Expert Testimony Appearances of Richard A. Baudino As of October States, Inc.

Size: px

Start display at page:

Download "Expert Testimony Appearances of Richard A. Baudino As of October States, Inc."

Melvin Bailey
6 years ago
Views:

1 Attachment A Page 9 of 14 Expert Testimony Appearances of Richard A. Baudino As of October 2012 Date Case Jurisdict. Party Utility Subject 11/00 R PA Penn Fuel PFG Gas, Inc. and Cost allocation issues. (Rebuttal) Transportation Customers North Penn Gas Co. 12/00 U LA Louisiana Public Entergy Gulf Return on equity Service Comm. States, Inc. 03/01 U LA Louisiana Public Entergy Gulf Stranded cost analysis. Service Comm. States, Inc. 04/01 U LA Louisiana Public Entergy Gulf Restructuring issues U (SC), Service Comm. States, Inc. U (SC) (Subdocket B) (Addressing Contested Issues) 04/01 R PA Philadelphia Industrial and Philadelphia Gas Works Revenue requirements, cost allocation Commercial Gas Users Group and tanff issues. 11/01 U LA Louisiana Public Entergy Gulf Return on equity. Service Comm. States, Inc. 03/ U GA Georgia Public Atlanta Gas Light Capital structure. Service Commission 08/ KY Kentucky Industrial Columbia Gas of Revenue requirements Utility Customers Kentucky 09/02 M PA Philadelphia Industrial Philadelphia Gas Transportation rates, terms, And Commercial Gas Works and conditions. Users Group 01/ KY Kentucky Industrial Kentucky Power Return on equity. Utility Customers 02/03 02S-594E CO Cripple Creek & Victor Aquila Networks - Return on equity. Gold Mining Company WPC 04/03 U LA Louisiana Public Service Entergy Gulf States, Return on equity. Commission Inc. 10/03 CV020495AB GA The Landings Assn., Inc. Utilities Inc. of GA Revenue requirement & overcharge refund 03/ KY Kentucky Industrial Louisville Gas & Return on equity, Utility Customers Electric Cost allocation & rate design J. KENNEDY AND ASSOCIATES, INC. 50

2 Attachment A Page 10 of 14 Expert Testimony Appearances of Richard A. Baudino As of October 2012 Date Case Jurisdict. Party Utility Subject 03/ KY Kentucky Industrial Kentucky Utilities Return on equity Utility Customers 4/04 04S-035E CO Cripple Creek & Victor Aquila Networks - Return on equity. Gold Mining Company, WPC Goodrich Corp., Holcim (U.S.) Inc., and The Trane Co. 9/04 U-23327, LA Louisiana Public Service Southwestern Electric Fuel cost review Subdocket B Commission Power Company 10/04 U LA Louisiana Public Service Southwestern Electric Return on Equity Subdocket A Commission Power Company 06/ El FL South Florida Hospital Florida Power & Return on equity and HeallthCare Assoc. Light Co. 08/ MD Maryland Industrial Baltimore Gas & Revenue requirement, cost Group Electric Co. allocation, rate design, Tariff issues. 01/ KY Kentucky Industrial Kentucky Power Co. Return on equity. Utility Customers, Inc. 03/ WV West Virginia Energy Appalachian Power Return on equity. E-PC-PW-42T Users Group Company 04/06 U LA Louisiana Public Service Entergy Louisiana, Transmission Issues Commission LLC 07/06 U LA Louisiana Public Service Southwestern Electric Return on equity, Service quality Commission Power Company 08/06 ER MO Missouri Office of the Kansas City Power Return on equity, 0314 Public Counsel & Light Co. Weighted cost of capital 08/ EG CO CF&I Steel, L.P. & Public Service Company Return on equity, Climax Molybdenum of Colorado Weighted cost of capital 01/ E-42T WV West Virginia Energy Monongahela Power & Return on Equity Users Group Potomac Edison 01/ AK Steel, Inc. Vectren South, Inc. Cost allocation, rate design 05/ Maine Office of the Bangor Hydro-Electric Return on equity, weighted cost of capital. Public Advocate 09/ Connecticut Industrial Connecticut Light & Power Return on equity, weighted cost of capital Energy Consumers 10/07 05-UR-103 Wisconsin Industrial Wisconsin Electric Power Co Return on equity J. KENNEDY AND ASSOCIATES, INC. 51

