COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION

Transcription

1 COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of: APPLICATION OF KENTUCKY ) UTILITIES COMPANY FOR ) CERTIFICATES OF PUBLIC ) CONVENIENCE AND NECESSITY ) CASE NO APPROVAL OF ITS 2016 COMPLIANCE ) PLAN FOR RECOVERY BY ) ENVIRONMENTAL SURCHARGE ) DIRECT TESTIMONY OF JOHN J. SPANOS ON BEHALF OF KENTUCKY UTILITIES COMPANY Filed: January 29, 2016

2 TABLE OF CONTENTS PAGE I. INTRODUCTION AND PURPOSE II. DEPRECIATION RATES FOR ASH PONDS III. CONCLUSION JOHN J. SPANOS DIRECT ii

3 I. INTRODUCTION AND PURPOSE Q. PLEASE STATE YOUR NAME AND ADDRESS. A. My name is John J. Spanos. My business address is 207 Senate Avenue, Camp Hill, Pennsylvania. Q. ARE YOU ASSOCIATED WITH ANY FIRM? A. Yes. I am associated with the firm of Gannett Fleming Valuation and Rate Consultants, LLC ( Gannett Fleming ). Q. HOW LONG HAVE YOU BEEN ASSOCIATED WITH GANNETT FLEMING? A. I have been associated with the firm since college graduation in June, Q. WHAT IS YOUR POSITION WITH THE FIRM? A. I am a Senior Vice President. Q. WHAT IS YOUR EDUCATIONAL BACKGROUND? A. I have Bachelor of Science degrees in Industrial Management and Mathematics from Carnegie-Mellon University and a Master of Business Administration from York College. Q. PLEASE OUTLINE YOUR EXPERIENCE IN THE FIELD OF DEPRECIATION. A. I have extensive experience in the field of depreciation, including conducting depreciation studies for many utilities throughout the United States and submitting testimony to regulatory utility commissions on the subject of utility plant depreciation. My experience is more fully detailed in my curriculum vitae, which is attached to my testimony as Exhibit JJS-1. Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING? JOHN J. SPANOS DIRECT - 1 -

4 1 2 3 A. I sponsor the depreciation rates for ash ponds recovery for Kentucky Utilities Company ( KU ), and to demonstrate the KU has recovered only a minimal amount of terminal net salvage cost in base rates for the ask ponds. 4 II. DEPRECIATION RATES FOR ASH PONDS Q. PLEASE DEFINE THE CONCEPT OF DEPRECIATION. A. Depreciation refers to the loss in service value not restored by current maintenance, incurred in connection with the consumption or prospective retirement of utility plant in the course of service from causes which can be reasonably anticipated or contemplated, against which the Company is not protected by insurance. Among the causes to be given consideration are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the art, changes in demand and the requirements of public authorities. Q. DID YOU DETERMINE THE DEPRECIATION RATES FILED BY KENTUCKY UTILITIES COMPANY IN THIS PROCEEDING? A. Yes. I determined the depreciation rates for ash pond recovery by KU with its filing in this proceeding. My analyses set forth the depreciation rates to be utilized by KU in order to recover the costs to close the ash ponds at various generating sites. Q. CAN YOU EXPLAIN THE DEVELOPMENT OF DEPRECIATION RATES FOR THE RECOVERY OF ASH PONDS? A. Yes. There were two specific components of the analyses. The first phase was to determine the original cost and accumulated depreciation expense as of September 30, 2015 for each ash pond site. The second phase included recovering the remaining net plant as well as the future cost of removal for each site over its remaining life. Q. PLEASE EXPLAIN THE FIRST PHASE OF THE CALCULATION. JOHN J. SPANOS DIRECT - 2 -

5 A. The initial step included identification within the property records of the age and surviving original cost as of September 30, 2015 of each ash pond site. Additionally, the corresponding accumulated depreciation for each asset was based on the age and approved depreciation parameters for each ash pond by location. Q. WERE THERE ANY OTHER COSTS TO BE DETERMINED? A. Yes. In addition to the net plant (original cost minus accumulated depreciation as of September 30, 2015), there are future removal costs for each ash pond to be determined. These costs totaled $423,231,000 for all KU sites and were established by engineering studies. Each site was assigned a specific removal cost. Q. PLEASE EXPLAIN THE SECOND PHASE OF THE CALCULATION. A. Once the remaining net plant and future removal costs for each ash pond site were established, then depreciation rates and expense were determined to recover the full service value of the ash ponds over the remaining life. The remaining life for each site is the time from September 30, 2015 to the probable retirement date of the related generating facility which was approved in the 2012 base rate case 1. Q. HAVE YOU PREPARED AN EXHIBIT THAT SETS FORTH RECOVERY OF THE ASH PONDS COSTS? A. Yes. Exhibit JJS-2 sets forth the recovery of the remaining ash pond costs over the remaining life of each site. Q. CAN YOU USE AN EXAMPLE TO ILLUSTRATE THE DEPRECIATION RECOVERY? 1 In the Matter of: Application of Kentucky Utilities Company for an Adjustment of Its Electric Rates, Case No (Dec. 2012). JOHN J. SPANOS DIRECT - 3 -

