Control Number: Item Number: 303. Addendum StartPage: 0

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1 Control Number: Item Number: 303 Addendum StartPage: 0

2 SOAH DOCKET NO rf DOCKET NO LomE23 PM 2: 48 APPLICATION OF SOUTHWESTERN YORE TH E ELECTRIC POWER COMPANY FOR PUB! ic.fli.'144g CLERK CERTIFICATE OF CONVENIENCE AND NECESSITY AUTHORIZATION STATE OFFICE OF AND RELATED RELIEF FOR THE WIND CATCHER ENERGY PROJECT IN OKLAHOMA ADMINISTRATIVE HEARINGS PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW OF TEXAS INDUSTRIAL ENERGY CONSUMERS, COMMISSION STAFF AND CITIES ADVOCATING FOR REASONABLE DEREGULATION Proposed Findings of Fact Description of the Wind Catcher Project 1. The proposed Wind Catcher project consists of two projects, the Wind Facilities and the Gen-Tie.1 2. The Wind Facilities are a 2000 MW wind farm to be located in Texas and Cimarron Counties, Oklahoma.2 The Wind Facilities will consist of 800 GE turbines. 3. The Wind Facilities will be developed by Invenergy and delivered to SWEPCO under the Membership Interest Purchase Agreement (MIPA) for a purchase price of $2.694 billion. SWEPCO's current projected cost for the Wind Facilities is $2.902 billion and the current projected in-service date is September 30, The Gen-Tie is a 350- to 380-mile long 765-kV transmission line spanning across Oklahoma from the Wind Facilities site to a substation in Tulsa, Oklahoma.4 5. The Gen-Tie will be constructed by Quanta under an Engineering, Procurement, and Construction (EPC) contract. SWEPCO's total projected cost for the Gen-Tie is $1.624 billion and the current projected in-service date is December 15, SWEPCO did not issue a request for proposals in selecting the Wind Catcher project or the developers.6 7. SWEPCO issued a request for proposals for binds in September, 2016 from thirdparty vendors for the purchase of wind energy and the responses to those bids suggest 1 SWEPCO Ex. 2, McCellon-Allen Dir. at Id. 3 Id. at Id. at Id at 5; SWEPCO Ex. 6, Weber Dir. at SWEPCO Ex. 2, McCellon-Allen Dir. at

3 that SWEPCO could have purchased wind energy from other suppliers in the market at a cost equal to or lower than the forecasted cost of wind energy from Wind Catcher.7 Adequacy of Existin2 Need and Need for Additional Service 8. Wind Catcher is not needed to address the adequacy of existing need or a need for additional service.8 9. Wind Catcher is not needed to meet any renewable energy standards.9 Probable Improvement of Service and Lowerin2 of Costs 10. Wind Catcher is being proposed solely as an economic project based on SWEPCO's claim that it will reduce costs for SWEPCO's ratepayers. 11. SWEPCO asserts that Wind Catcher will provide ratepayers benefits through lowering production costs, realizing production tax credits (PTCs), and deferring expected capacity additions SWEPCO asserted in its application projected ratepayers will receive $1.942 billion net present value (NPV) in net savings over the life of the project Mr. Norwood testified that a 10% reduction in SWEPCO's forecast of gas prices reduces SWEPCO's projected savings it attributed to Wind Catcher in its application as-filed by $1.035 billion Mr. Norwood testified that increasing SWEPCO's projected capital costs to construct Wind Catcher reduces SWEPCO's projected savings it attributed to Wind Catcher in its application as-filed by $320 million Mr. Norwood testified that a 20% reduction in the value of SWEPCO's projected value of PTCs reduces SWEPCO's projected savings it attributed to Wind Catcher in its application as filed by $375 million Mr. Norwood testified that a reduction of 10% in the production of energy from Wind Catcher reduces SWEPCO's projected savings it attributed to Wind Catcher in its application as-filed by $559 million.16 7 CARD Ex. 1, Norwood Dir. at 13; CARD Ex 37A & Id. at Id 10 Id. at Id. at 14-15, 18, 12 Id at Id. 14 Id. 15 Id 16 Id 2

