August 29, 2018 VIA ELECTRONIC CASE FILING

Transcription

1 Clark Hill PLC 212 East César E. Chávez Avenue Lansing, Michigan Bryan A. Brandenburg T T F F bbrandenburg@clarkhill.com clarkhill.com VIA ELECTRONIC CASE FILING Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 W. Saginaw Highway Lansing, Michigan August 29, 2018 Re: MPSC Case No. U-20165: In the matter of the application of Consumers Energy Company for approval of its integrated resource plan pursuant to MCL 460.6t and for other relief. Dear Ms. Kale: Enclosed for filing is the Association of Businesses Advocating Tariff Equity s Response in Opposition to the Motion to Strike Filed by the Environmental Law and Policy Center, the Ecology Center, and Vote Solar along with a Proof of Service. Sincerely, CLARK HILL PLC BAB/jmj Bryan A. Brandenburg cc w/enc.: Parties of Record ALJ Sharon L. Feldman

2 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of CONSUMERS ENERGY COMPANY for approval of its integrated resource plan pursuant to MCL 460.6t and for other relief. Case No. U ALJ Sharon L. Feldman ASSOCIATION OF BUSINESSES ADVOCATING TARIFF EQUITY S RESPONSE IN OPPOSITION TO THE MOTION TO STRIKE FILED BY THE ENVIRONMENTAL LAW AND POLICY CENTER, THE ECOLOGY CENTER, AND VOTE SOLAR Pursuant to the Michigan Public Service Commission ( Commission Rules of Practice and Procedure, specifically Rule 432 (Mich Admin Code R , and the procedural schedule set forth by the Administrative Law Judge ( ALJ in this proceeding, the Association of Businesses Advocating Tariff Equity ( ABATE, by its attorneys, Clark Hill PLC, hereby files this Response in Opposition to the Motion to Strike filed by the Environmental Law and Policy Center, the Ecology Center, and Vote Solar in this proceeding. In support of its response, ABATE states as follows: The Environmental Law and Policy Center, the Ecology Center, and Vote Solar (collectively, Joint Intervenors argue that certain testimony of Consumers Energy Company ( Consumers or the Company witnesses Richard Blumenstock, Thomas Clark, Keith Troyer, and Michael Torrey run astray of the Michigan Rules of Evidence. The testimony in question primarily relates to the Company s proposal to adjust its avoided cost calculation for purposes of PURPA. According to the Joint Intervenors, substantial portions of the witnesses testimony is irrelevant and outside the scope of this proceeding. The ALJ should find otherwise. As explained below, the motion to strike filed by the Joint Intervenors is premature and without merit.

3 The Company s testimony concerning its avoided cost proposal is decidedly relevant to this proceeding. Under the Commission s Rules of Practice and Procedure, regulatory hearings must adhere to the Michigan Rules of Evidence ( MRE as far as practicable. R In other words, all evidence having any tendency to make the existence of any fact of consequence more or less probable is admissible. MRE 401 and 402. The relevancy of the evidence depends principally on the issue or issues of the particular case. Bixby v Gallagher, 43 Mich App 328, 332; 204 NW2d 295, (1972. The standards for admissibility are designed to permit the introduction of all relevant evidence that is not otherwise excluded on the theory that it is best to have as much useful information as possible in deciding cases. People v Hampton, 407 Mich 354, 367; 285 NW2d 284, 287 (1979(emphasis added. Much of the case law arising out of MRE 401 and 402 support a liberal application of the rules. For example, the Joint Intervenors cite a criminal case involving the delivery of heroin to suggest that the Commission should take a more restrictive view of MRE 401. (Motion to Strike, p 8. In that particular case, the Supreme Court still found the evidence relevant under MRE 401. People v McKinney, 410 Mich 413, 420; 301 NW2d 824, 827 (1981. Although relevant, a court may still exclude evidence under MRE 403 if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay. The Joint Intervenors allude to this rule by stating that the Commission has recognized the authority of ALJs in utility cases to exclude relevant evidence under MRE 403. (Motion to Strike, p 8. Conversely, the Commission has also recognized the authority of ALJs in utility cases to deny motions to strike premised on MRE MPSC Order, Case No. U-18143, December 20, 2017, p 3. 2

