DIRECT TESTIMONY OF. Denise Kay Parrish

IN THE MATTER OF THE APPLICATION OF ) BEFORE THE PUBLIC SERVICE COMMISSION OF WYOMING Hearing Begins: June 18, 2012 Testimony Filed: May 25, 2012 IN SUPPORT OF THE STIPULATIONS AND AGREEMENTS On Behalf of the Office of Consumer Advocate Denise Kay Parrish DIRECT TESTIMONY OF SALES AND TRANSPORTATION RATES ) CHEYENNE LIGHT, FUEL AND POWER ) COMPANY FOR A GENERAL RATE ) DOCKET NO. 30005-157-GR-1 1 INCREASE OF $2.599770 PER ANNUM (A 6.7%) (RECORD NO. 13029) INCREASE) in ITS RETAIL NATURAL GAS ) IN THE MATTER OF THE APPLICATION OF ) 5.9% OVERALL INCREASE) IN ITS RETAIL ) COMPANY FOR A GENERAL RATE ) DOCKET NO. 20003-114-ER-il increase OF $5,907,945 PER ANNUM (A ) (RECORD NO. 13028) CHEYENNE LIGHT, FUEL AND POWER ) ELECTRIC SERVICE RATES ) OCA Exhibit 149

Suite 304, Cheyenne, Wyoming 82002. classes related to various aspects of public utility regulation, including income taxes, classes on an assortment of regulatory topics including accounting standards, general regulation, having been on the staff of four state utility regulatory commissions and member of the Office of Consumer Advocate for nearly nine years. I have taken regulatory accounting, capital recovery, cost-of-service, rate design, revenue requirements, separations and allocations, and other specialized topics. I have taught the Wyoming Public Service Commission; more than eleven of those years were with the Rates and Pricing Section (now part of the technical advisory staff). I have been a two consumer advocate entities. More than twenty of these years have been spent at Accounting. I have spent thirty-five years working in the area of public utility A. In 1976, I graduated from Michigan State University with a Bachelor of Arts degree in Q. WHAT IS YOUR EDUCATIONAL AND PROFESSIONAL BACKGROUND? issues, rules and regulations, and other items. I perform special studies, as well as provide information and research to customers, the legislature, the OCA Administrator, of regulated utilities an d provide recommendations to the Commission relative to Commission (Commission) and provide advice to the Administrator regarding the involvement the OCA should have, if any, in the various cases. I analyze the requests Commission. In this position, I review and provide input into the recommendations made by the OCA. I review utility applications filed with the Wyoming Public Service various utility matters, including revenue requirements, tariff language, competitive Advocate (OCA), an independent division of the Wyoming Public Service Administrator. A. I am currently the Deputy Administrator of the Wyoming Office of Consumer Q. WHAT IS YOUR OCCUPATION? and others. I do other assignments and tasks, as needed and as assigned by the OCA A. My name is Denise Kay Parrish and my business address is 2515 Warren Avenue, Q. PLEASE STATE YOuR NAME AND BUSINESS ADDRESS.

Since 2002, I have been a member of the program faculty at the Michigan State Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-li and 30005-157-GR-11 2-- position of any individual, group, municipality, or corporation. Wyoming citizens and all classes of utility customers in this public utility matter, as required by W.S. 37-2-401. It is neither my intent nor my charge to represent the A. As a member of the Office of Consumer Advocate, I represent the interests of Q. WHO DO YOU REPRESENT IN THIS PROCEEDING? Utilities Conimission, the Arizona Corporations Commission, the Wyoming Public Federal Energy Regulatory Commission, and the Federal-State Joint Board on Universal Service. I have testified in telecommunications, water, wastewater, electric, requirements, rate design, cost-of-capital, nuclear decommissioning, accounting deferrals, adjustment mechanisms, income taxes, capital recovery, universal service A. Yes. I have presented testimony before regulatory bodies in more than 190 cases. I Q. DO YOU HAVE EXPERIENCE AS AN EXPERT WITNESS? have testified before the Michigan Public Service Commission, the Colorado Public Service Commission, the Wyoming Legislature Joint Corporations Committee, the and natural gas cases. The subjects upon which I have testified include revenue funding, and other specialized topics. member of the National Association of State Utility Consumer Advocates (NASUCA) chair of the NARUC Staff Subcommittee on International Relations. I am also a (NARUC) Staff Subcommittee on Accounting and Finance. I am the immediate past Tax and Accounting Committee. I am a former chair of the National Association of Regulatory Utility Commissioners utility regulators. numerous international and domestic seminars, conferences and meetings involving University Institute of Public Utilities. I have been an instructor and participant in income taxes and other specialized topics to regulatory professionals. ratemaking principles, affiliate transactions, regulatory accounting, fmancial reporting,

20003-114-ER-il. I have not previously filed testimony in Cheyenne Light s current Cheyenne Light, Fuel and Power s (Cheyenne Light s) electric rate case, Docket No. Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-li and 30005-157-GR-i 1 My testimony is presented in three parts. The first relates to the agreed upon rate of return, cost of debt, and capital structure. Both the natural gas and the electric Agreements that have been entered into by the formal Parties to the two rate cases. The Agreement in Cheyenne Light s electric rate case, Docket No. 20003-114-ER-li. My Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY AT TifiS STAGE OF THE OCA fully supports the Stipulation and Agreement in Cheyenne Light s natural gas rate case, Docket No. 30005-l57-GR-1 1 and the separate but similar Stipulation and vantage point of the OCA. testimony is presented to explain why the agreements are in the public interest from the A. The purpose of my testimony is to provide the OCA s support for the Stipulations and TWO RATE CASE PROCEEDINGS? A. Ms. Wichmann and I both participated in the on-site review of Cheyenne Light s GAS RATE CASE. overview of the revenue requirement and proposed rate calculation, walking through natural gas rate application in January, 2012, in Rapid City. This was a thorough each of the schedules provided with the application. Additionally, upon our return from the on-site audit of the rate case, Ms. Wichmann and I continued to coordinate adjustments in the natural gas rate case. Q. PLEASE DESCRIBE YOUR INVOLVEMENT IN THE PENDING NATURAL our review and analysis of the Cheyenne Light electric and natural gas rate cases. We had several adjustments that needed to be coordinated between the two companion cases and I continued to provide advice to Ms. Wichmann, as requested, regarding the development of the OCA s recommendations in that proceeding. natural gas rate case, Docket No. 30005-57-GR-1 1, although I was a participant in the A. On April 9, 2012, my prefiled direct testimony was submitted to the Commission in Q. HAVE YOU PREVIOUSLY FILED TESTIMONY IN THESE DOCKETS?