3 Attachment A Page 11 of 14 Expert Testimony Appearances of Richard A. Baudino As of October 2012 Date Case Jurisdict. Party Utility Subject Energy Group, Inc 11/ Louisiana Public Service Cleco Power:LLC & Lignite Pricing, support of Commission Southwestern Elec. Power settlement 01/ EL-AIR Ohio Energy Group Ohio Edison, Cleveland Electric, Return on equity Toledo Edison 03/ , IL The Commercial Group Ameren Cost allocation, rate design , , , , , (consol.) 04/ IL The Commercial Group Commonwealth Edison Cost allocation, rate design R Cost and revenue allocation, PA Columbia Industrial Intervenors Columbia Gas of PA Tariffissues 07/08 R Philadelphia Area Industrial Cost and revenue allocation, PA Energy users Group PECO Energy Tariffissues 07/08 R PA PPL Gas Large Users Gp PPL Gas Retainage, LUFG Pct. 08/ UR- Wisconsin Industrial 116 WI Energy Group Wisconsin P&L Cost of Equity 08/ UR- Wisconsin Industrial 119 WI Energy Group Wisconsin PS Cost of Equity 09/08 ER Cost and revenue 0318 MO The Commercial Group AmerenUE allocation 10/08 R U.S. Steel & Univ. of Cost and revenue PA Pittsburgh Med. Ctr. Equitable Gas Co. allocation 10/08 08-G-0609 NY Multiple Intervenors Niagara Mohawk Power Cost and Revenue allocation J. KENNEDY AND ASSOCIATES, INC. 52

4 Attachment A Page 12 of 14 Expert Testimony Appearances of Richard A. Baudino As of October 2012 Date Case Jurisdict. Party Utility Subject 12/ U GA Georgia Public Service CWIP/AFUDC issues, Commission Georgia Power Company Review financial projections 03/09 ER FERC Louisiana Public Service Commission Entergy Services, Inc. Capital Structure 04/09 E002/GR The Commercial Group Northern States Power Cost and revenue allocation and rate design 05/ The Commercial Group Commonwealth Edison Cost and revenue allocation 07/ El South Flonda Hospital and Health Care Assn. Florida Power & Light Cost of equity, capital structure, Cost of short-term debt 07/09 U LA Louisiana PSC Cleco LLC, Southwestern Public Service Co. Lignite mine purchase 10/ UR-116WI Wisconsin Industrial Energy Group Northern States Power Class cost of service, rate design 10/09 M PA PP&L Industrial PPL Electric Utilities Smart Meter Plan cost allocation Customer Alliance 10/09 M Philadelphia Area PA Industrial Energy Users Group PECO Energy Company Smart Meter Plan cost allocation 10/09 M West Penn Power PA Industrial Intervenors West Penn Power Smart Meter Plan cost allocation 11/09 M Duquesne PA Industnal Intervenors Duquesne Light Company Smart Meter Plan cost allocation Met-Ed Industrial Users Gp. Metropolitan Edison, Penelec Industrial Customer Pennsylvania Electric Co., M Alliance, Penn Power Users Pennsylvania Power Co. 11/ PA Group Smart Meter Plan cost allocation 03/ Monongahela Power, E-42T WV West Virginia Energy Users Gp. Potomac Edison Return on equity, rate of return 03/10 E015/GR MN Large Power Intervenors Minnesota Power Return on equity, rate of return 04/ KY Kentucky Industrial Utility Consumers Kentucky Power Return on equity J. KENNEDY AND ASSOCIATES, INC. 53

5 Attachment A Page 13 of 14 Expert Testimony Appearances of Richard A. Baudino As of October 2012 Date Case Jurisdict. Party Utility Subject 04/ KY Kentucky Industrial Utility Consumers Louisville Gas and Electric, Kentucky Utilities Return on equity 05/ E- GI WV West Virginia Energy Users Group Appalachian Power Co] Wheeling Power Co. EE/DR Cost Recovery, Allocation, & Rate Design 05/10 R PA Columbia Industrial Intervenors Columbia Gas of PA Class cost of service & cost allocation 06/ KY Lexington-Fayette Urban County Government Kentucky American Water Company Return on equity, rate of return, revenue requirements 06/10 R PA PP&L Industrial Customer Alliance PPL Electric Utilities Rate design, cost allocation 07/10 R PA Philadelphia Area Industrial Energy Users Group PECO Energy Co. Return on equity 07/10 R PA Philadelphia Area Industrial Energy Users Group PECO Energy Co. Cost and revenue allocation 07/ MD Maryland Energy Group Baltimore Gas and Electric Electric and gas cost and revenue allocation; return on equity 09/ MA University of Massachusetts- Amherst Western Massachusetts Electric Co. Cost allocation and rate design 10/10 R PA Duquesne Industrial Intervenors Duquesne Light Company Cost and revenue allocation, rate design 11/10 P PA West Penn Power Industrial Intervenors West Penn Power Co Transmission rate design 11/ E-02T WV West Virginia Energy Users Group Appalachian Power Co. & Wheeling Power Co. Return on equity, rate of Return 11/ IL The Commercial Group Commonwealth Edison Cost and revenue allocation and rate design 04/11 R PA Central Pen Gas Large Users Group UGI Central Penn Gas, Inc. Tariff issues, revenue allocation 07/11 R PA Philadelphia Area Energy Users Group PECO Energy Retainage rate 08/11 R PA AK Steel Pennsylvania-American Water Compay Rate Design 08/11 11AL-151G CO Climax Molybdenum PS of Colorado Cost allocation 09/11 11-G-0280 NY Multiple Intervenors Coming Natural Gas Co. Cost and revenue allocation J. KENNEDY AND ASSOCIATES, INC. 54

