Resolution No. 81121
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RESOLUTION NO. 8112
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON ESTABLISHING THE TRANSMISSION REVENUE
BALANCING.ACCOUNT ADJUSTMENT IN ACCORDANCE WITH
VERNON'S TRANSMISSION OWNER TARIFF AND PROVIDING
FOR TARIFF SHEET CHANGES TO IMPLEMENT THE
ADJUSTMENT
WHEREAS, the City of Vernon is a Participating Transmission
Owner ("PTO") with the California Independent System Operator ("ISO")
and the Federal Energy Regulatory Commission ("FERC") has approved its
Transmission Owner Tariff ("TO Tariff"); and
WHEREAS, the City of Vernon TO Tariff provides for periodic
recalculation of the Transmission Revenue Balancing Account Adjustment
("TRBAA") which is a ratemaking mechanism designed to ensure that all
Transmission Revenue Credits are flowed through to transmission
customers; and
WHEREAS, on June 26, 2002, the City Council of the City of
Vernon adopted Resolution No. 7980 establishing the TRBAA and the City
made its TRBAA filing on June 28, 2002'in FERC Docket No. EL02-103; and
WHEREAS, the FERC issued its decision on October 11, 2002,
accepting the City's filing, subject to refund, effective July 1, 2002
and referencing that all PTOs, including the City, will make another
TRBAA recalculation effective January 1, 2003, in accordance with the
terms of the ISO Tariff as amended as a result of FERC's acceptance of
JISO Amendment No. 45; and
WHEREAS, a settlement in principle has been tentatively
reached among all current parties in FERC Docket No. EL02-103 but has
not been filed or approved by the FERC; and
WHEREAS, Peter J. Lanzalotta, a consultant to the City, has
f 1 r.
1 prepared testimony and exhibits which determine the TRBAA consistent
2 with the TO Tariff and support the TRBAA, along with TO Tariff sheet
3 changes to implement the.new TRBAA effective January 1, 2003; and
4 WHEREAS, if and when a settlement is reached in FERC Docket
5 No. EL02-103.and approved by FERC, a revised TRBAA filing may be made
6 by the City, as necessary; and
7 WHEREAS, a Notice of Public Hearing was posted on
8 November 27, 2002, notifying all interested parties that a hearing to
9 consider evidence to establish Vernon's new TRBAA was scheduled for
10 December 4, 2002, at approximately 5 p.m.; and
11 WHEREAS, by letter dated November 27, 2002, Bruce V.
12 Malkenhorst, City Administrator/City Clerk, recommended that the TRBAA
13 and Appendix I to the TO Tariff implementing the TRBAA be approved; and
14 WHEREAS, the City Council has heard and considered all
15 evidence, both written and oral, presented in consideration of the
16 establishment of Vernon's new TRBAA and amended Appendix I to the TO
17 Tariff implementing the new TRBAA.
18 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
19 CITY OF VERNON AS FOLLOWS:
20 SECTION 1: The City Council of the City of Vernon hereby
21 finds and determines that the recitals contained hereinabove are true
22 and correct.
23 SECTION 2: The City Council of the City of Vernon further
24 finds that all persons have had the opportunity to be heard or to file
25 written comments to the proposed establishment of Vernon's new TRBAA
26 and amended Appendix I to the Vernon TO Tariff implementing the new
27 TRBAA, and after due consideration of any and all evidence submitted at
28 the public hearing determines that there are compelling reasons to.
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justify the establishment of Vernon's new TRBAA and an amended Appendix
I to the TO Tariff implementing the new TRBAA.
SECTION 3: The City Council of the City of Vernon hereby
approves the establishment of Vernon'.s new TRBAA and amended Appendix I
to the TO Tariff implementing the new TRBAA, to be effective January 1,
2003, described in the testimony and exhibits prepared by Mr. Peter
Lanzalotta, a copy of which is attached hereto as Exhibit "A" and made
a part hereof, pursuant to the TO Tariff and consistent with the FERC
decisions in FERC Docket No. EL00-105, concerning that TRR and TO
I[Tariff.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the submittal of the Prepared Direct Testimony of Peter J.
Lanzalotta on behalf of the City of Vernon to the FERC
SECTION 5: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and thereafter
the same shall be in full force and effect.
APPROVED AND ADOPTED this 4th day of December, 2002.
,20 .
EONIS C. MALBUR , Mayo
ATTEST:
BRUCE V. MALKENHORST, City Clerk
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i Y &. r l Z.
1 STATE OF CALIFORNIA )
ss
2 COUNTY OF LOS ANGELES )
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4 I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
5 hereby certify that the foregoing Resolution, being Resolution No.
6 8112, was duly adopted by the City Council of the City of Vernon at a
7 regular meeting of the City Council duly held on Wednesday, December 4,
8 2002, and thereafter was duly signed by the Mayor of the City of
9 Vernon.
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11 BRUCE V. MALKENHORST, City Clerk
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(SEAL)
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_ 4 _
EXHIBIT
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1 EXHIBIT VER-1
2
3 UNITED STATES OF AMERICA
4 BEFORE THE
5 FEDERAL ENERGY REGULATORY COMMISSION
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11 CITY OF VERNON, CALIFORNIA ) DOCKET NO. ELO -
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15 Prepared Direct Testimony of
16 Peter J. Lanzalotta
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18 on behalf of the
19 City of Vernon, California
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21 December, 2002
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24 Q. Please state your name, affiliation and business address.
25 A. Peter J. Lanzalotta, Lanzalotta & Associates LLC, 9762 Polished Stone,
26 Columbia, Maryland 21046.
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28 Q. Please describe your educational background.
29 A. I am a graduate of Rensselaer Polytechnic Institute, where I received a Bachelors
30 of Science degree in Electric Power Engineering. In addition, I hold a Masters
31 degree in Business Administration with a concentration in Finance from Loyola
32 College in Baltimore.
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34 Q. Please describe your professional experience.
35 A. I am a Principal of Lanzalotta & Associates LLC, which was formed in January
36 2001. Prior to that, I was a partner of Whitfield Russell Associates, with which I
City of Vernon, California
Docket No. EL0_-_
Exhibit VER-1
Page 2 of 10
1 had been associated since March 1982. My areas of expertise include electric
2 system planning and operation, cost of service study, and utility rate design. I am
3 a registered professional engineer in the states of Maryland and Connecticut. My
4 prior professional experience is described in Exhibit VER-2, which is attached
5 hereto.
6
7 I have been involved with the planning and operation of electric utility systems
8 and with utility regulatory matters, including cost of service, cost allocation, and
9 rate design, as an employee of and as a consultant to a number of privately- and
10 publicly -owned electric utilities, regulatory agencies, developers, and electric
11 loads over a period exceeding thirty years.
