P.U.C. DOCKET NO. BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS APPLICATION OF TEXAS-NEW MEXICO POWER COMPANY FOR AUTHORITY TO CHANGE RATES
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1 P.U.C. DOCKET NO. BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS APPLICATION OF TEXAS-NEW MEXICO POWER COMPANY FOR AUTHORITY TO CHANGE RATES PREPARED DIRECT TESTIMONY AND EXHIBITS OF ROBERT K. ROBERTS ON BEHALF OF TEXAS-NEW MEXICO POWER COMPANY MAY 0, 0
2 TABLE OF CONTENTS I. INTRODUCTION AND QUALIFICATIONS... II. PURPOSE AND OVERVIEW OF TESTIMONY... III. AMS DEPLOYMENT PLAN AMENDMENT... IV. TRAVEL... V. NETWORK CELLULAR COSTS... VI. OUTAGE MANAGEMENT SYSTEM... VII. TRANSACTION MANAGEMENT SYSTEM MAINTENANCE... VIII. SMART METER TEXAS PORTAL... IX. SALARY FOR NEW PERSONNEL... X. CONTRACT EMPLOYEE EXPENSES... XI. SHIPPING CHARGES... XII. INTERNAL LABOR... XIII. AMS MANAGED SERVICES... 0 XIV. METER PLANT... XV. METER TESTING EQUIPMENT AND SECURITY HARDWARE... XVI. CONCLUSION... EXHIBIT RKR- EDUCATIONAL AND PROFESSIONAL BACKGROUND AMS RECONCILIATION SCHEDULES THAT ARE SPONSORED OR CO-SPONSORED EXHIBIT -G TRAVEL EXHIBIT -H NETWORK CELLULAR COSTS EXHIBIT -I PRODUCT MAINTENANCE (CO-SPONSORED) i
3 EXHIBIT -K LOW-INCOME HOME MONITOR EXHIBIT -N HOME AREA NETWORK EXHIBIT -R SMART METER TEXAS PORTAL EXHIBIT -S SALARY FOR NEW PERSONNEL EXHIBIT -T PILOT RETROFIT COSTS EXHIBIT -U METER TESTING ASSESSMENT EXHIBIT -V CONTRACT EMPLOYEE EXPENSES EXHIBIT -W SHIPPING CHARGES EXHIBIT -X INTERNAL LABOR EXHIBIT -X. AMS MANAGED SERVICES REQUIREMENTS EXHIBIT -A METER PLANT EXHIBIT -B NETWORK PLANT EXHIBIT -C IT PLANT ii
4 0 0 I. INTRODUCTION AND QUALIFICATIONS Q. PLEASE STATE YOUR NAME, EMPLOYER, AND BUSINESS ADDRESS. A. My name is Robert (Bobby) K. Roberts. I serve as the Advanced Metering System (AMS) Program Manager in the Advanced Metering Department at Texas-New Mexico Power Company. My business address is N. Garden Ridge Blvd., Lewisville, Texas 0. Q. PLEASE SUMMARIZE YOUR EDUCATIONAL BACKGROUND AND BUSINESS EXPERIENCE. A. My educational and professional background is outlined in Exhibit RKR-. Q. HAVE YOU PREVIOUSLY TESTIFIED BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS (PUCT)? A. Yes. I filed Direct Testimony and Exhibits in Docket No., Application of Texas- New Mexico Power Company to Reconcile AMS Costs. Q. PLEASE DESCRIBE YOUR AREAS OF RESPONSIBILITY AS PROJECT MANAGER FOR THE AMS PROGRAM. A. I have served as the AMS Program Manager since August 0. I manage and coordinate all activities related to TNMP s advanced metering implementation. This includes meter deployments, back office integration, implementation of the outage management system, and all required business process changes. Additionally, I serve as the TNMP point-of-contact for several external market working groups related to advanced metering. II. PURPOSE AND OVERVIEW OF TESTIMONY Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY? A. On March, 0, the Final Order was entered in TNMP s Reconciliation of AMS Costs, approving the reconciliation of AMS costs through August, 0. In this testimony, I will discuss certain costs associated with AMS which have been incurred in the time period since that reconciliation date, which is September, 0 through March, 0 ( post-reconciliation period ). I will describe and provide support for these costs during the post-reconciliation period associated with the following areas: travel, Application of Texas-New Mexico Power Company to Reconcile Advanced Metering System Costs, Order, Docket No., March, 0. Id., Item No..
