S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * In the matter of the application of ) CONSUMERS ENERGY COMPANY for a ) financing order approving the securitization ) Case No. U-18250 of qualified costs and related approvals. ) ) QUALIFICATIONS AND DIRECT TESTIMONY OF NICHOLAS M. REVERE MICHIGAN PUBLIC SERVICE COMMISSION May 16, 2017
QUALIFICATIONS OF NICHOLAS M. REVERE CASE NUMBER U-18250 PART I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Q. Please state your name and business address. A. My name is Nicholas M. Revere. My business address is 7109 West Saginaw Hwy, Lansing, Michigan 48917. Q. By whom are you employed and in what capacity? A. I am employed by the Michigan Public Service Commission (MPSC or Commission) as the Manager of the Rates and Tariffs Section of the Regulated Energy Division. Q. Would you briefly describe your academic background? A. I received a Bachelor of Arts degree in Political Science and a Bachelor of Arts degree in Economics from Michigan State University in 2006. In August of 2008 and 2009, I completed the annual National Association of Regulatory Utility Commissioners (NARUC) regulatory studies program at Michigan State University, which included courses on ratemaking, rate case auditing, regulatory policy, and other regulatory issues. In September of 2010, I completed the Institute for Public Utilities Advanced Regulatory Studies Program. In October 2012, I completed the Association of Edison Illuminating Companies Advanced Course in Load Research. Q. What are your current responsibilities at the MPSC? A. As Manager of the Rates and Tariffs Section, I supervise the members of and oversee the responsibilities of the section. The responsibilities of the section include, but are not limited to, analyzing utility reports, financial records, and rate case filings to determine the appropriate level of rates for regulated energy utilities, utilizing laws, regulations, and Commission policies. The section is charged with conducting MPSC Staff (Staff) Cost of Service allocation studies (COSS) and rate designs for gas and electric utilities and reviewing special contracts, gas storage rates, and Act 9 intrastate pipeline rates. The 1
QUALIFICATIONS OF NICHOLAS M. REVERE CASE NUMBER U-18250 PART I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 section is also involved in customer complaint and inquiry processing, updating electric and gas comparison spreadsheets for the MPSC website, and tariff administration. Q. Have you previously filed testimony in any cases before the Commission? A. Yes. I filed testimony in MPSC Case Nos. U-15645, U-16191, U-17735, and U-17990, Consumers Energy s (CE) Electric Rate Cases; MPSC Case Nos. U-15768, U-17767, and U-18014, Detroit Edison s (DTE) Electric Rate Cases; and MPSC Case No. U-16830, Wisconsin Power Company s Electric Rate Case. I filed testimony in MPSC Case No. U- 15766, MichCon Gathering Company v. Highmount Midwest Energy, an Act 9 gas pipeline complaint case. I also filed testimony in MPSC Case Nos. U-15986, U-17643, U- 17882, and U-18124, Consumers Energy s Gas Rate Cases; MPSC Case Nos. U-15985 and U-16999, Michigan Consolidated Gas Company s Rate Cases; MPSC Case No. U-16169, SEMCO Gas Company s Rate Case; MPSC Case No. U-16566, Consumers Energy s Electric Decoupling Mechanism Reconciliation; MPSC Case No. U-16780, Detroit Edison s Decoupling Mechanism Reconciliation; MPSC Case No. U-16568, Upper Peninsula Power Company s Decoupling Mechanism Reconciliation; and MPSC Case No. U-16952, Detroit Edison s Choice Incentive Mechanism Reconciliation. I also filed testimony in MPSC Case No. U-17689, DTE Electric s PA 169 Case, and MPSC Case No. U-17688, CE Electric s PA 169 Case. I filed testimony in MPSC Case No. U-17701, DTE Gas Infrastructure Recovery Mechanism (IRM) case. 2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 DIRECT TESTIMONY OF NICHOLAS M. REVERE CASE NUMBER U-18250 PART II Q. What is the purpose of your testimony? A. The purpose of my testimony is to address adjustments to cost allocations and surcharge calculations necessary as a result of the Order in the Company s most recently concluded electric rate case. Q. Are you sponsoring any exhibits? A. Yes, I am sponsoring the following exhibits: Exhibit S-6.1, STAFF Allocation of Palisades PPA Securitization Costs Exhibit