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W.W. ELROD II, P.A. JOHN P. GILL DRAKE M A ” MARIE-B. WR, P.A. CHARLES c . OWEN, P.A. HEARTSILL RAGON m, P.A W. BRADFORD SHERMAN

GILL ELROD RAGON OWEN & SHERMAN, P. A.

ATTORNEYS

June 15,2001

CHRlSToPHER L. TRAVIS

MONICA L. MASON T. DANIEL GOODWIN MATTHEW B. FINCH

ROGER H. FITZGIBBON. JR.

RICHARD L. LAWRENCE, COUNSEL JOHN A. FOGLEMAN, OF COUNSEL

Via hand delivery

Ms. Diana K. Wilson Secretary Arkansas Public Service Commission 1000 Center Street Little Rock, AR 72201

Re: In the Matter of the Unbundling of Competitive Customer Services of American Electric Power Company, Inc. Southwestern Electric Power Docket No. 01-008-U

Dear Ms. Wilson:

On behalf of American Electric Power Company, Inc. Southwestern Electric Power (“SWEPCO”), and pursuant to Order No. 2 entered in this Docket February 5 , 2001, and the Arkansas Public Service Commission Minimum Filing Requirements for Unbundling Competitive Customer Services, we are delivering for filing in the above referenced Docket the original and 20 copies of the following:

Direct Testimony and Exhibits of Chris Potter; Schedule 1 -2A: Schedule 1 -2B; Schedule 1 -2C; Billing Cost of Service Study; Workpapers in Support of Exhibits CP-2 and CP-5; and Direct Testimony and Exhibit DM-1 of Diane P. Moore.

We are also delivering under seal pursuant to Interim Protective Order No. 1 entered in this Docket January 18, 2001, the following:

Workpaper in support of Exhibit CP-6;

Suite 3801, Little Rock, Arkansas 72201 Facsimile (501) 372-3359 www.gill-law.corn

Ms. Diana K. Wilson Secretary Arkansas Public Service Commission June 15,2001 Page 2

Exhibit DM-2; and Workpapers in Support of Exhibits DM-1 and DM-2.

We are also including in this filing 4 electronic versions of the above described documents in the form of compact disks, 2 redacted versions and 2 complete versions under seal.

All parties to this Docket have been served with the above described documents either by hand delivery or by regular mail.

If you have any questions regarding this filing, please contact me.

Sincerely,

W.W. Elrod, I1

WWE/ernp

cc: Susan D’Auteuil (w/encls.) Shawn McMurray (w/encls.) David Matthews (w/o encls.) Chris Potter (w/o encls.) Dave Sartin (w/o encls.) Marc Lewis (w/o encls.) Mark Roberson (w/o encls.) Woody Merritt (w/o encls.)

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ARKANSAS PUBLIC SERVICE C O M M I S S I ~ N ~ :- L

DOCKET NO. 0 1 -008-U

IN THE MATTER OF

THE UNBUNDLING OF COMPETITIVE CUSTOMER SERVICES

OF AMERICAN ELECTRIC POWER COMPANY, INC

SOUTHWESTERN ELECTRIC POWER COMPANY

DIRECT TESTIMONY OF

CHRIS POTTER

ON BEHALF OF


JUNE 2001

APSC DOCKET NO. 01-008-U I CHRIS f'0 1 fFK

DIRECT T E S TLMON Y

TESTIMONY INDEX

SUBJECT PAGE

-7 1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

I1 PURPOSE OF TESTIMONY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

111. UNBUNDLING CUSTOMER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

IV. AVOIDED COST BILLING CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

V. CONCLUSION . , , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

EXHIBITS

EXHIBIT CP-1 EXHIBIT CP-2 EXHIBIT CP-3 EXHIBIT CP-4

EXHIBIT CP-5 EXHIBIT CP-6

Functional Costs Docket 00-099-U Assignment of Competitive Costs Revenue Requirement by Function Percentage Functional Revenue Requirement by

Unbundled tariffs Proposed Avoided Cost Credit Tariff

Customer Class

APSC DOCKET NO. 01-008-U 2 CIIRIS PO 1 1 l:K

DIRECT TESTIMONY

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ARKANSAS PUBLIC SERVICE COMMISSION

DOCKET NO. 0 1 -008-U

IN THE MATTER OF

THE UNBUNDLING OF COMPETITIVE CUSTOMER SERVICES

OF AMERICAN ELECTRIC POWER COMPANY, INC


DIRECT TESTIMONY OF

CHRIS POTTER

ON BEHALF OF


JUNE 2001

I. INTRODUCTION

Q. WOULD YOU PLEASE STATE YOUR NAME, POSITION, AND BUSINESS

ADDRESS?

My name is Chris Potter. My position is Principle Regulatory Consultant in the

Regulated Pricing & Analysis department for American Electric Power Service

Corporation (AEPSC), a subsidiary of American Electric Power Company, Inc.

A.

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(AEP) My business address is Williams Tower 11, Two West Second Street, Tulsa,

Oklahoma (74 103-3 102 j

WHAT ARE YOUR PRINCIPAL AREAS OF RESPONSIBILITY AS PRINCIPAL

REGULATORY CONSULTANT?

My responsibilities as Principal Regulatory Consultant are to manage pricing and

costing resources for rate cases, regulatory filings and rulemakings, as well as provide

pricing and costing services to AEP’s subsidiary electric utility operating companies in

the areas of regulatory analysis, cost-of-service studies and rate design I am also

responsible for assisting the AEP electric utility operating subsidiaries in the

preparation and coordination of filings before the Federal Energy Regulatory

Commission (FERC j, the Oklahoma Corporation Commission (OCC j, the Public

Utility Commission of Texas (PUCT), the Louisiana Public Service Commission

(LPSC j and the Arkansas Public Service Commission (APSC or Cornmission)

WHAT IS YOUR EDUCATIONAL AND PROFESSIONAL BACKGROUND?

I received my Bachelor of Business Administration degree from Corpus Christi State

University (CCSU). While attending CCSU I was employed by Central Power and

Light Company (CPL) as an intern in the Budgeting section of Accounting In

November of 1991 I accepted the position of General Ledger coordinator for CPL

My duties as General Ledger coordinator included monthly closing of CPL’s financial

books, preparation of external financial statements and implementation of various

mainframe systems used in the day to day operations of CPL. In July of 1994 I

transferred to Central and South West Services, Inc (CSWS) as the Closing

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Coordinator of CPL and Southwestern Electric Power Company (SWEPCO or

Company) In June of 1995 I was promoted to Accounting Consultant for CSWS but

maintained the same Closing Coordinator responsibilities In March of 1995 I

transferred to the CSWS PricingKosting department as a PricingKosting Consultant

In October of 1996, I was promoted to Project Manager in the PricingKosting

department and in May of 1999, I was promoted to Senior Project Manager In June

of 2000, with the conclusion of the AEP/CSW merger, I accepted my current position

as Principal Regulatory Consultant for AEP

HAVE YOU PREVIOUSLY SPONSORED TESTIMONY BEFORE A

REGULATORY COMMISSION?

Yes I have sponsored testimony before the APSC for SWEPCO, the LPSC for

SWEPCO, OCC for Public Service Company of Oklahoma (PSO), and before the

PUCT for CPL, West Texas Utilities Company (WTU) and SWEPCO

11. PURPOSE OF TESTIMONY

WHAT IS THE PURPOSE OF YOUR TESTIMONY?

The purpose of my testimony is to present SWEPCO’s fully allocated embedded

unbundled cost of providing competitive customer services relating to certain billing

functions as defined in Order No. 10 of Docket No. 00-054-U and required in Order

No. 6 of Docket 00-188-R. I will present calculated rates for the competitive

customer services using a fully allocated embedded costs basis as required by Order

No. 6 of Docket No, 00-188-R. Next, I will discuss the inappropriateness of using

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h l l y allocated embedded costs to determine the proposed rates for the provision of

competitive customer services. And finally I will present, as an alternative to the fully

allocated embedded cost methodology, an avoided cost methodology as the

appropriate basis for competitive customer services cost rates

DO YOU SPONSOR ANY SCHEDULES JN THE MINIMUM FILING

REQUIREMENTS FOR COMPETITIVE CUSTOMER SERVICE UNBUNDLING

(CSUMFR) SUPPLIED BY SWEPCO IN THIS PROCEEDING?

Yes, I am sponsoring all of the schedules required in the CSUMFR, as listed below

I-2A

I-2B Rate Base

I-2C Expenses

ARE THERE ANY EXHIBITS ATTACHED TO YOUR TESTIMONY?

Yes There are six exhibits attached to my testimony EXHIBIT CP-1 shows

SWEPCO’s fbnctional costs as approved by the Commission in Docket No 00-099-U

EXHIBIT CP-2 shows the direct assignment of costs to the competitive billing

function EXHIBIT CP-3 shows the calculation of revenue requirement by hnction

EXHIBIT CP-4 shows the percentage of current base revenues by hnction and

customer class EXHIBIT CP-5 shows the Company’s calculated unbundled tariffs

based on a hlly allocated embedded cost methodology as required by the

Commission’s CSUMFR. Finally, EXHIBIT CP-6 shows the Company’s proposed

avoided cost credit tariff for the competitive billing functions

Customer Service Cost of Service Summary

A P S C DOCKET NO 01 -1108-U 6 CHRIS POTTER

DIRECT TESTIMONY

1 Q WHAT IS THE RELATIONSHIP OF YOUR TESTIMONY TO THE TESTIMONY

2 OF COMPANY WITNESS DIANE MOORE?

3 A I have relied upon Ms. Moore’s testimony relating to the AEP billing process to better

4 understand the activities and associated costs related to SWEPCO’s billing fhction. I

5 have had in-depth discussions with Ms. Moore concerning the Commission’s recent

6 orders relating to billing and EU stand ready provisions. Ms. Moore has provided the

7 avoidable cost calculation associated with the competitive billing hnction that I have

8 utilized in the development of the avoided cost credit I am proposing in this

9 proceeding

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I 1 I11 UNBUNDLING CUSTOMER SERVICES

12 Q WHAT IS THE BASIS FOR SWEPCO’S UNBUNDLING CUSTOMER SERVICES

13 INTO COMPETITIVE BILLING AND OTHER CUSTOMER SERVICES

14 FUNCTIONS?

15 A. As set forth in Section 7.1 of the Commission’s CSUMFR, each utility is required to

16 use the Commission-approved compliance cost of service study, which was used in the

17 unbundling of that utility’s services, as the basis for unbundling its customer services.

18 Section 7.1 also states in part,

19 20 21 22 23 24 services.”

