Projected Net Operating Income Schedule: C1 "Total Electric" and "Jurisdictional Electric" Witness: T. M. Uzenski Projected 12 Month Period Ending March 31, 2012 Page: 1 of 1 ($000) (a) (b) (c) Historical Projected Net Operating Net Operating Line Income Income No. Description 12/31/2009 3/31/2012 1 Revenues 2 Total Revenues 4,437,356 4,299,038 3 4 Operating Expenses 5 Fuel and Purchased Power 1,446,307 1,405,606 6 Operations and Maintenance Expenses 1,347,026 1,520,953 7 Depreciation and Amortization 555,923 590,435 8 Property & Other Taxes 236,768 262,340 9 Loss/Gain on Sale of Assets (65) 0 10 State Income Taxes 43,879 28,143 11 Federal Income Taxes 181,649 74,192 12 Total Operating Expenses 3,811,486 3,881,670 13 14 Operating Income 625,870 417,368 15 16 Operating Income Adjustments 17 AFUDC and Other 8,662 10,783 18 Amortization of Loss on Reacquired Securities (3,168) (3,168) 19 Net Other Income and Deductions 5,494 7,614 20 21 "Total Electric" Net Operating Income 631,364 424,982 22 23 "Jurisdictional Electric" Net Operating Income 635,135 424,411
Adjusted Net Operating Income - Total Electric and Jurisdictional Electric Schedule: C1.1 For the 12 Month Period Ending March 31, 2012 Witness: T. M. Uzenski ($000) Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) Source Depreciation State Federal Total Electric Line Exhibit Fuel & and Regulatory Property & Income Income Loss/Gain AFUDC & Adjusted No. Description A-10 Revenues Purch Pwr O&M Amortization Assets Other Taxes Taxes Taxes on Sale Other NOI 1 Historical Year: 12 Months Ended 12/31/2009 2 Adjusted Normalized 2009 Net Operating Income 4,437,356 1,446,307 1,347,026 555,923-236,768 43,879 181,649 (65) 5,494 631,364 3 4 Projection Adjustments 5 Revenues C3 (138,318) (8,270) (45,517) (84,531) 6 Fuel and Purchased Power C4 (40,701) 2,434 13,394 24,874 7 O&M C5 173,927 (10,399) (57,235) (106,293) 8 Depreciation and Amortization C6 34,512 (2,063) (11,357) (21,092) 9 Property and Municipal Taxes C7 25,572 (1,529) (8,415) (15,628) 10 Federal Income Taxes C8 1,644 (1,644) 11 State Income Taxes C9 & C10 4,089 (4,089) 12 AFUDC & Other C11 65 2,120 2,055 13 Amortization of the Loss on Reacquired Debt C12-14 Income Tax Effect of Interest C13 91 592 (683) 15 Synchronization Adjustment C14 (87) (562) 649 16 Total Projection Adjustments (138,318) (40,701) 173,927 34,512-25,572 (15,735) (107,457) 65 2,120 (206,382) 17 18 19 Total Electric Net Operating Income 4,299,038 1,405,606 1,520,953 590,435-262,340 28,143 74,192-7,614 424,982 20 21 Jurisdictional Electric Net Operating Income 4,289,665 1,401,079 1,518,220 589,474 261,913 28,091 74,077 7,599 424,411 22 23 Jurisdictional Electric NOI 12 ME 3/31/2012 424,411 24 Source: Exhibit A-13, Page 1, Line 18, Column (b)
Revenue Conversion Factor Schedule: C2 Projected 12 Months Ending March 31, 2012 Witness: P. G. Horgan Page: 1 of 1 (a) (b) (c) Revenue Conversion Line Calc. Factor No. Description Logic 3/31/2012 1 Income Before Income taxes 100.0000 2 3 Michigan Business Tax: Income Tax Rate 4.9500% 4 Michigan Business Tax: Gross Receipts Tax Rate 0.8000% 5 Composite Municipal Excise Tax Rate (1) 0.1833% 6 Total State and Local Tax Rates (L3+L4+L5) 5.9333% 7 8 Federal Income Tax Base (L1 - (L6*100)) 94.0667 9 10 Federal Income Tax Rate 35.0000% 11 12 Federal Income Tax (L10 * L8) 32.9233 13 14 Income after Federal, Michigan Business Taxes and 15 Municipal Excise Taxes (L8 - L12) 61.1434 16 17 Revenue Conversion Factor (L1 / L15) 1.6355 (1) See A-10WPC2
Projected Sales Revenue Schedule: C3 For the 12 Month Period Ending March 31, 2012 Witness: T. M. Uzenski ($000) Page: 1 of 1 (a) (b) (c) Test Line Period No. Description Amounts Revenue 1 2 Normalized 12 Months Ended December 31, 2009 Revenues (1) 4,437,356 3 4 Projected 12 ME March 31, 2012 Revenues (2) 4,652,659 5 6 Less: Securitization 324,622 7 8 Regulatory Assets 3,109 9 10 Energy Optimization and REP Surcharge Revenue 179,461 11 12 Projected 12 ME March 31, 2012 Revenues Excluding Other Revenues 4,145,471 13 14 Sale for Resale 9,131 15 16 Miscellaneous 144,435 17 18 Projected 12 Months Ended March 31, 2012 Revenues 4,299,038 19 20 Change in Revenues (138,318) (1) Exh. A-3, Sch. C1, Line 33 (2) Exh. A-14, Sch. F2, Line 50, Column (b)
Calculation of Power Supply Expenses Schedule: C4 Using MPSC Staff Methodology from U-15768 Witness: K. A. Holmes Page: 1 of 1 (a) (b) (c) Line No. Description Amount Source 1 Current PSCR Base including transmission at generation level (mills/kwh) 31.26 U-15768; Exh. A-10, Sch. C4 2 Loss Factor (mills/kwh) 1.068 U-15768; Exh. A-10, Sch. C4 3 Current PSCR Base including transmission at sales level (mills/kwh) 33.39 (Line 1 + Line 2) 4 5 Detroit Edison Power Supply Projected Sales (MWh) 41,721,357 (Line 8 - Line 6) 6 Detroit Edison Wholesale Projected Sales (MWh) 174,220 7 8 Total Power Supply Sales (MWh) 41,895,577 9 10 Transmission Expense $ 305,671,000 U-15768; Ex. A-10, C4.3 11 12 Base Transmission Expense at PSCR Sales Level (mills/kwh) 7.33 (Line 10 Line 5) 13 14 Base Fuel & PP Expense at PSCR Sales Level (mills/kwh) 26.06 (Line 3 - Line 12) 15 16 2012 TY Power Supply Costs (Less Transmission) 17 18 Detroit Edison Power Supply Projected Sales (MWh) 41,721,357 (Line 8 - Line 6) 19 Detroit Edison R10 Hourly Power Supply Cost Projected Sales (MWh) 480,865 Exh A-14, Sch F3, Pg 36 of 42, Ln 2 20 Detroit Edison R10 MISO Pricing Option Projected Sales (MWh) 321,824 Exh A-14, Sch F3, Pg 36 of 42, Ln 8 21 Detroit Edison Non-PSCR LCC Sales (MWh) 18,689 LCC workpapers 22 Detroit Edison Retail Sales (less R10, FERC wholesale, LCC Int) (MWh) 40,899,979 23 Detroit Edison Wholesale Sales (MWh) 174,220 (Line 6) 24 Detroit Edison Wholesale Interruptible Sales (MWh) 491 Actual FERC Wholesale Direct Assignment in U-15677- R 25 Detroit Edison Wholesale Firm Sales (MWh) 173,729 (line 23 - Line 24) 26 27 Detroit Edison Retail Power Supply Costs (less R10, FERC wholesale, LCC Int) $ 1,065,997,114 (Line 22 * Line 14) 28 R10 Power Supply Costs 17,513,103 (Line 19 * $36.42/MWh) 2/ 29 R10 MISO Pricing Option Costs 11,263,840 (Line 20 * $35.00/MWh) 2/ 30 LCC Interruptible Sales Power Supply Costs 615,989 (Line 21 * $32.96/MWh) 3/ 31 Wholesale Interruptible Power Supply Costs 17,136 (Line 24 * $34.90/MWh) 3/ 32 Wholesale Firm Power Supply Costs 4,527,988 (Line 25 * Line 14) 33 Detroit Edison Total Power Supply Costs $ 1,099,935,171 34 35 Transmission Expense $ 305,671,000 36 37 Total Expense $ 1,405,606,171 Notes: 2/ Revenue amount on Exhibit A-14, Schedule No. F3 page 36 of 42 3/ Actual average rate credited to the PSCR during historic period (in U-15677-R)
