Philip J. Passanante Assistant General Counsel 92DC42 PO Box 6066 Newark, DE 19714-6066 302.429.3105 - Telephone 302.429.3801 - Facsimile philip.passanante@pepcoholdings.com atlantic cit11 elect, c An Exelon Company 500 N. Wakefield Drive atlanticcityelectric.com Newark, DE 19702 February 1, 2017 VIA FEDERAL EXPRESS and ELECTRONIC MAIL irene.asbury@bpu.nj.gov board.secretary@bpu.nj.gov Irene Kim Asbury, Esquire Secretary of the Board Board of Public Utilities 44 South Clinton Avenue, 3 rd Floor, Suite 314 P.O. Box 350 Trenton, New Jersey 08625-0350 RE: In the Matter of the Petition of Atlantic City Electric Company to Reconcile and Update the Level of Its Non-Utility Generation Charge ( NGC ) and Its Societal Benefits Charge ( SBC ) (2017) BPU Docket No. Dear Secretary Asbury: On behalf of Atlantic City Electric Company ( ACE ), enclosed herewith for filing are three conformed copies of a Verified Petition and supporting testimony (and Schedules thereto) seeking to reconcile and update ACE s NGC and SBC tariff charges. 1 A draft Public Notice is also attached to the Petition as Exhibit C. ACE respectfully requests that the Board retain jurisdiction of this matter and render a decision thereon so that final rates can be put into effect by no later than June 1, 2017. Thank you for your consideration and courtesies. Feel free to contact me with any questions or if I can be of further assistance. Respectfully submitted, Enclosure cc: Service List /jpr Philip J. Passanante An Attorney at Law of the State of New Jersey 1 This filing has been made consistent with the Board s Order Waiving Provisions of N.J.A.C. 14:4-2, N.J.A.C. 14:17-4.2(a), N.J.A.C. 14:1-1.6(c), and N.J.A.C. 14:17-1.6(d), issued on July 29, 2016 in connection with In the Matter of the Board s E-Filing Program, BPU Docket No. AX16020100.
IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE AND ITS SOCIETAL BENEFITS CHARGE (2017) STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES BPU Docket No. VERIFIED PETITION ATLANTIC CITY ELECTRIC COMPANY (hereinafter referred to as Petitioner, ACE or the Company), a public utility corporation of the State of New Jersey, respectfully requests that the New Jersey Board of Public Utilities (herein, the BPU or the Board) approve proposed changes to the Company s Non-Utility Generation Charge (NGC), and two of its Societal Benefits Charge (SBC) components, as proposed and outlined herein. The net effect of adjusting the NGC and SBC, as proposed herein, including associated changes in Sales and Use Tax, is an overall annual rate decrease of approximately 28.857 million 1. In support thereof, Petitioner states as follows: 1. The Company is engaged in the purchase, transmission, distribution, and sale of electric energy to residential, commercial, and industrial customers. ACE s service territory comprises eight counties located in southern New Jersey and includes approximately 547,000 customers. Brief Historical Summary of the SBC and the NGC 2. As a result of the Board s Final Decision and Order issued in connection with a matter entitled In the Matter of Atlantic City Electric Company - Rate Unbundling, Stranded Costs, and Restructuring Filing, BPU Docket Nos. EO97070455, EO97070456, and EO97090457, the Company implemented unbundled rates that included a Market Transition Charge (MTC), a Net Non-Utility Generation Charge (NNC), and the Societal Benefits Charge 1 The anticipated decrease is based upon actual data through December 31, 2016, and estimated data for the period January through March, 2017, and is subject to true up for actual data through March 31, 2017. 1
(SBC) as rate components. Those rates were changed as a result of a Summary Order issued by the Board on July 31, 2003, in connection with BPU Docket No. ER02080510. The Board s Order in BPU Docket No. ER02080510, dated July 8, 2004, maintained the NNC and MTC rates approved in the Summary Order. 3. The Company filed for an adjustment to the NNC and MTC on or about June 1, 2004. Changes to the NNC and the SBC were approved and implemented pursuant to the Board Order Adopting Initial Decision and Stipulation of Settlement issued in connection with Petitioner s 2003 base rate case, BPU Docket Nos. ER04060423, ER03020110, EO03020091, and EM0209033 (OAL Docket No. PUC06061-2003S) (released May 26, 2005), pursuant to which the NNC and MTC rates were adjusted and combined into the NGC, effective June 1, 2005. The NGC was further adjusted effective October 1, 2006, pursuant to the Board s Order in BPU Docket No. EM05121058 (dated July 21, 2006), approving the sale of the Company s Keystone and Conemaugh generating station assets. 4. The NGC and SBC were further reconciled and updated pursuant to a Board Order issued in connection with In the Matter of the Petition of Atlantic City Electric Company to Reconcile and Update the Level of Its Non-Utility Generation Charge and Its Societal Benefits Charge, BPU Docket No. ER07060356 (dated May 20, 2008). The NGC was reconciled again and put into effect on January 1, 2011, pursuant to the Board s Order dated December 22, 2010, in BPU Docket No. ER09050387. 5. The NGC was subject to regulatory review and reconciliation pursuant to a Board Order dated February 19, 2014, and issued jointly in connection with BPU Docket Nos. ER12020173 and ER13030186. The next revision to the NGC was put into effect on a provisional basis on June 1, 2014, pursuant to a Board Order dated May 21, 2014 in BPU Docket 2
No. ER14030209, and was subsequently made final by Board Order in the aforementioned docket dated January 21, 2015, which approved a Stipulation of Settlement that was entered into between the Company, Board Staff, and the Division of Rate Counsel (collectively, the Parties). 6. Further adjustments to the NGC and SBC were put into effect on a provisional basis on June 1, 2015 pursuant to a Board Order dated May 19, 2015 in BPU Docket No. ER15030277, and were made final by a Board Order in the aforementioned docket dated September 11, 2015 (the September 2015 Order). 7. The current NGC and SBC were put into effect on a final basis by Order of the Board in BPU Docket No. ER16020099, dated November 30, 2016 (the November 2016 Order), which Order approved a Stipulation of the Parties dated November 7, 2016. In addition to reconciling the NGC and SBC for actual data through May 31, 2016, the November 2016 Order provided certain credits to the NGC and SBC arising out of the Most Favored Nations (MFN) provision of the Joint Recommendations of the Parties approved by the Board by Order dated October 17, 2016 in BPU Docket No. EM14060581. MFN credits were applied to both the NGC and the SBC totaling approximately 16.7 million, with approximately 10 million being credited to the NGC, and 6.7 million credited to the Uncollectible component of the SBC. The NGC is currently designed to recover the above-market component of payments made under purchased power agreements (PPAs) with non-utility generators (NUGs) (i.e., the PPA payments less the revenue received from the sale of the NUG energy and capacity into the PJM market). Purpose of the Instant Petition 8. The purpose of the instant Petition is to reconcile and reset the levels of (i) the NGC; and (ii) the two components of the SBC. The SBC components to be changed include the Clean Energy Program (CEP) and the Uncollectible Accounts (UNC) charges. 3
