Enclosures. June 29, Via and FedEx

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1 Mary Patricia Keefe 520 Green Lane Vice President, External Affairs Union, NJ And Business Support tel fax cell June 29, 2018 Via and FedEx Aida Camacho, Secretary New Jersey Board of Public Utilities 44 South Clinton Avenue, 3 rd Fl., Suite 314 P.O. Box 350 Trenton, New Jersey Re: In the Matter of the Petition of Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas for Authority to Extend the Term of Energy Efficiency Programs and Approval of Associated Cost Recovery Mechanism BPU Docket No. GO Dear Secretary Camacho: Enclosed for filing are an original and ten copies of the Verified Petition of Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas ( Elizabethtown or Company ) for authority to extend the term of the Company s current Energy Efficiency Programs with certain modifications for a one-year period effective January 1, The Petition also requests that the costs of the Energy Efficiency Programs continue to be recovered through the Company s existing Energy Efficiency Program surcharge entitled the Energy Efficiency Program ( EEP ) Rider. The Company is not requesting a change to its EEP Rider rate at this time but will instead seek any necessary rate adjustments in its next filing to reconcile that rate. Enclosures Please contact the undersigned if you have any questions. Respectfully submitted, /s/ M. Patricia Keefe M. Patricia Keefe, Esq. cc: Joseph L. Fiordaliso, President Mary-Anna Holden, Commissioner Dianne Solomon, Commissioner Upendra Chivukula, Commissioner Bob Gordon, Commissioner Stacy Peterson, Director, Division of Energy Stefanie A. Brand, Director, Rate Counsel Attached Service List

2 IN THE MATTER OF THE PETITION OF PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS FOR AUTHORITY TO EXTEND THE TERM OF ENERGY EFFICIENCY PROGRAMS AND APPROVAL OF ASSOCIATED COST RECOVERY MECHANISM BPU DOCKET NO. SERVICE LIST Susan Buck Elizabethtown Gas 520 Green Lane Union, NJ Brian MacLean Elizabethtown Gas 520 Green Lane Union, NJ Aida Camacho, Office of the Secretary Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Aida.Camacho@bpu.nj.gov Bart Kilar Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Bart.Kilar@bpu.nj.gov Thomas Walker Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Thomas.Walker@bpu.nj.gov Maura Caroselli Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ mcaroselli@rpa.nj.gov Thomas Kaufmann Elizabethtown Gas 520 Green Lane Union, NJ tkaufman@southernco.com Gary Marmo Elizabethtown Gas 520 Green Lane Union, NJ gmarmo@southernco.com Alice Bator Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Alice.Bator@bpu.nj.gov Stacy Peterson Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Stacy.Peterson@bpu.nj.gov Sherri Jones Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ sherri.jones@bpu.nj.gov Kurt Lewandowski Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ klewando@rpa.nj.gov Mary Patricia Keefe, Esq. Elizabethtown Gas 520 Green Lane Union, NJ pkeefe@southernco.com Susan Potanovich Elizabethtown Gas 520 Green Lane Union, NJ spotanov@southernco.com Rachel Boylan Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Rachel.Boylan@bpu.nj.gov Andrea Reid Board of Public Utilities 44 South Clinton Avenue 3 rd Floor, Suite 314 P.O. Box 350 Trenton, NJ Andrea.Reid@bpu.nj.gov Stefanie A. Brand Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ smassey@rpa.nj.gov Brian Lipman, Litigation Manager Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ blipman@rpa.nj.gov Sarah Steindel, Esq. Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ ssteindel@rpa.nj.gov Alex Moreau, DAG Department of Law & Public Safety Division of Law 124 Halsey Street P.O. Box Newark, NJ Alex.Moreau@dol.lps.state.nj.us Felicia Thomas-Friel Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ fthomas@rpa.nj.gov Timothy Oberleiton Department of Law & Public Safety Division of Law 124 Halsey Street P.O. Box Newark, NJ Timothy.Oberleiton@law.njoag.gov Henry Ogden Division of Rate Counsel 140 East Front Street, 4 th Floor P.O. Box 003 Trenton, NJ hogden@rpa.nj.gov Caroline Vachier Department of Law & Public Safety Division of Law 124 Halsey Street P.O. Box Newark, NJ Caroline.Vachier@law.njoag.gov Page 1 of 2

3 IN THE MATTER OF THE PETITION OF PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS FOR AUTHORITY TO EXTEND THE TERM OF ENERGY EFFICIENCY PROGRAMS AND APPROVAL OF ASSOCIATED COST RECOVERY MECHANISM BPU DOCKET NO. SERVICE LIST Deborah Franco, Esq. Cullen and Dykman Garden City Center 100 Quentin Roosevelt Blvd. Garden City, NY Kenneth T. Maloney, Esq. Cullen and Dykman th Street NW, Suite 750 Washington, DC Isaac Gabel-Frank Gabel Associates, Inc. 417 Denison Street Highland Park, NJ Page 2 of 2

4 Minimum Filing Requirements For Petitions Under N.J.S.A. 48: Number Requirements Index I. General Filing Requirements a. The utility shall provide with all filings, information and data pertaining to the specific program proposed, as set forth in applicable sections of N.J.A.C. 14: and N.J.A.C. 14: b. All filings shall contain information and financial statements for the proposed program(s) in accordance with the applicable Uniform System of Accounts that is set forth in N.J.A.C. 14: The utility shall provide the Accounts and Account Numbers that will be utilized in booking the revenues, costs, expenses, and assets pertaining to each proposed program so that they can be properly separated and allocated from other regulated and/or other programs. c. The utility shall provide supporting explanations, assumptions, calculations, and work papers for each proposed program and cost recovery mechanism petition filed under N.J.S.A. 48:3-98.1, including the rationale for selecting the approach included in its proposed program(s), and for all qualitative and quantitative analyses therein. The utility shall provide electronic copies of all materials and supporting schedules, with all inputs and formulae intact. Petition and Testimony with supporting schedules including financial statements, public notice, notice to counties and municipalities and currently effective tariff sheets with no rate change being proposed but with an added incentive noted EEP Schedule TK- 9 EEP Schedules TK-1 - TK-6 (electronic copies of these Schedules with inputs intact are provided); and electronic copies of IGF-3 will be provided after the execution of a nondisclosure agreement d. The filing shall include testimony supporting the petition. Petition and supporting Testimony e. For any proposed program, the utility shall be subject to the requirements in this and all subsequent Sections. If compliance with Part V of these requirements would not be feasible for a particular program or sub-program, the utility may request an exemption but must demonstrate why such exemption should be granted. Examples of historical situations that have qualified for exemption include programs that had an educational rather than equipment-based focus and programs that introduced novel ideas where documentation supporting estimated costs/benefits may not be easily produced. N/A

5 Number Requirements Index f. If the utility is filing for an increase in rates, charges, etc. or for approval of a program that may increase rates/changes to ratepayers in the future, the utility shall include a draft public notice with the petition and proposed publication dates. Public Notice included with the Petition II. Program Descriptions a. The utility shall provide a detailed description of each proposed program for which the utility seeks approval, including, if applicable: 1. Description of program 2. Market segment/efficiency targeted 3. Delivery method 4. Estimated program participants 5. Total projected annual kwh/therms and peak reduction 6. Relationship to existing programs 7. Existing incentives 8. Proposed incentives 9. Anticipated job creation 10. Environmental emissions savings 11. Budget information 12. Marketing approach (as defined in section II(g)) 13. Contractor role (as defined in section II(e)) 14. Market barriers (as defined in section II(h)) 15. Program costs, broken down into the following categories: administration; marketing and sales; contractor training; incentives (including rebates and low- or no-interest loans); inspections and quality control; and evaluation. To the extent that the Board directs the New Jersey Clean Energy Program ("NJCEP") to report additional categories, the utility shall provide additional categories, as applicable. b. Comparison to in-state programs: The utility shall provide a detailed explanation of how the proposed program(s) are consistent with and/or different from existing or proposed New Jersey Clean Energy Program or utility programs (to the extent proposed program descriptions are available) targeting the same market segment, including how the proposed program(s) will complement, supplement, compete with, and/or impact existing programs being offered in-state. c. Comparison to out-of-state programs: The utility shall provide a detailed description of how the proposed program(s) are similar to and/or different from a sampling of/examples of existing or proposed utility programs or pilots in other states that were used to form the basis of the proposed program(s), with all supporting documentation. Buck Testimony, Schedules SB-1, SB-2, and SB-3, Gabel-Frank Testimony at Sections V, VI, and VII, Schedules IGF-EEP2018-3, IGF- EEP Schedule SB-1, SB-4 Petition, Buck Testimony at page 6 Buck Testimony at pages 6-7 2

6 Number Requirements Index d. The utility shall provide a detailed description of how the proposed program(s) comport with New Jersey State energy policy as reflected in reports, including but not limited to the prevailing New Jersey Energy Master Plan and the greenhouse gas emissions reports issued by the New Jersey Department of Environmental Protection pursuant to N.J.S.A. 26:2C-42(b) and (c) and N.J.S.A.26:2C-43 of the New Jersey Global Warming Response Act, N.J.S.A. 26:2C-37 et seq. e. The utility shall provide the extent to which the utility intends to utilize employees, contractors, or both to deliver the program(s) and, to the extent applicable, the criteria the utility will use for contractor selection. f. The utility shall provide a detailed description of the process for resolving any customer complaints related to the program(s). g. Marketing: The utility shall provide a description of where and how the proposed program(s)/project(s) will be marketed or promoted throughout the demographic segments of the utility's customer base. This shall include an explanation of how the specific service, along with prices, incentives, and energy bill savings for each proposed program/project, will be conveyed to customers, where available and applicable. h. The utility shall provide a description of any known market barriers that may impact the program(s) and address the potential impact on such known market barriers for each proposed program with all supporting documentation. This analysis shall include barriers across the various markets, including residential (both single and multifamily), commercial and industrial (both privately owned and leased buildings), as well as between small, medium, and large commercial and industrial markets. Schedule SB-1, Petition at paragraphs 4, 6, 8, 21, and 24 Schedule SB-1, Buck Testimony at pages 5-6,8 Buck Testimony at page 8 Schedule SB-1, Buck Testimony at page 9 Petition, Buck Testimony at page 9 3

7 Number Requirements Index III. Additional Filing Information a. The utility shall describe whether the proposed program(s) will generate incremental activity in the energy efficiency/ conservation/ renewable energy marketplace and what, if any impact on competition may be created, including any impact on employment, economic development, and the development of new business, with all supporting documentation. This shall include a breakdown of the impact on the employment within this marketplace as follows: marketing/sales, training, program implementation, installation, equipment, manufacturing, evaluation, and other applicable markets. With respect to the impact on competition the analysis should include the competition between utilities and other entities already currently delivering the service in the market or new markets that may be created, where applicable. The analysis should also address competition with other entities already currently delivering the service in the market and new markets that may be created, where applicable. b. The utility shall propose the method for treatment of Renewable Energy Certificates ("RECs"), including solar RECs ( SRECs ) or any other certificate developed by the Board of Public Utilities ( BPU or Board ), including Greenhouse Gas Emissions Portfolio and Energy Efficiency Portfolio Standards including ownership and use of the certificate revenue stream(s). Petition, Buck Testimony at pages 5-6, Schedules SB-1, SB-3, Gabel-Frank Testimony, Schedule IGF- 3 N/A The utility shall also propose the method for treatment of any air emission credits and offsets, including Regional Greenhouse Gas Initiative carbon dioxide allowances and offsets, including ownership and use of the certificate revenue stream(s). For programs that are anticipated to reduce electricity sales in its service territory, the utility shall quantify the expected associated annual savings in REC and SREC costs. IV. Cost Recovery Mechanism a. The utility shall provide appropriate financial data for the proposed program(s), including estimated revenues, expenses, and capitalized investments for each of the first three years of operations and at the beginning and end of each year of the three-year period. The utility shall include pro forma income statements for the proposed program(s) for each of the first three years of operations and actual or estimated balance sheets at the beginning and end of each year of the three year period. EEP Schedules TK-2 TK-6, TK-9 4

8 Number Requirements Index b. The utility shall provide detailed spreadsheets of the accounting treatment of the proposed cost recovery, including describing how costs will be amortized, which accounts will be debited or credited each month, and how the costs will flow through the proposed method of recovery of program costs. c. The utility shall provide a detailed explanation, with all supporting documentation, of the recovery mechanism it proposes to utilize for cost recovery of the proposed program(s), including proposed recovery through the Societal Benefits Charge, a separate clause established for these programs, base rate revenue requirements, government funding reimbursement, retail margin, and/or other mechanisms. d. The utility's petition for approval, including proposed tariff sheets and other required information, shall be verified as to its accuracy and shall be accompanied by a certification of service demonstrating that the petition was served on the Department of the Public Advocate, Division of Rate Counsel simultaneous to its submission to the Board. e. The utility shall provide a rate impact summary by year for the proposed program(s), and a cumulative rate impact summary by year for all approved and proposed programs showing the impact of individual programs, based upon a revenue requirement analysis that identifies all estimated program costs and revenues for each proposed program on an annual basis. Such rate impacts shall be calculated for each customer class. The utility shall also provide an annual bill impact summary by year for each program, and an annual cumulative bill impact summary by year for each program, and an annual cumulative bill impact summary by year for all approved and proposed programs showing bill impacts on a typical customer for each class. f. The utility shall provide, with supporting documentation, a detailed breakdown of the total costs for the proposed program(s), identified by cost segment (capitalized costs, operating expenses, administrative expenses, etc.). This shall also include a detailed analysis and breakdown and separation of the embedded and incremental costs that will be incurred to provide the services under the proposed program(s), with all supporting documentation. Embedded costs are costs that are provided for in the utility's base rates or through another rate mechanism. Incremental costs are costs associated with or created by the proposed program that are not provided for in base rates or another rate mechanism. EEP Schedule TK- 8 Petition, EEP Schedules TK-1 TK-5 Verified and Certification of Service included with filing EEP Schedule TK-10 EEP Schedule TK-4 Schedule SB-2 and SB-7 5

9 Number Requirements Index g. The utility shall provide a detailed revenue requirement analysis that clearly identifies all estimated annual program costs and revenues for the proposed program(s), including effects upon rate base and pro forma income calculations. h. The utility shall provide, with supporting documentation: (i) a calculation of its current capital structure, as well as its calculation of the capital structure approved by the Board in its most recent electric and/or gas base rate cases, and (ii) a statement as to its allowed overall rate of return approved by the Board in its most recent electric and/or gas base rate cases. i. If the utility is seeking carrying costs for a proposed program, the filing shall include a description of the methodology, capital structure, and capital cost rates used by the utility. j. A utility seeking incentives shall provide all supporting justifications and rationales for incentives, along with supporting documentation, assumptions, and calculations. Utilities that have approved rate mechanisms or incentive treatment from previous cases and are not seeking a modification of such treatment through the current filing are not subject to this requirement. EEP Schedule TK-3 EEP Schedule TK-7 Kaufmann Testimony at pages 6-8, Schedules TK- 2, TK-6, and TK-7 N/A V. Cost/Benefit Analysis a. The utility shall provide a detailed analysis with supporting documentation of the net benefits associated with the proposed program(s), including, if appropriate, an estimate of its projected avoided costs study, with supporting documentation and work papers. This estimate shall include avoided costs associated with, at a minimum, avoided fuel use, generation, losses, capacity requirements, transmission and distribution costs, emissions allowances, RECs and SRECs, and any savings associated with energy and capacity market impacts (i.e., DRIPE) of the program. This cost-benefit analysis should include consideration of seasonal savings and energy prices, and shall be performed on a Net Present Value ("NPV") basis specifying all financial assumptions, including inflation rate and discount rate. The value of the avoided environmental impacts and the environmental benefits and the value of any avoided or deferred energy infrastructure should be stated separately. Gabel-Frank Testimony, Schedules IGF-EEP2018-2, IGF- EEP

10 Number Requirements Index b. The utility shall calculate a cost/benefit analysis using the Participant Cost Test, Program Administrator Cost Test, Ratepayer Impact Measure Test, Total Resource Cost Test, and Societal Cost Test that assesses all program costs and benefits from a societal perspective i.e., that includes the combined financial costs and benefits realized by the utility and the customer. The utility may also provide any cost benefit analysis that it believes appropriate with supporting rationales and documentation. c. The utility must demonstrate how the results of the tests in section V(b) support Board approval of the proposed program(s). d. Renewable energy programs shall not be subject to a cost/benefit test but the utility must quantify all direct and indirect benefits resulting from such a proposed program as well as provide the projected costs. The utility must also demonstrate how such a proposed program will support energy and environmental statewide planning objectives, such as attainment of the Renewable Portfolio Standard and any emission requirements. e. The level of energy and capacity savings utilized in these calculations shall be based upon the most recent protocols approved by the Board to measure energy savings for the NJCEP. To the extent that a protocol does not exist or an alternative protocol is proposed for a filed program, the utility must submit a measurement methodology for the program or contemplated measure for approval by the Board. f. For cost effectiveness calculations, the utility shall also estimate and reflect in the energy and capacity savings any free rider and free driver effects, i.e., savings associated with participating customers who would have implemented energy efficiency or renewable energy measures without N.J.S.A. 48: benefits or incentives. Gabel-Frank Testimony, Schedules IGF- EEP2018-2, IGF- EEP Petition at paragraph 21, Gabel-Frank Testimony, Schedule IGF- EEP2018-2, IGF- EEP N/A Gabel-Frank Testimony, Schedules IGF-EEP2018-4, IGF-EEP Gabel-Frank Testimony at page 19 VI. Evaluation, Measurement, and Verification ( EM&V ) a. The utility shall provide a quantitative analysis and projections of both the total and percentage reduction in its annual kwh and/or therm sales as a result of the proposed programs, as well as of the projected total in peak load reduction expected from the proposed program(s), over the lifetime of the measures included in the program(s). The utility shall also provide this information expressed as a percentage reduction relative to its current annual peak load. Petition, Gabel-Frank Testimony, Schedule IGF- IGF-EEP

11 Number Requirements Index b. For renewable energy programs, the utility shall provide the anticipated contribution to annual KWh and peak load on an annual basis and for the service life of the renewable energy measure. c. An EM&V Plan for each program will include: 1. Methodology for monitoring program progress on program areas 4-15 as described in Section II (a) 2. Program progress results for each of the 12 program areas as compared to projections 3. Lessons learned in implementing the program with a focus on those related to exceeding or not reaching anticipated goals 4. Recommended program enhancements N/A Buck Testimony at pages

12 STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES x In The Matter Of The Petition Of : Pivotal Utility Holdings, Inc. d/b/a : Elizabethtown Gas For Authority to : Extend the Term of Energy : Efficiency Programs and Approval of : Associated Cost Recovery Mechanism : : x BPU Docket No. Verified Petition To The Honorable Board of Public Utilities: Pursuant to N.J.S.A. 48: et seq., Petitioner Pivotal Utility Holdings, Inc. ( Pivotal ) d/b/a Elizabethtown Gas ( Petitioner, Elizabethtown, or the Company ) hereby submits this Petition by which it seeks approval from the New Jersey Board of Public Utilities ( Board ) to extend the term of its existing Energy Efficiency Programs for a one-year term effective January 1, 2019 through December 31, Petitioner also seeks approval to continue to recover the costs associated with the extended Energy Efficiency Programs ( EE Programs ) through Petitioner s surcharge contained in Rider G to the Company s Tariff for Gas Service No. 15 entitled the Energy Efficiency Program ( EEP ) Rider. Petitioner is not proposing to revise its existing EEP Rider rate at this time. In support of the requested relief, Petitioner states as follows: 1. Petitioner is a public utility corporation organized under the laws of the State of New Jersey. Petitioner s principal office is located at 520 Green Lane, Union, New Jersey, Communications and correspondence concerning this petition should be sent as follows:

13 Mary Patricia Keefe Vice President, External Affairs and Business Support Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas 520 Green Lane Union, New Jersey (908) Deborah M. Franco Cullen and Dykman LLP One Riverfront Plaza Newark, New Jersey (973) Kenneth T. Maloney Cullen and Dykman LLP 1101 Fourteenth St., N.W. Suite 750 Washington, DC (202) Petitioner is engaged in the sale, transmission and distribution of natural gas to approximately 292,000 customers located within its service territory in Hunterdon, Mercer, Middlesex, Morris, Sussex, Union and Warren Counties. Petitioner is a utility operating division of Pivotal. On June 22, 2018, the Board approved the acquisition of Petitioner, including the sale of substantially all of Petitioner s assets ( Acquisition ). Consummation of the Acquisition is pending. 1 Background Statement 4. Petitioner s existing EE Programs consist of five programs consistent with the Global Warming Response Act, N.J.S.A.26-2C-45 (the RGGI Legislation ) and the Board s May 8, 2008 Order ( May 8 Order ) in Docket No. EO issued pursuant to N.J.S.A. 48:3-98.1(c). In the RGGI Legislation, the State Legislature determined that global warming is a pervasive and dangerous threat that should be addressed through the establishment of a statewide greenhouse gas emissions reduction 1 In the Matter of the Acquisition of Elizabethtown Gas, a Division of Pivotal Utility Holdings, Inc. by ETG Acquisition Corp., a Subsidiary of South Jersey Industries, Inc. and Related Transactions, BPU Docket No. GM , Decision and Order Approving Stipulation (June 22, 2018). 2

14 program. The May 8 Order allows electric and gas public utilities to offer energy efficiency and conservation programs on a regulated basis. In addition, the renewable and energy efficiency legislation enacted in May, 2018 requires, inter alia, gas utilities to implement energy efficiency measures to reduce natural gas usage by 0.75% The EE Programs, described more fully below, were first authorized by an August 3, 2009 Board Order ( August 3 Order ) in Docket Nos. EO and GO et al., which approved a Stipulation ( Stipulation ) among Petitioner, Board Staff and the Division of Rate Counsel ( Rate Counsel ). In the Stipulation, parties agreed to the implementation of the EE Programs and the establishment of surcharge to enable Petitioner to recover the costs associated with its EE Programs. The EE Programs were designed to enhance or supplement New Jersey s Clean Energy Program ( NJCEP ) over the 17-month period commencing August 3, 2009 through December 31, The Board authorized a number of extensions of Petitioner s EE Programs in BPU Docket Nos. GO , GO , GO , GO and GR The currently effective EE Programs, which were authorized in Docket No. GO and GR by BPU order dated April 21, 2017 ( April 21 Order ), are effective through December 31, These programs are described below. 6. The August 3 Order found the EE Programs to be reasonable, in the public interest and consistent with the State s economic stimulus and energy conservation goals. The Board also found the EE Programs cost effective and beneficial as reflected in the 2 An Act concerning clean energy, amending and supplementing P.L. 1999, c. 23, amending P.L. 2010, c. 57, and supplementing P.L. 2005, c. 354 (C. 34:1A-85 et seq.), P.L. 2018, c. 17, 3(a) (C. N.J.S.A. 48:3-87.9(a)). 3

15 cost-benefit analysis performed by Rutgers Center for Energy, Economic and Environmental Policy. The December 6, 2011 New Jersey Energy Master Plan ( 2011 EMP ) indicated that it was the goal of the State s then-current administration to manage energy in a manner which saves money, stimulates the economy, creates jobs [and] protects the environment It further noted that [n]atural gas EE remains a worthwhile goal with respect to increasing the penetration rate of high efficiency gas burning appliances, gas-related EE Programs, and general conservation trends. 4 The Board, in conjunction with the New Jersey Department of Environmental Protection, updated the 2011 EMP in December 2015 ( 2015 EMP Update ) and generally reiterated the goals of the 2011 EMP. On May 23, 2018, Governor Murphy issued Executive Order No. 28 directing the President of the Board to convene the Energy Master Plan Committee to prepare, complete and deliver a new Energy Mast Plan on or before June 1, The Executive Order requires the 2019 EMP to, inter alia, explore methods to incentivize the use of clean, efficient energy. 6 follows: 7. The existing EE Programs approved by the December 16 Order are as a. Residential Gas Heating Ventilation and Air Conditioning ( HVAC ) and Gas Hot Water Heater Incentive Program; b. Residential Home Energy Assessment Program; c. Residential Home Energy Assessment (OPower) Program; d. Residential Home Weatherization for Income Qualified Customers Program; and EMP at 1. 4 Id. at Executive Order No. 28 at 3. 6 Id. at 5. 4

16 e. Commercial Steam Trap Survey and Repair Program. In addition to a range of rebates, the EE Programs include various customer education and outreach initiatives, including an on-line customer home energy audit, designed to encourage customers to conserve energy and provide information to them on how to lower their gas bills. Details concerning the proposed term extension and modifications to the EE Programs are described below and in the supporting schedules. 8. Based on the continued need of the State to meet the energy efficiency, conservation and greenhouse gas emission reduction goals established for New Jersey, Elizabethtown has determined that it is reasonable and prudent at this time to continue the Company s EE Programs with the modifications proposed by this filing and to recover the costs associated with these Programs through the Company s existing EEP rider rate reflected in Rider G, the mechanism already in place for recovery of these costs. 9. By this Petition, the Company is not seeking to change its currently effective EEP Rider rate of ($0.0007) per therm, inclusive of all applicable taxes approved by the Board pursuant to an order dated September 23, 2016 in BPU Docket No. GR Costs incurred in connection with the proposed EE Program will be reflected in future EEP Rider rate reconciliation proceedings. On November 3, 2017, Petitioner filed a Petition ( 2017 Petition ) with the Board, which was assigned Docket No. GR requesting to increase its currently effective EEP rider rate from ($0.0007) per therm to $ per therm, inclusive of all applicable taxes effective. The 2017 Petition sought to reconcile EE Program costs and cost recoveries for the period commencing July 1, 2016 through June 30, 2017 and to recover actual and forecast revenues for the period July 1, 2017 through June 30, The 2017 Petition is pending final review by the Board. 5