Test Period Operation and Maintenance Expenses Schedule: C5 Summary Witness: T. Uzenski ($000) Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Projected Adjustments 01/01/10-01/01/11-01/01/12 - Exhibit Adjusted 12/31/10 12/31/11 3/31/12 Other Total Line Source Historical Rate Case Normalization Historical Inflation Inflation Inflation Adjustments Projected Projected No. Description A-10 Test Period Adjustments Adjustments Test Period Adjustment Adjustment Adjustment 1/ Adjustments Test Period 1 Steam Power Generation C5.1 315,608 0 0 315,608 4,596 4,640 1,675 10,180 21,091 336,699 2 Nuclear Power Generation C5.2 138,569 0 0 138,569 4,850 5,020 1,299 4,600 15,768 154,337 3 Hydraulic Power Generation C5.3 8,719 0 0 8,719 131 124 45 0 300 9,019 4 Other Power Generation C5.4 5,926 0 0 5,926 78 84 30 0 192 6,118 5 Distribution C5.6 220,035 0 0 220,035 3,300 3,127 1,131 14,144 21,703 241,738 6 Customer Service and Marketing C5.7 151,123 (14,766) 0 136,357 1,448 1,370 496 0 3,314 139,671 7 Uncollectible Accounts Expense C5.7 77,755 0 0 77,755 0 0 0 (4,855) (4,855) 72,900 8 Corporate Support C5.8 170,130 (15,879) (1,520) 152,731 3,443 3,480 975 10,569 18,467 171,199 9 Pension and Benefits C5.9 235,590 0 11,300 246,890 4,434 4,722 1,318 87,757 98,230 345,120 10 MERC C5.12 44,435 44,435 0 0 0 0 0 44,435 11 AMI & Smart Currents C5.13 (282) (282) (282) 1,323,455 13,790 9,780 1,347,025 22,279 22,567 6,970 122,113 173,928 1,520,953 1/ Test Period Adjustment, See respective Exhibit and Schedule.
Test Period Operation and Maintenance Expenses Schedule: C5.1 Steam Power Generation - Total Witness: P. Fessler ($000's) Page: 1 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Projected Adjustments 01/01/10-01/01/11-01/01/12-12/31/10 12/31/11 3/31/12 Total Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Total Adjustments Total Adjustments Total Adjustments Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ Adjustments Test Period 1 Steam Power Generation sum (c) thru (e) sum (g) thru (i) (f) + (j) 2 Operation 3 Operation Supervision and Engineering 4/ 500 18,672 0 0 18,672 544 5 96 645 19,317 4 Fuel 5/, 9/ 501 38,153 4,120 0 42,273 (3,070) 987 201 (1,882) 40,391 5 Steam Expenses 10/ 502 16,811 630 0 17,441 4,959 314 114 5,386 22,827 6 Steam from Other Sources 503 0 0 0 0 0 0 0 0 0 7 (Less) Steam Transferred-Cr. 504 0 0 0 0 0 0 0 0 0 8 Electric Expenses 6/ 505 6,768 0 0 6,768 102 96 35 233 7,001 9 Misc Steam Power Expenses 2/, 9/, 11/ 506 66,144 (4,120) 0 62,024 4,246 6,907 (137) 11,017 73,041 10 Rents 507 0 0 0 0 0 0 0 0 0 11 Total Operation Expense 146,548 630 0 147,178 6,781 8,309 309 15,399 162,577 12 13 Maintenance 14 Maintenance Supervision and Engineering 7/ 510 1,656 0 0 1,656 350 (296) 9 62 1,718 15 Maintenance of Structures 511 13,746 0 0 13,746 (251) 645 71 465 14,211 16 Maintenance of Boilers 3/, 10/ 512 100,259 (630) 0 99,629 (8,517) 12,661 (84) 4,060 103,689 17 Maintenance of Electric Plant 513 17,995 0 0 17,995 (1,747) 1,532 89 (125) 17,870 18 Maintenance of Misc Steam Plant 8/ 514 35,389 0 0 35,389 (1,193) 2,241 182 1,231 36,620 19 Total Maintenance Expense 169,045 (630) 0 168,415 (11,357) 16,783 266 5,692 174,107 20 21 Total Steam Power Generation 315,593 0 0 315,593 (4,576) 25,093 575 21,092 336,685 1/ Total Adjustments include known and measurable scope changes and labor and material adjustments (see page 2 through 4). 1.5% 2/ MPPA credit included in Line 10 FERC 506 (3,305) 1.4% 3/ MPPA credit included in Line 17 FERC 512 (3,650) 2.0% Total MPPA credit $ (6,955) 4/ Includes Fuel Supply $ 1,301 5/ Includes Fuel Supply 8,177 6/ Includes Fuel Supply 20 7/ Includes Fuel Supply 768 8/ Includes Fuel Supply 620 Total Fuel Supply $ 10,886 9/ To reclass Urea from FERC 506 to FERC 501. 10/ To reclass FGD operating chemicals from FERC 512 to FERC 502. 11/ Includes MEP $ 411
Test Period Operation and Maintenance Expenses Schedule: C5.1 Steam Power Generation (excluding FGD and SCR adjustments) Witness: P. Fessler ($000's) Page: 2 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Projected Adjustments 01/01/10-01/01/10-01/01/11-01/01/11-01/01/12-01/01/12-12/31/10 12/31/10 12/31/11 12/31/11 3/31/12 3/31/12 Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Total Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 1/ 1/ 1/ Adjustments Test Period 1 Steam Power Generation 2/ sum (c) thru (e) sum (g) thru (l) (f) + (m) 2 Operation 0.015 3 Operation Supervision and Engineering 5/ 500 18,672 0 0 18,672 260 284 (260) 265 0 96 645 19,317 4 Fuel 6/ 501 38,153 0 0 38,153 471 579 432 555 0 201 2,238 40,391 5 Steam Expenses 502 15,654 0 0 15,654 0 235 0 222 0 81 538 16,192 6 Steam from Other Sources 503 0 0 0 0 0 0 0 0 0 0 0 0 7 (Less) Steam Transferred-Cr. 504 0 0 0 0 0 0 0 0 0 0 0 0 8 Electric Expenses 505 6,768 0 0 6,768 0 102 0 96 0 35 233 7,001 9 Misc Steam Power Expenses 3/, 7/, 10/ 506 61,401 0 0 61,401 3,267 970 5,897 1,001 (500) 360 10,996 72,397 10 Rents 507 0 0 0 0 0 0 0 0 0 0 0 0 11 Total Operation Expense 140,648 0 0 140,648 3,998 2,170 6,069 2,140 (500) 773 14,650 155,298 12 13 Maintenance 14 Maintenance Supervision and Engineering 8/ 510 1,656 0 0 1,656 320 30 (320) 24 0 9 62 1,718 15 Maintenance of Structures 511 13,746 0 0 13,746 (450) 199 450 195 0 71 465 14,211 16 Maintenance of Boilers 4/ 512 96,374 0 0 96,374 (12,334) 1,261 8,028 1,307 0 473 (1,266) 95,108 17 Maintenance of Electric Plant 513 17,995 0 0 17,995 (1,987) 240 1,287 245 0 89 (125) 17,870 18 Maintenance of Misc Steam Plant 9/ 514 35,389 0 0 35,389 (1,698) 505 1,738 503 0 182 1,231 36,620 19 Total Maintenance Expense 165,160 0 0 165,160 (16,149) 2,235 11,183 2,274 0 824 367 165,527 20 21 Total Steam Power (excluding FGD and SCR adjustments) 305,808 0 0 305,808 (12,151) 4,405 17,252 4,414 (500) 1,596 15,016 320,824 1/ See Testimony of P. Fessler, pages 35 through 39. 1.5% 2/ Excludes FGD and SCR; (see Ex. A-10, C5.1, P. 3 and Ex. A-10, C5.1 P 4) 1.4% 2.0% 3/ MPPA credit included in Line 10 FERC 506 $ (3,305) 4/ MPPA credit included in Line 17 FERC 512 (3,650) Total MPPA credit $ (6,955) 5/ Includes Fuel Supply $ 1,301 6/ Includes Fuel Supply 8,177 7/ Includes Fuel Supply 20 8/ Includes Fuel Supply 768 9/ Includes Fuel Supply 620 Total Fuel Supply $ 10,886 10/ Includes MEP $ 411
