January 10, 2018 Ms. Kavita Kale Michigan Public Service Commission 7109 W. Saginaw Hwy. P. O. Box 30221 Lansing, MI 48909 RE: MPSC Case No. U-18090 Dear Ms. Kale: The following is attached for paperless electronic filing: Consolidated Response to (1 Consumers Energy Company s Petition for Rehearing and Clarification and (2 Consumers Energy Company s Motion to Stay Capacity Purchase Obligation on behalf of the Environmental Law & Policy Center, the Ecology Center, the Solar Energy Industries Association, and Vote Solar Attachment 1 Discovery Response ELPCDE-11.16 Affidavit of Adam Schumaker Proof of Service Sincerely, Margrethe Kearney Environmental Law & Policy Center mkearney@elpc.org cc: Service List, Case No. U-18090
STATE OF MICHIGAN MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, establishing the method and avoided cost calculation for CONSUMERS ENERGY COMPANY to fully comply with the Public Utilities Regulatory Policy Act of 1978, 16 USC 2601 et seq. Case No. U-18090 CONSOLIDATED RESPONSE TO: 1. CONSUMERS ENERGY COMPANY S PETITION FOR REHEARING AND CLARIFICATION, AND 2. CONSUMERS ENERGY COMPANY S MOTION TO STAY CAPACITY PURCHASE OBLIGATION ON BEHALF OF ENVIRONMENTAL LAW AND POLICY CENTER, THE ECOLOGY CENTER, THE SOLAR ENERGY INDUSTRIES ASSOCIATION, AND VOTE SOLAR January 10, 2018
The Environmental Law & Policy Center, the Ecology Center, the Solar Energy Industries Association, and Vote Solar (collectively, Joint Intervenors submit this response to the following petitions and motions filed on December 20, 2017: (1 Consumers Energy Company s ( Consumers or the Company Petition for Rehearing and Clarification, and (2 Consumers Motion to Stay Capacity Purchase Obligation. I. INTRODUCTION. Just one month after the Commission s November 21, 2017 Order requiring Consumers to begin contracting with PURPA QFs using a new avoided cost methodology, the Company filed a new capacity forecast in Case No. U-18491 that contains significant changes to the Company s assumptions and projections of capacity need that it filed in this docket. (See U- 18491, Direct Testimony of Thomas P. Clark at 18. Contrary to the position it took in earlier stages of this case, the Company now argues that it has no need for capacity over the next 10 years, and it is requesting that the Commission reset the Company s avoided capacity cost to the MISO PRA price for all new QF offers to sell capacity to the Company. (U-18491, Application at 4. Consumers request would severely reduce avoided cost payments to new PURPA QFs in Michigan. The Commission should reject Consumers request to unilaterally decrease capacity payments to PURPA QFs prior to the Commission s review and approval of the Company s new capacity forecasts filed in U-18491. Instead, as the Commission has previously ordered, the Commission must review and approve a utility s forecast that it has no need for capacity before the utility may adjust its avoided cost capacity payments to PURPA QFs. 1 The Company s 1 The first part of the Company s petition for rehearing made valid claims based on factual errors relating to certain calculations, see Consumers Petition, II(A(1-(5, at 3-6, and Joint Intervenors support the Company s request that the Commission exercise its discretion to correct the calculation errors. Joint Intervenors argument against 1
Petition for Rehearing fails to meet the legal standard for granting rehearings and relies on two flawed and unsubstantiated premises: (1 that there is a discrepancy between the Commission s May 2017 and November 2017 Orders regarding when utilities may reset avoided capacity rates to the MISO PRA, and (2 that the Company has no need for capacity over the next ten years. The Company s Motion to Stay reiterates the same arguments and fails to meet the legal standard for issuance of a stay. The facts of this case highlight why it is important for the Commission to approve utility forecasts before resetting avoided capacity rates. While the Company claims no capacity need, its filing in Case No. U-18491 rests on a number of unproven assumptions that the Commission has not yet reviewed or approved. Consumers is asking the Commission to allow it to adjust QF rates prior to a Commission determination that such an adjustment is warranted. This violates basic principles prohibiting utilities from adjusting rates or charges without first receiving Commission approval. See MCL 460.6a(1. The Commission should deny the Company s Petition for Rehearing and Motion to Stay implementation of the Commission s November 2017 Order. II. THE COMMISSION SHOULD REJECT THE COMPANY S PETITION FOR REHEARING, IN PART, AND SHOULD DENY THE COMPANY S MOTION TO STAY. A. The Commission Should Reject the Company s Petition for Rehearing because It Failed to State a Valid Claim for Rehearing Under Rule 437. The Company s petition fails to meet the Commission s legal standard for granting rehearing. Rule 437 only allows rehearing based on three narrow claims: (1 a claim based on a factual error; (2 a claim based on newly discovered evidence, and/or (3 a claim based on unintended consequences resulting from compliance with a decision or order. See Rule 437(1. rehearing applies only to the second part of the Company s petition for rehearing, which clearly does not meet the well-articulated standards this Commission applies in considering such petitions. 2
