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
20
21
22
BRUBAKER & ASSOCIATES, INC.
James T. Selecky
Page 7
Q HAVE YOU DEVELOPED A STRANDED BENEFIT CREDIT OR NEGATIVE
SURCHARGE THAT WOULD BE APPLICABLE TO ALL CUSTOMERS THAT
PARTICIPATE IN THE CUSTOMER CHOICE PROGRAM?
A Yes. I have developed a stranded benefit credit using the same rate design that the
Commission authorized DECo in Case No. U-12478, to collect its securitized cost. In
that case, DECo is authorized to apply a uniform securitization surcharge per kWh to
all metered customers. In this case, I am proposing that a stranded benefit credit or
negative surcharge of 4.18 mills per kWh be assessed to all customers that
participate in the open access program.
Because DECo is obligated to serve bundled customers, the stranded benefit
credit will not be applied to their usage. Although a bundled customer pays the
securitization charges, their base energy charge is reduced by an equal amount.
Therefore, the securitization charge does not currently adversely affect their power
costs.
Q HOW DID YOU DEVELOP YOUR PROPOSED STRANDED BENEFIT CREDIT?
A My stranded benefit credit was developed from comparing the costs that DECo will
securitize with the results of the net stranded cost analyses presented in this
proceeding by ABATE witnesses.
Q WOULD YOU PLEASE SUMMARIZE THE COST THAT DECo WILL SECURITIZE?
A On April 9, 2001, DECo supplied to the Commission a 30-day securitization report. In
that report, DECo indicated that it would securitize $1.750 billion of cost net of tax.
Table 1 below summarizes those costs on a before tax and net of tax basis.