Answer of the Environmental Law & Policy Center to Petition for Rehearing

November 26, 2018 Ms. Kavita Kale Michigan Public Service Commission 7109 W. Saginaw Hwy. P. O. Box 30221 Lansing, MI 48909 RE: MPSC Case No. U-18351 Dear Ms. Kale: The following is attached for paperless electronic filing: Answer of the Environmental Law & Policy Center to Petition for Rehearing Proof of Service Sincerely, Rachel Granneman Environmental Law & Policy Center rgranneman@elpc.org cc: Service List, Case No. U-18351

Consumers Energy Company ( Consumers filed a Petition for Rehearing in this docket on November 2, 2018. The Environmental Law & Policy Center ( ELPC hereby files its Answer opposing Consumers Petition. Consumers argues that the Public Service Commission ( PSC or Commission legally erred in ordering the phase-out of its Green Generation program in 2028, and that prohibiting enrollment of new customers after 6 months will lead to unintended consequences. In fact, Consumers Petition simply rehashes issues already fully considered by the Commission and therefore does not meet the requirements for a rehearing to be granted. Furthermore, Consumers proposal to allow new customer enrollment in the Green Generation program until December 31, 2020 is contrary to the purpose of Section 61 of Public Act 342 and would undermine the development of additional Section 61 Voluntary Green Pricing ( VGP programs. I. Consumers Petition Does Not Meet the Standard for Rehearing. Consumers acknowledges that a Petition for Rehearing may not be used simply to reassert arguments already considered and rejected by the Commission. Consumers quotes from a recent PSC decision rejecting a Petition for Rehearing: An application for rehearing is not merely another opportunity for a party to argue a position or to express disagreement with the Commission s decision. Unless a party can show the decision to be incorrect or improper because of errors, newly discovered evidence, or unintended consequences of the decision, the Commission will not grant a rehearing. Consumers Pet. at 4, quoting Order Denying Rehearing, In the Matter of the Application of DTE Gas Company, U-17691, at 8 (Jan. 31, 2017. Rehearing is not appropriate when the issues raised were already addressed in the proceeding, and claims of error should be supported with new citation of authority or factual analysis. Order Denying Petition for Rehearing, In Re Consumers Energy Co., U-13000, at 2 (Jan. 21, 2003. 1

Consumers was fully on notice of the Commission s position on non-section 61 programs going forward, and raised this issue in its Initial Brief. In its December 20, 2017 Order in this docket, long before briefing, the Commission explained its position on VGP programs that do not meet the requirements of Section 61: [T]he Commission... intends for all VGP programs, existing prior to, and proposed after the effective date of Section 61, to be filed in the above-listed dockets. The Commission s intent is to bring all VGP programs under a single statutory scheme... [T]he Commission will consider allowing certain existing VGP programs that do not meet the minimum requirements of the guidance set forth in the Commissions July 12 order, but are popular among the utility s customers, to be grandfathered under the law. On a case-by-case basis, the Commission will determine: (1 whether an existing program should be grandfathered under the new law; (2 whether the existing program should be closed to new customers, and the deadline by which new enrollment must cease; and (3 whether the utility must transition customers in existing programs to the Section 61 approved programs and the transition date as it is applicable. December 20, 2017 Order at 6-7 (emphasis in original. The Commission explicitly raised the possibility that it would order non-section 61 programs to phase out, and might set an earlier date for halting new enrollment. In its Initial Brief, Consumers addressed the exact issue of the future of non-section 61 programs. In the section discussing its Green Generation program, Consumers argued, Section 61 only requires that Consumers Energy offer its customers the opportunity to participate in a [VGP] program, and does not prohibit the existence of other renewable energy program options that are not Section 61 programs. Consumers Initial Br. at 9. Consumers does not offer any new legal authority in support of its Petition, but simply reiterates in greater detail its argument that Section 61 does not foreclose additional VGP programs that do not comply with Section 61. Consumers claim that Rehearing is appropriate because the Order will lead to unintended consequences is also unconvincing. Consumers argues that [r]equiring the Company to close the Green Generation program to new customers in six months has the unintended 2