4 17. Mr. Norwood testified that a reduction of 20% in SWEPCO's projected congestion costs reduces SWEPCO's projected savings it attributed to Wind Catcher in its application as-filed by $237 million SWEPCO unrealistically assumes that the savings it projects will be automatically passed to ratepayers. Simply as a product of regulatory lag, much of the "ratepayer savings" which SWEPCO attributes to Wind Catcher will actually never be realized by ratepayers On December 22, 2017, the Tax Cuts and Jobs Act (TJCA) was signed into law. The changes in the new tax law lowered SWEPCO's projection of the benefits to $1.495 billion (NPV) With modest changes to SWEPCO's projections on key issues such as the price of natural gas, the level of production by the Wind Catcher Project, receipt of less than 100% of PTCs, the capital costs of the Project, and the availability of wind-energy from other new projects in the energy markets during the next 25 years, the savings SWEPCO projects under its economic analysis are materially reduced or entirely eliminated SWEPCO unrealistically assumes that the savings it projects will be automatically passed to ratepayers. Simply as a product of regulatory lag, much of the "ratepayer savings" which SWEPCO attributes to Wind Catcher will actually never be realized by ratepayers Wind Catcher will not result in a probable improvement of service or lowering of costs. Project Costs 23. SWEPCO's current estimate of the combined capital cost of Wind Catcher is $4.526 billion SWEPCO estimates the total revenue requirement impact to be $3,819 billion (NPV) over the life of the project. SWEPCO estimates the revenue requirement impacts to be $2.668 billion for the Wind Facilities and $1.151 billion for the Gen-Tie SWEPCO's estimate of the revenue requirement impact of the Gen-Tie is based on a 50-year depreciation life. SWEPCO's estimate of the revenue requirement impact of the Wind Facilities is based on a 25-year depreciation life. Because the Gen-Tie is only being proposed to deliver energy from the Wind Facilities, it is appropriate to 17 Id. 18 CARD Ex. 1, Norwood Dir. at 4; CARD Initial Post-Hearing Brief. 19 SWEPCO Ex. 25, Pearce Reb. at Ex. KDP-2R. 20 CARD Ex. 1, Norwood Dir. at CARD Ex. 1, Norwood Dir. at 4; CARD Initial Post-Hearing Brief. 22 SWEPCO Ex. 2, McCellon-Allen Dir. at SWEPCO Ex. 25, Pearce Reb. at Ex. KDP-2R. 3

5 assume the same depreciable life. Depreciating the Gen-Tie over a 25-year life increases its revenue requirement impact by $102 million The MIPA and EPC contracts do not insulate SWEPCO from all risk of capital cost overruns The MIPA and EPC contracts contain force majeure and change in law clauses that excuse delays and cost overruns in events of force majeure and change in law The delay liquidated damages provisions in the MIPA and EPC contracts are not sufficient to cover SWEPCO's risk of lost PTCs due to a delay The EPC contract provides over twenty contractual pricing openers under which Quanta may request a cost increase The MIPA and the EPC contracts do not permit SWEPCO to terminate one contract based on delays or cost overruns with the other. This arrangement limits SWEPCO's ability to comply with its duty to monitor the economics of the project in an ongoing fashion For every 1% increase in the total capital cost, there is a $30 million increase (NPV) in the total revenue requirement.3 Production Cost Savinzs 32. SWEPCO estimated the production cost savings of Wind Catcher by using PLEXOS to model SWEPCO's operating costs with and without the project PLEXOS is not capable of modeling the entire Southwest Power Pool (SPP) region, which is required to capture all factors that impact locational marginal prices (LMPs) within SWEPCO's service area In order to simulate LMPs within the SPP, SWEPCO used a combination of PROMOD and an internally developed energy price forecast called the AEP Fundamentals Forecast. SWEPCO ran PROMOD for the years 2020 and 2025 and interpolated the results to derive SPP LMPs for the years 2021 the For the years 2026 to 2045, SWEPCO escalated the 2025 result based on growth rate implicit in the AEP Fundamentals Forecast Tr. at 1052:1-6 (Pearce Cross) (Feb. 20, 2018). 25 TIEC's Reply Br. at Id. at Id. at 15, Tr. at 236:18-237:1 (Weber Cross) (Feb. 13, 2018). 29 TIEC's Initial Br. at Tr. at 1049:14-17 (Pearce Cross) (Feb. 20, 2018). 31 TIEC Ex. 1, Pollock Dir. at Id at Id. at

