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HomeMy WebLinkAbout1998-381ORDINANCE NO ✓D AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH LOUIS BERGER & ASSOCIATES, INC FOR SERVICES RELATING TO THE VALUATION OF ELECTRIC TRANSMISSION AND DISTRIBUTION SYSTEM, AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN EFFECTIVE DATE (RFSP #2286-VALUATION OF ELECTRIC TRANSMISSION & DISTRIBUTION SYSTEM AWARDED TO LOUIS BERGER & ASSOCIATES, INC IN THE AMOUNT OF $85,000 00) THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is hereby authorized to execute a Professional Services Agreement with Louis Berger & Associates, Inc for service relating to the Valuation of Electric Transmission and Distribution System, a copy of which Agreement is attached hereto and incorporated herein by reference SECTION II That the expenditure of funds as provided in the attached agreement is hereby authorized SECTION III That this ordinance shall become effective immediately upon its passage and approval / PASSED AND APPROVED this the % tr[ day of �B�E/�. , 1998 JA C LER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY AP VED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY�'C RFSP 2286 PROFESSIONAL SERVICES AGREEMENT ORDINANCE PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES PERTAINING TO THE PREPARATION OF A VALUATION STUDY AND REPORT OF THE DENTON MUNICIPAL ELECTRIC TRANSMISSION AND DISTRIBUTION SYSTEM STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT is made and entered into as of the �64 day of W9909,,4eV , 1998, by and between the City of Denton, Texas, a Texas municipal corporation, with its principal office at 215 East McKinney Street, Denton, Texas 76201, hereinafter called "OWNER", and Louis Berger & Associates, Inc, with its principal office at 5840 Balcones Drive, Suite 200, Austin, Texas 78731, hereinafter called "CONSULTANT", acting herein, by and through their respective duly -authorized officials and officers WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually AGREE as follows ARTICLE I EMPLOYMENT OF CONSULTANT The OWNER hereby contracts with the CONSULTANT, as an independent contractor, and the CONSULTANT hereby agrees to perform the services herein in connection with the Project as stated in the Articles to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas The professional services set out herein are in connection with the following described project (hereinafter the "Project") The Project shall include, without limitation, preparation of a valuation study and report regarding the Denton Municipal Electric ("DME") transmission and distribution system ARTICLE II SCOPE OF SERVICES The CONSULTANT shall perform the following services in a professional manner A The CONSULTANT shall perform all those Basic Services as are necessary and appropriate and as described in the OWNER's Request for Sealed Proposal No 2286 B To perform all those Basic Services set forth in CONSULTANT's Proposal, dated October 12, 1998, which Proposal is attached hereto and made a part hereof as Exhibit "A", and is incorporated herewith by reference C If there is any conflict between the terms of this Agreement and the exhibit attached to this Agreement, the terms and conditions of this Agreement shall control over the terms and conditions of the attached exhibit ARTICLE III ADDITIONAL SERVICES Additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included in the above -described Basic Services set forth in Article II heremabove, are described as follows A Any presentation made to the Denton City Council B Any professional services rendered by CONSULTANT involving participation in negotiating activities between Denton Municipal Electric and other parties ARTICLE IV PERIOD OF SERVICE This Agreement shall become effective upon execution of this Agreement by the OWNER and the CONSULTANT and upon issuance of a notice to proceed by the OWNER, and shall remain in force for the period which may reasonably be required for the completion of the Project, including Additional Services, if any, and any required extensions approved by the OWNER This Agreement may be sooner terminated in accordance with the provisions hereof Time is of the essence in this Agreement The CONSULTANT shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule established by the OWNER, acting through its City Manager or his designee ARTICLE V COMPENSATION A COMPENSATION TERMS "Subcontract Expense" is defined as expenses incurred by the CONSULTANT in employment of others in outside firms as subcontractors or subconsultants for services to assist CONSULTANT in the performance of the Project 2, "Direct Non -Labor Expense" is defined as that expense for any assignment incurred by the CONSULTANT for supplies, transportation and equipment, travel, communications, subsistence, lodging away from home, and similar incidental expenses reasonably incurred in connection with the Project Page 2 B BILLING AND PAYMENT For and in consideration of the professional services to be performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost estimate detail at the hourly rates shown in Section 3, at page number 3-1 of Exhibit "A"(the Proposal) which is attached hereto and incorporated herewith by reference, a total fee, including reimbursement for direct non -labor expenses not to exceed $ 85,000 All direct non -labor expenses shall be billed by CONSULTANT to OWNER at actual cost Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through its City Manager or his designee, however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered The OWNER may withhold the final ten percent (10%) of the contract amount until satisfactory completion of the Project Nothing contained in this Article shall require the OWNER to pay for any work which is unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not submitted in compliance with the terms of this Agreement The OWNER shall not be required to make any payments to the CONSULTANT when the CONSULTANT is in default under this Agreement It is specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER The CONSULTANT shall not proceed to perform the services listed in Article III "Additional Services," without obtaining prior written authorization from the OWNER C ADDITIONAL SERVICES For additional services authorized in writing by the OWNER in Article III heremabove, the CONSULTANT shall be paid based on the Schedule of Charges at the hourly rates shown in Section 3, at page 3-1 of Exhibit "A " (the Proposal attached hereto Payments for additional services shall be due and payable upon submission by the CONSULTANT, with CONSULTANT's regular monthly statement as provided for above Statements shall not be submitted more frequently than monthly D PAYMENT If the OWNER fails to make payments due the CONSULTANT for professional services and expenses within sixty (60) days after receipt of the CONSULTANT's undisputed statement thereof, the amounts due the CONSULTANT will be increased by the rate of one percent (1%) per month from the said sixtieth (60`h) day, and, in addition, the CONSULTANT may, after giving seven (7) days written notice to the OWNER, suspend services under this Agreement until the CONSULTANT has been paid in full all amounts then due and owing for services, expenses, and charges, provided, however, nothing herein shall require the OWNER to pay the late charge of one Page 3 percent (1%) set forth herein if the OWNER reasonably determines that the work is unsatisfactory, in accordance with this Article V, "Compensation " ARTICLE VI OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT or any of CONSULTANT's subcontractors or subconsultants ARTICLE VII OWNERSHIP OF DOCUMENTS All documents prepared or furnished by the CONSULTANT (and CONSULTANT's subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and shall become the property of the OWNER upon the termination of this Agreement The CONSULTANT is entitled to retain copies of all such documents The documents prepared and furnished by the CONSULTANT are intended only to be applicable to this Project, and OWNER's use of these documents in other projects shall be at OWNER's sole risk and expense In the event the OWNER uses any of the information or materials developed pursuant to this Agreement in another project or for other purposes than specified herein, CONSULTANT is released from any and all liability relating to their use in that project ARTICLE VIII INDEPENDENT CONTRACTOR CONSULTANT shall provide services to OWNER as an independent contractor, not as an employee of the OWNER CONSULTANT shall not have or claim any right arising from employee status ARTICLE IX INDEMNITY AGREEMENT The CONSULTANT shall indemnify and save and hold harmless the OWNER and its officials,) officers, agents, and employees from and against any and all liability, claims, demands, damages losses, and expenses, including, but not limited to court costs and reasonable attorney's fees incurred by the OWNER, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the CONSULTANT or its officers, agents, employees, subcontractors or subconsultants in the execution, operation, or performance of this Agreement Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved Page 4 ARTICLE X INSURANCE During the performance of the services under this Agreement, CONSULTANT shall maintain the following insurance coverage with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with A M Best Rate Carriers of at least "A-" or above A Comprehensive or Commercial General Liability Insurance with bodily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with property damage limits of not less than $100,000 for each occurrence and not less than $100,000 in the aggregate B Automobile Liability Insurance with bodily injury limits of not less than $500,000 for each person and not less than $500,000 for each accident, and with property damage limits of not less than $100,000 for each accident C Worker's Compensation Insurance in accordance with statutory requirements, and Employers' Liability Insurance with limits of not less than $100,000 for each accident D Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate E The CONSULTANT shall furnish insurance certificates or insurance policies at the OWNER's request to evidence such coverage The insurance policies shall name the OWNER as an additional insured on all such policies to the extent legally possible, and shall contain a provision that such insurance shall not be cancelled or modified without thirty (30) days' prior written notice to OWNER and CONSULTANT In such event, the CONSULTANT shall, prior to the effective date of the change or cancellation deliver to OWNER insurance policies or certificates furnishing the same coverage ARTICLE XI ARBITRATION AND ALTERNATE DISPUTE RESOLUTION The parties may agree, but are not required to settle any disputes under this Agreement by submitting the dispute to arbitration or other means of alternate dispute resolution, such as mediation No arbitration or alternate dispute resolution arising out of or relating to this Agreement, involving one party's disagreement, may include the other party to the disagreement without the other parry's approval ARTICLE XII TERMINATION OF AGREEMENT A Notwithstanding any other provision of this Agreement, either party may terminate by giving thirty (30) days' advance written notice to the other party Page 5 B This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement No such termination will be affected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the non-performance, and not less than thirty (30) calendar days to cure the failure, and (2) an opportunity for consultation with the terminating party prior to termination C If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services and shall render a final bill for services to the OWNER within thirty (30) days after the date of termination The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred prior to the date of termination, in accordance with Article V "Compensation " Should the OWNER subsequently contract with a new consultant for the continuation of services on the Project, CONSULTANT shall cooperate in providing information The CONSULTANT shall turn over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of termination, but may maintain copies of such documents for its use ARTICLE XIII RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the CONSULTANT, its officers, employees, agents, subcontractors, and subconsultants for the accuracy and competency of their work, nor shall such approval be deemed to be an assumption of such responsibility by the OWNER for any defect in the work prepared by the CONSULTANT, its officers, employees, agents, subcontractors, and subconsultants ARTICLE XIV NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the addresses shown below, by means of certified mail, return receipt requested, unless otherwise specified herein Page 6 To CONSULTANT Louis Berger & Associates, Inc Steve Marsh, Manager of Energy Services 5840 Balcones Drive, Suite 200 Austin, Texas 78731 given City of Denton, Texas City Manager 215 East McKinney Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is ARTICLE XV ENTIRE AGREEMENT This Agreement, consisting of ten (10) pages and one (1) exhibit, constitutes the complete and final expression of the agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, understandings, and agreements which may have been made in connection with the subject matter of this Agreement ARTICLE XVI SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the parties hereto respecting the stricken provision ARTICLE XVII COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or be hereafter amended ARTICLE XVIII DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap Page 7 ARTICLE XIX PERSONNEL A The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform all the professional services required under this Agreement Such personnel shall not be employees or officers of, nor have any contractual relations with the OWNER CONSULTANT shall inform the OWNER of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement B All services required hereunder will be performed by the CONSULTANT or under its direct supervision All personnel engaged in work shall be qualified, and shall be authorized and permitted, under state and local laws, to perform such services ARTICLE XX ASSIGNABILITY The CONSULTANT shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the OWNER ARTICLE XXI MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed by the parties The parties further agree that the provisions of this Article will not be waived unless as set forth herein ARTICLE XXII MISCELLANEOUS A The following exhibits are attached to and made a part of this Agreement Exhibit "A"---CONSULTANT's Proposal, dated October 12, 1998 B CONSULTANT agrees that OWNER shall, until the expiration of three (3) years after the final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers, and records of the CONSULTANT involving transactions relating to this Agreement CONSULTANT agrees that OWNER shall have access during normal working hours to all necessary CONSULTANT facilities and shall be provided adequate and appropriate working space in order to conduct audits Page 8 in compliance with this section OWNER shall give CONSULTANT reasonable advance notice of intended audits C Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas This Agreement shall be governed by and construed in accordance with the laws of the State of Texas D For the purpose of this Agreement, the key person who shall perform most of the work hereunder shall be Steve Marsh, Manager of Energy Services of CONSULTANT Steve Marsh shall also serve as OWNER's principal point -of -contact on the Project However, nothing herein shall limit CONSULTANT from using other qualified and competent members of its firm to perform the professional services required herein E CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions of this Agreement In accomplishing the Project, CONSULTANT shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the OWNER F The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement G The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement IN WITNESS WHEREOF, OWNER and CONSULTANT have hereby executed this Agreement in quadruplicate original counterparts, the OWNER acting by and through its duly - authorized City Manager, and the CO SULTANT acting by and through its duly -authorized undersigned officer on this the /'%t� day of *fie,fyl �/fi� , 1998 "OWNER" CITY OF DENTON, TEXAS Page 9 ATTEST, JENNIFER WALTERS, CITY SECRETARY By APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY "CONSULTANT" LOUIS BERGER & ASSOCIATES, INC By ATTEST By oruL F \shared\dept\LGL\Our Documents\Contracts\98\Valuanon Study & Report doc Page 10 LLouis Berger & Associates, Inc e 5840 Balconies Drive, Suite 200, Austin, TX 78731 Tel 512 459 2126 • Fax 512 459 2138 Engineers • Economists • Planners • Appraisers October 12, 1998 Mr Ray Wells City of Denton Purchasing Department 901-A Telcas Street Denton, TX 76201 A Member of the Berger Group Subject Valuation of Electric Transmission & Distribution System (RFSP # 2286) Dear Mr Wells Thank you for giving us this opportunity to respond to the Request for Proposal #2286 Valuation of Electric Transmission & Distribution LBA Energy Services is a select group of professionals at Louis Berger & Associates, Inc (LBA), which has been involved in the energy and management consulting business since 1989 LEA staff has extensive experience in performing cost of service and rate studies for large municipal electric utilities, including those regulated by state regulatory bodies LBA is also extensively involved with industry deregulation and economic development issues Our services include strategic planning, economic and financial analyses, nansmission cost of service and rate unbundling, regulatory support, restructuring and power supply planning, gas supply planning, management assessments, competitive assessments, engineering design, strategic marketing planning, and utility valuation I have prepared an attachment and enclosures describing LBA and our approach to providing Denton Municipal Electric (DME) with the requested services We propose to complete the specified work assignment within eight weeks and a total estimated not -to -exceed budget of $85,000, which includes all fees for professional services and anticipated expenses The proposal is organized into ten tasks From our perspective all of the tasks are important and integral to a comprehensive approach to performing a valuation study of transmission and distribution assets The initial task is a kickoff meeting the purpose of which is to establish the framework for working together The overarching goal of the kickoff meeting is to optimize the use of LBA resources by beginning with clear statements of the questions to be answered and the issues of eonebrn Too often, consultants tend to concentrate on addressing questions for which available techniques can provide relatively precise answers For LBA, the bottom line is that techniques are subordinate to the goals of the program The LBA team is prepared to facilitate discussions with DME staff to explore the practical implications of deregulation on DME business policy Joining LBA on this assignment are two experts in valuation methodology Mr Dennis DeeGear is Vice President for Capital Appraisal Group the premier consulting firm spec,ializmg valuation studies for nearly every taxing authority in Texas Mr DeeGear brings more than two decades of experience assessing the value of utility systems His expertise will prove useful for determining EXHIBIT A ,vu i��y ,v cua October 12, 1998 Page 2 market value of the electric transmission and distribution system and the fiber optic telecommunication system Dr Anthony Lawrence, an independent consultant is an economist and econometncian with 25 years experience in the electric utility industry Dr Lawrence specializes in the development of mathematical methods of public utility planning and pricing in a competitive environment He will provide leadership for the team with the implicit valuation of extant capital assets and determination of customer value and system cost of differential services We