20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Martha Peine, Complainant v. Docket No. ER07-1069 American Electric Power Service Corporation, Respondent FORMAL CHALLENGE TO AMERICAN ELECTRIC POWER SERVICE CORPORATION 2013 FORMULA RATE ANNUAL UPDATE TO ITS ANNUAL TRANSMISSION REVENUE REQUIREMENT January 22, 2014 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM Table of Contents II.! INTRODUCTION .................................................................................................. 4! III.! CHALLENGER’S REQUESTS ............................................................................. 5! IV.! BACKGROUND .................................................................................................... 6! V.! DISCUSSION ....................................................................................................... 11! A.! AEP has failed to properly apply the Formula Rate and the procedures in the Protocols. ...................................................................... 11! B.! AEP’s charitable donations and expenses that would not have been incurred but for its charitable activities belong below-the-line in non-operating accounts. ............................................................................ 13! C.! ! 1.! Charitable contributions recorded to account 921 belong in below-the-line account 426.1. ....................................................... 14! 2.! Items recorded to account 923 that would not have been incurred but for AEP’s charitable activities belong in below-the-line non-operating accounts. ........................................ 15! 3.! Expenses that would not have been incurred but for AEP’s charitable activities recorded to account 930.2 belong in below-the-line non-operating accounts. ........................................ 17 AEP’s recording of certain general advertising expenses is an improper application of the Formula Rate and inconsistent with the USoA. ....................................................................................................... 18! 1.! The Annual Update improperly includes non-transmission general advertising expenses......................................................... 19! 2.! AEP’s non-safety related general advertising expenses belong in below-the-line non-operating accounts. ........................ 20! Page 2 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM D.! AEP’s economic development expenses benefitting local communities and communities outside the SPP footprint are not recoverable through the Formula Rate. ..................................................... 21! E.! AEP’s lobbying expenses belong below-the-line in non-operating accounts..................................................................................................... 22! F.! AEP’s non-transmission generation and distribution affiliate and state rate case expenditures are not recoverable through the Formula Rate............................................................................................. 24! VI.! CONCLUSION ..................................................................................................... 25 VII. EXHIBITS BEGIN ............................................................................................... 30 ! Page 3 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM II. INTRODUCTION Martha Peine, Interested Party, pro se (“Challenger”), disputes the recovery of $92,511 included in the American Electric Power Service Corporation (“AEP”) 2013 Formulate Rate Annual Update (“Formula Rate” or “Annual Update”) to its Transmission Revenue Requirement, filed on behalf of Public Service Company of Oklahoma (“PSO”) and Southwestern Electric Power Company (“SWEPCO”), Federal Energy Regulatory Commission (the “Commission” or “FERC”) docket number ER07-1069. All challenged items are located in SWEPCO’s 2012 Actual Transmission Revenue Requirement (“ATRR”). Challenger states: • The Commission has jurisdiction of AEP’s Annual Update filing and authority to set this matter for public hearing pursuant to section 402(a) of the Department of Energy Organization Act and by the Federal Power Act, particularly section 206 thereof, and pursuant to the Commission’s Rules of Practice and Procedure and the regulations under the Federal Power Act (18 C.F.R., Chapter I); • Challenger, as an Interested Party and end use customer who pays some portion of SWEPCO’s ATRR in her Carroll County Electric Cooperation bill for service she at receives at 637 County Road 231, Eureka Springs, Arkansas 72631, has standing to bring this formal challenge;1 • Challenger has satisfied all the terms and preconditions of bringing this formal challenge pursuant to the AEP Formula Rate Implementation Protocols !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Potomac Appalachian Transmission Highline, LLC, 140 FERC ¶ 61,229 (2012) at 106. “A complaint regarding a transmission rate can, under Commission rules, be filed by any person, including an end-use customer that will pay some portion of that rate when flowed through its retail bill.” ! Page 4 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM (“Protocols”) of the Southwest Power Pool, Inc. (“SPP”) Open Access Transmission Tariff (“OATT”);2 • Challenger has properly raised a preliminary challenge3 to AEP’s Annual Update; • Challenger has submitted requests for information from AEP; • Challenger has made good faith, timely, and persistent efforts to obtain information from AEP showing that it has reasonably applied the terms of the Formula Rate concerning the necessity and factual circumstances underlying the expenses included in the Annual Update; and • Despite Challenger’s efforts, issues of accounting errors and improperly recorded expenses have not been fully resolved to Challenger’s satisfaction.4 III. CHALLENGER’S REQUESTS Challenger hereby respectfully requests that this honorable Commission: • Order AEP to provide all documentation supporting its responses to the issues presented in Challenger’s Preliminary Challenge, and allow Challenger to amend this Formal Challenge if new improprieties are found in AEP’s additional production; • Conduct a full evidentiary hearing in order to fully develop the record with testimony that is subject to cross examination and challenge; • Order AEP to move charitable contributions, and related expenses that would not have been incurred but for AEP’s charitable activities, to appropriate below-the-line non-operating accounts; !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2 SPP OATT Addendum 4 to Attachment H – Part I See Exhibit A, Preliminary Challenge to AEP’s 2013 Formula Rate (December 9, 2013) 4 See Exhibit B, AEP’s Response to Preliminary Challenge (December 23, 2013) 3 ! Page 5 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM • Order AEP to remove non-transmission general advertising expenses from the cost of service, and to move non-safety transmission-related general advertising to below-the-line non-operating accounts; • Order AEP to remove economic development expenses from the cost of service; • Order AEP to move lobbying expenses, and expenses that would not have been incurred but for AEP’s lobbying activities, to an appropriate below-the-line account; • Order AEP to remove improperly recorded non-transmission generation and distribution affiliate expenses and state rate case expenses from the Annual Update; • Grant this Formal Challenge; and • Order AEP to make appropriate refunds to ratepayers with interest as directed by the Protocols consistent with the Commission’s findings. IV. BACKGROUND On August 31, 2007, the Commission issued an Order Conditionally Accepting and Suspending Revised Tariff Sheets and Establishing Hearing and Settlement Judge Procedures under