5 0 network cellular cost, outage management system (OMS), Transaction Management System (TMS) maintenance, low-income home monitors, home area network (HAN) testing, Smart Meter Texas Portal (SMTP) web portal, salary for new personnel, pilot meter retrofit costs, meter testing assessment, contract employee expenses, shipping charges, internal labor, AMS managed services costs, meter plant, and meter test equipment. I will also compare any costs that were estimated for each of these items pursuant to the settlement in Docket No. 0 with the actual amount spent and explain any variances. The remaining AMS cost areas will be addressed by witnesses Stacy R. Whitehurst, Barry F. Sullivan, Michael S. Seamster, Emmanuel J. Lopez, and Larry T. Morris. Q. WHAT EXHIBITS ARE INCLUDED WITH YOUR TESTIMONY? A. Exhibit RKR- summarizes my educational and professional background and qualifications. I also sponsor or co-sponsor the following Exhibits to the TNMP Annual Report of AMS Costs as of March, 0, included in the exhibits of Stacy Whitehurst: -G, -H, -I, -K, -N, -R, -S, -T, -U, -V, -W, -X, -X., -A, -B, and -C. Q. WERE THE SCHEDULES AND EXHIBITS PREPARED BY YOU OR UNDER YOUR DIRECTION AND SUPERVISION? A. Yes, they were. The information contained in these exhibits is true and correct to the best of my knowledge and belief. 0 III. AMS DEPLOYMENT PLAN AMENDMENT Q. DID TNMP APPLY FOR AN AMENDMENT TO ITS COMMISSION-APROVED AMS DEPLOYMENT PLAN? A. Yes. On September, 0, TNMP filed an application seeking to amend its previously approved AMS Deployment Plan (TNMP s G Remediation Initiative) to replace approximately,000 G meters that were to reach their end of life by December 0. Docket No. was approved by Commission on November, 0. Q. DID TNMP COMPLY WITH THE TERMS OF THE ORDER AS APPROVED BY THE COMMISSION? Texas-New Mexico Power Company s Request for Approval of Advanced Metering System (AMS) Deployment and AMS Surcharge, Docket No. 0, Jul,, 0. Application of Texas-New Mexico Power Company for Amendment to its Commission-Approved AMS Deployment Plan, Order, Docket No., Nov., 0.
6 0 A. Yes. Finding of Fact No. in the Order for Docket No., indicated that TNMP s maximum cost for the remediation efforts would not exceed $,000,000 and that the remainder of the costs would come from vendor contributions. At the completion of the initiative, TNMP s total cost was $,, (which includes the Contract Employee Expenses in Section X). Q. DID THE G REMEDIATION INITIATIVE DRIVE OTHER CHANGES WITHIN TNMP S AUTOMATED METERING INFRASTRUCTURE? A. Yes. In order to support the new generation technology (G), it became necessary to implement a new collection engine from Itron, called OpenWay Collection Engine (OWCE). Additionally, the increased complexities of supporting and operating multiple collection engines also drove a revised approach to the long-term strategic support model that TNMP employs. These changes are explained in more detail in Section XVII below. IV. TRAVEL 0 0 Q. DID TNMP INCUR TRAVEL EXPENSES AS PART OF ITS AMS COSTS DURING THE POST- A. Yes. Travel expenses were incurred in relation to market meetings, deployment and implementation oversight as well as vendor management. Q. HOW MUCH DID TNMP ACTUALLY INCUR IN TRAVEL EXPENSES DURING THE POST- A. TNMP actually incurred travel expenses of $, against an estimate of $, in the AMS Surcharge Model, resulting in a favorable variance of $,0. This is identified in Line No. of the AMS Reconciliation Report and Exhibit -G. Q. IS TNMP REQUESTING RECOVERY OF TRAVEL EXPENSES RELATED TO PREMIUM AIRFARE, ALCOHOL OR SPORTING EVENT TICKETS? A. No. There are no expenses included for premium airfare, alcoholic beverages or tickets to sporting events. All travel expenses are in accordance with internal TNMP travel guidelines and policies, which also prohibit these types of expenses. Q. WERE ALL OF TNMP S TRAVEL EXPENSES REASONABLE AND NECESSARY? A. Yes, these travel expenses were reasonable and necessary to ensure adequate representation in market working sessions such as the Advanced Metering Implementation Team (AMIT) and the Advanced Metering Working Group (AMWG), as