See MICH. ADMIN. CODE R 792.10437 ( Rule 437. Even if a claim fits within those narrow categories, [t]he ordering of a rehearing in a contested case is discretionary. See In re The Detroit Edison Co., Case No U-5315, Order at 5 (May 8, 1978. Consumers Petition does not allege factual error, newly discovered evidence, or unintended consequences. Instead, Consumers attempts to manufacture a disparity between two prior Commission orders when no disparity exists. There is no conflict between the May 2017 and the November 2017 Orders regarding the trigger for adjusting capacity payments. In its November 21, 2017 Order, the Commission ordered that if the company forecasts that no capacity is required in the next 10 years, Consumers shall make a filing so indicating, and upon Commission approval, the capacity price for new contracts shall be reset to the MISO PRA price. November Order at 32. This language is not in conflict with the Commission s prior Order that if no capacity is needed during the 10-year planning horizon, then Consumers shall make a filing so indicating, and the avoided cost for capacity shall be reset to the MISO PRA. May Order at 19. The language in the November Order clarifies and expands upon the language of the May Order and makes clear that Commission approval of a utility s capacity forecast is required before the utility may reset the capacity price for new QF contracts. PURPA itself supports the conclusion that there is no conflict between the May and November Orders. There can be no conflict because regardless of the procedural posture of the required filing be it a contested case, ex parte proceeding, or request for a declaratory ruling any utility filing would always require Commission approval because only the Commission may alter the rights of qualifying facilities ( QFs. See, e.g., Indep. Energy Producers Ass'n v. Cal. Pub. Utils. Comm'n, 36 F.3d 848, 859 (9th Cir. 1994 (PURPA preempted a state law that granted utilities authority to determine QFs compliance with state s regulations. Only the 3
Commission has the authority to alter the rights of QFs, and the relief sought by the Company to correct the alleged conflict between the November and May Orders would impermissibly delegate to the Company authority to alter the rights of QFs. Thus, as a matter of law, Consumers cannot unilaterally adjust the avoided capacity cost to the MISO PRA until the Commission reviews the Company s filing and determines that the Company, in fact, has no capacity need. This requirement of Commission approval is fundamental to the regulatory framework necessary for nondiscriminatory implementation of PURPA. The Company s filing does not provide a single example of another instance where Commission approval is not required before altering the rights of QFs. The Company s proposed relief would allow utilities to unilaterally decide that they have no capacity need, creating roadblocks to QF development that could defer or displace the utility s plans to build new generation or accelerate the utility s plans to retire old units. The risks of Consumers proposal are illustrated by the actions of another regulated Michigan utility, DTE Electric Company, who is informing proposed PURPA QFs that The Company presently forecasts that it has no additional capacity needs in the next 10 years. See Attachment 1 (discovery response ELPCDE-11.16 in Case No. U-18419. DTE makes this remarkable assertion to QFs despite the fact that DTE has asked the Commission to issue a Certificate of Necessity for 1,100 MW of additional capacity to be supplied by its proposed billion dollar natural gas plant. See In re Application of DTE Eelctric Co., Case No. U-18419, Application at 1 (July 31, 2017. This is precisely the behavior that witness Douglas Jester identified in his testimony: When the Company builds a plant, its capacity will typically be in excess of any immediate needs due to the lumpiness of their preferred technologies. The Company will then have a capacity surplus for a number of years, and could claim that they have no need for capacity from PURPA qualifying facilities. Then, when 4
