EXHIBIT 32

Case:17-03283-LTS Doc#:24535-32 Filed:06/12/23 Entered:06/12/23 21:36:46 Desc:

Exhibit AHG Ex 32 2023-06-01 Excerpted Scheider_FULL Page 1 of 9
1 IN THE UNITED STATES DISTRICT COURT

 FOR THE DISTRICT OF PUERTO RICO

2

 IN RE: THE FINANCIAL )

3 OVERSIGHT AND MANAGEMENT ) Case No. 17-BK-3283-LTS

 BOARD FOR PUERTO RICO, )

4 )

 AS A REPRESENTATIVE OF THE )

5 COMMONWEALTH OF PUERTO )

 RICO, ET AL., )

6 )

 Debtors. )

7 __________________________ )

 IN RE: THE FINANCIAL ) Case No. 17-BK-4780-LTS

8 OVERSIGHT AND MANAGEMENT )

 BOARD FOR PUERTO RICO, )

9 )

 AS A REPRESENTATIVE OF THE )

10 PUERTO RICO ELECTRIC POWER )

 AUTHORITY, )

11 )

 Debtor. )

12

13 *************************************************

14 ORAL AND VIDEOTAPED DEPOSITION OF

15 COREY ALLEN SCHNEIDER

16 JUNE 1, 2023

17 *************************************************

18

19

20

21

22

23

24

25

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Case:17-03283-LTS Doc#:24535-32 Filed:06/12/23 Entered:06/12/23 21:36:46 Desc:

Exhibit AHG Ex 32 2023-06-01 Excerpted Scheider_FULL Page 2 of 9
1 for ten years.

2 Q. And what is "SRP"?

3 A. System Remediation Program.

4 Q. Can you explain to me how PREPA

5 prepares a forecast -- a ten-year forecast of its

6 SRP capital expenditures?

7 A. I'm sorry. You said how PREPA

8 prepares them?

9 Q. I'm sorry. Let me -- I should have

10 said LUMA. Let me ask it again. Can you explain

11 to me the process LUMA undertakes to prepare

12 Capex forecasts, in general?

13 A. For which period of time? I think

14 the answer is different. Can you clarify that?

15 Q. Well, can you explain to me what you

16 -- what different periods of times would you be

17 referring to? Let's start there.

18 A. The immediate budget year and the

19 next following -- or the next two following

20 years, and then any periods after that.

21 Q. So let's start with for the immediate

22 budget year. What is LUMA's process for

23 preparing a Capex budget?

24 A. LUMA goes through detailed bottoms-up

25 preparation of Capex by program. And those are

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Case:17-03283-LTS Doc#:24535-32 Filed:06/12/23 Entered:06/12/23 21:36:46 Desc:

Exhibit AHG Ex 32 2023-06-01 Excerpted Scheider_FULL Page 3 of 9
1 done by the program brief owners and. That

2 information is then aggregated by my team into an

3 overall need to meet the system remediation

4 program timelines.

5 Q. And can you explain more what

6 specific information is being relied on to

7 determine the amount of capital expenditures

8 needed for the immediate period for the next

9 year?

10 A. I think that information varies by

11 system remediation program. The program brief

12 owners for those are responsible for their

13 individual Capex forecasts and the information

14 that those people rely upon would be individual

15 to those individual program briefs.

16 Q. So, for example, does it involve

17 looking at the state of particular assets in the

18 transmission and distribution system and when

19 they -- how much it will cost to repair them? Is

20 that an example of the information that's

21 considered?

22 A. Absolutely, but let's just be clear,

23 it is for meeting the objectives -- the

24 objectives of the individual system remediation

25 program and the Capex that is needed to meet the

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1 objectives of that individual program, rather

2 than a general Capex spend.

3 Q. Can you give me an example that

4 you're familiar with of how a particular program

5 goes about assessing its immediate Capex needs?

6 A. Sure. So our AMI program, we have

7 examined as a company the number of meters that

8 will need to be installed across all of our

9 customers, as well as the related telemetrics

10 that are needed to be installed and we forecasted

11 the amount of capital that would need to be spent

12 to buy those meters, install those meters, and

13 all of the related infrastructure.

14 Q. Is a similar process undertaken for

15 other programs assessment of their immediate

16 Capex needs?

17 A. For all of the system remediation

18 programs, the program brief owners are

19 responsible for that, yes.