7 0 0 0 well as active and effective vendor management. In addition, the costs spent were in accordance with TNMP s amended Deployment Plan approved by the Commission. Finally, they are in line with TNMP s internal travel policies and guidelines. Q. WILL TNMP CONTINUE TO INCUR TRAVEL EXPENSES AFTER THE POST- A. Yes. TNMP anticipates that ongoing travel will be needed to ensure adequate oversight of the various systems and processes that comprise the AMS. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. V. NETWORK CELLULAR COSTS Q. WERE THERE ANY CHANGES TO THE MODEL BY WHICH TNMP S NETWORK CELLULAR COSTS ARE CALCULATED DURING THE POST-RECONCILIATION PERIOD? A. No. There were no changes to TNMP s calculation model. The cost calculations remain at $0.0 per meter per month per active meter, plus messaging rates and taxes. Q. HOW MUCH DID TNMP INCUR IN NETWORK CELLULAR EXPENSES DURING THE SEPTEMBER, 0 MARCH, 0 PERIOD? A. TNMP actually incurred $,,0 in network cellular expenses for the period ending March, 0, against an estimate of $,0,0 in the AMS Surcharge Model. This is a variance of $,,. The costs and variance is identified in Line No. of the AMS Reconciliation Report and Exhibit -H. Q. WHY DID TNMP INCUR MORE IN NETWORK CELLULAR EXPENSES THAN ANTICIPATED? A. There were several reasons that TNMP incurred more in network cellular expenses than anticipated: ) as presented and approved in Docket No., TNMP s per meter per month charge for use on the G and G spectrum is $0.0 compared to the AMS Surcharge Model assumption of $0.0 per meter per month, ) TNMP served more customers, over more meters, during the post-reconciliation period than had been estimated in the AMS Surcharge Model, ) TNMP incurs cellular network charges on inactive meters which is not captured in the AMS Surcharge Model, including meters in working inventory, and ) TNMP incurs SMS charges for use as a backup communications channel.
8 0 Q. WERE THE ACTUAL NETWORK CELLULAR EXPENSES INCURRED BY TNMP REASONABLE AND NECESSARY? A. Yes. TNMP must incur cellular expenses in order to ensure timely communications with the AMS meters. A rate of $0.0 per meter per month for MB of pooled data using the G and G spectrum is a reasonable rate, and spent in accordance with TNMP s amended Deployment Plan. Q. DOES TNMP EXPECT TO INCUR NETWORK AND CELLULAR EXPENSES AFTER THE POST- A. Yes. TNMP is expected to incur ongoing network cellular costs for the life of its AMS. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. VI. OUTAGE MANAGEMENT SYSTEM 0 0 Q. WERE THERE ANY CHANGES TO THE SUPPORT APPROACH FOR TNMP S OUTAGE MANAGEMENT SYSTEM (OMS) DURING THE POST-RECONCILIATION PERIOD? A. No. TNMP continues to leverage a managed services arrangement with the OMS vendor, ABB. It is expected that this arrangement will continue for the foreseeable future. Q. HOW MUCH DID TNMP ACTUALLY INCUR FOR SUPPORT AND THE IMPLEMENTATION OF ADDITIONAL OMS FEATURES DURING THE POST- A. For the period September, 0 through March, 0, TNMP incurred $,0, in capital expenses for the OMS initiative. This is included in Line No. of the AMS Reconciliation Report and Exhibit -C attached to this testimony. An additional $,0, in O&M had been incurred for the same period, and is included as a component of Line No. 0 of the AMS Reconciliation Report and Exhibit -I. Q. WERE THE ACTUAL CAPITAL AND OPERATING EXPENSES INCURRED BY TNMP FOR THE OMS PROGRAM REASONABLE AND NECESSARY? A. Yes. These were required costs in order for TNMP to implement and support its OMS pursuant to the Final Order. These costs were closely managed by TNMP for accuracy and relevance, and should be considered reasonable and necessary.
