1 1 BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION 2 3 In the Matter of: DOCKET NO. 110138-EI 4 PETITION FOR INCREASE IN 5 RATES BY GULF POWER COMPANY. _____________________________/ 6 7 8 9 10 11 12 13 14 DEPOSITION OF: MARGARET D. NEYMAN 15 TAKEN AT THE 16 INSTANCE OF: The Staff of the Florida Public Service Commission 17 PLACE: Room 382D 18 Gerald L. Gunter Building 2540 Shumard Oak Boulevard 19 Tallahassee, Florida 20 TIME: Commenced at 9:30 a.m. Concluded at 1:15 p.m. 21 DATE: Tuesday, November 15, 2011 22 23 REPORTED BY: JANE FAUROT, RPR Official FPSC Reporter 24 (850) 413-6732 25 FLORIDA PUBLIC SERVICE COMMISSION 2 1 APPEARANCES: 2 RUSSELL BADDERS, ESQUIRE and STEVEN GRIFFIN, 3 ESQUIRE, Beggs & Lane Law Firm, Post Office Box 12950, 4 Pensacola, Florida 32591-2950, appearing on behalf of Gulf 5 Power Company. 6 JOSEPH A. MCGLOTHLIN, ESQUIRE, Office of Public 7 Counsel, c/o The Florida Legislature, 111 W. Madison Street, 8 Room 812, Tallahassee, Florida 32393-1400, appearing on 9 behalf of the Citizens of the State of Florida. 10 VICKI GORDON KAUFMAN, ESQUIRE, Keefe, Anchors, 11 Gordon & Moyle Law Firm, 118 North Gadsden Street, 12 Tallahassee, Florida 32301, appearing on behalf of Florida 13 Industrial Power Users Group. 14 MAJOR THOMPSON, ESQUIRE, Federal Executive 15 Agencies, c/o AFCESA-ULFSC139 Barnes Drive, Suite 1, Tyndall 16 AFB, Florida 32403-5319, appearing on behalf of Federal 17 Executive Agencies. 18 KEINO YOUNG, ESQUIRE, FPSC General Counsel's 19 Office, 2540 Shumard Oak Boulevard, Tallahassee, Florida 20 32399-0850, appearing on behalf of the Florida Public Service 21 Commission Staff. 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION 3 1 I N D E X 2 3 WITNESSES 4 NAME: PAGE NO. 5 MARGARET D. NEYMAN 6 Direct Examination by Mr. Young 6 Cross Examination by Mr. McGlothlin 60 7 Cross Examination by Mr. Griffin 98 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION 4 1 EXHIBITS 2 NUMBER: ID 3 1 (Late-filed) Average Number of calls handled per rep 39 4 2 (Late-filed) FTEs in customer service 5 and information for a six-month period 63 6 3 (Late-filed Number of full-time equivalent employees in customer accounts 7 current 64 8 4 (Late-filed) AMI reductions to date 65 9 5 Warehouse occupancy calculation 87 10 6 Calculation of AllConnect overheads 93 11 7 (Late-filed) Components of A&G overheads allocated to premium surge 96 12 8 July 2011 overhead calculations for 13 premium and commercial surge 97 14 15 16 17 18 19 20 21 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION 5 1 P R O C E E D I N G S 2 MR. YOUNG: Good morning, Ms. Neyman. 3 THE WITNESS: Good morning, Mr. Young. 4 MR. YOUNG: Let's take appearances. 5 Keino Young with Commission staff. To my 6 right I have -- 7 MS. SALNOVA: Natalia Salnova, Staff. 8 MR. MOURING: Curt Mouring, Commission Staff. 9 MR. McGLOTHLIN: I am Joe McGlothlin with the 10 Office of Public Counsel. 11 MR. BADDERS: Russell Badders on behalf of 12 Gulf Power Company. 13 MR. GRIFFIN: Steven Griffin with Beggs and 14 Lane on behalf of Gulf Power Company. 15 MS. TYE: Jennifer Tye (phonetic), Gulf Power 16 Company. 17 MS. KUMMER: Connie Kummer, Staff. 18 MS. KAPROTH: Kathy Kaproth, Staff. 19 MR. YOUNG: On the phone starting with Ms. 20 Kaufman. 21 MS. KAUFMAN: Vicki Kaufman on behalf of the 22 Florida Industrial Power Users Group. 23 MR. YOUNG: Major Thompson. 24 MAJOR THOMPSON: Major Thompson with FEA. 25 MS. ROBERTS: Arlisha Roberts, Staff. FLORIDA PUBLIC SERVICE COMMISSION 6 1 MR. YOUNG: Mr. Dodd. 2 MR. DODD: Yes, sir, I'm still here. Richard 3 Dodd with Gulf Power Company. 4 MARGARET D. NEYMAN 5 was called as a witness and, after being duly sworn by the 6 court reporter, testified as follows: 7 DIRECT EXAMINATION 8 BY MR. YOUNG: 9 Q. All right. Ms. Neyman. 10 A. Like rhymes with diamond. 11 Q. Yes. Ms. Neyman, thank you for being here. 12 During the course of this deposition, I don't 13 anticipate the deposition running long, but I want to 14 make sure that we have some open communication in terms 15 of breaks and everything else. At any time during the 16 course of this deposition if you think you need a break, 17 please let me know. Generally, I like to go about 50 18 minutes to an hour and then take, like, a five or 19 ten-minute break. So we can use that as our 20 placeholders. 21 Also, during the course of this deposition, 22 I'm going to ask you several questions that your 23 attorneys may object to, okay? Generally during the 24 course of depositions, if the attorney objects, unless 25 he instructs you not to answer, generally you answer or FLORIDA PUBLIC SERVICE COMMISSION 7 1 whatnot. 2 MR. GRIFFIN: Keino, can I just say I'm 3 reserving substantive objections. My objections will be 4 to the form of the question, all others are reserved. 5 MR. YOUNG: Yes, absolutely. I spoke to Mr. 6 McGlothlin and I think he has some questions, also. 7 Vicki, do you have questions? 8 MS. KAUFMAN: I don't anticipate any at this 9 time, Keino. 10 MR. YOUNG: All right. Major Thompson, do you 11 have anticipate any questions? Do you have questions or 12 do you anticipate any? 13 MAJOR THOMPSON: No, sir, I don't. 14 (Music playing.) 15 MR. YOUNG: I think someone just put their 16 phone on hold, and we have music on this end. Hello? 17 Did somebody just come back on the call, on the 18 deposition? 19 MS. DISMUKES: This is Kim Dismukes. I 20 joined, but I don't have music on my phone. 21 MR. YOUNG: Okay. During the course of the 22 deposition, you cannot put your phone on hold. Just put 23 it on mute if need be. 24 BY MR. YOUNG: 25 Q. Ms. Neyman, you were sent a notice of FLORIDA PUBLIC SERVICE COMMISSION 8 1 deposition through your attorney, correct? 2 A. Yes. 3 Q. And in that notice of deposition, you were 4 asked to have certain documents with you, correct? 5 A. Correct. 6 Q. Do you have those documents? 7 A. Well, I have all of my testimony and rebuttal 8 and interrogatory discovery. 9 Q. Also, in preparation for this deposition, did 10 you look at any other documents other than your 11 testimony, other than the ones you just stated? 12 A. I looked at -- I reviewed the testimony of 13 some of the other witnesses that submitted for this 14 case. 15 Q. And who were those witnesses? 16 A. Mr. McMillan's testimony, rebuttal testimony, 17 and portions of Ms. Erickson's testimony I reviewed. 18 Q. Okay. Ms. Neyman, can you please state your 19 full name and business address for the record? 20 A. My name is Margaret D. Neyman. My business 21 address is One Energy Place, Pensacola, Florida. 22 Q. By whom are you employed and in what position? 23 A. I'm employed by Gulf Power Company, and my 24 position is the Energy Sales, Service, and Efficiency 25 Director. FLORIDA PUBLIC SERVICE COMMISSION 9 1 Q. Did you file Direct Testimony dated July 8th, 2 2011, and Rebuttal Testimony dated November 4th, 2011, 3 in this docket? 4 A. Yes, I did. 5 Q. What are your current responsibilities as the 6 Director of Energy Sales, Service, and Efficiency? 7 A. I'm responsible for all of our district field 8 responsibilities as it relates to energy sales and 9 energy efficiency. I also have responsibility for our 10 customer service center, which is our call center. I 11 have responsibility for the market research and planning 12 function of the company, and then the major accounts 13 area, which includes lighting, energy services, and 14 supporting our large business customers, our industrial 15 customers. 16 Q. I have a question for you. Do you have any 17 changes, additions, deletions, corrections to your 18 prefiled testimony? 19 A. Yes, I do. I have a correction. 20 Q. Okay. 21 A. On Page 23, Line 5, I cited that Gulf Power's 22 customers performed over 100,000 transactions on-line 23 during 2010. That is actually a monthly number. The 24 2010 annual number should have been 1,387,059. 25 On Page 26, Line 19, I cited that Gulf Power's FLORIDA PUBLIC SERVICE COMMISSION 10 1 on-line customer care portal has seen a 62 percent 2 increase since 2005. Again, monthly numbers were used 3 instead of an annual number to calculate that. The 4 percentage increase since 2005 should have been 5 57.2 percent. That's all the corrections I have. 6 Q. Can you repeat the corrections on Page 23 7 again, please? 8 A. Page 23, Line 5, it currently says over 9 100,000 transactions, and it should be 1,387,059. 10 That's 1-3-8-7-0-5-9. 11 MR. YOUNG: Hello? Did somebody just join the 12 deposition? 13 MR. REHWINKEL: Hey, Keino. This is Charles 14 Rehwinkel. 15 MR. YOUNG: Hey, Charles. How are you? 16 MR. REHWINKEL: I'm good, thank you. Sorry to 17 interrupt. 18 MR. YOUNG: No problem. 19 BY MR. YOUNG: 20 Q. Will you please define and explain full-time 21 equivalent, which is abbreviated FTE, employees for 22 ratemaking purposes; what is your interpretation of 23 that? 24 A. A full-time equivalent would be an employee 25 that works a 40-hour work week, the hours that make up a FLORIDA PUBLIC SERVICE COMMISSION 11 1 40-hour work week for the full-time employee for the 2 year. 3 Q. And can you explain Gulf Power's decision 4 process used to determine the need for increasing 5 employee positions? 6 A. Yes. There's a variety of methods that are 7 used, depending on the area. The areas that I'm 8 covering in my testimony can really be broken down into 9 two groups. Those of the customer service center, which 10 handles all the telephone calls, is responsible for the 11 first line of point of contact. In that area it is very 12 much driven by the metrics of their area, calls and 13 average handle time. And we track that very closely 14 with our systems that we have to measure lost calls and 15 handle times. So that's the primary driver behind the 16 need to add positions. 17 In the energy sales and efficiency area, it 18 is, again, workload driven, but not quite as 19 quantifiable. That's really based on the programs we 20 are offering customers, and our estimate of what it will 21 take to support those programs. So, you know, we employ 22 a little more subjective information to make the 23 determination that we need to add people. 24 Q. Okay. What is customer service center? 25 A. The customer service center is actually our FLORIDA PUBLIC SERVICE COMMISSION 12 1 call center. It's where the employees that handle the 2 telephone calls that come in as well as the on-line 3 e-mails that come in. 4 Q. All right. Well, can you identify all the 5 functions of the customer center? 6 A. Yes. Like I said, it's answering the 7 telephone calls. It also has the -- so that would 8 include payment arrangements, new service, outage 9 reporting. The calls that come in could cover 10 everything, really, that involves our relationship with 11 the customer. They also handle anything that comes in 12 by way of e-mails. Also in the CSC, or reporting to the 13 CSC manager is what we call the support center. And 14 that area handles Commission inquiries that come -- warm 15 transfers, they do some of the back office things. 16 And also reporting to the customer service 17 center manager is a new area that was set up earlier 18 this year, which is our energy efficiency call center. 19 And those employees are much like the field energy 20 consultants. They work with customers on explaining 21 energy efficiency programs that we offer as well as 22 helping them with energy efficiency advice, and 23 scheduling energy audits with customers. 24 Q. Can you please identify all functions in the 25 CSC that Gulf Power is seeking an increase in the FLORIDA PUBLIC SERVICE COMMISSION 13 1 positions, number of positions? 2 A. Could you repeat that again? 3 Q. Can you identify all functions in the CSC that 4 are seeking an increase in the number of positions, Gulf 5 Power is seeking an increase in the number of positions? 6 A. The customer service center, the increase in 7 positions that we are seeking in this case are the 8 results of -- are CSC employees that will be staffing 9 the phones. Primarily it's phone driven. Phone volume 10 as well as the length of time. And so we had 11 identified -- I don't remember the exact number of FTEs 12 that we have. My testimony has got an exhibit, I think, 13 in my testimony that shows the number. But the purpose 14 of those FTEs is driven by the call volume. 15 There were 19. Sixteen of those 19 FTEs were, 16 as I was saying, related to CSRs, customer service 17 representatives, and they handle phone or they handle 18 e-mail. We also added three in the support area that I 19 was describing that reports to the CSC manager. 20 Q. On Page 2 of your Direct Testimony, Line 20? 21 A. Okay. 22 MR. GRIFFIN: Page 2, Line 20? 23 MR. YOUNG: Yes. 24 THE WITNESS: Got it. 25 FLORIDA PUBLIC SERVICE COMMISSION 14 1 BY MR. YOUNG: 2 Q. Can you take a moment to read that paragraph 3 on the first page? 4 A. Starting with Line 20? 5 Q. Yes. 6 A. My testimony also addresses the operations and 7 maintenance, or O&M expenses forecast for the 2012 test 8 year in several functional areas as prescribed by the 9 Federal Energy Regulatory Commission, FERC, customer 10 service and information, customer accounts and sales. I 11 testify that all of these O&M expenses are reasonable, 12 prudent, and representative of conditions when new rates 13 will be in effect and should be used to calculate new 14 base rates for Gulf to charge for its service to 15 customers. 16 Q. Okay. So you mentioned several functional 17 areas prescribed by FERC, and you name them, customer 18 service and information, customer accounts and sales. 19 Are there any other functional areas that are required 20 by FERC? 21 A. These are the three function areas that I'm 22 covering, yes. 23 Q. And those are the three functional areas that 24 you are asking for an increase in the number of 25 positions, correct? FLORIDA PUBLIC SERVICE COMMISSION 15 1 A. Yes. 2 Q. Is there any other that you are testifying to 3 that is not listed in there for your area? 4 A. FTEs? 5 Q. For your areas that you're covering? 6 A. No, not that I am testifying to. 7 Q. Okay. 8 A. The FTEs that I'm testifying to would be 9 covered in these three functional areas. 10 Q. And earlier you made a correction in terms of 11 the number, the average number of phone calls processed 12 by customer account functions, correct, in 2010? 13 A. I corrected the on-line numbers only. 14 Q. Okay. So can you please provide the average 15 number of phone calls processed by customer account 16 functions in the CSC in 2010? 