6 A. Yes. I will use the ash ponds for Ghent Unit 4 for KU. The ash ponds for Ghent Unit 4 were placed in Account 312, in 1994 and The surviving original cost as of September 30, 2015 is $32,692, with an associated accumulated depreciation of $13,338,503. This produces a net plant $19,354,161 ($32,692,664 minus $13,338,503) as of September 30, Based on the engineering study, the costs of removal for the Ghent Unit 4 ash ponds are $217,401,690. Therefore, the full recovery of the Ghent Unit 4 ash ponds over their remaining life is $236,760,375. The remaining life is 22.7 years which is the time between September 30, 2015 and the probable retirement date (2038) of Ghent Unit 4, based on the two vintages of the ash ponds. The weighted remaining life is 22.7 years. Therefore, the future service value of $236,760,375 should be recovered equally over 22.7 years or $10,407,050 annually. Q. IS IT REASONABLE TO RECOVER THE ASH POND COSTS THROUGH THE REMAINING LIFE OF THE FACILITY? A. Yes. The overall costs of the ash ponds and their closure should be recovered over the life of the associated generating facility as the ash pond life is associated with the generating facilities. This is consistent with the concept of group depreciation. Q. ARE THESE ADDED COSTS CONSIDERED TERMINAL NET SALVAGE? A. Yes. Q. HAS KU RECOVERED SOME OF THE TERMINAL NET SALVAGE COSTS PREVIOUSLY? A. Only a very small amount. KU had not been approved to accrue for terminal net salvage JOHN J. SPANOS DIRECT - 4 -

7 until the 2012 base rate case, 2 which those rates went into effect on January 1, The approved terminal net salvage was 2 percent. Therefore, all generating facilities and associated ash ponds have accrued for terminal net salvage for 21 months at a 2 percent level of the associated plant value. The total accrued terminal net salvage for all plants is $5,348 and the amount for Ghent Unit 4 is $1,717. Therefore, only $1,717 of the $236,760,375 for Ghent Unit 4 has been recovered as of September 30, 2015 for the ash ponds. Q. HAVE YOU PREPARED AN EXHIBIT THAT SETS FORTH THE HISTORICAL TERMINAL NET SALVAGE RECOVERED TO DATE? A. Yes. Exhibit JJS-3 sets forth the ash pond reserve into the two components as of September 30, 2015 and calculates the portion associated with terminal net salvage as recorded since January 1, Q. WHY HAS KU NOT RECORDED MORE TERMINAL NET SALVAGE TO DATE? A. The Public Service Commission of Kentucky had not approved recovery of a terminal net salvage component for any assets until the 2012 base rate case. Additionally, the level of required tasks to cap ash ponds was not specifically identified until the Coal Combustion Residual Rule ( CCR Rule ) was established. Q. WERE THERE ANY ASH PONDS RECOVERED DIFFERENTLY THAN THE METHODS DESCRIBED ABOVE? A. Yes. There are three generating sites which have been retired during The facilities 2 In the Matter of: Application of Kentucky Utilities Company for an Adjustment of Its Electric Rates, Case No (Dec. 2012). JOHN J. SPANOS DIRECT - 5 -

8 are Green River, Tyrone and Pineville. Given these facilities have high ash pond removal which cannot be recovered by the generating station retirement, the Company is proposing to recover the ash pond costs over a four-year period of time which coincides with the needed ash pond capping project costs. III. CONCLUSION Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes, it does JOHN J. SPANOS DIRECT - 6 -

9 COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND VERIFICATION ) ) ) SS: The undersigned, John J. Spanos, being duly sworn, deposes and says that he is Senior Vice President, for Gannett Fleming Valuation and Rate Consultants, LLC, that he has personal knowledge of the matters set forth 1n the foregoing testimony and exhibits, and the answers contained therein are true and correct to the best of his information, knowledge and belief. Subscribed and sworn to before me, a Notary Public in and before said County and Commonwealth, this eftf:l day of My Commission Expires: COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL E Cheryl Ann Rutter, Notary Public ast Penn s ~or.o Twp., Cumberland Count My ~s 1 o n Expire!! Feb. 20, 20 H/ ME.eER, PENNSYLVANIA ASSOCIATiON"OF NOTARIE.,

