S T A T E O F M I C H I G A N

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

* * * * *

In the matter of the application of ) CONSUMERS ENERGY COMPANY for ) approval of a power supply cost recovery plan and ) Case No. U-17317 for approval of monthly power supply cost recovery ) factors for the year 2014. ) ) At the May 20, 2016 meeting of the Michigan Public Service Commission in Lansing,

Michigan.

PRESENT: Hon. Sally A. Talberg, Chairman Hon. Norman J. Saari, Commissioner

ORDER

History of Proceedings

On September 30, 2013, pursuant to 1982 PA 304, MCL 460.6j (Act 304), Consumers Energy

Company (Consumers) filed an application, with supporting testimony and exhibits, requesting

authority to implement a power supply cost recovery (PSCR) plan in its rate schedules for 2014

metered jurisdictional sales of electricity. In its initial application, Consumers requested approval

of a uniform monthly maximum PSCR factor of $(0.00040) per kilowatt-hour (kWh) for all

classes of customers. Consumers also requested review and approval of its five-year forecast.

A prehearing conference was held on December 11, 2013, before Administrative Law Judge

Mark D. Eyster (ALJ). The ALJ granted petitions for leave to intervene filed by the Michigan

Department of the Attorney General (Attorney General); the Institute for Energy Innovation (IEI);

Boyce Hydro Power (Boyce); the Association of Businesses Advocating Tariff Equity (ABATE);

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Great Lakes Renewable Energy Association (GLREA); Midland Cogeneration Venture Limited

Partnership; Michigan Power Limited Partnership and Ada Cogeneration Limited Partnership,

jointly, and Michigan Environmental Council and Sierra Club, jointly (MEC/SC). The

Commission Staff (Staff) also participated in the proceedings.1

On March 31, 2014, Consumers filed a revised application, with supporting testimony and

exhibits. In its revised application, Consumers requested approval of a uniform PSCR factor of

$0.00456 per kWh. A second pre-hearing conference was held on May 13, 2014, and a new

schedule was adopted.

On October 1, 2014, Consumers filed motions to strike the testimony and exhibits of IEI’s

witness and GLREA’s witness. Responses to the motions were filed by IEI and GLREA on

October 8, 2014. The ALJ denied the motions to strike on October 21 and October 23, 2014.

Consumers appealed the ALJ’s rulings on November 4, 2014.

Evidentiary hearings were held on October 21 through October 23, 2014. Consumers, the

Staff, the Attorney General, GLREA, and MEC/SC filed briefs on November 21, 2014, and reply

briefs were filed by Consumers, the Attorney General, ABATE, IEI, GLREA, and MEC/SC on

December 22, 2014. The ALJ issued a Proposal for Decision (PFD) on November 20, 2015.

Consumers, the Attorney General, IEI and GLREA filed exceptions to the PFD, and Consumers,

the Attorney General, and MEC/SC filed replies to exceptions. The record in this matter consists

of 874 pages of transcript and 90 exhibits admitted into evidence.

1 Interventions by Boyce, IEI, and GLREA were contested by various parties, and the ALJ’s rulings granting intervention were appealed to the Commission. On March 6, 2014, the Commission issued an order determining that GLREA was entitled to intervention of right and that Boyce and IEI were entitled to permissive intervention.

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Overview Consumers requested that the Commission find its 2014 PSCR plan, revised factor, and five-

year forecast reasonable and prudent, and in compliance with Act 304. In its initial application,

Consumers requested a PSCR factor of ($0.00040) per kWh; however, because of higher than

originally projected power supply costs, Consumers filed a revised application requesting a PSCR

factor of $0.00456 per kWh, for which it ultimately sought approval. Consumers’ factor included

a roll-in of the previous year’s overrecovery of $10 million. The Staff recommended that the

Commission approve the company’s plan and updated factor as reasonable and prudent.

The Attorney General raised a number of issues with Consumers’ plan including:

(1) Consumers should not be permitted to implement a PSCR factor above what the company

proposed in its original application; (2) the Commission should deny Consumers’ request to roll

into its 2014 PSCR factor the company’s 2013 PSCR overrecovery; instead, the overrecovery

should be refunded to customers; (3) the Commission should reduce Consumers’ projected 2014

power supply costs by a total of approximately $27.2 million by rejecting certain coal supply

costs, transmission costs, and auxiliary fuel costs; (4) the Commission should direct Consumers to

work with Midcontinent Independent System Operator, Inc., (MISO) to improve the scheduling

and notice of transmission line work; (5) Consumers should be required to restructure the power

purchase agreement (PPA) with Entergy Nuclear Palisades, LLC (ENP) for energy from Palisades

Nuclear Power Plant (Palisades) and should be ordered to reduce power costs from scheduled

power outages through the use of financial transmission rights (FTRs) and other means; and

(6) pthe Commission should indicate to Consumers that cost recovery of Black Start Service to

Michigan Electric Transmission Company (METC) during periods of power grid restoration will

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not be approved until a tariff has been approved by the Federal Energy Regulatory Commission

(FERC).

MEC had a number of concerns involving the modeling and dispatch of Consumers’ coal

units. MEC contended that: (1) Consumers improperly bases its dispatch bids on the

“replacement cost” of coal, rather than the higher “as-burned” cost that ratepayers actually pay for

the coal; (2) Consumers models its coal units as must-run units in its five-year forecast, leading to

the projected uneconomic operation of those units; (3) for dispatch purposes, Consumers’ 30-day

economic forecast period is arbitrary and has not been shown to be accurate; (4) Consumers failed

to present substantial evidence that the company will decommit an operating unit when the 30-day

economic forecast is negative; (5) Consumers failed to include the cost of pollution control

sorbents in its five-year forecast; and (6) Consumers’ dispatch modeling is based upon an

unreasonably high energy market price. MEC therefore argued that Consumers’ plan and forecast

are unreasonable and imprudent because the PSCR plan and forecast do not accurately reflect

system costs or take appropriate steps to minimize these costs.

IEI contended that Consumers’ plan and forecast are unreasonable because they fail to

incorporate expanded energy efficiency programs and a conservation voltage reduction program.

GLREA also objected to Consumers’ forecast because it fails to reflect the expected growth in

solar generation resources over the five-year forecast period. The disputed issues are discussed ad

seriatum.

Motions to Strike Consumers filed motions to strike testimony and exhibits filed by GLREA and IEI on grounds

that the evidence was irrelevant and outside the scope of an Act 304 proceeding. The motions

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were opposed by GLREA and IEI. The ALJ found that, in both cases, the evidence offered was

relevant and sufficiently narrowly-tailored to fall within the scope of an Act 304 proceeding.

