state of michigan before the michigan public ... - …

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STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of INDIANA MICHIGAN POWER COMPANY for authority to increase its rates for the sale of electric energy and for approval of depreciation rates and other related matters. Case No. U-20359 INDIANA MICHIGAN POWER COMPANY EXHIBITS: VOLUME IV (Witness Lies: Cook Nuclear Plant) EXHIBIT IM-13 (QSL-1) THROUGH EXHIBIT IM-21 (QSL-9) - Part 1

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Page 1: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

* * * * *

In the matter of the application of INDIANA MICHIGAN POWER COMPANY for authority to increase its rates for the sale of electric energy and for approval of depreciation rates and other related matters.

Case No. U-20359

INDIANA MICHIGAN POWER COMPANY

EXHIBITS: VOLUME IV

(Witness Lies: Cook Nuclear Plant)

EXHIBIT IM-13 (QSL-1)

THROUGH

EXHIBIT IM-21 (QSL-9)

- Part 1

Page 2: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Indiana Michigan Power Company Exhibits and Schedules

Case No. U-20359 Base Rate Case

Exhibit Schedule Title Witness VOLUME I: PART I SCHEDULES AND EXHIBITS

Historical A-1 A1 Historical Revenue Deficiency

(Sufficiency) Caudill

A-1 A2 Historical Financial Metrics Ross A-2 B1 Historical Rate Base Caudill, Ross A-2 B2 Historical Utility Plant Ross A-2 B3 Historical Depreciation Reserve and Other

Deductions Ross

A-2 B4 Historical Working Capital Caudill, Ross A-3 C1 Historical Adjusted Net Operating Income Caudill, Ross A-3 C2 Historical Revenue Conversion Factor Kelly A-3 C3 Historical Operating Revenue Ross A-3 C4 Historical Fuel and Purchased Power/Cost

of Gas Sold Ross

A-3 C5 Historical Operation and Maintenance Expenses

Ross

A-3 C6 Historical Depreciation and Amortization Expenses

Ross

A-3 C7 Historical General Taxes Kelly A-3 C8 Historical Federal Income Taxes Kelly A-3 C9 Historical State Income Taxes Kelly A-3 C10 Historical Other (or Local) Taxes Kelly A-3 C11 Historical Allowance for Funds Used

During Construction Ross

A-4 D1 Historical Rate of Return Summary Messner A-4 D2 Historical Cost of Long-Term Debt Messner A-4 D3 Historical Cost of Short-Term Debt Messner A-4 D4 Historical Cost of Preferred Stock Messner A-4 D5 Historical Cost of Common Shareholders'

Equity Messner

A-5 E1 Historical Sales, Load & Customer Data Nollenberger Projected

A-11 A-1 Projected Revenue Deficiency (Sufficiency)

Williamson

A-11 A2 Forecasted Financial Metrics Messner/Heimberger/Williamson A-12 B1 Projected Rate Base Caudill/Heimberger A-12 B2 Projected Utility Plant Heimberger A-12 B3 Projected Accumulated Provision for

Depreciation Heimberger

A-12 B4 Projected Working Cap Caudill/Heimberger A-12 B5 Summary of Projected Capital

Expenditures Lucas

A-12 B5.1 Projected Capital Expenditures-Steam, Hydraulic & Other Power Generation

Lucas/Kerns

A-12 B5.2 Projected Capital Expenditures Nuclear Plant

Lucas/Lies

A-12 B5.3 Projected Capital Expenditures Distribution Plant

Lucas/Isaacson

Page 3: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Indiana Michigan Power Company Exhibits and Schedules

Case No. U-20359 Base Rate Case

Exhibit Schedule Title Witness A-12 B5.4 Projected Capital Expenditures Intangible

& General Lucas

A-12 B5.5 Projected Capital Expenditures-AFUDC Lucas A-13 C1 Projected Net Operating Income Heimberger/Caudill A-13 C2 Revenue Conversion Factor Kelly A-13 C3 Projected Sales Revenue Heimberger A-13 C4 Projected Fuel and Purchased Power/Cost

of Gas Sold Heimberger

A-13 C5 Projected Operation and Maintenance Expenses

Lucas/Heimberger

A-13 C6 Projected Depreciation and Amortization Expenses

Heimberger

A-13 C7 Projected General Taxes Kelly A-13 C8 Projected Federal Income Taxes Kelly A-13 C9 Projected State Income Taxes Kelly A-13 C10 Projected Other (or Local) Taxes Kelly A-13 C11 Projected Allowance for Funds Used

During Construction Heimberger

A-14 D1 Projected Rate of Return Summary Messner A-14 D2 Cost of Long-Term Debt Messner A-14 D3 Cost of Short-Term Debt Messner A-14 D4 Cost of Preferred Stock Messner A-14 D5 Cost of Common Shareholders' Equity Messner A-15 E1 Sales, Load and Customer Data Heimberger A-16 F1 Projected Cost of Service Allocation Study Caudill A-16 F1.1 Projected Test Year Class Cost of Service

Study Fee

A-16 F1.1.1 Net Cone & Open Access Distribution Reallocation

Fee

A-16 F1.1.2 Alternate Open Access Distribution Reallocation

Fee

A-16 F2 Summary of Present and Proposed Revenues

Caudill

A-16 F3 Detail of Present and Proposed Revenues Caudill A-16 F4 Comparison of Present and Proposed

Monthly Bills Nollenberger

VOLUME II: PART I SCHEDULES AND EXHIBITS A-16 F5.1 Proposed Tariff Sheets Section A Cooper A-16 F5.2 Proposed Tariff Sheets Section C Cooper A-16 F5.3 Proposed Tariff Sheets Section D Cooper A-16 F5.4 Proposed Tariff Sheets Section E Cooper

VOLUME III: I&M EXHIBITS IM-1 TLT-1 Index of Witnesses Thomas IM-2 TLT-2 Rockport Ownership Diagram Thomas IM-3 TLT-3 Electric Company Smart Meter

Deployments: Foundation for a Smart Grid Thomas

IM-4 DAL-1 Historical and Forecasted O&M Expenses Lucas IM-5 DAL-2 Historical and Forecast Capital

Expenditures Lucas

IM-6 DAL-3 Economic Development Pilot Programs Lucas IM-7 DAL-4 Customer Engagement Platform Lucas

Page 4: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Indiana Michigan Power Company Exhibits and Schedules

Case No. U-20359 Base Rate Case

Exhibit Schedule Title Witness IM-8 NAH-1 Projected Functional Plant Balances Heimberger IM-9 NAH-2 Historic and Projected Functional Plant

Activity Heimberger

IM-10 NAH-3 Revenue Comparison Heimberger IM-11 NAH-4 Fuel, Consumables, Allowances and

Purchased Power Comparison Heimberger

IM-12 NAH-5 Projected PSCR Basing Point Heimberger VOLUME IV: I&M EXHIBITS: COOK NUCLEAR PLANT

IM-13 QSL-1 Cook Plant Systems Diagram Lies IM-14 QSL-2 Baffle Bolt Diagram Lies IM-15 QSL-3 August 2013 Life Cycle Management

Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-16 QSL-4 March 2014 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-17 QSL-5 October 2014 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-18 QSL-6 April 2015 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-19 QSL-7 October 2015 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-20 QSL-8 April 2016 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-21 QSL-9 October 2016 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

VOLUME V: I&M EXHIBITS: COOK NUCLEAR PLANT IM-22 QSL-10 April 2017 Life Cycle Management Semi-

Annual Progress Report (CONFIDENTIAL) Lies

IM-23 QSL-11 November 2017 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-24 QSL-12 April 2018 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-25 QSL-13 October 2018 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-26 QSL-14 April 2019 Life Cycle Management Semi-Annual Progress Report (CONFIDENTIAL)

Lies

IM-27 **Exhibit intentionally omitted** VOLUME VI: I&M EXHIBITS

IM-28 DSI-1 I&M’s Michigan Five-Year Distribution Plan (2019-2023)

Isaacson

IM-29 JAC-1 Depreciation Study Report Cash IM-30 JAC-2 Brandenburg Industrial Service Company’s

conceptual dismantling study performed for the Rockport Plant

Cash

IM-31 JAC-3 Sargent and Lundy’s conceptual dismantling studies performed for the

Cash

Page 5: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Indiana Michigan Power Company Exhibits and Schedules

Case No. U-20359 Base Rate Case

Exhibit Schedule Title Witness Company’s hydroelectric (or hydraulic) facilities

IM-32 ALH-1 Summary of Decommissioning Liability Hill IM-33 KKK-1 2018 Operating Companies ICP

Framework Kaiser

IM-34 KKK-2 2018 Compensation Survey List Kaiser IM-35 KKK-3 Michigan Target TCC vs Market for

Technical, Craft and Clerical Positions Kaiser

IM-36 KKK-4 Target TCC vs Market for Exempt Positions Kaiser IM-37 KKK-5 Target TC vs Market for Senior

Management Positions Kaiser

VOLUME VII: I&M EXHIBITS IM-38 NCK-1 AEP Guidelines for Transmission Owner

Identified Needs Koehler

IM-39 NCK-2 Presentation Slides from the April 23, 2019 Meeting of the Subregional RTEP Committee – Western

Koehler

IM-40 **Exhibit intentionally omitted** IM-41 RWK-1 Resume of Roderick W. Knight Knight IM-42 RWK-2 Decommissioning Cost Study for the D.C.

Cook Nuclear Power Plant, January 2019, Revision 0

Knight

IM-43 RBH-1 Resume and Experience of Robert B. Hevert

Hevert

IM-44 RBH-2 Constant Growth DCF Results Hevert IM-45 RBH-3 Market Risk Premium Calculations Hevert IM-46 RBH-4 Beta Coefficients Hevert IM-47 RBH-5 Capital Asset Pricing Model Results Hevert IM-48 RBH-6 Market Risk Premium Calculations Hevert IM-49 RBH-7 Expected Earnings Analysis Results Hevert IM-50 RBH-8 Flotation Costs Hevert IM-51 RBH-9 Adjustment Clauses and Alternative

Regulation Hevert

IM-52 RBH-10 Capital Structure Hevert IM-53 RBH-11 Cost of Long-Term Debt Hevert IM-54 BEA-1 EZ Bill Tariff Sheets (R.S.-EZB and G.S.-

EZB Auer

IM-55 BEA-2 EZ Bill Offer Letter Auer IM-56 BEA-3 Bill Example Auer IM-57 BEA-4 EZ Bill Re-Enrollment Letter Auer IM-58 JGK-1 30 Year Historical Average Cooling &

Heating Degree Days at South Bend IN (1989 through 2018)

Kinateder

IM-59 JGK-2 Summary of Weather, Model Variability Risk for Residential and Small Commercial Customers

Kinateder

IM-60 JGK-3 Summary of Price Risk for Residential and Small Commercial Customers

Kinateder

IM-61 JGK-4 Program Fee Calculation Schematic Kinateder IM-62 JWL-1 IM Plugged in Pilot Program Details Lehman IM-63 TAC-1 Summary of Projected Adjustments

Caudill

Page 6: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Indiana Michigan Power Company Exhibits and Schedules

Case No. U-20359 Base Rate Case

Exhibit Schedule Title Witness IM-64 MWN-1 I&M’s Proposed Revenue Allocation and

Rate Realignment Surcharge Calculation Nollenberger

IM-65 KCC-1 Special Service Charge Development Cooper IM-66 KCC-2 Special Service Charges Revenue

Adjustment Cooper

IM-67 KCC-3 Update AMI Opt-out charges Cooper IM-68 AJW-1 Rockport Enhanced DSI Williamson IM-69 AJW-2 Rate Case Expenses Williamson IM-70 MWN-2 Proof of Revenues, Embedded COS PS-C Nollenberger IM-71 MWN-3 Proof of Revenues, Staff Method U-18370

PS-C Nollenberger

Page 7: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Indiana Michigan Power Company Case No. U-20359

Exhibit No. IM-13 (QSL-1)Page 1 of 1

Witness: Q.S. Lies

Page 8: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Baffle Bolt Diagram

Indiana Michigan Power Company Case No. U-20359

Exhibit No. IM-14 (QSL-2) Page 1 of 1

Witness: Q.S. Lies

Page 9: STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC ... - …

Page 1 of 31

INDIANA MICHIGAN POWER COMPANY

DONALD C. COOK NUCLEAR POWER PLANT

LIFE CYCLE MANAGEMENT PROJECT

SEMI-ANNUAL PROGRESS REPORT

PREPARED FOR

MICHIGAN PUBLIC SERVICE COMMISSION

AUGUST 2013

PURSUANT TO COMMISSION ORDER U-17026

Exhibit IM-15 (QSL-3) PUBLIC

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Page 2 of 31

TABLE OF CONTENTS

ACRONYMS AND DEFINITIONS ................................................................................... 3

EXECUTIVE OVERVIEW ............................................................................................... 5

STATUS OF THIRD PARTY INDEPENDENT MONITOR............................................... 7

EXPLANATION OF LCM SUB-PROJECT DEVIATIONS................................................ 9

PROJECT CHANGE REQUEST FORM LOG............................................................... 12

PROJECT SCHEDULE CHANGES .............................................................................. 21

IN-SERVICE DATES OF COMPLETED PROJECTS ................................................... 26

DEFERRALS................................................................................................................. 27

EXHIBITS...................................................................................................................... 29

Exhibit 1 – 2013-2018 Outage Projects .............................................................. 24

Exhibit 2 – 2013-2018 Online Projects ............................................................... 25

Exhibit 3 – Project Schedule Changes ............................................................... 26

Exhibit 4 – Forecasted LCM Capital Dollars ....................................................... 31

STATUS OF LCM SUB-PROJECTS: COSTS AND SCHEDULE................. Attachment 1

Exhibit IM-15 (QSL-3) PUBLIC

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Page 3 of 31

ACRONYMS AND DEFINITIONS

Acronym DefinitionAE Architect Engineer

AEP American Electric PowerAMSAC ATWS Mitigating System Actuation CircuitATWS Anticipated Transient Without ScramBKR BreakerBOB Buchanan Office Building