6 35. SWEPCO estimated approximately $3.8 billion in production cost savings, net of congestion costs and off-system sales margins SWEPCO's estimation of production cost savings used questionable assumptions for the future price of natural gas, the existence of a future carbon burden, the expected future wind buildout in the SPP, and the expected NCF performance of the Wind Facilities. Locational Marzinal Prices (LMPs) 37. The higher the LMPs assumed in the economic analysis, the greater the production cost savings Wind Catcher will show SWEPCO projects that LMPs in the AEP load zone will increase by approximately 60% from 2017 to 2021, and that the 2021 projected LMPs will then double by SWEPCO did not prove that these assumptions are realistic The AEP Fundamentals Forecast's projections over the last decade have consistently overstated future LMP prices SWEPCO's projected LMPs are impacted not only by the natural gas prices used in the analysis, but also by other assumptions, including SWEPCO's assumed carbontax and the amount of wind generation that was included in the models Even SWEPCO's projected LMPs under its "ultra-low gas case" are higher than the LMPs SPS presented in its Docket No analysis under its base gas case SWEPCO's "break-even" natural gas price analysis includes LMP assumptions that SWEPCO has not demonstrated are reasonable, including an assumed carbon-tax and understating the amount of wind in its SPP modeling.41 Natural Gas Prices 43. Natural gas is generally the marginal fuel within SPP, and the price of natural gas has a significant impact on LMPs within SPP For its economic analysis, SWEPCO used the natural gas prices contained in the 2016 AEP Fundamentals Forecast for its economic analysis Natural gas price forecasts have continued to decline since In February 2018, the Energy Information Administration (EIA) released its 2018 Annual Energy 34 SWEPCO Ex. 25, Pearce Reb. at Ex. KDP-2R. 35 TIEC Ex. 1, Pollock Dir. at Id. at 20, Ex. JP TIEC Initial Br. at TIEC Ex. 2, Pollock Supp. Dir. at Ex. JP-SD E.g., TIEC Initial Br. at TIEC Ex. 1, Pollock Dir. at Ex. JP-5; TIEC Ex. 96; TIEC Initial Br. at Attachment I. 2018). 41 TIEC Initial Br. at 44-45; TIEC Reply Br. at 36 & n.197; Tr. at 298:19-299:20 (Pearce Cross) (Feb. 14, 42 TIEC Ex. 1, Pollock Dir. at Tr. at 338:22-25 (Bletzacker Cross) (Feb. 14, 2018). 5

7 Outlook (AEO), which forecasted natural gas prices that were on average 20% lower than the 2016 AE The process by which AEP's Director of Fundamental Analysis creates the Fundamentals Forecast is opaque and heavily dependent on his personal judgment The AEP Fundamentals Forecast's projections over the last decade have consistently overestimated future natural gas prices The Fundamentals Forecast uses a 30-year weather normalization period. In Docket Nos and 46449, the Commission required SWEPCO to use a 10-year weather normalization period. Using 30-year weather normalization represents a cooler period, which results in higher projected demand and higher projected natural gas prices The Fundamentals Forecast natural gas price projections are significantly higher than the natural gas price forecasts utilized by Southwestern Public Service Company (SPS) and Entergy Texas, Inc. (ETI) in their recent CCN proceedings The Fundamentals Forecast natural gas price projections are significantly higher than the natural gas price forecasts produced by the EIA The Fundamentals Forecast natural gas price projections are significantly higher than the third-party natural gas price forecasts to which SWEPCO subscribes.' 52. The Fundamentals Forecast natural gas price projections are unreasonably high and should not be given any weight in SWEPCO's proposed Wind Catcher project. 53. Every dollar per MMBtu decrease in natural gas prices results in an approximately $392 million decrease (NPV) in net benefits.51 Using the base and low case natural gas prices SPS presented in Docket No results in $1.125 billion and $1.49 billion (NPV) decreases in expected production cost savings from SWEPCO's base case, respectively.52 Carbon Costs 54. The Fundamentals Forecast includes an assumption that a carbon tax will be adopted in 2024, with the burden beginning at $2.92/ton in 2024 and escalating to $26.31/ton in TIEC's Initial Br. at Id. at TIEC Ex. 2, Pollock Supp. Dir. at Ex. JP-SD Tr. at 371:10-23 (Bletzacker Reb.) (Feb. 14, 2018); Tr. at 843:23-844:4 (Smead Cross) (Feb. 16, 2018). 48 TIEC Ex. 1, Pollock Dir. at Ex. JP Compare TIEC Ex. 38 with TIEC Ex TIEC Ex. 2A, HS Pollock Dir. at Ex. JP-SD TIEC Ex. 1, Pollock Dir. at Id. at 12, 51-52; TIEC's Initial Br. at 33 n SWEPCO Ex. 9, Bletzacker Dir. at 10. 6