In its appeals, Consumers contends that the testimony and exhibits addressed matters that were

outside the limited scope of a PSCR plan proceeding. Again, GLREA and IEI opposed

Consumers’ motions and appeals. The Commission finds that the appeals should be granted and

the relief requested denied. The Commission reviews ALJ decisions on evidentiary issues under

an abuse of discretion standard. As the Commission discussed in the June 28, 2013 order in Case

No. U-16366, p. 4:

With regards to the decision of an ALJ to strike evidence, the Michigan Court of Appeals has stated, “Evidentiary decisions are reviewed for an abuse of discretion. An abuse of discretion occurs only where the challenged decision fell outside the range of reasonable and principled outcomes.” In re Consumers Energy Company, 281 Mich App 352, 357; 761 NW2d 346 (2008) (citation omitted); see, also, Saffian v Simmons, 477 Mich 8, 12; 727 NW2d 132 (2007). As the Commission has stated, “In reviewing claims of an abuse of discretion by an ALJ, … the result must be so palpably and grossly violative of fact and logic that it evidences perversity of will, defiance of judgment or the exercise of passion or bias.” October 30, 1984 order in Case No. U-7660, pp. 3-4.

Applying this standard, the Commission finds that the ALJ did not abuse his discretion in denying

Consumers’ motion to strike testimony and exhibits offered by GLREA and IEI. The Commission

is not persuaded by Consumers’ argument that the evidence offered by these parties was irrelevant

to, or beyond the scope of, a PSCR plan proceeding.

Revised PSCR Factor As noted above, approximately six months after submitting its initial application, Consumers

filed a revised application requesting a higher PSCR factor, which the company implemented on

July 1, 2014. The Attorney General objected to the company’s self-implementation of this higher

factor on grounds that Section 6j(9) of Act 304 does not permit implementation of a revised factor.

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The Attorney General pointed to Section 6j(10), which does permit a utility to file a revised plan

under certain circumstances, but these circumstances do not apply here. The Attorney General

cited the April 9, 1985 order in Case No. U-7785 (April 9 order) as support for his contention that

the Commission has recognized the clear distinction between a revised factor and a revised plan,

the former of which the Commission disapproved. The Attorney General requested that the

Commission find that Consumers’ implementation of a revised factor was unlawful and further,

that the Commission should prevent continued implementation of that factor through the issuance

of a cease and desist order. Finally, the Attorney General recommended that the Commission

order refunds of funds already collected under the illegally charged factor. ABATE agreed with

the Attorney General that Consumers’ implementation of a revised factor was unlawful and that

the April 9 order controls the outcome in this proceeding.

Consumers first pointed out that the Attorney General’s request for a cease and desist order

came eight months after the company filed its revised application. According to Consumers,

denying further implementation of the factor at this point would be unjust and unreasonable. With

respect to the Attorney General’s legal challenge, Consumers asserted that the use of “a complete

power supply” rather than “the complete power supply” in the statute evidences the Legislature’s

intent that self-implementation should not be limited to the factor contained in the original PSCR

plan. Consumers relied on Mich Community Action Agency Ass’n v Mich Pub Serv Comm,

unpublished opinion per curium of the Court of Appeals, issued June 19, 2007 (Docket No.

263262) and on the Commission’s September 26, 2014 order in Case No. U-17332 (September 26

order), in which the Commission found that, in the context of a gas cost recovery (GCR)

proceeding, Act 304 permits a utility to self-implement a revised GCR factor.

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The ALJ found that ABATE and the Attorney General’s position relied primarily on a 30-

year-old Commission order, while Consumers argued that the much more recent September 26

order was controlling. The ALJ agreed with Consumers, noting that the September 26 order

construed Sections 6h(3), 6h(8), and 6h(9) of Act 304, which are nearly identical to these same

sections under Section 6j. The ALJ also cited In re Application of Consumers Energy Co for

Approval of a Gas Cost Recovery Plan, ___ Mich App ___; ___ NW2d ___ (2015), a published

opinion issued on November 17, 2015, that affirmed, inter alia, the September 26 order.

The Attorney General takes exception, largely reiterating the arguments he presented in

briefing. Consumers replies that the ALJ’s decision appropriately applied the Commission’s

determinations in the September 26 order, and it contends that the Attorney General failed to

address the on-point decision in In re Application of Consumers Energy.

The Commission finds that the Attorney General’s exception should be rejected. As the ALJ

observed, the Court of Appeals has recently affirmed the Commission’s construction of analogous

sections of Act 304 pertaining to GCR plans. In In re Application of Consumers Energy, the Court

of Appeals considered consolidated appeals challenging the Commission’s authority to approve

temporary GCR factors and a revised GCR factor. With respect to self-implementation of a

revised factor, the Court held:

The Legislature plainly recognized that a gas supply and cost review might proceed into the period covered by the plan under review. To address that issue, the Legislature first empowered the Commission to issue temporary orders implementing the proposed plan in whole or in part. MCL 460.6h(8). It then provided that, in the event that the Commission fails to issue a temporary order for the relevant period, the utility may include its proposed recovery factors in its rates. Notably, the Legislature did not expressly limit the utility’s authority to self-implement the recovery factors to those specifically requested in the original application, but instead referred generally to the “recovery factors requested in its plan.” See MCL 460.6h(9). Because a utility can amend or revise its plan before the conclusion of the review, it follows that the utility can self-implement a revised recovery factor as being a recovery factor “requested in its plan.” Id. The

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provisions for self-implementation also strongly suggest that the Legislature wanted to encourage the Commission to issue timely temporary orders governing the implementation of recovery factors during the pendency of the review, which would include the authority to issue temporary orders governing a utility’s plan as revised or amended.

In re Application of Consumers Energy, supra, slip op. p. 8. Accordingly, the Commission finds that Consumers’ implementation of a revised factor was

reasonable in light of changed circumstances after the company’s plan was filed and that the self-

implementation of a revised PSCR factor comports with the September 26 order, which was

affirmed by the Court of Appeals.

