June 27, 2018 VIA ELECTRONIC CASE FILING

Transcription

1 Clark Hill PLC East César E. Chávez venue Lansing, Michigan 90 Bryan. Brandenburg T..00 T..0 F..099 F..0 clarkhill.com VI ELECTRONIC CSE FILING Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 09 W. Saginaw Highway Lansing, Michigan 9 June, 0 Re: MPSC Case No. U-00: In the matter on the Commission s own motion, to consider changes in the rates of all of the Michigan rate-regulated electric, steam, and natural gas utilities to reflect the effects of the federal Tax Cuts and Jobs ct of 0: DTE Energy Company files an application for determination of Credit as described in order U-9. Dear Ms. Kale: Enclosed for filing is the Direct Testimony of manda M. lderson on behalf of the ssociation of Businesses dvocating Tariff Equity along with a Proof of Service in the above case. Sincerely, CLRK HILL PLC Bryan. Brandenburg BB/jmj Enclosures cc w/enc.: Parties of Record LJ Sally L. Wallace 99. 0/0

2 STTE OF MICHIGN BEFORE THE MICHIGN PUBLIC SERVICE COMMISSION In the matter of the Commission s own motion, to consider changes in rates of all the Michigan rateregulated electric, steam and natural gas utilities to reflect the effects of the federal Tax Cuts and Jobs ct of 0: DTE ENERGY COMPNY files an application for determination of Credit as described in order U-9 Case No. U-00 Direct Testimony of manda M. lderson On behalf of ssociation of Businesses dvocating Tariff Equity June, 0 Project 0

3 manda M. lderson Page STTE OF MICHIGN BEFORE THE MICHIGN PUBLIC SERVICE COMMISSION In the matter of the Commission s own motion, to consider changes in rates of all the Michigan rateregulated electric, steam and natural gas utilities to reflect the effects of the federal Tax Cuts and Jobs ct of 0: DTE ENERGY COMPNY files an application for determination of Credit as described in order U-9 Case No. U-00 Direct Testimony of manda M. lderson PLESE STTE YOUR NME ND BUSINESS DDRESS. manda M. lderson. My business address is 90 Swingley Ridge Road, Suite 0, Chesterfield, MO 0. WHT IS YOUR OCCUPTION? I am a consultant in the field of public utility regulation and an ssociate with the firm of Brubaker & ssociates, Inc. ( BI, energy, economic and regulatory consultants. DESCRIBE YOUR EDUCTIONL ND PROFESSIONL BCKGROUND. This information is included in ppendix to my testimony.

4 manda M. lderson Page HVE YOU TESTIFIED PREVIOUSLY BEFORE THE MICHIGN PUBLIC SERVICE COMMISSION? Yes. I have testified in Case No. U-00 regarding Consumers Energy Company s Credit filing, and in Case No. U-00 regarding Indiana Michigan Power Company s Credit filing. 9 0 HVE YOU TESTIFIED PREVIOUSLY IN DTE ELECTRIC COMPNY ( DTE OR COMPNY PROCEEDING? No. However, I am familiar with DTE s cost of service, rate design, and other regulatory concerns. I became familiar with these issues during Case No. U-, in which I assisted Mr. James R. Dauphinais develop his testimony on behalf of the ssociation of Businesses dvocating Tariff Equity ( BTE. ON WHOSE BEHLF RE YOU PPERING IN THIS PROCEEDING? I am appearing on behalf of BTE. BTE s members purchase large amounts of electricity from DTE under various tariff provisions and will be subject to the rates, terms, and conditions of service approved in this proceeding. 9 HVE YOU REVIEWED DTE S FILED CREDIT PPLICTION? Yes. DTE has calculated a total Credit revenue credit of $.9 million. DTE proposes to spread the credit to rate classes using the cost of service study ( COSS and rate design models that were developed for compliance with the Commission s T.M. Uzenski Direct at.