17 A. In my testimony, there's a chart in my 18 exhibits which you can calculate it from this chart, 19 which is Schedule 4, Page 1 of 3 in my exhibits in my 20 prefiled testimony. 21 Q. Uh-huh. 22 A. You asked about 2010. In 2010, our call 23 volume -- now this does not include the on-line that I 24 corrected, which is 1,466,048 calls. We had FTEs -- we 25 had 56 FTEs in 2010. FLORIDA PUBLIC SERVICE COMMISSION 16 1 Q. Can you repeat that number for me again, 2 please? 3 A. 1,466,048 calls. 4 Q. And you stated -- 5 A. And there's 56 FTEs in 2010. 6 Q. Does that number include calls related to 7 customer complaints? 8 A. It would be all calls regardless of whether it 9 was a complaint, new service, outage, payment 10 arrangement request. 11 Q. Okay. And what is the estimated expected call 12 volumes for the projected test year? 13 A. On that same page you'll see the 2012 forecast 14 is 1,466,048. 15 Q. What is the average number of calls processed 16 by the customer account function in the CSC in 2011? 17 A. Year-to-date 2011. This is through October. 18 This is both the VRU, those calls handled by our voice 19 response unit as well as our CSRs, which is 1,061,861, 20 and that's October year-to-date 2011. 21 MR. GRIFFIN: Just to clarify, Mr. Young asked 22 about average numbers, but those are actuals? 23 THE WITNESS: That is the total. 24 BY MR. YOUNG: 25 Q. Okay. Can repeat that total, again, please? FLORIDA PUBLIC SERVICE COMMISSION 17 1 A. 1,061,861. I'm sorry, Mr. Young. It can be 2 calculated -- you asked for the average per person, so 3 that would need to be the ones handled by the CSRs 4 alone. 5 Q. Uh-huh. 6 A. And that number year-to-date October is 7 793,312. 8 Q. Going back to your exhibit that you mentioned, 9 MDN-1, Schedule 4, Page 1 of 3? 10 A. Yes. 11 Q. You mentioned the 2010 average calls, correct, 12 the estimated volume of the projected test year to be 13 1,466,048, correct? 14 A. Yes. 15 Q. And what is the -- just for the record, what 16 is the 2012 forecast? 17 A. That is what we have forecasted. 18 Q. It will be the same thing, correct? 19 A. We haven't updated that. 20 Q. You haven't updated that? 21 A. Not for 2012. 22 Q. Okay. Do you anticipate an update for 2012? 23 A. No. I know of no reason why we would update 24 it. That was our best estimate of what we thought would 25 happen in 2012. FLORIDA PUBLIC SERVICE COMMISSION 18 1 Q. Okay. Do you expect an increase in volume? 2 A. Over what I filed in my testimony for 2012, is 3 that what you're asking? An increase in what year? 4 Q. 2012. 5 A. Right now that's the best number we have. We 6 will be looking at that as we get into 2012 to see if we 7 have got it right or not, and measure it. 8 Q. Okay. What's the total number of -- what is 9 the average number of phone calls processed by each 10 employee in the customer account function at the CSC in 11 2010? 12 A. If I have a calculator, I can calculate that. 13 I don't actually have that calculated. I have the 14 numerator and I would have the denominator for a 15 year-to-date. Would that work? 16 Q. Uh-huh. 17 A. Let me just double-check and make sure I'm 18 pulling the right numbers. The black is year-to-date, 19 right, people called in 2011? Okay. Year-to-date 20 number for the calls handled by CSC would be to divide 21 1,222,732 by our FTEs year-to-date, which is 70. So do 22 you want me to calculate that? 23 Q. No, that's fine. For the record, I can do the 24 calculation, basic calculation. What about 2010? 25 A. 2010 would be to take 1,466,048 and divide it FLORIDA PUBLIC SERVICE COMMISSION 19 1 by 56. 2 Q. And that will give us the average number of 3 phone calls processed by each employee? 4 A. By the FTEs. 5 Q. In the customer account functions at the CSC 6 in 2010 and 2011? 7 A. That's correct. That's the way I would 8 calculate it, divide those numbers. 9 Q. Okay. 10 A. I would caution you that the other factor we 11 look at is call length. Call volume is not the only 12 metric that we have to look at when it comes to 13 staffing, or average handle time is what we call it, 14 metric we call it. 15 Q. And how does that play into your determination 16 in terms of staffing? 17 A. The longer the calls last, the more staffing 18 we have to have, and we have seen an increase in average 19 handle time in the last few years. 20 Q. What percentage increase? 21 A. We have -- okay, I misspoke. Our average 22 handle time is still running about what it did in 2010, 23 3 minutes and 35 seconds. In 2007 it was 3 minutes and 24 28 seconds. 25 Q. So 2007 -- FLORIDA PUBLIC SERVICE COMMISSION 20 1 A. 2010 and 2011. 2 Q. In 2007 the average call length -- 3 A. Was 3 minutes and 28 seconds. 4 Q. 2010 and 2011? 5 A. 3 minutes and 35 seconds. 6 Q. Okay. And, for the record, that is a seven 7 second difference, right, an increase in seven seconds? 8 A. Yes, I believe that's right. 9 Q. What's the primary reason behind the increase 10 in Gulf Power billing complaints in 2010? 11 A. There were a couple of factors that led to the 12 increase. One was weather, extreme weather, but we also 13 had rate increases in our fuel and environmental 14 clauses. So we had a rate increase, and then the 15 economy has been a factor. We believe that customers 16 have called in to make more payment arrangements in 2010 17 compared to historical years. 18 Q. Would you agree that the historical 2010 year 19 could be described as unusual with respect to call 20 volumes related to customer complaints? 21 A. No, we did not believe it was unusual. We 22 believe it was a trend that had started in 2008, and it 23 has continued to this day. So, no, we do not believe it 24 is an unusual year in terms of call volume. 25 Q. Okay. Would you agree that in addition to FLORIDA PUBLIC SERVICE COMMISSION 21 1 customer growth, the increase in call volume is also 2 attributable to customer complaints? 3 A. I don't know that I have done that analysis to 4 be able to say it is an increase in customer complaints. 5 That would require some analysis that we have not done 6 to look at the calls, pull a sample, let's say, and 7 determine how many of them are customer complaints. 8 Q. Would you be able to pull that sample? 9 A. I do not know if we -- the way we would do 10 that is to -- all the customer comes in through our 11 voice response unit first, and customers can select -- 12 there is not a choice on there that says I'm calling to 13 complain. There is usually an option of new service, 14 payment arrangements, or I have a question about my 15 bill, so there are some choices in the VRU, but that's 16 not one of the choices. And that would be the way we 17 would be able to slice and dice the calls that came in. 18 I don't believe I could actually do an analysis that 19 would give you that answer that would say customer 20 complaints. 21 Q. Okay. So your program is not set up to -- and 22 this is just for a point of inquiry, so the program is 23 not set up where after you go through the kiosk, the 24 first level of -- I call it the first level of the kiosk 25 system, where when you reach a live body or a FLORIDA PUBLIC SERVICE COMMISSION 22 1 representative where they log in the subject matter of 2 the call that you can easily take a sample of? 3 A. Well, the VRU options for the customer, like I 4 was saying earlier, has I'd would like to talk to 5 somebody about new service, I'd like to report an 6 outage. You know, it has a menu. And those metrics we 7 can measure. We can look at those and easily count how 8 many people came into the VRU and said I'm connecting 9 new service. 10 When they get to a customer service 11 representative, the customer service representative 12 responds to whatever they're -- if they were unable to 13 be serviced by the VRU, and many, many of them are, then 14 they get to a customer service representative. Again, 15 the customer service representative is responding to 16 whatever their issue is, so they don't necessarily go in 17 and say this was a complaint. We don't track it like 18 that. We track it about the actions that we take as a 19 result of the call. 20 Q. You say you can track it based on the actions 21 you took? 22 A. How many payment arrangements we have made, 23 that kind of thing, or how many new services we hook-up, 24 how many calls we got about outages. 25 Q. So if I asked you to -- can you express the FLORIDA PUBLIC SERVICE COMMISSION 23 1 number of phone calls related to complaints as a 2 percentage of total call volume in 2010, your answer 3 would be -- 4 A. No. 5 Q. -- you won't be able to do that? 6 A. We cannot -- we can slice and dice it by 7 whatever the VRU has as an option. 8 MR. YOUNG: Do you want to take a five-minute 9 break? 10 THE WITNESS: Maybe, yeah. To get a drink of 11 water would be good. 12 MR. YOUNG: All right. No problem. We'll 13 take a five minute break, y'all. For folks on the 14 phone, we'll come back at 20 after the hour. 15 (Brief recess.) 16 MR. YOUNG: We can go back on the record. 17 THE WITNESS: I'm ready. Thank you. 18 BY MR. YOUNG: 19 Q. Can I have you to pull out the MDN-1, Schedule 20 4, Page 1 of 3, again, please. 21 A. Page 1 of 3, correct? 22 Q. Yes, ma'am. 23 A. Okay. 24 Q. For 2010, is that an actual -- in terms of the 25 1,466,048, is that the actual number of customer FLORIDA PUBLIC SERVICE COMMISSION 24 1 complaints? 2 A. Yes. That is actual calls. 3 Q. Actual calls. And the forecast is the same in 4 terms of 1,466,048 in 2012 forecast of actual calls, 5 correct? 6 A. Correct. 7 Q. All right. The question I have is why is both 8 the actual and the forecast the same? 9 A. That's what we based the forecast on was the 10 actual. 11 Q. So do you anticipate customer growth? 12 A. We did not adjust it for any more customer 13 growth. We kept it the same level as what we got in 14 2010. 15 Q. Okay. Can you turn to Page 30 of your Direct 16 Testimony. Starting on Line 19, will you read the 17 question and the answer? 18 A. The question is, "Please explain the increase 19 in complaints in 2010 as shown in Schedule 2 of your 20 exhibit." 21 Answer, "During 2010, Gulf's customers 22 experienced extreme winter weather unlike that of the 23 last 30 years. This resulted in unusually high customer 24 bills. Coupled with the economic downturn, customers 25 were struggling. As a result, Gulf's billing complaints FLORIDA PUBLIC SERVICE COMMISSION 25 1 increased during 2010." That's the end of that answer. 2 Q. Focusing on this phrase resulted in unusually 3 high customer bills, so you anticipate unusually high 4 customer bills in 2012? 5 A. We will have a rate increase in 2012. We will 6 have customer growth in 2012. We will still have 7 customers struggling with the bad economy, so we have 8 staffed and planned accordingly. 9 Q. You said you staffed and planned accordingly, 10 correct? 11 A. What we expected the call volume to be in 12 2012. 13 Q. All right. And you anticipate the call volume 14 not increasing for 2012 compared to 2010, nor compared 15 to 2011, correct? 16 A. We have held it flat in our forecast. 17 Q. Okay. Do you anticipate a decrease in terms 18 of call length in terms of handling the calls based on 19 business efficiency? 20 A. We do not have anything that we anticipate to 21 significantly reduce the call length substantially in 22 2012. We are constantly looking for things, you know, 23 to improve the VRU, our customers' experiencing with us. 24 We are working on lot of enhancements to our offerings, 25 but none of those will really significantly reduce the FLORIDA PUBLIC SERVICE COMMISSION 26 1 call handle time. It's going to improve customer 2 service, but it won't reduce the average call length. 3 There's nothing that I know of that we are doing that 4 will reduce that. 5 Q. But it will bring efficiency to the call 6 center, correct? 7 A. Not necessarily. Most of our focus right now 8 has been on enhancing that experience for the customers. 9 For example, we're going to work on developing a 10 touch-tone option on the VRU. Right now it's voice 11 recognized, and sometimes that's not working. If there 12 is background noise, you know, the unit cannot recognize 13 the voice. So we hope to, in 2012, develop a touch-tone 14 option for a customer. If you would like to then -- 15 because we have gotten feedback from customers that they 16 do not like the VRU. So we are constantly trying to 17 improve the VRU experience. That's probably not going 18 to change the average call time, but it will improve our 19 customers' service. We are constantly looking at ways 20 to improve that experience with them. None of them are 21 directly tied to getting the call time down. 22 Q. But the overall objective is to increase the 23 efficiency of the whole unit, correct? 24 A. The overall objective is to increase the 25 customer satisfaction with that experience. When they FLORIDA PUBLIC SERVICE COMMISSION 27 1 call us, we want them to find value when they interface 2 with us. We do not have a specific goal to drive down 3 call time. We have a goal to improve customer service. 4 Q. Well, let me ask you this, would you agree 5 with me that if you anticipated the economy -- just 6 speaking in general. If you anticipate -- if it's 7 anticipated a decline in the number of complaints would 8 result in a reduced request for an estimated increase in 9 the number of employees? 10 A. Say that one more time. 11 Q. Would you agree that the anticipated declining 12 number of complaints should reduce the request estimated 13 increase for the number of employees? 14 A. No, I would not agree to that statement, 15 because a lot of factors go into our decision to staff, 16 and qualitative as well as quantitative. So it's not 17 just one simple metric that we look at to add employees 18 in the CSC. 19 Q. All right. What is the requested increase in 20 positions in the customer account function? 21 A. The CSRs that we were just talking about that 22 make up the CSC, their salary is charged to the customer 23 account FERC function. There's also -- there's actually 24 a reduction in that function as a result of the FSRs 25 going away, and then there may be an FTE or two in our FLORIDA PUBLIC SERVICE COMMISSION 28 1 district. No, they were all -- there weren't in our 2 district being increased. They were all -- we had 18 3 reductions as a result, that's charged to the customer 4 account FERC function, and then we had 19 added to the 5 CSC. 6 Q. Okay. Currently Gulf has vacancies in the 7 customer account functions at the CSC, is that correct? 