Docket No. ER07-1069. In this Order, the Commission accepted AEP’s revised tariff sheets to increase electric transmission rates in AEP’s zone in the electricity market that is overseen by SPP, and convert those rates into formula rates that would be automatically adjusted each year based on changes to AEP’s costs of providing service, without contemporaneous requests for approval under section 205 and suspended them for five months, to become effective on February 1, 2008, subject to refund, subject ! Page 6 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM to the outcome of hearing and settlement judge procedures, and subject to the compliance filing ordered. On June 24, 2009, the Commission approved a Settlement Agreement (“Settlement Agreement”)5 intended to resolve all issues set for hearing, which set a base return on equity of 11.2 percent. Subsequent to the Commission’s conditional guarantees in 2007, and throughout the time period covered by AEP’s 2013 Annual Update, AEP: • Made charitable donations, and incurred certain expenses that would not have been incurred but for its charitable activities, that provided no benefit to ratepayers; • Financed general advertising activities unrelated to safety and/or transmission that provided no benefit to ratepayers; • Financed economic development activities unrelated to transmission and providing no benefit to regional ratepayers; • Financed lobbying activities directed to various government officials and policymakers, and incurred certain expenses that would not have been incurred but for its lobbying activities, that provided no benefit to ratepayers; and • Recorded non-transmission generation and distribution and state rate case expenses improperly to Accounts 921, 923, and 930.2 and recovered these amounts through the Formula Rate. In May 2013, AEP filed its Annual Update showing a revenue requirement for SWEPCO of approximately $86,059,624, and beginning in August 2013, Challenger, as an Interested Party, began a series of Information Requests, pursuant to the Protocols, in !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5 American Electric Power Service Corporation, Offer of Settlement, Docket No. ER07-1069-000, February 23, 2009. ! Page 7 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM order to examine SWEPCO’s ATRR to ensure no accounting errors or improper recovery of expenditures had occurred. During the informal discovery process, Challenger and AEP were unable to reach an agreement about where and in what format the requested information and documents would be produced to Challenger. Challenger wanted AEP to produce the materials to her in an electronic format via a secure website. AEP wanted Challenger to travel to Ohio to obtain the materials. Pursuant to the Protocols, Challenger petitioned the Commission for the appointment of an administrative law judge to act as discovery master6 to resolve the disagreement. On November 4, 2013, the appointed discovery master Steven A. Glazer ordered AEP to produce any documents maintained and catalogued by AEP in electronic format in the usual course of its business to Challenger through its secure website no later than November 15, 2013.7 AEP provided Challenger with access to its responses via AEP’s ExtranetSharePoint on November 15, 2013, after which Challenger worked diligently to review and analyze the information provided to determine if it was responsive to Challenger’s requests. Challenger’s efforts were significantly hindered because (1) many of the files provided were multiple-page, non-searchable TIF files that could not be viewed past the first page unless downloaded, and (2) the batch download function on AEP’s ExtranetSharePoint was disabled by AEP so that each file had to be downloaded individually. Notwithstanding these obstructions, the limited responses received by Challenger illustrate a pattern of inaccurate and improper expense recording. For example, the responses explicitly showed expenditures related to non-safety related general advertising !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 6 7 ! SPP OATT Addendum 4 to Attachment H – Part 1, II.1(c) American Electric Power Service Corp., 145 FERC ¶ 63,008 (2013) at 13 and 16a Page 8 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM activities in accounts 921 and 923, and lobbying activities in accounts 921, 923, and 930.2 that should have been properly recorded to below-the-line accounts, but instead were recovered from ratepayers in operating accounts. These accounting errors and improperly recovered expenditures, among others, were the subject of a Preliminary Challenge served upon AEP on December 9, 2013. Per the Protocols, AEP had until December 24, 2013 to respond to the issues raised by Challenger. Challenger received AEP’s response to her Preliminary Challenge on December 23, 2013. In the Response, AEP: • Refused to provide a description of the purpose for $31,382 in expenses, including 55 rooms at the Gaylord Texan Resort & Convention Center on Lake Grapevine at $272.72 per person per night; • Characterized charitable donations and related expenses, such as a golf outing to benefit the Waste Not Center, as subscription and business meal expenses properly recorded to above-the-line accounts; • Characterized non-safety related general advertising expenses and nontransmission related general advertising expenses, such as the “Lemonade Ad” produced to influence the state of Ohio’s deregulation of its generation business, as incidental administrative expenses properly recorded to abovethe-line accounts; • Characterized economic development expenses benefitting local communities and communities outside the SPP footprint, such as membership dues in the Council of Great Lakes Industries (“CGLI”), as regional administrative and general expenses properly included in the Formula Rate; ! Page 9 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM • Characterized lobbying expenses, such as membership dues in the Association of Louisiana Lobbyists, as administrative and general expenses properly recorded to above-the-line accounts; • Characterized non-transmission generation and distribution affiliate expenses and state rate case expenses, such as payment to E3 Consulting LLC for monitoring Turk Plant and payment to J. Kennedy & Associates for auditing a Louisiana state rate case, as transmission-related administrative and general expenses properly included in the ATRR; and • Agreed to remove non-safety related advertising included in account 930.1 in the amount of $16,027 from the ATRR. Also on December 23, 2013, AEP filed a revised Annual Update reducing the revenue requirement to $86,037,060 to reflect the removal of non-safety related advertising from account 930.1. The revision was a direct result of Challenger’s investigation of the ATRR, but does not recognize any of the amounts or items challenged in this filing. While counsel for AEP has been helpful and worked with Challenger during the Resolution Period provided in the Protocols up to a point, AEP’s actual production of information and documentation supporting the ATRR, together with its intransigent responses to the Preliminary Challenge, and its failure to provide documentation to support those responses as required by the Protocols,8 indicate a lack of good faith and interest in working with Challenger, who earnestly wished to resolve all of the challenged issues without burdening the Commission with a Formal Challenge. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 8 ! SPP OATT Addendum 4 to Attachment H – Part 1, III.1 Page 10 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM Challenger does not embark on this filing lightly, nor does she wish to waste the Commission’s resources. However, this is the only course of action available to her to address the uncorrected accounting errors and improperly recovered expenditures resulting in unjust and unreasonable rates charged to consumers. V. DISCUSSION All of the challenges herein are brought in accordance with Section I.5(a) of the Protocols and allege AEP either failed to properly apply the Formula Rate or recorded expenses inconsistent with the Uniform System of Accounts (“USoA”)9 and FERC Accounting Polices and Practices. Section I.5(a) of the Protocols states: The Annual Update for the Rate Year shall be based upon AEP’s FERC Form No. 1 for the most recently completed calendar year, FERC’s orders establishing generally applicable transmission ratemaking policies, and, to the extent specified in the Formula Rate, upon the books and records of AEP consistent with the USoA, FERC accounting policies and practices, and SPP policies and the SPP OATT. A. AEP has failed to properly apply the Formula Rate and the procedures in the Protocols. As part of her Preliminary Challenge, Challenger raised the issue of certain formula rate inputs because no purpose for the expenses or benefit to ratepayers can be determined from the documentation provided to Challenger by AEP. The company has not shown that those expenses were properly recorded or imprudently incurred.10 The Preliminary Challenge proposed that these expenses be reviewed, and that transmissionrelated expenses only be placed in the proper account and appropriate credits and interest should be recorded as directed by the Protocols for non-transmission or improperly included expenses. Pursuant to the Protocols, if AEP disagreed with the issue raised, it !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 9 18 C.F.R. Part 101 See Exhibit C, Summary of expenses for which no description of purpose has been provided, with representative invoice 10 ! Page 11 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM was required to provide supporting documentation with its response.11 Specifically, Challenger expected AEP to respond with a description of the purpose of the questioned expenses, as it appears the Protocols require. Instead AEP responded that (1) the information provided for this section of the preliminary challenge follows the same documentation requirements as the other documents provided, and (2) the documentation provided meets the requirements of the Internal Revenue Service for the reimbursement of employee expenses.12 The deficiency of both those responses is that neither provides a description of the purpose of the expenses in question, nor the supporting documentation to describe the purpose of the expense, to show that these expenses were properly included in the Formula Rate. As a result, Challenger has been unable to determine whether these expenses were properly included in the ATRR. If AEP had complied with the requirements of the Protocols to provide documentation supporting its responses to the Preliminary Challenge, as it easily could have done, many of the items included in this challenge category might have been resolved without the necessity of bringing them before the Commission. For instance, if AEP had provided Challenger with a reasonable transmission related explanation for the payment to Gaylord Texan Resort & Convention Center on Lake Grapevine for 55 rooms at $272.72 per person per night,13 this issue may have been resolved. We will not know !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 11 SPP OATT Addendum 4 to Attachment H – Part 1, III.1. “AEP shall provide a written response to any Issues submitted to it within fifteen (15) days of receipt. Its written response shall notify the interested party of the extent to which AEP agrees or disagrees with the position raised by the interested party, and what, if any, modifications to the Annual Update will result. If AEP disagrees with the Issue, it shall provide supporting documentation with its response.” 12 See Exhibit B, AEP’s Response to Preliminary Challenge, Attachment A, Paragraph (I) Response (December 23, 2013) 13 See Exhibit C, which includes the Gaylord Texan Resort & Convention Center on Lake Grapevine invoice to AEP ! Page 12 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM whether these expenses are properly recoverable in the ATRR unless and until AEP produces the required information. AEP chose to seek recovery of its transmission expenses through a formula rate. In doing so, AEP placed itself in a position of transparency, under the watchful eyes of ratepayers financing its operations. If the necessary transparency standards set forth in the Protocols are not strictly enforced, then ratepayers have no means to ensure the rates they pay are just and reasonable. Challenger hereby challenges whether the ATRR includes only properly recorded items because AEP has failed to provide documentation of purpose for certain items in violation of the Protocols. Challenger respectfully requests the Commission order AEP to provide Challenger with a description of the purpose of the expenses and the benefit to ratepayers of the expenses listed on Exhibit C. Further, Challenger requests that the Commission allow Challenger to amend this Formal Challenge to include any improprieties discovered in AEP’s additional responses. Alternatively, Challenger respectfully requests the Commission order AEP to remove those items for which no purpose has been specified from the cost of service. B. AEP’s charitable donations, and expenses that would not have been incurred but for its charitable activities, belong below-the-line in nonoperating accounts. AEP improperly recorded charitable donations, and expenses that would not have been incurred but for its charitable activities, in above-the-line operating accounts. These inappropriately recorded items were posted to accounts 921, 923, and 930.2. In its response to the Preliminary Challenge, AEP characterized these items as subscriptions, ! Page 13 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM business meals, and other expenses.14 However, based on the limited information gleaned from the documentation produced by AEP, and Challenger’s research of the identified vendors, the charitable function of these items became apparent. For example, payment to the Grant Womens Service Board for Emerald Sponsorship of the Candy Cane Charity Ball may have provided AEP a seat at the banquet table, but was clearly a charitable donation. Similarly, payments to Microedge LLC, a provider of software and services to the giving community, are expenses that would not have been incurred absent AEP’s charitable activities.15 An examination of the USoA descriptions of the above accounts together with the descriptions of amounts properly included in account 426.1 is probative of this particular challenge. Beginning with account 426.1, the USoA states: “This account shall include all payments or donations for charitable, social, or community welfare purposes.” Pursuant to the plain language of this description, AEP’s charitable donations belong in below-the-line account 426.1. To allow otherwise would give recipients of AEP’s charitable largesse the mistaken impression that such gifts are a goodwill gesture of AEP, when in fact ratepayers provide the funds for these donations through the Formula Rate. Charity with ratepayers’ money does not conform to the USoA. 1. Charitable contributions recorded to account 921 belong in below-the-line account 426.1. Nevertheless, AEP insists that certain items recorded to account 921, such as payment to the Central Ohio Sustainability Alliance for a golf outing for four to benefit !