9 Q. WILL TNMP CONTINUE TO INCUR OMS COSTS AFTER THE POST- RECONCILIATION PROCEEDING? A. Yes. TNMP will incur additional capital expenses related to system upgrades throughout the life of the OMS. TNMP will also incur O&M costs related to the ongoing software and hardware maintenance fees as well as for the hosting and managed services to third-party vendor, ABB. The O&M costs are expected to continue. VII. TRANSACTION MANAGEMENT SYSTEM MAINTENANCE 0 0 Q. HOW MUCH IN MAINTENANCE FEES FOR THE TRANSACTION MANAGEMENT SYSTEM (TMS) DID TNMP INCUR DURING THE POST- A. TNMP has incurred $,00, in TMS maintenance and managed services expenses for the period September, 0 through March, 0. This is included as a component of Line No. 0 on the AMS Reconciliation Report and Exhibit -I. As indicated there, TMS costs during this period were less than estimated in the AMS Surcharge Model. While TNMP continues to utilize and receive support from Itron, after December 0, TNMP is no longer paying for TMS services due to a revised managed services model with Itron (see Section XII below). Q. WERE ALL OF THESE TMS MAINTENANCE EXPENSES REASONABLE AND NECESSARY? A. Yes, these expenses were reasonable and necessary. Since TMS is the collection engine that supports the majority of TNMP s AMS meters, it remains a critical and necessary component for implementing the advanced metering infrastructure (AMI). Therefore, TNMP incurred these costs in order to comply with the Final Order. VIII. SMART METER TEXAS PORTAL 0 Q. WERE THERE ANY CHANGES TO THE GOVERNANCE OR FUNDING APPROACHES FOR THE SMART METER TEXAS PORTAL (SMTP) DURING THE POST- A. No. The SMTP governance and funding approach remained the same throughout the post-reconciliation period. TNMP s SMTP expenses incurred during the original reconciliation period were approved as reasonable and necessary by the PUCT in Project No.. Q. HOW MUCH DID TNMP INCUR FOR SUPPORT AND MAINTENANCE OF SMTP DURING THE
10 0 A. The AMS Surcharge Model did not contemplate expenses for SMTP during the postreconciliation period. As I explained in Docket No., this was based on the presumption that ERCOT would assume control of SMTP after the third year of TNMP s participation in SMTP (0). However, this handoff did not occur and is not expected to occur in the foreseeable future; therefore expenses related to SMTP will continue on an ongoing basis. For the period September, 0 through March, 0, there was $0,0 in O&M costs incurred. These costs are identified in Line No. of the AMS Reconciliation Report and Exhibit -R. TNMP incurred an additional $, in Capital expenses related to functional enhancements to the SMTP during the post-reconciliation period. These costs are included in Line No. of the AMS Reconciliation Report and Exhibit -C. Q. WERE THE ACTUAL EXPENSES INCURRED BY TNMP FOR THE SMTP REASONABLE AND NECESSARY? A. Yes. The amounts spent by TNMP on the SMTP, were incurred in order for TNMP to continue to conform to the requirements of the Final Order. IX. SALARY FOR NEW PERSONNEL 0 0 Q. WERE THERE ANY CHANGES TO THE AMS-RELATED NEW PERSONNEL DURING THE POST- A. No. TNMP initially added more new personnel than the AMS Surcharge Model contemplated, costs for which were described and approved in Docket No.. Costs for the following positions were previously approved: one HAN Coordinator, eight System Operators for the Distribution Operations Center (DOC) where the OMS function is housed, one DOC Manager, and three AMS Transaction Analysts. TNMP has maintained the same staffing levels throughout the post-reconciliation period. For reference, the average monthly salary expense for the quarter ending March, 0 (within the initial reconciliation period) was $, and the average for the quarter ending March, 0 (end of the post-reconciliation period) was $,. The variance represents personnel changes and merit increases. Q. WERE THE ACTUAL EXPENSES INCURRED BY TNMP FOR NEW PERSONNEL REASONABLE AND NECESSARY? A. Yes. The amounts spent by TNMP on employee salary expenses, including the amounts more than the original estimate, were incurred in order for TNMP to conform to the requirements of the Final Order and the Commission s substantive rules.
