BEFORE THE CORPORATION COMMISSION OF TH M E Q ~R 13 2C0 9 STATE OF OKLAHOMA COURT CLERK'S OFFICE - Gh;C CORPQRAT;ON C:J;,' ;::t!;~,tliij OF OKLAHOM A

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1 -....,. BEFORE THE CORPORATION COMMISSION OF TH M E Q ~R 13 2C0 9 STATE OF OKLAHOMA COURT CLERK'S OFFICE - Gh;C CORPQRAT;ON C:J;,' ;::t!;~,tliij OF OKLAHOM A IN THE MATTER OF THE APPLICATION OF OKLAHOMA GAS AND ELECTRIC COMPANY FOR AN ORDER OF THE COMMISSION GRANTING A WAIVER OF OAC 165 : (3) REGARDING THE LEAVING OF A WRITTEN STATEMENT AT THE PREMISES UPON DISCONNECTION IN REGARD TO ITS SMART METER PROGRAM Cause No. PUD RESPONSIVE TESTIMON Y OF MARVIN VAUGH N MARCH 13, 2009

2 Oklahoma Gas and Electric Company Responsive Testimony of Marvin Vaugh n BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOMA RESPONSIVE TESTIMON Y OF MARVIN VAUGHN MARCH 13, 2009 INDEX Page 03 Page 05 Page 05 Page 07 Page 08 Page 10 INTRODUCTION PURPOSE THE CONCERNS OF STAFF THE REMEDIES BY OG&E RECOMMENDATIONS EXHIBIT MV - 1

3 Responsive Testimony of Marvin Vaugh n 1 INTRODUCTIO N 2 Q : Please state your name and business address. 3 A: My name is Marvin Vaughn. My business address is the Oklahoma Corporatio n 4 Commission, 2101 N. Lincoln Blvd., Jim Thorpe Building, Suite 580, Oklahom a 5 City, Oklahoma Q : What is your occupation and by whom are you employed? 7 A: I am a Coordinator of Energy and Water, employed by the Public Utility Division 8 (PUD) of the Oklahoma Corporation Commission (OCC or the Commission). I 9 previously held the position of Public Utility Regulatory Analyst (PURA) for PUD. 10 Q : What is your professional experience and educational background? i i A: I received a bachelor of business administration degree in accounting from the 12 University of Oklahoma. I have taken additional accounting and business hours 13 to satisfy the requirements for the certified public accountancy exam, which I 14 anticipate taking soon. I was employed as a regulato ry analyst with the PUD i n 15 December of 2004, and promoted to a Coordinator of Energy and Water positio n 16 in September of My responsibilities include preparation of exhibits, 17 comments, testimony and interrogatories, serving as an expert witness in cour t 18 proceedings, and reviewing reports and orders for technical accuracy. Other 1 9 responsibilities include analyzing utility applications, reports, financial records, 20 and cost studies in order to make recommendations. 3

4 Responsive Testimony of Marvin Vaugh n t During my employment with the Commission, I have testified in the mos t 2 recent rate cases of Oklahoma Natural Gas Company (ONG), Oklahoma Ga s 3 and Electric Company (OG&E), Arkansas Oklahoma Gas (AOG), and Publi c 4 Service Company of Oklahoma (PSO). I have also testified in the 2004, and 2006 fuel adjustment clause reviews of OG&E. I have also 6 attended numerous seminars and conferences to fu rther my knowledge in th e 7 regulato ry environment. 8 Q : Have you previously testified before the Commission and were your 9 credentials accepted? io A: Yes, most recently I testified in Cause Nos. PUD , PUD , 11 PUD , PUD , and PUD A more complet e 12 description of my qualifications and a list of the proceedings in which I have bee n 13 involved are included in my circum vitae, which is attached as Exhibit MV-1. 4