5 manda M. lderson Page pril, 0 Order in DTE s last base rate case, Case No. U-, with two exceptions. 9 0 WHT RE THE TWO EXCEPTIONS? DTE witness Mr. Bloch describes at page of his Direct Testimony that what DTE indicates as present revenues for Rate Rider ( R are different from the present revenues shown in the final rate design model from Case No. U-, and what DTE indicates as ordered revenues for Primary Rate D are different from the ordered revenues shown in the final rate design model from Case No. U-. DTE claims errors in the rate design model occurred in Case No. U-. DTE corrects the claimed errors in the instant proceeding. DTE has filed a Petition for Rehearing in Case No. U- concerning the issue in Primary Rate D ordered revenues, but not the issue concerning R present revenues. 9 0 HOW IS DTE S PETITION FOR REHERING IN CSE NO. U- RELEVNT TO THE INSTNT PROCEEDING? Case No. U- is the proper venue to present the arguments addressed by Mr. Bloch related to adjusting the present or ordered revenue levels in that proceeding. If the Commission grants DTE s request for rehearing and makes a subsequent adjustment to rates, then the issue should be corrected concurrently both in Case No. U- and the instant proceeding. at. T.W. Lacey Direct at 9, and M.. Williams Direct at, and K.. Holmes at, and T.. Bloch Case No. U- DTE Petition for Rehearing filed May, 0, Section D. at.

6 manda M. lderson Page 9 0 HS BTE LSO FILED REUEST FOR REHERING IN CSE NO. U-? Yes. BTE filed a Petition for Rehearing in Case No. U- explaining that the total power supply revenues used in development of the final approved tariffs for Rates D., D0, D, and R were not consistent with the Commission s final Order and must be amended along with the power supply rates that were produced from them. The COSS used to determine the final approved tariffs did not reflect the approved revenue target for Rate R, and therefore the power supply rates for Rate R and other primary service rates that are designed in concert with the rate design for Rate R must be corrected. In Case No. U-, the Commission Staff and DTE have responded to BTE s request for rehearing. Each agreed there is an error with respect to D/Other, D. and R rates, but proposed different relief than BTE. HOW IS BTE S PETITION FOR REHERING IN CSE NO. U- RELEVNT TO THE INSTNT PROCEEDING? 9 0 Similarly to DTE s Petition for Rehearing, if the Commission adjusts DTE s rates pursuant to BTE s Petition for Rehearing, then DTE will need to amend its Credit application. Not doing so will lead to a skewed Credit calculation because the calculation will be premised on erroneous power supply revenues for Rates D/Other, D., and R. Therefore, similar to DTE s pending Petition for Rehearing, I recommend that if the Commission grants relief in response to BTE s Petition for Rehearing, then the appropriate rate corrections should be made concurrently in Case No. U- and the instant proceeding. Case No. U- BTE Petition for Rehearing filed May, 0, Section II at. Id. at. Case No. U- DTE nswer Opposing Petitions for Rehearing, Section at -, and Staff nswer to BTE s Petition for Rehearing at.

7 manda M. lderson Page DOES THIS CONCLUDE YOUR DIRECT TESTIMONY? Yes, it does.

8 ppendix manda M. lderson Page ualifications of manda M. lderson PLESE STTE YOUR NME ND BUSINESS DDRESS. manda lderson. My business address is 90 Swingley Ridge Road, Suite 0, Chesterfield, MO 0. PLESE STTE YOUR OCCUPTION. I am a consultant in the field of public utility regulation and an ssociate with the firm of Brubaker & ssociates, Inc. ( BI, energy, economic and regulatory consultants PLESE STTE YOUR EDUCTIONL BCKGROUND ND PROFESSIONL EMPLOYMENT EXPERIENCE. I graduated from the University of Illinois at Urbana-Champaign in 00 where I received my Bachelor of rts in Economics, with minor studies in Statistics and International Business. I earned my Masters of Business dministration Degree with a concentration in Logistics and Operations Management upon graduation from the University of Missouri-St. Louis in 0. I joined BI in 00 as an analyst. Then, in September 0, I joined the consulting team of BI. I have worked on various issues including embedded and marginal cost of service studies, rate design, power procurement and portfolio management, contract negotiation and environmental and sustainability compliance management. In the regulated arena, I have filed testimony before the regulatory commissions in rizona, Delaware, Florida, Illinois, Massachusetts, Michigan, New Mexico and Wisconsin. This testimony has covered a range of topics including cost BRUBKER & SSOCITES, INC.