8 55. The impact of SWEPCO's carbon-tax assumption is to increase the projected LMPs in the economic analysis, which makes Wind Catcher appear to be more economical than it otherwise would be In February 2016, the Supreme Court stayed the Obama Administration's Clean Power Plan (CPP). President Trump was elected in November 2016 on a platform that supported repeal of the Clean Power Plan. In October 2017, the U.S. Environmental Protection Agency promulgated a proposed rule to repeal the CPP The U.S. federal government has never passed a carbon tax. 58. In the past, when Congress has addressed carbon emissions, it has done so by subsidizing zero-emission resources through policies like the PTC. Renewable generation subsidies decrease LMPs rather than increase them SWEPCO's economic analysis assumes a 100% chance that a carbon tax will be adopted and a 0% chance that additional renewable generation subsidies will be enacted. 60. SWEPCO undertook no meaningful analysis of the likelihood of carbon-tax legislation actually being enacted, but instead "deemed reasonable" the views of its lobbying team that such legislation would occur SWEPCO's inclusion of a carbon burden in its economic analysis was unreasonable. 62. The impact of including the carbon burden in the economic analysis is to increase the projected fuel cost savings by $550 million (NPV).58 Other Modelink Assumptions 63. SWEPCO used the SPP ITP10 "Future 3" case in its PROMOD modeling. The Future 3 case assumes 16,605 MW in 2020 and 17,025 MW of wind generation in The Future 3 case understates the amount of wind generation that is likely to be in service in SPP in 2020 and 2025 by at least 6,000 MW.6 A more realistic assessment would show that there would be approximately 14,000 MW more wind generation in SPP during that period Tr. at 382:17-23 (Bletzacker Cross) (Feb. 14, 2018). 55 TIEC Ex. 1, Pollock Dir. at 32; see also Chamber of Commerce v. EPA, 136 S. Ct. 999 (Feb. 9, 2016) (mem. op.); Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources:. Electric Utility Generating Units, 82 Fed. Reg. 48,035 (Oct. 16, 2017). 56 Tr. at 507:24-508:8 (Pollock Cross) (Feb. 15, 2018); Tr. at 536:20-537:4 (Pollock Redir.) (Feb. 15, 2018). 57 CARD Ex Tr. at 534:13-19 (Pollock Redir.) (Feb. 15, 2018). 59 SWEPCO Ex. 24, Pfeifenberger Reb, at 4-5 & n Id. at TIEC Ex. 1, Pollock Dir. at

9 65. Greater wind buildout within SPP results in lower LMPs, and lower projected fuel savings for Wind Catcher SWEPCO's assumptions regarding the future wind buildout in SPP are unreasonable. Production Tax Credits 67. SWEPCO asserted that the PTCs generated by Wind Catcher will have a value of $1.541 billion (NPV) over the life of the project, assuming that the PTCs will be credited to ratepayers as they are generated.'" 68. In order to qualify for the PTCs, SWEPCO must maintain a program of continuous construction, which SWEPCO can do either by meeting a safe harbor date or by proving continuous construction under a "facts and circumstances" analysis The safe harbor date for PTC eligibility is December 31, 2020, sixteen days after the estimated completion date for the Gen-Tie If SWEPCO is required to prove continuous construction under a facts and circumstances analysis, that could result in a protracted controversy with the Internal Revenue Service (IRS) If the Gen-Tie is not completed on time, SWEPCO proposes to use the temporary 50 MW Gridliance interconnection to place the Wind Facilities in service. During any period in which the Wind Facilities are connected to the grid through solely the Gridliance interconnection, the project will only be able to produce a small fraction of the PTCs that the 2000 MW (nameplate) Wind Facilities are projected to earn under SWEPCO's economic analysis.67 Deferred Tax Asset 72. Due to the passage of the TCJA, SWEPCO's parent company, AEP, will not be able to use all of the PTCs in the years in which they are generated SWEPCO has proposed to place the unused PTCs in a deferred tax asset (DTA), which will be placed in rate base and earn a return that is based 60% on SWEPCO's cost of debt and 40% on SWEPCO's weighted average cost of capital (WACC) Under SWEPCO's projections, the DTA would add over $700 million to SWEPCO's rate base by SWEPCO Ex. 24, Pfeifenberger Reb. at 3-4, 6; TIEC Initial Br. at SWEPCO Ex. 25, Ex. KDP-2R. 64 SWEPCO Ex. 23, Finn Reb. at Tr. at 175:6-10 (Bright Cross) (Feb. 13, 2018). 66 TIEC Ex Tr. 186:14-21 (Bright Cross) (Feb. 13, 2018). 68 TIEC Ex. 3, Pollock Second Supp. Reb. at Id. at I d. at 11. 8