capacity is once again needed the Company will again build excess capacity beyond immediate needs and the cycle will be repeated. This process would change if on the next occasion when Consumers Energy needed capacity, it sourced the annual increment of capacity needed through a Competitive Bidding process and then continued to do that annually going forward. Because there is no State policy that requires that Consumers Energy source annual increments of capacity through competitive bidding, qualifying facilities will never have nondiscriminatory access to sell power to Consumers Energy. 2 TR 248:6-17 Regardless, Consumers new position that it has no capacity need over the next ten years rests on a number of new assumptions and projections that have not yet been reviewed or approved by the Commission. See In re Consumers Energy Co., Case No. U-18491, Direct Testimony of Thomas Clark (Dec. 20, 2017. For example: Consumers forecast assumes that its remaining coal plants (Campbell Unit 1, Campbell Unit 2, Karn Unit 1, and Karn Unit 2 will continue to operate and provide capacity through MISO Planning Year 2030. (Clark Direct at 8. Consumers forecast further assumes that the Commission will approve the Company s plans to build and own up to 525 MW of new wind facilities in Case U- 18231. (Clark Direct at 14. The Company assumes that existing PURPA QF suppliers will continue their contractual relationships with the Company with new PPAs based on the Company s avoided costs. (Clark Direct at 15. It assumes that the Commission will allow Consumers to increase capacity at the Filer City PPA and extend its existing contract with the Midland Cogeneration Venture (MCV plant beyond the expiration of its current contract in 2025. (Clark Direct at 16-17. 5
The Company s filing also contains a number of assumptions about expansions of various demand response (DR and other programs. (Clark Direct at 22. The parties and the Commission have not yet had time to vet these assumptions, but some of them appear to be dubious. For example, it does not appear reasonable to assume that existing QF suppliers will continue their contractual relationships with the Company when several of those existing suppliers have publicly stated that they may need to shut down in light of future reduced avoided cost payments. Furthermore, allowing Consumers to reduce PURPA capacity payments based on the Company s own speculation that it will keep its coal plants open until 2030 subverts the purpose of PURPA. It is likely that procuring capacity through PURPA QF contracts could help replace the capacity provided by those old, polluting coal plants thereby allowing Consumers to close the plants, reduce pollution, and save money for ratepayers. As the Commission noted in its May Order, there is significant ratepayer value in deferring large, capacity additions through contracting with QFs for incremental capacity. May Order at 18. Consumers cannot make a prima facie showing of no capacity need without demonstrating that (1 the Company does not forecast a capacity shortfall within 10 years, and (2 this forecast does not include unapproved plans to add or build new capacity over the next 10 years. See, e.g., In re Indiana Michigan Power Co., Case No. U-18092, Proposal for Decision at 37-38 (Aug. 3, 2017 (ALJ finding that utility s plan to add 953 MW of renewable capacity over the subsequent 10 years demonstrated a capacity need; In re Northern States Power Co., Case No. U-18093, Proposal for Decision at 25-26 (Nov. 21, 2017 (ALJ finding that utility s plan to add 789 MW of renewable capacity and 1,316 MW of NGCT capacity over the subsequent 10 years demonstrated a capacity need; see also In re Consumers Energy Co., Case No. U-18090, Proposal for Decision at 31 (Mar. 10, 2017 ( ALJ agrees with the Staff that (1 6
any electric capacity Consumers may need over its current 10-year planning horizon should come from either existing or new/willing QF suppliers, if possible.. In this case, the Company s unapproved plans to build or add additional capacity over the next 10 years can likely be deferred or avoided by contracting with QFs. Instead of raising new issues, the Company s Petition for Rehearing is an effort to relitigate the already-settled issues in Michigan s PURPA policy. For example, the Company attempts to mischaracterize the new PURPA policy as one that would render the Integrated Resource Planning ( IRP process from Act 341 of 2016 meaningless. Consumers Petition at 9. The Company did not make that argument even though it had many opportunities to do so in earlier stages of the case. In addition, the IRP process and Michigan s new PURPA policy will work together in tandem because the Company will be able to consider new PURPA growth