S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * *

Transcription

1 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * In the matter of the application of ) CONSUMERS ENERGY COMPANY ) for approval of its integrated resource plan ) Case No. U-06 pursuant to MCL 60.6t and for other relief ) ) REBUTTAL TESTIMONY OF NAOMI J. SIMPSON MICHIGAN PUBLIC SERVICE COMMISSION November, 08

2 REBUTTAL TESTIMONY OF NAOMI J. SIMPSON CASE NUMBER U Q. Are you the same Naomi J. Simpson that filed direct testimony in this proceeding? A. Yes, I am. Q. What is the purpose of your rebuttal testimony? A. The purpose of my rebuttal testimony is to present MPSC Staff s (Staff s) position regarding recommendations made by Michigan Electric Transmission Company (METC) witness Charles Marshall. Q. Please provide a summary of the recommendations made by Staff in this rebuttal testimony. A. Staff makes three additional recommendations in response to witness Marshall s testimony. First, Staff recommends the Commission order Consumers Energy Company (the Company) to continue to investigate transmission improvements that facilitate the import of both capacity and energy, including the impact to the capacity import limit (CIL), and provide those details in the Company s next integrated resource plan (IRP). Second, Staff recommends that transmission investments be considered in utility IRP filings. Third, Staff recommends the Commission order Staff to explore all Midcontinent Independent System Operator (MISO) stakeholder processes to determine if there is an existing process that can be leveraged to perform a more comprehensive analysis of the transmission system for the entire Zone 7 region upon completion of the st round of utility IRPs. Q. Does METC address the impact that the proposed course of action has on the electrical system? A. METC witness Marshall provides an assessment of the impact the proposed course of action may have on the CIL. Witness Marshall s analysis showed a CIL in 0 to be, MW, which is a reduction of approximately,6 MW as compared to the

3 REBUTTAL TESTIMONY OF NAOMI J. SIMPSON CASE NUMBER U /09 planning year. This analysis is based upon assumptions made by METC and was done independently of the Company s IRP, but utilized the approach and methodology applied by MISO in its Loss of Load Expectation (LOLE) study. Staff is concerned that the degradation of the CIL could conflict with the Company s proposed course of action (PCA) in the later years when it depends on more imports. The CIL is a measure of the ability to import capacity into a resource zone, and a reduced CIL may be an indicator of a reduced ability to import energy depending upon the reason that a zone s CIL is being reduced. The Company s PCA includes significant planned purchases in the form of power purchase agreements and market purchases in later years. Given Consumers PCA, the Commission should order the Company to continue to investigate transmission improvements that facilitate the import of both capacity and energy, including the impact to the CIL and provide those details in the Company s next IRP. Q. How does this impact Staff s initial recommendations? A. Staff continues to support the Company working closely with METC to further analyze how the proposed course of action would impact the electrical system as stated by Staff witness Lynn Beck. Staff also recommends that transmission investments be considered in utility IRP filings. Such investments in the transmission system may be necessary to support a utility s resource plan. Staff s recommendation is further supported by Public Act of 06, MCL 60.6t()(h) and (j), which call for an analysis of potential new or upgraded electric transmission and plans for meeting current and future capacity needs, including the costs for major investment such as transmission. Transmission Prefiled direct testimony and exhibits of Charles Marshall, p 6. Prefiled direct testimony and exhibits of Charles Marshall, p.

4 REBUTTAL TESTIMONY OF NAOMI J. SIMPSON CASE NUMBER U improvements to facilitate increased imports of capacity or energy should be considered within the scope of individual IRP cases. However, many stakeholders have continued interests in the entire Zone 7 ability to import capacity and energy. Therefore, Staff also recommends engaging all MISO Local Resource Zone 7 (Zone 7) stakeholders in the evaluation of projects that could help improve or retain the current level of CIL. As indicated by METC witness Marshall, a utility by utility approach in an IRP could lead to a piecemeal approach to transmission improvement projects needed to support individual resource plans without ever analyzing the impact of all utility plans on the MISO Zone 7 transmission system. Q. How does Staff recommend a CIL improvement analysis take place? A. Since individual utility IRP s do not engage all MISO Zone 7 stakeholders, it is typically more appropriate that these discussions take place at MISO because MISO already analyzes the entire Zone 7 region and all stakeholders are already engaged in the various MISO processes. Therefore, Staff recommends the Commission direct Staff to explore all existing MISO processes to determine whether there is an appropriate MISO stakeholder process that can be leveraged to perform a more comprehensive analysis of the transmission system for the entire Zone 7 region once the first round of utility IRPs have been completed. Existing MISO processes may include, but are not limited to, the LOLE study, the annual MISO Transmission Expansion Planning, Market Efficiency Project, and Multi-value project studies. Staff would willingly participate in any MISO process or other Commission-ordered process to consider projects to maintain or improve the Zone 7 CIL. Q. Does Staff still recommend approval of the Company s PCA identified in its IRP?

5 REBUTTAL TESTIMONY OF NAOMI J. SIMPSON CASE NUMBER U A. Yes. Although Staff does continue to recommend further analysis of the PCA s impact to the transmission grid, Staff still supports the Commission s approval of the Company s IRP and initial three years of its PCA. METC s testimony regarding potential degradation to the CIL does not change Staff s position on the Company s IRP and PCA. Staff maintains its recommendation that the Commission limit its approval of the Company s IRP to the first three years and the investments associated with that three-year period. Q. Does this conclude your testimony? A. Yes, it does. Prefiled direct testimony and exhibits of Paul Proudfoot, p 9.