are committed to providing DME with the highest level of service We have included numerous examples of project experience, many of which were the result of follow-on assignments or referrals I, personally, have had leadership roles in the valuation studies for City Public Service of San Antonio, Austin Energy, and Lubbock Power & Light We would be pleased to discuss our approach on this project and expand on our experiences from other projects as necessary Thank you again forgiving us this opportunity I hope you can appreciate how important it is to us to be among those considered to work with DME on this project If you require additional information or discussion, please call me in Austin at (512) 459-2126 S , "IA' eve Marsh Manager of Energy Services Attachment Section 1 Discussion of Approach INTRODUCTION With the advent of deregulation, the restructuring of the utility industry has caused every utility owner to rethink the traditional relationships between supply and demand The prophecy that customers would one day have choices among multiple suppliers is closer to reality today than it ever has been before As a consequence, there is increased pressure being placed on strategic decision making and the business of a municipal utility Although traditional technical and economic valuation studies still bring meaningful insight into the decision making process, other factors are now complicating the framework within which business strategies are formulated As deregulation initiatives advance and new entrants launch aggressive programs to capture market share, public power utilities in particular are faced with the mixed prospect of both opportunity and inconvenience This has become no place for a timid agenda Louis Berger & Associates, Inc (LBA) is pleased to submit this proposal to provide strategic valuation services to Denton Municipal Electric (DME) We are certain there are positive opportunities for DME to continue as a regional supplier and we are anxious to assist the utility with making an orderly transition to a deregulated market In this proposal we bring together a unique blend of marketing, engineering, and management experience to assure DME that the program envisioned by you is delivered on budget and on time, and that the customer service and business management goals of DME are met LBA is a multi -disciplinary international consulting firm specializing in management and engineering services Our experience is extensive, ranging from competitive assessments and resource planning to organizational review and legislative and regulatory support We understand the competitive forces impacting the industry and have successfully conceived and implemented strategies that are responsive to the pressures of the marketplace Based on the issues described in the Request for Proposal (RFP), we have developed a focused and innovative program for your consideration We believe this program can both influence change and help prepare DME to be successful in competing in a restructured electric utility industry APPROACH The approach we propose is grounded on our current understanding of the potential uses of the valuation information by the City We plan to contrast the value of the DME transmission and distribution system from both public and private ownership structures We are mindful that the results of this valuation study could be used by DME and the Denton community to assess the benefit of municipal ownership The valuation assessment would be prepared considering two primary scenarios the continued operation of DME as a municipal utility in a new competitive environment, and, a new utility structure featuring all or portions of DME sold to private entities In describing the scenarios, the following stakeholder perspectives will be addressed • Value to the City of Denton • Value to the Denton community • Value to the customers LBA Energy Services Denton Municipal Utility Valuation Study Section 1 Discussion of Approach TABLE 1-1 Comparison of Benefits Public versus Private Ownership Stakeholder and Valuation Perspective Public Ownership Private Ownership City Perspective • General fund transfer ✓ • Franchise fees ✓ • Ad valorem taxes ✓ • Annuity for sale proceeds Community Perspective • DME employment ✓ • Area economic development ✓ ✓ • Other ad valorem taxes • Business/job retention ✓ • "Profit" extraction from community Customer Perspective • Rates ✓ ✓ • Services ✓ '� ✓ • Reliability'� Table 1-1 summaries the stakeholder perspectives under two ownership scenarios The first scenario is public ownership as a municipal utility The second scenario is private ownership as an investor -owned utility (IOU) The derivation of value from these three stakeholder perspectives under each ownership scenario would be addressed as follows The City Perspective Establishing a selling price for potential buyers of the DME transmission and distribution system is a major component of describing the City's perspective Conventional valuation methodologies will be used with considerable emphasis placed on the benefits derived from "future earnings" The estimates will provide the basis for contrasting the net benefit to the City Existing transfers and subsides provided by DME, as a municipal utility owned by the City, will be compared to the potential tax and annuity income available through a private ownership structure The three valuation methodologies prescribed by the REP will be used to derive the selling price estimate A discussion of the valuation methodologies to be employed is presented below Information that may be available from DME describing any strategic marketing initiatives of the utility will be used to establish a foundation for extrapolating the perspectives to the future DME business position Central to our analysis will be a focus on the quantifiable benefits of municipal ownership of an electric utility contrasted to those derived from private ownership This analysis will identify address the many issues, both tangible and intangible, of public ownership of the DME transmission and distribution system To the extent we can, we will quantify the intangible benefits based on our understanding of market dynamics and documentation of actual DME policy and community activity At minimum, our analysis will address these issues on a comparable basis LBA Energy Services Denton Municipal Utility Valuation Study 1-2 Section 1 Discussion of Approach A range of business positions will be assumed to provide a measure of sensitivity to future market conditions Valuation of the DME system will be made from two business -unit perspectives transmission and distribution, and distribution only Based on the results of discussion with DME staff at the project kick-off meeting, we will consider two different sale scenarios Key components of the transmission system and the entire transmission and distribution system If a more expanded analysis were required by DME, we would be pleased to collaborate with you to frame the optional approach Our concern at this point is that some components of the DME transmission system are not considered integral to the sale of generation assets currently owned by DME Similarly, some portions of the DME transmission system could be regarded as not integral to the reliable operation of the DME transmission and distribution system As mentioned above, three valuation approaches will be used to estimate the selling price of the transmission and distribution system from the City perspective They are • Cost • Income, and • Comparable sales (market) A fundamental assumption is that there are true indicators of value for the purposes of our analysis Under the Cost Approach, the two conventional methods are the Reproduction Cost Method and the Replacement Cost Method Typically, both are evaluated and compared The Reproduction Cost Method would construct the asset exactly as it exists today and allow for an assessment of observable condition for issues such as age, functional obsolescence, and ordinary wear and tear The useful life of the asset is also taken into consideration in the value estimate The Replacement Cost Method uses current technology and reconstructs an asset capable of providing the same genenc function, but may not exactly reproduce the asset The Replacement Cost is also adjusted for age and remaining useful life Typically, the Replacement Cost method is applied to older assets where exactly reproducing the asset for the purpose of determining value is not practical While some emphasis will be placed on the Cost Approach, we intend to use it to establish a benchmark for value and will focus more on the Income Approach Therefore, we will construct value under the Cost Approach by relying on DME data as it relates to book cost and information DME has on fixed assets The second approach to valuation is the Income Approach This approach is used widely to take into account the business structure of operating a company We propose to value your two primary business units under the Earnings Stream Method We will use discounted cash flow analysis We will develop value based on the earnings of DME We will include as many of the tangible and intangible components of value These can appear in the form of revenue, m-lieu-of franchise elements, investment income, ad valorem taxes, and other items as can be identified which would add to the earning value or net worth of DME to the City, either from a sale or retained ownership scenario For the purpose of comparison, we will employ the proprietary methodology developed by the Capital Appraisal Group for assessing taxable value of facilities owned and operated by private utilities in Texas The third approach to be considered is the Comparable Sales or Market Approach LBA will review the industry for recent sales of transmission and distribution systems comparable to DME and include this information in our report To supplement this information, we will rely on the extensive database of the Capital Appraisal Group to develop a statistically representative sample of comparative values (11� LBA Energy Services Denton Municipal Utility Valuation Study 1-3 Section'l Discussion of Once the three approaches are taken into consideration, a rc�oneiliation process will take place which will determine which approach is the better indicator of value and why we believe so Based on our analysis, we will provide an opinion of value of the transmission and distribution system, and the distribution system as a stand-alone entity The Community Perspective The community perspective would be quantified by assessing the direct and indirect benefits of the transmission and distribution system functions of DME as a major business in Denton Employment, economic development, and local business commitments provided by DME and the corresponding impact on the community would be estimated under both ownership scenarios By contrast, private ownership of the transmission and distribution system could provide a different approach to economic development plus additional ad valorem tax revenue to other governmental entities such as county government and independent school districts Similarly, the negative implications of profit being extracted from the community for the benefit of remote investors would be included in this assessment The Customer Perspective The customer perspective would be evaluated on a comparable basis of selling or retaining the transmission and distribution system Under municipal ownership customers have distinct advantages through participation in local governance structures to control policy on the availability and scope of rates, services, and system reliability Under a private ownership scenario, decisions of policy will likely be made remotely with the interest of the investor being a significant contributing factor LBA will examine and quantify the economic attributes derived by the customer under each scenario Rates, customer service, and reliability variables will be developed to portray the strengths and weaknesses of each SUMMARY The three stakeholder perspectives will be examined and discussed individually Consideration will be given to quantify when possible and potential overlap and impact of perspectives on the value analyses Care will be taken to develop accurate estimates of value based on the existing revenue streams The revenue from potential new markets will be forecasted directly from a business opportunity assessment, if one does not currently exist The last two sessions of the Texas Legislature have resulted in progress toward the restructuring of the electric market in Texas The framework for deregulation in Texas is being crafted now and the 76" Legislature promises to be dynamic and eventful Some of the questions to be addressed include • Will municipal utilities and electric cooperatives be allowed to determine when Customer Choice would be allowed within their service temtones9 • Will the schedule for deregulation proposed in the Governor's Bill of the last session be adopted, or will the difficulties experienced in California cause lawmakers to embrace a more deliberate timetable9 • Will consumer protection initiatives induce lawmakers to empower the Public Utility Commission to have expanded regulatory oversight of utility operations9 • Will new reliability standards for distribution system operation be useful or become a burden to municipal utilities • Will limits be placed on the magnitude of stranded investment allowed for recovery • Will consumer advocate positions cause guarantees of no over -recovery of stranded investment9 LBA Energy Services Denton Municipal Utility Valuation Study 1-4 Section 1 Discussion of Approach • What method for calculating stranded investment will be adopted9 • Will the Bush -Mauro governor's race cause new emphasis to be placed on the air emissions of power plants grandfathered under the Clean Air Act of 19789 • Will clean air compliance costs be included as part of stranded recovery, or become a component of wire charges? Will new requirements be imposed on utilities to guarantee that low-income customers have unrestricted access to energy efficiency options9 • Will renewable resources be excluded from the integrated resource planning process`? • Will transmission planning continue to be a utility function or will emphasis be shifted to the Independent System Operator9 • Will home utilities continue to have control of the relationship with the customer, or will a new model for billing and metering be imposed? • With the exit of many key players from the 75"' Legislature, who will be the champion of deregulation in the 76'h Legislature9 Although new law pertaining to deregulation of the electric industry was not enacted by the 75" Texas Legislature, restructuring initiatives were launched and, we believe, change is inevitable The difficulty being experienced by California with implementation of the Customer Choice experiment has given cause for a more deliberate approach to be taken in Texas However, it is not clear yet how legislators will heed the signal and react in the 76`h Legislature Overall, the transition to Customer Choice in Texas does not have a predictable course and, as a result, informed decisions will require constant research and tracking of issues Consistent with this thinking, we propose to incorporate a schedule for deregulation as part of our quantification of the long-term benefits of continued municipal ownership Fhis schedule will feature an orderly transition to deregulation Estimates of at risk load will be developed in full collaboration with DME staft and their first-hand knowledge of customer sensitivity to price, customer service, and reliability Sensitivity to competition will be estimated and the resulting potential impact on the value of the transmission and distribution system quantified The results of the analysis will be summarized and presented in a draft report for review by DME staff The document will present the individual assessment components and summarize the findings for the two sale scenarios The outlined schedule assumes submission of a completed draft of the assessment for review and comment by DME We will make ourselves available to present these findings in a meeting or workshop Following this meeting, DME staff comments will be incorporated into a final report for submittal and presentation to the DME Board and Denton City Council OPTIONAL CONSULTING SERVICES LBA uses General Electric's Market Assessment and Portfolio Strategies (MAPS) model for evaluating market -planning options Developed over the last 15 years by GE, MAPS captures the complex interaction of generation and transmission systems MAPS integrates into a single model the detailed generation, load, and transmission modeling The MAPS model requires no more system data than is used to run freestanding production simulation and load -flow models However, through its integration of generation and transmission models, MAPS provides hour by hour simulation of the power system In MAPS, transmission line flows on actual or scheduled paths can be determined chronologically with identification of hours where limits are reached Similarly, location -based market clearing prices (spot prices) can be calculated hour by hour on a nodal or zonal basis MAPS does these simulations for systems as large as LBA Energy Services Denton Municipal Utility Valuation Study �� 1-5 Section 1 Discussion of Approach 20,000 nodes, 80 companies and 2,500 generating units, thus making it unnecessary to simplify or create "equivalence" studies of the areas of interest Many of the market scenarios that will be considered in this project would benefit from a MAPS evaluation In addition to providing a powerful market assessment tool, MAPS could be useful for specific applications, such as • Evaluating the savings derived from pooled economic dispatch agreements, • Characterizing the impact of transmission pricing models by using representative point-to-point transaction data, • Analyzing the impact planned additions on future market prices, and, • Analyzing the economics of potential power sales or purchases LBA is currently using MAPS to assist clients with planning and evaluating market strategies (e g , retail and wholesale transactions) in the complex retail market of the New England Power Pool Although r-)t yet used in Texas, the ERCOT database has already been developed by LBA If requested, LBA will make a formal presentation to DME on the potential applications of MAPS System Reliability Assessments As part of a Scenario Analysis, LBA can assist DME with an assessment of transmission system and generation system reliability The transmission system reliability is calculated by LBA through simulating the millions of generator, line, and substation failures that could occur in the system In the LBA approach, line overloads, low voltages, and system islanding are causes for loss of load and are characterized in terms of megawatt -hours (MWH) A simulation can be repeated any number of times to study the reliability of alternative generation and load scenarios Failures likely to cause lengthy loss of customer load and/or unduly interruption of power sales and purchases are identified and ranked by their MWH simulation results The network is represented in detail for both the local load area and the large interconnected network of the Electric Reliability Council of Texas The analysis uses both generation performance data and transmission system electrical and performance data The major part of the transmission data is available in the public domain The generation system reliability is calculated by simulating the millions of possible generation and transmission failures that could occur in the system The reliability of the generation supply is first calculated without transmission constraints over a wide range of load levels Then transmission constraints are included to determine their relative effect on reliability over the same range of load levels Studies show that the transmission system is usually less reliable than generation at lower load levels The system components affecting reliability are determined by this analysis Transactions outside the local area causing a power flow through the local transmission system are identified These may have a detrimental effect