12
13 Q. Have you qualified to offer expert testimony in any judicial or quasi-judicial
14 proceedings?
15 A. Yes, I have presented expert testimony before the FERC and before regulatory
16 commissions and other judicial and legislative bodies in 16 states, the District of
17 Columbia, and the Provinces of Alberta and Ontario. My clients have included
18 utilities, regulatory agencies, ratepayer advocates, independent producers,
19 industrial consumers, the United States Government, and various city and state
20 government agencies. The proceedings in which I have testified are listed in
21 Exhibit VER-3.
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23 Q. What is the purpose of your testimony?
24 A. The purpose of my testimony is to present Vernon's Transmission Revenue
25 Balancing Account Adjustment ("TRBAA") proposed to become effective
26 January 1, 2003.
27
28 Q. Can you summarize your testimony?
29 A. Yes. The Vernon TRBAA is a rate -making mechanism that is part of Vernon's
30 TO Tariff, as approved by the FERC. The balance in the Vernon TRBA as of
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City of Vernon, California
Docket No. ELO_-
Exhibit VER-1
Page 3 of 10
1 September 30, 2002 is $166,532. For 2003, wheeling revenues are projected to be
2 a credit of $204,062 while usage/congestion revenues are projected to be a credit
3 of $2,673. Taken together, these items sum up to a TRBAA for the twelve
4 months starting January 1, 2003 of a credit, or negative, balance of $40,203.
5
6 Q. What is the TRBAA?
7 A. The TRBAA is a ratemaking mechanism designed to ensure that all Transmission
8 Revenue Credits ("TRCs") are flowed through to transmission customers. The
9 California ISO Tariff describes the annual TRBAA, in Appendix F, Schedule 3,
10 Section 6.1(b), as "... a dollar amount based on projected Transmission Revenue
11 Credits as adjusted for the true up of the prior year's difference between projected
12 and actual credits."
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14 Section 5.2 of the Vernon TO Tariff identifies the items to be reflected in the
15 TRBAA and sets forth the procedure for revising the TRBA on an annual basis, as
16 follows:
17 5.2 Transmission Revenue Balancing Account Adjustment
18 ("TRBAA") The Participating TO shall maintain a Transmission
19 Revenue Balancing Account ("TRBA") that will ensure that all
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Transmission Revenue Credits and the refunds, specified in Sections 6 and
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8 of Appendix F, Schedule 3 of the ISO Tariff, flow through to
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transmission customers.
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The TRBAA shall be equal to: TRBAA = TRCF + TRCT+ I.
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TRCT = The balance representing the prior period difference
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between the projected Transmission Revenue Credits and
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the actual credits.
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TRCF = The forecast of Transmission Revenue Credits for the
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City of Vernon, California
Docket No. EL0_-_
Exhibit VER-1
Page 4 of 10
1 following calendar year.
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3 I = The interest balance for the TRBA, which shall be
4 calculated using the interest rate pursuant to Section
5 35.19(a) of FERC's regulations under the Federal Power
6 Act (18 CFR Section 35.19(a)). Interest shall be calculated
7 based on the average TRBA principal balance each month,
8 compounded quarterly.
9
10 Q. How are Transmission Revenue Credits ("TRCs") defined?
11 A. TRCs are defined in Section 3.25 of the Vernon TO Tariff as follows:
12 3.25 Transmission Revenue Credit. The net of 1) the revenues received
13 by the Participating TO from the ISO for Wheeling service, Usage
14 Charges (excluding any Usage Charges received by the Participating TO
15 as an FTR Holder) and from the sale of an FTR; and 2) the shortfall or
16 surplus resulting from any cost differences between Transmission Losses
17 and Ancillary Service requirements associated with Existing Rights and
18 the ISO's rules and protocols.
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20 Q. Has the Commission addressed requirements as to Vernon's TRBAA filings?
21 A. Yes. Vernon made a TRBAA filing on June 28, 2002 in Docket No. EL02-103,
22 which was, like the herein filing, supported by my pre -filed testimony. Pursuant
23 to the procedural date established by the Commission in its July 10, 2002 notice,
24 various comments, protests, and a motion to reject were filed along with motions
25 to intervene by various parties, which addressed, among other things, the timing
26 and the content of that Vernon filing.
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28 On October 11, 2002, the Commission issued its "Order on Proposed Tariff
29 Amendment and Establishing Hearing and Settlement Judge Procedures." 101
30 FERC ¶ 61,051.
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City of Vernon, California
Docket No. ELO_-
Exhibit VER-1
Page 5 of 10
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2 That order rules, among other things, that the timing of Vernon's filing in that
3 docket was reasonable. It accepted Vernon's filing, subject to refund, effective
4 July 1, 2002. However, it also references the "ISO[`s] expect[ation that] all PTOs
5 (including Vernon) [will] make another TRBA Adjustment effective January 1,
6 2003, in accordance with the terms of the ISO Tariff as amended as the result of
7 the Commission's acceptance of Amendment No. 45." See 100 FERC 161,209
8 (2002)(order accepting Amendment No. 45). The timing of the herein filing is,
9 thus, based upon that Commission order and the terms off the ISO Tariff, as
10 amended by Amendment No. 45.
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12 The October 11, 2002 order also set "Vernon's TRBA projection" for hearing, but
13 suspended hearing procedures pending the outcome parties' attempts to reach a
14 settlement with the assistance of a Settlement Judge.' A settlement in principle
15 has been reached among all current parties to Docket No. EL02-103, and the
16 parties are in the process of drafting the necessary documents for filing with the
17 Commission. However, inasmuch as the settlement has yet been filed or its terms
18 otherwise made public, much less approved by the Commission, I have calculated
19 Vernon's TRBAA for purposes of this filing consistent with the methodology of
20 Vernon's June 28, 2002 filing in Docket No. EL02-103 and the terms of Vernon's
21 currently effective TO Tariff.2
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' Vernon request for rehearing and clarification of the October 11 order filed on November 11, 2002
is pending.
2 The October 11, 2002 order requires Vernon to remove the language "the shortfall or surplus
resulting from any cost difference between Transmission Losses and Ancillary Service requirements
associated with Existing Rights and the ISO's rule and protocols" from Section 9.25 of Vernon's TO Tariff,
which would have the effect of removing such amounts from crediting against Vernon's Transmission
Revenue Requirement through the Vernon TRBAA. October 11 Order, at paragraph No. 17. Vernon has
never had any objection to such removal. The Commission postpones the timing of a filing by Vernon to
remove this language "pending the resolution of the remaining issues in the proceeding." October 11
Order, n. 15. In any event, this portion of the current Vernon TO Tariff Section 9.25 that would be
removed has no effect on the TRBAA in Vernon's June 28, 2002 filing or in the herein filing, because even
if the language was effective, the amount of adjustment pursuant to that language is zero for both filings.