been discussed. Third, I present the OCA s support for the agreement in the electric gas rate case on all elements other than the rate of return, which will have afready have Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-i1 structures comprised of 54% common stock and 46% debt, while Dr. Rosenberg As to the capital structure, both Cheyenne Light and the OCA recommended capital When it comes to the return related issues, there are three issues to be addressed: (1) the capital structure (or proportionality of debt and equity in the total financing of the utility), (2) the cost of debt, and (3) the appropriate return on equity to include in the computations used to develop rates. electric and natural gas rate cases, on the issues related to the appropriate return on rate base that should be used for establishing retail electric and retail natural gas rates. He offered one set of recommendations on the capital structure, cost of debt, and rate of return on equity that should be utilized in both Cheyenne Light rate cases currently before the Commission. Similarly, Cheyenne Light recommends one return and one structure, interest rate, and return provisions are the same in the agreement for the electric operations as those found in the agreement for the natural gas operations. capital structure for both its electric and natural gas operations. Thus, the capital A. On April 9, 2012, Mr. Bryce Freeman filed direct testimony, applicable to both the NATURAL GAS AND ELECTRIC RATE CASES. RESOLVED BY THE STIPULATIONS AND AGREEMENTS IN THE Q. PLEASE DISCUSS THE RATE OF RETURN ON RATE BASE ISSUES TO BE CAPITAL STRUCTURE, COST OF DEBT, AND RETURN ON EQUITY RELATED TO BOTH DOCKET NOS. 30005-157-GR-l1 AND 20003-114-ER-li rate case, again noting that the rate of return agreement will already have been discussed. agreements include the same rate of return elements so this testimony is common to both rate cases. Second, I present the OCA s support for the agreement in the natural

and as described in Mr. Iverson s direct testimony at page 8, the percentage of debt of debt. Mr. Freeman did not take exception to the Company s proposed capital structure Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-l1 and short-run expectations of the United States and global economy, the risks faced by equity that should be used in the calculations. Dr. Avera, Dr. Rosenberg, and Mr. Each analyst is impacted by a wide variety of considerations including the long-run The true controversial item when determining a return on rate base is the return on inputs and judgments used cause the results to cross a wide spectrum. Thus, there is no single right answer when trying to measure investor expectations of a return on equity. equity. The individual nuances of each of the witnesses analyses and the different Freeman all performed multiple analyses in order to estimate an appropriate return on of debt of 6.09% is agreed to by all of the Parties to the Stipulations and Agreements. that it is important to base rates on the most current and accurate costs possible to match costs with rates during the rate effective period. Dr. Rosenberg does not use of the updated weighted average cost of 6.09%, stating on page 35 of his testimony debt may be even lower than the embedded cost offered by the Company. In the cost of debt of 6.10% other than to say, at page 46 of his testimony, that the cost of in this weighted average cost to 6.09%. In his testimony, Mr. Freeman supported the indicated that its weighted average embedded cost of debt was 6.10%, during the specifically offer an alternative to the originally stated weighted average embedded The cost of debt is the next matter to be determined. While Cheyenne Light originally course of the proceedings, the Company provided information that indicated a decline absence of alternative recommendations, the use of the updated weighted average cost Refining, a party to both the electric and natural gas cases did not object. capital structure, it is normal regulatory practice to use the Company s actual capital structure. That is what has been done in the Stipulations and Agreements, and Frontier for the first 8 months of 2011. Absent an exceptional reason to use a hypothetical Cheyenne Light has been less than 46% for each of the years of 2008, 2009, 2010, and natural gas stipulations agree to the use of a capital structure with 54% equity and 46% recommended a capital structure with 50% debt and 50% equity. Both the electric and

compare the results to try to identif commonality in the results. Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-1l While there is little commonality among the results of the analyses from the three return witnesses, one can say that the agreed-upon return on equity of 9.6% found in representing different interests in the case, there is an agreement that 9.6% return on agreed-upon 9.6% return on equity results in rates that are just and reasonable. is appropriate based on this evidence that the Commission also find that the use of the the Stipulations and Agreements does fall with at least one of the ranges of each of the analysts. More importantly, with each Party coming from a different perspective and equity is a fair and reasonable return on equity for the purposes of these proceedings. It 10.5 11.5% 6.18-9.85% 7.5 9.7% Capital Asset Premium 10.38% 11.49% Comparable or Earnings Current Projected Pricing Model 11.7% 12.2% 8.17% 10.45% 9.31% 9.0% 8.75% Qaci 2flti 4.54 7.82 6.18 9.1% I Current Projected MiL ML Median Current Projected Bond I Bond Discounted Cash Flow Expected 10.7% Reasonable Range Recommendation 9.25% 8.9% 10.3% 12.5% 6.79% 18.13% 9.85% 10.9% (Direct) 10.5% (Rebul) 9.1 11.5-5.99 8.97-7.81 8.4 9.4% Utility Non-Utility Mini Max. Median Cheyenne Light OCA Industrials Risk Bond 9.0-9.7% return on equity analyses for Cheyenne Light. The following table tries to capture the range of returns resulting from the different more. Given the subjective factors that enter into the analysis, it is often best to simply utilities in today s market, future capital requirements for new construction needs and

REQUIREMENT PORTION OF THE NATURAL GAS RATE CASE STIPULATION AND AGREEMENT. Q. PLEASE PROVIDE A BRIEF BACKGROUND AS TO THE REVENUE Stipulation Testimony of Denise Parrish Docket Nos. 20003414-ER-li and 30005-157-GR-1l Cheyenne Light also proposed two additional adjustments in its rebuttal testimony and the OCA does not object to either of these adjustments. The first is to update the balances of the capital additions that were proposed as a pro forma adjustment to the test year plant-in-service balances. These updated balances were based on more recent second adjustment removes approximately $8,500 of dues and donations that were information than was available at the time the Company s application was filed and better reflect the actual construction activities occurring in the service territory. The Interest Accrued on Customer Deposits (Accepted in Rebuttal) Accumulated Depreciation Correction (Accepted in Rebuttal) Accumulated Deferred Income Tax on Plant of Corporate Service Companies Rate Case Costs (Disputed in Rebuttal) Averaging of Materials and Supplies, Gas Inventories, and Prepaid Assets Averaging of Customer Deposits and Customer Advances (Disputed in Change in Acquisition Adjustment Balance due to IRS Audit (Disputed in Exclude Acquisition Adjustment Amortization Expense from Revenue are summarized on the list below. adjustments to the revenue requirement calculation. In response, through its rebuttal testimony, Cheyenne Light accepted the majority of the proposed adjustments. These (Accepted in Rebuttal) (Accepted in Rebuttal) Rebuttal) Requirement (Disputed in Rebuttal) Rebuttal) case application, she took issue with a number of items and proposed several A. In Ms. Wichmann s direct testimony, in response to Cheyenne Light s natural gas rate NATURAL GAS RATE CASE, DOCKET NO. 30005-157-GR-11