9. The purpose of the NGC and SBC rate components is to allow the Company to recover, on an unbundled basis, certain utility costs and expenses. The NGC provides for recovery of the above-market component of payments made under a utility s NUG contracts and stranded costs associated with such commitments. The SBC is intended to assist utilities to recover costs related to (i) the CEP obligations; (ii) the UNC, and (iii) the Universal Service Fund and Lifeline social programs. Proposed Adjustment of the NGC Component 10. The Company is proposing to reset the NGC for the period June 1, 2017 through May 31, 2018 based on actual data through December 31, 2016, and projected expenses for the period January 1, 2017 through March 31, 2017. The detailed rate design for the proposed NGC rate is attached as Schedule TMH-1, page 1 of 3, of Exhibit A. 11. The detailed rate design for the NGC is provided in Schedule TMH-1, page 1 of 3 of Exhibit A. The proposed rate is designed to recover forecasted above-market NUG costs of 91.323 million for the period of April 1, 2017 through March 31, 2018. It will also return the projected over-recovered balance of 1.983 million at March 31, 2017. Schedule TMH-1, page 2 of 3, provides the detailed estimate of the NGC projected deferred balance through March 31, 2017. The projected deferred balance of 1.983 million, subject to a true-up, is currently based on actual data through December 31, 2016, and projected data for the period of January 1, 2017 through March 31, 2017. The total forecasted recovery for this period is 89.341 million, which is a decrease of approximately 32% from the prior year s total forecasted recovery of 130.846 million as approved by the November 2016 Order. 12. As noted in the Direct Testimony of Company Witness Thomas M. Hahn (Exhibit A.), the primary drivers of the decrease in the forecasted recovery of the NGC are (i) 4
the decrease of 23.446 million in projected above market costs as compared to the projected 2016 above market costs, and (ii) the swing in the NGC balance from a projected underrecovered position of 16.077 million at June 1, 2016 to a projected over-recovered position of 1.983 million at April 1, 2017. The 23.446 million decrease in projected above market costs is primarily driven by the transition from a June 1 to May 31 reconciliation period to an April 1 to March 31 reconciliation period. Since rates approved in the November 2016 Order were designed to recover costs through May 31, 2017, there are two months in the new transition period of April 2017 March 2018 where revenue will be collected from ratepayers and applied to those costs (April and May 2017). The projected April and May 2017 revenue is expected to be 18.616 million, which is being applied against those months above market NUG costs in the projected NUG costs for the April 2017 May 2018 period. (See Schedule TMH-1, page 1 of 3, line 7.) The swing in the NGC balance from a projected under-recovered position of 16.077 million at June 1, 2016 to a projected over-recovered position of 1.983 million at April 1, 2017 is primarily driven by the following. Pursuant to the November 2016 Order, rates effective January 1, 2017 were set in a manner designed to fully recover the 16.077 million to ratepayers, and thereby reduce the deferred balance to 0 at June 1, 2017. Based on the timing of revenues and expenses during that rate recovery period, it was projected that the balance at March 31, 2017 would be an approximate over-recovery of 1.371 million. Currently, with actuals through December 31, 2016 and projections through March 31, 2017, that over-recovery balance is 1.983 million, an increase of approximately 0.612 million. This increase in the over-recovery was primarily driven by actual sales greater than forecasted. 5
Adjusting the Cost Components of the Societal Benefits Charge 13. Petitioner proposes to modify specific cost components of the SBC as follows: a. The UNC rate for the period June 1, 2017 through May 31, 2018 will be reset to recover forecasted uncollectible expense for the period April 1, 2017 through March 31, 2018 totaling 17.439 million, consistent with the rate design detailed on Schedule TMH-3, page 1 of 4, of Exhibit A. It will recover an additional under-recovered balance of 17.294 million. Schedule TMH-3, page 2 of 4, provides the detailed estimate of the UNC deferred balance through March 31, 2017. The projected under-recovered deferred balance of 17.294 million, subject to a true-up, is currently based on actual data through December 31, 2016, and projected data for the period of January 1, 2017 through March 31, 2017. The total forecasted recovery during the period is 34.733 million. b. As noted in the Direct Testimony of Company Witness Hahn, the primary drivers of the increase in the forecasted recovery of the UNC component of the SBC are due primarily to (i) an accounting change for estimating ACE s Reserve for Uncollectible Accounts Receivable, and (ii) a significant increase in ACE s actual write-offs in 2016, which directly impacts the Company s bad debt expense, and, in turn, increases the reserves balance requirements. The specific details with respect to the drivers for the increase in the UNC can be found in the Direct Testimony of Julie Giese, submitted herewith in support of the UNC adjustment. (Ms. Giese s Direct Testimony is attached as Exhibit B.) 6
c. The CEP is designed to recover costs associated with the Company s New Jersey Clean Energy Program obligations. The CEP charge is being adjusted to reflect the projected deferred balances as of March 31, 2017, and forecasted costs for the period of April 1, 2017 through March 31, 2018. It is based upon actual expenditures through December 31, 2016 and projected expenses for the period January 1, 2017 through March 31, 2017, based on projected funding levels approved by the Board for fiscal year 2017 (July 2016 June 2017) in an Order dated June 29, 2016, in connection with BPU Docket No. QO16040352. January 1, 2017 to June 30, 2017 projections have been used as provided in the aforementioned Board Order. The monthly expenditures from the fiscal year 2017 projected funding levels as found in the approved Order were used to develop the monthly expenditures for the periods July 2017 to March 2018 as the Board will not have issued funding levels for time periods after June 2017 as of the date of this filing. The detailed rate design is provided in Schedule TMH-2, page 1 of 2, of Exhibit A, and includes 27.186 million of projected expenses for the period April 1, 2017 to March 31, 2018. Schedule TMH-2, page 2 of 2, of Exhibit A provides an estimate of the CEP deferred balance through March 31, 2017, and indicates a projected over-recovery based on actuals through December 31, 2016 and projections for the period January 1, 2017 to March 31, 2017 of approximately 0.232 million. The total forecasted recovery for this period is 26.953 million. 7
