Re: American Transmission Systems, Incorporated Docket No ... · 01/05/2020 · Docket No. ER20-1739-000 Order No. 864 Compliance . Dear Secretary Bose: Pursuant to section 206 of

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Alston & Bird LLP www.alston.com

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May 1, 2020

The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426

Re: American Transmission Systems, Incorporated Docket No. ER20-1739-000 Order No. 864 Compliance

Dear Secretary Bose:

Pursuant to section 206 of the Federal Power Act1 and in compliance with the Commission’s Order No. 864 issued November 21, 2019 in Docket No. RM19-5-000 (“Order No. 864”),2 American Transmission Systems, Incorporated (“ATSI”) submits for filing revisions to its transmission formula rate set forth in Attachment H-21 of the PJM Open Access Transmission Tariff (“PJM Tariff”).3

As discussed below, this compliance filing fully satisfies the Commission’s directives in Order No. 864. Accordingly, ATSI respectfully requests that the Commission accept this filing without hearing, modification or condition.

I. Background

A. ATSI

ATSI is an affiliate of FirstEnergy Service Company and a wholly-owned subsidiary of FirstEnergy Corp. (“FirstEnergy”). ATSI is a transmission-only utility, which owns, operates and maintains transmission facilities in Ohio and western Pennsylvania. It

1 16 U.S.C. § 824e (2018).

2 Public Utility Transmission Rate Changes to Address Accumulated Deferred Income Taxes, Order No. 864, 169 FERC ¶ 61,139 (2019).

3 Pursuant to Order No. 714, this filing is being submitted by PJM Interconnection, L.L.C. ("PJM") on behalf of ATSI as part of an XML filing package that conforms with the Commission's regulations. PJM has agreed to make all filings on behalf of the PJM Transmission Owners in order to retain administrative control over the PJM Tariff. Thus, ATSI has requested PJM submit these revisions to the PJM Tariff in the eTariff system as part of PJM's electronic Intra PJM Tariff.

The Honorable Kimberly D. Bose May 1, 2020 Page 2 provides transmission service over its transmission facilities through the PJM Tariff. ATSI owns no generation and provides no retail utility service.

B. Order No. 864

In Order No. 864, the Commission required public utility transmission providers with transmission formula rates to revise those transmission formula rates to account for changes caused by the Tax Cuts and Jobs Act of 2017 (“TCJA”).4 The requirements are designed to address the effects of the TCJA on the accumulated deferred income taxes (“ADIT”) reflected in transmission formula rates.

The Commission required public utilities with transmission formula rates to: (1) include a mechanism to deduct any excess ADIT from or add any deficient ADIT to their rate bases; (2) incorporate a mechanism to decrease or increase their income tax allowances by any amortized excess or deficient ADIT, respectively; and (3) incorporate a new permanent worksheet into their transmission formula rates that will annually track information related to excess or deficient ADIT.5 It directed that the worksheet should include, at a minimum, five broad categories of information.6 Finally, the Commission required that the proposed worksheet and associated revisions to the formula rate be applicable to any future changes to tax rates that give rise to excess or deficient ADIT.7

ATSI’s proposed revisions to its transmission formula rate template address these requirements.

II. Compliance Filing in Response to Order No. 864

A. Order No. 864 Revisions

1. Rate Base Adjustment Mechanism Order No. 864 requires that a transmission formula rate include a Rate Base

Adjustment Mechanism to deduct any excess ADIT from or add any deficient ADIT to rate base. This requirement preserves rate base neutrality. The Rate Base Adjustment Mechanism must apply to any future changes to tax rates that give rise to excess or deficient ADIT, including any federal, state, or local tax rate changes.8

4 An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub. L. No. 115-97, 131 Stat. 2054 (2017) (Tax Cuts and Jobs Act).

5 Order No. 864 at PP 3–5.

6 Id. at PP 52 and 62.

7 Id. at P 62.

8 Id. at PP 28–29.

The Honorable Kimberly D. Bose May 1, 2020 Page 3 ATSI informs the Commission that its existing transmission formula rate meets this requirement. Namely, ATSI’s excess and deficient ADIT balances are within Accounts 254 (found on page 278 of the FERC Form No. 1) and 182.3 (found on page 232 of the FERC Form No. 1), respectively. Within the formula rate template, ATSI treats the excess and deficient ADIT balances within Accounts 254 and 182.3 as part of its “FAS109” adjustments, which can be seen on “WP03 – ADIT” by ADIT account (190, 282, and 283); Consequently, “WP03 – ADIT”, among other items, is deducting any excess ADIT and adding any deficient ADITs from the total ADIT balance to ensure ATSI preserves rate base neutrality.

2. Income Tax Allowance Adjustment Mechanism

Order No. 864 requires that a transmission formula rate include an Income Tax

Allowance Adjustment Mechanism that decreases or increases the income tax components by any amortized excess or deficient ADIT, respectively. This requirement ensures that public utilities with transmission formula rates return excess ADIT to or recover deficient ADIT from ratepayers.

In order to satisfy this requirement, ATSI has revised its formula rate template to

permit amortization of the tax law or tax rate change differential to be included in the income tax calculation of the formula rate. Specifically, ATSI has modified Appendix G (and created supporting detail on new Appendix G (1)) of the formula rate template to add lines 2 and 3. Line 2 provides the annual amortization for excess deferred taxes. Line 3 provides the annual amortization for deficient deferred taxes. ATSI also has added a new line 26b (“(Excess)/Deficient Deferred Income Taxes”) to page 3 of the Attachment H-21A formula rate template. The amounts specified in new lines 2 and 3, from Appendix G are used as inputs to new line 26b on Attachment H-21A.

In addition, ATSI has added a new Note GG to explain new line 26b on Attachment

H-21A. New Note GG states that the income tax component of the formula rate, “Upon enactment of changes in tax law, income tax rates (including changes in apportionment) and other actions taken by a taxing authority, deferred taxes are re-measured and adjusted in the Company's books of account, resulting in excess or deficient accumulated deferred taxes. Such excess or deficient deferred taxes attributed to the transmission function will be based upon tax records and calculated in the calendar year in which the excess or deficient amount was measured and recorded for financial reporting purposes.”

3. ADIT Worksheet

Order No. 864 also requires that a transmission formula rate include a new

permanent ADIT Worksheet that will annually track information related to excess or deficient ADIT. This requirement provides transparency regarding the adjustment of rate base and income tax allowances to account for excess or deficient ADIT and for excess and

The Honorable Kimberly D. Bose May 1, 2020 Page 4 deficient ADIT included in rates following future local, state, and federal tax rate changes.9 The Commission did not propose or adopt a pro forma worksheet, but instead adopted five categories of information that must be included in the ADIT Worksheet. These are:

1) How any ADIT accounts were re-measured and the excess or deficient ADIT

contained therein;

2) The accounting for any excess or deficient amounts in Accounts 182.3 (Other Regulatory Assets) and 254 (Other Regulatory Liabilities);

3) Whether the excess or deficient ADIT is protected or unprotected;

4) The accounts to which the excess or deficient ADIT are amortized; and

5) The amortization period of the excess or deficient ADIT being returned or recovered through rates.10

In order to satisfy this requirement, ATSI has included a new ADIT permanent

worksheet in its formula rate template. This permanent worksheet appears in new Appendix G (1) of the formula rate template. Consistent with the Commission’s directive, the new ADIT permanent worksheet narrates how any ADIT accounts were remeasured and the accounting for the excess and deficient amounts in Accounts 182.3 and 254. Moreover, this Worksheet identifies each specific source of the excess or deficient ADIT, classifies the excess or deficient ADIT as protected or unprotected, and lists the proposed amortization period and accounts associated with each classification or source. The permanent worksheet provides the detail needed to verify excess and deficient ADIT resulting from the TCJA and any future tax rate changes, and thus it is consistent with the requirements of Order No. 864.

ATSI’s proposed permanent worksheet in Appendix G (1) provides the five

categories of information that the Commission required for inclusion in the new ADIT Worksheet. Also, in support of this filing, ATSI is providing additional information demonstrating its genesis of the excess/deficient ADIT balances after remeasurement of the ADIT balances going from a federal corporate income tax rate of 35% to 21% resulting from the TCJA at December 31, 2017. Moreover, ATSI demonstrates the activity that occurred after the remeasurement of the excess/deficient ADIT balances on December 31, 2017 through December 31, 2019 and provides transparency by tying to the FERC Form No. 1 balances in Accounts 182.3 and 254.

In accordance with Order No. 864, as part of this filing, Attachment C displays the

new permanent worksheet (Appendix G (1)) populated with 2019 beginning balances, 2019 activity, and 2019 year-end balances. This demonstrates the data and information that will be provided going forward based on the proposed tariff modifications. Additionally, in each

9 Id. at P 62.

10 Id. at PP 52 and 62.

The Honorable Kimberly D. Bose May 1, 2020 Page 5 rate year, the new ADIT permanent worksheet in ATSI’s formula rate in Appendix G (1) will demonstrate the excess/deferred ADIT activity during the year as well as tie back to the prior year (for the beginning balance) and current year balances in Accounts 182.3 and 254, as found on pages 232 and 278 of the FERC Form No. 1. As stated above, the net amortization amount, sourced from Appendix G (1) will flow through to Attachment H-21A, page 3, line 26b so that the revenue requirement is adjusted accordingly through the “income taxes” section of the formula rate. Also, within this filing, Attachment D provides the additional information supporting the excess/deficient ADIT balances and activity from year-end 2017 to year-end 2019 (pre and post-remeasurement of ADIT balances).

4. Additional Revisions Related to Order No. 864 Compliance In addition to including the new permanent ADIT worksheet as Appendix G (1) and

the formula rate template changes mentioned above, ATSI needed to make one ministerial change to ensure the annual amortization associated with the excess/deficient deferred income taxes is included as a component in the total income taxes and revenue requirement; by adding row 26b to Attachment H-21A, ATSI changed the column (2) reference on Attachment H-21A, page 3 of 5, line 27 from “(line 25 plus line 26)” to “(sum lines 25 through 26b).” III. Additional Information

A. Communications Communications with respect to this filing should be directed to the following persons:

P. Nikhil Rao* Morgan E. Parke* Senior Corporate Counsel Associate General Counsel FirstEnergy Service Company FirstEnergy Service Company 76 South Main Street 76 South Main Street Akron, Ohio 44308 Akron, Ohio 44308 [email protected] [email protected]

Kenneth G. Jaffe* Roger D. Ruch* Richard P. Sparling* Director, Rates Support Alston & Bird LLP FirstEnergy Service Company 950 F Street, NW 76 South Main Street Washington, DC 20004 Akron, Ohio 44308 (202) 239-3300 (330) 384-5130 [email protected] [email protected] [email protected] * Designated to receive service. Pursuant to 18 C.F.R. § 385.2010, ATSI respectfully requests waiver to permit more than two individuals to receive service in this proceeding.

The Honorable Kimberly D. Bose May 1, 2020 Page 6

B. List of Documents Submitted With Filing

Together with this filing letter, ATSI submits the following attachments.

Attachment A: Marked version of the ATSI Template.

Attachment B: Clean version of the ATSI Template.

Attachment C: New ADIT Worksheet populated as required under Order No. 864.

Attachment D: Workpapers

C. Service PJM has served a copy of this filing on all PJM Members and on all state utility

regulatory commissions in the PJM Region by posting this filing electronically. In accordance with the Commission’s regulations,11 PJM will post a copy of this filing to the FERC filings section of its internet site, located at the following link: http://www.pjm.com/documents/ferc-manuals/ferc-filings.aspx with a specific link to the newly-filed document, and will send an e-mail on the same date as this filing to all PJM Members and all state utility regulatory commissions in the PJM Region12 alerting them that this filing has been made by PJM and is available by following such link. If the document is not immediately available by using the referenced link, the document will be available through the referenced link within 24 hours of the filing. Also, a copy of this filing will be available on the FERC’s eLibrary website located at the following link: http://www.ferc.gov/docs-filing/elibrary.asp in accordance with the Commission’s regulations and Order No. 714.

