March 22, 2013

Update:  The evidentiary hearing began this week and has mostly consisted of testimony and cross-examination of DP&L’s witnesses.

• Day 1: Witness Craig Jackson, Chief Financial Officer for DP&L, was on the stand for the entire day. Jackson testified regarding his pro forma financial projections and DP&L’s cost of debt calculations.

• Day 2: Witness Aldyn Hoekstra, DP&L’s Vice President for Merchant Portfolio Strategy, and witness Bill Chambers, a finance professor at Boston University who is testifying on DP&L’s behalf, took the stand. Hoekstra testified regarding the items that will be included in the fuel rider and market-based auction prices. Chambers testified regarding the need for DP&L to maintain its financial integrity with a return on equity between 7.7% and 10.4%.

• Day 3: Witness Jeff Malinak, an economic consultant for DP&L, witness Tim Rice, Assistant General Counsel and Corporate Secretary for DP&L, and witness Nathan Parke, Manager of Regulatory Operations for DP&L, took the stand today. Testimony was as follows: Malinak testified that DP&L’s electric security plan is more favorable than a market rate offer; Rice testified that DP&L’s corporate separation plan is consistent with the PUCO’s rules and similar to its previously filed corporate separation plan; and Parke testified regarding the methodology of various riders, specifically the alternative energy rider (renewables) and the fuel rider.

• Day 4: PUCO Staff witness Mahmud, PUCO Staff witness Strom, and witness Phil Herrington, President and Chief Executive Officer of DP&L, took the stand. Mahmud testified that DP&L should receive a service stability rider (SSR) amount of $133 million annually, rather than the $137.5 million that DP&L seeks; Strom testified regarding DP&L’s competitive bid process; and Herrington provided a high-level overview of DP&L’s ESP filing.

The hearing will likely go until the first week of April.  We will provide updates accordingly.