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Home My WebLink About20050118Rosborough Exhibits Part II.pdfCase No. PAC-05- Exhibit No. 14 Witness: Daniel J. Rosborough BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ACIFICORP Exhibit Accompanying Direct Testimony of Daniel J. Rosborough Pension Expense - Allocation & Reconciliation January 2005 Allocation of Fiscal Year 2004 and 2005 Expenses Fiscal Year 2004 Expense PacifiCorp Retirement Plan Bridger Coal Company 124 239 916 939 Glenrock Coal Company 258,745 177 073 Energy West 159 365 123 414 Subtotal Mjnes 542 349 217 426 Credjt Unjon 513 554 Enstor 601 774 PERCO 564 941 PFS 299 546 PPM 453 062 834 952 Subtotal Non-ReguJated 591 039 079 767 EJectric Operatjons 772 612 T otaJ 906 000 775 000 PacifiCorp Exhibit No. 14 page 1 of2 CASE NO. PAC-O5- Witness Daniel J. Rosborough Hewht Assodates 1/7 /2005 PacifiCorp Retirement Plan Electric Operations Reconciliation of Projected FY 2006 Expense to Actual FY 2005 Expense (millions) PacifiCorp Exhibit No. 14 page 2 of 2 CASE NO. P AC-O5- Witness Daniel 1. Rosborough Actual Fiscal Year 2005 Expense Impact oflower discount rate on service cost and interest cost 31.5 1.6Increase in interest cost due to additional benefit accruals during FY 2005 Impact of projected unfavorable asset return during FY 2005 and continued recognition of deferred asset losses Impact of projected increase in unrecognized net loss primarily attributable to the current and cumulative unfavorable asset experience Impact of projected increase in unrecognized net loss attributable to the lower discount rate Projected Fiscal Year 2006 Expense 48. Projection Assumptions - Discount rates: 6.25% for FY 2005 and 6.00% for FY 2006 - Expected long-term return on assets: 8.75% for FY 2005 and FY 2006 - Active participant increase of 250, based on actual 2003 hires - Pay increases of 4 - 4% rate of return on market value of assets during 2004 Case No. PAC-05- Exhibit No. Witness: Daniel J. Rosborough BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ACIFICORP Exhibit Accompanying Direct Testimony of Daniel J. Rosborough Defined Benefit Plan Comparison January 2005 PacifiCorp Exhibit No. 15 page I of2 CASE NO. PAC-E-O5- Witness Daniel J. Rosborough The following analysis compares the "value" ofPacifiCorp s defined benefit retirement program against the defined benefit retirement plans of a comparator list of companies. The companies included in the universe are: Arizona Public Service Cinergy Corp. DQE, Inc. Duke Energy Corporation Edison International Entergy Services, Inc. Northwest Natural Questar Corporation Reliant Resources, Inc. Salt River Proj ect Southern California Gas Company Southern Company The top bar in the illustration compares the value of the overall plan to the average value of the plans of the universe of companies. The second bar compares the plans again on the basis of the employer-funded value. For example, on the Defined Benefit Pension comparison, PacifiCorp s plan is 1.6% more valuable than the average plan. Because the plan is entirely company paid, the values are the same on both bases. PacltlCorp Exhibit No. 15 page 2 of2 CASE NO. PAC-O5- Witness Daniel J. Rosborough Retirement: Defined Benefit Pension Versus 11 Base Companies with Plans 100 Average Total Value 101. Employer-Paid Value 150 Ranking Among Plans in Study Employer- Paid Index Total Index First 114. Fourth Seventh Eleventh 114. 111. 102.1 59. 111. 102.1 59. Your Position Relative to the Base Companies Employer-Paid Value Total Value Index Ranking 101.6 7th/8th 101.6 7th/8th Hewitt Associates l(a)US34S8SV2002 Case No. PAC-05- Exhibit No. 16 Witness: Daniel J. Rosborough BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ACIFICORP Exhibit Accompanying Direct Testimony of Daniel J. Rosborough PacifiCorp Primary Health Plans - Record of Cost Increases January 2005 PacifiCorp Active Experience PacifiCorp Exhibit No. 16 page 1 of CASE NO. PAC-O5- Witness Daniel J. Rosborough All Active Employees Year Per Employee per National Trend National ChangeEnrollmentMonth (PEPM)Change lied to PEPM Trend 836 $374.N/A $374.N/A N/A 728 $391.47 $403. 