D. Effective Date In accordance with Order No. 864, ATSI respectfully requests that the Commission

accept these formula rate revisions effective January 27, 2020.13 After the Commission accepts these revisions without modification or condition, ATSI will begin flowing ADIT-related amounts to customers in accordance with the terms of its formula rate and formula rate protocols, calculated as of the effective date of the TCJA – i.e., January 1, 2018.

11 See 18 C.F.R §§ 35.2(e) and 385.2010(f)(3) (2019).

12 PJM already maintains, updates and regularly uses e-mail lists for all PJM Members and affected state commissions.

13 Order No. 864 at P 100.

The Honorable Kimberly D. Bose May 1, 2020 Page 7

E. Waiver The information submitted with this filing substantially complies with the requirements of Part 35 of the Commission’s rules and regulations applicable to filings of this type. ATSI requests a waiver of any applicable requirement of Part 35 for which a waiver is not specifically requested, if necessary, in order to permit this filing to become effective as proposed.

IV. Conclusion

This compliance filing fully satisfy the Commission’s directives in Order No. 864.

Accordingly, ATSI respectfully requests that the Commission accept this filing without hearing, modification or condition.

Please contact the undersigned if you have any questions.

Respectfully submitted,

/s/ Kenneth G. Jaffe

Kenneth G. Jaffe Richard P. Sparling Alston & Bird LLP 950 F Street, NW Washington, DC 20004

Attorneys for American Transmission Systems, Inc. Attachments

Attachment A

Marked Version of the ATSI Template

American Transmission Systems, Incorporated

May 1, 2020

Page 1

Attachment H-21A page 1 of 5

For the 12 months ended 12/31/ Formula Rate - Non-Levelized Rate Formula Template Utilizing FERC Form 1 Data

American Transmission Systems, Inc. Line Allocated

No. Amount

1 GROSS REVENUE REQUIREMENT (page 3, line 29, col 5) $ -

REVENUE CREDITS (Note T) Total Allocator

2a Account No. 451 (page 4, line 34) TP 0.00000 -

2b Account No. 454 (page 4, line 35) - TP 0.00000 -

3 Account No. 456 (page 4, line 36) - TP 0.00000 -

4a Revenues from Grandfathered Interzonal Transactions TP 0.00000 -

4b Revenues from service provided by the ISO at a discount TP 0.00000 -

5a Legacy MTEP Credit (Appendix E, page 2, line 3, col. 13) - TP 1.00000 -

5b Reserved - TP 1.00000 -

5c Reserved - TP 1.00000 -

5d Transmission Enhancement Credit (Appendix D, page 2, line 2, col. 11) - TP 1.00000 -

6a TOTAL REVENUE CREDITS (sum lines 2a-5d) $ - $ -

6b TRUE-UP ADJUSTMENT WITH INTEREST (Protocols)

7 NET REVENUE REQUIREMENT (line 1 minus line 6a plus line 6b) $ -

DIVISOR Total

8 1 Coincident Peak (CP) (MW) (Note A)

9 Average 12 CPs (MW) (Note B)

10 Reserved -

11 Reserved -

12 Reserved -

13 Reserved -

14 Reserved -

15 Reserved

Total

16 Annual Network Rate ($/MW/Yr) (line 7 / line 8) $ -

Peak Rate Off-Peak Rate

Total Total

17 Point-To-Point Rate ($/MW/Year) (line 7 / line 9) $ - $ -

18 Point-To-Point Rate ($/MW/Month) (line 17/12) $ - $ -

19 Point-To-Point Rate ($/MW/Week) (line 17/52) $ - $ -

20 Point-To-Point Rate ($/MW/Day) (line 19/5; line 19/7) $ - $ -

21 Point-To-Point Rate ($/MWh) (line 17/4,160; line 17/8,760) $ - $ -

Page 2


Formula Rate - Non-Levelized Rate Formula Template For the 12 months ended

12/31/ Utilizing FERC Form 1 Data American Transmission Systems, Inc. (1) (2) (3) (4) (5)

Form No. 1 Transmission Line Page, Line, Col. Company Total Allocator (Col 3 times Col 4)

No. RATE BASE:

GROSS PLANT IN SERVICE

1 Production 205.46.g (Notes U & X) NA

2 Transmission 207.58.g (Notes U & X) TP 0.00000 -

3 Distribution 207.75.g (Notes U & X) NA

4 General & Intangible 205.5.g & 207.99.g (Notes U & X) W/S 1.00000 -

5 Common 356.1 (Notes U & X) CE 1.00000 -

6 TOTAL GROSS PLANT (sum lines 1-5) - GP= 0.000% -

ACCUMULATED DEPRECIATION

7 Production 219.20-24.c (Notes U & X) NA

8 Transmission 219.25.c (Notes U & X) TP 0.00000 -

9 Distribution 219.26.c (Notes U & X) NA

10 General & Intangible 200.21.c & 219.28.c (Notes U & X) W/S 1.00000 -


12 TOTAL ACCUM. DEPRECIATION (sum lines 7-11) - -

NET PLANT IN SERVICE

13 Production (line 1- line 7) -

14 Transmission (line 2- line 8) - -

15 Distribution (line 3 - line 9) -

16 General & Intangible (line 4 - line 10) - -

17 Common (line 5 - line 11) - -

18 TOTAL NET PLANT (sum lines 13-17) - NP= 0.000% -

ADJUSTMENTS TO RATE BASE (Note F)

19 Account No. 281 (enter negative) 273.8.k (Note Y) NA

20 Account No. 282 (enter negative) 275.2.k (Note Y) NP 0.00000 -


22 Account No. 190 234.8.c (Note Y) NP 0.00000 -

23 Account No. 255 (enter negative) 267.8.h (Note Y) NP 0.00000 -

24 TOTAL ADJUSTMENTS (sum lines 19- 23) - -

25 LAND HELD FOR FUTURE USE 214.x.d (Notes G & Y) TP 0.00000 -

WORKING CAPITAL (Note H)

26 CWC calculated - -

27 Materials & Supplies (Note G) 227.8.c & .16.c (Note Y) TE 0.00000 -

28a Prepayments (Account 165) 111.57.c (Notes Y & CC) GP 0.00000 -

28b Unfunded Reserve Plant-related (enter negative) (Acct Nos. 228.1-228.4, 242) (Notes Y & Z) - NP 0.00000 -

28c Unfunded Reserve Labor-related (enter negative) (Acct Nos. 228.1-228.4, 242) (Notes Y & Z) - W/S 1.00000 -

29 TOTAL WORKING CAPITAL (sum lines 26 - 28c) - -

30 RATE BASE (sum lines 18, 24, 25, & 29) - -

Page 3


Formula Rate - Non-Levelized Rate Formula Template For the 12 months ended 12/31/ Utilizing FERC Form 1 Data

American Transmission Systems, Inc. (1) (2) (3) (4) (5)

Line Form No. 1 Transmission No. Page, Line, Col. Company Total Allocator (Col 3 times Col 4)

O&M (Note DD)

1 Transmission 321.112.b TE 0.00000 -

1a Less LSE Expenses Included in Transmission O&M Accounts (Note W) 1.00000

2 Less Account 565 321.96.b 1.00000 -

2a Less Deferred Internal Integration Costs (Note C) TE 0.00000 -

3 A&G 323.197.b (Note BB) W/S 1.00000 -

4 Less FERC Annual Fees W/S 1.00000 -

5 Less EPRI & Reg. Comm. Exp. & Non-safety Ad. (Note I) W/S 1.00000 -

5a Plus Transmission Related Reg. Comm. Exp. (Note I) TE 0.00000 -

6 Common 356.1 CE 1.00000 -

7 Transmission Lease Payments 1.00000 -

8 TOTAL O&M (sum lines 1, 3, 5a, 6, 7 less 1a, 2, 2a, 4, 5) - -

DEPRECIATION AND AMORTIZATION EXPENSE

9 Transmission 336.7.b (Note U) TP 0.00000 -

10 General & Intangible 336.1.f & 336.10.f (Note U) W/S 1.00000 -

11 Common 336.11.b (Note U) CE 1.00000 -

12 TOTAL DEPRECIATION (sum lines 9 - 11) - -

TAXES OTHER THAN INCOME TAXES (Note J)

LABOR RELATED

13 Payroll 263.i W/S 1.00000 -

14 Highway and vehicle 263.i W/S 1.00000 -

15 PLANT RELATED

16 Property 263.i GP 0.00000 -

17 Gross Receipts 263.i NA -

18 Other 263.i GP 0.00000 -

19 Payments in lieu of taxes GP 0.00000 -

20 TOTAL OTHER TAXES (sum lines 13 - 19) - -

INCOME TAXES (Note K)

21 T=1 - {[(1 - SIT) * (1 - FIT)] / (1 - SIT * FIT * p)} = 0.00%

22 CIT=(T/1-T) * (1-(WCLTD/R)) = 0.00%

where WCLTD=(page 4, line 27) and R= (page 4, line30)

and FIT, SIT & p are as given in footnote K.

23 1 / (1 - T) = (from line 21) 0.0000

24 Amortized Investment Tax Credit (266.8f) (enter negative)

25 Income Tax Calculation = line 22 * line 28 - NA -

26 ITC adjustment (line 23 * line 24) - NP 0. 00000 -

26b (Excess)/Deficient Deferred Income Taxes (App G, lines 2 & 3, col 3)(Note GG) DA 1.00000

27 Total Income Taxes (line 25 plus line 26) (sum lines 25 through 26b) - -

28 RETURN - NA -

[Rate Base (page 2, line 30) * Rate of Return (page 4, line 30)]

29 GROSS REV. REQUIREMENT - -

(sum lines 8, 12, 20, 27, 28 )

Page 4



American Transmission Systems, Inc.

SUPPORTING CALCULATIONS AND NOTES Line (1) (2) (3) (4) (5) (6) No. TRANSMISSION PLANT INCLUDED IN ISO RATES

1 Total transmission plant (page 2, line 2, column 3) - 2 Less transmission plant excluded from ISO rates (Note M) 3 Less transmission plant included in OATT Ancillary Services (Note N )

4 Transmission plant included in ISO rates (line 1 less lines 2 & 3) - 5 Percentage of transmission plant included in ISO Rates (line 4 divided by line 1) TP= 0.00000 TRANSMISSION EXPENSES

6 Total transmission expenses (page 3, line 1, column 3) - 7 Less transmission expenses included in OATT Ancillary Services (Note L)

8 Included transmission expenses (line 6 less line 7) - 9 Percentage of transmission expenses after adjustment (line 8 divided by line 6) 0.00000 10 Percentage of transmission plant included in ISO Rates (line 5) TP 0.00000 11 Percentage of transmission expenses included in ISO Rates (line 9 times line 10) TE= 0.00000 WAGES & SALARY ALLOCATOR (W&S) Form 1 Reference $ TP Allocation

12 Production 354.20.b 0.00 - 13 Transmission 354.21.b 0.00 - 14 Distribution 354.23.b 0.00 - W&S Allocator 15 Other 354.24,25,26.b 0.00 - ($ / Allocation)

16 Total (sum lines 12-15) - - = 1.00000 = WS COMMON PLANT ALLOCATOR (CE) (Note O) $ % Electric W&S Allocator

17 Electric 200.3.c (line 17 / line 20) (line 16) CE 18 Gas 201.3.d 1.00000 * 1.00000 = 1.00000 19 Water 201.3.e

20 Total (sum lines 17 - 19) - RETURN (R) $

21 Long Term Interest (117, sum of 62c through 67c) (Note AA) 22 Preferred Dividends (118.29c) (positive number) Development of Common Stock:

23 Proprietary Capital (112.16c) (Note X) 24 Less Preferred Stock (line 28) - 25 Less Account 216.1 (112.12c) (enter negative) (Note X)

26 Common Stock (sum lines 23-25) - Cost $ % (Note P) Weighted

27 Long Term Debt (112, sum of 18 through 21) (Note X) 0% 0.0000 0.0000 =WCLTD 28 Preferred Stock (112.3d) (Note X) 0% 0.0000 0.0000 29 Common Stock (line 26) - 0% 0.0000

30 Total (sum lines 27-29) - 0.0000 =R REVENUE CREDITS ACCOUNT 447 (SALES FOR RESALE) (310-311) (Note Q)

31 a. Bundled Non-RQ Sales for Resale (311.x.h) 32 b. Bundled Sales for Resale included in Divisor on page 1

33 Total of line 31 less line 32 -

34 ACCOUNT 451 (MISCELLANEOUS SERVICE REVENUE) (Note S) (300.17.b)

35 ACCOUNT 454 (RENT FROM ELECTRIC PROPERTY) (Note R) (300.19.b)

36 ACCOUNT 456 (OTHER ELECTRIC REVENUES) (Note V) (330.x.n)

Page 5




General Note: References to pages in this formulary rate are indicated as: (page#, line#, col.#)

References to data from FERC Form 1 are indicated as: #.y.x (page, line, column)

Note

Letter A As provided by PJM and in effect at the time of the annual rate calculations pursuant to Section 34.1 of the PJM OATT.