“ . . . the same methods used in the utilities’ unbundled compliance cost of service studies should be used to further separate the customer service function costs into competitive customer services and regulated customer services. Where information is available, the unbundled customer service function costs should be directly assigned to either the competitive or regulated customer

25 I have utilized the Company’s unbundled compliance cost of service study, approved

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in Docket No. 00-099-U, as the basis for the fkctional separation of competitive

customer service billing cost in this docket

HOW WERE COSTS FUNCTIONALLY ASSIGNED TO THE VARIOUS

CUSTOMER SERVICE FUNCTIONS?

Consistent with the Commission’s Cost Functionalization Guidelines, costs were

directly assigned to a hnction where possible. For example Account 903 -- Customer

Records and Collection Expenses - costs were assigned to either the customer service

or billing hnction based upon the assignment of costs in the Company’s compliance

cost of service study. Costs for which direct assignment was not possible, but for

which a cost causation factor could be determined, were hnctionalized on the basis of

the cost causation factor. For example, accounting department costs were

hnctionalized on the basis of the number of general ledger transactions by function

Costs common to all fimctions were hnctionalized consistent with the Commission’s

Cost Functionalization Guidelines.

WHICH CUSTOMER SERVICES HAVE BEEN DECLARED COMPETITIVE

FOR PURPOSES OF THIS PROCEEDING?

In Order No. 10 in Docket No, 00-054-U the following customer services were

declared competitive:

1) bill production and issuance,

2) payment processing and collections, and

MSC DOCKET NO. 01-008-U 8 CHRIS POTTER

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3) call center functions related to bill production and issuance and payment

processing and collections

WERE ANY COMPONENTS OF BILLING FOUND TO REMAIN REGULATED

IN DOCKET NO 00-054-U3

Yes On page 8 of Order No 7 of Docket No 00-054-U, the Commission found “that

the initial billing by the electric distribution company for its regulated distribution

services will, for now, remain regulated ” This finding by the Commission ensures that

some of the billing costs included in current rates should continue to be recovered in

the Electric Utility’s (EU) unbundled regulated customer service rates

DOES THE IDENTIFICATION OF BILLING COSTS AS PROVIDED IN

DOCKET NO 00-099-U REFLECT THE COMMISSION’S FINDINGS RELATED

TO BILLING BY THE DISTRIBUTION COMPANY FOR ITS SERVICES?

No The billing costs identified in Docket No 00-099-U represent the total AEP

SWEPCO Arkansas jurisdictional billing costs of a vertically integrated utility In that

proceeding the billing costs were not separated between regulated and competitive

finctions

HAVE YOU PERFORMED THE SEPARATION OF THE BILLING COSTS

BETWEEN REGULATED AND COMPETITIVE CUSTOMER SERVICE

FUNCTIONS IN THIS PROCEEDING?

Yes The Schedules I am sponsoring in this proceeding show the separation of the

functional customer service costs, as presented in Docket No 00-099-U, into a

regulated component and a competitive billing component

9 CHRIS POI’I‘ER

DIRECT TESTIMONY

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HOW DID YOU SEPARATE BILLING COSTS BETWEEN THE REGULATED

AND COMPETITIVE CUSTOMER SERVICE COMPONENTS’

I reviewed the billing process, as described in the testimony of Company witness Diane

Moore, to determine the steps of the billing process the EU would have to continue to

perform in order to calculate the bill for regulated distribution service As discussed

later in my testimony, the Commission has ruled in Docket No 00-054-U that EU’s

must be able to accommodate both Energy Service Provider (ESP) consolidated billing

and dual/multiple billing options, The Commission has given the choice of the billing

options to the ESP. The EU must be prepared to either present the ESP’s with an

electronic file containing the calculation of its charges in a bill ready format or to

directly bill each end use customer whose ESP decides not to choose the consolidated

billing option. If not for the Commission mandate that the EU must stand ready to

issue individual customer bills for its regulated distribution service, the separation

between the regulated and competitive costs could have been made after the

completion of the two batch billing process, as described in Ms. Moore’s direct

testimony, and before the actual printing of the bills. However, because of the

Commission’s “stand ready” mandate, the EU’s must have the systems and resources

in place to bill the ultimate consumer and costs associated with these systems and

resources should also be included in the regulated billing component The ultimate

criteria for the separation of billing costs between the regulated and competitive

hnctions is the determination of whether these are costs the EU must incur to comply

with the Commission’s orders and rules Costs that must be incurred to comply with

APSC DOCKET NO. 01-008-U 10 CHRIS POII‘ER

DIRECT TESTIMONY

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the Commission’s orders and rules have been functionalized as regulated. Those costs

over which the Company has the ability to choose whether to incur or avoid have been

3 functionalized as competitive

4 Q

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WHICH OF THE CUSTOMER SERVICE COSTS HAVE BEEN ASSIGNED TO

EXHIBIT CP-2 shows the direct assignment of operations and maintenance costs to

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the competitive billing function Common costs were assigned to both the regulated

and competitive billing functions based upon the same hnctionalization methodologies

utilized in the Company’s unbundled compliance cost of service study

HOW WAS IT DETERMINED THAT THE COSTS SHOWN IN EXHIBIT CP-2

WERE THE APPROPRIATE COSTS TO ASSIGN TO THE COMPETITIVE

BILLING FUNCTION?

As discussed earlier in my testimony, the direct assignment of costs to the competitive

billing function was based on the principle that only the costs of the activities over

which the EU has discretionary authority were assigned to the competitive billing

function

SHOULD THE FULLY ALLOCATED EMBEDDED COST METHOD BE THE

BASIS FOR THE FUNCTIONAL UNBUNDLING OF COMPETITIVE

CUSTOMER SERVICES?

No, the fbliy allocated embedded costs method for the functional unbundling of

competitive customer services is not the appropriate method Under current APSC

rules, the EU must maintain the capability to provide a distribution bill to customers

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solely at the discretion of the ESP In ordering the EU to stand ready to provide

billing services, the EU will incur certain fixed costs that do not vary with the amount

of bills processed The EU must be allowed hll cost recovery for the customer service

hnctions they are required to provide As discussed later in my testimony, it is

appropriate to utilize an avoided cost methodology to identify costs that an EU will

not incur as the result of ESP consolidated billing

WHAT IS THE BASIS FOR DETERMWTNG THAT THE EU MUST STAND

READY TO BILL ALL OF ITS CUSTOMERS FOR THE SERVICES THE EU

PROVIDES?

In Docket No 00-054-U Order No 10 the Commission found “that ESP Consolidated

Billing and DualMultiple Billing are appropriate and orders that the market

participants be required to accommodate these billing options ” Furthermore, in that

same order the Commission ruled “ the choice of billing options will be left with the

ESP ” If the ESP chooses not to provide its customers with a consolidated bill, the

EU must have the capability and be prepared to bill each customer for which it

provides services

ONCE THE BILLING COSTS WERE SEPARATED INTO EITHER THE

REGULATED OR COMPETITIVE FUNCTION, HOW WERE THEY

ALLOCATED TO THE ARKANSAS RETAIL CUSTOMER CLASSES”

In Docket No 00-099-U the unbundled compliance cost of service study consisted of

four hnctional studies The Company separated its Arkansas jurisdictional costs into

Generation, Transmission, Distribution, and Customer Service components Each of

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these components costs was then allocated to the Arkansas retail jurisdictional

customer classes in the same manner as was utilized in the Company’s compliance cost

of service study from Docket No 98-339-U The allocation of billing costs proposed

in this docket utilizes the same allocation methodologies as both the compliance cost

of service study from Docket No 98-339-U and the unbundled compliance cost of

service study from Docket No 00-099-U

HOW WERE THE RESULTS OF THE UNBUNDLED COST OF SERVICE

STUDY UTILIZED IN THE UNBUNDLTNG OF SWEPCO’S CUSTOMER

SERVICE RATES?

The results of the cost of service study were utilized to develop class revenue

requirement ratios by function, which were applied to SWEPCO’s unbundled

customer service rates in order to accomplish the competitive rate unbundling The

unbundled customer service rates are those rates resulting from Docket No 00-099-U,

the Company’s unbundling proceeding This methodology is consistent with the

unbundling of the Company’s rates in Docket No 00-099-U

WHAT WOULD BE THE RESULT OF SETTING THE RATES FOR

COMPETITIVE CUSTOMER SERVICES ON AN AVERAGE OR EMBEDDED

BASIS?

Setting the rate for the provision of the billing service on an average or embedded cost

basis would result in one of the following two occurrences Either 1) the total cost of

providing that service would be borne only by those customers whose ESP

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chooses not to offer consolidated billing or 2) the EU would not be allowed the

opportunity to recover the costs it incurs to provide a Commission mandated service

ARE EITHER OF THE OCCURRENCES DESCRIBED ABOVE APPROPRIATE''

No. It is not appropriate to expect a select group of customers to be responsible for

costs incurred to serve all customers, nor is it appropriate for the EU to be denied the

opportunity to recover the costs associated with providing a Commission mandated

service. The cost of standing ready to provide billing service should be borne by all

customers.

IV. AVOIDED COST BILLING CREDIT

WHICH COSTS SHOULD BE REMOVED FROM THE REGULATED

CUSTOMER SERVICES FUNCTION AS DETERMINED IN DOCKET NO 00-

099-U?

It is appropriate to remove only those costs from the EU's regulated cost of service

determination that the EU will truly avoid when an ESP decides to perform

consolidated billing. As discussed in the direct testimony of Company witness Moore,

these avoidable costs include such things as printing, paper, postage and bill

processing fees. These costs represent short run variable costs whose causation can be

directly linked to the amount of bills processed and can thus be avoided if the ESP

performs the consolidated billing, Please refer to the direct testimony of Ms Moore

for the quantification of the Company's avoidable costs.

AI'SC DOCKET NO. 01 -008-U CHRIS POTTER

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HOW SHOULD THESE AVOIDABLE COSTS BE REMOVED FROM THE

REGULATED CUSTOMER SERVICE CHARGES?

It is appropriate to use a billing credit, applied on a per customer bill basis to remobe

the avoidable costs from the regulated customer service charges The billing credit

would reflect those costs that are avoided when the ESP issues consolidated bills

HOW WAS THE AVOIDABLE COST CREDIT DETERMINED?

The avoidable cost, on a per customer bill basis, was provided by Ms Moore, please

refer to her testimony for the details of the calculation

WHY WAS THE AVOIDABLE COST CALCULATION BASED UPON A TIME

PERIOD OTHER THAN THE HISTORICAL TEST YEAR UTILIZED IN THE

COMPLIANCE COST OF SERVICE?

The Company is proposing an avoided cost billing credit to reflect the costs the EU

will avoid when an ESP issues a consolidated bill Since the EU will avoid current

costs, it is only appropriate to base that credit on more current cost information

WOULD YOU PLEASE COMPARE THE AVOIDABLE COST CALCULATED

BY MS MOORE TO THE COMPETITIVE BILLING COSTS BASED ON A

FULLY ALLOCATED EMBEDDED BASIS?