11 0 0 0 Q. WILL TNMP CONTINUE TO INCUR THE NEW PERSONNEL EXPENSE AFTER THE CONCLUSION OF THIS POST- A. Yes. TNMP will continue to incur salary expenses for these positions in perpetuity. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. X. CONTRACT EMPLOYEE EXPENSES Q. DID TNMP INCUR EXPENSES FOR CONTRACT EMPLOYEES DURING THE POST- A. Yes. Q. DID TNMP INCLUDE SPECIFIC AMOUNTS FOR CONTRACT EMPLOYEES DURING THE POST-RECONCILIATION PERIOD IN ITS AMS SURCHARGE MODEL? A. No. Costs for these contract employees were not anticipated in the AMS Surcharge Model approved by the Commission. Q. PLEASE EXPLAIN WHY THESE CONTRACTOR POSITIONS WERE REQUIRED. A. To facilitate TNMP s G Remediation Initiative, TNMP s AMI vendor, Itron, implemented the OWCE ahead of commercial readiness. This was necessary to support TNMP s G meters which were the desired replacement meters. Since all features were not fully developed, some processes remained manual which necessitated the need for temporary labor. To offset the costs associated with the temporary labor, Itron did not charge TNMP for the monthly services during the period prior to commercial readiness. The system was made available to TNMP with limited functionality in September 0, but was not commercially ready until December 0. The normal monthly fee for OWCE services is $0,000 per month (see Section XIII below). Q. HOW MUCH IN ACTUAL EXPENSES WAS INCURRED BY TNMP FOR CONTRACT EMPLOYEE EXPENSES? A. TNMP incurred actual expenses of $0,0 in contract employee expenses for the period September, 0 to March, 0. This is identified as Line No. in the AMS Reconciliation Report and Exhibit -V. Q. WERE ALL OF THESE EXPENSES REASONABLE AND NECESSARY? A. Yes. These expenses were reasonable and necessary to support TNMP s Amendment to its Commission-Approved AMS Deployment Plan.
12 Q. WILL TNMP CONTINUE TO INCUR CONTRACT EMPLOYEE EXPENSES AFTER THE A. No, it is not expected that TNMP will require or incur additional expenses related to contract personnel for the support of AMS. XI. SHIPPING CHARGES 0 0 Q. DID TNMP INCUR SHIPPING CHARGES AS PART OF ITS AMS COSTS DURING THE POST- A. Yes. Q. HOW MUCH IN ACTUAL SHIPPING CHARGES DID TNMP INCUR DURING THE A. TNMP incurred $, in actual shipping charges expenses. This is identified as Line No. in the AMS Reconciliation Report and Exhibit -W. Q. WERE ALL OF TNMP S SHIPPING CHARGES REASONABLE AND NECESSARY? A. Yes. These costs are reasonable and necessary. Q. WILL TNMP CONTINUE TO INCUR SHIPPING CHARGES AFTER THE POST- A. Yes. TNMP will continue to incur ongoing shipping charges related to the movement of meters among the TNMP warehouses and to vendor facilities. In Docket No., I explained that TNMP expected to directly ship meters to the various facilities thus eliminating the need for ongoing shipping charges. The new generation meters (G) that TNMP is now purchasing, may require a level of configuration that must be performed at our Centralized Meter Shop. Thus, TNMP will continue to receive shipments at the Centralized Meter Shop in Dickenson and reship to the various facilities as needed. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. XII. INTERNAL LABOR 0 Q. HOW MUCH IN INTERNAL LABOR COSTS DID TNMP INCUR DURING THE POST- A. TNMP incurred $, in internal labor costs related to meter change outs for field failures, and inventory management activities. These labor costs are incurred against previously existing personnel that are performing AMS-related duties, and are excluded
