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Transcript of Buckeye Power
UNITED STATES OF AMERICABEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Buckeye Power, Inc. )V. )American Transmission Systems, Incorporated )
Docket No. ELI1-54-002
EXHIBIT LISTOF
COMMISSION TRIAL STAFF
ExhibitNumberS-l
S-2
S-3
S-4
S-5
S-6
S-7
S-gProtected
S-9
It'itness Description
AntonioMaceoAntonioMaceoAntonioMaceo
AntonioMaceo
AntonioMaceo
AntonioMaceo
AntonioMaceoAntonioMaceo
AntonioMaceo
Direct and Answering Testimony
Excerpt from PJM White Paper "A Survey ofCost Allocation Issues, Methods and Practices."PJM News Release, article announcingAmerican Transmission Systems, Inc. (ATSI)joining PJM.Excerpt from NERC BalancingAuthority/Transmission Operator ReliabilityReadiness Evaluation Report FirstEnergyCorporation (FE-West MISO Territory) Akron,Ohio, April 16-19,2007.Midwest ISO Proposed Revisions to its OpenAccess Transmission Tariff (OATT) underER05-285-000.Excerpt Irom First Energy Service Company(FirstEnergy's) 2/28/2011 filing with theSecurity and Exchange Commission (SEC).Excerpt from PJM "Manual 27: Open AccessTransmission TarifF Accounting."ATSI's response to Staff discovery: Staff-l. I(PROTECTED), Staffl.3 (PROTECTED), Staff-1.4(PROTECTED), Staff-1.5 (PROTECTED),Staff-1.6 (PROTECTED), Staff-1.7, Staff-1.9,Staff-2.3.Excerpt from PJM Manual 14B:PJM RegionTransmission
Admitted intoEvidence
i n~~ nn alataiv Cammissia a
D krtw Ef I I -5'e/ oa &HeariagFw Na. i9 - I
patrie vtinM I/tf/t4DateAdmitted I Ol I I li~
I
20130116-0400 FERC PDF (Unofficial) 01/11/2013
AntonioMaceo
ATSI's response to Staff Data Request 2.1
AntonioMaceo
ATSI's response to Staff Data Request 2.3
20130116-0400 FERC PDF (Unofficial) 01/11/2013
FEDERAL ENERGY REGULATORY COMMISSIONOFFICE OF ADMINISTRATIVE LITIGATION
BUCKEYE POWER, INC.V.
AMERICAN TRANSMISSION SYSTEM, INC.
DOCKET NO. EL11-54-002
DIRECT AND ANSWERING TESTIMONYOF
COMMISSION TRIAL STAFF WITNESS
ANTONIO MACEOU ~
August 09, 2012
WASHINGTON, D.C. 20426
PUBLIC VERSION
20130116-0400 FERC PDF (Unofficial) 01/11/2013
.'.01 '0809-5108 i ERC PDP (Unof ficial) 8/9/?012 8:54:25 PN
I EDERAL LNFRGY l&EGIJI ATORY COMMISSIONt)l'12ICE OF ADIV1IN ISTIC%'I'I VF. LI'I IGA'I'ION
WASH IN(l fON. D.C. 20426Via Electronic Filinn
August 9, 2012
Ms. Kimberly D. HoseSecretaryI'ederal Energy Regulatory Commission888 First Street, N.E.Washington, D.C. 20426
Re: Buckeye Power, Inc.V.
/Imerican Transmission Systems. Inc.
Docket No. EL I I -54-002
Dear Madam Secretary:
Enclosed for electronic tiling with the Commission are the Initial 'festimony and
Exhibits of Antonio Maceo on behalf of the Commission Trial Staff in the above-captionedproceeding. This testimony consists of Exhibit Nos. S-I through S-9.
The testimony and supporting exhibits contain Protected Material, including CriticalEnergy Infrastructure Information, as designated under the Protective Order in the proceedingand Section 3888.112of the Commission's rules governing information requests, 18 C.F.R. It
388.112(2011).Accordingly, the testimony and supporting exhibits are being submitted in
two versions, a Public Version, which contains text where the Protected Material has beenobscured, and a Protected Version, where the Protected Material is visible.
Trial Staff will be serving all parties on the Commission's service list with copies ofthis testimony and exhibits by e-mail as well as providing both hard copy and electronicservice to the Presiding Administrative Law Judge.
20130116-0400 FERC PDF (Unofficial) 01/11/2013
201.:Ol)()0-0Ias FERC FDF (Unoiticial) 'I/O/00)" I:0 I: '"I IFM
I'lease contact me if you have any questions about this tiling. l'hank you l'or yourassistance with this matter.
Sincerely,
'.vl Lorna i HadlockLorna J. Hadlockl)redrick WilsonCommission Staff Counsel
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EXHIBIT iVO. S-I
FEDERAL ENERGY REGULATORY COMMISSIONOFFICE OF ADMINISTRATIVE LITIGATION
BUCKEYE POWER, INC.V.
AMERICAN TRANSMISSION SYSTEM, INC.
DOCKET NO. EL I 1-54-002
DIRECT AND ANSWERING TESTIMONYOF
COMMISSION TRIAL STAFF WITNESS
ANTONIO MACEO
lli8
4%5II'ugust
09, 2012
WASHINGTON, D.C. 20426
PUBLIC VERSION
20130116-0400 FERC PDF (Unofficial) 01/11/2013
. ) i 'i)HU')-su)8 I:iu)C PDF ir)notfici ii) Bls/2012 1:61:-'6,'u
Exhibit iVo. S-I
UViITED STATES OF AMERICABEFORE TIIE
FEDERAL ENERGY REGULATORY COMMISSION
Buckeye Power, Inc. l)ocket No. EL I I-54-002
American Transmission Systems, Incorporated
Direct and Answering Testimony ofAntonio Maceo
Witness for the Staff of theFederal Energy Regulatory Commission
Q. Please state your name and business address?
3 A. My name is Antonio Maceo. and my business address is 888 First Street, NE,
Washington, D.C. 20426.
5 Q. By whom are you employed and in what capacity?
6 A. I am employed by the Federal Energy Regulatory Commission (Commission) as
an Electrical Engineer in the Office of Administrative Litigation.
8 Q. Please state your educational background and work history.
9 A. I graduated from Morgan State University in l995 and 1996, earning Bachelor of
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Science degrees first in Physics and then Engineering Physics, with a
concentration in Nuclear Physics and Electrical Systems (Electro-physics).
Currently I am pursuing a Master of Science degree in Electrical Engineering
(MSEE) with a concentration in Control Systems from Capitol College in Laurel.
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Maryland. In addition to my engineering education, I have completed two
depreciation seminars given by the Society of Depreciation Prolbssionals (SDP), a
commercial organization widely recognized for its expertise in depreciation-
related matters. I am also a member ol'he Society of Depreciation Professionals
(SDP), the Institute of Flectrical and Flectronic Engineers (IEEE), the Institute of
Public Utilities (IPU), the American Physical Society (APS), and the National
Society of Black Engineers (NSBE).