Yes As shown on EXHIBIT CP-3, the hlly allocated embedded costs associated

with competitive billing for the Arkansas retail jurisdiction is $563,406 or $0 48 per

bill based upon the historical test year Arkansas retail customer count of 97,910

Ms Moore’s avoidable cost calculation results in a $0 47 per bill credit

APSC DOCKET NO 01 -008-U CHRIS PO 1 1 ER

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WHY IS THE USE OF A CREDIT THE APPROPRIATE METHODOLOGY WITH

W I C H TO RECOGNIZE THE COSTS ASSOCIATED WITH THE

COMPETITIVE CUSTOMER SERVICE BILLING FUNCTION?

The credit reflects on an individual customer bill basis the cost avoided by the EU

when the ESP performs the billing hnction for both its services as well as those

provided by the EU The credit approach allows the EU to recover its cost of billing

as well as the cost the EU incurs to stand ready to perform the billing fknction for its

distribution services. At the same time, the use of a credit reduces the charges to

ESPs for those costs the EU avoids due to the ESP performing the billing fknction for

the EU’s services as well as its own. Furthermore, this approach is allowed by Section

8 of the CSUMFR and the Commission’s Order No. 6 in Docket No. 00-188-R which

states “The CSUMFRs should also allow utilities, however, to file proposed rates

which have been derived using any allocation methodology other than the h l l y

allocated cost approach, along with supporting rationale for why that allocation

method is more appropriate than the fully allocated embedded cost method.”

WHY SHOULD A CUSTOMER WHOSE ESP IS PROVIDING CONSOLIDATED

BILLING BEAR SOME RESPONSIBILITY FOR THE COSTS AN EU INCURS

TO STAND READY TO BILL ITS CUSTOMERS?

As discussed earlier, the EU will incur certain costs in order to stand ready to perform

the billing function for its services to individual customers. These costs are incurred

for all customers and therefore should be borne by all customers. Even in the event a

particular customer’s ESP provides consolidated billing, the EU continues to incur

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costs to stand ready to bill that customer. If the customer’s ESP decides to no longer

offer consolidated billing or if the customer switches to an alternative ESP who may

not offer consolidated billing the EU would have to provide its own billing service.

V. CONCLUSION

PLEASE S L J A R I Z E YOUR TESTIMONY.

The unbundled cost of service study submitted in this proceeding fairly presents the

Company’s hnctional cost separation of competitive customer services based upon a

klly allocated embedded cost basis in compliance with Commission rules and orders.

The unbundled competitive customer service rates that I have developed are

based on a klly allocated embedded cost basis and meet the requirements set forth in

the CSUMFR guidelines.

Unbundled competitive customer service rates based upon fully allocated

embedded costs will result in either the shifting of cost responsibility between

customers or the under collection of costs by the EU.

The avoided cost approach proposed by the Company appropriately recognizes

the cost an EU will incur due to the stand ready mandate of this Commission. It also

recognizes the reduced costs for the EU that occur when ESPs choose to perform

consolidated billing, and therefore should be accepted.

The avoided cost credit proposed by the Company reflects, on an individual

customer bill basis the cost avoided by the EU when the ESP performs the

consolidated billing function. The avoided cost credit approach reduces the EU

APSC DOCKET NO. 0 1 -008-U 17 CHRIS POTTER

DmECT TESTIMONY

1

2 consolidated billing function

3 The avoided cost credit proposed by the Company is consistent with Section 8

4 of the CSUMFRs and Commission Order No 6 from Docket No 00-188-R-

5

6 Q DOES THIS CONCLUDE YOUR PREPhRED DIRECT TESTIMONY’

7 A Yes, it does

charges to the ESPs for those costs avoided due to the ESP performing the

reasonable, supported by testimony and should be approved

APSC DOCKET NO. 01-008-U 18 CHRIS POTTER

DIRECT TESTIMONY

Exhibit CP-1

Page 1 of 1

EErAlL

PRODUCTION ALLOCATION METHOD AVERAGE & 4CP

Functional Cost Separation

SOII l11WriSl f~RN I,l.I~CTRI(‘ I ’ O l V I ~ R rohll’;\v\ CUS I O M L R CLASS COS I -01:-SI:RVICI: S I [illy

1ES.I YEAR I:NUING JIJNL 3U. 1998

TOTAL Function AR RETAIL Generation Transmission Distribution Customer

JURISDICTION

(1) (7) (8) (9) (10)

SUMMARY

RATE BASE PLANT IN SERVICE PLANT HELD FOR FUTURE USE CONTRUCTION WORK IN PROGRESS WORKING CAPITAL ASSETS OTHER ADDITIONS TO RATE BASE RATE BASE DEFERRED TAXES

TOTAL RATE BASE

REVENUES PRESENT BASE REVENUE PRESENT FUEL REVENUE NON-FIRM REVENUE OTHER OPERATING REVENUE

TOTAL REVENUES

EXPENSES OPERATION AND MAINTENANCE DEPRECIATION / AMORTIZATION TAXES OTHER THAN INCOME FEDERAL AND STATE INCOME TAXES

TOTAL EXPENSES

OPERATING INCOME

PRESENT RATE OF RETURN

Revenue Requirement

Rate Revenue Requirement Fuel Revenue Requirement

Less Other Revenue Credit

Less Demand Related Margins Less Energy Related Margins Plus Mine Closing

Net ECR Revenue Requirement Base Rate Revenue Requirement

I 2 3 4 5 6 7 8 9 I O I I 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

342,387,094 I22,722,4 19 52,996,206 155,209,979

4,682,146 13,450,107

11,458,491

15,709,561 49,982,796

5,585,248 28,233,820

4,249,020 1,635,620

1,193,148 6,663,249

156,54 1,487 58,880,845 173,342,232 19,314,888 408,079,452

43,155,504 64,861,083 11,797,865

257,298 120,07 1.75 I

8,510,947 37,500.621 9,349.0 I 7 98.5 16,089 64,861.083 11,797,865 3,205.965

178,381,002 1,493,976

10,004,924 582,981

38.083.601 871,709

10,220,726

I l3,6l 1.3 I5 21,343.655

7,951,781 7,638.21 7

150,544,968

27,836,034

6.821%

178,381,002 (14,826,607) 163,554,395 67,546,796

(240,789) (2,444,837)

177,222 65,038,392 98.5 16,002

92,075,989 11,204.71 I 3,607,727 2,830,710

109,719, I 3 6

I0,352,6 I5

6.613%

120,071,751 (I 1,877.94 I ) 108,193,810 67,546,796

(240,789) (2,444,837)

177,222 65,038,392 43,155,418

1,697,733 2,067,324

923,111 1,215,721 5,903,890

4, lO 1.034

6.965%

10,004,924 (I ,493,976) 8,5 10.947

12,410,116 7,472,973 3,054,549 3,120,719

26,058,357

12,025,244

6.937%

38,083,601

37,500,621 (582,981)

7,427.477 598,647 366.394 47 1.067

8,863,585

1,357,141

7 026%

10,220,726

9,349.0 I 7 (871,709)

DEMPROD ENERGY

8,510.947 37.500.621 9.349.0 I 7

Southwestern Electric Power Company Exhibit C P-2

Separation of Competitive Customer Service Billing Costs

Description . .

Remittance Payments to Bank Remittance Payments to Bank

Postage Postage

Arkansas Allocated Total Company Arkansas

Account Amount Juris Factoc Amount

9030 663,696 20.3441 % 135,023 A&G Billing 233,166 20.3441% 47,436

896,862 182,459

147,520 A&G Billing 800,782 20.3441 Yo 162,912

1,525,904 310,431

9030 725,122 20.3441%

Forms A&G Billing 120,540 20.3441 % 24,523

Total Competitive Billing Charges 2,543,306 51 7,413

Summary by Account 9030 1,388,818 20.3441 % 282,543

A&G Billing 1,154,488 20.3441 % 234,870 Total Competitive Billing Charges 2,543,306 51 7,413

Arkansas Jurisdictional factor from the Compliance Cost of Service Study APSC Docket No. 98-339-U

Exhibit CP-3

Page 1 of 1

JEcAlL

PRODUCTION ALLOCATION METHOD AVERAGE & 4CP

Functional Cost Separation

TOTAL Function AR RETAIL Generation Transmission Distribution Customer Competitive Billing

JURISDICTION

TOTAL Function AR RETAIL Generation Transmission Distribution Customer Competitive Billing

JURISDICTION

SUMMARY

RATE BASE PLANT IN SERVICE PLANT HELD FOR FUTURE USE CONTRUCTION WORK IN PROGRESS WORKING CAPITAL ASSETS OTHER ADDITIONS TO RATE BASE RATE BASE DEFERRED TAXES

TOTAL RATE BASE

REVENUES PRESENT BASE REVENUE PRESENT FUEL REVENUE NON-FIRM REVENUE OTHER OPERATING REVENUE

TOTAL REVENUES

EXPENSES OPERATION AND MAINTENANCE DEPRECIATION /AMORTIZATION TAXES OTHER THAN INCOME FEDERAL AND STATE INCOME TAXES

TOTAL EXPENSES

OPERATING INCOME

PRESENT RATE OF RETURN

Revenue Requirement Less Other Revenue Credit

Rate Revenue Requirement Fuel Revenue Requirement

Less Demand Related Margins Less Energy Related Margins Plus Mine Closing

Net ECR Revenue Requirement Base Rate Revenue Requirement

1 2 3 4 5 6 7 8 9 I O I I 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

342,387,095 122.722.419 52,996,206

4,249.020 1,635,620

155.209.979 I I .454,507 3.983

5,585,248 28,233,820

4,682,146 13.450.107

1,192,733 6,262,269

415 400.980

156.54 1,487 408,079,452 58.880,845 173,342,232 18,909.509

8,785.639

405,378

563.406 43,155,504 64,861,083 11,797,865

257,298 120,071,751

98.5 16.089 64,861.083 11,797,865 3,205,965

178.38 I.002

8,510,937 37,500.621

1.493,976 10,004,924

582,981 38,083,601

87 1,647 9,657.285

63 563.469

I13,61 1.315 21,343,655 7,951,781 7,638,217

150,544,968

27,836,034

6.821%

178,381,002 (14,826,607) 163,554,395 67,546,796

(240,789) (2,444,837)

177.222 65,038,392 98,5 16,002

92,075,989 11.204,71 I 3,607,727 2,830,710

109,719, I36

10.352.615

6.613%

120,071,751 (I 1,877,941) 108,193,810 67,546,796

(240,789) (2,444,837)

177,222 65,038,392 43,155,418

1,697.733 2,067,324

923.1 1 1 1.2 I5,72 1 5,903,890

4,101,034

6.965%

10,004,924 (1,493,976) 8.5 10,947

I2.410,I 16 7,472,973 3,054,549 3,120.719

26,058,357

12,025,244

6 937%

38,083,601

37,500,621 (582,981)

6,906,247 597.753 364,897 460,060

8,328,957

1,328,328

7 025%

9,657.285

8.785.639 (871.647)