consequence of making this beneficial customer program no longer available to new customers before the Company has the opportunity to expand its other VGP offerings. Consumers Petition at 8-9. This argument is not persuasive. The Commission was fully cognizant of the importance of making Section 61 VGP programs available to customers without interruption. The Commission pointed to this exact concern in requiring Consumers to file plans to expand its Section 61 offerings within 60 days of its Order. Final Order at 18. Consumers may not delay its offering of additional Section 61 programs and attempt to essentially fill the gap with its Green Generation program, which is not a Section 61 program. To do so would violate the requirements of Section 61. See Final Order at 18 (noting that a lag between customer demand and available resources [for Section 61 programs], which would effectively violate Section 61. In addition, the Commission considered the potential interplay between enrollment in the Green Generation program and enrollment in new and expanded VGP programs, explaining that Consumers may not use the continuation of the Green Generation program to undercut efforts to refine and expand its Section 61 compliant programs. Final Order at 29. The Commission s Order requiring that the Green Generation program close to new enrollment within 6 months was a thoughtful decision to ensure success of future Section 61 programs. II. Consumers Proposal Is Contrary to the Purpose of Section 61 and Would Undermine the Development of Section 61 VGP Programs. Consumers proposal to allow new enrollment in its Green Generation program until December 31, 2020 is not consistent with the purpose of Section 61, and would undermine the development of new Section 61 VGP programs. The Commission explicitly stated that its intent was to bring all VGP programs under the Section 61 statutory framework, December 20, 2017 Order at 6-7, and, as noted above, also held that Consumers may not use the continuation of the 3

Green Generation program to undercut efforts to refine and expand its Section 61 compliant programs. Final Order at 29. Allowing Consumers to continue enrolling new customers into the Green Generation program, precisely at the same time that it is expanding and offering new Section 61 VGP opportunities, would almost certainly undercut interest in and demand for the new program. This is especially true since Green Generation customers are locked into that program for a full 12 months, during which time they would not be permitted to switch to a newly available program. Consumers Exh. A-3 (TLV-2 at 2. Rather than continuing to enroll customers in the Green Generation program, Consumers should expedite the roll-out of its new and expanded VGP programs to meet customer demand as quickly as possible. While Consumers finalizes these plans, it should create a waiting list of customers who wish to participate in the program once the renewable energy facilities are operational. Notably, well-designed new and expanded VGP programs will better meet environmental and public interest purposes of Section 61, as well as better meet customer needs. Because the new and expanded programs will require new dedicated renewable energy facilities to be built, customer participation will have a greater environmental benefit that participation in the existing Green Generation program. Moreover, if the new programs are designed costeffectively and priced fairly, they will offer an opportunity for customers to save money, which is impossible for customers participating in Green Generation (which has a set surcharge. CONCLUSION For the reasons stated above, the Commission should deny Consumers Petition for Rehearing. 4

Dated: November 26, 2018 Respectfully submitted, Rachel Granneman Environmental Law & Policy Center 35 E Wacker Drive, Suite 1600 Chicago, IL 60601 T: (312 795-3737 F: (312 795-3730 rgranneman@elpc.org 5

STATE OF MICHIGAN MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, regarding the regulatory reviews, revisions, determination and/or approvals necessary for CONSUMERS ENERGY COMPANY to comply with Section 61 of 2016 PA 342. Case No. U-18351 PROOF OF SERVICE I hereby certify that a true copy of the Answer of the Environmental Law & Policy Center to Petition for Rehearing was served by electronic mail upon the following Parties of Record, this 26 th of November, 2018. Name/Party Administrative Law Judge Martin Snider E-mail Address sniderm@michigan.gov MPSC Staff Heather M.S. Durian Spencer A. Sattler DTE Electric Company Gary A. Gensch, Jr. Anne M. Uitvlugt Energy Michigan, Advanced Energy Economy, Institute for Energy Innovation, and Michigan Energy Innovation Business Council Timothy J. Lundgren Toni L. Newell Laura A. Chappelle durianh@michigan.gov sattlers@michigan.gov mpscfilings@cmsenergy.com Gary.Genschjr@cmsenergy.com Anne.uitvlugt@cmsenergy.com tjlundgren@varnumlaw.com tlnewell@varnumlaw.com lachappelle@varnumlaw.com

Michigan Environmental Council Christopher M. Bzdok Lydia Barbash-Riley Kimberly Flynn Marcia Randazzo Karla Gerds chris@envlaw.com Lydia@envlaw.com Kimberly@envlaw.com Marcia@envlaw.com karla@envlaw.com Counsel for Consumers Energy Company Anne M. Uitvlugt Gary A. Gensch, Jr. mpscfilings@cmsenergy.com anne.uitvlugt@cmsenergy.com gary.genschjr@cmsenergy.com Rachel Granneman Environmental Law & Policy Center rgranneman@elpc.org