inadvertently left in the expenses used to compute the revenue requirement. This is a correction that follows good regulatory principles of not requiring customers to pay costs that are unnecessary to the provision of utility service. In summary, the starting point for the settlement negotiations had three revenue requirement items at issue: (1) the averaging of the balances of customer deposits and customer advances when determining the balance to be included in rate base, rather than using a balance as of a point in time; (2) the level and regulatory treatment of the acquisition premium related to Black Hills Corporations purchase of Cheyenne Light; and (3) the appropriate level of rate case expense to include in the determination of retail customers natural gas rates. Q. HOW ARE THE CUSTOMER DEPOSITS AND CUSTOMER ADVANCES TREATED IN THE COMPUTATIONS AGREED UPON IN THE NATURAL GAS STIPULATION AND AGREEMENT? A. The agreement eliminates the 12-month average originally utilized by the OCA in its pre-filed direct testimony. Upon further reflection, I agree with Cheyenne Light that Customer Advances tend to have some relationship to plant-in-service additions. Since Customer Advances are meant to offset a portion of the cost of new plant, the full amount of the Customer Advances should be included in rate base as an offset to the growing plant balance particularly in rate proceedings based on a year-end rate base rather than an average rate base. The OCA also agreed in the Stipulation and Agreement to use a point-in-time balance for Customer Deposits rather than a 12-month average as originally proposed. This was done in the spirit of compromise, while also noting that there is very little difference between the 12-month average balance suggested by Ms. Wichman in her testimony and the August, 2011, end of test year balance. The difference is approximately $5,300. When this difference is run through the revenue requirement calculation, it has a very small impact on the overall amount of recommended revenue increase. Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-il and 30005-157-GR-1 1

STIPULATION AND AGREEMENT? 9-- Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-li and 30005-157-GR-li Q. HOW WAS THE LAST OF THE REVENUE REQUIREMENT ISSUES rate case expenses. In its application, Cheyenne Light sought to include in its natural A. The last of the natural gas revenue requirement issues relates to the disagreement over RESOLVED? The second disagreement related to whether Cheyenne Light should be allowed to include in its retail rates the acquisition adjustment annual amortization expense. The maintains the balance that the OCA originally offered, that is, that it is appropriate to include the unamortized balance of the acquisition adjustment in rate base but the related amortization expense should be excluded from the calculation of retail rates. development of fair, just, and reasonable rates. This continues to balance the interest of shareholders and ratepayers in the OCA s position, that both shareholders and ratepayers should share in the cost related to the purchase of Cheyenne Light, is reflected in the agreement. The agreement to the Stipulation and Agreement. as a result of an Internal Revenue Service (IRS) audit should be recognized in the regarding the level of acquisition adjustment and whether an adjustment that was made ratemaking process. The Company s rebuttal further explained and clarified to the information about these accounting entries is provided on Joint Exhibit G506 attached Cheyenne Light regarding the acquisition adjustment. First, there was a dispute OCA the accounting treatment related to the adjustment related to the IRS audit, and balance to reflect the results of the IRS audit. The OCA now better understands that thus, the OCA agrees that it is appropriate to have updated the acquisition adjustment the update to the balance of the acquisition adjustment is offset by other accounting entries and the result is revenue neutral to the ratemaking process. Additional A. As noted above, there were two different disagreements between the OCA and ACQUISITION ADJUSTMENT, HOW ARE THEY RESOLVED IN THE Q. IN REGARD TO THE INITIAL DISPUTES RELATED TO THE

gas rates recovery of $175,000 in Outside Services costs related to the preparation, processing, and advocacy of its rate application. This $175,000 was sought to be recovered over a two year period and thus, the rate calculation included an annual rate case expense of $87,500. In her testimony, Ms. Wichmann objected to this request, and instead recommended an annual amount of rate case expense of $21,071 based on a total amount of $63,214 spread over three years. Furthermore, the Company requested to earn a return on the unamortized rate case expense by including such balance in rate base. In its rebuttal testimony, Cheyenne Light revised its requested annual outside service expense related to the natural gas rate case to $74,750 (instead of the original $87,500). This revised annual expense was based on a reduced overall cost estimate for both the electric and natural gas rate cases ($250,00 rather than $350,000), a different allocation of the total cost between the electric and natural gas operations, and the continued use of a two year amortization period. The Stipulation and Agreement is a compromise of the positions of the OCA and Cheyenne Light. It finds that the total rate case costs for the electric and natural gas operations should be $200,000 amortized over a two year period. The OCA is comfortable with this compromise given the amount of controversy in this case, the amount of discovery that has been propounded, and our understanding that Cheyenne Light is anticipating filing another set of general rate cases within the next 18 months. The agreement also accepts an allocation of the rate case costs that places 70.1% of the cost with the electric operations and 29.9% of the cost with the natural gas operations. This is reasonable given that the electric rate case has more active interveners, has generated more controversy, and has more complicated issues to be addressed. However, given the larger total cost and the shorter amortization time period, the agreement excludes the unamortized rate case costs from rate base, thus placing the responsibility for the carrying charge associated with the up-front expenditure with the shareholders rather than the ratepayers. -. 10 Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-il and 30005-157-GR-l1