B Peak as would be reported on page 401, column d of Form 1 at the time of the zonal peak for the twelve month period ending October 31 of the calendar year used to calculate rates. C Amount shown in Exhibit No. FE-100, Page 29 of 33, for Deferred Internal Integration Costs.

D Reserved

E Reserved

F The balances in Accounts 190, 281, 282 and 283 should exclude all FASB 106 or 109 related amounts. For example, any and all amounts in contra accounts identified as regulatory assets or liabilities related to FASB 106 or 109 should be excluded. The balance of Account 255 is reduced by prior flow throughs and excluded if the utility chose to utilize amortization of tax credits against taxable income as discussed in Note K. Account 281 is not allocated. Account 190 excludes any amounts relating to Charitable Contribution Limitations, Asset Retirement Obligations, and FAS 123 impacts related to Performance Shares and Restricted Stock Units. Accounts 282 and 283 exclude any amounts relating to AFUDC, offsets relating to Asset Retirement Obligation in Account 190, and offsets relating to Charitable Contribution Limitations in Account 190. Account 282 also excludes (i) Extraordinary Property Losses; and (ii) any Asset Impairment amounts incurred on or after January 1, 2015. For either (i) or (ii) above, ATSI is not precluded from requesting FERC approval through a section 205 filing for inclusion in the rate calculation.

G Identified in Form 1 as being only transmission related.

H Cash Working Capital assigned to transmission is one-eighth of O&M allocated to transmission at page 3, line 8, column 5. Prepayments are the electric related prepayments booked to Account No. 165 and reported on Page 111, line 57 in the Form 1.

I Line 5 - EPRI Annual Membership Dues listed in Form 1 at 353.f, all Regulatory Commission Expenses itemized at 351.h, and non-safety related advertising included in Account 930.1. Line 5a - Regulatory Commission Expenses directly related to transmission service, ISO filings, or transmission siting itemized at 351.h.

J Includes only FICA, unemployment, highway, property, gross receipts, and other assessments charged in the current year. Taxes related to income are excluded. Gross receipts taxes are not included in transmission revenue requirement in the Rate Formula Template, since they are recovered elsewhere.

K The currently effective income tax rate, where FIT is the Federal income tax rate; SIT is the State income tax rate, and p = "the percentage of federal income tax deductible for state income taxes". If the utility is taxed in more than one state it must attach a work paper showing the name of each state and how the blended or composite SIT was developed. Furthermore, a utility that elected to utilize amortization of tax credits against taxable income, rather than book tax credits to Account No. 255 and reduce rate base, must reduce its income tax expense by the amount of the Amortized Investment Tax Credit (Form 1, 266.8.f) multiplied by (1/1-T) (page 3, line 26).

Inputs Required: FIT =

SIT= (State Income Tax Rate or Composite SIT)

p = (percent of federal income tax deductible for state purposes)

L Removes dollar amount of transmission expenses included in the OATT ancillary services rates, including Account Nos. 561.1 - 561.3, and 561.BA.

M Removes transmission plant determined by Commission order to be state-jurisdictional according to the seven-factor test (until Form 1 balances are adjusted to reflect application of seven-factor test).

N Removes dollar amount of transmission plant included in the development of OATT ancillary services rates and generation step-up facilities, which are deemed included in OATT ancillary services. For these purposes, generation step-up facilities are those facilities at a generator substation on which there is no through-flow when the generator is shut down.

O Enter dollar amounts

P Debt cost rate = long-term interest (line 21) / long term debt (line 27). Preferred cost rate = preferred dividends (line 22) / preferred outstanding (line 28). No change in ROE may be made absen a filing with FERC under Section 205 or Section 206 of the Federal Power Act. Per the Settlement Agreement approved by order dated October 29, 2015, in Docket No. ER15-303-000, ATSI's stated ROE is set to: (a) 12.38% through June 30, 2015; (b) 11.06% for the period July 1, 2015 through December 31, 2015; and (c) 10.38% for the period commencing January 1, 2016.

Q Line 33 must equal zero since all short-term power sales must be unbundled and the transmission component reflected in Account No. 456.1 and all other uses are to be included in the divisor.

R Includes income related only to transmission facilities, such as pole attachments, rentals and special use.

S Excludes revenues unrelated to transmission services.

T The revenues credited on page 1, lines 2a-4b shall include only the amounts received directly (in the case of grandfathered agreements) or from the ISO (for service under this tariff) reflecting the Transmission Owner's integrated transmission facilities. They do not include revenues associated with FERC annual charges, gross receipts taxes, ancillary services, or facilities not included in this template (e.g., direct assignment facilities and GSUs) which are not recovered under this Rate Formula Template. The revenues on lines 5a-5d are supported by separate references for each item.

U Plant in Service, Accumulated Depreciation, and Depreciation Expense amounts exclude Asset Retirement Obligation amounts unless authorized by FERC. Depreciation Rates: FERC Account 352 Depr %: 2.24%; FERC Account 353 Depr %: 2.06%; FERC Account 354 Depr %: 2.24%; FERC Account 355 Depr %: 3.09%; FERC Account 356 Depr %: 2.69%; FERC Account 357 Depr %: 2.00%; FERC Account 358 Depr %: 2.04%; FERC Account 359 Depr %: 1.33%. No change to these Depreciation Rates may be made absent a filing with FERC under Section 205 or Section 206 of the Federal Power Act.

V On Line 35, enter revenues from RTO settlements that are associated with NITS and firm Point-to-Point Service for which the load is not included in the divisor to derive ATSI's zonal rates. Exclude non-firm Point-to-Point revenues, and revenues related to MTEP and RTEP projects. Include revenues and revenue adjustments associated with Docket EL02-111, and revenue credit adjustments related to ATSI's PJM integration as supported by Appendix G.

W Account Nos. 561.4, 561.8, and 575.7 consist of RTO expenses billed to load-serving entities and are not included in Transmission Owner revenue requirements.

X Calculate using a 13 month average balance.

Y Calculate using average of beginning and end of year balance.

Z Only include from Account No. 242 amounts relating to Vacation Accruals and Employee Incentive Compensation.

AA Short-term debt and related interest expense shall not be included in the formula rate calculation.

BB A&G excludes any credit facility fees charged to Account 930.2. PBOP included in FERC Acct. 926, as reported in FERC Form 1 page 323.187.b, is included in the Administrative & General Expenses input to Attachment H-21A, page 3 of 5, line 3. The total PBOP amount in FERC Acct. 926 is $0, per company records. No change to this PBOP amount may be made absent a filing with FERC under Section 205 or Section 206 of the Federal Power Act.

CC Prepayments shall exclude prepayments of taxes attributable to time periods ending before the beginning of the time period for which the rate calculation is being made.

DD ATSI will exclude (i) Extraordinary Property Losses; and (ii) any Asset Impairment amounts incurred on or after January 1, 2015. For either (i) or (ii) above, ATSI is not precluded from requesting FERC approval through a section 205 filing for inclusion in the rate calculation.

GG Upon enactment of changes in tax law, income tax rates (including changes in apportionment) and other actions taken by a taxing authority, deferred taxes are re-measured and adjusted in the Company's books of account, resulting in excess or deficient accumulated deferred taxes. Such excess or deficient deferred taxes attributed to the transmission function will be based upon tax records and calculated in the calendar year in which the excess or deficient amount was measured and recorded for financial reporting purposes.

Page 6

Attachment H-21A, Appendix G page 1 of 1

For the 12 months ended 12/31/

Income Tax Adjustments To be completed in conjunction with Attachment H-21A [1] [2] [3] Source Year-end

December 31,

2019

[C]

2 Amortized Excess Deferred Taxes (enter negative) [B] Appendix G1, Line 12, Column F - 3 Amortized Deficient Deferred Taxes [B] Appendix G1, Line 12, Column F -

Notes: [B] Upon enactment of changes in tax law, income tax rates (including changes in apportionment) and other actions taken by a taxing

authority, deferred taxes are re-measured and adjusted in the Company's books of account, resulting in excess or deficient accumulated deferred taxes. Such excess or deficient deferred taxes attributed to the transmission function will be based upon tax records and calculated in the calendar year in which the excess or deficient amount was measured and recorded for financial reporting purposes. The balance located within Column 3, line 2 and line 3, is the net impact of excess deferred and deficient amortization.

[C] Amounts from lines 2 and 3 included on Attachment H-21A, page 3 of 5, line 26b.

Reserved

Page 7

Attachment H-21A, Appendix G - Worksheet

[Reserved]

Attachment H-21A, Appendix G (1) page 1 of 1


Income Tax Adjustments Worksheet To be completed in conjunction with Attachment H-21A COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H

Line No. Description

(Excess)/Deficient ADIT Transmission - Beg Balance of Year

(Note B)

Current Period Other Activity

(Note C)

Amortization Period

(Note D)

Years Remaining at Year End

Amortization (Note E)

(Excess)/Deficient ADIT Transmission -

Ending Balance of Year

(Note F) (Col. B + Col. C) -

Col. F

Protected (P) Non-Protected (N)

Non-property (Note A): 1 Account 190 1a Example - 1b Example - 2 Account 282 2a Example - 3 Account 283 3a Example - 4 Non-property gross up for Taxes - 5 Total Non-Property - - - -


(Excess)/Deficient ADIT Transmission - Beginning Balance of

Year (Note B)


(Note C)

Amortization Period

(Note D)






Col. F


Property (Note A): 6 Property Book-Tax Timing Difference - Account 190 ARAM ARAM - 7 Property Book-Tax Timing Difference - Account 282 ARAM ARAM - 8 Property Book-Tax Timing Difference - Account 283 ARAM ARAM - 9 Property Gross up for Taxes - 10 Total Property (Total of lines 6 thru 9) - - - -

11 Deferral of Amortized Excess/Deficient ADITs (Note G)

12 Total Non-Property & Property Amortization, including gross up for taxes (Total of lines 5, 10, and 11) -

Notes: A Upon a tax rate change (federal, state and/or, if applicable, state apportionments), the Company remeasures its deferred tax assets and liabilities to the new applicable corporate tax rate. For schedule M items not directly taken to the P&L, the result of this remeasurement is a change to the net deferred tax

assets/liabilities recorded in accounts 190, 282, and 283 with a corresponding change in regulatory assets (account 182.3) and regulatory liabilities (account 254) to reflect the return of/collection from excess/deficient deferred taxes to/from customers. The remeasurement is effectuated within PowerTax and Tax Provision, which maintain both the timing difference and APB11 deferred tax balance (the historical ADIT based on the time difference and the rate in effect when the timing difference occurred). The difference in the two results is reclassified from ADIT to regulatory assets/liabilities for deficient/excess ADIT. Within the FERC Form 1, deficient and excess ADITs in Account 182.3 and Account 254, respectively are presented grossed-up for tax purposes. For ratemaking purposes, these grossed-up balances are treated as FAS109 and subsequently removed from rate base, thereby ensuring rate base neutrality for tax rate changes. The Company would follow the process described above to remeasure ADIT balances (increase or decrease) due to any future income tax rate change.

