Direct Testimony of Thomas M. Hildebrand - Consumer Advocate ...

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Trans-Allegheny Interstate Line Company
Supplemental Direc.t Testimony of Mark A. Mader
Page 3 of 12
TrAILCo Statement No. 10A
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TrAILCo Exhibit No. MpLz/I-6 presents updated TrhIL cost estimates.
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UPDATED FERC COST ALLOCATION PROCESS
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PLEASE DESCRIBE THE RECENT FERC ORDERS YOU REFERRED TO
EARLIER.
On April 19: 2007, FERC issued orders in Docket Nos. EL05 121 -000, et d, and ER06-
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1271-003, e! ai. (“April 19 Orders”) directing that new, centrally-planned facilities
within PJM that operate at or above SO0 kV (such as much of the TrAIL facilities) be
M1y allocated on a region-wide “postage stamp’’ basis and that costs for facilities below
500 kV (such as the Prexy 138 kV facilities of TrAIL) be allocated baed on a
“beneficiary pays” methodology. Under a region-wide “postage-stamp” raie design. the
costs of new, centrally-planned transmission facilities in the PJM region will be allocated
to all LSEs in PJM according to each LSE’s share of the regional load. Currently the
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total Allegheny Power zonal load is approximately 6% of the total PJM regional load,
This load ratio share is updated atmually. Under a "beneficiary pays” methodology. the
beneficiaries of a particular transmission upgrade will be identified and dLrectly slliocated
the costs of that upgrade.
HOW DO THE REVENUE REQUIREMEKTS FOR TRAIL DIFFER FROM WHAT
YOU DESCRIBED IN YOUR APRIL 13 TESTLMONY AS X RESC‘LT OF FERC‘S
.@RE 19 ORDERS?
Under the prior methodology, as I pointed out at pages 5 through 10 of my April 13
Testimony, dl the revenue requirements associated with the non-Presy portrons of TrrUL
and the DVP Facilities were allocated to loads outside the Allegheny Power Zone. dde
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