BEFORE THE PUBLIC SERVICE COMMISSION OF WISCONSIN

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1 BEFORE THE PUBLIC SERVICE COMMISSION OF WISCONSIN APPLICATION OF WISCONSIN PUBLIC SERVICE CORPORATION FOR AUTHORITY TO ADJUST ELECTRIC AND NATURAL GAS RATES DOCKET 6690-UR-124 Ex.-WPSC-Beyer-1

2 Ex.-WPSC-Beyer-1 Page 1 of 9 WISCONSIN PUBLIC SERVICE CORPORATION 2016 ELECTRIC EXTENSION ALLOWANCE CALCULATIONS The proposed 2016 distribution system investment extension allowances for the "Electric Extension Rules" were calculated using the methodologies described below cost of service data was used based on the commission Staff s preferred method of allocating plant costs by 70% group coincident demand and by 30% customer count. Page 4 contains the embedded cost allowances based upon the 70/30 split. 1. RESIDENTIAL CUSTOMERS The net distribution plant investments for accounts 364, 365, 366, and 367 were divided by the total number of 383,293 residential customers (see Exhibit WPSC-Beyer-1, page 4). See Page 4 for the calculated allowance value of $ DEMAND AND ENERGY COMMERCIAL AND INDUSTRIAL CUSTOMERS The net distribution plant investments for accounts 364, 365, 366, and 367 were divided by the total maximum customer non-coincident peak demands that occurred in the year multiplied by 12 to arrive at a dollar per kw allowance. See Page 4 for the calculated allowance value of $36.80/kW. 3. ENERGY-ONLY COMMERCIAL AND INDUSTRIAL CUSTOMERS a. Interval Data: To obtain needed customer load information, the interval data for energy only customers on the Cg rate schedules was used. The data from three representative months during the period of January 2014 to July 2014 was accumulated. One month from each of the following periods were chosen: Summer Peak (July) Winter Peak (January) Fall/Spring Off-Peak (April) Data from 1,627 customers was available in January 2014, 1,621 customers in April 2014, and 1,763 customers in July During the year, sample groups of customers were in the process of change resulting in more or less customers. b. Data Analysis: The individual customer load information utilized in this study was: Monthly usage Monthly customer maximum demand Monthly customer group coincident demand

3 This customer data was grouped into three categories by monthly usage. 0-3,000 kwh 3,001-15,000 kwh 15,001 and over kwh Ex.-WPSC-Beyer-1 Page 2 of 9 The usage and demand data was totaled for all customers in each of the three categories. These totals were then used as follows: 1) Usage and customer maximum demand was used in load factor calculation to determine customer demand range corresponding to the breakpoint between the three categories. 2) Customer group demand was used along with customer count to allocate net plant to the two highest demand ranges. The totals are shown on Page 5 while the calculated load factors and calculated demand ranges are displayed on Page 6. The demand range limits were calculated as follows: 3,000 kwh Hrs Ave Load Factor 744 mo. X = 17.4 kwh/mo. 15 kwh will continue to be used as the breakpoint. 15,000 kwh Hrs Ave Load Factor 744 mo. X = 49.3 kwh/mo. 50 kwh will continue to be used as the breakpoint. c. Customer Calculation: Average customer counts for the period January 2014 through December 2014, bill summaries by usage range were used to calculate the number of customers in the demand ranges determined above. Page 7 shows the bill summaries for the energy-only Cg rate schedules. The calculation of the number of customers is shown on Page 8. d. Net Plant Allocation: The net plant in accounts for the Cg-1 under 100 kwh (energy only) customers was allocated by weighting the group coincident demand by 70% and the customer counts by 30%. This allocation method is consistent with "cost of service" studies preferred by the commission Staff. See below for calculation of the net plant totals used in this study: 364, 365, 366, Cg-1 & Cg-2 Energy Only & 367 Plant Net Plant per Cust 1 x No. of Cust 2 = Net Plant Cg: $ x 52,443 = $33,151, From Ex.-WPSC-Beyer-1, page 4) 2. From Ex.-WPSC-Beyer-1, page 8) The net plant totals are then allocated to the three demand ranges above by using the same 70%/30% allocation method mentioned above. The allocation percentages for

4 Ex.-WPSC-Beyer-1 Page 3 of 9 the two higher demand ranges were calculated on Page 8, Sections A and B. The customer counts were taken from Page 8, Section B. The group demand allocators were calculated on Page 8, Section A. The allocation for the 0-15 kwh group was made assuming the $ per customer that is used for residential customers. The remaining net plant was divided between the other two groups using the above allocators. The calculation is shown on Page 8, Section C. e. Allowance calculation: The net distribution plant allocations from d. above are divided by the customer counts from c. above, to arrive at the allowances. They are on Page 8, Section D.