on the local reliability and ability of the local area to operate successfully in the market The major part of the transmission data is available in the public domain The results of reliability studies will be useful for characterizing power supply alternatives DME must consider in a deregulated environment For example, because there may be transmission system reliability weaknesses in the Denton region, DME spinning reserve may have greater importance to neighboring utilities than is recognized through current operating agreements LBA Energy Services Denton Municipal Utility Valuation Study iI 1-6 Section 1 Discussion of Approach New Products and Services A cornerstone of the LBA consulting philosophy is a commitment to developing and applying the best data available to support planning functions critical to our clients' strategic objectives Accurate data on customer usage characteristics, preferences and behavior are only a part of the picture Application and integration of these data into a system which is dynamic and accessible provides the ultimate data leverage LBA engineers, economists, and information system professionals fluent with the various objectives and issues in formulating methodological and software solutions are devoted to getting the best data to (and from) each system end -user The planning areas most reliant on quality market assessment data are program conception and design of new products and services Clearly, a major component of all program -related planning is an accurate and up-to-date database on the potential costs and revenues that could be expected from launching a new product or service Along with product marketing and penetration estimates, these data are most essential to identifying and projecting economic and achievable results Depending upon the specific need of our client, studies of market potential may vary in the resolution of the estimates (e g , nation-wide, service temtory, segment, region, district, or rate class), the coverage of the product or service (e g , security systems, appliance maintenance service, Internet service), and the analytic methodology employed (e g , macro/micro estimation, or individual benefit weighted estimation) The LBA product and screening methodology is designed for flexibility required by such custom estimation of technical potential A precursor to launching new products and services is the development of an effective marketing strategy and plan In a deregulated market, margins can be expected to shnnk and factors beyond pnce will receive more emphasis from consumers Image will be essential to an effective marketing strategy LBA is available to assist DME in developing a strong, visible corporate identity in response to changing market forces The corporate identity must be emphasized in the development of a marketing plan, which is designed to maintain and enhance utility revenue production, and improve customer service In order to meet this objective, there are a number of related project activities that must be completed • Conduct a marketing audit of DME current programs and plan • Identify specific strengths, weaknesses, opportunities and thrtats, which impact the utility's current and projected marketing efforts • Assess customer needs and attitudes to assess program opportunities and assess the perceptions of the utility in the market • Use the audit data to determine a relevant portfolio of products and services 1 nked to meeting customer need • Incorporate a comprehensive communication plan to convey the market benefits and opportunities to customers and stakeholders • Work interactively with DME to ensure common understanding and consensus on the approach and results of the study effort The LBA project team has developed a flexible project approach that is designed to provide DME with needed marketing support within a framework grounded in utility objectives and market realities Figure 1-1 provides the general approach in moving DME from its current market position to one that allows the utility to succeed A detailed delineation of specific project activities is presented in Section 3 of this proposal In developing this approach, there are a number of considerations that help ensure its applicability to DME These include the following LBA Energy Services Denton Municipal Utility Valuation Study 1-7 Section 1 Discussion of Approach • Flexibility —The approach is designed to be flexiblc and quickly modified and adapted to account for unique elements of the DME markets The inclusion of initial project activities is geared to identify areas that require greater emphasis and refinement of the process • Utility Team Involvement — The project is structured to incorporate interaction with a utility market planning team The use of a team approach serves to permit comprehensive responses across utility perspectives and assists in establishing an internal critical mass to champion the marketing cause for DME • Comprehensive — The project as proposed includes the full range of market elements These include customer needs, competitor impacts, regulatory issues, experiences from previously administered programs and communications This ensures that all elements will be covered • Sequential — The approach as proposed is based on completing a series of sequential tasks, all designed to provide the necessary information to make informed decisions in subsequent tasks This ensures that the information in the process is properly applied and that the most recent and available data is used The LBA project approach is designed to be flexible in refining any of the proposed activities to tailor the results to the needs of DME The approach incorporates the need to continually assess project progress and identify opportunities to modify the approach to cost-effectively address DME objectives Figure 1-1 Aaaroach to Strateev Develonment Current Market Position Alternative Strategic Marketplace Positions i I Assessment Chanee organizational Development • Niches • Future Industry Structure • Pncmg,Strategy • innovation • Legislative/Regulatory • Marketing, Sales & • New Products and Services Assessment Promotion • Learning Curve • Technology Assessment • Products and Services • Value • Market Factors • Contracts • Differentiation • Customer Factors • StrategiFAllrances I • Competitive Factors • BenchmarkinWBest Competitive Market Position LBA Energy ServiceS Denton Municipal Utility Valuation Study �t1I 1-8 Section 2 Scope of Services TASK 1 KICKOFF MEETING A kickoff meeting would be held in your offices organized around a mutually developed agenda with duration not to exceed two full days The purpose of the meeting is to introduce the key LBA team members to the DME project management staff and discuss how best to work together Clarification of the LBA approach and discussion of DME perspectives would be addressed at this time We envision an agenda that could be addressed in four separate sessions Session 1 Deregtlation Issues The purpose of the first session is to establish mutual understanding of what we believe to be the current direction of electric industry restructuring There are three areas of interest • Deregulation issues to be addressed by the 761h Legislature that are of particular interest to DME, • Recent activity by the mvestor-owned utilities, power marketers, independent power producers, or other competitive entities within ERCOT, and, • National deregulation initiatives We will mutate discussion centered on where senior management believes DME should be positioned in the new competitive market We will report on our knowledge of the activities of various market interest groups and how we envision they will attempt to influence legislation in Texas and nationally We will discuss how these elements would likely impact the determination of value of the transmission and distribution system We will examine the scope of external pressures that may influence DME business policies and discuss possible DME responses Session 2 Wholesale Market Planning We will discuss the status of the DME planning program, DME activity in the wholesale bulk power market, and regional reliability issues We will match recent achievements with prior initiatives to capture a profile of decision -making structures and processes The discussion will be focused on • The DME resource plan and planning process, • DME purchased power agreements, • Regional reliability issues, • DME system reliability and the transmission planning process, • The market characteristics of ERCOT, and, e Likely business scenarios Session 3 Market Opportunities Our proposal includes provision for developing an estimate of future business opportunity This session would be dedicated to discussion of the data that would be required by the LBA Team to complete the analysis The agenda would include the review of e DME marketing initiatives, • The'LBA data requirements to conduct a mini situation analysis, • The, LBA approach to screening new products and services, LBA Energy Services Denton Municipal Utility Valuation Study 2-1 Section 2 Scope of Services • The LBA approach to market assessment, • The LBA approach to organizational assessment, • The LBA approach to information technology assessment, and, • Likely DME strategies Session 4 Business Matters The final session would be devoted to concluding business activities associated with the project These would include • Confirm priorities for LBA research activity, • Review the types and availability of data for collection, • Determine the data collection activities (e g , conduct interviews, tour facilities, transfer files, etc ) to meet the desired research objectives, • Establish a schedule and budget for research activity, • Identify points of contact and channels of communication, • Confirm the scope, schedule, and budget of all planned activity, • Prepare a memorandum of understanding of tasks, assignments and responsibilities, and, • Prepare the revised work plan Findings from the kickoff meeting would be summarized in a memorandum to DME, which would identify all agreed upon changes to the work plan A detailed description of each work assignment and the corresponding schedule and budget would be developed for DME review and authorization in a revised Scope of Services document hidividual tasks would not be initiated by LBA without prior written authorization by DME During the course of the project, we anticipate there will be large volumes of information to be transferred from DME to LBA To facilitate conveyance, we suggest that a workspace be identified at DME for LBA to use to review and track relevant information We request that the space be large enough to accommodate 3-4 people who may be on -site at DME at various times during the project We would also appreciate having access to clerical support, telephones, fax machines, copy machines etc TASK 2 REVIEW DME DATA LBA will review data in the DME data room A list of shared DME and City services will be developed and submitted to DME for review, edits and additions TASK 3 DEVELOP PRELIMINARY VALUATION MODELS LBA will develop preliminary models for the Reproduction Cost Approach, Income Approach, and Comparable Sales Approach TASK 4 RESEARCH LITERATURE FOR COMPARABLES LBA will conduct a review of industry literature and known data sources to tabulate comparable sales of transmission and distribution systems LBA Energy Services Denton Municipal Utility Valuation Study �1 7iN 2-2 Section' 2 Scope of Services TASK 5 DEVELOP COST DATA LBA will review available information for DME to develop the assessment of cost Refine the comprehensive list of shared DME and City services TASK 6 DEVELOP ESTIMATE OF FUTURE BUSINESS OPPORTUNITY Review marketing information and forecasts Develop estimate of achievable market potential Incorporate findings into models TASK 7 DEVELOP COMPETITIVE IMPACT SENTIVITIES Interview DME staff Identify and quantify magnitude of at risk load Develop impact estimates Incorporate findings into models TASK 8. DEVELOP ESTIMATES OF VALUE Finalize models Identify income statement variations between municipal and IOU ownership TASK 9 DRAFT REPORT AND PRESENTATION Prepare draft report Present findings to DME staff TASK 10• FINAL REPORT AND PRESENTATION Incorporate DME comments into final report Present findings to DME Board and City Council LBA Energy Services Denton Municipal Utility Valuation Study 1 0 2-3 Section 3 Budget PROFESSIONAL FEES LBA believes in the identification of a fair price for specific project deliverables LBA will commit to a fixed guaranteed not -to -exceed professional fee of $75,000 EXPENSES LBA understands the importance of identifying the total cost of a project Unlike any of our competitors, LBA will identify a fixed amount for expenses and will manage expenditures within that budget LBA estimates project related expenses to be no more than $10,000 Project expenses will be based upon actual cost incurred TOTAL FIXED PRICE LBA will agree to a total fixed price guaranteed not -to -exceed a contract amount of $85,000 COSTING CALCULATION Hourly Rate Average Hours Average Fees Bob Anderson $150 20 $3,000 Steve Marsh $125 176 $22,000 Dennis DeeGear $125 128 $16,000 Frank Radigan $125 160 $20,000 Tony Lawerence $125 40 $5,000 Kris Rao $70 100 $7,000 Administrative support $40 50 $2,000 Total 674 $75,000 LBA Energy Services Denton Municipal Utility Valuation Study 3-1 Section 4 Schedule LBA proposes to complete this work assignment with 8 weeks with ten defined tasks SCHEDULE CTIVITY Week 1 2 3 4 5 6 7 8 ff Task 1 Kick meeting and revise plan Task 2 Review data Task 3 Developpreliminary models Task 4 Research literature for con arables Task 5 Developcost data Task 6 Develop estimate of future business Task 7 Deve pp competitive un acts Task 8 Develo values Task 9 Draft re ort and presentanon Task 10 Fm4l report and presentation 18A Energy Services Denton Municipal Utility Valuation Study 4-1 Section 5 LBA Management Team LBA BACKGROUND AND PHILOSOPHY Louts Berger & Associates, Inc is one of the largest multi -disciplinary consulting organizations in the world Founded by Dr Louis Berger in 1953, LBA professionals offer expertise in the areas of civil, structural, mechanical and environmental engineering, construction management, program management, planning, environmental sciences, cultural resources, economics, and information services With over 2,500 consultants, LBA has provided consulting and technical services for thousands of projects throughout the Untied states and over 140 nations worldwide Noted mostly for work in the transportation field, Engineering News Record consistently ranks LBA in the top 10 percent of engineering firms in the world LBA Energy Services, a select group of professionals at Louis Berger & Associates, Inc, provides a comprehensive range of energy related consulting services including economic and financial analyses, cost of service and rate design, regulatory support, restructuring and resource planning, management assessment, and utility valuation LBA Energy Services provides services to electric customers and power users, electric, gas, water and wastewater utilities and other parties involving municipal and investor ^wned utilities, public power agencies, independent power producers, private companies, law firms, regulatory agencies, financial institutions and others Our highly qualified team of economists, planners, engineers and appraisers has been extensively involved in providing support services to the utility industry, from financial analysis and engineering to regulatory support and economic investigations in a wide variety of applications LBA Energy Services currently has 13 employees at the consultant or senior consultant level who are experienced in the utility, energy and economic development fields LBA Energy Services recently won an $8 million multi -year contract with FERC to provide permitting services for power plants Our principal energy offices are located in Troy, New York, Austin, Texas, and Needham, Massachusetts The proposed engagement with DME would be managed out of our Austin office LBA's strength has always been that advice given to clients is based on sound engineering experience As the electric utility industry enters a new era of deregulation, our consulting philosophy derives the benefit of the years of experience of our staff working with national and international clients We have addressed the diverse needs of mvestor-owned and public power utilities, government agencies, and all sectors of energy customers The planning skills of our consultants have received national recognition by such organizations as the Electric Power Research Institute, the American Public Power Association and the Department of Energy This experience affords us the broadest possible perspective on the planning process and has prompted us to appreciate the importance of a balance in options in the utility resource portfolio Because every utility has its own particular set of circumstances, each must decide what strategy is appropriate and how best to adopt it We believe that there are no prescriptive formulas and the LBA approach is tailored to helping each client achieve a balanced strategy WHY CHOOSE THE LBA TEAMS With the acceleration of deregulation nationwide, many consulting firms have positioned themselves for acquisition by large energy companies or utility affiliates This strategy has caused these firms to stray from providing traditionally strong services in specific areas to offering an array of services with diminished depth Others, while having broad -based planning experience, have not yet made the transition to preparing clients for the change inherent to a market driven environment DME interests would be served best by a consultant with the depth of knowledge, expertise and breadth of experience gained over many years in the business This consultant should have a history of long-term commitment to clients, the sensitivity to and understanduig of municipal utility perspectives, and the capability to assess market dynamics under several sets of circumstances LBA has all of these qualifications We have not encumbered our position with any LBA Energy Services Denton Municipal Utility Valuation Study 5-1 Section 5 LBA Management Team prior or ongoing contract with any entity or agency within Texas or elsewhere that could be construed as conflict of interest LBA recognizes the need for DME to respond quickly and effectively to the market, regulatory, and political forces in the Electric Reliability Council of Texas (ERCOT) and adjacent systems With a staff of energy professionals that has demonstrated expertise in bringing solutions to clients worldwide, LBA can support DME with some of the best consultants in the business Table 5-1 introduces the LBA team and the areas they would support on this project Table 5-1 LBA Experience Matrix ao a � a nGa qj on G d ° v @) V] N Qi in '� Bob Anderson ✓ ✓ ✓ ✓ ✓ ✓ Steve Marsh ✓ ✓ ✓ ✓ ✓ ✓ Dennis GeeGear ✓ ✓ ✓ ✓ Frank Radi an ✓ ✓ ✓ ✓ ✓ ✓ Dr Anton Lawerence ✓ ✓ ✓ ✓ ✓ ✓ Kris Rao ✓ THE LBA MANAGEMENT TEAM LBA has assembled a team that will provide prompt, high -quality service to DME Figure 4-1 shows a schematic of the organization of the LBA team Mr Steve Marsh will provide overall project management and will serve as the DME pomt for contact for LBA He will attend all meetings involving project scoping, project kickoff, status reporting and final presentations He will handle all business and contact -related issues Hey will be responsible for formulating the LBA tactical approach to serving DME need for assistance on specific projects He will organize project teams comprised of LBA personnel most appropriate for each assignment Mr Bob Anderson will be the principal -in -charge for all DME projects and will be responsible assuring DME expectations for quality and timeliness are met Mr Dennis DeeGear of Capital Appraisal Group will bring extensive expertise in valuation studies and determination of market value Dr Anthony Lawrence, an independent consultant, will provide guidance for treatment of the uncertainty associated with competitive markets He will attend meetings, collect information, lead discussions, and propose strategy within the context of the LBA team LBA Energy Services Denton Municipal Utility