February 1, 2013
Update: This week, the OMAEG participated in a settlement meeting with DP&L, which was led by PUCO Chief of Staff, Eric Weldele. As expected, DP&L’s proposed nonbypassable, $137.5 million service stability rider (“SSR”) is of main concern to the majority of intervening parties. Accordingly, PUCO Staff has proposed that DP&L receive a specific rate of return of approximately 6.5%, which would equate to between $130-$137 million, according to PUCO Staff. In general, the intervening parties made the following representations:
- OCC and OEG propose to continue the current RSC at $73M.
- OCC does not have a specific number in mind for the return on earnings (“ROE”) ceiling, but finds OEG’s proposal of 10.4% using a 50% debt capital structure to be interesting.
- OEG expressed the importance of using actual figures for calculating the ROE floor and ceiling, with specific emphasis on avoiding forecasts.
- Wal-Mart, OMAEG, OPAE, IEU, Kroger, and the City of Dayton are concerned by the level of the proposed SSR, but did not propose alternative levels.
- OEG and IEU expressed concerns about the transfer price for affiliate transactions and its impact on any ROE calculation.
- IEU-Ohio maintains that the PUCO does not have jurisdiction to establish a non- bypassable charge to support a target ROE. IEU-Ohio, in the context of a settlement, may be able to agree to a reasonable nonbypassable charge.
At this time, PUCO Staff has given DP&L additional time to review the PUCO Staff’s proposals. Also, DP&L has provided the OMAEG with a settlement offer which remains valid until next Wednesday; however, the OMAEG currently awaits a sample bill analysis from DP&L in order to assess the proposed impact on different customers. In the event that settlement discussions are unsuccessful, then intervenor testimony is due February 25, 2013, and the evidentiary hearing will commence on March 11, 2013.