521,230 894

1,496 I1.016

534,637

28,831

7.112%

563,469 (63)

563,406

DEMPROD ENERGY

37,500,621 8,785,639 8,s 10,947 563,406

,t CP-4 Page 1 of 5

Firm Base Revenue Requirement

Dollars Generation Transmission Distribution Customer Service Competitive Bill

Total Base

Phase 2 Rates Base Revenue

Difference

Percentage Generation Transmission Distribution Customer Service Competitive Bill

Total Base

. . ve B W as a '10 of r Service Revenue

from Docket No. 00 099 L! - -

Customer Service Competitive Bill

Total Customer Service



TOTAL

AR RETAIL

JURISDICTION

( 1 )

43,155,504 8 3 1 0,947

37,500,621 8,785,639

563,406

98,516,117

98,508,372 98,508,372

7,745

43.806% 8.639%

38.065% 8.918% 0.572%

100.000%

8,785,639 563,406

9,349,044

93.974% 6.026%

100.000%

RESIDENTIAL

(2)

12,712,700 3,023,959

16,417,999 5,377,419

391,077

37,923,154

37,854,305

68,849

33.522%

43.293% 14.180% 1 .O31 yo

7.974 yo

100.000%

5,377,419 391,077

5,768,495

93.220% 6.780%

100.000%

COMMEKCIAL

/ SMALL

INDUSTRIAL

(3)

22,159,103 4,075,408

15,923,457 2,602,118

133,689

44,893,775

44,912,030

(1 8,255)

49.359% 9.078%

35.469% 5.796% 0.298%

100.000%

2,602,118 133,689

2,735,807

95.113% 4.887%

100.000%

LAKOE

INUUS r m L

(4)

7,705,568 1,372,252

932,583 683,327 31,351

10,725,081

10,781,488

(56,407)

71.846% 12.795% 8.695% 6.371 Yo 0.292%

100.000%

683,327 31,351

714,678

95.613% 4.387%

100.000%

M UNICIPAI.

( 5 )

233,147 36,396

275,883 40,883

658

586,966

587,465

(499)

39.721 Yo 6.201 Yo

47.002% 6.965% 0.1 12%

100.000%

40,883 658

41,541

98.41 7% 1.583%

100.000%

1 ICil l I lNCi

(6)

344,985 2,933

3,950,698 81,891

6,632

4,387,140

4,373,084

14,056

7.864 Yo

0.067% 90.052%

1.867% 0.151%

100.000%

81,891 6,632

88,523

92.508% 7.492%

100.000%

E CP-4 Page 2 of 5


CUSTOMER CLASS COS I-OF-SERVICE S'I'IIDY

TEST YEAR ENDING JLrNE 30. 1998

Firm Base Revenue Requirement ........................................................ RESIDEN'J IAL .........................................................


Total Base


Difference


Total Base

. . . . etitive Billing as a YO of

omor Service Revenue from Docket No. 00 099 II - -





BASIC

SEC

( 7 )

8,745,752 2,223,733

11,429,873 3,872,274

284,610

26,556,242

26,434,286

121,956

32.933% 8.374%

14.581 % 1.072%

43.040%

100.000%

3,872,274 284,610

4,156,884

93.1 53% 6.847%

100.000%

WII'II

WATER HEAT

SEC

(8)

863,013 21 9,978 971,646 304,792

21,665

2,381,093

2,381,093

36.244% 9.239%

40.807% 12.801% 0.910%

100.000%

304,792 21,665

326,457

93.364% 6.636%

100.000%

W I I I I

SPACE H E A f

SFC

(9)

285,155 68,452

329,815 96,539 6,745

786,707

786,707

36.247% 8.701 %

41.924% 12.271 % 0.857%

100.000%

96,539 6,745

103,284

93.469% 6.531%

100.000%

I O l A L

LI I C I RIC

S K

(10)

2,818,530 51 1,749

3,686,193 1,103,584

78,057

8,198,113

8,251,229

(53,116)

34.380%

44.964% 13.461 % 0.952%

6.242%

100.000%

1,103,584 78,057

1,181,641

93.394% 6.606%

100.000%

CON 1 KO1 I 1-1)

WATER IIFAT

SEC

( 1 1 )

250 47

473 230

0

999

990

9

25.039% 4.670%

47.299% 22.992%

0.000%

100.000%

230 0

230

99.999% 0.001%

100.000%

I [CP-4 Page 3 of 5


(12) (13)

Dollars Generation 4,992,033 11,881,721 Transmission 800,698 2,090.1 77 Distribution 1,711,806 9,402,240 Customer Service 444,986 971,983 Competitive Bill 21,089 27,385

SOUTliWESTERN ELECTKIC POWER COMPANY

CUSTOMER CLASS COST-OF-SERVICE SI’UDY

TEST YEAR ENDING JUNE 30, 1998

COMMEKCIAI. / SMALL INDUSTRIAL

G EN ERA I.

TVTAL LIGHT & POWER

s I X

(14) ( 1 9

16,829,756 4,798,297 2,882,774 1,131,582

11,168,732 4,395,867 1,414,376 1,066,690

48,399 63,669

c- I

RlDtK

StC

(16)

54,045 653

110,709 12,907

1

...~ .._...___.._..._. ~ ........................

LIGti7 & I’OWliK I O U ----- _. .- .. . .__.__.. ...

SllC I’KI

6,191 497,640 132 67,663

5251 9 161,923 14,873 92,983 5,067 16,402

101.41

(19 )

477,004 60,399

248,148 108,145 21,620

Total Base 7,970,612 24,373,506 32,344,037 1 1,456,106 178,315 78,781 a36,6i i 915,317

Phase 2 Rates Base Revenue 7,970,612 24,397,257 32,367,869 11,446,955 178,514 82,081 836,611 91 8,692

Difference (23,751) (23,832) 9,151 (199) (3,299) (3,375)

Percentage Generation 62.630% 48.749% 52.034 % 41.884% 30.309% 7.858% 59.483% 52.1 14%

6.599% 34.531% 38.371 Yo 62.086% 66.664% 19.355% 27.1 11%

Transmission 10.046% 8.576% 8.91 3% 9.878% 0.168% 8.088% Distribution 21.476% 38.576% Customer Service 5.583% 3.988% 4.373% 9.31 1 % 7.239% 18.878% 11.114% 11.815%

0.366%

Competitive Bill 0.265% 0.112% 0.150% 0.556% 0.000% 6.432% 1.961 % 2.362%

100.000% 100.000% 100.000% 100.000% 100.000% Total Base 100.000% 100.000% 100.000%

from Docket No. 00 - - 099 U

Customer Service 444,986 971,983 1,414,376 1,066,690 12,907 14,873 92,983 108,145 Competitive Bill 21,089 27,385 48,399 63,669 1 5,067 16,402 21,620

129,765 Total Customer Service 466,075 999,368 1,462,774 1,130,359 12,908 19,939 109,384

Customer Service 95.475% 97.260% 96.691 Yo 94.367% 99.995% 74.588% 85.005% 83.339% 4.525% 2.740% 3.309% 5.633% 0.005% 25.412% 14.995% 16.661% Competitive Bill

Total Customer Service 100.000% 100.000% 100.000% 100.000% 100.000% 100.000% 100.000% 100.000%

L . CP-4 Page 4 of 5

SOUTHWES7ERN ELECTRIC POWER COMPANY

CUSTOMER CLASS COST-Of-SERVICE S I'LlDY

TEST YEAR ENDING J l JNE 30. 1998



Total Base


Difference


Total Base

. . . . etitive Rillina as a O/O of er Service Revenue

from D W No. 00 099 U - -





.......................................................... LARGE FNDUSTRFAI

......................... LARGE LlGllT & POWER .........................

PRI

(20)

3,403,935 526,67 1 890,913 296,728

11,402

5,129,649

5,163,713

(34,064)

66.358% 10.267% 17.368% 5.785% 0.222%

100.000%

296,728 1 1,402

308,131

96.300% 3.700%

100.000%

69 K V

(21)

1,546,377 297,890

1,811 127,946

5,836

1,979,860

1,979,860

78.105% 15.046% 0.091% 6.462% 0.295%

100.000%

127,946 5,836

133,782

95.638% 4.362%

100.000%

TOTAL.

( 2 2 )

4,926,259 812,139 930,364 423,525

17,203

7,109,490

7,143,573

(34,083)

69.291% 11.423% 13.086% 5.957% 0.242%

100.000%

423,525 17,203

440,728

96.097% 3.903%

100.000%

.......................................................

.................. PULP & PAPER MILL ------

FIRM

69 KV

( 2 3 )

2,645,854 371,547

2,196 257,625

14,110

3,291,332

3,313,842

(22,510)

80.389% 1 1.289% 0.067%

0.429% 7.827%

100.000%

257,625 14,110

271,735

94.807% 5.193%

100.000%

IMCKIJP

69 KV

(24)

102,456 221,477

140

324,073

324,073

31.615% 68.342% 0.000% 0.043 yo 0.000%

100.000%

140

140

100.000% 0.000%

100.000%

-..

T01Al.

( 2 5 )

2,779,309 560,113

2,219 259,802

14,148

3,615,591

3,637,915

(22,324)

76.870% 15.492% 0.061 % 7.186% 0.391 %

100.000%

259,802 14,148

273,950

94.836% 5.164%

100.000%


CUSTOMER CLASS COST-OF-SERVICE STUDY

TEST YEAR ENDING J O N t 30. 1998

.................................... ~ ..___ LIGHTING __........__________.--..

it CP-4 Page 5 of 5



Total Base


Difference


Total Base

. . . . etitive B i m s a YO of r Service R e v e w

fr- - -





PUMPING

SERVICE

S EC

( 2 6 )

149,134 18,167

173,231 18,656

656

359,844

360,746

(902)

41.444% 5.049%

5.184% 48.140%

0.182%

100.000%

18,656 656

19,312

96.602% 3.398 Yo

100.000%

MUNICIPAL

SERVICE

SEC

(27)

84,012 18,228

102,652 22,227

1

227,122

226,719

403

36.990% 8.026%

45.197% 9.787% 0.001 Yo

100.000%

22,227 1

22,229

99.994% 0.006%

100.000%

MUNICIPAL

LIGHTING

SEC

(28)

80,458 829

1,033,106 55,948 6,592

1,176,934

1,170,627

6,307

6.836% 0.070%

87.779% 4.754% 0.560%

100.000%

55,948 6,592

62,540

89.460% 10.540%

100.000%

PUBLIC

HIGHWAY

SEC

(29)

20 1 4

1,693 236

39

2,173

2,160

13

9.266% 0.171%

77.910% 10.880% 1.774%

100.000%

236 39

275

85.984% 14.016%

100.000%

PRIVATI'

LIGIITING

S I T

( 3 0 )

37,767 453

769,370 4,815

0

81 2,405

808,676

3,729

4.649% 0.056%

94.703% 0.593% 0.000%

100.000%

4,815 0

4,815

99.992% 0.008%

100.000%

AT ISSUE . ... .-.. . .