Valuation Study 5-2 Section 5 LBA Management Team Figure 5-1 LBA Team Organization DME Project Manager and Staff Robert L Anderson LBA Principal -in -Charge Steve Marsh I LBA Project Manager Dennis GeeGear Valuation Studies Capital Appraisal Group Dr Antony Lawerence 1 Frank Radigan Economic Evaluation Market Assessment LBA Energy Services 5-3 Kris Rao Analyst Denton Municipal Utility Valuation Study Section 5 LBA Management Team BIOGRAPI-TICAL SKETCHES OF KEY LBA PERSONNEL Robert Anderson Mr Anderson is a Senior Associate in the firm and Director of Utility Services for LBA Energy Services He received a Bachelor of Arts degree in Economics, Accounting and Planning from Indiana University of Pennsylvania He also holds an MRP in Public Administration from the Syracuse University Maxwell School of Citizenship and Public Affairs as well as graduate studies in Finance and Operations Management from Syracuse He has managed or served on numerous projects including efficiency studies, organizational reviews, management assessments, competitive assessments, utility structure, and cost analysis He has considerable experience conducting audits and on -site interviews with utility policy makers, management, and staff at all levels of the organization Mr Anderson's utility organizational and development specialties span 20 years of experience Recently, Mr Anderson has been extensively involved in utility restructuring issues, including power supply investigation, economic development, rate unbundling, and other issues Steve Marsh Mr Marsh is Manager of Market Planning and Evaluation for LBA specializing in retail and wholesale marketing, utility restructuring, and the development of new products and services With over 20 years of professional management experience, Mr Marsh has more than 15 years planning, developing, implementing and evaluating marketing strategies for utilities in Texas and across the nation His consulting expertise includes strategic marketing planning and evaluation, wholesale and retail market assessment, asset valuation, competitive performance review, project feasibility analysis, telecommunications business planning, and technology research As a former manager with Florida Power & Light Company and the City of Austin Electric Utility, he has received national recognition for innovation in program planning and development He has hands-on development and evaluation experience with rates and pricing, demand -side management, load management, automatic meter reading, load research, co -generation, economic development and key account services for commercial and industrial customers Mr Marsh's clients include electric and gas industry associations, investor owned electric and gas utilities, public power utilities, independent power producers, power marketers, and large commercial and industrial customers Mr Marsh has a Bachelor of Science degree in Physics and Master of Science degree in Physics from the University of North Texas Frank Radigan Mr Radigan is Manager of Energy Planning for LBA Energy Services With more than fifteen years experience, Mr Radigan received his engineering degree from Clarkson University, and came to LBA from the staff of the New York Public Service Commission While with the Commission, Mr Radigan had responsibility over utility rate making and policy making with emphasis in restructuring, rate design and revenue allocation, wholesale and retail wheeling rates, analysis of load pockets and market power, divestiture, and retail access LBA Energy Services Denton Municipal Utility Valuation Study 5-4 Section 5 LBA Management Team In addition, Mr Radigan has extensive experience in generation planning, fuel budget forecasting, avoided cost torecastmg and power supply agreements He was the project manager in a Commission investigation to examine the policies, plans, and processes for developing Integrated Resource Plans in New York State Also while with the New York Commission, Mr Radigan led several investigations into the reasonableness of utility actions with respect to power supply contracts These investigations were spawned from the need to assess the reasonableness of entering into contracts, buy-out of uneconomic contracts, and management of power supply contracts with IPPs Most recently, Mr Radigan negotiated a multi -year rate and restructuring agreement for Con Edison on behalf of the New York State Public Service Commission Mr Radigan has served as an expert witness and provided testimony in over a dozen rate and other regulatory proceedings Mr Dennis DeeGear Mr DeeGear is Vice President with the Capital Appiaisal Group (CAG) in Austin, Texas CAG is the principal consulting firm used by almost every taxing authority in Texas for assessing taxable value on real property Mr DeeGear has more than two decades of experience with the appraisal of value of industrial, utility and commercial properties He is an expert in income valuation and market analysis for the purpose of determining ad valorem taxes Mr DeeGear is a Registered Professional Appraiser with the Texas Board of Tax Professional Examiners Mr DeeGear graduated cum laude with a Bachelor of Arts degree from Trinity University in San Antonio and holds a Masters of Public Administration from the University of Texas Dr Anthony Lawrence Dr Lawrence is an economist and econometrician with 25 years experience in energy issues and the electric utility industry He received his doctoral degree in economic from the State University of New York As a project manager with the Electric Power Research Institute, he published research of the implicit behavior of hedonic price structures of coal, oil and natural gas resulting from time -of -use rates Dr Lawrence pioneered the development and application of two micro - simulation models — REEPS and COMMEND Dr Lawrence is currently involved with industry restructuring issues including the determination of stranded assets and the valuation of transmission and generation properties Mr Kris Rao Mr Rao is a computer programmer and analyst with 10 years of professional experience working in support of consulting projects for utility, industrial, and commercial clients Using sophisticated computer models, he has evaluated electric utility load data, performed cost -of -service studies, and conducted revenue requirement and cash flow analyses Mr Rao has demonstrated expertise in developing and analyzing application -based spreadsheets, reports, budgets, and tracking systems With this broad knowledge of computer programs, he has tracked and maintained accounting reports for a number of commercial and manufacturing firms Mr Rao is specifically familiar with local LBA Energy Services Denton Municipal Utility Valuation Study 5-5 Section 5 LBA Management Team area network systems, date base development, and Intranet and Internet applications Mr Rao holds a Bachelor of Science degree in Computer Science and Applied Mathematics from the State University of New York at Albany, New York LBA Energy Services Denton Municipal Utility Valuation Study 1 5-6 Section 6 Qualifications EXPERIENCE As project manager, led an evaluation of potential extension of distribution service lines to serve new industrial loads for a New York municipal electnc utility Coordinated an engineering field evaluation and development of preliminary cost estimates Evaluated the impact on utility loads, and coordinated utility management policy formulation associated with additional service in a dual franchise area Conducted analyses of power supply economics for several New York municipal electric utilities considering alternative suppliers Project studies have included utility and non -utility sources, replacements, restructuring of existing purchased power contracts and analysis of transmission and wheeling costs As project manager, directs load surveys and load research studies for electric utilities throughout the United States Study activities include determination of appropriate sample size, random selection of customers, by class, for load research, circuit monitoring, data collecting, analysis and interpretation of data, and other activities As project manager and senior project investigator, has conducted numerous investigations associated with capital improvement projects for utilities throughout the United States Activities include power supply economics, cost -of -service analyses, and energy development projects 4• As Project Manager, conducting comprehensive rate analysis and rate restructuring for a Rhode Island municipal electric utility The comprehensive study effort involves analysis of costs and determination of cost -causation, and investigation of rates, both current and what cost -based rates would be The study also includes a competitive assessment of market conditions vis-a-vis other utilities in Rhode Island These analyses form a basis for preparation of the utility's Restructuring Plan which were filed on January 1, 1997 3 As lead project analyst, conducted a cost of service audit for a Texas municipal electric utility Performed a cost -of -service study to determine the fairness and prudency of costs associated with a wholesale rate which was allocated for power purchases to three municipal and cooperative utilities The analysis focused on the allocation of bulk power supply substation costs and other capital and operating costs :• As Project Manager, conducted an audit of cost allocations to various generation projects operated by a Massachusetts joint action agency The purpose of the audit was to identify general and administrative overhead budget items related to equity project power sales contracts, purchased power contracts, and member services costs, and how such costs are allocated, the analysis also examined practices among other joint action agencies and helped to determine if allocations to four Massachusetts municipal electric utilities were fair and proper •:• Served as Project Leader on a six-month effort to analyze load pockets and market power in New York State The electric utility industry generally defines load pockets as a geographic area of electric load LBA Energy Services Denton Municipal Utility Valuation Study 6-1 Section 6 Qualifications that, because of transmission limitations, must have generation resources placed within the area to ensure the reliable provision of electricity Due to the need to operate these generating facilities in a deregulated electric market the owners of the generators in the load pocket could extract substantial price increases for energy, capacity, and ancillary services The analysis identified the load pockets in New York and then analyzed the potential for market power in the identified load pockets Finally, the study identified both physical and financial mitigation measures that could mitigate market power (1995-1996) Served as Project Leader analyzing the impact of the Federal Energy Regulatory Commission's (FERC's) so-called Mega NOPR and subsequent FERC Order Nos 888 and 889 on State The analysis examined the impact and interrelationship of FERC's and the State's electric industry restructuring efforts, the interrelationship between State and Federal jurisdiction of electric utilities, and the rate design of the open access transmission tariffs The analysis also provided an identification and quantification of ancillary services, and the technical, cost, and regulatory impacts of a strict segregation between transmission and distribution facilities Finally, the analysis examined the impact of FERC's Orders on siting new transmission Ines in New York (1995-1996) :• Served as Chair on the NYS PSC Proceeding on the Motion of the Commission to Examine the Plans for Meeting Future Electricity Needs in New York State - Intrastate Wheeling The Commission established the proceeding to investigate the costs, prices, terms, and conditions for wheeling power within New York The proceeding studied a variety of measures for estimating and allocating the costs of wheeling Among the methods studied were several embedded cost methodologies, short -run marginal cost methods, and a variety of long run incremental cost methods The study was designed to be a tool to quantitatively examine the different transmission pricing methodologies •:• As account manager and senior consultant, estimated the value of the electric and gas system of City Public Service of San Antonio Developed three estimates of value from purchaser's perspective using conventional cost, income, and market valuation approaches Itemized benefits of municipal or alternative ownership from city, community, and customer perspectives Characterized impact of sale on City Payment, franchise fees, ad valorem taxes, sales tax from purchased commodities, services provided by CPS, services purchased by CPS, and energy services Forecasted long-term quantifiable benefits of municipal ownership under several growth and competitive scenarios Discussed non - quantifiable benefits of municipal ownership compared to alternative scenarios Summarized findings in a report to senior management As account manager and senior consultant, performed a competitive performance review of all functional areas and business units of Austin Energy Developed performance matrix to benchmark activities against utility mission and near -term and long-term strategic objectives Final report included an assessment of • Sufficiency of customer service and marketing management processes • Teamwork among functional areas • Functional ability of organizational units to respond to customer needs • Technical ability of organizational units to respond to customer needs �] LBA Energy Services Denton Municipal Utility Valuation Study �f 6-2 Section 6 Qualifications • Data access and management practices • Relationship to service allies • Methods of communication internally and with customers Operational effectiveness was characterized in terms of strengths, concerns, and areas for improvement As project manager, assisted Texas Utilities Electric Company with the development of a restructuring transition plan filed with the Public Utility Commission of Texas Assessed program performance through interviews and collection and analysis of data Performed cost -benefit analyses and developed recommendations for cost recovery ❖ As account manager and senior consultant, performed a competitive assessment of the Austin Energy Prepared project work plan, developed and coordinated data collection plan, and interviewed senior executive staff Calculated book value of the utility Performed present value analysis of rnur, cipal ownership versus IOU ownership Elements of the analysis included • The value of below -market cost of electricity to specific customer classes • The value of monetary transfers to support general government functions • The value of financial support for joint services provided by other City departments • The value of discounted utility services to City operations • The value of the utility providing various support services to other City departments • The value of utility employment to the community that might not exist under two alternative ownership scenarios • The value of other programs and services provided by the utility to the community, such as economic development, community related support services, rebates and incentives for demand -side management programs beyond what an IOU might offer, etc d• Identified and projected the value of new products and services for Austin Energy that broaden the utility revenue base and reduce unit cost The assessment included • Communications and fiber optics services to retail institutional customers • Energy efficiency services to large commercial and industrial customers • Metering, billing and Internet services to other utilities within the service territory • Meter reading, billing and Internet services to national, chain, and institutional accounts • Inside -the -fence cogeneration development services • Joint -use of utility facilities such as rights -of -way and pole -use • New technologies such as advanced lighting, industrial heat pumps, photovoltaics, electric vehicles, Internet services • Industrial energy parks and district systems LBA Energy Services Denton Municipal Utility Valuation Study 0 6-3 Section 6 Qualifications Results of the assessment were coupled with management audit to examine organizational responsibilities, effectiveness, breakdowns and inefficiencies, and targets for improvement Comprehensive findings were used to determine whether to retain or sell the utility and at what price ❖ As project manager and principal technical consultant, designed and launched a direct load control program for Central Louisiana Electric Company Services included the development of a Direct Load Control Manual describing all program management activities Evaluated communication technologies including VHF radio, power line earner using high -frequency injection, power line carrier using low frequency injection, hybrid radio/PLC, telephone, cable and fiber optics Addressed planning issues of cost, reliability and compatibility with existing voice, EMS and SCADA communication systems Program design included the development of target markets, incentive policy, procedures, forms, resource requirements and responsibilities, trade ally involvement, implementation schedules, budget, marketing materials, engineering design, equipment specification and selection, system communications and interfac e, monitoring and evaluation plan, and tracking and reporting mechanisms Approach used reduced evaluation expenses antic pated by client by $200,000, increased projected customer participation by 100%, and reduced total planned investment by 50% •: As principal technical consultant on an interdisciplinary team, analyzed the functional and data collection requirements for eight DSM programs to be implemented concurrently by an investor owned utility in Iowa Developed recommendations for implementation guidelines, programs procedures, and accounting form content and design Specified programming design for data entry, review, processing, and reporting were consistent with operational and evaluation objectives Findings were used by client to collect appropriate information, create logical database, and establish network of users As program manager and technical lead, designed and implemented an economic development program for the City of Austin Electric Utility Designed and marketed new services and alternative pricing structures for time -of -use, interruptible service, curtailable service, demand cooperatives, economic development, and standby service Applied rates as needed to respond to the challenge of cogeneration and fuel switching Represented the utility in all community and Chamber of Commerce economic development activities Prepared power service proposals to prospective new or expanding manufacturing load Used rate and service options as a means of attracting and retaining high load factor, high technology industrial customers Plan was successful in attracting or retaining every targeted customer to a service area with the highest industrial electric rates in the state •S As program manager, researched and developed a comprehensive approach to power quality servicee for the City of Austin Electric Utility Organized team of internal consultants to respond to specific concerns presented by customers Successfully diagnosed and solved customer problems with power quality Organized a power quality partnership with the utility's largest, high technology customers Modified primary service policy to insure local distribution system would not cause interruptions to critical loads As principal technical consultant on an interdisciplinary team, performed a competitive performance review of all functional areas of Lubbock Power & Light Personally investigated all marketing, LBA Energy Services Denton Municipal Utility Valuation Study ` 6-4 Section 6 Qualifications demand side management and customer service business units Developed performance matrix to benchmark activities against utility mission and near -term and long-term strategic objectives Final report included an evaluation of • Sufficiency of customer service and marketing management process • Teamwork among functional areas Functional ability of organization units to respond