B Beginning balance of year is the end of the prior year balance as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254)

C In the event the Company populates the data enterable fields, it will support the data entered as just and reasonable in its annual update

D The amortization periods shall be consistent with the following:

Protected Property & Non-Protected Property: ARAM, or directly assigned based on average remaining life of assets for property items not in PowerTax

Protected Non-Property & Non-Protected Non-Property will be directly assigned and presented in the table above

E The amortization will occur through FERC income statement Accounts 410.1. and 411.1

F Ending balance of year is the end of current year balance, as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254)

G Reflects the net amount of amortization, including gross-up for taxes, from prior period(s) that was booked for GAAP, but deferred for FERC purposes because a mechanism did not exist to pass back/collect excess/deficient ADITs to/from customers. The net amortized deferral amount, including the gross-up for taxes, is in Account 254, as reflected on FERC Form No. 1, page 278 or Account 182.3, as reflected on FERC Form No. 1, page 232.

Attachment B

Clean Version of the ATSI Template


May 1, 2020

Page 1


For the 12 months ended 12/31/ Formula Rate - Non-Levelized Rate Formula Template

Utilizing FERC Form 1 Data

American Transmission Systems, Inc. Line Allocated

No. Amount

1 GROSS REVENUE REQUIREMENT (page 3, line 29, col 5) $ -

REVENUE CREDITS (Note T) Total Allocator

2a Account No. 451 (page 4, line 34) TP 0.00000 -

2b Account No. 454 (page 4, line 35) - TP 0.00000 -

3 Account No. 456 (page 4, line 36) - TP 0.00000 -

4a Revenues from Grandfathered Interzonal Transactions TP 0.00000 -

4b Revenues from service provided by the ISO at a discount TP 0.00000 -

5a Legacy MTEP Credit (Appendix E, page 2, line 3, col. 13) - TP 1.00000 -

5b Reserved - TP 1.00000 -

5c Reserved - TP 1.00000 -

5d Transmission Enhancement Credit (Appendix D, page 2, line 2, col. 11) - TP 1.00000 -

6a TOTAL REVENUE CREDITS (sum lines 2a-5d) $ - $ -

6b TRUE-UP ADJUSTMENT WITH INTEREST (Protocols)

7 NET REVENUE REQUIREMENT (line 1 minus line 6a plus line 6b) $ -

DIVISOR Total

8 1 Coincident Peak (CP) (MW) (Note A)

9 Average 12 CPs (MW) (Note B)

10 Reserved -

11 Reserved -

12 Reserved -

13 Reserved -

14 Reserved -

15 Reserved

Total

16 Annual Network Rate ($/MW/Yr) (line 7 / line 8) $ -

Peak Rate Off-Peak Rate

Total Total

17 Point-To-Point Rate ($/MW/Year) (line 7 / line 9) $ - $ -

18 Point-To-Point Rate ($/MW/Month) (line 17/12) $ - $ -

19 Point-To-Point Rate ($/MW/Week) (line 17/52) $ - $ -

20 Point-To-Point Rate ($/MW/Day) (line 19/5; line 19/7) $ - $ -

21 Point-To-Point Rate ($/MWh) (line 17/4,160; line 17/8,760) $ - $ -

Page 2


Formula Rate - Non-Levelized Rate Formula Template For the 12 months ended

12/31/ Utilizing FERC Form 1 Data American Transmission Systems, Inc. (1) (2) (3) (4) (5)

Form No. 1 Transmission Line Page, Line, Col. Company Total Allocator (Col 3 times Col 4)

No. RATE BASE:

GROSS PLANT IN SERVICE

1 Production 205.46.g (Notes U & X) NA

2 Transmission 207.58.g (Notes U & X) TP 0.00000 -

3 Distribution 207.75.g (Notes U & X) NA

4 General & Intangible 205.5.g & 207.99.g (Notes U & X) W/S 1.00000 -


6 TOTAL GROSS PLANT (sum lines 1-5) - GP= 0.000% -

ACCUMULATED DEPRECIATION

7 Production 219.20-24.c (Notes U & X) NA

8 Transmission 219.25.c (Notes U & X) TP 0.00000 -

9 Distribution 219.26.c (Notes U & X) NA

10 General & Intangible 200.21.c & 219.28.c (Notes U & X) W/S 1.00000 -


12 TOTAL ACCUM. DEPRECIATION (sum lines 7-11) - -

NET PLANT IN SERVICE

13 Production (line 1- line 7) -

14 Transmission (line 2- line 8) - -

15 Distribution (line 3 - line 9) -

16 General & Intangible (line 4 - line 10) - -

17 Common (line 5 - line 11) - -

18 TOTAL NET PLANT (sum lines 13-17) - NP= 0.000% -

ADJUSTMENTS TO RATE BASE (Note F)

19 Account No. 281 (enter negative) 273.8.k (Note Y) NA



22 Account No. 190 234.8.c (Note Y) NP 0.00000 -

23 Account No. 255 (enter negative) 267.8.h (Note Y) NP 0.00000 -

24 TOTAL ADJUSTMENTS (sum lines 19- 23) - -

25 LAND HELD FOR FUTURE USE 214.x.d (Notes G & Y) TP 0.00000 -

WORKING CAPITAL (Note H)

26 CWC calculated - -

27 Materials & Supplies (Note G) 227.8.c & .16.c (Note Y) TE 0.00000 -

28a Prepayments (Account 165) 111.57.c (Notes Y & CC) GP 0.00000 -

28b Unfunded Reserve Plant-related (enter negative) (Acct Nos. 228.1-228.4, 242) (Notes Y & Z) - NP 0.00000 -

28c Unfunded Reserve Labor-related (enter negative) (Acct Nos. 228.1-228.4, 242) (Notes Y & Z) - W/S 1.00000 -

29 TOTAL WORKING CAPITAL (sum lines 26 - 28c) - -

30 RATE BASE (sum lines 18, 24, 25, & 29) - -

Page 3



American Transmission Systems, Inc. (1) (2) (3) (4) (5)

Line Form No. 1 Transmission No. Page, Line, Col. Company Total Allocator (Col 3 times Col 4)

O&M (Note DD)

1 Transmission 321.112.b TE 0.00000 -

1a Less LSE Expenses Included in Transmission O&M Accounts (Note W) 1.00000

2 Less Account 565 321.96.b 1.00000 -

2a Less Deferred Internal Integration Costs (Note C) TE 0.00000 -

3 A&G 323.197.b (Note BB) W/S 1.00000 -

4 Less FERC Annual Fees W/S 1.00000 -

5 Less EPRI & Reg. Comm. Exp. & Non-safety Ad. (Note I) W/S 1.00000 -

5a Plus Transmission Related Reg. Comm. Exp. (Note I) TE 0.00000 -

6 Common 356.1 CE 1.00000 -

7 Transmission Lease Payments 1.00000 -

8 TOTAL O&M (sum lines 1, 3, 5a, 6, 7 less 1a, 2, 2a, 4, 5) - -

DEPRECIATION AND AMORTIZATION EXPENSE

9 Transmission 336.7.b (Note U) TP 0.00000 -

10 General & Intangible 336.1.f & 336.10.f (Note U) W/S 1.00000 -

11 Common 336.11.b (Note U) CE 1.00000 -

12 TOTAL DEPRECIATION (sum lines 9 - 11) - -

TAXES OTHER THAN INCOME TAXES (Note J)

LABOR RELATED

13 Payroll 263.i W/S 1.00000 -

14 Highway and vehicle 263.i W/S 1.00000 -

15 PLANT RELATED

16 Property 263.i GP 0.00000 -

17 Gross Receipts 263.i NA -

18 Other 263.i GP 0.00000 -

19 Payments in lieu of taxes GP 0.00000 -

20 TOTAL OTHER TAXES (sum lines 13 - 19) - -

INCOME TAXES (Note K)

21 T=1 - {[(1 - SIT) * (1 - FIT)] / (1 - SIT * FIT * p)} = 0.00%

22 CIT=(T/1-T) * (1-(WCLTD/R)) = 0.00%

where WCLTD=(page 4, line 27) and R= (page 4, line30)

and FIT, SIT & p are as given in footnote K.

23 1 / (1 - T) = (from line 21) 0.0000

24 Amortized Investment Tax Credit (266.8f) (enter negative)

25 Income Tax Calculation = line 22 * line 28 - NA -

26 ITC adjustment (line 23 * line 24) - NP 0. 00000 -

26b (Excess)/Deficient Deferred Income Taxes (App G, lines 2 & 3, col 3)(Note GG) DA 1.00000

27 Total Income Taxes (sum lines 25 through 26b) - -

28 RETURN - NA -

[Rate Base (page 2, line 30) * Rate of Return (page 4, line 30)]

29 GROSS REV. REQUIREMENT - -

(sum lines 8, 12, 20, 27, 28 )

Page 4




SUPPORTING CALCULATIONS AND NOTES Line (1) (2) (3) (4) (5) (6) No. TRANSMISSION PLANT INCLUDED IN ISO RATES

1 Total transmission plant (page 2, line 2, column 3) - 2 Less transmission plant excluded from ISO rates (Note M) 3 Less transmission plant included in OATT Ancillary Services (Note N )

4 Transmission plant included in ISO rates (line 1 less lines 2 & 3) - 5 Percentage of transmission plant included in ISO Rates (line 4 divided by line 1) TP= 0.00000 TRANSMISSION EXPENSES

6 Total transmission expenses (page 3, line 1, column 3) - 7 Less transmission expenses included in OATT Ancillary Services (Note L)

8 Included transmission expenses (line 6 less line 7) - 9 Percentage of transmission expenses after adjustment (line 8 divided by line 6) 0.00000 10 Percentage of transmission plant included in ISO Rates (line 5) TP 0.00000 11 Percentage of transmission expenses included in ISO Rates (line 9 times line 10) TE= 0.00000 WAGES & SALARY ALLOCATOR (W&S) Form 1 Reference $ TP Allocation

12 Production 354.20.b 0.00 - 13 Transmission 354.21.b 0.00 - 14 Distribution 354.23.b 0.00 - W&S Allocator 15 Other 354.24,25,26.b 0.00 - ($ / Allocation)

16 Total (sum lines 12-15) - - = 1.00000 = WS COMMON PLANT ALLOCATOR (CE) (Note O) $ % Electric W&S Allocator

17 Electric 200.3.c (line 17 / line 20) (line 16) CE 18 Gas 201.3.d 1.00000 * 1.00000 = 1.00000 19 Water 201.3.e

20 Total (sum lines 17 - 19) - RETURN (R) $

21 Long Term Interest (117, sum of 62c through 67c) (Note AA) 22 Preferred Dividends (118.29c) (positive number) Development of Common Stock:

23 Proprietary Capital (112.16c) (Note X) 24 Less Preferred Stock (line 28) - 25 Less Account 216.1 (112.12c) (enter negative) (Note X)

26 Common Stock (sum lines 23-25) - Cost $ % (Note P) Weighted

27 Long Term Debt (112, sum of 18 through 21) (Note X) 0% 0.0000 0.0000 =WCLTD 28 Preferred Stock (112.3d) (Note X) 0% 0.0000 0.0000 29 Common Stock (line 26) - 0% 0.0000

30 Total (sum lines 27-29) - 0.0000 =R REVENUE CREDITS ACCOUNT 447 (SALES FOR RESALE) (310-311) (Note Q)

31 a. Bundled Non-RQ Sales for Resale (311.x.h) 32 b. Bundled Sales for Resale included in Divisor on page 1

33 Total of line 31 less line 32 -

34 ACCOUNT 451 (MISCELLANEOUS SERVICE REVENUE) (Note S) (300.17.b)

35 ACCOUNT 454 (RENT FROM ELECTRIC PROPERTY) (Note R) (300.19.b)

36 ACCOUNT 456 (OTHER ELECTRIC REVENUES) (Note V) (330.x.n)

Page 5




General Note: References to pages in this formulary rate are indicated as: (page#, line#, col.#)

References to data from FERC Form 1 are indicated as: #.y.x (page, line, column)

Note

Letter A As provided by PJM and in effect at the time of the annual rate calculations pursuant to Section 34.1 of the PJM OATT.

