BEFORE THE PUBLIC UTILITIES COMMISSION OF OHIO

Ohio Administrative Code Rule 4901-1-30 provides that any two or more parties to a proceeding may enter into a written stipulation covering the issues presented in that proceeding. This Amended Stipulation and Recommendation ("Stipulation") sets forth the understanding of the parties that have signed below (the "Signatory Parties"). The Signatory Parties recommend that the Public Utilities Commission of Ohio ("Commission") approve and adopt, as part of its Opinion and Order, this Stipulation which will resolve all of the issues in the above-captioned proceeding.

This Stipulation is a product of lengthy, serious, arm's-length bargaining among the Signatory Parties (who are capable, knowledgeable, and represented by counsel) with the participation of the Commission's Staff, which negotiations were undertaken by the Signatory Parties to settle this proceeding. This Stipulation was negotiated among all parties to the proceedings and no party was excluded from negotiations. This Stipulation is supported by

adequate data and information; as a package, the Stipulation benefits customers and the public interest; promotes effective competition and the development of a competitive marketplace; represents a just and reasonable resolution of all issues in this proceeding; violates no regulatory principle or practice; and complies with and promotes the policies and requirements of Chapter 4928, Revised Code. Although this Stipulation is not binding on the Commission, it is entitled to careful consideration by the Commission, where, as here, it is sponsored by Signatory Parties representing a wide range of interests.

WHEREAS, in order to comply with Ohio Rev. Code § 4928.143, DP&L filed an Application and Supporting Testimony, Schedules and Workpapers in this proceeding;

WHEREAS, the Signatory Parties engaged in extensive discovery in this proceeding, with The Dayton Power and Light Company ("DP&L" or "the Company") responding to over 1,200 discovery requests; three DP&L witnesses were deposed; DP&L deposed 22 intervenor witnesses;

WHEREAS, the terms of this Stipulation are reasonable to ensure that DP&L can maintain its financial integrity and modernize its distribution infrastructure so that customers receive stable and reliable service; and

WHEREAS, the terms and conditions of this Stipulation satisfy the policies of the State of Ohio as set forth in Section 4928.02, Revised Code.

Now, therefore, for the purposes of resolving all issues raised in this proceeding, the Signatory Parties stipulate, agree and recommend as follows:

1.    To assist in maintaining rate certainty, improving the financial health of the DP&L so as to allow it the opportunity to achieve and maintain an investment grade credit rating, and continue to provide safe and stable service in Ohio, the Signatory Parties agree that the ESP term shall begin upon Commission approval of this Stipulation, and shall run for a period of six (6) years.

To allow DP&L to provide stable and certain distribution service and to modernize its distribution grid, the Signatory Parties agree to the following terms.

1.    AES/DPL Contributions: DP&L, on behalf of itself and DPL Inc., agrees to the following:

Tax Sharing Liabilities to an additional equity investment in DPL Inc. on or before the effective date of the ESP. Thereafter, during the term of the DMR, AES and DPL Inc. will, each month, convert the additional DPL Inc. Tax Sharing Liabilities for that month to an additional equity investment in DPL Inc.  AES, DP&L and DPL Inc. agree that the conversions will not be reversed at any future date. 

2.    Distribution Modernization Rider/Distribution Investment Rider

approval, DP&L may have the option of extending the duration of Rider DMR for an additional two years. DP&L may apply for such extension by filing an application in a separate docket by June 1, 2019. The Commission will determine the amount of the Rider DMR for the two-year extension period based upon the evidence presented in the separate docket, including, but not limited to evidence of DPL Inc.'s and DP&L's financial needs and evidence of the measures undertaken by DPL Inc. and DP&L, to address their financial issues. Any Signatory Parties or Non‑Opposing Parties² to this Stipulation may advocate for or oppose the request for a DMR extension in the separate docket.

annual true-up mechanism, without carrying charges. Rate design within the classes is summarized as:

3.    Smart Grid Rider

SGR shall be set initially at zero. All other matters relating to the SGR shall be addressed in a future proceeding seeking approval of the Modernization Plan. Any Signatory Parties or Non-Opposing Parties to this Stipulation may advocate for or oppose all or some components of the Modernization Plan.