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City of Vernon, California
Docket No. ELO_-
Exhibit VER-1
Page 6 of 10
1 If a settlement is finally approved or other final resolution of this docket is
2 reached, a revised TRBAA filing will be promptly made by Vernon, as necessary.
3
4 Q. What are the results of your calculation of Vernon's TRBAA to be effective
5 January 1, 2003?
6 A. A summary of the elements of the Vernon TRBAA is shown in Exhibit VER-4. It
7 shows that the balance in the Vernon TRBA as of September 30, 2002, including
8 interest, is $166,532. Wheeling revenues are projected to be a credit of $204,062
9 while usage/congestion revenues are projected to be a credit of $2,673. Taken
10 together, these items sum up to a TRBAA for the twelve months starting January
11 1, 2003 of a credit, or negative, balance of $40,203.
12
13 It is worth noting that all of the Vernon transmission facilities that are reflected in
14 Vernon's transmission rates and the TRBAA are high voltage facilities.
15 Therefore, there is no need to allocate TRCs, or other TRBAA components,
16 between high voltage and low voltage rates.
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18 I will review the derivation of the elements of the Vernon TRBAA using the
19 components of the TRBAA, as stated in Section 5.2 of the Vernon TO Tarrif and
20 listed above, as a reference. The TRBAA is equal the sum of : TRCF + TRCT +
21 I.
22
23 Q. How was the balance of $166,532 Vernon TRBAA as of September 30, 2002
24 determined?
25 A. This balance represents the sum of the TRCT and the I components.
26
27 The TRCT Component of Vernon's TRBAA
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29 Q. What does TRCT represent?
30 A. TRCT represents a balance that reflects the prior period difference between the
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City of Vernon, California
Docket No. ELO_-
Exhibit VER-1
Page 7 of 10
1 projected TRCs and the actual credits. The prior period in this case is the 9 month
2 period starting January 1, 2002 and ending September 30, 2002.
3
4 A summary of the determination of the September 30, 2002 balance in the Vernon
5 TRBA is shown in Exhibit VER-5. The TRCT component reflects 1) the
6 previously projected 2001 TRCs for Vernon of $364,048, or $30,337 per month,
7 for the months January through June, and 2) projected 2002 TRCs of $528,587, or
8 $44,049 per month, for the months July through September, both as reflected on
9 Line No. 9 of Exhibit VER-5. Adjustments for actual payable TRCs reflecting 1)
10 congestion refunds payable to the transmission owner ("TO"), i.e., Vernon, and
11 reflecting 2) high voltage wheeling revenue payable to the TO are reflected in
12 Lines 10-13 of Exhibit VER-5 and produces the Under (Over) Collection figures
13 for the monthly payable TRC balances reflected in Line 13 of Exhibit VER-5.
14 These monthly balances are carried forward from month to month in Line 15 of
15 Exhibit VER-5. Interest is calculated monthly (the I component) on the under
16 (over) payment and is compounded quarterly into the monthly payable TRC
17 balances, pursuant to Section 5.2 of the Vernon TO Tariff. The interest
18 calculation for payable TRC balances is shown in Lines 17-21 of Exhibit VER-5.
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20 These payable TRC balances are then adjusted to reflect payment of TRC
21 revenues owed to Vernon from the period prior to 2002. These payments are
22 reflected in Lines 28-42 of Exhibit VER-5, under "Prior Period TRC Payment
23 Received" and are subtracted from the payable TRC balances at the end of the
24 year. Prior Period TRC Payments Received are developed in Exhibit VER-6.
25
26 Exhibit VER-6 shows the allocation of net ISO market invoice payments to the
27 transmission revenue credits function. This allocation uses a ratio of the adjusted
28 accrued transmission revenue credits reflected in each month's ISO invoice to the
29 net ISO invoice amount. These ratios are shown in Column H of Exhibit VER-6
30 for each month for which invoices were not paid when due. These ratios have
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City of Vernon, California
Docket No. ELO_-
Exhibit VER-1
Page 8 of 10
1 changed slightly from the ones used in the calculation of Vernon's TRBAA
2 effective July 1, 2002. I will discuss this change, the reasons for it, and the
3 ramifications of it, in more detail in the concluding section of my testimony.
4
5 Interest is calculated monthly on the Prior Period TRC Payments balance and is
6 compounded quarterly into the monthly Prior Period TRC Payment balances. The
7 interest calculation for the monthly Prior Period TRC Payment balances is shown
8 in Lines 3842 of Exhibit VER-5.
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10 The I (Interest) Component of Vernon's TRBAA
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12 Q. What does the I component of the TRBAA formula reflect?
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14 A. As discussed above, the I component reflects interest on payable balances and on
15 on payments for prior year TRCs. As provided in Section 5.2 of Vernon's TO
16 tariff, monthly interest carrying costs are calculated using the 18 CFR § 35.19(a)
17 interest rates and calculation method. These interest rates reflect the prime rate
18 values published in the Federal Reserve Bank's "Selected Interest Rates" and, for
19 each month in a quarter, the average rate for the three months, preceding the
20 quarter is applied, as provided for in 18 CFR § 35.19(a).
21
22 The calculation of interest is reflected in Exhibit VER-5 and is included as an
23 integral part of the calculation of the TRBA balance on September 30, 2002. It is
24 not reflected as a separate line item in Exhibit VER-4.
25
26 The TRCF Component of Vernon's TRBAA
27
28 Q. What does TRCF stand for?
29 A. TRCF stands for the forecast of TRCs for the following calendar year, in this case,
30 2003. These forecast TRCs reflect projected wheeling revenues and projected
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City of Vernon, California
Docket No. EL0_-_
Exhibit VER-1
Page 9 of 10
1 usage/congestion revenues for 2003.
2
3 Q. How were the projected wheeling revenues and usage/congestion revenues
4 developed?
5 A. Wheeling revenues, which correspond to account 384, are projected to be a credit
6 of $204,062, while usage/congestion revenues, which correspond to account 254,
7 are projected to be a credit of $2,673. These projections are shown in Exhibit No.
8 VER-7. These projections are based on accruals for services provided during the
9 twelve-month period ending September 30, 2002. A summary of the monthly
10 accruals to these accounts for the twelve months ending September 30, 2002 is
11 shown in Exhibit No. VER-8. The annual accrual for the twelve months ending
12 September for account 384 regarding wheeling revenues is $204,062, while the
13 annual accruals in account 254 regarding hour -ahead interzonal congestion
14 refunds are $2,673.