B Peak as would be reported on page 401, column d of Form 1 at the time of the zonal peak for the twelve month period ending October 31 of the calendar year used to calculate rates. C Amount shown in Exhibit No. FE-100, Page 29 of 33, for Deferred Internal Integration Costs.

D Reserved

E Reserved

F The balances in Accounts 190, 281, 282 and 283 should exclude all FASB 106 or 109 related amounts. For example, any and all amounts in contra accounts identified as regulatory assets or liabilities related to FASB 106 or 109 should be excluded. The balance of Account 255 is reduced by prior flow throughs and excluded if the utility chose to utilize amortization of tax credits against taxable income as discussed in Note K. Account 281 is not allocated. Account 190 excludes any amounts relating to Charitable Contribution Limitations, Asset Retirement Obligations, and FAS 123 impacts related to Performance Shares and Restricted Stock Units. Accounts 282 and 283 exclude any amounts relating to AFUDC, offsets relating to Asset Retirement Obligations in Account 190, and offsets relating to Charitable Contribution Limitations in Account 190. Account 282 also excludes (i) Extraordinary Property Losses; and (ii) any Asset Impairment amounts incurred on or after January 1, 2015. For either (i) or (ii) above, ATSI is not precluded from requesting FERC approval through a section 205 filing for inclusion in the rate calculation.

G Identified in Form 1 as being only transmission related.

H Cash Working Capital assigned to transmission is one-eighth of O&M allocated to transmission at page 3, line 8, column 5. Prepayments are the electric related prepayments booked to Account No. 165 and reported on Page 111, line 57 in the Form 1.

I Line 5 - EPRI Annual Membership Dues listed in Form 1 at 353.f, all Regulatory Commission Expenses itemized at 351.h, and non-safety related advertising included in Account 930.1. Line 5a - Regulatory Commission Expenses directly related to transmission service, ISO filings, or transmission siting itemized at 351.h.

J Includes only FICA, unemployment, highway, property, gross receipts, and other assessments charged in the current year. Taxes related to income are excluded. Gross receipts taxes are not included in transmission revenue requirement in the Rate Formula Template, since they are recovered elsewhere.

K The currently effective income tax rate, where FIT is the Federal income tax rate; SIT is the State income tax rate, and p = "the percentage of federal income tax deductible for state income taxes". If the utility is taxed in more than one state it must attach a work paper showing the name of each state and how the blended or composite SIT was developed. Furthermore, a utility that elected to utilize amortization of tax credits against taxable income, rather than book tax credits to Account No. 255 and reduce rate base, must reduce its income tax expense by the amount of the Amortized Investment Tax Credit (Form 1, 266.8.f) multiplied by (1/1-T) (page 3, line 26).

Inputs Required: FIT =

SIT= (State Income Tax Rate or Composite SIT)

p = (percent of federal income tax deductible for state purposes)

L Removes dollar amount of transmission expenses included in the OATT ancillary services rates, including Account Nos. 561.1 - 561.3, and 561.BA.

M Removes transmission plant determined by Commission order to be state-jurisdictional according to the seven-factor test (until Form 1 balances are adjusted to reflect application of seven-factor test).

N Removes dollar amount of transmission plant included in the development of OATT ancillary services rates and generation step-up facilities, which are deemed included in OATT ancillary services. For these purposes, generation step-up facilities are those facilities at a generator substation on which there is no through-flow when the generator is shut down.

O Enter dollar amounts

P Debt cost rate = long-term interest (line 21) / long term debt (line 27). Preferred cost rate = preferred dividends (line 22) / preferred outstanding (line 28). No change in ROE may be made absent a filing with FERC under Section 205 or Section 206 of the Federal Power Act. Per the Settlement Agreement approved by order dated October 29, 2015, in Docket No. ER15-303-000, ATSI's stated ROE is set to: (a) 12.38% through June 30, 2015; (b) 11.06% for the period July 1, 2015 through December 31, 2015; and (c) 10.38% for the period commencing January 1, 2016.

Q Line 33 must equal zero since all short-term power sales must be unbundled and the transmission component reflected in Account No. 456.1 and all other uses are to be included in the divisor.

R Includes income related only to transmission facilities, such as pole attachments, rentals and special use.

S Excludes revenues unrelated to transmission services.

T The revenues credited on page 1, lines 2a-4b shall include only the amounts received directly (in the case of grandfathered agreements) or from the ISO (for service under this tariff) reflecting the Transmission Owner's integrated transmission facilities. They do not include revenues associated with FERC annual charges, gross receipts taxes, ancillary services, or facilities not included in this template (e.g., direct assignment facilities and GSUs) which are not recovered under this Rate Formula Template. The revenues on lines 5a-5d are supported by separate references for each item.

U Plant in Service, Accumulated Depreciation, and Depreciation Expense amounts exclude Asset Retirement Obligation amounts unless authorized by FERC. Depreciation Rates: FERC Account 352 Depr %: 2.24%; FERC Account 353 Depr %: 2.06%; FERC Account 354 Depr %: 2.24%; FERC Account 355 Depr %: 3.09%; FERC Account 356 Depr %: 2.69%; FERC Account 357 Depr %: 2.00%; FERC Account 358 Depr %: 2.04%; FERC Account 359 Depr %: 1.33%. No change to these Depreciation Rates may be made absent a filing with FERC under Section 205 or Section 206 of the Federal Power Act.

V On Line 35, enter revenues from RTO settlements that are associated with NITS and firm Point-to-Point Service for which the load is not included in the divisor to derive ATSI's zonal rates. Exclude non-firm Point-to-Point revenues, and revenues related to MTEP and RTEP projects. Include revenues and revenue adjustments associated with Docket EL02-111, and revenue credit adjustments related to ATSI's PJM integration as supported by Appendix G.

W Account Nos. 561.4, 561.8, and 575.7 consist of RTO expenses billed to load-serving entities and are not included in Transmission Owner revenue requirements.

X Calculate using a 13 month average balance.

Y Calculate using average of beginning and end of year balance.

Z Only include from Account No. 242 amounts relating to Vacation Accruals and Employee Incentive Compensation.

AA Short-term debt and related interest expense shall not be included in the formula rate calculation.

BB A&G excludes any credit facility fees charged to Account 930.2. PBOP included in FERC Acct. 926, as reported in FERC Form 1 page 323.187.b, is included in the Administrative & General Expenses input to Attachment H-21A, page 3 of 5, line 3. The total PBOP amount in FERC Acct. 926 is $0, per company records. No change to this PBOP amount may be made absent a filing with FERC under Section 205 or Section 206 of the Federal Power Act.

CC Prepayments shall exclude prepayments of taxes attributable to time periods ending before the beginning of the time period for which the rate calculation is being made.

DD ATSI will exclude (i) Extraordinary Property Losses; and (ii) any Asset Impairment amounts incurred on or after January 1, 2015. For either (i) or (ii) above, ATSI is not precluded from requesting FERC approval through a section 205 filing for inclusion in the rate calculation.

GG Upon enactment of changes in tax law, income tax rates (including changes in apportionment) and other actions taken by a taxing authority, deferred taxes are re-measured and adjusted in the Company's books of account, resulting in excess or deficient accumulated deferred taxes. Such excess or deficient deferred taxes attributed to the transmission function will be based upon tax records and calculated in the calendar year in which the excess or deficient amount was measured and recorded for financial reporting purposes.

Page 6

Attachment H-21A, Appendix G page 1 of 1


Income Tax Adjustments

To be completed in conjunction with Attachment H-21A

[1]

[2] [3]

Source Year-end

December 31, 2019 [C] 2 Amortized Excess Deferred Taxes (enter negative) [B] Appendix G1, Line 12, Column F -

3 Amortized Deficient Deferred Taxes [B] Appendix G1, Line 12, Column F - Notes:

[B] Upon enactment of changes in tax law, income tax rates (including changes in apportionment) and other actions taken by a taxing authority, deferred taxes are re-measured and adjusted in the Company's books of account, resulting in excess or deficient accumulated deferred taxes. Such excess or deficient deferred taxes attributed to the transmission function will be based upon tax records and calculated in the calendar year in which the excess or deficient amount was measured and recorded for financial reporting purposes. The balance located within Column 3, line 2 and line 3, is the net impact of excess deferred and deficient amortization.

[C] Amounts from lines 2 and 3 included on Attachment H-21A, page 3 of 5, line 26b.

Page 7

Attachment H-21A, Appendix G (1)

page 1 of 1


Income Tax Adjustments Worksheet


COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H


(Excess)/Deficient ADIT Transmission - Beg

Balance of Year (Note B)


(Note C)

Amortization Period

(Note D)






Col. F


Non-property (Note A): 1 Account 190 1a Example

- 1b Example

-

2 Account 282 2a Example

-

3 Account 283 3a Example

-

4 Non-property gross up for Taxes

-

5 Total Non-Property

- -

- -



Beginning Balance of Year

(Note B)


(Note C)

Amortization Period

(Note D)






Col. F


Property (Note A): 6 Property Book-Tax Timing Difference - Account 190

ARAM ARAM - 7 Property Book-Tax Timing Difference - Account 282

ARAM ARAM -

8 Property Book-Tax Timing Difference - Account 283

ARAM ARAM - 9 Property Gross up for Taxes

-

10 Total Property (Total of lines 6 thru 9)

- -

- -


12 Total Non-Property & Property Amortization, including gross up for taxes (Total of lines 5, 10, and 11)

-

Notes: A Upon a tax rate change (federal, state and/or, if applicable, state apportionments), the Company remeasures its deferred tax assets and liabilities to the new applicable corporate tax rate. For schedule M items not directly taken to the P&L, the result of this remeasurement is a change to the net deferred tax assets/liabilities recorded in accounts 190, 282, and 283 with a corresponding change in regulatory assets (account 182.3) and regulatory liabilities (account 254) to reflect the return of/collection from excess/deficient deferred taxes to/from customers. The remeasurement is effectuated within PowerTax and Tax Provision, which maintain both the timing difference and APB11 deferred tax balance (the historical ADIT based on the time difference and the rate in effect when the timing difference occurred). The difference in the two results is reclassified from ADIT to regulatory assets/liabilities for deficient/excess ADIT. Within the FERC Form 1, deficient and excess ADITs in Account 182.3 and Account 254, respectively are presented grossed-up for tax purposes. For ratemaking purposes, these grossed-up balances are treated as FAS109 and subsequently removed from rate base, thereby ensuring rate base neutrality for tax rate changes. The Company would follow the process described above to remeasure ADIT balances (increase or decrease) due to any future income tax rate change.

B Beginning balance of year is the end of the prior year balance as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254) C In the event the Company populates the data enterable fields, it will support the data entered as just and reasonable in its annual update D The amortization periods shall be consistent with the following:

Protected Property & Non-Protected Property: ARAM, or directly assigned based on average remaining life of assets for property items not in PowerTax Protected Non-Property & Non-Protected Non-Property will be directly assigned and presented in the table above

E The amortization will occur through FERC income statement Accounts 410.1. and 411.1 F Ending balance of year is the end of current year balance, as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254) G Reflects the net amount of amortization, including gross-up for taxes, from prior period(s) that was booked for GAAP, but deferred for FERC purposes because a mechanism did not exist to pass back/collect excess/deficient ADITs to/from customers. The net amortized deferral amount, including the gross-up for

taxes, is in Account 254, as reflected on FERC Form No. 1, page 278 or Account 182.3, as reflected on FERC Form No. 1, page 232.

Attachment C

New ADIT Worksheet populated as required under Order No. 864.


