for them

00:30:23.370 --> 00:30:25.860
to spend a certain amount
of money on an annual basis,

00:30:25.860 --> 00:30:28.376
that's greater than what
they're doing now that,

00:30:28.376 --> 00:30:31.690
but with that we have to
see drastic improvements

00:30:31.690 --> 00:30:35.240
in these numbers, and we
have to see drastic evidence

00:30:35.240 --> 00:30:39.120
that they're using the best technology

00:30:39.120 --> 00:30:44.120
to determine how they select
the rights of way to be cleared

00:30:44.320 --> 00:30:46.020
and cleaned out.

00:30:46.020 --> 00:30:48.390
<v ->And Commissioner Glotfelty
have some recommendations</v>

00:30:48.390 --> 00:30:50.960
also regarding an independent consultant

00:30:50.960 --> 00:30:53.100
Keith Rogan says here for staff,

00:30:53.100 --> 00:30:55.760
we had talked about making
the independent consultant review

00:30:55.760 --> 00:30:58.040
transmission related outages,

00:30:58.040 --> 00:30:59.370
including vegetation management,

00:30:59.370 --> 00:31:01.390
but also that
recommendation could extend

00:31:01.390 --> 00:31:05.830
to distribution level to review
where there are hotspots

00:31:05.830 --> 00:31:07.110
for outages in the near term,

00:31:07.110 --> 00:31:09.764
and try to implement a
cycle in the long-term.

00:31:09.764 --> 00:31:12.585
<v ->What kind of consultant
are you thinking of there?</v>

00:31:12.585 --> 00:31:15.445
<v ->Keith, you might be
better to answer that.</v>

00:31:15.445 --> 00:31:17.240
<v ->Keith Rogan, Commission staff,</v>

00:31:17.240 --> 00:31:19.730
the recommendation for a consultant

00:31:19.730 --> 00:31:21.900
was on the transmission system

00:31:21.900 --> 00:31:24.410
because of the cascading outage.

00:31:24.410 --> 00:31:27.410
In addition to the vegetation
management issues,

00:31:27.410 --> 00:31:29.010
there were other causes of failures,

00:31:29.010 --> 00:31:31.940
so we made that recommendation

00:31:31.940 --> 00:31:33.310
to try and get some reassurance

00:31:33.310 --> 00:31:36.857
that this is gonna be
a problem in the future.

00:31:36.857 --> 00:31:38.140
<v ->But it's not specifically</v>

00:31:38.140 --> 00:31:42.620
a vegetation management
consultant or external resource.

00:31:42.620 --> 00:31:45.320
<v ->It should include a review
of vegetation management,</v>

00:31:45.320 --> 00:31:48.150
but be more widespread
than that for transmission,

00:31:48.150 --> 00:31:50.210
at least transmission level.

00:31:50.210 --> 00:31:54.159
<v ->So I guess, knowing
what I do about the industry,</v>

00:31:54.159 --> 00:31:57.590
which has not hit anything by any means,

00:31:57.590 --> 00:31:59.570
I'm scratching my head to think of

00:31:59.570 --> 00:32:01.080
who are those consultants out there,

00:32:01.080 --> 00:32:02.380
all the consultants that I know

00:32:02.380 --> 00:32:04.260
that are kind of engineering consultants

00:32:04.260 --> 00:32:06.947
and those that know
things about the system say,

00:32:06.947 --> 00:32:08.210
"We don't know anything
about vegetation management

00:32:08.210 --> 00:32:10.580
and go talk to the tree guys."

00:32:10.580 --> 00:32:13.040
And there are a handful of them.

00:32:13.040 --> 00:32:15.890
Do you all have thoughts in
mind as to who those might be

00:32:15.890 --> 00:32:18.410
that would do both or subcontracting or?

00:32:18.410 --> 00:32:21.173
<v ->I think subcontracting
could be an option.</v>

00:32:22.440 --> 00:32:24.302
Yeah, I think from stuff.

00:32:24.302 --> 00:32:26.010
<v ->That was part of my concern,</v>

00:32:26.010 --> 00:32:28.180
not only where is that expertise,

00:32:28.180 --> 00:32:32.570
but also the scope of what
the consultant's supposed

00:32:32.570 --> 00:32:37.250
to figure out, but also
above and beyond that

00:32:37.250 --> 00:32:42.250
who would the consultant
consider themselves working for

00:32:42.800 --> 00:32:47.050
and which master would
they think they're delivering?

00:32:47.050 --> 00:32:50.170
What answer to, I worry,

00:32:50.170 --> 00:32:55.100
we'd spend a lot of time
and money for a consultant

00:32:55.100 --> 00:32:57.680
to come back and say,
"Everything's just fine."

00:32:57.680 --> 00:32:59.430
<v ->Or you need to cut your trees.</v>

00:32:59.430 --> 00:33:00.263
<v ->Right.
(laughing)</v>

00:33:00.263 --> 00:33:04.840
<v ->Yeah, but happy to hear.</v>

00:33:04.840 --> 00:33:09.840
<v ->Chairman if I may on
the four-year cycle, I mean,</v>

00:33:09.840 --> 00:33:13.350
as Mr. Smokes says, the
company is very focused

00:33:13.350 --> 00:33:15.653
on the liability, just like you are,

00:33:16.570 --> 00:33:21.360
but you're never going to
completely eliminate outages.

00:33:21.360 --> 00:33:25.170
And so what the company
is doing is trying to find

00:33:25.170 --> 00:33:29.690
that amount of tree trimming
that is giving customers

00:33:29.690 --> 00:33:32.950
the bang for the buck
as as Malcolm says.

00:33:32.950 --> 00:33:37.090
And I think we thought that
moving to a four-year cycle

00:33:37.090 --> 00:33:41.930
was too much money,
but we are increasing

00:33:41.930 --> 00:33:45.730
as Mr. Smoke said, each
rate case we've increased

00:33:45.730 --> 00:33:48.690
the amount of vegetation management,

00:33:48.690 --> 00:33:52.430
and we've done the best
we can do with that money.

00:33:52.430 --> 00:33:56.830
And again, I'm not sure why
the company is being punished

00:33:56.830 --> 00:34:00.140
through its ROE, if we ultimately decide

00:34:00.140 --> 00:34:03.150
that we just need more money
for vegetation management,

00:34:03.150 --> 00:34:05.650
I'm sure they would be
happy to agree with that.

00:34:05.650 --> 00:34:07.530
Oh, I was gonna say I feel confident

00:34:07.530 --> 00:34:08.811
you hadn't hit the sweet spot yet.

00:34:08.811 --> 00:34:10.820
(laughing)

00:34:10.820 --> 00:34:12.740
<v ->If staff can respond,</v>

00:34:12.740 --> 00:34:16.650
since 2017 which was
during the ongoing 46449,

00:34:16.650 --> 00:34:20.300
their SAIFI scores dropped
significantly in 2018 and 2019,

00:34:20.300 --> 00:34:22.950
and have not gotten
above their 2017 level,

00:34:22.950 --> 00:34:25.610
even though they get
subsequent additional money

00:34:25.610 --> 00:34:26.580
in that last docket.

00:34:26.580 --> 00:34:29.290
So we believe that just giving
more money to the problem,

00:34:29.290 --> 00:34:30.555
isn't a solution to the problem.

00:34:30.555 --> 00:34:32.800
And it needs to be something else

00:34:32.800 --> 00:34:34.320
in a company with more money

00:34:34.320 --> 00:34:36.177
so that they will actually
have improved SAIDI

00:34:36.177 --> 00:34:38.020
and SAIFI scores.

00:34:38.020 --> 00:34:39.450
<v ->That's a great point.</v>

00:34:39.450 --> 00:34:40.286
Throwing money at the problem

00:34:40.286 --> 00:34:41.893
doesn't always solve the problem.

00:34:44.860 --> 00:34:48.790
<v ->Sure, but is there, I guess
my earlier question was,</v>

00:34:48.790 --> 00:34:52.220
is there for this particular case,

00:34:52.220 --> 00:34:54.590
is there a little bit of stick
and a little bit of carrot?

00:34:54.590 --> 00:34:56.910
Not all the way to 9.0, but.

00:34:56.910 --> 00:34:57.743
<v ->Yes, there is.</v>

00:34:57.743 --> 00:35:00.593
<v ->Something, while
also saying that,</v>

00:35:03.271 --> 00:35:05.090
what we've tried in
the past hasn't worked,

00:35:05.090 --> 00:35:06.370
so let's add a new metric,

00:35:06.370 --> 00:35:08.163
a new standards and more resources.

00:35:09.150 --> 00:35:14.150
We're not going all the
way 9.0 but next time.

00:35:14.260 --> 00:35:15.093
<v ->We are.</v>

00:35:15.093 --> 00:35:15.926
<v ->We are.</v>

00:35:15.926 --> 00:35:18.580
<v ->Yeah, I think that's
a fair discussion</v>

00:35:18.580 --> 00:35:20.980
to have and a fair number.

00:35:20.980 --> 00:35:24.290
How much do you all spend on just say,

00:35:24.290 --> 00:35:27.010
distribution vegetation management?

00:35:27.010 --> 00:35:28.910
According to this rate case it's.

00:35:28.910 --> 00:35:30.470
<v ->Yes, Commissioner
good afternoon,</v>

00:35:30.470 --> 00:35:32.380
Tom Bryce on behalf of SWEPCO

00:35:32.380 --> 00:35:34.200
about nine and a half million annually.

00:35:34.200 --> 00:35:36.810
And with the requests that
we asked for in the case,

00:35:36.810 --> 00:35:38.820
it'd be about 14 and a half million.

00:35:38.820 --> 00:35:40.540
So in our Texas jurisdiction.

00:35:40.540 --> 00:35:41.373
<v ->I'm sorry.</v>

00:35:41.373 --> 00:35:43.283
<v ->In just the Texas jurisdiction.</v>

00:35:44.271 --> 00:35:46.130
<v ->It just distribution, not
transmission as well?</v>

00:35:46.130 --> 00:35:47.134
<v Narrator>That's correct.</v>

00:35:47.134 --> 00:35:48.380
<v ->What's the transmission total?</v>

00:35:48.380 --> 00:35:51.760
<v ->So with all of the
East Texas growth,</v>

00:35:51.760 --> 00:35:54.770
with all of what they
have there it's $9 million.

00:35:54.770 --> 00:35:57.939
And to me that you
have thousands of miles

00:35:57.939 --> 00:36:00.410
of distribution rights of way.

00:36:00.410 --> 00:36:03.260
We've got to find a better solution

00:36:03.260 --> 00:36:06.760
to target that money,
again to use technologies,

00:36:06.760 --> 00:36:11.760
to use best practices,
set the best practices,

00:36:11.990 --> 00:36:13.180
create the best practices.

00:36:13.180 --> 00:36:14.110
Don't just follow them

00:36:14.110 --> 00:36:17.820
and let's figure out how
we can solve the problem,

00:36:17.820 --> 00:36:19.130
more money is partial the issue.

00:36:19.130 --> 00:36:23.133
<v ->Yeah, well, so where do
we get the best practices?</v>

00:36:23.133 --> 00:36:26.910
<v ->Well, I think as a staff we
ought to have that discussion</v>

00:36:26.910 --> 00:36:30.710
that may be within many of
the utilities around the state.

00:36:30.710 --> 00:36:33.013
I know there are best
practices out there.

00:36:34.260 --> 00:36:35.910
SWEPCO you may have some of them,

00:36:35.910 --> 00:36:37.180
you may be using some of them.

00:36:37.180 --> 00:36:38.503
I don't have that information.

00:36:38.503 --> 00:36:39.700
<v ->Fair question.</v>

00:36:39.700 --> 00:36:40.717
<v ->I think that.</v>

00:36:40.717 --> 00:36:43.520
<v ->Let's ask them, what
do you all as a company</v>

00:36:43.520 --> 00:36:47.300
consider industry best practices
on vegetation management,

00:36:47.300 --> 00:36:51.700
both in terms of KPI,
some sort of benchmark

00:36:51.700 --> 00:36:56.700
dollars per mile and/or highest
and best use of technology?

00:36:59.760 --> 00:37:02.070
<v ->Well, let me just kind
of slate answer that</v>

00:37:02.070 --> 00:37:03.193
if I could this way.

00:37:04.840 --> 00:37:08.274
First of all, we recognize that
we don't have enough money

00:37:08.274 --> 00:37:12.460
for T and D and we've increased on T,

00:37:12.460 --> 00:37:15.996
and we've increased on D
over the last couple of cases.

00:37:15.996 --> 00:37:17.150
And we're asking for some more,

00:37:17.150 --> 00:37:19.020
because we recognize
that we don't have enough,

00:37:19.020 --> 00:37:21.403
and we didn't propose
going to a four-year cycle

00:37:21.403 --> 00:37:24.050
because it would be
a significant increase,

00:37:24.050 --> 00:37:25.030
that's why we didn't propose

00:37:25.030 --> 00:37:26.830
going all the way to four-year cycle,

00:37:26.830 --> 00:37:28.330
but we did calculate the cost.

