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Item No: A-4

March 19, 2015

OAL Contributions to the 

Work of the Commission

I. Introduction

Good morning, Madam Chairman and Commissioners. The Office of Administrative Litigation, 

or OAL, appreciates this opportunity to address the Commission about our work in support of 

the Commission’s statutory obligation to assure just and reasonable rates and terms and 

conditions of service. Virtually all of OAL’s work is performed under the separation of 

functions rule, so today’s presentation necessarily is general in nature and does not discuss 

substantive matters or individual cases. 

OAL settles and litigates disputes that have been set for hearing by the Commission. These 

are usually tariff filings by utilities or pipelines, or complaints by customers, that raise 

complex issues about the rates utilities or pipelines charge, or the terms and conditions of 

service provided to their customers. We pursue outcomes that 

• produce just and reasonable rates; 

• are consistent with Commission policy; and 

• fairly reflect the interests of all stakeholders. 

We thank you for this opportunity to share with you and the public some information about 

our work, and look forward to any questions you may have. 
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Slide 2

Electric Cases Set for 

Hearing in 2014

Transmission

28.8%

Requirements

/trod

15.4%

RTO 17.3%

Ancillary 

Services

15.4%

ROE

15.4%

Hydro 1.9%

Interconnection 1.E

Distribution 4%

II. OAL BY THE NUMBERS 

In 2014, the Commission set for hearing and/or settlement procedures 52 electric cases, 6 

natural gas pipeline cases, and 5 oil pipeline cases – 63 cases in all. This slide focuses on the 

electric cases.

A. Electric 

Of the 52 new electric cases, 15 were related to transmission service and rates, 9 to RTOs, 8 

to requirements service or production, 8 to ancillary services, 8 to complaints about the rate 

of return on equity, and 4 to various other matters. 

B. Natural Gas and Oil Pipelines

The gas pipeline cases primarily were Natural Gas Act section 4 rate filings. Three of the five 

oil pipeline cases were complaint cases and the other two were rate filing investigations. 
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Slide 3

Active Cases in 2014

• On-Going Cases

In addition to the 63 new cases assigned in 2014, OAL continued work on another 63 cases 

that began in prior years. As this slide shows, electric matters comprise the majority of our 

cases. Of the 126 active cases last year, 100 were electric cases, 14 were natural gas 

pipeline cases, and 12 were oil pipeline cases. 
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Slide 4

Recent Trend in New 

OAL Cases

D. Workload Trends

This slide shows the trend of new cases in recent years. Following issuance of the Martha 

Coakley decision last year, we have experienced an increase in rate of return cases, largely 

from complaints that have been set for hearing. 
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Slide 5

Roles of OAL Staff

• Staffing

OAL Staff consists of (1) technical experts who conduct analyses and present evidence at 

hearings; (2) trial attorneys skilled in administrative litigation; and (3) litigation support and 

administrative staff. When the Commission issues a hearing order, OAL assigns Staff members 

to the case who have expertise in the specific topics indicated by the order. 
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Slide 6

Technical Staff Areas 

of Expertise

The next slide illustrates the areas of expertise of our technical Staff. These areas include 

finance, depreciation, accounting, engineering, economics, cost of service, and cost 

allocation and rate design. Many Staff members are cross-trained in more than one 

discipline, and the slide also indicates the variety of subjects we address in our cases. I’d 

now like to turn the presentation over to Chris Skorski to discuss how we go about our work.

III. HOW OAL WORKS 

A. Settlements

Thank you, Diane. One of OAL’s main functions is to promote settlement of complicated 

disputes in ways consistent with Commission policy. Settlements resolve cases more quickly 

than litigation, allow each party to gain from the process, and conserve the resources of the 

parties and the Commission. We analyze relevant data and Commission precedent and apply 

our knowledge and negotiation skills to present Staff recommendations and to help the 

parties, who often are working with a settlement judge, reach agreement. For parties with 

limited resources, OAL is a crucial source of information and expertise; for sophisticated 

parties, OAL’s independent analyses and advice provide valuable aid to achieving 

settlements. Typically, we help parties settle more than three-quarters of the cases that the 

Commission sets for hearing and/or settlement. 
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Slide 7

Settlements Savings

• Savings to Customers from Settlements

The Commission is responsible for ensuring that rates, terms, and conditions of jurisdictional 

service are just and reasonable and not unduly discriminatory or preferential. Consistent 

with that responsibility, OAL’s role is not to pursue the lowest rate in each case, but rather a 

rate that fairly reflects the needs of both the company and its customers.

Commission-approved settlements last year resulted in 338 million dollars in savings for 

customers in 2014 alone. These savings were comprised of 76 million dollars of refunds, or 

one-time savings, and 262 million dollars of forward-looking rate reductions, or annual 

savings, which will continue in 2015 and beyond. Cumulatively, for the six years from 2009 

through 2014, Commission-approved settlements have resulted in a total of 6.5 billion dollars 

of savings to wholesale customers. 

This bar chart is a bit busy, but by following its color key, one can see the benefits occurring 

in each year, including: 

• One-time savings in each year; and 

• Continuing annual savings from the previous years’ settlements that remain in 

effect during the subsequent year or years. 

To put the 6.5 billion dollar figure into context, rate reductions in settlements, on average, 

reduce filed rates by approximately 10 percent. The settlement rates thus balance the 
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companies’ needs for adequate revenue to provide service to their customers with the 

customers’ interest in avoiding excessive rates. 
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Slide 8

Litigation Process

• Hearing Order

• Discovery

• Testimony

• Hearing

• Initial and Reply Brief

• Initial Decisio

• Briefs On and Opposing Exceptions

• Commission Decision

C. Litigation

Not all cases settle. In such cases, our role changes from making proposals and being a 

facilitator and resource for the parties to being a litigator advocating specific outcomes—

outcomes that are guided by Commission policy and that fairly balance the companies’ and 

the customers’ interests. In this role, we engage in pre-trial discovery, file prepared direct 

testimony, and conduct cross-examination at the hearing. We strive to apply Commission 

policy to the facts and circumstances of the case, build a complete hearing record, and then 

file thorough briefs to assist the presiding judge and, on exceptions, the Commission. The 

colored boxes in this slide highlight the stages of litigation in which OAL is active. Ultimately, 

the Commission’s decisions provide OAL Staff with further guidance to apply in future cases. 

IV. HOW OAL WORKS WITH OTHER COMMISSION STAFF

For the most part, we work separately from the Commission’s advisory Staff, and the 

separation of functions requirements are carefully observed by all Commission Staff members. 

OAL’s expertise is at times called on in other contexts. Where appropriate under the rules, 

OAL Staff expertise is available to assist the Commission. 

This concludes OAL’s presentation. We would be glad to answer any question you may have. 
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Slide 9

Item No: A-4

March 19, 2015

OAL Contributions to the 

Work of the Commission