to customer needs Technical ability of organizational units to respond to customer needs • Relationship to service allies • Methods of communication intemally and with customers •3 Identified and projected value of new services that broaden the utility revenue base and reduce unit cost for Lubbock Power & Light including • Communications and fiber optics services to retail institutional customers • Energy efficiency services to large commercial and industnal customers • Metering and billing services to other utilities within the service territory • Meter reading and billing services to national, chain, and institutional accounts • Inside -the -fence cogeneration development services • New technologies such as advance lighting, industrial heat pumps, photovoltaics, electric vehicles • Industrial energy parks and district systems Results of the assessment were coupled with management audit to examine organizational responsibilities, effectiveness, breakdowns and inefficiencies, and targets for improvement Comprehensive fmdmgs were used to determine whether to retain or sell the utility and at what pnce LBA Energy Services Denton Municipal Utility Valuation Study �� 6-5 Appendix A: Resumes Stephen A. Marsh Stephen A Marsh is a senior consultant specializing in the evaluation of utility retail and wholesale business strategies and the development of new products and services With over 20 years of professional experience, Mr Marsh has 18 years planning, developing, implementing and evaluating electric utility programs at Florida Power & Light Company, the City of Austin Electric Utility, and as a consultant with Xenergy, RMI, and Louis Berger & Associates His expertise includes technology research, business assessment, program development, and process and impact evaluation He has recognized achievements in the areas of marketing and sales, economic development, pricing and rates, energy conservation, load management, load research, cogeneration, bulk power marketing, power quality and key account services for commercial and industrial customers Recently, Mr Marsh introduced database management tools to the public power community that enable clients to access time dependent energy information using a conventional Web browser in Internet, Intranet, or Extranet environments Mr Marsh is author of Business Opportunities for Public Power Utilities A Comprehensive Guide for Understanding and Implementing New Products and Services published by the American Public Power Association EDUCATION Bachelor of Science in Physics from the University of North Texas Master of Science in Physics from the University of North Texas Nuclear Research Fellow at Florida State University Additional post -graduate study at Florida State University, the California Institute of Technology, the University of Texas, and the University of Wisconsin EMPLOYMENT Louis Berger & Associates, Manager of Energy Consulting Resource Management International Inc , Executive Consultant XENERGY Inc, Senior Manager, Southwest Operations City of Austin Electric Utility Department, Division Manager, Development Planning Division Flonda Power and Light Company, Marketing Progiam Manager and Commercial & Industrial Energy Management Specialist Naval Weapons Center, Electronic Warfare Department, Radar Development Division, Project Engineer/Physicist LBA Energy Services Denton Municipal Utility Valuation Study ` A-1 Appendix A: Resumes Stephen A. Marsh MANAGEMENT CONSULTING Utility Valuation Study As account manager and senior consultant, estimated the value of the electric and gas system of City Public Service of San Antonio Developed three estimates of value from purchaser's perspective using conventional cost, income, and market valuation approaches Itemized benefits of municipal or alternative ownership from city, community, and customer perspectives Characterized impact of sale on City Payment, franchise fees, ad valorem taxes, sales tax from purchased commodities, services provided by CPS, services purchased by CPS, and energy services Forecasted long-term quantifiable benefits of municipal ownership under several growth and competitive scenarios Discussed non - quantifiable benefits of municipal ownership compared to alternative scenarios Summarized findings in a report to senior management Competitive Performance Review As account manager and senior consultant, performed a competitive performance review of all functional areas and business units of Austin Energy Developed performance matrix to benchmark activities against utility mission and near -term and long-term strategic obI rtives Final report included an assessment of • Sufficiency of customer service and marketing management processes • Teamwork among functional areas • Functional ability of organizational units to respond to customer needs • Technical ability of organizational units to respond to customer needs • Data access and management practices • Relationship to service allies • Methods of communication internally and with customers Operational effectiveness was characterized in terms of strengths, concerns, and areas for improvement transition Plan As project manager, assisted Texas Utilities Electric Company with the development of an energy efficiency plan as a component of the restructuring transition plan filed with the Public Utility Commission of Texas Assessed program performance through interviews and collection and analysis of data Performed cost -benefit analyses and developed recommendations for cost recovery Strategic Assessment As account manager and senior consultant, performed a competitive assessment of the Austin Energy Prepared project work plan, developed and coordinated data collection plan, and interviewed senior executive staff Calculated book value of the utility Performed present value analysis of municipal ownership versus IOU ownership Elements of the analysis included • The value of below -market cost of electricity to specific customer classes • The value of monetary transfers to support general government functions • The value of financial support for joint services provided by other City departments • The value of discounted utility services to City operations • The value of the utility providing various support services to other City departments • The value of utility employment to the community that might not exist under two alternative ownership scenarios LBA Energy Services Denton Municipal Utility Valuation Study A-2 Appendix A: Resumes Stephen A. Marsh • The value of other programs and service., provided by the utility to the community, such as economic development, community related support services, rebates and incentives for demand -side management programs beyond what an IOU might offer, etc Identified and projected the value of new products and services that broaden the utility revenue base and reduce unit cost The assessment included • Communications and fiber optics services to retail institutional customers • Energy efficiency services to large commercial and industrial customers • Metering, billing and Internet services to other utilities within the service territory • Meter reading, billing and Internet services to national, chain, and institutional accounts • Inside -the -fence cogeneration development services • Joint -use of utility f.icihties such as rights -of -way and pole -use • New technologies such as advanced lighting, industrial heat pumps, photovoltaics, electric vehicles, Internet services • Industrial energy parks and district systems Results of the assessment were coupled with management audit to examine organizational responsibilities, effectiveness, breakdowns and inefficiencies, and targets for improvement Comprehensive findings were used to det-rmme whether to retain or sell the utility and at what price ENERGY SERVICE BUSINESS ASSESSMENT & PLANNING Strategic Marketing Plan As account manager and senior consultant, developed a strategic marketing plan for City Public Service of San Antonio The plan identified marketing approaches and addressed the business -related issues, risks, and opportunities of offering new products and services in wholesale and retail markets A working document was prepared to provide flexible guidelines for implementation including an organizational audit, market assessment, marketing and sales strategies, and operations plan Results of the plan were presented to utility senior management Personally supervised assessment and planning activities in the areas of new products and services, key account program development, marketing data base systems, benc,hmarkmg and performance indices, and wholesale marketing program development Competition Assessment As project manager, performed an assessment of aggregation pricing strategies and customer services provided by competitors to City Public Service of San Antonio Researched literature and conducted interviews of principals with other utilities, regulators, chain accounts, and alternative energy service providers Characterized state-of-the-art marketing practices in the areas of load aggregation, pricing options, billing services, risk management services, financial services, and energy services Developed recommendations for developing competitive solution Summarized findings in a report Strategic Marketing Plan As project manager, assisted Georgetown Utilities with strategic market planning activities Devised a situation analysis that optimized the use of consulting services to identify areas of focused planning effort The approach leverages existing city resources and assets to identify new business opportunities that improve service or produce new revenue Specific considerations include potential LBA Energy Services Denton Municipal Utility Valuation Study A-3 Appendix A: Resumes Stephen A. Marsh applications of a new broadband telecommunications system, the offering of new alternative pricing structures, and the resulting requirements for a new information management system New Business Opportunities for Public Power Utilities As project manager and principal author, prepared a manual for the American Public Power Association and the Electric Power Research Institute to assist utilities with the development of new products and services that increase revenue or improve value Individual business assessments were prepared for equipment purchase loans, green pricing, appliance maintenance, performance contracting, environmental waste management, power quality, power marketing, building security systems, cable TV, and fiber optics including automatic meter reading and telecommunications services Prepared a procedure for screening prospective business units against ten criteria Developed case studies to illustrate issues and perspectives The manual addresses all research, market, staffing, budgeting, implementation and evaluation activities Devoted one chapter to the institutional issues associated with the implementation of new products and services by public power utilities EPRI sponsored this work Organized a steering committee of marketing executives at public power utilities to define the scope of issues Developed an interview guide for discussing issues with managers of new programs Built case studies to illustrate approach to various issues Conducted workshop with steering committee to screen draft and confirm approach Results were presented at three national conferences and two state conferences Market Assessment As project manager for a confidential client, assessed the market potential for a large corporation to offer electric and gas utilities a strategic alliance to provide turnkey capability in new retail energy products and services Evaluated the fourteen -state regional west of the Mississippi River to developed sub -regional and state -by -state forecasts of market potential Workshop on Strategic Marketing in the Commercial and Industrial Sector As project manager and mstructor, presented one -day workshop to marketing and executive management of member utilities of the Texas Public Power Association The workshop responded to interest in the public power community to attract, retain and expand commercial and industrial customer base in a competitive environment The workshop provided attendees with prescriptive guidelines in market research, market segmentation, program development, program implementation, and program evaluation The workshop also provides a fundamental approach to enhancing customer service in the commercial and industrial sector Workshops for International Utility Executives As technical consultant on interdisciplinary team, developed training materials targeting electric utility executives from several countries for workshops held in Cairo, Egypt and sponsored by the International Institute of Education Materials addressed customer service, loadi management, and commercial and industrial marketing strategies Conducted training sessions in Dallas and Houston for visiting executives from Russia and Ukraine TELECOMMUNICATIONS BUSINESS ASSESSMENT & PLANNING Telecommunication Business Plan As project manager, developed a strategic telecommunications business plan for an investor -owned electric utility The plan examines local and regional opportunities and threats to formulate an approach for the utility to enter the telecommunications business The intent was to leverage core competencies with strategic partnerships to provide an integrated range of new, non-traditional, unregulated; and profitable business units Specifically evaluated the business attributes of long distance service. broadband voice, video, and data services, and regional cellular service LBA Energy Services Denton Municipal Utility Valuation Study ` A-4 Appendix A: Resumes Stephen A. Marsh Telecommunication Strategy Review As project manager, reviewed the proposed implementation strategy between the City of Georgetown with Central and South West Communications specifying the provisions for installation of a fixed wireless automatic meter reading, SCADA, and information management system Presented findings in a report to senior management staff of the City Results were used in contract negotiations and the development of program implementation strategies Fiber Optics Technology Assessment and Business Strategy Development As technical consultant on an interdisciplinary team, assisted in assessing the use of fiber optics technology in non-traditional utility applications for a municipal utility in Florida Established business planning policies for the utility's fiber optic telecommunication network Client used findings to make deployment decisions for investment in fiber optics INTERNET & INTRANET SERVICES Internet Product & Service Development As project manager, provided guidance for product development, integration and marketing of Intranet -based energy products and services for a large consulting firm Products included Web -based display of bill history, energy consumption -weather correlation, multiple account consolidation and summary, multiple service provider consolidation and summary, load profiles, load research interval data, and other interactive services Internet -Based Marketing Techniques in the Energy Industry As project manager, researched the use of the Internet as a marketing tool by utilities, power marketers, product manufacturers and retailers, and other participants in the energy industry Reported findings at the fall 1997 meeting of the Energy/Customer Service and Communication Workshop of the American Public Power Association and the sprig 1998 meeting of the Texas Public Power Association Marketing Strategy for Internet -Based Services As project manager, assisted Austin Energy with the development of a product design for Intemet-based customer services DATA WAREHOUSING & DATABASE MANAGEMENT Functional Requirements Analysis for Marketing Program Support System As principal technical consultant, analyzed the functional and data collection requirements for eight marketing programs to be implemented concurrently by Iowa Southern Utilities Developed recommendations for implementation guidelines, program procedures and accounting, and data collection form content and design Specified design for data entry, review, processing, archiving and reporting consistent with program operational and evaluation objectives Client used findings to collect appropriate information, create logical database, and establish network of users Load Research and End -Use Metering Database Development As division manager and technical lead for Austin Energy, created the first end -use metering and load research data base system of its kind in Texas Supervised all engineering and software development for a multi -channel end -use metering system and database to quantify impacts of marketing programs First in the nation to use statistically based methods to quantify the demand reduction impact of various direct load control cycling strategies on residential air conditioning and water heaters Program was eventually expanded to encompass all load research activities LBA Energy Services Denton Municipal Utility Valuation Study �� A-5 Appendix A: Resumes Stephen A. Marsh Database Consolidation Consolidated load research data, billing data and SCADA data to develop statistically representative load shapes to forecast local feeder load for Austin Energy Work was funded in part by the American Public Power Association Used load research and SCADA data to identify favorable load shapes for application of photovoltaws for peak clipping Work was funded in part by the Electric Power Research Institute STRATEGY SCREENING Technology Screening As technical consultant, examined the impact of external tree shading on residential and commercial air conditioning and corresponding electric load and energy for Florida Power & Light Company Combined conditional demand analysis with statistically adjusted engineering model to predict load and energy impacts Interval load data for air conditioning from a statistically representative sample of buildings in South Miami were used to estimate the impact of shading Random samples of load research program participants will used to quantify differences in roof color on air conditioning load Resuh� were extrapolated to the total population using statistically adjusted engineering model, load research data, end - use metering, and micro -climate weather monitoring stations Screening of Heating and Cooling Technologies for Commercial and industrial Market Sectors As project manager and principal technical consultant, evaluated the technical and economic performance characteristics of competing heating and cooling technologies in commercial and industrial applications for Austin Energy Performed trade-off analysis that compared the performance of a 500-ton natural gas engine -driven chiller to a conventional electric centrifugal chiller, a high efficiency electric centrifugal chiller, a high efficiency electric centrifugal heat pump Simulated operation of each technology by developing hot day, cool day, average weekday, and average weekend day cooling and heating load profiles for every month for a 200,000 square -foot commercial office building Used actual weather data, occupancy profiles, and equipment schedules to maintain accuracy of estimates and facilitate future correlation of data Prepared present value economic analysis to characterize immediate and near -term benefits of ownership of each technology Results were used to develop marketing strategies to re -position electric technologies and develop near -term as well as long-term marketing plans for the client Marketing Program implementation Assistance As principal technical consultant and contractor for the Electric Power Research Institute (EPRI), provided marketing program implementation assistance to Citizens Utilities Electric Company Audited workflow processes to develop recommendations for improved program effectiveness and efficiency Prepared implementation manual targeting commercial and industrial customers Developed economic screening tools to determine the investment thresholds for utility participation in a fuel -switching program mandated by the state commission Expanded the use of existing utility databases to screen utility investment in individual products and services as part of a shared savings program for