Potomac-Appalachian Transmission Highline Annual Update For Year 2010 Presented July 20, 2011
Basics of the Annual Update • 2010 Projected Revenue Requirement was presented in the October 1, 2009 update filing. • 2010 Projected Revenue Requirement was based on: – Projected CWIP & Reg. Asset Balances (13-month average) – Projected Expenses – Income Taxes – Projected Amortization of Regulatory Asset • Rates became effective January 1, 2010. • 2010 Actual Transmission Revenue Requirement was filed on June 3, 2011. 2
True Up Adjustment 2010 in millions PATH WV PATH AYE Total PATH 2009 PTRR $ 18.1 $ 11.4 $ 29.5 2009 ATRR 13.3 11.3 24.6 True Up Adjustment $ (4.8) $ (0.1) $ ( 4.9) 3
Components of True Up PATH- WV 2010 in millions Surcharge / Projected Actual (Refund) Total O&M $ 5.1 $ 3.9 $ (1.2) Amort. of Reg. Asset 1.2 1.2 0.0 Taxes Other than Income Tax 0.0 0.2 0.2 Return on Rate Base 8.1 5.5 (2.6) Income Tax 3.7 2.5 ( 1.2) Total $ 18.1 $ 13.3 $ (4.8) 4
Components of True Up PATH- AYE 2010 in millions Surcharge / Projected Actual (Refund) Total O&M $ 2.5 $ 2.6 $ 0.1 Amort. of Reg. Asset 0.1 0.1 0.0 Taxes Other than Income Tax 0.6 0.2 (0.4) Return on Rate Base 5.6 5.7 0.1 Income Tax 2.6 2.7 0.1 Total $ 11.4 $ 11.3 $ (0.1) 5
Rate Base for 2010 PATH-WV in millions Projected Actual Difference CWIP $ 68.9 $ 33.8 $ (35.1) Regulatory Asset 3.3 3.3 0.0 Deferred Income Taxes 4.2 4.4 0.2 Land Held for Future Use 0.0 9.8 9.8 Cash Working Capital 0.8 0.7 (0.1) Total $ 77.2 $ 52.0 $ (25.2) PATH Rate Base is calculated using a 13-month average balance 6
Rate Base for 2010 PATH-AYE in millions Projected Actual Difference Plant in Service $ 9.8 $ 19.7 $ 9.9 CWIP 42.3 33.5 (8.8) Regulatory Asset 0.5 0.5 0.0 Deferred Income Taxes 0.3 0.4 0.1 Cash Working Capital 0.3 0.4 0.1 Total $ 53.2 $ 54.5 $ 1.3 PATH Rate Base is calculated using a 13-month average balance 7
Key Reasons for Refund • Lower than projected O&M Expense • Costs related to safety, education, siting, and outreach were lower than expected due to delays in the CPCN process • Lower than projected CWIP expenditures • The extension of the PATH project in-service date to 2015 pushed back all scheduled activities and associated costs including major siting and ROW activities, progress payments for materials and preliminary construction activities resulting in the major reduction of expected spend. 8
Next Steps • PATH will post 2012 Projected Transmission Revenue Requirement on September 1, 2011. • The 2012 revenue requirement will include a $4.9 million credit, effectively returning the overcollection to customers throughout 2012. • Interest will also be applied to the $4.9 million credit and included in the 2012 revenue requirement. • 9
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