From May 1995 to July 1995, I was employed as a program instructor at Morgan
State Uniiversity in the Electrical Engineering department, where I taught basic and
introductory electronics (analog k digital), with the use of computer simulation of
«lectronic circuits. From 1995 to 2005, I performed various job functions as an
Electronic Engineering Technician, Metrology Engineer, Quality Control
Engineer, and tlnally as an Environmental Sanitarian and Radiation Safety OAicer
for the Baltimore City Department of Health. On September 29, 2005, I accepted
a position with the Pennsylvania Public Utility Commission (PAPUC) as a
Nuclear Engineer. My job duties with the PAPUC included. but were not limited
to, assisting in the performance of studies and analyses regarding engineering
issues and energy regulation. Specifically, those issues included valuation,
depreciation, cost of service, and quality and reliability of service as they apply to
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.'r ) 'us))9 —0 u)a ) aRC por (Unotf ici &t) )3/') I "(1)s 4:ss: ss PM
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Kshibit No..'l-l1'ge 3 of 43
«lcctric utilities. In August 2008 I joined the I'edcral Energy Regulatory
Commission (FFRC), Oil)ce ot'Administrative Litigation (OAI.).
Q. Please summarize your duties with the Federal Energy RegulatoryCommission.
A. My responsibilities include pert'orming Electrical Fngincering analyses in «lcctric
cases set for hearing by the Commission. Furthermore, I also determine the
appropriate depreciation rates in formal gas and electric mte case proceedings. and
provide support for such rates.
') Q. I lave you previously testified before the Commission?
10 A. Yes. While employed at FERC, I submitted testimony in: ( I) Mirl/Imerican
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Energy Company, Docket No. ER09-823-000. My testimony in that proceeding
dealt with the examination of disputed facility upgrades of MidAmerican from the
perspective of the Commission's Seven Factor Test. The Seven Factor Test was
utilized in that proceeding to establish whether or not the disputed facility
upgrades conformed to the test for classifying them as local distribution facilities;
and (2) El Paso Natural Gas Company, Docket No. RP10-1398-000, in which I
examined and provided evidence supporting the view that contract life, should not
be the determining factor in establishing the depreciation service life of the
Willcox I.ateral (an extended natural gas pipeline). I further demonstrated that
contract life will understate the remaining life associated with this facility, thus
skewing the ability to have a properly assigned calculated depreciation rate.
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I'.shihit Nr&. 8-II'age 4 of 43
l (2. rllr. Maceo, have you previously testified before any State Commission?
Yes. While employed at the PAPUC, I tcstilied in: (1) Perrnsylvania Public Utilitv
3 Cr?rnnrission v. Valley Energy, Inc., Docket No. R-00072349. i&ly testimony in
4 that proceeding dealt with Late Payment Revenues as applied to natural gas
5 lacilities: (2) Pennsylvania Public Utility Commission v. Emporirrm )Voter
6 Crrmpany, Docket No. R-00061297, which dealt with Unaccounted t'or Water and
7 Line Breaks associated with the water system; (3) Pennsylvania Public Utility
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Commission v. /Iurbrbon Water Company, Docket No. R-000721000, which dealt
with Customer Service and its impact on the residential customerratepayers'verall
quality of service; (4) Pennsylvania Public Utility Commission v.
Cobrmbia Gas ofPennsylvania, Inc., Docket No. R-2008-2028039, which dealt
with the issue of Lost and Unaccounted for Gas, Retainage, and Unit)ed Sharing
Mechanisms within the context of natural gas facilities; and (5) Pennsylvania
Public Utility Commission v. Total Environmental Solutions, Inc., Docket No. R-
00072495, which dealt with the issue of Materials and Supply, Rate Design,
Customer Penalties, and the Water Allowance Minimum Charge within the
context of sewer facilities.
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thickeye l&mver, lnc.t)acket No. I?I.l 1-54-0(12
Exhibit l&to. 5&-l
Page 5 of43
L INTRODUCTION
(P. What gave rise to this proceeding".
3 A. ()n July 1 tt. 2011, 13uckeye 1'ower, inc. (Buckeye) tiled a complaint alleging that
the American '1 ransmission Systems. Incorporated's (ATSI's) voltage
dit'I'ercntiated rates tor transmission service in the ATSI zone ot PJM
interconnection. L.L.C.(PJM) are unjust, unreasonable, unduly discriminatory,
and preferential, and should be replaced with a rolled-in rate rellecting the cost of
all ATSI transmission facilities. regardless of transmission voltage. By order
issued on October 20, 2011, the Commission set Buckeye's complaint for hearing
and established settlement judge proceedings. The settlement etforts were not
successful, and the case entered the trial phase.
12 Q. What is the purpose of your testimony?
13 A. The purpose of my testimony is (1) to address, from an engineering perspective.
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whether the current voltage dilTerentiated rate structure is reasonable and whether
an alternative rate structure would be appropriate for ATSI's transmission
facilities: and (2) to respond to various comments raised in American Municipal
Power. Inc. and Cleveland Public Power (AMP/CPP's) witnesses'estimony.
18 Q. VVhat are your conclusions and recommendations?
19 A. Based on my analysis, I conclude that ATSI's existing voltage-differentiated rate
20 design is unreasonable and inappropriate. I recommend that ATSI's voltage
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F,xhibit No. Si-I
Page 6 of 43
1 differentiated rate design be replaced with a single rolled-in rate which rccov«rs
7 the costs associated with all ot A CSI's integrated transmission lacilitics, regardless
ot'oltage, in a single rate.
4 (2. What information did you review in preparing your answering testimony7
A. I reviewed the t'ollowing materials in preparing my testimony:
6 ~ The complaint tiled in this docket on July 18, 2011 by Buckeye, including the
testimony and exhibits ot'Buckeye witnesses Denis W. Bethel and Manmohan
K. Sachdeva:
9 ~ The answers tiled in this docket in response to Buckeye's complaint by
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American Municipal Power. Inc. and Cleveland Public Power (AMP/CPP) and
ATSI;
~ Buckeye's case-in-chief, filed in this docket on April 18, 2012, including the
direct testimony of Buckeye witnesses Bethel and Sachdeva;
~ The prepared answering testimony of ATSI witnesses Richard A. Ziegler and
Donald Morrison, filed in this docket on June 27, 2012;
~ The prepared answering testimony of AMP/CPP witnesses Paul D. Reising, H.
Lee Willis, and David W. Hilt tiled in this docket on June 27, 2012;
~ The data requests and responses exchanged during the discovery process
among Buckeye, AMP/CPP, ATSI, PJM, and Staff; and
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Kxhihlt No. S-IPage 7 of 43
~ Various other documents, papers. and Commission Orders that dealt with
rolled-in methodology ol'ransmission cost allocation, as referenced below in
my testimony.
4 Q. WVhat exhibits are you sponsoring?
A. I am sponsoring Exhibit No. S-l, which is my direct and answering testimony, and
Exhibit Nos. S-2 through S-S, which include supporting documents and responses
to various data requests.
S Q. liow is your testimony organized?
9 A.
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My testimony is organized into four sections: (I) Introduction; (II) Background;
(ill) Analysis of ATSI's Voltage-Differentiated Rates; and (IV) Comments
Regarding Other Witnesses'estimony.
In Section (I), I discuss Buckeye's complaint, the purpose of my testimony. and
how my testimony is organized.
in Section (II), I provide a description of ATSI's transmission system and describe
ATSI's Area Transmission System and Bulk Transmission System.
In Section (III), I provide an analysis of ATSI's voltage-diITerentiated rates, and
discuss tive factors that I believe should be addressed when addressing the issue of
rolled-in rates. In this section I also address problems with the existing cost
methodology and ATSI's justification for having a voltage-differentiated rate
treatment.
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gshihit No. S-IPage 8 of 43
In Section (IV), I comment on AMP/CPP witnesses Willis'nd I lilt's testimonies.
II.BACKGROUND
3 (2. IVhat is your understanding of the term "transmission system"?
4 A. A transmission system rel'ers to the physical assets or equipment (lines, towers,
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transformers, etc.) that facilitate the movement of electric energy from one
location to another. All physical assets that comprise the transmission system are
interconnected and operated in a synchronized manner.