4 Consumers Energy is the first Michigan utility to submit an IRP pursuant to Public Act 341 of 2016 ( Act 341. Prior to this initial filing, however, the Commission needed to establish a set of IRP parameters and filing requirements to guide utilities through the new IRP process. MCL 460.6t(3. To that end, the Commission initiated a collaborative process and solicited stakeholder comments in Case Nos. U and U The Commission addressed a tremendous number of issues throughout the course of those proceedings, including avoided costs and PURPA. In fact, Michigan Biomass, DTE Electric, Michigan Energy Innovation Business Council, Laura Chappelle, and Dan Scripps all raised the prospect of PURPA in their comments. 2 Moreover, the Commission, MAE, and MDEQ Staff established a Renewables and PURPA workgroup to address MCL 460.6t(1(f(iii. 3 It is simply inaccurate for the Joint Intervenors to claim that the Company s filing represents an attempt to insert PURPA issues in this IRP proceeding. (Motion to Strike, p 9. It is important to note that Consumers Energy is not constrained by the parameters that the Commission established in the implementation proceedings. Act 341 allows electric utilities to include additional scenarios and assumptions in developing their respective IRPs. MCL 460.6t(1(f. The Commission seemed to embrace this fact by stating that it prefers that utilities retain flexibility in selecting the type of risk analysis methodology performed. 4 Consequently, the Commission amended the IRP Filing Requirements to read: An analysis of the capital costs, energy production, energy production costs, fuel costs, energy served, capacity factor, emissions (levels and costs, and viability of all reasonable options available to meet projected energy and capacity needs, including, but not limited to, existing electric generation facilities in this state. The following suggest several elements that address the specific items to be included. They are not necessarily exhaustive. 2 MPSC Order, Case No. U-18418, November 21, 2017, pp 10; 32; 40; 54; Id. at Exhibit A, p 3. 4 MPSC Order, Case No. U-18461, December 20, 2017, p 13. 3

5 a Description of IRP portfolio design strategy (portfolio optimized for least cost, value maximization, reliability, risk minimization, environmental specification etc., or a particular combination; b Scenario and sensitivity results, including annual revenue requirements, present value of annual revenue requirements, and net present value of revenue requirements, and portfolio capacity including additions and retirements. Include monthly and annual energy pricing, and resource capacity and load factors; c Business as usual/reference case portfolios options to be selected from; d Analysis of IRP results; e Risk assessment of each scenario. 5 The Commission is rightfully inclined to encourage utilities to explore all viable options. Examining an expanded number of options and analyses naturally increases the Commission s ability to determine the most reasonable and prudent means of meeting the Company s energy and capacity needs. And at the end of the day, that should be the goal of this proceeding. The Joint Intervenors initially justified their participation in this proceeding by arguing that their members would be harmed if the Company proceeds with its proposed IRP without considering reasonable alternatives that might be cleaner, more reliable, or more cost-effective. (Petition to Intervene, July 9, 2018, p 4 (emphasis added. The Joint Intervenors also stated that their members each have an interest in the Company adopting optimal practices that promote clean, reliable and cost-effective power generation. (Id. at 5 (emphasis added. It is worth noting that the Environmental Law and Policy Center, the Ecology Center, the Union of Concerned Scientists, and Vote Solar filed a joint petition to intervene in this proceeding. That filing collectively identified the four entities as Petitioners. Only three of the original four 5 MPSC Order, Case No. U-18461, December 20, 2017, Exhibit A pp (emphasis added. 4

6 entities signed onto this motion to strike; therefore, it is unclear whether the Union of Concerned Scientists supports the underlying motion or any of the arguments contained therein. Nonetheless, the motion to strike alleges that the PURPA issues raised in the Company s IRP application are irrelevant to whether the Company s proposed IRP is the most reasonable and prudent to meet its energy and capacity needs. (Motion to Strike, p 9. ABATE disagrees. The testimony that the Joint Intervenors seek to strike demonstrates that the Company s avoided cost proposal will have ramifications far beyond its next PURPA proceeding: Company witness Blumenstock identifies several benefits related to an updated avoided cost methodology, including providing customers with the benefit of competitively priced energy and capacity. (Blumenstock Direct, p 18. Company witness Clark discusses avoided costs in terms of potential savings for ratepayers and the Company s current capacity position, both of which are very relevant to this proceeding. (Clark Direct, pp Company witness Torrey articulates how the proposed avoided cost methodology will maximize energy efficiency, demand response, and Conservation Voltage Reduction resources. (Torrey Direct, p 4. Company witness Troyer provides an overview of avoided costs, contrasts the Company s proposal with the status quo, and describes how ratepayers may benefit if the Commission approves the proposal. (Troyer Direct, pp Like all the parties involved in this case, ABATE is still evaluating the many facets of the Company s IRP. Considering that this is the first IRP case filed under the new energy laws, the parties deserve an opportunity to fully explore how a change in the Company s avoided cost methodology might impact the Company s other assumptions and proposals. WHEREFORE, ABATE requests that the ALJ deny the motion to strike filed by the Joint Intervenors. 5