14. Proposed tariff sheet revisions reflecting the changes outlined in this Petition are attached as Schedules TMH-5 and TMH-6 of Exhibit A, in redline and clean versions, respectively. 15. Communications and correspondence regarding this matter should be sent to Petitioner and its counsel at the following address: Philip J. Passanante, Esquire Assistant General Counsel Atlantic City Electric Company 92DC42 500 North Wakefield Drive Post Office Box 6066 Newark, Delaware 19714-6066 with copies to the following representatives of the Company: Thomas M. Hahn Principal Rate Analyst Atlantic City Electric Company 63ML38 5100 Harding Highway Mays Landing, New Jersey 08330 and Roger E. Pedersen Manager, New Jersey Regulatory Affairs Atlantic City Electric Company 63ML38 5100 Harding Highway Mays Landing, New Jersey 08330 16. This Petition proposes an overall rate decrease for the combined effect of the proposed changes to the NGC and SBC. Taken by itself, however, the change to the SBC would result in a rate increase. Therefore, in the absence of consensus of the parties to the contrary, Petitioner intends to conduct a public hearing(s) with respect to the SBC component of the Petition. Attached hereto as Exhibit C is a proposed Public Notice to be published in local newspapers serving Petitioner s service territory. 8
WHEREFORE, the Petitioner, ATLANTIC CITY ELECTRIC COMPANY, respectfully requests that the Board of Public Utilities: A. approve the requested changes to the NGC and SBC as detailed in this filing for implementation by no later than June 1, 2017; and B. grant such other or further relief as the Board may deem just and reasonable. Respectfully submitted, on behalf of ATLANTIC CITY ELECTRIC COMPANY Dated: February 1, 2017 /jpr PHILIP J. PASSANANTE Assistant General Counsel Atlantic City Electric Company 92DC42 500 North Wakefield Drive Post Office Box 6066 Newark, Delaware 19714-6066 (302) 429-3105 - Telephone philip.passanante@pepcoholdings.com 9
IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE AND ITS SOCIETAL BENEFITS CHARGE (2017) STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES AFFIDAVIT OF VERIFICATION KEVIN M. McGOWAN, being duly sworn, upon his oath, deposes and says: 1. I am the Vice President of Regulatory Policy and Strategy of and for Atlantic City Electric Company ("ACE"), the Petitioner named in the foregoing Verified Petition. I am duly authorized to make this Affidavit ofverification on ACE's behalf. 2. I have read the contents of the foregoing Verified Petition to Reconcile and Update the Level of ACE's Non-Utility Generation Charge and Societal Benefits Charge. I verify that the statement of facts and other information contained therein are true and correct to the best of my knowledge, information, and belief. KEVIN M. McGOWAN WASHINGTON, D.C. ) SS: -~- SWORN TO AND SUBSCRIBED before me this My Commission Expires: "if/3{/41
Exhibit A Testimony and Schedules of Thomas M. Hahn
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES IN THE MATTER OF THE PETITION OF ATLANTIC CITY ELECTRIC COMPANY TO RECONCILE AND UPDATE THE LEVEL OF ITS NON-UTILITY GENERATION CHARGE AND ITS SOCIETAL BENEFITS CHARGE (2017) BPU DOCKET NO. February 1, 2017 TESTIMONY OF Thomas M. Hahn ON BEHALF OF ATLANTIC CITY ELECTRIC COMPANY
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Q. Please state your name and position. A. My name is Thomas M. Hahn. I am a Principal Rate Analyst in the Regulatory Compliance Pricing Department of Pepco Holdings, LLC (PHI), an indirect, wholly owned subsidiary of Exelon Corporation (Exelon). I am testifying on behalf of Atlantic City Electric Company (ACE or the Company). Q. What is your educational and professional background? A. I possess a Bachelor of Science degree in Business Administration with a specialization in Accounting from Rowan College of New Jersey. I am also a Certified Public Accountant licensed in the State of New Jersey. Q. Please describe and summarize your employment experience in the utility industry. A. I joined PHI in 2005 as a Senior Accountant in the Revenue Accounting Department. Since that time, I have held positions as Accounting Coordinator, Revenue Accounting Supervisor, and Senior Account Manager Supplier Relations. In September 2012, I transferred into the Regulatory Compliance Pricing Department in the position of Regulatory Affairs Lead. In June 2014, I was promoted to Senior Regulatory Affairs Coordinator. As a result of the merger of Exelon and PHI, my title has changed to my current position of Principal Rate Analyst. Q. What is the purpose of your testimony? A. The purpose of my testimony is to describe the Company's proposed changes to the levels of the (i) Non-Utility Generation Charge (NGC); and (ii) the two components of the Societal Benefits Charge (SBC). The SBC components to 1
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 be adjusted include the Clean Energy Program (CEP) and the Uncollectible Accounts Charges (UNC). If approved by the Board of Public Utilities (the Board or BPU) as proposed in my testimony and in the Petition of which this testimony is a part, these changes will result in an annual decrease in customer rates of approximately 28.857 million. Q. Please provide a summary of the NGC. A. The current NGC rate was put into effect on January 1, 2017, pursuant to an Order issued by the Board dated November 30, 2016 in BPU Docket No. ER16020099 (the November 30, 2016 Order). The NGC is designed to recover the above-market payments made pursuant to BPU approved Purchase Power Agreements (PPAs) with Non-Utility Generators (NUGs) (i.e., the PPA payments less the revenue received from the sale of the NUG energy and capacity into the PJM market). The current NGC rate was made final by the November 30, 2016 Order, which approved a Stipulation of Settlement that was entered into by and among the Company, Board Staff, and the Division of Rate Counsel (Rate Counsel) (collectively, the Parties). Q. Please provide a summary of the mechanism approved in BPU Docket No. ER16020099 for updating the NGC and SBC rates. A. The rates that were put in to effect pursuant to the November 30, 2016 Order included forecasted costs for the NGC, CEP, and UNC components for the period of June 1, 2016 through May 31, 2017. These rates also included the then projected net under-recovered balances for the NGC, CEP, and UNC components as of May 31, 2016. In addition, the rates for the NGC and UNC components 2
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 included a credit of approximately 10 million for the NGC and 6.8 million for the UNC resulting from an Order issued by the Board dated October 31, 2016 in BPU Docket No. EM14060581 (the MFN Order), which approved the joint recommendation of the Parties for settlement of the Most Favored Nation issue included in that proceeding. As part of the November 30, 2016 Order, the Board approved a change in the annual period for the Company s 2017 NGC/SBC update and reconciliation filing. The Parties agreed and the Board approved that the Company's 2017 Petition would be based on actual data through December 31, 2016 with estimated data through March 31, 2017, which date would be the end of the 2017 NGC/SBC reconciliation period. This represents a departure from earlier NGC/SBC reconciliation filings that provided estimated data through May 31 st. This was agreed upon by the Parties with the expectation that, by ending the reconciliation period two months earlier than previously, the Parties would be able to conclude a review of the actual data for the reconciliation period in time for revised, final NGC rates to become effective on June 1, 2017. Q. Please explain if the Company s approach in this filing is consistent with the terms of the Stipulation of Settlement and the revised mechanism for reconciling historical NGC/SBC costs as approved in the November 30, 2016 Order. A. Yes, the Company s approach is consistent with the requirements of the November 30, 2016 Order. ACE has continued to monitor the forecasted deferred balances and has kept the Board, Board Staff, and Rate Counsel (i) advised of the status of the balances; (ii) provided a variance analysis of actual data to that 3