S-6.2, STAFF Development of Palisades PPA Securitization Charge Q. Does Staff recommend any adjustments to the allocation of Palisades power purchase agreement (PPA) securitizations costs, as sponsored by Company witness Stephen P. Stubleski? A. Yes. Staff recommends that the allocations be updated to reflect those most recently approved by the Commission in its February 28, 2017 Order in MPSC Case No. U-17990. The results of this update are shown on Staff Exhibit S-6.1. It is appropriate for the allocation of the securitization costs to reflect the allocations most recently approved by the Commission. Q. Do these adjustments result in a change to the calculation of surcharges? A. Yes. Staff has supplied the updated surcharge calculations on Staff Exhibit S-6.2. Staff s exhibits also reflect the updated filing made by the Company on March 22, 2017. Q. Does this complete your testimony? A. Yes, it does. 3
S T A T E OF M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * In the matter of the application of ) CONSUMERS ENERGY COMPANY for a ) financing order approving the securitization ) Case No. U-18250 of qualified costs and related approvals. ) ) EXHIBITS OF NICHOLAS M. REVERE MICHIGAN PUBLIC SERVICE COMMISSION May 16, 2017
Consumers Energy Company Case No.: U-18250 STAFF Allocation of Palisades PPA Securitization Costs Witness: Nicholas M. Revere Exhibit: S-6.1 Date: May 16, 2017 Page: 1 of 1 Palisades PPA (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) 1 Production Capacity 87.70% 2 Energy 12.30% Total Jurisdictional Total Total Total Lighting & Rate Non Cost/Settlement of Power Contribution Allocator Electric Electric Residential Secondary Primary Unmetered GSG Jurisdictional 3 Production Capacity (75/0/25) 100.00% 220 1.0000 0.9917 0.4256 0.2343 0.3281 0.0029 0.0008 0.0083 4 Energy 5 Mid-Peak Summer Purchased Power 14.90% 103 1.0000 0.9892 0.3666 0.2362 0.3824 0.0033 0.0006 0.0108 6 On-Peak Winter Purchased Power 35.14% 105 1.0000 0.9892 0.3584 0.2416 0.3833 0.0050 0.0009 0.0108 7 Off-Peak Summer Purchased Power 12.67% 104 1.0000 0.9892 0.3818 0.2056 0.3915 0.0090 0.0013 0.0108 8 Off-Peak Winter Purchased Power 29.89% 106 1.0000 0.9892 0.3857 0.2113 0.3802 0.0106 0.0014 0.0108 9 Critical Peak Summer Purchased Power 7.40% 107 1.0000 0.9892 0.3683 0.2480 0.3701 0.0025 0.0004 0.0108 Weighted Allocators - Jurisdictional Only 0.4063 0.1972 0.3760 0.0086 0.0014 10 Production Capacity 87.70% 0.8770 0.3764 0.2072 0.2901 0.0026 0.0007 11 Energy 12 Mid-Peak Summer Purchased Power 1.83% 0.0183 0.0068 0.0044 0.0071 0.0001 0.0000 13 On-Peak Winter Purchased Power 4.32% 0.0432 0.0157 0.0106 0.0167 0.0002 0.0000 14 Off-Peak Summer Purchased Power 1.56% 0.0156 0.0060 0.0032 0.0062 0.0001 0.0000 15 Off-Peak Winter Purchased Power 3.68% 0.0368 0.0143 0.0079 0.0141 0.0004 0.0001 16 Critical Peak Summer Purchased Power 0.91% 0.0091 0.0034 0.0023 0.0034 0.0000 0.0000 17 Energy 12.30% 0.1230 0.0462 0.0283 0.0475 0.0008 0.0001 18 Total Weighted Allocator 100.00% 1.00000 0.42258 0.23549 0.33851 0.00342 Source: U-17990 Electric Cost of Service Study
Consumers Energy Company Case No.: U-18250 Palisades PPA Securitization Witness: Nicholas M. Revere STAFF Development of Palisades PPA Securitization Charge Exhibit: S-6.2 Date: May 16, 2017 Expected Case Page: 1 of 2 Sales Sales Sales Sales Securitization Securitization Securitization Securitization Estimated Billings Residential-MWH Secondary-MWH Primary- MWH Streetlighting- Charge Residential Charge Secondary Charge Primary Charge Streetlighting Year ($000) (1) (2) (2) (2) MWH (2) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) 1 $ 44,404 12,141,799 7,152,180 13,650,818 244,987 0.001545 0.001462 0.001101 0.000620 2 53,813 12,013,188 7,079,103 13,714,070 240,056 0.001893 0.001790 0.001328 0.000767 3 54,172 11,935,601 7,046,998 13,832,966 235,923 0.001918 0.001810 0.001326 0.000786 4 54,015 11,907,659 7,047,532 13,981,920 233,906 0.001917 0.001805 0.001308 0.000790 $ 206,403.5530 47,998,246 28,325,814 55,179,774 954,871 Notes: (1) Exhibit A-1 (SL-1), p. 1 of 3, column (H) (2) WP-SPS-1, pg 1-5 (3) Primary includes GSG Rate Class Residential Secondary Primary (3) Lighting Allocation Factors 1.00000 0.42258 0.23549 0.33851 0.00342 Billings Year 1 $ 44,404 $ 18,764.35 $ 10,456.85 $ 15,031.34 $ 151.94 Year 2 $ 53,813 $ 22,740.17 $ 12,672.47 $ 18,216.21 $ 184.14 Year 3 $ 54,172 $ 22,891.68 $ 12,756.90 $ 18,337.58 $ 185.36 Year 4 $ 54,015 $ 22,825.36 $ 12,719.94 $ 18,284.45 $ 184.82