1.    As originally proposed in DP&L's ESP, DP&L will implement a bypassable, Standard Offer Rate that will be based on competitive bid auctions, as accepted by the Commission in Case No. 08-1094-EL-SSO and charged on a $/kWh basis for all tariff classes. However, the Standard Offer Rate will be modified from DP&L's original proposal as follows:

two year period such that DP&L's proposed rate design will be in place beginning year 3 of the ESP.

1.    To further State policy and enhance the State's effectiveness in the global economy, DP&L will offer several different economic development incentives to large customers that are Signatory or Non-Opposing Parties. Customers may receive only one of the incentives below, and incentives may not be combined.  The provisions in this Section shall expire when the DMR expires, or when an equivalent economic stability charge intended to provide financial stability to DP&L or DPL Inc., whether proposed in this case or another proceeding, expires.³ DP&L will implement the following economic development incentives:

2.    The costs of these programs will be recovered through DP&L's non-bypassable Economic Development Rider ("EDR"), consistent with how those costs are allocated and recovered through that rider currently.

1.    DP&L agrees to make the following economic development payments, which payments shall not be recoverable from customers. The provisions in this Section shall expire when the DMR expires, or when an equivalent economic stability charge intended to provide financial stability to DP&L or DPL Inc., whether proposed in this case or another proceeding, expires⁴.

local and statewide economic development organizations to identify and promote potential economic development in Adams and Brown Counties. 

1.    DP&L has proposed riders in both its pending Distribution Rate case and this ESP case. Those requests will be treated as follows:

efforts made in the prior 12 months to relieve itself of its OVEC obligations.

user is located or whether the administrative burden to DP&L, and the cost and risk to the customer, would render this option impractical. This pilot program will be for the term of the ESP and be limited to the first 50 accounts that do not take DP&L Standard Service Offer generation, are served at the primary voltage level and above, and notify DP&L in writing within 30 days of the approval of this Stipulation ("Pilot Participant").⁷ Subject to and taking into consideration any existing contract with a CRES provider, the Pilot Participant shall work with its CRES provider to complete any necessary steps for the Pilot Participant to participate in the pilot program, including establishing a separate PJM subaccount, registering a DUNS+4 with DP&L and completing related EDI testing. Contingent on these necessary steps, the effective date for the Pilot Participant’s opt-out of the TCRR-N, or any successor to the TCRR-N, shall be the next available meter read date following acceptance of the CRES provider’s enrollment request via EDI after the date which the CRES provider verifies all of the necessary steps have been taken to provide the Pilot Participant with all services otherwise provided by or through the TCRR-N, including Network Integration Transmission Service ("NITS"). The effective date shall be no earlier than the effective date of an order approving this Stipulation. Nothing in this provision prevents the Pilot Participant from delaying the effective date of the opt-out of the TCRR-N. Any increase or decrease in the load and usage characteristics of any Pilot Participant, opening of a replacement account or account

transfer shall not affect the right to continue to be eligible in the pilot program. Any account or successor account voluntarily returning to TCRR-N or any TCRR-N successor, after 60 days advance notice, shall not, thereafter, make such OATT election and eligibility for such election with regard to such account or successor account shall be deemed terminated. Subject to the maximum of 50 accounts and notwithstanding the requirement to provide notice to DP&L within 30 days of the approval of this Stipulation regarding a customer's desire to participate in the pilot program, new accounts of new customers and/or new and expanded accounts of an existing Pilot Participant shall also have the right to make such election regardless of whether the accounts are known or in existence by the election deadline specified herein. Any such election would be effective subject to the necessary timing steps outlined above. Such a Pilot Participant that has opted out shall not receive the benefits or be subject to the costs of TCRR-N or any successor to TCRR-N provided that they shall not be deprived of any costs or refunds arising from decisions issued by FERC or the Commission where such costs or refunds would flow through TCRR-N and are associated with the period during which they obtained service by or through TCRR-N and such costs or refunds are not otherwise available through the OATT. Such refunds (if any) shall be deducted from refund amounts included in TCRR-N. Such a Pilot Participant shall be eligible, at their election, as long as they continuously remain a Pilot Participant and continue to obtain such services through the

applicable OATT until such time as they may elect to discontinue such election and revert to TCRR-N or a TCRR-N successor.