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 forecasted for the NGC and SBC in its quarterly reports; and (iii) provided written updates regarding possible opportunities for mitigation of the costs of the NUG contracts. The filing of this Petition also complies with the November 30, 2016 Order that ACE s annual update/reconciliation Petition be filed with the Board at least 120 days prior to the proposed effective date in this case, June 1, 2017. Q. What specific modifications is the Company proposing to the NGC rate? A. The Company is proposing to reset the NGC for the period June 1, 2017 through May 31, 2018 based upon current forecasts of revenues and expenses, as well as sales projections for the period of April 1, 2017 through March 31, 2018. The detailed rate design for the NGC is provided in Schedule TMH-1, page 1 of 3. The proposed rate is designed to recover forecasted above-market NUG costs of 91.323 million for the period of April 1, 2017 through March 31, 2018. It will also return the projected over-recovered balance of 1.983 million at March 31, 2017. Schedule TMH-1, page 2 of 3, provides the detailed estimate of the NGC projected deferred balance through March 31, 2017. The projected overrecovered deferred balance of 1.983 million, subject to a true-up, is currently based on actual data through December 31, 2016, and projected data for the period of January 1, 2017 through March 31, 2017. The total forecasted recovery for this period is 89.341 million, which is a decrease of approximately 32% from last year s total forecasted recovery of 130.846 million. 4
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Q. Please describe the primary drivers which result in a decrease to the forecasted recovery in the NGC. A. The primary drivers of the decrease in the forecasted recovery of the NGC are (i) the decrease of 23.446 million in projected above market costs as compared to the projected 2016 above market costs, and (ii) the swing in the NGC balance from a projected under-recovered position of 16.077 million at June 1, 2016 to a projected over-recovered position of 1.983 million at April 1, 2017. The 23.446 million decrease in projected above market costs is primarily driven by the transition from a June 1 to May 31 reconciliation period to an April 1 to March 31 reconciliation period. Since rates approved in the November 30, 2016 Order were designed to recover costs through May 31, 2017, there are two months in the new transition period of April 2017 March 2018, where revenue will be collected from ratepayers and applied to those costs (April and May 2017). The projected April and May 2017 revenue is expected to be 18.616 million, which is being applied against those months above market NUG costs in the projected NUG costs for the April 2017 May 2018 period. (See Schedule TMH-1, page 1 of 3, line 7.) The swing in the NGC balance from a projected under-recovered position of 16.077 million at June 1, 2016 to a projected over-recovered position of 1.983 million at April 1, 2017 is primarily driven by the following. Pursuant to the Stipulation of the Parties -- which was approved by the November 30, 2016 Order -- rates effective January 1, 2017 were set in a manner designed to fully recover the 16.077 million to ratepayers, and thereby reduce the deferred balance to 0 at June 1, 2017. Based on the timing of revenues and expenses 5
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 during that rate recovery period, it was projected that the balance at March 31, 2017 would be an approximate over-recovery of 1.371 million. Currently, with actuals through December 31, 2016 and projections through March 31, 2017, that over-recovery balance is now at 1.983 million, an increase of approximately 0.612 million. This increase in the over-recovery was primarily driven by actual sales greater than forecasted. Q. Please detail the proposed change to the CEP component of the SBC. A. The CEP is designed to recover costs related to the Company s New Jersey Clean Energy Program obligations. The current CEP rate was put into effect on January 1, 2017, pursuant to the November 30, 2016 Order. In the instant filing, the Company is proposing to reset the CEP charge to reflect the projected deferred balance as of March 31, 2017, and forecasted costs for the period April 1, 2017 through March 31, 2018, based on the projected funding levels approved by the Board on June 29, 2016 for fiscal year 2017 (July 2016 June 2017) in BPU Docket No. QO16040352. The funding levels for January 1, 2017 to June 30, 2017, as provided in the aforementioned Board Order, have been 17 used for projections in the filing for those periods. In addition, monthly 18 19 20 21 22 23 expenditures from the fiscal year 2017 projected funding levels as found in the approved Order were used to develop the monthly expenditures for the period from July 2017 to March 2018, as the Board will not have issued funding levels for time periods after June 2017 as of the date of this filing. The detailed rate design is provided in Schedule TMH-2, page 1 of 2, and includes 27.186 million of projected expenses for the period April 1, 2017 to March 31, 2018. Note that 6
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 this amount is impacted by the transition from a June 1 to May 31 reconciliation period to an April 1 to March 31 reconciliation period. Since rates approved in the November 30, 2016 Order were designed to recover costs through May 31, 2017, there are two months in the new transition period of April 2017 March 2018 where revenue will be collected from ratepayers and applied to those costs (April and May 2017). The projected April and May 2017 revenue is expected to be 4.531 million, which is being applied against those months projected expenditures for the April 2017 May 2018 period. (See Schedule TMH-2, page 1 of 2, lines 5 and 6.) Schedule TMH-2, page 2 of 2, provides an estimate of the CEP deferred balance through March 31, 2017, and indicates a projected overrecovery based on actuals through December 31, 2016 and projections for the period January 1, 2017 to March 31, 2017 of approximately 0.232 million. The total forecasted recovery for this period is 26.953 million. Q. Please detail the proposed change to the UNC component of the SBC. A. The current UNC rate was put into effect on January 1, 2017, pursuant to the November 30, 2016 Order. The Company is proposing to reset the UNC for the period June 1, 2017 through May 31, 2018. The detailed rate design for the UNC is provided in Schedule TMH-3, page 1 of 4. The proposed rate is designed to recover forecasted uncollectible expense for the period of April 1, 2017 through March 31, 2018, totaling 17.439 million. Note that this amount is impacted by the transition from a June 1 to May 31 reconciliation period to an April 1 to March 31 reconciliation period. Since rates approved in the November 30, 2016 Order were designed to recover costs through May 31, 2017, there are 7