Roll-in of Prior Year Overrecovery The Attorney General objected to Consumers’ request to roll into its 2014 factor $10 million

of overrecovered PSCR costs from 2013 on grounds that Act 304 mandates that prior year over- or

underrecoveries must be refunded to customers. The Attorney General argued that carrying a

balance from a previous plan year to the current plan, creates a mismatch of costs and sends an

improper price signal to customers. The Attorney General discussed previous Commission orders

and Court of Appeals’ decisions affirming the roll-in method, but nevertheless argued that the

policy considerations that these decisions rely on do not outweigh the plain language of Act 304

which, he contends, requires over- or underrecoveries to be refunded or surcharged.

Consumers argued that the roll-in method was first approved by the Commission in 1994 and

has consistently been upheld by the Court of Appeals in myriad cases.

The ALJ agreed with Consumers, finding:

As he has in numerous contested cases, the Attorney General challenges the long-standing Commission and Court sanctioned roll-in methodology. Nothing in the law or the facts has changed in any significant way so as to warrant a review of the Commission’s roll-in methodology. Consumers’ application of the methodology is approved.

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PFD, p. 78.

The Attorney General takes exception, again contending that the Commission orders

approving (and Court of Appeals decisions affirming) the roll-in method are counter to the plain

language of the statute, Supreme Court orders concerning rules of statutory construction, and the

limits of the Commission’s authority. The Attorney General further argues that overturning prior

decisions concerning the roll-in method are justified based on changed circumstances. According

to him, the historical rationale, namely that refunding or surcharging over- and undercollections

was too costly in light of the benefits, does not hold true in this case, where the overcollection

exceeds $10 million.

In reply, Consumers maintains that the Attorney General’s arguments on this issue are

unsupported and unreasonable. Consumers again points out that the Court of Appeals has

repeatedly affirmed the Commission’s discretion to fashion an appropriate method to address

under- and overrecoveries and that the Attorney General presents no evidence that circumstances

have changed since the roll-in method was first approved.

The Commission agrees with the ALJ, for reasons that have been stated repeatedly and at

great length in past orders and Court of Appeals’ opinions. Accordingly, the Commission rejects

the Attorney General’s exception.

PROMOD Modeling and Coal Unit Dispatch As explained by Consumers, PROMOD is a production cost computer model of the operation

of an electric utility that includes inputs related to the characteristics of each generating unit,

power purchases, and the MISO market used to develop an optimal mix of generation and market

purchases to meet its sales requirements. Consumers uses PROMOD to forecast its generation,

fuel requirements and costs, purchases, and sales.

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A number of issues were raised by MEC/SC concerning the appropriate inputs to PROMOD,

for forecast purposes, and Consumers’ assumptions in the actual bidding of its coal units into

MISO. Specifically, MEC/SC contended that Consumers uses the improper cost of coal as well as

an unreasonably high projection of market prices; it designates its coal units as “must run,” rather

than “economic” and it does not include the variable costs of environmental control agents in its

modeling for its five-year forecast. According to MEC/SC, Consumers’ projections are therefore

inaccurate and its coal units appear to be more economical to dispatch than they actually are.

MEC/SC further contends that Consumers’ use of an arbitrary 30-day projection in evaluating the

economics of bidding a unit may result in the dispatch of units when it is not economical to do so.

Finally, MEC/SC asserted that Consumers did not provide sufficient evidence to demonstrate that

Consumers actually decommits units when market economics have changed. These issues are

discussed below.

Cost of Coal and Coal Unit Designation

In the modeling used to forecast the dispatch of its plants, and in actual bidding, Consumers

uses the “replacement” cost of coal, i.e., the spot-market price of coal, rather than the cost of coal

in the company’s inventory, i.e., the “as-burned” cost. According to MEC/SC, bidding based on

spot market coal, which is often less expensive than contract coal, provides erroneous modeling

outcomes and may result in the uneconomical dispatch of the company’s coal plants. Consumers

responded that the Commission has repeatedly affirmed Consumers’ use of replacement coal costs

in determining the reasonableness of its dispatch modeling. Consumers adds that its methodology

conforms to industry standards and that, because the majority of the company’s coal is under

contract (i.e., a fixed cost), the only cost to be factored into the dispatch determination is the

variable cost of replacement coal.

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The ALJ agreed with MEC/SC that Consumers failed to show that the use of the replacement

cost of coal in its dispatch modeling was reasonable, noting that Consumers’ witnesses were not

credible and finding that MEC/SC’s recommendation would save $1.4 million in PSCR costs

during the plan year, and $9 million over the five-year forecast. Specifically, the ALJ determined

that there was insufficient evidence to support Consumers’ claim that the use of replacement,

rather than as-burned, coal cost was standard industry practice, or that the spot market cost was a

reasonable proxy for replacement coal cost. The ALJ characterized coal cost as fungible, where

there is no guarantee that Consumers will actually purchase coal on the spot market to replace coal

that was burned. Given the company’s various coal purchasing strategies, Consumers has a great

deal of flexibility in acquiring coal, so that replacement coal can be obtained from existing

contracts, contracts under negotiation, or from the spot market. The ALJ therefore concluded that

spot market coal costs are not a reasonable proxy for replacement coal and that Consumers would

have to establish the reasonableness of using replacement coal cost in the PSCR reconciliation.

Consumers takes exception, arguing that the Commission has consistently rejected MEC/SC’s

position with respect to coal costs in numerous prior proceedings. See, e.g., July 13, 2012 order in

Case No. U-16432; January 23, 2014 order in Case No. U-16890; and May 14, 2015 order in Case

No. U-17095. According to Consumers, when an issue has been repeatedly litigated and decided,

as is the case with coal costs, it is up to the party challenging the past decisions to present new

evidence or a change in circumstances to support a different ruling on the issue. Pennwalt Corp v

Pub Serv Comm’n, 166 Mich App 1, 9; 420 NW2d 156 (1988). In this case, Consumers contends

that MEC/SC failed to present new evidence or a sufficient change in circumstance to justify a

different outcome. Consumers further contends that MEC/SC’s recommendation fails to consider

certain risks that cannot be modeled, or the way that units are required to be bid into MISO.

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MEC/SC replies that the Commission clearly indicated, in its May 15, 2015 order in Case

No. U-17095 that Consumers’ use of replacement coal costs should be more fully addressed in this

proceeding. MEC/SC reiterated that it had clearly demonstrated that Consumers’ use of

replacement coal cost was unreasonable because the risks that Consumers cited were minimal and

because, as the ALJ found, the use of spot market coal does not actually reflect the variable cost of

fuel used in dispatching the company’s coal units. Finally, MEC/SC points out that the lack of

credibility of Consumers’ witnesses who testified on this issue was well supported by the record.