6 Attachment A Page 14 of 14 Date Case Jurisdict. Party Expert Testimony Appearances of Richard A. Baudino As of October 2012 Utility Subject 10/ UR-117 WI Wisconsin Industrial Energy Group Northern States Power Cost and revenue allocation, rate design AL-947E CO Climax Molybdenum, CF&I Steel Public Svc Of Colorado Return on equity, wtd. cost of capital 07/ El FL South Florida Hospitals and Health Care Assn. Florida Power and Light Co, Return on equity, wtd. cost of capital 07/ E-PC WV West Virginia Energy Users Gp. Allegheny Power Company Special rate proposal for Century Aluminum 07/12 R PA 09/12 05-UR-106 WI 09/ KY 10/ MD PP&L Industrial Customer Alliance PPL Electric Utilities Corp. Cost allocation Wisconsin Industrial Class cost of service, cost and revenue Energy Group Wisconsin Electric Power Co. allocation, rate design Kentucky Industrial Louisville Gas and Electric, Utility Consumers Kentucky Utilities Return on equity Maryland Energy Group Baltimore Gas & Electric Cost and revenue allocation, rate design Cost of equity, weighted cost of capital 10/ UR-1 18 WI Wisconsin Industrial Northern States Power Class cost of service, cost and revenue Energy Group Company allocation, rate design 10/ TX Steering Committee of Cities Return on equity, Served by Oncor Cross Texas Transmission, LLC Weighted cost of capital J. KENNEDY AND ASSOCIATES, INC. 55

7 a, a, ^ V ^ 'ea Q-1 G^L o a^ A aas o,, O^ 60" so (0 LO z 6^ ^OT co U) N 4^, u W J W W ^ G N ZN O > `^ ^O S a 15 e a2 4) S oa 9o^s 9^ ^ o J Z an co yh U J a W 0 9 `n0, W O, so;,r. V so4`^ as Ao, lel O ol O1 ^ r N an IQ" o, oo, an OO OO O) 00 (0 Lf) C+) N r O 4^bn (%) PIa!A puo8

8 Schedule 2 Page 1 of 3 COMPARISON GROUP DIVIDEND YIELD CROSS TEXAS TRANSMISSION, LLC Sep-12 Aug-12 Jul-12 Jun-12 May-12 Apr-12 ALLETE High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 6 mos. Avg. Alliant Energy High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 6 mos. Avg. American Electric Power High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 6 mos. Avg. Cleco High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 6 mos. Avg. Consolidated Edison High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 6 mos. Avg. Great Plains Energy High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 6 mos. Avg % 4.47% 4.44% 4.57% 4.62% 4.51% 4.50% % 3.93% 3.88% 4.04% 4.06% 4.12% 4.02% % 4.40% 4.57% 4.78% 4.92% 4.95% 4.65% % 3.14% 2.89% 3.02% 3.10% 3.16% 3.09% % 3.83% 3.81% 3.92% 4.07% 4.15% 3.97% % 3.89% 3.87% 4.12% 4.24% 4.25% 4.04% 57