17 10. Annexed hereto and made a part of this Petition is Exhibit P-1, which Petitioner suggests be marked as indicated. Exhibit P-1 consists of the direct testimony and supporting schedules of Thomas Kaufmann, Manager of Rates and Tariffs for Petitioner. The schedules listed below are attached and referred to in Exhibit P-1 and contain information responsive to the Minimum Filing Requirements ( MFRs ) set forth in the Board s May 8 Order and updated in the Board s October 20, 2017 Order ( October 20 Order ) in BPU Docket No. QO : (a) (b) (c) (d) (e) (f) (g) (h) (i) Tariff Schedule TK-1 consists of Elizabethtown s currently effective tariff sheets with no rate change being proposed but with an added incentive noted; EEP Schedule TK-1 sets forth an example calculation of an EEP Rider rate; EEP Schedule TK-1a sets forth the calculation of the Projected EEP Rider rates based on current cost and recovery projections, as well as bill impacts for certain tariff classes through 2024 to a near zero balance; EEP Schedule TK-2 sets forth the calculation of the carrying costs on the EEP balance for the periods ended June 30; EEP Schedule TK-3 sets forth the calculation of the monthly EEP revenue requirement through June 2024; EEP Schedule TK-4 sets forth the EEP estimated O&M and Program Expenditures for the periods ended June through June 2024; EEP Schedule TK-5 sets forth cost recoveries for the period through June 2024; EEP Schedule TK-6 sets forth the over/underrecovered carrying costs rate applicable to the monthly balances set forth on EEP Schedule TK-2; EEP Schedule TK-7 contains a calculation of Petitioner s current capital structure as well as a calculation of the capital structure approved by the Board in Elizabethtown s last rate case updated for the Federal Income Tax change effective January 1, 2018; 6

18 (j) (k) (l) EEP Schedule TK-8 contains Uniform System of Account information that will be utilized in booking revenues, costs, expenses and assets pertaining to the Program; EEP Schedule TK-9 contains certain financial statements required by N.J.A.C. 14:1-5.12; and EEP Schedule TK-10 contains a rate impact analysis in compliance with MFR IV.e. 11. Annexed hereto and also made a part of this Petition is Exhibit P-2, which Petitioner suggests be marked as indicated. Exhibit P-2 contains the direct testimony and supporting schedules of Susan Buck, Program Manager, Energy Efficiency Programs of Petitioner. The schedules listed below are attached and referred to in Exhibit P-2 and contain information responsive to the MFRs set forth in the Board s May 8 Order and updated in the October 20 Order: (a) Schedule SB-1 contains program descriptions of the proposed programs: (i) (ii) (iii) (iv) (v) Residential Gas HVAC and Gas Hot Water Heater Incentive Program; Residential Home Energy Assessment Program; Residential Home Energy Report (Opower) Program; Residential Home Weatherization for Income Qualified Customers Program; and Commercial Steam Trap Survey and Repair Program. (b) Schedule SB-2 contains budgeted, estimated EE Program costs by major spending categories through December, 2019; (c) Schedule SB-3 contains estimated direct FTE employment data; (d) Schedule SB-4 contains a comparison of EE programs amongst New Jersey gas utilities; (e) Schedule SB-5 contains sample marketing material; and (f) Schedule SB-7 contains Proposed Allocation of Customer Outreach/Education Funds. 7

19 12. Annexed hereto and also made a part of this Petition is Exhibit P-3, which Petitioner suggests be marked as indicated. Exhibit P-3 contains the direct testimony and supporting schedules of Isaac Gabel-Frank, Vice President at Gabel Associates, Inc. The schedules listed below are attached and referred to in Exhibit P-3 and contain information responsive to the MFRs set forth in the Board s May 8 Order, as updated by the Board s October 20 Order: (a) Schedule IGF-EEP contains an overview of Mr. Gabel-Frank s work experience; (b) Schedule IGF-EEP provides a summary of the results of the five cost benefit analysis ( CBA ) tests for each of the Company s programs; (c) Schedule IGF-EEP provides detailed information underlying the results of the CBA tests; (d) Schedule IGF-EEP provides a list of the studies and regulatory decisions reviewed in determining lifetime avoided wholesale volatility costs; (e) Schedule IGF-EEP contains a list of all measures used to estimate energy and demand savings; and (f) Schedule IGF-EEP summarizes the total and percentage reduction in kwh and therm sales as a result of the proposed programs, as well as the projected total and percentage reduction in peak load expected from the proposed programs. An Index of the MFRs referencing the responsive schedules or testimony sponsored by Mr. Kaufmann, Ms. Buck and Mr. Gabel-Frank accompanies this Petition. 8

20 13. In addition, attached as Exhibits P-4 and P-5, respectively, are a form public notice and a form of notice to county clerks, municipal clerks and county administrators. 14. The Company satisfied the 30-day pre-filing meeting requirement by an inperson meeting held with Board Staff and Rate Counsel on May 25, Proposed Energy Efficiency Program 15. Elizabethtown proposes to extend the term of its EE Programs for a oneyear period commencing January 1, 2019 through December 31, As set forth in Schedule SB-2, the proposed annual amount budgeted for the EE Programs is approximately $3.0 million. The budgeted amount is based on projected expenditures for program investments and associated O&M and labor expense, which, as discussed below, Elizabethtown proposes to recover through the proposed EEP Rider Surcharge rate that will be reconciled in future proceedings to true-up that rate. A general overview of the Company s EE Programs and the specific proposed material modifications are as follows, with more detailed descriptions of each of the proposed programs provided in Schedule SB-1 that accompanies Ms. Buck s testimony: Residential Energy Efficiency Programs 16. Elizabethtown offers four residential energy efficiency programs. The first, the Residential Expanded Gas HVAC and Gas Hot Water Heater Incentive Program is designed to enhance the existing NJCEP gas HVAC and gas hot water heater incentive program by supplementing the incentive offered through NJCEP. The second program, the Residential Home Energy Assessment Program, provides participants with a 75- minute home energy audit and the direct installation of energy efficient measures such as 9

21 faucet aerators, low-flow shower heads, water heater pipe wrap insulation and a programmable thermostat. The third program, the Residential Home Energy Report (OPower) Program, provides customers with regular updates on their gas usage compared with the usage of their neighbors, along with recommendations on how to improve their energy efficiency. Finally, the fourth, the Residential Home Weatherization for Income Qualified Customers Program provides weatherization measures such as air sealing and insulation measures to low income customers who do not otherwise qualify for the Comfort Partners Program offered through the NJCEP. The program targets all residential customers who receive natural gas service from Elizabethtown or have the potential to receive gas service. 17. Elizabethtown is not proposing to alter any of the foregoing residential programs. More detailed descriptions of the residential programs are set forth in Schedule SB-1. Commercial Customer EE Program 18. The Commercial Steam Trap Survey and Repair Program provides participating customers with yearly surveys concerning the functionality of their steam traps and repair or replace defective steam traps to maximize energy efficiency. Elizabethtown is not proposing to alter this program. A more detailed description of these programs is set forth in Schedule SB-1. Cost/Benefit Information 19. As reflected in Schedule IGF-2, the proposed EE Programs pass all cost benefit tests. Petitioner respectfully submits that the proposed programs are appropriate 10

22 from a cost/benefit perspective, consistent with the goals of the 2011 EMP and 2015 EMP Update. 7 Cost Recovery 20. As is currently the case, the Company is proposing to recover all costs associated with the program, including, all program investments, such as rebates and reasonable and prudent incremental O&M expense, such as labor, customer education and outreach and costs associated with the on-line OPower tool through the existing Rider G EEP Rider rate. Elizabethtown is proposing to continue to amortize and recover its EE Program investments in rebates over a four-year period, with the return on the unamortized portion of the investments based upon the Company s weighted average cost of capital established by a Board Order in Docket No. GR , grossed up for the revenue expansion factor established in the same proceeding. The unamortized portion of these EE Program investments are net of accumulated amortization and accumulated deferred income taxes associated with the EE Program investments. 21. As noted above, a continuation of the EE Programs may have the beneficial effect of creating additional jobs in the energy efficiency market. The anticipated job impacts are set forth in Schedule SB-3. As discussed in Ms. Buck s testimony, the Company intends to utilize a combination of internal employees and third party contractors to deliver the EE Programs. 22. The proposed EE Programs will also help customers reduce their natural gas costs and play an important role in reducing greenhouse gas emissions, preserving 7 An electronic copy of Schedule IGF-EEP will be provided upon the execution of a nondisclosure agreement. 11

23 environmental resources and stimulating economic growth. As reflected in the 2011 EMP and 2015 EMP Update, these remain important State goals. Procedure and Request for Expedited Treatment 23. As set forth in the May 8 Order, once a Petition has been filed with the Board, Board Staff shall have 30 days, commencing on the filing date, to determine whether the Petition is administratively complete, advise the utility in writing whether or not the Petition is administratively complete and set forth the deficiencies and items required to remedy the deficiencies. The RGGI Legislation provides that unless the Board issues a written order within 180 days after the filing of the Petition approving, modifying or denying the requested recovery, the recovery required by the utility shall be granted effective on the 181st day after the filing without further order by the Board. N.J.S.A. 48:3-98.1(b). 24. To ensure that Petitioner can continue its Energy Efficiency Programs without interruption, Elizabethtown requests expedited treatment of this Petition. Elizabethtown further requests that the Board retain jurisdiction of this matter and not transfer the filing to the Office of Administrative Law. Elizabethtown submits that evidentiary hearings are not necessary or required to approve this Petition and requests that the Board issue an Order as soon as reasonably possible to promote implementation of the proposed EE Programs effective January 1, As stated in the May 8 Order (at 5) [t]he Board encourages all interested parties to work toward a settlement for the Board s consideration before the expiration of the 180 day period. Elizabethtown will work with the Board Staff and Rate Counsel to 12

24 reach an amicable and mutually acceptable resolution of this proceeding in the most expedient manner possible that is convenient to all the parties. Overall Impact 26. As a result of the proposed program extension, the Company estimates that the overall impact of Petitioner s filing in this proceeding, as compared to the current program, is a potential increase of an average rate of $ per therm through September This results in a bill increase in the monthly bill of a typical heating customer using 100 therms of $0.18 from $91.65 to $91.83, or 0.2%. Notice 27. Petitioner is serving notice and a copy of this Petition, together with a copy of the exhibits and schedules annexed hereto upon Stefanie A. Brand, Director, Division of Rate Counsel, 140 East Front Street, 4th Floor, Trenton, New Jersey, upon updated service lists compiled in Docket Nos. GO and GR Conclusion 28. For all the foregoing reasons, Elizabethtown respectfully requests that the Board retain jurisdiction of this matter and issue an Order on an expedited basis approving this Petition in its entirety and finding as follows: a. The Energy Efficiency Programs are in the public interest and Elizabethtown is authorized to continue to offer and administer these regulated services utility services under the terms set forth in this Petition and accompanying testimony, and supporting schedules for a one-year term effective January 1, 2019 through December 31, 2019; 13

25 b. Elizabethtown is authorized to recover all costs as requested herein; and c. Elizabethtown is granted such other and further relief as may be necessary to protect the Company s interests and implement the proposals as set forth in this Petition. Respectfully submitted, By: /s/ Mary Patricia Keefe Mary Patricia Keefe, Esq. Vice President, External Affairs And Business Support Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas 520 Green Lane Union, New Jersey (908) Date: June 28,

26 ST A TE OF NEW JERSEY ) COUNTY OF UNION ) : ss AFFIDAVIT M. Patricia Keefe, being duly sworn according to law, upon her oath, deposes and says that: 1. I am the Vice President, External Affairs and Business Support of Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas, the petitioner in the foregoing Petition. 2. I have read the annexed petition, and the matters and things contained therein are true to the best of my knowledge and belief. Sworn and subscribed before me this Cb- ) Notary Public in the State of New Jersey Jane.JamM Nota,y Public a., Commil8l e.p,- o.c. 20. mn

27 STATE OF NEW JERSEY ) COUNTY OF UNION ) : ss AFFIDAVIT Thomas Kaufmann, being duly sworn according to law, upon his oath, deposes and says: 1. I am Manager of Rates and Tariffs of the Petitioner in the foregoing Petition and I am authorized to make this Affidavit on behalf of the Petitioner. 2. The statements made in the foregoing Petition and the Exhibits and Schedules related to the development of the EEP charges submitted therewith correctly portray the information set forth therein, to the best of my knowledge, information and belief. Thomas Kaufmann Manager, Rates and Tariffs Sworn and subscribed before me this d% day owl,,.. vyl, State of New Jersey... '**'rpubiic..,. Crmn..._, Eaplrw o.o. ao. ami

28 STATE OF NEW JERSEY ) : ss COUNTY OF UNION ) AFFIDAVIT Susan Buck, being duly sworn according to law, upon her oath, deposes and says: 1. I am Program Manager of Energy Efficiency Programs of the Petitioner in the foregoing Petition and I am authorized to make this Affidavit on behalf of the Petitioner. 2. The statements made in the foregoing Petition and the Exhibits and Schedules related to the development of the EEP charges submitted therewith correctly portray the information set forth therein, to the best of my knowledge, information and belief.?x4-- / SusanBuck Program Manager, Energy Efficiency Programs Sworn and subscribed before me this + -- d-_ -day of..ll_, C\ OCL_ p-> Notary Public in the State of New Jersey JaneJamN Notary Public My Cornmiel r Dec. 20, 2021

29 STA TE OF NEW JERSEY ) COUNTY OF UNION ) : ss AFFIDAVIT Isaac Gabel-Frank, being duly sworn according to law, upon his oath, deposes and says: 1. I am Vice President at Gabel and Associates, Inc., consultant for the Petitioner in the foregoing Petition and I am authorized to make this Affidavit on behalf of the Petitioner. 2. The statements made in the foregoing Petition and the Exhibits and Schedules related to the development of the EEP charges submitted therewith correctly portray the information set forth therein, to the best of my knowledge, information and belief. Isaac Gabel-Frank Vice President Sworn and subscribed before me this "2... day of ou.. :s., &: Notary Public in the State of New Jersey --- BRIAN E. BIZJAK... ] NOTARY PUBLIC STATE OF NEW JERSEY t MY COMMISSION EXPIRES JAN. 30?.020 r I I

30 STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES In The Matter Of The Petition Of Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas For Authority to Extend the Term of Energy Efficiency Programs and Approval of Associated Cost Recovery Mechanism x X BPU Docket No. CERTIFICATE OF SERVICE I hereby certify that on the 29th day of June, 2018, a true and correct copy of the Verified Petition and supporting Testimony and Schedules relating to the abovecaptioned proceeding were served by Federal Express upon Stefanie A. Brand, Director, Division of Rate Counsel, 140 East Front Street, 4 th Floor, P.O. Box 003, Trenton, New Jersey, and by electronic mail upon the parties listed on the service list attached to the Verified Petition. Kim Bradshaw Legal Assistant Cullen and Dykman LLP

31 EXHIBIT P-1 STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES IN THE MATTER OF THE PETITION OF PIVOTAL UTILITY HOLDINGS, INC D/B/A ELIZABETHTOWN GAS FOR AUTHORITY TO EXTEND THE TERM OF ENERGY EFFICIENCY PROGRAMS AND APPROVAL OF ASSOCIATED COST RECOVERY MECHANISM DIRECT TESTIMONY OF THOMAS KAUFMANN ON BEHALF OF Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas JUNE 28, 2018

32 EXHIBIT P-1 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS DIRECT TESTIMONY OF THOMAS KAUFMANN Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. A. My name is Thomas Kaufmann. My business address is 520 Green Lane, Union, New Jersey, Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY? A. I am employed by Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas ( Elizabethtown or Company ) as Manager of Rates and Tariffs. Q. WHAT IS THE SCOPE OF YOUR DUTIES AT ELIZABETHTOWN? A. I am responsible for designing and developing rates and rate schedules for regulatory filings with the New Jersey Board of Public Utilities ( Board ) and internal management purposes. I also oversee daily rate department functions, including tariff administration, monthly parity pricing, competitive analyses and preparation of management reports. Q. PLEASE DESCRIBE YOUR PROFESSIONAL QUALIFICATIONS AND BUSINESS EXPERIENCE. A. In June 1977, I graduated from Rutgers University, Newark, N.J. with a Bachelor of Arts degree in Business Administration, majoring in accounting and economics. In July 1979, I graduated from Fairleigh Dickinson University, Madison, N.J. with a Masters of Business Administration, majoring in finance. My professional responsibilities have encompassed financial analysis, accounting, planning, and pricing in manufacturing and energy services companies in both regulated and unregulated industries. In 1977, I was employed by Allied 1

33 EXHIBIT P Chemical Corp. as a staff accountant. In 1980, I was employed by Celanese Corp. as a financial analyst. In 1981, I was employed by Suburban Propane as a Strategic Planning Analyst, promoted to Manager of Rates and Pricing in 1986 and to Director of Acquisitions and Business Analysis in In 1993, I was employed by Concurrent Computer as a Manager, Pricing Administration. In 1996, I joined NUI Corporation ( NUI ) as a Rate Analyst, was promoted to Manager of Regulatory Support in August 1997 and Manager of Regulatory Affairs in February 1998, and named Manager of Rates and Tariffs in July NUI Corporation was acquired by AGL Resources Inc. ( AGL ) in November AGL was acquired by Southern 10 Company in July By order dated June 22, 2018 in BPU Docket No GM , the Board approved the acquisition of Elizabethtown by SJI Industries, Inc. Consummation of the transaction is pending. Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING? A. The purpose of my testimony is to support Elizabethtown s proposed extension of the term of its Energy Efficiency Program ( EEP ) which is currently scheduled to expire on December 31, My testimony and schedules present the projected ( EEP ) Rider rates, based on the proposed extension, to be assessed to all customers except those served under special contracts as filed and approved by the Board, and those customers exempt from this charge pursuant to the Long-Term Capacity Agreement Pilot Program ( LCAPP ), P.L. 2011, c. 9. Q. IS THE COMPANY PROPOSING TO CHANGE THE RATE IN THIS FILING AND IF SO, WHAT IS THE EFFECTIVE DATE? A. The Company is not proposing a rate change in this filing. The calculation of future projected rates in this filing is based on twelve months of actual data through June 30 2

34 EXHIBIT P ( Recovery Year ), and estimated data from July 1 through June 30 of each subsequent year ( Subsequent Recovery Year ). Q. WHAT IS THE BASIS FOR THE COMPANY S FUTURE PROJECTED EEP RATES? A. The Company s filing is being made in connection with the Company s request to extend the term of the expenditures applicable to the Energy Efficiency Programs ( EE Programs ). These programs were initially approved in the August 3, 2009 Board Order ( August 3 Order ) in Docket No. GO and GO et al., which approved a Stipulation ( Stipulation ) signed by Elizabethtown, Board Staff and the Division of Rate Counsel in which these parties agreed to the establishment of a surcharge to enable Elizabethtown to recover the costs associated with its EE Programs. Multiple Board Orders have been approved to extend the program and alter the recovery rate from the initial filing. In the most recent Order dated April 21, 2017 ( April 21 Order ) issued in BPU Docket Nos. GR and GR , the Company was authorized to extend its EEP Program through December 31, The EE Program and associated projected expenditures are addressed by Company witness Buck. Q. ARE YOU PROPOSING ANY MATERIAL CHANGES TO THE EEP SURCHARGE COMPARED TO THOSE APPROVED IN THE AUGUST 3 ORDER? A. No. The Company is not proposing to change the cost recovery methodology. The rate proposed in this filing has been calculated in accordance with the methodology approved in the August 3 Order. 3

35 EXHIBIT P Q. DOES YOUR TESTIMONY INCLUDE ANY ILLUSTRATIVE SCHEDULES? A. Yes. My testimony includes schedules and proposed tariff sheets that were prepared under my direction and supervision. These schedules contain information responsive to the Minimum Filing Requirements ( MFRs ) as referenced in the MFR Index attached to the Company s Petition. The MFRs were set forth in the Board s May 8 Order in BPU Docket No. EO and the August 3 Order and further updated in the Board s October 20, 2017 Order in BPU Docket No. QO The schedules are as follows: (a) (b) (c) (d) (e) (f) Tariff Schedule TK-1 consists of Elizabethtown s currently effective tariff sheets as no changes are currently being proposed to the currently effective rate but with an added incentive noted; EEP Schedule TK-1 sets forth an example calculation of an EEP Rider rate; EEP Schedule TK-1a sets forth the calculation of the Projected EEP Rider rates based on current cost and recovery projections, as well as bill impacts for certain tariff classes through 2023 to a near zero balance; EEP Schedule TK-2 sets forth the carrying costs on the EEP balance for the periods ended June 30; EEP Schedule TK-3 sets forth the calculation of the monthly EEP revenue requirement through June 2024; EEP Schedule TK-4 sets forth the EEP estimated O&M and Program Expenditures for the periods ended June 30 through June 2024; 4

36 EXHIBIT P (g) (h) (i) (j) (k) (l) EEP Schedule TK-5 sets forth cost recoveries for the period through June 2024; EEP Schedule TK-6 sets forth the over-/under-recovered carrying costs rate applicable to the monthly balances set forth on EEP Schedule TK-2; EEP Schedule TK-7 contains a calculation of Petitioner's current capital structure as well as a calculation of the capital structure approved by the Board in Elizabethtown's last rate case updated for the Federal Income Tax change effective January 1, 2018; EEP Schedule TK-8 contains Uniform System of Account information that will be utilized in booking revenues, costs, expenses and assets pertaining to the Program; EEP Schedule TK-9 contains financial statements required by N.J.A.C. 14:1-5.12; and EEP Schedule TK-10 contains a rate impact analysis in compliance with MFR IV.e. REVENUE FORECAST Q. WHAT IS THE METHODOLOGY USED TO PROJECT FIRM SALES AND SERVICES FOR THE RECOVERY YEAR IN ORDER TO DERIVE THE COMPANY S PROPOSED EEP RATE? A. The methodology used to derive the Projected Normalized Sales and Services on EEP Schedule TK-1 is the same as that used in developing the demand forecast that supported Elizabethtown s Basic Gas Supply Service rate filing dated May 31, As mentioned above, the EEP rate is applicable to all customers except those served 5

37 EXHIBIT P under special contracts as filed and approved by the Board and those exempt from this charge pursuant to the LCAPP legislation. EEP RATE Q. PLEASE DESCRIBE THE EEP RIDER AND WHAT IT IS DESIGNED TO RECOVER. A. The August 3 Order authorized the establishment of a surcharge by which Elizabethtown recovers the costs associated with its EE Program. The cost recovery methodology reflected in this filing is consistent with that approved in the August 3 Order. Details concerning projected spending during the period July 2018 through June 2019, as well as other information associated with the EE Programs, are provided in Ms. Buck s testimony and supporting schedules. Q. PLEASE EXPLAIN HOW THE PROPOSED EEP RATE IS CALCULATED. A. The proposed EEP rate is calculated by taking the sum of (i) any prior period balance, plus (ii) current year O&M costs, plus (iii) current year revenue requirements, less (iv) current year recoveries and (v) applicable carrying costs, plus (vi) projected recoverable amounts for the upcoming year and dividing the total amount by the volumes projected for that upcoming year for the service classifications and customers subject to the EEP as shown on Tariff Schedule TK-1. The resulting quotient is adjusted for applicable taxes and assessments to arrive at an EEP rate per therm. 6

38 EXHIBIT P Q. PLEASE EXPLAIN HOW INCURRED O&M COSTS AND REVENUE REQUIREMENTS FOR PROGRAM EXPENDITURES ARE DETERMINED AND CALCULATED. A. Projected O&M amounts are recoverable in the year incurred. EE Program Expenditures are recoverable over a four (4) year period, as reflected on EEP Schedule TK-4. The calculation of the allowable monthly revenue requirement for the amortized EE Program expenditures is set forth on EEP Schedule TK-3. The allowable monthly recoverable amount is developed by taking EE Program expenditures less accumulated amortization and accumulated deferred income tax credits to derive a month end rate base. The average of the beginning and end of month balances is multiplied by the Company s after tax weighted average cost of capital ( WACOC ), grossed up for the Company s revenue factor and divided by twelve (12) to derive a monthly return on investment. This amount plus the monthly amortization results in the allowable monthly revenue. EEP Schedule TK-3 shows the Company s EEP after tax WACOC and revenue gross up factors used in calculating the monthly revenue requirement. Q. HOW ARE AMORTIZATION EXPENSES CALCULATED? A. The amortization expenses are calculated by dividing each month s amortizable expenditure by forty eight (48) months and accumulating (or layering) the amounts to the total monthly amortization expenses. Q. HOW IS THE DEFERRED INCOME TAX BENEFIT CALCULATED? A. The deferred tax benefit is calculated by multiplying the temporary difference in the Company s tax and book amortization expense by the effective income tax rate. The tax rate used in the calculation of the deferred tax benefit on EEP Schedule TK-3 was 7