00:37:29.330 --> 00:37:32.940
And so what we have found is that

00:37:32.940 --> 00:37:36.050
when we trim circuit, we
trimmed the whole surrogate

00:37:36.050 --> 00:37:39.620
because hotspotting
it's a very inefficient way

00:37:39.620 --> 00:37:40.640
of spending dollars.

00:37:40.640 --> 00:37:41.730
If you trim the whole circuit,

00:37:41.730 --> 00:37:44.720
what we found is based on
our data in the last 10 years,

00:37:44.720 --> 00:37:48.990
is that we will eliminate over
80% of tree calls outages,

00:37:48.990 --> 00:37:51.420
and minutes if we can
trim the whole circuit out,

00:37:51.420 --> 00:37:55.000
that's what our experience
shows us in our territory.

00:37:55.000 --> 00:37:59.350
And so we have
reduced the SAIFI in 2020.

00:38:01.050 --> 00:38:04.190
Ultimately the goal is to
prevent the outage from occurring

00:38:04.190 --> 00:38:06.283
and the minutes come with it
when you prevent the outage

00:38:06.283 --> 00:38:07.949
that we have reduced SAIFI

00:38:07.949 --> 00:38:10.670
and I'm glad to be
able to point that out

00:38:10.670 --> 00:38:12.733
because I'm proud of that fact.

00:38:13.620 --> 00:38:16.930
But the best practice
is if you can trim a tree,

00:38:16.930 --> 00:38:20.980
trim any line out, so that, for example,

00:38:20.980 --> 00:38:23.940
if you trimmed the trees
for four-years of growth,

00:38:23.940 --> 00:38:26.120
and that means you trim
every tree a little bit different

00:38:26.120 --> 00:38:27.700
because some trees
grow faster than others,

00:38:27.700 --> 00:38:30.840
so you trim the trees adjacent to align

00:38:30.840 --> 00:38:32.760
for four-years of growth.

00:38:32.760 --> 00:38:34.253
And theoretically in four-years,

00:38:34.253 --> 00:38:36.900
if you can be back
there, you're just in time,

00:38:36.900 --> 00:38:38.850
the wire's here and the
tree has just got out there

00:38:38.850 --> 00:38:42.150
and there just before at the right time,

00:38:42.150 --> 00:38:44.850
so you can trim that tree
again for four-years of growth.

00:38:44.850 --> 00:38:46.320
So that is the best practice.

00:38:46.320 --> 00:38:49.340
And so trimming those lines like that

00:38:49.340 --> 00:38:50.680
would mean that you would keep

00:38:50.680 --> 00:38:53.420
the outage reduced significantly.

00:38:53.420 --> 00:38:58.420
And we have been not on just
a we'll go here every so often,

00:38:59.170 --> 00:39:00.890
we've been going
where the needs to graze

00:39:00.890 --> 00:39:03.030
and that's why we know
that our data shows,

00:39:03.030 --> 00:39:05.080
this is an experience shows
us that 80% improvement

00:39:05.080 --> 00:39:06.833
is what we achieve.

00:39:07.790 --> 00:39:09.140
<v ->Would that metric
say that metric again,</v>

00:39:09.140 --> 00:39:12.600
80% improvement based if you do blank.

00:39:12.600 --> 00:39:15.330
<v ->If we trim and
surrogate from end to end</v>

00:39:15.330 --> 00:39:16.820
and all the customers on that circuit

00:39:16.820 --> 00:39:18.960
and every piece of wire as well,

00:39:18.960 --> 00:39:20.100
obviously, that's kind of intuitive,

00:39:20.100 --> 00:39:22.880
but I want to make that
clear, every circuit end to end,

00:39:22.880 --> 00:39:27.060
then for four-years of growth,

00:39:27.060 --> 00:39:30.630
then you will eliminate 80%
of the tree cause outages

00:39:30.630 --> 00:39:33.427
and minutes after
that, as a result of that,

00:39:33.427 --> 00:39:34.857
and the customers will experience that.

00:39:34.857 --> 00:39:36.450
And so when we do that,

00:39:36.450 --> 00:39:38.620
those customers will
be where we trim those,

00:39:38.620 --> 00:39:39.770
where we do that,

00:39:39.770 --> 00:39:41.800
they don't think there's
a reliability problem.

00:39:41.800 --> 00:39:43.560
'Cause they're seeing 80% improvement.

00:39:43.560 --> 00:39:46.640
In fact, the field
employees will tell you,

00:39:46.640 --> 00:39:47.680
who work in that area,

00:39:47.680 --> 00:39:49.450
I don't have any more
overtime over there

00:39:49.450 --> 00:39:51.770
because all the trees
are trimmed for example.

00:39:51.770 --> 00:39:55.062
So the evidence is there
that is very, very substantial

00:39:55.062 --> 00:39:58.690
how the improvement is
there when you do the trimming.

00:39:58.690 --> 00:40:00.010
So that's what we've been doing,

00:40:00.010 --> 00:40:00.890
with the money that we've got,

00:40:00.890 --> 00:40:03.520
we've been prioritizing and
spending the best we can

00:40:03.520 --> 00:40:06.660
and trying to increase it
as each time we come in

00:40:06.660 --> 00:40:07.623
for the case.

00:40:09.970 --> 00:40:11.840
<v ->Well, it sounds
like a good start</v>

00:40:11.840 --> 00:40:16.253
on some sort of metric or benchmark.

00:40:17.420 --> 00:40:21.970
Do you all utilize or deploy
any real-time monitoring

00:40:21.970 --> 00:40:26.970
or preemptive as IT
or industrial engineering

00:40:29.020 --> 00:40:30.870
we'll call it preemptive maintenance,

00:40:31.874 --> 00:40:34.170
trying to spot the trouble
before it becomes trouble.

00:40:34.170 --> 00:40:35.430
<v ->We have people in the field,</v>

00:40:35.430 --> 00:40:40.270
and so if we know about a
problem beginning to occur,

00:40:40.270 --> 00:40:42.710
because some small outages occur,

00:40:42.710 --> 00:40:45.360
then we will know about
it, about that problem.

00:40:45.360 --> 00:40:48.690
We have people in the
field that are patrolling lines

00:40:48.690 --> 00:40:50.060
as a normal course of their job.

00:40:50.060 --> 00:40:51.560
And if they see a problem developing,

00:40:51.560 --> 00:40:54.950
then we can change our plan.

00:40:54.950 --> 00:40:56.560
Our plan is not locked down so that we,

00:40:56.560 --> 00:40:58.139
this is the way it's gonna
be for 12, we don't would say,

00:40:58.139 --> 00:40:59.710
okay, there's 12 month plan,

00:40:59.710 --> 00:41:01.050
we're never change for 12 months,

00:41:01.050 --> 00:41:03.473
we will make cores
corrections as needed.

00:41:05.580 --> 00:41:09.440
<v ->But there's no other than
line of sight observation,</v>

00:41:09.440 --> 00:41:13.770
there's no tool you all utilize
to get in front of outages

00:41:13.770 --> 00:41:18.770
before recognize
exceptional vegetation growth

00:41:19.120 --> 00:41:20.350
before there's an outage

00:41:20.350 --> 00:41:22.870
or before someone happens to spot it.

00:41:22.870 --> 00:41:24.718
<v ->I don't think there's
any technology</v>

00:41:24.718 --> 00:41:28.500
that would tell you to go here before

00:41:28.500 --> 00:41:31.153
the trees would grow in,
and I don't believe there are.

00:41:32.160 --> 00:41:34.330
<v ->I would say that we
should explore that</v>

00:41:34.330 --> 00:41:36.790
'cause it's been my
experience that using LiDAR

00:41:36.790 --> 00:41:38.180
and other technologies,

00:41:38.180 --> 00:41:42.500
both satellite and both
aircraft, <v ->Drones.</v>

00:41:42.500 --> 00:41:45.156
And drones you can figure
that out and it can be done easy.

00:41:45.156 --> 00:41:47.300
It's done by other utilities,

00:41:47.300 --> 00:41:50.560
it's probably done by your
sister utilities in the mountains

00:41:50.560 --> 00:41:54.900
in Ohio and West Virginia and such where

00:41:54.900 --> 00:41:56.876
that it happens there as well.

00:41:56.876 --> 00:41:58.524
<v ->We do use our own transmission.</v>

00:41:58.524 --> 00:42:00.590
So we are using a lot of LiDAR

00:42:00.590 --> 00:42:03.983
but just not on every
inch of distribution with it.

00:42:06.890 --> 00:42:09.490
<v ->To build on that, I know
there's extensive drone usage</v>

00:42:09.490 --> 00:42:10.780
in pipeline monitoring

00:42:10.780 --> 00:42:12.450
and right of away
monitoring there as well.

00:42:12.450 --> 00:42:16.253
And there are many
landowners familiar with that.

00:42:17.290 --> 00:42:18.710
So it's out there.

00:42:18.710 --> 00:42:23.440
<v ->And I understand that we use
drones on transmission lines,</v>

00:42:23.440 --> 00:42:25.430
drone surveillance as well.

00:42:25.430 --> 00:42:28.760
So yes, the technology
that you're talking about

00:42:28.760 --> 00:42:29.900
is being used.

00:42:29.900 --> 00:42:34.380
<v ->And I recognize, I mean,
the amount of distribution</v>

00:42:34.380 --> 00:42:36.690
right of away that you have
versus transmission right of way

00:42:36.690 --> 00:42:38.840
is three or four times is my guess,

00:42:38.840 --> 00:42:43.800
maybe 10 times I don't know,
but it's a much bigger task,

00:42:44.640 --> 00:42:45.810
but I would also guess that

00:42:45.810 --> 00:42:47.540
that's where the most
of the outages come.

00:42:47.540 --> 00:42:50.620
All right, and the most recent incident

00:42:50.620 --> 00:42:52.223
was that transmission voltage,

00:42:53.120 --> 00:42:57.853
but distribution issues
they happen quite a bit,

00:42:59.730 --> 00:43:02.300
I hope we can come to an
agreement, Mr. Chairman,

00:43:02.300 --> 00:43:04.580
I want to see the problem solved,

00:43:04.580 --> 00:43:08.520
I want to be able to say that SWEPCO

00:43:08.520 --> 00:43:10.060
is a leader in this space,

00:43:10.060 --> 00:43:12.643
that they're trying to
find the best path forward.

00:43:13.547 --> 00:43:16.340
We've got to see better
improvement in that,

00:43:16.340 --> 00:43:18.820
or I have to see better
improvement in that

00:43:18.820 --> 00:43:19.653
to make that happen.

00:43:19.653 --> 00:43:20.900
They're a very large company,

00:43:20.900 --> 00:43:23.280
part of a very, even larger company.

00:43:23.280 --> 00:43:28.280
I know they have some great
practices and I'd love to see,

00:43:29.060 --> 00:43:31.003
how we can better improve this.

00:43:32.130 --> 00:43:34.560
<v ->Commissioners
Robert Parish again,</v>

00:43:34.560 --> 00:43:38.910
we had in our testimony
recommended a 12 and a half point

00:43:38.910 --> 00:43:40.890
basis reduction on a 9.35,

00:43:40.890 --> 00:43:43.417
which was our recommended ROE to 9.225.

00:43:44.890 --> 00:43:46.130
If the Commissioners believe maybe

00:43:46.130 --> 00:43:48.560
that would be reasonable either at 9.225

00:43:48.560 --> 00:43:51.340
or reduction from 9.3 of
12 and a half basis points,

00:43:51.340 --> 00:43:53.540
which is what we had calculated

00:43:53.540 --> 00:43:56.520
was an effect to put on their ROE

00:43:56.520 --> 00:44:00.820
based upon that outage
of August 19th, 2019,

00:44:00.820 --> 00:44:02.270
maybe that's some middle ground,

00:44:02.270 --> 00:44:04.820
but I defer to the Commissioners

00:44:04.820 --> 00:44:06.150
on y'all's expertise on this.

00:44:06.150 --> 00:44:11.150
<v ->Chairman even the 9.3
is about 35 basis points</v>

00:44:11.150 --> 00:44:13.690
below the average of
what's being awarded

00:44:13.690 --> 00:44:15.700
and throughout the nation.

00:44:15.700 --> 00:44:19.780
And it's far below any Texas utility.

00:44:19.780 --> 00:44:22.614
And so I think what we're trying to do,

00:44:22.614 --> 00:44:24.950
if I understand correctly

00:44:24.950 --> 00:44:27.650
is that we're trying to
encourage investment

00:44:27.650 --> 00:44:32.610
in utility infrastructure
and not discourage it.

00:44:32.610 --> 00:44:36.070
And so I think what Mr
Parish is talking about

00:44:36.070 --> 00:44:40.900
would absolutely be a
discouragement to making investments

00:44:40.900 --> 00:44:44.390
that we need to help
maintain reliability.

00:44:44.390 --> 00:44:47.050
<v ->Well, and if I could
add Commissioners</v>

00:44:47.050 --> 00:44:49.650
to Mr. Smoke's point earlier,

00:44:49.650 --> 00:44:51.730
the reliability measures are important,

00:44:51.730 --> 00:44:53.330
but it's important to look at each one,

00:44:53.330 --> 00:44:57.790
as Mr. Smoke said, SAIFI
has leveled and trended down

00:44:57.790 --> 00:45:00.890
as a result of the very
dollars that you've allowed

00:45:00.890 --> 00:45:03.040
the company to spend incrementally.