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 14 See Exhibit B, AEP’s Response to Preliminary Challenge, Attachment A, Paragraph (C) - Response (December 23, 2013) 15 See Exhibit D, Summary of charitable donations and related expenses, with vendor details and representative invoices ! Page 14 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM the Waste Not Center,16 are subscriptions, business meals, or other expenses, and not charitable donations to 501(c)(3) organizations. In fact, both the Central Ohio Sustainability Alliance and the Waste Not Center are or were 501(c)(3) organizations. In addition, a golf outing for four does not fit the description of any item recordable to account 921, which includes automobile service, bank charges, subscriptions, building service expenses, communications, office equipment, employee membership fees, legal department expenses, postage and printing, or meals, traveling and incidental expenses. However, the item does meet a commonly accepted description of a charitable donation in that the invoice provided by AEP to Challenger stated it was a payment made to “benefit” a 501(3)(c) organization. Challenger hereby challenges AEP’s recording of charitable contributions to account 921 in the ATRR. Payment to the Central Ohio Sustainability Alliance, together with other charitable contributions posted to account 921 and listed on attached Exhibit D, belong in below-the-line account 426.1. 2. Items recorded to account 923 that would not have been incurred but for AEP’s charitable activities belong in belowthe-line non-operating accounts. The USoA reserves account 923 for outside services employed “which are not applicable to a particular operating function or to other accounts.” The impropriety of recording expenses that would not have been incurred but for AEP’s charitable activities to account 923 is that they are applicable to another account; specifically account 426.1. Account 923 further states that it shall be maintained as to permit ready summarization according to the nature of service. AEP was either unable or unwilling to produce that summarization to Challenger during the Review Period and the Resolution Period !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 16 ! See Exhibit D, which includes Central Ohio Sustainability Alliance invoice to AEP Page 15 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM provided in the Protocols. Even without the required summarization, invoices produced by AEP together with Challenger’s research showed certain items recorded to account 923 were for services connected to AEP’s charitable activity. For instance, an invoice from the Teaching & Learning Collaborative, a 501(c)(3) organization, stated it was being paid to “Read, review, and evaluate Teacher Vision grant proposals submitted to American Electric Power Company.”17 AEP’s Teacher Vision Grant website states, “If adequate funding is all that stands between you and a new classroom adventure, American Electric Power's Teacher Vision Grant program may help.” It concludes with, “Digital photographs may be used to enhance project summaries. AEP may use the photos for publicity purposes.”18 Clearly, AEP uses this grant program to enhance its goodwill. Grant funding is not, to the best of Challenger’s knowledge, included in the ATRR. Since payment to the Teaching & Learning Collaborative is part and parcel of the actual grant funding, it must be recorded to the same account as the grant funding. Furthermore, the Teacher & Learning Collaborative, a 501(c)(3) organization engaged by AEP to review and evaluate grant proposals, does not fit the description of any of the illustrative vendors listed in the USoA description of 923. That list includes accountants, auditors, actuaries, appraisers, attorneys, engineering consultants, management consultants, negotiators, public relations counsel, tax consultants, and general manager services. It would be a tortuous and unnecessary stretch to apply any of those labels to this vendor, particularly because the service performed by Teaching & Learning Collaborative is inextricably linked to the charitable act of funding grants. Thus, !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 17 18 ! See Exhibit D, which includes the Teaching & Learning Collaborative invoice to AEP See http://www.aep.com/community/TeachersAndStudents/TeacherVisionGrants.aspx Page 16 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM the payment to Teaching & Learning Collaboration should be similarly categorized and recorded to the same below-the-line account as the actual grant funds. Challenger hereby challenges AEP’s recording of charitable contribution related expenses to account 923 in the ATRR. Items posted to account 923 and listed on attached Exhibit D, such as the payment to the Teacher & Learning Collaborative, would not have been incurred but for AEP’s charitable activities. These items belong together with the charitable activity that prompted their acquisition in below-the-line non-operating accounts, presumably account 426.1. 3. Expenses that would not have been incurred but for AEP’s charitable activities recorded to account 930.2 belong in belowthe-line non-operating accounts. USoA account 930.2 is also reserved for expenses “not provided for elsewhere.” Expenses AEP would not have incurred absent its charitable activities are provided for elsewhere in account 426.1. One charitable activity expense erroneously recorded to account 930.2 was payment to Guidestar, a 501(c)(3) organization whose mission is to revolutionize philanthropy, for a Premium Select Upgrade Annual Subscription.19 AEP’s Contributions and Membership Committee approval of this item is beyond understanding because the item simply does not match any of the descriptions in account 930.2, which include: Items Labor: 1. Miscellaneous labor not elsewhere provided for. Expenses: 2. Industry association dues for company memberships. 3. Contributions for conventions and meetings of the industry. 4. For Major utilities, research, development, and demonstration expenses not charged to other operation and maintenance expense accounts on a functional basis. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 19 ! See Exhibit D, which includes the Guidestar invoice to AEP Page 17 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM 5. 6. 7. 8. 9. 10. 11. 12. Communication service not chargeable to other accounts. Trustee, registrar, and transfer agent fees and expenses. Stockholders meeting expenses. Dividend and other financial notices. Printing and mailing dividend checks. Directors' fees and expenses. Publishing and distributing annual reports to stockholders. Public notices of financial, operating and other data required by regulatory statutes, not including, however, notices required in connection with security issues or acquisitions of property. For Nonmajor utilities, transportation and garage equipment, to account 933, Transportation Expenses. Guidestar does not provide labor, is not an industry association, does not conduct research and development, and does not provide any service related to trustees, communications, stockholders, or directors. In other words, it is not the type of expense includable in account 930.2. Rather, the only service Guidestar provides is information about nonprofits, which AEP uses to plan its charitable activities. Here again, we encounter an expense that would not have been incurred but for AEP’s charitable activity. It too belongs below-the-line in a non-operating account. Challenger hereby challenges AEP’s recording of charitable contribution related expenses to account 930.2 and listed on Exhibit D. These items belong in the same account as the charitable activity that prompted their acquisition, presumably account 426.1. C. AEP’s recording of certain general advertising expenses is an improper application of the Formula Rate and inconsistent with the USoA. The