'fhe movement of electricity over distances results in losses. Electric utilities use
higher transmission voltages for transmission lines to improve transmission
efftciency. Basically, for a given power transfer, transmission losses are reduced
exponentially with higher voltages. Therefore, electric utilities generally use
higher voltage facilities to move large amounts of power over long distances, as
transfers over higher voltages result in reduced power losses. According to PJM
White Paper, "A Survey of Transmission Cost Allocation Issues, Methods and
Practices," dated March 10, 2010, the function of the 345 kV, 500 kV. and 765 kV
transmission system is primarily to move large amounts of power over long
distances, whereas the function of facilities that operate at 230 kV and below is to
serve zonal, or localized needs.'
Ex. S-2, Excerpts from PJM White Paper 'A Survey of Cost Allocation Issues, Methods andPractices." The full paper can be found online at:htto://fto. oim.corn/-/media/documents/reoorts/20100310-transmission-allocation-cost-web.ash x.
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Kxhihit iVo. S-lI'age 9 of 43
I I lcctricity flows on the physical transmission system over paths in inverse
2 proportion to their impedances. I'he implication ol'this physical property is that
3 the llows of power from a generator to a load will not necessarily follow its
4 scheduled or contracted path, but rather, will l'ollow on paths based on the paths
5 relative impedances.
6 Q. Briefly describe ATSI's transmission system.
7 A. The ATSI transmission system consists ol'over 7,500 circuit miles of transmission
lines operated at 69 kV, l38 kV, and 345 kV voltages. The ATSI transmission
svstem is used to serve over 2.2 million customers in northern and central Ohio
10 and western Pennsylvania. The system has 38 interconnections with six
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neighboring control areas at voltages of 69 kV or higher. According to the North
American Electric Reliability Corporation (NERC) 2007 Balancing Authority/
fransmission Operator Reliability Readiness Evaluation Report, ATSI has four tie
lines that interconnect with neighboring control areas at 69 kV. On October 1.
2003, ATSI transferred functional control of its transmission facilities to Midwest
Ex. ATS-5 at 3.
Ex. S-4, Excerpt from NERC 2007 Balancing Authority/ Transmission Operator Reliability
Readiness Report. The full report is available online at htto:/Avww.nerc.corn/docs/rao/audits/FE BA-TOP Final Reoort.odf.~ ")
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!I) l.!0))0')-5)UH r Iiac I'OP (U0OE t') 0 l. 1l ) rl/') /2012 I:54:25 I'
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Exhibit )Vo. 8-IPage 10 of 43
Independent 'I ransmission System Operator. Inc. (Midwest ISO), and on June I.
'0 I I, A I'SI exited Midwest ISO and became a member ot'JM.
.3 Q. I)Vhitt is "PJM"?
A. PJM is a l&cgional Transmission Organization (I&TO) which ensures the reliability
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of the high-voltage electric power system serving 58 million people in all or parts
of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North
Carolina, Ohio, Pennsylvania, 'I'ennessee, Virginia, West Virginia and the District
ot Columbia. PJM coordinates and directs the operation of the transmission grid,
which includes 6,038 substations and 61,000 miles ot'ransmission lines;
administers a competitive wholesale electricity market; and plans regional
transmission expansion improvements to maintain grid reliability and relieve
congestion.'3
Q. How does ATSI currently classify its transmission system'?
14 A.
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While PJM coordinates and directs the operation of several regions'ransmission
grid, ATSI does the actual operation and planning of its own transmission system.
Even prior to transfer of its transmission facilities to ATSI, FirstEnergy (ATSI's
parent company) classified its transmission facilities into two categories: the Bulk
Transmission System (BTS), which was comprised of transmission facilities that
Ex. S-4 at 2, aod Ex. S-3, PJM News Release
Ex. S-3 at 2.
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I operated at 345 kV and l38 kV, and the Area 'I'ransmission System (ATS), which
was comprised of transmission t'acilities that operated at 69 kV, 36 kV, 34.5 kV.
3 33 kV, nnd 23 kV.e
4 When FirstEnergy transferred its transmission t'neil ities to ATSI, it only
transferred its transmission facilities that were integrated and operated in a parallel
6 manner.'hose facilities were determined to be of 345 kV, l38 kV, and 69 kV
7 voltages. Although those facilities were integrated and operated in parallel, ATSI
8 continued to use the FirstEnergy classitication of BTS and ATS, with the only
9 difference being that the ATS is now comprised of 69 kV facilities only."
10 Thus, ATSI's transmission system is currently made up of BTS (138 and 345 kV)
facilities. and ATS (69 kV) facilities.
l2 Q.l3
What are the main similarities between the I38/345 kV BTS and the 69 kVATS?
l4 A. The main similarities between the 138/345 kV BTS and the 69 kV ATS are: (I)
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both are used for the transfer of power from generation (500 MW of generation is
connected to the 69 kV ATS) to load centers or wholesale customers'elivery
000.Ex. BPI-3, Testimony of Carl Bridenbaugh —FERC Docket Nos. EC99-53-000 and ELUI-69-
Id. at 4: I I -I4.
/d. at 4:I I-I9.
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points and (2) they are both operated in a network manner with one another, and
are therefore responsive to facility outages in each other system.'"
Q.
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6 A.
What is the main difference between the l38/345 kV BTS and the 69 kVATS?
'fhe main difference between the l38/345 kV BTS and the Ci9 kV A'I'S is that the
7 BTS is more responsive to the transfer of power between interconnected
transmission systems across ATSI's territory, than the ATS. 'owever, I note
that, as also indicated in the PJM White Paper, higher-voltage transmission is
10 usually more responsive to transfers of power between transmission regions, as
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"transmission at 345 kV and above is generally used to move large amounts of
power over long distances," while transmission at 230 kV and below "is intended
13 to serve localized needs." Thus, not only the 69 kV ATS, but also the 138 kV
14 portion of the 138/345 kV BTS have little network response to large transfers of
15 power across ATSI'sregion.'6
Q. Are ATSPs 69 kV ATS and I38/345 kV BTS integrated, and operated17 parallel to each other?
18 A. Yes. All parties in this proceeding agree that the 69 kV ATS and the 138/345 kV
Ex. BPI-3 at 5:5-17.
I 0(d
12Ex. S-2 at 2.
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I3TS are integrated. For example, Buckeye's witness Bethel states in his
testimony that: "'ATSI's transmission system consists of more than 7.000 circuit
miles of 345 kV, 138 kV, and 69 kV transmission lines that are operated as a
single network."''fSI's witness Morrison, acknowledges that the 69 kV ATS is
integrated with the higher voltage facilities." Similarly AMP/CPP witness
lieising does not challenge the proposition that ATSI's 69 kV facilities are
integrated with the rest of the ATSl transmissionsystem.'O
According to FirstEnergy's description ol'ts transmission system in its 2001 tiling
with the Securities and Exchange Commission (SEC), the 69 kV ATS and the
138/345 kV BTS are integrated and operate in parallel to each other:
lll2l314I5
The primary function ot'he Transmission System is to integrate thegeneration resources of the FirstEnergy Companies with their nativeretail and wholesale loads. To perform this network function, theBulk Transmission System and the Area Transmission System areintegrated and operate in a parallel manner to each
other.'6
Ex. BPI-I at IO:20 —I I:I-3.
E». ATS-5 at 6:I-2.
E». AC-I at I I:S-IS.
16 Ex. S-6, Excerpts from FirstEnergy's filing with the Security and Exchange Commission. Thefull report can be found online at: htto://www.secinfo.corn/dvf4f.sig9a.htm.