5 Responsive Testimony of Marvin Vaugh n i PURPOSE 2 Q : What is the purpose of your testimony in this cause? 3 A : The purpose of my responsive testimony is to present PUD Staff 's 4 recommendations to the Commission regarding the waiving of OAC 165 : (3) in service areas where OG&E is utilizing their smart meter program. 6 Waiver of this rule would alleviate the requirement of the utility to leave a wri tten 7 statement at the premises where service has been disconnected. OG&E 's sma rt s meter program enables the utility to perform services, like disconnecting service, 9 remotely therefore a service vehicle will no longer be at the physica l 10 location/premises to leave the required statement. I will discuss Staffs concerns 11 and the remedies provided by OG&E to address those concerns THE CONCERNS OF STAF F 14 Q : Please explain the concerns that Staff had regarding this application. 15 A: First, Staff wanted to ensure that the Company would still be providing sufficien t 16 notice to customers if this waiver was granted. OAC 165 : , states 17 "When service is disconnected a the premises of the customer :...(3) The utility 18 employee shall leave a written statement at the premises that service has bee n 19 disconnected, the reason for the disconnection, and the telephone number an d 20 address where the consumer may arrange to have the service reconnected. " 21 Upon fu rther investigation, Kim Dobbins of the Consumer Services Divisio n 5

6 1 Public Service Company of Oklahoma Responsive Testimony of Marvin Vaughn 2 (CSD), of the Commission, found that the initial plan of the Company to provide 3 notice to its smart meter customers did not account for future customers in the 4 program. Since the initial phase of the program consisted of residential 5 apartment complexes, single family residences and a few commercial 6 businesses, Mrs. Dobbins was concerned that new tenants in these dwellings 7 would not have sufficient notice explaining that service had been disconnected, 8 the reasons for the disconnection, and how the customer could arrange to have 9 the service reconnected. 10 Second, Staff also wanted to ensure that the Company would still be in 11 compliance with other rules if the Commission were to grant the requested relief. 12 Specifically, since the Company's application is requesting an exception of an 1 3 existing rule, Staff wanted to ensure compliance with OAC 165 :35-1-3(f) which 14 requires that "...If.... a utility seeks and an exception or variance from this 15 Chapter in its tariffs or terms and conditions of service, such exception or 1 6 variance shall be clearly shown on such tariffs or terms and conditions of service, 1 7 sufficient to plainly bring to the Commission's attention the exact nature of the 18 said exception or variance..." 6

7 Responsive Testimony of Marvin Vaughn i THE REMEDIES BY OG& E 2 Q : Please provide the remedies offered by OG&E to address Staff's concerns. 3 A : First, the Company conducted informal discussions with both Staff and CSD to 4 address both concerns regarding this application. Second, the Company drafte d 5 language and circulated it both pa rties, which will notify customers that no notic e 6 will be left at the location in the event of service disconnection. This draft state d 7 OG&E will notify existing customers via a door tag when the smart meter wa s 8 installed; notify customers when they call to start service ; notify customers vi a 9 the Customer Guide bill inse rt ; notify customers via 10 day notice ; notify 10 customers via 48 hour notice bill inse rt ; and notify customers via the OG&E 11 Electric Services' Disconnection Policy bill. After the circulation of the draft 12 language, the parties met with the Company on Februa ry 11, 2009 and 13 determined that the information presented by the Company was sufficient In addition to the above listed efforts, Christopher Greenwell, OG&E's witness, 16 testified "the Company also initiates an automated call four (4) days prior to th e 17 date of disconnection and another call by a Customer Service representative on e 18 day prior to the date of disconnection." (Page 3 of Direct Testimony of 19 Christopher Greenwell). 20 7