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16 Change in Allocation Ratios
17
18 Q. Earlier in your testimony you mentioned that the ratios, used in the allocation of
19 net ISO market invoice payments to the transmission revenue credits function, as
20 shown in Exhibit VER-6, had been changed slightly from those used in Vernon's
21 prior TRBAA filing that was effective July 1, 2002. Why do these ratios change?
22 A. The ratios were developed to determine the dollar amount of the Transmission
23 Credits as a function of the net ISO market invoices. The ISO market invoices do
24 not include charges such as Grid Management Charges and FERC fees. These
25 two charges are invoiced and paid separately from the market invoice. However,
26 Vernon staff discovered that ISO Grid Management Charges and FERC fees were
27 inadvertently included in the calculation of the net ISO market invoices used to
28 determine the allocation ratios. Also, for the months of March through June 2001,
29 the Invoice Amounts, shown in Column D of Exhibit VER-6 and used in the
30 determination of the allocation ratios in Vernon's prior TRBAA filing, were
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City of Vernon, California
Docket No. EL0_-_
Exhibit VER-1
Page 10 of 10
1 found to not accurately reflect the net of the preliminary and final ISO invoices.
2 The data in Exhibit VER-6 reflects corrections in both of these areas.
3
4 Q. Weren't these ratios also used in Vernon's prior TRBAA filing, which went into
5 effect on July 1, 2002, and, if so, what effect does this change have on Vernon's
6 TRBAA?
7 A. Yes, these ratios were used in Vernon's prior TRBAA filing. Changing these
8 ratios as described above would change the balance in Vernon's TRBA on
9 December 31, 2001 from $42,340, as reflected in Vernon's prior TRBAA filing,
10 to $45,793, as reflected in Exhibit VER-9, which recalculates the balance in
11 Vernon's TRBAA using the changed data on transmission revenue credits not
12 received. The application of the changed ratios to the ISO invoice payments
13 received is depicted in Exhibit VER-10.
14
15 However, Vernon is not proposing to change the December 31, 2001 TRBA
16 balance of the previously filed amount of $42,340, but Vernon will use the
17 correct allocation ratios so that the ratios used in this filing are correct. The error
18 created an under -collection for Vernon of $3,453 and thus a benefit to ISO
19 customers in that amount. Given the relative magnitude of the under -collection,
20 Vernon is not seeking to collect it. The potential administrative expense of
21 determining whether and how to do otherwise may well be more significant than
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22 this small sum.
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24 Q. Does this conclude your prepared direct testimony?
25 A. Yes.
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City of Vernon, California
Docket No. ELO_-
Exhibit VER-2
Pagel of 2
2 Prior Experience of Peter J. Lanzalotta
3
4 Mr. Lanzalotta has more than twenty-five years experience in electric utility
5 system planning, power pool operations, distribution operations, electric
6 service reliability, load and price forecasting, and market analysis and
7 development. Mr. Lanzalotta has appeared as an expert witness on utility
8 reliability, planning, and operation matters in more than 50 proceedings in
9 13 states, the District of Columbia, and the Provinces of Alberta and
10 Ontario. He has developed evaluations of electric utility system cost, value,
11 reliability, and condition. He has participated in negotiations between
12 utilities and customers or regulators in more than ten states regarding
13 transmission access, the need for facilities, electric rates, electric service
14 reliability, the value of electric system components, and system operator
15 structure under wholesale competition.
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17 Prior to.his forming Lanzalotta & Associates LLC in 2001, he was a Partner
18 at Whitfield Russell Associates for fifteen years and a Senior Associate for
19 approximately four years before that. He holds a Bachelor of Science in
20 Electric Power Engineering from Rensselaer Polytechnic Institute and a
21 Master of Business Administration with a concentration in Finance from
22 Loyola College of Baltimore.
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24 Prior to joining Whitfield Russell Associates in 1982, Mr. Lanzalotta was
25 employed by the Connecticut Municipal Electric Energy Cooperative
26 ("CMEEC") as a System Engineer. He was responsible for providing
27 operational, financial, and rate expertise to Coop's budgeting, ratemaking
28 and system planning processes. He participated on behalf of CMEEC in the
29 Hydro-Quebec/New England Power Pool Interconnection project and
30 initiated the development of a database to support CMEEC's pool billing
31 and financial data needs.
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33 Prior to my CMEEC employment, He served as Chief Engineer at the South
34 Norwalk (Connecticut) Electric Works, with responsibility for planning,
35 data processing, engineering, rates and tariffs, generation and bulk power
36 sales, and distribution operations. While at South Norwalk, He conceived
City of Vernon, California
Docket No. EL0_-
Exhibit VER-2
Page 2 of 2
1 and implemented, through Northeast Utilities and NEPOOL, a peak -shaving
2 plan for South Norwalk and a neighboring municipal electric utility, which
3 resulted in substantial power supply savings. He programmed and
4 implemented a computer system to perform customer billing and maintain
5 accounts receivable accounting. He also helped manage a generating station
6 overhaul and the undergrounding of the distribution system in South
7 Norwalk's downtown.
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9 From 1977 to 1979, Mr. Lanzalotta worked as a public utility consultant for
10 Van Scoyoc & Wiskup and separately for Whitman Requart & Associates in
11 a variety of positions. During this time, he developed cost of service, rate
12 base evaluation, and rate design impact data to support direct testimony and
13 exhibits in a variety of utility proceedings, including utility price squeeze
14 cases, gas pipeline rates, and wholesale electric rate cases.
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16 Prior to that, He worked for approximately 2 years as a Service Tariffs
17 Analyst for the Finance Division of the Baltimore Gas & Electric Company
18 where he developed cost and revenue studies, evaluated alternative rate
19 structures, and studied the rate structures of other utilities for a variety of
20 applications. He was also employed by BG&E in Electric System
21 Operations for approximately 3 years, where his duties included operations
22 analysis, outage reporting, and participation in the development of BG&E's
23 first computerized customer information and service order system.
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25 Mr. Lanzalotta is a member of the Institute of Electrical & Electronic
26 Engineers, the National Society of Professional Engineers, the Association
27 of Energy Engineers, the National Fire Protection Association, the
28 American Solar Energy Society, and the Financial Management
29 Association. He is also registered Professional Engineer in the states of
30 Maryland and Connecticut.
City of Vernon, California
Docket No. ELO_-
Exhibit VER-3
Page 1 of 10
Proceedings in Which
Peter I Lanzalotta
Has Testified
In re: Public Service Company of New Mexico, Docket Nos. ER78-337
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and ER78-338 before the Federal Energy Regulatory Commission,
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concerning the need for access to calculation methodology underlying
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filing.