Projected Operation and Maintenance Expenses Schedule: C5.1 Flue Gas Desulfurization (FGD) Adjustment Witness: P. Fessler ($000's) Page: 3 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Projected Adjustments 01/01/10-01/01/10-01/01/11-01/01/11-01/01/12-01/01/12-12/31/10 12/31/10 12/31/11 12/31/11 3/31/12 3/31/12 Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Total Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 1/ 1/ 1/ Adjustments Test Period 1 sum (c) thru (e) sum (g) thru (l) (f) + (m) 2 FGD Operations 3 DECO Labor 502 949 0 0 949 2,487 52 0 49 0 18 2,605 3,554 4 REP 502 43 0 0 43 117 2 0 2 0 1 122 165 5 Contract Labor 502 0 0 0 0 0 0 0 0 0 0 0 0 6 Materials 2/ 502 165 630 0 795 2,024 42 0 40 0 15 2,121 2,916 7 Materials 512 630 (630) 0 0 0 0 0 0 0 0 0 0 8 Total Operation Expense 1,787 0 0 1,787 4,628 96 0 91 0 33 4,848 6,635 9 10 FGD Maintenance 11 DECO Labor 512 792 0 0 792 862 25 0 24 0 9 919 1,711 12 REP 512 25 0 0 25 52 1 0 1 0 0 55 80 13 Contract Labor 512 508 0 0 508 1,352 28 0 26 0 10 1,416 1,924 14 Materials 3/ 512 685 0 0 685 527 18 0 17 0 6 569 1,254 15 Total Maintenance Expense 2,010 0 0 2,010 2,793 72 0 68 0 25 2,958 4,968 16 17 Total FGD Expense 3,797 0 0 3,797 7,421 168 0 159 0 58 7,806 11,603 1/ See Testimony of P. Fessler, pages 35 through 39. 1.5% 2/ Beginning in 2010; Operating Chemicals are recorded in FERC 502 1.4% 2.0% 3/ Excludes 2009 operating chemicals
Projected Operation and Maintenance Expenses Schedule: C5.1 Selective Catalytic Reduction (SCR) Adjustment Witness: P. Fessler ($000's) Page: 4 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Projected Adjustments 01/01/10-01/01/10-01/01/11-01/01/11-01/01/12-01/01/12-12/31/10 12/31/10 12/31/11 12/31/11 3/31/12 3/31/12 Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Total Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 1/ 1/ 1/ Adjustments Test Period 1 sum (c) thru (e) sum (g) thru (l) (f) + (m) 2 SCR Operations 3 DECO Labor 506 544 0 0 544 0 8 0 8 0 3 19 563 4 REP 506 12 0 0 12 0 0 0 0 0 0 0 12 5 Contract Labor 506 0 0 0 0 0 0 0 0 0 0 0 0 6 Materials 506 67 0 0 67 0 1 0 1 0 0 2 69 7 Urea 506 4,120 (4,120) 0 0 0 0 0 0 0 0 0 0 8 Urea 2/ 501 0 4,120 0 4,120 (4,120) 0 0 0 0 0 (4,120) 0 9 Total Operation Expense 4,743 0 0 4,743 (4,120) 9 0 9 0 3 (4,099) 644 10 11 SCR Maintenance 12 DECO Labor 512 432 0 0 432 0 6 0 6 0 2 15 447 13 REP 512 13 0 0 13 0 0 0 0 0 0 0 13 14 Contract Labor 512 61 0 0 61 178 4 0 3 0 1 186 247 15 Materials 512 739 0 0 739 (500) 4 3,200 48 (600) 14 2,166 2,905 16 Total Maintenance Expense 1,245 0 0 1,245 (322) 14 3,200 58 (600) 18 2,368 3,613 17 18 Total SCR Expense 5,988 0 0 5,988 (4,442) 23 3,200 67 (600) 21 (1,731) 4,257 1/ See Testimony of P. Fessler, pages 35 through 39. 1.5% 2/ Beginning in 2010; Urea is recorded in FERC 501. 1.4% 2.0%
Test Period Operation and Maintenance Expenses Schedule: C5.2 Nuclear Power Generation Witness: W. A. Colonnello ($000) Page: 1 of 2 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Projected Adjustments 01/01/10-01/01/11-01/01/12 - FERC/ Adjusted 12/31/10 12/31/11 3/31/12 Other Total Line MPSC Historical Rate Case Normalization Historical Inflation Adj Inflation Adj Inflation Adj Adjustments Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 2/ Adjustments Test Period 1 Nuclear Power Generation sum (c) thru (e) sum (g) thru (j) (f) + (k) 2 Operation 3 Operation Supervision and Engineering 517 14,245 0 0 14,245 499 516 134 0 1,148 15,393 4 Coolants and Water 519 3,261 0 0 3,261 114 118 31 0 263 3,524 5 Steam Expenses 520 14,447 0 0 14,447 506 523 135 0 1,164 15,611 6 Steam from Other Sources 521 0 0 0 0 0 0 0 0 0 0 7 (Less) Steam Transferred-Cr. 522 0 0 0 0 0 0 0 0 0 0 8 Electric Expenses 523 3,412 0 0 3,412 119 124 32 0 275 3,687 9 Misc Nuclear Power Expenses 524 43,526 0 0 43,526 1,523 1,577 408 4,600 8,108 51,634 10 Rents 525 0 0 0 0 0 0 0 0 0 0 11 Station Expense 562 192 0 0 192 7 7 2 0 15 207 12 Total Operation Expense 79,083 0 0 79,083 2,768 2,865 741 4,600 10,974 90,057 13 14 Maintenance 15 Maintenance Supervision and Engineering 528 12,262 0 0 12,262 429 444 115 0 988 13,250 16 Maintenance of Structures 529 12,236 0 0 12,236 428 443 115 0 986 13,222 17 Maintenance of Reactor Plant Equipment 530 22,602 0 0 22,602 791 819 212 0 1,822 24,424 18 Maintenance of Electric Plant 531 9,877 0 0 9,877 346 358 93 0 796 10,673 19 Maintenance of Misc Nuclear Plant 532 2,509 0 0 2,509 88 91 24 0 202 2,711 20 Total Maintenance Expense 59,486 0 0 59,486 2,082 2,155 558 0 4,794 64,280 21 22 Total Operation and Maintenance Expense 138,569 0 0 138,569 4,850 5,020 1,299 4,600 15,768 154,337 23 24 25 1/ Inflation Adjustment Factor January 1, 2010 - December 31, 2010 3.5% 26 Inflation Adjustment Factor January 1, 2011 - December 31, 2011 3.5% 27 Inflation Adjustment Factor January 1, 2012 - May 31, 2012 3.5% 28 29 2/ Fuel offload (W. Colonnello testimony, page 10)
O&M Expenditures - Nuclear Generation Schedule: C5.2 Historical Test Year Witness: W. A. Colonnello ($000) Page: 2 of 2 (a) (b) Line Actual No. Organization Jan - Dec 2009 1 Nuclear Organization 103,551 2 Regulatory Assessments and Dues 10,372 3 Nuclear Organization - Base 113,923 4 5 Emergent Projects 5,300 6 7 Refueling Outage 8 Refuel Outage 31,494 9 Refuel Outage Accrual 20,462 10 Refuel Outage Reversal (32,610) 11 Total Refueling Outage 19,346 12 13 Total Nuc Gen Directs 138,569 14 15 Total Nuclear Generation 138,569 16 17 18 19 FERC Account Summary 20 Operating FERC Accounts 79,083 21 Maintenance FERC Accounts 59,486 22 Total Nuclear FERC Accounts 138,569