CP&B Corporate Planning and BudgetingCCW Component Cooling WaterCEQ Containment Air Recirculation/Hydrogen SkimmerCO2 Carbon Dioxide

Cook / CNP Donald C. Cook Nuclear Power PlantCRID Control Room Instrumentation DistributionCTS Containment SprayEAC Estimate at Completion

ECCS Emergency Core Cooling SystemEDG Emergency Diesel GeneratorEP Emergency Power

ESFAS Engineered Safety Features Actuation SystemESW Essential Service WaterFAT Factory Acceptance TestingFW Feedwater

GSU Generator Step-UpHDP Heater Drain PumpHP High Pressure

HTR HeaterHVAC Heating, Ventilation, Air Conditioning

HX Heat ExchangerI&M Indiana Michigan Power Company

IURC Indiana Utility Regulatory CommissionLCM Life Cycle ManagementLP Low Pressure

MHI Mitsubishi Heavy IndustriesMod Modification

MPSC Michigan Public Service CommissionMSR Moisture Separator ReheaterMVA Million Volt-Amperes

NESW Non-Essential Service WaterOEM Original Equipment ManufacturerPCRF Project Change Request Form

PM Project Manager

Exhibit IM-15 (QSL-3) PUBLIC

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Page 4 of 31

Acronym DefinitionPMBOK Project Management Body of Knowledge

PMI Project Management InstitutePMP Project Management ProfessionalPMT Preventative MaintenancePPC Plant Process ComputerPRF Project Request FormRCP Reactor Coolant PumpRFP Request for ProposalRMS Radiation Monitoring System

RPAC Radiation Protection Access ControlRPS Reactor Protection SystemSG Steam Generator

SWEPCO Southwestern Electric Power CompanySWCIP Secondary Water Chemistry Improvement Project

TAM Temporary Alarm MonitorTDAFP Turbine Driven Auxiliary Feed PumpTemp Temporary

TR TransformerTSC Technical Support CenterUAT Unit Auxiliary TransformerUNK UnknownUPS Uninterruptible Power SupplyVAC Volts - AC

Exhibit IM-15 (QSL-3) PUBLIC

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Page 5 of 31

EXECUTIVE OVERVIEW

This Semi-Annual Progress Report has been generated to provide the current status of the 117 LCM Sub-Projects that comprise the LCM Project at Cook Nuclear Plant. This report represents actual engineering, construction, budget, and schedule progress through June 30, 2013. Due to the recently completed contract negotiations with theproposed Independent Monitor, as required by MPSC ruling, this report has been developed by personnel from I&M, AEP Corporate, and Cook Nuclear Plant. The Independent Monitor will participate in subsequent semi-annual progress reports on the LCM Project.

Exhibit I&M-22 (TJB-5) from Case No. U-17026 has been modified and updated for ease of reference and familiarity (see Attachment 1). The following information has been provided as a high-level summary:

Completed 7 of the 117 LCM sub-projects at a cost savings of $12.1M* versusthe filing value for these sub-projects

Achieved a cost savings of $30.9M for LCM sub-projects that are ongoing, butremain to be in-serviced

Achieved an overall cost savings of $43.1M for all LCM sub-projects

A summary of the current LCM sub-project cost variances is included on page 6.

The calculated deferred depreciation and carrying charges for the LCM costs represent values from February 2013 through May 2013, as seen beginning on page 27.

Exhibit 1 provides a summary of LCM Sub-Projects that are scheduled to be performedduring upcoming CNP outages and Exhibit 2 provides a summary of LCM Sub-Projectsthat are scheduled to be performed online. Exhibit 3 is a summary of Sub-Project schedule changes that are referenced in Exhibits 1 and 2. Exhibit 4 provides a forecasted LCM Project spend curve, including a comparison to the as-filed forecast to the current long-range forecast.

Overall, the LCM Project and the associated sub-projects are progressing as anticipated. We are on track to complete all sub-projects within the 2018 timeframe and we are within the EAC as filed.

* $M denotes millions of dollars

Exhibit IM-15 (QSL-3) PUBLIC

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PAGE 6 OF 31: REMOVED

CONFIDENTIAL-SUBJECT TO PROTECTIVE ORDER ISSUED JUNE 5, 2012, IN CASE NO. U-17026

Exhibit IM-15 (QSL-3) PUBLIC

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Page 7 of 31

STATUS OF THIRD PARTY INDEPENDENT MONITOR

I&M has filed for recovery of the LCM Project with both the IURC and the MPSC in Cause No. 44182 and Case No. U-17026, respectively. I&M / Cook are required to have 3rd party independent monitor reviews performed on each of the 117 sub-projects that comprise the LCM Project. The independent monitor will allow I&M and Cook to maintain transparency with the Commissions. In addition, the monitoring will allow an independent review and updates be made to the Commissions on the progress of the LCM sub-projects, including information on implementation progress and costs.

Personnel from Cook solicited approximately a dozen potential candidate companies in late March 2013 to determine if they had the necessary skills and resources to perform independent monitoring on the LCM Project at Cook. Six (6) companies responded with summary sheets of their qualifications by 04/05/13.

A mandatory LCM Independent Monitoring Pre-Bid Meeting in regards to RFP #10200was held on 05/23/13 in Cook’s Nuclear Generation Group Headquarters in the Buchanan, Michigan office building. Applicable RFP documents, including the scope of work, were distributed to the attendees prior to the meeting. Attendees from all 6 companies were present, which included the following:

Absolute Consulting (Absolute)7552 Navarre Parkway, Suite 63Navarre, Florida 32566

Concentric Energy Advisors (Concentric)293 Boston Post Road West, Suite 500Marlborough, Massachusetts 01752

Administrative Controls Management (ACM)525 Avis Drive, Suite 2Ann Arbor, Michigan 48108

E3 Consulting (E3)3333 S. Bannock Street, Suite 500Englewood, Colorado 80110

AMEC1979 Lakeside Parkway, Suite 400Tucker, Georgia 30084

Navigant30 S. Wacker Drive, Suite 3100Chicago, Illinois 60606

Sealed bids were received on 06/13/13 and opened on 06/14/13 by Cook Nuclear Plant’s Contracts Department and Projects representatives. Four (4) companies (Absolute, ACM, Concentric, and E3) elected to submit bids, while the other two (2) companies (AMEC and Navigant) declined.

Five (5) individuals from Cook reviewed the proposals and completed independent numerical proposal performance rating forms for each of the four bids. The group met on 06/20/13 to compare results and develop one composite evaluation sheet.

Based on the information contained within the proposals and the composite numerical proposal performance rating, it was recommended that E3 Consulting be awarded the

Exhibit IM-15 (QSL-3) PUBLIC

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Page 8 of 31

STATUS OF THIRD PARTY INDEPENDENT MONITOR(continued)

scope of work identified in RFP #10200. The evaluating group collectively agreed that this company should provide the Independent Monitoring of the LCM Project. As such, a contract requisition was routed and approved by Cook Senior Management and the contract has been agreed to with E3 Consulting.