5 Wisconsin Public Service Corporation Year Ending December 31, 2016 Electric Extension Allowance Calculation Ex.-WPSC-Beyer-1 Page 4 of 9 Energy Only Billed Demand Billed Residential C & I C & I Lighting Description Account Cost / Customer Cost / Customer Cost / KW Cost / Lamp GROSS PLANT 3640 $ $ $16.55 $ GROSS PLANT 3650 $ $ $20.81 $39.11 GROSS PLANT 3660 $8.30 $25.19 $3.52 $0.86 GROSS PLANT 3670 $ $ $32.57 $ ACCUM DEPRECIATION $ $ $ $ ACCUM DEPRECIATION $ $ $ $23.85 ACCUM DEPRECIATION $3.98 -$ $1.69 -$0.41 ACCUM DEPRECIATION $ $ $ $51.85 $ $ $36.80 $192.49

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8 Ex.-WPSC-Beyer-1 Page 7 of 9 Wisconsin Public Service Corporation Year Ending December 31, 2014 Customer Bills 2014 Bills For Rate Classes: Cg-1 < 50 Cg Cg-3 OTOU kwh 2014 Bills , , , , , , , , , , , , , , ,000 15,919 1,001-1,500 59,292 1,501-2,000 39,288 2,001-3,000 47, ,547 3,001-4,000 30,109 4,001-5,000 20,083 5,001-10,000 43,031 10,001-15,000 5,746 98,969 15,001-20, ,001-25, ,001-30, ,001-50, ,001-70, , , , , , , ,001-1,000, ,000,001-2,000, ,000,001-6,000, ,000,001-10,000,000 0 >10,000, , ,424 / Adjustment 0-3,000 kwh \ Adj Pct Range Bills Adjustment Original Adjusted less: 50% 2,001-3,000 47,601-23,801 less: 25% 1,501-2,000 39,288-9,822 less: 10% 1,001-1,500 59,292-5,929 plus: 25% 3,001-4,000 30,109 7,527 plus: 10% 4,001-5,000 20,083 2,008-30, , ,531 / Adjustment 3,001-15,000 kwh \ Adj Pct Range Bills Adjustment Original Adjusted Diff Between End and Beginnig ,016 Diff Between End and Beginnig & Over -12,027 17,989 98, ,958 / Adjustment >15,000 kwh \ Adj Pct Range Bills Adjustment Original Adjusted Less 25% 15,001-20, Less 10% 20,001-25, Plus 25% 4,001-5,000 20,083 5,021 Plus 10% 5,001-10,000 43,031 4,303 Plus 50% 10,001-15,000 5,746 2,873 12, ,935 Total 0 593, ,424

9 Ex.-WPSC-Beyer-1 Page 8 of 9 Wisconsin Public Service Corporation Year Ending December 31, 2014 Customer Bills A. Calculation of Group Demand Allocators Total Group Demand No. of Cust Group X in Demand Range = Demand Range Demand No. of Customers (From Sect B.) Group Demand Allocators 21, kw , ,904 kw ,479 13, & >kw ,143 43,545 kw Total 192,450 kw B. Calculation of Customer Allocators 2016 / Bills \ 2016 Customers Demand Bills Customer PCT Customers Allocated To Customer Range From Page 7. Customers By Demand Range (Section C Below) Demand Range Allocators 463, kw , X 52,443 = 40, , kw , X 52,443 = 10, , & >kw , X 52,443 = 1, Customers 49, , Note: Forecasted customers for these rate schedules are allocated to demand ranges C. Net Plant Allocation Total Net Plant To Reallocate /-- From Section D of Write Up --\ Net Plant 2016 Total Per Customer Customers Net Plant Cg-1, Cg-2, Cg-3, ,443 33,151,563 Cg-4,Cg-5 52,443 33,151,563 Reallocation of Net Plant 0-15 kw Total Net Plant 0-15 kw Net Plant To / Customer \ /----- Group Demand \ Customer & Demand Customers Per Customer Net Plant Be Reallocated Allocator Allocator PCT Allocator Allocator PCT Demand Net Plant Range (Sect B.) (Page 4) Allocated to kw (Sect. B) 30% (Sect. A) 70% Allocator Re Allocated 0-15 kw 40, ,256,604 18,256, kw 14,894, ,090, & >kw 14,894, ,804, ,151,563 D. Allowance Calculation Calculated Proposed Demand Range Calculation Allowance Allowance 0-15 kw Same as Residential $446 $450 Net Plant Allocated 12,090, kw = $1,170 $1,170 Customers 10,336 Net Plant Allocated 2,804, & >kw = $2,454 $2,455 Customers 1,143 Residential From Page 1 $446 $450 Billed Demand C&I Per kw From Page 1 $37 $37