included in individual rate components and will track and recover actual costs. Implementation of this Rider also represents the removal of uncollectible expense from other individual rate components except for the historical uncollected uncollectible PIPP amounts up to the effective date of the rider. DP&L will address any uncollectible expense included in base distribution rates in the annual true-up filing of this rider, which will include an adjustment to revenue until new base distribution rates are in place. In addition, any amounts written off as uncollectible that are ultimately recovered will be credited back to the rider.  Carrying charges (at the last approved cost of debt) will be included within the calculation of the over- or under-collection in the annual true-up mechanism.

1.    Within 30 days of a Commission ruling on this Stipulation, DP&L will file an application for tariff approval to amend its cogeneration tariff in accordance with the most recent revisions to 4901:1-10-34 (Compliance with PURPA) of the Ohio Administrative Code.

1.     Within ten days of a final appealable Order by the Commission approving this Stipulation without material modification, all Signatory and Non‑Opposing Parties will take all steps necessary to withdraw any notice or notices of appeal they have filed in Supreme Court of Ohio Case Nos. 2017-204, 2017-205, 2017-241.

2.    DP&L withdraws its request for a Clean Energy Rider.

1.    No later than sixty (60) days after a Commission order approving this Stipulation with or without modifications, Staff will request that the Commission conduct a rule review to establish parameters to all for non-commodity billing in all electric distribution utility service territories. DP&L agrees to provide for a non-commodity billing on a customer’s utility bills after the Commission has evaluated and approved billing requirements for non-commodity billing in a rule review process or another proceeding. DP&L will be permitted to seek cost recovery associated with providing non-commodity billing in part from CRES providers utilizing non-commodity billing and other third parties and ratepayers equally in another proceeding, with any application for cost recovery to be submitted on an expedited basis to ensure timely implementation of non-commodity billing. Notwithstanding any provision to the contrary in this Section IX.1, DP&L shall submit an application to the Commission to establish non-commodity billing and parameters and to establish any terms for cost recovery by DP&L no later than eighteen (18) months after the date a Commission order issues approving this Stipulation with or without modification. Any Signatory Parties or Non‑Opposing Parties to this Stipulation may challenge the prudency of those costs..

2.    DP&L agrees to work with Staff, RESA, and IGS to determine the parameters of a two-year pilot supplier consolidated billing program for any CRES provider that is qualified and interested. The purpose of the pilot will be to provide the industry with data and information on the practicality of a supplier consolidated billing implementation in the Ohio electric choice market.

participating in the program over the two-year term of the pilot program. Unless otherwise approved by Staff and DP&L, the total number of customers participating in the pilot program shall not exceed 60,000 customers. At any time, if it is determined that a CRES provider is adequately performing under the pilot program, Staff and DP&L may increase the amount of customers that the CRES provider may serve under the pilot program, if the 60,000 cap has not been met.

time payment to RESA which will then allocate that payment at its discretion.  DP&L shall submit such payment to RESA within thirty (30) days after DP&L provides an estimate of the total implementation costs to interested CRES providers. CRES providers that enter the program after its implementation must agree to reimburse other participating CRES providers on a pro-rata basis to ensure a fair allocation of the implementation costs to be shared by participating CRES providers. DP&L's 50 percent share will be recovered in the Regulatory Compliance Rider (RCR). Any requests for cost reimbursement by DP&L to participating CRES providers shall include documentation supporting the request for cost reimbursement. Staff may study the costs needed to implement the pilot and include an analysis of the type of costs needed to expand the program and how that should be allocated among the participating CRES providers. Notwithstanding DP&L’s ability to recover its 50 percent share of the implementation costs, DP&L shall file in a separate proceeding an application for Commission approval of recovery for any portion of DP&L’s 50% share of the implementation costs that exceed $1,500,000.00. Any Signatory Parties or Non‑Opposing Parties to this Stipulation may challenge the prudency of those costs.

providers may begin billing under the pilot. In addition, metrics will be determined in order to study the results of the pilot program.