Preliminary Challenge included items improperly recorded to accounts 921 and 923 that are general advertising expenses. As general advertising expenses, the challenged items are not recoverable from ratepayers because they are either not transmission related or not safety related. AEP’s response is that it has already made an ! Page 18 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM adjustment to the 2013 Annual Update to remove non-safety related advertising expenses from 930.1. In addition, AEP insists that the remaining items challenged are incidental administrative expenses incurred in the general and administrative support of SWEPCO’s operations appropriately included in the ATRR.20 In fact, AEP’s revised ATRR, which did remove certain non-safety related advertising expenses from account 930.1, does not recognize any of the amounts or items challenged herein.21 1. The Annual Update improperly includes non-transmission general advertising expenses. The items in this challenge section are improperly recorded to accounts 921 and 923 because they are general advertising expenses.22 If these expenses were to be properly included in the ATRR at all, they would belong in account 930.1, which provides for the treatment of costs of advertising and related activities. However, even if placed correctly in account 930.1, these particular items are not transmission-related and therefore, not includable in the cost of service. Pursuant to the Formula Rate Settlement Agreement, AEP agreed that expenses in accounts 928 (Regulatory, Commission Expense), 930.1 (Safety Related Advertising) and 930.2 (Miscellaneous General Expenses) that are not directly related to transmission service would be removed from the cost of service. AEP also agreed that if it were to include these types of expenses in future updates, it would provide supporting information to identify the transmission purpose of such activity.23 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 20 See Exhibit B, AEP’s Response to Preliminary Challenge, Attachment A, Paragraph (A) - Response (December 23, 2013) 21 AEP’s removal of expenses from account 930.1 does not remove improper expenses from accounts 921 and 923. 22 See Exhibit E, Summary of non-transmission and non-safety related general advertising, with representative invoices 23 American Electric Power Service Corporation, Offer of Settlement, Attachment A – Paragraph 1.C.5. Docket No. ER07-1069-000, February 23, 2009. ! Page 19 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM AEP violated the Settlement Agreement and improperly applied the Formula Rate because it did not remove these non-transmission general advertising expenses from the cost of service. The most egregious of the expenses included in this category are payments to Strategy Group for Media Inc. for a television advertisement known as the “Lemonade Ad.”24 This television advertisement was for the benefit of AEP’s Ohio generation subsidiary, and was intended to influence public opinion to favor AEP’s position in a regulatory case before the Public Utility Commission of Ohio.25 It is clearly not transmission related, and for that reason alone should be removed from the cost of service in accordance with the Settlement Agreement. However, even if AEP were to come up with a plausible transmission purpose for the Lemonade Ad, it would belong below-the-line in a non-recoverable account because it is not safety related. Challenger hereby challenges AEP’s inclusion of general advertising expenses not directly related to transmission, as listed on Exhibit E, in the cost of service. Pursuant to the Settlement Agreement, items of this type are to be removed from the cost of service. 2. AEP’s non-safety related general advertising expenses belong in below-the-line non-operating accounts. The ATRR includes expenses for embossing AEP’s logo on items such as lip balm, key chains, and hand sanitizer. In the Preliminary Challenge, Challenger raised the issue that these expenses26 are properly categorized with non-safety related general advertising in below-the-line accounts. AEP disagreed, claiming these items are incidental administrative expenses. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 24 See Exhibit E, which includes the Strategy Group for Media Inc. invoice to AEP See Fight over AEP electric bills hits Ohio airwaves, BloombergBusinessweek June 18, 2012. http://www.businessweek.com/ap/2012-06-18/fight-over-aep-electric-bills-hits-ohio-airwaves 26 See Exhibit E, which includes the LSC Marketing/Lloyd Schuh invoice to AEP 25 ! Page 20 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM A logo is commonly defined as a graphic mark or emblem used by enterprises to aid and promote instant public recognition.27 While one expects to see a company’s logo on its stationery, business cards, vehicles and other equipment, the embossed objects included in this challenge, such as lip balm and hand sanitizer, have nothing to do with the electric industry, electrical safety issues, or general and administrative support. These items are purely promotional and were most likely used as giveaways at tradeshows and other promotional events. Challenger hereby challenges AEP’s inclusion of general advertising expenses in account 921, as listed on Exhibit E, because these items are not related to safety. Nonsafety related general advertising belongs below-the-line in a non-operating account. D. AEP’s economic development expenses benefitting local communities and communities outside the SPP footprint are not recoverable through the Formula Rate. In her Preliminary Challenge, Challenger questioned the propriety of certain items characterized as economic development expenses recorded in accounts 921, 923, and 930.2 on the grounds these items are not related to transmission.28 AEP responded that these expenses are appropriately accounted for administrative and general expenses.29 However, AEP has failed to explain the relationship between these expenditures and transmission or regional ratepayers. Pursuant to the Protocols, it is AEP’s responsibility to explain the relationship between the expenses incurred and regional ratepayers. Specifically, AEP has not demonstrated that all the economic development expenses charged to SWEPCO and !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 27 See http://en.wikipedia.org/wiki/Logo See Exhibit F, Summary of non-transmission related economic development expenses, with representative invoices 29 See Exhibit B, AEP’s Response to Preliminary Challenge, Attachment A, Paragraph (E) - Response (December 23, 2013) 28 ! Page 21 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM passed through to ratepayers even took place in locations within the SPP footprint. For instance, the items challenged included membership dues in the Council of Great Lakes Industries,30 whose mission is to promote the economic growth and vitality of the Great Lakes region, which is far removed from the SPP region. There is no benefit to SPP ratepayers from economic development activities that occur outside the SPP footprint. In addition, this particular expense was recorded to account 930.2, presumably as a corporate membership in an industry organization. However, an economic development organization is not an industry organization of the type contemplated in account 930.2. Other expenses in this challenge section, such as payment to the Kilgore Economic Development Council,31 may have provided benefit to the localities involved. If that is the case and these items are related to transmission, then they may be passed through to ratepayers in those locations, but should not be regionally allocated to ratepayers who received no benefit. Challenger hereby challenges AEP’s inclusion of economic development expenses in accounts 921, 923 and 930.2, as listed on Exhibit F, because these items are not related to transmission and provide no common benefit to regional ratepayers. E. AEP’s lobbying expenses belong below-the-line in non-operating accounts. Account 426.4 of the USoA provides for the recordation of expenditures for certain civic, political and related activities. It is generally accepted far and wide that these types of expenses are always recorded to below-the-line account 426.4, and may only be moved to an above-the-line account at the Commission’s discretion upon a showing of benefit to ratepayers. AEP claims the challenged items are appropriately !