8 A. I'm sorry, I was looking at my notes here. 9 Q. Does Gulf have vacancies in the customer 10 account function at the CSC? 11 A. Right now? 12 Q. Uh-huh. 13 A. We have a few vacancies that we are in the 14 process of filling. We have made job offers. We are 15 doing background checks, but we are essentially almost 16 at full complement in the CSC. 17 Q. When you say you have a few, what is the 18 number? 19 A. We have four that we have made offers. 20 Actually, that's over. I believe we have two folks 21 retiring early next year, so part of that four is 22 actually to go ahead and get their replacements on 23 board. So there's two that we have made job offers to 24 and they are external hires, and we are doing the 25 background checks. So I'm assuming that they will FLORIDA PUBLIC SERVICE COMMISSION 29 1 accept and they will clear all of that. 2 We have a supervisor's position that we have 3 posted that will probably result in another CSR vacancy 4 eventually. There will be a trickle-down effect. But 5 the current supervisor -- we have a new energy 6 efficiency call center. We selected that supervisor, 7 and that person came out of the CSC, or came out of the 8 customer accounts function, and so we are backfilling 9 that. Eventually it will trickle down to an entry level 10 job potentially, if it's not a system transfer or 11 somebody that gets that job. That is all that I can -- 12 then I believe we will be at full complement. 13 Q. Okay. So two are retiring next year? 14 A. We have gone ahead and picked their 15 replacements. 16 Q. Okay. 17 A. And then we have two more that we are in 18 various stages of the whole filling process, and then we 19 have the supervisor -- I'm sorry, we have two analysts. 20 One is an ECCR analyst; it's the analyst for the energy 21 efficiency call center. That job has been posted. It 22 has closed. We have not selected a candidate yet. And 23 then another analyst that we -- we have another training 24 analyst, and this analyst moved into that job. So we 25 have two analysts that are going to be picked by the new FLORIDA PUBLIC SERVICE COMMISSION 30 1 supervisor. So, I apologize, I forgot about those. But 2 they are because of -- really tied to our demand-side 3 management plan. We had just a tremendous impact to our 4 FTEs on the energy sales and efficiency side. And many 5 of those employees, because the skill sets of those jobs 6 come from customer service, and so when our plan was 7 approved in the spring of this year, and we rolled the 8 programs out, we have been in almost a constant state of 9 filling those jobs. And some of those successful 10 candidates came from the customer service function, so 11 we're in the process of backfilling. 12 The analysts and the supervisor that I was 13 just mentioning, those three I would tie to the ECCR 14 world. The trickle-down effect from the conservation 15 plan stand up, and then the four CSRs, two of which are 16 to replace retirees and two of which are for the last, 17 really, of the CSR positions. 18 Q. So it's roughly about seven positions? 19 A. The supervisor, two analysts, four -- yes, we 20 are in various stages of getting filled. 21 Q. Are in various stages of getting filled. Now 22 earlier you talked about four positions? 23 A. Those are part of the seven. 24 Q. Okay. Those were part of the seven? 25 A. Right. FLORIDA PUBLIC SERVICE COMMISSION 31 1 Q. Okay. All right. Would all of these 2 positions be filled by the end of 2011? 3 A. Yes, unless something comes back on the -- 4 there will be job offers made and accepted and vetting. 5 But, for example, the supervisor will come, from all 6 likelihood, another Gulf Power department. So working 7 out with their supervisor to let them go, you know, but 8 we will have job offers and candidates in those jobs. 9 Whether they are physically in those jobs by the end of 10 the year, I can't say. This is what, the middle of 11 November? I believe we will. I believe we'll have them 12 all filled. We will definitely have the CSRs and the 13 two analysts filled. 14 Q. Including the two folks who are retiring? 15 A. Their replacements will be training with them, 16 so we will double-up in that case. We will more FTEs 17 than we have in the test year. 18 Q. Okay. Can you please explain the primary 19 reason behind the need for additional employees in the 20 customer account function at the CSC? 21 MR. GRIFFIN: Could I hear that again, please? 22 BY MR. YOUNG: 23 Q. Could you please explain the primary reason 24 behind the need for additional employees in the customer 25 account function at the CSC? FLORIDA PUBLIC SERVICE COMMISSION 32 1 A. Well, all of the CSC employees, with the 2 exception of the energy efficiency call center, charge 3 their salary to the customer account functions. So the 4 same -- these are the same employees that we have been 5 discussing. And the additional need arose from the call 6 volumes going up, and our service levels were not 7 adequate for our customers. That is the primary reason 8 that we are adding employees in the CSC, which they 9 charge to the customer accounts function. 10 MR. YOUNG: One second, please. 11 (Off the record.) 12 BY MR. YOUNG: 13 Q. On Page 37 of your Direct Testimony? 14 A. I'm there. Page 37? 15 Q. Uh-huh. Well, let me ask you this way. In 16 your testimony you state that these additional positions 17 are necessary to respond to a continued increase in 18 customer calls and to ensure service levels are met and 19 customers remain satisfied. I think you just mentioned 20 that to my previous question, correct? 21 A. That's correct, yes. 22 Q. The continued increase in customer calls, 23 earlier we discussed that the level of customer calls 24 are going to remain stagnant? 25 A. We have forecasted them to. Our assumptions FLORIDA PUBLIC SERVICE COMMISSION 33 1 were that it would stay at that level. 2 Q. When you made the statement, is that based on 3 those assumptions? When you made the statement that a 4 continued increase in customer calls, was that based on 5 that assumption or was -- 6 A. I'm sorry, could you repeat the question? 7 Q. Earlier we talked about -- you and I had a 8 discussion in terms of the customer calls were going to 9 remain stagnant and level off for 2010, 2011, and 2012. 10 And in your testimony you said -- I asked you would you 11 please explain the reason behind the need for additional 12 employees in the customer account function at the CSC, 13 and I think you said that, one, to ensure customers 14 remain satisfied; two, to ensure service levels are met; 15 and I think you said increase in customer calls, 16 correct? 17 A. I don't remember if that's exactly what I 18 said. Let me try to clarify. We assume a certain call 19 volume, and then we determine the FTEs for that call 20 volume that it will take to meet service level, which is 21 answer 80 percent of the calls within 30 seconds. So 22 it's a pretty straightforward mathematical equation that 23 you get to those FTEs. So the call volume that was 24 used -- assumption used to come up with the FTEs we are 25 asking for is what is shown on my exhibit. FLORIDA PUBLIC SERVICE COMMISSION 34 1 Q. Uh-huh. So if I'm looking at the exhibit 2 correctly -- I hate to harp on this -- if I'm looking at 3 the exhibit correctly, I don't see an increase in the 4 number of call volumes? 5 A. For the assumption of FTEs, we assumed the 6 numbers that were 2010 numbers to derive the FTEs that 7 we have in this case based on that. 8 Q. And you said that 80 percent is built on that, 9 correct? 10 A. The service level, which is a pretty 11 industry-wide service level of 80 percent answered in 12 30 seconds. The system, there's a system that we use 13 that helps us schedule shifts. It's a pretty complex 14 shift design. It can factor in -- you know, employees 15 as they have more tenure, they have more vacation time. 16 So we run it through this model, and that helps us 17 figure out -- to get to 80 percent, this is the number 18 of FTEs that you have to have. 19 Q. Okay. So because no changes in call volumes 20 for 2010, 2011, and 2012, the requested FTEs to bring 21 customer service satisfaction to acceptable levels is -- 22 A. It's on my exhibit. That chart is -- 72. And 23 the chart has the service levels that we have 24 calculated. That's what it takes. It takes 72 FTEs to 25 get back to 80 percent with a call volume of 1,466,048. FLORIDA PUBLIC SERVICE COMMISSION 35 1 Q. Okay. What's the primary driver of the 2 increase in customer calls in the customer account 3 function at the CSC? 4 A. We have had more customers asking for payment 5 arrangements. We have had more customers calling in. 6 That has been the primary type of call that has come in. 7 The call from -- when we started looking at the numbers 8 in 2008, 2007 and 2008, we saw we weren't making service 9 levels. We saw 7 seconds I think we calculated longer 10 handle time, and customers were calling in predominately 11 to say we need to make payment arrangements. 12 We also initiated some -- we empowered the 13 front line employees to make more payment arrangements, 14 whereas in the past they had to go to their supervisor. 15 So we had more lenient payment arrangement terms with 16 our customers about that same time to respond to them. 17 Q. Okay. What is the continued average increase 18 in customer calls in the customer account functions at 19 the CSC? 20 A. Please repeat that. 21 Q. What is the continued average increase in 22 customer calls in customer function at the CSC? 23 A. The overall -- the increase in overall calls? 24 Q. Would it be 15 percent from 2007 to 2010, 25 subject to check? FLORIDA PUBLIC SERVICE COMMISSION 36 1 A. I have not calculated that, but I ought to be 2 able to calculate it here. Tell me, again, the years? 3 Q. 2007 through 2010. 4 A. In 2007, we had 1,243,152. In 2010, correct, 5 that was -- that's 1,466,000. And if I did my math 6 wrong, I will have to -- I get 17.9 percent. 7 Q. That's fine. The 80 percent that you talked 8 about earlier in terms of you want to make sure that you 9 complete 80 percent of the calls, that's a target, 10 correct? 11 A. Yes. That's an industry call center accepted 12 service level that we need to achieve. 13 Q. That you need to achieve? 14 A. We believe that if we don't achieve that we 15 are not serving our customers well. 16 Q. Okay. So let me ask you if you look at that 17 chart, again, MDN-1, Page 1 of 3, from 2007 to 2012, the 18 estimated -- well, 2007 to date, how many times has Gulf 19 achieved the 80 percent? 20 A. On an annual basis we have never achieved it 21 since -- the last time we achieved it on an annual basis 22 was 2008. 23 Q. Okay. 24 A. Sometimes we achieve it for a month. We did 25 one month earlier this year, but we have not met -- FLORIDA PUBLIC SERVICE COMMISSION 37 1 Q. The 80 percent. 2 A. We have not met it this year, and we are 3 probably not going to make it by year end. 4 Q. All right. And you did not meet it, and when 5 I talk about the past numbers, 2009 and 2010, those are 6 actuals? 7 A. Those are actuals. 8 Q. Okay. So let's go back to 2007. Actual 9 number, you did not meet the 80 percent, correct? 10 A. We did not. We were very close, 78.3. 11 Q. All right. And that's with 54 employees, 12 correct? 13 A. Correct. 14 Q. In 2008, you met the 80 percent with 54 15 employees, correct? 16 A. Correct. 17 Q. In 2009, with 55 employees, you did not meet 18 the 80 percent, correct? 19 A. Correct, we did not. 20 Q. Okay. In 2010, with 56 employees, you did not 21 meet the 80 percent, correct? 22 A. That is correct, we did not. 23 Q. And in 2011 to date -- 24 A. That was the forecasted. 25 Q. The forecast with 67 employees, you did not FLORIDA PUBLIC SERVICE COMMISSION 38 1 meet the 80 percent, correct? 2 A. That is correct. 3 Q. Okay. And that is with 67 employees, correct? 4 A. That is correct. And we have not -- we have 5 not met it this year? 6 Q. And you have not met it this year? 7 A. Not consistently. 8 Q. Okay. Would you be able to provide the 9 average number of phone calls per month processed by 10 each employee in the position in 2011? 11 A. Average number of calls? 12 Q. Yes. That's phone calls per month processed 13 by each employee? 14 A. I don't believe I can give you that, because 15 I'm not sure I have the month-by-month staffing levels. 16 I have the -- which the way to do that would be to take 17 the calls for January, divide it by the FTEs, or the 18 employees in January and calculate it to get that 2011. 19 Q. Is that a calculation that you think you can 20 do? 21 A. I can. I don't have that information with me. 22 Q. Today? 23 A. Today, correct. I'm sorry, I don't have it in 24 my backup. 25 Q. Can we get a late-filed exhibit? That will be FLORIDA PUBLIC SERVICE COMMISSION 39 1 Late-filed Exhibit Number 1. It can be titled phone 2 calls -- 3 A. Average number of calls handled per rep. 4 Q. Monthly. 5 A. Monthly. 6 MR. GRIFFIN: For which year? 7 MR. YOUNG: 2011. 8 (Late-filed Exhibit Number 1 marked for 9 identification.) 10 BY MR. YOUNG: 11 Q. And since we have your MDN-1, Schedule 4, if 12 you can flip the page to Page 2 of 3. Would you agree 13 that for customer service center new positions the 14 schedule shows 19 positions as an incremental FTE from 15 the actual 2010 to the test year 2012? 16 A. That's what's on that exhibit, yes. 17 Q. And would you agree that 16 out of the 19 18 positions in the customer accounts are for customer 19 representatives? 20 A. That's with three for support, I believe. I 21 was just looking at that a minute ago. I can't 22 remember. Let me make sure. That was 16 and 3. 16 23 CSRs, three support, that's correct. 24 Q. Okay. And would you agree as the schedule 25 shows that the net increase is seven FTEs for customer FLORIDA PUBLIC SERVICE COMMISSION 40 1 account function in the CSC? 2 A. Say that one more time. 3 Q. Would you agree that as the schedule shows 4 that the net increase is seven FTEs for customer account 5 function in the CSC? 6 A. No, I would not agree with that statement. 7 The seven is a -- as you'll see on schedule, it has a 8 reduction of 18, which is field service representatives 9 associated that we were eliminating because of our 10 deployment of AMI. They are not in the CSC. They are 11 in the districts. So the number for the customer 12 accounts function, that's FERC satisfaction accounts 13 function, includes the reduction of meter readers, field 14 service representatives, and the additions in the CSC 15 for a net of seven. 