Future Semi-Annual Reports will include a report from E3 Consulting, serving as the independent monitor for the CNP LCM Project.

Exhibit IM-15 (QSL-3) PUBLIC

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Page 9 of 31

EXPLANATION OF SELECT LCM SUB-PROJECTS

As discussed in Paul Schoepf’s (Director, Nuclear Projects) adopted direct testimony in Case No. U-17026, requests for a change to the scope of a sub-project are reviewed and analyzed by the project team and project manager, project sponsor, and project director as necessary. The project manager has authority for approving minor changes in task scope, task completion dates, task cost targets, and risk estimates that do not affect the overall sub-project scope, completion dates, or cost targets. Significant changes require project sponsor and project director approvals. Changes in project scope, schedule, or cost are facilitated through completion of a Project Change Request Form. A PCRF must be completed when at least one of the following conditions apply: 1) Scope is added or excluded from the original baseline charter; 2) The changerequires additional funding from the established LCM Project Management Reserve; or3) There is a schedule change that impacts a milestone or causes a re-baseline. Onlyapproved changes may be implemented. The PCRF change log is included on pages12-20.

In addition, the below information contains more in-depth details on a select number of higher priority LCM sub-projects.

PRF040174 Unit 2 GSU Transformer:The CNP Unit 2 GSU transformer consists of a bank of three single-phase transformers that increase the main generator output voltage from 26 kV to 765 kV. The existing transformer was rated at 433 MVA, for a total capacity of 1300 MVA. The transformers, manufactured by ASEA in 1974, had been in service since initial unit testing and start-up in 1977. The replacement transformers (and one spare) are larger than the original ones to allow for operational flexibility. The new transformer(s) have monitoring upgrades that meet new standards and have increased capability to detect adverse conditions prior to catastrophic failure. The sub-project was performed in 2011 and was completed on-time and within the approved budget.

PRF110060 U2 Iron Filtration:The Iron Filtration Unit uses a mechanical filter mechanism to remove iron from the secondary side. Iron filtration use during start-up, following the refueling outage, has resulted in the station not receiving Chemistry Effectiveness Index points for iron. This represents industry top quartile chemistry effectiveness. The sub-project was completed on time and within the initial approved budget.

PRF040196 U1 Unit Auxiliary Transformer:The two replacement transformers (and one spare) are larger than the original ones to allow operational flexibility. The new transformer(s) have monitoring upgrades that meet new standards and have increased capability to detect adverse conditions prior to catastrophic failure. The sub-project completed on time and within the initial approved budget.

Exhibit IM-15 (QSL-3) PUBLIC

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Page 10 of 31

EXPLANATION OF SELECT LCM SUB-PROJECTS(continued)

PRF040065 U1 Control Room Annunciator System:The Unit 1 Control Room Annunciator System was replaced during the spring 2013 refueling outage. There are almost 1600 annunciators in each control room. These are used as an indicator of the status of equipment or systems and will alarm when conditions are outside set parameters. The new digital computer-screen system replaced the original push button analog controls. The new system was installed in the Control Room Simulator well before installation so that Operators could be fully trained when the new system went into service. The sub-project was completed on-time and within the approved budget.

PRF040465 U2 Feedwater Heaters HP – 5A/5B/6A/6B:The current Unit 2 Westinghouse designed High Pressure (HP) Feedwater (FW) Heaters 2-HE-5A, 2-HE-5B, 2-HE-6A and 2-HE-6B are at the end of their useful life and require replacement in order to maintain functionality to last the full duration of the life extension expectancy of an additional 20 years of service. The sub-project is on budget; however, it is not on schedule due to timing concerns related to meeting outage milestones. To effectively manage implementation risk, it was decided to delay the implementation of the Unit 2 6A/6B Feedwater Heaters until the Cycle 22 outage in spring 2015. The U2 Feedwater Heaters (HP) – 5A/5B remain on track, also scheduled for Unit 2 Cycle 22.

PRF040236/PRF040235 U1 / U2 TDAFP Governors:Replacement of the Auxiliary Feed water Pump Turbine Speed Governor (TDAFP) for both Unit 1 and Unit 2 was included in the LCM Project. Originally, the OEM provided a certified letter stating that they would be unable to support the governors going forward, but during the development of the associated sub-projects it was determined that the vendor would continue to provide support for the existing Woodward PG mechanical-hydraulic governor that are installed. Additionally, post-Fukushima, the industry now understands that having a mechanical governor is the preferred option. Given this information, it was determined that reliability and performance of the governor can be effectively managed without upgrade/replacement and the associated sub-projects were therefore cancelled.

PRF040034 Ice Machine and Glycol Chillers / PRF090189 Ice Condenser System (Transport and Bins):The project addresses two obsolete components; ice machines and glycol chillers. Replacement of these components will provide modern, reliable, equipment which can be supported by vendors (spare parts and technical expertise) and will last through the life of the plant. The modern glycol chiller machines will provide more controls and the new ice machines will provide more capacity which could support future outage duration improvements. The Ice Machine, Bin, and Transport system replacement was moved to 2014 because 2013 was a dual refueling outage year and there was a concern that the time to install the new equipment was not adequate. The sub-project is currently over budget due to incorporation of the Ice Machine and Glycol Chiller sub-project with the

Exhibit IM-15 (QSL-3) PUBLIC

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Page 11 of 31

EXPLANATION OF SELECT LCM SUB-PROJECTS(continued)

Ice Condenser System Project to align cost accounting with project execution. Additionally, the project is showing an unfavorable variance due to cost increase associated with the constructability of the project. The project has been rebaselined and the revised EAC will be submitted for approval at the August 2013 I&M Subsidiary Company Board. The sub-project is slightly behind schedule with work originally expecting to complete in 2013 now scheduled for early 2014.

PRF040111 U1/U2 34.5/4kV Cables:This project will replace the 34.5kV cables from the switchyard to the reserved feed loop feed enclosures. These cables are routed underground through a wooded dune. These cables represent a reliability concern due to their age – the cables are approaching end of life (40 years). The project is currently in progress in the installation phase. The project is significantly over budget. The current estimated cost is approximately $9.2 million over the LCM filing value of $4.4 million. Most additional costs are related to challenges associated with excavation of the existing cable in (protected) sand dunes area. The project is on track for completion in 2013.

PRF110048 Emergency Diesel Generator Load Bank:The EDG Load Bank sub-project was directed by Senior Management to be cancelled during an Executive Project Review Group meeting because an alternative, low-cost approach was identified, allowing this project to be cancelled. Any required tuning of EDG governors, which was previously supported by the load banks, will now be supported through the use of a new or revised plant procedure that will align alternate existing plant loads to load the diesel generator. A corrective action was generated to develop an online PMT procedure.

Exhibit IM-15 (QSL-3) PUBLIC

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Page 12 of 31

PROJECT CHANGE REQUEST FORM LOG

PRF No. PCRF No. Project NameDate

Approved PCRF Summary

various PCRF-001 Multiple Major Projects 3/13/20132014 and 2015 reductions required to meet AEP Corporate Planning & Budgeting capital target reductions. Some LCM costs were reforecasted into future years.