10 JOHN SPANOS Exhibit JJS-1 Page 1 of 13 DEPRECIATION EXPERIENCE Q. Please state your name. A. My name is John J. Spanos. Q. What is your educational background? A. I have Bachelor of Science degrees in Industrial Management and Mathematics from Carnegie-Mellon University and a Master of Business Administration from York College. Q. Do you belong to any professional societies? A. Yes. I am a member and past President of the Society of Depreciation Professionals and a member of the American Gas Association/Edison Electric Institute Industry Accounting Committee. Q. Do you hold any special certification as a depreciation expert? A. Yes. The Society of Depreciation Professionals has established national standards for depreciation professionals. The Society administers an examination to become certified in this field. I passed the certification exam in September 1997 and was recertified in August 2003, February 2008 and January Q. Please outline your experience in the field of depreciation. A. In June, 1986, I was employed by Gannett Fleming Valuation and Rate Consultants, Inc. as a Depreciation Analyst. During the period from June, 1986 through December, 1995, I helped prepare numerous depreciation and original cost studies for utility companies in various industries. I helped perform depreciation studies for the following telephone companies: United Telephone of Pennsylvania, United Telephone of New Jersey, and Anchorage Telephone Utility. I helped perform depreciation studies for the following

11 Exhibit JJS-1 Page 2 of 13 companies in the railroad industry: Union Pacific Railroad, Burlington Northern Railroad, and Wisconsin Central Transportation Corporation. I helped perform depreciation studies for the following organizations in the electric utility industry: Chugach Electric Association, The Cincinnati Gas and Electric Company (CG&E), The Union Light, Heat and Power Company (ULH&P), Northwest Territories Power Corporation, and the City of Calgary - Electric System. I helped perform depreciation studies for the following pipeline companies: TransCanada Pipelines Limited, Trans Mountain Pipe Line Company Ltd., Interprovincial Pipe Line Inc., Nova Gas Transmission Limited and Lakehead Pipeline Company. I helped perform depreciation studies for the following gas utility companies: Columbia Gas of Pennsylvania, Columbia Gas of Maryland, The Peoples Natural Gas Company, T. W. Phillips Gas & Oil Company, CG&E, ULH&P, Lawrenceburg Gas Company and Penn Fuel Gas, Inc. I helped perform depreciation studies for the following water utility companies: Indiana-American Water Company, Consumers Pennsylvania Water Company and The York Water Company; and depreciation and original cost studies for Philadelphia Suburban Water Company and Pennsylvania-American Water Company. In each of the above studies, I assembled and analyzed historical and simulated data, performed field reviews, developed preliminary estimates of service life and net salvage, calculated annual depreciation, and prepared reports for submission to state public utility commissions or federal regulatory agencies. I performed these studies under the general direction of William M. Stout, P.E.

12 Exhibit JJS-1 Page 3 of 13 In January, 1996, I was assigned to the position of Supervisor of Depreciation Studies. In July, 1999, I was promoted to the position of Manager, Depreciation and Valuation Studies. In December, 2000, I was promoted to the position as Vice-President of Gannett Fleming Valuation and Rate Consultants, Inc. and in April 2012, I was promoted to my present position as Senior Vice President of the Valuation and Rate Division of Gannett Fleming Inc. (now doing business as Gannett Fleming Valuation and Rate Consultants, LLC). In my current position I am responsible for conducting all depreciation, valuation and original cost studies, including the preparation of final exhibits and responses to data requests for submission to the appropriate regulatory bodies. Since January 1996, I have conducted depreciation studies similar to those previously listed including assignments for Pennsylvania-American Water Company; Aqua Pennsylvania; Kentucky-American Water Company; Virginia-American Water Company; Indiana-American Water Company; Hampton Water Works Company; Omaha Public Power District; Enbridge Pipe Line Company; Inc.; Columbia Gas of Virginia, Inc.; Virginia Natural Gas Company National Fuel Gas Distribution Corporation - New York and Pennsylvania Divisions; The City of Bethlehem - Bureau of Water; The City of Coatesville Authority; The City of Lancaster - Bureau of Water; Peoples Energy Corporation; The York Water Company; Public Service Company of Colorado; Enbridge Pipelines; Enbridge Gas Distribution, Inc.; Reliant Energy-HLP; Massachusetts- American Water Company; St. Louis County Water Company; Missouri-American Water Company; Chugach Electric Association; Alliant Energy; Oklahoma Gas & Electric Company; Nevada Power Company; Dominion Virginia Power; NUI-Virginia Gas Companies; Pacific Gas & Electric Company; PSI Energy; NUI - Elizabethtown Gas