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I Q. Is there any generation interconnected at the 69 kV ATS?
2 A. Ycs. As I previously indicated, thcrc is more than 500 MW of generation
interconnected to ATSI's 69 kV ATS.'
Q. Please describe Buckeye.
5 A. Buckeye is a generation and transmission cooperative that produces, procures, and
6 provides the electric capacity and energy required by its 25 member electric
7 distribution cooperatives operating in Ohio. Buckeye and all of its member
8 distribution cooperatives are transmission dependent electric utilities. Buckeye is
9 a Network Integration Transmission Service (NITS) customer in the ATSI zone of
IO PJM, and purchases transmission service from PJM to deliver electricity to its
II members in the ATSI zone at delivery points operating at voltages of 138 kV or
12 lower. According to Buckeye's witness Sachdeva, Buckeye has six delivery points
13 connected to ATSI's 138 kV transmission facilities, and 36 delivery points
14 connected to ATSI's 69 kV transmission facilities. Buckeye and its members that
15 take delivery at 69 kV delivery points and pay two transmission rates: (I) the tirst
16 rate reflects the roiled-in cost of ATSI 138/345 kV BTS facilities; and (2) the
17 second rate retlects the rolled-in cost of ATSI's 69 kV ATS facilities.
18 Q. Mr. Maceo, please discuss your understanding of ATSI's voltage19 differentiated rates.
(7See ATSI circuit diagrams included as attachment to Buckeye's witness Sachdeva testimony as
Exhibit No. BPI-20 (PROTECTED).
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llockeye Power, Inc.l)ocket No. KL I I-54-IIIIZ
Kxhil&it No. S-IPage IS of 43
I A. ATSI employs a dual voltage rolled-in rate design for its transmission customers.
IO
12
l3
l4
l6
l7
IJnder this rate structure. two rolled in rates are established. One rate, the 138 kV
and above rate, recovers costs associated with ATSI's 138/345 kV BTS and is
charged to all transmission customers in the A fSI zone. 'fhe second rate, the 69
kV rate, recovers costs associated with ATSI's 69 kV ATS. Transmission
customers with delivery points at 69 kV pay this rate, in addition to the rate for the
138/345 kv BTS.
Pursuant to ATSI's voltage differentiated rate design, PJM currently charges
$9,906.26/MW-year to every transmission customer (connected at all voltage
levels, i.e., 69 kV, 138 kV, and 345 kV) for its total load on the BTS at the time of
the ATSI annual Network Service Peak Load (NSPL), and an additional
$13,177.10/MW-year for load identified by ATSI as being served on the ATS for
connections to or through 69 kV facilities at the time of the annual NSPL. For
example, a customer that takes service at 138 kV would pay $9,906.26/MW-year
for its annual NSPL total load, whereas a customer that takes service at 69 kV
would pay $23,083.36/MW-year ($9,906.26 + $ 13,177.10)for its annual NSPL
total load, which is more than twice what the 138 kV customer would pay."
Ex. BPI-I at 5-6.
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I".shibit No.!I-IPage 16 of 43
I About 90% of Buckeye's load is charged both ot'TSI's transmission rates, and,
as a result. ATSI's charges to 13uckeye for the year ended May 31, 2012 will
3 average $21,793/MW- Year.'
Q. When were the dual voltage rates established?
5 A. 'I'he dual voltage rates were established for ATSI's transmission system in 1997
6 Iollowing approval of the FirstEnergy Merger. With the approval of the
7 FirstFnergy Merger, a dual voltage design was integrated into the FirstEnergy
8 OA'IT. This rate structure was later transferred over to ATSI's OATT and to the
9 iVIidwest ISO Tarily when ATSI became a member of Midwest ISO. The current
IO dual voltage rate structure was established in Docket No. ER 05-285-000, which
was the proceeding that established the initial formula rate for ATSI under the
12 Midwest ISO tariff. By order issued on May 31, 2005, the Commission approved
13 a settlement that provided, among other things, for the continued use of dual
14 voltage rolled in rate design for customers taking transmission service to serve
15 loads in the ATSI zone.'"
16 Q. Has the transmission system changed from an operational and functional17 standpoint since the dual-voltage rate was introduced in l997?18
19 Es. BPW at 6-7.
20Midwest Independent Transmission System Operator, Inc. and FirstEnergy Service Company,
I I I FERC ti 61,30I (2005).
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I A. Ycs. In l997, FirstEncrgy's A'I'S included, in addition to the 69 kV facilities,
lower voltage lacilities of 36 kV, 34.5 kV, 33 kV, and 23 k V facilities (which are
3 generally isolated, and in a radial conltguration). FirstEnergy tound that these
4 lower voltage l'acilities -do not play a signiltcant role in the transt'cr of power on
the system." 'herefore, it is likely that in 1997, when the dual-voltage rates
6 were first introduced, the 23/33/34.5/36 /69 kV ATS was not fully integrated with
7 the l38/345 kV BTS (because it included the 36 kV, 34.5 kV, 33 kV, and 23 k V
8 lower-voltage facilities).
l2
l3
l4
I6
Subsequently, in l999, FirstEnergy updated its lunctional classification of its
transmission system, when it performed several analyses to identify which
facilities were in fact serving a transmission function, in order to transfer those to
ATSL lt appears that in I 999, FirstEnergy analyzed for the first time its
transmission facilities based on the Commission's Seven Factor Test for
distinguishing transmission from local distribution. Based on that analysis,
FirstEnergy identified and transferred to ATSI all transmission facilities that
served a transmission function. All facilities that served a distribution function
Ex. BPI-3 at 4:l7-lg.
22Protnoting IVholesale Competition through Open Access Non-Discriminatory Transmission
Services by Pnhiic Utiiities, Order No. 888.
Ex. BPI-3 at 10:IU-I2.
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t)nckeye Power, Inc.Docket No. EL1 1-54-lN)2
Exhibit No. S-tPage 18 of 43
which were classitied as local distribution remained with First Energy Operating
Company (FEOC).
'fhcrefore, in 1999, FirstEnergy changed the tunctional classification of its ATS
and determined that the transmission system transferred to ATSI was comprised of
69 kV ATS and l38/345 kV BTS facilities which were integrated and operated in
a parallel manner. However, despite the fact that ATSI's transmission system is
now fully integrated, ATSI has continued to use the pre-1999 dual-voltage rate
design.
9 Q.10
lr A.
13
14
IS
16
17
18
19
20
Did ATSI propose the elimination of the dual voltage rate in its formula ratefiling in Docket No. ER05-285-000?
Yes. Contrary to their current testimony, in 2004, ATSI proposed to adopt a
single, 100% rolled-in transmission rate that makes no "distinction between
service provided over different transmission voltage facilities." As shown in its
EROS-285-000 filing, where the Midwest ISO and FirstEnergy jointly filed for a
formula rate for ATSI under the Midwest ISO Tariff, ATSI proposed to eliminate
its voltage differentiated rates from its transmission rates and to replace it with a
single, uniform transmission rate across the entire ATSI zone. In its transmittal
!etter, ATSI stated that by adopting a single, rolled-in rate, ATSI's customers "will
benefit from a more transparent and uniform rate design than is currently in
Ex. BPt-3 at 11:14-16.
See Ex. S-S, Excerpt from ATS1's December 2, 2004 filing in Docket No. ER05-285-000.