in its IRP analysis. The Company also paints an unrealistic picture of PURPA growth by relying on the interconnection queue as a proxy even though it is unlikely that all the projects in the queue will make it through the many stages of development. See Schumaker Affidavit at 4-6. First, the Company appears to have counted ineligible projects in the approximately 300 MW of projects in the queue. Schumaker Affidavit at 5. Second, Michigan s interconnection standards provide a low barrier to entry for projects, which means that developers must often file interconnection applications in order to learn more about the viability of speculative projects before determining the ultimate viability of the projects. Schumaker Affidavit at 6. For example, for all of the projects in the queue, except for one, an interconnection study has yet to even be initiated, see Schumaker Affidavit at 6, therefore the interconnection queue itself is not a reasonable representation of how much capacity will be added. 7
The Commission has established a reasonable process for determining whether utilities have a capacity need for the purposes of implementing QF rates. Consumers is following that process in Case No. U-18491. The Commission should resolve any dispute over Consumers capacity needs in that docket, and any such dispute does not warrant rehearing in this docket. Instead, the Commission should allow QF development to begin in Michigan as contemplated in its November 2017 Order. New contracts for QF resources will help diversify Consumers capacity supply from a very small baseline of renewable resources. This will generate important information about the size of the QF market and performance of renewable resources that can be considered in future IRP and PURPA biennial review cases. The sky is not falling. Instead, the fact that Consumers is seeing more interest from QF developers indicates that PURPA, finally, is working as designed. B. The Commission Should Deny the Company s Motion to Stay because It Failed To Satisfy MCR 7.123(E(3, the Standard the Commission Uses to Decide Stay Requests. The Commission should deny the Company s Motion to Stay because the motion fails to satisfy the requirements of MCR 7.123(E(3. The Commission s power to stay an order is a matter of discretion, and the Commission considers the four criteria listed in MCR 7.123(E(3 when determining whether a stay is appropriate. See In re Consumers Energy Co., Case No. U- 17087, Order at 5 (Sept. 23, 2015. Under these criteria, the Commission may order a stay only if it finds all the following circumstances exist: 1. The moving party will suffer irreparable injury if a stay is not granted; 2. The moving party made a strong showing that it is likely to prevail on the merits; 3. The public interest will not be harmed if a stay is granted; and 4. The harm to the moving party in the absence of a stay outweighs the harm to the other parties to the proceedings if a stay is granted. MCR 7.123(E(3(a-(d. 8
The Company s Motion to Stay does not cite to the Commission s standard by which to judge a motion to stay and fails to even allege two of the four requirements for issuing a stay. The Company s motion does not allege any irreparable injury, as required by MCR 7.123(E(3(a or that the public interest will be harmed if a stay is not granted, as required by 7.123(E(3(c. The Company cannot prove all the elements of the Commission s standard if the Company does not even allege two of them. In failing to comply with MCR 7.123(E(3(c, not only did the Company fail to allege that the public interest would be harmed absent a stay, it is clear that the public interest would be harmed if a stay is granted. There is an established public interest in encouragement of renewable QF development. As the Commission observed: [E]xcept for situations where a utility is replacing large amounts of retiring generating capacity, the actual approaches to securing energy and capacity in the short to medium term do not necessarily entail building new, large-scale generation. Rather, energy resource additions tend to fall into three categories:...(3 the use of renewables to provide low-cost energy, as a hedge against high fuel prices, and to comply with renewable portfolio standard requirements. November Order at 30. A stay would do the opposite of encouraging development of renewables it would actively discourage it. As the Supreme Court said: [T]he words public interest in a regulatory statute... take meaning from the purposes of the regulatory language, and [t]he basic purpose of 210 of PURPA was to increase the utilization of cogeneration and small power production facilities and to reduce reliance on fossil fuels. Am. Paper Inst., Inc. v. Am. Elec. Power Serv. Corp., 461 U.S. 402, 417 (1983. Granting a stay harms the public interest because it hinders utilization and development of qualifying facilities, such as those in the interconnection queue. Since the first Order issued in this docket in May 2017 and before the Company filed its 9
