GENERAL ORDER NO I In the Matter of the Effects on Utilities of the 2017 Tax Cuts and Jobs Act:

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1 CONSUMER ADVOCATE DIVISION STATE OF WEST VIRGINIA PUBLIC SERVICE CO~MISSION 700 Union Building 723 Kanawha Boulevard, East Charleston, West Virginia (304) March 29, lngrid Fersell Executive Secretary Public Service Commission of West Virginia 201 Brooks Street Charleston, West Virginia RE: GENERAL ORDER NO I In the Matter of the Effects on Utilities of the 2017 Tax Cuts and Jobs Act: Dear Ms. Ferrell: Enclosed for filing in the above-styled and numbered case, please find the original and twelve (12) copies of the Consumer Advocate Division's (CAD) Secondf Data Request to Hope Gas, dba Dominion Energy West L'irginiu. Copies have been served on counsel of record. Very truly yours, Tom White, Bar No AN EQUAL OPPORTUNITY EMPLOYER

2 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON GENERAL ORDER NO In the Matter of the Effects on Utilities of the 2017 Tax Cuts and Jobs Act. CONSUMER ADVOCATE DIVISION'S SECOND DATA REQUEST TO HOPE GAS, INC. dba DOMINION ENERGY WEST VIRGINIA To: Hope Gas, Inc., dba Dominion Energy West Virginia: The Consumer Advocate Division of the Public Service Commission of West Virginia (CAD) hereby requests that you provide the information detailed in the questions attached hereto by April 18, 2018, or sooner if practical, for the purpose of the preparation of the abovereferenced case. If additional time is necessary, please advise so that schedule changes can be arranged. Please begin your response with a reiteration of the number and the question to which the response is addressed. 1. Unless otherwise specifically stated in the request. the term -'the Company" refers to the Hope Gas, Inc., dba Dominion Energy West Virginia. The CAD requests that the Company inform the CAD within five (5) days of any request for which the requested information does not apply. 2. The CAD requests that the Company respond to each item of this Request for Information (Request) by April 18, If there are any objections to any Request, please indicate within fourteen (14) days of receipt in accordance with Rule 13.6 of the PSC's Rules of Practice and Procedure. 3. The Companies, rather than holding responses to individual items until all

3 responses of this Request have been completed, should provide each response as completed. Many of these responses should be made available immediately 4. Where the Company. upon reviewing the items in this Request, determines that it cannot respond to individual itenis by April 18, 2018, the Company should notif)) the CAD immediately so that schedule changes can be agreed upon, where possible. 5. If the Company feels that any of the items set forth in this Request are ambiguous or unclear in any way, it should notify the CAD s attorney as soon as possible so that the item(s) may be properly clarified prior to the preparation of a written response 6. The Company should view each requested item of this Request as being continuing in nature so that as additional, more current, or more accurate information becomes available, that information will be provided to this office without undue delay. 7. Please send one hard copy of all responses in Microsoft Word, PDF, or Excel format, as appropriate, to the CAD s consultant and three hard copies to the Consumer Advocate Division at the address below. Also, please send a copy of all responses in electronic format via to the CAD at twliite!f~cad.statc.m\.us and to the CAD S consultant. If the responses cannot be sent via , please send the responses on a thumb drive to the CAD and a copy of that thumb drive to the CAD s consultant. The CAD s consultant is: Ralph Smith Larkin & Associates Farmington Rd. Livonia, MI rsmithla@aol.com 8. Please refer to CAD s 1 Data Request for complete instructions. Respectfully,

4 Tom White WV Bar No Consumer Advocate Division Public Service Commission of West Virginia 7th Floor, Union Building 723 Kanawlia Boulevard, East Charleston, West Virginia 25301