PRF040034 PCRF-001 Ice Machine and Glycol Chillers 12/16/2011 Returned funding based upon unrealized expenditures.

PRF040034 PCRF-002 Ice Machine and Glycol Chillers 1/18/2012

2011 to 2012 cost reconciliation. In 2011, money was returned based upon unrealized expenditures. Funding was requested in 2012 to procure material and complete engineering from 2011.

PRF040034 PCRF-003 Ice Machine and Glycol Chillers N/A not submitted

PRF040064 PCRF-001U2 Control Room Annunciator System

9/25/2012

Added additional HMI in the control room as requested by Operations. It is used to mimic the Unit Supervisor's HMI and share human interface devices with the Balance of Plant (BOP) HMI for maintenance to build alarm groups and to support other system activities. This change incorporated additional design into the Engineering Change.

PRF040064 PCRF-002U2 Control Room Annunciator System

3/7/2013

Project identified additional needed support beyond the original scope of A/E work to supplement the AEP design engineering staff. This included 1) preparation of drawings that were not provided by the vendor [construction requires connection wiring diagrams, which reduces installation risks], 2) additional field support to reduce installation risk [assure completion of work within outage window], 3) development of a full Temp Mod for the TAM installation [provides key annunciator alarm during the time that the annunciator is out of service], and 4) additional management involvement to support the required multi-organizational AEP and construction meetings.

PRF040064 PCRF-003U2 Control Room Annunciator System

5/15/2013

Requested engineering, materials, and construction required to design, configure, test, and install required Cyber Security appliances (not included in original project scope).

Exhibit IM-15 (QSL-3) PUBLIC

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Page 13 of 31

PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040065 PCRF-002U1 Control Room Annunciator System

7/19/2012

Equipment budget increased to account for difference between DC and AC powered equipment. The use of DC equipment eliminated the requirement to reanalyze the AC distribution system within the control room.

PRF040065 PCRF-003U1 Control Room Annunciator System

9/25/2012

Added additional HMI in the control room as requested by Operations. It is used to mimic the Unit Supervisor's HMI and share human interface devices with the Balance of Plant (BOP) HMI for maintenance to build alarm groups and to support other system activities. This change incorporated additional design into the Engineering Change.

PRF040065 PCRF-004U1 Control Room Annunciator System

9/6/2012

Increase scope to procure additional test equipment to enable the system to be configured so approximately one half of the input signals to the annunciator can be triggered simultaneously to verify that the system can handle a plant transient.

PRF040065 PCRF-005U1 Control Room Annunciator System

10/11/2012 Sought authorization for Hurst to accept Factory Acceptance Testing (FAT) as representatives of AEP.

PRF040065 PCRF-006U1 Control Room Annunciator System

9/27/2012

Scientech to provide modified front pinch plated for three (3) alarm display units. The plates are larger than thestandard front plates to cover the existing openings in the main control panels. Using the oversized front plates will avoid significant field work to patch the exposed openings.

PRF040065 PCRF-007U1 Control Room Annunciator System

10/11/2012

Increase in overall cost for Hurst Technologies based on scope that was not included in the original contract, scope changes, delays, and changes that have caused Hurstextra work. Unit 1 and Unit 2 covered in same contract.

PRF040065 PCRF-008U1 Control Room Annunciator System

10/24/2012 Upgrade Simulator with additional bandwidth in Dual Simulator Mode to operate the new annunciator system.

PRF040065 PCRF-009U1 Control Room Annunciator System

11/9/2012 Incorporate changes from Factory Acceptance Testing (FAT) into Concept of Operations, Engineering Change, and equipment modifications.

Exhibit IM-15 (QSL-3) PUBLIC

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Page 14 of 31

PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040065 PCRF-010U1 Control Room Annunciator System

3/7/2013

Project identified additional needed support beyond the original scope of A/E work to supplement the AEP design engineering staff. This included 1) preparation of drawings that were not provided by the vendor [construction requires connection wiring diagrams, which reducesinstallation risks], 2) additional field support to reduce installation risk [assure completion of work within outage window], 3) observation of vendor re-FAT [re-FAT was for resolution of open items from the initial FAT], 4) support for PMT test procedure development, 5) development of a full Temp Mod for the TAM installation [provides key annunciator alarm during the time that the annunciator is out of service], and 6) additional management involvement to support the required multi-organizational AEP andconstruction meetings.

PRF040065PCRF-ANN-01

U1 and U2 Control Room Annunciator Systems

12/10/2011 Transfer milestone payment in 2012 into 2011. Split between U1 and U2

PRF040068 PCRF-002 U2 Plant Process Computer (PPC) 3/25/2013 Install a temporary recorder for monitoring containment temperatures while installing the new PPC.

PRF040068 PCRF-003 U2 Plant Process Computer (PPC) 3/25/2013 Changed implementation from Unit 2 Cycle 21 to online timeframe in 2013.

PRF040068 PCRF-004 U2 Plant Process Computer (PPC) 2/15/2013

The Cyber Security Upgrade project scope included regulatory guidance to provide Network Intrusion Detection and Event Logging. The original funding request did not include funds to deploy the required technical solutions related to the PPC replacement project. This request was to provide funding for the remaining required technology.

PRF040068 PCRF-004 U2 Plant Process Computer (PPC) 5/16/2013

Due to the realignment of Unit 1 PPC implementation, Unit 2 is being rescheduled in two segments (May/June 2013 and November 2013). The actual PPC implementation has been moved to start right after the Unit 2 Cycle 21 100% Flux Mapping. (NOTE: This should have been labeled PCRF-005)

Exhibit IM-15 (QSL-3) PUBLIC

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Page 15 of 31

PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040068 PCRF-006 U2 Plant Process Computer (PPC) 6/17/2013Develop alternate methodology for Reactor Thermal Power Calculations (Precision Calorimetric) to be utilized during PPC installation.

PRF040069 PCRF-002 U1 Plant Process Computer (PPC) 7/19/2012 Upgrade to preferred hardware as requested by IT team and add cyber security firewalls.

PRF040069 PCRF-003 U1 Plant Process Computer (PPC) 2/15/2013

The Cyber Security Upgrade project scope included regulatory guidance to provide Network Intrusion Detection and Event Logging. The original funding request did notinclude funds to deploy the required technical solutions related to the PPC replacement project. This request was to provide funding for the remaining required technology.

PRF040069 PCRF-004 U1 Plant Process Computer (PPC) 1/23/2013 Add card reader, door switch, and electric door strike on door to new PPC room.

PRF040069 PCRF-005 U1 Plant Process Computer (PPC) 1/23/2013Increase scope to have Scientech resolve twenty-three (23) areas for improvement/enhancements that wereidentified during Factory Acceptance Testing.

PRF040069 PCRF-006 U1 Plant Process Computer (PPC) 3/25/2013 Install a temporary recorder for monitoring containment temperatures while installing the new PPC.

PRF040069 PCRF-007 U1 Plant Process Computer (PPC) 3/25/2013 Changed implementation from Unit 1 Cycle 25 (Spring 2013) to online timeframe in 2013.