ARKANSAS AREA

LIGI I'rlNG IWfAII,

S I C

( 3 1 ) - 2

226,558 1,648

2,146,528 20,892

1

2,395,628

2,391,621

4,007

9.457% 0.069%

89.602% 0.8 72% 0.000%

100.000%

20,892 1

20,893

99.993% 0.007%

100.000%

EXHIBIT CP-5


Original Sheet No: TC-1 Sheet 1 of 5 Sheets

Replacing: Sheet No:

Name of Company: SOUTHWESTERN ELECTRIC POWER COMPANY

Kind of Service: Electric

Title: TABLE OF CONTENTS

Class of Service

All

All

Class of Service

All

Class of Service

All

Residential

Residential

Residential

As Applicable

PART I. GENERAL INFORMATION

Schedule Number Schedule Name

1 Utility Information

2 Tariff Format

PART 11. EXEMPTION SCHEDULES


1 Exemption From General Service Rule 4.01 (Pos ID)

PSC File Mark Only

Sheet Number

1

2

PART 111. RATE SCHEDULES


Sheet Number

3

Sheet Number

1 Standard Terms and Conditions 4

2 Residential Service 12

3 Electric Heating Appliance Residential Service 14

4 Residential - Rider to Residential Service 17 For Controlled Service to Water Heaters - Closed

5 General Service 20

THIS SPACE FOR PSC USE ONLY







Class of Service

As Applicable

As Applicable

Industrial - Time of Use

Pulp & Paper Mill

Municipal

Municipal

Municipal

Municipal

As Applicable

As Applicable

As Applicable

As Applicable

As Applicable

PART 111. RATE SCHEDULES (Continued)


6 Lighting and Power

PSC File Mark Only

Sheet Number

23

7 Large Lighting and Power 27

8 Lighting and Power - Time of Use 31

9 Pulp and Paper Mill Service 35

10 Municipal Service 42

11 Municipal Pumping 45

12 Municipal Street Lighting - Closed 49

13 Municipal Street Lighting & Parkway Lighting 51 - Closed

14 Municipal Street Lighting - Closed 54

15 Municipal Street & Parkway Lighting 56

16 Municipal Street & Highway Lighting - Energy Only - Closed

59

17 Public Street and Highway Lighting - Closed 62

18 Public Street and Highway Lighting - Energy Only 65








Class of Service

As Applicable

Lighting

Lighting

Lighting

As Applicable

As Applicable

All

As Applicable

All

As Applicable

All

All

All


PSC File Mark Only

Schedule Number

19

20

21

22

23

24

25

26

27

28

29

30

31

Schedule Name

Public Street and Highway Lighting

Private Lighting - Closed

Area Lighting - Closed

Outdoor Lighting

Rider C- I Providing for Optional Reduced CommercialiIndustrialiMunicipal Rate for Seasonal Electric Space Heating

Rider C-2 Providing for CommercialiIndustrial Seasonal Electric Space Heating

Tax Adjustment Rider

Municipal Tax Rates

Energy Cost Recovery Rider

Supplementary, Backup, Maintenance, and As-Available Standby Power Service

Charges for Special or Additional Facilities

Temporary Service

Charges Related to Customer Activity

Sheet Number

67

70

73

76

79

81

83

84

89

98

110

111

112



Revision: 1 Sheet No: TC-4 Sheet 4 of 5 Sheets

Replacing: Original Sheet No: TC-4




Class of Service

As Applicable

As Applicable

All

As Applicable

As Applicable

As Applicable

As Applicable

As Applicable

As Applicable

All

PSC File Mark Only



32 Experimental Economic Development Rider - Closed

33 Purchased Power Service

34 Redundant Service for Municipal Accounts

35 Extension of Facilities Agreement

36 Experimental Curtailable Service Rider

37 Underground Electric Distribution System Agreement

38 Marketchoice

39 Selectchoice

40 Net Merger Savings Rider

41 Avoided Cost Competitive Billing Credit

PART IV. POLICY SCHEDULES

Schedule Class of Service Number Schedule Name

All 1 Extended Absence Payment Plan

Residential & Churches 2 Budget Plan (Equal Payment Plan)

Sheet Number

119

122

126

I28

130

135

144

153

162

164

Sheet Number

165

166



Revision: 1 Sheet No: TC-5 Sheet 5 of 5 Sheets

Replacing: Original Sheet No: TC-5




Class of Service

Residential

Residential & Churches

All

All

Residential

All

Industrial, Commercial, and Municipal

PART IV. POLICY SCHEDULES (Continued)

PSC File Mark Only

Schedule Number

3

4

5

6

7

8

9

Schedule Name

Retirement Plus Plan

Average Monthly Payment Plan (Levelized Billing)

Voltage Verification Plan

Standard Nominal Voltages

Provisions for Landlords and Tenants

Meter Testing Program

Summary Billing Program

Sheet Number

167

168

170

171

172

173

174


ARKANSAS PI BLIC SERVICE COMMISSION

Original Sheet No: 1 Sheet 1 of 1 Sheets



Kind of Service: Electric Class of Service: All

Part I. General Information Schedule No. 1

Title: UTILITY INFORMATION

PSC File Mark Only

Utility Official: Thomas P. Brice Regulatory Consultant

Telephone Number: (3 18) 673-3361

Mailing Address: southwestern Electric Power Company P. 0. Box 21 106 428 Travis Street (71 101) Shreveport, LA 7 1 156

E-Mail [email protected]


mailto:[email protected]

ARKANSAS PUBLIC SERVICE COMMISSION ~

Original SheetNo: 2 Sheet 1 of 1 Sheets




Part I . General Information Schedule No. 2

Title: TARIFF FORMAT (Rules of Practice & Procedure 1 1.03 (c)) PSC File Mark Only

The following symbols appear in the left margin opposite any revision to the previously approved tariff.

Explanation

Discontinued Rate

Additions to Text

Removal of Text

Change in Rate

Change in Practice

Change in Text

New Rate

A Correction

Move of Text







Part 11. Exemption Schedule No. 1

Title: EXEMPTION FROM GENERAL SERVICE RULE 4.01 (Pos ID) PSC File Mark Only

SWEPCO was granted exemption to utilize the computerized system of "Pos ID" in evaluating and identifying the credit risk of new applicants for utility service (Docket #98- 056U).







Part 111. Rate Schedule No. 1

Title: STANDARD TERMS AND CONDITIONS PSC File Mark Only

1. APPLICABLE TO ALL CLASSES OF ELECTRIC SERVICE In order that all Customers may receive uniform, efficient, and adequate service, electric service will be supplied to and accepted by all Customers receiving service from the Company in accordance with these Terms and Conditions.

2. ORDER FOR SERVICE Contract and agreement forms are provided by the Company to show the agreement under which the Customer receives and the Company delivers electric service. Appropriate arrangements will be completed with Customer, or his duly-authorized agent, before service is supplied by the Company. A separate contract will be in effect for each class of service at each separate location.

3. OPTIONAL RATES The Company's published rate schedules state the conditions under which each is available for electric service. When two or more rates are applicable to a certain class of service, the choice of such rates lies with the Customer.

The Company, at any time upon request, will determine for any Customer the rate best adapted to existing or anticipated service requirements as defined by the Customer, but the Company does not assume responsibility for the selection of such rate or for the continuance of the lowest annual cost under the rate selected.

The Company, lacking knowledge of changes that may occur at any time in the Customer's operating conditions, does not assume responsibility that Customer will be served under the most favorable rate; nor will the Company make refunds covering the difference between the charges under the rate in effect and those under any other rate applicable to the same service.









Rates are normally established on a twelve-month basis and a Customer having selected a rate adapted to his service may not change to another rate within a twelve-month period unless there is a substantial change in the character or conditions of his service. A new Customer will be given reasonable opportunity to determine his service requirements before definitely selecting the most favorable rate therefor.

4. MONTHLY BILLS Bills for service will be rendered monthly, unless otherwise specified. The term "month'' for billing purposes will mean the period between any two consecutive readings of the meters by the Company, such readings to be taken as nearly as practicable every thirty days.

Failure to receive a bill in no way exempts Customers from payment for electric service.

The Company makes a special effort to read all meters every month. Sometimes due to adverse weather conditions, dog hazards, damaged equipment, etc., it is not possible to obtain a meter reading and the bill may be estimated. Bill estimation is calculated based upon any one or combination of the following factors: (1) history of use at the service location, (2) actual weather conditions during the billing period, (3) changes in electrical equipment used by the customer during periods under review, (4) usage of service locations of the same class and similar electrical service characteristics. Estimated bills are designated with an "E" on the bill under code "CD." Customers served under rates that have both gross and net rates will be billed both the gross and net amounts for electric service each month. Where bills are paid on or before the last due date, only the net bill will be paid. Where a bill is paid after the last due date, the gross bill will be paid.









5. DISCONTINUANCE OF SERVICE When bills for electric service are in arrears, or in case the Customer fails to comply with these Terms and Conditions, the Company will have the right to discontinue electric service to the Customer and to remove its property from the Customer's premises upon mailing notice to address to which the monthly bills are sent. There will be a charge for reconnecting the service to Customers whose service has been disconnected for non-payment of bills.

6. EXCLUSIVE SERVICE ON INSTALLATION CONNECTED TO COMPANY'S SYSTEM

Except as may be specifically permitted under tariffs governing the interconnection or provision of service to small power producers or cogenerators, standard electric rate schedules are based on exclusive use of Company's service.

Except in cases where the Customer has a contract with the Company for breakdown or standby service, no other electric light or power service will be used by the Customer on the same installation in conjunction with the Company's service, either by means of a throw-over switch or any other connection.

The Company will not be required to supply or continue to supply service to any Customer where a portion of Customer's service requirement is obtained from other sources, except when such service is covered by a contract.

The Customer will not sell the electricity purchased from the Company to any other customer, company, or person, and Customer will not deliver electricity purchased from the









Company to any connection wherein said electricity is to be used off of the Customer's premises on which the meter is located.

7. CUSTOMER'S INSTALLATION All wiring and other electrical equipment furnished by the Customer will be installed, operated, and maintained by the Customer at all times in conformity with good electrical practice and with the requirements of the constituted authorities and these Terms and Conditions. Where no public authorities have jurisdiction, Company, for Customer's protection, may require Customer to furnish Company a certificate from wiring electrician that Customer's installation conforms to the National Electrical Code and/or the National Electrical Safety Code. The Company does not assume responsibility for the design, operation, or condition of the Customer's installation.

Service will be delivered to Customer for each premise at one point of delivery to be designated by Company and to conform to Company's service standards. For mutual protection of Customer and Company, only authorized employees of Company are permitted to make and energize the connection between Company's service wire and Customer's service entrance conductors.