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 two months in the new transition period of April 2017 March 2018 where revenue will be collected from ratepayers and applied to those costs (April and May 2017). The projected April and May 2017 revenue is expected to be 1.922 million, which is being applied against those months projected expenditures for the April 2017 May 2018 period. (See Schedule TMH-3, page 4 of 4, lines 2 and 3.) It will also recover the projected under-recovered balance of 17.294 million as of March 31, 2017. Schedule TMH-3, page 2 of 4, provides the detailed estimate of the UNC deferred balance through March 31, 2017. The projected under-recovered deferred balance of 17.294 million, subject to a trueup, is currently based on actual data through December 31, 2016, and projected data for the period of January 1, 2017 through March 31, 2017. The total forecasted amount to be recovered during the period is 34.733 million. Q. Please describe the primary driver for the increase to the forecasted recovery in the UNC component of the SBC. A. The primary driver of the increase in the forecasted recovery of the UNC component of the SBC is the swing in the UNC balance from a projected overrecovered position of 0.218 million at June 1, 2016 to a projected underrecovered position of 17.294 million at April 1, 2017. Rates that took effect January 1, 2017 were set to collect forecasted UNC costs of 13.729 million for the period of June 1, 2016 May 31 2017. Based on the timing of revenues and expenses during that rate recovery period, it was projected that the balance at March 31, 2017 would be an approximate over-recovery of 0.268 million. Currently, with actuals through December 31, 2016 and projections through 8
Witness Hahn 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 March 31, 2017, that balance is now an under-recovery of 17.294 million, an increase of approximately 17.562 million. The major drivers of the higher uncollectible expenses are primarily due to (i) a new process for estimating ACE s Reserve for Uncollectible Accounts Receivable and (ii) a significant increase in ACE s actual write-offs in 2016, which has led directly to increased bad debt expense and increased reserve needs. As noted in the Direct Testimony of Company Witness Julie Giese, Exhibit B to the instant Petition, the new process for estimating ACE s Reserve for Uncollectible Accounts Receivable has been implemented across all of PHI and better reflects the level of uncollectible risk in the Company s AR balance. Q. What is the overall impact of the rate changes being proposed in this filing? A. The net impact of adjusting the NGC, CEP, and UNC rate(s), including associated changes in Sales and Use Tax, is an overall annual decrease in rates and charges of approximately 28.857 million. This amount includes the return of the NGC and CEP, and recovery of the UNC deferred balances at March 31, 2017, and the going-forward recovery of all components for the period April 1, 2017 through March 31, 2018. This is summarized on Schedule TMH-4, page 1 of 4. For an average residential customer using approximately 1,000 kwh per month, this represents a decrease of approximately 3.30 or 1.73% on a total monthly bill as shown in Schedule TMH-4, page 4 of 4. Schedule TMH-4, pages 2 of 4 through 4 of 4, provide(s) a calculation of the residential bill impact by season and annually. 9
Witness Hahn 1 2 3 4 5 Q. Are there any other attachments to your testimony? A. Yes. Schedule TMH-5 and Schedule TMH-6 provide proposed Tariff Sheet revisions in redline and clean versions, respectively. Q. Does this conclude your testimony? A. Yes, it does. 10
Schedule TMH-1
Atlantic City Electric Company Net Non-Utility Generation Charge (NGC) Rate Design Rates Effective For Period June 2017 - May 2018 Updated for Actuals through December 2016 Schedule TMH-1 Page 1 of 3 Line 1 Table 1 Forecasted NUG Costs 2 3 Apr 17 * May 17 * Jun-17 Jul-17 Aug-17 Sep-17 4 5 6 7 NGC Costs Market -Based Revenue (000) Retail Revenue Collected in Current Rates 11,621,743 2,586,132 9,584,810 11,942,016 2,926,057 9,031,464 13,375,151 4,065,772 14,049,444 5,673,596 14,763,858 5,683,918 13,663,244 4,034,878 8 Above Market NUG Costs (000) (549,199) (15,504) 9,309,379 8,375,848 9,079,940 9,628,366 9 10 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-17 to Mar-18 11 12 NGC Costs 12,710,302 12,481,522 14,120,180 14,553,349 13,717,897 12,868,777 159,867,483 13 Market -Based Revenue (000) 3,167,118 3,171,421 5,374,661 5,519,098 4,503,323 3,221,967 49,927,941 14 Retail Revenue Collected in Current Rates 18,616,274 15 Above Market NUG Costs (000) 9,543,184 9,310,101 8,745,519 9,034,250 9,214,574 9,646,810 91,323,269 16 17 18 Projected Contract Cost (000) 159,867,483 = Line 5 + Line 12 19 Forecasted Market -Based Revenue (000) 49,927,941 = Line 6 + Line 13 20 Retail Revenue Collected in Current Rates 18,616,274 = Line 7 + Line 14 21 Forecasted Above Market NUG Costs (000) 91,323,269 = Line 18 - Line 19 - Line 20 22 23 Projected Over Recovered Balance At April 1, 2017 (1,982,653) Schedule TMH-1 Page 2 Col 9 Line 15 24 25 Total Period NGC Costs 89,340,616 Line 21 + Line 23 26 27 Table 2 NGC Rate with Voltage Level Loss Adjustment 28 Voltage Level Loss Factor 29 Secondary (120-480 Volts) 1.07149 30 Primary (4,000 & 12,000 Volts) 1.04345 31 Subtransmission (23,000 & 34,500 Volts) 1.03160 32 Transmission (69,000 Volts) 1.02150 33 34 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 = Col. 3 Lines 37-44 / = Col. 4 x Sum (Lines = Col. 6 x 35 = Col. 1 x Col. 2 Col. 3 Line 45 21 + 23) = Col. 5 / Col. 2 ((1/(1-0.00242))-1) = Col. 6 + Col. 7 = Col. 8 x 1.06875 Sales @ Customer Sales @ Bulk System - Allocated Revenue BPU Assessment Final NGC Rate Final NGC Rate w/ 36 Rate Class Loss Factor (kwh) Including Losses Allocation Factor Requirements NGC Rate (/kwh) (/kwh) (/kwh) SUT(/kWh) 37 RS 1.07149 4,171,964,933 4,470,218,707 0.4748 42,417,908 0.010167 0.000025 0.010192 0.010893 38 MGS Secondary 1.07149 1,152,950,462 1,235,374,891 0.1312 11,722,473 0.010167 0.000025 0.010192 0.010893 39 MGS Primary 1.04345 24,456,016 25,518,629 0.0027 242,146 0.009901 0.000024 0.009925 0.010608 40 AGS Secondary 1.07149 1,917,585,029 2,054,673,183 0.2182 19,496,795 0.010167 0.000025 0.010192 0.010893 41 AGS Primary 1.04345 571,955,641 596,807,114 0.0634 5,663,103 0.009901 0.000024 0.009925 0.010608 42 TGS 1.02150 920,786,585 940,583,497 0.0999 8,925,197 0.009693 0.000024 0.009717 0.010385 43 SPL/CSL 1.07149 73,240,385 78,476,341 0.0083 744,662 0.010167 0.000025 0.010192 0.010893 44 DDC 1.07149 12,621,752 13,524,081 0.0014 128,330 0.010167 0.000025 0.010192 0.010893 45 Total 8,845,560,805 9,415,176,442 1.0000 89,340,616 46 47 * - April 2017 and May 2017 Above Market NUG Costs represent above market NUG costs less projected retail revenue to be collected.