commercial and industrial customers Provided energy auditing tools and training for commercial and industrial field staff of performance contractor Client used findings to launch new programs, modify existing program processes, and resolve differences with performance contractor Technology Screening and Market Assessment As project manager and principal technical consultant, assessed opportunities new technology deployment in residential, commercial, and industrial markets for Central Louisiana Electric Company Develop technology performance characteristics and costs Performed cost -benefit analysis to rank technologies Developed preliminary program implementation guidelines Findings were used by client to set priorities and make informed decisions with regard to marketing issues LBA Energy Services Denton Municipal Utility Valuation Study A-6 Appendix A: Resumes Stephen A. Marsh PROGRAM DEVELOPMENT Load Research Program Development As principal investigator and project manager, designed and initiated a load research program for Kerrville Public Utility Board in central Texas Services included sample design, equipment specification and selection, software specification and selection, data base design, data management, data analysts and reporting, training, and development of the PC -Based Load Research Reference Manual An assessment of remote metering technology was performed to compare the capabilities of a power line carrier system (e g , ABB EMETCON Load Management System featuring Distribution System Manager for OS12 by Cannon Technologies) to radio -based and fiber -based systems The study also addressed customized software for load research versus off-tne-shelf PC -based software for statistical analysts and data base management Findings were used by the client to implement a successful PC -based load research program Direct Load Control Program Development As project manager and principal technical consultant, designed and launched a duect load control program for Central Louisiana Electric Company Services included the development of a Direct Load Control Manual describing all technologies and program management activities Evaluated communication technologies including VHF radio, power line carrier using high -frequency injection, power line camer using low frequency injection, hybrid radio/PLC, telephone, cable, and fiber optics Addressed issues of cost, reliability, and compatibility with existing voice, EMS and SCADA communication systems Program design included the development of target markets, incentive policy, accounting procedures and forms, resource requirements and responsibilities, trade ally involvement, implementation schedules, budgets, marketing materials, engineering design, equipment specification and selection, system communications and interface, monitoring and evaluation plan, and tracking and reporting mechanisms Approach used reduced evaluation expenses anticipated by client by $200,000, increased projected customer participation by 100 percent, and reduced total planned investment by 50 percent Technology Screening, Market Assessment and Program Development As project manager and principal technical consultant, assessed market opportunities for residential, commercial, and industrial markets for the Kansas City Board of Public Utilities Designed marketing programs for all sectors that provide rate and rebate inducements for efficient space heating and cooling, heat pumps, water heating, motors and drives, lighting, and industrial electro-technologies Findings were used by client to set priorities and make informed decisions with regard to marketing issues Strategic Marketing Plan Development As project manager and technical lead, designed and implemented a 15-year maiketing plan for Austin Energy The plan was twice recognized for innovction by the APPA, DOE, and the State of Texas Designed and implemented a comprehensive set of marketing programs, energy services and alternative energy technology strategies Introduced new marketing concepts to promote energy efficiency in building envelope, lighting, cooling, motor, and refrigeration end -use market segments Designed program plans for commercial and industrial marketing, residential direct load control, and innovative rates for all sectors Program designs were the first of their kind in the public power community PROGRAM IMPLEMENTATION Economic Development Program Implementation As program manager and technical lead, designed and implemented an economic development program for Austin Energy Designed and marketed new services and alternative pricmg structures for time -of -use, interruptible service, curtailable service, demand LBA Energy Services Denton Municipal Utility Valuation Study A-7 Appendix A: Resumes Stephen A. Marsh cooperatives, economic development, and standby service Applied rates as needed to respond to the challenge of cogeneration and fuel switching Represented the utility in all community and Chamber of Commerce economic development activities Prepared power service proposals to prospective new or expanding manufacturing load Used rate and service options as a means of attracting and retaining high load factor, high technology industrial customers Plan was successful in attracting or retaining every targeted customer to a service area with the highest industrial electric rates in the state Power Quality Program Implementation As program manager, researched and developed a comprehensive approach to power quality services for Austin Energy Organized team of internal consultants to respond to specific concerns presented by customers Successfully diagnosed and solved customer problems with power quality Organized a power quality partnership with the utility's largest, high technology customers Modified primary service policy to insure local distribution system would not cause interruptions to critical loads Thermal Storage Program Implementation As division manager and technical lead for Austin Energy, introduced the thermal storage concept to the Austin community Sponsored feasibility studies performed by local engineers for five commercial applications Developed a do-it-yourself design manual to assist local engineers, architects, and building owners with implementation Designed time -of -use rate structures by customer class and a compatible rebate program to promote acceptance Direct Load Control Program Implementation As division manager and technical lead, supervised all planning, engineering, marketing and evaluation activities for a residential and commercial VHF load management program for Austin Energy Successfully demonstrated customer acceptance of variable incentive levels tied to cycling strategies Key Accounts Program Implementation As division manager and technical lead for Austin Energy, created, organized and supervised a technical team of engineers to provide responsive single pomt-of-contact services for 5,000 large commercial and industrial accounts Provided energy engineering, power quality, load management, load research, and technical and economic assessments Personally initiated and fostered reciprocating working relationships with high facility managers including the University of Texas, the State of Texas, IBM, Motorola, Advanced Micro Devices, Texas Instruments, Sematech, Applied Materials, 3M Cogeneration Program Implementation As division manager and technical lead for Austin Energy, performed feasibility evaluations of "inside -the -fence" cogeneration projects targeting Austin's commercial and industrial customers and totaling more than 500 Megawatts Assessed technical and economic feasibility from utility, customer, and third -party perspectives Developed service proposals for customers promoting innovative rate strategies and electro-technologies as alternatives Researched federal and state guidelines to develop interconnection guidelines, parallel operating procedures, service agreements and rates to provide supplemental service, maintenance service, interruptible service and buy-back power Projects ranged in size from one to 100 Megawatts Commercial and Industrial Marketing Program Implementation As program manager in corporate general office for Florida Power & Light Company, developed and managed marketing programs for an electric utility with annual sales in excess of $4,000,000,000 Auditor Training Program As program manager for Florida Power & Light Company, developed a training program for 50 field engineers to perform 15,000 commercial and industrial energy audits annually Training curriculum included theory and problem solving techniques in metering, rates, psychrometrics, heat loss and heat gam, building envelope, heating, ventilation and air conditioning, controls, thermal LBA Energy Services Denton Municipal Ubhty Valuation Study A-8 Appendix A: Resumes Stephen A. Marsh energy storage, refrigeration, domestic water, heat recovery, motors and drives, lighting sources and design, energy management systems, and, energy economics Developed standardized algorithms for energy efficiency calculations PC -Based Energy Audits As program manager for Florida Power & Light Company, developed PC -based algorithms and analysis programs in BASIC to standardize and simplify report preparation for field engineers Thermal Storage Pilot Project As program manager at Florida Power & Light Company, launched a thermal storage pilot project at a Company office facility as a demonstration project of the FPL Quality Improvement Program Commercial & Industrial Energy Audits As program manager, personally performed more than 100 energy audits on large commercial and industrial facilities in Miami and south Florida Performed basic research in demand -side technologies Served as Executive Director of the South Florida Energy Partnership Certified as State of Florida energy auditor PROGRAM EVALUATION Evaluation of Direct Load Control Program Impacts and Processes As project manager and principal technical consultant, performed an evaluation of a residential air conditioning cycling program for an investor owned electric utility Designed stratified samples of participants for two geographic regions for installation of end -use metering equipment Collected and analyzed five-minute interval data to describe duty cycle of various cycling strategies Developed methodology according to EPRI guidelines to quantify impact of 33, 50, 67, and 100 percent cycling strategies Quantified success of program processes including marketing, data collection, system installation and operation, and customer satisfaction Summarized findings in a report for presentation to senior utility management and the state public service commission System Load Shape Disaggregation As part of an integrated supply-side and demand -side approach to resource planning for South Plains Electric Cooperative, developed and installed a data collection system to capture pulse data from antiquated SCADA system and record 15-minute interval readings from 20 substation sites Correlated circuit population densities taken from billing files with interval data to develop representative load shapes for the system by customer class Quantified impact of cycling irrigation load during summer peak period Determined opportunity for alternative load management strategies with other customer classes Researched cost structures to develop innovative rate concepts for customers Developed filing for hearing and approval by the Public Utility Commission of Texas Findings were used in developing strategies to retain valued customers Marketing Program Review for Cost Recovery Testimony in Rate Case Filing As project manager and principal technical consultant, reviewed rate filing testimony for legal counsel of Houston Lighting & Power Company Critiqued marketing program designs and implementation strategies Scrutinized reported expenditures, estimated demand and energy impacts, projected demand and energy impacts, and proposed evaluation plans Prepared detailed report discussing findings which were used by regulatory legal counsel to validate and revise testimony in rate case filing Development of Marketing Program Evaluation Strategies As principal technical consultant, developed evaluation strategies for Carolina Power & Light Company Strategies set priorities and focused evaluation methods on the impact of marketing, conservation and load management programs that have evolved over a LBA Energy Services Denton Municipal Utility Valuation Study A 9 Appendix A: Resumes Stephen A. Marsh 15-year period Analyzed program processes and identified areas of additional research to address overlapping missions, inconsistencies in data collection objectives and data base design, possible market saturation, unmet program objectives, unmeasured program results, barriers to acceptance, and misguided resources Review included the development of recommendations for new operating strategies for time -of - use and direct load control Evaluation strategies were subsequently designed to reposition the utility to respond to new market, planning and regulatory challenges Incorporated state-of-the-art capabilities of utility load research staff into evaluation planning Findings were used by client to reposition programs Marketing Program Evaluation Plan Development As senior technical consultant on an interdisciplinary team, developed marketing evaluation plans for Iowa Southern Utilities Company and Iowa Electric Company Specified methods for evaluating demand and energy impacts of residential, commercial and industrial marketing programs to be implemented over a three-year period Developed sampling plan for optimizing application of existing load research database and selecting end -use metering sites to quantify the impact of a direct load control pilot program Leveraged findings from evaluation of marketing programs of sister utility to reduce expense of evaluation Findings were used by client to comply with state ieg latory requirements, optimize the use of staff resources, and improve the probability of program implementation success Marketing Program Evaluation Plan Development As principal technical consultant on an interdisciplinary team, developed marketing evaluation plans for Iowa-Illmois Electric & Gas Company Plans specify methods for evaluating market impacts, program processes, and demand and energy impacts of marketing programs to be implemented over a three-year period Developed engineering algorithms for estimating demand reduction and energy savings of individual measures by program Specified data collection plan for data base development Leveraged findings from previous work to reduce expense of evaluation Findings were used by client to comply with state regulatory requirements, optimize the use of staff resources, and improve the probability of program implementation success Appliance Saturation Survey Plan Development As principal technical consultant on an interdisciplinary team, analyzed requirements for appliance saturation survey of residential customers for Iowa Southern Utilities Company Developed recommendations for sample design and survey instrument design Findings were used by client to develop efficient sample size and reduced anticipated metering expense Sample Design for Residential End -Use Metering and Evaluation Isvues for Direct Load Control As principal technical consultant on an interdisciplinary team, developed sampling plan for selecting end -use meters to quantify the impact of a direct load control pilot for Iowa Southern Utilities Company Reviewed status of existing load research database Developed correlation between existing load research sample and total customer population using bill frequency distribution Developed requirements for expanding existing load research data base to improve confidence and accuracy of existing data base and provide a robust baseline sample for evaluation of participant samples from Marketing programs Designed sample and specified data collection plan for data base development Resolved marketing evaluation issues for Iowa regulators regarding the validation of demand impacts, statistical concepts of the difference between two means, the use of paired observations, and expansion of results with known confidence and accuracy This work was the first of its kind in the nation Marketing Program Evaluation Plan Development As principal technical consultant on an interdisciplinary team, developed marketing evaluation plans for Iowa Southern Utilities Company Researched regulatory requirements and reviewed statewide initiatives Developed detailed plans to specify methods for evaluating market impacts, program processes, and demand and energy impacts of eight Marketing programs to be implemented over a three-year period Developed engineering algorithms for estimating LBA Energy Services Denton Municipal Utility Valuation Study 1 �{ A - 10 Appendix A: Resumes Stephen A. Marsh demand reduction and energy savings of individual mcasures by program Findings were used by client to comply with state regulatory requirements, optimize the use of staff resources, and improve the probability of program implementation success Much of this work was the first of its kind in the nation Basic Research in District Cooling and Heating As division manager and technical lead for Austin Energy, evaluated the technical and economic feasibility for the application of district cooling and heating in Austin Used billing and load research data to construct cooling load shape profiles Used billing data, load research data and state -plane XY-coordmate system to identify the location of thermal islands in Austin Evaluated the feasibility of a variety of source and distribution configurations including central cooling and heating (conventional and heat pump) with and without thermal storage and chilled and hot water distribution, cogeneration with central absorption chillers with chilled water and steam distribution, and, cogeneration with steam distribution with dispersed absorption chillers Work was funded by the APPA DEED Grant and DOE Electronic Warfare - Foreign Radar Development As project manager and radar development physicist for the Naval Weapons Center in China Lake, California, researched intelligence data to define Fleet requirements for radar simulators Performed the scoping study and developed the program design for a $22,000,000 radar development effort Managed a $5,000,000 sub -program to design, fabricate, test and operate remotely controlled radar transmitters Balanced resource and scheduling activities to meet project performance objectives Monitored and controlled electrical and mechanical budget expenditures Designed fiber optic communication interface between central control computer and high voltage modulators to reduce exposure to local interference Designed EMI and RFI shielding enclosure Designed remote facilities, HVAC system and utility service Developed FORTRAN software to design low voltage and high voltage inductors and transformers for power supplies and modulators BULK POWER MARKETING Wholesale Bulk Power Market Assessment As project manager, recently completed a comprehensive strategic assessment of the wholesale bulk power market for a large out-of-state corporation Created a working document to describe regulatory and market characteristics and the impact of recent legislation on various wholesale business opportunities Power Supply Proposal Development Assistance As project manager and principal investigator, assisted an independent power producer (IPP) with the development of a multi -phased power supply proposal to Magic Valley Electric Cooperative (MVEC) Collected data and developed technical, economic and policy descriptions of ancillary services available from local control areas Screened and interviewed prospective service providers (e g , fuel supply, power marketing, DSM) for possible strategic alliances Facilitated negotiations among parties Developed description of rulemakmg associated with transmission access, ancillary services and determination of excess cost over market Evaluate multiple locations for project siting Performed several power flow studies to optimize site for service reliability and merchant plant opportunities Developed complete technical and economic descriptions of required upgrades to the 138-kV transmission