From: Robert Berman [mailto:bermaneconomics@gmail.com]

Sent: Sunday, November 06, 2011 8:21 PM

To: Corkran, Jerry L

Cc: Robert Berman; Christopher Bolduc; Richard Parker; rick.anderson@faypwc.com; tballo@earthjustice.org; ScottB@lvmetals.com; john.caskey@nema.org; jo hn.cymbalsky@ee.doe.gov; adelaski@standardsasap.org; Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; rgreeson@federalpacific.com; bruce.r.hirsch@bge .com; jhodge@howard.com; mhyland@appanet.org; dave.millure@metglas.com; snadel@aceee.org; wes.pa tterson@us.abb.com; Eric.Petersen@aksteel.com; Raymond.Polinski@atimetals.com; artrosenfeld@g mail.com; srosenstock@eei.org; rroy@nrdc.org; robert.saint@nreca.coop; chuck.simmons@ pgnmail.com; Daniel.Cohen@hq.doe.gov; greg.coulter405@gmail.com; Jim.creevy @nema.org; ahofmann@publicpower.org; pkumar@publicpower.org; jmauer@standardsasap .org; Meyers, Aaron; jrossetti@mlgw.org; Paul.Ryan@hitmet.com; jerry.schoen@aksteel.com; bsmith@federalpacific.com; mwaltner@nrdc.org; kwinder@mleainc.com; Brian Coffey; kcough lin@lbl.gov; brenda.edwards@ee.doe.gov; jeremiah.freeman@ee.doe.gov; Caitlin Johnson; Zh imei Luo; emily.marchetti@ee.doe.gov; Michael Rivest; gjrosenquist@lbl.gov; charlied@uus.org; phopkinson@hvolt.com; James.Lass@cleco.com; maheshsampat@bellsouth.net; DYoung@energy-soluti on.com; chad.kennedy@us.schneider-electric.com; eduardorobles@eaton.com; vijay.tendulkar@onyxpower. com; thomas.patzner@us.schneider-electric.com; carlosgsiqueiros@eaton.com; Raba, Jim Subject: Re: A Note on Pole Change Out Cost:



### I can't comment on expected pole life other than to ask some of the IOUs or EEI what the regulatory commissions speci fy on depreciation rules.

As far as a 7% cost of money is concerned, if anyone can tell me where I can invest in today's market at 7% (in something as safe as IOUs) I would truly be eternally grateful! You would go a long way to rescuing what's left of my retirement fund. The Fed sa ys that money cost is going to be quite low for several years to come; and has ple dged to keep it that way. I'd just pick whatever OMB's current guidance is. Not worth fighting that one way or the other.



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)
BermanEconomics@gmail.com

On Nov 6, 2011, at 4:40 PM, Corkran, Jerry L wrote:Knowing not too much about pole life, I would expect the poles will last about 60 years provided the

transformer weight and wind profile does not increase.

 Would some of the utility people who have knowledge about give us an estimate of the typical pole

life?

 Does the pole life vary across the country from the wet to the dry regions?

 Also the utility person is requested to comment about what is their cost of money.

 Is the 7% cost of money about right as we have suggested?

Regards,

Jerry Corkran

Jerry

From: Robert Berman [ mailto:bermaneconomics@gmail.com ]

Sent: Sunday, November 06, 2011 12:23 PM

To: Christopher Bolduc

Cc: Richard
Parker; rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@lvmetals.com ; john.caskey@nema.o

rg ; Corkran, Jerry
L; john.cymbalsky@ee.doe.gov ; adelaski@standardsasap.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; rgreeson@federalpacific.com ; bruce.r.hirsch@bge.com ; jhodge@howard.com ; m hyland@appanet.org ; dave.millure@metglas.com ; snadel@aceee.org ; wes.patterson@us.abb.com ; Eric.P

etersen@aksteel.com ; Raymond.Polinski@atimetals.com ; artrosenfeld@gmail.com ; srosenstock@eei.org ; rroy@nrdc.org ; robert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; BermanEconomics@gmail.com ; Daniel.Cohen@hq.doe.gov ; greg.coulter405@gmail.com ; Jim.creevy@nema.org ; ahofmann@publicpower.

org ; pkumar@publicpower.org ; jmauer@standardsasap.org ; Meyers,
Aaron; jrossetti@mlgw.org ; Paul.Ryan@hitmet.com ; jerry.schoen@aksteel.com ; bsmith@federalpacific.co

m ; mwaltner@nrdc.org ; kwinder@mleainc.com ; brian.coffey@navigant.com ; kcoughlin@lbl.gov ; brenda.e dwards@ee.doe.gov ; jeremiah.freeman@ee.doe.gov ; caitlin.johnson@navigant.com ; zhimei.luo@navigan

t.com ; emily.marchetti@ee.doe.gov ; mrivest@navigant.com ; gjrosenquist@lbl.gov ; charlied@uus.org ; ph opkinson@hvolt.com ; James.Lass@cleco.com ; maheshsampat@bellsouth.net ; DYoung@energysolution.com ; chad.kennedy@us.schneiderelectric.com ; eduardorobles@eaton.com ; vijay.tendulkar@onyxpower.com ; thomas.patzner@us.schneider

-electric.com ; carlosgsiqueiros@eaton.com ; Raba, Jim Subject: A Note on Pole Change Out Cost:



### Hi Chris,

A quick note on the nature of pole change-out costs, and to what extent efficiency increases are

cost-causitive.

Poles do not last forever. They have a limite d life. Indeed, many utilities are replacing / reinforcing older wood poles as part of a general infrastructure improvement program. Commonwealth Edison is currently replacing 15,000 poles for just this purpose, according to Terry Donnelly, the Exec. VP for Operations.

### While an increase in efficiency may hasten the change-out, under some conditions, it is not costcausative of a pole change -- only of moving that change forward in time. For example, if a pole required replacement this year anyway, and there was a more efficient transformer to be installed, one would not suggest the transformer was responsible for the change. More generally, if a pole change were required 10 years earlier than ot herwise due to a heavier transformer, the cost would be the time value of money over the 10 year period, not the full cost of the pole. This time value of money should subject to sharing for the likelihood of a joint pole cost sharing arrangement, and included at its exp ected value (as you are currently doing).

Hope this helps.



### Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)
BermanEconomics@gmail.com