10 75. SWEPCO estimates the impact of this DTA to be a $300 million (NPV) increase in project co sts The actual cost of the DTA would depend on a number of factors that cannot be known at this time, including AEP's actual future tax liability and SWEPCO's actual cost of debt and WACC.72 Net Capacity Factor 77. The amount of production cost savings and PTC benefits Wind Catcher will produce is dependent upon the amount of energy that the project will actually generate and deliver to SWEPCO's load. 78. SWEPCO's application assumes that Wind Catcher will perform at a 51.1% net capacity factor (NCF), based on a study from Invenergy's consultant, DNV-GL DNV-GL used limited wind data in its analysis, which served to increase the uncertainty in its projections DNV-GL did not adequately consider certain loss factors, such as the possibility of high wind speeds and high temperatures that are outside of the wind turbines' operating range The GE wind turbines that will be used in the Wind Facilities are a new model that have never been placed in commercial operation before.76 DNV-GL noted that there is uncertainty associated with predicting the performance of new turbine models, but did not factor in that uncertainty in its study of Wind Catcher The power curve guarantee is not sufficient to address the risk of turbine underperformance or performance degradation The Gen-Tie is a radial line, and it is the only path for energy from the Wind Facilities to reach SWEPCO's load SWEPCO assumed that the Gen-Tie will have an availability factor of 99.8% based on the historical performance of AEP's 765-kV system on a per-100 mile basis SWEPCO's analysis failed to account for the length of the Gen-Tie. The historical availability factor for a 350-mile 765-kV line on AEP's system is 98.8% SWEPCO Ex. 25, Ex. KDP-2R. 72 TIEC Ex. 3, Pollock Second Supp. Dir. at Tr. at 192:16-18 (Godfrey Cross) (Feb. 13, 2018). 74 SWEPCO Ex. 4, Godfrey Dir. at Ex. NG-4 at TIEC's Initial Br. at TIEC Ex TIEC Initial Br. at TIEC's Reply Br. at Staff Ex. 3A, Smithson Dir. at SWEPCO Ex. 19, Bradish Reb. at 2 9

11 86. In its past projections, DNV-GL has historically overestimated the actual NCF by 2% SWEPCO has not adequately considered the risk of lower-than-expected performance of the Wind Facilities. 88. Every percentage point of underperformance in NCF results in approximately $95.6 million (NPV) in decreased benefits from less production savings and fewer PTCs.83 Capacity Value 89. SWEPCO projects that the project will allow the company to delay the addition of two new natural gas combined-cycle plants, one from 2026 to 2033, and one from 2038 to past SWEPCO estimates the value of these deferred plant additions to be $269 million (NPV) SWEPCO's projections are subject to uncertainty regarding its future capacity needs, SPP rules for calculating capacity, the type of future capacity that would be avoided, and the actual performance of Wind Catcher SWEPCO has not met its burden of proof in demonstrating that Wind Catcher will provide capacity benefits. Proposed Conditions to the CCN 92. In rebuttal testimony, SWEPCO made the following proposals:86 a. A soft capital cost cap set at 109% of the originally filed estimate excluding AFUDC. b. A soft NCF minimum of 44.7%, assessed on a five-year rolling basis. c. A guarantee that the PTCs SWEPCO actually earns, if any, will be at the 100% level. d. A cap on the DTA for unused PTCs at a lifetime average of $560 million per year. e. Crediting ratepayers 100% of margins from off-system sales. 93. In live testimony, SWEPCO presented a proposed calculation of what SWEPCO characterized as net ratepayer benefits over a ten-year lookback All of SWEPCO's proposals are subject to force majeure and change in law exceptions. SWEPCO defines force majeure as events outside of its reasonable 81 ETEC/NTEC Ex. 8 (Demonstrative); TIEC's Initial Br. at SWEPCO Ex. 16, Godfrey Reb. at Ex. JFG-1R. 83 Tr. at 1050: :9 (Pearce Cross) (Feb. 20, 2018). 84 SWEPCO Ex. 7, Pearce Dir. at Tr. at 1235: :9 (Pollock Surreb.) (Feb. 21, 2018). 86 SWEPCO Ex. 14, Chodak Reb. at TIEC Ex