Atlantic City Electric Company Summary of Non Utility Generation (NGC) Deferral Rates Effective For Period June 2017 - May 2018 Updated for Actuals through December 2016 Schedule TMH-1 Page 2 of 3 Col. 1 Line No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 6a Joint Settlement Retail NGC PJM Interchange Most Favored Nation Month Revenues Revenues Expenses Provision (MFN) Actual Apr-16 9,301,027 6,174,690 15,875,800 Actual May-16 8,415,643 6,130,919 16,839,510 Actual Jun-16 10,861,584 5,631,762 17,509,679 Actual Jul-16 13,816,242 8,089,491 18,058,173 Actual Aug-16 16,543,794 8,412,824 19,117,707 Actual Sep-16 16,157,320 5,161,783 15,158,292 Actual Oct-16 6,728,000 4,269,223 13,277,773 Actual Nov-16 8,763,407 3,644,161 12,204,089 9,984,316 Actual Dec-16 9,843,703 5,185,679 14,077,282 Projected Jan-17 11,745,871 4,695,181 14,123,481 Projected Feb-17 10,923,002 4,458,636 13,776,032 Projected Mar-17 10,406,773 3,154,394 12,806,028 Total Interest Aug2016-Mar2017 Total Over/(Under) Recovered Balance at April 1, 2017 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Col. 7 Stipulated Amortization Adjustments Expenses = - (2,703,399) (2,702,171) - - - - - - - - - - Col. 8 Deferral (3,103,482) (4,995,118) (1,016,333) 3,847,560 5,838,911 6,160,811 (2,280,550) 10,187,795 952,100 2,317,572 1,605,606 755,139 Col. 9 Pre-Tax Cumulative Deferral (21,361,154) (26,356,273) (27,372,605) (23,525,046) (17,707,582) (11,546,772) (13,827,322) (3,639,527) (2,687,427) (369,855) 1,235,751 1,990,890 (8,237) 1,982,653 Col. 10 Interest Rollover (21,447) Col. 11 After-Tax Cumulative Deferral (12,635,123) (15,589,735) (16,190,896) (13,915,064) (10,474,035) (6,829,915) (8,178,861) (2,152,780) (1,589,613) (218,769) 730,947 1,177,611 Col. 12 After-Tax Average Monthly Balance (11,717,268) (14,112,429) (15,890,316) (15,052,980) (12,194,550) (8,651,975) (7,504,388) (5,165,821) (1,871,197) (904,191) 256,089 954,279 Col. 13 Annual Interest Rate 0.42% 0.41% 0.41% 0.36% 0.33% 0.23% 0.27% 0.26% 0.32% 0.32% 0.32% 0.32% Col. 14 Interest (4,101) (4,822) (5,376) (4,516) (3,343) (1,685) (1,673) (1,119) (499) (241) 68 254 (8,237)
Atlantic City Electric Company Schedule TMH-1 Amortization of Under Recovered NGC Balance Page 3 of 3 Amortization for Period July 2012 to May 2016 Amortization Rate to be Effective For Period July 2012 - May 2016 Updated for Actuals through December 2016 Line 1 Total Under Recovered To Be Amortized 126,973,199 Settlement ER12020173 Schedule 1 Page 3 of 4 2 3 Interest Rate (Pre-Tax) 0.92% Settlement ER12020173 Schedule 1 Page 3 of 4 4 Interest Rate (After-Tax) 0.55% Settlement ER12020173 Schedule 1 Page 3 of 4 5 Amortization Period (Years) 3.9 Settlement ER12020173 Schedule 1 Page 3 of 4 6 Amortization 7 Total Annual Balance Per Year 32,418,689 Settlement ER12020173 Schedule 1 Page 3 of 4 8 9 Column Totals 126,973,199 1,355,862 10 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 11 12 Total Total Monthly Total Total 13 Period Month Starting Balance Amortization Interest Ending Balance 14 Deferral Starting Balance 126,973,199 15 1 Jul-12 126,973,199 2,701,557 57,082 124,271,641 16 2 Aug-12 124,271,641 2,701,557 55,855 121,570,084 17 3 Sep-12 121,570,084 2,701,557 54,627 118,868,527 18 4 Oct-12 118,868,527 2,701,557 53,400 116,166,969 19 5 Nov-12 116,166,969 2,701,557 52,172 113,465,412 20 6 Dec-12 113,465,412 2,701,557 50,945 110,763,854 21 7 Jan-13 110,763,854 2,701,557 49,717 108,062,297 22 8 Feb-13 108,062,297 2,701,557 48,489 105,360,739 23 9 Mar-13 105,360,739 2,701,557 47,262 102,659,182 24 10 Apr-13 102,659,182 2,701,557 46,034 99,957,625 25 11 May-13 99,957,625 2,701,557 44,807 97,256,067 26 12 Jun-13 97,256,067 2,701,557 43,579 94,554,510 27 13 Jul-13 94,554,510 2,701,557 42,352 91,852,952 28 14 Aug-13 91,852,952 2,701,557 41,124 89,151,395 29 15 Sep-13 89,151,395 2,701,557 39,896 86,449,838 30 16 Oct-13 86,449,838 2,701,557 38,669 83,748,280 31 17 Nov-13 83,748,280 2,701,557 37,441 81,046,723 32 18 Dec-13 81,046,723 2,701,557 36,214 78,345,165 33 19 Jan-14 78,345,165 2,701,557 34,986 75,643,608 34 20 Feb-14 75,643,608 2,701,557 33,758 72,942,050 35 21 Mar-14 72,942,050 2,701,557 32,531 70,240,493 36 22 Apr-14 70,240,493 2,701,557 31,303 67,538,936 37 23 May-14 67,538,936 2,701,557 30,076 64,837,378 38 24 Jun-14 64,837,378 2,701,557 28,848 62,135,821 39 25 Jul-14 62,135,821 2,701,557 27,621 59,434,263 40 26 Aug-14 59,434,263 2,701,557 26,393 56,732,706 41 27 Sep-14 56,732,706 2,701,557 25,165 54,031,148 42 28 Oct-14 54,031,148 2,701,557 23,938 51,329,591 43 29 Nov-14 51,329,591 2,701,557 22,710 48,628,034 44 30 Dec-14 48,628,034 2,701,557 21,483 45,926,476 45 31 Jan-15 45,926,476 2,701,557 20,255 43,224,919 46 32 Feb-15 43,224,919 2,701,557 19,027 40,523,361 47 33 Mar-15 40,523,361 2,701,557 17,800 37,821,804 48 34 Apr-15 37,821,804 2,701,557 16,572 