39 EXHIBIT P % through June 2010, 40.85% from July 2010 through December 2017, and 28.11% thereafter, per the Federal Income Tax change. Q. ARE CARRYING COSTS INCLUDED IN THE EEP CALCULATION? A. Yes. In accordance with the August 3 Order, the Company is permitted to recover carrying costs or issue credits on its EEP over/under recovered balances. The Company will continue to accrue such amounts on its deferred EEP balances for recovery in subsequent years as shown on EEP Schedule TK-2. Q. HOW ARE THE CARRYING COSTS CALCULATED? A. Carrying cost rates are applied to each year s net prior year balance and current year revenue requirements and recoveries. The interest rate is based on the Company's monthly short-term debt rate on an after-tax basis shown on Schedule TK-6 and is applied monthly to the average monthly EEP balance as shown on EEP Schedule TK- 2. Interest on monthly balances is not compounded. Q. WHAT ARE THE EE PROGRAM COSTS REFLECTED IN THE FILING? A. EEP Schedule TK-4 presents a summary of the expenditures for the actual and projected periods through December 2019 for the EEP O&M and Program expenditures used in setting the projected rates shown on EEP Schedule TK-1a. The actual and projected expenditures result in total EE O&M and Program expenditures of approximately $18.3 million from inception through December 31, A breakdown of these expenditures to specific EE programs can also be found on Schedule SB-2 sponsored by Ms. Buck. 8

40 EXHIBIT P Q. WHAT IS THE RANGE OF BILL IMPACTS OF THE PROPOSED CHANGES IN THESE RATES ON TYPICAL RESIDENTIAL CUSTOMERS? A. The impact of the proposed rate adjustments are projected on EEP Schedule TK-1a. For the extension period October 1, 2018 to October 1, 2023, the projected rates range from a high of $ to a low of ($0.0001) per therm. As a result of the proposed program extension, the Company estimates that the overall impact of Petitioner s filing in this proceeding, as compared to the current program, is a potential increase of an average rate of $ per therm through September This results in a bill increase in the monthly bill of a typical heating customer using 100 therms of $0.18 from $91.65 to $91.83, or 0.2%. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes it does. 9

41 REDLINE Tariff Schedule TK-1 Page 1 of 7

42 ELIZABETHTOWN GAS B. P. U. NO. 15 GAS REVISEDORIGINAL SHEET NO. 126 RIDER "E" ENERGY EFFICIENCY PROGRAM ( EEP ) Applicable to all customers except those customers under special contracts as filed and approved by the BPU and those customers exempted pursuant to the Long-Term Capacity Agreement Pilot Program ( LCAPP ), P.L c.9, codified as N.J.S.A. 48: See the LCAPP Exemption Procedures at the end of the Societal Benefits Charge ( SBC ) Rider D. The EEP shall be collected on a per therm basis and shall remain in effect until changed by order of the BPU. The applicable EEP unit charges are as follows: ($0.0007) per therm The charges applicable under this Rider include provision for the New Jersey Sales and Use Tax, and when billed to customers exempt from this tax shall be reduced by the amount of such tax included therein. In the "Global Warming Act," N.J.S.A.26-2C-45. or "RGGI Legislation" the State Legislature determined that global warming is a pervasive and dangerous threat that should be addressed through the establishment of a statewide greenhouse gas emissions reduction program. On May 8, 2008, the Board issued an Order (the "RGGI Order") pursuant to N.J.S.A. 48:3-98.1(c). The RGGI Order allowed electric and gas public utilities to offer energy efficiency and conservation programs on a regulated basis. By Order dated April 11, 2012 in Docket No. GO , the Board approved a Stipulation that extended the program for one year, changed the name to EEP, and streamlined the program offerings. By Order dated April 29, 2013 in Docket No. GO , the Board approved a Stipulation that extended the program to September 1, By Order dated August 21, 2013 in Docket No. GO , the Board approved a Stipulation that extended the program through August, The EEP will enhance or supplement existing Clean Energy Program ( CEP ) incentives with programs such asenables the Company to recover all costs associated with the following energy efficiency programs approved by the Board order dated April 21, 2017 in BPU Docket Nos. GR and GO : 1. Expanded Residential gas HVAC and hot water heater incentive programs for residential customers; 2. Residential home energy assessment program; 3. Residential home energy report (OPower) program; Tariff Schedule TK-1 Page 2 of 7 4. Residential home weatherization for income qualified customers program; and 5. Commercial customer energy efficiency programs which enhance CEP SmartStart and Pay for Performance incentivessteam trap survey and repair program.; and 3. Enhanced customer education and outreach initiatives designed to encourage customers to conserve energy and lower their gas bills.

43 Tariff Schedule TK-1 Page 3 of 7 Date of Issue: June 30, 2017 Issued by: Brian MacLean, President 520 Green Lane Union, New Jersey Effective: Service Rendered on and after July 1, 2017 Filed Pursuant to Order of the Board of Public Utilities Dated June 30, 2017 in Docket No. GR

44 Tariff Schedule TK-1 Page 4 of 7 ELIZABETHTOWN GAS B. P. U. NO. 15 GAS REVISEDORIGINAL SHEET NO. 127 RIDER "E" ENERGY EFFICIENCY PROGRAM ( EEP ) (continued) The EEP will recover all costs associated with the program, including, but not limited to customer outreach and system implementations to implement and manage the programs. Determination of the EEP On or about July 31 of each year, the Company shall file with the Board an EEP rate filing based on the costs and recoveries incurred during the previous EEP year ending June 30th as well as estimates, if applicable, through the upcoming calendar year to develop the EEP rate to be effective October 1st as follows: The EEP monthly recoverable expenditure amounts shall be derived from taking the average of the cumulative beginning and end of month expenditures associated with the EEP investments less accumulated amortization and accumulated deferred income tax credits times the after tax weighted average cost of capital grossed up for the Company s revenue factor, as directed in the Board s August 21, 2013 Order in Docket No. GO , plus monthly amortization using a four year amortization period. The EEP rate shall be calculated by summing the (i) prior year s EEP over or under recovery balance, plus (ii) current year monthly recoverable expenditure amounts, less (iii) current year recoveries, plus (iv) current year carrying costs based on the monthly average over or under recovered balances, at a rate equal to the rate obtained on the Company s weighted average of its commercial paper and bank credit lines, if both sources have been utilized, not to exceed the weighted average cost of capital after tax as described above, plus (v) an estimated amount to recover the upcoming year s recoverable expenditures amount and dividing the resulting sum by the annual forecasted per therm quantities for the applicable customers set forth above. The resulting rate shall be adjusted for all applicable taxes. The EEP rate shall be self-implementing on a refundable basis as directed by the BPU. Date of Issue: June 30, 2017 Issued by: Brian MacLean, President 520 Green Lane Union, New Jersey Effective: Service Rendered on and after July 1, 2017 Filed Pursuant to Order of the Board of Public Utilities Dated June 30, 2017 in Docket No. GR

45 CLEAN Tariff Schedule TK-1 Page 5 of 7

46 ELIZABETHTOWN GAS B. P. U. NO. 15 GAS REVISED SHEET NO. 126 RIDER "E" ENERGY EFFICIENCY PROGRAM ( EEP ) Applicable to all customers except those customers under special contracts as filed and approved by the BPU and those customers exempted pursuant to the Long-Term Capacity Agreement Pilot Program ( LCAPP ), P.L c.9, codified as N.J.S.A. 48: See the LCAPP Exemption Procedures at the end of the Societal Benefits Charge ( SBC ) Rider D. The EEP shall be collected on a per therm basis and shall remain in effect until changed by order of the BPU. The applicable EEP unit charges are as follows: ($0.0007) per therm The charges applicable under this Rider include provision for the New Jersey Sales and Use Tax, and when billed to customers exempt from this tax shall be reduced by the amount of such tax included therein. In the "Global Warming Act," N.J.S.A.26-2C-45. or "RGGI Legislation" the State Legislature determined that global warming is a pervasive and dangerous threat that should be addressed through the establishment of a statewide greenhouse gas emissions reduction program. On May 8, 2008, the Board issued an Order (the "RGGI Order") pursuant to N.J.S.A. 48:3-98.1(c). The RGGI Order allowed electric and gas public utilities to offer energy efficiency and conservation programs on a regulated basis. By Order dated April 11, 2012 in Docket No. GO , the Board approved a Stipulation that extended the program for one year, changed the name to EEP, and streamlined the program offerings. By Order dated April 29, 2013 in Docket No. GO , the Board approved a Stipulation that extended the program to September 1, By Order dated August 21, 2013 in Docket No. GO , the Board approved a Stipulation that extended the program through August, The EEP enables the Company to recover all costs associated with the following energy efficiency programs approved by the Board order dated April 21, 2017 in BPU Docket Nos. GR and GO : 1. Residential gas HVAC and hot water heater incentive programs; 2. Residential home energy assessment program; 3. Residential home energy report (OPower) program; 4. Residential home weatherization for income qualified customers program; and 5. Commercial steam trap survey and repair program. Tariff Schedule TK-1 Page 6 of 7 Date of Issue: Issued by: Brian MacLean, President 520 Green Lane Union, New Jersey Effective: Service Rendered on and after Filed Pursuant to Order of the Board of Public Utilities Dated in Docket No.

47 Tariff Schedule TK-1 Page 7 of 7 ELIZABETHTOWN GAS B. P. U. NO. 15 GAS REVISED SHEET NO. 127 RIDER "E" ENERGY EFFICIENCY PROGRAM ( EEP ) (continued) The EEP will recover all costs associated with the program, including, but not limited to customer outreach and system implementations to implement and manage the programs. Determination of the EEP On or about July 31 of each year, the Company shall file with the Board an EEP rate filing based on the costs and recoveries incurred during the previous EEP year ending June 30th as well as estimates, if applicable, through the upcoming calendar year to develop the EEP rate to be effective October 1st as follows: The EEP monthly recoverable expenditure amounts shall be derived from taking the average of the cumulative beginning and end of month expenditures associated with the EEP investments less accumulated amortization and accumulated deferred income tax credits times the after tax weighted average cost of capital grossed up for the Company s revenue factor, as directed in the Board s August 21, 2013 Order in Docket No. GO , plus monthly amortization using a four year amortization period. The EEP rate shall be calculated by summing the (i) prior year s EEP over or under recovery balance, plus (ii) current year monthly recoverable expenditure amounts, less (iii) current year recoveries, plus (iv) current year carrying costs based on the monthly average over or under recovered balances, at a rate equal to the rate obtained on the Company s weighted average of its commercial paper and bank credit lines, if both sources have been utilized, not to exceed the weighted average cost of capital after tax as described above, plus (v) an estimated amount to recover the upcoming year s recoverable expenditures amount and dividing the resulting sum by the annual forecasted per therm quantities for the applicable customers set forth above. The resulting rate shall be adjusted for all applicable taxes. The EEP rate shall be self-implementing on a refundable basis as directed by the BPU. Date of Issue: Issued by: Brian MacLean, President 520 Green Lane Union, New Jersey Effective: Service Rendered on and after Filed Pursuant to Order of the Board of Public Utilities Dated in Docket No.

48 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS Exhibit 1 EEP Schedule TK-1 ENERGY EFFICIENCY PROGRAM ("EEP") CALCULATION OF THE EEP RATE October 1, 2018 through September 30, 2019 RECOVERY YEAR Prior Year Balance - (Sch. TK-2) June 30, 2017 ($314,764) Actuals Through April, Projected Through: June 30, Current Year O&M Costs (Sch. TK-2) $397,328 3 Current Year Revenue Requirements (Sch. TK-2) $592,760 4 Current Year Recovery Credits (Sch.TK-2) $311,286 5 Current Year Carrying Costs (Sch. TK-2) $3,902 6 Proforma Current Year TK-2 Ending Balance (Sum L1-L5) $990,512 7 Projected Recoverables : June 30, Revenue Requirements (Sch. TK-3) $1,145,697 - O&M Costs (Sch. TK-4) $736,792 $1,882,489 8 Total Proposed Recoveries (L6+L7) $2,873, Month Projected Normalized Sales and Services: - Residential and GLS 234,387,400 - Commercial 145,223,714 - Industrial 73,317,600 - NGV 97,998 - Cogeneration 0 453,026,712 therms 10 EEP Rate, before taxes (L8/L9) $ /therm 11 Sales & Use 6.625% $ EEP Rate (L10+L11) $ /therm Schedule TK-1-8 and 10 TK-1

49 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") EEP Schedule TK-1a CALCULATION OF THE EEP RATE PROFROMA RATES PER KNOWN ACTUALS Data to June 30th to Set Rate For Before Rate Date Implementation Adjustments October 1, 2018 October 1, 2019 October 1, 2020 October 1, 2021 October 1, 2022 October 1, 2023 October 1, 2024 October 1, 2025 October 1, 2026 October 1, 2027 October 1, 2028 October 1, 2029 June-18 June-19 June-20 June-21 June-22 June-23 June-24 June-25 June-26 June-27 June-28 June-29 1 Prior Year (Over)/ Under Balance (Sch. TK-2) $990,512 $794,941 $44,046 ($100,172) ($46,048) ($72,395) 2 Monthly Revenue Requirement (Sch. TK-2) $1,145,697 $1,605,419 $1,516,369 $1,191,402 $577,596 $49,534 3 O&M Expenditures (Sch. TK-2) $736,792 $238,392 $0 $0 $0 $0 4 Total Proposed Recoveries (Sum L1+L2+L3) $2,873,001 $2,638,752 $1,560,415 $1,091,230 $531,548 ($22,861) 5 Projected Firm Sales (1) (Sch. TK-5) Therms 453,026, ,088, ,088, ,088, ,088, ,088,461 6 Rate, before taxes (L4/L5) $ $ $ $ $ ($0.0001) 7 Sales & Use 6.625% $ $ $ $ $ $ Rate (L6+L7) per Therm $ $ $ $ $ ($0.0001) (1) All therms excluding NJBPU approved special contracts. Average: $ Average Billing Changes: Determinates Rates October 1, 2018 October 1, 2019 October 1, 2020 October 1, 2021 October 1, 2022 October 1, /1/18 Prj. Billed Amt Prj. Billed Amt Prj. Billed Amt Prj. Billed Amt Prj. Billed Amt Prj. Billed Amt Effective EEP Rate > ($0.0007) Residential Sales Service 12 Service Charge $8.48 1,000 Volumetric Charge $ Bill $ $ $ $ $ $ $ Annual Bill Change $7.40 ($0.50) ($2.60) ($1.00) ($1.30) ($1.40) Percent Change 0.8% (0.1%) (0.3%) (0.1%) (0.1%) (0.1%) Bill Change from Base $7.40 $6.90 $4.30 $3.30 $2.00 $0.60 Cumulative Billed $24.50 Small General Service 12 Service Charge $ ,000 Volumetric Charge $ Bill $1, $1, $1, $1, $1, $1, $1, Annual Bill Change $7.40 ($0.50) ($2.60) ($1.00) ($1.30) ($1.40) Percent Change 0.7% 0.0% (0.2%) (0.1%) (0.1%) (0.1%) Bill Change from Base $7.40 $6.90 $4.30 $3.30 $2.00 $0.60 Cumulative Billed $24.50 General Delivery Service 12 Service Charge $ ,300 Demand Charge $ ,000 Volumetric Charge $ Bill $10, $10, $10, $10, $10, $10, $10, Annual Bill Change $96.20 ($6.50) ($33.80) ($13.00) ($16.90) ($18.20) Percent Change 0.9% (0.1%) (0.3%) (0.1%) (0.2%) (0.2%) Bill Change from Base $96.20 $89.70 $55.90 $42.90 $26.00 $7.80 Cumulative Billed $ Schedule TK-1-8 and 10 TK-1a

50 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-2 Carrying Costs Revenue Ending Balance Beginning Requirement O&M Recoveries Ending Average Interest Rate Carrying plus Cum. (O)/U Balance TK-3 TK-4 TK-5 Balance Balance TK-6 Cost Carrying Cost a b c d e f=b+c+d-e g=(b+f)/2 h i=g*h/12 j=f+ cum of i Jun-10 $153,488 $522,139 $2,991,884 ($2,316,257) ($2,271,904) ($4,351) ($2,320,608) Jun-11 $470,672 $1,314,822 $2,061,741 ($2,596,855) ($2,712,974) ($7,577) ($2,604,432) Jun-12 $1,016,105 $1,610,350 $4,416 $17,607 ($49,611) ($2,436) $15,171 Jun-13 $1,326,760 $348,053 $817 $1,689,167 $1,620,408 $2,233 $1,691,400 Jun-14 $1,259,659 $462,362 $1,120,717 $2,292,704 $2,262,365 $4,375 $2,297,079 Jun-15 $1,043,900 $447,774 $3,449,216 $339,537 $368,708 $3,845 $343,382 Jun-16 $660,990 $206,306 $2,147,607 ($936,929) ($917,797) ($904) ($937,833) Jun-17 $437,843 $177,035 ($12,305) ($310,650) ($339,156) ($4,114) ($314,764) Jun-18 * $592,760 $397,328 ($311,286) $986,610 $920,410 $3,902 $990,512 Jun-19 * $1,145,697 $736,792 $2,092,777 $780,224 $743,255 $14,717 $794,941 Jun-20 * $1,605,419 $238,392 $2,603,612 $35,140 $13,738 $8,906 $44,046 Jun-21 * $1,516,369 $0 $1,661,216 ($100,801) ($134,778) $629 ($100,172) Jun-22 * $1,191,402 $0 $1,137,709 ($46,479) ($66,349) $431 ($46,048) Jun-23 * $577,596 $0 $604,065 ($72,517) ($75,207) $122 ($72,395) Jun-24 * $49,534 $0 $20,933 ($43,794) ($44,028) ($849) ($44,643) Jun-25 * Jun-26 * Total $13,048,194 $6,461,353 $19,573,119 $18,929 * Projected Schedule TK-1-8 and 10 TK-2

51 Exhibit 1 EEP Schedule TK-3 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Monthly Recoverable Investment Program Expenditures - Amortized Over Four Years Wtd. Avg. Amortizable Accum. Cost of Monthly Monthly Expenditures Cumulative Average Amort. Monthly Accum. Deferred Earnings / Average Capital (1) Revenue Return on Revenue YTD ending TK-4 Expenditures Expenditures Months Amortization Amort. Income Tax Rate Base Rate Base After-tax Factor Rate Base Requirement June a b c d e f g h i=c-g-h i k l m= (j) *k*l/12 n=m+f Begin Balance $0 $0 $0 Aug-09 $415 $415 $ $9 $9 $167 $239 $ % $1 $10 Sep-09 $58,552 $58,967 $29, $1,228 $1,237 $23,715 $34,015 $17, % $168 $1,396 Oct-09 $503,469 $562,436 $310, $11,717 $12,954 $225,727 $323,755 $178, % $1,758 $13,475 Nov-09 $9,154 $571,590 $567, $11,908 $24,862 $224,596 $322,132 $322, % $3,175 $15,083 Dec-09 $6,648 $578,238 $574, $12,047 $36,909 $222,378 $318,951 $320, % $3,090 $15,137 Jan-10 $29,746 $607,984 $593, $12,666 $49,575 $229,394 $329,015 $323, % $3,052 $15,718 Feb-10 $22,212 $630,196 $619, $13,129 $62,704 $233,125 $334,367 $331, % $3,125 $16,254 Mar-10 $67,165 $697,361 $663, $14,528 $77,232 $254,749 $365,380 $349, % $3,296 $17,824 Apr-10 $25,100 $722,461 $709, $15,051 $92,283 $258,877 $371,301 $368, % $3,470 $18,521 May-10 $45,518 $767,979 $745, $16,000 $108,283 $271,003 $388,693 $379, % $3,580 $19, mos. Jun-10 $37,061 $805,040 $786, $16,772 $125,055 $279,338 $400,647 $394, % $3,718 $20,490 $153,488 Jul-10 $66,161 $871,201 $838, $18,150 $143,205 $298,950 $429,046 $414, % $3,893 $22,043 Aug-10 $38,308 $909,509 $890, $18,948 $162,153 $306,859 $440,497 $434, % $4,080 $23,028 Sep-10 $102,354 $1,011,863 $960, $21,080 $183,233 $340,059 $488,571 $464, % $4,359 $25,439 Oct-10 $115,476 $1,127,339 $1,069, $23,486 $206,719 $377,637 $542,983 $515, % $4,840 $28,326 Nov-10 $160,103 $1,287,442 $1,207, $26,822 $233,541 $432,082 $621,819 $582, % $5,465 $32,287 Dec-10 $121,085 $1,408,527 $1,347, $29,344 $262,885 $469,558 $676,084 $648, % $6,089 $35,433 Jan-11 $316,793 $1,725,320 $1,566, $35,944 $298,829 $584,285 $842,206 $759, % $7,123 $43,067 Feb-11 $69,466 $1,794,786 $1,760, $37,391 $336,220 $597,387 $861,179 $851, % $7,992 $45,383 Mar-11 $145,466 $1,940,252 $1,867, $40,422 $376,642 $640,298 $923,312 $892, % $8,372 $48,794 Apr-11 $123,753 $2,064,005 $2,002, $43,000 $419,642 $673,285 $971,078 $947, % $8,888 $51,888 May-11 $181,299 $2,245,304 $2,154, $46,777 $466,419 $728,238 $1,050,647 $1,010, % $9,485 $56,262 Jun-11 $94,109 $2,339,413 $2,292, $48,738 $515,157 $746,772 $1,077,484 $1,064, % $9,984 $58,722 $470,672 Jul-11 $151,612 $2,491,025 $2,415, $51,896 $567,053 $787,506 $1,136,466 $1,106, % $10,387 $62,283 Aug-11 $225,652 $2,716,677 $2,603, $56,597 $623,650 $856,564 $1,236,463 $1,186, % $11,133 $67,730 Sep-11 $217,236 $2,933,913 $2,825, $61,123 $684,773 $920,336 $1,328,804 $1,282, % $12,035 $73,158 Oct-11 $223,848 $3,157,761 $3,045, $65,787 $750,560 $984,905 $1,422,296 $1,375, % $12,907 $78,694 Nov-11 ($250,636) $2,907,125 $3,032, $60,565 $811,125 $857,779 $1,238,221 $1,330, % $12,482 $73,047 Dec-11 $200,118 $3,107,243 $3,007, $64,734 $875,859 $913,083 $1,318,301 $1,278, % $11,994 $76,728 Jan-12 $279,326 $3,386,569 $3,246, $70,554 $946,413 $998,367 $1,441,789 $1,380, % $12,949 $83,503 Feb-12 $256,311 $3,642,880 $3,514, $75,893 $1,022,306 $1,072,067 $1,548,507 $1,495, % $14,029 $89,922 Mar-12 $249,404 $3,892,284 $3,767, $81,089 $1,103,395 $1,140,824 $1,648,065 $1,598, % $14,997 $96,086 Apr-12 $198,955 $4,091,239 $3,991, $85,234 $1,188,629 $1,187,279 $1,715,331 $1,681, % $15,683 $100,917 May-12 $238,126 $4,329,365 $4,210, $90,195 $1,278,824 $1,247,709 $1,802,832 $1,759, % $16,228 $106,423 Jun-12 $43,972 $4,373,337 $4,351, $91,111 $1,369,935 $1,228,452 $1,774,950 $1,788, % $16,503 $107,614 $1,016,105 Jul-12 $8,900 $4,382,237 $4,377, $91,297 $1,461,232 $1,194,793 $1,726,212 $1,750, % $16,149 $107,446 Aug-12 $54,599 $4,436,836 $4,409, $92,434 $1,553,666 $1,179,338 $1,703,832 $1,715, % $15,821 $108,255 Sep-12 $13,890 $4,450,726 $4,443, $92,723 $1,646,389 $1,147,134 $1,657,203 $1,680, % $15,503 $108,226 Oct-12 $64,306 $4,515,032 $4,482, $94,063 $1,740,452 $1,134,978 $1,639,602 $1,648, % $15,207 $109,270 Nov-12 $25,868 $4,540,900 $4,527, $94,602 $1,835,054 $1,106,901 $1,598,945 $1,619, % $14,938 $109,540 Dec-12 $38,951 $4,579,851 $4,560, $95,414 $1,930,468 $1,083,836 $1,565,547 $1,582, % $14,596 $110,010 $652,747 Jan-13 $11,653 $4,591,504 $4,585, $95,656 $2,026,124 $1,049,520 $1,515,860 $1,540, % $14,213 $109,869 Feb-13 $39,889 $4,631,393 $4,611, $96,487 $2,122,611 $1,026,400 $1,482,382 $1,499, % $13,829 $110,316 Mar-13 $61,254 $4,692,647 $4,662, $97,763 $2,220,374 $1,011,486 $1,460,787 $1,471, % $13,575 $111,338 Apr-13 $115,134 $4,807,781 $4,750, $100,162 $2,320,536 $1,017,602 $1,469,643 $1,465, % $13,517 $113,679 May-13 $33,163 $4,840,944 $4,824, $100,853 $2,421,389 $989,950 $1,429,605 $1,449, % $13,373 $114,226 Jun-13 $34,827 $4,875,771 $4,858, $101,579 $2,522,968 $962,682 $1,390,121 $1,409, % $13,006 $114,585 $1,326,760 Jul-13 $38,889 $4,914,660 $4,895, $102,389 $2,625,357 $936,743 $1,352,560 $1,371, % $12,651 $115,040 Aug-13 $35,900 $4,950,560 $4,932, $103,128 $2,728,485 $909,280 $1,312,795 $1,332, % $12,294 $115,422 Sep-13 $19,751 $4,970,311 $4,960, $102,320 $2,830,805 $875,551 $1,263,955 $1,288, % $10,463 $112,783 Oct-13 $23,954 $4,994,265 $4,982, $92,330 $2,923,135 $847,619 $1,223,511 $1,243, % $10,100 $102,430 Nov-13 $35,053 $5,029,318 $5,011, $92,869 $3,016,004 $824,001 $1,189,313 $1,206, % $9,797 $102,666 Dec-13 $13,937 $5,043,255 $5,036, $93,021 $3,109,025 $791,695 $1,142,535 $1,165, % $9,468 $102,489 Jan-14 $45,466 $5,088,721 $5,065, $93,349 $3,202,374 $772,135 $1,114,212 $1,128, % $9,163 $102,512 Feb-14 $37,678 $5,126,399 $5,107, $93,671 $3,296,045 $749,262 $1,081,092 $1,097, % $8,914 $102,585 Mar-14 $1,330 $5,127,729 $5,127, $92,299 $3,388,344 $712,101 $1,027,284 $1,054, % $8,561 $100,860 Apr-14 $56,891 $5,184,620 $5,156, $92,962 $3,481,306 $697,366 $1,005,948 $1,016, % $8,256 $101,218 May-14 $41,786 $5,226,406 $5,205, $92,884 $3,574,190 $676,493 $975,723 $990, % $8,046 $100,930 Jun-14 $39,235 $5,265,641 $5,246, $92,929 $3,667,119 $654,559 $943,963 $959, % $7,795 $100,724 $1,259,659 Jul-14 $4,676 $5,270,317 $5,267, $91,648 $3,758,767 $619,030 $892,520 $918, % $7,457 $99,105 Aug-14 $40,208 $5,310,525 $5,290, $91,688 $3,850,455 $598,001 $862,069 $877, % $7,124 $98,812 Sep-14 $27,556 $5,338,081 $5,324, $90,130 $3,940,585 $572,440 $825,056 $843, % $6,850 $96,980 Oct-14 $32,072 $5,370,153 $5,354, $88,392 $4,028,977 $549,433 $791,743 $808, % $6,565 $94,957 Nov-14 $75 $5,370,228 $5,370, $85,058 $4,114,035 $514,717 $741,476 $766, % $6,225 $91,283 Dec-14 $60,029 $5,430,257 $5,400, $83,786 $4,197,821 $505,013 $727,423 $734, % $5,964 $89,750 Jan-15 $33,078 $5,463,335 $5,446, $77,875 $4,275,696 $486,713 $700,926 $714, % $5,800 $83,675 Feb-15 $35,129 $5,498,464 $5,480, $77,160 $4,352,856 $469,543 $676,065 $688, % $5,591 $82,751 Mar-15 $32,917 $5,531,381 $5,514, $74,815 $4,427,671 $452,428 $651,282 $663, % $5,390 $80,205 Apr-15 $1,697 $5,533,078 $5,532, $72,272 $4,499,943 $423,598 $609,537 $630, % $5,119 $77,391 May-15 $60,423 $5,593,501 $5,563, $69,754 $4,569,697 $419,786 $604,018 $606, % $4,927 $74,681 Jun-15 $76,527 $5,670,028 $5,631, $69,388 $4,639,085 $422,702 $608,241 $606, % $4,922 $74,310 $1,043,900 Jul-15 $17,591 $5,687,619 $5,678, $66,596 $4,705,681 $402,684 $579,254 $593, % $4,822 $71,418 Aug-15 $2,706 $5,690,325 $5,688, $61,951 $4,767,632 $378,482 $544,211 $561, % $4,562 $66,513 Sep-15 $22,340 $5,712,665 $5,701, $57,891 $4,825,523 $363,960 $523,182 $533, % $4,334 $62,225 Oct-15 $32,451 $5,745,116 $5,728, $53,903 $4,879,426 $355,197 $510,493 $516, % $4,197 $58,100 Nov-15 $27,056 $5,772,172 $5,758, $59,689 $4,939,115 $341,866 $491,191 $500, % $4,067 $63,756 Dec-15 $67,554 $5,839,726 $5,805, $56,927 $4,996,042 $346,207 $497,477 $494, % $4,014 $60,941 Jan-16 $5,366 $5,845,092 $5,842, $51,219 $5,047,261 $327,476 $470,355 $483, % $3,930 $55,149 Feb-16 $139,111 $5,984,203 $5,914, $48,778 $5,096,039 $364,378 $523,786 $497, % $4,037 $52,815 Mar-16 $26,827 $6,011,030 $5,997, $44,141 $5,140,180 $357,305 $513,545 $518, % $4,212 $48,353 Apr-16 $1,132 $6,012,162 $6,011, $40,019 $5,180,199 $341,419 $490,544 $502, % $4,077 $44,096 May-16 $4,007 $6,016,169 $6,014, $35,142 $5,215,341 $328,701 $472,127 $481, % $3,909 $39,051 Jun-16 $25,675 $6,041,844 $6,029, $34,761 $5,250,102 $324,989 $466,753 $469, % $3,812 $38,573 $660,990 Schedule TK-1-8 and 10 TK-3