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 30 31 ! See Exhibit F, which includes the Council of Great Lakes Industries invoice to AEP See Exhibit F, which includes the Kilgore Economic Development Council invoice to AEP Page 22 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM charged to administrative and general accounts such as accounts 921, 923, and 930.2.32 Challenger disagrees.33 Payment to Dilenschneider Group Inc. for “Dinner with G. Schoenfeld, Romney Advisor -- Advancing energy/AEP discussion”34 succinctly fits the description of political activity for the purpose of influencing public officials, and therefore belongs in account 426.4. In addition to direct lobbying expenditures, this challenge category includes expenses that would not have been incurred but for AEP’s lobbying activities, such as payment for membership dues in the Association of Louisiana Lobbyists for an AEP governmental affairs manager.35 These linked expenses are, as previously stated, part and parcel of the activities that prompted their acquisition and belong recorded in the same account therewith, presumably account 426.4. Expenses related to AEP’s activities for the purpose of influencing public officials on public policy matters in which AEP has a pecuniary interest are expenditures for political activities that belong in below-the-line account 426.4. Challenger hereby challenges AEP’s inclusion of lobbying expenses, and expenses that would not have been incurred but for AEP’s lobbying activity, in accounts 921, 923 and 930.2, as listed on Exhibit G, because these expenses belong in below-theline non-operating account 426.4. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 32 See Exhibit B, AEP’s Response to Preliminary Challenge, Attachment A, Paragraph (H) - Response (December 23, 2013) 33 See Exhibit G, Summary of lobbying expenses, with representative invoices 34 See Exhibit G, which includes the Dilenschneider Group Inc. invoice to AEP 35 See Exhibit G, which includes the Association of Louisiana Lobbyists to AEP ! Page 23 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM F. AEP’s non-transmission generation and distribution affiliate expenses and state rate case expenditures are not recoverable through the Formula Rate. In this final challenge category, Challenger raises the issue of the inclusion of generation and distribution affiliate expenses and state rate case expenses in the ATRR.36 AEP asserts these expenses are appropriately included in the Formula Rate.37 Generation and distribution affiliate related expenses, if recoverable at all, are properly recovered in rate case filings initiated on behalf of the associated generation or distribution affiliate, not through the ATRR. Transmission-related rate recovery is FERC jurisdictional. Consequently, state rate cases are not transmission-related and not properly included in the Formula Rate. Generation related expenses, such as retrofits of coal-fired generation plants required by the United States Environmental Protection Agency, are not transmissionrelated. Nevertheless, AEP included plant-retrofit related expenses in the ATRR, including expenses for an employee lunch meeting to discuss a presentation to advance its Welsh Unit Retrofit.38 AEP also included expenses for independent monitoring of the Turk Plant construction in the ATRR,39 which is clearly a generation expense properly recovered, if at all, in a generation rate case. Distribution expenses do not belong in the Formula Rate for the same reasons that generation expenses do not belong. Distribution related expenses are properly recovered in a distribution rate case filed on behalf of a distribution affiliate. AEP improperly included such expenses in the ATRR. For example, VEMCO, a company that merged !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 36 See Exhibit H, Summary of generation and distribution affiliate expenses and state rate case expenses, with representative invoices 37 See Exhibit B, AEP’s Response to Preliminary Challenge, Attachment A, Paragraph (J) – Response and Paragraph (K) - Response (December 23, 2013) 38 See Exhibit H, which includes the Petroleum Club of Shreveport invoice to AEP 39 See Exhibit H, which includes the E3 Consulting LLC invoice to AEP ! Page 24 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM with SWEPCO in 2010, is for all intents and purposes a distribution company.40 Nevertheless, AEP improperly included VEMCO related distribution expenses in the Formula Rate.41 State rate case expenses are not related to transmission in that transmission rates are determined at the FERC. So, for example, expenses related to J. Kennedy & Associates’42 investigation of a SWEPCO state revenue requirement on behalf of the Louisiana Public Service Commission (“LPSC”) is not transmission-related. Even if there is some intrastate transmission system over which the LPSC has rate-making jurisdiction, costs associated with that system would remain a part of the state rate case, and not be properly included in the Formula Rate. Challenger hereby challenges AEP’s recording of generation and distribution affiliate expenses and state rate case expenses in accounts 921, 923 and 930.2, as listed on Exhibit H, because these items are not related to transmission, are properly a part of other jurisdictional ratemaking activities, and provide no benefit to transmission ratepayers. VI. CONCLUSION Challenger, as an affected ratepayer and Interested Party, began her Information Requests in August 2013 in an effort to gain knowledge regarding AEP’s Annual Update. As described above, the Information Responses revealed many instances of improperly recorded expenses recovered from ratepayers. AEP’s recovery of improperly recorded !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 40 See Exhibit I, In the Matter of the Application of SWEPCO for Authority to Acquire Certain Public Utility Plant Constituting an Operating Unit or System, Arkansas Public Service Commission, Docket No. 10-071-U, Order No. 2, at page 7. 41 See Exhibit H, which includes Recurring Contract to VEMCO Board Director Therman Nash 42 See Exhibit H, which includes J. Kennedy & Associates invoice to AEP for audit required in Louisiana state rate case ! Page 25 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM expenses that resulted in rates that are unjust and unreasonable takes advantage of the following realities: • Should no parties take on the burden of contesting a filing, ratepayers must pay for all expenses that companies choose to include in their revenue requirement and rate base; • State consumer advocate offices and other load entities do not have resources or expertise to review annual formula rate updates in anywhere near the depths that can be accomplished in occasional rate cases. Industrial and commercial load do have the resources and expertise, but as for-profit businesses are constrained from spending money and reassigning staff to reviews of rates whose impact on any single industrial or commercial customer is deemed insufficient to justify the cost.43 • It is exceedingly rare for individuals to voluntarily scrutinize complex formula rates and the hundreds of documents necessary to track expenses through the formula. Challenger has taken on that burden spending hundreds of hours learning about formula rates and combing through AEP’s records discovering a multitude of instances wherein AEP improperly applied the Formula Rate or failed to adhere to the USoA and FERC Accounting Policies and Practices. Some of the improprieties concerned small amounts that were further reduced by account allocators. In its response to one issue raised in Challenger’s Preliminary Challenge, AEP stated, “Upon further review, AEP has determined that there are items that may be more appropriately charged to other !