A. In its application, Cheyenne Light sought an increase in its natural gas base revenues of PARTIES IN THE PROCEEDING? Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-il and 30005-157-GR-11 11 study provided in this proceeding were suspect and should not be relied upon as an end the interruptible service class did not match what would have been expected and thus and was provided in this case as a directional guidepost but that more work should be done to make it more reliable in future cases. Thus, the Stipulation and Agreement calls for further discussions to be held on developing an appropriate class cost of service with the intent that better class cost of service information will be available in the next case. Both the OCA and Cheyenne Light agreed that the results of the class cost of service point for the ultimate setting of rates. In particular, the class cost of service results for raised concerns about an end point for setting rates. Furthermore, the Company freely admitted in audit discussions that the class cost of service required additional review reliability of the class cost of service study, (2) the pace at which rates should move toward cost of service, and (3) the amount of the recommended increase that should be collected through the commodity charge versus the service and facilities charge. service and rate design issues that needed to be addressed: (1) the appropriateness and A. Going into the settlement negotiations, it was clear that there were three class cost of MATTERS ADDRESSED IN THE STIPULATION AND AGREEMENT. Q. PLEASE DESCRIBE THE CLASS COST OF SERVICE AND RATE DESIGN The Stipulation and Agreement recommends an increase in natural gas revenues of in this proceeding. about $2.6 million. This request was reduced in the rebuttal to a request of about $2.0 million. The OCA initially recommended an increase of about $1.7 million per annum. $1,639,521. This is slightly less than the OCA s initial recommendation in this proceeding. The outcome is fair to both customers and shareholders and recognizes that each has some responsibility for some of the costs that were the subjects of dispute RECOMMENDED COMPARE TO THE ORIGINAL POSITIONS OF THE Q. HOW DOES THE NATURAL GAS BASE REVENUE INCREASE NOW BEING

parties are comfortable. There was general agreement that gradualism should play a Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-lI and 30005-157-GR-11 12 toward cost of service. Because of doubts about the class cost of service results and how things might change with better data, especially for the interruptible class, the collecting the entire recommended increase through the commodity rate element. Once proposed to increase the service and facilities charges by a small amount. The Stipulation and Agreement takes a middle ground by making some movement to recognize class costs in the rate design but at a more modest level than proposed by OCA originally proposed leaving the service and facilities charges at current levels and the Company was convinced to begin taking a serious look at the use of the class cost Cheyenne Light. No changes were made to the fixed portion of the rate for the Interruptible rate class, as small changes to the rates for this class can have significant impacts on the other classes rates and because the class cost of service results for the Interruptible class were the most suspect. The decision was made to wait for better of service in rate design, abandoning its initial concept of across-the-board increases, it The third item to be addressed ties into the discussion about gradualism and moving of the rate increase to any particular class to 15% or less. Cheyenne Light recognized that a substantial portion of the non-commodity (non-gas) concept of gradualism into the case. Ultimately, the Stipulation and Agreement continues to include interciass subsidies (or, if you will, shifts of revenue in the service and facilities charges, given the questionable nature of the data, whereas of service that could be made in this case. The OCA was reluctant to make any changes disagreement was over whether there was any directional movement toward class cost responsibilities among the classes). Some directional movement toward the expected role in the establishment of rates. There was also general agreement that it is important to consider disproportionate customer impacts caused by the selected rate design. The costs are fixed in nature. It saw that making a small step now would incorporate the cost for each class was made in designing the rates while attempting to limit the impact The next item to be addressed was how quickly rates should move toward the class cost of service results, assuming that results are available with which the interested

beyond data in the next case before making any significant changes to the rates for the Interruptible class. The progression of the development of the Service and Facilities charges are shown in the following table: Residential Commercial Interruptible Currently Approved$15.00 $20.00 $190.00 Application $17.83 $23.77 $225.83 OCA Recommendation $15.00 $20.00 $190.00 $16.50 $24.50 $190.00 Stipulation and Agreement $15.85 $22.00 $190.00 Rebuttal One benefit of the Stipulation and Agreement is in this proposed rate design. It moves the Company away from straight across-the-board increases (as originally proposed) but made only very modest changes to the rate element that often raises the ire of customers if increased too quickly. And, there is a vision of having a better method for developing rates in the next case. All of these things are in the public interest and provide support for approval of the Stipulation and Agreement in this proceeding. Q. PLEASE DESCRIBE THE CHANGE TO THE CONSTRUCTION DEPOSIT REFUND PERIOD THAT IS FOUND ON JOINT EXHIBIT G502.1 ATTACHED TO THE STIPULATION AND AGREEMENT. A. This is a simple change to the rule that is supported by the OCA as it has the potential to provide additional benefits to new customers. In simple terms, this provision relates to line extensions for new customers. One new customer may pay for a line extension with the expectation that additional new customers will come on the system that will also utilize the facilities paid for by the initial customer. If this happens, the initial customer may receive a refund of some of the initial funds put forth to pay for the initial facilities. However, the current rule requires the new customers to be added to those initially customer funded facilities within five years initial customer is no longer able to receive refunds. which time the - 13 - Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-11

slow-down and the current economic conditions. New customers have the potential benefit without any additional out-of-pocket funds being required of existing Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-i 1 14 Retirements related to Wygen II Replacement Projects (Accepted in Rebuttal) Include Accumulated Deferred Income Taxes for Corporate Service Companies Inclusion of Deferred Plant Maintenance Liability in Rate Base (Accepted in Revenue Adjustment Based on Estimated Changes to Load (Accepted in Update of Purchased Power Costs (Accepted in Rebuttal) adjustments to the Company s proposed revenue requirement calculation, with many of (Accepted in Rebuttal) Correction to Test Year Plant Accumulated Depreciation (Accepted in the adjustments agreed to by Cheyenne Light in its rebuttal testimony. The issues and their status following the filing of rebuttal are sunirnarized below: Rebuttal) (Accepted in Rebuttal but Error in OCA Calculation) Rebuttal) Rebuttal; Company made further updates to the Load Forecast) Update of Capital Project Costs (Accepted in Rebuttal) Use of Average Balance for Prepayments and Materials and Supplies A. As occurred in the natural gas proceeding, the OCA recommended a number of FOLLOWING THE FILING OF CHEYENNE LIGHT S REBUTTAL THE REVENUE REQUIREMENT FOR THE ELECTRIC RATE CASE TESTIMONY. Q. PLEASE DISCUSS THE ISSUES THAT WERE IN DISPUTE RELATIVE TO ELECTRIC RATE CASE, DOCKET NO. 20003-114-ER-il customers. Again, the OCA sees this change as being in the public interest and supports it as part of the Stipulation and Agreement. The proposed rule changes this potential refund period to eight years from the current five year period. This is a rule change that makes sense given the current construction