16 Q. For a net of seven. Okay. Would you agree 17 that the six vacant positions shown on the schedule are 18 attributable to customer accounts in the CSC? 19 A. The vacancies, the six vacancies, where are 20 those? 21 Q. Yes, ma'am. 22 A. Okay. I need to double check that. I don't 23 remember exactly where they were. 24 Q. And that's as of December 31st, 2010. 25 A. Right. FLORIDA PUBLIC SERVICE COMMISSION 41 1 MR. BADDERS: Keino, would you repeat the 2 question. 3 BY MR. YOUNG: 4 Q. Would you agree that the six vacant positions 5 as shown on the schedule are attributable to customer 6 accounts in the CSC? 7 A. I don't know that all six of those were 8 actually employees that were in the CSC. I seem to 9 remember -- and we can get in back to you with this -- I 10 seem to remember that some of those vacancies were 11 actually in the districts, but I need to check. 12 Q. Offhand, do you know how many possibly can be 13 attributed to the district? 14 A. I cannot. I just don't remember. I don't 15 have it broken down, I don't believe. Just from the 16 standpoint of the odds are it would be mostly CSC, 17 because there is more employees in the CSC charging to 18 that function than there is in the district. But I need 19 to check that to tell you what those six vacancies are. 20 Q. Okay. And would you agree that all six vacant 21 positions shown on the schedule were already filled? 22 A. Now? 23 Q. Yes. 24 A. Yes, they are filled now. 25 Q. Okay. Can you please refer to MDN-1, Schedule FLORIDA PUBLIC SERVICE COMMISSION 42 1 4, Page 3 of 3. 2 A. Keep going, one more? All right. Great. I 3 should never have flipped back. 4 Q. This schedule shows the FTE incrementals from 5 actual 2010 to budget 2012, correct? 6 A. Yes. 7 Q. What is the number of filled positions in the 8 customer service and information function which Gulf 9 Power Company seeks recovery in this rate case? 10 A. Okay. The DSM are not included. Okay. The 11 ones that appear in -- you'll see the first column there 12 that says O&M, which is 6.5, and then the other has one 13 FTE over to the far right, other. That is capital. So, 14 those two -- ignore the center column where it says 15 ECCR, those are not part of this case. 16 Q. Okay. What's the current number of vacant 17 positions in the customer service and information 18 function? 19 A. Let me see. Now, you're talking about ones 20 that's the subject -- not the ECCR ones, just the ones 21 that we are discussing today. Let me see if I have a -- 22 we have filled all positions. That was on my rebuttal 23 Page 5 -- in the customer service and information 24 function. 25 Q. On Page 40 of your Direct Testimony, you FLORIDA PUBLIC SERVICE COMMISSION 43 1 stated that due to split responsibilities, the costs 2 associated with one FTE was budgeted to ECCR. 3 A. I'm sorry, can you show me what line? On Line 4 24 you said? 5 Q. Yes. 6 A. Let me read that. 7 MR. McGLOTHLIN: What page number? 8 MR. YOUNG: Page 40. 9 THE WITNESS: Page 40, Line 24. Yes. 10 BY MR. YOUNG: 11 Q. Okay. Can you please explain in greater 12 detail why the FTE position is budgeted to be recovered 13 through the ECCR clause and not O&M? 14 A. That position duties are in support of our 15 ECCR programs, so they are charged to ECCR based on 16 their work. Their work is in support of those programs 17 that are recovered through ECCR. Does that answer your 18 question? 19 Q. Yes, ma'am. 20 On Page 3, starting on Line 7. 21 A. Of my Direct Testimony? 22 Q. Of your Rebuttal Testimony. 23 A. Okay. Got it, Page 3, Line 7. 24 Q. Uh-huh. It starts, "Gulf nonregulated 25 operations." Take a minute to read it to yourself, FLORIDA PUBLIC SERVICE COMMISSION 44 1 please. 2 A. You want me to read it out loud? 3 Q. You can read it to yourself. 4 A. Okay. 5 Q. Can you explain the correlation between the 6 benefits SCS provides to Gulf nonregulated operations 7 and the competitiveness of Gulf's nonregulated 8 operations providing a similar product and service? 9 A. In the first part of that question you asked 10 about what support or services? 11 Q. Yes, the benefits. 12 A. The benefits from -- could you repeat that 13 part? 14 Q. The benefits that SCS provides to Gulf's 15 nonregulated operations. Basically, I want you to 16 explain -- to clarify the correlation between the 17 benefits that the SCS provides to nonregulated 18 operations, and the competitiveness of Gulf's 19 nonregulated operations with providers -- 20 A. Okay. The services that Southern Company -- 21 Q. -- for similar products and services. 22 A. Anytime Southern Company Services provides a 23 service to us, they charge and we pay them back. The 24 unregulated products and services, which if they do, it 25 would be maybe because of the customer service system, FLORIDA PUBLIC SERVICE COMMISSION 45 1 the billing system, so they compensate the company, and 2 it's done through an SCS work order. That's with our 3 customer service center. It's billed to us through an 4 SCS work order, so the unregulated products and services 5 which utilizes that system some pays for their use of 6 that system. Okay. Now, repeat the competitive -- 7 Q. And compared to the competitiveness of Gulf's 8 nonregulated operations with providers of similar 9 products and services? 10 A. The surge products that most customers 11 utilize, if they don't utilize premium surge -- and we 12 actually have a regulated surge product called meter 13 treater (phonetic), it's tariffed, and it just covers 14 our service entrance, and oftentimes lightning comes 15 through other service entrances. So prior to us 16 offering premium, our advice to customers was, one, 17 contact your local cable provider and your phone company 18 to see if they will put surge protection on your 19 equipment, or you can purchase point-of-use surge 20 products that you can buy from a variety of people. And 21 that is the primary way customers were attempting to 22 protect their equipment in their homes from lightning. 23 It was not meeting their expectations, though. 24 Q. So is Gulf's nonregulated operations the 25 customer in this -- basically in this statement in terms FLORIDA PUBLIC SERVICE COMMISSION 46 1 of your explanation? 2 A. Our customer is the reason we offer this 3 product. After years of customers being very frustrated 4 and they, of course, call us. They think it's our 5 service that is defective. There is a problem because 6 our transformer has gone bad, and they call us and we 7 would send someone out and determine that, in fact, it 8 was lightning. 9 In many cases the customer was very frustrated 10 with that, and so we offered meter treater, but that was 11 not enough. We would have the same thing happen, and we 12 would get out there and tell them, no, it did not come 13 through the meter. We can look at our device and tell 14 it did not come through the meter. And their TV has 15 been fried. So we would say, "In all likelihood it came 16 through the cable connection." And through years of 17 spending time and energy helping customers, assisting 18 customers, we decided that we would offer a service that 19 would hopefully mitigate some of that frustration on 20 their part. 21 We also had done a good bit of education with 22 our customers about these devices, and we would actually 23 have examples of it and we would hold them up and we 24 would tell them, you know, this is what you ought to 25 use. But, you know, it still continued to be an issue FLORIDA PUBLIC SERVICE COMMISSION 47 1 with our customers, so we started offering premium as 2 another choice for customers that have surge problems. 3 MR. YOUNG: We will take a five-minute break 4 and come back at 20 after. 5 (Recess.) 6 MR. YOUNG: Back on the record. 7 BY MR. YOUNG: 8 Q. Before we went off break, I think -- let me 9 see if I can clarify my question. My question is the 10 correlation between the benefits that the SCS provides 11 to Gulf nonregulated operations compared to the 12 competitiveness of Gulf's nonregulated operations with 13 providers of similar products and services. Can you 14 clarify the correlation between those two? 15 A. I'm not sure. I still don't quite understand 16 exactly the question that's being asked. 17 Q. In terms of -- you talked about the surge 18 protectors and everything else in terms of what SCS 19 provides to the customers, correct? 20 MR. GRIFFIN: I'm going to object to the form 21 of that question, because it assumes testimony that has 22 not been given in terms of what SCS has provided. 23 BY MR. YOUNG: 24 Q. Okay. I'm just trying to -- and your 25 objection is duly noted. I'm just trying to get my head FLORIDA PUBLIC SERVICE COMMISSION 48 1 around your statements earlier. You were talking about 2 surge protectors and everything else that Gulf Power 3 provides to customers, correct? 4 A. Correct; yes. 5 Q. And do you have a nonregulated entity that 6 provides those service that you contract with? 7 A. There is an employee, really part of an 8 employee that oversees those three programs or services. 9 Products and services, I should say. I don't know if I 10 would describe it as an entity. It's just not that 11 major of an operation. And he charges his time to those 12 products and services. Any of the costs associated with 13 them we charge to those products and services. 14 Q. Any of the costs associated with those you 15 charge to who? 16 A. To those below-the-line accounts, to those 17 products and services. Any costs that they occur are 18 charged to them. 19 Q. Okay. So my question is are the nonregulated 20 operations customers of Gulf Power? 21 A. Yes. The nonregulated -- the customers who, 22 for example, purchase premium surge are customers of 23 Gulf Power Company. 24 Q. And the people who provide those services, are 25 they customers of Gulf Power, also? FLORIDA PUBLIC SERVICE COMMISSION 49 1 A. There is a third-party vendor that provides 2 the product and the warranty on the premium surge, for 3 example, and they are a contractor. The employee is a 4 Gulf Power employee, and he oversees the program that's 5 offered to our customers. We don't offer the services 6 to non-Gulf Power customers. Is that your question? 7 MR. YOUNG: One second. I think we're getting 8 close. 9 (Off the record.) 10 BY MR. YOUNG: 11 Q. On Page 3 of your Rebuttal Testimony on Line 12 4. 13 A. Page 3, Line 4. Yes. 14 Q. All right. "Question: How do you respond to 15 the claim by Ms. Dismukes that the nonregulated 16 operations obtain substantial benefits by being 17 associated with Gulf regulated operations? 18 "Answer: I disagree with her claim. Gulf 19 nonregulated operations must compete for customers with 20 other similar products and services. Customers are 21 looking for the product or service that offers them the 22 best value regardless of their provider." 23 And my question is can you clarify the 24 correlation in this statement, in your statement, your 25 answer, Gulf nonregulated operations must compete for FLORIDA PUBLIC SERVICE COMMISSION 50 1 customers with other similar products and services? 2 A. Yes, I can clarify that statement. Let's pick 3 commercial surge. Commercial customers can achieve 4 surge protection through a variety of methods. They 5 don't have to pick our surge program, commercial surge 6 program. It is offered by other providers. If we want 7 to serve them, they have to choose us because they feel 8 like we are providing a better service than they would 9 get from the others. 10 Q. Okay. Are those nonregulated operations the 11 customer -- is the nonregulated operations the customers 12 in that statement? 13 A. Are the unregulated entity itself the 14 customer? 15 Q. Yes, of Gulf Power. 16 A. The unregulated business unit customers are 17 customers of Gulf Power. They take electric service 18 from Gulf Power. The entity itself is not a customer, 19 per se, of Gulf Power. It doesn't take electric service 20 from us. It is part of our company below-the-line, and 21 not part of this proceeding. None of the costs 22 associated with it, neither are any of the revenues 23 associated with it part of this proceeding. 24 Q. All right. Keeping on Page 3, Line 15. 25 Starting on Line 15. FLORIDA PUBLIC SERVICE COMMISSION 51 1 A. Uh-huh. 2 Q. I'll ask you if you would like to read the 3 question and the answer to yourself, and then we can go 4 from there. Take a moment to read that to yourself. 5 A. Just that one question? I've read it. 6 Q. For efficiency's sake, on the next page, too, 7 starting on Page 4, starting on Line 1, I'm going to ask 8 you a series of questions. Take a moment to review 9 that. 10 A. Okay. I've read both of those. 11 Q. Okay. To the extent possible, can you please 12 provide an example of the overhead costs that are 13 charged to Gulf's non-regulated operations? 14 A. Yes. The interrogatories that I referenced 15 here have that type of -- have that in them. Let me 16 pull those up. Warehouse occupancy is an overhead 17 charge to the business unit. That was supplied in the 18 answer to Interrogatory 136. 19 MR. GRIFFIN: And for the record, it's 20 actually Request to Produce Number 136. 21 THE WITNESS: Not interrogatory, production of 22 documents, right. Sorry. 23 Then in POD 137 we provided some labor-related 24 overheads that are an example of an overhead charge to 25 this business unit. FLORIDA PUBLIC SERVICE COMMISSION 52 1 BY MR. YOUNG: 2 Q. All right. In addition to the overhead costs 3 charged to Gulf's non-regulated operations via journal 4 entries, what other methods are used -- what other 5 methods are used for SEC (sic) overhead charges, 6 overhead costs to Gulf's nonregulated operations? 7 MR. GRIFFIN: Object to the form. You can 8 answer it. And to clarify my objection, you referenced 9 SEC. 10 MR. YOUNG: I'm sorry, SCS. Excuse me. 11 THE WITNESS: Repeat it again. 12 MR. YOUNG: Okay. 13 BY MR. YOUNG: 14 Q. In addition to the overhead charge -- overhead 15 costs charged to Gulf's nonregulated operations via 16 journal entries, what other methods are used to charge 17 SCS overhead costs to Gulf's nonregulated operations? 18 And your objection can be noted, again, for 19 the record. 