12 control. SWEPCO did not demonstrate that its proposal provided any protections beyond the existing ratepayer protections against imprudent utility actions SWEPCO's PTC guarantee does not provide any ratepayer protection if SWEPCO fails to qualify for the PTCs due to failing to timely complete the Wind Facilities or Gen-Tie SWEPCO's ten-year lookback uses a methodology for calculating ratepayer savings that overstates actual ratepayer benefits SWEPCO's ten-year lookback calculates fuel savings based entirely on SWEPCO's generation stack, the generation that would actually have replaced the energy generated by the Wind Facilities SWEPCO's ten-year lookback freezes the generation stack as filed in this case, so that the fuel savings are calculated based on SWEPCO's current generation stack, irrespective of what generation is actually in place between 2021 and SWEPCO's ten-year lookback assumes that to the extent SWEPCO does not have enough generation in its stack to hypothetically substitute for up to 1400 MW of Wind Catcher generation, it will simply use the most expensive unit on its system SWEPCO's ten-year lookback assumes ratepayers will receive $253 million of capacity value, whether or not there is actually any such value SWEPCO's ten-year lookback would not begin crediting customers for unrealized benefits from until after This proposal violates the principle of intergenerational equity SWEPCO s proposed conditions provide little, if any, ratepayer protection. Proposed Ratemakinz Treatments 103. SWEPCO proposed several ratemaking treatments in its application, including: a. Recovering the revenue requirement through fuel before inclusion in rate base. b. Flowing PTCs through fuel as they are generated. c. Creating a DTA for unused PTCs. d. Proposing to defer PTCs to shape the revenue requirement. 88 TIEC's Reply Br. at TIEC's Reply Br. at Tr. at 1232:6-20 (Pollock Surreb.) (Feb. 21, 2018); Tr. at 1144: :7 (Norwood Surreb.) (Feb. 21, 2018); Tr. at 1192: :5 (Nalepa Surreb.) (Feb. 21, 2018). 91 TIEC's Reply Br. at

13 e. Setting jurisdictional and class allocation factors. f. Setting depreciation rates. g. Creating a tariff schedule for customers to purchase renewable energy credits Because SWEPCO's CCN application is denied, its proposed ratemaking treatments are moot. Proposed Conclusions of Law 1. The Commission has jurisdiction over this matter pursuant to Public Utility Regulatory Act, Tex. Util. Code Ann , , , , and (West 2016 & Supp. 2017) (PURA). 2. The State Office of Administrative Hearings has jurisdiction over this proceeding, including the preparation of this proposal for decision with findings of fact and conclusions of law, pursuant to PURA and Tex. Gov't Code Ann and Notice of the Application was provided in compliance with PURA and 16 Tex. Admin. Code because Wind Catcher is an out-of-state facility. 4. SWEPCO has not met its burden to show that it has a need for additional generation pursuant to PURA (c)(2). 5. SWEPCO has not met its burden to show that Wind Catcher would improve service or result in a probable lowering of costs to retail customers pursuant to PURA (c)(4)(e). 6. SWEPCO is not entitled to approval of the Application because it has failed to demonstrate that Wind Catcher is necessary for the service, accommodation, convenience, or safety of the public within the meaning of PURA (a), taking into consideration the factors set out in PURA (c). 12

14 Respectfully submitted, THOMPSO KNIGHT LLP Rex D., iddleswe State o Benjamin Hallmar State Bar No James Z. Zhu State Bar No San Jacinto Blvd., Suite 1900 Austin, Texas (512) (512) (fax) ATTORNEYS FOR TEXAS INDUSTRIAL ENERGY CONSUMERS PUBLIC UTILITY COMMISSION OF TEXAS LEGAL DIVISION Margaret Uhlig Pemberton Division Director Stephen Mack Managing Attorney Rachelle Nicolette Robles State Bar No Rosemary E. Hambright State Bar No N. Congress Avenue P.O. Box Austin, Texas (512) (fax) ATTORNEYS FOR COMMISSION STAFF 13

15 HERRERA LAW & ASSOCIATES, PLLC Ple1/ rirt bi, Alfred Herrera State Bar No Brennan Foley State Bar No Congress Ave, Ste. 950 Austin, Texas (512) (512) (fax) forawei Tiz ATTORNEYS FOR CITIES ADVOCATING REASONABLE DEREGULATION CERTIFICATE OF SERVICE I, Benjamin B. Hallmark, Attorney for TIEC, hereby certify that a copy of the foregoing document was served on all parties of record in this proceeding on this 23"I day of March, 2018 by facsimile, electronic mail and/or First Class, U.S. Mail, Postage Prepaid. "rift Benjamin B. Hallmark qvul vir'' F02_, 14