Test Period Operation and Maintenance Expenses Schedule: C5.3 Hydraulic Power Generation Witness: P. Fessler ($000's) Page: 1 of 2 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Projected Adjustments 01/01/10-01/01/11-01/01/12-12/31/10 12/31/11 3/31/12 Total Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Total Adjustments Total Adjustments Total Adjustments Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ Adjustments Test Period 1 Hydraulic Power Generation sum (c) thru (e) sum (g) thru (i) (f) + (j) 2 Operation 3 Operation Supervision and Engineering 535 1,194 0 0 1,194 18 17 6 41 1,235 4 Water for Power 536 0 0 0 0 0 0 0 0 0 5 Hydraulic Expenses 537 1,295 0 0 1,295 19 18 7 44 1,339 6 Electric Expenses 538 827 0 0 827 12 12 4 28 855 7 Misc Hydraulic Power Expenses 539 934 0 0 934 14 13 5 32 966 8 Rents 540 0 0 0 0 0 0 0 0 0 9 Total Operation Expense 4,250 0 0 4,250 64 60 22 146 4,396 10 11 Maintenance 12 Maintenance Supervision and Engineering 541 303 0 0 303 5 4 2 10 313 13 Maintenance of Structures 542 323 0 0 323 5 5 2 11 334 14 Maintenance of Reservoirs, Dams 543 565 0 0 565 8 8 3 19 584 15 Maintenance of Electric Plant 544 1,896 0 0 1,896 28 27 10 65 1,961 16 Maintenance of Misc Hydraulic Plant 545 1,382 0 0 1,382 21 20 7 47 1,429 17 Total Maintenance Expense 4,469 0 0 4,469 67 64 23 154 4,623 18 19 Total Hydraulic Power Generation 8,719 0 0 8,719 131 124 45 300 9,019 1/ Total Adjustments include known and measurable scope changes and labor and material adjustments (see page 2). 1.5% 1.4% 2.0%
Test Period Operation and Maintenance Expenses Schedule: C5.3 Hydraulic Power Generation Witness: P. Fessler ($000's) Page: 2 of 2 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Projected Adjustments 01/01/10-01/01/10-01/01/11-01/01/11-01/01/12-01/01/12 - Adjusted 12/31/10 12/31/10 12/31/11 12/31/11 3/31/12 3/31/12 Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Total Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 1/ 1/ 1/ Adjustments Test Period 1 Hydraulic Power Generation sum (c) thru (e) sum (g) thru (l) (f) + (m) 2 Operation 3 Operation Supervision and Engineering 535 1,194 0 0 1,194 0 18 0 17 0 6 41 1,235 4 Water for Power 536 0 0 0 0 0 0 0 0 0 0 0 0 5 Hydraulic Expenses 537 1,295 0 0 1,295 0 19 0 18 0 7 44 1,339 6 Electric Expenses 538 827 0 0 827 0 12 0 12 0 4 28 855 7 Misc Hydraulic Power Expenses 539 934 0 0 934 0 14 0 13 0 5 32 966 8 Rents 540 0 0 0 0 0 0 0 0 0 0 0 0 9 Total Operation Expense 4,250 0 0 4,250 0 64 0 60 0 22 146 4,396 10 11 Maintenance 12 Maintenance Supervision and Engineering 541 303 0 0 303 0 5 0 4 0 2 10 313 13 Maintenance of Structures 542 323 0 0 323 0 5 0 5 0 2 11 334 14 Maintenance of Reservoirs, Dams 543 565 0 0 565 0 8 0 8 0 3 19 584 15 Maintenance of Electric Plant 544 1,896 0 0 1,896 0 28 0 27 0 10 65 1,961 16 Maintenance of Misc Hydraulic Plant 545 1,382 0 0 1,382 0 21 0 20 0 7 47 1,429 17 Total Maintenance Expense 4,469 0 0 4,469 0 67 0 64 0 23 154 4,623 18 19 Total Hydraulic Power Generation 8,719 0 0 8,719 0 131 0 124 0 45 300 9,019 1/ See Testimony of P. Fessler, pages 40 through 41. 1.5%
Test Period Operation and Maintenance Expenses Schedule: C5.4 Other Power Generation Witness: P. Fessler ($000's) Page: 1 of 2 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Projected Adjustments 01/01/10-01/01/11-01/01/12-12/31/10 12/31/11 3/31/12 Total Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Total Adjustments Total Adjustments Total Adjustments Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ Adjustments Test Period 1 Other Power Generation sum (c) thru (e) sum (g) thru (i) (f) + (j) 2 Operation 3 Operation Supervision and Engineering 546 0 0 0 0 0 0 0 0 0 4 Generation Expenses 548 32 0 0 32 0 0 0 1 33 5 Misc Other Power Expenses 549 2,298 0 0 2,298 34 33 12 79 2,377 6 Rents 550 0 0 0 0 0 0 0 0 0 7 Total Operation Expense 2,330 0 0 2,330 35 33 12 80 2,410 8 9 Maintenance 10 Maintenance Supervision and Engineering 551 0 0 0 0 0 0 0 0 0 11 Maintenance of Structures 552 0 0 0 0 0 0 0 0 0 12 Maintenance of Generating & Electric Plant 553 2,913 0 0 2,913 (718) 791 15 89 3,002 13 Maintenance of Misc Other Power Plant 554 0 0 0 0 0 0 0 0 0 14 Total Maintenance Expense 2,913 0 0 2,913 (718) 791 15 89 3,002 15 16 Power Supply Related Expenses 17 18 Operation Supervision and Engineering 556 657 0 0 657 10 9 3 23 680 19 Generation Expenses 557 26 0 0 26 0 0 0 1 27 20 Total Expense 683 0 0 683 10 10 4 23 706 21 22 Total Other Power Generation Expenses 5,926 0 0 5,926 (672) 834 30 192 6,118 1/ Total Adjustments include known and measurable scope changes and labor and material adjustments. 1.5% 1.4% 2.0%
Test Period Operation and Maintenance Expenses Schedule: C5.4 Other Power Generation Witness: P. Fessler ($000's) Page: 2 of 2 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) Projected Adjustments 01/01/10-01/01/10-01/01/11-01/01/11-01/01/12-01/01/12-12/31/10 12/31/10 12/31/11 12/31/11 3/31/12 3/31/12 Line FERC/ MPSC Historical Rate Case Normalization Adjusted Historical Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Scope Adjustments Labor & Mat. Cost Adj Total Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 1/ 1/ 1/ Adjustments Test Period 1 Other Power Generation sum (c) thru (e) sum (g) thru (l) (f) + (m) 2 Operation 3 Operation Supervision and Engineering 546 0 0 0 0 0 0 0 0 0 0 0 0 4 Generation Expenses 548 32 0 0 32 0 0 0 0 0 0 1 33 5 Misc Other Power Expenses 549 2,298 0 0 2,298 0 34 0 33 0 12 79 2,377 6 Rents 550 0 0 0 0 0 0 0 0 0 0 0 0 7 Total Operation Expense 2,330 0 0 2,330 0 35 0 33 0 12 80 2,410 8 9 Maintenance 10 Maintenance Supervision and Engineering 551 0 0 0 0 0 0 0 0 0 0 0 0 11 Maintenance of Structures 552 0 0 0 0 0 0 0 0 0 0 0 0 12 Maintenance of Generating & Electric Plant 553 2,913 0 0 2,913 (750) 32 750 41 0 15 89 3,002 13 Maintenance of Misc Other Power Plant 554 0 0 0 0 0 0 0 0 0 0 0 0 14 Total Maintenance Expense 2,913 0 0 2,913 (750) 32 750 41 0 15 89 3,002 15 16 Power Supply Related Expenses 17 18 Operation Supervision and Engineering 556 657 0 0 657 0 10 0 9 0 3 23 680 19 Generation Expenses 557 26 0 0 26 0 0 0 0 0 0 1 27 20 Total Expense 683 0 0 683 0 10 0 10 0 4 23 706 21 22 Total Other Power Generation Expenses 5,926 0 0 5,926 (750) 78 750 84 0 30 192 6,118 1/ See Testimony of P. Fessler, pages 41 through 43.