system to enable interconnection with various plant capacities Summarized findings in a report included in each phase of the submittal Bulk Power Market Assessment and Project Feasibility Study As project manager and principal technical consultant, performed an assessment of the bulk power market in South Texas, the Electric Reliability Council of Texas (ERCOT), and northeast Mexico Several site and generation plant alternatives were modeled under various transmission, fuel supply, environmental, and political configurations Site- LBA Energy Services Denton Municipal Utility Valuation Study ix A: Resumes A. Marsh generation combinations were presented in an attribute matrx to facilitate strategic planning activities and project negotiations The study updated the forecasts of future power requirements and planned capacity additions of all major generating utilities in South Texas, ERCOT, and Mexico Impact of DSM and purchased power agreements by utilities were factored into the market assessm.nt Statewide wholesale power costs and other sales information were developed Transmission issues were addressed including the current status of transmission wheeling rule development, pricing methodologies, and rates All power market issues in Texas were addressed including recent state legislation impacting the Public Utility Regulatory Act, competition, published philosophy of commissioners on competition, current and proposed status of NUGs, the IRP process, and other market changes anticipated during the next legislative session Both supplier and purchaser perspectives were evaluated Findings were used by client to develop a business plan to secure financing and initiate implementation The prospect of selling power to Mexico was examined using the maqudadora load as a likely first target Addressed the technical, economic, and political barriers to selling power to Mexico Tested the receptiveness of power supply proposals through discussions with national utility decision makers in Mexico City Power Supply Assessment As principal technical consultant, investigated power supply options for South Planets Electric Cooperative Monitored regulatory activity, identified issues and tracked public correspondence between the two suppliers that serve the cooperative and have conflicting NOIs for the construction of new power production facilities Evaluated alternative power supply strategies including new wholesale rate design, new DSM initiatives, and new supply contracts from independent power producers Findings were used to strengthen the position of the cooperative in negotiations with suppliers Texas Power Supply Market Assessment As principal technical consultant, assessed the technical and economic attributes of the electric power supply market in I exas for several independent power producers Summarized the forecasts of future power requirements and planned capacity additions of all major generating utilities in the state Factored impact of DSM and purchased power agreements into planning processes Researched and summanzed statewide wholesale power costs and other customer information Prepared a review of transmission issues including wheeling rules, pncing methodologies, and wheeling rates Prepared discussion of regulatory issues in Texas including an overview of published philosophy of commissioners, proposed legislation, the current and proposed status of NUGs, and the IRP process Client studies were confidential and vaned in scope and purpose Both supplier and purchaser perspectives were evaluated Findings were used by clients to set prionties for business plan implementation Power Resource Proposal Support Phases 1 II and III As project manager and principal technical consultant, screened potential sites in Austin for Southern Flectric Intematiora] for the purpose of locating a proposed 300-MW, multiple unit, combustion turbine generating facility Calculated transmission power flow constraints and estimated single and double line contingency impacts Developed engineering design requirements transmission switch gear, transmission system upgrade, relay protection, fiber -based communications, fuel supply, and environmental safe -guards Developed public involvement plan to address siting, noise, emissions, and EMF Identified and coordinated minonty and women -owned business subcontractors Identified and coordinated contact with commercial real estate firm Lobbied decision - makers on behalf of client Information was used by client to develop winning proposal Power Options Assessment As principal technical consultant, evaluated the power supply options for the City of Denton municipal utility Examined all combinations of purchased and generated power options including remain in an existing joint action agency, form new wholesale supply relationships with local power pools and suppliers, repower existing central station generation, and purchase excess power from local and remote qualifying facilities Findings were used by client to informed decisions relative to proposed new plant construction program f LBA Energy Services Denton Municipal Utility Valuation Study �`� A - 12 Appendix A: Resumes Stephen A. Marsh Power Supply Evaluation for Plant in Sebree, Kentucky As principal technical consultant, investigated power supply options for the Hudson Foods meat processing and distribution facilities located at multiple sites in Kentucky Developed load profiles and forecasts from available data Performed trade-off analyses of rate and service options including transmission voltage level services, redundant and dedicated primary supply, primary feeder configuration and protection schemes, interruptible service, self -generation, fuel switching, conventional and economic development rates, and various DSM initiatives Assisted client with negotiations for high quality, low cost electric service with the flexibility of access to an open market when retail wheeling is available Sale of Generating Equipment As independent project developer, represented the sale of 20 used, Allison 501-k mobile turbine generators for International Business Machines Developed and implemented marketing strategy which included sales brochure, descriptive literature, operating statistics, and photographs and video of individual units Prepared all materials for joint venture partnerships, sales agreements, site visits, check-out tests, manufacturers statement, transportation and insurance, set-up and testing support, operations and maintenance support, spare parts, frequency conversion from 60 hertz to 50 hertz, high temperature operation modification, and dual fuel conversion Negotiated agreements for sale with prospective domestic and international purchasers ' LBA Energy Services Denton Municipal Utility Valuation Study A-13 DENNIS M. DEEGEAR EDUCATION Master of Public Attatrs 1975, Lyndon B Johnson School of Public Attatrs University, of Texas at Austin Bachelor of Arts 1972 (Cum Laude), Trinity University, ban Antonio Texas APPRAISAL COURSESIPROFESSIONAL DESIGNATIONS American,lnstitute of Real Estate Appraisers Real testate Appraisal Principles Inteinational Association of Assessing Officers Fundamentals of Property Appraisal, Inwme Approach to Valuation, Development and Writing of Narrative Appraisal Reports, Income Approach to Valuation 11, Tndustrial Property Appraisal Mass Appraisal of Income Producing Property Designation Registered Professional Appraiser (RPA), Texas Board of Tax Professional Examiners PROFESSIONAL EXPERIENCE 1998-Present Vice President, Complex Properties, Capitol Appraisal Group, 111c , Austin, Texas bunctton as assistant director of the industrial division responsible for workload management client relations, and recruiting hiring and traintrig protessional and clerical personnel Professional duties include appraising industrial, utility (electrical, gas, pipeline and cable television) mineral and commercial properties, real and personal, including highest and best use analysis, and testifying as an expert witness In-house specialist for mwme valuation, market analysis and Uniform Standards of Professional Appraisal Practice (USPAP) wmpiiance Frequent speaker at association conferences and chaplet meetings 1984-Present Instructor Taught wurses on Appraisal of Personal Property, income Approach to Value, and Mass Appraisal Concepts for various protessional organizations and educational institutions including the Texas Association of Assessing Officers and the Texas AsSOLianon of Appraisal Districts 1981-1997 Appraiser, Capitol Appraisal Gtoup, Inc , Austin, lexas Responsible for appraising a wide range of utility, industrial, mineral, and commercial properties for ad valorem tax purposes DENNIS M DEEGEAR Page 2 1980-1981 Assistant Director for Valuation of Complex Properties, Texas State Property Tax Board, Austin, Texas Responsible for statewide appraisal of utility, industrial, mineral and commercial properties Fdnor of and contributor to the General Appraisal Manual (1981) Conducted and supervised research into appropriate appraisal methods for all types of taxable properties in Texas 1978-1980 Valuation Specialist, Texas State Property Tax Board Appraised and reviewed appraisals of utility, mineral and industrial properties 1975-1978 Research Associate, Public Affairs Research Council of Louisiana Responsible tot researching and writing reports on problems and issues confronting state and local government in Louisiana 1974-1975 Research Assistant Legislative Property Tax Committee Texas Legislature Responsible for researc hmg and producing a report on statewide market value stuC.es conducted by the fifty states Kc o1L'_._rU__ Have reappraised annually approximately $10 billion of utility property, including all types of power plants using both unit valuation and replacement -ost new less deprecation, and over 100 industrial plants and special purpose commercial properties using all three -approaches to value Oversaw the development of the personal property appraisal system used A Capitol Appraisal Group, Inc Developed various income approach models used at Capitol Appraisal Group, lnc, , including cost of capital, unit appraisal and discounted cash flow Co -developer of a bank stock valuation model for the Texas Association of Appraisai Districts AFFILIATIONS. Member, International Association of Assessing Officers (IAAO) Chair, Public Utility Section, IAAO, 1998-99 Member, Industrial Liaison Committee, Texas Association of Appraisal Di%tricts, 1998 1999 CURRICULUM VITAE ANTHONY G LAWRFNCE 9 John Brown Road Post Office Box 711 Lake Placid, NY 12946 (518)52-1-8205 EDUCATION PhD 1973 State University of New York at Buffalo (Economics) Dissertation Pricing and Planning in the US Natural Gas Industry 4n Econometric and Programming Studt, Arno Press -New York Times, 1979 M A 1970 State University of New York at Buffalo (Economics) Thesis d Linem Prog,ainming A,Iodel of Yugoslavia's Developmetu Prospects State University of New York at Buffalo 1970 BA 1968 State University of New York at Buffalo (EWnom1CS) FM1IPLOY.VENT EYPERIENCE--CONSULTING, RESE4RCH. 4ND TEACHING 1994-present Quincunx, Principal Researched sttitistical and mathematical methods tot public utility planning and pricing in a competitive environment production and cost function analyses energy -supply substitution, strategic investment planning real-time pricing implicit valuation of extant capital assets, customer value and system cost of differentiated services, and market research Developed mierosimulahon methods to measure the impact of equipment -vendor, efficiency -incentive programs applied said methods to estimate the impact of three demand - management programs for a major public utility t,ompany 1989 - 1991 [ nited States Department of the Treasury, Policy Economist Responsible for econometric research on economic growth investment savings, productivity infrastructure, and the monetary structure of the economy Reviewed and critiqued literature on money markets, monetary theory and monetary econometrics pertaining to the determination and control of the money supply and its relationship to economic activity Developed several potential policies tar the United States to increase the domestic sav rags rate via specific alterations in the Federal tax strULture such as switching to a consumption -based value-added tax (VAT) Reviewed and critiqued the extant economic and econometric literatwe related to the level of gross investment and the relative valuation of corpotate equity compared to its replacement or book valuation (e g Tobm's q) Reviewed and debunked the popular economic hteiature on publtt-mtrastructute investment as the causal determinant of pioductivity growth CURRICULUM VITAE ANTHONY G LAN17RENCE 1981-present Angel Economic Reports, President Developed non -parametric econometric methods to obtain robust estimates of the impact of commercial -industrial programs for a major public utility company Developed integrated survev-research methods for application to multiple sample feeds pertaining to several seemingly -unrelated demand -management programs, applied said methods to three residential demand -management programs for a major public utility company Developed hedomc-price models for primary residential energy -using durables to estimate the implicit price of energy efficiency Developed survey research methods to estimate the energv-effteiency distribution of the primary energy -using dw ables offered for -sale in the marketplace, applied said methods for majot public utility wmpanies Researched the economic motivation for the Gulf war Developed econometric methods for the estimation of the impact of conservation and demand -management programs for application to time -series of cross -sections of public -utility customers' billing histories with matching weather statistics and essential customer survey data, applied said methods to estimate the impact of demand -management programs for several public. utility companies Reviewed and synthesized published studies from a large sample of public utilities on customer responses to time -of -use rates, real-time pricing and direst load control pi ograms with especial emphasis on the level of monetary incentives and the marketing methodology Surveyed econometric models of residential energy use Analyzed customer attitudes and responses to electric utility load management Developed scenarios of future energy demand Prepared Nonresidential Buildings Energy Consumption Survey (NBECS) for analvsis Estimated conditional probability models of conservation actions in the commercial sector 1984 - 1985 American University in Cairo, Associate Professor Taught undergraduate and graduate microeconomic theory Research on economic problems of the Middle East 1980 - 1981 Applied Forecasting and analysis, Vice President Consulted on energy demand and loirocasung Developed statistical models of end -use energy consumption in the residential sector Surveyed utility forecasting methods 1980 - 1981 Lniversity of California at Berkeley, Visiting Professor Lectured on econometrics and taught macroeconomic theory to honor students 1979 - 1980 Cambridge Svstematics, Inc , Director of Economics Responsible for business development in economics Consulted on the effect of weather on electriuty sales Researched the factors determining the energy wnsumption of individual electrical CURRICULUM VITAE AVTHOM1Y G LAWRENCE appliances using load research and survey data Estimated conditional demand models for residential gas Ind elecniciry use 1975 - 1979 Electric Power Research Institute, Project Manager Initiated seminal EPRI research programs in several areas Time-ot-use pricing and diurnal energy -price elasticities and substitution possibilities, residential and commercial end -use energy modeling microsimulation using both real and synthetic sample data, load modelling with modern time -series methods and cubic splines analyses of potential future market for electric vehiclCs and their air quality impacts, and transfer of EPRI-sponsored research to utility members via regular industry workshops Managed research projects on energy demand and conservation Designed projects including research objectives, economic theory, statistical methodology, econometric modelling, data collection and survey research Shepherded projects through EPRI-industry approval process Wiote requests for pioposals and qualifications Reviewed competitive proposals and selected contractors Collaboiated with and managed research contractors academic consultants and industry advisors Arranged, managed and chaired various research workshops and industry seminars Edited research reports and conference and workshop proceedings Conducted independent in-house research wrote professional articles and research summaries, and presented results at various professional meetings on demand analysis qualitative choice, aggregation, and demand systems applied to the demand for energy -using durables and coal production Did m-housc toreeastmg of U S energy demands Ran workshops and seminars to transfer research results to the utility industry 1974 - 1975 University of Kentucky, Assistant Professor Taught statistical decision analysis and economic development Researched the Kentucky coal industry (subsidized by the Institute for Mining and Minerals) evaluated the causes and effects of the ownership pattern of Kentucky coal mines Developed cross sectional data from confidential tax records in order to estimate a production function for Kentucky mines Researched substitutability and lags in adjustment for both residen*rtl and steam -electric demands 1972 - 1974 Bureau of Labor Statistics, Economist, Cost of 1 ivmg Project Researched the theory of demand behavior, the econometrics of complete systems of demand equations and their relation to the theory of a cost of living index Researched the theory and empirical measuiement of quality change and hedomc price functions Studied empirically mtei-tuel substitution in the ek etric power industry and residential CURRICULUM VITAE energy markets ANTHONY G LAWRENCE 1969 - 1972 Governor Herbert H Lehman Fellow in Economics at State Lmveruty of New York at Buffalo As doctoral research developed a pricing and planning model for the U S Natural Gas Industry For Master's thesis, developed a linear programming model for Y ugoslavia Researched random coetficient methods for regression analysts of pooled times -series cross-section data Studied quantitative economic planning, operations research, economic growth theory, operations research, and advanced ewnumetncs Taught macroeconomics, economic growth and business cycles, and microeconomcc theory 1968 - 1969 .National Defense Education Act Fellow in Economics at State University of New York at Buffalo Studied econometrics, mathematical economics and economic theory Taught economics at Millard Fillmore College and statistics at C anisius College PAPERS, PUBLICATIONS, AND PRESENTATIONS "A Linear Programming Model of Yugoslavia's Development Prospects" M A Ihesis State i niverstn of New York at Buffalo, 1970 "Interfuel Substitution The Steam Electric Industry's Demand for Fuel" BLS Woikmg Paper 8, presented at winter meetings, Econometric Society Toronto December 28 1972 Pricing and Planning in the US Natui al Gas Industry 4n Fconomeme and Progt amming Stndv Arno Press New York 1979, Ph D Dissertation State University of New York at Buffalo February 1973 "The Asymptotic Bias and Variance of a Computed True Cost of Living Index The Case of the Klan Rubin Constant Utility Index", BLS Woikmg Papet 20 presented at Western Ewnomic Assowation Meetings Las Vegas June 20 1974 'Regional Residential Energv Demand in the U S " presented at Western Economic Association Meeting, Las Vegas, June 20, 1974 'Aggregate CES Input Demand with Polytomous Micro Demand" with R McDonald Econometnca March 1978 presented at winter meetings Econometric Sot,iety, San Franusco December 29 1974 "The Causes and Consequences of the Changing Pattern of Coal Mine Owner hip" Institute for Mining and Minerals Research, IMMR-PD3-75 University of Kentucky, September 1973 CURRICULUM VITAE ANTHONY G LAWRENCE "The Role of Prices in Qualitative Choice Models" presentcd at Econometric Society September 16-18 1976 "Micro Foundations of Discrete Choice Modeling