182 $452.38 15.$433.10. 570 $488.$505.11.8%16. 605 $565.15.$555.13. 683 $593.5.1%$637.12.14. 58.70. Annual Cumulative (since 1999) $841,501 $841,501 ($1,153,425)($311,925) $933,779 $621,854 ($534,996)$86,858 $2,441,002 $2,527 861 Total Cost 1998 1999 2000 2001 2002 2003 1999-2003 $26,196,533 $26,908,221 $28,131,020 $26,801,450 $31,224 699 $33,362,776 Total experience savings amount for 1999: Total experience savings amount for 2000: Total experience savings amount for 2001: Total experience savings amount for 2002: Total experience savings amount for 2003: Active Electric Operations Year Total Cost Enrollment 1998 $19,017,495 251 1999 $19,113,446 108 2000 $20,961 159 002 2001 $21 097,755 738 2002 $24 622 509 720 2003 $26,617,049 827 1999-2003 PEPM $372. $387. $436.47 $470. $551.58 $579. Total experience savings amount for 1999: Total experience savings amount for 2000: Total experience savings amount for 2001: Total experience savings amount for 2002: Total experience savings amount for 2003: Annual $720,984 ($325,921) $790,190 ($763,036) $1,944 641 Change National Trend National ChangeApplied to PEPM Trend $372. $402.35 $429. $487. $534.49 $621. N/A 12. 17.3% 11ril~l. -='"' Cm;tulative (since 1999) $720,984 $395,063 $1,185,253 $422,217 366,858 N/A N/A9% 7. 10.8% 6. 11.8% 13. 13.6% 9. 12.8% 16.4% i"tl,I'JliJ PacifiCorp Electric Operations vs. National Cost Trend rFJ rFJ -+- Total Cos t Cos t Trend -- PEPM National Trend * .... ./".a. .,....../'./'./'./'../" 1998 200119992000 * Average national medical trend applied to PEPM costs.Year 2002 2003 I Includes HMO premiums, UHC paid claims, UHC expenses, UBH paid claims, and UBH expenses; includes COBRAIL TDILOA and non-regulated plans and excludes opt-outs 2 National trend weighted by product 700650600 ~ .... 550 0.. 0500 (1) U50 ~..c ..c .... .... 350 - g = ~~ E ~ ~ 200 ~ 150 ~ 00 Cl.c Hewitt Associates 03458137.xIs971l9Go 0412003 Case No. P AC- E-05- Exhibit No. 17 Witness: Daniel J. Rosborough BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ACIFICORP Exhibit Accompanying Direct Testimony of Daniel J. Rosborough Summary ofPacifiCorp Health Care Programs January 2005 PacifiCorp Exhibit No. 17 page I of2CASE NO. P AC-O5- Witness Daniel J. Rosborough The following analysis compares the "value" ofPacifiCorp s health care programs against a comparator list of companies. The companies included in the universe are: Arizona Public Service Cinergy Corp. DQE, Inc. Duke Energy Corporation Edison International Entergy Services, Inc. Northwest Natural Questar Corporation Reliant Resources, Inc. Salt River Project Southern California Gas Company Southern Company The top bar in the illustration compares the value of the overall plans to the average value of the plans of the universe of companies. The second bar compares the plans again on the basis of the employer funded value. On the comparison, using the arrow outlined in black (this arrow compares plans using a 92% company subsidy for PacifiCorp' s medical plan, which is the subsidy in effect during 2003), PacifiCorp s total healthcare plans are 98.7% of the average plan value. On the comparison of Employer Provided value (the second bar), PacifiCorp subsidizes approximately 4.1 percent more of the plan cost than the average company. The company is transitioning to a lower medical subsidy (900/0 of plan cost) over time, which will be complete in 2005. Using the gray arrow, the 900/0 subsidy, based on 2002 plan design, is shown as 98.7% for the overall plan and 101.8% for the company provided value. PacifiCorp Exhibit No. 17 page 2 of 2 CASE NO. P AC-E-O5- Witness Daniel J. Rosborough All Preretirement Health Care: Medical, Dental, Vision, and Hearing 100 Average 101.8 104. 106. Total Value Employer-Paid Value 150 Ranking Among Plans in Study Employer-Paid Index Total Index First 122.110. 103. 94.2 100.4 Fourth 107. 76.4 90.1 Seventh Eleventh Your Position Relative to the Base Companies Employer-Paid ValueIndex Ranking Total ValueIndex Ranking 106.5th/6th 99.7th/8th 104.6th/7th 98.7th/8th 101.8 6th/7th 98.7th/8th Current Medical Revised Med + 92% Subsidy Revised Med + 90% Subsidy Hewitt Associates US3458SV2002