6 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of ) CONSUMERS ENERGY COMPANY ) for approval of its integrated resource plan ) Case No. U-06 pursuant to MCL 60.6t and for other relief ) ) PROOF OF SERVICE Linda G. Brauker, being duly sworn, deposes and says that on November, 08, A.D., she ed a copy of the attached MPSC Rebuttal Testimony to the persons as shown on the attached list. Linda G. Brauker Subscribed and sworn to before me this nd day of November, 08. Lisa Felice Notary Public, Eaton County, Michigan My Commission Expires: April, 00

7 Service List for U-06 Consumers Energy Company Anne M. Uitvlugt Robert W. Beach Bret Totoraitis Gary A. Gensch, Jr. Michael C. Rampe Theresa A.G. Staley Consumers Energy Company One Energy Plaza Jackson, MI Environmental Law & Policy Center, Ecology Center, Union of Concerned Scientists & Vote Solar Margrethe K. Kearney Environmental Law & Policy Center Wealthy St. SE, Suite 6 Grand Rapids, MI 906 mkearney@elpc.org Cadillac Renewable Energy, LLC; Genesee Power Station, LP; Grayling Generating Station, LP; Hillman Power Company, LLC; TES Filer City Station, LP; Viking Energy of Lincoln, Inc; Viking Energy of McBain, Inc. Thomas J. Waters Anita G. Fox Fraser Trebilcock Davis & Dunlap, PC Allegan Street, Suite 000 Lansing, MI 89 tjwaters@fraserlawfirm.com afox@fraserlawfirm.com Michigan Electric Transmission Company Richard J. Aaron Courtney Kissel Dykema Gossett, PLLC 0 Townsend Street, Suite 900 Lansing, MI 89 raaron@dykema.com ckissel@dykema.com Michigan Environmental Council Christopher M. Bzdok Lydia Barbash-Riley 0 E. Front Street Traverse City, MI 9686 chris@envlaw.com kimberly@envlaw.com karla@envlaw.com lydia@envlaw.com Energy Michigan, Inc. Laura A. Chappelle Timothy J. Lundgren 0 N. Washington Square, Suite 90 Lansing, MI 89 lachappelle@varnumlaw.com tjlundgren@varnumlaw.com Cypress Creek Renewables, LLC Jennifer Utter Heston Fraser Trebilcock Davis & Dunlap, P.C. W. Allegan, Suite 000 Lansing, MI 89 jheston@fraserlawfirm.com Midland Cogeneration Venture, LP Jason Hanselman John A. Janiszewski Dykema Gossett, PLLC 0 Townsend Street, Suite 900 Lansing, MI 89 jhanselman@dykema.com jjaniszewski@dykema.com Independent Power Producers Coalition of Michigan Timothy Lundgren Laura A. Chappelle Varnum Law Firm 0 N. Washington Square Suite 90 Lansing, MI 89 lachappelle@varnumlaw.com tjlundgren@varnumlaw.com

8 Service List for U-06 Michigan Energy Innovation Business Council & Institute for Energy Innovation Laura A. Chappelle Varnum Law Firm 0 N. Washington Square Suite 90 Lansing, MI 89 lachappelle@varnumlaw.com Toni L. Newell Bridge Street, NW Grand Rapids, MI 90 tlnewell@varnumlaw.com Residential Customer Group & Great Lakes Renewable Energy Association Don L. Keskey Brian W. Coyer Public Law Resource Center PLLC University Office Place Albert Avenue, Suite East Lansing, MI 88 donkeskey@publiclawresourcecenter.com bwcoyer@publiclawresourcecenter.com Sierra Club Michael Soules 6 Mass Ave, NW, Ste70 Washington, DC 006 msoules@earthjustice.org Attorney General Bill Schuette Celeste R. Gill Assistant Attorney General P. O. Box 07 Lansing, MI 8909 gillc@michigan.gov ag-enra-spec-lit-@michigan.gov Michigan Chemistry Council & Solar Energy Industries Association Toni L. Newell Varnum Law Firm Bridge Street, NW Grand Rapids, MI 90 tlnewell@varnumlaw.com Jennifer Utter Heston Fraser Trebilcock Davis & Dunlap, PC W. Allegan St., Ste. 000 Lansing, MI 89 jheston@fraserlawfirm.com Association of Businesses Advocating Tariff Equity Michael J. Pattwell Bryan A. Brandenburg Clark Hill, PLC E Cesar E. Chavez Avenue Lansing, MI 8906 mpattwell@clarkhill.com bbrandenburg@clarkhill.com Invenergy Renewables LLC. Nolan J. Moody Brandon C. Hubbard Dickinson Wright S. Washington Sq., Suite 00 Lansing, MI 89 nmoody@dickinsonwright.com bhubbard@dickinsonwright.com Administrative Law Judge Hon. Sharon L. Feldman Administrative Law Judge 709 W Saginaw Hwy., rd Floor Lansing, MI 897 feldmans@michigan.gov MPSC Staff Spencer A. Sattler Heather Durian Assistant Attorneys General Michigan Public Service Comm. 709 W. Saginaw Hwy., rd Floor Lansing, MI 897 sattlers@michigan.gov durianh@michigan.gov