52 Exhibit 1 EEP Schedule TK-3 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Monthly Recoverable Investment Program Expenditures - Amortized Over Four Years Wtd. Avg. Amortizable Accum. Cost of Monthly Monthly Expenditures Cumulative Average Amort. Monthly Accum. Deferred Earnings / Average Capital (1) Revenue Return on Revenue YTD ending TK-4 Expenditures Expenditures Months Amortization Amort. Income Tax Rate Base Rate Base After-tax Factor Rate Base Requirement June a b c d e f g h i=c-g-h i k l m= (j) *k*l/12 n=m+f Jul-16 $53,903 $6,095,747 $6,068, $35,698 $5,285,800 $332,426 $477,521 $472, % $3,834 $39,532 Aug-16 $1,929 $6,097,676 $6,096, $34,601 $5,320,401 $319,080 $458,195 $467, % $3,799 $38,400 Sep-16 $31,675 $6,129,351 $6,113, $34,971 $5,355,372 $317,733 $456,246 $457, % $3,713 $38,684 Oct-16 $17,197 $6,146,548 $6,137, $33,990 $5,389,362 $310,873 $446,313 $451, % $3,665 $37,655 Nov-16 $19,566 $6,166,114 $6,156, $33,859 $5,423,221 $305,035 $437,858 $442, % $3,590 $37,449 Dec-16 $19,860 $6,185,974 $6,176, $33,461 $5,456,682 $299,479 $429,813 $433, % $3,523 $36,984 Jan-17 $20,031 $6,206,005 $6,195, $33,635 $5,490,317 $293,921 $421,767 $425, % $3,458 $37,093 Feb-17 $1,301 $6,207,306 $6,206, $32,832 $5,523,149 $281,041 $403,116 $412, % $3,349 $36,181 Mar-17 $50,755 $6,258,061 $6,232, $32,613 $5,555,762 $288,452 $413,847 $408, % $3,317 $35,930 Apr-17 $15,518 $6,273,579 $6,265, $30,537 $5,586,299 $282,317 $404,963 $409, % $3,325 $33,862 May-17 $12,094 $6,285,673 $6,279, $30,099 $5,616,398 $274,962 $394,313 $399, % $3,245 $33,344 Jun-17 $9,676 $6,295,349 $6,290, $29,575 $5,645,973 $266,833 $382,543 $388, % $3,154 $32,729 $437,843 Jul-17 $11,721 $6,307,070 $6,301, $29,009 $5,674,982 $259,771 $372,317 $377, % $3,111 $32,120 Aug-17 $10,292 $6,317,362 $6,312, $28,475 $5,703,457 $252,343 $361,562 $366, % $3,025 $31,500 Sep-17 $300,856 $6,618,218 $6,467, $34,331 $5,737,788 $361,219 $519,211 $440, % $3,630 $37,961 Oct-17 $82,233 $6,700,451 $6,659, $35,546 $5,773,334 $380,290 $546,827 $533, % $4,394 $39,940 Nov-17 $239,392 $6,939,843 $6,820, $39,803 $5,813,137 $461,823 $664,883 $605, % $4,994 $44,797 Dec-17 $110,560 $7,050,403 $6,995, $41,816 $5,854,953 $489,905 $705,545 $685, % $5,648 $47,464 Jan-18 $181,033 $7,231,436 $7,140, $44,640 $5,899,593 $528,245 $803,598 $754, % $5,369 $50,009 Feb-18 $278,475 $7,509,911 $7,370, $49,657 $5,949,250 $592,566 $968,095 $885, % $6,303 $55,960 Mar-18 $77,229 $7,587,140 $7,548, $51,238 $6,000,488 $599,872 $986,780 $977, % $6,955 $58,193 Apr-18 $145,737 $7,732,877 $7,660, $53,089 $6,053,577 $625,915 $1,053,385 $1,020, % $7,258 $60,347 May-18 $288,397 $8,021,274 $7,877, $58,226 $6,111,803 $690,616 $1,218,855 $1,136, % $8,084 $66,310 Jun-18 $95,316 $8,116,590 $8,068, $59,395 $6,171,198 $700,714 $1,244,678 $1,231, % $8,764 $68,159 $592,760 Jul-18 $95,316 $8,211,906 $8,164, $61,283 $6,232,481 $710,280 $1,269,145 $1,256, % $8,943 $70,226 Aug-18 $492,816 $8,704,722 $8,458, $70,712 $6,303,193 $828,934 $1,572,595 $1,420, % $10,110 $80,822 Sep-18 $95,316 $8,800,038 $8,752, $72,124 $6,375,317 $835,453 $1,589,268 $1,580, % $11,249 $83,373 Oct-18 $95,316 $8,895,354 $8,847, $73,442 $6,448,759 $841,602 $1,604,993 $1,597, % $11,364 $84,806 Nov-18 $95,316 $8,990,670 $8,943, $75,426 $6,524,185 $847,193 $1,619,292 $1,612, % $11,471 $86,897 Dec-18 $335,993 $9,326,663 $9,158, $81,175 $6,605,360 $918,822 $1,802,481 $1,710, % $12,174 $93,349 Jan-19 $130,400 $9,457,063 $9,391, $83,203 $6,688,563 $932,089 $1,836,411 $1,819, % $12,946 $96,149 Feb-19 $335,400 $9,792,463 $9,624, $89,458 $6,778,021 $1,001,224 $2,013,218 $1,924, % $13,696 $103,154 Mar-19 $130,400 $9,922,863 $9,857, $91,489 $6,869,510 $1,012,161 $2,041,192 $2,027, % $14,424 $105,913 Apr-19 $130,400 $10,053,263 $9,988, $94,171 $6,963,681 $1,022,346 $2,067,236 $2,054, % $14,616 $108,787 May-19 $335,400 $10,388,663 $10,220, $99,899 $7,063,580 $1,088,545 $2,236,538 $2,151, % $15,311 $115,210 Jun-19 $130,400 $10,519,063 $10,453, $101,022 $7,164,602 $1,096,803 $2,257,658 $2,247, % $15,989 $117,011 $1,145,697 Jul-19 $130,400 $10,649,463 $10,584, $103,372 $7,267,974 $1,104,401 $2,277,088 $2,267, % $16,133 $119,505 Aug-19 $335,400 $10,984,863 $10,817, $110,303 $7,378,277 $1,167,675 $2,438,911 $2,358, % $16,778 $127,081 Sep-19 $130,400 $11,115,263 $11,050, $112,554 $7,490,831 $1,172,692 $2,451,740 $2,445, % $17,399 $129,953 Oct-19 $130,400 $11,245,663 $11,180, $114,595 $7,605,426 $1,177,135 $2,463,102 $2,457, % $17,485 $132,080 Nov-19 $335,400 $11,581,063 $11,413, $121,019 $7,726,445 $1,237,397 $2,617,221 $2,540, % $18,074 $139,093 Dec-19 $130,400 $11,711,463 $11,646, $122,328 $7,848,773 $1,239,666 $2,623,024 $2,620, % $18,643 $140,971 Jan-20 $0 $11,711,463 $11,711, $122,216 $7,970,989 $1,205,312 $2,535,162 $2,579, % $18,351 $140,567 Feb-20 $0 $11,711,463 $11,711, $119,318 $8,090,307 $1,171,771 $2,449,385 $2,492, % $17,733 $137,051 Mar-20 $0 $11,711,463 $11,711, $118,759 $8,209,066 $1,138,388 $2,364,009 $2,406, % $17,124 $135,883 Apr-20 $0 $11,711,463 $11,711, $118,735 $8,327,801 $1,105,012 $2,278,650 $2,321, % $16,517 $135,252 May-20 $0 $11,711,463 $11,711, $118,652 $8,446,453 $1,071,658 $2,193,352 $2,236, % $15,910 $134,562 Jun-20 $0 $11,711,463 $11,711, $118,117 $8,564,570 $1,038,456 $2,108,437 $2,150, % $15,304 $133,421 $1,605,419 Jul-20 $0 $11,711,463 $11,711, $116,994 $8,681,564 $1,005,569 $2,024,330 $2,066, % $14,703 $131,697 Aug-20 $0 $11,711,463 $11,711, $116,954 $8,798,518 $972,693 $1,940,252 $1,982, % $14,105 $131,059 Sep-20 $0 $11,711,463 $11,711, $116,294 $8,914,812 $940,003 $1,856,648 $1,898, % $13,508 $129,802 Oct-20 $0 $11,711,463 $11,711, $115,936 $9,030,748 $907,413 $1,773,302 $1,814, % $12,914 $128,850 Nov-20 $0 $11,711,463 $11,711, $115,528 $9,146,276 $874,938 $1,690,249 $1,731, % $12,322 $127,850 Dec-20 $0 $11,711,463 $11,711, $115,114 $9,261,390 $842,580 $1,607,493 $1,648, % $11,732 $126,846 Jan-21 $0 $11,711,463 $11,711, $114,697 $9,376,087 $810,338 $1,525,038 $1,566, % $11,145 $125,842 Feb-21 $0 $11,711,463 $11,711, $114,670 $9,490,757 $778,104 $1,442,602 $1,483, % $10,558 $125,228 Mar-21 $0 $11,711,463 $11,711, $113,613 $9,604,370 $746,168 $1,360,925 $1,401, % $9,974 $123,587 Apr-21 $0 $11,711,463 $11,711, $113,289 $9,717,659 $714,322 $1,279,482 $1,320, % $9,394 $122,683 May-21 $0 $11,711,463 $11,711, $113,037 $9,830,696 $682,548 $1,198,219 $1,238, % $8,815 $121,852 Jun-21 $0 $11,711,463 $11,711, $112,836 $9,943,532 $650,829 $1,117,102 $1,157, % $8,237 $121,073 $1,516,369 Jul-21 $0 $11,711,463 $11,711, $112,592 $10,056,124 $619,180 $1,036,159 $1,076, % $7,661 $120,253 Aug-21 $0 $11,711,463 $11,711, $112,377 $10,168,501 $587,591 $955,371 $995, % $7,085 $119,462 Sep-21 $0 $11,711,463 $11,711, $106,109 $10,274,610 $557,763 $879,090 $917, % $6,526 $112,635 Oct-21 $0 $11,711,463 $11,711, $104,396 $10,379,006 $528,418 $804,039 $841, % $5,988 $110,384 Nov-21 $0 $11,711,463 $11,711, $99,409 $10,478,415 $500,474 $732,574 $768, % $5,467 $104,876 Dec-21 $0 $11,711,463 $11,711, $97,105 $10,575,520 $473,178 $662,765 $697, % $4,964 $102,069 Jan-22 $0 $11,711,463 $11,711, $93,334 $10,668,854 $446,941 $595,668 $629, % $4,477 $97,811 Feb-22 $0 $11,711,463 $11,711, $87,532 $10,756,386 $422,336 $532,741 $564, % $4,015 $91,547 Mar-22 $0 $11,711,463 $11,711, $85,923 $10,842,309 $398,183 $470,971 $501, % $3,571 $89,494 Apr-22 $0 $11,711,463 $11,711, $82,887 $10,925,196 $374,883 $411,384 $441, % $3,139 $86,026 May-22 $0 $11,711,463 $11,711, $76,879 $11,002,075 $353,273 $356,115 $383, % $2,731 $79,610 Jun-22 $0 $11,711,463 $11,711, $74,893 $11,076,968 $332,220 $302,275 $329, % $2,342 $77,235 $1,191,402 Jul-22 $0 $11,711,463 $11,711, $72,907 $11,149,875 $311,726 $249,862 $276, % $1,964 $74,871 Aug-22 $0 $11,711,463 $11,711, $62,640 $11,212,515 $294,118 $204,830 $227, % $1,618 $64,258 Sep-22 $0 $11,711,463 $11,711, $60,655 $11,273,170 $277,068 $161,225 $183, % $1,302 $61,957 Oct-22 $0 $11,711,463 $11,711, $58,669 $11,331,839 $260,576 $119,048 $140, % $997 $59,666 Nov-22 $0 $11,711,463 $11,711, $56,683 $11,388,522 $244,642 $78,299 $98, % $702 $57,385 Dec-22 $0 $11,711,463 $11,711, $49,683 $11,438,205 $230,676 $42,582 $60, % $430 $50,113 Jan-23 $0 $11,711,463 $11,711, $46,967 $11,485,172 $217,474 $8,817 $25, % $183 $47,150 Feb-23 $0 $11,711,463 $11,711, $39,979 $11,525,151 $206,236 ($19,924) ($5,554) 6.063% ($40) $39,939 Mar-23 $0 $11,711,463 $11,711, $37,263 $11,562,414 $195,761 ($46,712) ($33,318) 6.063% ($237) $37,026 Apr-23 $0 $11,711,463 $11,711, $34,546 $11,596,960 $186,050 ($71,547) ($59,130) 6.063% ($421) $34,125 May-23 $0 $11,711,463 $11,711, $27,558 $11,624,518 $178,304 ($91,359) ($81,453) 6.063% ($580) $26,978 Jun-23 $0 $11,711,463 $11,711, $24,842 $11,649,360 $171,321 ($109,218) ($100,289) 6.063% ($714) $24,128 $577,596 Jul-23 $0 $11,711,463 $11,711, $22,125 $11,671,485 $165,101 ($125,123) ($117,171) 6.063% ($834) $21,291 Schedule TK-1-8 and 10 TK-3

53 Exhibit 1 EEP Schedule TK-3 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Monthly Recoverable Investment Program Expenditures - Amortized Over Four Years Wtd. Avg. Amortizable Accum. Cost of Monthly Monthly Expenditures Cumulative Average Amort. Monthly Accum. Deferred Earnings / Average Capital (1) Revenue Return on Revenue YTD ending TK-4 Expenditures Expenditures Months Amortization Amort. Income Tax Rate Base Rate Base After-tax Factor Rate Base Requirement June a b c d e f g h i=c-g-h i k l m= (j) *k*l/12 n=m+f Aug-23 $0 $11,711,463 $11,711, $15,138 $11,686,623 $160,846 ($136,006) ($130,565) 6.063% ($929) $14,209 Sep-23 $0 $11,711,463 $11,711, $12,421 $11,699,044 $157,355 ($144,936) ($140,471) 6.063% ($999) $11,422 Oct-23 $0 $11,711,463 $11,711, $9,704 $11,708,748 $154,627 ($151,912) ($148,424) 6.063% ($1,056) $8,648 Nov-23 $0 $11,711,463 $11,711, $2,717 $11,711,465 $153,863 ($153,865) ($152,889) 6.063% ($1,088) $1,629 Dec-23 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) Jan-24 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) Feb-24 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) Mar-24 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) Apr-24 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) May-24 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) Jun-24 $0 $11,711,463 $11,711, $0 $11,711,465 $153,863 ($153,865) ($153,865) 6.063% ($1,095) ($1,095) (1) The Company's Weighted Average After Tax Cost of Capital from 2009 rate case thru April 19, Schedule TK-1-8 and 10 TK-3

54 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-4 Schedule of Expenditures O&M Recoverable In Period Expended Program Expenditures - Amortized Over Four Years Customer Prog Eval/ Total Cust Fin & Program Program Labor (1) Education Dashboard Consultant O&M Opower Expenditures Total Total Jun-10 $99,464 $204,988 $217,687 $0 $522,139 $500,000 $305,040 $805,040 $1,327,179 Jun-11 $451,985 $801,775 $61,062 $0 $1,314,822 $0 $1,534,373 $1,534,373 $2,849,195 Jun-12 $884,924 $693,368 $32,058 $0 $1,610,350 ($500,000) $2,533,924 $2,033,924 $3,644,274 Jun-13 $126,113 $134,040 $87,900 $0 $348,053 $0 $502,434 $502,434 $850,487 Jun-14 $119,181 $302,681 $40,500 $0 $462,362 $0 $389,870 $389,870 $852,232 Jun-15 $92,172 $268,202 $54,000 $33,400 $447,774 $0 $404,387 $404,387 $852,161 Jun-16 $122,039 $30,267 $54,000 $0 $206,306 $0 $371,816 $371,816 $578,122 Jun-17 $130,568 $19,467 $27,000 $0 $177,035 $0 $253,505 $253,505 $430,540 Jun-18 * $233,839 $148,489 $0 $15,000 $397,328 $874,382 $946,859 $1,821,241 $2,218,569 Jun-19 * $305,661 $291,131 $0 $140,000 $736,792 $733,118 $1,669,355 $2,402,473 $3,139,265 Jun-20 * $136,392 $102,000 $0 $0 $238,392 $360,000 $832,400 $1,192,400 $1,430,792 Jun-21 * $0 $0 $0 $0 $0 $0 $0 $0 $0 Jun-22 * $0 $0 $0 $0 $0 $0 $0 $0 $0 Jun-23 * $0 $0 $0 $0 $0 $0 $0 $0 $0 Jun-24 * $0 $0 $0 $0 $0 $0 $0 $0 $0 Jun-25 * Jun-26 * Total $2,702,338 $2,996,408 $574,207 $188,400 $6,461,353 $1,967,500 $9,743,963 $11,711,463 $18,172,816 * Projected (1) Excludes AIP and includes external Auditor and Temporary Labor costs Schedule TK-1-8 and 10 TK-4

55 Exhibit 1 EEP Schedule TK-5 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Recoveries Therm Sales and Services Recoveries Total Total Res & GLS Commercial Industrial NGV Cogen. Therms Res & GLS Commercial Industrial NGV Cogen. Recoveries Jun ,789, ,568,200 81,414, , ,625,482 $1,488,554 $900,379 $599,096 $0 $3,855 $2,991,884 Jun ,140, ,002,697 90,445, ,637, ,225,974 $1,019,635 $608,929 $410,115 $0 $23,062 $2,061,741 Jun ,189, ,394,478 82,175, ,760,040 $1,780 $2,636 $0 $0 $0 $4,416 Jun ,455, ,113,439 80,848, ,418,190 $270 $547 $0 $0 $0 $817 Jun ,136, ,372,547 77,878, ,387,441 $597,818 $363,514 $159,385 $0 $0 $1,120,717 Jun ,592, ,487,646 79,638,706 32, ,750,945 $1,815,568 $1,104,482 $528,934 $232 $0 $3,449,216 Jun ,899, ,876,408 77,353, , ,277,026 $1,055,138 $664,641 $427,000 $828 $0 $2,147,607 Jun ,031, ,194,120 77,887, , ,291,768 ($44,126) ($12,440) $44,072 $189 $0 ($12,305) Jun-18 * 239,929, ,339,072 77,152, , ,564,606 ($160,712) ($100,052) ($52,259) ($98) $0 ($313,121) Jun-19 * 234,387, ,223,714 73,317,600 97, ,026,712 $1,138,270 $677,443 $276,719 $345 $0 $2,092,777 Jun-20 * 234,029, ,642,464 73,317,600 98, ,088,461 $1,349,403 $837,274 $416,378 $557 $0 $2,603,612 Jun-21 * 234,029, ,642,464 73,317,600 98, ,088,461 $835,435 $532,234 $293,144 $403 $0 $1,661,216 Jun-22 * 234,029, ,642,464 73,317,600 98, ,088,461 $578,227 $364,979 $194,238 $265 $0 $1,137,709 Jun-23 * 234,029, ,642,464 73,317,600 98, ,088,461 $300,702 $193,294 $109,915 $154 $0 $604,065 Jun-24 * 234,029, ,642,464 73,317,600 98, ,088,461 ($1,567) $5,770 $16,703 $27 $0 $20,933 Jun-25 * Jun-26 * Total 3,379,699,398 2,096,784,641 1,164,701,843 1,094,007 3,490,600 6,645,770,489 0 $9,974,395 $6,143,630 $3,423,440 $2,902 $26,917 $19,571,284 * Projected ** Billing at the tariff rate yields the dollars recovered, inclusive of rate proration, if any. The rate presented is derived from dividing that amount by the therms, as such rounding differences to the tariff / billing rate may Schedule TK-1-8 and 10 TK-5