35,120,246 49 35 May-15 35,120,246 2,701,557 15,345 32,418,689 50 36 Jun-15 32,418,689 2,701,557 14,117 29,717,132 51 37 Jul-15 29,717,132 2,701,557 12,890 27,015,574 52 38 Aug-15 27,015,574 2,701,557 11,662 24,314,017 53 39 Sep-15 24,314,017 2,701,557 10,434 21,612,459 54 40 Oct-15 21,612,459 2,701,557 9,207 18,910,902 55 41 Nov-15 18,910,902 2,701,557 7,979 16,209,345 56 42 Dec-15 16,209,345 2,701,557 6,752 13,507,787 57 43 Jan-16 13,507,787 2,701,557 5,524 10,806,230 58 44 Feb-16 10,806,230 2,701,557 4,297 8,104,672 59 45 Mar-16 8,104,672 2,701,557 3,069 5,403,115 60 46 Apr-16 5,403,115 2,701,557 1,841 2,701,557 61 47 May-16 2,701,557 2,701,557 614 0 62 48 Jun-16 0-0 0 Notes: 1) Monthly Amortizations = Amortization Balance Per Year / 12 Months (Adjusted for 47 month Amortization) 2) Interest = Average Monthly Balance * Interest Rate Per Month Average Monthly Balance = (Prior Month Balance + Current Month Balance) / 2 Interest Rate Per Month = Interest Rate (After Tax) / 12 months
Schedule TMH-2
Atlantic City Electric Company NJ Clean Energy Program Funding Rate Design Rates Effective For Period June 2017 - May 2018 Updated for Actuals through December 2016 Schedule TMH-2 Page 1 of 2 Line No. 1 Table 1 Projected Comprehensive Resource Analysis Program Expenditures April 2017 - March 2018 2 3 Month Projected Expenditure 4 5 Apr-17 (42,895) * *Represents Expenses for April and May 17 minus projected retail revenue to be collected in current rates. 6 May-17 32,117 * 7 Jun-17 2,515,930 Projected based on NJBPU QO16040352 Order 8 Jul-17 3,195,841 dated 6/29/2016 FY2017 Annual Expenditures 9 Aug-17 3,426,172 10 Sep-17 3,144,645 11 Oct-17 2,490,747 12 Nov-17 2,228,422 13 Dec-17 2,401,753 14 Jan-18 2,722,437 15 Feb-18 2,582,671 16 Mar-18 2,487,938 17 18 Total 27,185,776 19 20 21 Table 2 Clean Energy Program Funding Rate Design June 2017 - May 2018 22 23 Total Period Expenditures 27,185,776 =Line 18 24 Return of NJ Clean Energy Program Funding Deferral Balance (232,279) Schedule TMH-2, Page 2, Col. 7 Row 15 25 Total Clean Energy Program Recovery 26,953,497 =Line 23 + Line 24 26 Projected Delivered Sales June 2017 - May 2018 8,845,560,805 27 Clean Energy Program Funding Rate (/kwh) 0.003047 28 BPU Assessment 0.000007 29 Rate without SUT (/kwh) 0.003055 30 Rate Including SUT (/kwh) 0.003265
Atlantic City Electric Company Summary of Clean Energy Program Deferral Rates Effective For Period June 2017 - May 2018 Updated for Actuals through December 2016 Schedule TMH-2 Page 2 of 2 Col. 1 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 7 Col. 8 Col. 9 Col. 10 Col. 11 Col. 12 After-Tax Pre-Tax After-Tax Average Annual Deferral Interest Deferral Monthly Interest Line No. Month Revenues Expenses Deferral Cumulative Rollover Cumulative Balance Rate Interest 1 Actual Apr-16 2,204,763 2,164,816 39,947 137,201 81,155 69,340 0.42% 24 2 Actual May-16 2,004,892 2,275,386 (270,494) (133,293) (78,843) 1,156 0.41% 0 3 Actual Jun-16 2,607,563 2,557,317 50,246 (83,046) (49,122) (63,982) 0.41% (22) 4 Actual Jul-16 3,273,529 2,632,090 641,439 558,392 330,289 140,584 0.36% 42 5 Actual Aug-16 3,905,672 3,924,783 (19,111) 540,662 1,380 319,801 325,045 0.33% 89 6 Actual Sep-16 3,822,532 3,201,743 620,788 1,161,450 686,998 503,400 0.23% 96 7 Actual Oct-16 1,572,333 2,494,609 (922,277) 239,173 141,471 414,234 0.27% 93 8 Actual Nov-16 2,084,043 2,308,390 (224,348) 14,826 8,769 75,120 0.26% 16 9 Actual Dec-16 2,332,565 2,366,608 (34,043) (19,218) (11,367) (1,299) 0.32% (0) 10 Projected Jan-17 2,855,934 2,722,437 133,498 114,280 67,597 28,115 0.32% 7 11 Projected Feb-17 2,656,473 2,582,671 73,802 188,082 111,250 89,423 0.32% 24 12 Projected Mar-17 2,531,776 2,487,938 43,838 231,920 137,181 124,215 0.32% 33 13 14 Total Interest Aug2016-Mar2017 359 359 15 Total Over/(Under) Recovered Balance >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 232,279
Schedule TMH-3
Atlantic City Electric Company Schedule TMH-3 Uncollectible Charge Rate Design Page 1 of 4 Rates Effective For Period June 2017 - May 2018 Updated for Actuals through December 2016 Line No. 1 Projected Uncollectible Expense (April 2017 - March 2018) 17,439,396 Schedule TMH-3, Page 4 Line 15 2 3 Under Recovered Balance At April 1, 2017 17,293,942 Schedule TMH-3 Page 2, Column 7 Line 15 4 5 Total Uncollectible Recovery 34,733,338 Line 1 + Line 3 6 7 Projected Delivered Sales June 2017 - May 2018 8,845,560,805 8 Uncollectible Rate (/kwh) 0.003927 9 BPU/RPA Revenue Assessment 0.000010 10 Final Uncollectible Rate (/kwh) 0.003937 11 Final Uncollectible Rate including SUT (/kwh) 0.004207