13 Exhibit JJS-1 Page 4 of 13 Company; Cinergy Corporation CG&E; Cinergy Corporation ULH&P; Columbia Gas of Kentucky; South Carolina Electric & Gas Company; Idaho Power Company; El Paso Electric Company; Aqua North Carolina; Aqua Ohio; Aqua Texas, Inc.; Ameren Missouri; Central Hudson Gas & Electric; Centennial Pipeline Company; CenterPoint Energy-Arkansas; CenterPoint Energy Oklahoma; CenterPoint Energy Entex; CenterPoint Energy - Louisiana; NSTAR Boston Edison Company; Westar Energy, Inc.; United Water Pennsylvania; PPL Electric Utilities; PPL Gas Utilities; Wisconsin Power & Light Company; TransAlaska Pipeline; Avista Corporation; Northwest Natural Gas; Allegheny Energy Supply, Inc.; Public Service Company of North Carolina; South Jersey Gas Company; Duquesne Light Company; MidAmerican Energy Company; Laclede Gas; Duke Energy Company; E.ON U.S. Services Inc.; Elkton Gas Services; Anchorage Water and Wastewater Utility; Kansas City Power and Light; Duke Energy North Carolina; Duke Energy South Carolina; Monongahela Power Company; Potomac Edison Company; Duke Energy Ohio Gas; Duke Energy Kentucky; Duke Energy Indiana; Northern Indiana Public Service Company; Tennessee-American Water Company; Columbia Gas of Maryland; Bonneville Power Administration; NSTAR Electric and Gas Company; EPCOR Distribution, Inc.; B. C. Gas Utility, Ltd; Entergy Arkansas; Entergy Texas; Entergy Mississippi; Entergy Louisiana; Entergy Gulf States Louisiana; the Borough of Hanover; Louisville Gas and Electric Company; Kentucky Utilities Company; Madison Gas and Electric; Central Maine Power; PEPCO; PacifiCorp; Minnesota Energy Resource Group; Jersey Central Power & Light Company; Cheyenne Light, Fuel and Power Company; United Water Arkansas; Central Vermont Public Service Corporation; Green Mountain Power; Portland General Electric Company; Atlantic City Electric; Nicor Gas Company; Black Hills Power; Black Hills Colorado

14 Exhibit JJS-1 Page 5 of 13 Gas; Black Hills Kansas Gas; Black Hills Service Company; Black Hills Utility Holdings; Public Service Company of Oklahoma; City of Dubois; Peoples Gas Light and Coke Company; North Shore Gas Company; Connecticut Light and Power; New York State Electric and Gas Corporation; Rochester Gas and Electric Corporation and Greater Missouri Operations. My additional duties include determining final life and salvage estimates, conducting field reviews, presenting recommended depreciation rates to management for its consideration and supporting such rates before regulatory bodies. Q. Have you submitted testimony to any state utility commission on the subject of utility plant depreciation? A. Yes. I have submitted testimony to the Pennsylvania Public Utility Commission; the Commonwealth of Kentucky Public Service Commission; the Public Utilities Commission of Ohio; the Nevada Public Utility Commission; the Public Utilities Board of New Jersey; the Missouri Public Service Commission; the Massachusetts Department of Telecommunications and Energy; the Alberta Energy & Utility Board; the Idaho Public Utility Commission; the Louisiana Public Service Commission; the State Corporation Commission of Kansas; the Oklahoma Corporate Commission; the Public Service Commission of South Carolina; Railroad Commission of Texas Gas Services Division; the New York Public Service Commission; Illinois Commerce Commission; the Indiana Utility Regulatory Commission; the California Public Utilities Commission; the Federal Energy Regulatory Commission ( FERC ); the Arkansas Public Service Commission; the Public Utility Commission of Texas; Maryland Public Service Commission; Washington Utilities and Transportation Commission; The Tennessee Regulatory Commission; the Regulatory Commission of Alaska; Minnesota Public Utility Commission; Utah Public Service Commission; District of Columbia Public Service

15 Exhibit JJS-1 Page 6 of 13 Commission; the Mississippi Public Service Commission; Delaware Public Service Commission; Virginia State Corporation Commission; Colorado Public Utility Commission; Oregon Public Utility Commission; South Dakota Public Utilities Commission; Wisconsin Public Service Commission; Wyoming Public Service Commission; Maine Public Utility Commission; Iowa Utility Board; Connecticut Public Utilities Regulatory Authority; New Mexico Public Regulation Commission and the North Carolina Utilities Commission. Q. Have you had any additional education relating to utility plant depreciation? A. Yes. I have completed the following courses conducted by Depreciation Programs, Inc.: Techniques of Life Analysis, Techniques of Salvage and Depreciation Analysis, Forecasting Life and Salvage, Modeling and Life Analysis Using Simulation, and Managing a Depreciation Study. I have also completed the Introduction to Public Utility Accounting program conducted by the American Gas Association. Q. Does this conclude your qualification statement? A. Yes.