00:45:03.040 --> 00:45:07.070
The duration question is
influenced by a number of factors.

00:45:07.070 --> 00:45:09.600
As Mr. Smoke said that we can't control

00:45:09.600 --> 00:45:11.720
where there were
significant minor storms,

00:45:11.720 --> 00:45:16.400
and I think there's even some
anecdotal evidence that says,

00:45:16.400 --> 00:45:20.047
as you spend incremental tree
trimming dollars to some point

00:45:20.047 --> 00:45:23.270
you could see an increase in SAIDI,

00:45:23.270 --> 00:45:27.910
because what that does,
is cause a number of storms

00:45:27.910 --> 00:45:30.520
to be classified as minor storms,

00:45:30.520 --> 00:45:32.900
which are included in
the SAIDI calculation.

00:45:32.900 --> 00:45:35.110
If we simply didn't do tree trimming,

00:45:35.110 --> 00:45:37.440
these storms could be defined as major

00:45:37.440 --> 00:45:40.700
and therefore excluded
from the SAIDI calculation.

00:45:40.700 --> 00:45:44.790
So it's important to consider
the exact ramifications

00:45:44.790 --> 00:45:48.060
of these measures and SAIFI
has trending in the manner

00:45:48.060 --> 00:45:52.520
that we wanted to, as a
result of this incremental spin.

00:45:52.520 --> 00:45:56.010
Major storms are excluded
from these calculations,

00:45:56.010 --> 00:46:00.950
so anytime you have a storm
that takes more than 24 hours

00:46:02.130 --> 00:46:04.830
for a certain number of
customers, it's just excluded.

00:46:06.090 --> 00:46:09.430
And by doing this tree
trimming that we've done,

00:46:09.430 --> 00:46:12.550
we've been able to
restore service more quickly,

00:46:12.550 --> 00:46:15.160
and therefore some of these minor storms

00:46:15.160 --> 00:46:17.193
are actually in the calculation.

00:46:18.180 --> 00:46:20.680
I know that seems
a bit counterintuitive,

00:46:20.680 --> 00:46:22.370
but that's the outcome of spending

00:46:22.370 --> 00:46:26.160
some of this tree trimming
dollars up to some sweet spot,

00:46:26.160 --> 00:46:29.730
which I believe is 5 million
that we're talking about today

00:46:29.730 --> 00:46:31.738
will put us at that sweet spot

00:46:31.738 --> 00:46:36.203
and allow that trend to
go in the right direction.

00:46:38.870 --> 00:46:39.703
<v ->Commissioners.</v>

00:46:39.703 --> 00:46:40.536
<v Narrator>Yes sir, go ahead.</v>

00:46:40.536 --> 00:46:41.369
<v ->I will be very brief.</v>

00:46:41.369 --> 00:46:43.480
Ben Hallmark for TIC
I just wanted to briefly

00:46:43.480 --> 00:46:46.203
address the question on average ROE.

00:46:47.720 --> 00:46:52.207
It was in the 965 968 range in 2017,

00:46:52.207 --> 00:46:54.870
and spoke last rate case that you noted

00:46:54.870 --> 00:46:57.820
in your memorandum
chairman, it's declined since then,

00:46:57.820 --> 00:47:00.133
and we're now in the 93 94 range.

00:47:01.008 --> 00:47:01.877
If you look at interest rates,

00:47:01.877 --> 00:47:04.670
if you look at the spread
between interest rates

00:47:04.670 --> 00:47:07.490
and authorized ROE
being at an all time high,

00:47:07.490 --> 00:47:11.550
our recommendation was
9.15 and that's irrespective

00:47:11.550 --> 00:47:13.190
of these vegetation management issues.

00:47:13.190 --> 00:47:16.050
So I just wanted to make
sure that, that effective

00:47:16.050 --> 00:47:17.810
was out there as part
of this conversation.

00:47:17.810 --> 00:47:20.900
<v ->To agree with Mr. Hallmark
stats 9.35 recommendation</v>

00:47:20.900 --> 00:47:23.010
before the reduction
was the middle ground

00:47:23.010 --> 00:47:27.630
so we also disagree with
Mr. CO's analysis of ROE

00:47:27.630 --> 00:47:28.463
being that high.

00:47:28.463 --> 00:47:31.110
We believe 9.35 is the middle,

00:47:31.110 --> 00:47:34.070
and that may be
around 9.1 is the bottom,

00:47:34.070 --> 00:47:37.413
but not in the 9.6 as he stated.

00:47:38.860 --> 00:47:42.040
<v ->Chairman the middle
of the proxy group</v>

00:47:42.040 --> 00:47:44.240
for staff's witness,

00:47:44.240 --> 00:47:48.560
the average ROE for the
staff's witness was 9.61,

00:47:48.560 --> 00:47:52.920
for TIC witness the
middle of the average ROE

00:47:52.920 --> 00:47:55.763
of their proxy group was 953.

00:47:56.830 --> 00:48:01.320
And so we're not talking
about ROE that are competitive

00:48:01.320 --> 00:48:03.460
with the rest of the industry.

00:48:03.460 --> 00:48:05.520
<v ->Those numbers go back to 2017,</v>

00:48:05.520 --> 00:48:07.533
we're in a declining space here.

00:48:08.428 --> 00:48:10.380
And that's what we address in our brief.

00:48:10.380 --> 00:48:12.310
And we'd look at the equity risk premium

00:48:12.310 --> 00:48:15.920
that the utility business is
less risky than it's ever been

00:48:15.920 --> 00:48:18.590
with all the generation
cost recovery radars

00:48:18.590 --> 00:48:19.610
and everything else that we have,

00:48:19.610 --> 00:48:23.160
and yet we're awarding
these ROE, authorize ROEs

00:48:23.160 --> 00:48:25.860
that are at a higher
premium than interest rates

00:48:25.860 --> 00:48:26.700
than ever before.

00:48:26.700 --> 00:48:30.583
So in our view a 915 is the right ROE,

00:48:32.226 --> 00:48:34.503
before we talk about
vegetation management.

00:48:34.503 --> 00:48:35.802
<v ->Mr. Chairman.</v>

00:48:35.802 --> 00:48:40.802
<v ->It's a comparison to other
investment options today,</v>

00:48:42.040 --> 00:48:43.130
not four-years.

00:48:43.130 --> 00:48:46.310
<v ->Right, and this
Commission has been tasked</v>

00:48:46.310 --> 00:48:47.510
by the Texas Legislature

00:48:47.510 --> 00:48:49.304
with setting ROE for Texas utilities.

00:48:49.304 --> 00:48:52.370
Not based on what a
Commission in Oklahoma did,

00:48:52.370 --> 00:48:54.683
or Michigan or Wisconsin
or anywhere else.

00:48:55.980 --> 00:48:58.280
<v ->I was just going to
add Mr. Chairman,</v>

00:48:58.280 --> 00:49:00.780
I believe this is in
either our exceptions

00:49:00.780 --> 00:49:04.790
or the replies that there's
no noticeable trend downward

00:49:04.790 --> 00:49:07.170
in authorized ROE across the states.

00:49:07.170 --> 00:49:09.900
If you look at the
information in the graph

00:49:09.900 --> 00:49:11.970
it's been flat over this time period,

00:49:11.970 --> 00:49:14.180
that Mr. Mahal Marcus is referencing.

00:49:14.180 --> 00:49:18.860
<v ->Right, and there is a
table on page 25 of our reply</v>

00:49:18.860 --> 00:49:22.200
to the exceptions that
demonstrates just that,

00:49:22.200 --> 00:49:25.703
that there really
statistically is not a trend.

00:49:28.150 --> 00:49:31.570
<v ->Well, what was it,
Jimmy you said earlier,</v>

00:49:31.570 --> 00:49:34.240
just because we done it
that way before doesn't mean

00:49:34.240 --> 00:49:35.573
we gonna keep doing it.

00:49:37.980 --> 00:49:41.533
Other questions for
folks we've called up.

00:49:43.040 --> 00:49:43.920
<v ->None from me.</v>

00:49:43.920 --> 00:49:47.810
<v ->Okay, any other,
I guess, for staff,</v>

00:49:47.810 --> 00:49:51.910
I'd ask in a perfect world in
the concept of the consultant,

00:49:51.910 --> 00:49:53.740
vegetation management consultant,

00:49:53.740 --> 00:49:55.740
what is the work product you would,

00:49:55.740 --> 00:49:57.580
perfect world what is a work product

00:49:57.580 --> 00:50:02.580
you would expect to
receive in the path forward

00:50:03.696 --> 00:50:07.440
that would enable us to
take to drive the changes

00:50:07.440 --> 00:50:10.570
that we know we need to
prevent these types of allergies

00:50:10.570 --> 00:50:13.610
and to improve the quality of service

00:50:13.610 --> 00:50:14.943
our constituents receive?

00:50:16.060 --> 00:50:18.360
<v ->Yeah, the recommendation
for a consultant</v>

00:50:18.360 --> 00:50:20.890
was based on that cascading outage

00:50:20.890 --> 00:50:24.040
that had not only vegetation
management issues,

00:50:24.040 --> 00:50:26.550
but there were other issues as well.

00:50:26.550 --> 00:50:28.910
And given the fact that it
was a cascading outage

00:50:28.910 --> 00:50:32.470
that affected a large geographic area,

00:50:32.470 --> 00:50:34.110
we wanted reassurance

00:50:34.110 --> 00:50:37.300
that there are not some
underlying problems

00:50:37.300 --> 00:50:40.230
that are still out there that
could cause a recurrence

00:50:40.230 --> 00:50:41.063
in the future.

00:50:41.063 --> 00:50:42.650
And obviously vegetation management

00:50:42.650 --> 00:50:44.950
was a clear part of the problem.

00:50:44.950 --> 00:50:49.190
And in terms of how to
manage the vegetation,

00:50:49.190 --> 00:50:53.070
there are other things other
than a standardized trim cycle

00:50:53.070 --> 00:50:55.550
like you do on the distribution system

00:50:55.550 --> 00:50:57.510
that could be employed.

00:50:57.510 --> 00:51:01.400
So just given the
severity of the problems,

00:51:01.400 --> 00:51:02.800
that was our recommendation.

00:51:03.910 --> 00:51:07.780
And just to clarify
too on the trim cycle

00:51:07.780 --> 00:51:10.200
for the distribution system,

00:51:10.200 --> 00:51:11.940
staff didn't make that recommendation,

00:51:11.940 --> 00:51:15.280
but it was actually based on
SWEPCO's witness's statement,

00:51:15.280 --> 00:51:17.920
that, that was the way to
take care of the problem.

00:51:17.920 --> 00:51:20.640
We are aware of utilities
that use other practices

00:51:20.640 --> 00:51:22.840
beyond just the standardized trim cycles

00:51:22.840 --> 00:51:24.810
that can also be employed,

00:51:24.810 --> 00:51:26.637
but given what was in the record,

00:51:26.637 --> 00:51:28.546
and the fact that this has
been a chronic problem

00:51:28.546 --> 00:51:30.260
it's not new.

00:51:30.260 --> 00:51:33.283
They've been underfunding
this issue for years and years,

00:51:34.150 --> 00:51:35.990
it's been too little too late,

00:51:35.990 --> 00:51:39.800
so we wanted something
serious done going forward,

00:51:39.800 --> 00:51:41.700
that's what we were trying to achieve.

00:51:42.850 --> 00:51:45.060
<v ->Yup, same question
for you I suppose.</v>

00:51:45.060 --> 00:51:48.010
In a perfect world if we
go forward with a consultant

00:51:48.010 --> 00:51:50.730
like this, what is the deliverable?

00:51:50.730 --> 00:51:52.493
How do we use that to move forward?

00:51:53.590 --> 00:51:56.640
Is it benchmark, compliance standard?

00:51:56.640 --> 00:51:58.640
<v ->I think it's maybe
all the above.</v>

00:51:58.640 --> 00:52:03.490
I mean a lot of these it's benchmarking

00:52:03.490 --> 00:52:07.593
the SAIDI, SAIFI lines, the
10 highest that 10 lowest,

00:52:08.450 --> 00:52:09.283
I mean there are a lot of things

00:52:09.283 --> 00:52:10.230
that we could have them look at.

00:52:10.230 --> 00:52:13.130
I don't know the total
universe of that right now,

00:52:13.130 --> 00:52:16.543
but consultants are expensive.

00:52:17.760 --> 00:52:19.540
I don't know if this is a
million dollar consultant

00:52:19.540 --> 00:52:22.333
that could be used for
vegetation management.

00:52:23.562 --> 00:52:28.450
I know that there are
good consultants out there

00:52:28.450 --> 00:52:29.950
that do vegetation management.

00:52:35.970 --> 00:52:37.730
I mean, ultimately what I think

00:52:37.730 --> 00:52:40.300
is that it's the
utility's responsibility

00:52:40.300 --> 00:52:41.800
to manage their right of away.

00:52:42.920 --> 00:52:45.880
It's like the data shows
us you're not doing it,

00:52:45.880 --> 00:52:47.280
how are you gonna do better?