Atlantic City Electric Company Summary of Uncollectible Account Deferral Rates Effective For Period June 2017 - May 2018 Updated for Actuals through December 2016 Schedule TMH-3 Page 2 of 4 Col. 1 Line No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Col. 2 Col. 3 Col. 4 Col. 5 Col. 6 Col. 6a Prior Period & Uncollectible Uncollectible Joint Settlement Stipulated Accounts Accounts Most Favored Nation Adjustments Month Revenues Expenses Provision (MFN) Expenses Are (-) Actual Apr-16 965,831 829,827 (233,733) Actual May-16 878,143 734,285 (233,627) Actual Jun-16 1,117,023 1,002,370 - Actual Jul-16 1,459,105 1,306,307 - Actual Aug-16 1,710,857 1,689,284 - Actual Sep-16 1,674,393 4,007,357 - Actual Oct-16 688,799 870,565 - Actual Nov-16 912,862 14,095,111 6,753,135 - Actual Dec-16 1,021,719 (965,687) - Projected Jan-17 1,211,548 8,425,475 - Projected Feb-17 1,126,932 (1,455,179) - Projected Mar-17 1,074,033 790,653 - Total Interest Aug2016-Mar2017 Total Over/(Under) Recovered Balance at April 1, 2017 >>>>>>>>>>>>>>>>>>>>>>>> Col. 6b Net Uncollectible Deferral (97,729) (89,769) 114,653 152,798 21,574 (2,332,964) (181,766) (6,429,114) 1,987,406 (7,213,927) 2,582,111 283,381 Col. 7 Pre-Tax Cumulative Deferral (6,163,790) (6,253,559) (6,138,906) (5,986,108) (5,974,142) (8,307,106) (8,488,872) (14,917,986) (12,930,580) (20,144,507) (17,562,396) (17,279,016) (14,926) (17,293,942) Col. 8 Interest Rollover (9,608) Col. 9 After-Tax Deferral Cumulative (3,645,882) (3,698,980) (3,631,163) (3,540,783) (3,533,705) (4,913,653) (5,021,168) (8,823,989) (7,648,438) (11,915,476) (10,388,157) (10,220,538) Col. 10 After-Tax Average Monthly Balance (3,616,978) (3,672,431) (3,665,071) (3,585,973) (3,537,244) (4,223,679) (4,967,410) (6,922,578) (8,236,213) (9,781,957) (11,151,817) (10,304,348) Col. 11 Annual Interest Rate 0.42% 0.41% 0.41% 0.36% 0.33% 0.23% 0.27% 0.26% 0.32% 0.32% 0.32% 0.32% Col. 12 Interest (1,266) (1,255) (1,240) (1,076) (973) (810) (1,118) (1,500) (2,607) (2,198) (2,974) (2,748) (14,926)
Atlantic City Electric Company Amortization of Under Recovered UNC Balances Amortization for Period July 2012 to May 2016 Amortization Rate to be Effective For Period July 2012 - May 2016 Updated for Actuals through December 2016 Schedule TMH-3 Page 3 of 4 Line 1 2 3 4 5 6 Total Under Recovered UNC Balance 10,977,980 Settlement ER12020173 Schedule 3 Page 3 of 4 Interest Rate (Pre-Tax) Interest Rate (After-Tax) Amortization Period (Years) 0.92% 0.55% 3.9 7 Amortization 8 UNC Annual Balance Per Year 2,802,888 9 10 Col. 1 Column Totals Col. 2 11 12 13 Period Month Total Starting Balance 14 Deferral Starting Balance 15 1 Jul-12 10,977,980 16 2 Aug-12 10,744,406 17 3 Sep-12 10,510,832 18 4 Oct-12 10,277,258 19 5 Nov-12 10,043,683 20 6 Dec-12 9,810,109 21 7 Jan-13 9,576,535 22 8 Feb-13 9,342,961 23 9 Mar-13 9,109,387 24 10 Apr-13 8,875,813 25 11 May-13 8,642,239 26 12 Jun-13 8,408,665 27 13 Jul-13 8,175,091 28 14 Aug-13 7,941,517 29 15 Sep-13 7,707,943 30 16 Oct-13 7,474,369 31 17 Nov-13 7,240,795 32 18 Dec-13 7,007,221 33 19 Jan-14 6,773,647 34 20 Feb-14 6,540,073 35 21 Mar-14 6,306,499 36 22 Apr-14 6,072,925 37 23 May-14 5,839,351 38 24 Jun-14 5,605,777 39 25 Jul-14 5,372,203 40 26 Aug-14 5,138,629 41 27 Sep-14 4,905,055 42 28 Oct-14 4,671,481 43 29 Nov-14 4,437,907 44 30 Dec-14 4,204,333 45 31 Jan-15 3,970,759 46 32 Feb-15 3,737,185 47 33 Mar-15 3,503,611 48 34 Apr-15 3,270,036 49 35 May-15 3,036,462 50 36 Jun-15 2,802,888 51 37 Jul-15 2,569,314 52 38 Aug-15 2,335,740 53 39 Sep-15 2,102,166 54 40 Oct-15 1,868,592 55 41 Nov-15 1,635,018 56 42 Dec-15 1,401,444 57 43 Jan-16 1,167,870 58 44 Feb-16 934,296 59 45 Mar-16 700,722 60 46 Apr-16 467,148 61 47 May-16 233,574 62 48 Jun-16 0 Notes: 1) Monthly Amortizations = Amortization Balance Per Year / 12 Months 2) Interest = Average Monthly Balance * Interest Rate Per Month Average Monthly Balance = (Prior Month Balance + Current Month Balance) / 2 Interest Rate Per Month = Interest Rate (After Tax) / 12 months To Settlement ER12020173 Schedule 3 Page 3 of 4 Settlement ER12020173 Schedule 3 Page 3 of 4 Settlement ER12020173 Schedule 3 Page 3 of 4 Settlement ER12020173 Schedule 3 Page 3 of 4 10,977,980 117,227 Col. 3 Col. 4 Col. 5 Total Monthly Amortization 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 233,574 - Total Interest 4,935 4,829 4,723 4,617 4,511 4,405 4,298 4,192 4,086 3,980 3,874 3,768 3,662 3,556 3,449 3,343 3,237 3,131 3,025 2,919 2,813 2,706 2,600 2,494 2,388 2,282 2,176 2,070 1,964 1,857 1,751 1,645 1,539 1,433 1,327 1,221 1,114 1,008 902 796 690 584 478 371 265 159 53 0 Total Ending Balance 10,977,980 10,744,406 10,510,832 10,277,258 10,043,683 9,810,109 9,576,535 9,342,961 9,109,387 8,875,813 8,642,239 8,408,665 8,175,091 7,941,517 7,707,943 7,474,369 7,240,795 7,007,221 6,773,647 6,540,073 6,306,499 6,072,925 5,839,351 5,605,777 5,372,203 5,138,629 4,905,055 4,671,481 4,437,907 4,204,333 3,970,759 3,737,185 3,503,611 3,270,036 3,036,462 2,802,888 2,569,314 2,335,740 2,102,166 1,868,592 1,635,018 1,401,444 1,167,870 934,296 700,722 467,148 233,574 0 0