56 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-6 Over / Under Recovered Carrying Cost Rate Weighted Average Cost of Borrowing Rates: Ratio: After Tax Commercial Bank Commercial Bank Wtd. Avg. Cost Paper Credit Lines Paper Credit Lines of Borrowing. (1) a b c d e (b*d+c*e)*(1-tax Rate Aug % 0.00% % 0.00% 0.49% Sep % 0.00% % 0.00% 0.47% Oct % 0.00% % 0.00% 0.41% Nov % 0.00% % 0.00% 0.33% Dec % 0.00% % 0.00% 0.31% Jan % 0.00% % 0.00% 0.31% Feb % 0.00% % 0.00% 0.34% Mar % 0.00% % 0.00% 0.38% Apr % 0.00% % 0.00% 0.67% May % 0.00% % 0.00% 0.66% Jun % 0.00% % 0.00% 0.35% Jul % 0.00% % 0.00% 0.35% Aug % 0.00% % 0.00% 0.32% Sep % 0.00% % 0.00% 0.30% Oct % 0.00% % 0.00% 0.30% Nov % 0.00% % 0.00% 0.30% Dec % 0.00% % 0.00% 0.30% Jan % 0.00% % 0.00% 0.29% Feb % 0.00% % 0.00% 0.29% Mar % 0.00% % 0.00% 0.54% Apr % 0.00% % 0.00% 0.00% May % 0.00% % 0.00% 0.19% Jun % 0.00% % 0.00% 0.18% Jul % 0.00% % 0.00% 0.20% Aug % 0.00% % 0.00% 0.20% Sep % 0.00% % 0.00% 0.00% Oct % 0.00% % 0.00% 0.00% Nov % 0.00% % 0.00% 0.28% Dec % 0.00% % 0.00% 0.34% Jan % 0.00% % 0.00% 0.33% Feb % 0.00% % 0.00% 0.30% Mar % 0.00% % 0.00% 0.28% Apr % 0.00% % 0.00% 0.28% May % 0.00% % 0.00% 0.28% Jun % 0.00% % 0.00% 0.28% Jul % 0.00% % 0.00% 0.29% Aug % 0.00% % 0.00% 0.29% Sep % 0.00% % 0.00% 0.30% Oct % 0.00% % 0.00% 0.30% Nov % 0.00% % 0.00% 0.30% Schedule TK-1-8 and 10 TK-6

57 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-6 Over / Under Recovered Carrying Cost Rate Weighted Average Cost of Borrowing Rates: Ratio: After Tax Commercial Bank Commercial Bank Wtd. Avg. Cost Paper Credit Lines Paper Credit Lines of Borrowing. (1) a b c d e (b*d+c*e)*(1-tax Rate Dec % 0.00% % 0.00% 0.30% Jan % 0.00% % 0.00% 0.30% Feb % 0.00% % 0.00% 0.30% Mar % 0.00% % 0.00% 0.28% Apr % 0.00% % 0.00% 0.25% May % 0.00% % 0.00% 0.24% Jun % 0.00% % 0.00% 0.21% Jul % 0.00% % 0.00% 0.21% Aug % 0.00% % 0.00% 0.20% Sep % 0.00% % 0.00% 0.21% Oct % 0.00% % 0.00% 0.22% Nov % 0.00% % 0.00% 0.21% Dec % 0.00% % 0.00% 0.21% Jan % 0.00% % 0.00% 0.20% Feb % 0.00% % 0.00% 0.20% Mar % 0.00% % 0.00% 0.21% Apr % 0.00% % 0.00% 0.22% May % 0.00% % 0.00% 0.14% Jun % 0.00% % 0.00% 0.15% Jul % 0.00% % 0.00% 0.14% Aug % 0.00% % 0.00% 0.16% Sep % 0.00% % 0.00% 0.17% Oct % 0.00% % 0.00% 0.18% Nov % 0.00% % 0.00% 0.22% Dec % 0.00% % 0.00% 0.28% Jan % 0.00% % 0.00% 0.30% Feb % 0.00% % 0.00% 0.30% Mar % 0.00% % 0.00% 0.32% Apr % 0.00% % 0.00% 0.27% May % 0.00% % 0.00% 0.26% Jun % 0.00% % 0.00% 0.28% Jul % 0.00% % 0.00% 0.27% Aug % 0.00% % 0.00% 0.27% Sep % 0.00% % 0.00% 0.28% Oct % 0.00% % 0.00% 0.28% Nov % 0.00% % 0.00% 0.28% Dec % 0.00% % 0.00% 0.42% Jan % 0.00% % 0.00% 0.47% Feb % 0.00% % 0.00% 0.47% Mar % 0.00% % 0.00% 0.46% Apr % 0.00% % 0.00% 0.44% Schedule TK-1-8 and 10 TK-6

58 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-6 Over / Under Recovered Carrying Cost Rate Weighted Average Cost of Borrowing Rates: Ratio: After Tax Commercial Bank Commercial Bank Wtd. Avg. Cost Paper Credit Lines Paper Credit Lines of Borrowing. (1) a b c d e (b*d+c*e)*(1-tax Rate May % 0.00% % 0.00% 0.47% Jun % 0.00% % 0.00% 0.38% Jul % 0.00% % 0.00% 0.42% Aug % 0.00% % 0.00% 0.44% Sep % 0.00% % 0.00% 0.43% Oct % 0.00% % 0.00% 0.44% Nov % 0.00% % 0.00% 0.51% Dec % 0.00% % 0.00% 0.64% Jan % 0.00% % 0.00% 0.63% Feb % 0.00% % 0.00% 0.61% Mar % 0.00% % 0.00% 0.77% Apr % 0.00% % 0.00% 0.77% May % 0.00% % 0.00% 0.78% Jun % 0.00% % 0.00% 0.90% Jul % 0.00% % 0.00% 0.88% Aug % 0.00% % 0.00% 0.88% Sep % 0.00% % 0.00% 0.88% Oct % 0.00% % 0.00% 0.89% Nov % 0.00% % 0.00% 0.90% Dec % 0.00% % 0.00% 1.02% Jan % 0.00% % 0.00% 1.26% Feb % 0.00% % 0.00% 1.24% Mar % 0.00% % 0.00% 1.72% Apr % 0.00% % 0.00% 1.73% May % 0.00% % 0.00% 1.37% Jun-18 * 1.91% 0.00% % 0.00% 1.37% Jul-18 * 1.91% 0.00% % 0.00% 1.37% Aug-18 * 1.91% 0.00% % 0.00% 1.37% Sep-18 * 1.91% 0.00% % 0.00% 1.37% Oct-18 * 1.91% 0.00% % 0.00% 1.37% Nov-18 * 1.91% 0.00% % 0.00% 1.37% Dec-18 * 1.91% 0.00% % 0.00% 1.37% Jan-19 * 1.91% 0.00% % 0.00% 1.37% Feb-19 * 1.91% 0.00% % 0.00% 1.37% Mar-19 * 1.91% 0.00% % 0.00% 1.37% Apr-19 * 1.91% 0.00% % 0.00% 1.37% May-19 * 1.91% 0.00% % 0.00% 1.37% Jun-19 * 1.91% 0.00% % 0.00% 1.37% Jul-19 * 1.91% 0.00% % 0.00% 1.37% Aug-19 * 1.91% 0.00% % 0.00% 1.37% Sep-19 * 1.91% 0.00% % 0.00% 1.37% Schedule TK-1-8 and 10 TK-6

59 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-6 Over / Under Recovered Carrying Cost Rate Weighted Average Cost of Borrowing Rates: Ratio: After Tax Commercial Bank Commercial Bank Wtd. Avg. Cost Paper Credit Lines Paper Credit Lines of Borrowing. (1) a b c d e (b*d+c*e)*(1-tax Rate Oct-19 * 1.91% 0.00% % 0.00% 1.37% Nov-19 * 1.91% 0.00% % 0.00% 1.37% Dec-19 * 1.91% 0.00% % 0.00% 1.37% Jan-20 * 1.91% 0.00% % 0.00% 1.37% Feb-20 * 1.91% 0.00% % 0.00% 1.37% Mar-20 * 1.91% 0.00% % 0.00% 1.37% Apr-20 * 1.91% 0.00% % 0.00% 1.37% May-20 * 1.91% 0.00% % 0.00% 1.37% Jun-20 * 1.91% 0.00% % 0.00% 1.37% Jul-20 * 1.91% 0.00% % 0.00% 1.37% Aug-20 * 1.91% 0.00% % 0.00% 1.37% Sep-20 * 1.91% 0.00% % 0.00% 1.37% Oct-20 * 1.91% 0.00% % 0.00% 1.37% Nov-20 * 1.91% 0.00% % 0.00% 1.37% Dec-20 * 1.91% 0.00% % 0.00% 1.37% Jan-21 * 1.91% 0.00% % 0.00% 1.37% Feb-21 * 1.91% 0.00% % 0.00% 1.37% Mar-21 * 1.91% 0.00% % 0.00% 1.37% Apr-21 * 1.91% 0.00% % 0.00% 1.37% May-21 * 1.91% 0.00% % 0.00% 1.37% Jun-21 * 1.91% 0.00% % 0.00% 1.37% Jul-21 * 1.91% 0.00% % 0.00% 1.37% Aug-21 * 1.91% 0.00% % 0.00% 1.37% Sep-21 * 1.91% 0.00% % 0.00% 1.37% Oct-21 * 1.91% 0.00% % 0.00% 1.37% Nov-21 * 1.91% 0.00% % 0.00% 1.37% Dec-21 * 1.91% 0.00% % 0.00% 1.37% Jan-22 * 1.91% 0.00% % 0.00% 1.37% Feb-22 * 1.91% 0.00% % 0.00% 1.37% Mar-22 * 1.91% 0.00% % 0.00% 1.37% Apr-22 * 1.91% 0.00% % 0.00% 1.37% May-22 * 1.91% 0.00% % 0.00% 1.37% Jun-22 * 1.91% 0.00% % 0.00% 1.37% Jul-22 * 1.91% 0.00% % 0.00% 1.37% Aug-22 * 1.91% 0.00% % 0.00% 1.37% Sep-22 * 1.91% 0.00% % 0.00% 1.37% Oct-22 * 1.91% 0.00% % 0.00% 1.37% Nov-22 * 1.91% 0.00% % 0.00% 1.37% Dec-22 * 1.91% 0.00% % 0.00% 1.37% Jan-23 * 1.91% 0.00% % 0.00% 1.37% Feb-23 * 1.91% 0.00% % 0.00% 1.37% Schedule TK-1-8 and 10 TK-6

60 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Exhibit 1 EEP Schedule TK-6 Over / Under Recovered Carrying Cost Rate Weighted Average Cost of Borrowing Rates: Ratio: After Tax Commercial Bank Commercial Bank Wtd. Avg. Cost Paper Credit Lines Paper Credit Lines of Borrowing. (1) a b c d e (b*d+c*e)*(1-tax Rate Mar-23 * 1.91% 0.00% % 0.00% 1.37% Apr-23 * 1.91% 0.00% % 0.00% 1.37% May-23 * 1.91% 0.00% % 0.00% 1.37% Jun-23 * 1.91% 0.00% % 0.00% 1.37% Jul-23 * 1.91% 0.00% % 0.00% 1.37% Aug-23 * 1.91% 0.00% % 0.00% 1.37% Sep-23 * 1.91% 0.00% % 0.00% 1.37% Oct-23 * 1.91% 0.00% % 0.00% 1.37% Nov-23 * 1.91% 0.00% % 0.00% 1.37% Dec-23 * 1.91% 0.00% % 0.00% 1.37% Jan-24 * 1.91% 0.00% % 0.00% 1.37% Feb-24 * 1.91% 0.00% % 0.00% 1.37% Mar-24 * 1.91% 0.00% % 0.00% 1.37% Apr-24 * 1.91% 0.00% % 0.00% 1.37% May-24 * 1.91% 0.00% % 0.00% 1.37% Jun-24 * 1.91% 0.00% % 0.00% 1.37% * Projected (1) The Company's weighted average interest rate obtained on its commercial paper and bank credit lines, when utilized. The projected months are based on the last actual rate. The tax rate of 40.85% changed to 28.11% effective January 1, Schedule TK-1-8 and 10 TK-6

61 EEP Schedule TK-7 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") MFR - IV h. Rate Case December 17, 2009 Capitalization After Ratios Rate Cost % Tax 40.85% Long Term Debt 45.10% 5.77% 2.602% 1.539% Short Term Debt 7.01% 1.50% 0.105% 0.062% Common Equity 47.89% 10.30% 4.933% 4.933% Total Capitalization % 7.64% 6.53% Debt Rates Updated as of March 31, 2013 Capitalization After Ratios Rate Cost % Tax 40.85% Long Term Debt 43.55% 5.07% 2.21% 1.307% Short Term Debt 12.60% 1.36% 0.17% 0.101% Common Equity 43.84% 9.75% 4.27% 4.270% Total Capitalization % 6.65% 5.68% Capital Structure and Debt Rates Updated as of December 31, EXTENSION 2015 Capitalization After Ratios Rate Cost % Tax 40.85% Long Term Debt 46.28% 4.97% 2.300% 1.360% Short Term Debt 5.74% 1.26% 0.072% 0.043% Common Equity 47.98% 9.75% 4.678% 4.678% Total Capitalization % 7.05% 6.08% Capital Structure and Debt Rates Updated as of December 31, EXTENSION 2016 Capitalization After Ratios Rate Cost % Tax 40.85% Long Term Debt 0.000% 0.000% Short Term Debt 0.000% 0.000% Common Equity 47.98% 0.000% 0.000% Total Capitalization % 0.00% 0.00% Schedule TK-1-8 and 10 TK-7

62 EEP Schedule TK-8 Energy Efficiency Chart of Accounts MFR I.b and IV.b Account General Ledger Title Description Residential Base Programs HVAC, WH, Home Energy Assessments, Home Weatherization, opower (No longer active Cost Cutter Kits, Thermostats) Small C&I Enhanced Prog. Steam trap (No longer active HVAC,AWH) Large C&I Enhanced Prog. (No longer active HVAC,AWH, Combined Heat & Power, Gas Cooling) Residential Outreach & Customer Education Customer Education Residential Dashboard (No longer active Customer Education online) Regulatory Asset Customer Recoveries Accumulated Amortization Accumulated Amortization Accounts are program costs that are amortized over a four year period. Accounts are O & M cost which are recovered annually. Account Allowable RGGI revenue requirements offset by recoveries billed to customers. Account Recoverable current year portion of the program costs. Schedule TK-1-8 and 10 TK-8

63 Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas Three Year Comparative Balance Sheet Balance As of December 31, 2017 EEP Schedule TK-9 Page 1 of Assets and Other Debits Utility Plant , 114 Utility Plant $ 1,399,999,950 $ 1,249,911,371 $ 1,157,261, Construction Work in Progress 38,358,267 60,258,186 47,364, ,111,115 (Less) Accum. Prov. for Depr. Amort. Depl. (324,996,699) (330,644,953) (324,544,010) Net Utility Plant 1,113,361, ,524, ,082, Long-Term Portion of Derivative Assets-Hedges Total Other Property and Investments Current and Accrued Assets 142 Customer Accounts Receivable 63,241,892 47,828,787 31,207, Other Accounts Receivable 7,718,678 1,417,735 1,710, (Less) Accum. Prov. for Uncollectible Acct.-Credit (4,905,352) (4,053,761) (4,896,787) 154 Plant Materials and Operating Supplies 251, , , Gas Stored Underground - Current 19,586,247 18,803,909 21,294, Liquefied Natural Gas Stored and Held for Processing 1,382,174 1,688,786 2,227, Prepayments 34,819,907 8,373,940 14,571, Derivative Instrument Assets-Hedges - 8,385, (less) Long-Term Portion of Derivative Assets-Hedges Total Current and Accrued Assets 122,094,874 82,693,145 66,380,627 Deferred Debits 181 Unamortized Debt Expense 680, , , Other Regulatory Assets 135,777,311 88,787,180 95,047, Miscellaneous Deferred Debits 40,000 6,516 26, Unamortized Loss on Reacquired Debt 3,870,043 4,304,520 4,739, Accumulated Deferred Income Taxes 12,762,695 22,067,346 12,124, Unrecovered Purchased Gas Costs - - 5,662,700 Total Deferred Debits 153,130, ,914, ,416,435 Total Assets and Other Debits $ 1,388,587,107 $ 1,178,131,974 $ 1,064,879,528 Liabilities and Other Credits Proprietary Capital Other Paid-In Capital $ 166,377,323 $ 132,019,251 $ 64,858, ,215.1,216 Retained Earnings 268,372, ,511, ,792, Accumulated Other Comprehensive Income - (20,870,015) (19,960,809) Total Proprietary Capital 434,750, ,661, ,689,483 Long-Term Debt 223 Advances from Associated Companies 268,405, ,527, ,830, Other Long-Term Debt 180,100, ,100, ,100, (Less) Unamortized Discount on Long-Term Debt-Dr. (112,780) (120,383) (127,986) Total Long-Term Debt 448,393, ,507, ,802,219 Other Noncurrent Liabilities Accumulated Provision for Injuries and Damages Accumulated Provision for Pensions and Benefits 19,216,443 20,863,384 32,409, Accumulated Miscellaneous Operating Provisions 277, , , Long-Term Portion of Derivative Instrument Lia.-Hedges Total Other Noncurrent Liabilities 19,494,220 21,210,345 32,756,188 Current and Accrued Liabilities 232 Accounts Payable 16,562,426 16,196,732 11,802, Accounts Payable to Associated Companies 81,902,559 55,185,806 50,030, Customer Deposits 7,299,263 9,686,043 10,683, Taxes Accrued 8,685,921 3,124,019 5,607, Interest Accrued 7 167, , Tax Collections Payable 4,196,482 4,011,509 1,688, Miscellaneous Current and Accrued Liabilities 934, ,207 5,171, Obligations Under Capital Leases-Current Derivative Instrument Liabilities-Hedges 2,005,920-13,857, (less) Long-Term Portion of Derivative Instrument Lia.-Hedges Total Current and Accrued Liabilities 121,587,113 89,252,603 99,008,542 Deferred Credits 252 Customer Advances for Construction 1,061, , , Other Deferred Credits 85,136, ,053, ,371, Other Regulatory Liabilities 130,927,857 18,914,533 6,541, Accumulated Deferred Investment Tax Credits 62, , , Accumulated Deferred Federal Income Taxes 144,843, ,504, ,818, Accumulated Deferred Other Income Taxes 2,331, Total Deferred Credits 364,362, ,500, ,623,096 Total Liabilities and Other Credits $ 1,388,587,107 $ 1,178,131,974 $ 1,064,879,528 Schedule TK-9 p1 GL55 FERC Balance Sheet ETG

64 EEP Schedule TK-9 Page 2 of 5 Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas Three Year Comparative Income Statement For Year Ended December 31, Utility Operating Income 400 Gas Operating Revenues $ 307,632,025 $ 297,871,471 $ 309,927,271 Utility Operating Expenses 401 Operation Expenses 194,266, ,387, ,405, Maintenance Expenses 8,247,782 7,780,232 7,159, Depreciation Expense 28,666,777 26,595,939 25,415, Amort. & Depl. of Utility Plant 6,516 19,549 19, Taxes Other Than Income Taxes 5,473,999 3,130,614 3,362, Income Taxes - Federal (10,826,424) 5,341,205 (661,416) Income Taxes - Other (1,021,580) 1,377,789 1,023, Provision for Deferred Income Taxes 32,939,066 8,157,236 20,056, Investment Tax Credit Adj. - Net (86,075) (118,623) (152,025) Total Utility Operating Expenses 257,666, ,671, ,630,130 Net Operating Income (Loss) 49,965,232 38,199,890 46,297,141 Other Income (Deductions) Other Income, Net (375,850) (737,467) (507,401) Miscellaneous Income Deductions (121,490) (104,042) (105,494) Total Taxes on Other Inc. and Ded. (418,787) (213,329) 246,094 Net Other Income (Deductions) (916,127) (1,054,838) (366,801) Interest Charges 427 Interest on Long-Term Debt 2,665,547 2,026,609 1,608, Amort. of Debt Disc. and Expense 67,997 67,997 67, Amortization of Loss on Reacquired Debt 442, , , Interest on Debt to Assoc. Companies 13,363,176 12,372,239 11,774, Other Interest Expense (219,349) 231,078 1,174, (Less) Allow. for Borrowed Funds Used During Construction-Cr. (359,820) (207,992) (184,971) Net Interest Charges 15,959,631 14,932,396 14,882,484 Net Income (Loss) $ 33,089,474 $ 22,212,656 $ 31,047,856 Schedule TK-9 p2 GL55 FERC Income Statement ETG

65 EEP Schedule TK-9 Page 3 of 5 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS STATEMENT OF GAS OPERATING REVENUES FOR THE YEAR ENDED DECEMBER 31, 2017 Sales of Gas Jurisdictional Non-Jurisdictional Total 480 Residential $ 190,842,498 $ 190,842, Commercial $ 72,920,928 $ 8,251,038 $ 81,171,966 Total Sales of Gas $ 263,763,426 $ 8,251,038 $ 272,014,464 Other Gas Revenues 487 Forfieted Discounts $ 400,160 $ 400, Miscellaneous Service Revenues $ 681,921 $ 681, Revenue from Transportation of Gas of Others $ 29,920,417 $ 582,495 $ 30,502, Other Gas Revenues $ 4,032,568 $ 4,032,568 Total Other Gas Revenues $ 298,798,492 $ 8,833,533 $ 307,632,025 Schedule TK-9 p3 MJM-9 Exhibit updated for Dec 2017 REV

66 EEP Schedule TK-9 Page 4 of 5 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Operating Revenue $ (289,319) $ 2,516,714 $ 2,168,124 $ 1,542,904 $ 1,196,606 $ 684,503 $ 30,342 Operating Expense Operations & Maintenance $ 408,591 $ 630,529 $ 238,392 $ - $ - $ - $ - Amortized Program Expenses $ 1,628,160 $ 2,651,354 $ 1,248,200 $ - $ - $ - $ - Depreciation & Amortization $ - $ - $ - $ - $ - $ - $ - Income Taxes 28.11% $ (196,183) $ 530,207 $ 542,448 $ 433,710 $ 336,366 $ 192,414 $ 8,529 Interest Expense $ 4,409 $ 13,561 $ 4,208 $ 476 $ 1,269 $ 535 $ (1,306) Total Operating Expense $ 1,844,977 $ 3,825,651 $ 2,033,248 $ 434,186 $ 337,635 $ 192,949 $ 7,223 Net Income $ (2,134,296) $ (1,308,937) $ 134,876 $ 1,108,718 $ 858,971 $ 491,554 $ 23,119 Balance Sheet Assets Cumulative Expenditures $ 7,923,509 $ 10,574,863 $ 11,823,063 $ 11,823,063 $ 11,823,063 $ 11,823,063 $ 11,823,063 Less: Accum Amortization $ (6,163,153) $ (7,140,513) $ (8,565,474) $ (9,972,336) $ (11,141,717) $ (11,758,053) $ (11,823,064) Net Cumulative Expenditures $ 1,760,356 $ 3,434,350 $ 3,257,589 $ 1,850,727 $ 681,346 $ 65,010 $ (1) Plant, Property & Equipment $ - $ - $ - $ - $ - $ - $ - Less: Accum Depreciation $ - $ - $ - $ - $ - $ - $ - Net Property, Plant & Equipment $ - $ - $ - $ - $ - $ - $ - Deferred Tax Asset $ 648,700 $ 1,119,260 $ 1,069,572 $ 674,103 $ 345,390 $ 172,138 $ 153,863 Total Assets $ 2,409,056 $ 4,553,610 $ 4,327,161 $ 2,524,830 $ 1,026,736 $ 237,148 $ 153,862 Liabilities & Capitalization Liabilities: Deferred Income Taxes $ 648,700 $ 1,119,260 $ 1,069,572 $ 674,103 $ 345,390 $ 172,138 $ 153,863 Capitalization 7/1/2017 Debt 54.00% $ 950,592 $ 1,854,549 $ 1,759,098 $ 999,393 $ 367,927 $ 35,105 $ (1) Common Equity 46.00% $ 809,764 $ 1,579,801 $ 1,498,491 $ 851,334 $ 313,419 $ 29,905 $ (0) Total Capitalization $ 1,760,356 $ 3,434,350 $ 3,257,589 $ 1,850,727 $ 681,346 $ 65,010 $ (1) Total Liabilities & Capitalization $ 2,409,056 $ 4,553,610 $ 4,327,161 $ 2,524,830 $ 1,026,736 $ 237,148 $ 153,862 $ - $ - $ - $ - $ - $ - $ - Schedule TK-9 p4 Financial Stmnt Format

67 EEP Schedule TK-9 Page 5 of 5 Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas Schedule of Intercompany and Interdivisional Transactions Between Elizabethtown Gas and Other Divisions and Subsidiaries of AGL Resources Year Ended December 31, 2017 Southern Company Gas AGL Services Company Sequent Energy Mngmt, LP-Corp Pivotal Utility Holdings Inc Transaction Type (Pay)/ Rec Grand Total Allocated O&M Costs ($19,687,154) ($19,687,154) Allocation of Tax ($2,541,024) ($2,541,024) Capitalization of O&M Costs ($1,676,248) ($1,676,248) Dividends ($25,228,625) ($25,228,625) Interest ($1,351,897) ($12,011,279) ($13,363,176) Property, Workers Comp, and General Liability Insurance(²) ($2,369,641) ($2,369,641) Net Cash Activity (¹) $76,819,702 $76,819,702 Payroll & Benefits ($25,376,876) ($25,376,876) Purchase of Gas ($130,812,426) ($130,812,426) Space allocation for AGL Services Company Employees $81,550 $81,550 Transfer and Assignment of Shared Assets ($19,873,652) ($19,873,652) Asset Management Fees $2,029,950 $2,029,950 Recapitalization of Capital Structure-Increase in Common Equity $34,401,353 $34,401,353 Recapitalization of Capital Structure - Issuance LT Debt ($100,877,849) ($100,877,849) Recapitalization of Capital Structure - Issuance ST Debt $100,877,849 $100,877,849 Grand Total ($27,769,649) $6,565,784 ($128,782,476) $22,390,074 ($127,596,267) (¹) Net Cash Activity includes all Accounts Payable, Accruals, Accounts Receivables, and Cash Receipts activities that are recorded through the Money Pool Agreement. (²) The insurance amount reflected were provided by Southern Company Services and Global Energy Res Insurance Company through services agrements.