Test Period Operation and Maintenance Expense Schedule: C5.5 Power Supply Related Expenses Witness: K. A. Holmes ($000) Page: 1 of 1 (a) (b) (c) (d) (e) Other Power Supply Projected Period FERC/ Historical 04/01/11 - Line MPSC Test Period Adjustments 03/31/12 No. Description Account 1/ 2/ 3/ 1 Power Supply Related Expenses 2 Fuel - Steam 501 786,480 3 Allowances 509 38,338 4 Fuel - Nuclear 518 37,541 5 Fuel - Other 547 9,061 6 Purchased Power 555 262,695 7 Load Dispatching 561 9,919 8 Transmission of Electricity by Others 565 267,056 9 Regional Market Expenses 575 12,238 10 11 Total Power Supply Related Expenses 1,423,328 (17,722) 1,405,606 1/ See Exhibit A-3, Schedule C4 2/ Column (e) less column (c) 3/ See Exhibit A-10, Schedule C4
Projected Operation and Maintenance Expenses Schedule: C5.6 Distribution Expenses Witness: P. D. Whitman ($000) Page: 1 of 3 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Projected Adjustments 2009 01/01/10-01/01/11-01/01/12 - FERC/ Adjusted 12/31/10 12/31/11 3/31/12 Restoration Total Line MPSC Historical Rate Case Normalization Historical Inflation Adj Inflation Adj Inflation Adj Normalization Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 2/ Adjustments Test Period 1 Distribution Expenses sum (c) thru (e) sum (g) thru (j) (f) + (k) 2 Operation 3 Operation Supervision and Engineering 580 26,198 0 0 26,198 393 372 135 2,861 3,761 29,959 4 Load Dispatching 581 3,159 0 0 3,159 47 45 16 0 109 3,268 5 Station Expenses 582 13,490 0 0 13,490 202 192 69 0 463 13,953 6 Overhead Line Expenses 583 7,953 0 0 7,953 119 113 41 0 273 8,226 7 Underground Line Expenses 584 2,079 0 0 2,079 31 30 11 0 71 2,150 8 Street Lighting and Signal System Exp 585 0 0 0 0 0 0 0 0 0 0 9 Meter Expenses 586 14,246 0 0 14,246 214 202 73 0 489 14,735 10 Customer Installations Expenses 587 816 0 0 816 12 12 4 0 28 844 11 Miscellaneous Expenses 588 7,806 0 0 7,806 117 111 40 0 268 8,074 12 Rents 589 9,774 0 0 9,774 147 139 50 0 336 10,110 13 Total Operation Expense 85,521 0 0 85,521 1,283 1,215 440 2,861 5,799 91,320 14 15 Maintenance 16 Maintenance Supervision and Engineering 590 1,731 0 0 1,731 26 25 9 0 59 1,790 17 Maintenance of Structures 591 3,029 0 0 3,029 45 43 16 0 104 3,133 18 Maintenance of Station Equipment 592 11,853 0 0 11,853 178 168 61 0 407 12,260 19 Maintenance of Overhead Lines 593 99,582 0 0 99,582 1,494 1,415 512 8,763 12,184 111,766 20 Maintenance of Underground Lines 594 14,433 0 0 14,433 216 205 74 1,977 2,473 16,906 21 Maintenance of Line Transformers 595 0 0 0 0 0 0 0 0 0 0 22 Maintenance of Street Lighting and 596 3,886 0 0 3,886 58 55 20 543 676 4,562 23 Signal Systems 24 Maintenance of Meters 597 0 0 0 0 0 0 0 0 0 0 25 Maintenance of Misc Distribution Plant 598 0 0 0 0 0 0 0 0 0 0 26 Total Maintenance Expense 134,514 0 0 134,514 2,018 1,911 692 11,282 15,904 150,418 27 Total Operation and Maintenance Expense 220,035 0 0 220,035 3,301 3,127 1,132 14,143 21,703 241,738 1/ CPI Annual Inflation Adjustment for January 1, 2010 - December 31, 2010 1.5% CPI Annual Inflation Adjustment for January 1, 2011 - December 31, 2011 1.4% CPI Annual Inflation Adjustment for January 1, 2012 - March 31, 2012 2.0% 2/ Reflects restoration adjustment of $14.143 million (see page 2 of 3)
Restoration Normalization Schedule: C5.6 ($000) Witness: P. D. Whitman Page: 2 of 3 (a) (b) (c) (d) (e) (f) (g) (h) (i) Line Actual 1/1/2009 - Col (g) - (h) No. Storm and Non-Storm Restoration History 2005 2006 2007 2008 2009 5 Yr Avg 12/31/2009 Adjustment 1 Operation and Maintenance Expense 2 Storm 59,546 30,821 48,302 51,000 32,896 44,513 32,896 3 Non-Storm Restoration 58,277 70,360 70,248 72,584 65,297 67,353 65,297 4 Total 117,823 101,181 118,550 123,584 98,193 111,866 98,193 5 6 CPI Annual Inflation Rate for Jan - Dec 2010 1.5% 1,678 1,473 7 CPI Annual Inflation Rate for Jan - Dec 2011 1.4% 1,590 1,395 8 CPI Annual Inflation Rate for Jan - Mar 2012 2.0% 576 505 9 Total $115,709 $101,566 10 Adjustment in Column J, Line 27, page 1 of 3 $14,143
Line Clearance Expenses Schedule: C5.6 ($000) Witness: P. D. Whitman Page: 3 of 3 (a) (b) (c) (d) (e) (f) 04/01/11-01/01/10-01/01/11-01/01/12-3/31/12 2009 12/31/10 12/31/11 3/31/12 Projected Line Historical Inflation Adj Inflation Adj Inflation Adj Test Period No. Description Test Period 1/ 2/ 3/ 4/ 1 2009 Historical Test Period 49,014 2 2009 Historical Test Period Inflated 49,749 50,446 12,864 50,698 1/ CPI Annual Inflation Adjustment Factor January 1, 2010 - December 31, 2010 1.5% 2/ CPI Annual Inflation Adjustment Factor January 1, 2011 - December 31, 2011 1.4% 3/ CPI Annual Inflation Adjustment Factor January 1, 2012 - March 31, 2012 2.0% 4/ Projected Test Period equals.75(d)+(e)
Test Period Operation and Maintenance Expenses Schedule: C5.7 Customer Service and Marketing Witness: D. W. Broome ($000) Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Projected Adjustments 01/01/10-01/01/11-01/01/12 - FERC/ Rate Case Adjusted 12/31/10 12/31/11 3/31/12 Other Total Line MPSC Historical Adjustments Normalization Historical Inflation Adj Inflation Adj Inflation Adj Adjustments Projected Projected No. Description Account Test Period 1/ Adjustments Test Period 2/ 2/ 2/ 3/ Adjustments Test Period 1 Customer Accounts Expenses sum (c) thru (e) sum (g) thru (j) (f) + (k) 2 Operaton 3 Supervision 901 2,912 0 0 2,912 44 41 15 0 100 3,012 4 Meter Reading Expenses 902 12,645 0 0 12,645 190 180 65 0 434 13,079 5 Customer Records and Collection Expenses 903 56,470 0 0 56,470 847 802 291 0 1,940 58,410 6 Uncollectible Accounts 904 77,755 0 0 77,755 0 0 0 (4,855) (4,855) 72,900 7 Miscellaneous Customer Accounts Expenses 905 5,078 (4,834) 0 244 4 3 1 0 8 252 8 Total Operation Expense 154,860 (4,834) 0 150,026 1,084 1,027 372 (4,855) (2,372) 147,654 9 10 Customer Service and Informational Expenses 11 Operaton 12 Supervision 907 1,415 0 0 1,415 21 20 7 0 49 1,464 13 Customer Assistance Expenses 908 66,628 (9,019) 0 57,609 266 252 91 0 610 58,219 14 Informational and Instructional Expenses 909 893 (913) 0 (20) (0) (0) (0) 0 (1) (21) 15 Miscellaneous Customer Service