PRF040069 PCRF-008 U1 Plant Process Computer (PPC) 4/12/2013Develop manual calculation method for Reactor Thermal Power Calculations (Precision Calorimetric) to be utilized during PPC installation.

PRF040069 PCRF-009 U1 Plant Process Computer (PPC) 5/16/2013 Change the implementation start date from May 2013 to August 2013.

PRF040069 PCRF-010 U1 Plant Process Computer (PPC) 6/17/2013

Subsequent to PCRF 040069-008, it was concluded that the manual Reactor Thermal Power computation does not meet licensing requirements. Therefore, an alternate implementation is required to provide an acceptable alternate method for use that can meet all licensing requirements which can be implemented under the 50.59 process.

Exhibit IM-15 (QSL-3) PUBLIC

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PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040111 PCRF-001 34.5/4kV Cables 9/13/2012Increase total estimate for completion of the 34kV cables based on study. Increased amounts in 2012 and 2013; decreased in 2014.

PRF040111 PCRF-002 34.5/4kV Cables N/A Increase Scope Change (Not Approved)

PRF040139 PCRF-001U1 Steam Generator (SG) Water Level Controls

8/22/2012Reallocate a portion of the 2012 budget to 2013.

PRF040139 PCRF-002U1 Steam Generator (SG) Water Level Controls

3/25/2013 Change the signal range from selected inputs to the new SG Water Level Control System.

PRF040139 PCRF-003U1 Steam Generator (SG) Water Level Controls

3/26/2013 Change the implementation date from Unit 1 Cycle 27 to Unit 1 Cycle 26.

PRF040140 PCRF-001U2 Steam Generator (SG) Water Level Controls

8/29/2012Reallocate a portion of the 2012 budget to 2013.

PRF040140 PCRF-002U2 Steam Generator (SG) Water Level Controls

3/25/2013 Change the signal range from selected inputs to the new SG Water Level Control System.

PRF040140 PCRF-003U2 Steam Generator (SG) Water Level Controls

3/26/2013 Change the implementation date from Unit 2 Cycle 23 to Unit 2 Cycle 22.

PRF040154 PCRF-001U2 East Component Cooling Water (CCW) Heat Exchanger (HX)

5/29/2013New schedule, pending results of study. Change the implementation date from Unit 2 Cycle 23 to Unit 2 Cycle 24.

PRF040154 PCRF-002U2 East Component Cooling Water (CCW) Heat Exchanger (HX)

4/12/2013 Move the project back into Phase 1 due to the lack of details regarding installation.

PRF040155 PCRF-001U1 East Component Cooling Water (CCW) Heat Exchanger (HX)

N/Anot submitted

PRF040155 PCRF-002U1 East Component Cooling Water (CCW) Heat Exchanger (HX)

4/12/2013 Move the project back into Phase 1 due to the lack of details regarding installation.

PRF040174 PCRF-001U2 Generator Step-Up (GSU) Transformer

12/16/2011Returned unused funds for 2011.

PRF040174 PCRF-002U2 Generator Step-Up (GSU) Transformer

12/16/2011Transfer funds from 2011into 2012, due to timing variance.

PRF040196 PCRF-001U1 Unit Auxiliary Transformers (UATs) TR1AB/TR1CD

12/9/2011 Transfer funds from 2011into 2012 to pay for work performed by Sargent & Lundy in Phase 2B.

Exhibit IM-15 (QSL-3) PUBLIC

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PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040196 PCRF-002U1 Unit Auxiliary Transformers (UATs) TR1AB/TR1CD

2/1/2012 Transfer funds from 2011into 2012 to pay for work performed by Sargent & Lundy in Phase 2B.

PRF040196 PCRF-003U1 Unit Auxiliary Transformers (UATs) TR1AB/TR1CD

4/5/2012 Journal correct O&M funds to capital for study performed to provide solution to ensure the margin on the Degraded Voltage Relay lower analytical limit can be increased.

PRF040196 PCRF-005U1 Unit Auxiliary Transformers (UATs) TR1AB/TR1CD

9/18/2012 Add a third Bushing Current Transformer (BCT) to the UAT High Voltage side.

PRF040198 PCRF-002U2 Unit Auxiliary Transformers (UATs) TR2AB/TR2CD

7/30/2012 2012 budget transfer from U2 UAT’s to U1 UAT’s. 2013 reforecasted opposite impacts.

PRF040235 PCRF-001U2 Turbine Driven Auxiliary Feed Pump (TDAFP) Governor

10/24/2012Transfer funds from 2012 into 2013 to complete engineering, procurement, and AEP labor and Staff Aug costs that were not realized in 2012.

PRF040235 PCRF-002U2 Turbine Driven Auxiliary Feed Pump (TDAFP) Governor

2/18/2013

Due to information discovered during the bid process for engineering services, the previous assumption of governor obsolescence and ongoing vendor support capabilities was determined to be inaccurate. Based upon this information, the need to replace the existing governors is no longer prudent at this time. (sunk costs)

PRF040236 PCRF-001U1 Turbine Driven Auxiliary Feed Pump (TDAFP) Governor

10/24/2012Transfer funds from 2012 into 2013 to complete engineering, procurement, and AEP labor and Staff Aug costs that were not realized in 2012.

PRF040236 PCRF-002U1 Turbine Driven Auxiliary Feed Pump (TDAFP) Governor

2/18/2013

Due to information discovered during the bid process for engineering services, the previous assumption of governor obsolescence and ongoing vendor support capabilities was determined to be inaccurate. Based upon this information, the need to replace the existing governors is no longer prudent at this time. (sunk costs)

PRF040439 PCRF-001 U1 Seismic Monitoring System 12/13/2012Transfer funds from 2012 into 2013 to procure material and complete engineering work that was not completed in 2012.

Exhibit IM-15 (QSL-3) PUBLIC

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PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040464 PCRF-001U2 Feedwater Heaters Low Pressure (LP) - 4A/4B

3/27/2013 Decrease 2013 spend due to lower than expected installation costs.

PRF040465 PCRF-001U2 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

1/12/2012

The U2 HP Heaters (5A/5B/6A/6B) and the U2 LP Heaters (4A/4B) were scheduled for replacement during Unit 2 Cycle 21. The schedule was changed to split the installation between Unit 2 Cycle 21 (5A/5B) and Unit 2 Cycle 22 (4A/4B/6A/6B). This was based on Areva's "prudency" review, in which they recommended not replacing all three (3) sets in one outage, due in part to safety, schedule, and space concerns.

PRF040465 PCRF-2HPU2 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

12/21/2011

Transfer cost under run from 2011 to 2012. When Shaw was released as the EPC contractor, the project was effectively placed on hold while plans were established to move forward. As a result, some activities originally planned for 2011 were not completed and pushed into 2012.

PRF040465 PCRF-002U2 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

7/27/2012

Control system for 5A/5B heaters to be replaced during Unit 2 Cycle 21 Refueling Outage, so that the new electronic control systems being installed on the 4A/4B/6A/6B heaters would not have to interface with an old pneumatic system on the 5A/5B heaters.

