1. Application of Northern Virginia Electric Cooperative PUE-2013-00055
For approval of pole attachment rates and terms and conditions under Section of the Code of Virginia

2. Section 56-466.1 Code of Virginia
F. The Commission is authorized to determine just and reasonable rates, and terms and conditions of service, excluding safety and debt collection, for attachments to electric cooperative poles by telecommunications service providers or cable television systems if, following good faith negotiations to do so, the parties cannot reach agreement thereon; however, the Commission shall not determine rates or terms and conditions for any existing agreement until it expires or is terminated pursuant to its own terms. The terms of an expired or terminated agreement shall continue to govern while good faith negotiations or Commission review pursuant to this section are pending. Such determinations shall be made in accordance with the following:
1. Just and reasonable pole attachment rates and terms and conditions of service to be determined by the Commission shall include, without limitation, rearrangement and make-ready costs, pole replacement costs, and all other costs directly related to pole attachments and maintenance, replacement, and inspection of poles or pole attachments, and right of way maintenance essential to pole attachments, provided however, that cost recovery for rearrangement, make-ready and pole replacement shall be addressed in terms and conditions, and shall not be included in annual rental rates;
2. In determining pole attachment rates, the Commission shall consider (i) any effect of such rates on the deployment or utilization, or both, of broadband and other telecommunications services, (ii) the interests of electric cooperatives’ members, and (iii) the overall public interest;
3. The Commission may develop and utilize alternative forms of dispute resolution for purposes of addressing disputes (i) arising under this subsection and (ii) falling within the scope of the Commission’s authority established hereunder;
4. The Commission is authorized to assess reasonable application fees to recover appropriate Commission costs of proceedings arising under this subsection; and
5. The Commission is authorized to develop, if necessary, rules and regulations, including a definition of good faith negotiations, to implement this section.

3. NOVEC Proposal
NOVEC’s proposed pole attachment rates and other specific requests are delineated in NOVEC witness Spinner’s direct testimony. Specifically, NOVEC is requesting the following:
• An annual base year charge (“BYC”) applicable to Comcast of $431,210 (lowered during interrogatories) reflecting 15,034 Comcast attachments on 13,946 poles;
• An increment/decrement based adjustment to the BYC in future years equal to the difference in a given year’s number of attachments from the base year level number of attachments multiplied by $26.71 per incremental attachment;
• An escalation factor applicable in future years to both the BYC and the increment/decrement rate per attachment based on the Handy-Whitman Index for Distribution Costs;
• A one-time charge, collectible in 2014, for each of NOVEC’s poles that currently support or historically supported an unauthorized attachment. The proposed charge is $ per pole with an unauthorized attachment or a total charge of $596,911. NOVEC represents that this one-time charge will settle any historic claims related to existing unauthorized attachments;
• A charge for any future unauthorized attachments of $ per attachment;
• A definition of a pole attachment as the communications or cable facilities attached to a NOVEC pole via a single bolt affixed to that pole by means of a single bolt hole. Additionally, NOVEC seeks that the terms and conditions will allow NOVEC to analyze and assure that the attachment will not compromise the reliable and efficient operation of NOVEC’s electrical delivery system;
• NOVEC requests that the rates and terms and conditions approved by the Commission in this proceeding have a term of at least five years but not to exceed ten years; and
• NOVEC requests that the Commission address existing violations of the National Electrical Safety Code (“NESC”) from Comcast attachments that are improperly affixed to NOVEC’s pole plant. Specifically, NOVEC requests that the Commission order that such violations be corrected at Comcast’s expense.
NOVEC’s proposed BYC and increment/decrement adjustment charges were developed using an incremental cost methodology developed by NOVEC. NOVEC also refers to this methodology as a “but for” costs approach.

4. NOVEC Cost Categories
NOVEC Proposed Rate $26.43

5. FCC Formula (Comcast)
Carrying charge includes maintenance expense, taxes and a factor for the rate of return
Using this formula the pole attachment rate is $8.93

6. Staff FCC Cable Rate Calculations

7. Summary of Proposed Rates

8. Issues
NOVEC’s Incremental approach vs. Comcast’s FCC approach vs. Staff’s FCC 2 approach
Number of poles and number of attachments (total number vs. wood only)
Actual costs vs. estimated costs (normal ratemaking needs known and certain costs)
Worker safety zone (40”) and usable space (Staff 1.8’ vs. FCC 1’)
5 year survey (how does the survey affect unauthorized attachments and safety violations?) Past surveys were not done in a timely manner.

9. Issues (Continued)
5’ taller poles installed as a rule, make-ready work or incremental?
How do attachments affect storm restoration and how are costs recovered? (ie.pay as you go or built into incremental pole attachment rates?)
Tree trimming costs, include in pole attachments rates? (NOVEC explanation and on-site demonstration) Staff did not agree with adding to Incremental costs but the FCC formula includes it.

10. Issues (continued)
Permitting process (expiration dates, communication, preventing future unauthorized attachments and safety violations)
Full time person assigned to joint use?
Joint use negotiations (cost recovery)

11. Contact Information
Jeff Dodson-Utilities Engineer
Division of Energy Regulation
State Corporation Commission
Commonwealth of Virginia
1300 East Main Street
Richmond, VA 23219
Office Phone