Consumers Energy Company Case No.: U-18250 Palisades PPA Securitization Witness: Nicholas M. Revere STAFF Development of Palisades PPA Securitization Charge Exhibit: S-6.2 Date: May 16, 2017 Breakeven Case - Revised Page: 2 of 2 Securitization Charge Residential Securitization Charge Secondary Securitization Charge Primary Sales Sales Sales Sales Estimated Residential-MWH Secondary-MWH Primary- Streetlighting- Year Billings ($000) (1) (2) (2) MWH (2) MWH (2) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Securitization Charge Streetlighting 1 $ 47,188 12,141,799 7,152,180 13,650,818 244,987 0.001642 0.001554 0.001170 0.000659 2 57,539 12,013,188 7,079,103 13,714,070 240,056 0.002024 0.001914 0.001420 0.000820 3 57,841 11,935,601 7,046,998 13,832,966 235,923 0.002048 0.001933 0.001415 0.000839 4 57,718 11,907,659 7,047,532 13,981,920 233,906 0.002048 0.001929 0.001397 0.000844 $ 220,285 47,998,246 28,325,814 55,179,774 954,871 Notes: (1) Exhibit A-21 (SL-1) (Revised), p. 2 of 3, column (H) (2) WP-SPS-1, pg 1-5 (3) Primary includes GSG Rate Class Residential Secondary Primary (3) Lighting Allocation Factors 1.00000 0.42258 0.23549 0.33851 0.00342 Billings Year 1 $ 47,188 $ 19,940.62 $ 11,112.36 $ 15,973.61 $ 161.47 Year 2 $ 57,539 $ 24,314.61 $ 13,549.86 $ 19,477.43 $ 196.88 Year 3 $ 57,841 $ 24,442.17 $ 13,620.95 $ 19,579.61 $ 197.92 Year 4 $ 57,718 $ 24,390.32 $ 13,592.05 $ 19,538.07 $ 197.50 Total $ 220,285 $ 93,088 $ 51,875 $ 74,569 $ 754
STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of ) CONSUMERS ENERGY COMPANY for a ) financing order approving the securitization ) Case No. U-18250 of qualified costs and related approvals. ) ) PROOF OF SERVICE Linda G. Brauker, being duly sworn, deposes and says that on May 16, 2017, A.D., she emailed a copy of the attached MPSC Testimony and Exhibits to the persons as shown on the attached list. Linda G. Brauker Subscribed and sworn to before me this 16th day of May, 2017. Pamela A. Pung, Notary Public State of Michigan, County of Clinton Acting in County of Eaton My Commission Expires: 05/07/2018
Service List for U-18250 Consumers Energy Company Bret A. Totoraitis Robert W. Beach Shaun M. Johnson Consumers Energy Company One Energy Plaza Jackson, MI 49201 bret.totoraitis@cmsenergy.com robert.beach@cmsenergy.com shaun.m.johnson@cmsenergy.com mpsc.filings@cmsenergy.com Paul M. Collins Sherri A. Wellman Miller Canfield Paddock & Stone, PLC One Michigan Ave., Ste. 900 Lansing, MI 48933 wellmans@millercanfield.com collinsp@millercanfield.com Association of Businesses Advocating Tariff Equity (ABATE) Sean P. Gallagher Michael J. Pattwell Stephen A. Campbell Clark Hill PLC 212 E. Grand River Ave. Lansing, MI 48906 sgallagher@clarkhill.com mpattwell@clarkhill.com scampbell@clarkhill.com Entergy Nuclear Palisades, LLC and Entergy Nuclear Power Marketing, LLC Timothy J. Lundgren Laura A. Chappelle Varnum Law The Victor Center 201 N. Washington Sq., Ste. 910 Lansing, MI 48933-1323 tjlundgren@varnumlaw.com lachappelle@varnumlaw.com Administrative Law Judge Hon. Sharon L. Feldman Administrative Law Judge Michigan Public Service Comm. 7109 W. Saginaw Hwy., 3 rd Floor Lansing, MI 48917 feldmans@michigan.gov Michigan Environmental Council Christopher M. Bzdok Tracy Jane Andrews Olson, Bzdok & Howard 420 E. Front St. Traverse City, MI 49686 chris@envlaw.com tjandrews@envlaw.com Kimberly Flynn, Legal Assistant Karla Gerds, Legal Assistant kimberly@envlaw.com karla@envlaw.com Residential Customer Group Don L. Keskey Brian W. Coyer Public Law Resource Center PLLC University Office Place 333 Albert Ave., Ste. 425 East Lansing, MI 48823 donkeskey@publiclawresourcecenter.com bwcoyer@publiclawresourcecenter.com Attorney General Bill Schuette John A. Janiszewski Celeste R. Gill Assistant Attorney General Environment, Natural Resources and Agriculture Div. G. Mennen Williams Bldg., 6 th Floor 545 W. Ottawa St.; P.O. Box 30755 Lansing, MI 48909 janiszewskij2@michigan.gov gillc1@michigan.gov AG-ENRA-Spec-Lit@michigan.gov MPSC Staff Meredith Beidler Lauren Donofrio Assistant Attorneys General Michigan Public Service Commission 7109 W. Saginaw Hwy., 3 rd Floor Lansing, MI 48917 beidlerm@michigan.gov donofriol@michigan.gov