20 A. So in addition to those charges that are 21 applied through a journal entry, is there any other 22 Southern Company Services expenses charged through 23 another -- let me ask my backup a question. 24 MS. BRADLEY: Can we go off the record? 25 MR. YOUNG: Yes, you can go off the record. FLORIDA PUBLIC SERVICE COMMISSION 53 1 (Off the record.) 2 THE WITNESS: All of the SCS charges 3 applicable for the unregulated business units are 4 charged by way of a journal entry. For example, the 5 customer service -- the CSS, customer service system, is 6 Southern Company Services charged through a direct 7 charge work order, and then Gulf then journals over and 8 charges the appropriate amount to the unregulated 9 business units. So everything comes by way -- from SCS 10 comes by way of a journal entry to the unregulated 11 products. I thought maybe they had a direct charge, but 12 everything is allocated. 13 MR. YOUNG: Okay. 14 BY MR. YOUNG: 15 Q. A question for you. Are you familiar with the 16 proposed changes to the Form 4 -- 17 MR. YOUNG: One second, please. (Pause.) 18 Are you ready? 19 THE WITNESS: I'm ready, yes. 20 BY MR. YOUNG: 21 Q. And you might be able to answer these 22 questions. If you're not, then we can -- if you can 23 point us to the appropriate witness, we can possibly get 24 these answered that way. 25 Are you familiar with the proposed changes to FLORIDA PUBLIC SERVICE COMMISSION 54 1 the Form 4 which would allow the all outdoor lighting 2 rates to be adjusted annually? 3 A. Yes, I'm familiar with it. 4 Q. Specifically, can you address the impact on 5 the changes on the existing customers? 6 A. No, I cannot quantify the impact. I can 7 describe the value of the proposal, but to actually 8 quantify that, that would be Mr. Thompson if you are 9 looking for potential calculations. 10 Q. All right. Well, we will just go through some 11 questions and see how far we can go. And if you can't 12 answer the questions, if you can point us to the 13 appropriate witness, we will go from there. 14 A. Yes. 15 Q. To your knowledge, do any other IOUs -- any 16 other of the four IOUs adjust their existing lighting 17 fixtures or associated facilities on an annual basis? 18 A. Florida IOUs? 19 Q. Yes. 20 A. I do not believe that they utilize an 21 existing, no. 22 Q. Generally speaking, are there significant 23 fluctuations in lighting fixtures and associated 24 facilities, or are they relatively fixed for a period of 25 time? FLORIDA PUBLIC SERVICE COMMISSION 55 1 A. There are changes in lighting technology, 2 particularly new technology, like LED lighting is one of 3 the ones that we utilize the existing template for to 4 offer that to our customers. We actually had the first 5 LED tariff in the State of Florida, and that is 6 projected to decline. We have also seen, you know, some 7 escalation in fixture cost around it. 8 Q. What -- let preface it. My questions are 9 related to current existing customers, not new 10 technology or anything of that nature. 11 A. Okay. 12 Q. All right. You talked about a minute ago the 13 significant fluctuation in lighting fixtures and 14 associated facilities, or are they relatively fixed for 15 period of time. Can you explain your answer, again? 16 A. Well, it's a judgment call. But the last time 17 we filed was ten years ago, and there has been 18 significant changes in the pricing of -- the cost I 19 should say, the cost of lighting fixtures. 20 Q. What are the drivers behind the fluctuation 21 and how do they typically occur? 22 A. The manufacturers drive that. And it can be 23 cost of materials, it can be sometimes the plant, you 24 know, there has been a certain fixture that customers 25 like, and that particular plant may have -- they may FLORIDA PUBLIC SERVICE COMMISSION 56 1 have moved it offshore. So it's really driven by the 2 manufacturers, the prices. And then in the case of the 3 LED lighting, which we have had for maybe two years, we 4 are told that as more of it has become mass produced, it 5 should see a decline. So it's usually driven back to 6 the manufacturers particular circumstances, cost of 7 materials, cost of manufacturing. 8 Q. Okay. Would you agree that for lighting 9 schedules which list specific rates in tariffs, Gulf 10 must petition the Commission for approval to make 11 changes to any of these rates or charges? 12 A. Today's option for us is we must petition the 13 Commission to change an existing lighting tariff. 14 Q. Currently Form 4 is a formula-based template 15 that allows Gulf to price and offer new lighting 16 fixtures and associated facilities, is this correct? 17 A. Would you repeat that, please. 18 Q. Form 4 -- 19 A. Yes. 20 Q. -- is a formula-based template that allows 21 Gulf to price and offer new lighting fixtures and 22 associated facilities, is this correct? 23 A. Yes. 24 Q. And as it stands today, Form 4 does not allow 25 Gulf to reprice existing fixtures and associated FLORIDA PUBLIC SERVICE COMMISSION 57 1 facilities annually, correct? 2 A. That is correct. That is what we are asking 3 to do. 4 Q. And as staff understands the filing, Gulf is 5 seeking to approve -- seeking approval to extend the use 6 of Form 4 to allow it to reprice existing lighting 7 fixtures and associated facilities, is this correct? 8 A. Yes. 9 Q. And if, as a result of the annual review, 10 there is a change of 10 percent or more in either 11 direction, up or down, in any of the base rate charges, 12 Gulf will automatically reprice the existing fixtures 13 and associated facilities, correct? 14 A. Correct. 15 Q. When will this review take place? 16 A. Annually? 17 Q. Uh-huh. 18 A. When annually will it take place? 19 Q. Uh-huh. 20 A. Probably around the first of the year, but I'm 21 not sure I know that exactly that answer. But it will 22 be driven by when the costs are updated in our power 23 delivery organization. They actually work -- as part of 24 the Southern Company, we do joint negotiations with the 25 manufacturers, so we buy volume procurement. And FLORIDA PUBLIC SERVICE COMMISSION 58 1 usually it's during the time of the year -- I believe it 2 will be pretty close to the first of the year. 3 (Phone interference.) 4 And I can get back -- I can probably -- if you 5 need to know that with some better precision, but it 6 will be tied to when the unit costs or the costs are 7 updated. 8 Q. All right. And when will the new rates go 9 into effect? 10 A. After that. And probably Mr. Thompson might 11 be better to give you some idea of how long it will take 12 once the calculation is done, and he would be 13 responsible for that. 14 Q. Okay. Will Mr. Thompson be the one to discuss 15 how customers will be notified of the changes in rates? 16 A. Yes. I think he would be the best person to 17 ask that question. 18 Q. What about what affects will the repricing 19 have on customers who have already entered into a 20 long-term contract for lighting fixtures and associated 21 facilities? Can you answer that? 22 A. Yes. Actually maybe it might be better for 23 Mr. Thompson to answer that. I have some knowledge, but 24 he is really the appropriate person to answer that 25 question. FLORIDA PUBLIC SERVICE COMMISSION 59 1 Q. Well, you might be able to answer this. If 2 the customers who are currently under contract for 3 lighting fixtures and associated facilities are 4 affected, will they have an option to opt out of that 5 contract they are currently in? 6 A. Yes. I don't believe we have any contracts 7 that at any point in time the customer can choose to 8 have us remove the light. 9 (Phone interruption.) 10 Q. Is there a minimum length of the contract? 11 A. I probably need to defer to Mr. Thompson. I 12 do not believe there is. 13 Q. Okay. 14 A. In our lighting contracts. 15 Q. You mentioned that they can opt out, correct, 16 the customers can opt out of that contract? Are they 17 required to enter into a new contract? 18 A. No, they are not required to take lighting 19 services from us. It's purely voluntary. 20 Q. All right. And can you explain the opt 21 out-option that the customers have? 22 A. They call us and tell us we would like to have 23 these removed and quit paying for them. So our lighting 24 crews go out and remove the lights. 25 MR. YOUNG: Thank you so much. That's all the FLORIDA PUBLIC SERVICE COMMISSION 60 1 questions I have at this time, and I will turn it over 2 to Mr. McGlothlin. 3 CROSS EXAMINATION 4 BY MR. McGLOTHLIN: 5 Q. Joe McGlothlin with the Office of Public 6 Counsel. 7 Hello, Ms. Neyman. Are you ready to push on 8 for awhile? 9 A. I'm ready. 10 Q. Okay. My questions relate to some of the same 11 subjects that staff covered, but I will try not to be 12 redundant. I hope I can get rid of this frog in my 13 throat. 14 (Laughter.) 15 A. You may need to make a hike over to the 16 vending machines. 17 Q. Maybe I can get by. And I will begin with a 18 couple of questions about staffing. Let me give you a 19 couple of references to your testimony. Rebuttal 20 testimony, Page 5, Line 19, and Direct Testimony, Page 21 37, Line 20. 22 A. Okay. Page 5 on the Rebuttal you said? 23 Q. Yes. 24 A. And you said that was line -- on the Rebuttal, 25 Page 5, Line -- FLORIDA PUBLIC SERVICE COMMISSION 61 1 Q. 19 through 22. 2 A. Okay. And then -- 3 Q. Direct, Page 37, Line 20. 4 A. Page 37, Line 20. Okay. 5 Q. And here is the question. In your Rebuttal 6 Testimony you say that Gulf Power has filled all 7 positions in the customer service and information 8 function, and then in your direct testimony you say that 9 there's 128 full-time equivalents in that area. Should 10 we read this to mean that Gulf currently has 128 11 employees, full-time employees, on board in that 12 function? 13 A. Point me, if you will, to the 128 number to 14 make sure I'm -- 15 Q. Page 37, Line 20, is the reference I have. 16 A. I do not see that number, 128. On Line 21 17 there is a question, "Please explain the net increase of 18 seven FTEs in customer accounts." And Line 19 is 19 discussing customer accounts. 20 Q. There must be a pagination error or something. 21 Offhand do you know how many full-time equivalent 22 employees you have in that area? 23 A. In the CS&I area? 24 Q. Yes. 25 A. No, I do not know off the top of my head how FLORIDA PUBLIC SERVICE COMMISSION 62 1 many are in CS&I total, including ECCR and -- 2 Q. Is it correct that Gulf Power has filled all 3 positions in that area as of this time? 4 A. Yes. We have filled all of the positions -- 5 well, we have a vacancy that has resulted -- we are 6 posting a job as we speak right now and filling it. So 7 there is one in market research and planning, and I 8 can't really remember why, what created the vacancy. 9 I'm sorry, that's an ECCR position. 10 Q. Okay. Have you been ramping up or increasing 11 the head count in that area over time to get to that 12 point? 13 A. We had the DSM plan approved in the spring of 14 this year, and that resulted in a significant increase 15 in workload, and we added FTEs associated with the DSM 16 plan. It was a major undertaking for us to roll out all 17 those new programs and support those programs. 18 Q. Would it be possible to provide to us the 19 number of employees that you had on board in the 20 customer service and information function at the end of 21 each month for the last six months so we can see what 22 kind of a pattern there was in terms of increasing the 23 number of persons to reach the total? 24 A. Now, what time frame are you asking? 25 Q. Past six months. FLORIDA PUBLIC SERVICE COMMISSION 63 1 A. Okay. So you want to know the customer 2 service and information FTEs. 3 Q. Yes. 4 A. Starting -- 5 Q. And maybe you can help me ask how to portray 6 it best, but my thought was at the end of the month for 7 the last six months for which you have information. 8 A. Okay. 9 Q. And that would also give us the total number 10 of employees in the area, would it not, if you are 11 currently full? 12 A. Yes. For this -- 13 Q. For this area? 14 A. For what's recovered in this case. 15 Q. Customer service and information function. 16 A. Yes, I think we can provide that information. 17 MR. McGLOTHLIN: Okay. That would be 18 Late-Filed Number 2, FTEs in customer service and 19 information for a six-month period. 20 THE WITNESS: Yes. 21 (Late-Filed Exhibit 2 marked for 22 identification.) 23 BY MR. McGLOTHLIN: 24 Q. Again, Page 37, at Line 16, you say there are 25 200 full-time equivalent employees budgeted in the FLORIDA PUBLIC SERVICE COMMISSION 64 1 customer accounts function. Do you know how many of 2 those FTEs have been filled at this point? 3 A. I'm sorry, what line are you on? 4 Q. This is line number -- 5 A. Page 37, Line -- 6 Q. Line 16. 7 A. 200 full-time employees budgeted in the 8 customer accounts function, and customer accounts at the 9 end of 2010. 10 Q. Do you know how many you have currently? 11 A. No, I do not know. The field service 12 representatives, the meter readers has been a very fluid 13 number. We have had contract employees coming back 14 filling when an employee has left to find another job, 15 because their jobs are targeted. So that I would have 16 to check to determine exactly where they are at this 17 point in time with meter readers. 18 MR. McGLOTHLIN: Okay. Can we have that as 19 Late-Filed 3, number of full-time equivalent employees 20 in customer accounts current. 21 (Late-Filed Exhibit 3 marked for 22 identification.) 23 BY MR. McGLOTHLIN: 24 Q. And one more question along these lines. 25 Exhibit MDN-1, again, Schedule 4 on Page 2. FLORIDA PUBLIC SERVICE COMMISSION 65 1 A. Schedule 4, Page 2. 2 Q. Yes. In response to questions from staff you 3 discussed that the AMI reductions are related to the 4 reduced need for meter readers as a result of the new 5 technology. Can you tell us how many of the AMI 6 reductions have been accomplished at this point? 7 A. The current FTEs that are -- let's see if I 8 have that. I believe we are on track reducing -- let me 9 check, I may have it. 10 I think all I have is what we used to 11 calculate the 18, which was a -- because it's a moving 12 thing. But, no, I do not know exactly where we stand. 13 MR. McGLOTHLIN: Let me ask for Late-Filed 4, 14 which, again, referring to Schedule 4, Page 2 of 3, that 15 shows AMI reductions of 18 FTEs. Late-Filed 4 would be 16 AMI reductions to date. 17 (Late-Filed Exhibit 4 marked for 18 identification.) 19 THE WITNESS: That correlate to that 18? 