Coal Tons Burned (Accepted in Rebuttal) Different Estimate of Generation Dispatch and Scheduling Costs (Disputed in Rebuttal) Rate Case Costs (Disputed in Rebuttal) Change in Acquisition Adjustment Balance due to IRS Audit (Disputed in Rebuttal) Exclude Acquisition Adjustment Amortization Expense from Revenue Requirement (Disputed in Rebuttal) Correction of Labor Costs (Accepted in Rebuttal) Remove Dues and Donations Inadvertently Left in Revenue Requirement (Accept in Rebuttal) Correction of Regulatory Treatment of Customer Deposits and Related Interest (Accept in Rebuttal) In addition to the OCA proposed adjustments, Dr. Rosenberg proposed several adjustments to the revenue requirement over and above his recommended changes to the return on rate base. Some of these were also acceptable to the Company as discussed in the rebuttal testimony while others were not. The following summarizes Dr. Rosenberg s adjustments in a similar manner as the OCA s adjustments shown above: Modification of the sales price associated with the reduced sales from Wygen I due to additional customer growth (Disputed in Rebuttal) Rejection of the adjustment to increase the tons of coal to be burned (Disputed in Rebuttal) Increase in Sales for Resale revenue related to the Wygen I energy being sold back to Black Hills (Accepted in Rebuttal) Modification of coal costs (Disputed in Rebuttal) Modification of Cheyenne Light s contract with Black Hills to sell back the power at market prices rather than cost based prices (Disputed in Rebuttal) Additional sales from existing large customers not reflected in the test period (Partially Accepted in Rebuttal) 15 Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-li and 30005-157-GR-11

Adjustment to expected load growth from new customers (Disputed in Rebuttal) Elimination of the Acquisition Adjustment from inclusion in rate base (Disputed in Rebuttal) Thus, the revenue requirement items still in dispute following the filing of rebuttal testimony were: (1) the level of load growth, (2) generation dispatch and scheduling costs, (3) coal prices, (4) sales for resale prices and revenues, (5) rate case costs, and (6) treatment of the acquisition adjustment. Compared to the initial list of adjustments made by the interveners, the adjustments still in dispute were limited. This list became a good starting point for negotiating a resolution of the level of revenue increase Cheyenne Light should receive in response to its request to increase retail electric rates. Q. HOW DOES THE ELECTRIC STIPULATION AND AGREEMENT RESOLVE THE DISPUTED LEVELS OF LOAD GROWTH? A. The Parties have agreed to accept the updated level of load growth that was provided by Cheyenne Light in its rebuttal testimony. This updated load growth includes some increased growth for existing customers (both small and large customers) and anticipated growth from new customers. The rebuttal testimony updates the figures that were in Cheyenne Light s rate application. The revenues, expenses, and billing determinants in the case incorporate the latest estimates on load growth, and correct some revenue and billing determinant errors that were discovered during the course of the proceeding. Some actual data is even available for some of the load growth that was only estimated in earlier documents. Having better, more up -to-date data is generally seen as positive in regulatory circles and should be viewed as a positive development in this proceeding. Q. HOW IS THE DISAGREEMENT OVER THE APPROPRIATE LEVEL OF GENERATION DISPATCHING AN]) SCHEDULING COSTS PROPOSED TO BE RESOLVED? 16 Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-il and 30005-157-GR-11

A. These costs will be included in the rate computations at the test year levels. The OCA had originally proposed to reduce these expenses below the level contained in the test year but was convinced that allowing the last known actual set of costs associated with dispatching and scheduling was reasonable for the purpose of establishing rates in this case. The use of the actual test year expense levels rather than the OCA originally recommended adjusted levels increases operating expenses by approximately $12,000, an amount that is quite modest given the overall electric revenue requirement. Q. WHAT COAL COSTS ARE PROPOSED TO BE USED AS A RESULT OF THE ELECTRIC SETTLEMENT AND AGREEMENT? A. The only adjustment to coal costs contained in the settlement is related to the adjustment to the number of tons found in my prefiled direct testimony. The per unit cost of coal (that is, the price per ton) will continue to be calculated using the same cost basis as has been used in previous cases and as detailed in Statement R of the exhibits attached to Cheyenne Light s electric rate case application. An advantage of the use of this method is that it is cost-based and is not driven by unanticipated supply and demand factors, as spot market prices for goods and services often are. It is also a method that has been adopted and used in previous cases and thus is known and the supporting information is generally available. Q. HOW ARE ISSUES RELATED TO SALES FOR RESALE AND PURCHASED POWER COSTS ADDRESSED IN THE STIPULATION AND AGREEMENT? A. The treatment of these items is also consistent with their treatment in the rebuttal testimony. The rebuttal contains a couple of adjustments in this expense area that were not in the original application and these adjustments are described on page 7 of Mr. Kilpatrick s rebuttal testimony. The first of the rebuttal adjustments agrees with the use of some updated power costs that were recommended by me in my prefiled direct testimony. The second is in response to Dr. Rosenberg s suggestion that as power costs increased, the buyback rate used by Black Hills to purchase excess power from Cheyenne Light also increases. This resulted in additional Sales for Resale revenues that assist in reducing the overall revenue increase in electric base rates. - 17 Stipulation Testimony of Denise Parrish Docket Nos. 20003-1 14-ER-il and 30005-157-GR-1 1

the suggestion that the market price for purchased power necessary to serve a portion 18 - Stipulation Testimony of Denise Parrish Docket Nos. 20003-114.ER-11 and 30005-157-GR.11 estimate to $250,000 but suggested that there be a different split applied to the costs rather than simply sharing the cost 50/50 between the gas and electric operations. In its rebuttal testimony, the Company revised its total gas and electric rate case Q. WHAT RATE CASE COSTS ARE PROPOSEI) TO BE INCLUDED IN THE rate case resolution within the natural gas rate case proceeding. Cheyenne Li ght originally estimated the total outside service costs related to the rate case to be Wichmann in the natural gas case, the total is approximately $162,000.) I recommended that the $98,514 be amortized over a two year period, since there is a operations within the next 18 months. $350,000 for both the electric and gas cases, with 50% of that cost allocated to the electric operations. In the OCA response, I did not look at a total cost that was allocated, but instead offered what I thought was a reasonable set of costs associated with only the electric rate case. The total electric costs I deemed reasonable were $98,514. (I note that when this amount is added to the amount recommended by Ms. strong likelihood that Cheyenne Light will file another rate case for its electric A. The resolution of the rate case expense controversy is similar to the earlier described CALCULATION OF RETAIL ELECTRIC RATES PURSUANT TO THE PARTIES AGREEMENT? on to ratepayers. case. However, if the Stipulation and Agreement is adopted, the Company will have initial cost estimates continue to be used for the purpose of computing rates in this because the proposed Power Cost Adjustment tariff includes a sharing mechanism wherein a portion of power cost savings are retained by the Company and not passed an incentive to keep purchased power expenses as low as reasonably possible. This is of the growing load has been estimated at too high a level. Therefore, the Company s in the Stipulation and Agreement. Specifically, no adjustment was made in response to Another recommendation offered by Dr. Rosenberg was neither adopted nor included