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2.
In re: Baltimore Gas and Electric Company, Case No. 7238-V before the
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Maryland Public Service Commission, concerning outage replacement
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power costs.
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3.
In re: Houston Lighting & Power Company, Texas Public Utilities
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Commission Docket No. 4712, concerning modeling methods to determine
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rates to be paid to cogenerators and small power producers.
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4.
In re: Nevada Power Company, Nevada Public Service Commission,
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Docket No. 83-707 concerning rate case fuel inventories, rate base items,
16
and O&M expense.
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5.
In re: Virginia Electric & Power Company, Virginia State Corporation
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Commission, Case No. PUE820091, concerning the operating and
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reliability -based need for additional transmission facilities.
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6.
In re: Public Service Electric & Gas Company, New Jersey Board of
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Public Utilities, Docket No. 831-25, concerning outage replacement power
24
costs.
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7.
In re: Philadelphia Electric Company, Pennsylvania Public Utilities
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Commission, Docket No. P-830453, concerning outage replacement power
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costs.
City of Vernon, California
Docket No. ELO_-
Exhibit VER-3
Page 2 of 10
Proceedings in Which
Peter J. Lanzalotta
Has Testified
1 8. In re: Cincinnati Gas & Electric Company, Public Utilities Commission
2 of Ohio, Case No. 83-33-EL-EFC, concerning the results of an
3 operations/fuel-use audit conducted by Mr. Lanzalotta.
4
5 9. In re: Kansas City Power and Light Company, before the State
6 Corporation Commission of the state of Kansas, Docket Nos. 142,099-U
7 and 120,924-U, concerning the determination of the capacity, from a new
8 base -load generating facility, needed for reliable system operation, and the
9 capacity available from existing generating units.
10
11 10. In re: Philadelphia Electric Company, Pennsylvania Public Utilities
12 Commission, Docket No. R-850152, concerning the determination of the
13 capacity, from a new base -load generating facility, needed for reliable
14 system operation, and the capacity available from existing generating units.
15
16 11. In re: ABC Method Proposed for Aonlication to Public Service
17 Company of Colorado, before the Public Utilities Commission of the State
18 of Colorado, on behalf of the Federal Executive Agencies ("FEA"),
19 concerning a production cost allocation methodology proposed for use in
20 Colorado.
21
22 12. In re: Duquesne Light Company, Docket No. R-870651, before the
23 Pennsylvania Public Utilities Commission, on behalf of the Office of
24 Consumer Advocate, concerning the system reserve margin needed for
25 reliable service.
26
27 13. In re: Pennsylvania Power Company, Docket No. I-7970318 before the
28 Pennsylvania Public Utilities Commission, on behalf of the Office of
29 Consumer Advocate, concerning outage replacement power costs. '
City of Vernon, California
Docket No. EL0_-
Exhibit VER-3
Page 3 of 10
Proceedings in Which
Peter J. Lanzalotta
Has Testified
1 14. In re: Commonwealth Edison Company, Docket No. 87-0427 before the
2 Illinois Commerce Commission, on behalf of the Citizen's Utility Board of
3 Illinois, concerning the determination of the capacity, from new base -load
4 generating facilities, needed for reliable system operation.
5
6 15. In re: Central Illinois Public Service Company, Docket No. 88-0031
7 before the Illinois Commerce Commission, on behalf of the Citizen's Utility
8 Board of Illinois, concerning the degree to which existing generating
9 capacity is needed for reliable and/or economic system operation.
10
11 16. In re: Illinois Power Company, Docket No. 87-0695 before the State of
12 Illinois Commerce Commission, on behalf of Citizens Utility Board of
13 Illinois, Governors Office of Consumer Services, Office of Public Counsel
14 and Small Business Utility Advocate, concerning the determination of the
15 capacity, from a new base -load generating facility, needed for reliable
16 system operation, and the capacity available from existing generating units.
17
18 17. In re: Florida Power Corporation, Docket No. 860001-EI-G (Phase II),
19 before the Florida Public Service Commission, on behalf of the Federal
20 Executive Agencies of the United States, concerning an investigation into
21 fuel supply relationships of Florida Power Corporation.
22
23 18. In re: Potomac Electric Power Company, before the Public Service
24 Commission of the District of Columbia, Docket No. 877, on behalf of the
25 Public Service Commission Staff, concerning the need for and availability
26 of new generating facilities.
City of Vernon, California
Docket No. ELO_-
Exhibit VER-3
Page 4 of 10
Proceedings in Which
Peter J. Lanzalotta
Has Testified
1 19. In re: South Carolina Electric & Gas Companv, before the South
2 Carolina Public Service Commission, Docket No. 88-681-E, On Behalf of
3 the State of Carolina Department of Consumer Affairs, concerning the
4 capacity needed for reliable system operation, the capacity available from
5 existing generating units, relative jurisdictional rate of return, reconnection
6 charges, and the provision of supplementary, backup, and maintenance
7 services for QFs.
8
9 20. In re: Commonwealth Edison Company, Illinois Commerce Commission,
10 Docket Nos. 87-0169, 87-0427, 88-0189, 88-0219, and 88-0253, on behalf
11 of the Citizen's Utility Board of Illinois, concerning the determination of the
12 capacity, from a new base -load generating facility, needed for reliable
13 system operation.
14
15 21. In re: Illinois Power Company, Illinois Commerce Commission, Docket
16 No. 89-0276, on behalf of the Citizen's Utility Board Of Illinois, concerning
17 the determination of capacity available from existing generating units.
18
19 22. In re: Jersey Central Power & Light Company, New Jersey Board of
20 Public Utilities, Docket No. EE88-121293, on behalf of the State of New
21. Jersey Department of the Public Advocate, concerning evaluation of
22 transmission planning.
23
24 23. In re: Canal Electric Company, before the Federal Energy Regulatory
25 Commission, Docket No. ER90-245-000, on behalf of the Municipal Light
26 Department of the Town of Belmont, Massachusetts, concerning the
27 reasonableness of Seabrook Unit No. 1 Operating and Maintenance
28 expense.
- City of Vernon, California
Docket No. ELO_-
Exhibit VER-3
Page 5 of 10
Proceedings in Which
Peter J. Lanzalotta
Has Testified
1 24. In re: New Hampshire Electric Cooperative Rate Plan Proposal, before
2 the New Hampshire Public Utilities Commission, Docket No. DR90-078, on
3 behalf of the New Hampshire Electric Cooperative, concerning contract
4 valuation.