00:52:47.280 --> 00:52:49.220
If you wanna hire a
consultant and pay for it

00:52:49.220 --> 00:52:51.620
with your shareholders, pay for it,

00:52:51.620 --> 00:52:53.480
but get the numbers right.

00:52:53.480 --> 00:52:57.270
The rate payers shouldn't
have to pay for a consultant

00:52:57.270 --> 00:53:00.342
to tell you how to do your
right of way management.

00:53:00.342 --> 00:53:01.175
<v ->Which you're already doing.</v>

00:53:01.175 --> 00:53:02.800
<v ->That you should
already be doing.</v>

00:53:02.800 --> 00:53:04.410
Your shareholders can pay for that,

00:53:04.410 --> 00:53:05.461
your parent can pay for that.

00:53:05.461 --> 00:53:09.003
You can spend the money and maybe,

00:53:10.180 --> 00:53:11.580
but what we got to get it fixed.

00:53:11.580 --> 00:53:16.110
So I would say that I understand
the staff recommendation

00:53:16.110 --> 00:53:17.423
on the consultant.

00:53:18.380 --> 00:53:22.420
I believe that it's the
utility's responsibility

00:53:22.420 --> 00:53:23.313
to get this done,

00:53:24.410 --> 00:53:25.760
and they need to be coming back to us

00:53:25.760 --> 00:53:28.170
with what they need to make it happen.

00:53:28.170 --> 00:53:31.170
And I don't necessarily
believe that $5 million we'll do it.

00:53:33.290 --> 00:53:34.490
<v ->So other than a change in ROE,</v>

00:53:34.490 --> 00:53:36.770
is there something else you'd suggest

00:53:36.770 --> 00:53:40.793
like move to the
four-year term cycle or?

00:53:42.217 --> 00:53:43.050
Requires more evidence?

00:53:43.050 --> 00:53:46.940
<v ->So the four-year term
cycle, I think folks in the case</v>

00:53:46.940 --> 00:53:50.380
of that was gonna be a
$30 million modification,

00:53:50.380 --> 00:53:52.043
I don't, I'm sorry.

00:53:52.880 --> 00:53:53.900
<v ->Well, over 30.</v>

00:53:53.900 --> 00:53:56.430
<v ->And Commissioner Glotfelty
there is nothing in the record</v>

00:53:56.430 --> 00:53:58.950
that indicates how that 32 million,

00:53:58.950 --> 00:54:00.110
they came to that number,

00:54:00.110 --> 00:54:03.803
so staff is unaware of
how they came to 32 million.

00:54:05.100 --> 00:54:07.070
If we don't get a four-year term cycle,

00:54:07.070 --> 00:54:09.140
have SWEPCO before
their next base rate case,

00:54:09.140 --> 00:54:11.830
at least do an analysis of
how much it would cost to move

00:54:11.830 --> 00:54:14.270
to a four-year trim cycle

00:54:14.270 --> 00:54:16.050
and show exactly where
they're gonna have to spend

00:54:16.050 --> 00:54:18.100
that money over what period of time

00:54:18.100 --> 00:54:19.933
to be at a four-year trim cycle.

00:54:21.120 --> 00:54:24.010
<v ->What the other utilities, do
we have four-year term cycles</v>

00:54:24.010 --> 00:54:27.738
among all the other distribution
companies around the state?

00:54:27.738 --> 00:54:31.273
Or would this be like
the first time we set a.

00:54:36.750 --> 00:54:39.240
<v ->Run down on the
Swami Commission staff,</v>

00:54:39.240 --> 00:54:42.030
Entergy does have four-year trim cycle,

00:54:42.030 --> 00:54:44.910
SPS has a five-year cyclic interval.

00:54:44.910 --> 00:54:48.520
So yes Commissioners
that are other utilities

00:54:48.520 --> 00:54:51.810
that do have trim cycles and
vegetation management plan.

00:54:51.810 --> 00:54:52.875
<v Narrator>You said
Entergy is four-years?</v>

00:54:52.875 --> 00:54:53.708
<v ->Yes, sir.</v>

00:54:53.708 --> 00:54:56.880
<v ->Yeah, so I would say that
Entergy is more like SWEPCO,</v>

00:54:56.880 --> 00:54:59.670
SPS is not, SPS is pretty arid up there.

00:54:59.670 --> 00:55:00.503
<v ->That's right.</v>

00:55:04.870 --> 00:55:06.770
Maybe a four-year trim
cycle is the right thing,

00:55:06.770 --> 00:55:07.697
is the next step to say,

00:55:07.697 --> 00:55:10.870
"Look, let's get this thing
going and let's get it right."

00:55:10.870 --> 00:55:13.360
And mandate a four-year trim cycle.

00:55:13.360 --> 00:55:16.823
I forgot how we get the
resources to make that happen,

00:55:17.800 --> 00:55:19.300
and the best practices.

00:55:19.300 --> 00:55:24.300
And we can modify the
ROE to make it something.

00:55:28.400 --> 00:55:29.962
<v ->You guys had analysis</v>

00:55:29.962 --> 00:55:32.303
on what a four-year
trim cycle looks like?

00:55:33.140 --> 00:55:36.860
We did have evidence
of how much it would cost.

00:55:36.860 --> 00:55:39.410
And I think that was sponsored

00:55:39.410 --> 00:55:43.050
by our vice president of distribution.

00:55:43.050 --> 00:55:45.490
I can't tell you sitting here right now

00:55:45.490 --> 00:55:47.038
exactly how he made it through.

00:55:47.038 --> 00:55:50.370
<v ->There is a number in
evidence it's $32 million,</v>

00:55:50.370 --> 00:55:52.820
but staff is not seeing
the underlying evidence

00:55:52.820 --> 00:55:53.910
that gets to that number 30.

00:55:53.910 --> 00:55:55.030
<v ->The methodology
that gets through.</v>

00:55:55.030 --> 00:55:56.340
<v ->Right, exactly.</v>

00:55:56.340 --> 00:55:58.173
How much of that is catch-up to?

00:55:59.066 --> 00:56:02.180
They're way behind a
four-year term cycle now

00:56:02.180 --> 00:56:04.280
and they've been that
way for a long time.

00:56:05.350 --> 00:56:06.950
<v ->What would you
say just in practice,</v>

00:56:06.950 --> 00:56:09.040
your current trim cycle is?

00:56:09.040 --> 00:56:10.000
<v ->Oh, sorry, what
was the question?</v>

00:56:10.000 --> 00:56:13.740
<v ->What in practice, what
is your current trim cycle?</v>

00:56:13.740 --> 00:56:15.848
<v ->Well, this is a
calculated trim cycle,</v>

00:56:15.848 --> 00:56:20.360
and it's the number was in testimony,

00:56:20.360 --> 00:56:23.970
I don't remember what it was
but it was eight to 10 years,

00:56:23.970 --> 00:56:26.210
as I recall, that's subs a check.

00:56:26.210 --> 00:56:27.043
<v Narrator>May I?</v>

00:56:27.043 --> 00:56:27.876
<v ->Yes please.</v>

00:56:27.876 --> 00:56:29.860
<v ->So SWEPCO has what they call</v>

00:56:29.860 --> 00:56:32.210
a targeted management program.

00:56:32.210 --> 00:56:35.600
They don't have a standalone
tree risk management program,

00:56:35.600 --> 00:56:39.313
which is also a practice
with many other utilities.

00:56:41.860 --> 00:56:44.740
We had provided a graph in my testimony

00:56:44.740 --> 00:56:47.750
on like year over year
spend of how much.

00:56:47.750 --> 00:56:49.810
They have entities all over the place,

00:56:49.810 --> 00:56:53.000
it is not even half of what they suggest

00:56:53.000 --> 00:56:55.070
is for a four-year term cycle.

00:56:55.070 --> 00:56:58.860
So just going by how the SAIDI, SAIFI,

00:56:58.860 --> 00:57:00.380
SAIFI yes they are right,

00:57:00.380 --> 00:57:03.427
but according to how they
are forced outages are,

00:57:03.427 --> 00:57:07.240
and the amount of spend
it does not add up, sorry.

00:57:07.240 --> 00:57:09.250
<v ->No, no, no that's perfect.</v>

00:57:09.250 --> 00:57:12.370
I guess what I was really angling
at was when you mentioned

00:57:12.370 --> 00:57:16.373
that the full circuit trimming
solves 80% of the problem.

00:57:17.540 --> 00:57:20.623
How on the full circuit trimming,

00:57:21.560 --> 00:57:23.217
what that solves that 80% of the problem

00:57:23.217 --> 00:57:26.481
if you take that framework, how often,

00:57:26.481 --> 00:57:30.330
what is the cycle
that you all get to that,

00:57:30.330 --> 00:57:31.453
that is utilized?

00:57:32.630 --> 00:57:36.250
<v ->On a four-year cycle we
would do that every four years.</v>

00:57:36.250 --> 00:57:39.770
<v ->Currently, how often
do you trim the full circuit</v>

00:57:39.770 --> 00:57:42.450
to get to that 80% of
the problem solved now?

00:57:42.450 --> 00:57:44.290
<v Narrator>Equal 10 Years, right?</v>

00:57:44.290 --> 00:57:46.690
<v ->Is it calculated as
long as in four-years.</v>

00:57:46.690 --> 00:57:50.300
But am I right in saying
that you're not on a cycle

00:57:50.300 --> 00:57:51.680
that you used that in targeting.

00:57:51.680 --> 00:57:53.750
<v ->But they don't do
the full circuit at time,</v>

00:57:53.750 --> 00:57:56.330
so that's what I'm trying to tease out

00:57:56.330 --> 00:57:59.480
is if you have that informant,
I mean, that's kinda,

00:57:59.480 --> 00:58:01.150
that would probably
need to be extrapolated

00:58:01.150 --> 00:58:05.240
for more detailed look at the
operations, but that's yeah,

00:58:05.240 --> 00:58:06.890
that's what I'm trying to get at.

00:58:10.608 --> 00:58:12.013
<v ->What's the
program that you said</v>

00:58:12.013 --> 00:58:14.730
that other utilities currently
use, that they don't?

00:58:14.730 --> 00:58:17.020
<v ->Well, they have a tree
risk management program,</v>

00:58:17.020 --> 00:58:17.853
<v ->Tree risk management program.</v>

00:58:17.853 --> 00:58:20.182
<v ->Correct, and Commissioner,
one of the two answer one,</v>

00:58:20.182 --> 00:58:22.070
one of your, sorry, chairman,

00:58:22.070 --> 00:58:24.410
like to answer one of your questions.

00:58:24.410 --> 00:58:28.200
So when they came
for the last rate case,

00:58:28.200 --> 00:58:30.640
they still they having
a targeted program

00:58:30.640 --> 00:58:35.400
and we did the wide Commission
approved additional funding,

00:58:35.400 --> 00:58:38.200
and they had certain,

00:58:38.200 --> 00:58:43.130
they had provided a list of
certain distribution feeders

00:58:43.130 --> 00:58:45.130
that are gonna be targeted.

00:58:45.130 --> 00:58:49.690
And they have, again, provided
us a list of targeted feeders

00:58:49.690 --> 00:58:53.410
that will be addressed
with the additional 5 million

00:58:53.410 --> 00:58:54.520
that they are asking.

00:58:54.520 --> 00:58:58.510
So they basically have
these feeders that they target,

00:58:58.510 --> 00:59:03.510
and they do the distribution
VM for those feeders.

00:59:03.950 --> 00:59:08.567
It is not an entire distribution
vegetation (indistinct).

00:59:10.970 --> 00:59:11.803
<v ->Exactly.</v>

00:59:15.698 --> 00:59:16.890
I sorry, Mr. Chairman, thank you.

00:59:16.890 --> 00:59:18.560
Alfred Archuleta, representing cities,

00:59:18.560 --> 00:59:21.560
advocating reasonable
deregulation, known as CARD.

00:59:21.560 --> 00:59:22.910
I hesitate to step it up here

00:59:22.910 --> 00:59:25.430
'cause there were enough
folks already up here

00:59:25.430 --> 00:59:26.480
addressing the issue.

00:59:27.580 --> 00:59:32.580
The ALJs made a proposal that
SWEPCO be required to conform

00:59:33.270 --> 00:59:35.660
to a compliance program,

00:59:35.660 --> 00:59:39.003
to report on what it's doing
with its vegetation management.

00:59:40.100 --> 00:59:43.510
We opposed adding the $5 million

00:59:43.510 --> 00:59:45.590
to the vegetation management
program for other reasons.

00:59:45.590 --> 00:59:47.400
And one of them was precisely

00:59:47.400 --> 00:59:49.770
because of what folks
have already discussed.

00:59:49.770 --> 00:59:52.430
We've given them
money to do this before,

00:59:52.430 --> 00:59:54.380
and we can't seem to solve the problem.