3.    DP&L agrees to the following Tariff changes:

until such other time as is mutually agreed to by the supplier and the Company."

payment is not corrected within two (2) calendar days after the Company notifies the AGS to cure such failure, * * *."

1.    The provisions in this Section shall expire when the DMR expires, or when an equivalent economic stability charge intended to provide financial stability to DP&L or DPL Inc., whether proposed in this case or another future proceeding, expires.⁸

2.    City of Dayton

reclosers and load break centers, which will allow the customer to transfer between its circuits and supply and execute all agreements to allow for the instantaneous transfer of power, including any and all interconnect agreements to support system safety and reliable service at the Dayton International Airport. In addition to making the aforementioned improvements on the DP&L side of the meter, DP&L further agrees to provide all necessary improvements to customer equipment ("customer-side improvements") to allow the customer to transfer between its circuits. The cost to DP&L of making those improvements shall not exceed $50,000. All costs in excess of $50,000 to make customer-side improvements shall be the responsibility of the Dayton International Airport.

of Dayton, then the City of Dayton shall have an option to purchase the approximately one hundred twenty five (125) acres and improvements comprising DPL's MacGregor Park facility, under the following terms and conditions:

have up to fifteen (15) days after DP&L's written notice to provide to DP&L a written response accepting or rejecting DP&L's request for certification, which response shall not be unreasonably withheld or delayed. Failure to provide such written response shall cause Dayton's option for the MacGregor Park property to expire without further notice.

then the City of Dayton must acquire the MacGregor Park property at a closing within ninety (90) days of its written notice to DP&L or else the option expires without further notice.

for each subsequent year of the ESP by no later than January 15th of each calendar year.

3.    Edgemont/Ohio Partners for Affordable Energy

4.    Honda

5.    Ohio Hospital Association

audits, education related to energy efficiency and demand reduction, meetings with hospital facility directors and members of hospital c-suites, and presentations that champion energy efficiency, hospital resilience and energy-related actions to mitigate climate change and related issues. During the first year, the $200,000 in funding for OHA shall be funded by shareholders. During the remaining years, the $200,000 in funding shall be proposed for recovery through subsequent Energy Efficiency Portfolio filings. In the event that the Commission determines that this $200,000 in funding does not qualify for recovery in the Energy Efficiency Rider, or if the Energy Efficiency Rider no longer exists, the $200,000 will be funded by shareholders. The funding described in this paragraph of the Stipulation is separate from the commitments set forth in the Case No. 16-649-EL-POR. In addition, DP&L and OHA will collaborate to determine the level of funding from this pool of dollars to contribute to projects throughout the year to appropriately incentivize OHA members to implement EE/PDR projects, which should include a preference for OHA members that have below average Energy Star scores.

6.    PWC

1.    In arm's-length bargaining, the Signatory Parties have negotiated terms and conditions that are embodied in this Stipulation. This Agreement involves a variety of difficult, complicated issues that would otherwise be resolved only through expensive, complex, protracted litigation. This Stipulation contains the entire Agreement among the Signatory Parties, and embodies a complete settlement of all claims, defenses, issues and objections in these proceedings. The Signatory Parties agree that this Stipulation is in the best interests of the public and urge the Commission to adopt it.

2.    All Signatory and Non-Opposing Parties, other than DP&L, will not support their filed testimony. DP&L may offer its testimony and exhibits as further evidentiary support for this Stipulation, and will file supplemental testimony in support of this Stipulation. Except as modified by this Stipulation, DP&L's Application in these matters is approved. Nothing in this subsection prohibits any Signatory Party or Non-Opposing Party from filing testimony or submitting evidence in support of the Stipulation.