20 Q. So, then, you said that the next type

21 of forecast is for two years out. Is that right?

22 A. The current year budget and then two

23 years out is what we spend more detailed time on,

24 yes.

25 Q. So for the two years out period, is

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1 the process the same as for the immediate period

2 or are there differences?

3 A. I believe it is all the same.

4 Q. I believe you said that, then,

5 there's forecasting for period past, I guess it

6 would be three years out through ten years. Is

7 that fair?

8 A. Just for the system remediation

9 program, correct, and the FEMA spend.

10 Q. For the system remediation program --

11 can we call that period from, I guess it would be

12 after three years through ten years, the

13 long-term forecast just to make it easier to talk

14 about?

15 A. Sure.

16 Q. So for this long-term forecast for

17 the -- for Capex needed for SRP, can you explain

18 to me how LUMA prepares that forecast?

19 A. I believe it's somewhat similar to

20 the short-term. However, there's an objective or

21 milestones that need to be met and the dollars

22 that are needed to be spent for those milestones.

23 And as you get farther out, the variability or

24 the preciseness of the Capex forecast will go

25 down just based upon obvious variables.

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1 A. They were separate at the time they

2 were ordered.

3 Q. Are they separate in the 2020 -- in

4 the fiscal year 2024 proposed LUMA budget?

5 A. When you say "separate," can you

6 please help me with that?

7 Q. Sure. Well, I'll move on from that.

8 Are there other PREB-ordered Capex expenditures?

9 A. Yes, but we haven't been able to

10 quantify some of them. So, for example, the EV

11 program or DG program, some Capex related to

12 those, to my knowledge.

13 Q. You mentioned -- after you mentioned

14 general maintenance Capex, you also said other

15 non-SRP Capex. Was there something in particular

16 you were referring to?

17 A. Yes. So there are other deficiencies

18 that have been identify by LUMA on the system

19 that don't meet the threshold of an SRP that will

20 still require Capex to remediate and fix the

21 system to bring it to a prudent utility standard.

22 Q. In preparing the SRP and FEMA Capex

23 forecasts that we've just been talking about,

24 does LUMA rely on comparisons to Capex

25 expenditures by other utilities?

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1 A. Not that I'm aware.

2 Q. Why doesn't it?

3 A. We're focused on the specific

4 improvements that are needed within the system

5 that we operate and the Capex that's required to

6 remediate those specific deficiencies.

7 MR. MAYRELL: Could we take a

8 five-minute break and then we can come back?

9 MR. INGERMAN: Sure.

10 THE VIDEOGRAPHER: All parties in

11 agreement with going off the record?

12 MR. INGERMAN: Yes.

13 THE VIDEOGRAPHER: We are going off

14 the record at 9:58 a.m.

15 (Break.)

16 THE VIDEOGRAPHER: We are going back

17 on the record at 10:07 a.m.

18 Q. (By Mr. Mayrell) Mr. Schneider, I

19 want to show you a document.

20 MR. MAYRELL: If the concierge could

21 pull up the document that is tab 3 and it was

22 previously marked in the earlier section of this

23 deposition as Exhibit 2. And it's the fiscal

24 year 2024 to 2026 LUMA budget.

25 Q. (By Mr. Mayrell) We'll try -- I

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1 position with respect to whose responsibility it

2 is to obtain matching funds for the federal

3 grants?

4 MR. INGERMAN: Objection. Form.

5 Scope. You can answer.

6 A. Yes, it does. The government of

7 Puerto Rico owns PREPA and it's either PREPA --

8 well, it's -- under FEMA block grants, it is the

9 recipient that needs to have the matched funding,

10 and that is either PREPA or the government of

11 Puerto Rico.

12 Q. (By Mr. Mayrell) Has LUMA suggested

13 that these matching funds should come from an

14 increase in rates?

15 A. Not that I'm aware.

16 MR. INGERMAN: Objection. Form.

17 A. Not that I'm --

18 MR. INGERMAN: You can answer.

19 A. Not that I'm aware.

20 MR. MAYRELL: Just a moment. Can the

21 concierge pull up Tab 11? And if the concierge

22 can remind what exhibit number we're on.

23 THE VERITEXT CONCIERGE: This is

24 Exhibit 3.

25 Q. (By Mr. Mayrell) Mr. Schneider, for

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