Motion to Stay on December 21, 2017, the Company received interconnection requests from prospective QFs exercising their right under PURPA to sell power to the Company. See Consumers Motion to Stay at 7. Many of these projects will never develop due to a variety of reasons. See Schumaker Affidavit at 4-6. Even so, staying implementation for prospective QFs already in the interconnection queue fails to encourage the development of these QFs and PURPA s purpose, and, therefore, staying implementation, as requested by the Company, would fail to promote the public interest. The balancing of harms required by MCR 7.123(E(3(d falls squarely in favor of not granting a stay. If the Commission grants an extended stay, harm would befall Joint Intervenors members and the Company s ratepayers. A stay would harm prospective QF developers in Michigan already in the Company s interconnection queue who would be unable to finance projects due to the uncertainty of the contract payments. As the Commission recognized, [t]he availability of a standard tariff reduces transaction costs for individual projects, thus reducing barriers to entry, especially for developers of smaller QFs. May Order at 20. A stay would delay the standard offer s availability and perpetuate the barrier to entry for smaller QFs. The Company s ratepayers would also be harmed by a stay because delaying implementation of the Commission s November Order in this docket would not allow prospective QFs the opportunity to defer the construction of utility-owned generation resources or accelerate the closure of old, polluting plants that may not be economically viable in the future. The Commission s new avoided cost methodology ensures that ratepayers will not pay more for new QF capacity than the utility would likely pay for its own capacity needs. The Company was required to show all four circumstances required by MCR 7.123(E(3(a-(d, but the Company failed to show a single one. The Company did not allege 10
irreparable injury and was silent on whether the public interest favored a stay. The Company s underlying argument that it has no capacity need is unlikely to succeed on the merits because the Company s own filings demonstrate that it intends to construct at least 625 MW of new utilityowned capacity over the next 10 years. A stay in this proceeding would not be in the public interest because the public interest is served by encouraging not staying new clean and renewable energy development consistent with the intent of PURPA. The Commission should deny the Company s Motion to Stay. III. CONCLUSION. The Commission has spent more than two years carefully developing a modernized methodology for implementing PURPA. Now that the Commission s PURPA policy is on the cusp of becoming final, the Company s petition and motion represent a final effort to delay its implementation. Consumers filing is a predictable response from a regulated monopoly seeking to preserve its monopoly power. But Congress designed PURPA specifically to combat the tendency of utilities to protect monopoly rents by discriminating against independent power producers. By offering small renewable generators rates based on the Company s avoided costs, the Commission s final PURPA policy will ensure that the Company s ratepayers will pay no more than would otherwise be incurred had the Company supplied the power itself. The Commission s final PURPA policy advances both the public interest in promoting renewable generation and the public interest in protecting ratepayers from expensive and unnecessary utility investments. For the above reasons, the Commission should reject the second part of the Company s Petition for Rehearing and deny the Company s Motion to Stay. 11
Respectfully submitted, January 10, 2018 Margrethe Kearney Environmental Law & Policy Center 1514 Wealthy St. SE, Ste. 256 Grand Rapids, MI 49506 T: (312 795-3708 F: (312 795-3730 mkearney@elpc.org 12
DTE Electric Company One Energy Plaza, 688 WCB Detroit, MI 48226-1279 Case No. U-18090 Date: January 10, 2018 Attachment 1 David S. Maquera (313 235-3724 david.maquera@dteenergy.com January 5, 2018 Margrethe Kearney, Esq. Environmental Law & Policy Center 1514 Wealthy St. SE, Suite 256 Grand Rapids, MI 49506 Re: In the matter of the Application of DTE Electric Company for approval of Certificates of Necessity pursuant to MCL 460.6s, as amended, in connection with the addition of a natural gas combined cycle generating facility to its generation fleet and for related accounting and ratemaking authorizations. MPSC Case No. U-18419 Dear Ms. Kearney: Attached is DTE Electric Company s Response to the Environmental Law and Policy Center s, the Ecology Center s, the Solar Energy Industries Association s, the Union of Concerned Scientists, and Vote Solar s Eleventh Discovery Request. Also attached is the Proof of Service. Very truly yours, DSM/lah Attachments cc: Service List David S. Maquera