8. OWNERS CONSENT TO OCCUPY The Company shall have the right to install and maintain equipment in, over and under the Customer's property and shall have access to the Customer's premises for any other purpose necessary for supplying electric service to the Customer. In case the Customer is not the owner of the premises or of the intervening property between the premises and the Company's lines, the Customer will obtain from the property owner or owners the easements or right-of-way necessary to install and maintain in, over or under said premises all such









wires and electrical equipment as are necessary or convenient for supplying electric service to the Customer.

9. MOTOR INSTALLATIONS For mutual protection of service to all customers, all motor installations will be as follows:

(a) All motors rated in horsepower up to and including 7-1/2 HP and individual air conditioning units with ratings of 65,000 BTUH (ARI rating) or less will be single phase, unless otherwise agreed to by the Company or served in conjunction with other larger three phase loads.

(b) All three phase motors will be equipped with approved starting equipment having low voltage release attachment and properly sized over-current protection in each of the three phases.

10. POWER FACTOR The Company will not be required to furnish electric service to any Customer with low power factor equipment.

Where Customer has power or heating equipment installed that operates at low power factor, Customer, when requested to do so by the Company, will furnish, at his own expense, suitable corrective equipment to maintain a power factor of 90% lagging, or higher.

Customer will install and maintain in conjunction with any fluorescent lighting, neon lighting, or other lighting equipment having similar load characteristics, auxiliary or other








Title: STANDARD TERMS AND CONDITIONS

I

PSC File Mark Only

corrective apparatus that will correct the power factor of such lighting equipment to not less than 90% lagging.

1 1. PROTECTION OF SERVICE The Company will not be obligated to serve any devices that have a detrimental effect upon the service rendered to other Customers or upon Company equipment. Where the Customer's use of such a device causes voltage fluctuation of the 60 Hertz wave, clipping of the current, or voltage wave - thereby producing harmonics or a cyclic pulsation between one and sixty Hertz (1 and 60 Hertz), Customer will furnish at his own expense necessary equipment to limit such voltage fluctuation, harmonics, or pulsations so that they will not interfere with other Customers or Company equipment. Where the interference cannot be corrected, the use of such devices must be discontinued.

12. CONTINUOUS SERVICE The Company will endeavor to maintain continuous service but will not be liable for loss or damage caused by interruption or failure of service or delay in commencing service due to accident to or breakdown of plant, lines, or equipment, strike, riot, act of God, or causes reasonably beyond the Company's control or due to shutdown for reasonable periods to make repairs to lines or equipment.

In like manner, should the Customer's premises be rendered wholly unfit for the continued operation of the Customer's plant or business, due to any of the causes mentioned above, the Customer's contract, if any, will thereupon be suspended until such time as the plant or premises will have been reconstructed, reconditioned, and reoccupied by the Customer for the purpose of his business.









13. INTERRUPTION OF SERVICE The Company shall not be responsible in damages for any failure to supply electricity, or for interruption, or reversal of the supply, if such failure, interruption, or reversal is without willful default or negligence on its part, nor for interruptions, by underfrequency relays or otherwise, to preserve the integrity of the Company's system or interconnected systems.

14. METERING The electricity used will be measured by a meter or meters to be furnished and installed by the Company at its expense and bills will be calculated upon the registration of such meters. Meters include all measuring instruments. Meter installations will be made in accordance with the Company's service standards. Customer will provide a sufficient and proper space in a clean and safe place, accessible at all times and free from vibration, for the installation of Company's meters. Company will furnish all meter bases and/or metering enclosures to be installed by Customer on supply side of service equipment to be metered.

Meters will be tested as reasonably necessary. If the meter or meters are found to be in error more than 2%, proper adjustment in billing will be made for the period during which the meter was in error. Should Company's meters fail to register, the amount of electricity delivered to Customer will be estimated on the basis of the best available information, or upon Customer's meters when installed.

15. PROTECTION OF COMPANY'S PROPERTY AND ACCESS TO PREMISES The Customer will protect the Company's property on the Customer's premises from loss or damage and will permit no one who is not an agent of the Company to remove or tamper with the Company's property.









The Company will have the right of access to the Customer's premises at all reasonable times for the purpose of installing, reading, inspecting, or repairing any meters or devices owned by Company or for the purpose of removing its property.

16. AGENTS CANNOT MODIFY AGREEMENT No agent has power to amend, modify, or waive any of these Terms and Conditions, or to bind the Company by making any promises or representations not contained herein.

17. SUPERSEDE PREVIOUS TERMS AND CONDITIONS These Terms and Conditions supersede all Terms and Conditions under which the Company has previously supplied electric service.






Kind of Service: Electric Class of Service: Residential


Title: RESIDENTIAL SERVICE

PSC File Mark Only

AVAILABILITY

This schedule is available to residential customers for all domestic uses in residences, individual family apartments, and private rooming houses.

Where a portion of a residential unit is used for non-residential purposes, the appropriate non-residential service schedule is applicable to all uses of electric service. However, this rate schedule may be applied to the residential portion of such use provided the Customer's wiring is so arranged that the use of electric service for residential purposes can be metered separately from the non-residential use.

NET MONTHLY RATE

F U N C T I O N Customer Competitive

Generation Transmission Distribution Service Bill

Customer Charge Per Meter $1.23 $5.26 $0.39

Kilowatthour Charge (per kWh) May through September Billing Cycles

October through April Billing Cycles

$0.016102 $0.004104 $0.019394

$0.013825 $0.003523 $0.0 16652


ARKANSAS PUBLIC SERVICE COMMISSION ~~ ~






Title: RESIDENTIAL SERVICE

PSC File Mark Only

Adjustments:

Fuel Adjustment: In addition to all other charges, the amount of the Customer’s bill will be adjusted by an amount per kilowatthour calculated according to the formula in the Energy Cost Recovery Rider - Arkansas.

Tax Adiustment: In addition to all other charges, the amount of the Customer’s bill will be increased by the proportionate part of any new tax or increased rate of tax in accordance with the Tax Adjustment Rider - Arkansas.

Multiple Dwelling: -Where service is rendered through one meter to a multiple dwelling unit or apartment house, the amount of the Customer Charge will be multiplied by the number of single residence units served.

PAYMENT FOR SERVICE

Customers who pay within 22 days of the date of the bill will pay the net bill computed on the Net Monthly Rate. The gross bill will be payable after 22 days of the date of the bill. The gross bill will be the total net bill plus the sum of 10 percent of the first $30 of the net bill plus 2 percent of the amount over $30.

TERMS AND CONDITIONS

Service will be furnished under the Company’s Standard Terms and Conditions.








Title: ELECTRIC HEATING APPLIANCE RESIDENTIAL SERVICE

PSC File Mark Only

AVAILABILITY

This schedule is available to residential customers for all domestic uses in residences, individual family apartments, and private rooming houses under one or both of the following conditions :

1. When a Customer regularly uses one or more Company-approved electric water heaters for all water heating requirements, notifies the Company, and has the installation verified by Company personnel, and/or,

2. When there is a permanently installed electric reverse cycle central system heat pump or a total of five kilowatts or more of permanently installed electric space heating devices which are in regular use for space heating purposes, and the Customer notifies the Company, and has the installation verified by Company personnel.

Where a portion of a residential unit is used for non-residential purposes, the appropriate non-residential service schedule is applicable to all uses of electric service. However, this rate schedule may be applied to the residential portion of such use provided the Customer's wiring is so arranged that the use of electric service for residential purposes can be metered separately from the non-residential use.









Class of Service: Residential

Customer Charge Per Meter

Kilowatthour Charge (per kWh) May through September Billing Cycles

October through April Billing Cycles First 500 kWh

All additional kWh

PSC File

NET MONTHLY RATE

lark Only



$1.23 $5.28 $0.37

$0.0 19530 $0.0 16695 $0.003375

$0.014334 $0.002898 $0.016768

$0.007378 $0.001491 $0.00863 1

ADJUSTMENTS

Fuel Adiustment: In addition to all other charges, the amount of the Customer’s bill will be adjusted by an amount per kilowatthour calculated according to the formula in the Energy Cost Recovery Rider - Arkansas.

Tax Adjustment: In addition to all other charges, the amount of the Customer’s bill will be increased by the proportionate part of any new tax or increased rate of tax in accordance with the Tax Adjustment Rider - Arkansas.









PSC File Mark Only

Multiple Dwelling: Where service is rendered through one meter to a multiple dwelling unit or apartment house, the amount of the Customer Charge will be multiplied by the number of single residence units served.

PAYMENT FOR SERVICE











Title: RESIDENTIAL - RIDER TO RESIDENTIAL SERVICE FOR CONTROLLED SERVICE TO WATER HEATERS (closed to new installations)

AVAILABILITY

PSC File Mark Only

This rider is closed to new customers and only available to those customers taking service under the terms of this rider on or before the approval date of this schedule. This rider is only available to current rider customers using electricity for electric water heaters with controlled heating units and used by residential customers for all water heating requirements.

1. Service must be supplied through a separate circuit to which no equipment except the controlled heating unit of each electric water heater will be connected. Controlled service will be measured through a separate meter furnished and owned by the Company.

2. The operation of the controlled heating unit of the electric water heater will be controlled by a time regulating device, furnished and owned by the Company, to electronically disconnect this unit during certain periods of the day. Such periods of disconnection will be designated by the Company and subject to change from time to time as the Company’s peak load conditions vary.

3 . The controlled heating unit of the electric water heater must be of a capacity not in excess of 7200 watts.

4. In case of a twin unit heater, the two heating units must be so controlled that both cannot operate at the same time.

The uncontrolled heating unit of the electric water heater may be operated during all hours of the day and will be of a capacity not in excess of 7200 watts.

Customers will be billed under the appropriate residential rate schedule for electric service to the uncontrolled element of each water heater and for all other residential uses of electric



Original Sheet No: IS Sheet 2 of 3 Sheets





Title: RESIDENTIAL - RIDER TO RESIDENTIAL SERVICE FOR CONTROLLED SERVICE TO WATER HEATERS (closed to new installations) PSC FI Mark Only

service. The energy for the operation of the controlled heating unit of the electric water heater will be billed in accordance with the rate schedule herein.

Service under this rider is subject to all provisions of the applicable rate schedule to which it applies, except those provisions specifically modified herein.

NET MONTHLY RATE




Kilowatthour Charge (per

May through September Billing Cycles

kWh)


$1.76 $1.74 $0.00

$0.01 8435 $0.003445 $0.0 17720

$0.008147 $0.001522 $0,00783 1

Adiustments:

Fuel Adiustment: In addition to all other charges, the amount of the Customer’s bill will be adjusted by an amount per kilowatthour calculated according to the formula in the Energy Cost Recovery Rider - Arkansas.