00:59:55.420 --> 00:59:58.110
To say that you can't take
it out of my return on equity,

00:59:58.110 --> 00:59:59.940
because that's punishing me

00:59:59.940 --> 01:00:02.400
we don't believe that's
necessarily the case

01:00:02.400 --> 01:00:05.280
because the evidence
supports returns on equity

01:00:05.280 --> 01:00:08.310
from below nine to
above nine, for that matter,

01:00:08.310 --> 01:00:10.740
including SWEPCO's
witnesses and the ALJs landed

01:00:10.740 --> 01:00:15.020
where they did a 9.15 is
established recommended,

01:00:15.020 --> 01:00:17.540
or as a TIC recommends would be good.

01:00:17.540 --> 01:00:20.520
Our witness recommended
9% irrespective of what you do

01:00:20.520 --> 01:00:23.410
with your management program.

01:00:23.410 --> 01:00:25.687
The other thing I'd
ask you to keep in mind

01:00:25.687 --> 01:00:28.100
and you touch upon this
Commissioner Glotfelty

01:00:28.100 --> 01:00:31.970
is why we're here, what's
the Commission's role?

01:00:31.970 --> 01:00:34.843
And that is to serve as they
substitute for competition.

01:00:36.410 --> 01:00:39.640
If a company has not
performed in a particular area

01:00:39.640 --> 01:00:42.240
in the past, if it's in
a competitive market,

01:00:42.240 --> 01:00:43.990
what does the market do?

01:00:43.990 --> 01:00:46.470
The market likely punishes them.

01:00:46.470 --> 01:00:48.650
We're not asking you to
punish SWEPCO here.

01:00:48.650 --> 01:00:53.380
We believe that a return
on equity of 9%, 9.2 9.15,

01:00:53.380 --> 01:00:56.500
somewhere in that range
is a sound return on equity,

01:00:56.500 --> 01:00:59.830
irrespective of what you do
with vegetation management.

01:00:59.830 --> 01:01:01.440
With regard to vegetation management,

01:01:01.440 --> 01:01:04.380
the ALJ gave you a good recommendation,

01:01:04.380 --> 01:01:07.650
and that is require SWEPCO to come in

01:01:07.650 --> 01:01:09.810
with some type of reporting

01:01:09.810 --> 01:01:12.750
to show us what it is
they're doing on that front.

01:01:12.750 --> 01:01:15.110
For those of us, who've
had been around a while,

01:01:15.110 --> 01:01:19.410
a few rate cases back,
we had a surcharge,

01:01:19.410 --> 01:01:23.480
a radar SWEPCO's
tariffs, where we gave them,

01:01:23.480 --> 01:01:25.840
I forget if it was 10 or $15 million

01:01:25.840 --> 01:01:29.330
to undertake a vegetation
management program.

01:01:29.330 --> 01:01:31.870
It lasted, I'm going by memory,

01:01:31.870 --> 01:01:34.170
I wanna say it was a 12 month radar,

01:01:34.170 --> 01:01:35.653
but yet here we are again.

01:01:36.920 --> 01:01:39.020
We have concerns?

01:01:39.020 --> 01:01:41.870
Yes, with the quality of service.

01:01:41.870 --> 01:01:43.960
And we're not saying
the quality service is poor,

01:01:43.960 --> 01:01:45.273
SWEPCO is a good company.

01:01:46.730 --> 01:01:49.140
We have issues with
vegetation management,

01:01:49.140 --> 01:01:52.200
they don't seem to be addressed.

01:01:52.200 --> 01:01:56.670
The ALJs have given you a
good out on how to follow up

01:01:56.670 --> 01:01:58.420
with what it is SWEPCO is doing

01:01:58.420 --> 01:02:00.180
with regard to vegetation management.

01:02:00.180 --> 01:02:02.330
We suggested that,
that would be the route,

01:02:03.460 --> 01:02:04.570
the return on equity.

01:02:04.570 --> 01:02:09.550
We believe it should be in
the low nines at the outside,

01:02:09.550 --> 01:02:12.310
irrespective of what you
do with vegetation matters.

01:02:12.310 --> 01:02:14.610
But if we go back to
the fundamental role

01:02:14.610 --> 01:02:16.480
of the Commission has
to serve as a substitute

01:02:16.480 --> 01:02:19.520
for competition, you
would take that into account.

01:02:19.520 --> 01:02:20.979
I hesitated getting up here

01:02:20.979 --> 01:02:23.930
and repeating that and saying that,

01:02:23.930 --> 01:02:28.750
but my thought is that's where
we are in terms of the link,

01:02:28.750 --> 01:02:32.293
if any between return on equity
and vegetation management.

01:02:33.360 --> 01:02:34.193
<v Narrator>Thank you.</v>

01:02:34.193 --> 01:02:37.320
<v ->Mr. Chairman could I
respond if that's all right?</v>

01:02:37.320 --> 01:02:38.200
<v Narrator>Sure.</v>
<v ->Just for a few moments.</v>

01:02:38.200 --> 01:02:39.430
<v ->And we will go through
Commission stuff.</v>

01:02:39.430 --> 01:02:44.153
<v ->The record in this case
supports the success</v>

01:02:44.153 --> 01:02:46.310
of the tree trimming program.

01:02:46.310 --> 01:02:49.790
I disagree that the
reliability is degradating

01:02:49.790 --> 01:02:52.200
and that these targeted dollar

01:02:52.200 --> 01:02:55.560
is not accomplishing their
objective because they are,

01:02:55.560 --> 01:02:58.530
there is overwhelming
evidence in the record

01:02:58.530 --> 01:03:02.190
that on the circuits trim
the reliability improved

01:03:02.190 --> 01:03:04.990
by 85 to 90%.

01:03:04.990 --> 01:03:06.080
First and foremost,

01:03:06.080 --> 01:03:10.500
secondly, that the SAIFI
measure from the last rate case

01:03:10.500 --> 01:03:14.180
has stabilized and in most
recent year come down,

01:03:14.180 --> 01:03:15.060
the objective.

01:03:15.060 --> 01:03:18.195
<v ->So if you know
that it comes down</v>

01:03:18.195 --> 01:03:21.670
and it works to trim the trees,
why aren't you doing more?

01:03:21.670 --> 01:03:24.450
<v ->Well, it's always been
our approach Commissioner</v>

01:03:24.450 --> 01:03:29.300
to balance the reliability with rates.

01:03:29.300 --> 01:03:33.321
Do customers demand
perfect reliability or?

01:03:33.321 --> 01:03:36.917
<v ->This is $9 million and
vegetation management</v>

01:03:36.917 --> 01:03:39.330
for the entire company?

01:03:39.330 --> 01:03:40.800
<v ->No, sir, that's not correct,</v>

01:03:40.800 --> 01:03:43.310
it's nine and a half million for Texas,

01:03:43.310 --> 01:03:46.200
we spend about almost 40, well,

01:03:46.200 --> 01:03:48.683
32 to 35 million total company,

01:03:49.990 --> 01:03:52.710
which is a significant
amount for tree trimming,

01:03:52.710 --> 01:03:56.840
and 14 and a half million
at the requested level

01:03:56.840 --> 01:04:01.840
I believe will certainly
give us this opportunity.

01:04:02.490 --> 01:04:04.350
Not only improve the performance

01:04:04.350 --> 01:04:07.040
on the circuits week we trim,

01:04:07.040 --> 01:04:09.810
but to improve that
overall reliability measure.

01:04:09.810 --> 01:04:13.560
And I want to go back to
the comment I made earlier

01:04:13.560 --> 01:04:16.070
that it's designed to do just that.

01:04:16.070 --> 01:04:19.030
And it's going to keep the system

01:04:19.030 --> 01:04:22.610
from experiencing fewer
outages during storms.

01:04:22.610 --> 01:04:24.010
But when that does occur,

01:04:24.010 --> 01:04:26.290
when there is an outage in a storm,

01:04:26.290 --> 01:04:30.580
by having trim the cycle,
you restore it more quickly,

01:04:30.580 --> 01:04:33.010
and that becomes a minor storm.

01:04:33.010 --> 01:04:36.280
When you have a minor
storm, those outage minutes

01:04:36.280 --> 01:04:39.390
stay in the SAIDI calculation,

01:04:39.390 --> 01:04:41.890
and it's caused that SAIDI calculation

01:04:41.890 --> 01:04:46.100
to go up a little bit,
but that in the end,

01:04:46.100 --> 01:04:49.320
that sweet spot where
if we get this 5 million,

01:04:49.320 --> 01:04:53.020
I believe there's a chance
where that SAIDI number

01:04:53.020 --> 01:04:54.583
does begin to come down.

01:04:55.420 --> 01:04:58.540
But we don't need to go all
the way to the four-year cycle

01:04:58.540 --> 01:04:59.780
for that SAIDI number

01:04:59.780 --> 01:05:04.270
to start trending back
downward in my view.

01:05:04.270 --> 01:05:06.520
But it's important to get out there

01:05:06.520 --> 01:05:09.640
that there is significant
evidence in the record

01:05:09.640 --> 01:05:12.960
that tree trimming has been
beneficial for our customers,

01:05:12.960 --> 01:05:14.940
and we've shown that, thank you.

01:05:14.940 --> 01:05:16.410
I don't think anybody is arguing

01:05:16.410 --> 01:05:18.989
that tree trimming improves reliability,

01:05:18.989 --> 01:05:21.043
there's just not enough trees trimmed.

01:05:21.043 --> 01:05:23.950
<v ->Here's the question, how
does Entergy make it work</v>

01:05:23.950 --> 01:05:24.817
on a five-year cycle?

01:05:24.817 --> 01:05:28.950
And SWEPCO is not
saying geography (indistinct).

01:05:28.950 --> 01:05:29.783
<v ->Entergy four.</v>

01:05:29.783 --> 01:05:31.220
<v ->Entergy's a four-year
cycle and I believe that,</v>

01:05:31.220 --> 01:05:33.643
<v ->Oh, they are a four-year cycle.</v>

01:05:33.643 --> 01:05:34.740
<v Narrator>Entergy is four.</v>

01:05:34.740 --> 01:05:36.682
<v ->How do they make it work?</v>

01:05:36.682 --> 01:05:39.331
<v ->I can't speak to the,</v>

01:05:39.331 --> 01:05:43.867
might have to do with service territory.

01:05:43.867 --> 01:05:44.810
<v ->[narrator[ Both these
Texas there's a heck</v>

01:05:44.810 --> 01:05:48.152
of a lot of trees and
all that East Texas.

01:05:48.152 --> 01:05:49.790
<v ->I don't know, I'd have to look</v>

01:05:49.790 --> 01:05:52.191
into the details of their programs.

01:05:52.191 --> 01:05:54.710
I don't know what
they're doing differently.

01:05:54.710 --> 01:05:57.253
I suspect they're spending
more dollar per mile.

01:05:59.500 --> 01:06:01.008
<v ->If I can respond
to that Mr. Chair.</v>

01:06:01.008 --> 01:06:01.841
<v Narrator>Yes, please.</v>

01:06:01.841 --> 01:06:03.630
<v ->First to Mr. Bryce's points,</v>

01:06:03.630 --> 01:06:06.470
they reflect that the SAIFI
score has started to stabilize

01:06:06.470 --> 01:06:08.270
for the first time since 2017,

01:06:08.270 --> 01:06:12.003
but their SAIDI score
continues to be very high.

01:06:12.840 --> 01:06:15.170
And generally from 2018 to 2020,

01:06:15.170 --> 01:06:17.220
their scores were lower than in 2017

01:06:17.220 --> 01:06:19.810
before they got the additional monies

01:06:19.810 --> 01:06:21.300
in their last base rate case.

01:06:21.300 --> 01:06:23.220
And the reason the staff went further

01:06:23.220 --> 01:06:24.830
than Mr. Herrera and the PFD

01:06:24.830 --> 01:06:27.280
is because there was a
similar recommendation

01:06:27.280 --> 01:06:30.900
in docket 46449 in the final
order with a compliance docket.

01:06:30.900 --> 01:06:32.390
And we don't think that goes far enough

01:06:32.390 --> 01:06:35.300
that a four-year trend
cycle is absolutely necessary

01:06:35.300 --> 01:06:37.867
to actually get them to
a point where their SAIDI

01:06:37.867 --> 01:06:41.200
and SAIFI scores decrease
in reliability increases.

01:06:41.200 --> 01:06:43.550
And we think that
spending additional money

01:06:43.550 --> 01:06:45.930
is after SWEPCO proves
up how much it'll cost

01:06:45.930 --> 01:06:48.100
is the best way to improve reliability

01:06:48.100 --> 01:06:51.312
and to lower those
SAIDI and SAIFI scores.

01:06:51.312 --> 01:06:55.060
<v ->So I'd certainly think
it's worth considering</v>

01:06:55.060 --> 01:06:57.280
something along those lines
where we ask for more evidence

01:06:57.280 --> 01:07:00.170
to support and validate the costs

01:07:00.170 --> 01:07:03.603
of what a four-year trim
cycle would look like.

01:07:05.650 --> 01:07:07.300
I think there's some merit there.

01:07:08.370 --> 01:07:11.100
Any other, looked like you
had some other thoughts to add?

01:07:11.100 --> 01:07:13.030
<v ->Well, Mr. Chairman,
certainly the company</v>

01:07:13.030 --> 01:07:15.560
would do the four-year cycle if funded ,

01:07:15.560 --> 01:07:20.560
that's our concern that
asking customers to pay

01:07:21.100 --> 01:07:23.640
for another $30 million to fund it,

01:07:23.640 --> 01:07:28.240
but that certainly company
would support the four-year cycle

01:07:28.240 --> 01:07:30.933
if funded and that's the challenge.