In a related issue, Consumers designates its coal units as “must run” resources for modeling

purposes during both the plan and forecast summer months. Consumers explained that coal units

provide baseload capacity and are more efficient and economical if run continuously. Consumers

pointed out that coal plants have complex start up and shut down procedures and it is not practical

to cycle these plants.

MEC/SC objected to Consumers’ designation of its units as “must run” generators, contending

that the company’s modeling forecloses the potential for more economic operation, thus increasing

costs to customers. Noting that MISO is ultimately responsible for economic dispatch of

generating resources, MEC/SC nevertheless pointed out that MISO’s dispatch determinations are

significantly influenced by the ways that these resources are bid into the market. Thus,

Consumers’ modeling and bidding of all of its coal units as “must run” could lead to uneconomic

operation of these units. MEC/SC contended that several of Consumers’ coal generating units are

projected to run at a loss in 2014 and for significant portions of the five-year forecast period, based

on Consumers’ PROMOD results. Exhibit MEC-15.

Consumers responded that PROMOD is designed to provide a reasonable forecast of PSCR

costs based on reasonable assumptions. During the actual operations, units are constantly

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evaluated and are not necessarily offered as “must run” resources. According to Consumers, at

least once every day, the company computes the net energy value (NEV) for each generating unit

over a 30-day period. If the NEV is positive (i.e., the projected revenues are greater than the

projected costs, including start-up costs and a $25,000 adder) then the unit is designated as must-

run. If the NEV is negative (i.e., projected costs exceed projected market revenues) then the unit

is bid as an economic resource, which allows MISO to commit or decommit the unit according to

economic dispatch and regional reliability needs. Consumers added that MEC/SC’s position has

been rejected in several prior proceedings. See, Case Nos. U-16045-R, U-16432, U-16890, and

U-16890-R.

The ALJ noted that MEC/SC introduced two different concerns: (1) the reasonableness of

Consumers’ designation of its coal units as “must run” in PROMOD; and (2) the reasonableness of

Consumers’ methods for deciding whether its plants are must run or economic resources when the

plants are actually bid into MISO during the plan year. The ALJ found that Consumers’

projections for the plan year indicated that all of the company’s coal units, except for Karn 1, had a

positive NEV. Thus, the ALJ found that Consumers’ modeling for the plan year was reasonable.

The ALJ also determined that for the remainder of the five-year forecast, there were significant

negative net returns for certain units over extended periods of time. The ALJ concluded that

Consumers failed to adequately explain why it intended to operate its units in a fashion that is

detrimental to ratepayers as shown in its five-year forecast. The ALJ also observed that while the

company had established that its units will be operated differently than modeled in PROMOD, it

was reasonable to issue a warning under Section 6j(7) of Act 304 (Section 7 warning) that costs

associated with designating the Whiting Units as must-run resources might be disallowed. The

ALJ further observed that although there were differences between the company’s modeling and

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actual operation, the latter based on actual operating conditions and current NEV, it was not clear

whether Consumers actually adhered to the practice of changing unit designation according to

updated NEV. The ALJ noted that Consumers’ witness was unable to clearly articulate other

considerations that are taken into account in designating units as must run or economic.

Nevertheless, the ALJ found that these concerns did not rise to the level where a Section 7 warning

should be issued, but that actual plant operation should be assessed in a PSCR reconciliation.

Consumers takes exception arguing that the Commission has consistently rejected MEC/SC’s

position on coal (and gas) unit designation. Consumers highlights the Commission’s

determination in the July 13, 2013 order in Case No. U-16432, that MEC/SC’s recommendation to

cycle the company’s coal units does not conform to MISO dispatch, and the January 23, 2014

order in Case No. U-16890, where the Commission adopted the ALJ’s finding that designating

coal units as economic, rather than must run, would result in higher PSCR costs because cycling

these units leads to significant wear and tear. Accordingly, Consumers asserts that no further

review of this issue is necessary.

In response, MEC/SC points out that although Consumers admitted that its modeling showed

significant periods where units were operated uneconomically, the company failed to adequately

explain its projections or why ratepayers should be subject to increased costs. MEC/SC argues

that the ALJ correctly found that the company was vague about its decision-making process for

decommitting a unit if the NEV turns negative. MEC/SC further contends that the cases

Consumers cites involved different issues, different witnesses, and different evidence. MEC/SC

reminds Consumers that each PSCR case stands on its own merits.

The Commission agrees with the ALJ that Consumers’ presentation in this proceeding on both

the designation of coal units as must-run and its rationale for the use of replacement cost of coal,

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was less thorough than in prior proceedings. Nevertheless, the Commission agrees with the

company that a large part of the issue concerning the use of replacement cost versus as-burned cost

of coal has in fact been extensively litigated in the past, in cases where Consumers’ presentation

was far more robust. One notable example can be found in the January 23, 2014 order in Case No.

U-16890, where the Commission found that there were no objections to the extensive analysis of

unit designation and coal costs provided by ALJ Dennis W. Mack, and therefore the Commission

tacitly adopted the findings and conclusions in the PFD, while leaving the door open to further

evidence and arguments in future proceedings.

In this case, the Commission finds that although MEC/SC presented some new arguments on

this issue, their presentation was insufficient to overcome the fact that using as-burned coal costs

in modeling and bidding the company’s units would necessitate bidding on the basis of sunk costs,

rather than variable costs, thus violating principles of economic dispatch and MISO rules. 5 Tr

441-442, 444-445. In addition, as Consumers pointed out, the Commission has previously found

that MEC/SC’s recommendation is not standard in the industry and could introduce additional

risks that could ultimately result in higher customer costs. That said, in future proceedings, the

Commission would prefer to see a better presentation by the company of how the MISO tariff

dictates the company’s cost estimates in generator dispatch.

With respect to unit designation as “must run” versus economic, again, the Commission has

repeatedly rejected MEC/SC’s recommendations with respect to how the units are modeled. The

Commission also finds persuasive Consumers’ claim that its actual bidding may change

significantly from its modeling simply due to rapidly changing economic outlooks that Consumers

constantly evaluates. Thus, the Commission also rejects MEC/SC’s contention that Consumers’

30-day window for evaluating NEV is arbitrary. However, the Commission agrees with the ALJ

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and MEC/SC that it is appropriate for Consumers to demonstrate in its PSCR reconciliation why

units were not decommitted when the NEV was negative, in the event that any units were operated

at a loss.

