S T A T E OF M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * In the matter on the Commission s own ) motion, to consider changes in the rates ) of all the Michigan rate-regulated ) electric, steam and natural gas utilities ) Case No. U-0 to reflect the effects of the federal Tax ) Cuts and Jobs Act of 0: ) UPPER PENINUSLA POWER COMPANY ) files an application for determination of Credit B ) as described in Orders U- and U-0. ) QUALIFICATIONS AND DIRECT TESTIMONY OF MARK J. PUNG MICHIGAN PUBLIC SERVICE COMMISSION October, 0
QUALIFICATIONS OF MARK J. PUNG CASE NUMBER U-0 PART I 0 0 Q. Please state your name and business address. A. My name is Mark J. Pung. My business address is 0 West Saginaw Highway, Lansing, Michigan. Q. By whom are you employed and in what capacity? A. I am employed by the Michigan Public Service Commission (MPSC or Commission) as a Departmental Analyst in the Rates and Tariff Section of the Regulated Energy Division. Q. Please briefly describe your educational background. A. I graduated from Michigan State University in 00 with a Bachelor of Arts degree in Supply Chain Management. Q. Have you completed any other courses? A. Yes, I have completed two graduate courses at Central Michigan University s Lansing campus, Quantitative Applications in Administrative Decision Making and Financial Management. I have also completed the Association of Edison Illuminating Company s Fundamentals of Customer Load Data Analysis course and the National Association of Regulatory Utility Commissioners (NARUC) Annual Regulatory Studies Program held at Michigan State University. Q. What are your current responsibilities at the MPSC? A. In my current position at the MPSC, I participate in rate cases, PSCR Reconciliations, self-implementation reconciliations, and special contract cases. My duties also involve customer complaint and inquiry processing and tariff administration.
QUALIFICATIONS OF MARK J. PUNG CASE NUMBER U-0 PART I Q. Have you previously presented testimony or participated in utility cases before the MPSC? A. Yes. I have participated in the following cases: Case No. Utility Description U-0-R Presque Isle, Cherryland, Tri-County, and PSCR Reconciliation Great Lakes U- Presque Isle Electric and Gas Cooperative Rate Design U-0-R Presque Isle, Cherryland, Tri-County, and PSCR Reconciliation Great Lakes & TIER Audit 0 0 U--R Ontonagon County REA Rate Design U- Upper Peninsula Power Company Rate Design U-0 Great Lakes Energy Cooperative Rate Design U- SEMCO Energy Gas Company Rate Design U-0 Wisconsin Electric Power Company Rate Design U- Wisconsin Public Service Corp. Ex parte of new rate U- Detroit Edison Company Rate Design U- Consumers Energy Company Rate Design U- Alpena Power Company Ex parte of new rate U-00 Wisconsin Electric Power Company Rate Design U- Consumers Energy Company Rate Design U- Wisconsin Electric Power Company Rate Design U- Upper Peninsula Power Company Rate Design U-0 Indiana Michigan Power Company Rate Design
QUALIFICATIONS OF MARK J. PUNG CASE NUMBER U-0 PART I 0 0 Case No. Utility Description U- Detroit Edison Company Rate Design U- Consumers Energy Company Rate Design U-0 Consumers Energy Company Revenue Decoupling U- Michigan Consolidated Gas Company Revenue Decoupling U-0 Consumers Energy Company VHWF U-0 Consumers Energy Company Rate Design U- Michigan Gas Utilities Corporation Revenue Decoupling U- Michigan Gas Utilities Corporation Un-collectables U- Tilden Mining Company RAS- Tariff U-0 DTE Michigan Gathering Company Ex parte of new rate U- Michigan Gas Utilities Corporation Revenue Decoupling U- Michigan Gas Utilities Corporation Tariff Revisions U- Consumers Energy Company Act Case U- Consumers Energy Company Rate Design U- Upper Peninsula Power Company Rate Design U-0 Consumers Energy Company Rate Design U- Detroit Edison Company Rate Design U- Northern States Power Company Rate Design U-00 Alpena Power Company TCJA Credit A U-00 Northern States Power Company TCJA Credit A U-00 Upper Michigan Energy Resource Corp. TCJA Credit A
DIRECT TESTIMONY OF MARK J. PUNG CASE NUMBER U-0 PART II 0 Q. What is the purpose of your testimony? A. I sponsor MPSC Staff s (Staff) recommendation regarding Upper Peninsula Power Company s (UPPCo) Credit B surcharge calculation and its corresponding tariff changes. Q. Does Staff agree with the Company s calculation of Credit B as proposed by the Company? A. Staff agrees with the Company s proposed calculation of Credit B in principle, but with three modifications supported by Staff witness Charles E. Putnam. Q. Does Staff support the Company s changes to the Tax Cuts & Jobs Act of 0 tariff sheet D-0.00? A. No. The Company has merged Credit A with Credit B into a combined TCJA credit on tariff sheet D-0.00. Staff s position is that Credit A and Credit B should be displayed individually by power supply and distribution to provide clear separate surcharges for each portion of the Tax Cuts and Jobs Act to its customers. This will minimize changes to the tariff, as the Credits will drop off at different times, and avoid confusion. Q. Does this conclude your testimony? A. Yes, it does.