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 43 Comments of Maryland Office of People’s Council, FERC Docket No. ER12-269-000, December 1, 2011. ! Page 26 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM accounts that would be excluded from the formula rate. These items total $55,535 on the basis of inputs to the formula and equate to $349 after processing through the formula. This is immaterial in relation to SWEPCO’s ATRR, which is approximately $86 million.” This response fairly typifies AEP’s overall stance with regard to this ratepayer’s inquiries about the Formula Rate. Considering that Challenger limited her review of the Formula Rate to only a handful of accounts, and that her standing further limits her challenges to that portion of improperly recorded or recordable items allocated to SWEPCO’s ATRR, the amounts challenged are material within the broader context in which they occur. AEP’s claim that challenged expenses, which in many cases should have been borne by AEP’s stockholders but were improperly passed through to ratepayers, are too small to be material, shows a callous disregard for the ratepayers the company serves. The pennies, and fractions of pennies, add up. The system established for the recovery of transmission costs enables an unchallenged AEP, a multi-faceted, multi-billion dollar corporation, to spread unjust and unreasonable rates thinner over a larger group of ratepayers. Nevertheless, the rates are unjust and unreasonable because they reflect an improper application of the Formula Rate and the recording of expenses inconsistent with the USoA and FERC Accounting Policies and Practices. Each improperly recorded or recordable item, no matter how small, must be addressed and corrected. Challenger respectfully requests the Commission to order AEP to correct the improperly recorded expenses and issue appropriate credits and interest as directed by the Protocols. Challenger also respectfully requests the Commission order AEP to provide all documentation supporting its responses to issues presented in the Preliminary Challenge, ! Page 27 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM and allow Challenger to amend this Formal Challenge if new improprieties are found in AEP’s additional production. Respectfully submitted, /s/ Martha Peine Martha Peine, pro se 637 County Road 231 Eureka Springs, AR 72631 (713) 504-4957 mpeine@comcast.net Mailing Address: 6435 Jefferson St Houston, TX 77023 Dated: January 22, 2014 ! Page 28 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM CERTIFICATE OF SERVICE I, Martha Peine, hereby certify that I have served a copy of the foregoing document upon the respondent and all parties listed on the Commission’s official service list in this proceeding, on January 22, 2014. /s/ Martha Peine Martha Peine, pro se 637 County Road 231 Eureka Springs, AR 72631 (713) 504-4957 mpeine@comcast.net Mailing Address: 6435 Jefferson St Houston, TX 77023 ! Page 29 of 29! 20140122-5240 FERC PDF (Unofficial) 1/22/2014 4:22:36 PM EXHIBIT G SUMMARY OF LOBBYING EXPENSES, WITH REPRESENTATIVE INVOICES EXHIBIT G Summary of Lobbying Expenses, With Representative Invoices Request Account Doc ID1 Doc ID2 Vendor 104 104 104 921 921 921 AEP AEP AEP 0 0 0 201 201 921 921 5 6 R00149738 ARKANSAS ENVIRONMENTAL FEDERATION R00152853 ARKANSAS ENVIRONMENTAL FEDERATION 201 201 201 921 921 921 8 9 19 25940345 ARLINGTON RESORT & SPA 25674974 ASSOCIATION OF LOUISIANA LOBBYISTS R00185001 EUREKA SPRINGS CHAMBER OF COMME 201 921 25 201 921 26 201 921 32 201 921 44 201 201 921 921 43 67 201 921 62 201 921 73 201 201 921 921 89 107 202 203 203 203 203 203 203 203 203 203 203 203 203 203 921 921 921 921 921 921 921 921 921 921 921 921 921 921 BANK BANK BANK BANK BANK BANK BANK BANK BANK BANK BANK BANK BANK ONE ONE ONE ONE ONE ONE ONE ONE ONE ONE ONE ONE ONE 114699 205347 30464932 30464974 30464934 30464942 30808833 111852 111850 111855 30808936 30464953 197410 204128 203 921 BANK ONE 203 203 921 921 BANK ONE BANK ONE Documented Amount Challenged Imput Amount 2 2,398 5,930 Description and Purpose 2 2,398 5,930 2 2,398 5,930 285 285 285 285 5,427 200 60 10,607 200 60 100 100 3,230 3,230 450 450 R00175427 LOVE & WAR IN TEXAS CATERING 3,050 3,050 R00130283 LOVE & WAR IN TEXAS CATERING R00158039 PETROLEUM CLUB OF SHREVEPORT 3,050 468 3,050 484 Bradley Hardin, Manager Government 285 Affairs Registration for Trade Show 285 Brian Bond Registration for Trade Show Bradley Hardin, Arlington Presentation and 5,427 Dinner Buffet for 100. 200 Emile B. Cordaro Membership Dues 60 Jeff Milford, Chamber Banquet for 2 Board of Directors Event Fee for T. Brian 100 Bond Venita McCellon-Allen flight to LR for University of Arkansas Bowen School of Law luncheon honoring Collette Honorable 3,230 and meeting with Senator Harrelson Washington DC Briefing or debriefing. 450 Venita McCellon-Allen Texas Municipal League Luncheon. Ordered by Jennifer Meyer Also Double 3,050 Billed, see R00130283 Texas Municipal League Luncheon. 3,050 Ordered by Jennifer Meyer 342 Discuss District 3 Seat (Womack) 139 139 83 PAC Leadership La Op; Gemini Parade Plan 100 100 2,577 20 2,577 20 HONEY, KEITH R CORDARO, EMILE GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY GIBBS, GARY HARDIN, BRADLEY HUBBARD, JOHN 1,006 65 13 231 118 418 146 138 56 814 921 1,069 145 56 1,006 610 13 291 559 561 715 1,092 1,313 1,376 1,828 2,833 390 309 30094167 MEYER, JENNIFER 1,119 896 118937 110724 MEYER, JENNIFER MEYER, JENNIFER 2,368 1,473 1,898 2,323 100 Gary Gibbs registration for Lobby Directory Dinner for 140 at David Means 4-H 2,577 Building 20 Leaders Luncheon Jennifer Meyer Habitat Build, Presentation of Rate Case to 1,006 City Officials 65 Lobbying 13 Lobbying 231 Lobbying 118 Lobbying 418 Lobbying 146 Lobbying 138 Lobbying 56 Lobbying 814 Lobbying 921 Lobbying 1,069 Lobbying 145 Dinner with state rep and wife 48 Company matters and political contacts Hudson Mtg, Texas City Manager Assoc 1,119 Mtg Hope Community Coffee, TX Rate Case, 2,368 flowers 1,473 55 Meals, Flowers. "Gary - Keith Bradley" 25678505 Gibbs, Gary Gibbs, Gary HARDIN, BRADLEY Amount GREATER SHREVEPORT CHAMBER OF R00159662 GULF STATES AIR 25662929 25742743 LA STATE COMMITTEE PETROLEUM CLUB OF SHREVEPORT R00180878 POLITECHS INC R00147727 SAVOIES CATERING 25868456 TEXARKANA CHAMBER OF COMMERCE Page 1 of 20 EXHIBIT G Summary of Lobbying Expenses, With Representative Invoices Cont. 203 921 BANK ONE 30282238 MILFORD, JEFF 156 665 156 203 921 BANK ONE 30545146 MILFORD, JEFF 1,079 1,043 1,079 203 203 921 921 BANK ONE BANK ONE 30871014 30132389 MILFORD, JEFF PEEPLES, FRED 257 767 1,668 767 257 9 203 204 921 921 BANK ONE AEP 1,088 60 1,088 600 536 60 204 921 AEP 25683983 COMPASS CONSULTING GROUP LLC 549 5,000 549 204 921 AEP 25744104 COMPASS CONSULTING GROUP LLC 549 5,000 549 204 921 AEP 25744105 COMPASS CONSULTING GROUP LLC 549 5,000 549 204 921 AEP 25803151 COMPASS CONSULTING GROUP LLC 558 5,000 558 204 921 AEP 25848237 COMPASS CONSULTING GROUP LLC 558 5,000 558 204 921 AEP 25918864 COMPASS CONSULTING GROUP LLC 558 5,000 558 204 921 AEP 25937330 