Finally, MEC/SC raised an issue concerning Consumers’ use of projected market prices as

part of its PROMOD modeling for unit dispatch. According to them, by overestimating market

price for energy, Consumers projects that its units are dispatched more frequently than if market

prices were lower. MEC/SC attributed Consumers’ overestimation to an unrealistic assumption

about coal unit retirements due to federal Mercury and Air Toxics Standards (MATS) compliance.

MEC/SC therefore requested that the company be instructed to reevaluate and better justify its

market price forecast. Consumers responded that its estimates concerning MATS costs were

necessarily at a very high level due to the significant uncertainty about the effect of MATS on

market energy prices.

The ALJ agreed with MEC/SC that Consumers should endeavor to provide a reasonable

estimate of all of its costs based on the best available information at the time. Instead, the ALJ

found that Consumers had used an excessive market price estimate, based on future MATS-related

costs that were not well substantiated, to justify the over-dispatch of its units. Nevertheless, the

ALJ determined that Consumers appeared to intend to refine its MATS-related costs, thus,

MEC/SC’s recommendation, that the company revise its market price forecast, should be adopted.

Consumers takes exception, arguing that, in fact, it was MEC/SC’s modeling that was in error

in failing to recognize the uncertainty surrounding MATS compliance costs. Consumers also

contends that MEC/SC failed to quantify the effect of any alleged overstated market prices.

Consumers’ energy price forecast is a critical component of the modeling of its PSCR plan

and forecast. As such, significant errors in market prices could lead to erroneous assumptions

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about coal unit dispatch, which could in turn lead to imprudent fuel purchases or other adverse

outcomes. Accordingly, the Commission adopts the recommendation in the PFD and directs

Consumers to better evaluate and refine its MISO energy price forecast in future PSCR

proceedings.

Mercury and Air Toxics Control Costs

With respect to the costs for sorbents necessary for compliance with MATS, MEC/SC noted

that these costs were not included in Consumers’ plan or forecast; however, through responses to

discovery, MEC/SC determined that Consumers in fact was planning to use significant amounts of

sorbents for its dry sorbent injection (DSI) and activated carbon injection (ACI) systems at several

of its coal units. MEC/SC contended that failure to include variable DSI and ACI costs in the

company’s modeling affects the economics, and reasonableness of dispatching the coal units and

that the Commission should therefore instruct Consumers to provide a complete and updated

projection of all environmental compliance costs. In addition, MEC/SC requested that the

Commission issue a Section 7 warning indicating that given the lack of evidence on the

reasonableness of pollution control costs, the Commission would be unlikely to permit recovery of

DSI costs at Campbell Units 1 and 2.

Consumers responded that it did not include DSI costs in the PSCR plan case because the

issues concerning MATS compliance, including sorbent costs, were extensively litigated in Case

No. U-17087. Consumers further noted that it had not yet determined how it intended to comply

with MATS and that, in any event, there would be no DSI or ACI costs until 2015. MEC/SC

replied that because Case No. U-17087 was concluded with a black-box settlement, there were no

decisions made with respect to the reasonableness and prudence of the company’s proposals

concerning MATS compliance.

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The ALJ agreed with MEC/SC that Consumers failed to include appropriate projections of

DSI and ACI costs as part of its forecast. The ALJ found Consumers’ central explanation (i.e.,

that it could not accurately project sorbent costs at this time) unpersuasive, noting that projections

are always characterized by some degree of uncertainty. The ALJ recommended that Consumers

be instructed to provide more information about sorbent costs in future plan proceedings and that a

Section 7 warning was therefore unnecessary.

Consumers filed an exception in which it agreed with the ALJ that no Section 7 warning was

merited, but nevertheless requested that the Commission reject any finding that indicated that the

company’s five-year forecast was in any way deficient. Consumers contends that MEC/SC’s

argument primarily centers on concerns about capital and operations and maintenance (O&M)

expenses, rate case issues that Consumers maintains were fully litigated in Case No. U-17087. In

response, MEC/SC again points out that Case No. U-17087 was resolved by settlement and that

the significant variable costs of sorbents are an important issue in PROMOD modeling and PSCR

proceedings. MEC/SC therefore urged the Commission to adopt the PFD and require Consumers

to provide updated sorbent cost projections in future PSCR proceedings.

The Commission agrees with MEC/SC that the ALJ’s recommendation should be adopted.

Consumers’ attempt to rely on the May 15, 2013 order approving the settlement agreement in Case

No. U-17087 is not well taken because the settlement agreement itself provides that:

[N]either the parties . . . nor the Commission . . . shall make reference to or use this Settlement Agreement . . . as a reason, authority, rationale, or example for taking any action . . . or making any decision in any other case or proceeding[.]

Moreover, the Commission has extensively discussed the issue of the relationship between capital

expenditures for MATS compliance and sorbent costs in various cases concerning DTE Electric

Company (DTE Electric). Most recently, in the December 11, 2015 order in Case No. U-17767,

Page 19 U-17317

pp. 13-16, the Commission noted that although sorbent costs are appropriately examined in PSCR

proceedings, these costs, which may be quite significant, are also needed to inform a holistic

review of capital expenditures for MATS compliance in a rate case. Accordingly, the Commission

finds that in future PSCR cases, Consumers shall provide updated projected and actual cost

information on sorbents used for MATS compliance. And the company is expected to show that

these costs are reasonable and prudent.

Black Start Expenses Consumers explained that it maintains certain facilities to allow the restoration of generators,

without relying on the bulk transmission system, in the event of a widespread power outage.

Consumers further explained that it entered into a contract with METC on July 1, 2013, to provide

this so-called Black Start Service. The Attorney General argued that Consumers’ provision of

Black Start Service should be compensated by METC and that Consumers’ ratepayers were

subsidizing Black Start Service through the PSCR. Accordingly, the Attorney General

recommended that Consumers be warned that the cost of Black Start Service will not be recovered

unless the company makes a tariff filing with the FERC to receive compensation for this service.

Consumers replied that it was considering making a tariff filing with the FERC but had no

timetable for doing so. Consumers further pointed out that the primary beneficiaries of Black Start

Service are in fact the company’s customers.

The ALJ noted that Consumers admitted that it was providing uncompensated Black Start

Services outside its service area, and that, for reasons unknown, Consumers has not made a filing

at the FERC. The ALJ found that, based on the limited record in this proceeding, a warning under

Section 7 was appropriate.

Page 20 U-17317

Consumers takes exception, arguing that the great proportion of Michigan Joint Zone

customers who benefit from Black Start Service are Consumers’ customers. Consumers adds that

the cost for Black Start Service is small and generally not a PSCR expense.