9 ppendix manda M. lderson Page of service allocation methodologies and model results, base rate design, fuel adjustment clauses and other riders and trackers, and marginal cost of service and rates. I have also evaluated case filings in other jurisdictions, including Indiana, Texas, uebec, Nova Scotia and others. I have conducted bill audits, rate forecasts and tariff rate optimization studies. I have performed utility investment prudence reviews with respect to such items as fuel, purchased power and renewable energy investments. I have also provided support to clients with facilities in deregulated markets, including drafting supply requests for proposals, evaluating supply bids, and auditing competitive supply bills. I have also prepared and presented to clients reports that monitor the electric market and recommend strategic hedging transactions. BI was formed in pril 99. BI and its predecessor firm have participated in more than 00 regulatory proceedings in forty states and Canada. BI provides consulting services in the economic, technical, accounting, and financial aspects of public utility rates and in the acquisition of utility and energy services through RFPs and negotiations, in both regulated and unregulated markets. Our clients include large industrial and institutional customers, some utilities and, on occasion, state regulatory agencies. We also prepare special studies and reports, forecasts, surveys and siting studies, and present seminars on utility-related issues. In general, we are engaged in energy and regulatory consulting, economic analysis and contract negotiation. In addition to our main office in St. Louis, the firm also has branch offices in Phoenix, rizona and Corpus Christi, Texas. \\consultbai.local\documents\prolawdocs\sdw\0\testimony-bi\9.docx BRUBKER & SSOCITES, INC.

10 STTE OF MICHIGN BEFORE THE MICHIGN PUBLIC SERVICE COMMISSION * * * * * In the matter on the Commission s own motion, to consider changes in the rates of all of the Michigan rate-regulated electric, steam, and natural gas utilities to reflect the effects of the federal Tax Cuts and Jobs ct of 0: DTE ENERGY COMPNY files an application for determination of Credit as described in order U-9. Case No. U-00 LJ Sally L. Wallace PROOF OF SERVICE STTE OF MICHIGN ss COUNTY OF INGHM Bryan. Brandenburg, being first duly sworn, deposes and says that on June, 0, he did cause to be served the Direct Testimony of manda M. lderson on behalf of the ssociation of Businesses dvocating Tariff Equity, 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 th day of June, 0. Bryan. Brandenburg Jennifer M. Johnson, Notary Public Eaton County, Michigan My Commission Expires: March 9, 00 cting in Ingham County 99. 0/0

11 SERVICE LIST MPSC Case No. U-00 dministrative Law Judge Hon. Sally L. Wallace Michigan Public Service Commission 09 W. Saginaw Hwy., rd Floor Lansing, Michigan 9 wallaces@michigan.gov Counsel for DTE Electric Company ndrea. Hayden DTE Gas Company haydena@dteenergy.com mpscfilings@dteenergy.com Counsel for Michigan Cable Telecommunications ssociation (MCT Michael S. shton nita G. Fox Fraser Trebilcock Davis & Dunlap, P.C. mashton@fraserlawfirm.com afox@fraserlawfirm.com Counsel for Michigan ttorney General Joel King Michael Moody ssistant ttorney General kingj@michigan.gov moodym@michigan.gov Counsel for MPSC Staff Heather Durian Lori Mayabb (Staff ssistant durianh@michigan.gov mayabbl@michigan.gov Counsel for Energy Michigan Timothy J. Lundgren Laura Chappelle Varnum LLP tjlundgren@varnumlaw.com lachappelle@varnumlaw.com Counsel for Residential Customer Group Don L. Keskey Brian W. Coyer donkesky@publiclawresourcecenter.com briancoyer@publiclawresourcecenter.com Counsel for BTE Michael J. Pattwell Bryan. Brandenburg Clark Hill PLC mpattwell@clarkhill.com bbrandenburg@clarkhill.com Consultant for BTE manda lderson Brubaker & ssociates, Inc. aalderson@consultbai.com 99. 0/0