Title: RESIDENTIAL - RIDER TO RESIDENTIAL SERVICE FOR CONTROLLED SERVICE TO WATER HEATERS (closed to new installations) PSC File Mark Only

Tax Adjustment: In addition to all other charges, the amount of the Customer’s bill will be increased by the proportionate part of any new tax or increased rate of tax in accordance with the Tax Adjustment Rider - Arkansas.

PAYMENT FOR SERVICE









Kind of Service: Electric Class of Service: As Applicable


Title: GENERAL SERVICE

PSC File Mark Only

AVAILABILITY

This rate schedule is available to all Customers except multiple dwellings or apartment houses, on an annual basis for secondary service for lighting, heating and power, or combination of lighting, heating and power where facilities of adequate capacity and suitable phase and voltage are available. Service will be supplied at one point of delivery through one meter. This schedule is available for Demand up to 50 kilowatts.

NET MONTHLY RATE

F U N C T I O N


Demand Charge per kW: All kW over 6.0 kW

Kilowatthour Charge (per

May through September Billing Cycles

kWh)


Customer Competitive Generation Transmission Distribution Service Bill

$0.30 $6.79 $0.41

$1.71 $0.41 $1.57

$0.012397 $0.002933 $0.01 1370

0.010354 $0.002450 $0.009496

~~~

THIS SPACE FORPSC USE ONLY








PSC File Mark Only

Determination of Kilowatts of Billing Demand: The Kilowatts of Billing Demand for each month will be the average kilowatt load used by the Customer during the 15-minute period of maximum use during the month. The Kilowatts of Billing Demand will be subject to the Power Factor Adjustment Clause.

Capacity Charge for Highly FluctuatinP - Loads: Should the Customer operate equipment with highly fluctuating, intermittent, or abnormal characteristics that make it necessary for the Company to install special facilities to serve the Customer or to prevent disturbances to the service to other Customers, an additional Distribution Function charge of $1 .OO per month per kilovolt-ampere (kVA) or fraction thereof of transformer capacity installed by the Company to serve the Customer will be added to the Customer's bill.

Power Factor Adjustment: The Company reserves the right to determine the power factor of the Customer's installation served hereunder. Should the average lagging power factor during the month be determined to be below 90%, the Customer's Kilowatts of Billing Demand will be adjusted by multiplying the Kilowatts of Billing Demand by 90% and dividing by the average lagging power factor.

Adjustments:

Fuel Adiustment: In addition to all other charges, the amount of the Customer's bill will be adjusted by an amount per kilowatthour calculated according to the formula in the Energy Cost Recovery Rider - Arkansas.









PSC File Mark Onlv

Tax Adiustment: In addition to all other charges, the amount of the Customer's bill will be increased by the proportionate part of any new tax or increased rate of tax in accordance with the Tax Adjustment Rider - Arkansas.

PAYMENT FOR SERVICE



Service will be furnished under Company's Standard Terms and Conditions.



~ Original SheetNo: 23 Sheet 1 of 4 Sheets

1 Replacing: Sheet No:




Title: LIGHTING AND POWER

PSC File Mark Only

AVAILABILITY

This rate schedule is available to all customers, except multiple dwellings or apartment houses, on an annual basis for service for lighting, heating and power or combination of lighting, heating and power where facilities of adequate capacity and suitable phase and voltage are available. Service will be supplied at one point of delivery through one meter. This schedule is available for Billing Demands from 50 kilowatts to 10,000 kilowatts.

NET MONTHLY RATE


Generation Transmission Distribution Service Bill Secondary Service: May through September Billing Cycles First 50 kW or less in the month

All additional kW in the Month (per kW)

Kilowatthour Charge (per kWh)

October through April Billing Cycles First 50 kW or less in the month



$155.20 $27.35 $122.88 $12.71 $0.36

$3.10 $0.55 $2.46 $0.25 $0.0 1

$0.006530 $0.001 I51 $0.005 170 $0.000535 $.000015

$124.99 $22.03 $98.96 $10.23 $0.29

$2.50 $0.44 $1.98 $0.20 $0.01

$0.001949 $0.000343 $0.001543 $0.000160 $0.000004








Title: LIGHTING AND POWER

PSC File Mark Only


Generation Transmission Distribution Service Bill Primary Service:

May through September Billing Cycles First 50 kW or less in the month $133.27 $23.49 $105.52 $10.71 $0.5 1

All additional kW in the Month (per kW) $2.67 $0.47 $2.1 1 $0.21 $0.0 1

Kilowatthour Charge (per kWh) $0.006335 $0.001 1 I6 $0.005016 $0.000509 $0.000024

October through April Billing Cycles First 50 kW or less in the month $102.82 $18.12 $81.40 $8.27 $0.39

All additional kW in the Month (per kW) $2.06 $0.36 $1.63 $0.17 $0.0 I

Kilowatthour Charge (per kWh) $0.001754 $0.000309 $0.001389 $0.000141 $0.000007

Determination of Kilowatts of Billing - Demand: The Kilowatts of Billing Demand for each month will be the average kilowatt load used by the Customer during the 15-minute period of maximum use during the month, but not less than 70% of the highest Kilowatts of Billing Demand established during the 11 preceding months. The Kilowatts of Billing Demand will be subject to the Power Factor Adjustment Clause.








Title: LIGHTNG AND POWER

PSC File Mark Only

Capacity Charge for Highly Fluctuating Loads: Should the Customer operate equipment with highly fluctuating, intermittent, or abnormal characteristics that make it necessary for the Company to install special facilities to serve the Customer or to prevent disturbances to the service to other Customers, an additional Distribution Function charge of $1 .OO per month per kilovolt-ampere (kVA) or fraction thereof of transformer capacity installed by the Company to serve the Customer will be added to the Customer's bill.

Power Factor Adjustment: The Company reserves the right to determine the power factor of the Customer's installation served hereunder. Should the average lagging power factor during the month be determined to be below 90%, the Customer's Kilowatts of Billing Demand will be adjusted by multiplying the Kilowatts of Billing Demand by 90% and dividing by the average lagging power factor.

Primary Service: Applicable when electric service is provided at the Company's primary distribution voltage of 12.5 kV or higher and the Customer furnishes and maintains all necessary transformation equipment beyond this point.

Adiustments:










Title: LIGHTmG AND POWER

PAYMENT FOR SERVICE

PSC File Mark Only





_______


~ Original Sheet No: 27 Sheet 1 of 4 Sheets





Title: LARGE LIGHTING AND POWER

AVAILABILITY

PSC File Mark Only

This rate schedule is available to all customers on an annual basis for service for lighting, heating and power or combination of lighting, heating and power where facilities of adequate capacity and suitable phase and voltage are available. Service will be supplied at one point of delivery though one meter. This schedule is available for Billing Demands of 10,000 kilowatts or greater.

NET MONTHLY RATE


Generation Transmission Distribution Service Bill Primary Service: May through September Billing Cycles First 10,000 kW or less in the month



October through April Billing Cycles First 10,000 kW or less in the month



$36,284.92 $5,625.09 $9,502.55 $3,165.79 $121.65

$3.63 $0.56 $0.95 $0.32 $0.01

$0.008623 $0.001337 $0.002258 $0.000752 $0.000029

$93.85 $27,993.12 $4,339.65 $7,33 1.03 $2,442.35

$2.80 $0.43 $0.73 $0.24 $0.01

$0.002388 $0.000370 $0.000625 $0.000208 $0.000008


ARKANSAS PUBLIC SERVICE COMMISSION ~~






Title: LARGE LIGHTING AND POWER

Transmission Service: May through September Billing Cycles

First 10,000 kW or less in the month



October through April Billing Cycles First 10,000 kW or less in the month



PSC File Mark Only



$39,971.08

$4.00

$0.010071

$30,212.51

$3.02

$0.002732

S7,720.72

$0.77

$0.001945

$5,835.78

$0.58

$0.000528

$46.85

$0.00

$0.0000 I2

$35.41

$0.00

$0.000003

$3,310.36

$0.33

$0.000834

$2,502.17

$0.25

$0.000226

$150.99

$0.02

$0.000038

$1 14.13

$0.0 1

$0.0000 10

Determination of Kilowatts of Billing Demand: The Kilowatts of Billing Demand for each month will be the average kilowatt load used by the Customer during the 15-minute period of maximum use during the month but not less than 80% of the highest Kilowatts of Billing Demand established during the 11 preceding months. The Kilowatts of Billing Demand will be subject to the Power Factor Adjustment Clause.

~








Title: LARGE LIGHTING AND POWER PSC File Mark Only

Determination of Kilowatts of Billing Demand: The Kilowatts of Billing Demand for each month will be the average kilowatt load used by the Customer during the 15-minute period of maximum use during the month but not less than 80% of the highest Kilowatts of Billing Demand established during the 11 preceding months. The Kilowatts of Billing Demand will be subject to the Power Factor Adjustment Clause.

Capacity Charge for Highly Fluctuating Loads: Should the Customer operate equipment with highly fluctuating, intermittent, or abnormal characteristics that make it necessary for the Company to install special facilities to serve the Customer or to prevent disturbances to the service to other Customers, an additional Distribution Function charge of $1 .00 per month per kilovolt-ampere (LVA) or fraction thereof of transformer capacity installed by the Company to serve the Customer will be added to the Customer's bill.

Power Factor Adiustment: The Company reserves the right to determine the power factor of the Customer's installation served hereunder. Should the power factor at the time of establishment of any 15 minute period of maximum use during the month be determined to be below 90%, the Customer's Kilowatts of Billing Demand will be adjusted by multiplying the Kilowatts of Billing Demand by 90% and dividing the result by the actual power factor at the time of maximum use.

Transmission Service: Applicable when electric service is provided at the Company's available transmission voltages of 69 kV or higher and the Customer furnishes and maintains all necessary transformation equipment beyond this point.


~







Title: LARGE LIGHTING AND POWER PSC File Mark Only

Adiustments:



PAYMENT FOR SERVICE











Title: LIGHTING AND POWER - TIME OF USE

Class of Service: Industrial - Time of Use

AVAILABILITY

PSC File Mark Only

This rate schedule is available to Industrial customers on an annual basis having loads of 800 Kilowatts of maximum demand or greater. Service will be provided at one point of delivery through one meter where facilities of adequate capacity and suitable phase and voltage are available .

NET MONTHLY RATE


Generation Transmission Distribution Service Bill Secondary Service: On-Peak First 50 kW or less of On- Peak Billing Demand in the month

All additional kW of On- Peak Billing Demand in the month (per kW)


Off-peak First 50 kW or less of Off- Peak Billing Demand in the month

All additional kW of Off- Peak Billing Demand in the month (per kW)


$267.60 $36.47 $87.14

$5.35 $0.73 $1.74

$0.023727 $0.003233 $0.007726

$70.77 $9.65 $23.03

$1.42 $0.19 $0.46

$0.006244 $0.00085 1 $0.002033

$43.85 $14.94

$0.88 $0.30

$0.003888 $0,001325

$1 1.60 $3.95

$0.23 $0.08

$0.001023 $0.000349






Kind of Service: Electric Class of Service: Industrial -



Time of Use

Primary Service: On-Peak

First 50 kW or less of On- Peak Billing Demand in the month

All additional kW of On- Peak Billing Demand in the month (per kW)


Off-peak First 50 kW or less of Off- Peak Billing Demand in the month

All additional kW of Off- Peak Billing Demand in the month (per kW)


PSC File Mark Only