5 CONSUMER ADVOCATE DIVISION DATA REQUESTS FOR DOMINION HOPE GAS COMPANY CAD-2-1. Details of ADIT balances at December 3 1, Identify the December 3 1, recorded per-book balance of Accumulated Deferred Income Taxes (ADIT) in each account (account , 283 etc.). Show by each book-tax difference, the components which comprise the ADIT in each ADIT account. For each component of the ADIT listed in response to the above requests, please also provide the following information: 1) The state income tax rate used to compute the ADIT. 2) The federal income tax rate used to compute the ADIT. 3) The combined state and federal income tax rate used to compute the ADIT. 4) The balance (book-tax difference at 12/3 1 /20 17) to which the state and federal income tax rates were applied to compute the ADIT. CAD-2-2. CAD-2-3. For each component in the ADIT accounts. identify the amount representing "excess" ADIT (Le.. calculated using the new 21% flat federal corporate income tax rate versus the previous FIT rate [e.g., of 34% or 35%] that the Company used). For each amount of excess property-related ADIT in account 282, please indicate whether it is "protected" (Le.. related to the use of accelerated tax depreciation including MACRS and bonus tax depreciation) or "nonprotected" (i.e.. related to other book-tax differences such as repairs deductions, etc.) What software does the Company use to track the tax basis and tax depreciation of its utility plant assets? a) Explain the capabilities of that software for tracking tax basis and tax depreciation by plant account by vintage (year in which the plant was placed into service). b) Explain the capabilities of that software for calculating amortization of excess accumulated deferred income taxes (EADIT) using an average rate assumption method (ARAM). What software does the Company use to track the book basis and book depreciation of its utility plant assets?

6 CAD-2-4. CAD-2-5. a) Explain the capabilities of that software for tracking book basis and book depreciation by plant account by vintage (year in which the plant was placed into service). b) Explain the capabilities of that software for calculating amortization of excess accumulated deferred income taxes (EADIT) using an average rate assumption method (ARAM). Provide a listing of each regulatory asset and regulatory liability, by account. that was recorded on the Company's books as of December For each item, also provide the following information: the amount the amortization period (if any) being applied whether the balance accrues carrying charges and, if so. the carrying charge rate and how it is determined the amount of ADIT related to the item and how that ADIT was determined (include details for the state and federal income tax rate applied to compute the ADIT and the balance to which the tax rates were applied) whether the item was included in utility rate base in the Company's last West Virginia rate case whether the item represents cost deferrals (over- or under-recoveries) that are expected to be recovered via a rider or surcharge and an explanation of such recovery. Referring to the 2 1 % federal corporate income tax rate that became effective January 1, 2018 as part of the Tax Cuts and Jobs Act (TCJA) that was signed into law by President Trump on December and the identification of excess federal ADIT as of December : a) Explain whether and how the Company will be applying the Average Rate Assumption Method (ARAM) to the "protected" portions of the excess federal ADIT balances that relate to the use of accelerated tax depreciation for federal income tax purposes, and show in detail how the Company is calculating the ARAM. b) Is the Company proposing to use an alternative method for amortizing the "protected" portion of its excess ADIT? If so, identify and describe the method and show in detail how the Company is applying it. c) Please provide the Company's currently authorized depreciation rates, by plant account (and sub-account if applicable). For each depreciation rate, please provide a breakout of the rate between (1) the portion related to the recovery of original cost over the plant's estimated useful life and (2) the portion related to cost of renioval/negative net salvage. d) How does the Company account for the cost of removal when actual removal costs are incurred. and how does the Companj account for the

7 CAD-2-6. e) component of depreciation rates (and depreciation expense) that relates to negative net salvage in recording Depreciation Expense and Accumulated Depreciation? Please explain fully. identify and provide accounting policies related to this, and provide illustrative journal entries made in showing the accounting. Does the cost of removalhegative net salvage component of the Company's depreciation rates have any impact on the derivation of the Average Rate Assumption Method that is specified in the Tax Cuts and Jobs Act for application to excess federal ADIT related to the use of accelerated tax depreciation? If "yes" explain fully, and provide an illustrative example showing how the cost of removalhegative net salvage component of the Company's depreciation rates impacts the ARAM plant additions and bonus tax depreciation. aj b) Please identify by account the Company's actual plant additions. Does the Company anticipate claiming bonus tax depreciation 011 any of its plant additions? (i) If "yes" to part b. identify the plant additions which are eligible for bonus tax depreciation and show the amounts of bonus tax depreciation that the Company intends to claim. cj Please also address whether and how the Company distinguished costs for public utility property (1 j through September and (2) from September 28, through December 3 1, 201 7, in determining its bonus tax depreciation amounts. (i) If "no" to part c, explain fully why not. and provide a copy of the related financial and economic analysis. d) Does the Company plan on claiming for tax year any MACRS tax depreciation on any of its plant additions? (i) If "yes" to part e, identi@ the plant additions for which the Company intends to claim MACRS tax depreciation and show the amounts of MACRS tax depreciation that the Company intends to claim for tax year e) Does the Company plan on claiming for tax year any bonus tax depreciation on any of its plant additions (such as property that was under construction at September 27, and placed into service in 20 1 S)?