S T A T E OF M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * In the matter on the Commission s own motion, ) to consider changes in the rates of all the Michigan ) rate-regulated electric, steam and natural gas utilities ) Case No. U-0 to reflect the effects of the federal Tax Cut and Jobs ) Act of 0: UPPER PENINSULA POWER ) COMPANY files an application for determination ) of Credit B as described in orders U- and ) U-0. ) ) QUALIFICATIONS AND DIRECT TESTIMONY OF CHARLES E. PUTNAM, CPA MICHIGAN PUBLIC SERVICE COMMISSION October, 0
QUALIFICATIONS OF CHARLES E. PUTNAM, CPA CASE NUMER U-0 PART I 0 0 Q. Please state your name and business address. A. My name is Charles E. Putnam. My business address is 0 W. Saginaw Highway, Lansing, MI. Q. By whom are you currently employed and in what capacity? A. I am employed as an Auditing Specialist with the Michigan Public Service Commission (Commission or MPSC) in the Revenue Requirements Section of the Regulated Energy Division. Q. How long have you been employed by the MPSC and what are your duties? A. I joined the MPSC in 00 as a Department Analyst in the Rates and Tariffs Section. My primary responsibilities involved cost of service studies for electric utilities. In April 0, I joined the Revenue Requirements Section as an Auditing Specialist. Q. Please describe your educational background and work experience. A. I graduated from Davenport University, with distinction, in 0 with a Master of Accountancy degree. I received a Bachelor of Science degree from Michigan State University in Physiology in and an Associate degree in Accounting from Lansing Community College in. Prior to joining the MPSC I was a Corporate Tax Accountant for Dart Container Corporation from to. I left Dart Container to take a Senior Accountant position with the City of Lansing. After leaving the City of Lansing in, I served for years as the Controller for Universal Map Enterprises. I am also an adjunct accounting professor with Lansing Community College and have over thirty years of teaching experience. Q. Do you have any professional licenses?
QUALIFICATIONS OF CHARLES E. PUTNAM, CPA CASE NUMER U-0 PART I 0 0 A. Yes, I am a Certified Public Accountant, licensed by the State of Michigan. Q. Have you previously presented testimony or been involved in proceedings before the Commission? A. Yes, I have been involved in the following proceedings: Case Number Company Description U-0 MGU Credit B Refund U-0 SEMCO Credit B Refund U-0 UMERC Credit B Refund U-0 NSP-Electric Credit B Refund U-0 NSP-Gas Credit B Refund U- Detroit Edison Cost of Service Study U-0 Detroit Edison Cost of Service Study U-0 Detroit Edison Cost of Service Study U- Detroit Edison Cost of Service Study U- Detroit Edison Cost of Service Study U- Detroit Edison Cost of Service Study U- Detroit Edison Cost of Service Study U- Detroit Edison Cost of Service Study U- Consumers Gas Cost of Service Study U- Consumers Gas Cost of Service Study U- Consumers Energy Cost of Service Study U-0 Consumers Energy Cost of Service Study U- Consumers Energy Cost of Service Study
QUALIFICATIONS OF CHARLES E. PUTNAM, CPA CASE NUMER U-0 PART I 0 0 U- Consumers Energy Cost of Service Study U-0 Consumers Energy Cost of Service Study U- Consumers Energy Cost of Service Study U- Consumers Energy Cost of Service Study U- Consumers Energy Cost of Service Study U- Consumers Energy Cost of Service Study U-0 Wisconsin Electric Cost of Service Study U- Wisconsin Electric Cost of Service Study U-00 Wisconsin Electric Cost of Service Study U-0 Wisconsin Electric Cost of Service Study U- Upper Peninsula Power Cost of Service Study U- Upper Peninsula Power Cost of Service Study U- Upper Peninsula Power Cost of Service Study U- Upper Peninsula Power Rate Design U- Upper Peninsula Power Cost of Service Study U-0 Xcel NSPW Cost of Service Study U- Xcel NSPW Cost of Service Study U- SEMCO Audit Taxes and Other Revenue U--R Tri-County Rate Design U-0-R Tri-County Audit/TIER/PSCR/Rate Design U-0-R Tri-County Audit/TIER/PSCR/Rate Design U-0-R Tri-County Audit/TIER/PSCR U--R Midwest Cost of Service Study
QUALIFICATIONS OF CHARLES E. PUTNAM, CPA CASE NUMER U-0 PART I U- PA and PA Cost of Service