20 MR. McGLOTHLIN: Yes. 21 THE WITNESS: And that will actually be the 22 AMI, the FSRs that make up that 18, their salaries 23 charged to customer accounts, FERC. 24 BY MR. McGLOTHLIN: 25 Q. Okay. And my other questions relate to the FLORIDA PUBLIC SERVICE COMMISSION 66 1 area of nonregulated activities that you discussed to 2 some degree with staff. 3 A. Uh-huh. 4 Q. In your testimony again today you have 5 identified the premium surge, the commercial surge, and 6 I think something else called AllConnect. And my first 7 question is is that the entire universe of Gulf Power's 8 nonregulated activities? 9 A. Yes. 10 Q. And I gather that when you distinguish between 11 products and services, the products relate to the 12 devices that serve to protect against surges as opposed 13 to the service of connecting the caller to other 14 potential providers of services, correct? 15 A. Yes. 16 Q. With respect to the products, the premium 17 surge and commercial surge, how do customers learn about 18 the availability of those products from Gulf Power? 19 A. We mail, do direct mail pieces to inform 20 customers of those products. That is the majority of 21 the way that they are promoted. In some cases, the 22 customers -- it's on our web page, and they may discover 23 it there. There's times if an employee is working with 24 our power quality folks, or a field employee is working 25 with a customer that has had a lightning strike, they FLORIDA PUBLIC SERVICE COMMISSION 67 1 may suggest that they go to the web page and look at 2 that as a service. 3 Q. What about calls coming into the service 4 center, are the customer service representatives trained 5 to market or inform customers of the availability of 6 those products? 7 A. Customer service representatives are trained 8 about all of our products and services, including those 9 three products and services. 10 Q. And in the course of that training are they 11 trained simply to respond to complaints by customers 12 having problems, or do they initiate some marketing 13 activity related to the nonregulated products? 14 A. There is no out-bound sales call or any -- 15 everything they do is in response to a customer that has 16 an issue. And sometimes customers will call in saying 17 do you offer anything, you know, and the customer 18 service rep will explain it to them. Or a customer 19 calls in and it appears to be a surge-related event, a 20 lightning strike, and they are frustrated or there has 21 been some experience there, the customer service 22 representative will offer that or say have you heard 23 about it, and, you know, you can go to our web page and 24 get information about it. 25 Q. You have anticipated my next question. You FLORIDA PUBLIC SERVICE COMMISSION 68 1 suggested that the customer service representative tells 2 the customer go to the web page. Is that the only 3 direction they give the customer, or is there some more 4 direct marketing to put the customer in touch with the 5 person or the organization within Gulf Power that 6 pursues the transaction? 7 A. There's not anything formal. I think that 8 there's nothing formal to say let me transfer you to the 9 gentleman that handles this program. There are times, 10 though, when customers start asking complex questions, 11 or they are particularly upset, and the customer service 12 rep is instructed that this is a resource for you to 13 help you meet the customer's needs. 14 In many cases, like I was answering earlier, 15 the customer is -- they think it's us. They think it's 16 our quality of service, and they are calling in because 17 they have had a problem. And it takes some length of 18 time sometimes to convince them that it's not us. I 19 mean, we can do some checking from the office, but -- 20 so, customer service representatives stand ready to send 21 them and respond to them. 22 It's more reactive than proactive. There's no 23 out-bound calls. When a direct mail piece is sent out, 24 when that business unit sends out a direct mail piece, 25 even though it says go here, go to the web page or do FLORIDA PUBLIC SERVICE COMMISSION 69 1 this, customers will call. They just do that, they 2 call. 3 Q. I understand there's no out-bound calls, and 4 by that I think you mean the call originates at Gulf 5 Power and terminates with the customer. What about if 6 the customer calls the call service center, does the 7 representative who fields that call see that as an 8 opportunity to market the unregulated products and 9 services? 10 A. The customer service representative will 11 utilize whatever means he or she has to respond to the 12 customer, and that may include the new products and 13 services. 14 Q. But only in response to either a question or a 15 problem that the customer has identified, at that point 16 would the nonregulated products come into the 17 conversation? 18 A. Correct. And in some cases when it's, say, a 19 commercial customer and the customer service 20 representative knows enough about their business, that 21 they have a lot of electronics or they would be 22 particularly sensitive to a lightning strike, he or she 23 may bring it up in the course of the call. A new 24 connection, for example, with a commercial customer that 25 is very dependent on -- their business is very dependent FLORIDA PUBLIC SERVICE COMMISSION 70 1 on equipment that is sensitive to surge. And they will 2 say, you know, do you know about our commercial surge 3 program, and sometimes they will offer it that way. 4 Q. I see. And that may or may not be in 5 connection with either a complaint -- 6 A. Right. Or it could be a new service. 7 Q. Or it could be initiated during the 8 conversation by the customer rep? 9 A. Uh-huh. 10 Q. You said several times that the customer is 11 directed to the web page. Okay. If the customer goes 12 to the web page, what happens then? 13 A. There is a way for them to enroll. There is 14 information, the details about the program, and there is 15 a way for them to enroll on-line in the program, if they 16 so choose. 17 Q. By enroll, do you mean either purchase or 18 subscribe to the device? 19 A. Right. 20 Q. Okay. Is there any other way the customer can 21 enroll in either commercial surge or premium surge? 22 A. I suppose they can go into our local offices 23 and ask for a -- bring in, they could bring in their 24 direct mail piece. They can mail it back in. I guess 25 they could walk in and hand it to a cashier. I don't FLORIDA PUBLIC SERVICE COMMISSION 71 1 think that happens very often. I think most customers 2 either go on-line or they mail it back after they have 3 received a direct mail piece in the mail, fill it out 4 and mail it back. 5 Q. Okay. So either through an on-line 6 application or somebody will send it to the field office 7 you received, Gulf Power has received an application by 8 a particular customer to take part in the commercial 9 surge or premium surge, what happens then? 10 A. Let me back up and clarify one thing. There 11 is a toll-free number offered by our third party that 12 they can call and enroll. There's a number provided, a 13 toll free number, third party provided and managed that 14 they can enroll, as well. Now, I'm sorry, can you 15 repeat your last question? 16 Q. Yes, and then we will come back to what you 17 just said. 18 The last question was this, I think. At some 19 point through either an application received on-line 20 through the web page or through an application from 21 someone who walks into a field office and says I want 22 this, Gulf Power has in its hands the desire of a 23 customer to have either the surge device for a 24 residential customer or for commercial customers. What 25 happens then? FLORIDA PUBLIC SERVICE COMMISSION 72 1 A. They are enrolled. They are set up. Their 2 account is set up for this product or service. Not 3 service, the product. The two products, commercial and 4 premium. 5 Q. Okay. Who installs the device that they want 6 to participate in? 7 A. We have a contractor that we -- that that 8 business unit has hired, and that contractor does the 9 installation. 10 Q. So no Gulf employee drives to the 11 establishment to install this device? 12 A. No, it's done by the vendor. 13 Q. So the request from the customer is received 14 and handed off to a contractor? 15 A. Yes. 16 Q. Okay. Now, several times you've talked about 17 this one employee who oversees this activity. What is 18 that job title? 19 A. He is a -- I think his title is actually 20 program manager, is actually his job title. 21 Q. And since that is only part of his job duties, 22 what else does he do? 23 A. He is the program manager for some of our DSM 24 programs. Refrigerator recycling is one of the programs 25 he helps manage. FLORIDA PUBLIC SERVICE COMMISSION 73 1 Q. And you say he charges the time involved in 2 the nonregulated to the -- 3 A. Nonregulated accounts. 4 Q. Below-the-line accounts? 5 A. And then he charges his other time appropriate 6 to the program that he is working on. 7 Q. Now, the amount of time that he charges to 8 this particular program, is that a fixed amount or does 9 it vary with the level of the activity in some fashion? 10 A. There is a fixed -- we call it a fixed 11 distribution setup that is reviewed periodically to make 12 sure that it's appropriate. He tracks his time, as do 13 most of the employees in customer service and 14 information that are field employees, because we have to 15 charge appropriately to the ECCR accounts. There's 16 processes in place to ensure we are charging the correct 17 labor to the correct program. 18 Q. So it's fixed until the point at which Gulf 19 reviews it and decides some adjustment is necessary to 20 move forward? 21 A. That's correct. If there's a change in the 22 time being spent, they are -- in a certain time of the 23 year, they will be -- like when he was working on the, 24 we were launching the refrigerator recycling program on 25 June 1st, he was almost full-time on that program. So FLORIDA PUBLIC SERVICE COMMISSION 74 1 we keep up with the amount of time it is taking so we 2 can track the programs. We have done that for years. 3 And the Commission has come in and audited us, and taken 4 day-timers and tracked it all the way through. And we 5 have always gotten good marks for our ability to keep up 6 with our employees' time and appropriately charge it. 7 Q. When this part of a person is overseeing the 8 nonregulated activities physically, what does he do when 9 he is involved in that? 10 A. The types of things that he will end up doing 11 is if there's a customer that has had a claim, he will 12 process the claim, and ensure they get paid 13 appropriately with the third party. There is a 14 third-party vendor that warrants these products. So if 15 there has been a lightning strike, he sends -- there is 16 another vendor that does the installation and the 17 checking, the on-site checking of the surge equipment. 18 It will show whether there has been a strike or not, 19 whether did it come through the phone, did it come 20 through the cable, did it come through the satellite 21 dish, did it come through the meter. 22 So there is a -- he tells the third-party 23 vendor to go to the house, we have gotten a claim 24 request. And then if, in fact, there has been a 25 lightning strike, then he coordinates with the customer FLORIDA PUBLIC SERVICE COMMISSION 75 1 or contacts the third party if they are due a claim. He 2 makes the decisions about the direct mail pieces. When 3 they are going to go, he schedules those being mailed 4 out. Any issue with it, he handles it. 5 Q. The direct mailouts, are those prepared and 6 mailed by Gulf Power or somebody else? 7 A. It's a combination. Some of it is printed. I 8 believe a third-party does the stuffing. In fact, I 9 know it is the Pollock or ARC Group that does some of 10 that. We contract with that. I believe the printing 11 actually is done by our printing services, and they are 12 charged, this position is charged. But we use a third 13 party to do the stuffing and the mailing. 14 Q. Are these direct mailouts specific to the 15 nonregulated products and services, or are there times 16 in which a direct mailout will cover both regulated and 17 nonregulated products and services? 18 A. It just covers the unregulated product. 19 Q. And you mentioned that the costs are charged 20 in some fashion. Can you describes how that's done? 21 A. When the calls come in about the programs to 22 the customer service center? 23 Q. The costs of the advertisements themselves. 24 A. Oh, the costs. Yes, there is an invoice 25 rendered to the -- in essence, an invoice rendered to FLORIDA PUBLIC SERVICE COMMISSION 76 1 the unregulated product and service by the regulated 2 department. They present them, basically, with a bill, 3 and then they pay it. It's charged, if you will, to 4 their account, and they can identify the cost of the 5 paper, the time, all of that is just like they charge 6 the regulated products, they pay as well for any direct 7 mail. 8 Q. Now, I think earlier we were discussing a 9 situation in which the customer service representative 10 at the call center receives the call from a customer, 11 presumably on a regulated matter, and either in response 12 to something that the customer says or as a result of 13 the opportunity presenting itself to the representative, 14 the conversation turns to this nonregulated subject. Is 15 any portion of the compensation or other costs of the 16 customer service representative either charged or 17 reallocated to the nonregulated operations? 18 A. Yes. 19 Q. Okay. How is that accomplished? 20 A. They actually do a journal entry and charge 21 for labor in the call center. 22 Q. Is that on a transaction-by-transaction basis, 23 or is some -- 24 A. There are some assumptions in there that the 25 managers over the call center have determined that it's FLORIDA PUBLIC SERVICE COMMISSION 77 1 going to be -- they have some metrics and some ways to 2 sort of sample that and get a basis to use that to 3 charge it. It's a very conservative estimate. In my 4 opinion they charge more than they actually spend, but 5 we want to make sure that we are adequately charging and 6 appropriately charging, and so they err on the high side 7 and charge the unregulated business unit. 8 Q. Let's talk about the AllConnect for a minute. 9 In your testimony you say that the customers -- or the 10 representative offers to transfer the customer to the 11 AllConnect at no cost to the customer. Who does incur 12 the cost in that situation? 