16 LIST OF CASES IN WHICH JOHN J. SPANOS SUBMITTED TESTIMONY Exhibit JJS-1 Page 7 of 13 Year Jurisdiction Docket No. Client Utility Subject PA PUC R City of Bethlehem Bureau of Water Original Cost and Depreciation PA PUC R City of Lancaster Original Cost and Depreciation PA PUC R The York Water Company Depreciation D.T.&E. DTE Massachusetts-American Water Company Depreciation PA PUC R City of Lancaster Original Cost and Depreciation PA PUC R The York Water Company Depreciation PA PUC R Pennsylvania-American Water Company Depreciation OH PUC GA-AIR Cinergy Corp Cincinnati Gas & Elect Co. Depreciation KY PSC Cinergy Corp Union Light, Heat & Power Co. Depreciation PA PUC R Philadelphia Suburban Water Company Depreciation KY PSC Columbia Gas of Kentucky Depreciation NJ BPU GF NUI Corporation/Elizabethtown Gas Co. Depreciation ID PUC IPC-E-03-7 Idaho Power Company Depreciation PA PUC R The York Water Company Depreciation IN URC R Cinergy Corp PSI Energy, Inc. Depreciation PA PUC R Pennsylvania-American Water Co. Depreciation MO PSC WR Missouri-American Water Co. Depreciation FERC ER NSTAR-Boston Edison Company Depreciation NJ BPU BPU South Jersey Gas Company Depreciation NV PUC Nevada Power Company Depreciation LA PSC U CenterPoint Energy Arkla Depreciation PA PUC R Pennsylvania Suburban Water Company Depreciation AB En/Util Bd EPCOR Distribution, Inc. Depreciation PA PUC R National Fuel Gas Distribution Corp (PA) Depreciation PA PUC R PPL Electric Utilities Depreciation PA PUC R The York Water Company Depreciation OK Corp Cm PUC CenterPoint Energy Arkla Depreciation OH PUC El-AIR Cinergy Corp. Cincinnati Gas and Depreciation Electric Company RR Com of TX GUD# CenterPoint Energy Entex Gas Services Div. Depreciation NY PUC 04-G-1047 National Fuel Gas Distribution Gas (NY) Depreciation AR PSC U CenterPoint Energy Arkla Depreciation

17 Exhibit JJS-1 Page 8 of 13 Year Jurisdiction Docket No. Client Utility Subject IL CC 05- North Shore Gas Company Depreciation IL CC 05- Peoples Gas Light and Coke Company Depreciation KY PSC Union Light Heat & Power Depreciation IL CC MidAmerican Energy Company Depreciation MO PSC GF-2005 Laclede Gas Company Depreciation KS CC 05-WSEE-981-RTS Westar Energy Depreciation RR Com of TX GUD # CenterPoint Energy Entex Gas Services Div. Depreciation FERC Cinergy Corporation Accounting OK CC PUD Oklahoma Gas and Electric Co. Depreciation MA Dept Tele- DTE NSTAR Depreciation com & Ergy NY PUC 05-E-934/05-G-0935 Central Hudson Gas & Electric Co. Depreciation AK Reg Com U Chugach Electric Association Depreciation CA PUC A Pacific Gas & Electric Depreciation PA PUC R Aqua Pennsylvania, Inc. Depreciation PA PUC R T.W. Phillips Gas and Oil Co. Depreciation NC Util Cm. Pub. Service Co. of North Carolina Depreciation PA PUC R City of Lancaster Depreciation PA PUC R Duquesne Light Company Depreciation PA PUC R The York Water Company Depreciation PA PUC R PPL GAS Utilities Depreciation PUC of TX CenterPoint Energy Houston Electric Depreciation KY PSC Duke Energy Kentucky Depreciation SC PSC SCANA AK Reg Com U-06-6 Municipal Light and Power Depreciation DE PSC Delmarva Power and Light Depreciation IN URC IURC43081 Indiana American Water Company Depreciation AK Reg Com U Chugach Electric Association Depreciation MO PSC WR Missouri American Water Company Depreciation FERC ISO82, ETC. AL TransAlaska Pipeline Depreciation PA PUC R National Fuel Gas Distribution Corp. (PA) Depreciation NC Util Com. E-7 SUB 828 Duke Energy Carolinas, LLC Depreciation