3.    This Stipulation is a consensus among the Signatory Parties of an overall approach to rates in this proceeding. It is submitted for the purposes of this case alone and should not be understood to reflect the positions that an individual Signatory Party may take as to any individual provision of the Stipulation standing alone, nor the position a Signatory Party may have taken if all of the issues in this proceeding had been litigated. Nothing in this Stipulation shall be used or construed for any purpose to imply, suggest or otherwise indicate that the results produced through the compromise reflected herein represent fully the objectives of any Signatory Party. This Stipulation is submitted for purposes of this proceeding only, and is not deemed binding in any other proceeding, except as expressly provided herein, nor is it to be offered or

relied upon in any other proceedings, except as necessary to enforce the terms of this Stipulation. The willingness of Signatory Parties to sponsor this document currently is predicated on the reasonableness of the Stipulation taken as a whole.

4.    The Signatory Parties will support the Stipulation if the Stipulation is contested.⁹ In order to provide certainty to customers, parties, and Applicant, the Signatory Parties and Non‑Opposing Parties agree that in DP&L's pending Electric Rate Case, Nos. 15-1830-EL-AIR, 15-1831-EL-AAM, 15-1832-EL-ATA, no party will seek to support any attempt to withdraw, curtail, or revise any provision of this settlement or to revise the provisions or benefits of this Stipulation. However, nothing in this Stipulation prohibits the Signatory Parties and Non-Opposing Parties from contesting issues in the distribution rate case (Case No. 15-1830-EL-AIR) that are not otherwise addressed in this Stipulation.¹⁰ 

5.    This Stipulation is conditioned upon adoption of the Stipulation by the Commission in its entirety and without material modification. If the Commission rejects or modifies all or any part of this Stipulation, any Signatory Party shall have the right to apply for rehearing. If the Commission does not adopt the Stipulation without material modification upon rehearing, or if the Commission makes a material modification to any Order adopting the Stipulation pursuant to any reversal, vacation and/or remand by the Supreme Court of Ohio, then within thirty (30) days of the Commission's Entry on Rehearing or Order on Remand: (a) any Signatory Party may withdraw from the Stipulation by filing a notice with the Commission ("Notice of Withdrawal"); or (b) DP&L may terminate and withdraw from the Stipulation by filing a notice ("Utility Notice").¹¹ Upon the filing of such Utility Notice by DP&L, the Stipulation shall immediately become null and void. No Signatory Party shall file a Notice of

Withdrawal or Utility Notice without first negotiating in good faith with the other Signatory Parties to achieve an outcome that substantially satisfies the intent of the Stipulation. If a new agreement achieves such an outcome, the Signatory Parties will file the new agreement for Commission review and approval. If the discussions to achieve an outcome that substantially satisfies the intent of the Stipulation are unsuccessful, and a Signatory Party files a Notice of Withdrawal, then the Commission will convene an evidentiary hearing to afford that Signatory Party the opportunity to contest the Stipulation by presenting evidence through witnesses, to cross-examine witnesses, to present rebuttal testimony, and to brief all issues that the Commission shall decide based upon the record and briefs. If the discussions to achieve an outcome that substantially satisfies the intent of the Stipulation are successful, then some or all of the Signatory Parties shall submit the amended Stipulation to the Commission for approval after a hearing if necessary.

IN WITNESS THEREOF, the undersigned Signatory Parties agree to this Stipulation and Recommendation as of this 13^th day of March, 2017. The undersigned Signatory Parties request the Commission to issue its Opinion and Order approving and adopting this Stipulation.

____________________________

I certify that a copy of the foregoing Amended Stipulation and Recommendation has been served via electronic mail upon the following counsel of record, this 13^th day of March, 2017.

/s/ Jeffrey S. Sharkey                
Jeffrey S. Sharkey

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