13 A. I'm not sure I understand. 14 Q. Is Gulf Power compensated for the service it 15 provides through AllConnect? 16 A. The AllConnect business unit pays some of the 17 time of the customer service representative. The time 18 it takes, and there is an estimate of how long that 19 takes to talk to a customer. So that labor and 20 benefits, overhead associated with those minutes are 21 charged to the AllConnect program. 22 Q. If the customer calls in and the 23 representative says, "If you're interested, I can 24 transfer you to AllConnect." And the customer says, 25 "Okay." What happens then? FLORIDA PUBLIC SERVICE COMMISSION 78 1 A. At the end of everything else that the 2 customer service representative is doing with the 3 customer, he or she will usually say, "After we're 4 finished here, I will transfer you over." And then she 5 transfers them to the AllConnect call center, I guess, 6 is what they are, and then the customer can discuss with 7 them what their needs are around additional services. 8 Q. Does the representative say, "And I am now 9 going to transfer you," or is there some question to the 10 customer that allows the customer to decide whether to 11 be transferred? 12 A. Oh, absolutely, yes. The customer must say, 13 "I would like to be transferred." 14 Q. Okay. 15 A. Sometimes the customers take the number down 16 and call back at a later date to AllConnect. 17 Q. And what entities participate in AllConnect? 18 A. I'm sorry, say again. 19 Q. Which entities participate in AllConnect? 20 A. I do not know what their current offerings 21 are, but in the past it has been cable providers, I 22 believe telephone. I know cable providers have been one 23 of the services that the customer could find out about. 24 I was listening in on a call with a customer service 25 representative, and it was a customer coming from FLORIDA PUBLIC SERVICE COMMISSION 79 1 Wisconsin who had rented an apartment. Military; sight 2 unseen. And he asked her who provides -- she was 3 finished. She actually didn't offer to him AllConnect. 4 But she said, "Is there anything else I can help you 5 with today?" And he said, "Yes, who provides the cable 6 service?" And so she said, "Well, actually, I can 7 connect you with a service that would help you find 8 that." So I know the cable is still being offered, or 9 she wouldn't have said that to him. He took the number 10 down and was very happy with it. 11 We have a lot of military in our service 12 territory and they are usually renting sight unseen. 13 And, you know, they are trying to get all of that hooked 14 up. It's a service for them to be able to sort of 15 one-stop shopping be able to figure out who they want to 16 contact for cable and phone and water and things like 17 that. 18 Q. And so that I'm clear on this, I believe you 19 said that some portion of the time of the customer 20 representative is charged to or allocated to the 21 AllConnect? 22 A. We make the assumption on every new connection 23 some time is offered. We know customer service reps are 24 not offering it on every new connection, but we charge 25 the unregulated business unit as though it is. Again, FLORIDA PUBLIC SERVICE COMMISSION 80 1 to be on the high side of what we're charging them. 2 Q. But it's on the basis of time as opposed to 3 whatever success rate the other entities may or may 4 not -- 5 A. Absolutely. It's based on -- we're making the 6 assumption that it is going to take so many minutes 7 every single new connection, and we are charging 8 AllConnect business unit -- not AllConnect, the company, 9 but AllConnect business unit a portion of every CSR's 10 time for every single connection, whether she or he 11 transfers them to them or mentions it or not. 12 Q. I see. Now, you referred to the AllConnect 13 business unit. Is that an organization within Gulf 14 Power? 15 A. No, it's just the -- it is one of the three 16 products and services. There's a series of accounts 17 that we track the costs and the revenues, so that time 18 is journaled over to the AllConnect program accounts as 19 an expense for them. 20 Q. When the customer service representative 21 transfers the customer to AllConnect, is the person who 22 takes that call a Gulf Power employee? That's what I'm 23 trying to get clear in my head. 24 A. No, that is the third party. That's 25 AllConnect. FLORIDA PUBLIC SERVICE COMMISSION 81 1 Q. That's the third party? 2 A. I think that's the name of the company is 3 AllConnect. They receive that call, and we are done at 4 that point with any of our time, any of our employees' 5 time. 6 Q. And the amount that is billed to AllConnect, 7 is that the result of a contract negotiated between Gulf 8 Power and the AllConnect business? 9 A. Now, the time that -- the customer service 10 representative's time that we charge to the AllConnect 11 program, we do that ourselves. We determine that 12 ourselves, what is the appropriate amount to charge 13 based on our estimation of how long it took. 14 Q. Okay. 15 A. What happens after we transfer the -- for 16 every transfer we are compensated by AllConnect, for 17 every customer we transfer to them. I believe we have 18 answered that in an interrogatory how that works. 19 Q. Okay. And this may be in the answer also, but 20 that compensation per transfer, is that the result of a 21 negotiated contract? 22 A. It is a contract. I'm not sure. I wasn't 23 involved in the setting of it up, so I don't know if 24 they negotiated it or if it was just what they 25 standardly offer. FLORIDA PUBLIC SERVICE COMMISSION 82 1 (Recess.) 2 MR. McGLOTHLIN: We are back on the record. 3 BY MR. McGLOTHLIN: 4 Q. Ms. Neyman, I want to refer you now to your 5 Rebuttal Testimony, Page 3 and 4. And, again, this 6 covers some of the same ground that staff's questions 7 addressed. And, specifically, in response to 8 Ms. Dismukes' statement and testimony that there are no 9 overhead costs allocated or assigned to the premium 10 surge or commercial surge products, you say that she is 11 mistaken. And then you cite with respect to the surge 12 products, certain responses to our POD Number 136, and 13 with respect to AllConnect you refer to some responses 14 to our POD Number 137. And, as you are aware, those 15 responses were lengthy and somewhat voluminous. 16 Recently, I told your counsel that during the 17 deposition we were going to ask you to point to specific 18 portions of those responses to which you referred here. 19 Have you had an opportunity to identify the specific 20 portions that you are referring to in these answers on 21 Pages 3 and 4 of your rebuttal? 22 A. Yes. The POD Number 136, it's on pages -- I'm 23 sorry, Bates Pages 1 through 25. It's at the bottom. 24 And that's involving the occupancy overheads 25 documentation, the journal report that shows -- so you FLORIDA PUBLIC SERVICE COMMISSION 83 1 will go through Bates Page 25. 2 Q. Okay. I have what I believe to be the 3 occupancy document that is part of 136. And if you have 4 your copy, I want to be careful not to tread on anything 5 that's confidential, but you refer to Pages 1 through 6 25. Can you direct me to specific line items or entries 7 that represent allocation of overheads related to the 8 surge products? 9 A. Yes. You want to look at Page 1, Bates Page 10 1, you will see right below the black that's marked 11 through, you will see description, premium surge 12 warehouse occupancy. 13 Q. I see that. 14 A. And look to the far right and you will see a 15 debit. Under the debit column, you will see $228.08. 16 Q. Yes. 17 A. And that is charging the premium surge account 18 numbers for warehouse occupancy, which is an overhead. 19 And right below that is a $25.35 charge for commercial 20 surge. And then there is a credit to the account that 21 is the regulated side of the business for these 22 overheads related to warehouse occupancy. 23 Q. Okay. Let's stop there and focus on what you 24 have identified so far. What is warehouse occupancy? 25 What service or what physical attribute does that refer FLORIDA PUBLIC SERVICE COMMISSION 84 1 to? 2 A. The hardware for these two programs is stored 3 in our warehouse, so there is building and grounds kind 4 of costs associated with the facilities that are made up 5 of -- that make this up here. So the equipment is 6 stored there and our vendor comes, the installation 7 vendor, comes to the warehouse to pick it up. 8 Q. The warehouse, that's used for both regulated 9 and nonregulated things? 10 A. That is correct. 11 Q. Okay. And the entry of $228.08 is being 12 charged to the nonregulated portion? 13 A. Correct. 14 Q. And how is that value derived? How is that 15 calculation made? 16 A. It is done on a square footage type 17 allocation, a percentage of total square footage. That 18 is typically how we identify the cost, unless there is 19 some other, you know -- that is typically how we 20 allocate warehouse cost is based on square footage. 21 Q. Okay. And Gulf Power regards this portion of 22 the warehouse as an overhead? 23 A. Yes. I mean, it's a -- to the premium surge 24 program it is an overhead. 25 Q. Okay. Let me ask you this before we go any FLORIDA PUBLIC SERVICE COMMISSION 85 1 further. How do you define overhead? In your view, 2 what is encompassed or included within the term overhead 3 as we are discussing it today? 4 A. Anything that is not directly related to the 5 cost of the goods. In other words, the equipment itself 6 is a direct cost, or direct labor to install. Those are 7 not -- those are not overheads. 8 Q. Okay. All right. So far you have identified 9 an allocation of warehouse storage as one overhead 10 that's a portion of which is allocated to the surge 11 products. What other overheads are allocated? 12 A. They have labor-related overheads that are 13 charged to the program. 14 Q. Is that within the same occupancy document, or 15 is that something else? 16 A. No, there is another -- I believe it's in the 17 137. It's 136 we are in. 137 -- 18 Q. Excuse me, before we turn to another document, 19 let me just follow up with this occupancy. So far we 20 have been talking about Page 1, and you have referred me 21 to Pages 1 through 25. Are these similar allocations 22 done for different time periods, or what is the 23 difference? 24 A. I'm sorry. Yes, they are. 25 Q. Okay. Is there anything else within this FLORIDA PUBLIC SERVICE COMMISSION 86 1 occupancy document that is in the nature of overheads 2 allocated to nonregulated products? 3 A. I think they are all space related, space 4 allocations. Yes, these are all -- 25 of these pages 5 have to do with that. Let me flip back to the back and 6 make sure. Yes. 7 Q. And if you know, if you can glean without 8 spending a lot of time on it, what time frame is 9 encompassed within this particular 25-page document? 10 A. I've already explained that. It is 2010 and 11 projected 2011. (Pause.) These are by month. The 12 month number has the year first, and then the month is 13 next. So it is 2010. Twelve is the December journal 14 entry for 2010. 15 Q. Okay. 16 A. The top is a month number. I see 2010, also. 17 These are all 2010. These were all 2010 historical 18 year. 19 Q. And without asking you to divulge any 20 confidential information and speaking generally, what is 21 the nature of the information that has been deleted on 22 this document? 23 A. I think it was other journal entries that did 24 not pertain to the premium or commercial surge. 25 Q. Okay. FLORIDA PUBLIC SERVICE COMMISSION 87 1 A. But I don't -- I never reviewed it before it 2 was -- 3 MR. McGLOTHLIN: Since it has been redacted, I 4 don't think there's any difficulty in making this an 5 exhibit to the deposition. 6 (Exhibit Number 5 marked for identification.) 7 MR. McGLOTHLIN: We will call this Warehouse 8 Occupancy Calculation. 9 BY MR. McGLOTHLIN: 10 Q. To what other portions of 136 and 137 did you 11 refer in your testimony, Ms. Neyman? 12 A. 137. There's no Bates pages on the schedule. 13 MR. GRIFFIN: These are documents that were 14 taken from electronic files that we produced in response 15 to OPC POD 137, so they do not have Bates stamps on 16 them. The first two pages came from an electronic file 17 that we produced in response to 137 entitled 2010 CSC, 18 AllConnect costs report .XLSX. And then the second page 19 of this two-page document came from a separate 20 electronic file. That file was titled 2011 CSC 21 AllConnect costs report .XLS. 22 MR. McGLOTHLIN: I think I have those, so give 23 me a moment so we can get on the same page. Okay. Is 24 either of these pages confidential? 25 MR. GRIFFIN: I don't believe so. I don't FLORIDA PUBLIC SERVICE COMMISSION 88 1 know whether they were subject to the motion for 2 temporary protective order. I don't have a copy of that 3 in front of me, but I do not believe that these 4 documents are confidential. 5 BY MR. McGLOTHLIN: 6 Q. Okay. Let's begin with the 2010 CSC 7 AllConnect cost report. Can you direct me to entries on 8 this page that illustrate allocations of overhead to the 9 nonregulated products or services? 10 A. Now, tell me which one are you looking at? 11 Q. 2010 CSC AllConnect cost report. 12 MR. GRIFFIN: Can we see your page just to 13 make sure? This is the same document. 14 THE WITNESS: Okay. Okay. I'm looking for 15 that title, though, on here. 16 MR. GRIFFIN: Well, the title at the very top 17 left is Gulf Power connection costs, and then to the 18 right of that it says December 2010. 19 Can we go off the record for a second? 20 (Off the record.) 21 MR. McGLOTHLIN: Let's go back on the record. 22 BY MR. McGLOTHLIN: 23 Q. And to establish first that we are talking 24 about the same document, I'm looking at a one-page 25 document, and in the upper left-hand corner the caption FLORIDA PUBLIC SERVICE COMMISSION 89 1 says Gulf Power connection costs. The date is 2 December 2010. And underneath the date is the phrase, 3 new overhead rates effective 3/1/10. Do you have that 4 same document in front of you? 5 A. Yes. 6 Q. Now, do I understand correctly that you are 7 referring to this page when you assert in Rebuttal 8 Testimony that overheads have been allocated to 9 nonregulated products and services? 10 A. Yes. 11 Q. Can you point me to the entries on this page 12 that demonstrate that? 13 A. Yes. You see at the bottom where it says Gulf 14 Power connection costs. You will see a line that says 15 overheads. January 2010, it's $133.74. 