and 910 3,737 0 0 3,737 56 53 19 0 128 3,865 16 Informational Expenses 17 Total Operation Expense 72,673 (9,932) 0 62,741 343 325 118 0 786 63,527 18 19 Sales Expenses 20 Operaton 21 Supervision 911 273 0 0 273 4 4 1 0 9 282 22 Demonstrating and Selling Expenses 912 590 0 0 590 9 8 3 0 20 610 23 Advertising Expenses 913 320 0 0 320 5 5 2 0 11 331 24 Miscellaneous Sales Expenses 916 162 0 0 162 2 2 1 0 6 168 25 Total Operation Expense 1,345 0 0 1,345 20 19 7 0 46 1,391 26 27 Total Customer Service and Marketing 228,878 (14,766) 0 214,112 1,447 1,371 497 (4,855) (1,540) 212,572 1/ FERC 905 - Remove Energy Optimization 4,834 FERC 908 - Remove Energy Optimization 7,244 FERC 908 - Renewables Reg Assist Adj. to RPS case 1,775 Total FERC 908 13,853 FERC 909 - Remove Energy Optimization 913 Total adjustment to remove EO 14,766 2/ CPI Inflation Rate Adjustment Factor January 1, 2010 - December 31, 2010 1.5% CPI Inflation Rate Adjustment Factor January 1, 2011 - December 31, 2011 1.4% CPI Inflation Rate Adjustment Factor January 1, 2012 - March 31, 2012 2.0% Note: Inflation was not calculated on LIEEF payments of $39.858 million 3/ Projected reduction in Uncollectible Expense
Test Period Operation and Maintenance Expenses Schedule: C5.8 Administrative and General Expenses Witness: T. M. Uzenski ($000's) Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Projected Adjustments 01/01/10-01/01/11-01/01/12 - FERC/ Adjusted 12/31/10 12/31/11 3/31/12 Other Total Line MPSC Historical Rate Case Normalization Historical Inflation Adj Inflation Adj Inflation Adj Adjustments Projected Projected No. Description Account Test Period Adjustments Adjustments Test Period 1/ 1/ 1/ 2/ Adjustments Test Period 1 Administrative and General Expenses sum (c) thru (e) sum (g) thru (j) (f) + (k) 2 Operaton 3 Administrative and General Salaries 920 102,360 (13,623) 2/ (519) 3/ 88,218 2,647 2,726 702 0 6,074 94,292 4 Office Supplies and Expenses 921 27,150 0 0 27,150 407 386 140 0 933 28,083 5 (Less) Administrative Expenses Transferred-Cr. 922 (18,739) 0 (1,001) 4/ (19,740) (296) (280) (102) 0 (678) (20,418) 6 Outside Services Employeed 923 24,094 0 0 24,094 361 342 124 0 828 24,922 7 Property Insurance 924 8,598 0 0 8,598 129 122 44 0 295 8,893 8 Injuries and Damages 925 11,428 0 0 11,428 0 0 0 10,569 10,569 21,997 9 Franchise Requirements 927 0 0 0 0 0 0 0 0 0 0 10 Regulatory Commission Expenses 928 949 0 0 949 14 13 5 0 33 982 11 (Less) Duplicate Charges-Cr. 929 0 0 0 0 0 0 0 0 0 0 12 General Advertising Expenses 930.1 1,682 (362) 5/ 0 1,320 20 19 7 0 45 1,365 13 Miscellaneous General Expenses 930.2 3,058 (1,894) 6/ 0 1,164 17 17 6 0 40 1,204 14 Rents 931 4,703 0 0 4,703 71 67 24 0 162 4,865 15 Total Operation Expense 165,283 (15,879) (1,520) 147,885 3,370 3,411 950 10,569 18,301 166,185 16 17 Maintenance 18 Maintenance of General Plant 935 4,847 0 0 4,847 73 69 25 0 167 5,014 19 Total Maintenance Expense 4,847 0 0 4,847 73 69 25 0 167 5,014 20 21 Grand Total Operation & Mainenance Expense 170,130 (15,879) (1,520) 152,732 3,443 3,480 975 10,569 18,467 171,199 1/ Inflation Adjustment Factors Wage Inflation January 1, 2010 - December 31, 2010 3% January 1, 2011 - December 31, 2011 3% January 1, 2011 - March 31, 2012 3% Non-Wage Inflation January 1, 2010 - December 31, 2010 1.5% January 1, 2011 - December 31, 2011 1.4% January 1, 2011 - March 31, 2012 2.0% 2/ Line 3 includes: Executive incentive compensation adjustment - $13,623,000 3/ Line 3 includes: Incentive plan in excess of 100% payout (normalized) - ($7,420,000) Normalize one-time adjustment related to vacation policy change - $6,900,000 4/ Line 5 includes: Vacation policy change cap A&G credit 5/ Line 12 eliminates disallowed advertising - $362,000 6/ Line 13 eliminates disallowed corporate memberships - $1,894,000
Projected Operation and Maintenance Expenses Schedule: C5.9 Employee Pensions and Benefits Witness: J. C. Wuepper Projected 12 Month Period Ending March 2012 Page: 1 of 2 ($000) (a) (b) (c) (d) Employee Pensions and Benefits Expense Line Historical Projected No. Description Test Period Adjustments 1/ Test Period 2/ 1 Qualified Pension $ 73,627 $ 97,269 $ 170,896 2 OPEB 162,247 21,161 183,408 3 Less: Transition Costs Securitized (6,984) - (6,984) 4 Net OPEB 155,263 21,161 176,424 5 Active Health Care 62,631 13,433 76,064 6 Life Insurance 9,429 760 10,189 7 Savings Plan 22,789 1,837 24,626 8 Other 7,640 12,943 20,583 9 Subtotal Other Benefit Costs 102,490 28,972 131,463 10 Total Employee Benefit Costs $ 331,380 $ 147,402 $ 478,782 11 Less: Capitalized and Transferred (95,791) (37,871) (133,662) 12 O&M Employee Benefit Expense $ 235,590 $ 109,531 $ 345,120 1/ Column (d) less Column (b) 2/ Carried from page 2, column (j), of this exhibit
Projected Operation and Maintenance Expenses Schedule: C5.9 Employee Pension and Benefits Witness: J. C. Wuepper Projected 12 Month Period Ending March 2012 Page: 2 of 2 ($000) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Projected Adjustments Adjusted Jan. 1, 2010 - Jan. 1, 2011 - Jan. 1, 2012 - Total Line Historical Normalization Historical Dec. 31, 2010 Dec. 31, 2011 Mar. 31, 2012 Other Projected Projected No. Description Test Period Adjustments Test Period Inflation Adj 2/ Inflation Adj 2/ Inflation Adj 2/ Adjustments Adjustments Test Period Col (b) + Col (c) Sum Col (e) thru Col (h) Col (d) + Col (i) 1 Qualified Pension $ 73,627 $ - $ 73,627 $ - $ - $ - $ 97,269 3/ $ 97,269 $ 170,896 2 OPEB 162,247-162,247 - - - 21,161 3/ 21,161 183,408 3 Transition Costs Securitized (6,984) - (6,984) - - - - - (6,984) 4 Net OPEB 155,263-155,263 - - - 21,161 21,161 176,424 5 Pension and OPEB, Transfers to and from LLC (9,489) - (9,489) - - - (3,225) (3,225) (12,714) 6 Benefit Plan Administration Fees 8,767-8,767 132 125 45-301 9,068 7 Healthcare, Dental and Vision Expenses 53,864-53,864 4,309 4,654 1,319 2,850 4/ 13,132 66,996 8 Total Active Health Care 62,631-62,631 4,441 4,778 1,364 2,850 13,433 76,064 9 Life Insurance 9,429-9,429 330 342 88-760 10,189 10 Employee Savings Plan 22,789-22,789 798 826 214-1,837 24,626 11 Other 12 