01:07:31.921 --> 01:07:34.193
I think the recommendation was unfunded.

01:07:36.260 --> 01:07:39.570
<v ->Jimmy, I know this
is a key area for you</v>

01:07:39.570 --> 01:07:42.950
and you've got a lot of
background and expertise on this.

01:07:42.950 --> 01:07:47.705
So let me start with you
and let you bring it home.

01:07:47.705 --> 01:07:50.600
<v ->I'm a middleman here actually.</v>

01:07:54.210 --> 01:07:56.910
<v ->Staff can you tell me again
what you had recommended</v>

01:07:57.910 --> 01:08:00.860
on a 9.3?

01:08:00.860 --> 01:08:04.090
<v ->Well, it was a 9.35 ROE
with a 12 and a half point</v>

01:08:04.090 --> 01:08:06.803
basis reduction to 9.225 I believe.

01:08:08.060 --> 01:08:11.890
Based upon that August 19th, 2019 outage

01:08:11.890 --> 01:08:14.563
the reduction of those
12 and a half basis points.

01:08:19.230 --> 01:08:20.149
<v ->Sorry, Mr. Chair.</v>

01:08:20.149 --> 01:08:20.982
<v ->No, no, not at all.</v>

01:08:20.982 --> 01:08:23.287
<v ->I don't mean to
make a show here.</v>

01:08:23.287 --> 01:08:25.344
<v ->No, no, this is the Jimmy show.</v>

01:08:25.344 --> 01:08:27.873
We're just the side characters.

01:08:32.260 --> 01:08:34.540
Let me put this out
for y'all's consideration,

01:08:34.540 --> 01:08:39.540
I would suggest that
for the day we table this

01:08:39.660 --> 01:08:44.330
ask for two things, one,
more evidence from SWEPCO

01:08:44.330 --> 01:08:47.010
about the costs and validating the cost

01:08:47.010 --> 01:08:49.623
of the four-year trim cycle.

01:08:50.560 --> 01:08:52.410
If it comes out to the 32 million great,

01:08:52.410 --> 01:08:54.740
but let's see the
calculus to back that up,

01:08:54.740 --> 01:08:58.080
if it's lower that would be even better.

01:08:58.080 --> 01:09:02.400
And at the same time
ask Commission staff

01:09:03.240 --> 01:09:06.290
to come up with a more concrete,

01:09:06.290 --> 01:09:11.290
compliant standard metric
benchmark that we can link up

01:09:14.090 --> 01:09:17.510
with a potential four-year trim cycle

01:09:17.510 --> 01:09:19.690
so that we know what our north star is,

01:09:19.690 --> 01:09:20.640
we know where we're going,

01:09:20.640 --> 01:09:22.260
we know where we're aiming at.

01:09:22.260 --> 01:09:25.720
And so that when we come
in the next time around,

01:09:25.720 --> 01:09:30.490
we have a clear metric
on which to measure

01:09:30.490 --> 01:09:32.112
success or failure.

01:09:32.112 --> 01:09:35.570
<v ->And dovetailing on your
last comment, Mr. Chairman.</v>

01:09:35.570 --> 01:09:40.570
And again, this is my first
rodeo as a Commissioner here

01:09:41.080 --> 01:09:43.360
on a rate case, but I assume

01:09:43.360 --> 01:09:45.668
this Commission cannot tie
the hands of a Commission

01:09:45.668 --> 01:09:50.183
on future rate cases,
is that established law?

01:09:50.183 --> 01:09:51.841
<v ->That's my understanding,</v>

01:09:51.841 --> 01:09:54.180
that each Commission can
make their own decisions.

01:09:54.180 --> 01:09:58.720
<v ->Right, so if we establish
some type of performance metric</v>

01:09:59.680 --> 01:10:03.123
that if rates are
approved return on equity,

01:10:04.580 --> 01:10:07.550
any type of performance
measure is approved,

01:10:07.550 --> 01:10:09.053
that shall be complied with,

01:10:09.053 --> 01:10:12.300
that would affect the
outcome of the next rate case

01:10:12.300 --> 01:10:13.133
that's out of bounds, right?

01:10:13.133 --> 01:10:15.673
Because we're tying the
hands of the future Commission.

01:10:17.720 --> 01:10:21.060
<v ->Mr. Lake I think we could
probably find some cases</v>

01:10:21.060 --> 01:10:24.120
where the Commission
has done that in the past.

01:10:24.120 --> 01:10:24.960
<v ->Probably need to look at that,</v>

01:10:24.960 --> 01:10:26.600
but we need to figure out

01:10:26.600 --> 01:10:29.740
what our performance
measure capabilities here.

01:10:29.740 --> 01:10:32.670
<v ->I would agree that
you can't tie the hands</v>

01:10:32.670 --> 01:10:33.513
of a Commission.

01:10:33.513 --> 01:10:35.140
(laughing)

01:10:35.140 --> 01:10:36.800
<v Narrator>Even to the upside?</v>

01:10:36.800 --> 01:10:37.633
<v ->Sir?</v>

01:10:37.633 --> 01:10:38.466
<v ->Even to the upside?</v>

01:10:38.466 --> 01:10:39.299
(laughing)

01:10:39.299 --> 01:10:41.003
<v ->Well, what do you have in mind?</v>

01:10:41.003 --> 01:10:42.890
(laughing)

01:10:42.890 --> 01:10:44.980
<v ->I mean, there's
sticks and carrots</v>

01:10:46.650 --> 01:10:48.400
out-performance can be rewarded.

01:10:48.400 --> 01:10:50.544
<v ->Well, ECRF.</v>

01:10:50.544 --> 01:10:52.150
<v ->Yeah, there you go.</v>

01:10:52.150 --> 01:10:57.150
<v ->If I could ask a
question on the evidence,</v>

01:10:57.380 --> 01:11:00.660
are you asking for SWEPCO
to bring you back evidence

01:11:00.660 --> 01:11:05.660
that's in the record, or are
you asking for new evidence,

01:11:06.670 --> 01:11:09.170
which would raise some procedural issues

01:11:09.170 --> 01:11:11.030
for the other parties
in terms of our ability

01:11:11.030 --> 01:11:13.840
to evaluate that and
respond that evidence

01:11:13.840 --> 01:11:16.960
we opening the record
either the Commissioner

01:11:16.960 --> 01:11:21.590
is issuing a order
based on that evidence

01:11:21.590 --> 01:11:24.720
or remanding it back to the
Administrative Law Judge,

01:11:24.720 --> 01:11:29.270
to evaluate that evidence
with regard to tying the hands

01:11:29.270 --> 01:11:30.523
of a future Commission.

01:11:31.380 --> 01:11:34.040
I think the standard would be a change,

01:11:34.040 --> 01:11:35.500
have circumstances changed,

01:11:35.500 --> 01:11:37.770
and can you change
your mind in the future

01:11:37.770 --> 01:11:39.910
because circumstances have changed,

01:11:39.910 --> 01:11:42.160
perfectly fine for the
Commission to do that,

01:11:42.160 --> 01:11:44.320
so you can make a decision today

01:11:44.320 --> 01:11:45.760
if things change in the future,

01:11:45.760 --> 01:11:47.740
then a Commission in the future,

01:11:47.740 --> 01:11:49.470
based on those changed circumstances

01:11:49.470 --> 01:11:51.120
may reach a different conclusion.

01:11:52.840 --> 01:11:53.808
<v ->Both points well-taken,</v>

01:11:53.808 --> 01:11:56.960
I think step one is figuring
out the performance standard

01:11:56.960 --> 01:12:01.960
we wanna solidify or crystallize,

01:12:02.540 --> 01:12:05.410
and then we can figure
out how best to approach,

01:12:05.410 --> 01:12:07.880
ensuring compliance with it.

01:12:07.880 --> 01:12:09.997
<v ->In cost to performance
standard (indistinct).</v>

01:12:11.283 --> 01:12:15.860
<v ->In terms of the evidence
I'll defer to Mr. Janae,</v>

01:12:15.860 --> 01:12:18.100
if we're asking for backup documentation

01:12:18.100 --> 01:12:22.670
of existing evidence, where
does that fall on the spectrum?

01:12:22.670 --> 01:12:25.630
<v ->I think what I've heard
is there's little evidence</v>

01:12:25.630 --> 01:12:27.412
of what y'all want.

01:12:27.412 --> 01:12:30.323
What we're really asking
for is new evidence.

01:12:31.800 --> 01:12:35.360
Mr. Harris talking about when
they see that new evidence,

01:12:35.360 --> 01:12:38.350
they are gonna want an
opportunity to cross examine,

01:12:38.350 --> 01:12:40.713
or bring their own witnesses to bear,

01:12:42.110 --> 01:12:46.940
which could be done in a
Commission held hearing here,

01:12:46.940 --> 01:12:49.693
a limited hearing on this
sole issue in the future.

01:12:52.710 --> 01:12:55.750
<v ->That's probably more
expeditious in remaining to the LJ.</v>

01:12:55.750 --> 01:12:59.300
<v ->I think sending it back to
solely for this small piece</v>

01:12:59.300 --> 01:13:01.350
would probably not be the best course.

01:13:01.350 --> 01:13:02.740
<v ->Oh, geez.</v>

01:13:02.740 --> 01:13:06.710
<v ->We might learn something
about vegetation management.</v>

01:13:06.710 --> 01:13:09.180
<v ->Your honor
(indistinct) from TIC,</v>

01:13:09.180 --> 01:13:11.150
if I might offer a suggestion.

01:13:11.150 --> 01:13:13.390
<v ->Sure, please find
the microphone</v>

01:13:13.390 --> 01:13:15.463
and state your name
on the record if you will.

01:13:16.610 --> 01:13:18.260
Make sure folks at home can hear.

01:13:21.332 --> 01:13:22.165
(indistinct)

01:13:22.165 --> 01:13:23.497
<v ->From TIC your honor,</v>

01:13:23.497 --> 01:13:25.520
I've been listening to
this and trying to say

01:13:25.520 --> 01:13:28.080
this wasn't as an issue of concerned us,

01:13:28.080 --> 01:13:30.290
but it wasn't one that we
had a bunch of testimony on,

01:13:30.290 --> 01:13:35.290
but I'm trying to find a way to
do what you wanna do here.

01:13:35.730 --> 01:13:40.730
And it seems to me that
using the ALJs recommendation

01:13:41.540 --> 01:13:45.150
to institute, not just a filing,
but a compliance docket,

01:13:45.150 --> 01:13:48.120
an open proceeding
that could take evidence

01:13:49.110 --> 01:13:52.760
that I would argue could
give the Commission authority

01:13:52.760 --> 01:13:56.683
in that compliance docket
to use some sticks or carrots.

01:13:57.650 --> 01:14:00.930
And that would allow
evidence and consideration

01:14:00.930 --> 01:14:04.740
and deliberation
that it's difficult to do

01:14:04.740 --> 01:14:07.960
in the final order meeting on
a PFD where everything else

01:14:07.960 --> 01:14:09.440
seems to you seem to be there.

01:14:09.440 --> 01:14:13.100
So I would adjust at least consideration

01:14:13.100 --> 01:14:17.020
of taking up the ALJs recommendation

01:14:17.020 --> 01:14:19.420
to open up a compliance docket,

01:14:19.420 --> 01:14:21.770
start thinking about
what teeth you'd put

01:14:21.770 --> 01:14:24.640
and what you have to require
in that compliance docket.

01:14:24.640 --> 01:14:27.440
<v ->What mechanisms would we have</v>

01:14:27.440 --> 01:14:29.450
like once we write this check,

01:14:29.450 --> 01:14:32.080
check goes to them and it gets cashed?

01:14:32.080 --> 01:14:36.738
<v ->Well, once you issue a, yes.</v>

01:14:36.738 --> 01:14:41.240
That is right, so what can
you do in a compliance docket?

01:14:41.240 --> 01:14:43.063
That's a good question.

01:14:44.281 --> 01:14:47.990
There are mechanisms for you to,

01:14:47.990 --> 01:14:50.630
if there were serious
problems or mechanisms

01:14:50.630 --> 01:14:53.360
for the Commission
to reopen a rate inquiry,

01:14:53.360 --> 01:14:55.670
to determine whether
the rates are excessive

01:14:55.670 --> 01:14:57.570
in light of performance.

01:14:57.570 --> 01:15:02.570
That's a pretty big stick
that is also hard to wield,

01:15:03.010 --> 01:15:04.780
but it's pretty big stick,

01:15:04.780 --> 01:15:09.780
but it just seems that there
is more that can be done.

01:15:11.130 --> 01:15:14.210
And these things
they're not in the record,

01:15:14.210 --> 01:15:17.700
and there's gonna be arguments
about whether they're similar

01:15:17.700 --> 01:15:18.740
to Entergy or whether they're not.

01:15:18.740 --> 01:15:22.350
And there's gonna be
arguments about what does the N,

01:15:22.350 --> 01:15:27.090
and I see this opening up
a lot in terms of a remand

01:15:27.090 --> 01:15:28.800
or possible hearing.

