SCEG OATT Formula Transmission Rate Filing.pdf - SCANA ...

20091231-0037 FERC PDF (Unofficia1) 12/29/2009
SCE&G's OATT Formula Transmission Rate Filing
Docket No. ERIO- __
Page 3
considering transmission expansion. In Order No. 679, for example, the Commission stated that
"formula rates can provide the certainty of recovery that is conducive to large transmission
expansion programs.,,7
In an effort to inform its transmission customers about this Formula Rate filing, SCE&G
conducted a customer outreach process in the winter and spring of 2009. All of SCE&G's
transmission customers were invited to participate in a general public session, at which SCE&G
described the proposed Formula Rate filing and entertained questions. In addition, SCE&G
offered each customer the opportunity to discuss with SCE&G issues of specific relevance to
each, and three customers availed themselves of those individual discussions. Finally, SCE&G
posted information about the proposed Formula Rate filing on its OASIS. By these efforts,
SCE&G offered customers an opportunity to raise and resolve their concerns before this filing
was made and provided its customers with ample notice of, and explanation for, this filing.
Introduction
of Witnesses
SCE&G supports this rate filing with the testimony of four witnesses:
White, and Heintz, and Dr. Vilbert.
Messrs. Addison,
Mr. Addison addresses three topics: (I) He supports SCE&G's request to utilize a
formula for the determination of its annual transmission revenue requirement; (2) He explains
the business and financial risks peculiar to SCE&G that bear upon its credit rating and cost of
capital; and (3) He supports the cost of capital to be used in SCE&G's filing.
Mr. White supports recovery of SCE&G's costs incurred pursuing the GridSouth regional
transmission organization in response to the Commission's mandates in Order No. 2000 and
subsequent related orders.
Mr. Heintz supports the formula rate methodology that SCE&G proposes to implement.
He explains all the components of the formula and supports the population of the formula with
costs for this rate filing. He explains the protocols for annual adjustments of the rates pursuant to
the formula. He also explains and supports charging for network transmission service through a
formula rate, replacing the current load-ratio share methodology. He explains how the formula
will accommodate future rate incentives that may be granted by the Commission for particular
7
Promoting Transmission Investment Through Pricing Reform, Order No. 679, FERC
Stats. & Regs.' 31,222, at P 386 ("Order No. 679"), order on reh'g, Order No. 679-A, FERC Stats. &
Regs. , 31,236 (2006) ("Order No. 679-A"), order on reh 'g, 119 FERC , 61,062 (2007). See also New
York Indep. Sys. Operator, Inc., 109 FERC, 61,372, at P 29 (2004), reh'g denied, III FERC, 61,182
(2005) (encouraging parties to explore option of formula transmission rates); Allegheny Power Sys.
Operating Cos., \06 FERC '61,003, at P 32 (2004) (parties to explore option of formula transmission
rates and noting that the Commission has approved incentive formula rates); So. Calif. Edison Co., 116
FERC, 61,099, at P 17 (2006) ("formula rates enhance cost recovery"),