10 Wisconsin Public Service Corporation History of Electric Extension Rule Allowances Ex.-WPSC-Beyer-1 Page 9 of 9 Customer Proposed Class Effective: kw $118 $145 $170 $195 $185 $180 $205 $205 $360 $425 $ kw $475 $570 $645 $750 $865 $940 $1,130 $1,130 $1,065 $1,060 $1, & > kw $1,645 $1,840 $2,280 $2,265 $2,215 $2,095 $2,640 $2,640 $2,280 $2,470 $2,455 Per kw $36 $41 $38 $33 $31 $33 $33 $33 $27 $27 $37

11 Ex.-WPSC-Beyer-1 Schedule 2 Page 1 of 1 Wisconsin Public Service Corporation Derivation of NatureWise Incremental Costs Proposed WPSC-WI Rate Case 6690-UR-124 Power Supply Costs Renewable Power Generation (kwh) Forecast Ave Cost % of Total ($/kwh) WTD Ave Cost ($/kwh) Ag/Bio/Landfill 144,496,560 50% $ $ Wind 118,651,260 50% $ $ Average Renewable Power ($/kwh) $ Non Renewable Power Rate Hours Cost Capacity On Peak Energy $ , Off Peak Energy $ , Total 8, Total Non Renewable Power ($/kwh) $ Incremental Power Supply Costs ($/kwh) $ Non Power Supply Costs Program Administration $4,900 Total Non Power Supply Costs $4,900 Forecasted kwh Renewable Sales 8,917,200 Non Power Supply Costs/kWh $ Total Incremental Costs/kWh $0.026 Total Incremental Cost/ 100kWh Block $2.60

12 WISCONSIN PUBLIC SERVICE CORPORATION Ex.-WPSC-Beyer-1 Schedule 3 Page 1 of 1 P.S.C.W. Volume No. 7 4th Rev. Sheet No. E4.42 Replaces 3rd Rev. Sheet No. E4.42 Amendment XXX Schedule Ls-1 Outdoor Overhead Lighting Service Company-Owned EFFECTIVE IN All territory served. AVAILABILITY Facilities in this section are available to all classes of customers who desire company owned lighting service. MONTHLY RATE Fixture Type Lamp Type Lumens Watts $/Month R R R Post Top Sodium Vapor 5, $17.00 Cobra Head (closed) Sodium Vapor 9, $17.52 Cobra Head (closed) Sodium Vapor 14, $20.00 Cobra Head (closed) Sodium Vapor 27, $24.65 Cobra Head Sodium Vapor 45, $33.06 Cobra Head Metal Halide 8, $23.55 Cobra Head Metal Halide 26, $29.88 Cobra Head (closed) Metal Halide 36, $33.06 LED LED 9,000* 100* $14.47 LED LED 14,000* 150* $18.23 LED LED 27,000* 250* $23.83 Area-Power Bracket Sodium Vapor 9, $14.65 Area-Power Bracket Sodium Vapor 14, $17.96 Directional-Flood Sodium Vapor 27, $29.90 Directional-Flood Sodium Vapor 45, $36.56 Directional-Flood Metal Halide 26, $31.91 Directional-Flood (closed) Metal Halide 36, $36.30 Directional-Flood Metal Halide 110,000 1,000 $55.00 The above charges are for lighting standard facilities on existing company-owned distribution poles. The company will own and install the standard facilities Monthly charges for LED are based on all night burning hours and will be the only option for this rate. * The wattages and lumens listed under the LED lamps are wattages and lumens of sodium vapor lamps to which the LED lamps are considered equivalent. Actual wattages and lumens of LED lamps may vary. Continued to Sheet No. E4.43 Issued XX-XX-XX Effective for Service Rendered On and After XX-XX-XX PSCW Authorization By Order 6690-UR-124 Dated XX-XX-XX