01:15:28.800 --> 01:15:32.890
And granted the
biggest stick you have is

01:15:32.890 --> 01:15:35.810
at a final order meeting
in a rate case granted,

01:15:35.810 --> 01:15:38.490
but it seems like maybe
the balance in this case,

01:15:38.490 --> 01:15:41.440
in light of the additional
information you need

01:15:41.440 --> 01:15:44.110
would favor the compliance docket.

01:15:44.110 --> 01:15:49.110
And I believe the Commission
still has ample sticks to use,

01:15:49.140 --> 01:15:53.360
to ensure reasonable action

01:15:53.360 --> 01:15:55.230
in accordance with
the compliance docket.

01:15:55.230 --> 01:15:58.450
So offer that almost as a
suggestion from the outside

01:15:58.450 --> 01:16:01.110
and your honors but as a possible way

01:16:01.110 --> 01:16:02.896
to get us to a final order

01:16:02.896 --> 01:16:07.613
and still address this issue
and all the complexity of it.

01:16:08.540 --> 01:16:11.700
<v ->And if I understand what
Mr. Van Meddles is saying</v>

01:16:11.700 --> 01:16:16.240
is he's talking about
severing this reliability issue

01:16:16.240 --> 01:16:20.330
and cost issues and
into a compliance docket

01:16:20.330 --> 01:16:22.420
and moving forward with this case,

01:16:22.420 --> 01:16:26.890
if that's true, then
I think this concept

01:16:26.890 --> 01:16:31.890
of lowering the ROE
for reliability reasons

01:16:32.220 --> 01:16:35.720
would be severed off into that as well,

01:16:35.720 --> 01:16:37.640
and that we can proceed in this docket

01:16:37.640 --> 01:16:42.640
with what is the ROE really
for SWEPCO's competitors?

01:16:45.220 --> 01:16:49.950
<v ->So you're suggesting
we get you back up to 9.6?</v>

01:16:49.950 --> 01:16:52.513
<v ->Yes, 9.6 that would be good.</v>

01:16:55.630 --> 01:16:57.980
<v ->Staff has concerns with
the compliance docket,</v>

01:16:57.980 --> 01:16:59.690
whether we would be able to,

01:16:59.690 --> 01:17:02.370
if we approve SWEPCO's
funding now for their VM,

01:17:02.370 --> 01:17:04.930
go back and retroactively change it

01:17:04.930 --> 01:17:06.770
and institute a four-year trim cycle.

01:17:06.770 --> 01:17:08.910
And if that's possible,
staff would be okay,

01:17:08.910 --> 01:17:10.467
but staff would prefer
to maybe have this

01:17:10.467 --> 01:17:12.294
for the Commissioner so that
y'all can see the new evidence

01:17:12.294 --> 01:17:15.960
and y'all can weigh in and ask questions

01:17:15.960 --> 01:17:18.190
and we can get this resolved
sooner rather than later,

01:17:18.190 --> 01:17:22.130
because SWEPCO has again not had great

01:17:22.130 --> 01:17:23.850
SAIDI or SAIFI scores,
and we wanna make sure

01:17:23.850 --> 01:17:26.640
that the new vegetation management
program gets implemented

01:17:26.640 --> 01:17:28.110
as quickly as possible.

01:17:28.110 --> 01:17:30.990
And we think maybe a
Commission hearing would expedite

01:17:30.990 --> 01:17:33.560
that process on the VM issue alone

01:17:33.560 --> 01:17:36.120
and the cost of the vegetation
management program

01:17:36.120 --> 01:17:37.950
for four-year trim cycle.

01:17:37.950 --> 01:17:41.360
But we leave it to the
Commissioners that your discretion.

01:17:41.360 --> 01:17:43.120
<v ->All right, y'all gonna
make me jump in now.</v>

01:17:43.120 --> 01:17:48.120
So the compliance docket
that is briefly mentioned

01:17:48.570 --> 01:17:51.780
in the PFT and very briefly mentioned,

01:17:51.780 --> 01:17:53.287
I don't think as a compliance docket,

01:17:53.287 --> 01:17:54.870
and I think it was a docket

01:17:54.870 --> 01:17:57.230
to basically accumulate information

01:17:57.230 --> 01:17:59.873
similar to what you asked
for in your memorandum,

01:18:01.120 --> 01:18:03.870
going forward, give us
some data points to see

01:18:03.870 --> 01:18:06.050
how well you are doing.

01:18:06.050 --> 01:18:10.730
<v ->More than just the
10% or the top 10,</v>

01:18:10.730 --> 01:18:12.203
just the limited scope of the SAIDI.

01:18:12.203 --> 01:18:14.380
<v ->I'm not sure there's
really no talking about</v>

01:18:14.380 --> 01:18:15.810
what the scope of the information.

01:18:15.810 --> 01:18:17.530
<v ->I think that's our intent.</v>

01:18:17.530 --> 01:18:19.177
<v ->Yeah, our intent
of what you were.</v>

01:18:19.177 --> 01:18:21.350
<v ->Certainly my
intent to get more,</v>

01:18:21.350 --> 01:18:22.550
that's more information.

01:18:25.670 --> 01:18:27.770
<v ->Putting the final
decision off here.</v>

01:18:27.770 --> 01:18:29.542
If you're serious about looking

01:18:29.542 --> 01:18:33.663
at a mandating a
four-year cycle on this,

01:18:35.640 --> 01:18:37.580
I think it's fair to say
it's gonna cost more

01:18:37.580 --> 01:18:38.980
than what they've asked for.

01:18:40.050 --> 01:18:41.930
Going in and holding
a hearing to figure out

01:18:41.930 --> 01:18:45.660
what that is gonna be an effort,

01:18:45.660 --> 01:18:46.750
we're going back to hearing,

01:18:46.750 --> 01:18:49.480
parties are gonna wanna
do probably discovery.

01:18:49.480 --> 01:18:51.560
They're gonna want to bring witnesses.

01:18:51.560 --> 01:18:54.130
We're looking at making
a decision on this case

01:18:54.130 --> 01:18:55.960
in the next year.

01:18:55.960 --> 01:18:56.950
I don't know when,

01:18:56.950 --> 01:18:59.120
I mean, y'all got a lot
of other things own.

01:18:59.120 --> 01:19:02.850
<v ->It won't be this, it
won't be us this year,</v>

01:19:02.850 --> 01:19:05.880
given the bandwidth
issues that we've got.

01:19:05.880 --> 01:19:08.163
<v ->Clearly the PFD has made,</v>

01:19:09.290 --> 01:19:13.070
SWEPCO has asked to PFDs
agreed and recommended an increase

01:19:13.070 --> 01:19:15.600
in the funding in their expense items

01:19:15.600 --> 01:19:17.453
for vegetation management.

01:19:20.300 --> 01:19:23.300
If you want to send a signal,

01:19:23.300 --> 01:19:28.300
and this is still not binding
feature Commissioners,

01:19:29.940 --> 01:19:33.420
you pick your ROE number today

01:19:33.420 --> 01:19:35.950
and you indicate what
you will do to them

01:19:35.950 --> 01:19:39.570
when they come back with
good SAIDI, SAIFI numbers,

01:19:39.570 --> 01:19:41.420
with good vegetation management number,

01:19:41.420 --> 01:19:44.703
give them a target to shoot
for, let them go out and work.

01:19:49.140 --> 01:19:50.860
I mean, we can get a
lot more complicated

01:19:50.860 --> 01:19:53.130
or you can talk about
splitting this whole number

01:19:53.130 --> 01:19:53.963
out of base rates.

01:19:53.963 --> 01:19:56.310
We'll split it in a radar
let's go do something else,

01:19:56.310 --> 01:20:01.160
let's hold some, let's
get into piecemeal, right?

01:20:01.160 --> 01:20:03.441
Making let's challenge that law I mean.

01:20:03.441 --> 01:20:05.910
We can get as complicated

01:20:05.910 --> 01:20:08.293
and ridiculous as you want to hear.

01:20:13.920 --> 01:20:15.763
<v ->How serious are you Jimmy?</v>

01:20:16.740 --> 01:20:18.056
<v ->Why'd you write this memo?</v>

01:20:18.056 --> 01:20:20.306
(laughing)

01:20:21.490 --> 01:20:23.463
I think this is what.

01:20:23.463 --> 01:20:26.663
<v ->I mean, I throw one before,
I'm sorry to interrupt you.</v>

01:20:27.660 --> 01:20:30.590
The utility is free at any
time to file rate cases.

01:20:30.590 --> 01:20:33.360
They wanna go in and
decide how to do a four-year

01:20:33.360 --> 01:20:36.830
or three-year cycle on their
stuff and how much it costs.

01:20:36.830 --> 01:20:39.010
They can put a rate case
together and come back in

01:20:39.010 --> 01:20:40.313
and ask you for the money.

01:20:42.405 --> 01:20:44.320
I mean, this is not
the final rate case ever.

01:20:44.320 --> 01:20:46.130
I know we have these
new four-year cycles,

01:20:46.130 --> 01:20:49.123
but they're not
precluded from coming in.

01:20:49.123 --> 01:20:51.940
<v ->That would be an
unfunded mandate.</v>

01:20:51.940 --> 01:20:53.080
I don't even know that.

01:20:53.080 --> 01:20:54.666
<v Narrator>Oh, come on.</v>

01:20:54.666 --> 01:20:57.753
(laughing)

01:20:57.753 --> 01:21:00.420
<v ->And it's $38 million
and it would be unfunded</v>

01:21:00.420 --> 01:21:04.444
in what Mr. Janae is talking
about is incur a test year.

01:21:04.444 --> 01:21:07.260
That's gonna take a
year file a rate case,

01:21:07.260 --> 01:21:09.300
that's gonna take six
months to put together

01:21:09.300 --> 01:21:12.860
and then another year to litigate it.

01:21:12.860 --> 01:21:16.290
So we're talking about two
and a half years of unfunded.

01:21:16.290 --> 01:21:18.700
And I think we started out
at the very beginning saying,

01:21:18.700 --> 01:21:22.040
listen, we understand
the liability costs money,

01:21:22.040 --> 01:21:25.560
and if we want them to do more trimming,

01:21:25.560 --> 01:21:28.049
then we need to give
them money to do that.

01:21:28.049 --> 01:21:30.150
<v ->The regulatory
lag is one reason</v>

01:21:30.150 --> 01:21:32.150
that you get as high ROE as you get.

01:21:32.150 --> 01:21:34.890
If we're gonna eliminate
ROE regulatory lag

01:21:34.890 --> 01:21:36.780
we can start talking 6% ROE I think.

01:21:38.650 --> 01:21:40.540
<v ->Commissioner Glotfelty
you've made a very good point</v>

01:21:40.540 --> 01:21:45.540
that we know that trimming
trees improves reliability

01:21:46.670 --> 01:21:49.600
and that's part of your
basic job description,

01:21:49.600 --> 01:21:51.093
that's not a bonus feature.

01:21:52.260 --> 01:21:53.267
That's something we all expect

01:21:53.267 --> 01:21:55.293
and all our constituents expect.

01:21:57.530 --> 01:22:00.467
So that's part of standard
business. Thoughts?

01:22:06.483 --> 01:22:08.480
<v ->We have a lot of
other issues to discuss</v>

01:22:08.480 --> 01:22:09.593
in this right here, I
don't know how to split,

01:22:09.593 --> 01:22:13.810
and maybe we ought to table this point,

01:22:13.810 --> 01:22:16.040
vegetation management for a little bit,

01:22:16.040 --> 01:22:18.320
and continue to walk through
the worksheet that we have

01:22:18.320 --> 01:22:20.110
to address the other issues,

01:22:20.110 --> 01:22:23.979
and then come back revisit
this before the end of the day

01:22:23.979 --> 01:22:26.690
and see if we can find closure on that.

01:22:26.690 --> 01:22:28.290
That would be my recommendation.

01:22:29.440 --> 01:22:33.763
<v ->I'm happy to table this
distinct point for the time being,</v>

01:22:36.720 --> 01:22:38.463
thank you all, I'm sure.

01:22:40.910 --> 01:22:41.920
<v Narrator>That I
will stick around.</v>

01:22:41.920 --> 01:22:42.980
<v ->Yeah, you're
welcome to stick around.</v>

01:22:42.980 --> 01:22:45.180
We'll I'm sure we'll
be chatting again soon.

01:22:46.540 --> 01:22:49.000
What is the next item
or a point of discussion

01:22:49.000 --> 01:22:51.013
you'd like to cover?

01:22:55.758 --> 01:22:58.160
<v ->Okay, well, I was gonna say,</v>

01:22:58.160 --> 01:23:00.533
I agree with you on the
self-insurance reserve,

01:23:02.340 --> 01:23:04.733
and I agree with you
on hurricane law costs.

01:23:09.400 --> 01:23:11.213
The ring fencing, I think is,

01:23:13.500 --> 01:23:14.930
I talked to quick we're gonna be back

01:23:14.930 --> 01:23:17.923
at this vegetation management
issue in about two minutes.