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I?xhlhlt Nn. S-IPage I9 of 43
&0
place." ATSI asserted that the existing dual-voltage rate design "made sense in
the cra when transmission customers contended with balkanized transmission
systems. I-lowever, today, all transmission customers receive the same quality of
service ...regardless of whether the load is situated on a 69 kV, 138 kV, or 345
kV facility." ATSI also noted that another benettt to adopting a rolled-in rate
was "reduction in the cost and complexity of administering ATSI's rate that is
unique within the Midwest ISO. A'CSI is the only transmission asset owner in the
Midwest ISO that has a voltage differentiated rate in effect, and the instant hling
will eliminate the need to maintain special billing and settlements processes to
accommodate this feature." ATSI further stated that:
Il121314
151617IS
19
[T]he change to Attachment 0 will increase transparency in the costof transmission service, align the derivation of transmission chargeswithin the ATSI zone more closely with the other Midwest ISOzones, and simplify billing and settlement processes. For theforegoing reasons, FirstEnergy and the Midwest ISO propose toeliminate the voltage-differentiated charges in the Tariff.
Ultimately, however, that proceeding was resolved by a settlement that retained
the current dual voltage rate design.
Ex. S-5 at 4.
21 Ex. S-5 at 5.
sgEx. S-5 at 5.
29 Ex. S-5 at 5.
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Exhil&it No. S-lPnge 20 ol'43
I As discussed above, at this time, ATSI was the only transmission owner in the
ibtidwest ISO's tootprint that used a voltage-differentiated mte design. Similarly
3 in PJM, Al SI again appears to be the only transmission owner that uses a dual-
voltage rate design.'"
5 (2. lies Buckeye been paying voltage-differentiated rates for its wholesale6 transmission service since the l997 approval of the FirstEnergy Merger'7
8 A. No. According to Buckeye's response to AMP/CPP discovery, from January I,
9 l 968 through June 30, 2003, Buckeye received transmission service I'rom six
10 interconnected transmission-owning utilities pursuant to a Power Delivery
II
21 12
Agreement (PDA). 'uring the 35 year term of the PDA, Buckeye paid a single
contract rate administered by Ohio Power. Starting July I, 2003, Buckeye entered
13 separate transmission contracts with its providers of transmission service (ATSI
14 being one of them), their holding companies, or their RTO/ISO operators. Thus,
15 Buckeye started paying voltage differentiated rates under ATSI's transmission
16
17 Q.Ig
service contract starting July I, 2003,
Did Buckeye participate in Docket No. ER05-285-000?
30See Ex. S-7, Excerpt from PJM OATT.
3& Ex. AC-18, AMP/CPP-BP1-1.4 at 1-4. The six utilities were: The Cincinnati Gas & ElectricCompany (CG&E); Columbus and Southern Ohio Electric Company (CSO); The Dayton Power andLight Company (DP&L); Monongahela Power Company (Monongahela); Ohio Power Company (OhioPower); and The Toledo Edison Company (TEC).
Ex. AC-18, AlvlP/CPP-BPI-I.4 at 1-4.
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l A. No. Buckeye states that although it was concerned about ATSI's voltage
differentiated rate design, 13uckeye expressed that concern only informally on a
number of occasions afier July I. 2003.'uckeye states that at the time of the
4 proceeding in Docket No. ER05-285-000, it was 'was preoccupied with other
matters," and therefore did not submit an intervention."
6 However, Buckeye submitted a protest in Docket No. ER11-2814-000, et al.,
7 where PJM and ATSI jointly proposed to modify the PJM OATT to integrate
8 ATSI into PJM. In that proceeding, Buckeye protested ATSI's proposal to retain
9 the dual-voltage rate design. In its order on the proposed modifications. the
10
12
l3
Commission found that the issue of voltage differentiated rates was beyond the
scope of that proceeding and indicated to Buckeye that, should they wish to pursue
the matter further, they should do so by filing a complaint." On July 18, 2011,
Buckeye tiled a complaint alleging that ATSI's voltage diITerentiated rates were
14 unjust, unreasonable and unduly discriminatory which began the instant
15 proceeding.
Ex. AC-)8, AMP/CPP-BPI-1.4 at 3-4.ie
id.
PJMInierconnection, LLC., 135 FERC I 6),l98 (20) 1)
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Exhibit Nn. 8-IPage 22 of 43
I IIL ANALYSIS OF ATSI'S VOLTAC E-DIFFERENTIATED RATES
Q3
4 A.
WVhat is your opinion of ATSI's existing rate design?
Based on my analysis, I believe A'1'Sl's existing voltage-differentiated rate design
5 is unreasonable.
6 Q. liow did you form that opinion'&
7 A. 1 considered the following factors:
IO
12
13
14
15
16
~ Whether ATSI's 69 kV ATS is integrated and operates in parallel with its
138/345 kv BTS.
~ Whether the 69 kV ATS provides, or has the capacity to provide benefits
and support to the 138/345 kV BTS.
~ Whether the difference in rates paid by customers served from the 69 kV
ATS and 138/345 kV BTS is justified.
~ Whether transmission customers taking service at 69 kV are similarly
situated to customers taking service at 138 kV.
~ Whether Commission policy supports the roll-in of transmission costs for
ATSI's ATS and BTS facilities.
18
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Kshihit No. S-IPage 23 of43
FIVE FACTORS FOR ROLLED-IN RATES
Whether ATSI's 69 kV ATS is intearated and onerated in narallel with its13II/345 kV BTS.
Q. Is ATSI's 69 kV ATS integrated and operated in parallel with its BTS?
6 A. Yes. As I noted earlier in my testimony, all parties in this proceeding agree that
ATSI's 69 kV ATS is integrated with the 138/345 kV BTS. My own examination
of the ATSI's One Line Diagrams, provided as Exhibit Nos. ATS-6, ATS-7, BPI-
19 (PROTECTED), and BPI-20 (PROTECTED),
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20
22 Q. Does the 69 kV ATS satisfy the AIansfield Integration Test?
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Exhibit No. S-IPage 24 of 43
I A. Yes. I'e 69 kV ATS meets all ot the Manstield integration t'actors set forth in
Mansfield Municipal Electric Department, et aL v. /Yew England Power Company,
3 ')4 FERC $ 63,023 (200 l ).
4 Q. Please discuss the iVlansficld integration factors.
5 A. ln Mansfield, the Presiding Judge agreed, and the Commission oflirmed, a tive-
factor test to determine whether a facility is integrated with the rest of the
transmission system. That test has since been known as the "Manstield Test."
The Manstield Test looks at the following five factors:
0)
10
II
I2
I3
I4
15
l6
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IS
l. Whether the facilities are radial, or whether they loop back into the
transmission system;
2. Whether power tlows only in one direction, from the transmission system
to the customer over the facilities, or in both directions, from the
transmission system to the customer, and from the customer to the
transmission system;
3. Whether the transmission provider is able to provide transmission service to
itself or other transmission customers over the facilities in question;
4. Whether the facilities provide benefits to the transmission grid in terms of
capability or reliability, and whether the facilities can be relied on for
Op. No. 454, 97 FERC $ 6(, (34 (200 I ), reh'g denied, Op. No. 454A, 98 FERC $ 6I,I I5 (2002).
.it//nsfietd, 94 FERC $ 63,023 (200 I), at p. 65, I 70.
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Fxhibit iVo. S-IPage 25 of 43
coordinated operation of the grid; and
5. Whether an outage on the Iacilities would at'I'ect the transmission system.
3 g. Under the Mansfield Test, is the 69 kV ATS integrated with the 138/345 kV4 BTS2
5 A. Ycs, the 69 kV ATS is integrated with the 138/345 kV BTS for the following
reasons:
l. As I explained above, the vast majority of the ATSI's 69 kV, 138 kV, and 345
kV transmission lines are looped facilities, not radial lines. Thus, the 69 kV ATS
satistles this tirst factor.