between the gas and electric rate determinations, but the total amount of costs to be case. For purposes of the settlements, this Blended Allocator is used to share the costs 19 -, Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-11 The OCA s original position was to include the unamortized balance of the Acquisition same position taken by the OCA in the previous Cheyenne Light rate case. There is one notable difference, however, between the gas and electric cases relative to the as described above in the description of the gas agreement. This position is also the Adjustment in rate base but exclude the annual expense associated with the amortization of the Acquisition Adjustment. The reasons for this position are the same stipulation, there is a document provided with the electric stipulation that shows the Adjustment balance revenue neutral. other accounting entries that make the Company s proposal to update the Acquisition at the time that OCA put its initial recommendations together. As in the gas A. Yes. In both cases, the OCA took issue with the level of the acquisition adjustment, NATURAL GAS RATE CASE? ACQUISITION ADJUSTMENT ALSO SIMILAR TO THE RESOLUTION OF THE SAME ISSUES THAT YOU DESCRIBED EARLIER RELATIVE TO THE Q. IS THE RESOLUTION OF THE CONTROVERSY THAT SURROUNDED THE it turns out, this change in the balance was due to an IRS audit that was misunderstood since it unexpectedly changed between the last rate case and the current rate cases. As the Company agreed to a reduced overall amount of rate case related, outside services preparation of witnesses, hearing time, and other activities. It is my understanding that allocated is $200,000. This is simply an estimate of the costs that will be necessary to complete this proceeding, and includes costs related discovery, settlement completion, expenditures, since settling a case generally involves fewer overall costs than does litigating a highly contested matter before the Commission. However, some of the discovery process. expense has already been incurred through the preparation of the application and the allocation factor which results in about 70% of the costs being attributed to the electric Instead, the costs would be split based on the Blended Revenue, Employees, and Plant

Acquisition Adjustment. In the electric case, Frontier Refining and Dyno Nobel weighed in on the issue of allowing the unamortized balance in rate base, with Dr. Rosenberg objecting to the inclusion of this item in rate base as well as objecting to the inclusion of the amortization expense as an operating expense that is used for computing rates. Of course, the Company also objected to the OCA s position, arguing that it should be allowed both a return on the unamortized balance and recovery of the amortization expense through rates. However, in the end, for purposes of the agreement, the Parties agreed to the OCA position that allows the unamortized Acquisition Adjustment in rates but excludes the amortization expense from the ratemaking calculation. As explained above, this position shares some of the cost obligation associated with the Acquisition Adjustment with the shareholders and does not place the entire burden on ratepayers. Yet, from the OCA s vantage point, it also recognizes that the Cheyenne Light customers are thus far better off with the Black Hills management than they were as part of the Xcel corporate family. Q. WHAT FORM DOES THE POWER COST ADJUSTMENT MECHANISM TAKE IF THE COMMISSION WERE TO APPROVE THE ELECTRIC STIPULATION AND AGREEMENT? A. Cheyenne Light s current Power Cost Adjustment rate schedule incorporates a $1 million deadband with the remainder of the change in specified costs shared 95% with customers and 5% with shareholders. In other words, a base power cost rate is established based on test year power costs that include the fuel costs associated with Company owned generating facilities and the costs of purchasing power from other generators, with cost offsets to reflect the revenues garnered from Sales for Resale. Each year, the difference bepveen the base costs and the actual costs are measured. Under the concept of the deadband, the first $1 million of either savings or additional costs are the not passed on to customers. After that first $1 million of deadband, the savings or additional costs are shared between customers and shareholders on a 95% / 5% basis. Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-1 1 20 -

arrangement such that there would be graduated sharing bands: the greater that actual Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-1l 21 - deadband but instead of a graduated series of cost sharing levels, it simply requires that shareholders basis. This is a means of trying to incent the Company to keep power power cost increase, no matter how large or small. The OCA sees this as being in the The Power Cost Adjustment provisions of the Stipulation take a different approach from either the current method or any of the original proposals. It eliminates the any changes from the base power cost be shared on an 85% customers / 15% costs as low as reasonably possible, by allowing a portion of the savings to be kept by shareholders. It also requires shareholders to be responsible for a portion of any net public interest as shareholders will bear some burden if power costs increase, and might actually be incented to reduce costs. But, if costs decrease, the majority of the savings will still go to customers. power costs are increasing and that a change in the sharing band and elimination of the deadband would shift more costs to customers. We were particularly concerned about arrangements between Black Hills and Cheyenne Light that the OCA fears may raise this since there are also changes occurring to the power buying and selling the net power costs to Cheyenne Light. Our bottom line recommendation was that there were too many unanswered questions such that it was the wrong time to make significant changes to the Power Cost Adjustment without an additional look at the The OCA s response was different than Dr. Rosenberg s. We were concerned that issues. to the shareholders. In his testimony, Dr. Rosenberg recommended either keeping the costs are from the base, the larger the proportion of savings or expense that is assigned sharing mechanism or the deadband with graduated sharing. He also recommended that if the deadband were eliminated, the return on equity should be reduced by 0.25%. eliminate the deadband. Furthermore, the Company proposed to modify the sharing The Company has proposed to modify this method of deadbands and sharing arid