9 Schedule 2 Page 2 of 3 COMPARISON GROUP DIVIDEND YIELD CROSS TEXAS TRANSMISSION, LLC Sep-12 Aug-12 Jul-12 Jun-12 May-12 Apr-12 Hawaiian Electric High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 4.60% 4.47% 4.34% 4.42% 4.63% 4.83% 6 mos. Avg. 4.55% IDACORP High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 3.10% 3.14% 3.09% 3.26% 3.33% 3.28% 6 mos. Avg. 3.20% Pepco High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 5.65% 5.48% 5.49% 5.61% 5.74% 5.82% 6 mos. Avg. 5.63% PG&E Corp. High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 4.24% 4.03% 4.01% 4.10% 4.13% 4.23% 6 mos. Avg. 4.12% Pinnacle West High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 3.99% 3.97% 3.96% 4.17% 4.33% 4.44% 6 mos. Avg. 4.14% Portland General High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 3.97% 3.95% 3.99% 4.18% 4.22% 4.23% 6 mos. Avg. 4.09% 58

10 Schedule 2 Page 3 of 3 COMPARISON GROUP DIVIDEND YIELD CROSS TEXAS TRANSMISSION, LLC Sep-12 Aug-12 Jul-12 Jun-12 May-12 Apr-12 Southern Co. High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div % 4.18% 4.13% 4.17% 4.30% 4.19% 6 mos. Avg. 4.21% UNS Energy High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 4.17% 4.24% 4.27% 4.53% 4.68% 4.76% 6 mos. Avg. 4.44% Westar Energy High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 4.46% 4.26% 4.33% 4.52% 4.69% 4.75% 6 mos. Avg. 4.50% Wisconsin Energy High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 3.18% 3.02% 2.97% 3.10% 3.24% 3.36% 6 mos. Avg. 3.14% Xcel High Price ($) Low Price ($) Avg. Price ($) Dividend ($) Mo. Avg. Div. 3.88% 3.75% 3.72% 3.81 % 3.79% 3.92% 6 mos. Avg. 3,81% Average Dividend Yield 4.12% Monthly Group Average 4.09% 4.01% 3.99% 4.14% 4.24% 4.29% Source: Yahoo! Finance 59

11 Schedule 3 Page 1 of 2 COMPARISON GROUP GROWTH RATES AND DCF RETURN ON EQUITY CROSS TEXAS TRANSMISSION, LLC (1) (2) (3) (4) (5) Value Line Value Line Value Line Thomson Company DPS EPS B x R Zacks Financial ALLETE, Inc. 3.00% 9.00% 4.50% 5.50% 6.00% Alliant Energy Corporation 5.50% 6.50% 4.00% 6.12% 6.30% American Electric Power Co. 3.50% 3.00% 3.50% 3.48% 3.37% Cleco Corp % 6.50% 5.00% 3.00% 3.00% Consolidated Edison, Inc. 1.00% 4.00% 4.00% 3.30% 3.02% Great Plains Energy Incorporated 5.00% 5.50% 3.00% 8.17% 5.25% Hawaiian Electric Industries, Inc. 2.00% 9.00% 3.50% 6.72% 8.60% IDACORP 8.00% 2.00% 4.00% 4.00% 4.00% Pepco Holdings, Inc. 1.00% 7.00% 2.50% 5.88% 5.83% PG&E Corporation 2.00% 4.50% 5.00% 3.20% 0.20% Pinnacle West Capital Corp. 2.50% 5.00% 3.00% 6.52% 5.87% Portland General Electric 3.50% 5.50% 4.00% 4.10% 3.62% Southern Company 4.00% 5.00% 4.00% 5.22% 5.38% UNS Energy Corp. 7.50% 5.50% 5.50% 6.30% 8.00% Westar Energy, Inc. 3.00% 6.50% 3.50% 5.67% 4.80% Wisconsin Energy Corporation 13.50% 6.50% 5.00% 5.42% 6.05% Xcel Energy 5.00% 6.00% 3.50% 5.38% 5.09% Averages 4.79% 5.71% 3.97% 5.18% 4.96% Median Values 3.50% 5.50% 4.00% 5.42% 5.25% Sources: Zack's and Thomson Earnings Reports, retrieved October 16, 2012 Value Line Investment Survey, August 3, August 24, and September 21,

12 Schedule 3 Page 2 of 2 RETURN ON EQUITY CALCULATION - COMPARISON GROUP CROSS TEXAS TRANSMISSION, LLC (1) (2) (3) (4) (5) Value Line Value Line Zack's Thomson Average of Dividend Gr. Earnings Gr. Earning Gr. Earning Gr. All Gr. Rates Method 1: Dividend Yield 4.12% 4.12% 4.12% 4.12% 4.12% Growth Rate 4.79% 5.71% 5.18% 4.96% 5.16% Expected Div. Yield 4.22% 4.24% 4.23% 4.23% 4.23% DCF Return on Equity 9.01% 9.95% 9.41% 9.19% 9.39% Midpoint of Results 9.48% Method 2: Dividend Yield 4.12% 4.12% 4.12% 4.12% 4.12% Median Growth Rate 3.50% 5.50% 5.42% 5.25% 4.92% Expected Div. Yield 4.20% 4.24% 4.24% 4.23% 4.23% DCF Return on Equity 7.70% 9.74% 9.66% 9.48% 9.15% Midpoint of Results 8.72% 61