ID
Il
2. Power tlows in two directions, from the 138 kV BTS to the 69 kV ATS and
from the 69 kV ATS to the 138 kV BTS.
l2
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14
15
16
17
18 Thus, the 69 kV
Ex. BPI-3 at I I:17-19.
Ex. S-8 at 2-7.
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ATS satislies this second factor.
3. ATSl can, and does provide transmission service to itselt and also to other
transmission customers, such as AMP. and other customers serving retail load in
Ohio Edison, Penn Power. and Toledo Edison over the 69 kV ATS. Therefore, the
69 kV ATS satisfy this third factor as well.
12
13
4. The 69 kV ATS facilities provide clear benelits to the 138/345 kU BTS, as they
and therefore can serve as a
back-up to that system. Also, the 69 kV ATS facilities are included in PJM's
Regional Transmission Expansion Planning (RTEP), and Energy Management
System (EMS) Model which is used for reliability evaluations and for congestion
management analysis." Thus, the 69 kV facilities are being relied upon for
reliability and, to a certain extent, for coordinated operation of the grid.
Consequently, the 69 kV ATS satisfies this fourth factor.
l4
15
l6
5. An outage on the 69 kV ATS would definitely alfect the 138/345 kV BTS, as
the 69 kV facilities are operated in a network, or looped fashion, with the 138 kV
and 345 kV facilities. An outage on one of the looped 69 kV facilities would
create a change in power flow over the networked 138 kV or 345 kV facilities.
iaSee Ex. S-9 for an excernt from PJM Manual 148: PJM Region Transmission Planning
Process, and Ex. AC-23 and AC-24 for a list of ATSI 69 kV facilities modeled by PJM in its RTEP and
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gxhihit No. 8-IPape 27 uf 43
Accordingly, this BIIh and linal I'actor is also satisfied by the 69 kV A' S.
2 Q. lies ATSI performed any power tlow studies that demonstrate the integrationand the parallel nature of its 69 kV ATS with its l38/345 kV BTS?
45 A. Yes. 'fhe testimony of lvir. Bridcnbaugh, FirstEnergy director ol transmission
6 planning and protection which was submitted to the Public Utilities Commission
7 ot'Ohio in 2000, provided by Buckeye witness Bethel in Exhibit BPI-4, includes a
II power liow analysis that "demonstrates the network or parallel nature of the 69 kV
system across the entire FirstEnergy fransmission System." 'hat analysis uses
IO power tlow models ol the ATSI system tor the 2000 summer peak load conditions,
and shows the extent to which ATSI facilities support deliveries to loads
connected at different voltages."
l3 This study is signilicant as both ATSI and Buckeye agree that ATSI's
l4 transmission system has not significantly changed since the 2000 analysis, and
IS hence the results of that analysis remain valid."
l6 Q. Please explain your understanding of how Mr. Bridenbaugh's analysis was
l7 performed and the conclusions of that analysis.
Fx. BPI-4 at 23:4-5.
Ex. ATS-5 at 7:12-22.
Ex. ATS-5 at I I:IO-I4.
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Exhibit )Vn. S-lI'age 28 of 43
I A. Ivfr. 13ridenbaugh's analysis is based on his Transmission Participation Factor
ITPF), which determines the extent to which particular transmission facilitics
support a given power transfer. 'I he analysis comprises two studies; the l)rst study
measured the impact of power transt'ers between each ot'he six control areas
directly interconnected to FirstEnergy on its 34S kV, 138 kV. 69 kV. 33-36 kV,
and 23 kV facilities, as illustrated in fable I, which is shown below:
'fable 1:Transmission Participation Factor (TPF)
for power transfers between control areas bordering ATSI
FirstEnergy Voltage Class Net Area to Area Absolute Value of lns andOuts
345 kv138 kv69 kv33-36 kv73 kv
36.00%6.64%0.24%0.00%0.01%
46.95%12.20%1.76%0.14%0 13%
10II12
13
14
The second study was performed to determine the impact of power transfers from
generation internal to the FirstEnergy system or imported from neighboring
systems to load within the FirstEnergy control area at different voltage levels.
Table 2, shown below, illustrates the results of the second study.
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17
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Kidiihit No. 8-IPage 29 uf 43
Table 2:Transmission Participation Factor (TPF)
for power transfers from generation to loads within ATSl
345 kvI38 kv69 kV33-36 kv23 kv
76 38%76.55%
'8%
0 00ut
0.03%
FirstEnergy Voltage Class Net Area to Area Absolute Value ol lns andOuts89.78%85 97%6.52%0.38%0.25%
5 Q. What is your interpretation of the results of the first study performed by Mr.Ci Bridenbaugh as illustrated in Table l?78 A. Table I shows each voltage level power )low participation for transfer of power
9 through the FirstEnergy transmission system. fn other words, Table I illustrates
10 the question: "For a power transfer between two control areas bordering ATSI,
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15
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18
how much power tlows through each of ATSI's voltage classes?" For example,
looking at the "Absolute Value of lns and Outs" column, for a transfer of power
between two control areas interconnected to FirstEnergy, the 345 kV transmission
system demonstrates a significant TPF of 46.95%, the l38 kV transmission system
demonstrates a lower TPF of 12.20%, and the 69 kV transmission system
demonstrates a TPF of 1.76%.
The significant TPF of the 345 kV transmission facilities validates its high
participation in movement of bulk power across control areas, in comparison to a
lower participation in movement of large amounts of power with the decrease in
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Exhibit iso. S-II'age 30 of 43
voltage. The main reason for this result is that a 345 kV line has more than twice
lhe capacity of a 138 kV line, and therefore it can carry more than twice the
amount of power that a 138 kV line can carry, and a 138 kV line has more than
twice the capacity of a 69 kV line, and therefore it can carry more than twice the
amount of power that a 69 kV line can carry.
6 Q.7
What is your interpretation of the results of the second study performed byMr. Bridenbaugh as illustrated in Table 2?
8 A. The results in Table 2 illustrate the question: -For deliveries to loads connected to
10
12
13
14
a voltage class, what portion of that energy is carried by parallel lines. on facilities
in another voltage class?" For example, using again the absolute value method,
(he 345 kV facilities provide 89.78%of the flows to loads connected at 138 kV
and 69 kV, the 138 kV facilities provide 85.97%of the flows to loads connected at
69 kV, and the 69 kV facilities provide 6.52% of the flows to loads connected at
138 kV. According to Mr. Bridenbaugh, the response of the targeted voltage was
15 excluded from the average response calculation. For example, the response of the
16
17
l8
138 kV system was not considered for transfer of load directly connected at 138
kV, as that response would necessarily be high and not an indication of general
network response."
19 Q.20
Do the power flow results presented in Table I support ATSI's use of its dual-voltage transmission rate?
Ex. BPI-4 at 24:2-6.
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Exhibit No. S-IPage 3I of 43
I
A.
10
No. The TFP results presented in Table 1 simply illustrate the law of physics that
transfer of power follows the path of least impedance, and since higher-voltage
lacilities are of lower impedance than lower-voltage facilities, the higher-voltage
1'acilities would have a signilicantly higher TPF. Also, the 'I'PF results in Table I
show that the demarcation between voitages could very reasonably be set between
the 345 kV and 138 kV, as the TPF of the 345 kV facilities (46.95 percent) is
almost four times larger than that of the 138 kV lacilities (12.20 percent).