May 1, 2020

Attachment H-21A, Appendix G (1)

page 1 of 1

For the 12 months ended 12/31/2019

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H

Line

No.Description

(Excess)/Deficient

ADIT Transmission -

Beg Balance of Year

(Note B)

Current Period

Other Activity

(Note C)

Amortization Period

(Note D)

Years Remaining at

Year End

Amortization

(Note E)

(Excess)/Deficient

ADIT Transmission -

Ending Balance of

Year

(Note F)

(Col. B + Col. C) -

Col. F

Protected (P) Non-

Protected (N)

Non-property (Note A):

1 Account 1901a Accum Prov For Inj and Damage-Gen Liability 888 - 2 - 888 - N

1b Charitable Cont Carryfwd State RTA 377 - 2 - 377 - N

1c Charitable Contribution State & Local RTA (20) - 2 - (20) - N

1d Federal Long Term NOL - Protected 35,161,736 - 20 18 1,850,618 33,311,119 P

1e Federal Long Term NOL - Unprotected 44,157 - 20 18 2,324 41,833 N

1f ITC FAS 109 - FE 456,193 - 17 15 28,512 427,681 N

1g NOL Deferred Tax Asset - LT OH Local DIT (1,714,765) - 5 3 (428,691) (1,286,074) N

1h NOL Deferred Tax Asset - LT PA (175,283) - 20 18 (9,225) (166,058) N

1i NOL Deferred Tax Asset - LT WV (954) - 20 18 (50) (903) N

1j Pension/OPEB : Other Def Cr. or Dr. 3,911,461 - 33 31 122,233 3,789,228 N

1k PJM Payable 191,556 - 2 - 191,556 - N

1l PJM Receivable (2,278,794) - 2 - (2,278,794) - N

1m Qualified Asset Adjustment - Local (17,028) - 30 28 (587) (16,441) N

2 Account 2822a N/A -

3 Account 2833a Deferred Charge-EIB (35,023) - 2 - (35,023) - N

3b FE Service Tax Interest Allocation (44) - 2 - (44) - N

3c FE Service Timing Allocation (68,617) - 2 - (68,617) - N

3d MISO Exit Fees Deferral (8,022,055) - 10 8 (891,339) (7,130,715) N

3e Qualified Asset Adjustment - Local - Val Allow 11,668 - 30 28 402 11,266 N

3f RTO Study Deferral (379,985) - 10 8 (42,221) (337,764) N

3g State Income Tax Deductible (140,635) - 2 - (140,635) - N

3h Valuation Allowance NOL WV 954 - 20 18 50 903 N

3i Vegetation Management 825,055 - 10 8 91,673 733,382 N

-

4 Non-property gross up for Taxes 8,122,507 38,725 (472,148) 8,633,380 N,P

5 Total Non-Property 35,893,349 38,725 (2,078,762) 38,010,836

Line

No.Description

(Excess)/Deficient

ADIT Transmission -

Beginning Balance

of Year

(Note B)

Current Period

Other Activity

(Note C)

Amortization Period

(Note D)

Years Remaining at

Year End

Amortization

(Note E)

(Excess)/Deficient

ADIT Transmission -

Ending Balance of

Year

(Note F)

(Col. B + Col. C) -

Col. F

Protected (P) Non-

Protected (N)

Property (Note A):6 Property Book-Tax Timing Difference - Account 190 8,483,271 1,762,676 ARAM ARAM 989,564 9,256,383 N & P

7 Property Book-Tax Timing Difference - Account 282 (312,164,794) 2,419,154 ARAM ARAM (6,925,917) (302,819,722) N & P

8 Property Book-Tax Timing Difference - Account 283 - - ARAM ARAM - - N & P

9 Property Gross up for Taxes (88,821,762) 805,480 (1,744,562) (86,271,720) N & P

10 Total Property (Total of lines 6 thru 9) (392,503,285) 4,987,310 (7,680,915) (379,835,060)


12 Total Non-Property & Property Amortization, including gross up for taxes (Total of lines 5, 10, and 11) (9,759,677) N & P

Notes:

A

B Beginning balance of year is the end of the prior year balance, including gross-up for taxes, as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254)

C In the event the Company populates the data enterable fields, it will support the data entered as just and reasonable in its annual update

D The amortization periods shall be consistent with the following:


Protected Non-Property & Non-Protected Non-Property will be directly assigned and presented in the table above

E The amortization will occur through FERC income statement Accounts 410.1. and 411.1

F Ending balance of year is the end of current year balance, as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254)

G

Income Tax Adjustments Worksheet


Upon a tax rate change (federal, state and/or, if applicable, state apportionments), the Company remeasures its deferred tax assets and liabilities to the new applicable corporate tax rate. For schedule M items not directly taken to the P&L,

the result of this remeasurement is a change to the net deferred tax assets/liabilities recorded in accounts 190, 282, and 283 with a corresponding change in regulatory assets (account 182.3) and regulatory liabilities (account 254) to

reflect the return of/collection from excess/deficient deferred taxes to/from customers. The remeasurement is effectuated within PowerTax and Tax Provision, which maintain both the timing difference and APB11 deferred tax balance (the

historical ADIT based on the timing difference and the rate in effect when the timing difference occurred). The difference in the two results is reclassified from ADIT to regulatory assets/liabilities for deficient/excess ADIT. Within the FERC

Form 1, deficient and excess ADITs in Account 182.3 and Account 254, respectively are presented grossed-up for tax purposes. For ratemaking purposes, these grossed-up balances are treated as FAS109 and subsequently removed from

rate base, thereby ensuring rate base neutrality for tax rate changes. The Company would follow the process described above to remeasure ADIT balances (increase or decrease) due to any future income tax rate change.

Reflects the net amount of amortization, including gross-up for taxes, from prior period(s) that was booked for GAAP, but deferred for FERC purposes because a mechanism did not exist to pass back/collect excess/deficient ADITs to/from

customers. The net amortized deferral amount, including the gross-up for taxes, is in Account 254, as reflected on FERC Form No. 1, page 278 or Account 182.3, as reflected on FERC Form No. 1, page 232.

Attachment D

Workpapers


May 1, 2020

ADIT Offset to P&L

(Note A)

(Excess) Deficient

Deferred Income

Taxes (Note A & B)

Book-Tax Temporary Difference

12/31/2017 ADIT

Balance

(Prior to TCJA)

12/31/2017 ADIT

Balance

(After TCJA)

Change in ADIT due

to TCJATax Expense (Benefit)

ADIT Offset to

Regulatory Asset

(Liability)

Other Adjustments

Including Gross-up

True-ups

2017 Return-to-

Accrual Adjustment

(Recorded in 2018)

2018 Amortization

(Note C & D & F)

2018 Return-to-

Accrual Adjustment

(Recorded in 2019)

2019 Amortization

(Note C & D & F)

12/31/2019 Ending

Balance (Note E)

Protected /

Unprotected

Non-Property Related Items:

190 Accounts

Accum Prov For Inj and Damage-Gen Liability - - - - - - 1,776 (888) - (888) - Unprotected

Asset Retirement Obligation Liability 669,582 416,642 (252,939) 252,939 - - - - - - - N/A

Charitable Cont Carryfwd State RTA (3,497) (4,250) (753) - 753 - - (377) - (377) - Unprotected

Charitable Contribution Carryforward 113,470 70,606 (42,864) - 42,864 - (42,864) - - - - Unprotected

Charitable Contribution State & Local RTA 183 223 39 - (39) - - 20 - 20 - Unprotected

Federal Long Term NOL - Protected 91,677,894 55,006,736 (36,671,158) - 36,671,158 - 341,197 (1,850,618) - (1,850,618) 33,311,119 Protected

Federal Long Term NOL - Unprotected - - - - - - 46,481 (2,324) - (2,324) 41,833 Unprotected

ITC FAS 109 - FE 1,283,111 798,407 (484,705) - 484,705 - - (28,512) - (28,512) 427,681 Unprotected

NOL Deferred Tax Asset - LT OH Local DIT 9,951,761 12,095,217 2,143,456 - (2,143,456) - - 428,691 - 428,691 (1,286,074) Unprotected

NOL Deferred Tax Asset - LT PA 856,647 1,041,155 184,508 - (184,508) - - 9,225 - 9,225 (166,058) Unprotected

NOL Deferred Tax Asset - LT WV 4,660 5,664 1,004 - (1,004) - - 50 - 50 (903) Unprotected

Pension/OPEB : Other Def Cr. or Dr. 10,678,003 6,644,309 (4,033,694) - 4,033,694 - - (122,233) - (122,233) 3,789,228 Unprotected

PJM Payable 1,014,174 631,062 (383,112) - 383,112 - (0) (191,556) - (191,556) - Unprotected

PJM Receivable (12,064,855) (7,507,267) 4,557,588 - (4,557,588) - (0) 2,278,794 - 2,278,794 - Unprotected

Qualified Asset Adjustment - Local 81,787 99,402 17,616 - (17,616) - - 587 - 587 (16,441) Unprotected

Total For 190 Accounts: 104,262,920 69,297,906 (34,965,014) 252,939 34,712,074 - 346,590 520,860 - 520,860 36,100,384

282 Accounts

Sale of Property - Book Gain or (Loss) 124,224 77,297 (46,926) 46,926 - - - - - - - N/A

Total For 282 Accounts: 124,224 77,297 (46,926) 46,926 - - - - - - -

283 Accounts

Deferred Charge-EIB (185,428) (115,381) 70,047 - (70,047) - - 35,023 - 35,023 - Unprotected

FE Service Tax Interest Allocation (233) (145) 88 - (88) - - 44 - 44 - Unprotected

FE Service Timing Allocation (363,286) (226,052) 137,234 - (137,234) - - 68,617 - 68,617 - Unprotected

MISO Exit Fees Deferral (23,595,555) (14,682,160) 8,913,394 - (8,913,394) - 0 891,339 - 891,339 (7,130,715) Unprotected

Qualified Asset Adjustment - Local - Val Allow (56,043) (68,114) (12,071) - 12,071 - - (402) - (402) 11,266 Unprotected

RTO Study Deferral (1,117,662) (695,457) 422,205 - (422,205) - - 42,221 - 42,221 (337,764) Unprotected

State Income Tax Deductible (218,361) (131,017) 87,344 - (87,344) - (193,925) 140,635 - 140,635 - Unprotected

Valuation Allowance NOL WV (4,660) (5,664) (1,004) - 1,004 - - (50) - (50) 903 Unprotected

Vegetation Management 2,426,764 1,510,036 (916,728) - 916,728 - 0 (91,673) - (91,673) 733,382 Unprotected

Total For 283 Accounts: (23,114,465) (14,413,955) 8,700,510 - (8,700,510) - (193,925) 1,085,754 - 1,085,754 (6,722,928)

Total Non-Property Related Items:

Net (Excess) Deficient Deferred Income Taxes (excluding Gross-up) 81,272,679 54,961,249 (26,311,430) 299,866 26,011,564 - 152,664 1,606,614 - 1,606,614 29,377,456

Net Tax Gross-up 7,593,015 53,744 44,564 469,908 - 472,148 8,633,379 Net (Excess) Deficient Deferred Income Taxes (including Gross-up) 33,604,580 53,744 197,228 2,076,521 - 2,078,762 38,010,836

Property Related Items:

190 Accounts

CIAC-Fed-Norm 8,736,545 5,241,927 (3,494,618) - 3,494,618 (0) (183,788) (426,156) 162 (400,342) 2,484,494 Unprotected

CIAC-Fed-Norm-Incurred-CWIP 4,445,261 2,667,156 (1,778,104) - 1,778,104 (6,928) - - - - 1,771,176 Unprotected

CIAC-Fed-Norm-Reversal-CWIP (5,135,843) (3,081,506) 2,054,337 - (2,054,337) 283,161 - - - - (1,771,176) Unprotected

CIAC-OH Local-Norm 217,522 264,373 46,851 - (46,851) (4,432) (1,190) 7,599 (14,399) 9,203 (50,070) Unprotected

CIAC-OH Local-Norm-Incurred-CWIP 110,678 134,516 23,838 - (23,838) 9,400 - - (6,800) - (21,238) Unprotected

CIAC-OH Local-Norm-Reversal-CWIP (127,872) (155,414) (27,542) - 27,542 (10,344) - 0 6,800 (0) 23,997 Unprotected

CIAC-PA-Norm 121,013 147,077 26,064 - (26,064) (20,135) (3,700) 3,762 (8,752) 4,271 (50,619) Unprotected

CIAC-PA-Norm-Incurred-CWIP 55,906 67,947 12,041 - (12,041) (2,640) - 0 (3,759) - (18,441) Unprotected

CIAC-PA-Norm-Reversal-CWIP (64,591) (78,502) (13,912) - 13,912 1,095 - - 3,759 - 18,766 Unprotected