Case No. U-18090 Date: January 10, 2018 Attachment 1 MPSC Case No.: U-18419 Respondent: R. J. Mueller Requestor: ELPC Question No.: ELPCDE-11.16 Page: 1 of 1 Question: Please provide all correspondence with proposed PURPA Qualifying Facilities that refers or relates to DTE s capacity needs over the next ten years. Answer: DTE sent the below form letter text to the following recipients on 12/21/2017 Cypress Creek: MI.Utility@ccrenew.com Orion: Andrew Makee amakee@orionrenewables.com Geronimo: csiebenshuh@geronimoenergy.com; 'Tena Monson' tena@geronimoenergy.com SPower: 'Daniel Wang' dwang@spower.com NET Sun: Adam Schumaker <aschumaker@gmail.com> PURPA Qualifying Facility Notification This letter is to inform you that if you intend your project to be a PURPA Qualifying Facility, please see DTE Electric Rider No. 6 and note that Standard Offers are for projects less than 100kW. Consistent with the current Company tariff, the terms and conditions for a Power Purchase Agreement (PPA for any facility greater than 100kW would be negotiated. Furthermore, any PPA that we negotiate in connection with a PURPA qualifying facility will be negotiated consistent with all PURPA rules, including the one-mile rule. The Company presently forecasts that it has no additional capacity needs in the next 10 years.
STATE OF MICHIGAN MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, establishing the method and avoided cost calculation for CONSUMERS ENERGY COMPANY to fully comply with the Public Utilities Regulatory Policy Act of 1978, 16 USC 2601 et seq. Case No. U-18090 AFFIDAVIT OF ADAM SCHUMAKER Adam Schumaker, being duly sworn, deposes and states as follows: 1. I previously provided expert testimony in this case, Case No. U-18090, on behalf of the Ecology Center, the Environmental Law & Policy Center, the Solar Energy Industries Association, and Vote Solar. I have also provided expert testimony in other Commission cases, including Case Nos. U-18091, U-18092, U-18093, U-18094, and U-18095. I have been involved in some aspect of the solar industry for over 10 years. After I graduated from the University of Wisconsin, Madison in 2003, I started working as a solar installer. I later went back to graduate school and earned a Master of Science in Environmental Science with a focus on Energy Technology and Policy from Humboldt State University in Arcata, California. From 2010 through 2012 I worked for the Renewable Northwest Project, which is an organization that advocates for the expansion of environmentally responsible renewable energy resources in the Northwest through collaboration with government, industry, utilities, customers, and advocacy groups. In that position, I studied and evaluated the implementation of PURPA in Oregon, Washington and Idaho with respect to solar QF development. 2. In its petition, Consumers states that it has received 118 interconnection requests for solar generators ranging in size from 0.15MW to 20MW, which totals 296MW (Petition, p. 9. 1
Consumers goes on to state that it has approximately 300 MW of solar projects in the interconnection queue being developed to obtain QF contracts and that if [Consumers] is required to sign 300MWs of PURPA-based solar contracts that are compensated at $140,505/ZRC-yr, the Company s customers will be obligated to pay approximately $26 million annually for this capacity (p. 11. While 300 MW of solar in the interconnection queue is a healthy indicator of solar growth in Michigan, and a positive step towards the continued diversification and strengthening of Michigan s energy sector, it is unlikely that all of those projects will actually move forward. 3. I reviewed the most recent Consumers interconnection queue available online, posted on November 30, 2017. 1 After sorting the list for solar projects ranging in size between 0.15MW and 20MW that applied for interconnection after May 31, 2017, I came up with 115 projects totaling 295.6 MW. The MW volume is consistent with Consumer s statements but it is unclear why the project volume does not match. The only other interconnection queue that Consumer s could be referring to is the MISO interconnection queue. Upon review of the MISO queue, there is only one solar project between 0.15MW and 20MW, but it is located in Delta County, MI (upper peninsula and not in Consumers territory 2. Therefore, my analysis is based on the interconnection queue posted on Consumer s website dated November 30, 2017 (the Consumers Queue. 