Another provision that was negotiated that we look upon favorably is that 100% of any revenues received from the sale of renewable energy credits will be passed on to customers. As we have argued in other cases, the costs of the facilities that generate those renewable energy credits are being paid for by customers so they should also get the benefits. Q. HOW DOES THE INCREASE IN ELECTRIC OPERATING REVENUES COMPARE TO CHEYENNE LIGHT S ORIGINAL REQUEST? A. With its initial application, Cheyenne Light requested an increase in electric revenues of about $5.9 million per annum. This amount was revised downward in the rebuttal testimony to about $4.6 million. Dr. Rosenberg submitted testimony wherein he offered support for a reduction in electric rates of $2.9 million. The OCA s initial recommendation was to increase electric rates by about $1.65 million. The Stipulation and Agreement supports an increase in electric revenues of approximately $2.7 million, or less than 50% of Cheyenne Light s originally requested electric rate increase. The recommended level of increase should be approved as just and reasonable, as it allows the Company to earn a fair return on its investment in light of the current economic conditions and risks, it includes a fair and reasonable level of operating expenses necessary to serve loads that are anticipated to be in place in the near term future, and includes investment currently seen as necessary to provide safe, adequate and reliable service. Furthermore, the Power Cost Adjustment provides some incentive for management to keep power costs at as low as reasonably possible, while providing a safety net if unexpected events were to cause significant increases in coal, natural gas, or purchased power costs. Q. WERE THERE DISAGREEMENTS AMONG THE PARTIES ABOUT THE APPROPRIATENESS OF THE COMPANY S CLASS COST OF SERVICE AND ITS USE IN THE ESTABLISHMENT OF RATES FOR THE EACH CLASS? A. Yes. While the Company submitted a class cost of service study with its application, it was not supporting the use of that study to establish rates for each class. Instead, it 22 Stipulation Testimony of Denise Parrish Docket Nos, 20003-114-ER-li and 30005-157-GR-ll

proposed to increase rates on an equal percentage basis generally across-the-board, without even the use of the class cost of service study as a guidepost. Shortly after the Company filed its application, the OCA made it clear that it was not interested in increasing rates by an equal percentage across-the-board. The participation in the case of Dyno Nobel and Frontier Refining also appeared to prompt additional work on a more accurate class cost of service study that would provide at least some directional guidance when it came to spreading the revenue increase among the classes and establishing individual rate elements. Between the time the application was filed and the OCA testimony was filed, there had been a flurry of activity among the Parties that impacted the class cost of service. Some changes were made to allocators to better reflect customer costs. Better information on customer demand was starting to be gathered. Updates had been made to the energy billing determinants. I included as much of this updated information as possible in my prefiled direct testimony. Ms. Iversen provided very detailed testimony on her view of the class cost of service and then even filed cross-answer testimony pointing out some errors of the OCA and disagreements she had with our position. During this process, it was clear that some disagreements existed but it was also clear that progress was made in reaching agreement on specific issues when the Parties had a chance to talk and communicate about operational and system costs on an informal basis. From this came the idea of the collaborative on class cost of service issues prior to the next rate case. From the OCA s perspective, this is a key provision of the Stipulation and Agreement with the goal that there is a more useable, reliable class cost of service that better identifies each class costs in an appropriate manner. Meanwhile, the Parties to this case were able to confer enough to agree on allocators to use in this proceeding so that the Commission and the Parties may start to get an idea of what the costs of serving each class are, and how far away the rates are from those identified costs. The major item that was developed through compromise was the annual load factor for the industrial contract class. This impacts the Production Capacity allocation factor which is used to allocate a significant portion of the plant in 23 Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-li and 30005-15 7-GR-1 1

service to the various classes. The compromise allocates less to the large, industrial customers than did Cheyenne Light s proposed rebuttal allocations. However, since the new industrial contract class is increasing its revenue contribution in spite of the results of the class cost of service study showing that a decrease is warranted, the OCA does not worry about any inappropriate cost shifts to the other classes at this time as a result of the compromise on the allocation factor. This is a key matter that is slated for discussion at the class cost of service collaborative, as proposed in the electric agreement. Q. HOW WERE THE RESULTS OF THE CLASS COST OF SERVICE STUDY USED IN THE DEVELOPMENT OF THE PROPOSED RATES? A. The class cost of service study results provided some directional guidance, especially relative to the establishment of the monthly Service and Facilities Charges. The following table shows the relationship of the costs and the proposed rates for this high profile rate element: Secondary Primary Industrial Residential Commercial General General Contract Identified Cost $12.79 $16.07 $157.55 $1,333.83 $350.48 Current Rate $12.00 $12.00 $16.00 $230.00 $9,000 Proposed Rate $13.00 $16.00 $32.00 $460.00 $1,000 In looking at this table, it is clear that an attempt was made to move the residential and commercial customers to within close proximity of the identified costs associated with customer related costs such as billing, meter reading, cost of the meter, etc. For the secondary general and primary general classes, the concept of gradualism entered into our thinking, and a decision was made not to recommend a monthly Service and Facilities charge that is more than double the one currently in place. As to the rate for the industrial class, there are currently only two customers who would start out in that class. Once the amount of revenue to come from that class was determined, the two customers worked out a proposal on the entire rate design for that Stipulation Testimony of Denise Parrish Docket Nos. 20003414-ER-il and 30005-157-GR-11

class. This proposal is included in the Stipulation and Agreement and is one to which the OCA does not object. The step-by-step process for determining the rest of the rate elements is shown on Joint Exhibit E504 attached to the Stipulation and Agreement. Several concepts are incorporated throughout the calculation. A decision was made to recommend no increases in lighting rates as the class cost of service results showed that the lighting class should have received a rate decrease. Rather than decrease rates, the Parties are recommending no increase for lighting. The concept of rate stability also came into play here, as Cheyenne Light has agreed to study the multitude of lighting rate options and try to consolidate them as part of its next rate case filing. We also tried to hold the increase to the kwh charge to 15% or less again, in the name of gradualism. Customer impacts were also considered and Joint Exhibit E505 shows the impacts on customers within a class at different usage levels. Relative to the matter of customer impacts, there is one other significant item that impacts the rate design and the customer bills: the current level of the Power Cost Adjustment rate. On March 26, 2012, in Docket No. 20003-1 18-EP-12, the Commission issued a Notice and Order approving a PCA increase that raised the Power Cost Adjustment rate to $0.00876 per kwh. This was a significant increase from the prior rate of $0.00588. This increase, when coupled with the proposed increases in base rates, is particularly concerning to some customers, especially the larger industrials. Therefore, to mitigate the impact of the PCA and the base rate increase, the Stipulation proposes to spread the costs currently being collected through the PCA rate over a two year time period rather than a one year period. This would temporarily mitigate the impact of the two sets of rates increasing at one time. This is seen as a positive impact of the agreement, as the power costs are anticipated to stabilize over the next few years, and additional large PCA increases are not foreseen at this time. The Stipulation and Agreement recognizes that some additional procedural steps will need to be take in order to accomplish a change to a rate that has z5 Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-li and 30005-157-GR-l1