CIAC-WV-Norm 221 269 48 - (48) 27 29 2 21 (1) 30 Unprotected

CIAC-WV-Norm-Incurred-CWIP 113 137 24 - (24) 29 - - 10 (0) 15 Unprotected

CIAC-WV-Norm-Reversal-CWIP (130) (158) (28) - 28 (31) - - (10) 0 (13) Unprotected

Tax Interest Capitalized-Fed-Norm 15,991,452 9,594,871 (6,396,581) - 6,396,581 0 101,997 (674,520) 7,513 (619,255) 5,212,316 Unprotected

Tax Interest Capitalized-Fed-Norm-Incurred-CWIP 26,475,202 15,885,121 (10,590,081) - 10,590,081 18,941 - - 0 - 10,609,021 Unprotected

Tax Interest Capitalized-Fed-Norm-Reversal-CWIP (21,544,748) (12,926,849) 8,617,899 - (8,617,899) (137,289) - - - - (8,755,188) Unprotected

Tax Interest Capitalized-OH Local-Norm 398,154 483,911 85,756 - (85,756) 15,778 (7,863) 8,333 (26,355) 10,703 (85,160) Unprotected

Tax Interest Capitalized-OH Local-Norm-Incurred-CWIP 659,178 801,155 141,977 - (141,977) 58,373 - - (40,730) - (124,333) Unprotected

Tax Interest Capitalized-OH Local-Norm-Reversal-CWIP (536,420) (651,956) (115,536) - 115,536 (42,415) - 0 33,612 (0) 106,734 Unprotected

Tax Interest Capitalized-PA-Norm 217,641 264,518 46,877 - (46,877) (11,582) (11,557) 5,037 (16,019) 5,865 (75,133) Unprotected

Tax Interest Capitalized-PA-Norm-Incurred-CWIP 334,907 407,041 72,134 - (72,134) (16,088) - - (22,648) - (110,871) Unprotected

Tax Interest Capitalized-PA-Norm-Reversal-CWIP (272,900) (331,678) (58,778) - 58,778 14,507 - 0 18,713 (0) 91,999 Unprotected

Tax Interest Capitalized-WV-Norm 405 493 87 - (87) 65 52 (2) 38 (6) 59 Unprotected

Tax Interest Capitalized-WV-Norm-Incurred-CWIP 671 815 144 - (144) 177 - 0 59 0 92 Unprotected

Tax Interest Capitalized-WV-Norm-Reversal-CWIP (546) (664) (118) - 118 (143) - (0) (49) - (74) Unprotected

Total For 190 Accounts: 30,081,820 18,734,600 (11,347,220) - 11,347,220 149,526 (106,019) (1,075,947) (68,833) (989,564) 9,256,383

282 Accounts

263A MSC-Fed-Norm (5,490,297) (3,294,178) 2,196,119 - (2,196,119) 0 - 334,353 - 334,348 (1,527,417) Unprotected

263A MSC-OH Local-Norm (141,299) (171,732) (30,434) - 30,434 27,398 2,189 (9,143) 7,388 (10,470) 47,796 Unprotected

263A MSC-PA-Norm (73,614) (89,469) (15,855) - 15,855 (8,145) 3,511 (1,719) 4,208 (2,480) 11,230 Unprotected

263A MSC-WV-Norm (139) (169) (30) - 30 59 (18) (11) (10) (9) 41 Unprotected

263A-Fed-Norm (153,838,535) (92,303,121) 61,535,414 - (61,535,414) (0) 6,107,935 1,750,102 19,289 2,140,256 (51,517,832) Unprotected

Deferred Tax Asset (Liability) (Note A) (Excess) Deficient Deferred Income Tax Activity post TCJA

263A-OH Local-Norm (3,830,263) (4,655,242) (824,979) - 824,979 (195,720) (28,605) (19,952) 227,157 (33,600) 774,259 Unprotected

263A-PA-Norm (1,934,739) (2,351,453) (416,713) - 416,713 188,769 41,913 (24,627) 125,401 (37,310) 710,859 Unprotected

263A-WV-Norm (3,899) (4,738) (840) - 840 (1,072) (564) 29 (330) 46 (1,052) Unprotected

Accelerated Tax Depr-Fed-Norm (638,236,029) (382,941,617) 255,294,412 - (255,294,412) 0 (12,552,681) 2,361,457 235,430 4,221,632 (261,028,573) Protected

Accelerated Tax Depr-OH Local-Norm (15,890,764) (19,313,387) (3,422,623) - 3,422,623 (112,724) 428,505 (46,603) 1,093,526 (86,400) 4,698,926 Protected

Accelerated Tax Depr-PA-Norm (4,024,395) (4,891,189) (866,794) - 866,794 (76,552) 192,114 (14,161) 298,829 (23,777) 1,243,248 Protected

Accelerated Tax Depr-WV-Norm (16,175) (19,658) (3,483) - 3,483 (2,228) (2,062) (3) (1,597) 72 (2,336) Protected

AFUDC Debt-Fed-Norm (10,942,533) (6,565,520) 4,377,013 - (4,377,013) 0 (113,642) 373,968 (2,480) 360,969 (3,758,197) Unprotected

AFUDC Debt-Fed-Norm-Incurred-CWIP (15,875,064) (9,525,039) 6,350,026 - (6,350,026) (0) - (0) 0 - (6,350,026) Unprotected

AFUDC Debt-Fed-Norm-Reversal-CWIP 14,598,034 8,758,821 (5,839,214) - 5,839,214 71,624 - (0) 0 - 5,910,838 Unprotected

AFUDC Debt-OH Local-Norm (272,447) (331,127) (58,681) - 58,681 5,879 6,325 (7,650) 17,600 (8,720) 72,115 Unprotected

AFUDC Debt-OH Local-Norm-Incurred-CWIP (395,256) (480,389) (85,132) - 85,132 (39,397) - - 24,379 - 70,114 Unprotected

AFUDC Debt-OH Local-Norm-Reversal-CWIP 363,461 441,745 78,284 - (78,284) 33,246 - (0) (22,693) (0) (67,730) Unprotected

AFUDC Debt-PA-Norm (137,618) (167,259) (29,641) - 29,641 9,107 7,349 (2,939) 9,742 (3,688) 49,211 Unprotected

AFUDC Debt-PA-Norm-Incurred-CWIP (199,652) (242,654) (43,002) - 43,002 9,403 - 0 13,477 (0) 65,883 Unprotected

AFUDC Debt-PA-Norm-Reversal-CWIP 183,591 223,134 39,543 - (39,543) (9,493) - 0 (12,545) - (61,581) Unprotected

AFUDC Debt-WV-Norm (277) (337) (60) - 60 88 (35) (3) (25) 0 85 Unprotected

AFUDC Debt-WV-Norm-Incurred-CWIP (402) (489) (87) - 87 (110) - (0) (35) - (59) Unprotected

AFUDC Debt-WV-Norm-Reversal-CWIP 370 450 80 - (80) 101 - 0 33 0 54 Unprotected

AFUDC Equity/FAS 43-Fed-FT (28,004,895) (16,802,937) 11,201,958 - (11,201,958) 11,201,958 - - - - - N/A

AFUDC Equity/FAS 43-Fed-FT-Incurred-CWIP (33,974,161) (20,384,497) 13,589,665 - (13,589,665) 13,589,665 - - - - - N/A

AFUDC Equity/FAS 43-Fed-FT-Reversal-CWIP 30,184,841 18,110,904 (12,073,936) - 12,073,936 (12,073,936) - - - - - N/A

AFUDC Equity/FAS 43-OH Local-FT (697,264) (847,444) (150,180) - 150,180 (150,180) - - - - - N/A

AFUDC Equity/FAS 43-OH Local-FT-Incurred-CWIP (845,887) (1,028,078) (182,191) - 182,191 (182,191) - - - - - N/A

AFUDC Equity/FAS 43-OH Local-FT-Reversal-CWIP 751,540 913,411 161,870 - (161,870) 161,870 - - - - - N/A

AFUDC Equity/FAS 43-PA-FT (352,202) (428,060) (75,859) - 75,859 (75,859) - - - - - N/A

AFUDC Equity/FAS 43-PA-FT-Incurred-CWIP (427,274) (519,302) (92,028) - 92,028 (92,028) - - - - - N/A

AFUDC Equity/FAS 43-PA-FT-Reversal-CWIP 379,618 461,381 81,764 - (81,764) 81,764 - - - - - N/A

AFUDC Equity/FAS 43-WV-FT (710) (863) (153) - 153 (153) - - - - - N/A

AFUDC Equity/FAS 43-WV-FT-Incurred-CWIP (861) (1,046) (185) - 185 (185) - - - - - N/A

AFUDC Equity/FAS 43-WV-FT-Reversal-CWIP 765 930 165 - (165) 165 - - - - - N/A

ARO-Fed-Norm (46,123) (27,674) 18,449 - (18,449) - (2,149) 20,598 (619) 62 (557) Unprotected

ARO-OH Local-Norm (1,148) (1,396) (247) - 247 (166) 29 (111) 6 (1) 5 Unprotected

ARO-PA-Norm (580) (705) (125) - 125 (1) 45 (169) 6 (1) 6 Unprotected

ARO-WV-Norm (1) (1) (0) - 0 (0) (0) 0 (0) - (0) Unprotected

Cap Vertical Tree Trimming-Fed-Norm - - - - - - (4,065,836) 111,726 1,145 534,325 (3,418,641) Unprotected

Cap Vertical Tree Trimming-OH Local-Norm - - - - - - 58,430 (1,606) 17,516 (10,763) 63,578 Unprotected

Cap Vertical Tree Trimming-PA-Norm - - - - - - 33,630 (924) 9,683 (6,125) 36,265 Unprotected

Cap Vertical Tree Trimming-WV-Norm - - - - - - 21 (1) (25) 2 (3) Unprotected

Casualty Loss-Fed-Norm (263,032) (157,819) 105,213 - (105,213) - 472 10,474 0 9,427 (84,840) Unprotected

Casualty Loss-OH Local-Norm (6,549) (7,960) (1,411) - 1,411 (343) 95 (116) 462 (151) 1,357 Unprotected

Casualty Loss-PA-Norm (3,308) (4,020) (712) - 712 (4) 154 (86) 255 (103) 929 Unprotected

Casualty Loss-WV-Norm (7) (8) (1) - 1 (1) (1) - (1) 0 (1) Unprotected

FAS 123R - Performance Shares-Fed-Norm (3) (2) 1 - (1) (0) 0 1 (0) 1 0 Unprotected

FAS 123R - Performance Shares-OH Local-Norm (0) (0) (0) - 0 (0) - - - (0) - Unprotected

FAS 123R - Performance Shares-PA-Norm (0) (0) (0) - 0 1 0 (0) - (0) 1 Unprotected

FAS 123R - RSU Capital-Fed-Norm (433) (260) 173 - (173) 0 (0) 5 0 5 (163) Unprotected

FAS 123R - RSU Capital-OH Local-Norm (11) (13) (2) - 2 (0) 0 (0) 1 (0) 3 Unprotected

FAS 123R - RSU Capital-PA-Norm (5) (7) (1) - 1 (0) 0 (0) 0 (0) 1 Unprotected

FAS 123R - RSU Capital-WV-Norm (0) (0) (0) - 0 - - - - - 0 Unprotected

G Overheads-Fed-Norm (2,857,562) (1,714,537) 1,143,025 - (1,143,025) (0) (8,599) 36,613 7,298 57,909 (1,049,804) Unprotected

G Overheads-OH Local-Norm (71,147) (86,471) (15,324) - 15,324 6,821 1,328 (689) 4,054 (1,358) 25,480 Unprotected

G Overheads-PA-Norm (35,938) (43,678) (7,740) - 7,740 (1,891) 1,754 (287) 2,320 (550) 9,087 Unprotected

G Overheads-WV-Norm (72) (88) (16) - 16 (46) (9) 2 (6) 3 (42) Unprotected

Highway Reimbursements-Fed-Norm 64,163 38,498 (25,665) - 25,665 0 (214) (769) (112) (878) 23,693 Unprotected