COMPASS CONSULTING GROUP LLC 568 5,000 568 204 921 AEP R00140201 COMPASS CONSULTING GROUP LLC 568 5,000 568 204 921 AEP R00151921 COMPASS CONSULTING GROUP LLC 568 5,000 568 204 921 AEP R00161783 COMPASS CONSULTING GROUP LLC 578 5,000 578 204 921 AEP R00175108 COMPASS CONSULTING GROUP LLC 578 5,000 578 204 921 AEP R00183127 COMPASS CONSULTING GROUP LLC 578 5,000 578 204 921 AEP CQ-ROLL CALL INC 70 636 70 204 921 AEP R00185466 CQ-ROLL CALL INC 88 763 88 204 921 AEP CQ-ROLL CALL INC 419 3,815 419 204 921 AEP R00140211 CQ-ROLL CALL INC 518 4,557 518 204 204 921 921 AEP AEP R00187872 DUKE ENERGY BUSINESS SERVICES 25798598 DEMOCRACY DATA & COMMUNICATIONS LLC 3,979 190 43,271 10,000 3,979 190 213205 WARREN, ANN R00172087 ASSOCIATION OF EDISON 25726840 25675170 Lunch with Cave Springs Mayor Larry Smith while presenting check to IRWP for Lake Keith Project, Flint Creek Retrofit Flint Creek Retrofit - Lowell/Rogers Area Chamber of Commerce Retreat, Lunch with Johnson City Mayor, Gift baskets for teachers Shipe Rd to Kings River - Mtg with City of Bentonville, Burns and McDonnell; Flint Creek Retrofit AICPA dues 4% not deductible Printer toner - governmental affairs Baton Rouge AEIC Load Research Committee Meeting Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP Government Consulting Services - billed to Tony Kavanagh, VP 1 year Subscriptionexpires 12/11 to Roll Call Print 1 year Subscriptionexpires 1/13 to Roll Call Print 1 year Subscription expires 1/12 to CQ Weekly Print Version - Balanced analysis of Legislation and the people who will impact it 1 year Subscription expires 1/13 to CQ Weekly Print Version - Balanced analysis of Legislation and the people who will impact it Seattle and Boston Global Sustainable Electricity Partnership Summit Policy/Project Committee Mtgs Grassroots, PAC Page 2 of 20 EXHIBIT G Summary of Lobbying Expenses, With Representative Invoices Cont. 204 204 204 204 204 204 204 204 204 204 204 204 204 204 204 204 921 921 921 921 921 921 921 921 921 921 921 921 921 921 921 921 AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP AEP R00144346 R00191311 25674956 25803154 25848240 25918866 25937334 R00140130 R00161258 R00168635 R00181548 25744094 R00190487 25674958 25726844 25744110 DILENSCHNEIDER GROUP INC GRIDWISE ALLIANCE INC ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER ICE MILLER - SZD WHITEBOARD MWR STRATEGIES MWR STRATEGIES MWR STRATEGIES 643 20,000 1,098 1,115 1,115 1,136 1,136 1,156 1,156 1,156 1,156 2,197 1,098 549 549 549 5,733 20,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 20,000 10,000 5,000 5,000 5,000 643 20,000 1,098 1,115 1,115 1,136 1,136 1,156 1,156 1,156 1,156 2,197 1,098 549 549 549 204 921 AEP 25805854 NCSL 1,958 18,000 1,958 204 921 AEP 25879240 PACIFIC NORTHWEST ECONOMIC REGION 675 675 675 204 204 204 204 204 204 204 205 203 203 203 921 921 921 921 921 921 921 921 921 921 921 AEP AEP AEP AEP AEP AEP AEP AEP BANK ONE BANK ONE BANK ONE 25674957 25884859 R00140124 R00161234 R00183138 25803157 R00140182 25748712 120973 30132610 30694368 988 1,004 1,023 1,041 1,041 1,006 852 10,000 838 927 1,772 9,000 9,000 9,000 9,000 9,000 9,021 75,000 10,000 61 226 1,743 988 1,004 1,023 1,041 1,941 1,006 852 10,000 838 927 1,772 210 210 210 210 210 210 210 923 923 923 923 923 923 923 AEP AEP AEP AEP AEP AEP AEP 25642979 R00181230 R00178942 R00188062 25936669 R00145490 R00176696 394 1,741 282 7,419 7,293 7,293 7,419 4,000 14,198 2,500 0 65,000 65,000 65,000 210 210 210 923 923 923 AEP AEP AEP R00157954 DILENSCHNEIDER GROUP INC 25788332 DILENSCHNEIDER GROUP INC 25631848 DILENSCHNEIDER GROUP INC 663 7,480 7,399 65,066 67,987 68,328 210 210 210 923 923 923 AEP AEP AEP R00154471 DILENSCHNEIDER GROUP INC 25742694 DILENSCHNEIDER GROUP INC 25897470 DILENSCHNEIDER GROUP INC 7,513 7,438 7,649 68,455 68,673 69,529 RISSING STRATEGIC LLC RISSING STRATEGIC LLC RISSING STRATEGIC LLC RISSING STRATEGIC LLC RISSING STRATEGIC LLC RISSING STRATEGIC LLC SOUTHEAST LABOR & MANAGEMENT PUBLIC ICE MILLER GIBBS, GARY GIBBS, GARY GIBBS, GARY Allocator Account 921 0.06288 COCHRAN GROUP INC CQ-ROLL CALL INC DEMOCRACY DATA & COMMUNICATIONS LLC DILENSCHNEIDER GROUP INC DILENSCHNEIDER GROUP INC DILENSCHNEIDER GROUP INC DILENSCHNEIDER GROUP INC Private Party for 14 at Metropolitan Club, Presentation "America's Urgent Challenge: The Need for a National Energy Policy", Limo Service AEP 2013 Full Membership Dues 11/11 General Strategic Advice 3/12 General Strategic Advice 4/12 General Strategic Advice 5/12 General Strategic Advice 6/12 General Strategic Advice 7/12 General Strategic Advice 8/12 General Strategic Advice 9/12 General Strategic Advice 10/12 General Strategic Advice 12/11 & 1/12 & General Strategic Advice 11/12 General Strategic Advice Lobbying, PR Lobbying, PR Lobbying, PR National Conferene of State Legislators Intensive training program on "energy" for 42 state legislators Support 2011 Legislative Energy Horizon Institute Participate in Legislative Update Call, Review endorsement letters Manchin/Copays Bill Lobbying Lobbying Lobbying Lobbying Attend National Mining Association Mtg Initial Membership Dues for Emile Cordaro 2/12 General Strategic Advice Lobbying Lobbying Lobbying ATRR Amount 7,023 Services CQ State Track GOTV Annual Website License Fee 111,690 394 1,741 282 7,419 7,293 "Special Project" 7,293 "Special Project" 7,419 "Special Project" Duplicate Ground charge to Romney 663 Advisor Dinner 7,480 "Special Project" 7,399 "Special Project" Dinner with G. Schoenfeld, Romney 7,513 Advisor-Advancing Energy/AEP 7,438 "Special Project" 7,649 "Special Project" Page 3 of 20 EXHIBIT G Summary of Lobbying Expenses, With Representative Invoices Cont. 210 210 210 923 923 923 114 114 114 930.2 930.2 930.2 114 114 114 930.2 930.2 930.2 114 AEP AEP AEP Req214 Req214 Req214 25742695 DILENSCHNEIDER GROUP INC R00162945 DILENSCHNEIDER GROUP INC 25832419 DILENSCHNEIDER GROUP INC Allocator Account 923 0.06288 30791027 AMERICAN COALITION FOR CLEAN 30606154 AMERICAN WIND ENERGY ASSOC 25795460 AMERICAN WIND ENERGY ASSOC 7,587 7,419 7,834 70,049 70,911 71,204 16,711 928 534 1,021,387 33,000 56,700 6 1,242 81 1,122 78,075 5,000 Req214 1506366 25661170 25785312 BANK ONE COMMERCIAL CARD ACTIVITY BUSINESS ROUNDTABLE CONSUMERS UNITED FOR RAIL EQUITY 930.2 Req214 25649933 COUNCIL OF STATE GOVERNMENTS 95 6,000 114 930.2 Req214 25920995 COUNCIL OF STATE GOVERNMENTS 97 6,000 114 114 930.2 930.2 Req214 Req214 25643407 25739267 DEMOCRATIC GOVERNORS ASSOCIATION EDISON ELECTRIC INSTITUTE 795 687 50,000 117,600 114 930.2 Req214 25874639 EMERGING ISSUES POLICY FORUM 162 10,000 114 930.2 Req214 25641970 KEYSTONE CENTER 239 15,000 114 930.2 Req214 25649935 MIDWESTERN GOVERNORS ASSOCIATION 239 15,000 114 930.2 Req214 30704769 NATIONAL COAL COUNCIL 491 30,000 114 114 930.2 930.2 Req214 Req214 25913168 25649936 SOUTHERN GOVERNORS ASSOCIATION SOUTHERN STATES ENERGY BOARD Allocator Account 930.2 1 486 48 30,000 3,000 7,587 "Special Project" 7,419 "Special Project" 7,834 "Special Project" ATRR Amount 5,837 92,823 16,711 Company Membership 928 Corporate Membership 6 534 C6 Industry Leaders Amatos Christopher - March 2012 Policy 6 Communications 1,242 Annual Dues 81 Membership Dues 2012 Membership Dues - Direct access to 95 state leadership 2013 Membership Dues - Direct access to 97 state leadership 2012 DGA Membership Contribution 795 Campaign Contributions 687 2012 USWAG Membership Dues Energy Corporate Board of Advisors 2012 162 Membership Fee Financial support of The Keystone Center's 239 Energy Board Membership in Partners Program to Lauri 239 Sheridan White - Director of Public Policy Member Dues and Chairman's Advisory 491 Committee Contribution 2012 Corporate Affiliates membership 486 Renewal 48 Associate Membership Dues ATRR Amount 22,840 22,840 TOTAL ATRR AMOUNT 227,353 $35,700 Page 4 of 20