the processing of this rate case, in order to effectuate this particular provision of the agreement. Stipulation Testimony of Denise Parrish Docket Nos. 20003-114-ER-il and 30005-157-GR-1 1 26. A. Yes, it does. THE STIPULATION? Q. DOES THAT COMPLETE YOUR PREFILED TESTIMONY IN SUPPORT OF the agreement and, more importantly, explain some of the reasons that the OCA supports the agreement. We ask the Commission to find that the Stipulation and described in my testimony. However, I have attempted to describe the highlights of Agreement is in the public interest and ask that the Commission approve the agreement expeditiously. A. No. The agreement speaks for itself and contains additional provisions that I have not PROVISION OF THE STIPULATION? Q. HAVE YOU ATTEMPTED IN YOUR TESTIMONY TO DESCRIBE EACH Parties hope to bring the necessary requests before the Commission concurrent with only recently taken effect and has not otherwise been included in this proceeding. The

COMPANY FOR A GENERAL RATE ) DOCKET NO. 20003-114-ER-il INCREASE OF $5,907,945 PER ANNUM (A ) RECORD NO. 13028 CHEYENNE LIGHT, FUEL AND POWER ) IN THE MATTER OF THE APPLICATION OF) fl oor.1rmcpior E3r:n:3 i.i& COUNTY OF STATE OF JANET L. CATHCART NOTARY PUBLIC My Commission Expires:.25, Witness my hand and official seal. The foregoing was acknowledged before me by De Kay Parrish on this 25th day of May, 2012. COUNTY OF LARAMIE ) STATE OF WYOMING ) ) SS: (307) 777-5743 Cheyenne, WY 82002 2515 Warren Avenue, Suite 304 Denise Kay P, Deut, Administrator Wyoming Office of Collsumer Advocate Dated this 25 th day of May, 2012. Further Affiant Sayeth Not. of the Wyoming Office of Consumer Advocate. contained within the testimony and all of its attached schedules are true and complete and constitute the recommendations of the Affiant in her official capacity as Deputy Administrator Affiant hereby verifies that, based on Affiant s knowledge, all statements and information action, been duly authorized to file this testimony and make this Oath and Verification. Affiant prepared and caused to be filed the foregoing testimony. Affiant has, by all necessary party intervenor in this matter pursuant to its Notice of Intervention filed on December 2, 2011. Affiant is the Deputy Administrator of the Wyoming Office of Consumer Advocate which is a that: Denise Kay Parrish (Affiant) being of lawful age and being first duly sworn, hereby deposes and says AFFIDAVIT. OATH AND VERIFICATION (A 6.7% INCREASE) in ITS RETAIL ) increase OF $2.599770 PER ANNUM ) (RECORD NO. 13029) NATURAL GAS SALES AND ) TRANSPORTATION RATES ) CHEYENNE LIGHT, FUEL AND POWER ) COMPANY FOR A GENERAL RATE ) DOCKET NO. 30005-157-GR-1 I IN THE MATTER OF THE APPLICATION OF) ELECTRIC SERVICE RATES ) 5.9% OVERALL INCREASE) IN ITS RETAIL) BEFORE TIlE PUBLIC SERVICE COMMISSION OF WYOMING

Denise Kay Parrish by delivering copies thereof to the following individuals/entities below, by e-mail and United States mail: I hereby certifr that on May 25, 2012, I served the foregoing Stipulation Testimony of Certificate of Service - 1 - lmagnuson(lindguist.com Sioux Falls, SD 57104 Mr. Lee A. Magnuson 100 5. Dakota Ave. Lindquist & Vennum glynda.rahn(2blackhillscorp.com Corporate Attorney Black Hills Corporation Rapid City, SD 57709 P0 Box 1400 625 Ninth Street Ms. Glynda 0. Gullickson Rahn chris.kilpatrick(b1ackhil1scorp.com Director of Rates and Resource Planning Black Hills Corporation Rapid City, SD 57709 P0 Box 1400 625 Ninth Street Mr. Christopher J. Kilpatrick kyle.white@blackhillscorp.com P0 Box 1400 625 Ninth Street Vice-President Black Hills Corporation Rapid City, SD 57709 Resource Planning and Regulatory Affairs Mr. Kyle D. White mstegecheyennelight.com 108 West 18th Street Cheyenne Light, Fuel and Power Company Cheyenne, Wyoming 82001 Vice President of Operations Mr. Mark Stege CERTIFICATE OF SERVICE

Mrs. Victoria J. Fry Ms. Lori Brand Wyoming Public Service Commission Hansen Building 2515 Warren Avenue, Suite 300 Cheyenne, WY 82002 victoria.fry@wyo.gov lori.brand@wyo.gov Mr. Rick A. Thompson Mr. Lucas Buckley Hathaway & Kunz, P.C. P0 Box 1208 Cheyenne, WY 82003 Rthompson@hkwyolaw.com Lbuckley@hlcwyolaw.com Munderhill@hkwyolaw.com Mr. Dale W. Cottam, Esq. Mr. Ronald J. Lopez, Esq. Hirst Applegate, LLP P.O. Box 1083 Cheyenne, WY 82003 dcoftam(hirstapp1egate.com rlopez(hirstapplegate.com Mr. Kevin Burke, Vice President and Refinery Manager Frontier Refining LLC 300 Morrie Ave. P.O. Box 1588 Cheyenne, WY 82007 kburke@frontieroil-chey.com Mr. Matthew P. Reinhart General Counsel The HollyFrontier Companies 2828 North Harwood, Suite 1300 Dallas, TX 75201 rnatt.reinhart@hollyfrontier.com Dr. Alan Rosenberg BAI (Brubaker & Associates, Inc.) 16690 Swingley Ridge Road, Ste. 140 Chesterfield, MO 63017 arosenberg(consu1tbai.com Certificate of Service - 2 -

Kathryn E. Iverson BAT (Brubaker & Associates, Inc.) 17244 W. Cordova Ct. Surprise, AZ 85387 kiverson@consultbai.com Doug Chandler Plant Manager Dyno Nobel, Inc. 8305 Otto Road Cheyenne, WY 82009 douglas.chandler(,am.dynonobel.com Dustin Kukuchka Dyno Nobel, Inc. 8305 Otto Road Cheyenne, WY 82009 Dustin.kukuchka@am.dynonobel.com Certificate of Service - 3 -