PRF040465 PCRF-003U2 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

11/20/2012Change in scope to include 19 modulating control valves be included in the new Feedwater Heater control system, per requests from Operations and Engineering.

PRF040467 PCRF-001U1 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

7/30/2012

Requested change in budgets to increase Unit 2 LP and HP Feedwater Heaters and decrease (of same amount) to Unit 1 HP Feedwater Heaters, due to Unit 2 needing additional funding in 2012 for engineering, procurement, and implementation costs.

PRF040467 PCRF-002U1 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

9/25/2012

Requested change in budgets to increase Unit 2 LP and HP Feedwater Heaters and decrease (of same amount) to Unit 1 HP Feedwater Heaters, due to Unit 2 needing additional funding in 2012 for procurement costs.

Exhibit IM-15 (QSL-3) PUBLIC

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PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF040467 PCRF-003U1 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

2/12/2013

Change in scope to include the following: 13 analog input signals from 13 modulating control valves for position feedback; 9 analog input signals from the Heater Drain Pumps inlet pressure, inlet flow, and outlet pressure; 3 analog outputs to the Heater Drain Pumps modulating Emergency Leak Off (ELO) valves; and 3 analog inputs from the ELO valves for position feedback. The requested changes will provide Operations and Systems Engineering important information, especially when the valves are put into manual mode. Tremendous improvement in control stability and reliability, trending, and troubleshooting will be achieved.

PRF040467 PCRF-004U1 Feedwater Heaters High Pressure (HP) - 5A/5B/6A/6B

3/27/2013

Schedule change to split the installation of the 5A/5B and 6A/6B heaters. The 5A/5B heaters will be installed in Unit 1 Cycle 26 and the 6A/6B heaters will be installed in Unit 1 Cycle 27, as directed by Station Management. The 6A/6B FW HTR control system will remain scheduled for Unit 1 Cycle 26. Funds reforecasted from 2013 to out years.

PRF040479 PCRF-001765kV Breaker (BKR) 2-52-B2 Replace

6/26/2013

Remove 765kV 'B2' breaker & install new 765kV 'B' breaker. The Unit 2 Generator Synchronizing system configuration had to be modified due to changes in the sources utilized to provide synchronizing reference potentials associated with the 765kV busses.

PRF070114 PCRF-001 U1 Condensate Polishers 12/16/2011 Returned funding based upon unrealized expenditures.

PRF070114 PCRF-002 U1 Condensate Polishers 7/19/2012 Returned funding based upon unrealized expenditures. Forecasted to use funds in 2014.

PRF070114 PCRF-003 U1 Condensate Polishers 3/14/2013

Acceleration of implementation schedule to complete project in 2013. Conceptual design portion was complete and design portion is limited in scope and already contracted. Major design changes not expected. Funding requested to be moved from 2015 to 2013.

PRF080001 PCRF-001 U2 Condensate Polishers 12/16/2011 Returned funding based upon unrealized expenditures.

PRF080001 PCRF-002 U2 Condensate Polishers 7/19/2012 Returned funding based upon unrealized expenditures. Forecasted to use funds in 2014.

Exhibit IM-15 (QSL-3) PUBLIC

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PRF No. PCRF No. Project NameDate

Approved PCRF Summary

PRF080001 PCRF-003 U2 Condensate Polishers 3/14/2013

Acceleration of implementation schedule to complete project in 2013. Conceptual design portion was complete and design portion is limited in scope and already contracted. Major design changes not expected. Funding requested to be moved from 2015 to 2013.

PRF080128 LCM-01 Life Cycle Management N/A

Year ending variance from budget is a result of near term reductions in scope of LCM modifications, due to the need to levelize outage scope, some projects have been moved to later outages. Forecast year-to-date expenditures have been reduced by $20M due to current cost projections for the remainder of 2011. $19.5M was transferred to other projects in need of funding. Reduced 2011 by $9.6M and 2012 by $3.8M. Reforecasted into future years.

PRF110006 PCRF-001U1 West Component Cooling Water (CCW) Heat Exchanger (HX)

N/A not submitted

PRF110006 PCRF-002U1 West Component Cooling Water (CCW) Heat Exchanger (HX)

4/12/2013 Move the project back into Phase 1 due to the lack of details regarding installation.

PRF110007 PCRF-001U2 West Component Cooling Water (CCW) Heat Exchanger (HX)

5/29/2013New schedule, pending results of study. Change the implementation date from Unit 2 Cycle 22 Refueling Outage to Unit 2 Cycle 23 Refueling Outage.

PRF110007 PCRF-002U2 West Component Cooling Water (CCW) Heat Exchanger (HX)

4/12/2013 Move the project back into Phase 1 due to the lack of details regarding installation.

PRF110060 PCRF-001 U2 Iron Filtration 12/16/2011 Returned funding based upon unrealized expenditures.

PRF110060 PCRF-002 U2 Iron Filtration 2/22/2012

The project was originally funded for in-house and Staff Augmentation labor to support all engineering activities. These activities could no longer be performed using in-house or Staff Aug labor and required AE support to be completed to meet schedule. Money for materials moved to account for the engineering increase.

PRF110105 PCRF-001 U2 Seismic Monitoring System 12/13/2012Reallocate funds from 2012 to 2013 to procure material and complete engineering work that was not completed in 2012.

Exhibit IM-15 (QSL-3) PUBLIC

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IN-SERVICE DATES OF COMPLETED PROJECTS

Line ProjectProject Number

In-Service Date

(Month/Year)Comments

1U2 Generator Step-Up (GSU) Transformer

PRF040174 05/2012

2 U2 Iron Filtration PRF110060 04/2012

5U2 Essential Service Water (ESW) Pump Motor (2-PP-7E/7W)

PRF080073 05/2012

6 765KV Breaker (BKR) 2-52-A2 Replace PRF040478 04/2012

17 U1 Control Room Annunciator System PRF040065 04/2013

19U1 Unit Auxiliary Transformers (UATs) TR1AB/TR1CD

PRF040196 05/2013

21 Ice Machine and Glycol Chillers PRF040034 03/2013partial in-service; chiller units 7 and 8

29 34kV Circuit Breakers - BE Breakers PRF040480 04/2013

88 U1 Control Room Recorders - Phase III PRF040105 10/2011partial in-service; replacement of 1-GN-13 recorder

Exhibit IM-15 (QSL-3) PUBLIC

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Page 22 of 31

DEFERRALS

Calculation of Monthly Depreciation:Deferred Depreciation for the LCM costs is calculated and recorded on a monthly basis. The first step is to determine the post-2012 I&M Plant in Service balance by work order,which is eligible for deferred depreciation. Once the balance of Plant in Service is calculated, the balance is decreased by any retirements on the work order, per the order dated January 28, 2013 in Case No. U-17026. This balance is then jurisdictionalized by applying (multiplying) the Michigan jurisdictional demand allocation factor of 14.28826%. The result is then multiplied by the appropriate Michigan depreciation rate, effective April 2012, and divided by 12 months. The total Deferred Depreciation is recorded as a debit to account 403.1 and a credit to account 182.3.