for Household Fuel Decision" with J Boyd, presented at Econometric Society, September 16-18, 1976 "The Residential Demand for Electricity by Time-of-Dav An Fconometric Analysis", w nh Steven Braithwait, presented at Public Ltilities Forecasting Conference sponsored by Bell -Canada and Unrvei sity of Lancaster, March 22-25, 1977, and presented at EPRI workshop on Methodologies for Forecasting Time -of -day and Seasonal Electricity Loads, Aspen, Coloiado March 39 - April 1 1977 "Technological Change and Transportation Energy Forecasting", with R T Crow, in Proceedings of Workshop on Long Run Energy Demand MTR 7263 The Mitre Corporation, May 1977 "Time of Day and Seasonal Load Forecasting", EPRI Journal, August 1977 "Estimation of an Aggregate Industry Production Function Using the Efficiency Distribution of Micro Units Midwestern C oal" presented at Western Economic Meetings, June 20-22, 1977 and the Econometric Society winter meetings, New York City, December 1977 Foi ecasting and Modeling Time -of -Dar and Seasonal Electricity Demands, editor, EA 578-SR, Electric Powei Research Institute, December 1977 "The Residential Demand for Electricitv by Time -of -Day" with Steven Rraithwait, Journal of Econometrics, 9, 1979, pp 50-77 r "Developing a Method for Weather Adjustment of Energy Sales by Class of Customer", presented at EPRI Demand & Conservation Workshop, October 1980 "Econometric Estimation of Residential Appliance Unit Energv Consumption" presented at EPRI Workshop, Atlanta, Georgia, in Proceedings End-Lse Models and Constrvation Analysis, EPRI EA2509 Project 1050, Flectric Power Research Institute, Palo Alto CA July 1982 "A Survey of Electric Utility Load Forecasting Methods" mimeo for EPRI project RP1815 August 1981 "Unit Energy Consumption (UEC) Analysib of Residential Electnc and Gas Appliances for the Pacific Gab and Electric Company 1979", Angel Economic Reports May 1982 "Unit Energy Consumption Analysis of the National Interim Energy Consumption Survey Data", with M Robinson June 1982, Applied Forecasting and Analysis Inc under subcontract to A D Little, Inc for Electric Power Research Institute project RP1587 CURRICULUM VITAE ANTHOINY G LAWRLNCF Survei of Conditional Energy Demand Models for Estunanng Residetutal Unti E.ttergv Camiiniptunt (UEC) Coefficients with M Parti, final report for EPRI research project RP576 3 August 1983 Flectric Power Research Institute, Palo Alto, CA Customers' Attitudes and Customers' Response to Load Managentent, final report for Electric Ctilm, Rate Design Study, topic IV 1, November 1983, Electric Power Research Institute "Developirtg a Unified Research Quality Database at Niagara Mohawl, Power Corporation", Research Memorandum for Niagara Mohawk Power Corporation, February 1986 "Comments on RTI's Pilot Study Design Issues", Research Memoi andum for Niagara Mohawk Power Corpoiation February 1986 "Heating and Cooling Requirements Functions", Research Memorandum for Niagara Mohawk Power Corporation, September 1986 "Hedonie Price Models for Energ} Using Durables from the Sellei s' Perspectn e" Working Paper Prepared for Niagara Mohawk Power Corporation, May 1987 "Residential Energy Utilization Indexes for Niagara Mohawk Conditional Demand Results tot 1979, 1985 and 1986", Working Paper Prepared for Niagara Mohawk Powei Corporation, November 1987 "A Test for Endogeneity of Appliances in a Conditional Demand Modol of Residential Energy Use' Working Paper Prepared for Niagara Mohawk Powei C orporation December 1987 "The Price of Efficiency implied by Hedomc Price Functions of Residential Energy Usmg Appliances" Working Paper Prepared for Illagara Mohawk Power Corporation, December 1987 "The Value of Service for Commercial Electricity Customers An Econometric Approach," W otking papei for private client using stuvev data from a major electric utility company December 1988 ' fhe Value of Service for Residential Electricity Customers An Econometric Approach " Woi king paper for private client using survey data from a major electic utthty companv January 1989 "The Value of Service for Residential Electricity Customets An I-conometric Approach," Working paper for private client using customer data from a Bonnex ille Power Administration surrey, April 1989 " 4ltemative Policies to Enhance Domestw SaN urg,' Treasury memorandum for working group on savings and the cost of capital, May 1989 'MetaMoney the Role of Money, Credit and Promises," Tieasun working paper for Office of hconomic Policy, August 1989 "A C titique of Barnett's Monetary Aggregate," Treasury working paper for Office of Economic Policy CURRICULUM VITAE Novembei 1989 A,NTHOW G LAWRFNCF "A C ntical Evaluation of Alternative Money Aggregates," l reasur}, working paper for Of (,e of Economic Policy April 1990 "A Critique of Aschauer's Intrastrucnire-Productivity Work " I reasury working paper toi Office of Economic Pohcy, August 1990 "The Economic Reasons for the War An American Economist's Perspective," Paper prepared for presentation to the Faculty of the School of Economics and Business University of Rome Februan 1991 "The Productivity-infrastructure-Grmvth Nexus An Review of the Lconometric Evidence " Treasury working paper for Office of Economic Policy, June 1991 "Impact Evaluation of 1991 Dealer hncentive Programs and ( ompact Fluorescent Light Bulb Program " Aspen Systems Corporation for Con Edison 1993 "Impact Evaluation of 1992 Dealer Incentive Programs and Compact Fluorescent Light Bulb Program' Aspen Systems Corporation for Con Edison, 1994 "Impact of Demand Management Program for Large Commeicial-Industrial Customers' Aspen Systems Corpoianon toi Boston Edison, 1994 "Impact Evaluation of 1993 Dealer Incentive Piograms and Compact Fluorescent Light Bulb Program," Aspen Systems Corporation for Con Edison, 1995 Y 0 TON M U N I C I P A L E L E C T R I C Denton t Tcvasryav -6-5irc1) Denrun Tcrus "h_ol ., P I„ . 1 TO Howard Martin Assistant City Manager for Ltihties FROM Sharon Mays Electric Ltthtt Director DATE October 27, 1998 SUBJECT PUC Effort to Implement Retail Deregulation Without Legislative Action Attached are two newspaper articles and a letter from Pat Wood to the other PUC Commissioners The Pat Wood letter lays out his present vision for a deregulated Texas electnc utility market The news paper articies describe a new initiative for opening the retail electric market to competition without any involvement of the legislature Former Governor Mark White has begun a campaign to use the PUC's ability to issue multiple electric utility certification as a mechanism to allow retail electric access Mr White's position is that any group can form a utility, go the PUC for certification to provide retail electric service in an area and begin serving customers His argument is that the PUC has always had the ability to grant multiple certifications and that they can create competition by simply granting certifications to anyone wishing to serve an area The PUC is actively pursuing this approach through two different rulemaking proceedings One proceeding (Project 18876 — Investigation into Switchover Issues) was onginally designed to correct problems customers in existing dual certified areas were having switching from one provider to another For example today, if a TU electric customer in the Denton city limits wanted to change to DME, that customer has to get TU to remote or abandomtheir distribution facilities, which were installed to deliver power to that customer, and get DME to install new facilities It is not uncommon for the utility that was losing the customer to try to charge large fees to the customer for removing their facilities and/or take a long time getting the facilities removed The proposed rule to correct these abuses was published August 28 It did not apply to municipalities or address retail wheeling over another utility's system However, the Commission revised the proposed rule after the comment period to include a requirement that the utility with the existing facilities setting a customer who wishes to switch must deliver the competitor's power to the switching customer over its facilities This is retail wheeling which creates deregulation at the retail level The Commission is also attempting to broaden the application of this proposed rule to cover municipalities In addition to the effort descnbed abote the Commission has incorporated the same concept into their proposed new rules governing the protision of wholesale transmission service (Project 18703- Review of Transmission Access Rules) The dralt nevv rules include a provision that states a transmission service provider shall also provide access at the distribution level to another electric utility in order to transmit power to a customer in an area in which the other electric utility has a certificate to provide electnc service Such service shall be provided under the same pncing and other terms and conditions available to the transmission service provider in serving similar customers Once again this creates retail, customer by customer competition in anv area where more than one utility is certified to provide electric service Obviously it the Commission is successful in its efforts these rules would have an immediate impact on DME, since we are dual or triple certified in much of our city limits It is doubtful that the Commission has the legal authonty to order a municipal utilnv to provide retail wheeling The only authority the Commission has over our operation is in the area of wholesale transmission service Tlns narrow authonty was given to the PUC under PURA 95 However, even if we were to be successful in preventing the Commission from imposing retail wheeling requirements directly on municipalities absent legislation action, the implications of what the Commission is Irving to accomplish are huge If they are successful, Texas would have retail deregulation without addressing issues such as reliability, stranded investment, or the ability of the Texas Independent System Operator to operate the ERCOT system The legislature would be left entirely out of the process All members of the traditional electric service provider commuruty, investor owned utilities, co-operatives, and municipal utilities are opposing this effort by the PUC I have been in contact with Jim Boyle and he assures me that he will carry our message to our legislators We will also participate actively in the comment process on both Projects We have already filed comments on Project 18876 tv 06 -o,y3 ���yvsCS a �yp3e _?u 4 v _COpp s Oy �9?7�_,3 c`c,au�E�c��E'V�°ELTE= m o ga c e 3'da N cngE,E' OA Nda O - L �09. Sc3 i� pp�0QZ?2 '33oE�r 3 RN -3'�4Or �yi a , Oa F pp��rr39 �'E�aa $v�7i F'4U N C 1'.. 0.+a.. �' Y- �E8 S.0,s �c$9G7�S°R 3�Ncs�Am3� <5G5 c°aa06 J.3�R- ..a„ �- G ,cw i'J QOON �y 7 tN. v ;5553 �iOE� .G' 04 >1U'i 3a0Eyoc$y YC�nJ7S"> 4�3uc3 8'92 yG� c- >>CLEE T %=Ay�y YCQ3�Y -L-� �Ea�$y Su�ydd :$ v C AsaE M'` >'0- iiii v _TE " a ¢� c" dcmI. c6'S�=�3 Ez9;wa `=So � OOEc ��Cz,yp 7v E LO) ca`too'a`"yE��� >y_r-3 C.�ayslm Jrw�ECc.`a> uyy� R�Gv Tc0.43�n N Continued from 1f. Corpus Christi now served by CP&L All utilities must have such certificates to sell power to retail customers, including homes and businesses of all sizes For years those certiflcates t ale been seen as a barrier to xouldbe competitors The tin pticit bargain was that a utility could get a certificate to serve a particular area and, with a few exceptions would face no competitors But %ebb sees an opportunity For some legal maneuvering that would enable the Corpus Christi group to compete by getting a certificate rather than waiting for the Legislature to open up the monopolies The state constitution. Webb said, bars state and local govern menta from awarding exclusive franchises Just because CP&L has a certificate to serve a certain area does not prevent others from also serving, he said if a certificate is granted, Webb said Corpus Christi Power & Light could begin serving customers lust as any utility would And as a utility its rates and service stan dards would be subject to earn mission approval, just as CP&L's are Roberson at Central and South West, indicated CP&L interprets the law to say that the commission cannot award a certificate to an other company unless it can show the incumbent is providing triad equate service —"and we're Pro- viding a high standard ofrellabil ivy within our service territory," he said Even with a certificate, howev er where would the challengers get their electricity and how would they deliver R9 After all, CP&L, like most utilities, has Writ decades and billions of dol Lars building its power system No problem, White said "The money situation on this doesn It require $100 million " There s no need to buy power plants wires or poles he said because they are already in place The Legislature in IM deregu ated wholesale sales of electricity, White, in fact, helped form Power Choice [nc , an outfit that intends to buy power on the wholesale market for resale to the new Car pus Christi Power & Light And the challengers want to use the power lines of their rival CP&L togettheelectricitytotheir own customers Of course, they say, they would toy a teasooable fee for the service Ls,ng CP&L s equipment is not as outlandish an idea as it might seem White likened it to the tele phone industry in which South western Bell Telephone Co is re quired to let its new competitors use its wires and poles For a fee The utility cormission re(ently proposed new n—es that would among other thirgs makeiteabier for customers to switch power companies where more than one is certified without having to add or replace power lines (For histori cal reasons, about 20 percent of the state s area has two or more utdi ties certified to serve ) Still, as Webb admitted, the Corpus Christ] group faces con- siderable odds Central and South West is no pushover it had rave nues last year of i5 2 billion 'Right now they re winning and we re not," White said "But we're not through fighting 771e Wall Street Journal Wednesday, October 21, 1998 Utility Panel Aims to Ease Switching seep BY Roetmr zwm hs t State utilityyre a W�sha�lovstny xher aRtftlpl to 1NIafOn have Lade aa- tVlWytln(fKlee e��LsIaaaantonut04 W(tfte The staff of the Puhhe t1°llaes Conn lnasWn has Dropasad a we Nat we make it caster for cuscomers in anas served by moo Nan one Itarty-soeaD00 etual<or'nfieli areas—m SWICCh uataie companies. The Dropasal, datgnad wend rat high data and Ion dataYs tavdvett With ewrtthing, would affect rexam In about anediRh of are sore and he dray We suit dour to dereguladOn This d" two. which wftujuy the thnw•member miz f>t "a byvetsd 1a suy.damtspeeupywak�u°jao4alPy. lie Ise mote aasaa Cam rlsatslsg awIsli [at feat WkIdE ate determtsad by the cam. tnlsdem m to memo tveyesCag per. Isatead C wand b&s a tnWty dssm ttWdltg mas who dwwi m svtkh pay for Wks tog out thee sic Thte n0oaemd rwr also ww rh&sp some ucnuadot nee to lower the undty s nhtChNC delta to add,• 104 the we sea as "day lime umrt for switcbetb made tear osoe reQ&ueha s w ray, some uaHne fr Port del{ys Of up to severs! mouths for maids f a man. eci switttho erthe hud *at would tend toasier rajo wmad make iteutmu@ r Me i number of slattdp oven.- spurring coo mhos IsKeith . m Cemad &etas. sayg Ce ni w, mn YrrsWGhep STIR t�hl r4e,la aD m totdlntt rofhp2:12 ialit�yvee I the east and debt involved Cr Overateppint BoudarteSs "'a both Mee Djn poead we has drawn fire el"" cooperiinves +f"I tony�serrvve mast dttaltertlAad etas but, UILF bat. Mesa w need for w,;%r,ustdmer, state d s sq expensive to switch a Opponents "Urt vet lea eeesmaseton Soya mhte W{giltims,e Lef's an:re stint ateCunve of the Texas Camc Cooper&, lives the a Rade FatP that represents Che state s -t Cooperatives 'TVs sort of TEXAS JOURNAL t tilaty Commission Proposes Making Snitching Easier �a Of slur, It public policy ought to oAp na a ltom t aloha base of People picked by he eleetortte and not hom three Aft: malmsstonanl *no may or may Dot be In ouch nth ghat Ulf electorate wafu • Nr Wnllilm adds Nat probiome with 1e01tanan4 from eeroPs inn t wfdamnad. Complain that the 'Wti &send Uartua the ststa Public Unhry RetwtearyArt ban on what ls ewled •vetad wheeubr one unhty tnmmsmn f,leemeaty oar an xur uauy s atnsdtlf luws to bed ouch in an eltatt to reduce snteNnf rho 'or utusan the rule woadd allow a Company to use "abler uahty f Una rather Nan tore eompaNee o fa'al f now Uses r des Contract fxlsting ones Tavel Utilities Cgtof Dallas bnWtad Me Kc for oversteppuif its tutbae,' a,.d 1mt to Pose TV to ateept an in lee taw -Tan to M m... ,.w..uw waoesms etecRlGCy oeag fW11305 Is osdar for &eotaee Gain. OUR a nail $afe - Tire brief Reds to .. .v ,paaeeman says the we if wou ld uld be •a dyhtrafte, as the pnae's waft ale a read ateetrie alit bad ceGW fad Up CoVAcdag nN whatever mfuwv Iawmaken adopt. mr Ragas Counters that of we u rtut an asteastod of a durrwal aw Nat snows Me *001"I n'mfvussioa of power WIWo Nee'Slary weuW m raet be vneeled- over entsanf Uhee & Usury would Ot binMf lee power from Latter on a wholesale wvN sae sending it to rus eemen (The Dan on matt wheaW stems from the state a buteriew tnl4IIe01 of "shah as monopeaa gut tttw twrhmk�a u Ne ftnenCde and trusmusaoe r power have Dlmipted Tetas a onto Up compact don in the Wholesale dacRtc oaf fft and t0 consider avtendun f tat Coe pendob to the Matt mark w Sbutog as Area Dual<vrtfled areas enlst bemuse some P&M or the state won sarvfd by more Noe oat usury whfn .lie state reguialory act became Ww In in WNIe In most alias of .he leap staple irdiafs wan 3natad no nopoues N dual cerstled areas lee rust Ulf flecere'y peavidfn Were all allowed to Cor CnVt't serve the ate% DUe but for 5f�t U the S•?t 'ail market 'r electriesy However dual cert,hsd areas art concentrated te fa,t fnwinf rerantl of ,he sod PLAhejuly around 04 Da"" Fort Sonh ],�] near 'teCWr Ca&sC Csmpeuaon tot exunnf am0a f VlWtitl A such a.Tas rant 't^e -11wgh eiectnelry Castome l Ad", - nea areas an Choose beneea n Dron'den ley ruviy io PUC tiro"_ sat TtoosCS o(seilchlhg'a anoC.ef-IN trta serhee can om into Nf bundr,u ]( do lib and customers Wanda switch save to pay twtce-tat their ,orient -arc,y NOvwder'n d&c9Mect tresr serv'c• ]^E br & new provider to hook alp tl �,,r is dence Theluga,eesdlscourar,eA,,wa an trvtn CAUMC unUttet beta's, t wood late years to stoup the eats Tact the FOR 2elknap Elton ! Cov a gave to YotsdWen Teas, TM Coop says 't IM 1111104111 7p ahais spp Of Y and continuesto&Coos au, or ate a wtWt_ltpm its loin umpetuor lie d Texas Yew Hebeb Power Co put x,]p it e re,re say even man a]awme•s wnwd have swttUlfd if not for Tetas Yew ,Wes Ica s ugh swatch -over tact Nutt Rules Me coop s genera, manager son . ex.0 Yew allow Charges nsldentlel ate pay en as average (ee of scout trod to Elscun nett tom Jul Rid. The Port Belknap cooplenove has xeo acempaamtwiththapuc aeeusinfTesas `ate S41100 of 'ants<ompe0uve sw_n over pruaea ' Shannon K mcclendob Tests veW X"Co Powar's sew witatory suase says lee do" s Comolaant s -a red be nut, rut vas rated after the uxury sue few lepestad Wow vManam 00 44 PA f Bcut Pon limu; ectm eleisnegradues) We xgC:eftdaA aft mat a**� as P� over tea in Cstgad twfufaaom A Battle In the War the Proposed vet IS UN &test move by Ne comnutsiod is push the .tat# s titcnr'e multaW toward Competition in aatlap& a" a de"Tgatton PUC oa.rran 1`30"1 t Wood M Am been spurwf Mtn u[nittn and fi tmcat coopena.es over the We of TeTU move to ritau mtcTc dolnpeanon sou a dete"croe am lie backed In IM tared W Na sawn s Mal days flw watte of blow tuft to state should Proceed- sad W whu dtnadon. nab Cued IV in law= t"niaave Coemtletea surly At Ne date fuadoe issue aaple°elier switching utoOfMe Utkeeecua�n between u01111d and Santo fegWafdn, fa muds. the "any Commluba Proposed a sat at noes &sat would have •unbundled• datenat aspects o(anrfy teMCf by rate Me annaa to separate out Chair cons n their bills to Catoman and make Ise data available to state regulators The odes would has also required new repaes in meter eats ctn(ts and oNer^ustomer tier Wass Coops and utdlues complalftd ma, h, Niel Alen too envy tine ten an snares racy admlnisalave burden com,de^.r that comPetai1011 In ,fie -rtalf Marv: W35 lit mmllltrit. These complaints lie Pad df- WY 3enon an lee unbundling prepos , which ntnaln Pendin f