68 Exhibit 1 EEP Schedule TK-10 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") RATE IMPACT Current rate Eff 10/1/ (Over)/Under Balance at June * ($1,805,129) $990,512 $794,941 Recoverable Program Costs 7/18 6/20: ** Original filing 8/09 12/10 $0 $0 $0 Extension 1/11 3/12 $154,642 $0 $0 Extension 4/12 8/13 $355,795 $0 $0 Extension 9/13 4/17 *** $996,508 $238,307 $116,982 Extension 5/17 12/18 $0 $806,738 $876,269 Proposed 1/19 12/19 $0 $837,444 $850,559 Total Amount to be Recovered ($298,184) $2,873,001 $2,638,751 Per Therm Recovery Incl. Tax Firm Throughput therms 435,680, ,026, ,026,712 (Over)/Under Recovery ($0.0044) $ $ Original filing 8/09 12/10 $ $ $ Extension 1/11 3/12 $ $ $ Extension 4/12 8/13 $ $ $ Extension 9/13 4/17 *** $ $ $ Extension 5/17 12/18 $ $ $ Proposed 1/19 12/19 $ $ $ EEP Rate, $ / Therm, inclusive of taxes ($0.0007) $ $ Typical Annual Bill Amounts Residential Non Heat 250 Annual Therms (Over)/Under Recovery ($1.10) $0.55 $0.45 Original filing 8/09 12/10 $0.00 $0.00 $0.00 Extension 1/11 3/12 $0.10 $0.00 $0.00 Extension 4/12 8/13 $0.23 $0.00 $0.00 Extension 9/13 4/17 *** $0.60 $0.15 $0.08 Extension 5/17 12/18 $0.00 $0.48 $0.53 Proposed 1/19 12/19 $0.00 $0.50 $0.50 Total Typical Annual Bill Amount ($0.17) $1.68 $1.56 $ Increase from Current Bill Amount $0.00 $1.85 $1.72 % Increase from Current Bill Amount 0.0% 0.6% 0.6% Residential Heat 1,000 Annual Therms (Over)/Under Recovery ($4.40) $2.20 $1.80 Original filing 8/09 12/10 $0.00 $0.00 $0.00 Extension 1/11 3/12 $0.40 $0.00 $0.00 Extension 4/12 8/13 $0.90 $0.00 $0.00 Extension 9/13 4/17 *** $2.40 $0.60 $0.30 Extension 5/17 12/18 $0.00 $1.90 $2.10 Proposed 1/19 12/19 $0.00 $2.00 $2.00 Total Typical Annual Bill Amount ($0.70) $6.70 $6.20 $ Increase from Current Bill Amount $0.00 $7.40 $6.90 % Increase from Current Bill Amount 0.0% 0.8% 0.7% Small General Service 1,000 Annual Therms (Over)/Under Recovery ($4.40) $2.20 $1.80 Original filing 8/09 12/10 $0.00 $0.00 $0.00 Extension 1/11 3/12 $0.40 $0.00 $0.00 Extension 4/12 8/13 $0.90 $0.00 $0.00 Extension 9/13 4/17 *** $2.40 $0.60 $0.30 Extension 5/17 12/18 $0.00 $1.90 $2.10 Proposed 1/19 12/19 $0.00 $2.00 $2.00 Total Typical Annual Bill Amount ($0.70) $6.70 $6.20 $ Increase from Current Bill Amount $0.00 $7.40 $6.90 % Increase from Current Bill Amount 0.0% 0.7% 0.7% General Delivery Service 13,000 Annual Therms (Over)/Under Recovery ($57.20) $28.60 $23.40 Original filing 8/09 12/10 $0.00 $0.00 $0.00 Extension 1/11 3/12 $5.20 $0.00 $0.00 Extension 4/12 8/13 $11.70 $0.00 $0.00 Extension 9/13 4/17 *** $31.20 $7.80 $3.90 Extension 5/17 12/18 $0.00 $24.70 $27.30 Proposed 1/19 12/19 $0.00 $26.00 $26.00 Total Typical Annual Bill Amount ($9.10) $87.10 $80.60 $ Increase from Current Bill Amount $0.00 $96.20 $89.70 % Increase from Current Bill Amount 0.0% 0.9% 0.9% * Consists of prior year balance plus current year recoveries and carrying costs. ** Amortized costs and return on rate base for the respective periods plus O&M for the period. *** Extension 9/13 8/15 which was subsequently extended through 12/16 using the same budget and extended again through 7/17 with additional money. Schedule TK-1-8 and 10 TK-10

69 EXHIBIT P-2 STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES IN THE MATTER OF THE PETITION OF PIVOTAL UTILITY HOLDINGS, INC D/B/A ELIZABETHTOWN GAS FOR AUTHORITY TO EXTEND THE TERM OF ENERGY EFFICIENCY PROGRAMS AND APPROVAL OF ASSOCIATED COST RECOVERY MECHANISM DIRECT TESTIMONY OF SUSAN BUCK ON BEHALF OF Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas JUNE 28, 2018

70 EXHIBIT P-2 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS DIRECT TESTIMONY OF SUSAN BUCK Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. A. My name is Susan Buck. My business address is 520 Green Lane, Union, New Jersey, Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY? A. I am employed by Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas ( Elizabethtown or Company ) as Program Manager Energy Efficiency. Q. WHAT IS THE SCOPE OF YOUR DUTIES AT ELIZABETHTOWN? A. I manage all residential and commercial energy efficiency programs for Elizabethtown. Q. PLEASE DESCRIBE YOUR PROFESSIONAL QUALIFICATIONS AND BUSINESS EXPERIENCE. A. I am a graduate of Nova International University in Fort Lauderdale, Florida, graduating with a Bachelor of Arts Degree, with a major in Business and Professional Management. I have over 29-years of experience in leadership and program management, most of which has been with United Airlines from 1988 through During a 2.5 year furlough from United, I managed training programs for our affiliate company in Illinois, Nicor Gas, which included energy efficiency programs. I joined the Elizabethtown team in July 2015 as the Program Manager Energy Efficiency Programs. 1

71 EXHIBIT P Q. DOES YOUR TESTIMONY INCLUDE ANY ILLUSTRATIVE SCHEDULES? A. Yes. My testimony includes the schedules listed below that were prepared under my direction and supervision. These schedules contain information responsive to the Minimum Filing Requirements ( MFRs ) as referenced in the MFR Index attached to the Petition and as set forth in the Board s May 8, 2008 Order in BPU Docket No. EO and the Board s August 3, 2009 Order ( August 3 Order ) in Docket Nos. EO and GO , and further updated in the Board s October 20, 2017 Order in BPU Docket No. QO The schedules are as follows: (a) Schedule SB-1 contains program descriptions of the proposed programs: (i) (ii) (iii) (iv) (v) Residential Heating Ventilation and Air Conditioning ( HVAC ) and Gas Hot Water Heater Incentive Program; Residential Home Energy Assessment Program; Residential Home Energy Report (OPower) Program; Residential Home Weatherization for Income Qualified Customers Program; Commercial Steam Trap Survey and Repair Program (b) Schedule SB-2 contains budgeted, estimated EE Program costs by major spending categories through December 31, 2019; (c) Schedule SB-3 contains estimated direct FTE employment data; (d) Schedule SB-4 contains a comparison of EE programs amongst New Jersey gas utilities; 2

72 EXHIBIT P (e) Schedule SB-5 contains sample marketing material; and (f) Schedule SB-6 contains Historical and Proposed Allocation of Customer Outreach/Education Funds. Q. PLEASE DESCRIBE THE COMPANY S EE PROGRAMS. A. The Company s EE Programs were initially approved by the Board s August 3 Order. At the time, the EE Programs consisted of six EE Programs that were designed to enhance or supplement New Jersey's Clean Energy Program ("NJCEP") over the 17-month period commencing August 2009 through December Pursuant to a Board order dated January 19, 2011 in BPU Docket Nos. GO and GO that approved a January 12, 2011 Stipulation among Elizabethtown, Board Staff and Rate Counsel, Elizabethtown was authorized to extend the term of its EE Programs through December 31, A third Order issued April 11, 2012 in BPU Docket No. GO authorized the Company to extend three of its EE Programs until April 19, A fourth Order issued August 21, 2013 in BPU Docket No. GO authorized the Company to extend three of its EE Programs through September 1, A fifth Order issued December 16, 2015 in BPU Docket No. GO authorized the Company to extend existing EE programs through December 31, A sixth order issued April 21, 2017 authorized the Company to modify its EE Programs to consist of the five current programs described in Schedule SB-1 and extended the term of the EE Programs through December 31,

73 EXHIBIT P Q. PLEASE IDENTIFY THE COMPANY'S CURRENTLY EFFECTIVE INDIVIDUAL EE PROGRAMS. A. The currently effective EE Programs comprise the following: 1. The Residential Expanded Gas HVAC and Gas Hot Water Heater Incentive Program; 2. The Residential Home Energy Assessment Program; 3. The Home Energy Report (OPower) Program; 4. The Home Weatherization for Income Qualified Customers Program; and 5. The Commercial Steam Trap Survey and Repair Program. In addition to a number of rebates and related offers, the EE Programs contain various customer education and outreach initiatives, including an on-line customer home energy audit designed to encourage energy conservation and provide information on ways customers can lower their gas bills. Q. WHAT IS THE COMPANY PROPOSING IN THIS FILING WITH RESPECT TO THESE PROGRAMS? A. The Company is proposing to extend its current EE Program for a one-year period commencing January 1, 2019 through December 31, An overview of the EE Programs are set forth in the accompanying Petition and reflected in the program descriptions contained in Schedule SB-1 that accompanies my testimony. Overall, the Company is proposing to continue offering our current EE Programs that have been designed to produce more energy and cost savings and reach more customers who may not have had the 4

74 EXHIBIT P ability to participate in past programs, particularly through the continuation of our Home Weatherization for Income Qualified Customers Program. Q. PLEASE EXPLAIN THE CHANGES BETWEEN THE CURRENTLY EFFECTIVE PROGRAMS AND THE PROGRAMS PROPOSED BY THIS FILING. A. There are no proposed changes by this filing. The Company is proposing to maintain its current programs without any design changes for a one year period. Q. PLEASE DESCRIBE THE COMPANY S PROJECTED SPENDING LEVELS FOR THE EE PROGRAMS DURING THE JANUARY 1, 2019 THROUGH DECEMBER 31, 2019 PERIOD. A. As set forth in Schedule SB-2, the proposed annual amount budgeted for the EE Programs for the January 1, 2019 through December 31, 2019 period is approximately $3.0 million. Q. WHAT DIRECT IMPACTS DOES THE COMPANY EXPECT THE EE PROGRAMS TO HAVE ON COMPETITION AND FULL-TIME EMPLOYMENT? A. To the best of Elizabethtown s knowledge, there is no relevant impact on competition as the other gas utility programs are not marketed in Elizabethtown s service territory. The direct FTE employment impacts, with an FTE defined as 1,820 hours of work annually, are reflected in Schedule SB-3. The Company estimates that the EE Programs will result in 2 in-house jobs and approximately 12.5 contractor jobs. The Company utilizes a combination of internal employees and third-party contractors to deliver the EE Programs. Contractors were selected 5

75 EXHIBIT P on the basis of a combination of factors, including price, capability and availability. Q. HOW ARE ELIZABETHTOWN S PROPOSED EE PROGRAMS CONSISTENT WITH AND/OR DIFFERENT FROM THE PROGRAMS OFFERED BY THE NJCEP? A. Elizabethtown s proposed EE Programs are designed to enhance or supplement the NJCEP and offer unique options not available through the NJCEP. The Home Weatherization for Income Qualified Customers Program is designed to provide customers, whose income is between 225% and up to 400% above the federal poverty level, enhanced opportunities to participate in energy efficiency 11 initiatives. More details showing the comparison between Elizabethtown s programs and those offered by the NJCEP are contained in Schedule SB-1. Q. HOW ARE ELIZABETHTOWN S PROPOSED EE PROGRAMS CONSISTENT WITH AND/OR DIFFERENT FROM OTHER UTILITY PROGRAMS? A. A comparison of Elizabethtown s programs and other utility programs is outlined in Schedule SB-4. Q. ARE SIMILAR PROGRAMS TO ELIZABETHTOWN S EE PROGRAMS OFFERED OUTSIDE OF NEW JERSEY? A. Yes, several similar programs are offered by a variety of providers in other states, as set forth below: 6

76 EXHIBIT P (a) Programs similar to the Residential Expanded Gas HVAC Program are offered by National Grid (Massachusetts and Rhode Island), EnergizeCT (Connecticut), and Efficiency Vermont (Vermont). (b) Programs similar to the Residential Home Energy Assessment Program are offered by Nicor (New York), Consolidated Edison (New York), and National Grid (Massachusetts and Rhode Island). (c) Programs similar to the Home Energy Report (OPower) Program are offered by American Electric Power (Ohio), Commonwealth Edison (Illinois), Consolidated Edison (New York) Duke Energy (North Carolina), National Grid (Massachusetts and Rhode Island), Pacific Gas and Electric (California), San Diego Gas and Electric (California), Xcel Energy (Minnesota). (d) Programs similar to the Residential Home Weatherization Program for Income Qualified Customers Program are offered by Efficiency Vermont (Vermont), Eversource (Connecticut), and EmPower Maryland (Maryland). (e) Programs similar to the Commercial Steam Trap Survey and Repair Program are offered by National Grid (New York) and Ameren Illinois (Illinois). 20 7

77 EXHIBIT P Q. PLEASE DESCRIBE THE (i) TARGET MARKET AND CUSTOMER ELIGIBILITY FOR THE PROGRAMS; (ii) THE PROGRAM OFFERINGS; (iii) QUALITY CONTROL METHODS; AND (iv) THE PROGRAM ADMINISTRATION AND PROGRAM DELIVERY MECHANISM. A. This information is set forth in detail in Schedule SB-1. In general, Elizabethtown s target market encompasses customers who are interested in improving their energy efficiency through equipment upgrades, direct install of energy efficient measures and weatherization. Qualifications for each program, including program incentives and related offerings, are outlined in detail in SB-1. Quality control is generally performed by an independent contractor, and the primary administration and delivery methods are provided through a group of qualified contractors. Q. HOW DOES ELIZABETHTOWN PROPOSE TO RESOLVE CUSTOMER COMPLAINTS? A. Customer complaints in the first instance will be reviewed by Elizabethtown s call center. The call center representative intakes the information and directs it for investigation and cause. A company representative will be assigned to resolve the complaint internally. If the complaint is not resolved to the customer s satisfaction, the customer will be referred to the New Jersey Board of Public Utilities Consumer Complaint Division. 8

78 EXHIBIT P Q. PLEASE DESCRIBE HOW THE COMPANY INTENDS TO MARKET THE PROGRAMS. A. The Company will use direct marketing to customers through traditional utility channels (i.e. bill inserts), mail, print, online advertising, bus/train ads, blasts, social media, outreach events (i.e., street fairs) and indirect outreach through other stakeholders that can help to increase awareness and education. Other stakeholders include contractors, realtors, environmental commissions, green teams and community groups. Sample marketing materials from the current Elizabethtown program are attached as SB-5 as a point of reference. Q. PLEASE DESCRIBE THE CRITERIA UPON WHICH ELIZABETHTOWN SELECTED THE PROPOSED PROGRAMS. A. Elizabethtown selected programs that it believes will foster the goals of the programs, enabling customers of all demographic areas the ability to participate in our programs, and are consistent with New Jersey s clean energy policies. As reflected in the testimony of Isaac Gabel-Frank of Gabel Associates, Inc. and his supporting cost benefit analysis, the proposed programs are consistent with these objectives. In addition, as reflected in Mr. Gabel-Frank s schedules IGF- EEP and IGF-EEP2018-3, the programs are expected to produce a number of benefits that are consistent with the State s objectives to promote clean energy, including the reduction of carbon emissions. Q. ARE THERE ANY KNOWN MARKET BARRIERS THAT MAY IMPACT THE PROGRAMS? A. The Company is unaware of any market barriers that may impact the Program. 9

79 EXHIBIT P Q. PLEASE DESCRIBE ELIZABETHTOWN S PROPOSED EVALUATION, MEASUREMENT AND VERIFICATION ( EMV ) PLAN. A. Elizabethtown maintains ongoing evaluation, monitoring, and verification of its EE Programs to ensure that the Programs are properly operating and maintain appropriate funding. Elizabethtown uses a combination of internal and external resources to perform these functions. For example, as a result of the Company s internal monitoring, to ensure EE Programs are operating properly, Elizabethtown identified a lower than anticipated participation in its Rebates, Grants, and Incentives Program and higher than anticipated participation in its Home Weatherization for Income Qualified Customers Program. To adjust to the participation levels of these EE Programs, by letter dated April 6, 2018, Elizabethtown notified the Board of its intent to transfer funding from the Rebates, Grants and Incentives Program to the Home Weatherization for Income Qualified Customers Program. This transfer of funds, which became effective on May 7, 2018, allowed the continued operation of both Programs. In addition, Elizabethtown has retained Nexant, Inc. ( Nexant ) to perform an evaluation of Elizabethtown s currently effective EE Programs. Nexant s evaluation is expected to be completed shortly and it will be provided when available. Going forward, Elizabethtown intends to secure an independent evaluation contractor to conduct impact and process evaluations for all the Company s programs over the course of the five-year program. The Company s independent 10

80 EXHIBIT P evaluation contractor will use industry standard methodology and practices to determine baseline and savings values for use in the evaluation studies. The evaluation, measurement, and verification study will provide the methodology for monitoring program progress, including a comparison of actual results to projections, and identify lessons learned in implementing the program. The study will also recommend program enhancements based upon the findings of the evaluation. Other studies may be commissioned by the Company to be conducted by independent contractors. These may include: review of savings protocols, baseline studies to confirm existing conditions, customer and trade ally feedback, market potential studies to assist with continuous program planning and program development, and known best practices. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes, it does. 11

81 Schedule SB-1.i Page 1 of 3 Elizabethtown Gas Residential HVAC and Gas Hot Water Heater Incentive Program Description Of Program This program is designed to enhance the existing New Jersey Clean Energy Program ( NJCEP ) gas HVAC and hot water heater incentive program by supplementing the incentives offered through NJCEP. The name of the NJCEP program being supplemented by this Elizabethtown Gas (ETG) Program is WARMADVANTAGE. This program will be available to all residential customers as follows: Customers will be informed via outreach opportunities of the energy efficiency offerings of both the NJCEP and ETG s Energy Efficiency Program. If qualifying energy efficient units are installed, ETG will supplement the NJCEP incentive in an amount of $250 for furnaces and $300 for boilers. ETG will supplement the NJCEP incentive in an amount $100 or $200 for the installation of an energy efficient gas hot water heater, including power vented gas hot water heaters. In no event will the combined NJCEP and ETG incentive exceed the total project cost. The specific types of equipment that qualify for incentives under this program are as follows: Gas Fired Boilers Gas Boiler Hydronic AFUE* 90% or greater Gas Furnaces Tier 1 AFUE 95% or greater Tier 2 - AFUE 97% or greater Gas Water Heater Energy Factor (EF).82 or greater Thermal Efficiency (TE) 90% or greater with sealed combustion Power Vented ( EF).67 or greater *AFUE (Annual Fuel Utilization Efficiency) Only those customers who are in good standing and subject to the EEP surcharge are eligible to participate in and receive the incentives associated with this program. The equipment standards reflected in this program description track the standards utilized by the NJCEP. To the extent these standards are modified by NJCEP during the term of the program, the ETG own equipment standard will reflect such modified standard.

82 Schedule SB-1.i Page 2 of 3 Elizabethtown Gas Residential HVAC and Gas Hot Water Heater Rebate Incentive Program Summary of Program Description As Set Forth Above: HEATING Furnace Tier 1 ETG Rebates NJCEP Rebates Total AFUE* 95% or greater $250 $250 $500 $250 $500 $750 Furnace Tier 2 AFUE 97% or greater Boiler Hydronic* AFUE 90% or greater Steam boilers do not qualify for rebate $300 $300 $600 Gas On-Demand Water Heater EF*.82 or greater $200 $300 $500 WATER HEATING COMBINATIONS Gas Water Heater Thermal Efficiency (TE) 90% or greater with sealed combustion $200 $300 $500 Gas Power-Vented Water Heater EF 0.67 or greater $100 $300 $400 Furnace and Water Heater Combination (1) Qualifying Tier 1 gas furnace and a qualifying water heater above $450 $700 $1,150 (2) Qualifying Tier 2 gas furnace and a qualifying water heater above $450 $950 $1,400 Boiler and Water Heater Combination Qualifying boiler (above) and water heater (above): Integrated water heating and boiler unit (Combi Boilers) OR a qualifying water heater OR an indirect water heater attached to a qualifying boiler $500 $700 $1,200 The NJCEP incentives may be subject to change. The change in an NJCEP incentive level will not impact the ETG incentive level, but may impact the total grant amount. Participation in this program does not require an energy audit, however ETG will refer participants to the ETG Home Energy Assessment Program and the NJCEP Home Performance with Energy Star ( HPwES ) Program in order to promote a whole house solutions approach to energy efficiency.

83 Schedule SB-1.i Page 3 of 3 Elizabethtown Gas Residential HVAC and Gas Hot Water Heater Rebate Incentive Program Delivery Method HVAC installation and/or quality control work will be performed by trained heating, home improvement and energy service providers, including contractors providing such services for the NJCEP. Estimated 12-Month Program Participants (January 1, 2019 December 31, 2019) Total: 934 Participants 743 Participants (HVAC Furnaces & Boilers); 61 Participants monthly 143 Participants (Hot Water Heaters); 12 Participants monthly 48 Participants (Boiler / Water Heater combo)/ 4 Participants monthly 12-Month Budget Information (January 1, 2019 December 31, 2019) Total Rebates: $240,000 Averages $20,000 per month Total Rebate Processing: $9,600 Averages $800 per month 3

84 Schedule SB-1.ii Page 1 of 2 Elizabethtown Gas Residential Home Energy Assessment Program Description Of Program Elizabethtown Gas Home Energy Assessment Program is available to all residential customers and provides a 75-minute home energy assessment, free direct installs and educational information on additional energy-saving measures and activities. A customized report provides details on specific measures the homeowner can take to reduce their energy consumption. The incentive for this program covers 100% of the assessment fee. Although not mandatory, customers who apply for a rebate will be referred to this program as an additional incentive. Direct install energy-saving measures and activities include: A programmable thermostat, if needed Programmable thermostat education Faucet aerators Low-flow shower heads Water heater pipe wrap insulation Water heater setback The assessor will evaluate the age and functionality of gas-related energy consuming equipment within the home and provide the customer with details on eligible rebates the customer can receive as a result of upgrading their furnace, boiler or hot water heater. Rebates are available from both the NJ Clean Energy Warm Advantage Program and the Elizabethtown Gas Energy Efficiency Program. If needed, assessors will recommend additional measures for air sealing & insulation. An implementation contractor will qualify a select group of contractors to provide air sealing and insulation services. These contractors will receive an incentive for which they can provide customers an instant rebate on the work completed. The on-site assessor will provide a listing of the pre-qualified contractors to the customer. Incentives include: Air Sealing $250-$500/unit (average $375/unit) Duct Sealing $350/unit Attic Insulation r5-r38 $600/unit Attic Insulation r11-r38 $520/unit Attic Insulation r19-r38 $400/unit Attic Knee Wall Insulation $250/unit Wall Insulation $200/unit Basement Sidewall Insulation $300/unit Assessors will focus on the whole-house approach and if needed, will recommend the NJCEP s Home Performance with Energy Star (HPwES) Program.