$252.74 $34.44 $82.29 $47.20 S8.33

$5.05 $0.69 $1.65 $0.94 $0.17

$0.023609 $0.003217 $0.007687 $0.004409 $0.000778

$55.90 $7.62 $18.19 $10.44 $1.85

$1.12 $0.15 $0.36 $0.21 $0.04

$0.006 125 $0.000835 $0.001994 $0.001 144 $0.000202

Determination of Kilowatts of Billing Demand: Billing Demands will be separately maintained and applied for the On-Peak and Off-peak periods. Billing Demands shall be calculated as follows:

On-Peak: The Kilowatts of On-Peak Billing Demand for each month in which On-Peak period rates are applicable shall be the average kilowatt load used by the customer during the


______


1 Original Sheet No: 33 Sheet 3 of 4 Sheets



Kind of Service: Electric Class of Service: Industrial -

Part 111. Rate Schedule No. 8 Time of Use

Title: LIGHTING AND POWER - TIME OF USE PSC File Mark Only

15 minute period of maximum use during that month's On-Peak period, but not less than 70% of the highest Kilowatts of Billing Demand established during the On-Peak period during the 11 preceding months. The Kilowatts of On-Peak Billing Demand shall be subject to the Power Factor Adjustment Clause.

Off-peak: The Kilowatts of Off-peak Billing Demand for each month shall be the average kilowatt load used by the Customer during the 15 minute period of maximum use during the Off-peak period of that month, but not less than 70% of the highest Kilowatts of Billing Demand established during either the On-Peak or Off-peak period during the 11 preceding months. The Kilowatts of Off-peak Billing Demand shall be subject to the Power Factor Adjustment Clause.

Definition of Rating Periods:

On-Peak: The On-Peak hours shall be the hours from 1 :01 p.m. through 7:OO p.m. during weekdays, excluding national holidays, during the months of July, August and September.

Off-peak: The Off-peak hours shall be all hours other than the On-Peak hours.

Capacity Charge for Highly Fluctuating Loads: Should the Customer operate equipment with highly fluctuating, intermittent, or abnormal characteristics that make it necessary for the Company to install special facilities to serve the Customer or to prevent disturbances to the service to other Customers, an additional Distribution Function charge of $1 .OO per month per kilovolt-ampere (kVA) or fraction thereof of transformer capacity installed by the Company to serve the Customer will be added to the Customer's bill.






Kind of Service: Electric Class of Service: Indusfrial -



Time of Use

PSC File Mark Only

Power Factor Adjustment: The Company reserves the right to determine the power factor of the Customer's installation served hereunder. Should the average lagging power factor during the month be determined to be below 90%, the Customer's Kilowatts of Billing Demand in each rating period will be adjusted by multiplying the Kilowatts of Billing Demand in each rating period by 90% and dividing by the average lagging power factor.

Primary Service: Applicable when electric service is provided at the Company's primary distribution voltage of 12.5 kV or higher and the Customer furnishes and maintains all necessary transformation equipment beyond this point.

Fuel Adiustment: In addition to all other charges, the amount of the Customer's bill will be adjusted by an amount per Kilowatthour calculated according to the formula in the Energy Cost Recovery Rider - Arkansas.

Tax Adjustment: In addition to all other charges, the amount of the Customer's bill will be increased by the proportionate part of any new tax or increased rate of tax in accordance with the Tax Adjustment Rider - Arkansas.

PAYMENT FOR SERVICE









Kind of Service: Electric Class of Service: Pulp & Paper Mill


Title: PULP AND PAPER MILL SERVICE I PSC File Mark Only

I

AVAILABILITY

This rate schedule is available to pulp and paper mills on an annual basis where facilities of adequate capacity and suitable phase and voltage are available. Service will be supplied at one point of delivery through one meter.

PULP AND PAPER MILL RATE

The Company shall render a bill and the Customer shall pay for electric service supplied each month an amount to be determined in the following manner:



First 20,000 kW or less in the month $7 1,874.98 $10,109.07 $59.65 $6,999.91 $383.39

All additional kW in the Month (per kW) $3.59 $0.5 I $0.00 $0.35 $0.02

Kilowatthour Charge (per kWh) $0.004822 $0.000678 $0.000004 $0.000470 $0.000026

Determination of Kilowatts of Billing Demand: The Kilowatts of Billing Demand will be measured and will be the kilowatt load supplied during the 15-minute period of maximum use in the 12-month period ending with the current month, but never less than 20,000 kilowatts.








Title: PULP AND PAPER MILL SERVICE PSC File Mark Only

Power Factor Adiustment: In the event the power factor at the time of establishment of any 15-minute period of maximum use during the month is less than 90%, the Kilowatts of Billing Demand shall be adjusted by multiplying the Kilowatts of Billing Demand by 90% and dividing the result by the actual power factor at the time of said maximum use, and the result so obtained shall be Kilowatts of Billing Demand for the month, but never less than the maximum number of Kilowatts of Billing Demand in the 12-month period ending with the current month and, in any event, not less than 20,000 kilowatts.

Minimum Monthly Bill: The minimum monthly bill will be the maximum Kilowatts of Billing Demand charge during the 12-month period ending with the current month, but never less than the charge of $89,400.00 for the first 20,000 Kilowatts of Billing Demand or less, and plus or minus the Fuel Adjustment charge plus the Tax Adjustment charge.

Annual Guarantee: It is mutually understood and agreed that in order for Company to be equitably compensated for permitting Customer to operate its plant generators in parallel with Company system the Customer will take or pay for, each year ending on October 3 1, a minimum of 2,000 hours times the maximum number of Kilowatts of Billing Demand previously determined, but not less than 40,000,000 of kilowatthours per year.

Kilowatthours used during periods of turbine-generator overhaul, maintenance or emergency shall not be included in the Annual Guarantee.








Title: PULP AND PAPER MILL SERVICE 1 PSC File Mark Only

Conjunctive Rate Provisions: When the Pulp and Paper Mill rate is used in conjunction with the Supplementary, Backup, Maintenance, and As-Available Standby Power Service rate, the Power Factor Adjustment and the following provisions for turbine-generator overhaul, emergency power, and maintenance power will not apply.

Turbine-Generator Overhaul: It is recognized that it will be necessary for the integrated operations of the turbine-generators of Customer and power service of the Company, that scheduled overhaul periods on the equipment of the Customer must be fitted into the similar schedules of the Company. During periods of agreed overhaul the Kilowatts of Billing Demand shall be based on actual kilowatts during such overhaul period but in no event less than maximum Kilowatts of Billing Demand previously established under normal operations. The Kilowatts of Billing Demand established during overhaul period will not be used to determine the maximum kilowatt load previously established.

Emergency Power: The Company recognizes that actual emergencies can occur to Customer's generating facilities and that Customer may desire assistance in supplying such loss of generating capability not to exceed 30 days for any one emergency.

The Company will, to the extent of facilities then available, make every reasonable effort to supply Customer's emergency. Customer agrees to correct its emergency conditions as soon as reasonably possible. An authorized representative of the Customer shall notify Company's system operations center's authorized representative at time of the beginning of the emergency, the cause and the expected duration thereof. The Customer's representative will also notify Company at the time the emergency ends. Such notices shall be confirmed by letter containing the same information to the authorized representative within 24 hours of the start and end of the emergency.









The Customer shall pay the Company for all emergency load and energy supplied on the following basis:


Generation Transmission Distribution Service Billing

Kilowatt Charge $4.40 $0.62 $0.00 $0.43 $0.02

per Kilowatt of Billing Demand in excess of the Determination of Kilowatts of Billing Demand under normal firm load conditions or 20,000 kilowatts.


Generation Transmission Distribution Service Billing

Kilowatthour Charge $0.010448 $0.001470 $0.000009 $0.001 026 $0.000056

per kilowatthour plus Fuel Adjustment charge or 110% of Company's highest kilowatthour cost either purchased or generated during the time of the emergency, whichever is greater. The kilowatthours will be the sum of the kilowatthours determined by multiplying the Maximum demand in each hour of the emergency that is in excess of the determination of Kilowatts of Billing Demand under normal firm load conditions times one hour.

Maintenance Power: To enable the Customer to repair and maintain the operating efficiency of its facilities, the Customer may purchase additional power referred to as "Maintenance Power" from the Company. Maintenance Power shall be arranged in advance by telephone








Title: PULP AND PAPER MILL SERVICE I PSC File Mark Or Y

jupplied, provided the Company is reasonably certain that a system peak will not be created -equests to the Company's system operation center. Such Maintenance Power will be

during this period and providing the Company in its judgment has adequate capacity in its own system to supply the requested demand. Maintenance Power requests will be for a limited period of time as specified by Company. Maintenance Power will be extremely limited or unavailable during the months of June, July, August and September. Company reserves the right to terminate Customer's purchase of Maintenance Power due to changes within this system with one-hour notice to Customer. Maintenance Power will be provided only during periods when the Customer is receiving firm power from the Company. The Customer will pay for such maintenance power on whichever of the following basis is applicable:

Maintenance Power - Used only from 1 1 :00 p.m. on Fridays until 7:OO a.m. on Mondays and from 12:Ol a.m. on holidays to 7:OO a.m. the following morning.



Kilowatt Charge $1.80 $0.25 $0.00 $0.18 $0.0 1


The normal charges per kilowatthour as provided in the rate schedule.









Maintenance Power - Used at any time in addition to or including 1 1 :00 p.m. on Fridays until 7:OO a.m. on Mondays and from 12:Ol a.m. on holidays to 7:OO a.m. the following morning.



KIlowatt Charge $3.59 $0.5 1 $0.00 $0.35 $0.02


The normal charges per kilowatthour as provided in the rate schedule.

The Kilowatts of Billing Demand created during an agreed to use of Maintenance Power in excess of the Determination of Kilowatts of Billing Demand under normal firm load conditions will not be used to determine the maximum kilowatt load previously established.

Adi ustments :

Fuel Adiustment - In addition to all other charges, the amount of the Customer's bill will be adjusted by an amount per kilowatthour calculated according to the formula in the Energy Cost Recovery Rider - Arkansas.

Tax Adjustment - In addition to all other charges, the amount of the Customer's bill will be increased by the proportionate part of any new tax or increased rate of tax in accordance with Tax Adjustment Rider - Arkansas.









PAYMENT FOR SERVICE



Service will be furnished under the Company's Standard Terms and Conditions.


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