Direct Testimony of James T. Selecky On Behalf of ABATE

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
BRUBAKER & ASSOCIATES, INC.
James T. Selecky
Page 11
net of tax adjustment of $2,692 million. Since the net benefits produced by the
ABATE analyses are 13.1% greater than DECo’s proposed securitized costs, I
recommend that the net benefit credit be 13.1% greater than the securitization
surcharge. Therefore, if the securitization surcharge is 3.7 mills per kWh for DECo,
the net benefit credit should be 4.18 mills per kWh. It should be remembered that the
net benefit credit is a negative surcharge and is only applicable to those customers
who participate in the open access program.
Alternatively, the Commission could implement a stranded benefit credit equal
to the securitization surcharge. The $352 million of net stranded benefits that is not
included in the credit would be used to offset future implementation costs. However,
in the event that the available net stranded benefits exceed the implementation costs,
any excess should be fed back to the customers.
Q DO YOU HAVE ANY COMMENTS TO MAKE REGARDING THE DEVELOPMENT
OF A STRANDED BENEFIT CREDIT?
A Yes. If the Commission, in the unbundling case to be filed, requires that a
securitization surcharge be developed separately for each rate class, a similar
approach has to be taken for the development of the stranded benefit credit.
However, the same approach that is used to develop the securitization surcharge
should also be used to develop the stranded benefit credit.