18 Exhibit JJS-1 Page 9 of 13 Year Jurisdiction Docket No. Client Utility Subject OH PSC EL-AIR Duke Energy Ohio Gas Depreciation PA PUC R PPL Electric Utilities Corporation Depreciation KY PSC Kentucky American Water Company Depreciation PA PUC R Pennsylvania American Water Company Depreciation KY PSC NiSource Columbia Gas of Kentucky Depreciation NY PSC 07-G-0141 National Fuel Gas Distribution Corp (NY) Depreciation AK PSC U Anchorage Water & Wastewater Utility Depreciation TN Reg Auth Tennessee-American Water Company Depreciation DE PSC Artesian Water Company Depreciation PA PUC R The York Water Company Depreciation KS CC 08-WSEE1-RTS Westar Energy Depreciation IN URC Northern Indiana Public Service Co. Depreciation IN URC Duke Energy Indiana Depreciation MD PSC 9159 NiSource Columbia Gas of Maryland Depreciation KY PSC Kentucky Utilities Depreciation KY PSC Louisville Gas & Electric Depreciation PA PUC Pennsylvania American Water Co.-Wastewater Depreciation NY PSC 08-E887/ Central Hudson Depreciation WV TC VE /VG Avista Corporation Depreciation IL CC ICC Peoples Gas, Light and Coke Co. Depreciation IL CC ICC North Shore Gas Company Depreciation DC PSC 1076 Potomac Electric Power Company Depreciation KY PSC NiSource Columbia Gas of Kentucky Depreciation FERC ER Entergy Services Depreciation PA PUC R Pennsylvania American Water Co. Depreciation NC Util Cm E-7, Sub 090 Duke Energy Carolinas, LLC Depreciation KY PSC Duke Energy Kentucky Depreciation VA St. CC PUE Aqua Virginia, Inc. Depreciation PA PUC Aqua Pennsylvania, Inc. Depreciation MS PSC 09- Entergy Mississippi Depreciation AK PSC U Entergy Arkansas Depreciation TX PUC Entergy Texas Depreciation TX PUC El Paso Electric Company Depreciation

19 Exhibit JJS-1 Page 10 of 13 Year Jurisdiction Docket No. Client Utility Subject PA PUC R The Borough of Hanover Depreciation KS CC 10-KCPE-415-RTS Kansas City Power & Light Depreciation PA PUC R United Water Pennsylvania Depreciation OH PUC Aqua Ohio Water Company Depreciation WI PSC 3270-DU-103 Madison Gas & Electric Co. Depreciation MO PSC WR-2010 Missouri American Water Co. Depreciation AK Reg Cm U Chugach Electric Association Depreciation IN URC Northern Indiana Public Service Co. Depreciation WI PSC 6690-DU-104 Wisconsin Public Service Corp. Depreciation PA PUC R PPL Electric Utilities Corp. Depreciation KY PSC Kentucky American Water Company Depreciation PA PUC R Columbia Gas of Pennsylvania Depreciation MO PSC GR Laclede Gas Company Depreciation SC PSC E South Carolina Electric & Gas Co. Depreciation NJ BD OF PU ER Atlantic City Electric Depreciation VA St. CC PUE Virginia American Water Company Depreciation PA PUC R The York Water Company Depreciation MO PSC ER Greater Missouri Operations Co. Depreciation MO PSC ER Kansas City Power and Light Depreciation PA PUC R T.W. Phillips Gas and Oil Co. Depreciation PSC SC E SCANA Electric Depreciation PA PUC R Peoples Natural Gas, LLC Depreciation AK PSC U Oklahoma Gas and Electric Co. Depreciation IN URC Northern Indiana Public Serv. Co. - NIFL Depreciation IN URC Northern Indiana Public Serv. Co. - Kokomo Depreciation PA PUC R Pennsylvania American Water Co - WW Depreciation NC Util Cn. W-218,SUB310 Aqua North Carolina, Inc. Depreciation OH PUC WS-AIR Ohio American Water Company Depreciation MS PSC EC Entergy Mississippi Depreciation CO PUC 11AL-387E Black Hills Colorado Depreciation PA PUC R Columbia Gas of Pennsylvania Depreciation PA PUC R Lancaster, City of Bureau of Water Depreciation IN URC IGCC 4S Duke Energy Indiana Depreciation FERC IS Enbridge Pipelines (Southern Lights) Depreciation