7 Respectfully submitted, CLARK HILL PLC Date: August 29, 2018 By: Bryan A. Brandenburg (P77216 Michael J. Pattwell (P72419 Attorneys for Association of Businesses Advocating Tariff Equity Clark Hill PLC 212 East César E. Chávez Avenue Lansing, MI

8 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of CONSUMERS ENERGY COMPANY for approval of its integrated resource plan pursuant to MCL 460.6t and for other relief. Case No. U ALJ Sharon L. Feldman PROOF OF SERVICE STATE OF MICHIGAN ss COUNTY OF INGHAM Bryan A. Brandenburg, being first duly sworn, deposes and says that on August 29, 2018, he did cause to be served the Association of Businesses Advocating Tariff Equity s Response in Opposition to the Motion to Strike Filed by the Environmental Law and Policy Center, the Ecology Center, and Vote Solar, as well as this Proof of Service, in the above docket, via electronic mail, to the persons identified on the attached service list. Subscribed and sworn to before me this 29 th day of August, Bryan A. Brandenburg Jennifer M. Johnson, Notary Public Eaton County, Michigan My Commission Expires: March 9, 2020 Acting in Ingham County

9 SERVICE LIST MPSC Case No. U Administrative Law Judge Hon. Sharon L. Feldman Michigan Public Service Commission 7109 W. Saginaw Hwy., 3rd Floor Lansing, Michigan Counsel for Consumers Energy Company Anne M. Uitvlugt Robert W. Beach Bret A. Totoraitis Gary A. Gensch, Jr. Michael C. Rampe Theresa A.G. Staley Counsel for Michigan Environmental Council; Natural Resources Defense Council; City of Flint; City of Grand Rapids Christopher M. Bzdok Tracy Jane Andrews Lydia Barbash-Riley Kimberly Flynn (Legal Assistant Karla L. Gerds (Legal Assistant Breanna Thomas (Legal Assistant Olson, Bzdok & Howard Counsel for the Sierra Club Michael Soules Counsel for Independent Power Producers Coalition of Michigan; Michigan Energy Innovation Business Council; Institute for Energy Innovation Laura A. Chappelle Toni L. Newell Timothy J. Lundgren Varnum LLP Counsel for Energy Michigan, Inc. Laura A. Chappelle Timothy J. Lundgren Varnum LLP Counsel for Environmental Law & Policy Center Margrethe K. Kearney Bradley Klein Counsel for Cypress Creek Renewables, LLC Jennifer Utter Heston Fraser Trebilcock Davis & Dunlap, P.C. Counsel for MPSC Staff Daniel Sonneveldt Amit T. Singh Heather M.S. Durian Spencer A. Sattler Michigan Public Service Commission 2

10 Counsel for Michigan Attorney General Celeste R. Gill Assistant Attorney General Special Litigation Division Counsel for Cadillac Renewable Energy, LLC; Genesee Power Station, LP; Grayling Generating Station, LP; Hillman Power Company, LLC; TES Filer City Station, LP; Viking Energy of Lincoln, Inc.; Viking Energy of McBain, Inc. Thomas J. Waters Anita G. Fox Fraser Trebilcock Davis & Dunlap, P.C. Counsel for Michigan Electric Transmission Company (METC Richard J. Aaron Courtney Kissel Dykem a Gossett PLLC raaron@dykema.com ckissel@dykema.com Counsel for the Great Lakes Renewable Energy Association; Residential Customer Group Don L. Keskey Brian W. Coyer donkeskey@publiclawresourcecenter.com bwcoyer@publiclawresourcecenter.com Counsel for Midland Cogeneration Venture, LP Jason T. Hanselman John A. Janiszewski Dykema Gossett PLLC jhanselman@dykema.com jjaniszewski@dykema.com Charles E. Dunn Midland Cogeneration Venture, LP cedunn@midcogen.com Counsel for Michigan Chemistry Council; Solar Energy Industries Association Timothy J. Lundgren Justin K. Ooms Varnum LLP tjlundgren@varnumlaw.com jkooms@varnumlaw.com Consultants for ABATE Jeffry C. Pollock Billie S. LaConte Kitty A. Turner J.Pollock, Incorporated jcp@jpollockinc.com bsl@jpollockinc.com kat@jpollockinc.com Counsel for ABATE Michael J. Pattwell Bryan A. Brandenburg Lauren K. Degnan (Legal Assistant Jennifer M. Johnson (Legal Assistant Clark Hill PLC mpattwell@clarkhill.com bbrandenburg@clarkhill.com ldegnan@clarkhill.com jmjohnson@clarkhill.com 3