Highway Reimbursements-OH Local-Norm 1,598 1,942 344 - (344) (310) (19) 20 (91) 27 (717) Unprotected

Highway Reimbursements-PA-Norm 807 981 174 - (174) 89 (38) 4 (52) 6 (164) Unprotected

Highway Reimbursements-WV-Norm 2 2 0 - (0) (1) 0 0 0 0 (1) Unprotected

ITC Basis Reduction-Fed-Norm (198,709) (119,225) 79,484 - (79,484) (0) (372) 11,180 135 10,046 (58,495) Unprotected

ITC Basis Reduction-OH Local-Norm (4,947) (6,013) (1,066) - 1,066 959 86 (296) 260 (304) 1,771 Unprotected

ITC Basis Reduction-PA-Norm (2,499) (3,037) (538) - 538 (276) 121 (54) 145 (69) 405 Unprotected

ITC Basis Reduction-WV-Norm (5) (6) (1) - 1 2 (1) (0) (0) (0) 2 Unprotected

OPEBs-Fed-Norm 146,050 87,630 (58,420) - 58,420 0 8 (2,718) 57 (4,086) 51,681 Unprotected

OPEBs-OH Local-Norm 3,636 4,420 783 - (783) (31) (57) 39 (215) 78 (968) Unprotected

OPEBs-PA-Norm 1,837 2,232 396 - (396) (875) (87) 70 (120) 102 (1,307) Unprotected

OPEBs-WV-Norm 4 5 1 - (1) 2 1 (0) 0 (0) 2 Unprotected

Other Basis Differences-Fed-Norm 76,385,252 45,831,151 (30,554,101) - 30,554,101 0 187,062 (1,620,760) (23,976) (1,366,758) 27,729,670 Unprotected

Other Basis Differences-OH Local-Norm 1,901,836 2,311,461 409,626 - (409,626) (351,621) (34,416) 39,718 (111,072) 39,467 (827,548) Unprotected

Other Basis Differences-PA-Norm 953,941 1,159,405 205,464 - (205,464) 71,325 (46,392) 9,138 (61,381) 10,564 (222,210) Unprotected

Other Basis Differences-WV-Norm 1,936 2,353 417 - (417) (744) 249 41 163 31 (676) Unprotected

Pensions-Fed-Norm 50,112 30,067 (20,045) - 20,045 0 12 (820) (41) (722) 18,474 Unprotected

Pensions-Fed-Norm-Incurred-CWIP 62,469 37,481 (24,988) - 24,988 - - - - - 24,988 Unprotected

Pensions-Fed-Norm-Reversal-CWIP (61,835) (37,101) 24,734 - (24,734) - - - - - (24,734) Unprotected

Pensions-OH Local-Norm 1,248 1,516 269 - (269) (99) (20) 16 (73) 17 (428) Unprotected

Pensions-OH Local-Norm-Incurred-CWIP 1,555 1,890 335 - (335) 201 - - (96) - (230) Unprotected

Pensions-OH Local-Norm-Reversal-CWIP (1,540) (1,871) (332) - 332 (199) - - 95 - 228 Unprotected

Pensions-PA-Norm 630 766 136 - (136) 91 (30) 3 (41) 4 (108) Unprotected

Pensions-PA-Norm-Incurred-CWIP 786 955 169 - (169) (36) - - (53) - (258) Unprotected

Pensions-PA-Norm-Reversal-CWIP (778) (945) (168) - 168 36 - - 52 - 256 Unprotected

Pensions-WV-Norm 1 2 0 - (0) 1 0 (0) 0 (0) 1 Unprotected

Pensions-WV-Norm-Incurred-CWIP 2 2 0 - (0) 0 - - 0 - 0 Unprotected

Pensions-WV-Norm-Reversal-CWIP (2) (2) (0) - 0 (0) - - (0) - (0) Unprotected

PT Rebal-Add'l Property RTA-All-Norm 266,842 166,041 (100,802) - 100,802 590 - - (604) - 100,787 Unprotected

PT Rebal-Add'l Property-All-Norm (71,379) (44,415) 26,964 - (26,964) 5,454 - - 164 - (21,346) Unprotected

PT Rebal-Rate Change-All-FT (2,390,448) (1,487,439) 903,009 - (903,009) 903,009 - - - - - N/A

PT Rebal-Rate Change-All-Norm 2,390,448 1,487,439 (903,009) - 903,009 6,080 - - (5,489) - 903,600 Unprotected

PT Rebal-Reg Asset Recon 652,314 405,897 (246,416) - 246,416 (652,931) - - (1,498) - (408,013) Unprotected

PT Rebal-Reg Asset Recon - APB11 (652,314) (405,897) 246,416 - (246,416) (1,659) - - 1,498 - (246,578) Unprotected

R&D Cost-Fed-Norm (4,114,631) (2,468,779) 1,645,852 - (1,645,852) - 59 172,772 (0) 151,143 (1,321,879) Unprotected

R&D Cost-OH Local-Norm (102,446) (124,511) (22,065) - 22,065 (4,405) 1,587 (2,021) 5,655 (2,348) 20,534 Unprotected

R&D Cost-PA-Norm (59,699) (72,557) (12,858) - 12,858 59,699 2,844 (5,319) 3,746 (4,721) 69,106 Unprotected

R&D Cost-WV-Norm (104) (127) (22) - 22 (39) (14) 3 (8) 4 (31) Unprotected

Tax Basis Step Up-Fed-Norm (2,075,655) (1,245,393) 830,262 - (830,262) (0) - 105,533 - 89,505 (635,224) Unprotected

Tax Basis Step Up-OH Local-Norm (51,680) (62,811) (11,131) - 11,131 (6,817) 801 (825) 3,045 (1,070) 6,265 Unprotected

Tax Basis Step Up-PA-Norm (26,104) (31,727) (5,622) - 5,622 (36,851) 1,245 1,853 1,684 1,580 (24,867) Unprotected

Tax Basis Step Up-WV-Norm (53) (64) (11) - 11 2 (7) (0) (4) 0 2 Unprotected

Tax UoP Repair Disallow Loss-Fed-Norm 13,399 8,039 (5,360) - 5,360 (0) - (687) - (682) 3,990 Unprotected

Tax UoP Repair Disallow Loss-OH Local-Norm 334 405 72 - (72) (65) (5) 18 (18) 21 (121) Unprotected

Tax UoP Repair Disallow Loss-PA-Norm 169 205 36 - (36) 19 (8) 3 (10) 5 (28) Unprotected

Tax UoP Repair Disallow Loss-WV-Norm 0 0 0 - (0) (0) 0 0 0 0 (0) Unprotected

Tax UoP Repair Exp-Fed-Norm (36,655,974) (21,993,584) 14,662,390 - (14,662,390) 0 (177,513) 429,678 3,921 589,381 (13,816,922) Unprotected

Tax UoP Repair Exp-Fed-Norm-Incurred-CWIP (24,113,325) (14,467,995) 9,645,330 - (9,645,330) (2,994,267) - - - - (12,639,597) Unprotected

Tax UoP Repair Exp-Fed-Norm-Reversal-CWIP 32,478,407 19,487,044 (12,991,363) - 12,991,363 167,683 - - - - 13,159,045 Unprotected

Tax UoP Repair Exp-OH Local-Norm (912,658) (1,109,231) (196,572) - 196,572 (30,345) 16,658 (6,291) 76,817 (11,332) 242,079 Unprotected

Tax UoP Repair Exp-OH Local-Norm-Incurred-CWIP (600,372) (729,683) (129,311) - 129,311 14,909 - - 48,525 - 192,745 Unprotected

Tax UoP Repair Exp-OH Local-Norm-Reversal-CWIP 808,646 982,815 174,170 - (174,170) 23,583 - 0 (50,519) 0 (201,106) Unprotected

Tax UoP Repair Exp-PA-Norm (461,001) (560,294) (99,293) - 99,293 12,124 23,469 (3,408) 42,454 (6,661) 167,271 Unprotected

Tax UoP Repair Exp-PA-Norm-Incurred-CWIP (303,260) (368,577) (65,317) - 65,317 31,508 - (0) 26,827 - 123,652 Unprotected

Tax UoP Repair Exp-PA-Norm-Reversal-CWIP 408,462 496,439 87,977 - (87,977) (12,851) - (0) (27,929) 0 (128,757) Unprotected

Tax UoP Repair Exp-WV-Norm (929) (1,129) (200) - 200 (166) (122) 12 (112) 16 (171) Unprotected

Tax UoP Repair Exp-WV-Norm-Incurred-CWIP (611) (743) (132) - 132 (67) - - (70) 0 (6) Unprotected

Tax UoP Repair Exp-WV-Norm-Reversal-CWIP 823 1,000 177 - (177) 110 - 0 73 (0) 6 Unprotected

Total For 282 Accounts: (828,695,602) (513,289,929) 315,405,673 - (315,405,673) 9,568,314 (9,913,512) 3,994,661 2,010,571 6,925,917 (302,819,722)

Total Property Related Items:

Net (Excess) Deficient Deferred Income Taxes (excluding Gross-up) (304,058,453) 9,717,840 (10,019,531) 2,918,714 1,941,737 5,936,353 (293,563,339)

Net Tax Gross-up (98,296,392) 12,376,941 (3,100,798) 853,675 150,290 1,744,562 (86,271,721) Net (Excess) Deficient Deferred Income Taxes (including Gross-up) (402,354,845) 22,094,781 (13,120,328) 3,772,389 2,092,028 7,680,915 (379,835,060)

Total Property and Non-property Related Items:

Net (Excess) Deficient Deferred Income Taxes (excluding Gross-up) (278,046,889) 9,717,840 (9,866,867) 4,525,328 1,941,737 7,542,967 (264,185,883)

Net Tax Gross-up (90,703,376) 12,430,686 (3,056,233) 1,323,583 150,290 2,216,710 (77,638,341) Net (Excess) Deficient Deferred Income Taxes (including Gross-up) (368,750,265) 22,148,526 (12,923,100) 5,848,911 2,092,028 9,759,677 (341,824,224)

Notes:

A

B Reflects the end of 2017 balance, as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254)

C The amortization periods shall be consistent with the following:


Protected Non-Property & Non-Protected Non-Property will be directly assigned

D The amortization will occur through FERC income statement Accounts 410.1. and 411.1

E Ending balance of year is the end of 2019 balance, as reflected on FERC Form No. 1, pages 232 (Account 182.3) and 278 (Account 254)

F

Upon a tax rate change (federal, state and/or, if applicable, state apportionments), the Company remeasures its deferred tax assets and liabilities to the new applicable corporate tax rate. For schedule

M items not directly taken to the P&L, the result of this remeasurement is a change to the net deferred tax assets/liabilities recorded in accounts 190, 282, and 283 with a corresponding change in

regulatory assets (account 182.3) and regulatory liabilities (account 254) to reflect the return of/collection from excess/deficient deferred taxes to/from customers. The remeasurement is effectuated

within PowerTax and Tax Provision, which maintain both the timing difference and APB11 deferred tax balance (the historical ADIT based on the timing difference and the rate in effect when the timing

difference occurred). The difference in the two results is reclassified from ADIT to regulatory assets/liabilities for deficient/excess ADIT. Within the FERC Form 1, deficient and excess ADITs in Account

182.3 and Account 254, respectively are presented grossed-up for tax purposes. For ratemaking purposes, these grossed-up balances are treated as FAS109 and subsequently removed from rate

base, thereby ensuring rate base neutrality for tax rate changes. The Company would follow the process described above to remeasure ADIT balances (increase or decrease) due to any future income

tax rate change.

Reflects the net amount of amortization, including gross-up for taxes, that was booked for GAAP, but deferred for FERC purposes because a mechanism did not exist to pass back/collect

excess/deficient ADITs to/from customers. The net amortized deferral amount, including the gross-up for taxes, is in Account 254, as reflected on FERC Form No. 1, page 278 as reflected on FERC

Form No. 1, page 232. Tariff modifications proposed in this compliance filing will facilitate the pass back/collection of excess/deficient amortization related to calendar years 2018 and 2019 as well as

future years.