85 Schedule -SB1.ii Page 2 of 2 Elizabethtown Gas Residential Home Energy Assessment Program Elizabethtown Gas will contract with a third-party vendor to schedule and perform the home energy assessment and to provide quality assurance. The Elizabethtown Gas Home Energy Assessment is similar to Home Energy Assessments offered by New Jersey Natural Gas and South Jersey Gas. Key differences include: Not required to receive a rebate Required by NJNG and SJG Delivery Method Home Energy Assessment services is provided by a third party vendor. This includes the scheduling of appointments, answering of inquiries and quality control. Air sealing/insulation work will be performed by trained heating, home improvement and energy service providers, including contractors providing such services for the NJCEP. Estimated 12-Month Program Participants (January 1, 2019 December 31, 2019) 768 Home Energy Assessment Participants, 64 per month 60 Air Sealing & Insulation Participants, approximately 5 per month (8% take rate) 12-Month Budget Information (January 1, 2019 December 31, 2019) $300,000 Total, $25,000 per month $144,000 Total, $12,000 per month Administrative Fees 2

86 Schedule SB-1.iii Page 1 of 2 Elizabethtown Gas Residential Home Energy Report (Opower) Program Description Of Program Elizabethtown Gas (ETG) will continue to partner with Opower to provide a sample population of residential customers with Home Energy Reports that compare energy usage against that of their neighbors. Home Energy Reports are user-friendly, detailed, and informative messages that provide personalized information to customers about their natural gas energy usage and easy to follow tips that can quickly lead to energy savings. The Home Energy Reports have proven results in influencing customer behavior in the reduction of energy usage and is a means to leverage customer participation in other energy efficiency programs offered by both ETG and the New Jersey Clean Energy Program (NJCEP). At the heart of each report is a neighborhood comparison, or similar homes comparison that compares a participating customer s energy use against that of similar sized homes, so they have meaningful context regarding their overall energy consumption. Comparisons are based on like homes and excludes homes that are not the same home type, use a different heating fuel, are not of similar size, are far away, or are vacant. Customers in the test group are provided with an energy efficiency score that are calculated through comparisons with these neighbors. Energy consumption is monitored for the test group and is measured against a control group who do not receive the reports. The use of test and control groups has proven to be highly successful Worldwide in reducing customer energy usage cost-effectively through information, education, and also by increasing customer participation rates in other energy efficiency programs. Participating customers are also given the opportunity to access a customized portal, where they can change profile information, track energy usage, access tips, find out more about our other energysaving programs and learn about rebate opportunities. All ETG customers have access to and are encouraged to use an Online Home Energy Audit. This interactive tool provides suggestions on how to improve home energy usage. Customers enter specifics about their home and the tool determines where the most energy is being utilized and recommends ways to reduce energy usage. In addition, a dedicated call center phone number is provided on all reports, where participating customers can ask questions or opt out of the program at any time. Proven results for the Opower offering show a 60% participation lift in energy efficiency programs and a 5% increase in customer satisfaction. In addition, New Jersey Natural Gas has utilized Opower s offerings since 2010 claiming successful results and South Jersey Gas contracted and successfully launched this offering with Opower in The Home Energy Reports and Online Energy Audits recommend other programs to customers such as the ETG Home Energy Assessment & the NJCEP Home Performance with Energy Star Program.

87 Schedule SB-1.iii Page 2 of 2 Elizabethtown Residential Gas Home Energy Report (Opower) Program Delivery Method The Home Energy Reports and Online Energy Audits are provided by Opower, a subsidiary of Oracle Corporation, who specializes in behavioral science, data analytics, and user-centric software design, currently working with over 100 utilities in nine countries. Estimated 12-Month Program Participants (January 1, 2019 December 31, 2019) 155,000 Residential Customers in the Test Group / 25,000 Residential Customers in the Control Group 12-Month Budget Information (January 1, 2019 December 31, 2019) Program Costs: Total: $720,000 2

88 Elizabethtown Gas Residential Home Weatherization for Income Qualifed Customers Program Schedule SB-1.iv Page 1 of 2 Description Of Program This program is an energy saving and energy education program provided to those residential customers with low to moderate income who based on household salary, would not qualify for the Comfort Partners Program. Participants of this program are provided with a free Home Energy Assessment, as well as energy-saving information and weatherization measures. A certified contractor will evaluate the home s energy efficiency, provide comprehensive, personalized information that educates customers on their energy usage and educates them on how to save energy daily. If eligible, participants will also be provided with systems testing and the direct install of energy-saving measures (determined on a home-specific basis) which can include: A programmable thermostat Programmable thermostat education Faucet aerators Low-flow shower heads Pipe wrap insulation Air sealing Insulation Efficient lighting products Heating/cooling equipment maintenance Combustion safety testing The maximum approved measures cannot exceed $6000 per home. Note: Any exceptions made to rectify safety issues *must* have pre-approval from ETG Program Manager prior to completing the project. Comfort Partners qualification level includes household income that falls in the category of up to 225% over the Federal Income Poverty Level. The Home Weatherization for Income Qualified Customers Program qualification includes household income that falls in the category of over 225% up to 400% over the Federal Income Poverty Level for the number of family members living in the home. The Federal Income Poverty Level is updated yearly and Elizabethtown Gas will update our requirements to show the appropriate income levels with each update. Gas appliance replacement will be provided to those participants who fail safety testing who are unable to purchase the replacement product on their own. Approved energy efficient gas appliances only will be installed by qualified technicians provided by the program. Other requirements: The customer must also use the home as a primary residence and be the ratepayer of record with the electric or gas utility. The customer must be a Residential-Heat Elizabethtown Gas customer to qualify for this program.

89 Elizabethtown Residential Gas Home Weatherization for Qualifing Customers Program Schedule SB-1.iv Page 2 of 2 Delivery Method Elizabethtown Gas will continue to partner with Green Life Energy Solutions to provide this offering to the Company s qualified residential customers. Green Life Energy Solutions will provide all in-home work and will also provide income verification, set-up appointments, perform quality control and provide a phone contact for customer inquiries. Estimated 12-Month Program Participants (January 1, 2019 December 31, 2019) Total: 132 (approximately 11 per month) 12-Month Budget Information (January 1, 2019 December 31, 2019) Total Program Costs: $792,000, approximately $66,000 per month Total Program Administrative Fees: $79,200 approximately $6,600 per month 2

90 Elizabethtown Gas Commercial Steam Trap Survey and Repair Program Schedule SB-1.v Page 1 of 1 Description Of Program Steam trap surveys test and document the operational status of steam traps, utilizing both ultrasound and temperature differentials. In steam systems that have not been maintained for 3 to 5 years, between 15% to 30% of the installed steam traps fail allowing live steam to escape into the condensate return system. In systems with a regularly scheduled maintenance program, leaking traps should account for less than 5% of the trap population. Customers eligible for this program are hospitals, municipalities and schools. The goal of this program is to incorporate a steam trap survey and repair cycle to hospitals, municipalities, and/or schools, who use steam heating to ensure their leaking traps account for no more than 5% of the total number of traps. A goal of the program is to change the equipment maintenance behavior of hospitals, municipalities and schools such that these customers will continue with regular maintenance regardless of whether incentives are available. Toward this end, customers will be advised that regular maintenance has the potential to provide consistent therms savings and significantly reduce the cost for future repairs. A surveyor completes a comprehensive survey and provides a detailed steam-trap functionality report. Survey documentation details a complete trap inventory including location, type, and application engineering. Survey reports also include a full economic analysis (return on investment) and recommendations for overall system improvements. The goal of the report is to document recommendations aimed at improving energy/emission losses, steam generation and distribution, engineering practices/correct applications, health and safety, and heat recovery/return of condensate. Qualified and fully experienced technicians will repair or replace the defective steam traps as required. Since this program places the building on a yearly maintenance cycle, each year the building is surveyed and repairs are made. It is the cycle of maintenance that reduces the number of failing steam traps yearly, ensuring that ultimately no more than 5% of the trap population fail. Incentives include: Incentive covers 50% of survey costs Incentive pays $0.50 per therm saved up to 50% of the total service, repair or replacement costs Incentives are paid for both the survey costs and total project costs once the project is completed. Note: The project must include a natural gas boiler system to be eligible for this project. Elizabethtown Gas will work with the company performing the surveys to identify and recommend hospitals, municipalities, schools, etc. 1

91 Elizabethtown Gas Commercial Steam Trap Survey and Repair Program Schedule SB-1.v Page 1 of 1 Delivery Method Steam trap surveys and the repair/replacement of steam traps will be performed by American Plant Maintenance, Inc., an independent steam trap and repair company. Their independent gives them the ability to perform unbiased surveys and recommend the optimum solution for our customers regardless of the manufacturer. Estimated 12-Month Program Participants (January 1, 2019 December 31, 2019) Anticipating approximately 2 hospitals, 3 municipality buildings and 3 schools. 20-Month Budget Information (January 1, 2019 December 31, 2019) Total: $100,000 2

92 Schedule SB-2 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS ENERGY EFFICIENCY PROGRAM ("EEP") ESTIMATED SPENDING BY PROGRAM JAN 1, DEC 31, 2019 ESTIMATE Budget O&M EXPENDITURES Labor $ 270,798 Customer Education, Outreach $ 204,000 Program Evaluation $ 125,000 TOTAL O&M $ 599,798 PROGRAM EXPENDITURES Residential Gas: Administration Marketing & Sales Contractor Training Incentives Inspections & Quality Control Evaluation Rebates, Grants, Incentives $ 240,000 $ - $ 32,640 $ 10,000 $ 240,000 $ - $ 25,000 Rebate Processing $ 9,600 $ 9,600 $ - $ - $ - $ - $ - Home Energy Assessments $ 300,000 $ - $ 57,120 $ - $ 24,000 $ - $ 25,000 HEA Administrative Fees $ 144,000 $ 144,000 $ - $ - $ - $ - $ - Home Weatherization for Income Qualified $ 792,000 $ - $ 114,240 $ - $ - $ 53,000 $ 25,000 HW for IQC Administrative Fees $ 79,200 $ 79,200 $ - $ - $ - $ - $ - Home Energy Report - Opower $ 720,000 $ 720,000 $ - $ - $ - $ - $ 25,000 $ 2,284,800 Commercial Gas Steam Trap Survey & Cleaning Pilot $ 100,000 $ - $ - $ - $ 100,000 $ - $ 25,000 $ 100,000 Total Program Expenditures $ 2,384,800 Total RGGI Expenditures $ 2,984,598

93 Schedule SB-3 Page 1 of 1 RGGI Program Admin Estimated Direct Full-Time Employee ( FTE ) Employment Data Residential (HVAC & WH) *Based on 2- man crew Home Energy Assessment Home Energy Report Home Weatherization for Income Qualified Steam Trap Survey and Repair Yearly participants N/A , Yearly man-days per job N/A N/A Yearly work-days needed N/A N/A Available work days per year N/A Total estimated jobs created ETG Positions ETG Audit Contractor Contractor Field Contractor Admin Total Estimated Jobs Created: #14.5 ETG Jobs 1 ETG Direct Contractor Jobs 1 Contractor Jobs 12.5 Total: 14.5

94 Schedule SB-4 Comparison of Energy Efficiency Programs Amongst Investor-Owned New Jersey Gas Utilities* Overview of Residential Programs Gas Utility Rebates Home Energy Assessment Home Energy Report Home Weatherization for Income Qualified ETG Yes Yes Yes Yes NJNG Yes Yes Yes No SJG Yes Yes Yes No PSEG No No Yes - Pending No Overview of Commercial Programs Gas Utility ETG NJNG SJG PSEG Steam Trap Surveys & Repair Yes No No No* *PSE&G commercial programs incorporate the whole building approach and not stand-alone steam traps. Summary of Residential Offerings ETG Elizabethtown offers enhanced rebates of $250 for furnaces and $300 for boilers; $200/$100 for approved water heaters; no audits are required. Customers have the option to participate in a free Home Energy Assessment which includes the direct install of energy saving measures. Elizabethtown also offers the free Home Weatherization for Income Qualified Customers program for income levels between 225% and 400% over the Federal Poverty Level, which is a unique program in New Jersey. NJNG After the installation of NJCEP WARMAdvantage qualifying furnace, boiler or hot water heater, customers can apply for a $500 (furnace/boiler) or $100 (hot water heater) NJNG enhanced rebate, following a required free home energy analysis. If a customer installs a qualifying water heater in addition to a qualifying furnace or boiler, they can apply for the $600 rebate or apply for up to $6,500 at 0% APR for five years through an NJNG on-bill repayment program.

95 SJG South Jersey Gas provides $500 enhanced rebates or they can apply for off-bill financing for up to $6,500 at 0% APR for five years, for customers who install NJCEP qualifying combination gas furnace and water heater and combination gas boiler and water heater. The incentive requires a free home energy audit to be completed before the customer applies for the rebate. South Jersey Gas also offers off-bill financing for customers who participate in the Home Performance with Energy Star program or who convert to natural gas. PSEG PSE&G is in the process of starting up a Home Energy Report with Tendril. The first report is due to be sent in the 3 rd quarter of Summary of Commercial Offerings ETG Elizabethtown offers a unique Steam Trap Survey and Repair Program for hospitals, municipalities and schools which is a unique option in New Jersey. This program pays 50% or survey costs and $0.50 per therm saved for service and repairs, up to 50% of the total project cost. Incentives are paid yearly as part of a maintenance incentive offer. NJNG NJNG does not provide enhanced rebates for the installation of energy efficient equipment in commercial buildings. The utility website redirects customers to the NJCEP SmartStart Buildings rebate program. SJG South Jersey Gas provides enhanced incentives for customers who qualify for the NJCEP Direct Install Program and NJCEP SmartStart Program. The NJCEP Direct Install Program pays 70% of the cost of all qualifying upgrades up to $125,000. South Jersey Gas finances the remaining 30% at 0% financing for two years with an unsecured loan. The NJCEP SmartStart Buildings Program provides financial incentives for qualifying equipment dependent on type, size, and efficiency. Through South Jersey Gas, this program includes an unsecured loan at 0% financing over five years up to $100,000. PSEG PSE&G offers several commercial programs. Focus is on the whole-building and not on stand-alone stream traps. Although steam traps are included in the program, they are worked on as a one-time incentive compared to ETG s maintenance approach.

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102 Schedule SB 6 Page 1 of 1 Proposed Allocation of Customer Outreach/Education Funds Proposed Customer Outreach/Education Budgetary Spend** Activity 2017 Bill Inserts $60,000 Online / Social Media $15,000 Community Outreach $12,000 Contractor Outreach $10,000 Print Materials / Collateral / Signage $48,000 Direct Mail $30,000 Promotional Items $20,000 Bus/Transit Ads $20,000 Total: $205,000 **Proposed budgetary spend is based on current market prices. Elizabethtown Gas reserves the right to change allocation of funds based on economic factors, new or enhanced outreach channels, program participation rate, and market focus.

103 EXHIBIT P-3 STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES IN THE MATTER OF THE PETITION OF PIVOTAL UTILITY HOLDINGS, INC D/B/A ELIZABETHTOWN GAS FOR AUTHORITY TO EXTEND THE TERM OF ENERGY EFFICIENCY PROGRAMS AND APPROVAL OF ASSOCIATED COST RECOVERY MECHANISM DIRECT TESTIMONY OF ISAAC GABEL-FRANK ON BEHALF OF Pivotal Utility Holdings, Inc. d/b/a Elizabethtown Gas JUNE 28, 2018

104 EXHIBIT P-3 TABLE OF CONTENTS I. INTRODUCTION... 1 II. PURPOSE OF THIS TESTIMONY... 3 III. SUMMARY OF CONCLUSIONS... 7 IV. COST-BENEFIT ANALYSIS ASSUMPTIONS... 8 V. COST-BENEFIT ANALYSIS RESULTS VI. JOB CREATION VII. ENERGY SAVINGS VIII. CONCLUSIONS... 24

105 EXHIBIT P-3 PIVOTAL UTILITY HOLDINGS, INC. d/b/a ELIZABETHTOWN GAS DIRECT TESTIMONY OF ISAAC GABEL-FRANK I. INTRODUCTION Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. A. My name is Isaac Gabel-Frank and my business address is 417 Denison Street, Highland Park, New Jersey, I am presently employed as a Vice President at Gabel Associates, Inc., an energy, environmental, and public utility consulting firm. Q. PLEASE SUMMARIZE YOUR PROFESSIONAL EXPERIENCE AND EDUCATIONAL BACKGROUND. A. As a Vice President at Gabel Associates, Inc., I perform specialized economic, financial, tariff, regulatory, and marketplace analysis for various energy projects including energy efficiency, renewable energy, cogeneration, and traditional generation sources. This comprehensive analysis takes into account all critical cost/benefit factors and is designed to quantify the economic outcome of customized projects to support investment decisions. Through this work, I also monitor the electricity, natural gas, and renewable markets and offer tailored insights in that regard. Since beginning work at Gabel Associates, Inc. in 2009, I have evaluated a myriad of projects for both public and private clients and assisted in the analysis, development, and implementation for all types of technologies and contractual arrangements. This includes the development of proprietary models that evaluate the viability of projects, as well as long-term forecasts based on market signals and industry knowledge

106 EXHIBIT P I use my knowledge of wholesale electricity and natural gas markets, paired with my experience working with retail tariffs to deliver in-depth market forecasts which are used to assess and undertake project investment decisions. I am also versed on regional transmission organizations (RTOs) including the offering of energy efficiency, demand response, renewable, and traditional generation resources into the PJM market, and was a lead contributor in the development of a proprietary statistical model that computes the risk exposure of capacity resources within the PJM and ISO-New England footprints. I received a BA in Economics, Political Science, and English Writing from the University of Pittsburgh. Further work experience is detailed in my resume provided in the attached Schedule IGF-EEP Q. WHAT EXPERIENCE DO YOU HAVE IN CONDUCTING COST BENEFIT ANALYSES FOR ENERGY EFFICIENCY PROGRAMS? A. In 2018, I have prepared analysis and supporting testimony for the South Jersey Gas and New Jersey Natural Gas energy efficiency filings. In 2017, I prepared Public Service Electric & Gas Company s (PSE&G) cost benefit analysis using the five tests required by the BPU s Minimum Filing Requirements (MFRs), supporting its 2017 Energy Efficiency Program filing, and provided expert testimony presenting the CBAs. I have also completed numerous cost-benefit analyses for federal agencies across the United States, as a well as a multitude of counties, municipalities, and school districts within the State of New Jersey. I am also currently preparing cost-benefit analyses for other utilities in New Jersey to support their upcoming energy efficiency filings

107 EXHIBIT P The projects I have analyzed range in type and size and represent an array of different technologies and configurations. Having performed this analysis for projects with varying degrees of complexity, I am extremely familiar with the process and methodology to formulate an objective and balanced cost-benefit study. Q. DID YOU PREPARE THE COST-BENEFIT ANALYSIS SUPPORTING THE PETITION OF ELIZABETHTOWN GAS COMPANY (ELIZABETHTOWN OR THE COMPANY) FOR CONTINUATION OF THE COMPANY S PROGRAMS? A. Yes. I prepared the cost-benefit analysis (CBA) which calculates and details the results of the five tests prescribed in the MFRs as required by the New Jersey Board of Public Utilities (BPU or Board). This entailed developing a model which analyzed measurespecific details and computed the estimated costs and savings of each program for use in the Total Resource Cost (TRC) test, the Participant Cost test (PCT), the Program Administrator Cost (PAC) test, the Ratepayer Impact Measure (RIM) test, and the Societal Cost test (SCT). 15 II. PURPOSE OF THIS TESTIMONY Q. PLEASE DESCRIBE THE PURPOSE OF THIS TESTIMONY. A. The purpose of this testimony is to present the methodology and results of the five CBA tests required by the Board s MFRs. I will also review the methodology used to calculate job creation associated with the Elizabethtown programs. Q. PLEASE DESCRIBE THE FIVE CBA TESTS REQUIRED BY THE BOARD S MFRS

108 EXHIBIT P A. On October 20, 2017, the Board approved Docket No. QO memorializing a new set of MFRs to supersede those put in place in May of As set forth in the updated MFRs section V.b. states: The utility shall calculate a cost/benefit analysis using the Participant Cost Test, Program Administrator Cost Test, Ratepayer Impact Measure Test, Total Resource Cost Test, and Societal Cost Test that assesses all program costs and benefits from a societal perspective i.e., that includes the combined financial costs and benefits realized by the utility and the customer. The utility may also provide any cost benefit analysis that it believes appropriate with supporting rationales and documentation. Each test listed above is designed to provide a different perspective on the costeffectiveness of the proposed programs. According to the California Standard Practice Manual, 1 the five tests can be understood to illustrate the following: Societal Cost Test The Societal Cost Test measures the net costs of a program as a resource option based on the total costs of the program, including both the participants' and the utility's costs. The Societal Test differs from the TRC test in that it includes the effects of societal impacts such as environmental impacts to the economy, excludes tax credit benefits, and uses a different (societal) discount rate. Total Resource Cost Test The Total Resource Cost Test measures the net costs of a program as a resource option based on the total costs, including both the participant and the utility costs of the program. Participant Cost Test The Participant Test is the measure of the quantifiable benefits and costs from the perspective of program participants. Since many customers do not base their decision to participate in a program entirely on quantifiable variables, this test is not a complete measure of the benefits and costs of a program to a customer. 1 cpuc.ca.gov/uploadedfiles/cpuc_public_website/content/utilities_and_industries/energy_- _Electricity_and_Natural_Gas/CPUC_STANDARD_PRACTICE_MANUAL.pdf - 4 -

109 EXHIBIT P Program Administrator Cost Test The Program Administrator Cost Test measures the net costs of a program as a resource option based on the costs incurred by the program administrator or utility (including incentive costs) and excluding any net costs incurred by the participant. The benefits are similar to the TRC benefits. Costs are defined more narrowly. This test measures the net economic impact of investing in energy efficiency programs from the perspective of the utility. Ratepayer Impact Measure Test The Ratepayer Impact Measure (RIM) test measures what happens to customer rates due to changes in utility revenues and operating costs caused by the program. Rates will go down if the change in revenues from the program is greater than the change in utility costs. Conversely, rates or bills will go up if revenues collected after program implementation are less than the total costs incurred by the utility in implementing the program. This test indicates the direction and magnitude of the expected change in customer bills or rate levels. In essence, this test reviews the benefits of energy efficiency programs against the cost to all ratepayers, not just participants. In aggregate, these tests provide the Board with multiple viewpoints of the benefits and costs associated with the programs. Q. DO YOU HAVE A PREFERENCE FOR A SPECIFIC TEST TO EVALUATE THE COST-EFFECTIVENESS OF THE PROPOSED PROGRAM? A. Yes. I believe the SCT is the best test to evaluate energy efficiency programs because it provides the most complete picture of the costs and benefits of the energy efficiency programs. In fact, the renewable and energy efficiency legislation (P.L. 2018, c. 17) which was signed into law by Governor Murphy on May 23, 2018 requires utilities to file - 5 -

110 EXHIBIT P energy efficiency programs with cost benefit analyses that consider both economic and environmental factors. The other tests, while useful for other information, are incomplete in comparison with the SCT. For example, the SCT is the only test that recognizes carbon reduction and other environmental benefits, and therefore is the only means to consider the potential cost of climate change and the positive impact on the environment of proposed programs, and their alignment with the State s environmental and energy policy goals. A thorough accounting of all benefits related to the energy efficiency programs, inclusive of environmental benefits and other important society-wide impacts such as emission reductions, economic and employment benefits, enhanced ability for low income bill payment and reduced health costs, among other benefits, can only be accomplished through use of the SCT as a critical test evaluating cost-effectiveness. Q. DID YOU EVALUATE ALL THE PROGRAMS BEING PROPOSED USING THE FIVE CBA TESTS REQUIRED IN THE MFRS? A. Yes, I did provided results for all five tests. Q. DOES YOUR TESTIMONY INCLUDE ANY ILLUSTRATIVE SCHEDULES? A. Yes. My testimony includes the schedules listed below that were prepared under my direction and supervision. These schedules contain information responsive MFRs as referenced in the MFR Index attached to the Petition and as set forth in the Board s May 8, 2008 Order in BPU Docket No. EO and the Board s August 3, 2009 Order ( August 3 Order ) in Docket Nos. EO and GO , and further updated in the Board s October 20, 2017 Order in BPU Docket No. QO The schedules are as follows: - 6 -

111 EXHIBIT P III. (a) Schedule IGF-EEP contains an overview of my work experience; (b) Schedule IGF-EEP provides a summary of the results of the five CBA tests for each of the Company s programs; (c) Schedule IGF-EEP provides a detailed information underlying the results of the CBA tests; 2 (d) Schedule IGF-EEP provides a list of the studies and regulatory decisions reviewed in determining lifetime avoided wholesale volatility costs; (e) Schedule IGF-EEP contains a list of all measures used to estimate energy and demand savings; and (f) Schedule IGF-EEP summarizes the total and percentage reduction in kwh and therm sales as a result of the proposed programs, as well as the projected total and percentage reduction in peak load expected from the proposed programs. SUMMARY OF CONCLUSIONS Q. PLEASE SUMMARIZE YOUR CONCLUSIONS. A. Based on a careful calculation of costs and benefits (as detailed in this testimony), I derived the benefit-cost ratio of the each of the five tests for each of the sectors being proposed in the filing. Accordingly, the Elizabethtown Gas 2019 Energy Efficiency portfolio level SCT ratio is 3.2. Over the life of the energy efficiency measures, the programs will yield total societal benefits (NPV) of $9.0 million as compared to total societal costs of $2.8 million, resulting in net benefits of $6.2 million. The detailed results of the CBA are provided below. A summary of the results is provided in Schedule IGF- EEP and detailed results are provided in Schedule IGF-EEP The results from the other tests, in summary, indicate that: The Elizabethtown program is cost effective from a TRC perspective The Elizabethtown program is cost effective from a PCT perspective 2 An electronic copy of Schedule IGF-EEP will be provided upon the execution of a non-disclosure agreement