The Attorney General replies that Consumers misses the point of his concerns and that the

company has done nothing to clarify how Black Start Service expenses will be recovered in the

future. The Attorney General therefore concludes that the issue surrounding Black Start Service

expense is an appropriate subject for a Section 7 warning.

On the basis of the record before it, the Commission agrees with the ALJ that a caution under

Section 7 indicating that PSCR expenses associated with Black Start Services may not be

recoverable unless Consumers properly allocates these expenses to customers outside its service

territory is warranted, even if these expenses are negligible, as Consumers claims.

Palisades Contract In 2007, Consumers sold Palisades to ENP. As part of that transaction, Consumers entered

into a 15-year PPA with ENP to purchase output from Palisades. In addition, the PPA specified

that in the event of an outage, at its option, ENP could elect to provide replacement power or could

require Consumers to purchase replacement power.

The Attorney General claimed that the replacement power provision of the Palisades PPA

disproportionately favored ENP and had cost Consumers’ ratepayers $63.8 million for replacement

power from January until March 2014. The Attorney General therefore recommended:

In addressing the inherent inequities of the Palisades PPA, the burden of which is ultimately carried by Consumers Energy’s customers, first the Commission should order Consumers Energy to restructure the Palisades power purchase agreement with Entergy and take other appropriate actions to avoid incurring large incremental power costs during periods of prescheduled power outages. Secondly, the Commission should order the Company to take other actions to modify the contract with Entergy and/or hedge the price exposure in a timely fashion to avoid a

Page 21 U-17317

potential reoccurrence of a large increase in power costs from future refueling or other scheduled power outages. Lastly, the Commission should indicate to Consumers Energy that recovery of these incremental costs incurred during 2014 will be conditioned upon the Company providing sufficient evidence that it took all reasonable and prudent actions to avoid and minimize such costs.

Attorney General’s initial brief, p. 44.

Consumers did not disagree that the specific contract provision at issue favored ENP, but

argued that the clause concerning outage replacement power was one small part of a much larger

transaction, and that making the provision of replacement power optional for the buyer of

Palisades resulted in a higher purchase price. Consumers further contended that the Attorney

General was attempting to relitigate Case No. U-14992, where the Commission approved the PPA.

The ALJ rejected the Attorney General’s position, finding that his first two requests,

concerning the renegotiation of the Palisades PPA, were presented without legal authority

supporting a determination that the Commission has the power to order the company to modify the

contract. As for the Attorney General’s third recommendation, concerning an instruction to

Consumers that it must present evidence that it took reasonable and prudent efforts to mitigate

outage costs, the ALJ found that the reconciliation provisions of Act 304 already require this

showing.

The Attorney General takes exception, arguing that the term at issue in the Palisades PPA

leaves Consumers’ ratepayers at great financial risk and that the Commission should adopt one or

more of his recommendations to reduce this risk.

In reply, Consumers reiterates that the Attorney General mischaracterizes the Palisades PPA,

and he is attempting to relitigate a matter that is long settled.

The Commission agrees with the ALJ that the Attorney General’s request to direct Consumers

to effectively renegotiate an approved PPA was presented without authority showing that the

Page 22 U-17317

Commission has the ability to order such a remedy. Moreover, the Commission observes that the

Attorney General participated in Case No. U-14992, where the Palisades PPA was extensively

litigated and was found reasonable and prudent. Finally, the Commission agrees with the ALJ that

in the PSCR reconciliation, Consumers will be required to show that its actions and PSCR costs,

including replacement power costs, were reasonable and prudent.

Transmission Outages In February 2014, a 345 kilovolt (kV) transmission line was taken out of service for substation

maintenance. The outage limited MISO’s ability to bring power into Michigan from Indiana and

increased locational marginal prices (LMPs) at several Michigan nodes. At the same time, the

MISO market was exhibiting significant variability due to extreme cold weather.

The Attorney General claimed that Consumers’ failure to plan for the outage led to significant

increases in PSCR costs. The Attorney General therefore advocated that the company be directed

to work with MISO and transmission system operators to improve communication about

anticipated outages. In addition, the Attorney General recommended that outages be avoided

during periods when costs are higher than normal and that Consumers use FTRs to mitigate the

impact of higher transmission costs during outages. And Consumers should be subject to a

disallowance should the company fail to mitigate higher transmission costs.

Consumers responded that it has attempted to enhance coordination and planning for outages,

however, MISO market rules limit the amount of information that can be conveyed to market

participants. Consumers added that coordination of information would not have avoided the need

for the outage in February 2014, because the transmission outage needed to coincide with the

outage at Palisades. What was not anticipated was the extreme cold weather and the market

Page 23 U-17317

turmoil that resulted. By the time the market prices increased, Consumers maintained it had no

opportunity to purchase FTRs to mitigate the price increase.

The ALJ found that the Attorney General’s recommendations were unnecessary because

Consumers appeared to have already undertaken the suggested actions. The ALJ nevertheless

found that Consumers should be encouraged to continue its efforts towards enhanced coordination

of outages and to find ways to mitigate potential price increases when outages occur.

The Attorney General takes exception, arguing that the ALJ should have made a more formal

recommendation to adopt the Attorney General’s proposals on this issue. In reply, Consumers

asserts that the ALJ properly rejected the Attorney General’s proposals on grounds that the

Attorney General’s recommendations were unnecessary; they ignore market rules about

information sharing, and even if the proposals were adopted, they would not have affected the

transmission outage in February 2014.

The Commission finds the PFD well-reasoned and adopts the ALJ’s conclusions on this issue.

As Consumers pointed out, MISO rules restrict the amount of information that can be shared with

market participants and Consumers appears to be making efforts to address the Attorney General’s

concerns, within the limits imposed by the regulations. The Attorney General’s exception is

therefore rejected.

Attorney General’s Reductions to PSCR Costs The Attorney General recommended three reductions, totaling $27.2 million, to Consumers’

PSCR costs: (1) a $7.8 million reduction for increased coal supply costs; (2) a $2.3 million

reduction for auxiliary fuel costs; and (3) a reduction of $17.1 million for transmission costs.

Consumers explained that due to heavy snow and other factors impacting the demand for rail

service, certain coal deliveries to the company’s generating plants were delayed or cancelled

Page 24 U-17317

leading to higher PSCR costs resulting from the need to purchase more expensive power from the

MISO market.

The Attorney General contended that customers should not be required to pay the additional

$7.8 million in incremental costs resulting from coal suppliers’ failures to make timely deliveries.