5
6 25. In re: Connecticut Light & Power Company, before the Connecticut
7 Department of Public Utility Control, Docket No. 90-04-14, on behalf of a
8 group of Qualifying Facilities concerning O&M expenses payable by the
9 QFs.
10
11 26. In re: Duke Power Company, before the South Carolina Public Service
12 Commission, Docket No. 91-216-E, on behalf of the State of South Carolina
13 Department of Consumer Advocate, concerning System Planning, Rate
14 Design and Nuclear Decommissioning Fund issues.
15
16 27. In re: Jersey Central Power & Light Company, before the Federal
17 Energy Regulatory Commission, Docket No. ER91-480-000, on behalf of
18 the Boroughs of Butler, Madison, Lavallette, Pemberton and Seaside
19 Heights, concerning the appropriateness of a separate rate class for a large
20 wholesale customer.
21
22 28. In re: Potomac Electric Power Company, before the Public Service
23 Commission of the District of Columbia, Formal Case No. 912, on behalf of
24 the Staff of the Public Service Commission of the District of Columbia,
25 concerning the Application of PEPCO for an increase in retail rates for the
26 sale of electric energy.
27
28 29. Commonwealth of Pennsylvania, House of Representatives, General
29 Assembly House Bill No. 2273. Oral testimony before the Committee on
30 Conservation, concerning proposed Electromagnetic Field Exposure
31 Avoidance Act.
City of Vernon, California
Docket No. ELO -
Exhibit VER-3
Page 6 of 10
Proceedings in Which
Peter J. Lanzalotta
Has Testified
1 30. In re: Hearings on the 1990 Ontario Hydro Demand\Supply Plan,
2
before the Ontario Environmental Assessment Board, concerning Ontario
3
Hydro's System Reliability Planning and Transmission Planning.
4
5
31.
In re: Maui Electric Company, Docket No. 7000, before the Public
6
Utilities Commission of the.State of Hawaii, on behalf of the Division of
7
Consumer Advocacy, concerning MECO's generation system, fuel and
8
purchased power expense, depreciation, plant additions and retirements,
9
contributions and advances.
10
11
32.
In re: , Hawaiian Electric Company, Inc., Docket No. 7256, before the
12
Public Utilities Commission of the State of Hawaii, on behalf of the
13
Division of Consumer Advocacy, concerning need for, design of, and
14
routing of proposed transmission facilities.
15
16
33.
In re: Commonwealth Edison Company, Docket No. 94-0065 before the
17
Illinois Commerce Commission on behalf of the City of Chicago,
18
concerning the capacity needed for system reliability.
19
20
34.
In re: Commonwealth Edison Company, Docket No. 93-0216 before the
21
Illinois Commerce Commission on behalf of the Citizens for Responsible
22
Electric Power, concerning the need for proposed 138 kV transmission and
23
substation facilities.
24
25
35.
In re: Commonwealth Edison Company, Docket No. 92-0221 before the
26
Illinois Commerce Commission on behalf of the Friends of Illinois'Prairie
27
Path, concerning the need for proposed 138 kV transmission and substation
28
facilities.
29
'
30 36. In re: Commonwealth Edison Company, Docket No. 94-0179 before the
31 Illinois Commerce Commission on behalf of the Friends of Sugar Ridge,
City of Vernon, California
Docket No. EL0_-
Exhibit VER-3
Page 7 of 10
Proceedings in Which
Peter I Lanzalotta
Has Testified
1
concerning the need for proposed 138 kV transmission and substation
2
facilities.
3
4
37.
In re: Public Service Com6any of Colorado, Docket Nos. 95A-531EG
5
and 95I-464E before the Colorado Public Utilities Commission on behalf of
6
the Office of Consumer Counsel, concerning a proposed merger with
7
Southwestern Public Service Company and a proposed performance -based
8
rate -making plan.
9
10
38.
In re: South Carolina Electric & Gas Company, Duke Power Company
11
and Carolina Power & Light Company, Docket No. 95-1192-E, before
12
the South Carolina Public Service Commission on behalf of the South
13
Carolina Department of Consumer Advocate, concerning avoided cost rates
14
payable to qualifying facilities.
15
16
39.
In re: Lawrence A. Baker v. Truckee Donner Public Utility District,
17
Case No. 55899, before the Superior Court of the State of California on
18
behalf of Truckee Donner Public Utility District, concerning the
19
reasonableness of electric rates.
20
21
40.
In re: Black Hills Power & Light Company, Docket No. OA96-75-000,
22
before the Federal Energy Regulatory Commission on behalf of the City of
23
Gillette, Wyoming, concerning the Black Hills' proposed open access
24
transmission tariff.
25
26
41.
In re: Metropolitan Edison Company and Pennsylvania Electric
27
Company for Approvals of the Restructuring Plan Under Section 2806,
28
Docket Nos. R-00974008 and R-00974009 before the Pennsylvania PUC on
29
behalf of Operating NUG Group, concerning miscellaneous restructuring
30
issues.
31
City of Vernon, California
Docket No. ELO -
Exhibit VER-3
Page 8 of 10
Proceedings in Which
Peter J. Lanzalotta
Has Testified
1 42. In re: New Jersev State Restructuring Proceeding for consideration of
2 proposals for retail competition under BPU Docket Nos. EX94120585U;
3 E097070457; E097070460; E097070463; E097070466 before the New
4 Jersey BPU on behalf of the New Jersey Division of Ratepayer Advocate,
5 concerning load balancing, third party settlements, and market power.
6
7 43. In re: Arbitration Proceeding In Citv of Chicago v. Commonwealth
8 Edison for consideration of claims that franchise agreement has been
9 breached, Proceeding No. 51Y-114-350-96 before an arbitration panel
10 board on behalf of the City of Chicago concerning electric system
11 reliability.
12
13 44. In re: Transalta Utilities Corporation, Application No. RE 95081 on
14 behalf of the ACD companies, before the Alberta Energy And Utilities
15 Board in reference to the use and value of interruptible capacity.
16
17 45. In re: Consolidated Edison Company, Docket No. EL99-58-000 on
18 behalf of The Village of Freeport, New York, before FERC in reference to
19 remedies for a breach of contract to provide firm transmission service on a
20 non-discriminatory basis.
21
22 46. In re: ESBI Alberta Ltd., Application No. 990005 on behalf of the Firm
23 Customers, before the Alberta Energy And Utilities Board concerning the
24 reasonableness of the cost of service plus management fee proposed for
25 1999 and 2000 by the transmission administrator.