112 EXHIBIT P The Elizabethtown program is cost effective from a PAC perspective The Elizabethtown program shows appropriate impact from a RIM perspective I also determined that the Elizabethtown programs would result in approximately 31 direct, indirect and induced job-years created over the course of the measure lives of the programs. More detail on job creation is provided below as well as in Schedule IGF- EEP Q. WHAT DO YOU CONCLUDE FROM THESE RESULTS? A. I conclude that each of the proposed subprograms, as well as the total portfolio, are cost effective under the SCT, the most comprehensive measure of cost-effectiveness. In addition, the results of the remaining tests also show the programs are cost-effective and provide significant benefits. 12 IV. COST-BENEFIT ANALYSIS ASSUMPTIONS Q. WHAT TYPES OF COST BENEFIT ANALYSES DID YOU PREPARE? A. I prepared analysis for the five CBA tests required by the Board s MFRs, specifically: 1) Societal Cost Test (SCT); 2) Total Resource Cost (TRC) Test; 3) Participant Cost Test (PCT); 4) Program Administrator Cost (PAC) Test; and 5) Ratepayer Impact Measure (RIM) Test. Q. WHAT METHODOLOGY DID YOU USE TO UNDERTAKE THESE CALCULATIONS? A. Consistent with previous EE filings at the Board, I utilized the methods in the California Standard Practice Manual, which has been used throughout the country for over 30 years as a basis for the calculation of cost-effectiveness tests through the five prescribed CBA tests discussed above. I also utilized the National Standard Practice Manual, developed - 8 -

113 EXHIBIT P by the National Efficiency Screening Project to support the measurement of costeffectiveness. 3 Within the CBA tests, there are a wide range of costs and benefits used to characterize program integrity, some of which are applicable in conducting certain tests but not others. Table 1 shows a list of specific costs and benefits and the tests they apply to: Table 1: Costs and Benefits Utilized in CBA Tests SCT TRC PCT PAC RIM Program Benefits Lifetime Avoided Wholesale Electric Energy Costs x x x x Lifetime Avoided Wholesale Electric Capacity Costs x x x x Lifetime Avoided Wholesale Natural Gas Costs x x x x Lifetime DRIPE Benefits (E&G) x x x x Lifetime Avoided RPS REC Purchase Costs x x x x Lifetime Avoided Wholesale Volatility Costs (E&G) x x x x Lifetime Avoided T&D Costs (E&G) x x x x Lifetime Avoided Retail Electric Costs Lifetime Avoided Retail Natural Gas Costs Lifetime Program Investment Costs Lifetime Avoided Distribution Costs (utility lost revenue) Lifetime Avoided Emissions Costs Lifetime Job and Savings Multiplier Benefits Program Costs Lifetime Incremental Costs x x Lifetime Participant Costs Lifetime Administration Costs x x x x Lifetime Program Investment Costs x x Lifetime Reallocated Distribution Costs (utility lost revenue) x x x x x x x x Q. PLEASE DESCRIBE THE PROGRAM BENEFITS LISTED IN TABLE 1. A. To conduct the CBA, I reviewed and analyzed thirteen (13) types of benefits which were incorporated across the five prescribed cost benefit tests. These benefits are: 3 nationalefficiencyscreening.org/wp-content/uploads/2017/05/nspm_may-2017_final.pdf

114 EXHIBIT P Lifetime Avoided Wholesale Natural Gas Costs The lifetime avoided wholesale natural gas costs category captures wholesale natural gas market purchases that would be avoided as a result of reduction in energy usage associated with the programs. The value of avoided costs is computed based upon the market cost of natural gas delivered to Transcontinental Pipeline (Transco) Z6 Non-NY North delivery point. Underlying supply prices were escalated based upon EIA Annual Energy Outlook Henry Hub reference case. The underlying Henry Hub supply forecast was combined with the Transco Z6 Non-NY North basis to determine the avoided cost projection. All values were adjusted to account for average losses and sales and use tax. Lifetime Avoided Wholesale Electric Energy Costs The lifetime avoided wholesale electric energy costs category captures wholesale electric market purchases that would be avoided as a result of reductions in energy usage associated with the programs. The value of avoided costs is estimated using PJM Western Hub forward prices, adjusted for congestion to reconcile for topographical Locational Marginal Pricing (LMP) differences between Western Hub and the Jersey Central Power & Light (JCP&L) zone (the electric delivery territory in which a majority of Elizabethtown customers receive electric service). Prices were forecasted based upon Energy Information Administration (EIA) Annual Energy Outlook reference case for the Reliability First Corporation East region electricity generation escalations. All values were adjusted to account for marginal line losses on the JCP&L and PJM systems, and sales and use tax

115 EXHIBIT P Lifetime Avoided Wholesale Electric Capacity Costs The lifetime avoided wholesale electric capacity costs category captures the wholesale reduction in PJM capacity as a result of the reductions in electric demand associated with the programs. I used actual cleared PJM Eastern Mid-Atlantic Area Council (EMAAC) Locational Deliverability Area (LDA) prices where available. Clearing prices were escalated by three (3) percent thereafter. All values were adjusted to account for marginal line losses on the ACE and PJM systems, PJM s Forecast Pool Requirement (FPR) to account for avoided reserve requirements, and sales and use tax. Lifetime Demand Reduction Induced Price Effect Benefits (Electric & Gas) The lifetime Demand Reduction Induced Price Effects (DRIPE) price suppression (also known as merit order benefits) is a benefit that captures the reduction in wholesale electric and natural gas market prices to all customers, not just participants, as a result of energy efficiency. Wholesale electric and natural gas markets are fundamentally supply and demand based therefore, downward movement in the electric or natural gas demand curve as a result of reduced consumption should result in less expensive generation resources being dispatched for electricity, and less expensive natural gas delivered. Both markets clear at a lower price, and the associated reductions in market prices flow through to all customers. Natural gas DRIPE price suppression occurs as a result of reduced demand in the natural gas markets servicing New Jersey. Highly congested natural gas markets, in particular those in New Jersey such as those that trade around the Transco Z6 Non-NY North delivery point are candidates for DRIPE price suppression effects as a result of

116 EXHIBIT P energy efficiency. In these highly liquid and traded markets, even a small reduction in the bid-ask price spread can have significant effects on the cost of natural gas. While a value for electric or natural gas DRIPE price suppression was not included in this analysis, it merits further research and could be included at a later date as it represents a real benefit to all ratepayers. Lifetime Avoided RPS REC Purchase Costs The lifetime avoided RPS REC purchase costs estimates the reduced volume of RECs that must be purchased by New Jersey s electric retail suppliers as a result of SJG s Programs. The New Jersey Renewable Portfolio Standard (RPS) sets the total volume requirement of Renewable Energy Certificates (RECs) that must be purchased as a percentage of retail load. A reduction in retail load due to energy efficiency will reduce the total number of RECs required to be purchased. Market prices for New Jersey Class I RECs, Class II RECs and SRECs were used based upon an internal supply-demand analysis and compliance costs for the three New Jersey REC markets. Lifetime Avoided Wholesale Volatility Costs (Electric & Gas) The lifetime avoided wholesale volatility cost category estimates the value of avoiding risk of wholesale purchases. Wholesale electric and natural gas prices are inherently risky as they are market-based and not fixed in price or volume. Large fluctuations in prices expose customers and retail suppliers to risks that ultimately are priced into retail rates. Energy efficient measures and practices amount to a purchase of energy service which does not contain the price volatility implicit in the price of electricity and natural gas. By reducing the overall energy purchases of customers,

117 EXHIBIT P customers are exposed to less fuel volatility. In this regard, energy efficiency can be viewed as an energy resource that does not contain the price volatility embedded in purchases from the electric and gas supply systems. The risk avoidance benefit of energy efficiency was applied as a price adder to the cost of electricity and natural gas. The price adder was determined based upon a review of studies and regulatory decisions. While there is some variation among the studies, a conservative premium based on these precedents equal to 10% of electric and natural gas costs was assumed. A list of the studies and regulatory decisions reviewed in associated with this value is provided in IGF-EEP Lifetime Avoided T&D Costs (E&G) The lifetime avoided T&D cost category estimates the value of reducing the cost of building new and maintaining existing transmission and distribution infrastructure as a result of reduced or flattened load. Avoided electric T&D costs were calculated based upon the precedent set in previous filings, sourced from the Draft Energy Efficiency Cost-Benefit Analysis Avoided Cost Assumptions produced by the Center for Energy, Economic and Environmental Policy (CEEP) of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, which has been used previously in a BPU proceeding and was not contested by any party. This estimate is conservative based on other recent data presented by the American Council for an Energy-Efficient Economy, which presented a range of $0 to $200 per kw with most values exceeding $50/kW. 4 4 See Everyone Benefits: Practices and Recommendations for Utility System Benefits of Energy Efficiency at aceee.org/sites/default/files/publications/researchreports/u1505.pdf

118 EXHIBIT P Avoided natural gas T&D value results from a reduction in natural gas throughput, which has the potential to avoid incremental investment in transportation and delivery infrastructure, as well as potentially reduce maintenance and other related costs on a system experiencing less throughput. While avoided natural gas T&D value was not included in this analysis, it merits further research and could be included at a later time as it represents a real benefit to all ratepayers. Lifetime Avoided Retail Electric and Natural Gas Costs The lifetime avoided retail electric and natural gas cost categories captures the actual bill savings to participants of the programs. A key benefit of energy efficiency is reduced consumption by participants which results in reduced utility costs. Avoided retail electric costs were calculated based upon the electric charges and applicable rate classes in JCP&L s Tariff for Electric Service. This method results in a price to compare analysis, as only portions of the tariff which would be offset as a result of the programs are included in the analysis. By way of example, customers will not offset any of the monthly fixed Service Charge, so that avoiding that charge was not included in the retail electric savings analysis. Each charge was escalated, by component, to account for separate escalation rates for distribution and supply charges. Charges related to electric delivery and transmission were escalated at 2.0% per year and electric energy and capacity supply charges were escalated in a manner consistent with the wholesale market escalations explained above. Avoided retail natural gas costs were calculated based on the natural gas charges and applicable rate classes available in Elizabethtown s Tariff for Gas Service. This method results in a price to compare type analysis, as only portions of the tariff which

119 EXHIBIT P would be offset as a result of the programs are included in the analysis. By way of example, customers will not offset any of the monthly fixed Service Charge, so that avoiding that charge was not included in the retail natural gas savings analysis. Each charge was escalated, by component, to account for separate escalation rates for distribution and supply charges. Charges related to natural gas delivery were escalated at 2.0% per year while natural gas supply charges were escalated in a manner consistent with the wholesale market escalations explained above. Lifetime Program Investment Costs The lifetime program investment cost category captures the direct rebate incentives provided to participants of the programs. Depending on perspective, lifetime program investment costs can either be a benefit to a program (to participants) or a cost to programs (to the utility and ultimately, ratepayers). This benefit is only realized in the participant cost test, as that test singles out the experience of a participant in the programs. Lifetime Avoided Distribution Costs (Gained Utility Revenue) The lifetime avoided distribution cost category captures additional revenues collected by the utility which can be used to reduce distribution costs for all customers. The avoided distribution costs primarily occur when revenues from new or increased customer usage exceed the cost to service the new load. This cost is sometimes known as gained utility revenues. This filing did not include any programs which resulted in avoided distribution costs

120 EXHIBIT P Lifetime Avoided Emissions Costs The lifetime avoided emissions cost category captures the value of reductions in CO2, NOx, and SO2. I did not include mercury or other greenhouse gases. The reduction in power plant emissions was forecast using dispatch simulation results using AURORAxmp. Because AURORAxmp dispatches generation at the individual unit level, the simulation results provide marginal emissions rates for CO2, SO2, and NOx. Emissions rates associated with natural gas usage savings were based upon the US Environmental Protection Agency s (EPA) emissions factors for residential natural gas use. The emissions benefits were calculated using methods accepted by the State and US EPA and other recognized national sources, including the Social Cost of Carbon for Regulatory Impact Analysis - Under Executive Order produced by the Interagency Working Group on Social Cost of Greenhouse Gases, United States Government, as well as the Cross-State Air Pollution Rule (CSAPR) EPA cost-benefit analysis. Lifetime Job and Savings Multiplier Benefits The lifetime job and savings multiplier benefits were calculated using the Jobs and Economic Development Impact (JEDI) model, developed by the National Renewable Energy Laboratory (NREL). This model has been accepted by the BPU and captures direct, indirect, and induced job multiplier benefits. I also included a multiplier benefit to capture the value of participant savings in the economy, as a portion of that savings would be spent and have a multiplied impact that would benefit the State overall. This value netted out any additional fixed costs reallocated to ratepayers

121 EXHIBIT P Q. PLEASE DESCRIBE THE PROGRAM COSTS LISTED IN TABLE 1 ABOVE. A. I reviewed and analyzed five (5) categories of costs which were incorporated into the five prescribed cost benefit tests. These costs are: Lifetime Incremental Costs The lifetime incremental cost category captures the incremental cost of participating in the programs. This cost is calculated based upon the difference between the efficient measure costs assumed to install energy efficiency technologies and processes and the base measure cost assumed that a participant would otherwise pay without access to the proposed program. Lifetime Participant Costs The lifetime participant cost category captures the incremental cost of participating in the programs paid by participants. This category includes both incremental costs paid by participants for the non-subsidized portion of energy efficiency costs, as well as loan repayments for programs offering financing. Lifetime Administration Costs The lifetime administration cost category captures the cost of administering the energy efficiency programs by Elizabethtown Gass. These costs were developed by the Company, with my support, based upon a Full Time Employee (FTE) equivalent and program year basis. While these costs are not direct customer incentives, the programs could not function without adequate administration and oversight. These costs also include marketing, contractor training, inspections and quality control, and evaluation

122 EXHIBIT P Lifetime Program Investment Costs The lifetime program investment cost category captures the direct rebate incentives provided to participants of the programs. Rebate values were determined to maximize customer participation and minimize ratepayer impact. This cost mirrors that provided as a benefit to participants in the participant cost test. Lifetime Reallocated Distribution Costs (Utility Revenue Lost) An associated cost is the lifetime reallocated distribution costs category which captures the value of any distribution costs being avoided by participants that must be collected from the balance of ratepayers. These are not direct program costs and represent the transfer between existing ratepayer subsectors. This cost is sometimes known as lost utility costs or lost revenues. Reallocated distribution costs were calculated based upon the individual rate charges which currently contribute to supporting distribution costs. In addition, the reallocated distribution costs also include tariff surcharges and riders which do not contribute to distribution costs but would likely be reallocated to ratepayers at large. Reallocated distribution costs do not include any supply related costs, as New Jersey s electric and natural gas utilities are deregulated, and avoided supply costs resulting from energy efficiency are not borne by ratepayers. Q. WHAT ASSUMPTIONS DID YOU USE FOR ESTIMATING MEASURE AND PROGRAM COSTS AND ENERGY SAVINGS? A. I relied on several different sources to estimate energy and demand savings, as well as costs, for specific measures. My primary source was Elizabethtown s previous energy efficiency filing which was approved by the Board on April 21, 2017 along with

123 EXHIBIT P discussions with internal representatives of Elizabethtown and Company records. Because this filing is a one-year extension of the currently in-place programs, the savings and cost sources are applicable. A schedule of all measures included in the analysis is provided in IGF-EEP With respect to free rider and free driver (spillover) effects I assumed a net-to gross ratio of 1.0. This is consistent with the approach taken by TRC in NJCEP planning. In fact, the NJCEP Protocols report gross savings and generation only. Free riders and free drivers are not addressed in these Protocols. Further research in this area is planned. While some participants may have made similar investments absent the program (free riders), the programs also drive non-participants to invest in energy efficient products and change behavior (free drivers). I believe 1.0 is a reasonable estimate based on these factors. In addition, the lack of a formal net-to-gross evaluation in New Jersey makes it extremely difficult to ascertain this impact. Q. WERE THE COSTS AND BENEFITS EVALUATED ON A NOMINAL OR PRESENT VALUE BASIS? A. For the purposes of each of the CBA tests, all costs and benefits were evaluated on a present value basis. The TRC, PCT, PAC, and RIM tests used a discount rate to determine the present value of costs and benefits of 6.1%. This value was determined based upon Elizabethtown s net of tax weighted average cost of capital. The SCT was evaluated using a discount rate of 2.77%, equal to the yield of a 30-year U.S. Treasury bond

124 EXHIBIT P V. COST-BENEFIT ANALYSIS RESULTS Q. WHAT WERE THE RESULTS OF THE CBA FOR THE PROPOSED ELIZABETHTOWN GAS 2019 ENERGY EFFICIENCY PROGRAMS? A. Based on my analysis, a majority of programs exceed a SCT ratio of 1.0, with a portfolio wide average result of 3.2. Table 2 summarizes the SCT ratios for each of the programs offered by Elizabethtown. Table 2: Elizabethtown 2018 Energy Efficiency SCT Ratios Subprogram SCT Total Portfolio 3.2 Residential HVAC and HW 2.3 Residential Home Energy Assessment 4.4 Residential Home Energy Report 4.4 Residential Home Weatherization 3.5 Commercial Steam Trap Survey and Repair Q. HOW DID THE PROPOSED ELIZABETHTOWN GAS 2019 ENERGY EFFICIENCY PROGRAMS FARE IN TRC, PCT PAC, AND RIM TESTS? A. The Elizabethtown programs proved cost-effective using the balance of the CBA tests prescribed in the MFRs, in addition to the SCT test, as described above. The following table illustrates the CBA ratios for each of the subprograms for the TRC, PCT, PAC, and RIM tests

125 EXHIBIT P-3 Table 3: Elizabethtown 2018 Energy Efficiency TRC, PCT, PAC, & RIM Ratios TRC PCT PAC RIM Total Portfolio Residential HVAC and HW Residential Home Energy Assessment Residential Home Energy Report 1.9 n/a Residential Home Weatherization Commercial Steam Trap Survey and Repair Q. WHY DID SOME SUBPROGRAMS SCORE SO HIGHLY IN THE PARTICIPANT COST TEST? A. As detailed above, the participant cost test is designed to ascertain cost-effectiveness for customers participating in programs. Many of the programs were designed to offer participants a number of low and no-cost measures and energy savings, and target markets which often have difficulty participating in energy efficiency programs. This includes subprograms such as the Residential Home Weatherization program which targets residents earning between 225% to 400% of federal poverty level, just above eligibility to participate in the Comfort Partners program, but still in an economic demographic with difficulty focusing on and investing in energy efficiency. Another subprogram encompassed in the Residential Programs is the Residential Home Energy Report program which provides customized Home Energy Reports (HERs) to participants. The HERs provide customers with insights and behavioral recommendations to improve the efficiency of their homes, all at no cost to the participants. Because participants pay nothing for the HERs, the PCT for this particular subprogram is infinite (any level of savings divided by zero costs is an incalculable infinite number). Combining

126 EXHIBIT P this subprogram with other programs which require participant payments results in aggregated results with high cost-effectiveness. 3 VI. JOB CREATION Q. IS THE SPENDING RELATED TO ELIZABETHTOWN S ENERGY EFFICIENCY PROGRAMS EXPECTED TO CREATE ANY JOBS IN NEW JERSEY? A. Yes. The proposed programs are expected to generate jobs in New Jersey s clean energy sector. The commitment of Elizabethtown to energy efficiency is expected to net the State 31 direct, indirect & induced job-years. Q. HOW DID YOU CALCULATE THE JOB CREATION ASSOCIATED WITH ELIZABETHTOWN S ENERGY EFFICIENCY PROGRAMS? A. I employed the use of industry standard methods and models to calculate the job creation generated from Elizabethtown s energy efficiency programs. Direct job creation was estimated using the Rutgers Analysis for the 2011 Draft New Jersey Energy Master Plan Update. 5 This report specifies 7.91 direct jobs created for every one-million dollars invested in energy efficiency in New Jersey. The Rutgers analysis has been incorporated into previous energy efficiency filings and represents a standard method of determining direct job creation from energy efficiency spending in New Jersey. Indirect and induced jobs are created as a result of those employed by the direct jobs spending a portion of their earnings on other goods and services in New Jersey, creating additional economic value and jobs. This derivative job creation, or multiplier

127 EXHIBIT P effect can have a significant effect on the economy, and if not included would severely understate the job creation benefits of energy efficiency expenditures. Indirect and induced jobs was estimated by employing the National Renewable Energy Laboratory (NREL) Jobs and Economic Development Impact (JEDI) model 6. JEDI is an input-output economic impact model that has been accepted by the NJ BPU in other matters and uses state and industry specific economic multipliers that estimate the direct, indirect and induced economic impact of energy industry investments. While JEDI does not have a model specifically for energy efficiency investments, the solar PV model has similar economic characteristics (e.g. both have a large up-front investment for the initial installation followed by very low maintenance costs going forward). Further, both utilize a similar level of skilled trade workers. The model assumed that no New Jersey in-state manufacturing activity would result from the investments; to the extent manufacturing activity is induced, it would result in additional job and multiplier benefits to the State. 14 VII. ENERGY SAVINGS Q. WHAT LEVEL OF NATURAL GAS AND ELECTRIC SAVINGS RESULT FROM THE IMPLEMENTATION OF ELIZABETHTOWN S ENERGY EFFICIENCY PROGRAMS? A. Over the lifetime of the measures, Elizabethtown s energy efficiency programs will result in the reduced consumption of roughly 7.0 million therms of natural gas and 21 million kwh of electricity. The incremental annual reduction in natural gas is equal to greater than 1.0 million therms per year, while the incremental annual reduction in electricity is equal to greater than 5.1 million kwhs per year. In addition, the programs will offset

128 EXHIBIT P great than 100 kw of electricity demand. A schedule summarizing the total and percentage reduction in kwh and therm sales as a result of the proposed programs, as well as the projected total and percentage reduction in peak load expected from the proposed programs, over the lifetime of the measures, is included in IGF-EEP VIII. CONCLUSIONS Q. CAN YOU SUMMARIZE THE RESULTS OF YOUR ANALYSIS? A. My cost benefit analysis of the Elizabethtown energy efficiency programs shows the portfolio is cost effective and will provide quantified net benefits to the customers. Total direct benefits to ratepayers (participants and non-participants) total more than $5.4 million while the associated costs are $3.0 million yielding net benefits of $2.4 million. In addition, participants direct retail bill savings are estimated at $10.5 million. The Elizabethtown energy efficiency programs are also estimated to generate 31 direct, indirect and induced job-years of work in the New Jersey economy. Q. BASED ON THESE RESULTS WHAT DO YOU CONCLUDE? A. I conclude that the Board should approve Elizabethtown Gas application based upon the substantial benefits to the State and to ratepayers, and reasonable outcomes in the cost benefit test results. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes. However, I reserve the right to update this testimony to account for additional information I may receive. Thank you

129 Overview of Experience Isaac Gabel-Frank, Vice President at Gabel Associates, has over 8 years of experience supporting complex energy issues related to cost-benefit analysis, energy efficiency and renewables, energy project development, economic and tariff analysis, electric vehicles, regional transmission organizations (RTOs), and energy procurement. Schedule IGF-EEP Isaac Gabel-Frank Vice President Professional Qualifications BA., Economics, Political Science, English Writing University of Pittsburgh, 2009 Mr. Gabel-Frank is an expert on cost-benefit analytics and has supported a multitude of clients in quantifying cost and benefit dynamics related to the economic impact of energy projects. This includes past and present work for Federal agencies, state and local governments, school districts, and private sector clients on energy efficiency, renewable energy, cogeneration, and traditional generation projects. Mr. Gabel-Frank also performs sensitivity analysis to help identify risk boundaries and market deviations. This analysis is critical to investment decisions as it allows clients to understand the full value proposition associated with energy initiatives. Mr. Gabel-Frank has submitted expert testimony to the New Jersey Board of Public Utilities (NJBPU) in matters regarding the cost effectiveness of energy efficiency. He is also currently supporting analytical and filing preparation activities for energy efficiency, renewable, energy storage, and electric vehicle matters for a range of clients. Mr. Gabel-Frank has also performed in-depth project valuation and levelized cost of energy studies to support a proposed asset transaction. Mr. Gabel-Frank assists in the development of numerous renewable and energy efficiency projects including in-depth economic, technical, and utility tariff analysis, which incorporates long-term utility and energy forecasts. He has developed various tariff models from the ground up, which are customized to reflect the specific parameters of each project. He is also skilled at calculating energy savings associated with various project structures. As a result of his strong analytical skill set, Mr. Gabel-Frank has served an integral role on various progressive projects throughout the region. He supports solar projects through the request for proposal (RFP) process as well as reviews utility tariffs and performs cost/benefit analysis. He is also knowledgeable on the solar renewable energy certificate (SREC) market and has provided transactional support. He has specialized knowledge on demand response programs and can effectively support clients in evaluating this revenue opportunity. Mr. Gabel-Frank also developed a model that calculates energy savings and potential rebates associated with energy efficiency projects. In addition, he is extremely knowledgeable on RTO issues and actively monitors activities related to energy and capacity markets, energy efficiency, demand response, ancillary services, interconnection, and general grid issues. Mr. Gabel- Frank helps clients formulate and strategize positions on current PJM rules as well as provides analysis on potential market changes. This includes development of offer and bid strategies for energy efficiency, demand response, renewable, and traditional generation resources into the PJM market. He was a key contributor in the development of the Analytical Likelihood of Availability and Non-Performance Risk (ALAN) model, a proprietary stochastic modeling tool that computes the exposure of capacity resources within the PJM and ISO-NE footprints. ALAN uses resource outage data as well expected performance assessment event information to determine the probabilistic coincidence of outages and performance assessment events. Gabel Associates, Inc.