13 0 from the Salary for New Personnel (Section IX above). This is identified as Line No. in the AMS Reconciliation Report and Exhibit -X. Q. WERE ALL OF THESE INTERNAL LABOR COSTS REASONABLE AND NECESSARY? A. Yes. TNMP incurred these labor costs in order to fully comply with the Final Order and to implement its AMS. Corresponding costs incurred during the initial reconciliation period were approved as reasonable and necessary in Docket No.. Q. WILL TNMP CONTINUE TO INCUR INTERNAL LABOR COSTS AFTER THE A. No. XIII. AMS MANAGED SERVICES 0 0 Q. WAS IT NECESSARY FOR TNMP TO ENTER INTO A NEW MANAGED SERVICES AGREEMENT WITH ITS AMI VENDOR, ITRON? A. Yes. TNMP was already under contract with Itron for managed services related to the TMS, the collection engine for TNMP s first generation AMS meters. In order to facilitate the evolution of TNMP s AMS meters, it became necessary to also implement Itron s OWCE to support the next generation technologies (G). These systems needed to run in parallel for the earlier of; ) the remaining life of the first generation meters, or ) the migration of the first generation meters into OWCE. Additionally, it was determined that vendor management of TNMP s AMI would be preferable to building out the necessary support staff internally within PNMR Services IT department (BTS). In late 0, BTS conducted a support assessment of TNMP s AMI to determine the best long-term support strategy. It was determined that seven additional FTEs would be required to provide the daily operational and support equivalent of that being offered by Itron. In addition, Itron has committed to include regular hardware/software maintenance and upgrades, thus minimizing additional investments by TNMP and providing cost predictability. Q. WHAT SYSTEMS WERE DETERMINED TO BE IN-SCOPE FOR THE MANAGED SERVICES AGREEMENT? A. In addition to OWCE, TNMP has contracted with Itron to support the following systems: MV-0xi, Meter Data Management System (MDMS), MDMS Archive/Purge Tool, and the Complex Billing System as well as implementation of Itron Analytics. The MV-0xi 0
14 0 0 0 system is used for interrogation of IDR meters and is a companion collection engine to TMS and OWCE. The MDMS Archive/Purge Tool is described in greater detail in the testimony of Barry Sullivan. The MDMS and the Complex Billing System are systems whose implementations were contemplated in the AMS Surcharge Model, and approved under Docket No.. Itron Analytics is an analytics platform that will enable TNMP to more effectively monitor the system for tampering and other safety-related issues. Additionally, it will provide the foundation to better incorporate AMS meter data into system reliability initiatives. Q. HOW WERE THE TMS MAINTENANCE AND MANAGED SERVICES FEES IMPACTED BY THE NEW MANAGED SERVICES AGREEMENT? A. Since OWCE is the replacement product for TMS, Itron agreed to continue providing TMS services at no charge, provided that TNMP remains current with OWCE. Over time, TNMP will migrate the TMS-linked meters over to the OWCE platform. Q. HOW MUCH DID TNMP INCUR IN EXPENSES RELATED TO THE MANAGED SERVICES CONTRACT DURING THE POST- A. TNMP incurred $, in Capital expenses related to the new managed services agreement during the post-reconciliation period. These expenses represent procurement, standup and migration activities necessary to move to the Itron datacenters. The Capital costs are included as a component of Line No. of the AMS Reconciliation Report and Exhibit -C. In addition to Capital expenses, TNMP has incurred O&M expenses associated with implementation of the new managed services agreement with Itron. The O&M expenses total $, for the post-reconciliation period and are identified in Line No. of the AMS Reconciliation Report and Exhibit - X.. TNMP also incurred managed services fees related to the new set of agreements, in the amount of $, (O&M) during the period. See Line No. 0 of the AMS Reconciliation Report and Exhibit -I. This represents four months of maintenance and managed services fees (plus taxes and loads) for collection engine support. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. Q. WHERE THESE EXPENSES REASONABLE AND NECESSARY? A. Yes. These expenses were reasonable and necessary.