The Attorney General argued that this was especially true when Consumers failed to exercise

remedies available under its contracts with these coal suppliers. The Attorney General

recommended that Consumers be warned that these excessive costs may be disallowed in the

PSCR reconciliation if they are not reasonable and prudent.

The ALJ found that there was insufficient evidence in the record to show that any contract

conditions were breached or that Consumers failed to avail itself of any available legal remedies.

Further, the ALJ found that it was unnecessary to warn Consumers about imprudent costs because

the reconciliation requires a showing that all PSCR costs were reasonably and prudently incurred.

Next, the Attorney General argued that Consumers’ increase in auxiliary fuel costs, from

$4.2 million in its initial filing to $9.8 million in its revised filing, was not supported.

Nevertheless, the Attorney General acknowledged that there was some likely increase in these

costs and thus recommended that the Commission approve $7.2 million for auxiliary fuel.

Consumers maintained that the increased cost was supported in its filing, noting that its

projection of natural gas costs and burn volume increased in its revised application by 50% and

54% respectively.

The ALJ found that Consumers’ revised projections were supported by the record and were

reasonable.

Finally, the Attorney General claimed that Consumers’ actual transmission expense was 5.7%

lower than expected for January and February 2014, and that applying that same percentage

Page 25 U-17317

decrease to the remainder of the plan year resulted in a reduction of $17.1 million in transmission

expense. Consumers responded that the Attorney General’s proposed method, essentially applying

a reduction experienced in a two month period to the remaining ten months of the plan year, was

far too simplistic. The company pointed out that it uses multiple parameters for each month in

arriving at its transmission expense projection.

The ALJ noted that no party objected to Consumers’ method for projecting transmission

expense, and he agreed with Consumers that the Attorney General’s proposed alternative was

unreliable.

The Attorney General takes exception to the ALJ’s rejection of his position on these issues,

arguing that: (1) $7.8 million in incremental energy costs should be removed from the plan until

Consumers exercises its contractual rights concerning the delays in coal deliveries, and the

Commission should warn Consumers that these costs may be disallowed in a reconciliation if not

found to be reasonable and prudent; (2) Consumers’ revised calculation of auxiliary fuel costs was

unsupported and appears excessive, thus, the Commission should reduce this expense by $2.3

million; and (3) Consumers failed to update its transmission expense projection in its revised plan,

and the Commission should therefore adopt the Attorney General’s recommendation to reduce

overall transmission expense by 5.7%, or $17.1 million, consistent with actual transmission

expense reductions for January and February 2014.

Consumers responds that the Attorney General’s issue concerning the coal contracts was

based on a single discovery response, and that he incorrectly assumes that there has been a

contract violation. Consumers explains that its contracts with Western coal producers are based on

total minimum tonnage delivered over the 2014 plan year; thus, any violation of the contract could

not be determined until the end of the year. Further, Consumers contends that the Attorney

Page 26 U-17317

General’s recommendation that the company declare force majeure would relieve the supplier of

its obligations, potentially leaving ratepayers in a worse position. Consumers maintains that

because the Attorney General’s arguments are misplaced, a warning is unnecessary.

With respect to auxiliary power costs, Consumers argues that the ALJ’s finding was correct

and that the company fully supported its position that: (1) natural gas prices were projected to

increase by 50% over the originally filed projection; and (2) burn volume, on which auxiliary fuel

volumes and costs are based, was similarly projected to increase by 54%. Consumers further

argued that the Attorney General provided no analysis of his projection for auxiliary fuel expense

and that his claim was based merely on speculation about what he considered “excessive.”

Consumers reasserts that the Attorney General’s adjustment to transmission expense is overly

simplified and relies, unreasonably, on two months of data to project the remaining 10 months of

expense. Consumers adds that its forecast of transmission expense is a comprehensive method

that includes projections for sales, financial rates, capital expenditures and monthly expenses.

Accordingly, Consumers contends that the Attorney General exception should be rejected.

After reviewing the record and the arguments of the parties, the Commission agrees with the

ALJ that the Attorney General’s recommended adjustments to the incremental cost of coal,

auxiliary power expense, and transmission expense should be rejected. The Commission finds that

Consumers fully supported its revised costs for coal and that, as highlighted by the ALJ, the

extreme weather conditions in early 2014 were the most significant driver of increased costs

associated with coal deliveries. The Commission also agrees with Consumers that the Attorney

General’s recommended reduction in auxiliary power expense was arbitrary and that his reduction

to transmission expense was overly-simplistic. The Attorney General’s exceptions on these issues

are therefore rejected.

Page 27 U-17317

Solar Resources and Energy Efficiency Measures GLREA took issue with Consumers’ five-year forecast, claiming that the generation forecast

was inaccurate and incomplete because it failed to recognize the increasing contribution of solar

resources to the company’s portfolio, as supported by national and regional trends in the cost and

implementation of solar. GLREA further contended that because Michigan does not have an

integrated resource planning (IRP) process, the five-year forecast is much more important.

GLREA therefore recommended that the Commission direct Consumers to include a more detailed

discussion and analysis of solar resources, including cost savings, in future plans and forecasts and

to align its forecast of solar generation with recommendations for the expansion of solar set forth

in various reports.

Consumers disagreed with GLREA’s characterization, contending that the company did

include solar generation in its forecast. However, because the adoption of solar in Michigan is

limited, it is not a significant part of the company’s portfolio. Consumers added that Act 304

requires that the forecast be based on existing sources of generation or generation under

construction. Consumers further argued that GLREA’s presentation was not appropriate for an

Act 304 proceeding, and that issues concerning the type and amount of renewable resources in the

company’s portfolio should be addressed in a renewable energy plan case under 2008 PA 295

(Act 295).

In a similar vein, IEI contended that although energy efficiency programs are reviewed under

Act 295, energy efficiency has a direct effect on power supply requirements and costs and thus

should also be considered in the context of Act 304. IEI argued that there are cost-effective energy

efficiency opportunities that go beyond the energy optimization (EO) mandates of Act 295, and

that Consumers should be directed to evaluate additional efficiency programs and include all cost-

Page 28 U-17317

effective energy efficiency measures in its next PSCR plan and forecast. In addition, IEI observed

that conservation voltage reduction, facilitated by advanced metering infrastructure (AMI), is a

specific, cost-effective way to reduce energy demand, thereby reducing power supply costs.