I also note that the results for the 69 kV facilities did not show zero participation
in movement of bulk power across control areas, but 1.76 percent, which shows
some support, in the movement of buik power (which according to the PIM White
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18
Paper is typical of mainly 345 kV and above facilities). The fact that the 69 kV
ATS exhibits 1.76percent support confirms that the 69 kV ATS contributes in the
movement of bulk power across ATSI's transmission system.
Mr. Bridenbaugh confirms this in his testimony stating: "However, while the
participation of the 69 kY facilities is less than for the Bulk facilities, it is still
significant and demonstrates the network or parallel nature of the 69 kV system
across the entire FirstEnergy Transmission System.""
19 Q.2021
Do the power flow results presented in Table 2 support ATSI's use of its dual-voltage transmission rate?
Ex. BPI-4 at 23:2-5.
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1 A. No. Dhe FFP results presented in'I'able 2 illustrate that 6.52 percent of the power
that tlows to the 138 kV loads, llows through the 69 kV system during normal
power system operation (and that percentage could be even higher during
emergency conditions, as the 69 k V can be used as a back-up to the 138 kV
system). I consider this to be an important amount of power tlowing through the
6)9 kV system, not from a magnitude perspective, but from the fact that the 6.52
percent power tlow benetits strictly loads served at 138 kV. Nonetheless, under
the dual-voltage rate design, customers served over the 138 kV lines pay nothing
towards the recovery of costs for 69 kV tacilities.
1 p Q. What is your conclusion regarding this ilrst factor?
11 A. Based on the fact that ATSI's 69 kV ATS is integrated and operates in parallel
12
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14
with its 138/345 kV BTS, a single rolled-in transmission rate covering all ATSI's
integrated transmission facilities would be more appropriate to use than the
existing dual-voltage transmission rate.
15
16
1718 Q.19')p
2I A.
73
Whether the 69 kV ATS orovides. or has the canacitv to nrovide benefits andsunnort to the 138/345 kV BTS.
Does the 69 kV ATS provide, or has the capacity to provide benefits andsupport to the I38/345 kV BTS?
Yes. As I mentioned earlier in my testimony, the 69 kV ATS operates in parallel
with the 138/345 kV BTS. This means that during emergency conditions on the
138/345 kV BTS, the 69 kV ATS can operate as a back-up, or can be relied upon
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to relieve overloads on the higher-voltage system.
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which constitutes a major benetit to the BTS
and demonstrates that the 69 kV A fS supports the 138/345 kV BTS.""
Furthermore, ATSI witness Morrison agrees that the 69 kV facilities support the
138/345 kV BTS.Mr. Morrison states:
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I lowever, ATSI agrees that the 69 kV Area Transmission System isintegrated with the higher voltage facilities. This is one of theconclusions of an analysis that is discussed in the testimony of Mr.Bridenbaugh, which Buckeye has submitted as Exhibit No. BPI-4.This analysis demonstrates that the 69 kV Area TransmissionSystem otTered a degree of support for power llows on the highervoltage system sufficient to show that the 69 kV facilities wereintegrated with the Bulk Transmission System."
Mr. Bridenbaugh further states that, "This additional power flow analysis also
demonstrates the signilicant network response of the Area Transmission System to
supply of load in the FirstEnergy transmission system.""
See ATSi's response to Staff discovery, Ex. S-8 at 2-7.
Ex. ATS-5 at fn1-7
Ex. BPI-4 at 24:9-10.
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l.astly. the bcnelits provided by the 69 kY ATS may also be detined more broadly.
I'or example, if the 6.52 percent ot power tlow on the 69 kY ATS that is
attributable to loads served at I 38 kV were eliminated, then the l38/345 kY BTS
would have to accommodate this additional power tlow by constructing new high-
voltage facilities, which all transmission customers would have to pay for.
6 Q. What is your conclusion regarding this second factor?
7 A. Based on the lhct that ATSI's 69 kV A'I'S provides benefits and support to its
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l38/345 kY BTS, it is unreasonable tbr ATSI to use a ditferentiated transmission
rate treatment in which its wholesale customers receiving transmission service at
the I 38/345 kV BTS level pay nothing for this additional service/benefit. The
appropriate and equitable rate treatment would be to use a single rolled-in
transmission rate recovering all ATSI's integrated transmission facilities, as these
facilities benefit to some degree all ATSI's transmission customers.
I4I5l6I7ISI920
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Whether the difference in rates naid bv customers served from the 69 kVATS and 138/345 kV BTS is iustifiied.
Q. Is there justification for the difference in transmission rates paid bycustomers served from the 69 kV ATS and the 138/345 kV BTS?
A. No. In my opinion, there is no justification for the difference in rates paid by
customers served from the 69 kV ATS and the 138/345 kV BTS. The network
transmission rate paid by the BTS customers is twice the NITS transmission rate
paid by the ATS customers. There is simply no justification for this significant
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dill'crcnce, as all ATSI's transmission customers receive the same quality
ot'ervice.
regardless of whether their load is situated on a 69 kV, I 38 kV, or 345 k V
lhcility. My opinion is shared by the hfidwest ISO and FirstEnergy in their tiling
in Docket No. ER05-285-000 with the Commission, where they jointly recognized
the lack of justilication I'or the continuing ATSI's voltage dilTerentiated rates,
stating:
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Under the existing voltage differentiated rates, suppliers in the ATSIzone pay different transmission charges to serve the same amount ofload based on the voltage of facilities utilized. This distinction madesense in the era when transmission customers contended withbalkanized transmission systems. However, today, all transmissioncustomers receive the same quality of service from the Midwest ISO,across the entire Midwest ISO footprint, regardless of whether theload is situated on a 69 kV, 138 kV or 345 kV facility.
I 5 Q.l6l718 A.
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What is ATS1's main argument now in this proceeding for changing itsposition and supporting the existing dual-voltage rate treatment?
In this proceeding, ATSI's main argument for supporting the dual-voltage rate
treatment is that transmission customers derive different levels of benefits from
ATSI's 69 kV ATS, and 138 kV BTS. For example, ATSI's witness Ziegler
argues that "certain transmission customers (such as Cleveland Public Power)
serve their load entirely through voltages of 138 kV and above; others (including
Buckeye) serve their load predominantly using the 69 kV system...while all of
these customers are receiving network transmission service from PJM for
49 Ex. S-Sat4.
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deliveries to load in the ATSI's pricing zone, they are using and benetiting from
ATSI's transmission t'acilitics in different voltage classes in very different
ways...ihe 69 kV transmission facilities provide only limited support for power
transfers to loads connected at higher voltages."'r. Ziegler t'urther concludes
that -some wholesale customers rely signilicantly on the 69 kV transmission
I'acilities to serve loads from those I'acilities, while other customers place much
less reliance on those facilities""
I disagree with Mr. Ziegler. First, as I mentioned earlier in my testimony,
transmission lines can carry different amounts of power liow, based on their
voltage. A 138 kV line can carry at least twice as much power as a 69 kV line.
For example, Exhibit No. BPI-I9, shows
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Ex. ATS-1 at 11:10-20.
Ex. ATS-1 at 12:1-3.
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In my
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opinion, the customers served in the Cleveland area by the l38 kY 13TS derive the
same degree of benetit from ATSI's transmission system as customers located in
more rural areas of ATSI's territory with lesser load density, which ATSI can
serve more economically by a 69 kV transmission line.'n other words, ATSI has
chosen routes for its l38 kV and 69 kV so as to minimize its overall costs to
provide firm power and energy to all of its customers.'" More densely-situated
customers, such those trom urban areas, would be served more economically by
higher-voltage, 138 kV transmission lines. Customers situated in less-dense rural
areas would be more economically served by lower voltage, 69 kV transmission
lines, which are less expensive to construct and maintain than the higher-voltage
transmission networks. In my opinion, both the urban and the rural customers
derive the same benefit from the integrated transmission system, and there is no
justification to charge those customers voltage differentiated transmission rates.
