July 27, 2012

Update:   As you know, DP&L filed an application for a market rate offer (“MRO”) and we have been having settlement discussions for several months.  We spoke to DP&L this week and they are in the process of finalizing a draft stipulation that they will circulate on Monday morning, prior to the settlement meeting scheduled for Tuesday morning of next week.  Additionally, DP&L sent individual parties separate “term sheets” that would become a part of the stipulation if that party signs on.  Finally, DP&L has agreed to shift the stipulation to an ESP and not an MRO.  For the OMAEG, the term sheet would provide the group $100,000 in 2013 and then, for the balance of the ESP period, if DP&L’s return on equity (“ROE”) exceeds 8%, each year thereafter OMA would get $100,000 for “energy efficiency, economic development or related projects.”  It is not clear whether DP&L will recover this money from other ratepayers or if its shareholder money.  We conveyed to DP&L that our main concerns include: the amount of the nonbypassable charge, the total overall rates (including new riders that they have not identified amounts for yet), and that our members would have the ability to get favorable arrangements with DPLER going forward.  Additionally, we indicated that we need a critical mass of parties on the settlement in order to participate.  We have spoken to several other parties in this case and get the impression that DP&L thinks they are closer to a global settlement than they actually are.   We will circulate the draft stipulation on Monday; however, it is likely that there will be few changes from the prior term sheet.  We may also discuss this matter with members in DP&L’s service territory prior to the OMAEG Board meeting on Wednesday.