20 Exhibit JJS-1 Page 11 of 13 Year Jurisdiction Docket No. Client Utility Subject Il CC MidAmerican Energy Corporation Depreciation OK CC Oklahoma Gas & Electric Co. Depreciation PA PUC Pennsylvania American Water Company Depreciation FERC Carolina Gas Transmission Depreciation WA UTC UE /UG Avista Corporation Depreciation AK Reg Cm U Chugach Electric Association Depreciation MA PUC DPU Columbia Gas of Massachusetts Depreciation TX PUC El Paso Electric Company Depreciation ID PUC IPC-E-12 Idaho Power Company Depreciation PA PUC R PPL Electric Utilities Depreciation PA PUC R Hanover, Borough of Bureau of Water Depreciation KY PSC Louisville Gas and Electric Company Depreciation KY PSC Kentucky Utilities Company Depreciation PA PUC R Peoples Natural Gas Company Depreciation DC PSC Case 1087 Potomac Electric Power Company Depreciation OH PSC EL-AIR Duke Energy Ohio (Electric) Depreciation OH PSC GA-AIR Duke Energy Ohio (Gas) Depreciation PA PUC R Lancaster, City of Sewer Fund Depreciation PA PUC R Columbia Gas of Pennsylvania Depreciation FERC ER ITC Holdings Depreciation MO PSC ER Kansas City Power and Light Depreciation MO PSC ER KCPL Greater Missouri Operations Co. Depreciation MO PSC GO Laclede Gas Company Depreciation MN PUC G007,001/D Integrys MN Energy Resource Group Depreciation TX PUC Aqua Texas Depreciation PA PUC York Water Company Depreciation NJ BPU ER PHI Service Co. Atlantic City Electric Depreciation KY PSC Columbia Gas of Kentucky Depreciation VA St CC Virginia Electric and Power Co. Depreciation IA Util Bd MidAmerican Energy Corporation Depreciation PA PUC Pennsylvania American Water Co. Depreciation NY PSC 13-E-0030, 13-G-0031, Consolidated Edison of New York Depreciation 13-S PA PUC Peoples TWP LLC Depreciation

21 Exhibit JJS-1 Page 12 of 13 Year Jurisdiction Docket No. Client Utility Subject TN Reg Auth Tennessee American Water Depreciation ME PUC Central Maine Power Company Depreciation DC PSC Case 1103 PHI Service Co. PEPCO Depreciation WY PSC 2003-ER-13 Cheyenne Light, Fuel and Power Co. Depreciation FERC ER Kentucky Utilities Depreciation FERC ER MidAmerican Energy Company Depreciation FERC ER PPL Utilities Depreciation PA PUC R Duquesne Light Company Depreciation NJ BPU ER Jersey Central Power and Light Co. Depreciation PA PUC R Bethlehem, City of Bureau of Water Depreciation OK CC UM 1679 Oklahoma, Public Service Company of Depreciation IL CC Nicor Gas Company Depreciation WY PSC EA-13 PacifiCorp Depreciation UT PSC PacifiCorp Depreciation OR PUC UM 1647 PacifiCorp Depreciation PA PUC Dubois, City of Depreciation IL CC North Shore Gas Company Depreciation FERC ER14- Duquesne Light Company Depreciation SD PUC EL Black Hills Power Company Depreciation WY PSC ER-14 Black Hills Power Company Depreciation PA PUC Hanover, Borough of Municipal Water Works Depreciation PA PUC Columbia Gas of Pennsylvania Depreciation IL CC Peoples Gas Light and Coke Company Depreciation MO PSC ER Ameren Missouri Depreciation KS CC 14-BHCG-502-RTS Black Hills Service Company Depreciation KS CC 14-BHCG-502-RTS Black Hills Utility Holdings Depreciation KS CC 14-BHCG-502-RTS Black Hills Kansas Gas Depreciation PA PUC Lancaster, City of Bureau of Water Depreciation WV PSC E-D First Energy MonPower/PotomacEdison Depreciation VA St CC PUC Aqua Virginia Depreciation VA St CC PUE-2013 Virginia American Depreciation OK CC PUD Oklahoma Gas and Electric Depreciation OR PUC UM1679 Portland General Electric Depreciation IN URC Cause No Indianapolis Power & Light Depreciation

22 Exhibit JJS-1 Page 13 of 13 Year Jurisdiction Docket No. Client Utility Subject MA DPU DPU NSTAR Gas Depreciation CT PURA Connecticut Light and Power Depreciation MO PSC ER Kansas City Power & Light Depreciation KY PSC Kentucky Utilities Company Depreciation KY PSC Louisville Gas and Electric Company Depreciation PA PUC R United Water Pennsylvania Inc. Depreciation PA PUC R Columbia Gas of Pennsylvania Depreciation NY PSC 15-E-0283/15-G-0284 New York State Electric and Gas Corporation Depreciation NY PSC 15-E-0285/15-G-0286 Rochester Gas and Electric Corporation Depreciation MO PSC WR /SR Missouri American Water Company Depreciation OK CC PUD Oklahoma, Public Service Company of Depreciation WV PSC W-42T West Virginia American Water Company Depreciation PA PUC PPL Electric Utilities Depreciation IN URC Cause No Northern Indiana Public Service Company Depreciation OH PSC EL-RDR First Energy-Ohio Edison/Cleveland Electric/ Depreciation Toledo Edison NM PRC UT El Paso Electric Depreciation TX PUC PUC-44941; SOAH El Paso Electric Depreciation WI PSC 3370-DU-104 Madison Gas and Electric Company Depreciation OK CC PUD Oklahoma Gas and Electric Depreciation