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16Whether transmission customers takina service at 69 kV are similarlvsituated to customers takina service at 138 kV and above.
17 Q. Are the transmission customers taking service at 69 kV similarly-situated tocustomers taking service at 138 kV and above?
Ex. BPI-18 at 13-14.
See Ex. BPI-S.
See Ex. ATS-I at 21:21-23.
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I A. Ycs, I believe they are. Customers situated in highly-dense urban areas who toke
2 service t'rom l38 k V Iacilities receive the same quality of transmission service that
3 customers situated in less-dense, rural areas receive Irom 69 k V facilities. In other
4 words, both types of customers are similarly situated, although they receive
5 transmission service at diITcrent voltages. At one point in time, both urban and
6 rural loads were adequately served by 69 kY facilities. However, because of the
7 high load increase in urban areas, it became more economical. and also made
8 engineering sense tor ATSI to replace the 69 kV facilities with l38 kV facilities,
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which can carry more load. Could ATSI continue to serve its urban customers
trom 69 kV lines'? Certainly. However, it would have to use two or more 69 kV
lines to serve the same load served by a single l38 kV line. In an urban setting,
this may not be achievable, due to land constraints. Mr. Sachdeva's testimony
confirms this fact, pointing out that the Cleveland area has underground 69 kV
facilities that are no longer in service." ATSI's customers served from the 69 kV
facilities pay more than twice for network transmission service than their urban
counterpart, at 138 kV, even though they are similarly situated.
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Ex. BPl-la at 14.
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Exhibit I))n. S-IPage 40 of43
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'I'wo other factors weighing in favor of rolled-in costing are theundisputed nature of the transmission system. and the fact that thelower voltage facilities appear to meet the technical delmition ofIacilities which serve a -transmission" Iunction. Where power linesoperate in an integrated manner to perform a transmission I'unction,
we think it unnecessary and inappropriate to try to segregate selectedlines and claim they do not benet)t the entire network of lines. Withan integrated transmission system such as hJtah's, it would almost beimpossible to trace individual lines and show that some of thoselines do not benetit others by providing general back up, maximizingcNciency and minimizing costs of the entire transmission network.
In cases where an integrated transmission system is involved, weadhered to the rolled in costing methodology absent specialcircumstances. The judge provides a well-reasoned analysis ofCommission precedent and the evidence in this particular case. Weagree with him that no special circumstances have been shown. Theinitial decision is aIT)rmed and adopted on the merits of the
issue.'ow
does the Commission policy favoring roll-in of integratedtransmission facilities affect your analysis in this case?
A. My engineering analysis is independent of my review of the Commission's
policy. However, it is my understanding that the Commission as a matter of
policy supports the roll-in of integrated transmission facility costs,
Accordingly, the Commission's policy corroborates my analysis.
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What are the conclusions and recommendations of your analysis?
Based on the tive factors discussed above, I conclude that ATSI's existing voltage
differentiated rate design methodology is unreasonable and unfair toward ATSI's
wholesale transmission customers served from delivery points at 69 kV.
Utah, 27 FERC at 61,258.
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I I'herefore, I recommend that the dual-voltage rate be replaced by a single rolled-in
transmission rate which covers all of A'I'SI's integrated transmission facilities.
AMP/CPP witness Willis asserts in his testimony that "the 69 kV facilitiesoperated by ATSI are sub-transmission lines, which makes them an adjunctto equipment that performs the local power distribution function..." Do youagree with Mr. Willis'ssertion'!
3 IV. COMMENTS REGARDINGOTHER WITNESSES'ESTIMONY
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I I A. iVo. As I explained throughout my testimony, ATSI's 69 kV ATS facilities have
l2 always been classified as transmission. These facilities perform a transmission
l3 lunction, and are integrated and operate in parallel with the 138/345 kV BTS.
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Therefore, they are transmission, and not sub-transmission. and do not perform a
local power distribution function. This opinion is also shared by ATSI, as
contirmed by their response to Statt's discovery request.
AMP/CMP witness Hilt contends in his testimony that ATSI's 69 kV ATSdoes not provide support to the 13S/345 kV BTS because the 69 kV ATS didnot/could not support the 138/345 kV during the August 2003 Blackout. Doyou have comments regarding Mr. Hilt's contention'7
l7 Q.l8l9o02122 A. Yes. Mr. I-lilt discusses in his testimony some of the events that occurred during
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the August 2003 Blackout that involved the West Akron substation. "During the
progression of the blackout, numerous l38 kV lines in Ohio had tripped out of
service due generally to overloads caused by the tripping of higher-voltage
rs Ex. 8-8 at 8.
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lines.-'r. I-lilt further notes that because nt'he numerous I 38 kV circuits that
had been lost, the 69 kV facilities, which were still energized, became a path for
power to liow toward the l38 kV loads."" Due to the excessive amount ot'current
llowing from the 69 kV system into the 138 kV system, the relays protecting the
ti9/138 kV Transformer No. I at West Akron interrupted the tlow into the l38 kV
system from the 69 KV system "to prevent an excessive amount of current from
being pulled through the 69 kV facilities into the l38 kU system. l3ecause the
protective relaying operated as expected, the 69 kV facilities did not support the
l38 kV system during this instance of network stress.""
While I agree that during the 2003 blackout the relays protecting Transformer No.
I at West Akron intenupted the Ilaw into the l38 kV system from the 69 kV
system to prevent an excessive amount of current flowing through the transformer,
I disagree that this relay operation is indicative of the lack of support the 69 kV
system provided to the 138 kV system. First, as discussed in ATSI's response to
StaQ'discovery, the protective relays at West Akron "do not react to balanced
power flow through the transformer." In other words, the extreme, unbalanced
Ex. AC-2& at 5:16-IS.
Ex. AC-2S at 5:16-6:2.
6) Ex. AC-2S at 6:4-IS.
Ex. S-S at 2.
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I power tlow conditions during the 3003 blackout were the reasons lor the relay
operations at West Akron, and not the lack of support received from the 6)9 kV
.3 system. Moreover, in its response to Staff discovery ATSI admits that that "the
4 West Akron Substation could be energized from the 69 kV system through the
5 138/69 kV Transformer // l. There are no protection schemes that would prevent
this from occurring."" ATSl explains that 139/69 kV transtormers at Star,
7 Chamberlain, Darrow, and Midway substations can all be energized from the 69
8 k V system and there are no protection schemes that would prevent this from
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happening.6'hus, ATSI's response conlirms that the 69 kV ATS can support
and serve as a back-up for the 138/345 kV BTS.Therefore, the 69 kV ATS is
designed to support, and can support the 138/345 kV BTS.
l2 Q. Doesthisconcludeyourtestimony?
13 A. Yes, it does.
Ex. S-8 at 2.
64Ex S-8 at 3-6.
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UNITED STA'I'ES OF AMERICABEFORE TIIK
FEDERAL ENERGY REGULATORY COMMISSION
Buckeye Power,! nc. ) Docket No. KLI I-54-002
CERTIFICATE of Antonio Maceo
l, Antonio Maceo, declare under penalty ot'erjury that I am the author of the foregoingtestimony„ that the facts set forth herein are true and correct to the best of my knowledge,and that if asked the same questions contained in the text, I would give the answerscontained in the testimony.
Is/Antonio Maceo
Antonio Maceo
Auaust 9. 2012
Date
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