DIRECT TESTIMONY OF CHARLES E. PUTNAM, CPA CASE NUMBER U-0 PART II 0 0 Q. What is the purpose of your testimony in this proceeding? A. The purpose of my testimony is to present the MPSC Staff s (Staff) position regarding the Upper Peninsula Power Company (UPPCO or the Company) total proposed Tax Cuts and Jobs Act (TCJA) Credit B and support for inclusion of a residual balance mechanism. Q. Are you sponsoring any exhibits in this case? A. No, I am not. Q. Does Staff support the Company s proposed Credit B as initially proposed? A. No. But, Staff does support the Company s proposed Credit B as initially proposed with three modifications. First, the Company s proposed refund period for October 0 through March 0 is no longer possible. Staff proposes a sixmonth refund period to begin the month following the issue of an Order in this case. At the earliest, the refunds could be accomplished from November 0 through April 0. Q. What is Staff s proposed second modification? A. The Company included interest on the unrefunded Credit B balance only through June 0. It is Staff s position that interest be accrued on the unrefunded Credit B balance through the end of the refund period. If the Commission is able to issue an order in this case in October 0, interest should be accrued through April 0. Page of Staff s February, 0 proposal in MPSC Case No. U-, which was adopted by the Commission in its February, 0 Order, MPSC Case No. U-, February, 0 Order, page 0, The Commission adopts the Staff s proposal.
DIRECT TESTIMONY OF CHARLES E. PUTNAM, CPA CASE NUMBER U-0 PART II 0 0 recommends that this credit be spread over no longer than six months, and interest be applied to the un-refunded balance of Credit B at the short-term interest rate. Q. What is Staff s third proposed modification? A. Staff proposes that the Company include a residual balance mechanism. Q. Is it typical for refunds to include a residual balance mechanism? A. Yes. Typically refunds include a residual balance mechanism. This allows for the final disposition of any residual balance. Q. What does Staff propose for a residual balance mechanism? A. Staff proposes to determine if a residual balance exists for each rate class at the conclusion of the refund period in a manner consistent with the residual balance methodology approved in Case No. U-00. If the total residual balance is less than $0,000, the amount shall be given to a charity chosen by the Company. If an under collection occurred that is less than $0,000, the under collection should be written off by the Company. If a residual balance exists resulting from an under collection that is greater than $0,000, surcharges will be calculated on a per customer basis and applied during a subsequent month until the residual balance is less than $0,000. If an over collection occurred that is greater than $0,000, credits will be calculated on a per customer basis and applied during a subsequent month until the over collection is less than $0,000. However, if the residual balance is less than $0,000 and any one rate schedule is over or under collected by greater than $0,000, then additional surcharging or credits will be
DIRECT TESTIMONY OF CHARLES E. PUTNAM, CPA CASE NUMBER U-0 PART II implemented for that particular rate schedule on a per customer basis, until the balance is less than $0,000 for that rate schedule. Q. Does this conclude your testimony? A. Yes.
STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the mater on the Commission s own motion to consider changes in the rates Case No. U-0 of all the Michigan rate-regulated electric, (E-File Paperless) steam and natural gas utilities to reflect the effects of the federal Tax Cuts and Jobs Act of 0: UPPER PENINSULA POWER COMPANY files an application for determination of Credit B as described in Order U-. / STATE OF MICHIGAN ) ) ss COUNTY OF EATON ) PROOF OF SERVICE Jennifer M. Brooks, being first duly sworn, deposes and says that on September, 0, she served a true copy of MPSC Staff Qualifications and Direct Testimony Pung, Putnam upon the following parties by depositing the same in a United States postal depository enclosed in an envelope bearing postage fully prepaid, plainly addressed as follows: Administrative Law Judge Sally L. Wallace Administrative Law Judge Michigan Public Service Commission 0 W. Saginaw Hwy., rd Floor Lansing, MI Wallaces@michigan.gov Attorney General Bill Schuette Michael Moody Assistant Attorney General West Ottawa Street P. O. Box 0 Lansing, MI 0 Moodym@michigan.gov Upper Peninsula Power Company Paul M. Collins Sherri A. Wellman Miller, Canfield, Paddock & Stone, P.L.C One Michigan Avenue, Suite 00 Lansing, MI Collinsp@millercanfield.com wellmans@millercanfield.com Association of Businesses Advocating Tariff Equity Bryan A. Brandenburg E Cesar E Chavez Avenue Lansing, MI 0 bbrandenburg@clarkhill.com
Jennifer M. Brooks Subscribed and sworn to before me this th day of October, 0. Lisa Felice, Notary Public State of Michigan, Eaton County My Commission Expires: April, 00