16 Q. I see that. 17 A. That is the resulting charge, and there's also 18 one further on down, it's overheads that -- the first 19 overhead that I was referencing, $133, that had to do 20 with the CSRs labor. There is another overhead line, 21 and it has to do with supervisors labor. 22 Q. Okay. Where do you see an indication that 23 133.74 relates to the CSRs labor? Is that depicted on 24 the page somewhere? 25 A. Well, I actually just know that that is the FLORIDA PUBLIC SERVICE COMMISSION 90 1 overhead associated with the labor that is shown above 2 it. You can see up in the box, you will see -- 3 Q. It's CSR labor, and then the next line is 4 overhead. All right. 5 A. And then up in the box it shows you the 6 alphabet soup there. It sort of shows you how we 7 calculated those. 8 Q. When you say up in the box, you mean -- 9 A. In this part right here. In the center part 10 of the page there is a box around, and it has -- it 11 references at the top you will see we have assigned an 12 alphabet to various pieces of information, and then in 13 the box we use those to calculate overheads. You'll see 14 about halfway down the box there is CSR cost, labor, 15 overheads. 16 Q. Yes. 17 A. And that is derived by taking H times C, where 18 H is the total time and C is the CSR cost per minute 19 overhead. 20 Q. I'm looking for the alphabet to which you 21 refer. I see A, B, C, D, and E. 22 A. H is actually in the box down below. 23 Q. Okay. 24 A. The F, G, H, I, J, K are all defined in the 25 inside of the box. FLORIDA PUBLIC SERVICE COMMISSION 91 1 Q. All right. And can you walk me through the 2 calculation that takes place in the box, and that that 3 results in the overhead, for instance, of CSR labor 4 being 133.74? 5 A. Yes. Let me take a piece of paper here so I 6 can make sure I get it straight. Let's use the 133.74, 7 January 2010. Let's back into that, which would be -- 8 inside the box you will see CSR cost, labor, overheads, 9 which is H times C. And for January that is 226.5, CH 10 is 706, C is .333. Actually, I haven't done this 11 calculation for one of these months myself. Give me a 12 minute and let me calculate it myself, and then I can 13 make sure I'm directing you correctly. 14 (Off the record.) 15 MR. McGLOTHLIN: Back on the record. 16 THE WITNESS: If you take the .333 at the top, 17 which is the first C, it says CSR cost per minute 18 overhead. 19 BY MR. McGLOTHLIN: 20 Q. I see that. 21 A. Okay. It's .333. You multiply that times, if 22 you go inside the box, you will see CSR costs, labor, 23 overheads. I'm sorry, backup. H, you will see it is H 24 times C. The H is above total time in minutes, which is 25 706 minutes. So 706 is multiplied times .333. So H is FLORIDA PUBLIC SERVICE COMMISSION 92 1 multiplied times C, the first C, and you get the line 2 that says cost, labor, overheads, which is 226.50. 3 Q. I follow. 4 A. Okay. Now, that is actually -- you tie that 5 number back below when you add together overheads and A 6 and G. 7 Q. All right. The total time, is that the total 8 number of minutes that CSR is devoted to the 9 nonregulated activity in the time frame covered? 10 A. Yes. That is which alphabet? That is the H. 11 Q. Yes. 12 A. Yes. 13 Q. And the CSR cost per minute overhead, what 14 overhead is involved in that? 15 A. For AllConnect. This is for AllConnect. 16 Q. Yes, I understand. 17 A. I'm sorry. 18 Q. Did I misspeak a minute ago? I meant to say 19 AllConnect. CSR cost per minute overhead, what is 20 included in that, the .333? 21 A. That would be benefits, labor-related 22 overheads. 23 Q. Okay. All right. And do I understand 24 correctly that this page refers or applies to the 25 AllConnect nonregulated service? FLORIDA PUBLIC SERVICE COMMISSION 93 1 A. Yes. 2 Q. And what about the other document, again, 3 captioned Gulf Power connection costs, but dated 4 June 2011? Is that also related to AllConnect? 5 A. Yes. 6 Q. Is it similar to the first one, but it covers 7 a different time frame? 8 A. Yes. 9 MR. McGLOTHLIN: I would like to mark these 10 two documents as a single exhibit to the deposition. It 11 would be Number 6, calculation of AllConnect overheads. 12 (Exhibit Number 6 marked for identification.) 13 BY MR. McGLOTHLIN: 14 Q. Are there any other portions of the responses 15 to 136 and 137 that contain examples of overheads 16 allocated to nonregulated products and services? 17 A. I'm sorry, would you repeat the question? 18 Q. Yes. Are there any other portions of the 19 responses to our PODs 136 and 137 that include 20 additional allocations of overhead to nonregulated 21 products and services? 22 A. Yes. The pages that you will see in that POD, 23 they'll have at the top premium surge and commercial 24 surge. They look like this. 25 Q. Give me a moment. Premium surge equipment FLORIDA PUBLIC SERVICE COMMISSION 94 1 invoice? 2 A. No, it doesn't have a title. On one column, 3 Column 1 it just says premium surge, and it will have a 4 date, and then it will say commercial surge. There is 5 one for every month covering the time period. 6 MR. GRIFFIN: Well, I was just going to 7 clarify that these documents are also produced in 8 electronic format, so there is no Bates stamp, 9 obviously, but they were produced in file number or file 10 titled P-R-E-M and C-O-M-M surge CSC, ampersand, CSS 11 billing monthly journal 10-11.XLS. 12 MR. McGLOTHLIN: I believe I have that in a 13 different format. 14 (Off the record.) 15 MR. McGLOTHLIN: Okay. Let's go back on the 16 record. 17 BY MR. McGLOTHLIN: 18 Q. Ms. Neyman, you have referred me to documents 19 captioned premium surge and commercial surge as other 20 examples of instances in which overhead has been 21 allocated to nonregulated products. Do I understand 22 correctly that these pages contain similar information 23 but for different time frames? 24 A. That's correct. Each sheet is a different 25 month. FLORIDA PUBLIC SERVICE COMMISSION 95 1 Q. Okay. Let me ask you to use the month -- with 2 respect to premium surge, can you use the month of 3 7-1-2011 as an example and demonstrate what is being 4 depicted here? 5 A. Yes. Premium surge 7/1/2011. I have that in 6 front of me. 7 Q. What information is disclosed on that page? 8 A. It shows the number of calls received during 9 the month. In this case it's 10. It shows the time 10 that was involved -- well, per call offer time 3.28 11 minutes for a total of 32.8 total minutes. Then there 12 is -- the next line down is CSR labors cost per minute. 13 The next line is overhead cost per minute. And then A&G 14 cost per minute. And then it's telephone cost. Then 15 the number of bills. Then you see where they are 16 charging the debit, DR and CR is showing that they 17 charged the premium surge program for CSR labor of 18 $8.81, labor overhead of $6.84, A&G overhead of $5, 19 telephone charges of $9.84, and then the CSS, which is 20 the billing system, $753.36. 21 Q. What is included in A&G overheads, if you 22 know? 23 A. I do not know what is included in A&G 24 overheads. 25 MR. McGLOTHLIN: Let me ask you to answer that FLORIDA PUBLIC SERVICE COMMISSION 96 1 in Late-filed Exhibit Number 7. And a short title would 2 be "Components of A&G Overheads Allocated to Premium 3 Surge." 4 (Late-Filed Exhibit Number 7 marked for 5 identification.) 6 BY MR. McGLOTHLIN: 7 Q. Okay. You were walking through the items, and 8 can you give me an overview of the type of calculation 9 that is being made here and the result of it? 10 A. They are capturing the minutes -- the calls 11 during the month and the minutes associated with those 12 calls. And they are allocating overhead costs and A&G 13 overhead costs per minute to derive those amounts that 14 are shown below. There were ten calls during the month. 15 Q. And are similar calculations made for both the 16 premium surge and commercial surge? Is there any 17 difference in the methodology? 18 A. There is no difference in the methodology. 19 The volume is significantly less for commercial. In the 20 month of July there were zero calls. 21 MR. McGLOTHLIN: Let's mark the pages from 22 this document that cover the month of 7/1/2011 as 23 Exhibit Number 8. Any concerns about confidentiality on 24 this one? 25 MR. GRIFFIN: No. FLORIDA PUBLIC SERVICE COMMISSION 97 1 MR. McGLOTHLIN: And a short title will be 2 "July 2011 Overhead Calculations." 3 THE WITNESS: Do you want to say for premium 4 and commercial? 5 MR. McGLOTHLIN: Yes, "For Premium and 6 Commercial Surge." 7 (Exhibit Number 8 marked for identification.) 8 BY MR. McGLOTHLIN: 9 Q. Are there any other examples within these PODs 10 that fit the description of allocations of overhead to 11 nonregulated products and services? 12 A. No. The rest of these sheets are different 13 months illustrating that. 14 MR. McGLOTHLIN: Give me a minute. I think 15 we're about ready to wrap up here. 16 BY MR. McGLOTHLIN: 17 Q. I think this was implicit in an earlier 18 answer, but do you consider administrative salaries and 19 wages as an overhead cost? 20 A. Yes. 21 MR. McGLOTHLIN: Those are all the questions I 22 have. 23 Thank you, Ms. Neyman. 24 MR. GRIFFIN: I just wanted to go back -- 25 MR. YOUNG: Vicki? Ms. Kaufman, Vicki FLORIDA PUBLIC SERVICE COMMISSION 98 1 Kaufman? All right. 2 Major Thompson? Major Thompson? 3 Is there any other party on the line? 4 MS. ROBERTS: Arlisha Roberts is here. 5 MR. YOUNG: Pardon me? 6 MS. ROBERTS: Arlisha with staff is still on 7 the line. I think all the other parties may be gone. 8 MS. DODSON: Gulf is still here. 9 MR. YOUNG: Okay. Rebuttal? 10 MR. GRIFFIN: I just want to make sure one 11 thing is clear for the record, Ms. Neyman. 12 CROSS EXAMINATION 13 BY MR. GRIFFIN: 14 Q. During staff's questions they asked you a 15 number of questions about Schedule 4, Page 1 of 3 to 16 your Exhibit MDN-1; do you remember that? 17 A. Yes. 18 Q. And they noted that the call volume that is 19 projected for 2011 and 2012 is the same as the call 20 volume that was experienced in 2010. Do you recall 21 that? 22 A. Yes. 23 Q. If Gulf Power had projected a higher call 24 volume for 2011 or 2012, how would that impact the 25 full-time equivalents that Gulf Power -- the additional FLORIDA PUBLIC SERVICE COMMISSION 99 1 FTEs that Gulf Power is requesting in this case? 2 A. They would go up. 3 MR. GRIFFIN: That's all I have. 4 MR. YOUNG: Okay. Do you want to read? 5 MR. GRIFFIN: Yes. We'd like to read and 6 sign, please. Can we go off the record and talk about 7 the exhibits. 8 (Off-the-record discussion.) 9 MR. YOUNG: Thank you for your time. That 10 concludes our deposition. 11 (The deposition concluded at 1:15 p.m.) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION 100 1 ERRATA SHEET DO NOT WRITE ON TRANSCRIPT - ENTER CHANGES HERE 2 IN RE: DOCKET NO. 110138-EI 3 NAME: Margaret D. Neyman DATE: November 15, 2011 4 |PAGE|LINE|_________________CHANGE | 5 |____|____|__________________________________________ _| |____|____|_________________________________________ ___| 6 |____|____|___________________________________________ _| |____|____|_______________________________________________| 7 |____|____|_______________________________________________| |____|____|_______________________________________________| 8 |____|____|_______________________________________________| |____|____|_______________________________________________| 9 |____|____|_______________________________________________| |____|____|_______________________________________________| 10 |____|____|_______________________________________________| |____|____|_______________________________________________| 11 |____| ___|_______________________________________________| |____|____|_______________________________________________| 12 |____|____|_______________________________________________| |____|____|_______________________________________________| 13 |____|____|_______________________________________________| |____|____|_______________________________________________| 14 |____|____|_______________________________________________| |____|____|_______________________________________________| 15 |____|____|_______________________________________________| |____|____|_______________________________________________| 16 |____|____|_______________________________________________| |____|____|_______________________________________________| 17 |____|____|_______________________________________________| |____|____|_______________________________________________| 18 |____|____|_______________________________________________| |____|____|_______________________________________________| 19 |____|____|_______________________________________________| |____|____|_______________________________________________| 20 |____|____|_______________________________________________| 21 Under penalties of perjury, I declare that I have read my deposition and that it is true and correct subject to any 22 changes in form or substance entered here. 23 ___________ _________________________________ DATE Margaret D. Neyman 24 25 FLORIDA PUBLIC SERVICE COMMISSION 101 1 STATE OF FLORIDA ) 2 : CERTIFICATE OF OATH 3 COUNTY OF LEON ) 4 I, the undersigned authority, certify that 5 Margaret D. Neyman personally appeared before me and was 6 duly. Sworn 7 WITNESS my hand and official seal this 21st 8 day of November, 2011. 9 10 11 ____________________________________________ JANE FAUROT 12 Notary Public - State of Florida 13 14 15 16 17 18 19 20 21 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION 102 1 STATE OF FLORIDA ) : CERTIFICATE OF REPORTER 2 COUNTY OF LEON ) 3 I, JANE FAUROT, Official FPSC Commission Reporter, do hereby certify that I 4 was authorized to and did stenographically report the foregoing deposition at the time and place herein stated. 5 I FURTHER CERTIFY that this transcript, consisting 6 of 101 pages, constitutes a true record of the testimony given by the witness. 7 I FURTHER CERTIFY that I am not a relative, 8 employee, attorney or counsel of any of the parties, nor am I a relative or employee of any of the parties' attorney or 9 counsel connected with the action, nor am I financially interested in the action. 10 DATED THIS 21st day November, 2011. 11 12 ________________________________ JANE FAUROT, RPR 13 Chief, Hearing Reporter Services Office of Commission Clerk 14 (850) 413-6732 15 16 17 18 19 20 21 22 23 24 25 FLORIDA PUBLIC SERVICE COMMISSION