Accordingly, IEI recommended that the Commission direct Consumers to evaluate opportunities

for PSCR cost savings through conservation voltage reduction, and plan to implement all cost-

effective voltage controls as part of the company’s next PSCR plan proceeding.

Consumers argued that the Commission should disregard IEI’s presentation, on grounds that

the consideration of demand side management is beyond the scope of an Act 304 proceeding, as

the Commission has repeatedly determined. See, e.g., August 22, 2006 order in Case No.

U-14701 and June 28, 2013 order in Case No. U-16892. Consumers further argued that, like the

issues raised by GLREA, the appropriate forum for IEI’s concerns are Act 295 proceedings

concerning EO.

The ALJ agreed with Consumers that in several past orders in Act 304 cases, the Commission

has restricted the issues to be considered in the plan and forecast. However, he noted that in the

May 15, 2015 order in Case No. U-17319 (May 15 order), the Commission indicated more

inclination to consider the recommendations made by IEI and GLREA in the context of a PSCR

plan case. Nevertheless, in the May 15 order, the Commission rejected IEI and GLREA’s

arguments on grounds that there was simply too much uncertainty about the direction of energy

policy in Michigan. The ALJ found that the state of policy uncertainty cited previously has not

changed, and therefore the recommendations made by GLREA and IEI should again be rejected.

GLREA takes exception arguing that the ALJ erred in generally accepting Consumers’ plan

and forecast, and that the Commission should require Consumers to file a more complete and

adequate plan, at least with respect to solar resources. GLREA specifically argues that the plan

Page 29 U-17317

and forecast presented by Consumers do not comport with Michigan’s statutory and public

policies that encourage the development of solar resources, the increasingly favorable economics

of solar generation, or the additional social and grid benefits that could be obtained by an increase

in solar generation. GLREA also requests that the Commission take official notice of various

studies, utility actions, and regulatory determinations that GLREA claims support its presentation

and recommendations in this case.

Consumers replies that GLREA’s exceptions should be rejected as beyond the scope of this

proceeding and in conflict with the purpose of the Act 304 forecast. Consumers reiterates that its

forecast reflects the expected, albeit small, contribution of solar resources over the five-year period

and that the appropriate forum for GLREA’s concerns is a renewable energy proceeding under

Act 295. Consumers also objects to GLREA’s official notice request on grounds that the

information is unnecessary; it does not further the record, and some information is hearsay.

IEI takes exception, arguing that, contrary to the ALJ’s recommendation to defer the issue of

accelerated energy efficiency until energy legislation is in place, the Commission is now poised to

reconsider the role of energy efficiency in the context of a PSCR case. IEI points to a 2013

Commission report on energy efficiency, the potential for additional energy savings, and the Act

304 mandate that the utility take “all appropriate actions to minimize the cost of fuel” as part of the

five-year forecast. MCL 460.6j(6) and (7). “Thus, IEI recommends that the Commission should

indicate to Consumers that it expects the Company to propose accelerated Energy Optimization

[EO] programs that will accomplish all cost-effective measures as soon as is practical.” IEI’s

exceptions, p. 3. IEI envisions a two-step process wherein Consumers is first ordered to enhance

its EO programs to the maximum expenditure level permitted under Act 295, then submit an

Page 30 U-17317

integrated resource plan that includes all cost-effective energy efficiency measures that can be

practically achieved.

Consumers replies that IEI’s evidence and arguments should be rejected on grounds that they

are not relevant to a PSCR plan case, and that, on the basis of past Commission precedent affirmed

by the Court of Appeals, IEI should be foreclosed from raising this issue in future PSCR plan

proceedings.

With respect to GLREA’s official notice request, the Commission agrees with Consumers that

the information for which GLREA requests notice is not necessary for a complete record in this

proceeding. Further, the Commission has previously determined that it will not consider requests

for judicial notice late in a proceeding, absent a compelling reason to consider the information.

The Commission also agrees that Consumers’ forecast in this case credibly reflects the

projected growth of solar generation in Michigan. That said, the Commission also expects

Consumers to continue to monitor, analyze, and update its forecasts to ensure that reasonable

projections of customer generation are included, especially in light of the rapidly declining costs of

solar and other renewable technologies.

The Commission disagrees with Consumers’ request to disallow issues concerning energy

efficiency to be raised in future PSCR proceedings. Consumers contends that this comports with

past Commission precedent excluding these issues, and in any event, such concerns are

appropriately raised in another forum. As Consumers is no doubt aware, IRP was very much a

part of the PSCR forecast for many years until the enactment of 2000 PA 141, after which the

Commission determined that the need for IRP was considerably lessened by the advent of

deregulation and electric competition.

Page 31 U-17317

Nevertheless, the Commission also agrees with the ALJ that because energy policy in

Michigan remains unsettled, any significant changes to PSCR forecasts, at least with respect to

energy efficiency, are not practical at this time. That said, the Commission agrees with IEI that

Consumers should make greater efforts through its EO programs to maximize the cost-effective

opportunities to reduce or eliminate energy waste. In addition, the Commission expects that as

part of its efforts to maximize the functionality and energy savings benefits of AMI, Consumers

should evaluate the implementation of voltage control facilitated by AMI.

THEREFORE, IT IS ORDERED that:

A. The application for a power supply cost recovery plan and factors for calendar year 2014,

filed by Consumers Energy Company, is approved, as modified by this order.

B. Consumers Energy Company’s net overrecovery balance of $9,030,171, inclusive of

interest, shall be reflected as the company’s 2014 power supply cost recovery reconciliation

beginning balance.

Page 32 U-17317

The Commission reserves jurisdiction and may issue further orders as necessary.

Any person desiring to appeal this order must do so in the appropriate court within 30 days

after issuance and notice of this order, pursuant to MCL 462.26. To comply with the Michigan

Rules of Court’s requirement to notify the Commission of an appeal, appellants shall send required

notices to both the Commission’s Executive Secretary and to the Commission’s Legal Counsel.

Electronic notifications should be sent to the Executive Secretary at mpscedockets@michigan.gov

and to the Michigan Department of the Attorney General - Public Service Division at

pungp1@michigan.gov. In lieu of electronic submissions, paper copies of such notifications may

be sent to the Executive Secretary and the Attorney General - Public Service Division at 7109

W. Saginaw Hwy., Lansing, MI 48917.

MICHIGAN PUBLIC SERVICE COMMISSION

________________________________________ Sally A. Talberg, Chairman

________________________________________ Norman J. Saari, Commissioner By its action of May 20, 2016. ________________________________ Mary Jo Kunkle, Executive Secretary