01:23:19.178 --> 01:23:20.011
<v ->I wasn't more than 10.</v>

01:23:20.011 --> 01:23:21.120
<v ->I was (indistinct) efficient.</v>

01:23:22.120 --> 01:23:25.593
<v ->Well, I guess all of the
other issues on your memo</v>

01:23:28.160 --> 01:23:33.160
I agree with, and that I
would have supported those.

01:23:33.250 --> 01:23:34.083
<v ->See.</v>

01:23:35.517 --> 01:23:37.767
(laughing)

01:23:39.090 --> 01:23:40.691
<v ->You gave yourself
a 32nd break though.</v>

01:23:40.691 --> 01:23:43.316
(laughing)

01:23:43.316 --> 01:23:44.900
<v ->Mr. Chairman, could I suggest</v>

01:23:44.900 --> 01:23:46.400
that y'all took a short break.

01:23:47.560 --> 01:23:50.510
<v ->Sure thing let's recess for
15 minutes, it's two o'clock,</v>

01:23:50.510 --> 01:23:53.533
we'll be back out in 15 minutes, 2:15.

01:24:16.850 --> 01:24:19.790
This meeting of the Public
Utility Commission of Texas

01:24:19.790 --> 01:24:21.343
will now reconvene.

01:24:22.930 --> 01:24:26.163
Thank you all for
accommodating caffeine break.

01:24:28.660 --> 01:24:31.473
We've covered a lot of
ground with a lot of good input.

01:24:33.010 --> 01:24:38.010
I think risk of going
in circles indefinitely.

01:24:42.010 --> 01:24:45.403
Let me offer a suggestion
for y'all's consideration.

01:24:49.250 --> 01:24:53.130
Jimmy and in deference
to your very valid concerns

01:24:53.130 --> 01:24:58.130
about the vegetation issue,

01:24:58.250 --> 01:25:03.250
I'd be prepared to move
off of the 9.3 to a 9.25 closer

01:25:03.930 --> 01:25:05.253
to staff's recommendation.

01:25:06.750 --> 01:25:11.220
And in addition to the information

01:25:11.220 --> 01:25:13.100
about all the vegetation
management issues

01:25:13.100 --> 01:25:16.930
and the distribution
line clearance record

01:25:16.930 --> 01:25:18.630
that's in my memo,

01:25:18.630 --> 01:25:23.630
also ask or direct staff to
include an annual update

01:25:25.130 --> 01:25:28.020
of that information to
submit it in the annual report

01:25:29.040 --> 01:25:32.280
as part of our regular
ongoing SAIDI, SAIFI hearings.

01:25:32.280 --> 01:25:35.280
So that that information is
not gonna just be filed away

01:25:35.280 --> 01:25:38.913
and gather dust, but it will
be brought on a regular basis,

01:25:40.710 --> 01:25:43.410
be revisited a minimum of each year

01:25:43.410 --> 01:25:45.960
before this Commissioner,
any other future Commissions.

01:25:45.960 --> 01:25:50.023
So that information is in
front of us is being considered.

01:25:51.490 --> 01:25:54.840
And I wouldn't want to put conditions

01:25:54.840 --> 01:25:58.460
on future Commissions, but
say that's the performance

01:25:58.460 --> 01:26:03.460
of how the performance
on those and the data

01:26:07.910 --> 01:26:09.373
in those annual records,

01:26:11.160 --> 01:26:13.673
if that improves and
improves substantially,

01:26:15.210 --> 01:26:19.220
I'd say that would be grounds for

01:26:20.110 --> 01:26:22.560
or that would be a very clear
indication of improvement

01:26:22.560 --> 01:26:26.282
of quality of service to our
customers or our constituents.

01:26:26.282 --> 01:26:30.150
And that would be a very
valid reason for considering

01:26:30.150 --> 01:26:32.520
a higher ROI or higher spread

01:26:32.520 --> 01:26:34.990
to whatever the appropriate benchmark

01:26:34.990 --> 01:26:36.650
is the next time around.

01:26:36.650 --> 01:26:41.650
So I'll submit that for
y'all's consideration.

01:26:44.360 --> 01:26:49.360
<v ->I like that idea,
that proposal,</v>

01:26:50.910 --> 01:26:53.820
I would hope that in the annual report,

01:26:53.820 --> 01:26:57.330
we could require
SWEPCO to put all the lines

01:26:57.330 --> 01:27:01.530
that had been interrupted
by vegetation during the year

01:27:02.890 --> 01:27:05.983
and the length of time, those lines,

01:27:06.970 --> 01:27:09.190
since the length of time
and vegetation management

01:27:09.190 --> 01:27:11.340
has not been done on those lines,

01:27:11.340 --> 01:27:13.663
we need more of that information

01:27:13.663 --> 01:27:15.810
that go into that annual report.

01:27:15.810 --> 01:27:17.730
And the one other
thing that I would suggest

01:27:17.730 --> 01:27:21.913
is since this doesn't have to do

01:27:21.913 --> 01:27:23.680
with this rate case specifically,

01:27:23.680 --> 01:27:25.970
but perhaps we ought to
have a workshop on this

01:27:25.970 --> 01:27:30.970
to get utilities input across
the board on best practices.

01:27:31.040 --> 01:27:33.440
And I would say that
sometime next year we ought

01:27:35.091 --> 01:27:38.880
to set a day or two
aside to talk about trees,

01:27:43.517 --> 01:27:45.230
I support both of those.

01:27:45.230 --> 01:27:48.250
<v ->I would support
your 9.25 all the way.</v>

01:27:48.250 --> 01:27:52.120
<v ->And then the annual
reporting in addition to</v>

01:27:52.120 --> 01:27:55.520
or in conjunction with each
occurrence of vegetation contact

01:27:55.520 --> 01:27:58.920
with utility infrastructure,

01:27:58.920 --> 01:28:01.920
the top length of time
since that particular line

01:28:01.920 --> 01:28:04.550
had been maintained.

01:28:04.550 --> 01:28:05.600
<v ->Okay, that's right.</v>

01:28:07.783 --> 01:28:10.420
I certainly think that's
valuable, happy to include that,

01:28:10.420 --> 01:28:11.480
or staff to include that.

01:28:11.480 --> 01:28:15.243
<v ->I'm okay with the
9.25, as it relates to.</v>

01:28:18.390 --> 01:28:22.520
And I'm okay with the docket
updates for SAIDI, SAIFI

01:28:22.520 --> 01:28:26.077
as it relates to the consultant.

01:28:26.077 --> 01:28:30.900
Are we still on track as
per your memo on that?

01:28:30.900 --> 01:28:32.070
<v ->Yeah, I think.</v>

01:28:32.070 --> 01:28:33.370
<v ->Still stands?</v>

01:28:33.370 --> 01:28:35.760
<v ->Yeah, I think that
it's still too ambiguous</v>

01:28:35.760 --> 01:28:39.140
to spend the right pair of money on it.

01:28:39.140 --> 01:28:41.310
I think we can accomplish

01:28:41.310 --> 01:28:44.060
a similar objective, more directly.

01:28:44.060 --> 01:28:45.900
<v ->Direct oversight
through updates.</v>

01:28:45.900 --> 01:28:49.380
<v ->Get that information in
this house or in house here,</v>

01:28:49.380 --> 01:28:52.540
and we'll have staff be
able to look at it, parse it,

01:28:52.540 --> 01:28:56.540
and in conjunction with
Jimmy's adjusted workshop

01:28:56.540 --> 01:29:01.090
or work session we can
make bigger strides quicker

01:29:01.090 --> 01:29:04.340
to get to more concrete
standards and metrics

01:29:05.650 --> 01:29:06.600
to move forward.

01:29:06.600 --> 01:29:07.830
<v ->And I a hundred percent agree.</v>

01:29:07.830 --> 01:29:09.230
I think the workshop would be valuable

01:29:09.230 --> 01:29:11.650
because I think this is
gonna be reoccurring thing

01:29:11.650 --> 01:29:13.293
with some utilities out there.

01:29:14.640 --> 01:29:17.367
So I hope we can
add that off at the past.

01:29:17.367 --> 01:29:18.493
<v ->I hope so too.</v>

01:29:19.680 --> 01:29:22.290
<v ->Yeah, the goal was
to improve quality</v>

01:29:22.290 --> 01:29:24.683
for our customers, their constituents.

01:29:28.270 --> 01:29:30.620
What do you need from us

01:29:30.620 --> 01:29:34.290
other than a motion to adopt or limit?

01:29:34.290 --> 01:29:35.910
Let me see if I can get a hold of it.

01:29:35.910 --> 01:29:37.500
<v ->Can I ask one clarification?</v>

01:29:37.500 --> 01:29:40.833
Is it 9.25 or staff's recommended 9.225?

01:29:42.600 --> 01:29:43.490
<v Narrator>9.25.</v>

01:29:43.490 --> 01:29:44.663
<v ->Okay, thank you.</v>

01:29:45.860 --> 01:29:49.770
Before you make it, well, you
can either make your motion,

01:29:49.770 --> 01:29:51.268
or we can include this.

01:29:51.268 --> 01:29:53.470
We can do this second, but
we're gonna need authority,

01:29:53.470 --> 01:29:56.470
a delegated authority to ask staff

01:29:56.470 --> 01:29:58.670
to do number running

01:29:58.670 --> 01:30:02.023
since we're changing some
of very important services.

01:30:03.717 --> 01:30:05.890
<v Narrator>And if I may
ask a clarifying question.</v>

01:30:05.890 --> 01:30:06.723
<v ->Yes, sir.</v>

01:30:08.960 --> 01:30:13.430
<v ->As Mr. Janae said,
after the PFD came out</v>

01:30:13.430 --> 01:30:18.430
in the exceptions, the
ALJs filed a exceptions letter

01:30:18.550 --> 01:30:21.630
where they made some
important changes to, for example,

01:30:21.630 --> 01:30:24.130
the Dolan Hills rate writer,

01:30:24.130 --> 01:30:28.350
they recommended the
additional orient paragraph

01:30:28.350 --> 01:30:30.380
or with the regulatory asset

01:30:30.380 --> 01:30:34.210
to avoid the unintended
normalization violation.

01:30:34.210 --> 01:30:37.370
So as I understand what
you're about to propose

01:30:37.370 --> 01:30:42.050
is that you're going to
adopt the PFD as amended

01:30:42.050 --> 01:30:45.100
by the ALJs and their
November nine letter,

01:30:45.100 --> 01:30:47.800
except to the extent
that it may conflict

01:30:47.800 --> 01:30:51.747
with your memo chairman,
is that what's on your table?

01:30:51.747 --> 01:30:52.580
<v Narrator>Yeah.</v>

01:30:52.580 --> 01:30:53.538
<v ->Okay, thank you.</v>

01:30:53.538 --> 01:30:54.740
<v Narrator>That's the intention.</v>

01:30:54.740 --> 01:30:56.477
<v ->That's our standard
practice detected,</v>

01:30:56.477 --> 01:30:57.630
but it's good to say.

01:30:57.630 --> 01:30:58.463
<v ->Thank you.</v>

01:31:00.380 --> 01:31:02.660
<v ->All right, is there a motion</v>

01:31:02.660 --> 01:31:06.740
to first delegate authority to OPDM,

01:31:06.740 --> 01:31:11.740
to make necessary
adjustments, to numbers,

01:31:12.560 --> 01:31:16.560
to adopt the proposal
for decision as modified

01:31:16.560 --> 01:31:21.560
by the substantial, the
full extent of my memo,

01:31:22.150 --> 01:31:26.890
in addition to changing the ROE to 9.25

01:31:29.110 --> 01:31:31.040
and adding the condition

01:31:31.040 --> 01:31:36.040
to the vegetation management
annual report section

01:31:36.200 --> 01:31:41.200
of my memo to include and
subsection one of section four,

01:31:41.710 --> 01:31:43.500
that each occurrence
of an outage related

01:31:43.500 --> 01:31:46.630
to vegetation contact
where utility infrastructure

01:31:46.630 --> 01:31:49.900
also include in each of those instances,

01:31:49.900 --> 01:31:53.870
the time since vegetation
management maintenance

01:31:53.870 --> 01:31:57.653
has been most recently
conducted on that line.

01:32:00.230 --> 01:32:01.110
<v ->So moved.</v>

01:32:01.110 --> 01:32:02.160
<v ->Second.</v>

01:32:02.160 --> 01:32:03.460
<v ->All in favor say aye.</v>

01:32:03.460 --> 01:32:04.293
<v All>Aye.</v>

01:32:05.640 --> 01:32:08.839
<v ->Not opposed motion passes,
thank you all very much.</v>

01:32:08.839 --> 01:32:12.589
<v Narrator>Thank you Commissioners.</v>

01:32:12.589 --> 01:32:13.422
<v ->Think.</v>

01:32:13.422 --> 01:32:14.750
<v ->Yeah, (indistinct) everywhere.</v>

01:32:17.840 --> 01:32:19.453
Got everything you need?

01:32:21.270 --> 01:32:25.580
All right, having no further business

01:32:25.580 --> 01:32:28.090
before this Commission,

01:32:28.090 --> 01:32:30.790
this meeting of the Public
Utility Commission of Texas

01:32:30.790 --> 01:32:32.823
is hereby adjourned.