4. In my experience, the activity in the Consumers Queue is very common for new markets and indicates that the Commission s new PURPA policy is headed in the right direction to promote a diversified renewable energy portfolio that can hedge against future fossil fuel cost, provide grid stability, and provide energy and capacity at rates no more than what ratepayers 1 https://www.consumersenergy.com/~/media/ce/documents/renewables/generator-interconnection/generatorinterconnection-status-report.ashx?la=en 2 https://www.misoenergy.org/planning/generatorinterconnection/pages/interconnectionqueue.aspx 2
would otherwise pay. That said, project development is an inherently risky business, and developers expect that some projects will ultimately not move forward due to interconnection costs and timelines, permitting and other land use issues, or any other unforeseen issues. To expect that 100% of projects that file an interconnection application will be constructed does not take into account any of these hurdles that solar projects routinely face during the development process. 5. Furthermore, Consumers did not provide the interconnection queue s capacity in terms of ZRC, which is the actual measure of their capacity under the standard offer tariff and would account for MISO s effective load carrying capacity ( ELCC. In addition, Consumers appears to have included applications that the Company itself has already determined are ineligible. There are nine applications listed as ineligible that total 36MW; eight of these are for 2MW interconnections and one is for a 20MW interconnection. 6. Michigan s interconnection standards provide a low barrier to entry for projects in the 2MW size range to apply for interconnection and enter the interconnection queue. For a 2MW project to apply for interconnection (and thereby enter the queue, it only needs to submit a basic site plan, a single-line drawing and a $250 fee along with its interconnection form and is not required to have site-control. In my experience, minimal interconnection standards like those in Michigan lead many developers to file interconnection applications in order to obtain additional information to determine if a given point of interconnection is viable and worth pursuing further in development. For all of the 296MW (with the exception of Queue Reference Number CE1713, the Engineering Review Status is listed as Pending or With Customer, indicating that an actual interconnection study has not yet been initiated for any of the applications. While 300 MW of solar projects constructed at Consumers avoided cost would be a positive contribution to 3
Michigan s energy supply, given their very early stage of development it is unlikely that all of the projects in the queue will ultimately be built. Dated: January 10, 2018 Adam Schumaker 4
STATE OF MICHIGAN MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own motion, establishing the method and avoided cost calculation for CONSUMERS ENERGY COMPANY to fully comply with the Public Utilities Regulatory Policy Act of 1978, 16 USC 2601 et seq. Case No. U-18090 PROOF OF SERVICE I hereby certify that a true copy of the foregoing Consolidated Response to Consumer Energy Company s Petition for Rehearing and Clarification and Consumer Energy Company s Motion to Stay Capacity Purchase Obligation on behalf of the Environmental Law & Policy Center, the Ecology Center, the Solar Energy Industries Association, and Vote Solar was served by electronic mail upon the following Parties of Record, this 10th of January, 2018. Name/Party Administrative Law Judge Hon. Mark E. Cummins Great Lakes Renewable Energy Association Don L. Keskey Brian W. Coyer Consumers Energy Company Anne M. Uitvlugt Robert W. Beach MPSC Staff Spencer A. Sattler Heather M.S. Durian Cadillac Renewable Energy, LLC et. al Thomas J. Waters Michigan Environmental Council Christopher M. Bozdok Kimberly Flynn Karla Gerds E-mail Address cumminsm@michigan.gov donkeskey@publiclawresourcecenter.com bwcoyer@publiclawresourcecenter.com Mpscfilings@cmsenergy.com Anne.uitvlugt@cmsenergy.com Robert.Beach@cmsenergy.com sattlers@michigan.gov durianh@michigan.gov twaters@fraserlawfirm.com Chris@envlaw.com Kimberly@envlaw.com Karla@envlaw.com
Independent Power Producers Coalition of Michigan Timothy J. Lundgren Laura A. Chappelle John W. Sturgis Michigan Power Limited Partnership Ada Cogeneration Limited Partnership David E. S. Marvin tjlundgren@varnumlaw.com lachappelle@varnumlaw.com jwsturgis@varnumlaw.com dmarvin@fraserlawfirm.com Margrethe Kearney Environmental Law & Policy Center MKearney@elpc.org