8 (i) If "yes" to part e, identify the plant additions for which the Company intends to claiin bonus tax depreciation and show the amounts of bonus tax depreciation that the Company intends to claim for tax year CAD-2-7. CAD-2-8. CAD-2-9. How much income tax expense was allowed in the Company's last West Virginia Rate case? Please identie the amount, and provide a breakout showing the amounts for each of the following: Current federal income tax expense (also provide the amount of federal taxable income and the FIT rate used) Current state inconie tax expense (also provide the amount of state taxable income and the state income tax rate used) Deferred federal income tax expense (also provide each book-tax difference for which deferred federal income tax expense was computed and identify the FIT rate used) Deferred state income tax expense (also provide each book-tax difference for which deferred state income tax was computed the state income tax rate used) Investment tax credit amortization Any other components of income tax expense (identify, quantify and explain in detail). Does the Company have a cost of service study file in Excel from its last West Virginia rate case? If so, please provide it, with formulas and cross references intact. a> CIAC. a> How were income taxes allocated among rate classes in the cost of service study in the Company's last West Virginia rate case? Explain fully and show allocations in detail. How were the Company's ADIT balances allocated among rate classes in the cost of service study in the Company's last West Virginia rate case? Explain fully and show allocations in detail. Did the Company receive any collection of CIAC during 201 7? If "yes" please identify the amounts of CIAC and explain to uhich plant accounts the CIAC amounts relate. Does the Company have an opinion on whether any of the CIAC collected in will be required to be included as taxable income on its federal income tax return for tax year 20 17? If not. explain fully why not. If "yes" please explain the opinion and the basis for it.

9 CAD CAD c) Did the Company reflect any amounts of federal income tax for CIAC received in 201 7? If so, please identify such amounts. Does the Company have any journal entries and journal entry workpapers showing how it identified and recorded aniounts of EADIT as of December 3 1, as a net regulatory liability? If not, explain fully why not. If so, identify and provide the journal entries and journal entry workpapers and supporting calculations. Net operating loss carry-forwards. a) Does the Company have a net operating loss carry forward for federal income tax purposes as of /20 16 of 12/3 1 /20 17? If so: 1) identify the federal NOL carryforward amount as of each date. 2) show over what period the Company anticipates utilizing the 12/3 1/20 17 NOL carryforward. 3) identify, quantify and explain how the Company has recorded an ADIT balance related to the NOL carryfoward as of each date. 4) identify. quantifjr and explain how the Company has or will adjust its 12/3 1/20 17 recorded ADIT balance related to the NOL carryfoward for the reduction in the corporate FIT rate from 34% to 2 1 YO. b) Does the Company have a net operating loss carry forward for state income tax purposes as of 12/3 1/20 16 of /20 1 7? If so: 1) identify the state NOL carryforward amount as of each date. 2) show over what period the Company anticipates utilizing the 12/3 1 / state NOL carryforward. 3) identify, quantify and explain how the Company has recorded an ADIT balance related to the state NOL carryfoward as of each date. CAD CAD CAD Identify each regulatory filing, including each filing for each surcharge or rider rate adjustment, that the Company plans to file in When does the Company plan to file its next West Virginia base rate case? Please quantify and explain all savings in and that the Company expects to realize from the TCJA.

10 I GENERAL ORDER NO PUBLIC SERVICE C OM~ISSIO~ OF WEST VIRGINIA CHARLESTON In the Matter of the Effects on Utilities of the 2017 Tax Cuts and Jobs Act. CERTIFICATE OF SERVICE 1, Tom White, counsel for the Consumer Advocate Division of the Public Service Commission of West Virginia, (CAD), hereby certify that I have served a copy of the foregoing Consumer Advocate Division s (CAD) Second Data Request upon all parties of record by First Class, U.S. Mail, postage pre-paid as follows: John Auville, Esquire Caryn Short, Esquire Public Service Commission of West Virginia 201 Brooks Street Charleston, WV Co unse 1. for Coin m iss ion Sfuir Kurt L. Krieger, Esquire Todd M. Swanson, Esquire Steptoe & Johnson PLLC Chase Tower, Seventh Floor P.O. Box 1588 Charleston, WV Counsel for Hope Gas, Inc., dba Dominion Energy West Virginia, and Peoples Gas w LLC Brien J. Fricke, Esquire Dominion Resources Services, Inc. Legal Department 925 White Oaks Boulevard Bridgeport, WV Counsel for Hope Gas, Inc., dba Dominion Energy West Virginia Thomas N. White WV State Bar #6393 Dated: March 29, 201 8