Contract analysis

From: George Trujillo <gtrujillo@calderwoodharkness.com> To: "Sandra K. Fenton" <sfenton@atpc-pipeline.com> Cc: Brett Callahan <bcallahan@calderwoodharkness.com> Subject: Re: Fourth Settlement Conference — Docket Nos. RP22-847-000/001 — Logistics and Agenda

Happy New Year. I hope you and the team at ATPC had a restful holiday season. I am writing to follow up on the scheduling of the fourth settlement conference before Settlement Judge Howard Margolis in the above-referenced dockets (RP22-847-000, the rate case proceeding, and RP22-847-001, the interconnection proceeding). As you know, it has been approximately six months since our third settlement conference on July 12

The fourth settlement conference is currently scheduled for **January 18, 2024**. We propose a start time of **10:00 a.m. EST**, subject to confirmation by Judge Margolis's chambers. The conference would be held at **FERC headquarters, 888 First Street NE, Washington, DC 20426**, in the settlement hearing room to be designated by the Judge's chambers. Should any of your attendees be unable to travel to Washington, we

I have set out below a proposed agenda for the conference. Please let me know if you would like to suggest modifications or additional items, and we will circulate a finalized agenda in advance of the session.

1. **Recourse Rate — Current Positions.** As the parties are aware, the gap between Ridgeline's redesigned tariff recourse rate of $0.3140/Dth and the ceiling of approximately $0.2560/Dth indicated by ATPC and the Mountainside Gas Producers Coalition remains the central unresolved issue. The approximately $0.058/Dth differential represents a significant spread, and we would like to use this session to explore whether

2. **Return on Equity.** Ridgeline's originally filed ROE of 14.00% has been under review in connection with the ongoing tariff redesign, and our client's revised analysis is trending downward from that figure. We anticipate being in a position to discuss the direction and magnitude of that movement at the conference. For reference, ATPC's answering testimony supported a 10.75% ROE, and the MGPC, through Dr. Eleanor

3. **Interconnection Cost Allocation.** This remains a significant sticking point. Ridgeline's position allocates the $22.3 million total interconnection facilities cost on a 34.1% / 65.9% basis ($7.6 million Ridgeline share, $14.7 million ATPC share), while ATPC has advocated a 50/50 split ($11.15 million each). We would like to discuss whether there is a framework — whether based on usage projections, capacity comm

4. **Load Factor Assumption.** Ridgeline has moved from the originally filed 100% load factor toward 75% in the tariff redesign. ATPC, the MGPC, and the Cumberland Municipal Gas Authority have each advocated for a load factor of 85% or higher. We anticipate a discussion of the factual and engineering bases for the parties' respective positions.

5. **Status of Tariff Redesign.** Ridgeline will provide an update on the progress of the tariff redesign being conducted with the assistance of Braswell Energy Consulting Group LLC, including the status of the 14 deficiency items identified in FERC's January 19, 2023 Deficiency Letter. As noted above, the current deadline for filing the redesigned tariff and supplemental testimony is February 23, 2024, under the sec

6. **Interconnection Metering Station Design — Wetzel County Interconnect.** We would like to receive an update on the status of the ongoing technical discussions between Ridgeline and ATPC regarding the metering station specifications at the Wetzel County Interconnect, including the ultrasonic flow meter configuration (3 runs, 12-inch), gas chromatograph specifications, SCADA integration requirements, and pig launch

7. **Other Matters.** Any additional items the parties wish to raise.

Could you please confirm ATPC's attendees at your earliest convenience? We anticipate that you and/or Marcus Alderman may attend on behalf of ATPC, along with Bill Pratt and any other representatives from Kellner, Royce & Dillard.

On Ridgeline's side, we expect the following attendees: James K. Winfield (CEO), Dr. Natasha Orlov (Director of Rates & Regulatory), and Angela Moretti (VP, Finance & Treasurer), along with Brett Callahan, David Stanton, and me from Calderwood & Harkness. Patricia Dunmore may also attend.

I have separately reached out to Rebekah Montague at Whitmore & Sable LLP regarding the MGPC's attendance and attendee list, and to Stephen Greer at Fordham Municipal Law Group regarding the CMGA's participation. I understand they will be coordinating with Calvin Dreyer at MGPC and Dennis Ott at CMGA, respectively, and I expect to hear back from them shortly.

To ensure a productive session, I propose that the parties exchange any updated settlement position papers or revised proposals no later than **Friday, January 12, 2024** — one week before the conference — so that all participants have adequate time for review. As you know, Ridgeline has previously circulated two settlement proposals: Version 1.0 (November 2022) and Version 2.0 (October 2023). Ridgeline may circulate

I would remind all parties and counsel that settlement communications remain privileged and confidential under the Commission's settlement rules (18 C.F.R. § 385.602) and the protective order in effect in this proceeding. Settlement position papers should be marked accordingly.

Please let us know whether ATPC and Kellner Royce prefer an in-person or hybrid format so that we can plan accordingly. Additionally, if it would be helpful for any of the parties to caucus informally before the formal session with Judge Margolis, we are happy to make Calderwood & Harkness's conference room available at our offices at 1601 K Street NW, Suite 900, Washington, DC 20006. The FERC building is a short dis

For our records, I have ATPC's principal office address as 2200 Penn Center West, Suite 300, Pittsburgh, PA 15276 — please let me know if any correspondence should be directed elsewhere.

Sandra, I recognize that meaningful distance remains between the parties on several key issues, but I am hopeful that this conference will provide an opportunity for candid dialogue and that we can make progress toward narrowing the gap. Settlement Judge Margolis has been patient and constructive throughout this process, and I believe all parties share an interest in exploring whether a negotiated resolution is achie

Please do not hesitate to reach out to me directly if you have any questions or would like to discuss any of the foregoing in advance of the conference.

**George Trujillo** Partner Energy & Infrastructure Practice Calderwood & Harkness LLP 1601 K Street NW, Suite 900 Washington, DC 20006 Tel: (202) 555-4180 Email: gtrujillo@calderwoodharkness.com