K"�
27 47. In re: South Carolina Electric & Gas Comvan Docket No. 2000-0170-
28 E on behalf of the South Carolina Department of Consumer Affairs before
29 the Public Service Commission of 'South Carolina concerning an application
30 for a Certificate of Environmental Compatibility and Public Convenience
31 and Necessity for new and repowered generating units at the Urquhart
City of Vernon, California
Docket No. ELO_-
Exhibit VER-3
Page 9 of 10
Proceedings in Which
Peter I Lanzalotta
Has Testified
1
generating station.
2
3
48.
In re: BGE, Case No. 8837 on behalf of the Maryland Office of People's
4
Counsel before the Maryland Public Service Commission concerning
5
proposed electric line extension charges.
6
7
49.
In re: PEPCO, Case No. 8844 on behalf of the Maryland Office of
8
People's Counsel before the Maryland Public Service Commission
9
concerning proposed electric line extension charges.
10
11
50.
In re: GenPower Anderson LLC, Docket No. 2001-78-E on behalf of the
12
South Carolina Department of Consumer Affairs before the Public Service
13
Commission of South Carolina concerning an application for a Certificate
14
of Environmental Compatibility and Public Convenience and Necessity for
15
new generating units at the GenPower Anderson LLC generating station.
16
17
51.
In re: Pike County Light & Power Company, Docket No. P-00011872,
18
on behalf of Pennsylvania Office of Consumer Advocate before the
19
Pennsylvania Public Utility Commission concerning the Pike County
20
request for a retail rate cap exception.
21
22
52.
In re: Potomac Electric Power Company and Conectiv, Case No. 8890,
23
on behalf of the Maryland Office of People's Counsel before the Maryland
24
Public Service Commission concerning the proposed merger of Potomac
25
Electric Power Company and Conectiv.
26
27
53.
In re: South Carolina Electric & Gas Company, Docket No. 2001-420-E
28
on behalf of the South Carolina Department of Consumer Affairs before the
29
Public Service Commission of South Carolina concerning an application for
30
a Certificate of Environmental Compatibility and Public Convenience and
31
Necessity for new generating units at the Jasper County generating station.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
City of Vernon, California
Docket No. ELO_-
Exhibit VER-3
Page 10 of 10
Proceedings in Which
Peter I Lanzalotta
Has Testified
54. In re: Connecticut Light & Power CompanyDocket No. 217 on behalf
of the Towns of Bethel, Redding, Weston, and Wilton, Connecticut before
the Connecticut Siting Council concerning an application for a Certificate of
Environmental Compatibility and Public Need for a new transmission line
facility between Plumtree Substation, Bethel and Norwalk Substation,
Norwalk.
55. In re: The City of Vernon, California, Docket No. ER02-103 on behalf of
the City of Vernon before the Federal Energy Regulatory Commission
concerning Vernon's transmission revenue balancing account adjustment
reflecting calendar year 2001 transactions.
56. In re: San Diego Gas & Electric Company et. al., Docket No. EL00-95-
045 on behalf of the City of Vernon, California before the Federal Energy
Regulatory Commission concerning refunds and other monies payable in
the California wholesale energy markets.
City of Vernon, California
Docket No. ELO_
Exhibit VER-4
A
B C D E F G H
1
2
3
CITY OF VERNON
4
TRANSMISSION REVENUE BALANCING ACCOUNT ADJUSTMENT (TRBAA)
5
CALENDAR
YEAR
2003
6
7
IDESCRIPTION
TOTAL
8
9
Balance in TRBA on September 30,
2002
$166,532
10
including interest
11
12
Forecast Wheeling Revenues
($204,062)
13
14
Forecast Congestion
Revenues
($2,673)
15
16
17
18
TRBAA
($40,203)
19
20
21
22
Source
23
Line 9
Exhibit VER-5, Column K, Line 50
24
Line 12
Exhibit VER-7, Column C, Line 23
25
Line 14
Exhibit VER-7, Column E, Line 23
26
27
28
29
30
31
32
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TRCRDT03
City of Vernon, California
Docket No. El-0--
Exhibit VER-7
A
B
C
I D
E
F
1
CITY OF VERNON
2
FORECAST TRANSMISSION CREDITS
3
CALENDAR YEAR 2003
4
5
6
MONTH
Wheeling
Usage/Congestion
7
8
January-03
($17,005.15)
($222.77)
9
February-03
($17,005.15)
($222.77)
10
March-03
($17,005.15)
($222.77)
11
April-03
($17,005.15)
($222.77)
12
May-03
($17,005.15)
($222.77)
13
June-03
($17,005.15)
($222.77)
14
July-03
($17,005.15)
($222.77)
15
August-03
($17,005.15)
($222.77)
16
September-03
($17,005.15)
($222.77)
17
October-03
($17,005.15)
($222.77)
18 1
November-03
.($17,005.15)
($222.77)
19
December-03
($17,005.15)
($222.77)
20
21
22
23
Total
($204,061.77)
($2,673.27)
24
25
26
Exh 4-10 Fin 1126 02.x1s
City of Vernon, California
Docket No. ELO_-
Exhibit VER-8
A B C D E F
1
2
Transmission Credits (TRC) Received
3
Year Ending September
2002
4
204
254
255
384
5
Service Month
Payment Due
6
7
October-01
January-02
$0.00
($3,054.36)
$0.00
($11,593.92)
8
November-01
February-02
$0.00
$0.00
$0.00
($9,805.49)
9
December-01
March-02
$0.00
$0.00
$0.00
($3,704.70)
10
January-02
April-02
$0.00
$0.00
$0.00
($10,051.55)
11
February-02
May-02
$0.00
$0.00
$0.00
($5,077.05)
12
March-02
June-02
$0.00
$381.09
$0.00
($10,165.04)
13
April-02
July-02
$0.00
$0.00
$0.00
($11,499.01)
14
May-02
August-02
$0.00
$0.00
$0.00
($12,310.90)
15
June-02
September-02
$0.00
$0.00
$0.00
($31,442.44)
16
July-02
October-02
$0.00
$0.00
$0.00
($54,592.37)
17
August-02
November-02
$0.00
$0.00
$0.00
($33,429.87)
18
September-02
December-02
$0.00
$0.00
$0.00
($10,389.43)
19
1 $0.00
($2,673.27)
$0.00
($204,061.77)
20
Average Monthly
$0.00
($222.77)
$0.00
($17,005.15)
21
($222.77)
($17,005.15)
22
23
0204- Day -Ahead Inter
-Zonal Congestion
Refund due TO (w/o amounts related to FTR ownership.)