23 KENTUCKY UTILITIES ASH POND RECOVERY SUMMARY OF FUTURE RECOVERY PARAMETERS CALCULATED AS OF SEPTEMBER 30, 2015 NET BOOK CALCULATED ANNUAL COMPOSITE SURVIVOR SALVAGE ORIGINAL DEPRECIATION FUTURE ACCRUAL ACCRUAL REMAINING ACCOUNT CURVE PERCENT COST RESERVE ACCRUALS AMOUNT RATE LIFE (1) (2) (3) (4) (5) (6) (7) (8)=(7)/(4) (9)=(6)/(7) DEPRECIABLE PLANT STEAM PRODUCTION PLANT STRUCTURES AND IMPROVEMENTS TRIMBLE COUNTY UNIT S4 * ** 4,562, ,148,119 33,759, , GHENT UNIT 1 SCRUBBER 100-S4 * ** 39, ,420 2,503, , GHENT UNIT S4 * ** 322, ,586 5,015, , TOTAL ACCOUNT STRUCTURES AND IMPROVEMENTS 4,924, ,487,125 41,278,959 1,074, BOILER PLANT EQUIPMENT TRIMBLE COUNTY UNIT S4 * ** 4,610, ,102 35,287, , BROWN UNIT S4 * ** 13,208, ,854,880 15,429,392 1,990, BROWN UNIT S4 * ** 19,802, ,026,115 33,380,025 1,690, GHENT UNIT S4 * ** 1,777, ,464,285 12,811, , GHENT UNIT S4 * ** 32,692, ,338, ,760,375 10,407, GHENT UNIT 2 SCRUBBER 100-S4 * ** 1,901, ,908,524 12,483, , TOTAL ACCOUNT BOILER PLANT EQUIPMENT 73,992, ,268, ,151,321 16,134, TOTAL DEPRECIABLE PLANT 78,917, ,755, ,430,280 17,208, RETIRED PLANT STEAM PRODUCTION PLANT BOILER PLANT EQUIPMENT TYRONE 3 ** 575, ,456 13,103,000 3,275,750 *** 4.0 GREEN RIVER 3 ** 1,831, ,831,841 56,829,000 14,207,250 *** 4.0 PINEVILLE 3 ** 91, ,266 8,009,000 2,002,250 *** 4.0 TOTAL ACCOUNT BOILER PLANT EQUIPMENT 2,498, ,498,563 77,941,000 19,485, TOTAL RETIRED PLANT 2,498, ,498,563 77,941,000 19,485,250 TOTAL COSTS TO BE RECOVERED 81,415, ,254, ,371,280 36,694,008 * LIFE SPAN PROCEDURE IS USED. CURVE SHOWN IS INTERIM SURVIVOR CURVE ** TERMINAL NET SALVAGE FACTOR WHICH IS BASED ON VINTAGE AND FUTURE COSTS *** ACCRUAL CALCULATED USING 4 YEAR AMORTIZATION Exhibit JJS-2 Page 1 of 1

24 Kentucky Utilities Ash Pond Recovery for ECR Filing As of September 30, 2015 COR Accruals Terminal Ash Pond Reserve Cost of Since Last Net Salvage Original For Life Removal Case was Since Account Location Cost Ash Pond Reserve Reserve Approved 1/1/2013 (1) (2) (3) (4) (5) (6) (7)* (8) 311 Trimble County 2 4,562, ,148,119 1,897, ,115 14, Ghent 1 FGD 39, ,420 31,952 2, Ghent 1 322, , ,854 18, Trimble County 2 4,610, , ,935 93,167 20, Brown 1 9,299, ,068,828 6,241, ,053 26, Brown 1 3,909, ,786,052 3,343, ,968 10, Brown 3 19,802, ,026,115 5,697, ,026 48, Ghent 1 1,777, ,464,285 1,292, ,614 5, Ghent 4 16,544, ,003,055 7,199, ,507 43, Ghent 4 16,148, ,335,448 4,799, ,679 42, Ghent 2 FGD 1,901, ,908,524 1,708, ,013 4, Tyrone 3 575, , ,910 57,546 2, Green River 3 1,831, ,831,841 1,025, ,716 7, Pineville 3 50, ,117 47,516 2, Pineville 3 41, ,149 39,013 2, * In the Matter of; Application of Kentucky Utilities Company for an Adjustment of its Electric Rates, Case No (Dec. 2012). Exhibit JJS-3 Page 1 of 1