Accrued Vacation Expense (8,548) 11,300 1/ 2,752 96 100 26-222 2,974 13 Wellness Plan Expenses 3,231-3,231 48 46 17-111 3,342 14 Disability Expenses 3,860-3,860 135 140 36-311 4,171 15 Non-Qualified Pension (ESRP) 5,023-5,023 - - - 520 3/ 520 5,543 16 Non-Qualified Pension (SERP) 1,274-1,274 - - - 205 3/ 205 1,479 17 Supplemental Savings Plan 1,588-1,588 56 58 15-128 1,716 18 Dividends on Performance Shares 1,775-1,775 62 64 17-143 1,918 19 Deferred Compensation 477-477 17 17 4-38 516 20 Other Benefit Expenses 503-503 8 7 3-17 520 21 Chargeout to MPPA (Belle River Power Plant) (1,542) - (1,542) (23) (22) (8) - (53) (1,595) 22 Sub-Total Other Benefits 7,640 11,300 18,940 399 410 109 725 1,643 20,583 23 Total before Capitalization 321,891 11,300 333,191 5,967 6,355 1,775 118,779 132,876 466,068 24 Less: Capitalized Benefits 5/ (86,302) - (86,302) (1,533) (1,634) (457) (31,022) (34,646) (120,947) 25 Total Employee Benefit Expense $ 235,590 $ 11,300 $ 246,890 $ 4,434 $ 4,722 $ 1,318 $ 87,757 $ 98,231 $ 345,120 1/ Vacation policy change resulted in one-time reduction of vacation expense due to no accrual for 2009 2/ Inflation Adjustment Factors: see table below 3/ Adjustment pursuant to actuarial report 4/ Impact on active healthcare of reform legislation $4.500, partially offset by favorable Local 223 Union negotiations of $1,650 5/ Capitalization rate based on 2009 historical test period: 26.1% Annual Inflation Rates applied to benefits: 2010 2011 2012 Benefit Plan Administration Fees 1.50% 1.40% 2.00% Healthcare, Dental and Vision Expenses 8.00% 8.00% 8.00% Life Insurance 3.50% 3.50% 3.50% Employee Savings Plan 3.50% 3.50% 3.50% Accrued Vacation Expense 3.50% 3.50% 3.50% Wellness Plan Expenses 1.50% 1.40% 2.00% Disability Expenses 3.50% 3.50% 3.50% Supplemental Savings Plan 3.50% 3.50% 3.50% Dividends on Performance Shares 3.50% 3.50% 3.50% Deferred Compensation 3.50% 3.50% 3.50% Other Benefit Expenses 1.50% 1.40% 2.00% Chargeout to MPPA (Belle River Power Plant) 1.50% 1.40% 2.00%
Projected Operation and Maintenance Expenses Schedule: C5.10 Pension Cost - Qualified Witness: J. C. Wuepper Projected 12 Month Period Ending March 2012 Page: 1 of 1 ($000) (a) (b) (c) (d) Pension Cost - Qualified Line Historical Projected No. Description Test Period Adjustments 1/ Test Period 2/ 1 Cost Components: 2 Service cost $ 40,859 $ 21,442 $ 62,301 3 Interest cost 154,376 (7,441) 146,935 4 Expected return on assets (164,812) 14,036 (150,776) 5 Amortization: 6 Net (Gain)/Loss 36,506 70,928 107,434 7 Prior service cost 6,698 (1,696) 5,002 8 Transition - - - 9 Total Amortization 43,204 69,232 112,436 10 Net ASC 715-30 (SFAS 87) Cost $ 73,627 $ 97,269 $ 170,896 1/ Column (d) less Column (b) 2/ Carried from workpaper JCW-1
Projected Operation and Maintenance Expenses Schedule: C5.11 Other Post Employment Benefits (OPEB) Witness: J. C. Wuepper Projected 12 Month Period Ending March 2012 Page: 1 of 1 ($000) (a) (b) (c) (d) Other Post Employment Benefits (OPEB) Line Historical Projected No. Description Test Period Adjustments 1/ Test Period 2/ 1 Cost Components: 2 Service cost $ 45,383 $ 23,326 $ 68,709 3 Interest cost 102,370 (672) 101,698 4 Expected return on assets (41,863) (16,450) (58,313) 5 Amortization: 6 (Gain)/Loss 52,414 20,402 72,816 7 Prior service cost 1,608 (5,360) (3,752) 8 Transition 2,335 (85) 2,250 9 Total Amortization 56,357 14,957 71,314 10 Net ASC 715-60 (SFAS 106) Cost $ 162,247 $ 21,161 $ 183,408 1/ Column (d) less Column (b) 2/ Carried from workpaper JCW-2
Projected Operation and Maintenance Expenses Schedule: C5.12 Midwest Energy Resource Company (MERC) Witness: M. Hoffman ($000) Page: 1 of 1 (a) (b) (c) (d) (e) Midwest Energy Resource Company (MERC) Projected FERC/ Historical Period Line MPSC Test Period 04/01/11 - No. Description Account 2009 Adjustments 03/31/12 1 Midwest Energy Resource Company (MERC) 2 3 Fuel Handling Expense 501 41,019 0 41,019 4 Administrative Expense 501 3,416 0 3,416 5 6 44,435 0 44,435
Projected Operation and Maintenance Expenses - AMI and SmartCurrents SM Schedule: C5.13 ($000) Witness: R. E. Sitkauskas Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) Projected Period Program Expenses & Savings Historical Adjusted FERC/ 12 Months Historical Line MPSC Ending Rate Case Normalization Test Period 01/01/10-01/01/11-04/01/11 - No. Description Account 12/31/09 Adjustments Adjustments 1/ 12/31/10 12/31/11 3/31/12 Expenses sum (c) thru (e) 1 Distribution Expenses 2 Operation 3 Meter Expenses 586 0 0 0 0 400 819 850 4 Total Operation Expense 0 0 0 0 400 819 850 5 6 ITS Expenses 7 Customer Assistance Expense 908 0 0 0 0 1,739 2,677 2,685 8 9 Communication Plan/Marketing 10 Demonstrating and Selling Expense 912 0 0 0 0 406 1,691 1,691 11 12 Total O&M Expenses 0 0 0 0 2,545 5,188 5,226 Savings 13 Distribution Expenses 14 Operation 15 Load Dispatching 581 0 0 0 0 0 0 (16) 16 Overhead Line Expenses 583 (1) 0 0 (1) (4) (24) (31) 17 Meter Expenses 586 (12) 0 0 (12) (95) (491) (673) 18 Total Operation Expense (14) 0 0 (14) (99) (515) (720) 19 20 Maintenance 21 Maintenance of Overhead & Underground Lines 593 / 594 (9) 0 0 (9) (24) (179) (233) 22 Total Maintenance Expense (9) 0 0 (9) (24) (179) (233) 23 24 Meter Reading Expense 902 (2,102) 0 0 (2,102) (2,267) (3,657) (4,347) 25 Customer Records and Collection Expense 903 (1) 0 0 (1) (3) (19) (70) 26 Uncollectible Accounts 904 (7) 0 0 (7) (29) (108) (138) 27 28 Total O&M Savings (2,132) 0 0 (2,132) (2,422) (4,476) (5,508) 29 30 Net O&M (2,132) 0 0 (2,132) 124 712 (282) 1/ Historical test period savings also reflected in Exhibit A-10, Schedules C5.6 and C5.7