24
0254- Hour -Ahead Inter -Zonal Congestion Refund due TO (w/o amounts related to FTR ownership)
0255- Hour -Ahead Inter -Zonal Congestion Debit to TOs
r26
0384 - High Voltage Wheeling Revenue due TO
TRCRDT02 Exh 4-10 Fin 1126 02.xis
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SUPPORTING
DOCUMENTS
CITY COUNCILi
LEONIS C. MALIIR
Mayor
Y
THOMAS A. YBARRA �3
Mayor Pro —Tern
WM. 'BILL" DAV
Councilman
H. "LARRY" GONZALES
Councilman
W. MICHAEL MCCORMIC
Councilman
BRUCE V. MALKENHORST
City Administrator/City Clerk
FAX (323) 826-1438
City Council
City of Vernon
Honorable Members:
CITY HALL
43 5 SANTA FE AVENUE, VERNON, CALIFORNIA 90058
TELEPHONE (323) 583-8811
November 27, 2002
fj�E6UARDO OLIVO
City Attorney
FAX: (562) 869-1883
KEVIN WILSON
Director of Community Services & Water
FAX: (323) 826-1435
KENNETH J. DeDARIO
Director of Utilities
FAX: (323) 826-1425
STEVEN E. PARKER
Fire Chief
FAX: (323) 826-1407
BRUCE W. OLSON
Police Chief
FAX: (323) 826-1481
O-Cu I �-
�a
On June 26, 2002, this legislative body approved a Transmission
Revenue Balancing Account Adjustment (TRBAA) to be effective July 1,
2002, which is to be recalculated annually consistent with the
Transmission Owner (TO) Tariff. Recently, FERC approved a revised ISO
Tariff which requires all PTO's to file a new annual TRBAA using the
accounting period through September 30th of each year to be effective
January 1st of the following year.
The services of Lanzalotta & Associates LLC were retained to assist
with the preparation of the TRBAA and has advised that it be filed
with FERC. This has been reviewed by the Director of Utilities and
City Attorney and it is hereby recommended that the TRBAA and Appendix
I to the TO Tariff to implement the TRBAA be approved.
Very truly yours,
Bruce V. Malkenhorst
City Administrator/City Clerk
BVM/gm
Transmission Owner Tariff (cont.)
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $10,216,178.
The TRBAA is a negative $40,203 for the 12-month period effective January 1, 2003.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff, approved by the
Vernon City Council, and provided to the ISO.
Authorized by City of Vernon
Ordinance No. 940
Issued on:
Resolution No. Effective: January 1, 2003
Second Revised Sheet No. 22
Superseding First Revised Sheet No. 22
EM
Transmission Owner Tariff (cont.)
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $10,216,178.
The TRBAA is a negative $40,203 for the 12-month period effective January 1, 2003.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff, approved by the
Vernon City Council, and provided to the ISO.
0
Authorized by City of Vernon Resolution No. Effective: January 1, 2003
Ordinance No. 940 Second Revised Sheet No. 22
Superseding First Revised Sheet No. 22
Issued on:
Transmission Owner Tariff (cont.)
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $10,216,178.
The TRBAA is a negative $40,203 for the 12-month period effective January 1, 2003.
All of Vernon's transmission facilities and Entitlements placed under the ISO's Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff, approved by the
Vernon City Council, and provided to the ISO.
Authorized by City of Vernon Resolution No. Effective: January 1, 2003
Ordinance No. 940 Second Revised Sheet No. 22
Superseding First Revised Sheet No. 22
Issued on:
Transmission Owner Tariff (cont.)
APPENDIX I
Transmission Revenue Requirement and TRBAA
The Vernon Base Transmission Revenue Requirement is $10,216,178.
The TRBAA is a negative $40,203 for the 12-month period effective January 1, 2003.
All of Vernon's transmission facilities and Entitlements placed under the ISO's .Operational
Control are High Voltage Facilities as defined by the ISO Tariff.
The TRBAA will be recalculated annually consistent with the ISO Tariff, approved by the
Vernon City Council, and provided to the ISO.
Authorized by City of Vernon Resolution No. Effective: January 1, 2003
Ordinance No. 940 Second Revised Sheet No. 22
Issued on: Superseding First Revised Sheet No. 22
(az,-
November 26, 2002
TO: Bruce V. Malkenhorst, City Administrator
FROM: Kenneth J. DeDario, Director of Utilities
SUBJECT: Transmission Revenue Requirements
On August 29, 2000 Council established the Transmission Revenue Requirement (TRR)
associated with Vernon's high voltage transmission for the purpose of becoming a Participating
Transmission Owner with the ISO. The TRR and Transmission Owner (TO) Tariff were
approved by FERC on September 14, 2001.
On June 26, 2002 Council approved a Transmission Revenue Balancing Account Adjustment
(TRBAA) to be effective July 1, 2002 which is to be recalculated annually consistent with the
TO Tariff. However, recently FERC approved a revised ISO tariff which requires all PTO's to
file a new annual TRBAA using the accounting period through September 30th of each year to be
effective January 1st of the following year.
Mr. Peter Lanzalotta, an experienced FERC consultant with the firm of Lanzalotta & Associates
LLC was retained to assist in preparing and recommending the TRBAA to be filed with FERC.
I recommend approval of the TRBAA as recommended by Mr. Lanzalotta and which is fully
explained in the attached testimony. I also recommend approval of the attached Appendix I to
the TO Tariff which implements the TRBAA.
If you have any questions, please contact me. Thank you for your consideration.
KJD:ah
Attachments
NOTICE OF PUBLIC HEARING
The City of Vernon will conduct a Public Hearing which
you may attend.
PLACE: Vernon City Hall
City Council Chambers
4305 Santa Fe Avenue
Vernon, CA 90058
DATE AND TIME: Wednesday, December 4, 2002, at 5:00
p.m., or as soon thereafter as the
matter may be heard
PURPOSE: To consider evidence to establish
Vernon's new Transmission Revenue
Balancing Account Adjustment for its
high voltage (over 200 kV) transmission
facilities and entitlements (all
located outside the City) pursuant to
Vernon's Transmission Owner Tariff
Any interested person may attend and may make an oral
presentation to the City Council at the time of the
hearing, or may present written comments prior to the
hearing.
If you challenge the approval of the establishment of
Vernon's new Transmission Revenue Balancing Account
Adjustment or any provision thereof in court, you may be
limited to raising only those issues you or someone else
raised at the hearing described in this notice or in
written correspondence delivered to the City of Vernon at,
or prior to, the meeting.
Information may be obtained by contacting the office
of the City Clerk at the above address.
The hearing may be continued or adjourned to a stated
time and place without further notice.
Dated: November 27, 2002
BRUCE V. MALKENHORST,
City Administrator/City Clerk