13 Schedule 4 Page 1 of 2 CAPITAL ASSET PRICING MODEL - CURRENT MARKET RETURN CROSS TEXAS TRANSMISSION, LLC 20-Year Treasury Bond, Value Line Beta Line No. 1 Market Required Return Estimate 2 Expected Dividend Yield 3 Expected Growth 4 Required Return 5 Risk-free Rate of Return, 20-Year Treasury Bond 6 Average of Last Six Months 8 Risk Premium 6 Month Average RFR (Line 4 minus Line 6) 10 Comparison Group Beta 11 Comparison Group Beta * Risk Premium 6 Month Average RFR (Line 10 * Line 9) 13 CAPM Return on Equity 6 Month Average RFR (Line 12 plus Line 6) Value Line 0.76% 12.32% 13.08% 2.46% 10.62% % 9.71% 5-Year Treasury Bond, Value Line Beta 1 Market Required Return Estimate 2 Expected Dividend Yield 3 Expected Growth 4 Required Return 5 Risk-free Rate of Return, 5-Year Treasury Bond 6 Average of Last Six Months 8 Risk Premium 6 Month Average RFR (Line 4 minus Line 6) 10 Comparison Group Beta 11 Comparison Group Beta * Risk Premium 6 Month Average RFR (Line 9 * Line 10) 13 CAPM Return on Equity 6 Month Average RFR (Line 12 plus Line 6) 0.76% 12.32% 13.08% 0.72% 12.37% % 9.16% 62

14 Schedule 4 Page 2 of 2 CAPITAL ASSET PRICING MODEL - CURRENT MARKET RETURN CROSS TEXAS TRANSMISSION, LLC Supporting Data for CAPM Analyses 20 Year Treasury Bond Data Avg. Yield April % May % June % July % August % September % 6 month average 2.46% 5 Year Treasurv Bond Data Avg. Yield April % May % June % July % August % September % 6 month average 0.72% Value Line Market Growth Rate Data: Forecasted Data: Earnings 14.84% Book Value 9.80% Average 12.32% Source: Value Line Investment Survey for Windows, October 3, 2012 Comparison Group Betas: ALLETE, Inc. Alliant Energy Corporation American Electric Power Co. Cleco Corporation Consolidated Edison, Inc. Great Plains Energy Incorporated Hawaiian Electric Industries, Inc. IDACORP, Inc. Pepco Holdings, Inc. PG&E Corporation Pinnacle West Capital Corp. Portland General Electric Southern Company UNS Energy Corp. Westar Energy, Inc. Wisconsin Energy Corporation Xcel Energy Inc. Average Source: Value Line Investment Survey Value Line

15 Schedule 5 CAPITAL ASSET PRICING MODEL - HISTORICAL RISK PREMIUM CROSS TEXAS TRANSMISSION, LLC Geometric Mean Arithmetic Mean Long-Term Annual Return on Stocks 9.80% 11.80% Long-Term Annual Income Return on Long-Term Government Bonds 5.30% 5.30% Historical Market Risk Premium 4.50% 6.50% Comparison Group Beta, Value Line Beta * Market Premium 3.07% 4.44% Current 20-Year Treasury Bond Yield 2.46% 2.46% CAPM Cost of Equity, Value Line Beta 5.53% 6.90% Source: Ibbotson S Classic Yearbook, Morningstar Note: Income return calculated by subtracting 0.4% capital appreciation from total return of 5.7%. 64

16 Schedule 6 CROSS TEXAS TRANSMISSION RECOMMENDED WEIGHTED COST OF CAPITAL Pct. Weighted Percentage Cost Cost Long- Term Debt 60.00% 5.32% 3.19% Common Equity 40.00% 9.10% 3.64% Total % 6.83% 65

Gas and electric cost of service, revenue allocation and rate design. Ratemaking treatment of the Tax Reform Act of 1986.

Gas and electric cost of service, revenue allocation and rate design. Ratemaking treatment of the Tax Reform Act of 1986. EDUCATION Georgia Institute of Technology Bachelor of Industrial Engineering Goizueta Business School of Emory University Master of Business Administration Twenty-six years experience in utility rate analysis