Projected Depreciation and Amortization Expense Schedule: C6 Projected 12 Month Period Ending March 31, 2012 Witness: T. M. Uzenski ($000) Page: 1 of 1 (a) (b) (c) (d) (e) (f) (g) (h) (i) Depreciation Depreciation Projected Projected Expense Expense Projected Base Depreciable Period Depreciable Increase Increase Depreciation & Line Depreciation Plant Plant Plant Annual On Plant On Plant Amort. Expense No. Description @ 12/31/09 @ 3/31/11 Adjustments @3/31/12 Rate @3/31/11 @3/31/12 3/31/2012 1 2 Nuclear Plant 436,727 62,195 498,922 3.27% 2,686 5,529 5,529 3 Transmission and Distribution 6,271,118 225,919 6,497,037 3.56% 8,271 18,105 18,105 4 Production (Steam, Hydraulic, MERC & Other) 7,084,828 151,346 7,236,175 2.63% 3,879 8,617 8,617 5 General Plant 884,272 41,123 925,395 4.97% 1,811 4,133 4,133 6 Intangible Plant 502,119 7,633 509,752 20.00% 1,754 3,736 3,736 7 Environmental Plant 20,327 33,973 54,300 2.72% 307 1,081 1,081 8 AMI & Smart Systems 45,668 31,755 77,424 3.31% 812 1,965 1,965 9 Other Retirements (266,523) (199,569) (466,092) 3.31% (8,508) (15,434) (15,434) 10 Items with Special Depreciation rates 11 ½ Year Base Depreciation Add'l in subsequent Periods 11,019 11,019 11,019 12 Base Year Depreciation 496,339 496,339 496,339 13 Physical Plant Subtotal 496,339 14,978,536 354,376 15,332,912 518,370 38,750 535,089 14 15 Nuclear Decommissioning 17,497 34,732 16 Amortization DTE-2 2,611 2,611 17 Amortization of CTA 18,003 18,004 18 Net Regulatory Debits less Regulatory Credits 21,473 19 Total 555,923 14,978,536 354,376 15,332,912 518,370 38,750 590,435
Projected Property and Other General Taxes Schedule: C7 ($000) Witness: M. Lewis Page: 1 of 4 (a) (b) (c) (d) Line 12 ME 15 ME 12 ME No. Description 12/31/2009 3/31/2011 3/31/2012 1 FICA 32,796 41,725 33,923 2 3 Federal Unemployment (FUTA) 285 363 295 4 5 Michigan Unemployment (SUTA) 641 816 663 6 7 Allocated Corporate Payroll Taxes 561 714 580 8 9 MPSC Assessment 6,385 8,123 6,604 10 11 Property Taxes 194,209 256,100 218,319 12 13 Use Tax 120 153 124 14 15 Other Tax Expense 1,771 2,253 1,832 16 17 Total 236,768 310,247 262,340
Projected Property Tax Expense Schedule: C7 ($000) Witness: M. Lewis Page: 2 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Property Tax Expense Calculation (61%) (39%) 2009 Liability 2010 Liability Line STC True Cash Taxable Depreciation 2009 Taxes 2010 Expensed Expensed No. Description Cost Multiplier Value Value Multiplier Mils Assessed Liability in 2010 in 2010 1 Prior Year Tax Estimated Liability (2009) 199,872 121,922 2 Assessment Reduction from Tax Planning (10,400) 3 Valuation Multiplier Incremental Annual Obsolescence 1,696,151 0.0143 55.0775 (1,336) 4 Remove 12/31/2008 CWIP 0 0.5000 0 0 55.0775 0 5 Retirements as of 12/31/2008 (100,000) 0.3200 (32,000) (16,000) 55.0775 (881) 6 7 Production Plant 154,959 0.9800 151,860 75,930 55.0775 4,182 8 9 Nuclear Production 116,950 0.9800 114,611 57,306 55.0775 3,156 10 11 Intangible Plant 15,381 12 (15,381) 0 0.0000 0 0 55.0775 0 13 14 Distribution and Transmission Plant 290,226 15 Customer Service 19,285 309,511 0.9600 297,130 148,565 55.0775 8,183 16 17 General Plant 12,905 0.8900 11,485 5,743 55.0775 316 18 494,324 543,086 1,967,695 13,620 13,620 19 20 12/31/09 CWIP 115,298 0.5000 57,649 28,825 55.0775 1,588 1,588 21 Total 609,623 600,735 1,996,520 15,208 22 2010 Property Tax Liability 204,680 121,922 79,825 23 24 Property Tax Expense for Calendar Year 2010 201,747
Projected Property Tax Expense Schedule: C7 ($000) Witness: M. Lewis Page: 3 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Property Tax Expense Calculation (61%) (39%) 2010 Liability 2011 Liability Line STC True Cash Taxable Depreciation 2009 Taxes 2011 Expensed Expensed No. Description Cost Multiplier Value Value Multiplier Mils Assessed Liability in 2011 in 2011 1 Prior Year Tax Estimated Liability (2010) 204,680 124,855 2 Valuation Multiplier Incremental Annual Obsolescence 1,996,520 0.0143 55.0775 (1,572) 3 Remove 12/31/2009 CWIP (115,298) 0.5000 (57,649) (28,825) 55.0775 (1,588) 4 Retirements as of 12/31/2009 (100,000) 0.3200 (32,000) (16,000) 55.0775 (881) 5 6 Production Plant 204,496 0.9800 200,406 100,203 55.0775 5,519 7 8 Nuclear Production 184,869 0.9800 181,172 90,586 55.0775 4,989 9 10 Intangible Plant 11,999 11 (11,999) 0 0.0000 0 0 55.0775 0 12 13 Distribution and Transmission Plant 339,415 14 Customer Service 17,538 356,953 0.9600 342,675 171,338 55.0775 9,437 15 16 General Plant 29,819 0.8900 26,539 13,270 55.0775 731 17 560,839 661,143 2,327,092 16,635 16,635 18 19 12/31/10 CWIP 187,401 0.5000 93,701 46,851 55.0775 2,580 2,580 20 Total 748,240 754,844 2,373,943 19,215 21 2011 Property Tax Liability 223,895 124,855 87,319 22 23 Property Tax Expense for Calendar Year 2011 212,174 24 25 Property Tax Expense for 15 Months YE March 2011 26 Property Tax Expense for Calendar Year 2010 201,747 27 Prorated - 3 months 2012 (212,174 x 3/12) 53,044 28 MERC - YE March 2011 1,309 29 Total - 15 Months YE March 2011 256,100
Projected Property Tax Expense Schedule: C7 ($000) Witness: M. Lewis Page: 4 of 4 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Property Tax Expense Calculation (61%) (39%) 2011 Liability 2012 Liability Line STC True Cash Taxable Depreciation 2009 Taxes 2012 Expensed Expensed No. Description Cost Multiplier Value Value Multiplier Mils Assessed Liability in 2012 in 2012 1 Prior Year Tax Estimated Liability (2011) 223,895 136,576 2 Valuation Multiplier Incremental Annual Obsolescence 2,373,943 0.0143 55.0775 (1,870) 3 Remove 12/31/2010 CWIP (187,401) 0.5000 (93,701) (46,851) 55.0775 (2,580) 4 Retirements as of 12/31/2010 (100,000) 0.3200 (32,000) (16,000) 55.0775 (881) 5 6 Production Plant 247,092 0.9800 242,150 121,075 55.0775 6,669 7 8 Nuclear Production 131,157 0.9800 128,534 64,267 55.0775 3,540 9 10 Intangible Plant 10,177 11 (10,177) 0 0.0000 0 0 55.0775 0 12 13 Distribution and Transmission Plant 343,566 14 Customer Service 19,942 363,508 0.9600 348,968 174,484 55.0775 9,610 15 16 General Plant 34,889 0.8900 31,051 15,526 55.0775 855 17 489,245 625,002 2,686,444 15,342 15,342 18 19 12/31/11 CWIP 437,798 0.5000 218,899 109,450 55.0775 6,028 6,028 20 Total 927,043 843,901 2,795,894 21,370 21 2012 Property Tax Liability 245,265 136,576 95,653 22 23 Property Tax Expense for Calendar Year 2012 232,229 24 25 Property Tax Expense for 12 Months YE March 2012 26 Prorated - 9 months 2011 (212,174 x 9/12) 159,131 27 Prorated - 3 months 2012 (232,229 x 3/12) 58,057 28 MERC - YE March 2012 1,132 29 Total - 12 Months YE March 2012 218,319