8 Responsive Testimony of Marvin Vaughn i Second, the issue on compliance with OAC165 :35-1-3(f) is still being discussed. 2 Staffs position is that the Company should amend their tariff to include language 3 addressing the smart meter program customer service exception. Specifically, 4 the new language should clearly state that in service areas utilizing the sma rt 5 meter program, no notices or statements will be left at the premises where 6 service has been disconnected is an exception to OAC 165 : (3 ), in 7 compliance with OAC 165 : (f). Even though the issues dealing with th e 8 sma rt meter programs will be reviewed in OG&E 's current rate case Cause No. 9 PUD , addressing the sma rt meter program waive r 10 request/"exception " in the tariff now will ensure Company compliance with th e 11 Commission rules. 1 2 RECOMMENDATION S 13 Q : What is Sta ffs recommendation with regard to the application in thi s 14 cause? 15 A: Staff finds that the Company has shown that compliance with OAC 165 : (3) in areas utilizing smart meters would result in costs that would otherwis e 17 not be incurred because of the technology being employed. Also, Staff finds that 18 the Company has demonstrated the ability to comply with the intent of OAC : (3) by providing alternative methods of sufficient notice to existin g 20 and future customers during this initial phase of OG&E 's sma rt meter program. 8

9 Responsive Testimony of Marvin Vaugh n i These alternative methods will sufficiently inform the customers that no notice 2 will be left at their premises when service has been disconnected. 3 4 Staff also finds that in order to comply with OAC 165 :35-1-3(f), OG&E should 5 make the necessary changes to their tariff clearly stating that in service area s 6 utilizing the sma rt meter program, no notices or statements will be left at th e 7 premises where service has been disconnected is an exception to OAC 165 : (3) Staff recommends this application be approved by the Commission so that th e 11 Company can comply with Commission rules while implementing its smart mete r 12 program I state under penalty of perju ry under the laws of Oklahoma that the foregoing is true and correct. nijv- (Signature) 9

10 E xhibit MV-1 Cause Number PUD Responsive Testimony of Marvin Vaughn Contact occ .com 580 jim Thorpe Building Tel: P.O. Box Fax: Oklahoma City, OK Education Universi ty of Oklahoma B. B.A., Accounting Work Experience Oklahoma Corporation Commission Coordinator of Energy and Wate r 2004-Prese nt Lead case analyst and expert witness on the following PUD Cause : Expert witness for the following PUD Causes : PSO Rate Case Public Utility Regulatory Analys t Lead case analyst and expert witness on the following PUD Causes : , / , , , , , , , , and /327. Expert witness for the following PUD Causes : PSO Rate Case , AOG Rate Case , OG&E Rate Case , and ONG Rate Case Actively participated in the revenue requirement adjustments of Cause PUD Center Point Energy of Oklahoma's Performance Based Rate Change. Professional Training Transmission Summit Transmission Renaissance FERC Account Training presented by Jerry McKenzie of MAXIMU S Financial Services 2008 American Public Power Association Winter Educatio n Institute on Advanced Public Utility Accounting and Basic Cost o f Service & Retail Rate Design Fred Pryor Microsoft Excel and Advanced Microsoft Excel Trainin g Semina r 2007 Institute of Public Utilities Advanced Regulatory Studies Progra m Expert Witness Training 2006 N A R UC Utility Rate Schoo l 10

11 Cause No. PUD Certificate of Service CERTIFICATE OF SERVIC E I, the undersigned, do hereby certify that on the 7day of March, 2009, a true and correct copy of the above and foregoing was deposited, with postage prepaid thereon, in the U.S. Mail to : William L. Hume s Office of Attorney General 313 NE 21 S` Street Oklahoma City, OK Mr. Patrick D. Shore Mr. William (Bill) J. Bullard OG&E Post Office Box 32 1 Oklahoma City, OK ~ _---' ~ FrancieILudwick

RESPONSIVE TESTIMONY

RESPONSIVE TESTIMONY ~ BEFORE THE CORPORATION COMMISSION OF THE STATE OF OKLAHOM A IN THE MATTER OF THE APPLICATION OF CENTERPOINT ENERGY RESOURCES CORP., D/B/A CENTE RPOI NT ENERGY OKLAHOMA GAS, FOR APPROVAL OF ITS PERFORMANCE