15 XIV. METER PLANT 0 0 Q. HOW MUCH DID TNMP INCUR IN METER PLANT EXPENSES DURING THE POST- A. Due to the large number of G meters retired in accordance with TNMP s G Remediation Initiative, TNMP generated a credit of ($,) in meter plant expenses for the period September, 0 through March, 0 against an initial estimate of $,,00. This is a favorable variance of $,0, and reflects a minimal quantity of meters purchased offset by the approximately,000 G meters retired. The cost and variance are identified in Line No. of the AMS Reconciliation Report and Exhibit -A. Q. WERE THE ACTUAL METER PLANT EXPENSES INCURRED BY TNMP REASONABLE AND NECESSARY? A. Yes. These expenses should be considered reasonable and necessary. Q. DOES TNMP EXPECT TO INCUR METER PLANT EXPENSES AFTER THE POST- A. Yes. TNMP expects to continue to incur meter plant expenses throughout the lifespan of AMS. As meters are removed from service due to unrepairable failure, they must be replaced; however they are expected to be accounted for in normal blanket purchase orders and base rates. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. XV. METER TESTING EQUIPMENT AND SECURITY HARDWARE 0 Q. HOW MUCH IN ACTUAL EXPENSES DID TNMP INCUR FOR METER TESTING EQUIPMENT AND SECURITY HARDWARE EXPENSES DURING THE POST- A. TNMP actually incurred $, in meter testing equipment and security hardware expenses. The AMS Surcharge did not contemplate any additional expenses for this during the post-reconciliation period. This is identified as a component of the Network Plant expenses identified in Line No. on the AMS Reconciliation Report and Exhibit - B. Q. WERE THE EXPENSES INCURRED FOR METER TESTING EQUIPMENT AND SECURITY HARDWARE REASONABLE AND NECESSARY?
16 A. Yes. These expenses were reasonable and necessary. Q. DOES TNMP EXPECT TO INCUR METER TESTING EQUIPMENT AND SECURITY HARDWARE COSTS AFTER THE POST- A. Yes. TNMP will have an ongoing need for upgrading and refreshing its meter testing hardware and software, however it is expected these expenses will be minimal. Costs incurred between April, 0 and the effective date of new base rates will be recorded to AMS expenses and included in the final AMS reconciliation. XVI. CONCLUSION 0 Q. PLEASE SUMMARIZE YOUR CONCLUSIONS. A. TNMP has continued to successfully implement its AMS program in accordance with the Final Order in Docket No. 0 and the amended deployment plan in Docket No.. Pursuant to these Orders, TNMP has incurred reasonable and necessary expenses, in some cases lower than the original estimates, in other cases higher than what was anticipated, but in all cases appropriate to carrying out its AMS implementation. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes, it does. Texas-New Mexico Power Company s Request for Approval of Advance Metering System (AMS) Deployment and AMS Surcharge, Docket No. 0, Jul., 0.
17 AFFIDAVIT STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned authority, on this day personally appeared R&ber-f, who, upon proving his identity to me and by me being duly sworn, deposes and states the following: "My name is Bo be* & QbsfS". I am of legal age, a resident of the State of i^, and have never been convicted of a felony. I certify that the foregoing testimony, offered by me on behalf of Texas-New Mexico Power Company, is true and correct and based upon my personal knowledge and experience." Witness jfc sfc ^ ^ SWORN TO AND SUBSCRIBED before me, Notary Public, on this day of May 0, to certify which witness my hand and seal of office. <" tsm CHRISTINA VANESSA ZIMMERMAN Public, State of Texas Comm. Expires --0 e, V»mv^ Notary ID 0 NOTA State of Tl m LKMn and for the Printed Name: Cilvi lifwmohvia-h SEAL: My Commission expires:.] Notary ID#.* 'ZOZJ
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