J&A_(19-057-02).pdf

Single Source Justification (Simplified Acquisition)

24 Jul 17 Page 1 of 2

Contracting Activity: 772ESS/PKD

Project/Program Name: IN THE MATTER OF THE APPLICATION OF DOMINION ENERGY UTAH TO

INCREASE DISTRIBUTION RATES AND CHARGES AND MAKE TARIFF

MODIFICATIONS

Purchase Request/Identification Number: TBD

Estimated Contract Cost (including Options): $80,000

Dominion Energy Utah (“DEU” or “Company”), filed for an increase in natural gas base rates of $19.2 million (5%) over present delivery-service rates. The preliminary assessment shows an estimated increase of approximately 58.4% annually for its transportation accounts.

Based on the initial review of DEU’s filing, we believe the requested Return on Equity (ROE) of 10.5% is excessive. The Company’s requested ROE is significantly above current market cost of equity capital for low-risk regulated utilities. Further, DEU proposes to move rates to full cost of service that includes Hill AFB in the TS rate category. DEU claims the TS class has been receiving rate subsidies and mitigation for over 30 years, and proposes no rate mitigation for the TS category. This position results in an over 58% increase for Hill AFB.

An evaluation of all filed pleadings, testimony, and data is necessary to determine if the rates proposed are non-discriminatory, accurately reflect the actual cost of providing the service, and are necessary under the circumstances. In addition, expert assistance in reviewing all filed and to be filed documents, drafting data requests and responses, testimony, cross-examination, briefs, and strategy is necessary for proper preparation of this case. The Contractor’s assistance will be needed in all phases of case preparation from this point until the conclusion of the case.

Brubaker & Associates Inc. (BAI) has been identified as the contractor who employs the experts that have been determined to have the required background, experience, and a track record for having their recommendations followed. Specifically, Michael P. Gorman has 35 years of experience in this field, has filed testimony in over 350 regulatory proceedings, starting June 1991, he started in the utility regulatory field in Sept 1990; was a consultant in August 1983; and is a Charted Financial Analyst (CFA). This experience and expertise in dealing with service rate increases and depreciation rates is necessary to assist the Government in the analysis, presentation, and defense of any claims or requests for adjustment to contract terms and conditions as a result of the anticipated litigation. BAI was chosen based on trial experience of the litigation attorneys of ULFSC. BAI has the most appropriate level of experience and reputation of any utility rate expert team with this level of technical expertise, experience, proven results, a working knowledge of government rates, and has filed testimony on behalf of the federal government multiple times. Their particular

Section A: General Contract Information

Section B: Description of the Supplies/Services Required

SectionC: Justification for Soliciting from a Single Source or Brand Name

Single Source Justification (Simplified Acquisition)

24 Jul 17 Page 2 of 2 expertise, opinion, reputation are what the ULFSC has chosen for this litigation. " 10 USC 2304 (c)(3) and FAR Part 6.302-3(a)(2)(iii) states that full and open competition need not be provided when it is necessary to acquire the services of an expert for litigation. Other experts of similar caliber were considered, but are not available due to conflict or prior commitments in this case.

The Government has reviewed other contract vehicles but has found BAI as the most suitable in regards to their background, experience, and track record along with their record in regards to litigation and no further research is required by the exception. Additionally, an explicit exception to full & open competition for the purchase of the services of an expert to support the Federal Government in any current or anticipated litigation or dispute is found in FAR Subpart 6.302-3(a)(2)(iii).

An explicit exception to full & open competition for the purchase of the services of an expert to support the Federal Government in any current or anticipated litigation or dispute is found in FAR Subpart 6.302-3(a)(2) (iii).

I have determined, in accordance with FAR13.106-1(b)(1), that the circumstances of this contract action deem only a single source is reasonably available.

Date 27 Sep 19

Typed Name and Rank/Grade of Contracting Officer GEORGE MASON-GS13

Signature of Contracting Officer

Section D: Efforts to Obtain Competition

Section E: Steps to Preclude Future Single Source or Brand NameAwards

Section F: Contracting Officer's Determination