Calculation of Monthly Carrying Charges:Carrying charges for the LCM costs are calculated and recorded on a monthly basis. The first step in the calculation is to determine the post-2012 I&M Plant in Service monthly balance which is eligible for LCM carrying charges, as specified in the order dated January 28, 2013 in Case No. U-17026. This balance is then jurisdictionalized by applying (multiplying) the Michigan jurisdictional demand allocation factor of 14.28826%. The resulting product is then multiplied by a total annual carrying charge rate of 9.66% divided by 12 months in order to calculate the monthly carrying charges. The annual carrying charge rate is the overall rate of return approved in Case No. U-16801, I&M’s last Michigan rate case, with the equity return grossed up for taxes using the gross revenue conversion factor approved in I&M’s last Michigan rate case.

DEFERRED DEPRECIATION EXPENSE

Project Number

Total Company Plant in Service Balance

Eligible for Deferral of Depreciation

Expense(Feb-May 2013)

Michigan Jurisdictional Plant in Service Balance

Eligible for Deferral of Depreciation

Expense(Feb-May 2013)

Michigan Jurisdictional

Monthly Depreciation

Expense(Feb-May 2013)

PRF040034 4,641,646.17 663,210.48 1,011.39

PRF040065 6,738,825.81 962,860.94 1,468.68

PRF040185 240.00 34.29 0.05

PRF040196 6,785,168.35 969,482.49 1,014.31

PRF040235 984.99 140.74 0.19

PRF040236 2,207.36 315.39 0.65

PRF040478 144,317.64 20,620.48 28.36

PRF040480 332,548.10 47,515.33 49.50

PRF110093 82,573.87 11,798.37 25.66

Total $ 18,728,512.29 $ 2,675,978.51 $ 3,598.79

Exhibit IM-15 (QSL-3) PUBLIC

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DEFERRED CARRYING CHARGES

Project Number

Total Company Plant in Service Balance Eligible for Deferral of

Carrying Charges

(Feb-May 2013)

Michigan Jurisdictional

Plant in Service Balance Eligible for Deferral of

Carrying Charges

(Feb-May 2013)

Michigan Jurisdictional Monthly Total Carrying Costs

(.0966 rate)(Feb-May 2013)

Michigan Jurisdictional

Monthly Carrying Costs -

Debt Component

(Feb-May 2013)

Michigan Jurisdictional

Monthly Carrying Costs -

Unrecognized Equity

(Feb-May 2013)

PRF040033 320.32 45.76 0.36 0.24 0.12

PRF040034 5,784,417.82 826,492.67 6,653.26 4,125.57 2,527.69

PRF040064 90,350.56 12,909.53 103.93 64.45 39.48

PRF040065 7,024,652.37 1,003,700.59 8,079.79 5,010.13 3,069.66

PRF040068 3,288.79 469.90 3.78 2.35 1.43

PRF040174 8,748.25 1,249.97 10.06 6.24 3.82

PRF040185 240.00 34.29 0.28 0.17 0.11

PRF040196 7,791,685.34 1,113,296.26 8,962.05 5,557.21 3,404.84

PRF040235 984.99 140.74 1.13 0.70 0.43

PRF040236 2,207.36 315.39 2.54 1.57 0.97

PRF040478 233,175.20 33,316.68 268.20 166.32 101.88

PRF040480 345,485.21 49,363.83 397.37 246.42 150.95

PRF080128 17,646.00 2,521.30 20.29 12.59 7.70

PRF110093 82,573.87 11,798.37 94.98 58.89 36.09 Sum of Monthly Balances (Feb-May

2013) $21,385,776.08 $3,055,655.28 $24,598.02 $15,252.85 $9,345.17

Exhibit IM-15 (QSL-3) PUBLIC

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PAGES 24 THROUGH 31 OF 31: REMOVED

ATTACHMENT 1: REMOVED

CONFIDENTIAL-SUBJECT TO PROTECTIVE ORDER ISSUED JUNE 5, 2012, IN CASE NO. U-17026

Exhibit IM-15 (QSL-3) PUBLIC

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Warner Norcross & Judd LLP Attorneys at Law

120 North Washington Square Suite 410 Lansing, Michigan 48933 www.wnj.com

RICHARD J. AARONPARTNER

517-679-7430FAX 517-316-8430

[email protected]

April 1, 2014

Ms. Mary Jo Kunkle VIA ELECTRONIC MAIL Executive Secretary Michigan Public Service Commission 6545 Mercantile Way, P.O. Box 30221 Lansing, Michigan 48909

Re: In the matter of the application of INDIANA MICHIGAN POWER COMPANY for a certificate of necessity pursuant to MCL 460.6s and related accounting authorizations. Case No. U-17026

Dear Ms. Kunkle:

Enclosed for filing are Indiana Michigan Power Company’s March 2014 Donald C. Cook Nuclear Power Plant Life Cycle Management Project Semi-Annual Progress Report and a Proof of Service with regard to the above-referenced matter.

If you have any questions, please feel free to contact me. Thank you for your assistance.

Very truly yours,

Richard J. Aaron

RJA/datEnclosurecc: Counsel/Parties of Record

Indiana Michigan Power Company

Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLIC

CONFIDENTIAL – Subject to Protective Order issued June 5, 2012, in Case No. U-17026

Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLIC

CONFIDENTIAL – Subject to Protective Order issued June 5, 2012, in Case No. U-17026

Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1 CONTAINS CONFIDENTIAL INFORMATION AND HAS BEEN REMOVED

Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLIC

CONFIDENTIAL – Subject to Protective Order issued June 5, 2012, in Case No. U-17026

Exhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

Indiana Michigan Power Company Cause No. 44182 LCM 2

Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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Exhibit JWG-1 PUBLIC VERSION

ATTACHMENT 1-PUBLICExhibit IM-16 (QSL-4) PUBLIC

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STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

________________________________________________________________________

In the matter of the application of ) INDIANA MICHIGAN POWER COMPANY ) for a certificate of necessity pursuant to ) Case No. U-17026 MCL 460.6s and related accounting authorizations. ) __________________________________________)

PROOF OF SERVICE

Deborah A. Thompson states that she is an employee of Warner Norcross & Judd LLP and that, on April 1, 2014, she served copies of Indiana Michigan Power Company’s Donald C. Cook Nuclear Power Plant Life Cycle Management Project Semi-Annual Progress Report and this Proof of Service upon the following parties via electronic mail.

Michigan Environmental Council Christopher M. Bzdok Olson Bzdok & Howard, P.C. 420 East Front Street Traverse City, MI 49686 [email protected]

Michigan Public Service Commission StaffSpencer A. Sattler Assistant Attorney General Public Service Division 6520 Mercantile Way, Ste. 1 Lansing, MI 48911 [email protected]

Attorney GeneralDonald E. Erickson Assistant Attorney General Environment, Natural Resources, and Agriculture Division Sixth Floor Williams Bldg. 525 W. Ottawa Street P. O. Box 30755Lansing, MI 48909 [email protected]

ABATERobert A. W. Strong Clark Hill PLC 151 S. Old Woodward, Ste. 200 Birmingham, MI 48009 [email protected]

Deborah A. Thompson

Exhibit IM-16 (QSL-4) PUBLIC